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                                LSC, INCORPORATED
                            2000 STOCK INCENTIVE PLAN


1.       PURPOSE OF PLAN.

         The purpose of the LSC, Incorporated 2000 Stock Incentive Plan (the
"Plan") is to advance the interests of LSC, Incorporated (the "Company") and its
shareholders by enabling the Company and its Subsidiaries to attract and retain
persons of ability to perform services for the Company and its Subsidiaries by
providing an incentive to such individuals through equity participation in the
Company and by rewarding such individuals who contribute to the achievement by
the Company of its economic objectives.

2.       DEFINITIONS.

         The following terms will have the meanings set forth below, unless the
context clearly otherwise requires:

         2.1      "BOARD" means the Board of Directors of the Company.

         2.2      "BROKER EXERCISE NOTICE" means a written notice pursuant to
which a Participant, upon exercise of an Option, irrevocably instructs a broker
or dealer to sell a sufficient number of shares or loan a sufficient amount of
money to pay all or a portion of the exercise price of the Option and/or any
related withholding tax obligations and remit such sums to the Company and
directs the Company to deliver stock certificates to be issued upon such
exercise directly to such broker or dealer.

         2.3      "BUSINESS COMBINATION" means an event described in Section
10.1(c) of the Plan.

         2.4      "CHANGE IN CONTROL" means an event described in Section 10.1
of the Plan.

         2.5      "CODE" means the Internal Revenue Code of 1986, as amended.

         2.6      "COMMITTEE" means the group of individuals administering the
Plan, as provided in Section 3 of the Plan.

         2.7      "COMMON STOCK" means the common stock of the Company, $0.01
par value, or the number and kind of shares of stock or other securities into
which such common stock may be changed in accordance with Section 4.3 of the
Plan.

         2.8      "DISABILITY" means the disability of the Participant such as
would entitle the Participant to receive disability income benefits pursuant to
the long-term disability plan of the Company or Subsidiary then covering the
Participant or, if no such plan exists or is applicable to the Participant, the
permanent and total disability of the Participant within the meaning of Section
22(e)(3) of the Code.

         2.9      "ELIGIBLE RECIPIENTS" means all employees of the Company or
any Subsidiary and any non-employee directors, consultants and independent
contractors of the Company or any Subsidiary.


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         2.10     "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.

         2.11     "FAIR MARKET VALUE" means, with respect to the Common Stock,
as of any date (or, if no shares were traded or quoted on such date, as of the
next preceding date on which there was such a trade or quote) (a) the closing
sale price of the Common Stock if the Common Stock is listed, admitted to
unlisted trading privileges or reported on any foreign or national securities
exchange or on the Nasdaq National Market or an equivalent foreign market on
which sale prices are reported; (b) if the Common Stock is not so listed,
admitted to unlisted trading privileges or reported, the closing bid price as
reported by the Nasdaq SmallCap Market, OTC Bulletin Board or the National
Quotation Bureau, Inc. or other comparable service; or (c) if the Common Stock
is not so reported, such price as the Committee determines in good faith in the
exercise of its reasonable discretion. If determined by the Committee, such
determination will be final, conclusive and binding for all purposes and on all
Persons, including, without limitation, the Company, the shareholders of the
Company, the Participants and their respective successors-in-interest. No member
of the Committee will be liable for any determination regarding the fair market
value of the Common Stock that is made in good faith.

         2.12     "INCENTIVE AWARD" means an Option or a Restricted Stock Award
granted to an Eligible Recipient pursuant to the Plan.

         2.13     "INCENTIVE STOCK OPTION" means a right to purchase Common
Stock granted to an Eligible Recipient pursuant to Section 6 of the Plan that
qualifies as an "incentive stock option" within the meaning of Section 422 of
the Code.

         2.14     "NON-STATUTORY STOCK OPTION" means a right to purchase Common
Stock granted to an Eligible Recipient pursuant to Section 6 of the Plan that
does not qualify as an Incentive Stock Option.

         2.15     "OPTION" means an Incentive Stock Option or a Non-Statutory
Stock Option.

         2.16     "PARTICIPANT" means an Eligible Recipient who receives one or
more Incentive Awards under the Plan.

