exv10w2



Table of Contents







    Exhibit 10.2



 


 




    ADC
    TELECOMMUNICATIONS, INC.



 


 




    2008
    GLOBAL STOCK INCENTIVE PLAN



 












 







    TABLE OF
    CONTENTS



 











	 	 	 	 	 	 	 
	
 
	
 
	
 
	
 
	
    Page

	 

	

    Section 1.


	
 
	
    Purpose
	
 
	 
	

3	 

	

    Section 2.


	
 
	
    Definitions
	
 
	 
	
    3
	 

	

    Section 3.


	
 
	
    Administration
	
 
	 
	
    5
	 

	

    (a)


	
 
	
    Power and Authority of the Committee
	
 
	 
	

5	 

	

    (b)


	
 
	
    Delegation
	
 
	 
	
    5
	 

	

    (c)


	
 
	
    Power and Authority of the Board of Directors
	
 
	 
	
    5
	 

	

    Section 4.


	
 
	
    Shares Available for Awards
	
 
	 
	
    6
	 

	

    (a)


	
 
	
    Shares Available
	
 
	 
	
    6
	 

	

    (b)


	
 
	
    Accounting for Awards
	
 
	 
	
    6
	 

	

    (c)


	
 
	
    Adjustments
	
 
	 
	
    6
	 

	

    (d)


	
 
	
    Award Limitations Under the Plan
	
 
	 
	
    6
	 

	

    Section 5.


	
 
	
    Eligibility
	
 
	 
	
    7
	 

	

    Section 6.


	
 
	
    Awards
	
 
	 
	
    7
	 

	

    (a)


	
 
	
    Options
	
 
	 
	
    7
	 

	

    (b)


	
 
	
    Stock Appreciation Rights
	
 
	 
	
    7
	 

	

    (c)


	
 
	
    Restricted Stock and Restricted Stock Units
	
 
	 
	
    7
	 

	

    (d)


	
 
	
    Dividend Equivalents
	
 
	 
	
    8
	 

	

    (e)


	
 
	
    Performance Awards
	
 
	 
	
    8
	 

	

    (f)


	
 
	
    Stock Awards
	
 
	 
	
    9
	 

	

    (g)


	
 
	
    Other Stock-Based Awards
	
 
	 
	
    9
	 

	

    (h)


	
 
	
    General
	
 
	 
	
    9
	 

	

    Section 7.


	
 
	
    Amendment and Termination; Corrections
	
 
	 
	
    10
	 

	

    (a)


	
 
	
    Amendments to the Plan
	
 
	 
	
    10
	 

	

    (b)


	
 
	
    Amendments to Awards
	
 
	 
	
    10
	 

	

    (c)


	
 
	
    Correction of Defects, Omissions and Inconsistencies
	
 
	 
	
    10
	 

	

    Section 8.


	
 
	
    Income Tax Withholding
	
 
	 
	
    10
	 

	

    Section 9.


	
 
	
    General Provisions
	
 
	 
	
    11
	 

	

    (a)


	
 
	
    No Rights to Awards
	
 
	 
	
    11
	 

	

    (b)


	
 
	
    Award Agreements
	
 
	 
	
    11
	 

	

    (c)


	
 
	
    No Rights of Shareholders
	
 
	 
	
    11
	 

	

    (d)


	
 
	
    No Limit on Other Compensation Plans or Arrangements
	
 
	 
	
    11
	 

	

    (e)


	
 
	
    No Right to Employment or Directorship
	
 
	 
	
    11
	 

	

    (f)


	
 
	
    Governing Law
	
 
	 
	
    11
	 

	

    (g)


	
 
	
    Severability
	
 
	 
	
    11
	 

	

    (h)


	
 
	
    No Trust or Fund Created
	
 
	 
	
    11
	 

	

    (i)


	
 
	
    No Fractional Shares
	
 
	 
	
    11
	 

	

    (j)


	
 
	
    Headings
	
 
	 
	
    11
	 

	

    Section 10.


	
 
	
    Effective Date of the Plan
	
 
	 
	
    12
	 

	

    Section 11.


	
 
	
    Term of the Plan
	
 
	 
	
    12
	 















    

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Table of Contents





 




    ADC
    TELECOMMUNICATIONS, INC.

    2008 GLOBAL STOCK INCENTIVE PLAN



 




    Section
    1.  Purpose.
    



 



    The purpose of the Plan is to promote the interests of the
    Company and its shareholders by aiding the Company in attracting
    and retaining employees, officers and non-employee Directors
    capable of assuring the future success of the Company, to offer
    such persons incentives to put forth maximum efforts for the
    success of the Company’s business and to compensate such
    persons through various stock-based arrangements and provide
    them with opportunities for stock ownership in the Company,
    thereby aligning the interests of such persons with the
    Company’s shareholders.



 




    Section
    2.  Definitions.
    



 



    As used in the Plan, the following terms shall have the meanings
    set forth below:



 



    (a) “Affiliate” shall mean (i) any entity
    that, directly or indirectly through one or more intermediaries,
    is controlled by the Company and (ii) any entity in which
    the Company has a significant equity interest, in each case as
    determined by the Committee.



