exv10w6






Exhibit 10.6




MANAGEMENT INCENTIVE PLAN DOCUMENT

Fiscal Year 2010




Plan Name and Effective Date




The name of this Plan is the ADC Telecommunications, Inc. Management Incentive Plan (“MIP”). The
plan is effective from October 1, 2009 through September 30, 2010.



Purpose




The purpose of the Plan is to provide, with full regard to the protection of shareholder’s
investments, a direct financial incentive for eligible managers to make a significant contribution
to ADC’s established annual goals.



Eligibility




Eligibility for Fiscal Year 2010 is limited to full or part-time regular employees in the U.S. and
in such other countries where ADC has specifically notified employees of eligibility for
participation in the Plan. Eligibility for participation in this Plan is limited to such employees
who hold executive officer and certain management positions reporting to the Chief Executive
Officer. The CEO does not participate in the Plan. In order to be eligible, an employee cannot
participate in any other ADC incentive plan, except as approved by the Compensation Committee of
the Board of Directors, and must be employed in an eligible position on or before August 1, 2010.



The MIP is intended to encourage and reward both excellence of performance and employee retention.
Accordingly, a participant must be an employee of ADC on the day of payment of incentive, in
addition to satisfying all other eligibility requirements as outlined in the Plan, to be eligible
to receive an incentive award.



Timing of Payment




Payments that become due under this Plan are made as soon as administratively feasible following
the close of ADC’s fiscal year, but within seventy-five days of that event, generally in December.
All payments are subject to appropriate withholdings.



Plan Metrics




The Plan reinforces the key goals that support ADC’s long-term strategic plans. The key factors in
ADC’s FY10 corporate success are Pro Forma Operating Income, Net Sales and a Key Performance
Indicator (“KPI”), which will be a reduction of Operating Expenses for FY10. These factors are the
same for ADC’s operating units: Global Connectivity Solutions (GCS), Network Solutions, and ADC
Professional Services (APS). Accounting methodology changes and extraordinary events such as
acquisitions, divestitures, etc. may dictate corresponding goal modifications during the plan year.
Additionally, a portion of each participant’s MIP is based upon individual contribution.



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Following is a description of the Plan’s financial components:



	 	 	 
	Plan Metric	 	Definition
	Pro Forma Operating Income

	 	Net Sales less all relevant expenses
incurred to produce the products or
deliver services. Expenses include
direct material and labor costs as
well as regional and Business Unit
costs, including engineering, sales
& marketing expenses, and corporate
overhead costs. Pro Forma
Operating Income does not include
interest income, interest expense,
income tax or other non-operating
income. It also excludes
restructuring and other one-time
expenses that are not reflective of
the ongoing business.



Corporate overhead costs not
directly attributable to the
Business Unit are assessed as a
shared service charge set at a fixed
percentage of Revenue. ADC-level
Pro Forma Operating Income will
reflect absorption of ALL corporate
expenses including variances above
or below the level of the shared
service charge.
	 
	 	 
	Net Sales

	 	The amount ADC can recognize in
accordance with Generally Accepted
Accounting Principles (GAAP) for
goods shipped or services provided
to third-party customers, net of
returns received and discounts.
	 
	 	 
	Operating Expenses

	 	Annualized company-wide operating
expense including sales, general,
administrative and research &
development costs excluding all
incentives.






NOTE: For the Business Units, Net Sales, and Pro-Forma Operating Income are measured on Plan
foreign exchange rates.



Goal Weightings




Executives participating in the Plan will have the following business/corporate weightings:



	 	 	 	 	 	 	 	 	 	 	 
	 	 	50% of Total Award
	 	 	Business	 	 	 	 	 	Net Sales
	 	 	Weight	 	OI Metric	 	Metric
	BU Leader

	 	50% BU
	 	 	25	%	 	 	25	%
	 

	 	50% ADC
	 	 	25	%	 	 	25	%
	Corporate Function Leader

	 	100% ADC
	 	 	25	%	 	 	25	%






For purposes of this Plan, Global Connectivity Solutions, Network Solutions and APS will be treated
as separate Business Units.



Key Performance Indicator




Each participant will have twenty-five percent (25%) of their target MIP award tied to a KPI.
Effective with fiscal year 2010, ADC has implemented the concept of a flexible, company-level
performance objective that may be modified annually to focus resources on critical



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business issues or challenges. For fiscal year 2010, the KPI has been defined as a corporate-wide
operating expense reduction target. The KPI is subject to the Performance Gate as defined below.