         2.17     "PERSON" means any individual, corporation, partnership,
group, association or other "person" (as such term is used in Section 14 (d) of
the Exchange Act), other than the Company, a wholly owned subsidiary of the
Company or any employee benefit plan sponsored by the Company or a wholly owned
subsidiary of the Company.

         2.18     "PREVIOUSLY ACQUIRED SHARES" means shares of Common Stock that
are already owned by the Participant or, with respect to any Option, that are to
be issued upon the exercise or vesting of such Option.

         2.19     "RESTRICTED STOCK AWARD" means an award of Common Stock
granted to an Eligible Recipient pursuant to Section 7 of the Plan that is
subject to the restrictions on transferability and the risk of forfeiture
imposed by the provisions of such Section 7.

         2.20     "RETIREMENT" means termination of employment or service
pursuant to and in accordance with the regular (or, if approved by the Board for
purposes of the Plan, early) retirement/pension plan or practice of the Company
or Subsidiary then covering the Participant,

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provided that if the Participant is not covered by any such plan or practice,
the Participant will be deemed to be covered by the Company's plan or practice
for purposes of this determination.

         2.21     "SECURITIES ACT" means the Securities Act of 1933, as amended.

         2.22     "SUBSIDIARY" means any entity that is directly or indirectly
controlled by the Company or any entity in which the Company has a significant
equity interest, as determined by the Committee.

3.       PLAN ADMINISTRATION.

         3.1      THE COMMITTEE. The Plan will be administered by the Board or
by a committee of the Board. So long as the Company has a class of its equity
securities registered under Section 8 of the Exchange Act, any committee
administering the Plan will consist solely of two or more members of the Board
who are "non-employee directors" within the meaning of Rule 16b-3 under the
Exchange Act and, if the Board so determines in its sole discretion, who are
"outside directors" within the meaning of Section 162(m) of the Code. Such a
committee, if established, will act by majority approval of the members (but may
also take action with the written consent of a majority of the members of such
committee), and a majority of the members of such a committee will constitute a
quorum. As used in the Plan, "Committee" will refer to the Board or to such a
committee, if established. To the extent consistent with corporate law, the
Committee may delegate to any officers of the Company the duties, power and
authority of the Committee under the Plan pursuant to such conditions or
limitations as the Committee may establish; provided, however, that only the
Committee may exercise such duties, power and authority with respect to Eligible
Recipients who are subject to Section 16 of the Exchange Act. The Committee may
exercise its duties, power and authority under the Plan in its sole and absolute
discretion without the consent of any Participant or other party, unless the
Plan specifically provides otherwise. Each determination, interpretation or
other action made or taken by the Committee pursuant to the provisions of the
Plan will be conclusive and binding for all purposes and on all Persons,
including, without limitation, the Company, the shareholders of the Company, the
Participants and their respective successors-in-interest. No member of the
Committee will be liable for any action or determination made in good faith with
respect to the Plan or any Incentive Award granted under the Plan.

         3.2      AUTHORITY OF THE COMMITTEE.

                  (a)      In accordance with and subject to the provisions of
         the Plan, the Committee will have the authority to determine all
         provisions of Incentive Awards as the Committee may deem necessary or
         desirable and as consistent with the terms of the Plan, including,
         without limitation, the following: (i) the Eligible Recipients to be
         selected as Participants; (ii) the nature and extent of the Incentive
         Awards to be made to each Participant (including the number of shares
         of Common Stock to be subject to each Incentive Award, any exercise
         price, the manner in which Incentive Awards will vest or become
         exercisable and whether Incentive Awards will be granted in tandem with
         other Incentive Awards) and the form of written agreement, if any,
         evidencing such Incentive Award; (iii) the time or times when Incentive
         Awards will be granted; (iv) the duration of each Incentive Award; and
         (v) the restrictions and other conditions to which the payment or
         vesting of Incentive Awards may be subject. In addition, the Committee
         will have the

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         authority under the Plan in its sole discretion to pay the economic
         value of any Incentive Award in the form of cash, Common Stock or any
         combination of both.