 



    (b) “Award” shall mean any Option, Stock
    Appreciation Right, Restricted Stock, Restricted Stock Unit,
    Dividend Equivalent, Performance Award, Stock Award or Other
    Stock-Based Award granted under the Plan.



 



    (c) “Award Agreement” shall mean any written
    agreement, contract or other instrument or document evidencing
    an Award granted under the Plan. An Award Agreement may be in an
    electronic medium and need not that be signed by a
    representative of the Company or the Participant. Each Award
    Agreement shall be subject to the applicable terms and
    conditions of the Plan and any other terms and conditions (not
    inconsistent with the Plan) determined by the Committee.



 



    (d) “Board” shall mean the Board of Directors of
    the Company.



 



    (e) “Code” shall mean the Internal Revenue Code
    of 1986, as amended from time to time, and any regulations
    promulgated thereunder.



 



    (f) “Committee” shall mean the Compensation
    Committee of the Board or any successor committee of the Board
    designated by the Board to administer the Plan. The Committee
    shall be comprised of not less than such number of Directors as
    shall be required to permit Awards granted under the Plan to
    qualify under
    Rule 16b-3,
    and each member of the Committee shall be a “Non-Employee
    Director” within the meaning of
    Rule 16b-3
    and an “outside director” within the meaning of
    Section 162(m) of the Code. The Company expects to have the
    Plan administered in accordance with the requirements for the
    award of “qualified performance-based compensation”
    within the meaning of Section 162(m) of the Code.



 



    (g) “Company” shall mean ADC Telecommunications,
    Inc., a Minnesota corporation, or any successor corporation.



 



    (h) “Director” shall mean a member of the Board.



 



    (i) “Dividend Equivalent” shall mean any right
    granted under Section 6(d) of the Plan.



 



    (j) “Eligible Person” shall mean any employee,
    officer or non-employee Director providing services to the
    Company or any Affiliate whom the Committee determines to be an
    Eligible Person. An Eligible Person must be a natural person.



 



    (k) “Exchange Act” shall mean the Securities
    Exchange Act of 1934, as amended.



 



    (l) “Fair Market Value” shall mean, with respect
    to any property (including, without limitation, any Shares or
    other securities), the fair market value of such property
    determined by such methods or procedures as shall be established
    from time to time by the Committee. Notwithstanding the
    foregoing,




    

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    unless otherwise determined by the Committee, the Fair Market
    Value of Shares on a given date for purposes of the Plan shall
    be the closing sale price of the Shares on the NASDAQ Global
    Select Market as reported on such date or, if such market is not
    open for trading on such date, on the most recent preceding date
    when such market was open for trading.



 



    (m) “Incentive Stock Option” shall mean an option
    granted under Section 6(a) of the Plan that is intended to
    meet the requirements of Section 422 of the Code or any
    successor provision.



 



    (n) “Non-Qualified Stock Option” shall mean an
    option granted under Section 6(a) of the Plan that is not
    intended to be an Incentive Stock Option.



 



    (o) “Option” shall mean an Incentive Stock Option
    or a Non-Qualified Stock Option.



 



    (p) “Other Stock-Based Award” shall mean any
    right granted under Section 6(g) of the Plan.



 



    (q) “Participant” shall mean an Eligible Person
    designated to be granted an Award under the Plan.



 



    (r) “Performance Award” shall mean any right
    granted under Section 6(e) of the Plan.



 



    (s) “Performance Goal” shall mean one or more of
    the following performance goals, either individually,
    alternatively or in any combination, applied on a corporate,
    subsidiary, division, business unit, line of business or
    geographic regional basis: sales, revenue, costs, expenses,
    earnings (including one or more of net profit after tax, gross
    profit, operating profit, earnings before interest and taxes,
    earnings before interest, taxes, depreciation and amortization
    and net earnings), earnings per share, earnings per share from
    continuing operations, operating income, pre-tax income, net
    income, margins (including one or more of direct gross, gross,
    operating income, net income and pretax net income margins),
    returns (including one or more of return on actual or proforma
    assets, net assets, equity, investment, investment capital,
    capital and net capital employed), shareholder return (including
    total shareholder return relative to an index or peer group),
    stock price, economic value added, cash generation, cash flow,
    unit volume, working capital, market share, cost reductions and
    strategic plan development and implementation. Performance goals
    may be an absolute measure or a defined change (amount or
    percentage) in a measure. Performance goals may reflect absolute
    entity or business unit performance or a relative comparison to
    the performance of a peer group of entities or other external
    measure of the selected performance criteria. At the time a
    Performance Goal is approved by the Committee or on or before
    the 90th day of the performance period applicable to such
    Performance Goal, the Committee may provide that, in determining
    whether the Performance Goal has been achieved, the effect of
    certain events may be excluded. These events include, but are
    not limited to, any of the following: asset write-downs;
    litigation or claim judgments or settlements; changes in tax
    law, accounting principles or other such laws or provisions
    affecting reported results; severance, contract termination and
    other costs related to exiting certain business activities; and
    gains or losses from the disposition of businesses or assets or
    from the early extinguishment of debt.



