EXHIBIT 10(b)

Digi International Inc.
2014 Omnibus Incentive Plan
1. Purpose. The purpose of the Digi International Inc. 2014 Omnibus Incentive
Plan (the “Plan”) is to promote the interests of the Company and its
stockholders by providing key personnel of the Company and its Affiliates and
Non-Employee Directors with an opportunity to acquire a proprietary interest in
the Company and thereby develop a stronger incentive to put forth maximum effort
for the continued success and growth of the Company and its Affiliates. In
addition, the opportunity to acquire a proprietary interest in the Company will
aid in attracting and retaining key personnel and Non-Employee Directors of
outstanding ability.
2. Definitions.
2.1 The capitalized terms used elsewhere in the Plan have the meanings set forth
below.
(a) “Affiliate” means any corporation that is a “parent corporation” or
“subsidiary corporation” of the Company, as those terms are defined in Code
Sections 424(e) and (f), or any successor provisions, and, for purposes other
than the grant of Incentive Stock Options, any entity in which the Company or
any such “subsidiary corporation” owns at least 20% of the combined voting power
of the entity’s voting securities and which is designated by the Committee as
covered by the Plan.
(b) “Agreement” means a written or electronic contract (i) entered into between
the Company and a Participant and (ii) containing the terms and conditions of an
Award in such form and not inconsistent with the Plan as the Committee shall
approve from time to time, together with all amendments thereto, which
amendments may be unilaterally made by the Company (with the approval of the
Committee) unless such amendments are deemed by the Committee to be materially
adverse to the Participant and not required to comply with applicable law or
stock exchange rules.
(c) “Award” or “Awards” means a grant made under the Plan in the form of
Restricted Stock, Options, Stock Appreciation Rights, Stock Units, an Other
Stock-Based Award or a Cash Incentive Award.
(d) “Board” means the Board of Directors of the Company.
(e) “Cash Incentive Award” means an Award described in Section 8.2 of the Plan.
(e) “Code” means the Internal Revenue Code of 1986, as amended and in effect
from time to time or any successor statute.
(f) “Committee” means two or more Non-Employee Directors designated by the Board
to administer the Plan under Plan Section 3.1, each of whom shall be (i) an
independent director within the meaning and rules of the Nasdaq Stock Market,
(ii) a “non-employee director” within the meaning of Exchange Act Rule 16b-3 and
(iii) an “outside director” for purposes of Code Section 162(m). Unless
otherwise specified by the Board, the Committee shall be the Compensation
Committee of the Board.
(g) “Company” means Digi International Inc., a Delaware corporation, or any
successor to all or substantially all of its businesses by merger,
consolidation, purchase of assets or otherwise.
(h) “Effective Date” means the date specified in Plan Section 13.1.
(i) “Employee” means an employee (including an officer or director who is also
an employee) of the Company or an Affiliate.
 
(j) “Exchange Act” means the Securities Exchange Act of 1934, as amended and in
effect from time to time or any successor statute.
(k) “Exchange Act Rule 16b-3” means Rule 16b-3 promulgated by the Securities and
Exchange Commission under the Exchange Act, as now in force and in effect from
time to time or any successor regulation.
(l) “Fair Market Value” as of any date means, unless otherwise expressly
provided in the Plan, the fair market value of a Share determined as follows:
(i) If the Shares are then readily tradable on an established securities market
(as determined under Code Section 409A), then Fair Market Value will be the
closing sale price for a Share on the principal securities market on which it
trades on such date, or if no sale of Shares occurred on that date, on the next
preceding date on which a

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sale of Shares occurred, as reported in The Wall Street Journal or such other
source as the Committee deems reliable; or
(ii) If clause (i) is inapplicable, then Fair Market Value will be determined by
the Committee as the result of a reasonable application of a reasonable
valuation method that satisfies the requirements of Code Section 409A.
In the case of an Incentive Stock Option, if this determination of Fair Market
Value is not consistent with the then current regulations of the Secretary of
the Treasury, Fair Market Value shall be determined in accordance with those
regulations. The determination of Fair Market Value shall be subject to
adjustment as provided in Plan Section 17.
(m) “Full Value Award” means any Award other than an Option Award, Stock
Appreciation Rights Award or Cash Incentive Award.
(n) “Fundamental Change” means a dissolution or liquidation of the Company, a
sale of substantially all of the assets of the Company, a merger or
consolidation of the Company with or into any other corporation, regardless of
whether the Company is the surviving corporation, or a statutory share exchange
involving capital stock of the Company.
(o) “Incentive Stock Option” means any Option designated as such and granted in
accordance with the requirements of Code Section 422 or any successor provision.
(p) “Insider” as of a particular date means any person who, as of that date, is
a director of the Company or an officer of the Company as defined under Exchange
Act Rule 16a-1(f) or its successor provision.
(q) “Non-Employee Director” means a member of the Board who is not an Employee.
(r) “Non-Statutory Stock Option” means an Option other than an Incentive Stock
Option.
(s) “Option” means a right to purchase Stock, including both Non-Statutory Stock
Options and Incentive Stock Options.
(t) “Other Stock-Based Award” means an Award described in Section 8.1 of the
Plan.
(u) “Participant” means a person to whom an Award is or has been made in
accordance with the Plan.
(v) “Performance-Based Compensation” means a Full Value or Cash Incentive Award
to a person who is, or is determined by the Committee to likely become, a
“covered employee” (as defined in Code Section 162(m)(3)) and that is intended
to constitute “performance-based compensation” within the meaning of Code
Section 162(m)(4)(C).
 
(w) “Performance Cycle” means the period of time as specified in an Agreement
over which a performance-based Award is to be earned.
(x) “Plan” means this Digi International Inc. 2014 Omnibus Incentive Plan, as
may be amended and in effect from time to time.
(y) “Prior Plans” means the Digi International Inc. 2000 Omnibus Stock Plan, as
amended and restated as of December 4, 2009 (the “2000 Plan”), and the Digi
International Inc. 2013 Omnibus Incentive Plan (the “2013 Plan”).
(z) “Restricted Stock” means Stock granted under Plan Section 7 so long as such
Stock remains subject to one or more restrictions.
(aa) “Section 16” or “Section 16(b)” means Section 16 or Section 16(b),
respectively, of the Exchange Act or any successor statute and the rules and
regulations promulgated thereunder as in effect and as amended from time to
time.
(bb) “Share” means a share of Stock.
(cc) “Stock” means the common stock, par value $.01 per share, of the Company.
(dd) “Stock Appreciation Right” means a right, the value of which is determined
in relation to the appreciation in value of Shares pursuant to an Award granted
under Plan Section 10.
(ee) “Stock Unit” means an Award described in Section 11 of the Plan.
(ff) “Subsidiary” means a “subsidiary corporation,” as that term is defined in
Code Section 424(f) or any successor provision.