Individual Performance




Each participant will have twenty-five percent (25%) of their target MIP award tied to one (1) to
three (3) individual goals mutually agreed upon by the participant and the CEO. Achievement of the
agreed-upon goals yields a 100% award payout. The individual performance component does not have a
Performance Gate (as defined below), it is based on the employee’s percent of achievement.



An additional overachievement award may be made as recommended by the CEO at his sole discretion to
the Compensation Committee. The maximum individual performance award is 50% of the participant’s
total target MIP award.



Modifications may be made to individual goals before August 1, 2010. Any changes made to
individual goals require documentation and approval of the CEO, Chief Financial Officer and Chief
Administrative Officer. Undocumented modifications of individual plans will not be honored for
award payment.



Performance Gates




To ensure protection of shareholder interest, no payment will be provided as the result of any
ADC-wide financial performance factor unless ADC achieves its threshold Pro-Forma Operating Income
for the year. Similarly, no payment will be provided as the result of any Business Unit financial
performance factor unless the Business Unit achieves its threshold Pro-Forma Operating Income.



Calculation of Payment




Prior to making any payment under this Plan, the Board of Directors must determine that the claimed
Business Performance levels have been achieved. The Board of Directors has complete authority and
discretion to determine whether performance levels have been achieved, including without limitation
the authority and discretion to properly calculate Pro-Forma Operating Income. The size of an
incentive award will be based on four factors:




	 	1.	 	Target Incentive Opportunity  —  Determined on the basis of the ADC salary grade
associated with an individual’s job and country of work. It is expressed as a
percentage of an individual’s FY 2010 Eligible Earnings Paid.
	 
	 	2.	 	FY2010 Eligible Earnings Paid  — This is the amount paid to the participant
during the fiscal year in base salary and other eligible payments.
	 
	 	3.	 	Business Performance in comparison with the established goals.
	 
	 	4.	 	FY2010 Individual Performance out of 100% target individual goal achievement
	 
	 	5.	 	FY2010 KPI Performance in comparison with established goals.





Specific financial goals (e.g., net sales, OI and the FY2010 KPI) have been established for 0%,
100%, and 200% of target. Results between these specific points are interpolated for each goal.
The maximum award attributable to each financial performance factor is 200% of its target. The
maximum total individual award is 100% of the individual performance target payout.



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Following is an example of a hypothetical award calculation.



Assume a GCS Plan participant with the following facts, where the ADC performance gate has been
met:



Management Incentive Plan Example

     Level II with BU Component




Assumptions:




	 	 	 	 	 
	Eligible Earnings Paid:
	 	$	250,000	 
	MIP Target %:
	 	 	50	%
	BU:
	 	GCS Global	 
	Individual Performance Score:
	 	 	90	%






	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Grade 19 &	 	 	 	 	 	 	 	 
	 	 	Above	 	Financial	 	Combined	 	 	 	 
	 	 	Financial	 	Component	 	Component	 	Actual	 	 
	Measures	 	Weights	 	Weights	 	Weights*	 	Performance**	 	Result***
	Financial - 50%
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	ADC:
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	OI
	 	 	50	%	 	 	25	%	 	 	12.5	%	 	 	107.00	%	 	 	13.38	%
	Net Sales
	 	 	 	 	 	 	25	%	 	 	12.5	%	 	 	102.00	%	 	 	12.75	%
	GCS Global:
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	OI
	 	 	50	%	 	 	25	%	 	 	12.5	%	 	 	110.00	%	 	 	13.75	%
	Net Sales
	 	 	 	 	 	 	25	%	 	 	12.5	%	 	 	108.00	%	 	 	13.50	%
	Individual - 25%
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Personal Goals
	 	 	 	 	 	 	 	 	 	 	25.0	%	 	 	90.00	%	 	 	22.50	%
	Key Performance Indicator (KPI) - 25%	 	 	 	 	 	 	 	 	 	 	 	 
	  KPI
	 	 	 	 	 	 	 	 	 	 	25.0	%	 	 	100.00	%	 	 	25.00	%
	Total Component Weights:	 	 	100.0	%	 	 	 	 	 	 	 	 
	Composite Score:	 	 	 	100.88	%