 



    (t) “Person” shall mean any individual or entity,
    including a corporation, partnership, limited liability company,
    association, joint venture or trust.



 



    (u) “Plan” shall mean this ADC
    Telecommunications, Inc. 2008 Global Stock Incentive Plan, as
    amended from time to time.



 



    (v) “Restricted Stock” shall mean any Share
    granted under Section 6(c) of the Plan.



 



    (w) “Restricted Stock Unit” shall mean any unit
    granted under Section 6(c) of the Plan evidencing the right
    to receive a Share (or a cash payment equal to the Fair Market
    Value of a Share) at some future date.



 



    (x) “Rule 16b-3”
    shall mean
    Rule 16b-3
    promulgated by the Securities and Exchange Commission under the
    Exchange Act or any successor rule or regulation.



 



    (y) “Section 162(m)” shall mean
    Section 162(m) of the Code and the applicable Treasury
    Regulations promulgated thereunder.




    

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    (z) “Shares” shall mean shares of Common Stock,
    par value of $0.20 per share, of the Company or such other
    securities or property as may become subject to Awards pursuant
    to an adjustment made under Section 4(c) of the Plan.



 



    (aa) “Stock Appreciation Right” shall mean any
    right granted under Section 6(b) of the Plan.



 



    (bb) “Stock Award” shall mean any Share granted
    under Section 6(f) of the Plan.



 




    Section
    3.  Administration.
    



 



    (a) Power and Authority of the
    Committee.  The Plan shall be administered by the
    Committee. Subject to the express provisions of the Plan and to
    applicable law, the Committee shall have full power and
    authority to: (i) designate Participants;
    (ii) determine the type or types of Awards to be granted to
    each Participant under the Plan; (iii) determine the number
    of Shares to be covered by (or the method by which payments or
    other rights are to be calculated in connection with) each
    Award; (iv) determine the terms and conditions of any Award
    or Award Agreement; (v) amend the terms and conditions of
    any Award or Award Agreement, provided, however, that, except as
    otherwise provided in Section 4(c) hereof, the Committee
    shall not reprice, adjust or amend the exercise price of Options
    or the grant price of Stock Appreciation Rights previously
    awarded to any Participant, whether through amendment,
    cancellation and replacement grant, or any other means;
    (vi) accelerate the exercisability of any Award or the
    lapse of restrictions relating to any Award;
    (vii) determine whether, to what extent and under what
    circumstances Awards may be exercised in cash, Shares, other
    securities, other Awards or other property, or canceled,
    forfeited or suspended; (viii) determine whether, to what
    extent and under what circumstances cash, Shares, other
    securities, other Awards, other property and other amounts
    payable with respect to an Award under the Plan shall be
    deferred either automatically or at the election of the holder
    of the Award or the Committee; (ix) interpret and
    administer the Plan and any instrument or agreement, including
    any Award Agreement, relating to the Plan; (x) establish,
    amend, suspend or waive such rules and regulations and appoint
    such agents as it shall deem appropriate for the proper
    administration of the Plan; and (xi) make any other
    determination and take any other action that the Committee deems
    necessary or desirable for the administration of the Plan.
    Unless otherwise expressly provided in the Plan, all
    designations, determinations, interpretations and other
    decisions under or with respect to the Plan or any Award or
    Award Agreement shall be within the sole discretion of the
    Committee, may be made at any time and shall be final,
    conclusive and binding upon any Participant, any holder or
    beneficiary of any Award or Award Agreement, and any employee of
    the Company or any Affiliate. The Company intends that Awards
    under the Plan shall satisfy the requirements of
    Section 409A of the Code to avoid any adverse tax results
    thereunder, and the Committee shall administer and interpret the
    Plan and all Award Agreements in a manner consistent with that
    intent. If any provision of the Plan or an Award Agreement would
    result in adverse tax consequences under Section 409A of
    the Code, the Committee may amend that provision (or take any
    other action reasonably necessary) to avoid any adverse tax
    results, and no action taken to comply with Section 409A of
    the Code shall be deemed to impair or otherwise adversely affect
    the rights of any holder of an Award or beneficiary thereof.



 



    (b) Delegation.  The Committee may
    delegate its powers and duties under the Plan to one or more
    Directors (including a Director who is also an officer of the
    Company) or a committee of Directors and may authorize one or
    more officers of the Company to grant Awards under the Plan,
    subject to such terms, conditions and limitations as the
    Committee may establish in its sole discretion; provided,
    however, that the Committee shall not delegate its powers and
    duties under the Plan (i) with regard to officers or
    directors of the Company or any Affiliate who are subject to
    Section 16 of the Exchange Act or (ii) in such a
    manner as would cause the Plan not to comply with the
    requirements of Section 162(m) of the Code.