                  (b)      The Committee will have the authority under the Plan
         to amend or modify the terms of any outstanding Incentive Award in any
         manner, including, without limitation, the authority to modify the
         number of shares or other terms and conditions of an Incentive Award,
         extend the term of an Incentive Award, accelerate the exercisability or
         vesting or otherwise terminate any restrictions relating to an
         Incentive Award, accept the surrender of any outstanding Incentive
         Award or, to the extent not previously exercised or vested, authorize
         the grant of new Incentive Awards in substitution for surrendered
         Incentive Awards; provided, however that the amended or modified terms
         are permitted by the Plan as then in effect and that any Participant
         adversely affected by such amended or modified terms has consented to
         such amendment or modification. No amendment or modification to an
         Incentive Award, however, whether pursuant to this Section 3.2 or any
         other provisions of the Plan, will be deemed to be a re-grant of such
         Incentive Award for purposes of this Plan.

                  (c)      In the event of (i) any reorganization, merger,
         consolidation, recapitalization, liquidation, reclassification, stock
         dividend, stock split, combination of shares, rights offering,
         extraordinary dividend or divestiture (including a spin-off) or any
         other change in corporate structure or shares, (ii) any purchase,
         acquisition, sale or disposition of a significant amount of assets or a
         significant business, (iii) any change in accounting principles or
         practices, or (iv) any other similar change, in each case with respect
         to the Company or any other entity whose performance is relevant to the
         grant or vesting of an Incentive Award, the Committee (or, if the
         Company is not the surviving corporation in any such transaction, the
         board of directors of the surviving corporation) may, without the
         consent of any affected Participant, amend or modify the vesting
         criteria of any outstanding Incentive Award that is based in whole or
         in part on the financial performance of the Company (or any Subsidiary
         or division thereof) or such other entity so as equitably to reflect
         such event, with the desired result that the criteria for evaluating
         such financial performance of the Company or such other entity will be
         substantially the same (in the sole discretion of the Committee or the
         board of directors of the surviving corporation) following such event
         as prior to such event; provided, however, that the amended or modified
         terms are permitted by the Plan as then in effect.

4.       SHARES AVAILABLE FOR ISSUANCE.

         4.1      MAXIMUM NUMBER OF SHARES AVAILABLE. Subject to adjustment as
provided in Section 4.3 of the Plan, the maximum number of shares of Common
Stock that will be available for issuance under the Plan will be 1,000,000
shares of Common Stock, plus any shares of Common Stock which, as of the date
the Plan is approved by the shareholders of the Company, are reserved for
issuance under the Company's 1992 Stock Option Plan and which are not thereafter
issued or which have been issued but are subsequently forfeited and which would
otherwise have been available for further issuance under such plan.
Notwithstanding any other provisions of the Plan to the contrary, no Participant
in the Plan may be granted any Options or any other Incentive Awards with a
value based solely on an increase in the value of the Common Stock after the
date of grant, relating to more than 250,000 shares of Common Stock in the
aggregate in any fiscal year of the Company (subject to adjustment as provided
in Section 4.3 of the Plan); provided, however, that a Participant who is first
appointed or elected as an officer,


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hired as an employee or retained as a consultant by the Company or who receives
a promotion that results in an increase in responsibilities or duties may be
granted, during the fiscal year of such appointment, election, hiring, retention
or promotion, Options relating to up to 250,000 shares of Common Stock (subject
to adjustment as provided in Section 4.3 of the Plan).

         4.2      ACCOUNTING FOR INCENTIVE AWARDS. Shares of Common Stock that
are issued under the Plan or that are subject to outstanding Incentive Awards
will be applied to reduce the maximum number of shares of Common Stock remaining
available for issuance under the Plan. Any shares of Common Stock that are
subject to an Incentive Award that lapses, expires, is forfeited or for any
reason is terminated unexercised or unvested and any shares of Common Stock that
are subject to an Incentive Award that is settled or paid in cash or any form
other than shares of Common Stock will automatically again become available for
issuance under the Plan. Any shares of Common Stock that constitute the
forfeited portion of a Restricted Stock Award, however, will not become
available for further issuance under the Plan.