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(gg) “Substitute Award” means an Award granted under the circumstances described
in Section 21 of the Plan.
(hh) “Successor” with respect to a Participant means the legal representative of
an incompetent Participant, and if the Participant is deceased the estate of the
Participant or the person or persons who may, by bequest or inheritance, or
pursuant to the terms of an Award, acquire the right to exercise an Option or
Stock Appreciation Right or to receive cash and/or Shares issuable in
satisfaction of an Award in the event of the Participant’s death.
(ii) “Term” means the period during which an Option or Stock Appreciation Right
may be exercised or the period during which the restrictions or terms and
conditions placed on Restricted Stock or any other Award are in effect.
(jj) “Transferee” means any “family member” of a Participant as the term is
defined in General Instruction A(5) to Form S-8 under the Securities Act of
1933, as amended.
2.2 Gender and Number. Except when otherwise indicated by the context, reference
to the masculine gender shall include, when used, the feminine gender and any
term used in the singular shall also include the plural.
3. Administration and Indemnification.
3.1 Administration.
(a) The Committee shall administer the Plan. The Committee shall have exclusive
power to (i) make Awards, (ii) determine when and to whom Awards will be
granted, the form of each Award, the amount of each Award, and any other terms
or conditions of each Award consistent with the Plan, and (iii) determine
whether, to what extent and under what circumstances, Awards may be settled,
paid or exercised in cash, Shares or other Awards, or other property or
canceled, forfeited or suspended. Each Award shall be subject to an Agreement
authorized by the Committee. A majority of the members of the Committee shall
constitute a quorum for any meeting of the Committee, and acts of a majority of
the members present at any meeting at which a quorum is present or the acts
unanimously approved in writing by all members of the Committee shall be the
acts of the Committee. Any such action of the Committee shall be valid and
effective even if any member of the Committee at the time of the action is later
determined not to have satisfied all of the criteria for membership in clauses
(i), (ii) and (iii) of Section 2(f). Notwithstanding the foregoing, the Board
shall have the sole and exclusive power to administer the Plan with respect to
Awards granted to Non-Employee Directors.
(b) Solely for purposes of determining and administering Awards to Participants
who are not Insiders, the Committee may delegate all or any portion of its
authority under the Plan to one or more persons who are not Non-Employee
Directors.
(c) To the extent within its discretion and subject to Plan Sections 16, 17, and
19, the Committee may amend the terms and conditions of any outstanding Award.
(d) It is the intent that the Plan and all Awards granted pursuant to it shall
be administered by the Committee so as to permit the Plan and Awards to comply
with Exchange Act Rule 16b-3, except in such instances as the Committee, in its
discretion, may so provide. If any provision of the Plan or of any Award would
otherwise frustrate or conflict with the intent expressed in this
Section 3.1(d), that provision to the extent possible shall be interpreted and
deemed amended in the manner determined by the Committee so as to avoid the
conflict. To the extent of any remaining irreconcilable conflict with this
intent, the provision shall be deemed void as applicable to Insiders to the
extent permitted by law and in the manner deemed advisable by the Committee.
(e) The Committee’s interpretation of the Plan and of any Award or Agreement
made under the Plan and all related decisions or resolutions of the Board or
Committee shall be final and binding on all parties with an interest therein.
Consistent with its terms, the Committee shall have the power to establish,
amend or waive regulations to administer the Plan. In carrying out any of its
responsibilities, the Committee shall have discretionary authority to construe
the terms of the Plan and any Award or Agreement made under the Plan.
(f) The Committee may grant Awards to Employees and other eligible service
providers who are foreign nationals, who are located outside of the United
States or who are not compensated from a payroll maintained in the United
States, or who are otherwise subject to (or could cause the Company to be
subject to) legal or regulatory requirements of countries outside of the United
States, on such terms and conditions different from those specified in the Plan
as may, in the judgment of the Committee, be necessary or desirable to comply
with applicable foreign laws and regulatory requirements and to promote
achievement of the purposes of the Plan. In connection therewith, the Committee
may establish such sub-plans and modify exercise procedures and other Plan rules
and procedures to the extent such actions are deemed necessary or desirable, and
may take any other action that it deems advisable to obtain local regulatory
approvals or to comply with any necessary local governmental regulatory
exemptions.

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3.2 Indemnification. Each person who is or shall have been a member of the
Committee, or of the Board, and any other person to whom the Committee delegates
authority under the Plan, shall be indemnified and held harmless by the Company,
to the extent permitted by law, against and from any loss, cost, liability or
expense that may be imposed upon or reasonably incurred by such person in
connection with or resulting from any claim, action, suit or proceeding to which
such person may be a party or in which such person may be involved by reason of
any action taken or failure to act, made in good faith, under the Plan and
against and from any and all amounts paid by such person in settlement thereof,
with the Company’s approval, or paid by such person in satisfaction of any
judgment in any such action, suit or proceeding against such person, provided
such person shall give the Company an opportunity, at the Company’s expense, to
handle and defend the same before such person undertakes to handle and defend it
on such person’s own behalf. The foregoing right of indemnification shall not be
exclusive of any other rights of indemnification to which such person or persons
may be entitled under the Company’s Certificate of Incorporation or Bylaws, as a
matter of law, or otherwise, or any power that the Company may have to indemnify
them or hold them harmless.
4. Shares Available Under the Plan and Maximum Awards.
4.1 Number of Shares Available for Grants. Subject to adjustment as provided in
Sections 4.1(a) and 17 herein, the number of Shares that may be the subject of
Awards and issued to Participants under the Plan shall be 2,250,000. After the
Effective Date, no additional awards may be granted under the Prior Plans. Any
Shares that are subject to Awards of Options shall be counted against the
maximum Share limitation as one Share for every one Share granted, and Awards of
Stock Appreciation Rights shall be counted against this maximum Share limitation
as equal to the number of Shares to which such Stock Appreciation Rights relate.
Any Shares that are subject to Full Value Awards shall be counted against this
maximum Share limitation as 2.0 Shares for every one Share granted. Substitute
Awards shall not be counted against this maximum Share limitation, nor shall
they reduce the number of Shares authorized for grant to a Participant in any
calendar year. The Shares to be delivered under the Plan will be made available
from authorized but unissued Shares or issued Shares that are held in the
Company’s treasury.
(a) Any Shares subject to an Award under this Plan, or to an award granted under
one of the Prior Plans that is outstanding on the Effective Date (a “Prior Plan
Award”), that expires, is forfeited, cancelled, returned to the Company for
failure to satisfy vesting requirements, is settled for cash or otherwise
terminates without payment being made thereunder shall, to the extent of such
expiration, forfeiture, cancellation, return, cash settlement or termination,
again be available for grant under the Plan. Each Share that again becomes
available for grant pursuant to the preceding sentence shall increase the total
number of Shares remaining available for Awards by (i) one Share if such Share
was subject to an Option or Stock Appreciation Right granted under the Plan or
to a stock option or stock appreciation right granted under one of the Prior
Plans, (ii) 2.0 Shares if such Share was subject to a Full Value Award granted
under the Plan or under the 2013 Plan, or (iii) 1.3 Shares if such Share was
subject to a Full Value Award granted under the 2000 Plan. The following Shares
will, however, continue to be charged against the foregoing maximum Share
limitation and will not again become available for grant: (i) Shares tendered by
the Participant or withheld by the Company in payment of the purchase price of
an Option, (ii) Shares tendered by the Participant or withheld by the Company to
satisfy any tax withholding obligation with respect to an Award, (iii) Shares
subject to a Stock Appreciation Right that are not issued in connection with the
settlement of the Stock Appreciation Right upon its exercise, and (iv) Shares
repurchased by the Company with proceeds received from the exercise of a stock
option issued under this Plan or the Prior Plan.
(b) Where two or more types of Awards (all of which are payable in Shares) are
granted to a Participant in tandem with each other, such that the exercise of
one type of Award with respect to a number of Shares cancels at least an equal
number of Shares of the other, the number of Shares to be counted against the
maximum Share limitation shall be the maximum number of Shares available under
the larger of the two Awards.
(c) If a company acquired by the Company or any Subsidiary or with which the
Company or any Subsidiary combines has shares available under a pre-existing
plan approved by stockholders and not adopted in contemplation of such
acquisition or combination, the number of shares remaining available for grant
pursuant to the terms of such pre-existing plan (as adjusted, to the extent
appropriate, using the exchange ratio or other adjustment or valuation ratio or
formula used in such acquisition or combination to determine the consideration
payable to the holders of common stock of the entities party to such acquisition
or combination) may be used for Awards under the Plan and shall not reduce the
number of Shares authorized for grant under the Plan. Awards using such
available shares shall not be made after the date awards or grants could have
been made under the terms of the pre-existing plan, absent the acquisition or
combination, and shall only be made to individuals who were not Employees or
Non-Employee Directors prior to such acquisition or combination.
 