	 	 	 	 	 	 	 	 	 	 	 	 	 
	Eligible Earnings

Paid

	 	X
	 	MIP Target
%
	 	X
	 	Composite

Score
	 	=
	 	Payout
	$ 250,000
	 	 	 	50%
	 	 	 	100.88%
	 	 	 	$ 126,093.75








 




			
	*	 	Combined Component Weights = Financial Weights x Financial Component Weights (see graph below)
	 
	**	 	Actual Performance is rounded to the nearest hundreth of one percent
	 
	***	 	Result = Actual Performance x Combined Component Weights. Final result is rounded to the
nearest hundredth of one %












Combined Component Weights











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Effect of Change in Employment Status




Termination of Employment: If employment with ADC is terminated for any reason other than
death, disability or as a result of a reduction in force implemented by the Company, and if the
Employment Termination Date occurs prior to the date the payout is made, a participant will not
receive an award under the Plan. For purposes of this Plan, the “Employment Termination Date” is
the date that the participant ceases to be an employee of ADC (as determined by the company). In
the case of termination of employment by ADC, the Employment Termination Date shall be determined
without regard to whether such termination is with or without cause or with or without reasonable
notice. For the purposes of this Plan, if employment with ADC is involuntarily terminated as a
result of the participant’s death or disability or as a result of a reduction in force implemented
by the Company, the employee may be entitled to receive a prorated payment. To be eligible, the
employee must have been employed by the Company for at least 3 full calendar months during FY10 and
involuntarily terminated as described above. In such cases, the prorated payment, if any, will be
subject to the achievement of the applicable Business Performance criteria for the plan year and
may not be adjusted for individual performance. Such prorated payment will be payable following
the end of the fiscal year in accordance with the Company’s incentive plan payment practices.



Transfer, Promotion or Demotion to another position with a different ADC incentive plan, Target
Incentive Opportunity or business goals:



A participant who transfers, is promoted or demoted to another position with a different plan,
target incentive opportunity or business goals will receive a prorated calculation of payment based
upon the amount of eligible earnings paid under each position. For example, a participant
transferring from Network Solutions to GCS on June 10 would receive payment under the Network
Solutions plan for eligible earnings paid during the period of October 1 — June 9 and payment under
the GCS plan for eligible earnings paid during June 10 — September 30.



Administration




The Management Incentive Plan is authorized by the Compensation Committee of the Company’s Board of
Directors, which will administer the Plan. The Compensation Committee of the Board of Directors is
authorized under its charter to make all decisions as required in administration of the Plan and to
exercise its discretion to define, interpret, construe, apply, approve, administer, withdraw and
make any exceptions to the terms of the Plan.



Right to Modify




ADC reserves the right to modify or adjust the Plan at any time in its sole discretion either in
whole or with respect to a particular Business Unit. The Participant explicitly agrees with this
modification right of ADC.



Governing Law




The Plan is made and shall be construed in accordance with the laws of the State of Minnesota,
U.S.A. without regard to conflicts of law principles thereof, or those of any other state of the
U.S.A. or of any other country, province or city.



Severability



If any provision of this Plan is held invalid, illegal or unenforceable by a court or tribunal of a
competent jurisdiction, this Plan shall be deemed severable and such invalidity, illegality



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or
unenforceability shall not affect any other provision of this Plan which shall be enforced in
accordance with the intent of this Plan.



Assignment




The Company shall have the right to assign this Plan to its successors and assigns and this Plan
shall inure to the benefit of and be enforceable by said successors and assigns. Participant may
not assign this Plan or any rights hereunder.



Entire Understanding




This Plan constitutes the entire understanding between the parties regarding the payment of
incentive compensation under this Plan, and it supersedes any and all prior agreements or
understandings, whether oral or written, express or implied, on such subject matter.



No Acquired Rights or Entitlements/Plan Amendment or Termination




The Plan shall not entitle Participants to any future compensation. The Plan is not an element of
the employees’ base salary or base compensation and shall not be considered as part of such in the
event of severance, redundancy, or resignation. ADC has no obligation to offer incentive plans to
Participants in the future, and the plan shall be effective only for the time period specified in
the plan and shall not be deemed to renew year over year. The Participant understands and accepts
that the incentive payments made under the Plan are entirely at the sole discretion of ADC.
Specifically, ADC assumes no obligation to the Participant under this Plan with respect to any
doctrine or principle of acquired rights or similar concept. Subject to the provisions of the Plan,
ADC may amend or terminate the Plan or discontinue the payment of incentives under the Plan at any
time, at its sole discretion and without advance notice.




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