         4.3      ADJUSTMENTS TO SHARES AND INCENTIVE AWARDS. In the event of
any reorganization, merger, consolidation, recapitalization, liquidation,
reclassification, stock dividend, stock split, combination of shares, rights
offering, divestiture or extraordinary dividend (including a spin-off) or any
other change in the corporate structure or shares of the Company, the Committee
(or, if the Company is not the surviving corporation in any such transaction,
the board of directors of the surviving corporation) will make appropriate
adjustment (which determination will be conclusive) as to the number and kind of
securities or other property (including cash) available for issuance or payment
under the Plan and, in order to prevent dilution or enlargement of the rights of
Participants, (a) the number and kind of securities or other property (including
cash) subject to outstanding Incentive Awards, and (b) the exercise price of
outstanding Incentive Awards.

5.       PARTICIPATION.

         Participants in the Plan will be those Eligible Recipients who, in the
judgment of the Committee, have contributed, are contributing or are expected to
contribute to the achievement of economic objectives of the Company or its
Subsidiaries. Eligible Recipients may be granted from time to time one or more
Incentive Awards, singly or in combination or in tandem with other Incentive
Awards, as may be determined by the Committee in its sole discretion. Incentive
Awards will be deemed to be granted as of the date specified in the grant
resolution of the Committee, which date will be the date of any related
agreement with the Participant.

6.       OPTIONS.

         6.1      GRANT. An Eligible Recipient may be granted one or more
Options under the Plan, and such Options will be subject to such terms and
conditions, consistent with the other provisions of the Plan, as may be
determined by the Committee in its sole discretion. The Committee may designate
whether an Option is to be considered an Incentive Stock Option or a
Non-Statutory Stock Option. To the extent that any Incentive Stock Option
granted under the Plan ceases for any reason to qualify as an "incentive stock
option" for purposes of Section 422 of the Code, such Incentive Stock Option
will continue to be outstanding for purposes of the Plan but will thereafter be
deemed to be a Non-Statutory Stock Option.


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         6.2      EXERCISE PRICE. The per share price to be paid by a
Participant upon exercise of an Option will be determined by the Committee in
its discretion at the time of the Option grant; provided, however, that (a) such
price will not be less than 100% of the Fair Market Value of one share of Common
Stock on the date of grant with respect to an Incentive Stock Option (110% of
the Fair Market Value if, at the time the Incentive Stock Option is granted, the
Participant owns, directly or indirectly, more than 10% of the total combined
voting power of all classes of stock of the Company or any parent or subsidiary
corporation of the Company), and (b) such price will not be less than 85% of the
Fair Market Value of one share of Common Stock on the date of grant with respect
to a Non-Statutory Stock Option.

         6.3      EXERCISABILITY AND DURATION. An Option will become exercisable
at such times and in such installments as may be determined by the Committee in
its sole discretion at the time of grant; provided, however, that no Option may
be exercisable after 10 years from its date of grant.

         6.4      PAYMENT OF EXERCISE PRICE. The total purchase price of the
shares to be purchased upon exercise of an Option will be paid entirely in cash
(including check, bank draft or money order); provided, however, that the
Committee, in its sole discretion and upon terms and conditions established by
the Committee, may allow such payments to be made, in whole or in part, by
tender of a Broker Exercise Notice, Previously Acquired Shares, a promissory
note (on terms acceptable to the Committee in its sole discretion) or by a
combination of such methods.

         6.5      MANNER OF EXERCISE. An Option may be exercised by a
Participant in whole or in part from time to time, subject to the conditions
contained in the Plan and in the agreement evidencing such Option, by delivery
in person, by facsimile or electronic transmission or through the mail of
written notice of exercise to the Company (Attention: Chief Financial Officer)
at its principal executive office in Eagan, Minnesota and by paying in full the
total exercise price for the shares of Common Stock to be purchased in
accordance with Section 6.4 of the Plan.