(d) Additional rules for determining the number of Shares granted under the Plan
may be made by the Committee as it deems necessary or desirable.

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(e) No fractional Shares may be issued under the Plan; however, cash shall be
paid in lieu of any fractional Share in settlement of an Award.
4.2 Individual Award Limitations. Subject to adjustment pursuant to Plan
Section 17, the maximum number of Shares that may be awarded to a Participant in
any calendar year in the form of Options is 350,000, and the maximum number of
Shares that may be awarded to a Participant in any calendar year in the form of
Stock Appreciation Rights is 175,000.
5. Eligibility. Participation in the Plan shall be limited to Employees,
Non-Employee Directors and any consultant or advisor who is a natural person and
who provides services to the Company or any Affiliate (other than in connection
with (i) the offer or sale of securities in a capital-raising transaction or
(ii) directly or indirectly promoting or maintaining a market in Company
securities). The granting of Awards is solely at the discretion of the
Committee, except that Incentive Stock Options may only be granted to Employees.
References herein to “employed,” “employment” or similar terms (except
“Employee”) shall include the providing of services to the Company or an
Affiliate as a Non-Employee Director, consultant or advisor. Neither the
transfer of employment of a Participant between any of the Company or its
Affiliates, nor a leave of absence granted to such Participant and approved by
the Committee, shall be deemed a termination of employment for purposes of the
Plan.
6. General Terms of Awards.
6.1 Amount of Award. Each Agreement shall set forth the number of Shares of
Restricted Stock, Stock or Stock Units subject to the Agreement, or the number
of Shares to which the Option subject to the Agreement applies or with respect
to which payment upon the exercise of the Stock Appreciation Right subject to
the Agreement is to be determined, as the case may be, together with such other
terms and conditions applicable to the Award as determined by the Committee
acting in its sole discretion.
6.2 Term. Each Agreement, other than those relating solely to Awards of Shares
without restrictions, shall set forth the Term of the Option, Stock Appreciation
Right, Restricted Stock, Stock Unit or other Award or the Performance Cycle for
any performance-based Award, as the case may be. Acceleration of the expiration
of the applicable Term is permitted, upon such terms and conditions as shall be
set forth in the Agreement, which may, but need not, include, without
limitation, acceleration in the event of the Participant’s death or retirement.
Acceleration of the Performance Cycle of any performance-based Awards shall be
subject to Plan Section 6.6. Each award granted to a Participant shall have such
Term as the Committee shall determine at the time of grant; provided, however,
that any such Term shall not exceed eight (8) years.
6.3 Transferability. Except as provided in this Section, during the lifetime of
a Participant to whom an Award is granted, only that Participant (or that
Participant’s legal representative) may exercise an Option or Stock Appreciation
Right, or receive payment with respect to Stock Units or any other Award. No
Award of Restricted Stock (before the expiration of the restrictions), Options,
Stock Appreciation Rights or Stock Units or other Award may be sold, assigned,
transferred, exchanged or otherwise encumbered other than to a Successor in the
event of a Participant’s death or pursuant to a qualified domestic relations
order as defined in the Code or Title 1 of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”), or the rules thereunder; any
attempted transfer in violation of this Section 6.3 shall be of no effect.
Notwithstanding the immediately preceding sentence, the Committee, in an
Agreement or otherwise at its discretion, may provide that the Award (other than
Incentive Stock Options) may be transferable to a Transferee if the Participant
does not receive any consideration for the transfer. Any Award held by a
Transferee shall continue to be subject to the same terms and conditions that
were applicable to that Award immediately before the transfer thereof to the
Transferee. For purposes of any provision of the Plan relating to notice to a
Participant or to acceleration or termination of an Award upon the death,
disability or termination of employment of a Participant, the references to
“Participant” shall mean the original grantee of an Award and not any
Transferee.
 
6.4 Termination of Employment. Except as otherwise determined by the Committee
or provided by the Committee in an Agreement, in case of a Participant’s
termination of employment (which includes other service relationships as
provided in Section 5), the following provisions shall apply:
(a) Options and Stock Appreciation Rights.
(i) If a Participant’s employment with the Company and its Affiliates terminates
because of the Participant’s death, then any Option or Stock Appreciation Right
that has not expired or been terminated shall become exercisable in full if the
Participant’s employment has been continuous between the date the Option or
Stock Appreciation Right was granted and a date not more than three months prior
to such death, and may be exercised by the Participant’s Successor at any time,
or from time to time, within one year after the date of the Participant’s death.
(ii) If a Participant’s employment with the Company and its Affiliates
terminates because the Participant is disabled (within the meaning of
Section 22(e)(3) of the Code), then any Option or Stock Appreciation Right that