 



    (c) Power and Authority of the Board of
    Directors.  Notwithstanding anything to the
    contrary contained herein, the Board may, at any time and from
    time to time, without any further action of the Committee,
    exercise the powers and duties of the Committee under the Plan,
    unless the exercise of such powers and duties by the Board would
    cause the Plan not to comply with the requirements of
    Section 162(m) of the Code.




    

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    Section
    4.  Shares Available for Awards.
    



 



    (a) Shares Available.   Subject to
    adjustment as provided in Section 4(c) of the Plan, the
    aggregate number of Shares that may be issued under all Awards
    under the Plan shall be 11,000,000. Shares to be issued under
    the Plan will be authorized Shares. If any Shares covered by an
    Award or to which an Award relates are not purchased or are
    forfeited or are reacquired by the Company (including shares of
    Restricted Stock, whether or not dividends have been paid on
    such shares), or if an Award otherwise terminates or is
    cancelled without delivery of any Shares, then the number of
    Shares counted pursuant to Section 4(b) of the Plan against
    the aggregate number of Shares available under the Plan with
    respect to such Award, to the extent of any such forfeiture,
    reacquisition by the Company, termination or cancellation, shall
    again be available for granting Awards under the Plan. Shares
    that are withheld in full or partial payment to the Company of
    the purchase or exercise price relating to an Award or in
    connection with the satisfaction of tax obligations relating to
    an Award shall not be available for granting Awards under the
    Plan.



 



    (b) Accounting for Awards.  For purposes
    of this Section 4, if an Award entitles the holder thereof
    to receive or purchase Shares, the number of Shares covered by
    such Award or to which such Award relates shall be counted, in
    accordance with this Section 4(b), on the date of grant of
    such Award against the aggregate number of Shares available for
    Awards under the Plan. With respect to Options and Stock
    Appreciation Rights, the number of Shares available for Awards
    under the Plan shall be reduced by one Share for each Share
    covered by such Award or to which such Award relates. With
    respect to any Awards other than Options and Stock Appreciation
    Rights, the number of Shares available for Awards under the Plan
    shall be reduced by 1.74 Shares for each Share covered by
    such Award or to which such Award relates. For Stock
    Appreciation Rights settled in Shares upon exercise, the
    aggregate number of Shares with respect to which the Stock
    Appreciation Right is exercised, rather than the number of
    Shares actually issued upon exercise, shall be counted against
    the number of Shares available for Awards under the Plan. Awards
    that do not entitle the holder thereof to receive or purchase
    Shares and Awards that are settled in cash shall not be counted
    against the aggregate number of Shares available for Awards
    under the Plan.



 



    (c) Adjustments.  In the event that any
    dividend or other distribution (whether in the form of cash,
    Shares, other securities or other property), recapitalization,
    stock split, reverse stock split, reorganization, merger,
    consolidation,
    split-up,
    spin-off, combination, repurchase or exchange of Shares or other
    securities of the Company, issuance of warrants or other rights
    to purchase Shares or other securities of the Company or other
    similar corporate transaction or event affects the Shares such
    that an adjustment is necessary in order to prevent dilution or
    enlargement of the benefits or potential benefits intended to be
    made available under the Plan, then the Committee shall, in such
    manner as it may deem equitable, adjust any or all of
    (i) the number and type of Shares (or other securities or
    other property) that thereafter may be made the subject of
    Awards, (ii) the number and type of Shares (or other
    securities or other property) subject to outstanding Awards,
    (iii) the purchase or exercise price with respect to any
    Award and (iv) the limitations contained in
    Section 4(d) of the Plan.



 



    (d) Award Limitations Under the Plan.



 



    (i) Section 162(m) Limitation for Certain Types of
    Awards.  No Eligible Person may be granted
    Options, Stock Appreciation Rights or any other Award or Awards
    under the Plan, the value of which Award or Awards is based
    solely on an increase in the value of the Shares after the date
    of grant of such Award or Awards, for more than
    1,000,000 Shares (subject to adjustment as provided in
    Section 4(c) of the Plan) in the aggregate in any calendar
    year.



 



    (ii) Section 162(m) Limitation for Performance
    Awards.  The maximum amount payable pursuant to
    all Performance Awards to any Participant in the aggregate in
    any calendar year shall be $25,000,000 in value, whether payable
    in cash, Shares or other property. This limitation does not
    apply to any Award subject to the limitation contained in
    Section 4(d)(i) of the Plan.




    

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    Section
    5.  Eligibility.
    



 



    Any Eligible Person shall be eligible to be designated a
    Participant. In determining which Eligible Persons shall receive
    an Award and the terms of any Award, the Committee may take into
    account the nature of the services rendered by the respective
    Eligible Persons, their present and potential contributions to
    the success of the Company or such other factors as the
    Committee, in its discretion, shall deem relevant.
    Notwithstanding the foregoing, an Incentive Stock Option may
    only be granted to full-time or part-time employees (which term
    as used herein includes, without limitation, officers and
    Directors who are also employees), and an Incentive Stock Option
    shall not be granted to an employee of an Affiliate unless such
    Affiliate is also a “subsidiary corporation” of the
    Company within the meaning of Section 424(f) of the Code or
    any successor provision.