         6.6      AGGREGATE LIMITATION OF STOCK SUBJECT TO INCENTIVE STOCK
OPTIONS. To the extent that the aggregate Fair Market Value (determined as of
the date an Incentive Stock Option is granted) of the shares of Common Stock
with respect to which incentive stock options (within the meaning of Section 422
of the Code) are exercisable for the first time by a Participant during any
calendar year (under the Plan and any other incentive stock option plans of the
Company or any subsidiary or parent corporation of the Company (within the
meaning of the Code)) exceeds $100,000 (or such other amount as may be
prescribed by the Code from time to time), such excess Options will be treated
as Non-Statutory Stock Options. The determination will be made by taking
incentive stock options into account in the order in which they were granted. If
such excess only applies to a portion of an Incentive Stock Option, the
Committee, in its discretion, will designate which shares will be treated as
shares to be acquired upon exercise of an Incentive Stock Option.

7.       RESTRICTED STOCK AWARDS.

         7.1      GRANT. An Eligible Recipient may be granted one or more
Restricted Stock Awards under the Plan, and such Restricted Stock Awards will be
subject to such terms and conditions, consistent with the other provisions of
the Plan, as may be determined by the Committee in its sole discretion. The
Committee may impose such restrictions or conditions, not inconsistent with the
provisions of the Plan, to the vesting of such Restricted Stock Awards as it


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deems appropriate, including, without limitation, that the Participant remain in
the continuous employ or service of the Company or a Subsidiary for a certain
period or that the Participant or the Company (or any Subsidiary or division
thereof) satisfy certain performance goals or criteria.

         7.2      RIGHTS AS A STOCKHOLDER; TRANSFERABILITY. Except as provided
in Sections 7.1, 7.3 and 11.3 of the Plan, a Participant will have all voting,
dividend, liquidation and other rights with respect to shares of Common Stock
issued to the Participant as a Restricted Stock Award under this Section 7 upon
the Participant becoming the holder of record of such shares as if such
Participant were a holder of record of shares of unrestricted Common Stock.

         7.3      DIVIDENDS AND DISTRIBUTIONS. Unless the Committee determines
otherwise in its sole discretion (either in the agreement evidencing the
Restricted Stock Award at the time of grant or at any time after the grant of
the Restricted Stock Award), any dividends or distributions (including regular
quarterly cash dividends) paid with respect to shares of Common Stock subject to
the unvested portion of a Restricted Stock Award will be subject to the same
restrictions as the shares to which such dividends or distributions relate. In
the event the Committee determines not to pay such dividends or distributions
currently, the Committee will determine in its sole discretion whether any
interest will be paid on such dividends or distributions. In addition, the
Committee in its sole discretion may require such dividends and distributions to
be reinvested (and in such case the Participants consent to such reinvestment)
in shares of Common Stock that will be subject to the same restrictions as the
shares to which such dividends or distributions relate.

         7.4      ENFORCEMENT OF RESTRICTIONS. To enforce the restrictions
referred to in this Section 7, the Committee may place a legend on the stock
certificates referring to such restrictions and may require the Participant,
until the restrictions have lapsed, to keep the stock certificates, together
with duly endorsed stock powers, in the custody of the Company or its transfer
agent or to maintain evidence of stock ownership, together with duly endorsed
stock powers, in a certificateless book-entry stock account with the Company's
transfer agent.

8.       EFFECT OF TERMINATION OF EMPLOYMENT OR OTHER SERVICE.

         8.1      TERMINATION DUE TO DEATH, DISABILITY OR RETIREMENT. Unless
otherwise provided by the Committee in its sole discretion in the agreement
evidencing an Incentive Award, in the event a Participant's employment or other
service with the Company and all Subsidiaries is terminated by reason of death,
Disability or Retirement, (a) all outstanding Options then held by the
Participant shall become immediately exercisable in full and remain exercisable
after such termination for a period of three months in the case of Retirement
and one year in the case of death or Disability (but in no event after the
expiration date of any such Option) and (b) all Restricted Stock Awards then
held by the Participant that have not vested will be terminated and forfeited.