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has not expired or been terminated shall become exercisable in full if the
Participant’s employment has been continuous between the date the Option or
Stock Appreciation Right was granted and the date of such disability, and the
Participant or the Participant’s Successor may exercise such Option or Stock
Appreciation Right at any time, or from time to time, within one year after the
date of the Participant’s disability.
(iii) If a Participant’s employment terminates for any reason other than death
or disability, then any Option or Stock Appreciation Right that has not expired
or been terminated shall remain exercisable for three months after termination
of the Participant’s employment, but, unless otherwise provided in the
Agreement, only to the extent that such Option or Stock Appreciation Right was
exercisable immediately prior to such Participant’s termination of employment;
provided, however, that if the Participant is a Non-Employee Director, the
Option or Stock Appreciation Right shall remain exercisable until the expiration
of the Term after such Non-Employee Director ceases to be a director of the
Company but, unless otherwise provided in the Agreement, only to the extent that
such Option or Stock Appreciation Right was exercisable immediately prior to
such Non-Employee Director ceasing to be a director.
(iv) Notwithstanding the foregoing Plan Sections 6.4(a)(i), (ii) and (iii), in
no event shall an Option or a Stock Appreciation Right be exercisable after the
expiration of the Term of such Award. Any Option or Stock Appreciation Right
that is not exercised within the periods set forth in Plan Sections 6.4 (i),
(ii) and (iii), except as otherwise provided by the Committee in the Agreement,
shall terminate as of the end of the periods described in such Sections.
(b) Performance-Based Full Value Awards. If a Participant’s employment with the
Company and its Affiliates terminates during a Performance Cycle because of
death or disability, or under other circumstances provided by the Committee in
its discretion in the Agreement or otherwise, the Participant, unless the
Committee shall otherwise provide in the Agreement, shall be entitled to a
payment with respect to a performance-based Full Value Award at the end of the
Performance Cycle based upon the extent to which achievement of performance
goals was satisfied at the end of such period (as determined at the end of the
Performance Cycle) and prorated for the portion of the Performance Cycle during
which the Participant was employed by the Company or its Affiliates. Except as
provided in this Section 6.4(b) or in the Agreement, if a Participant’s
employment or other service relationship with the Company and its Affiliates
terminates during a Performance Cycle, then such Participant shall not be
entitled to any payment with respect to that Performance Cycle.
(c) Time Vested Restricted Stock and Stock Unit Awards. Unless otherwise
provided in the Agreement, in case of a Participant’s death or disability, the
Participant shall be entitled to have vest a number of Shares of Restricted
Stock or a number of Stock Units under outstanding Awards subject only to
service-based vesting that has been prorated for the portion of the Term of the
Awards during which the Participant was employed by the Company and its
Affiliates, and, with respect to such Shares or Stock Units, all restrictions
shall lapse. Any Shares of Restricted Stock or Stock Units that do not vest and
as to which restrictions do not lapse under the preceding sentence shall
terminate at the date of the Participant’s termination of employment and such
Shares of Restricted Stock or Stock Units shall be forfeited to the Company.
6.5 Rights as Stockholder. Each Agreement shall provide that a Participant shall
have no rights as a stockholder with respect to any securities covered by an
Award unless and until the date the Participant becomes the holder of record of
the Stock, if any, to which the Award relates.
6.6 Performance-Based Awards. Any Award may be granted as a performance-based
Award if the Committee establishes one or more measures of Company, Subsidiary,
business unit or individual performance which must be attained, and the
Performance Cycle over which the specified performance is to be attained, as a
condition to the vesting, exercisability, lapse of restrictions and/or
settlement in cash or Shares of such Award. In connection with any such Award,
the Committee shall determine the extent to which performance goals have been
attained and other applicable terms and conditions have been satisfied, and the
degree to which vesting, exercisability, lapse of restrictions and/or settlement
in cash or Shares of such Award has been earned. Any performance-based Award
that is intended by the Committee to qualify as Performance-Based Compensation
shall additionally be subject to the requirements of Section 12 of this Plan.
Except as provided in Section 12 with respect to Performance-Based Compensation,
the Committee shall also have the authority to provide, in an Agreement or
otherwise, for the acceleration of a Performance Cycle and an adjustment or
waiver of the achievement of performance goals upon the occurrence of certain
events, which may, but need not include, without limitation, a Fundamental
Change, a recapitalization, a change in the accounting practices of the Company,
a change in a Participant’s title or employment responsibilities, a
Participant’s death or retirement or, with respect to settlements in Shares with
respect to an Award, a reclassification, stock dividend, stock split or stock
combination as provided in Plan Section 17. An Agreement also may provide for a
limitation on the value of an Award that a Participant may receive.
6.7 Dividends and Dividend Equivalents. Any dividends or distributions paid with
respect to Shares that are subject to the unvested portion of a Restricted Stock
Award will be subject to the same restrictions as the Shares to which such

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dividends or distributions relate, except for regular cash dividends on Shares
subject to the unvested portion of a Restricted Stock Award that is subject only
to service-based vesting conditions. In its discretion, the Committee may
provide in an Agreement for a Stock Unit Award or an Other Stock-Based Award
that the Participant will be entitled to receive dividend equivalents on the
units or other Share equivalents subject to the Award based on dividends
actually declared on outstanding Shares. The terms of any dividend equivalents
will be as set forth in the applicable Award Agreement, including the time and
form of payment and whether such dividend equivalents will be credited with
interest or deemed to be reinvested in additional units or Share equivalents.
Any dividend equivalents payable with respect to the unvested portion of a Stock
Unit Award or an Other Stock-Based Award that is performance-based within the
meaning of Section 6.6 will be subject to the same restrictions as the units or
other Share equivalents to which such dividend equivalents relate. The Committee
may, in its discretion, provide in Award Agreements for restrictions on
dividends and dividend equivalents in addition to those specified in this
Section 6.7.
6.8 Minimum Vesting Period. The Committee may provide in an Agreement for such
vesting conditions as it may determine, subject to the following limitations on
Full Value Awards:
(1) A Full Value Award that vests solely as the result of the passage of time
and continued employment by the Participant shall be subject to a vesting period
of not less than three years from the grant date of the Award (but permitting
pro rata vesting over such vesting period); and
(2) A Full Value Award whose vesting is subject to the satisfaction of
performance goals over a Performance Cycle shall be subject to a Performance
Cycle of not less than one year.
The minimum vesting periods specified in clauses (1) and (2) above will not,
however, apply in the following situations: (i) an Award made to attract a key
executive to join the Company; (ii) upon a Fundamental Change; (iii) upon
termination of Service due to death, disability or retirement; (iv) Awards made
in payment of or exchange for other earned compensation (including
performance-based Awards); (v) any Substitute Award that does not reduce the
vesting period of the award being replaced; (vi) Awards made to Non-Employee
Directors; and (vii) Awards involving an aggregate number of Shares not in
excess of 10% of the number of Shares specified in the first sentence of
Section 4.1.
7. Restricted Stock Awards.
7.1 Nature of Award. An Award of Restricted Stock under the Plan shall consist
of Shares subject to restrictions on transfer and conditions of forfeiture,
which restrictions and conditions shall be included in the applicable Agreement.
The Committee may provide for the lapse or waiver of any such restrictions or
conditions and the vesting of the Shares based on such factors or criteria as
the Committee, in its sole discretion, may determine.
7.2 Stock Certificates. Except as otherwise provided in the applicable
Agreement, each Stock certificate issued with respect to an Award of Restricted
Stock shall either be deposited with the Company or its designee, together with
an assignment separate from the certificate, in blank, signed by the
Participant, or bear such legends with respect to the restricted nature of the
Restricted Stock evidenced thereby as shall be provided for in the applicable
Agreement.
7.3 Vesting of Awards. The Agreement shall describe the terms and conditions by
which the restrictions and conditions of forfeiture upon awarded Restricted
Stock shall lapse and the Shares vest. Upon the lapse of the restrictions and
conditions, Shares free of restrictive legends, if any, relating to such
restrictions shall be issued to the Participant or a Successor or Transferee.
7.4 Rights as a Stockholder. Except as otherwise provided in the Plan, a
Participant or a Transferee with a Restricted Stock Award shall have all the
rights of a stockholder, including the right to vote the Shares of Restricted
Stock.
8. Other Awards.
8.1 Other Stock-Based Awards. The Committee may from time to time grant Stock
and other Awards that are valued by reference to and/or payable in whole or in
part in Shares under the Plan. The Committee, in its sole discretion, shall
determine the terms and conditions of such Awards, provided that such Awards
shall not be inconsistent with the terms and purposes of the Plan. The Committee
may, at its sole discretion, direct the Company to issue Shares subject to
restrictive legends and/or stop transfer instructions that are consistent with
the terms and conditions of the Award to which the Shares relate.
8.2 Cash Incentive Awards. A Cash Incentive Award shall be considered a
performance-based Award for purposes of, and subject to, Section 6.6, the
payment of which shall be contingent upon the degree to which one or more
specified performance goals have been achieved over a specified Performance
Cycle. Cash Incentive Awards may be granted to any Participant in such amounts
and upon such terms and at such times as shall be determined by the Committee,
and may be denominated in units that have a dollar value established by the
Committee as of the applicable grant date. Following the

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completion of the applicable Performance Cycle and the vesting of a Cash
Incentive Award, payment of the settlement amount of the Award to the
Participant shall be made at such time or times in the form of cash or other
forms of Awards under the Plan (valued for these purposes at their grant date
fair value) or a combination of cash and other forms of Awards as determined by
the Committee and specified in the applicable Agreement. If a Cash Incentive
Award is not by its terms exempt from the requirements of Code Section 409A,
then the applicable Agreement shall contain terms and conditions intended to
avoid adverse tax consequences specified in Code Section 409A.
 