 




    Section
    6.  Awards.
    



 



    (a) Options.  The Committee is hereby
    authorized to grant Options to Eligible Persons with the
    following terms and conditions and with such additional terms
    and conditions not inconsistent with the provisions of the Plan
    as the Committee shall determine:



 



    (i) Exercise Price.  The purchase price
    per Share purchasable under an Option shall be determined by the
    Committee and shall not be less than 100% of the Fair Market
    Value of a Share on the date of grant of such Option; provided,
    however, that the Committee may designate a per share exercise
    price below Fair Market Value on the date of grant (A) to
    the extent necessary or appropriate, as determined by the
    Committee, to satisfy applicable legal or regulatory
    requirements of a foreign jurisdiction or (B) if the Option
    is granted in substitution for a stock option previously granted
    by an entity that is acquired by or merged with the Company or
    an Affiliate.



 



    (ii) Option Term.  The term of each Option
    shall be fixed by the Committee but shall not be longer than
    10 years from the date of grant.



 



    (iii) Time and Method of Exercise.  The
    Committee shall determine the time or times at which an Option
    may be exercised in whole or in part and the method or methods
    by which, and the form or forms (including, without limitation,
    cash, Shares, other securities, other Awards or other property,
    or any combination thereof, having a Fair Market Value on the
    exercise date equal to the applicable exercise price) in which,
    payment of the exercise price with respect thereto may be made
    or deemed to have been made.



 



    (b) Stock Appreciation Rights.  The
    Committee is hereby authorized to grant Stock Appreciation
    Rights to Eligible Persons subject to the terms of the Plan and
    any applicable Award Agreement. A Stock Appreciation Right
    granted under the Plan shall confer on the holder thereof a
    right to receive upon exercise thereof the excess of
    (i) the Fair Market Value of one Share on the date of
    exercise (or, if the Committee shall so determine, at any time
    during a specified period before or after the date of exercise)
    over (ii) the grant price of the Stock Appreciation Right
    as specified by the Committee, which price shall not be less
    than 100% of the Fair Market Value of one Share on the date of
    grant of the Stock Appreciation Right; provided, however, that
    the Committee may designate a per share grant price below Fair
    Market Value on the date of grant (A) to the extent
    necessary or appropriate, as determined by the Committee, to
    satisfy applicable legal or regulatory requirements of a foreign
    jurisdiction or (B) if the Stock Appreciation Right is
    granted in substitution for a stock appreciation right
    previously granted by an entity that is acquired by or merged
    with the Company or an Affiliate. Subject to the terms of the
    Plan and any applicable Award Agreement, the grant price, term,
    methods of exercise, dates of exercise, methods of settlement
    and any other terms and conditions of any Stock Appreciation
    Right shall be as determined by the Committee. The Committee may
    impose such conditions or restrictions on the exercise of any
    Stock Appreciation Right as it may deem appropriate.



 



    (c) Restricted Stock and Restricted Stock
    Units.  The Committee is hereby authorized to
    grant Awards of Restricted Stock and Restricted Stock Units to
    Eligible Persons with the following terms and conditions and




    

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    with such additional terms and conditions not inconsistent with
    the provisions of the Plan as the Committee shall determine:



 



    (i) Restrictions.  Shares of Restricted
    Stock and Restricted Stock Units shall be subject to such
    restrictions as the Committee may impose (including, without
    limitation, any limitation on the right to vote a Share of
    Restricted Stock or the right to receive any dividend or other
    right or property with respect thereto), which restrictions may
    lapse separately or in combination at such time or times, in
    such installments or otherwise, as the Committee may deem
    appropriate. The minimum vesting period of such Awards shall be
    three years from the date of grant, unless the Award is
    conditioned on performance of the Company or an Affiliate or on
    personal performance (other than continued service with the
    Company or an Affiliate), in which case the minimum vesting
    period of such Award shall be at least one year from the date of
    grant. Notwithstanding the foregoing, the Committee may permit
    acceleration of vesting of such Awards in the event of:
    (A) the Participant’s death, disability, retirement or
    involuntary termination of employment due to elimination of the
    Participant’s employment position in connection with a
    reduction in force, (B) a divestiture by the Company of a
    business that employs the Participant, or (C) a change in
    control of the Company.



 



    (ii) Issuance and Delivery of Shares.  Any
    Restricted Stock granted under the Plan shall be issued at the
    time such Awards are granted and may be evidenced in such manner
    as the Committee may deem appropriate, including book-entry
    registration or issuance of a stock certificate or certificates,
    which certificate or certificates shall be held by the Company.
    Such certificate or certificates shall be registered in the name
    of the Participant and shall bear an appropriate legend
    referring to the restrictions applicable to such Restricted
    Stock. Shares representing Restricted Stock that is no longer
    subject to restrictions shall be delivered to the Participant
    promptly after the applicable restrictions lapse or are waived.
    In the case of Restricted Stock Units, no Shares shall be issued
    at the time such Awards are granted. Upon the lapse or waiver of
    restrictions and the restricted period relating to Restricted
    Stock Units evidencing the right to receive Shares, such Shares
    shall be issued and delivered to the holder of the Restricted
    Stock Units.