         8.2      TERMINATION FOR REASONS OTHER THAN DEATH, DISABILITY OR
RETIREMENT.

                  (a)      Unless otherwise provided by Section 10 of the Plan
         or by the Committee in its sole discretion in the agreement evidencing
         an Incentive Award, in the event a Participant's employment or other
         service is terminated with the Company and all Subsidiaries for any
         reason other than death, Disability or Retirement, or a Participant is
         in the employ or service of a Subsidiary and the Subsidiary ceases to
         be a Subsidiary of


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         the Company (unless the Participant continues in the employ or service
         of the Company or another Subsidiary), all rights of the Participant
         under the Plan and any agreements evidencing an Incentive Award will
         immediately terminate without notice of any kind, and no Options then
         held by the Participant will thereafter be exercisable and all
         Restricted Stock Awards then held by the Participant that have not
         vested will be terminated and forfeited; provided, however, that if
         such termination is due to any reason other than termination by the
         Company or any Subsidiary for "cause," all outstanding Options then
         held by such Participant that are currently exercisable by the
         Participant as of the time of such termination will remain exercisable
         for a period of three months after such termination (but in no event
         after the expiration date of any such Option).

                  (b)      For purposes of this Section 8.2, "cause" (as
         determined by the Committee) will be as defined in any employment or
         other agreement or policy applicable to the Participant or, if no such
         agreement or policy exists, will mean (i) dishonesty, fraud,
         misrepresentation, embezzlement or deliberate injury or attempted
         injury, in each case related to the Company or any Subsidiary, (ii) any
         unlawful or criminal activity of a serious nature, (iii) any
         intentional and deliberate breach of a duty or duties that,
         individually or in the aggregate, are material in relation to the
         Participant's overall duties or (iv) any material breach of any
         employment, service, confidentiality or non-compete agreement entered
         into with the Company or any Subsidiary.

         8.3      MODIFICATION OF RIGHTS UPON TERMINATION. Notwithstanding the
other provisions of this Section 8, upon a Participant's termination of
employment or other service with the Company and all Subsidiaries, the Committee
may, in its sole discretion (which may be exercised at any time on or after the
date of grant, including following such termination), cause (a) Options (or any
part thereof) then held by such Participant to become or continue to become
exercisable and/or remain exercisable following such termination of employment
or service and (b) Restricted Stock Awards then held by such Participant to vest
and/or continue to vest or become free of transfer restrictions, as the case may
be, following such termination of employment or service in each case in the
manner determined by the Committee; provided, however, that no Option may remain
exercisable beyond its expiration date.

         8.4      BREACH OF CONFIDENTIALITY OR NONCOMPETE AGREEMENTS.
Notwithstanding anything in the Plan to the contrary, in the event that a
Participant materially breaches the terms of any confidentiality or non-compete
agreement entered into with the Company or any Subsidiary, whether such breach
occurs before or after termination of such Participant's employment or other
service with the Company or any Subsidiary, the Committee in its sole discretion
may immediately terminate all rights of the Participant under the Plan and any
agreements evidencing an Incentive Award then held by the Participant without
notice of any kind.

         8.5      DATE OF TERMINATION OF EMPLOYMENT OR OTHER SERVICE. Unless the
Committee otherwise determines in its sole discretion, a Participant's
employment or other service will, for purposes of the Plan, be deemed to have
terminated on the date recorded on the personnel or other records of the Company
or the Subsidiary for which the Participant provides employment or other
service, as determined by the Committee in its sole discretion based upon such
records.

9.       PAYMENT OF WITHHOLDING TAXES.


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         9.1      GENERAL RULES. The Company is entitled to (a) withhold and
deduct from future wages of the Participant (or from other amounts that may be
due and owing to the Participant from the Company or a Subsidiary), or make
other arrangements for the collection of, all legally required amounts necessary
to satisfy any and all foreign, federal, state and local withholding and
employment-related tax requirements attributable to an Incentive Award,
including, without limitation, the grant, exercise or vesting of, or payment of
dividends with respect to, an Option or a disqualifying disposition of stock
received upon exercise of an Incentive Stock Option, or (b) require the
Participant promptly to remit the amount of such withholding to the Company
before taking any action, including issuing any shares of Common Stock, with
respect to an Incentive Award.

         9.2      SPECIAL RULES. The Committee may, in its sole discretion and
upon terms and conditions established by the Committee, permit or require a
Participant to satisfy, in whole or in part, any withholding or
employment-related tax obligation described in Section 9.1 of the Plan by
electing to tender Previously Acquired Shares, a Broker Exercise Notice or a
promissory note (on terms acceptable to the Committee in its sole discretion),
or by a combination of such methods.