9. Stock Options.
9.1 Terms of All Options.
(a) An Option shall be granted pursuant to an Agreement as either an Incentive
Stock Option or a Non-Statutory Stock Option. The purchase price of each Share
subject to an Option shall be determined by the Committee and set forth in the
Agreement, but shall not be less than the Fair Market Value of a Share as of the
date the Option is granted, except in the case of Substitute Awards.
(b) The purchase price of the Shares with respect to which an Option is
exercised shall be payable in full at the time of exercise, provided that to the
extent permitted by law, the Agreement may permit some or all Participants to
simultaneously exercise Options and sell the Shares thereby acquired pursuant to
a brokerage or similar relationship and use the proceeds from the sale as
payment of the purchase price of the Shares. The purchase price may be payable
in cash or in such other manner as the Committee may permit, including by
delivery to the Company of Shares (by actual delivery or attestation) already
owned by the Participant or by the Company withholding Shares otherwise issuable
to the Participant upon the exercise of the Option (in either case, such Shares
delivered or withheld having a Fair Market Value as of the date the Option is
exercised equal to the purchase price of the Shares being purchased pursuant to
the Option), or a combination thereof, as determined by the Committee, but no
fractional Shares will be issued or accepted.
(c) Each Option shall be exercisable in whole or in part on the terms provided
in the Agreement. In no event shall any Option be exercisable at any time after
the expiration of its Term. When an Option is no longer exercisable, it shall be
deemed to have lapsed or terminated.
(d) Each Option granted to a Participant shall expire at such time as the
Committee shall determine at the time of grant; provided, however, that no
Option shall be exercisable later than the eight (8th)  anniversary date of its
grant.
9.2 Incentive Stock Options. In addition to the other terms and conditions
applicable to all Options:
(a) The maximum number of Shares that may be issued upon the exercise of
Incentive Stock Options shall equal the maximum number of Shares that may be the
subject of Awards and issued under the Plan as provided in the first sentence of
Section 4.1.
(b) The aggregate Fair Market Value (determined as of the date the Option is
granted) of the Shares with respect to which Incentive Stock Options held by an
individual first become exercisable in any calendar year (under the Plan and all
other incentive stock option plans of the Company and its Affiliates) shall not
exceed $100,000 (or such other limit as may be required by the Code) if this
limitation is necessary to qualify the Option as an Incentive Stock Option. To
the extent an Option or Options granted to a Participant exceed this limit, the
Option(s) shall be treated as Non-Statutory Stock Option(s).
(c) The Agreement covering an Incentive Stock Option shall contain such other
terms and provisions that the Committee determines necessary to qualify this
Option as an Incentive Stock Option.
(d) Notwithstanding any other provision of the Plan to the contrary, no
Participant may receive an Incentive Stock Option under the Plan if, at the time
the Award is granted, the Participant owns (after application of the rules
contained in Code Section 424(d), or its successor provision), Shares possessing
more than 10% of the total combined voting power of all classes of stock of the
Company or its Subsidiaries, unless (i) the exercise price for all Shares
subject to that Incentive Stock Option is at least 110% of the Fair Market Value
of a Share on the date of grant and (ii) that Option is not exercisable after
the date five years from the date that Incentive Stock Option is granted.
10. Stock Appreciation Rights. An Award of a Stock Appreciation Right shall
entitle the Participant (or a Successor or Transferee), subject to terms and
conditions determined by the Committee, to receive upon exercise of the Stock
Appreciation Right all or a portion of the excess of (i) the Fair Market Value
of a specified number of Shares as of the date of exercise of the Stock
Appreciation Right over (ii) a specified price that shall not be less than 100%
of the Fair Market Value of such Shares as of the date of grant of the Stock
Appreciation Right. A Stock Appreciation Right may be granted in connection with
part or all of, in addition to, or completely independent of an Option or any
other Award under the Plan. If issued in connection with a previously or
contemporaneously granted Option, the Committee may impose a condition that
exercise of a Stock Appreciation

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Right cancels a pro rata portion of the Option with which it is connected and
vice versa. Each Stock Appreciation Right may be exercisable in whole or in part
on the terms provided in the Agreement. No Stock Appreciation Right shall be
exercisable at any time after the expiration of its Term. When a Stock
Appreciation Right is no longer exercisable, it shall be deemed to have lapsed
or terminated. Upon exercise of a Stock Appreciation Right, payment to the
Participant or a Successor or Transferee shall be made at such time or times as
shall be provided in the Agreement in the form of cash, Shares or a combination
of cash and Shares as determined by the Committee. The Agreement may provide for
a limitation upon the amount or percentage of the total appreciation on which
payment (whether in cash and/or Shares) may be made in the event of the exercise
of a Stock Appreciation Right. The Term of a Stock Appreciation Right granted
under the Plan shall be determined by the Committee, in its sole discretion;
provided, however, that such Term shall not exceed eight (8) years.
11. Stock Units.
11.1 Vesting and Consideration. A Stock Unit shall consist of the right to
receive, in cash and/or in Shares as determined by the Committee, the Fair
Market Value of one or more Shares, with any Stock Unit Award subject to such
vesting conditions, and the corresponding lapse of forfeiture conditions and
other restrictions, based on such factors and occurring over such period of time
as the Committee may determine in its discretion. The Committee may provide
whether any consideration other than Services must be received by the Company or
any Affiliate as a condition precedent to the settlement of a Stock Unit Award.
11.2 Payment of Award. Following the vesting of a Stock Unit Award, settlement
of the Award and payment to the Participant shall be made at such time or times
in the form of cash, Shares (which may themselves be considered Restricted Stock
under the Plan subject to restrictions on transfer and forfeiture conditions) or
a combination of cash and Shares as determined by the Committee. If the Stock
Unit Award is not by its terms exempt from the requirements of Code
Section 409A, then the applicable Agreement shall contain terms and conditions
intended to avoid adverse tax consequences specified in Code Section 409A.
12. Performance-Based Compensation.
12.1 Designation of Awards. If the Committee determines at the time a Full Value
Award or a Cash Incentive Award is granted to a Participant that such
Participant is, or is likely to be, a “covered employee” for purposes of Code
Section 162(m) as of the end of the tax year in which the Company would
ordinarily claim a tax deduction in connection with such Award, then the
Committee may provide that this Section 12 will be applicable to such Award,
which shall be considered Performance-Based Compensation.
12.2 Compliance with Code Section 162(m). If an Award is subject to this
Section 12, then the lapsing of restrictions thereon and the distribution of
cash, Shares or other property pursuant thereto, as applicable, shall be subject
to the achievement over the applicable Performance Cycle of one or more
performance goals based on one or more of the performance measures specified in
Section 12.4. The Committee will select the applicable performance measure(s)
and specify the performance goal(s) based on those performance measures for any
Performance Cycle, specify in terms of an objective formula or standard the
method for calculating the amount payable to a Participant if the performance
goal(s) are satisfied, and certify the degree to which applicable performance
goals have been satisfied and any amount payable in connection with an Award
subject to this Section 12, all within the time periods prescribed by and
consistent with the other requirements of Code Section 162(m). In specifying the
performance goals applicable to any performance period, the Committee may
provide that one or more objectively determinable adjustments shall be made to
the performance measures on which the performance goals are based, which may
include adjustments that would cause such measures to be considered “non-GAAP
financial measures” within the meaning of Rule 101 under Regulation G
promulgated by the Securities and Exchange Commission. The Committee may also
adjust performance goals for a Performance Cycle to the extent permitted by Code
Section 162(m) in connection with an event described in Section 17 to prevent
the dilution or enlargement of a Participant’s rights with respect to
Performance-Based Compensation. The Committee may adjust downward, but not
upward, any amount determined to be otherwise payable in connection with such an
Award. The Committee may also provide, in an Agreement or otherwise, that the
achievement of specified performance goals in connection with an Award subject
to this Section 12 may be waived upon the death or Disability of the Participant
or under any other circumstance with respect to which the existence of such
possible waiver will not cause the Award to fail to qualify as
“performance-based compensation” under Code Section 162(m).
12.3 Limitations. With respect to Awards of Performance-Based Compensation, the
maximum number of Shares that may be the subject of any Full Value Awards that
are denominated in Shares or Share equivalents and that are granted to any one
Participant during any calendar year shall not exceed 175,000 Shares (subject to
adjustment as provided in Section 17). The maximum amount payable with respect
to any Cash Incentive Awards and Full Value Awards that are denominated other
than in Shares or Share equivalents and that are granted to any one Participant
during any calendar year shall not exceed $1,000,000.