 



    (iii) Forfeiture.  Except as otherwise
    determined by the Committee, upon a Participant’s
    termination of employment or resignation or removal as a
    Director (in either case, as determined under criteria
    established by the Committee) during the applicable restriction
    period, all Shares of Restricted Stock and all Restricted Stock
    Units held by the Participant at such time shall be forfeited
    and reacquired by the Company; provided, however, that the
    Committee may, when it finds that a waiver would be in the best
    interest of the Company, waive in whole or in part any or all
    remaining restrictions with respect to Shares of Restricted
    Stock or Restricted Stock Units.



 



    (d) Dividend Equivalents.  The Committee
    is hereby authorized to grant Dividend Equivalents to Eligible
    Persons under which the Participant shall be entitled to receive
    payments (in cash, Shares, other securities, other Awards or
    other property as determined in the discretion of the Committee)
    equivalent to the amount of cash dividends paid by the Company
    to holders of Shares with respect to a number of Shares
    determined by the Committee. Subject to the terms of the Plan
    and any applicable Award Agreement, such Dividend Equivalents
    may have such terms and conditions as the Committee shall
    determine. Notwithstanding the foregoing, the Committee may not
    grant Dividend Equivalents to Eligible Persons in connection
    with grants of Options or Stock Appreciation Rights to such
    Eligible Persons.



 



    (e) Performance Awards.   The Committee is
    hereby authorized to grant to Eligible Persons Performance
    Awards which are intended to be “qualified
    performance-based compensation” within the meaning of
    Section 162(m). A Performance Award granted under the Plan
    may be payable in cash or in Shares (including, without
    limitation, Restricted Stock). Performance Awards shall, to the
    extent required by Section 162(m), be conditioned solely on
    the achievement of one or more objective Performance Goals, and
    such Performance Goals shall be established by the Committee
    within the time period prescribed by, and shall otherwise comply
    with the requirements of, Section 162(m). Subject to the
    terms of the Plan and any applicable Award Agreement, the
    Performance Goals to be achieved during any performance period,
    the length of any performance period, the amount of any
    Performance Award granted, the amount of any payment or transfer
    to




    

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    be made pursuant to any Performance Award and any other terms
    and conditions of any Performance Award shall be determined by
    the Committee. The Committee shall also certify in writing that
    such Performance Goals have been met prior to payment of the
    Performance Awards to the extent required by Section 162(m).



 



    (f) Stock Awards.  The Committee is hereby
    authorized to grant to Eligible Persons Shares without
    restrictions thereon, as deemed by the Committee to be
    consistent with the purpose of the Plan. Subject to the terms of
    the Plan and any applicable Award Agreement, such Stock Awards
    may have such terms and conditions as the Committee shall
    determine.



 



    (g) Other Stock-Based Awards.  The
    Committee is hereby authorized to grant to Eligible Persons such
    other Awards that are denominated or payable in, valued in whole
    or in part by reference to, or otherwise based on or related to,
    Shares (including, without limitation, securities convertible
    into Shares), as are deemed by the Committee to be consistent
    with the purpose of the Plan. The Committee shall determine the
    terms and conditions of such Awards, subject to the terms of the
    Plan and the Award Agreement. Shares, or other securities
    delivered pursuant to a purchase right granted under this
    Section 6(g), shall be purchased for consideration having a
    value equal to at least 100% of the Fair Market Value of such
    Shares or other securities on the date the purchase right is
    granted. The consideration paid by the Participant may be paid
    by such method or methods and in such form or forms (including,
    without limitation, cash, Shares, other securities, other Awards
    or other property, or any combination thereof), as the Committee
    shall determine.



 



    (h) General.



 



    (i) Consideration for Awards.  Awards may
    be granted for no cash consideration or for any cash or other
    consideration as may be determined by the Committee or required
    by applicable law.



 



    (ii) Awards May Be Granted Separately or
    Together.  Awards may, in the discretion of the
    Committee, be granted either alone or in addition to, in tandem
    with or in substitution for any other Award or any award granted
    under any other plan of the Company or any Affiliate. Awards
    granted in addition to or in tandem with other Awards or in
    addition to or in tandem with awards granted under any other
    plan of the Company or any Affiliate may be granted either at
    the same time as or at a different time from the grant of such
    other Awards or awards.



 



    (iii) Forms of Payment under
    Awards.  Subject to the terms of the Plan and of
    any applicable Award Agreement, payments or transfers to be made
    by the Company or an Affiliate upon the grant, exercise or
    payment of an Award may be made in such form or forms as the
    Committee shall determine (including, without limitation, cash,
    Shares, other securities, other Awards or other property, or any
    combination thereof), and may be made in a single payment or
    transfer, in installments or on a deferred basis, in each case
    in accordance with rules and procedures established by the
    Committee. Such rules and procedures may include, without
    limitation, provisions for the payment or crediting of
    reasonable interest on installment or deferred payments or the
    grant or crediting of Dividend Equivalents with respect to
    installment or deferred payments.