10.      CHANGE IN CONTROL.

         10.1     CHANGE IN CONTROL. For purposes of this Section 10, a "Change
in Control" of the Company will mean the following:

                  (a)      The acquisition by any Person of beneficial ownership
         (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
         of 50% or more of the combined voting power of the then-outstanding
         voting securities of the Company entitled to vote generally in the
         election of directors; provided, however, that for purposes of this
         Section 10.1(a), the following acquisitions shall not constitute a
         Change of Control: (i) any acquisition directly from the Company, (ii)
         any acquisition by the Company, (iii) any acquisition by any employee
         benefit plan (or related trust) sponsored or maintained by the Company
         or any corporation controlled by the Company, or (iv) any acquisition
         by any corporation pursuant to a transaction which complies with
         clauses (i), (ii) and (iii) of Section 10.1(c); or

                  (b)      The Incumbent Directors (as defined in Section 10.2)
         cease for any reason to constitute at least a majority of the Board; or

                  (c)      Consummation of a reorganization, merger or
         consolidation or sale or other disposition of all or substantially all
         of the assets of the Company (a "Business Combination"), in each case,
         unless, following such Business Combination, (i) all or substantially
         all of the individuals and entities who were the beneficial owners of
         the combined voting power of the then-outstanding voting securities of
         the Company entitled to vote generally in the election of directors
         immediately prior to such Business Combination beneficially own,
         directly or indirectly, more than 50% of the then-outstanding combined
         voting power of the then-outstanding voting securities entitled to vote
         generally in the election of directors of the corporation resulting
         from such Business Combination (including, without limitation, a
         corporation which as a result of such transaction owns the Company or
         all or substantially all of the Company's assets either directly or
         through one or more subsidiaries) in substantially the same proportions


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         as their ownership, immediately prior to such Business Combination, of
         the combined voting power of the then-outstanding voting securities
         entitled to vote generally in the election of directors, (ii) no Person
         (excluding any corporation resulting from such Business Combination or
         any employee benefit plan (or related trust) of the Company or such
         corporation resulting from such Business Combination) beneficially
         owns, directly or indirectly, 50% or more of the combined voting power
         of the then-outstanding voting securities entitled to vote generally in
         the election of directors of such corporation, except to the extent
         that such ownership existed prior to the Business Combination and (iii)
         at least a majority of the members of the board of directors of the
         corporation resulting from such Business Combination were Incumbent
         Directors at the time of the execution of the initial agreement, or of
         the action of the Board, providing for such Business Combination; or

                  (d)      Approval by the shareholders of the Company of a
         complete liquidation or dissolution of the Company.

         10.2     INCUMBENT DIRECTORS. For purposes of this Section 10,
Incumbent Directors will mean any individuals who are members of the Board on
the effective date of the Plan, and any individual becoming a director
subsequent to such date whose election, or nomination for election by the
Company's shareholders, was approved by a vote of at least a majority of the
Incumbent Directors shall be considered as though such individual was an
Incumbent Director, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board.

         10.3     EFFECT OF CHANGE IN CONTROL. Without limiting the authority of
the Committee under Sections 3.2 and 4.3 of the Plan, if a Change in Control of
the Company occurs, then, unless otherwise provided by the Committee in its sole
discretion either in the agreement evidencing an Incentive Award at the time of
grant or at any time after the grant of an Incentive Award, all outstanding
Options will vest and remain exercisable and all outstanding Restricted Stock
Awards will vest as and to the extent determined by the Committee in its sole
discretion.

         10.4     CASH PAYMENT. If a Change in Control of the Company occurs,
then the Committee, if approved by the Committee in its sole discretion either
in an agreement evidencing an Incentive Award at the time of grant or at any
time after the grant of an Incentive Award, and without the consent of any
Participant effected thereby, may determine that some or all Participants
holding outstanding Options will receive, with respect to some or all of the
shares of Common Stock subject to such Options, as of the effective date of any
such Change in Control of the Company, cash in an amount equal to the excess of
the Fair Market Value of such shares immediately prior to the effective date of
such Change in Control of the Company over the exercise price per share of such
Options.

