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Exhibit 10-d




Publish Date:  01 November 2006

Destroy Date: 31 December 2007




ADC




Management Incentive Plan Document

Fiscal Year 2007





 









 








MANAGEMENT INCENTIVE PLAN DOCUMENT

Fiscal Year 2007




Plan Name and Effective Date




The name of this Plan is the ADC Telecommunications, Inc. Management Incentive Plan. The plan is
effective from November 1, 2006 through October 31, 2007.



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 and individual contributors to make
a significant contribution to ADC’s established goals.



Eligibility




Eligibility for Fiscal Year 2007 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, certain management and higher-level individual contributor positions. In order
to be eligible, an employee cannot participate in any other ADC incentive plan, except as approved
by the Compensation and Organization Committee of the Board of Directors or the CEO, and must be
employed in an eligible position on or before October 1, 2007.



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, generally in late December or early January. All payments are
subject to appropriate withholdings.



Plan Goals




The Plan reinforces the key goals that support ADC’s long-term strategic plans. The key factors in
ADC’s FY07 corporate success are Pro Forma Operating Income, Free Cash Flow, and Net Sales. The
key factors in ADC’s FY07 Global Connectivity Solutions success are Pro Forma Operating Income,
adjusted Inventory Turns, and Net Sales. For the Wireline and Wireless Business Units, the key
factors for FY07 are Pro Forma Operating Income, Inventory Turns, and Net Sales. For APS U.S., the
key factors for FY07 are Pro Forma Operating Income including Product Pull Through, Contribution
Margin without Product Pull Through, Days Sales Outstanding, and Net Sales including Product Pull
Through. For APS Germany, the key factors for FY07 are Pro Forma Operating Income without Product
Pull Through, Cash Conversion Cycle, and Net Sales including Product Pull Through. Goals are set
at the ADC and Business Unit levels including regional goals for GCS. Accounting methodology
changes may dictate corresponding goal modifications during the plan year.



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Following is a description of the plan components:



	 	 	 
	Plan Goal	 	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.
	 
	 	 
	 

	 	Beginning in FY07, corporate overhead costs not directly attributable to the
Business Unit will be 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 / Revenue

	 	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.
	 
	 	 
	Free Cash Flow

	 	ADC cash from operations (including restructuring charges) less capital expenditures.
	 
	 	 
	Cash Conversion 

Cycle (Days)

	 	Represents the average number of days between ADC cash payments for products,
services, labor, and operating expenses, and ADC cash receipts from customers: days
of receivables plus days of inventory supply less days payables. 




Above metrics are based upon monthly average balances of inventory, receivables, and
	 
	 	 
	 

	 	payables relative to 3rd party Net Sales and 3rd party cost of
sales.
	 
	 	 
	Inventory Turns*

	 	Represents a measure of how many times per year ADC sells through its inventory
balance: 3rd party cost of sales divided by average monthly net
inventory balance.
	 
	 	 
	Days Sales 

Outstanding

	 	A measure of the amount of uncollected 3rd party obligations to ADC
(Accounts Receivable) relative to average daily sales. The calculation is average
monthly net accounts receivable balance divided by average quarterly 3rd
party Revenues divided by 90. (Also called Days of Receivables)
	 
	 	 
	Product Pull Through

	 	ADC product sales that are sold through ADC Professional Services channels.
	 
	 	 
	Business Unit 

Contribution Margin

	 	Net Sales less the cost to produce the products or services sold and less certain
costs directly associated with that Business Unit including but not limited to
engineering, product management, and administrative expenses. It does not take into
account operating expenses deemed regional during the budgeting process, corporate
allocations, interest income, interest expense, other income/loss or income tax. It
also excludes restructuring and other one-time expenses that are not reflective of
the ongoing business.






 




*For Global Connectivity Solutions the measure is Adjusted Inventory Turns: (Inventory Turns x
percent ship-to-request).