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12.4 Performance Measures. For purposes of any Full Value Award or Cash
Incentive Award considered Performance-Based Compensation subject to this
Section 12, the performance measures to be utilized shall be limited to one or a
combination of two or more of the following: revenue or net sales; gross profit;
operating profit; net income; earnings before one or more of interest, taxes,
depreciation, amortization and other adjustments; profitability as measured by
return ratios (including, but not limited to, return on assets, return on
equity, return on investment and return on revenues or gross profit) or by the
degree to which any of the foregoing earnings measures exceed a percentage of
revenues or gross profit; cash flow; market share; margins (including one or
more of gross, operating and net earnings margins); stock price; total
stockholder return; asset quality; non-performing assets; operating assets;
operating expenses; balance of cash, cash equivalents and marketable securities;
improvement in or attainment of expense levels or cost savings; operating asset
turnover; accounts receivable levels (including measured in terms of days sales
outstanding); economic value added; improvement in or attainment of working
capital levels; employee retention; customer satisfaction; implementation or
completion of critical projects; and growth in customer base. Any performance
goal based on one or more of the foregoing performance measures may, in the
Committee’s discretion, be expressed in absolute amounts, on a per share basis
(basic or diluted), relative to one or more other performance measures, as a
growth rate or change from preceding periods, or as a comparison to the
performance of specified companies or a published or special index (including
stock market indices) or other external measures, may relate to one or any
combination of Company, Affiliate or business unit performance, and may be
expressed in terms of differing levels of achievement, such as threshold, target
and maximum levels of achievement.
13. Effective Date and Duration of the Plan.
13.1 Effective Date. The Plan shall become effective on the date it is approved
by the Company’s stockholders, which shall be considered the date of its
adoption for purposes of Treasury Regulation §1.422-2(b)(2)(i). No Awards shall
be made under the Plan prior to its Effective Date. If the Company’s
stockholders fail to approve the Plan within 12 months of its approval by the
Board, the Plan shall be of no further force or effect.
13.2 Duration of the Plan. The Plan shall remain in effect until all Stock
subject to it shall be distributed, all Awards have expired or lapsed, the Plan
is terminated pursuant to Plan Section 16, or the tenth anniversary of the
effective date of the Plan, whichever occurs first (the “Termination Date”).
Awards made before the Termination Date may be exercised, vested or otherwise
effectuated beyond the Termination Date unless limited in the Agreement or
otherwise. No Award of an Incentive Stock Option shall be made more than 10
years after the Effective Date of the Plan (or such other limit as may be
required by the Code) if this limitation is necessary to qualify the Option as
an Incentive Stock Option. The date and time at which an Award is made or
granted shall be the date and time the Committee approves the grant of the
Award, or such later date and time as may be specified by the Committee at the
time it approves the Award.
14. Plan Does Not Affect Employment Status.
14.1 No Entitlement to Award. Status as an eligible Employee or other service
provider shall not be construed as a commitment that any Award will be made
under the Plan to that eligible Employee or service provider or to eligible
individuals generally.
14.2 No Right to Continued Employment. Nothing in the Plan or in any Agreement
or related documents shall confer upon any Participant any right to continue in
the employment of the Company or any Affiliate or constitute any contract of
employment or affect any right that the Company or any Affiliate may have to
change such person’s compensation, other benefits, job responsibilities, or
title, or to terminate the employment of such person with or without cause.
15. Tax Withholding. The Company shall have the right to withhold from any cash
payment under the Plan to a Participant or other person (including a Successor
or a Transferee) an amount sufficient to cover any required withholding taxes.
The Company shall have the right to require a Participant or other person
receiving Shares under the Plan to pay the Company a cash amount sufficient to
cover any required withholding taxes before actual receipt of those Shares. In
lieu of all or any part of a cash payment from a person receiving Shares under
the Plan, the Committee may permit the individual to cover all or any part of
the required withholdings (up to the Participant’s minimum required tax
withholding rate) through a reduction of the number of Shares delivered or
delivery or tender to the Company of Shares held by the Participant or other
person, in each case valued in the same manner as used in computing the
withholding taxes under the applicable laws.
16. Amendment, Modification and Termination.
16.1 Amendment, Modification and Termination of Plan. The Board may at any time
and from time to time terminate, suspend or modify the Plan. No termination,
suspension, or modification of the Plan may materially and adversely affect any
right acquired by any Participant or Successor or Transferee under an Award
granted before the date of termination, suspension, or modification, unless
(i) otherwise agreed to by the Participant in the Agreement or otherwise, or
(ii) such action is necessary to comply with applicable law or stock exchange
rules. It will be conclusively presumed that any adjustment for changes in
capitalization provided for in Plan Sections 6.6 or 17 does not adversely affect
these rights.