 



    (iv) Term of Awards.  The term of each
    Award shall be for a period not longer than 10 years from
    the date of grant.



 



    (v) Limits on Transfer of Awards.  Except
    as otherwise provided in this Section 6(h)(v), no Award
    (other than a Stock Award) and no right under any such Award
    shall be transferable by a Participant other than by will or by
    the laws of descent and distribution. The Committee may
    establish procedures as it deems appropriate for a Participant
    to designate a Person or Persons, as beneficiary or
    beneficiaries, to exercise the rights of the Participant and
    receive any property distributable with respect to any Award in
    the event of the Participant’s death. The Committee, in its
    discretion and subject to such additional terms and conditions
    as it determines, may permit a Participant to transfer a
    Non-Qualified Stock Option to any “family member” (as
    such term is defined in the General Instructions to
    Form S-8
    (or any successor to such Instructions or such Form) under the
    Securities Act of 1933, as amended) at any time that such
    Participant holds such Option, provided that such transfers may
    not be for value (i.e., the transferor may not receive
    any consideration therefor) and the family member may not make
    any subsequent transfers other than by will or by the laws of
    descent and distribution. Each Award under the Plan or right
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    any such Award shall be exercisable during the
    Participant’s lifetime only by the Participant (except as
    provided herein or in an Award Agreement or amendment thereto
    relating to a Non-Qualified Stock Option) or, if permissible
    under applicable law, by the Participant’s guardian or
    legal representative. No Award (other than a Stock Award) or
    right under any such Award may be pledged, alienated, attached
    or otherwise encumbered, and any purported pledge, alienation,
    attachment or encumbrance thereof shall be void and
    unenforceable against the Company or any Affiliate.



 



    (vi) Restrictions; Securities Exchange
    Listing.  All Shares or other securities delivered
    under the Plan pursuant to any Award or the exercise thereof
    shall be subject to such restrictions as the Committee may deem
    advisable under the Plan, applicable federal or state securities
    laws and regulatory requirements, and the Committee may cause
    appropriate entries to be made or legends to be placed on the
    certificates for such Shares or other securities to reflect such
    restrictions. If the Shares or other securities are traded on a
    securities exchange, the Company shall not be required to
    deliver any Shares or other securities covered by an Award
    unless and until such Shares or other securities have been
    admitted for trading on such securities exchange.



 




    Section
    7.  Amendment and Termination; Corrections.
    



 



    (a) Amendments to the Plan.  The Board may
    amend, alter, suspend, discontinue or terminate the Plan at any
    time; provided, however, that, notwithstanding any other
    provision of the Plan or any Award Agreement, prior approval of
    the shareholders of the Company shall be required for any
    amendment to the Plan that:



 



    (i) requires shareholder approval under the rules or
    regulations of the Securities and Exchange Commission, the
    National Association of Securities Dealers, Inc. or any
    securities exchange that are applicable to the Company;



 



    (ii) increases the number of shares authorized under the
    Plan as specified in Sections 4(a) and 4(b) of the Plan;



 



    (iii) increases the number of shares subject to the
    limitations contained in Section 4(d) of the Plan;



 



    (iv) permits repricing of Options or Stock Appreciation
    Rights which is prohibited by Section 3(a)(v) of the Plan;



 



    (v) permits the award of Options or Stock Appreciation
    Rights at a price less than 100% of the Fair Market Value of a
    Share on the date of grant of such Option or Stock Appreciation
    Right, contrary to the provisions of Sections 6(a)(i) and
    6(b)(ii) of the Plan; and



 



    (vi) would cause Section 162(m) of the Code to become
    unavailable with respect to the Plan.



 



    (b) Amendments to Awards.  Subject to the
    provisions of the Plan, the Committee may waive any conditions
    of or rights of the Company under any outstanding Award,
    prospectively or retroactively. Except as otherwise provided in
    the Plan, the Committee may amend, alter, suspend, discontinue
    or terminate any outstanding Award, prospectively or
    retroactively, but no such action may adversely affect the
    rights of the holder of such Award without the consent of the
    Participant or holder or beneficiary thereof.



 



    (c) Correction of Defects, Omissions and
    Inconsistencies.  The Committee may correct any
    defect, supply any omission or reconcile any inconsistency in
    the Plan or in any Award or Award Agreement in the manner and to
    the extent it shall deem desirable to implement or maintain the
    effectiveness of the Plan.



 




    Section
    8.  Income Tax Withholding.
    