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



Goal Weightings




Employees serving multiple Business Units have 100% of their incentive plan based on ADC goals and
results. Employees dedicated at least 90% to one Business Unit have a portion of their incentive
based on ADC results and a portion on Business Unit results. The weightings for Business Unit
participation are as follows:



	 	 	 	 	 	 	 	 	 
	 	 	ADC	 	BU or Regional
	Grade	 	Weighting	 	Weighting
	Grade 19+:
	 	 	50	%	 	 	50	%
	Grades 15-18
	 	 	30	%	 	 	70	%






For purposes of this Plan, Wireless, Wireline, APS U.S. and APS Germany will be treated as separate
Business Units. Executives responsible for more than one of these will have two Business Units as
part of their Business Unit incentive component (ratio of 30% Wireless and 20% Wireline; or 30% APS
U.S. and 20% APS Germany). All Business Unit plans will be global, with the exception of GCS,
which will have regional plans. Manufacturing facilities will be subject to the relevant GCS
regional plan. The only Manufacturing exception is China, which will be subject to the Global GCS
plan.



Individual Performance




Exceptional individual performance can be recognized in the MIP program. An ADC-wide award pool is
available to supplement the financial-based awards for outstanding performers. No awards will be
made from this pool unless ADC GAAP net income is above zero. The maximum individual performance
award is 50% of the participant’s total target MIP award.



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 three 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 2007 Eligible Base Salary earnings.
	 
	 	2.	 	FY2007 Eligible Base Salary – This is the amount paid to the participant during
the fiscal year in Base Salary.
	 
	 	3.	 	Business Performance in comparison with the established goals.










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While each goal has a threshold of 0% of Target Incentive Opportunity, the minimum individual
payment is a total payment of 10% of an employee’s target. If incentives earned total less than
10% of target, no payout will be made. The maximum award attributable to each performance factor
is 200% of its target. The maximum total individual award is 200% of the target payout. This
maximum includes any MIP award also provided for exceptional individual performance. Specific
financial goals have been established for 0%, 100%, and 200% of target. Results between these
specific points are interpolated for each goal.



Here is an example of a hypothetical award calculation.



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



	 	 	 	 	 
	 

	 	Target Opportunity:
	 	15% of Eligible Base Salary earnings
	 

	 	FY07 Eligible Base Salary:
	 	70,000 EUR
	 

	 	Business Performance Percentages:
	 	Hypothetical ADC and GCS regional
results shown in the following table






	 	 	 	 	 	 	 	 	 	 	 	 	 
	Metrics	 	Measure Weighting	 	Performance	 	Wtd. Perf.
	ADC Level Metrics
	 	 	 	 	 	 	 	 	 	 	 	 
	Pro Forma Operating Income
	 	 	60	%	 	 	107	%	 	 	64.2	%
	Free Cash Flow
	 	 	20	%	 	 	95	%	 	 	19.0	%
	Net Sales
	 	 	20	%	 	 	102	%	 	 	20.4	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	103.6	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	GCS EMEA Regional Level Metrics
	 	 	 	 	 	 	 	 	 	 	 	 
	Pro Forma Operating Income
	 	 	60	%	 	 	110	%	 	 	66.0	%
	Adjusted Inventory Turns
	 	 	20	%	 	 	95	%	 	 	19.0	%
	Net Sales
	 	 	20	%	 	 	108	%	 	 	21.6	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	106.6	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Overall Weighted Performance
	 	 	 	 	 	 	 	 	 	 	 	 
	ADC Metrics
	 	 	30	%	 	 	103.6	%	 	 	31.1	%
	GCS EMEA Regional Metrics
	 	 	70	%	 	 	106.6	%	 	 	74.6	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	105.7	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Payment Calculation:
	70,000 (Eligible Base Salary)
* 15% (incentive target) * 105.7%
(Business Performance) = 11,099 EUR
	 	 	 	 	 	 	 	 	 	 	 	 






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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 end of the Fiscal Year, 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 FY07 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
would 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 number of months served in each position.
The participant must be in the new position by the first of the month in order to receive credit
for that month under the new plan, target or goals. For example, a participant transferring from
Wireless to Connectivity on June 10 would receive eight months payment under the Wireless plan
(November 1 — June 30) and four months under Connectivity (July 1 – October 31). In order to
receive payment under MIP, a participant must have completed one full month of service under the
plan during that plan year.



Administration



A Management Incentive Plan Committee (“Committee”), appointed and authorized by the Compensation
Committee of the Company’s Board of Directors, will administer this Plan. Subject to the complete
and full discretion of the Compensation Committee of the Board of Directors, the Committee is
authorized 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.



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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 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 supercedes 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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