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16.2 Amendment of Agreement. Subject to Section 19, the Committee may
unilaterally amend the terms of any Agreement previously granted, except that no
such amendment may materially and adversely affect the rights of any Participant
under the applicable Award without the Participant’s consent, unless such
amendment is necessary to comply with applicable law or stock exchange rules or
any compensation recovery policy as provided in Section 20.3.
17. Adjustment for Changes in Capitalization. In the event of any equity
restructuring (within the meaning of authoritative guidance issued by the
Financial Accounting Standards Board relating to stock-based compensation) that
causes the per Share value of Shares to change, such as a stock dividend, stock
split, spin off, rights offering, or recapitalization through a large,
nonrecurring cash dividend, the Committee shall cause there to be made an
equitable adjustment to (i) the number and kind of Shares that may be issued
under the Plan, (ii) the limitations on the number of Shares that may be issued
to an individual Participant as an Option or a Stock Appreciation Right or in
the form of Restricted Stock in any calendar year or that may be issued in the
form of Restricted Stock or Shares without restrictions and (iii) the number and
kind of Shares or, subject to Plan Section 6.6, Stock Units, subject to and the
exercise price (if applicable) of any then outstanding Awards of Options, Stock
Appreciation Rights, Restricted Stock, Stock Units or any other Awards related
to shares of Stock (to the extent such other Awards would not otherwise
automatically adjust in the equity restructuring); provided, in each case, that
with respect to Incentive Stock Options, no such adjustment shall be authorized
to the extent that such adjustment would cause such options to violate
Section 422(b) of the Code or any successor provision; provided further, with
respect to all Awards, no such adjustment shall be authorized to the extent that
such adjustment would cause the Awards to be subject to adverse tax consequences
under Section 409A of the Code. In the event of any other change in corporate
capitalization, such as a merger, consolidation, any reorganization (whether or
not such reorganization comes within the definition of such term in Section 368
of the Code), including a Fundamental Change (subject to Plan Section 18), or
any partial or complete liquidation of the Company, such equitable adjustments
described in the foregoing sentence may be made as determined to be appropriate
and equitable by the Committee to prevent dilution or enlargement of rights. In
either case, any such adjustment shall be conclusive and binding for all
purposes of the Plan. Unless otherwise determined by the Committee, the number
of Shares subject to an Award shall always be a whole number. In no event shall
an outstanding Option or Stock Appreciation Right be amended for the sole
purpose of reducing the exercise price or grant price thereof.
18. Fundamental Change. In the event of a proposed Fundamental Change, the
Committee may, but shall not be obligated to:
(a) if the Fundamental Change is a merger or consolidation or statutory share
exchange, make appropriate provision for the protection of the outstanding
Options and Stock Appreciation Rights by the substitution of options, stock
appreciation rights and appropriate voting common stock of the corporation
surviving any merger or consolidation or, if appropriate, the parent corporation
of the Company or such surviving corporation; or
(b) at least ten days before the occurrence of the Fundamental Change, declare,
and provide written notice to each holder of an Option or Stock Appreciation
Right of the declaration, that each outstanding Option and Stock Appreciation
Right, whether or not then exercisable, shall be canceled at the time of, or
immediately before the occurrence of the Fundamental Change in exchange for
payment to each holder of an Option or Stock Appreciation Right, within ten days
after the Fundamental Change, of cash equal to (i) for each Share covered by the
canceled Option, the amount, if any, by which the Fair Market Value (as defined
in this Section) per Share exceeds the exercise price per Share covered by such
Option or (ii) for each Stock Appreciation Right, the price determined pursuant
to Section 10, except that Fair Market Value of the Shares as of the date of
exercise of the Stock Appreciation Right, as used in clause (i) of Plan
Section 10, shall be deemed to mean Fair Market Value for each Share with
respect to which the Stock Appreciation Right is calculated determined in the
manner hereinafter referred to in this Section. At the time of the declaration
provided for in the immediately preceding sentence, each Stock Appreciation
Right and each Option shall immediately become exercisable in full and each
person holding an Option or a Stock Appreciation Right shall have the right,
during the period preceding the time of cancellation of the Option or Stock
Appreciation Right, to exercise the Option as to all or any part of the Shares
covered thereby or the Stock Appreciation Right in whole or in part, as the case
may be. In the event of a declaration pursuant to Plan Section 18(b), each
outstanding Option and Stock Appreciation Right granted pursuant to the Plan
that shall not have been exercised before the Fundamental Change shall be
canceled at the time of, or immediately before, the Fundamental Change, as
provided in the declaration.
Notwithstanding the foregoing, no person holding an Option or a Stock
Appreciation Right shall be entitled to the payment provided for in this
Section 18(b) if such Option or Stock Appreciation Right shall have terminated,
expired or been cancelled. For purposes of this Section 18 only, “Fair Market
Value” per Share means the cash plus the fair market value, as determined in
good faith by the Committee, of the non-cash consideration to be received per
Share by the stockholders of the Company upon the occurrence of the Fundamental
Change.
19. Prohibition on Repricing. Except pursuant to Section 17 of the Plan in
connection with an equity restructuring, or pursuant to Section 18 of the Plan
in connection with a Fundamental Change, in either case in order to prevent
dilution or enlargement of the benefits or potential benefits intended to be
provided under the Plan, no Option or Stock Appreciation Right granted under the
Plan may be amended to decrease the exercise price or grant price thereof, be
cancelled in exchange for the grant of any