 



    In order to comply with all applicable federal, state, local or
    foreign income tax laws or regulations, the Company may take
    such action as it deems appropriate to ensure that all
    applicable federal, state, local or foreign payroll,
    withholding, income or other taxes, which are the sole and
    absolute responsibility of a Participant, are withheld or
    collected from such Participant. In order to assist a
    Participant in paying all or a portion of the applicable taxes
    to be withheld or collected upon exercise or receipt of (or the
    lapse of restrictions relating to) an Award, the Committee, in
    its discretion and subject to such additional terms and
    conditions as it may adopt, may permit the Participant to
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    Company withhold a portion of the Shares otherwise to be
    delivered upon exercise or receipt of (or the lapse of
    restrictions relating to) such Award with a Fair Market Value
    equal to the amount of such taxes or (b) delivering to the
    Company Shares other than Shares issuable upon exercise or
    receipt of (or the lapse of restrictions relating to) such Award
    with a Fair Market Value equal to the amount of such taxes. The
    election, if any, must be made on or before the date that the
    amount of tax to be withheld is determined.



 




    Section
    9.  General Provisions.
    



 



    (a) No Rights to Awards.  No Eligible
    Person, Participant or other Person shall have any claim to be
    granted any Award under the Plan, and there is no obligation for
    uniformity of treatment of Eligible Persons, Participants or
    holders or beneficiaries of Awards under the Plan. The terms and
    conditions of Awards need not be the same with respect to any
    Participant or with respect to different Participants.



 



    (b) Award Agreements.  No Participant
    shall have rights under an Award granted to such Participant
    unless and until an Award Agreement is issued to, and accepted
    by, the Participant.



 



    (c) No Rights of Shareholders.  Except
    with respect to Restricted Stock and Stock Awards, neither a
    Participant nor the Participant’s legal representative
    shall be, or have any of the rights and privileges of, a
    shareholder of the Company with respect to any Shares issuable
    upon the exercise or payment of any Award, in whole or in part,
    unless and until the Shares have been issued.



 



    (d) No Limit on Other Compensation Plans or
    Arrangements.  Nothing contained in the Plan shall
    prevent the Company or any Affiliate from adopting or continuing
    in effect other or additional compensation plans or
    arrangements, and such plans or arrangements may be either
    generally applicable or applicable only in specific cases.



 



    (e) No Right to Employment or
    Directorship.  The grant of an Award shall not be
    construed as giving a Participant the right to be retained as an
    employee of the Company or any Affiliate, or a Director to be
    retained as a Director, nor will it affect in any way the right
    of the Company or an Affiliate to terminate a Participant’s
    employment at any time, with or without cause. In addition, the
    Company or an Affiliate may at any time dismiss a Participant
    from employment free from any liability or any claim under the
    Plan or any Award, unless otherwise expressly provided in the
    Plan or in any Award Agreement.



 



    (f) Governing Law.  The internal law, and
    not the law of conflicts, of the State of Minnesota, shall
    govern all questions concerning the validity, construction and
    effect of the Plan or any Award, and any rules and regulations
    relating to the Plan or any Award.



 



    (g) Severability.  If any provision of the
    Plan or any Award is or becomes or is deemed to be invalid,
    illegal or unenforceable in any jurisdiction or would disqualify
    the Plan or any Award under any law deemed applicable by the
    Committee, such provision shall be construed or deemed amended
    to conform to applicable laws, or if it cannot be so construed
    or deemed amended without, in the determination of the
    Committee, materially altering the purpose or intent of the Plan
    or the Award, such provision shall be stricken as to such
    jurisdiction or Award, and the remainder of the Plan or any such
    Award shall remain in full force and effect.



 



    (h) No Trust or
    Fund Created.  Neither the Plan nor any Award
    shall create or be construed to create a trust or separate fund
    of any kind or a fiduciary relationship between the Company or
    any Affiliate and a Participant or any other Person. To the
    extent that any Person acquires a right to receive payments from
    the Company or any Affiliate pursuant to an Award, such right
    shall be no greater than the right of any unsecured general
    creditor of the Company or any Affiliate.



 



    (i) No Fractional Shares.  No fractional
    Shares shall be issued or delivered pursuant to the Plan or any
    Award, and the Committee shall determine whether cash shall be
    paid in lieu of any fractional Share or whether such fractional
    Share or any rights thereto shall be canceled, terminated or
    otherwise eliminated.



 



    (j) Headings.  Headings are given to the
    Sections and subsections of the Plan solely as a convenience to
    facilitate reference. Such headings shall not be deemed in any
    way material or relevant to the construction or interpretation
    of the Plan or any provision thereof.




    

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    Section
    10.  Effective Date of the Plan.
    



 



    The Plan shall be subject to approval by the shareholders of the
    Company at the annual meeting of shareholders of the Company to
    be held on March 6, 2008 and the Plan shall be effective as
    of the date of such shareholder approval.



 




    Section
    11.  Term of the Plan.
    



 



    The Plan shall terminate at midnight on March 5, 2018,
    unless terminated before then by the Board. Awards may be
    granted under the Plan until the Plan terminates or until all
    Shares available for Awards under the Plan have been purchased
    or acquired; provided, however, that Incentive Stock Options may
    not be granted following the
    10-year
    anniversary of the Board’s adoption of the Plan. The Plan
    shall remain in effect as long as any Awards are outstanding.




    

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