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new Option or Stock Appreciation Right with a lower exercise or grant price or
any new Full Value Award, be repurchased by the Company or any Affiliate, or
otherwise be subject to any action that would be treated under accounting rules
or otherwise as a “repricing” of such Option or Stock Appreciation Right, unless
such action is first approved by the Company’s stockholders.
20. Forfeitures and Compensation Recovery.
20.1 Forfeiture for Cause. Notwithstanding any other provision of the Plan or an
Agreement, if a Participant’s employment is terminated for cause as defined in
this Section 20.1, then as of the date of such termination, any of the
Participant’s outstanding Awards that have not vested or been exercised by the
Participant will be forfeited to the Company. For purposes of this Section 20.1,
“cause” means the Participant: (i) committed a felony or a crime involving moral
turpitude or committed any other act or omission involving fraud, embezzlement
or any other act of dishonesty in the course of his employment by the Company or
an Affiliate which conduct damaged the Company or an Affiliate;
(ii) substantially and repeatedly failed to perform duties of the office held by
the Participant as reasonably directed by the Company or an Affiliate;
(iii) committed gross negligence or willful misconduct with respect to the
Company or an Affiliate; (iv) committed a material breach of any employment
agreement between the Participant and the Company or an Affiliate that is not
cured within ten (10) days after receipt of written notice thereof from the
Company or the Affiliate, as applicable; (v) failed, within ten (10) days after
receipt by the Participant of written notice thereof from the Company or an
Affiliate, to correct, cease or otherwise alter any failure to comply with
instructions or other action or omission which the Board reasonably believes
does or may materially or adversely affect the Company’s or an Affiliate’s
business or operations; (vi) committed misconduct which is of such a serious or
substantial nature that a reasonable likelihood exists that such misconduct will
materially injure the reputation of the Company or an Affiliate; (vii) harassed
or discriminated against the Company’s or an Affiliate’s employees, customers or
vendors in violation of the Company’s policies with respect to such matters;
(viii) misappropriated funds or assets of the Company or an Affiliate for
personal use or willfully violated the Company policies or standards of business
conduct as determined in good faith by the Board; (ix) failed, due to some
action or inaction on the part of the Participant, to have immigration status
that permits the Participant to maintain full-time employment with the Company
or an Affiliate in the United States in compliance with all applicable
immigration law; or (x) disclosed trade secrets of the Company or an Affiliate.
The findings and decision of the Committee or the Board, if applicable, with
respect to any such matter, including those regarding the acts of the
Participant and the damage done to the Company, will be final for all purposes.
No decision of the Committee, however, will affect the finality of the discharge
of the individual by the Company or an Affiliate.
20.2 Forfeiture Events. The Committee may specify in an Agreement that the
Participant’s rights, payments and benefits with respect to an Award shall be
subject to reduction, cancellation, forfeiture, or recoupment upon the
occurrence of certain specified events, in addition to any otherwise applicable
vesting or performance conditions of an Award. Such events may include, but
shall not be limited to, termination of employment for cause, termination of
employment for any other reason, violation of material policies of the Company
and its Affiliates, breach of noncompetition, confidentiality, or other
restrictive covenants that may apply to the Participant, or other conduct by the
Participant that is detrimental to the business or reputation of the Company and
its Affiliates.
20.3 Compensation Recovery Policy. Awards and any compensation associated
therewith may be made subject to forfeiture, recovery by the Company or other
action pursuant to any compensation recovery policy adopted by the Board or the
Committee at any time, including in response to the requirements of Section 10D
of the Exchange Act and any implementing rules and regulations thereunder, or as
otherwise required by law. Any Agreement may be unilaterally amended by the
Committee to comply with any such compensation recovery policy.
21. Corporate Mergers, Acquisitions, Etc. The Committee may also grant
Substitute Awards under the Plan in substitution for, or in connection with the
assumption of, existing options, stock appreciation rights, restricted stock or
other awards granted, awarded or issued by another corporation and assumed or
otherwise agreed to be provided for by the Company pursuant to or by reason of a
transaction involving a corporate merger, consolidation, acquisition of property
or stock, separation, reorganization or liquidation to which the Company or a
Subsidiary is a party. The terms and conditions of the Substitute Awards may
vary from the terms and conditions set forth in the Plan to the extent as the
Board at the time of the grant may deem appropriate to conform, in whole or in
part, to the provisions of the awards in substitution for which they are
granted.
22. Unfunded Plan. The Plan shall be unfunded and the Company shall not be
required to segregate any assets that may at any time be represented by Awards
under the Plan. Neither the Company, its Affiliates, the Committee, nor the
Board of Directors shall be deemed to be a trustee of any amounts to be paid
under the Plan nor shall anything contained in the Plan or any action taken
pursuant to its provisions create or be construed to create a fiduciary
relationship between the Company and/or its Affiliates, and a Participant or
Successor or Transferee. To the extent any person acquires a right to receive an
Award under the Plan, this right shall be no greater than the right of an
unsecured general creditor of the Company.
23. Limits of Liability.

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23.1 Contractual Liability Only. Any liability of the Company to any Participant
with respect to an Award shall be based solely upon contractual obligations
created by the Plan and the Award Agreement.
23.2 Liability Limit. Except as may be required by law, neither the Company nor
any member of the Board of Directors or of the Committee, nor any other person
participating in any determination of any question under the Plan, or in the
interpretation, administration or application of the Plan, shall have any
liability to any party for any action taken, or not taken, in good faith under
the Plan.
24. Compliance with Applicable Legal Requirements. No certificate for Shares
distributable pursuant to the Plan shall be issued and delivered unless the
issuance of the certificate complies with all applicable legal requirements
including, without limitation, compliance with the provisions of applicable
state securities laws, the Securities Act of 1933, as amended and in effect from
time to time or any successor statute, the Exchange Act and the requirements of
the exchanges on which the Company’s Shares may, at the time, be listed.
25. Deferrals and Settlements. The Committee may require or permit Participants
to elect to defer the issuance of Shares or the settlement of Awards in cash
under such rules and procedures as it may establish under the Plan. It may also
provide that deferred settlements include the payment or crediting of interest
on the deferral amounts.
26. Other Benefit and Compensation Programs. Payments and other benefits
received by a Participant under an Award made pursuant to the Plan shall not be
deemed a part of a Participant’s regular, recurring compensation for purposes of
the termination, indemnity or severance pay laws of any country and shall not be
included in, nor have any effect on, the determination of benefits under any
other employee benefit plan, contract or similar arrangement provided by the
Company or an Affiliate unless expressly so provided by such other plan,
contract or arrangement, or unless the Committee expressly determines that an
Award or portion of an Award should be included to accurately reflect
competitive compensation practices or to recognize that an Award has been made
in lieu of a portion of competitive cash compensation.
27. Beneficiary Upon Participant’s Death. To the extent that the transfer of a
Participant’s Award at his or her death is permitted under an Agreement, a
Participant’s Award shall be transferable at death to the estate or to the
person who acquires the right to succeed to the Award by bequest or inheritance.
28. Requirements of Law.
28.1 Governing Law. To the extent that federal laws do not otherwise control,
the Plan and all determinations made and actions taken pursuant to the Plan
shall be governed by the laws of the State of Minnesota without regard to its
conflicts-of-law principles and shall be construed accordingly.
 
28.2 Severability. If any provision of the Plan shall be held illegal or invalid
for any reason, the illegality or invalidity shall not affect the remaining
parts of the Plan, and the Plan shall be construed and enforced as if the
illegal or invalid provision had not been included.
29. Code Section 409A. It is intended that (i) all Awards of Options, Stock
Appreciation Rights and Restricted Stock under the Plan will not provide for the
deferral of compensation within the meaning of Code Section 409A and thereby be
exempt from Code Section 409A, and (ii) all other Awards under the Plan will
either not provide for the deferral of compensation within the meaning of Code
Section 409A, or will comply with the requirements of Code Section 409A, and the
Committee shall endeavor to structure Awards and administer and interpret the
Plan in accordance with this intent. The Plan and any Agreement may be
unilaterally amended by the Company in any manner deemed necessary or advisable
by the Committee or Board in order to maintain such exemption from or compliance
with Code Section 409A, and any such amendment shall conclusively be presumed to
be necessary to comply with applicable law. Notwithstanding anything to the
contrary in the Plan or any Agreement, with respect to any Award that
constitutes a deferral of compensation subject to Code Section 409A:
(1) If any amount is payable under such Award upon a termination of employment,
a termination of employment will be deemed to have occurred only at such time as
the Participant has experienced a “separation from service” as such term is
defined for purposes of Code Section 409A; and
(2) If any amount shall be payable with respect to any such Award as a result of
a Participant’s “separation from service” at such time as the Participant is a
“specified employee” within the meaning of Code Section 409A, then no payment
shall be made, except as permitted under Code Section 409A, prior to the first
business day after the earlier of (i) the date that is six months after the
Participant’s separation from Service or (ii) the Participant’s death. Unless
the Committee has adopted a specified employee identification policy as
contemplated by Code Section 409A, specified employees will be identified in
accordance with the default provisions specified under Code Section 409A.

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None of the Company, the Committee nor any other person involved with the
administration of this Plan shall in any way be responsible for ensuring the
exemption of any Award from, or compliance by any Award with, the requirements
of Code Section 409A. By accepting an Award under this Plan, each Participant
acknowledges that the Company has no duty or obligation to design or administer
the Plan or Awards granted thereunder in a manner that minimizes a Participant’s
tax liabilities, including the avoidance of any additional tax liabilities under
Code Section 409A.