         10.5     LIMITATION ON CHANGE IN CONTROL PAYMENTS. Notwithstanding
anything in Section 10.3 or 10.4 of the Plan to the contrary, if, with respect
to a Participant, the acceleration of the vesting of any Incentive Award or the
payment of cash in exchange for all or part of an Incentive Award (which
acceleration or payment could be deemed a "payment" within the meaning of
Section 280G(b)(2) of the Code), together with any other "payments" that such
Participant has the right to receive from the Company or any corporation that is
a member of an


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<PAGE>


"affiliated group" (as defined in Section 1504(a) of the Code without regard to
Section 1504(b) of the Code) of which the Company is a member, would constitute
a "parachute payment" (as defined in Section 280G(b)(2) of the Code), then the
"payments" to such Participant pursuant to Section 10.3 or 10.4 of the Plan or
any agreement evidencing an Incentive Award will be reduced to the largest
amount as, in the sole judgment of the Committee, will result in no portion of
such "payments" being subject to the excise tax imposed by Section 4999 of the
Code; provided, however, that if a Participant is subject to a separate
agreement with the Company or a Subsidiary that expressly addresses the
potential application of Sections 280G or 4999 of the Code (including, without
limitation, that "payments" under such agreement or otherwise will be reduced,
that such "payments" will not be reduced or that the Participant will have the
discretion to determine which "payments" will be reduced), then this Section
10.5 will not apply, and any "payments" to a Participant pursuant to Section
10.3 or 10.4 of the Plan or any agreement evidencing an Incentive Award will be
treated as "payments" arising under such separate agreement.

11.      RIGHTS OF ELIGIBLE RECIPIENTS AND PARTICIPANTS; TRANSFERABILITY.

         11.1     EMPLOYMENT OR SERVICE. Nothing in the Plan will interfere with
or limit in any way the right of the Company or any Subsidiary to terminate the
employment or service of any Eligible Recipient or Participant at any time, nor
confer upon any Eligible Recipient or Participant any right to continue in the
employ or service of the Company or any Subsidiary.

         11.2     RIGHTS AS A SHAREHOLDER. As a holder of Incentive Awards, a
Participant will have no rights as a stockholder unless and until such Incentive
Awards are exercised for, or paid in the form of, shares of Common Stock and the
Participant becomes the holder of record of such shares. Except as otherwise
provided in the Plan, no adjustment will be made for dividends or distributions
with respect to such Incentive Awards as to which there is a record date
preceding the date the Participant becomes the holder of record of such shares,
except as the Committee may determine in its discretion.

         11.3     RESTRICTIONS ON TRANSFER. Except pursuant to testamentary will
or the laws of descent and distribution or as otherwise expressly permitted by
the Plan, unless approved by the Committee in its sole discretion, no right or
interest of any Participant in an Incentive Award prior to the exercise or
vesting of such Incentive Award will be assignable or transferable, or subjected
to any lien, during the lifetime of the Participant, either voluntarily or
involuntarily, directly or indirectly, by operation of law or otherwise. A
Participant will, however, be entitled to designate a beneficiary to receive an
Incentive Award upon such Participant's death, and in the event of a
Participant's death, payment of any amounts due under the Plan will be made to,
and exercise of any Options (to the extent permitted pursuant to Section 8 of
the Plan) may be made by, the Participant's legal representatives, heirs and
legatees.

         11.4     NON-EXCLUSIVITY OF THE PLAN. Nothing contained in the Plan is
intended to modify or rescind any previously approved compensation plans or
programs of the Company or create any limitations on the power or authority of
the Board to adopt such additional or other compensation arrangements as the
Board may deem necessary or desirable.


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<PAGE>


12.      SECURITIES LAW AND OTHER RESTRICTIONS.

         Notwithstanding any other provision of the Plan or any agreements
entered into pursuant to the Plan, the Company will not be required to issue any
shares of Common Stock under this Plan, and a Participant may not sell, assign,
transfer or otherwise dispose of shares of Common Stock issued pursuant to
Incentive Awards granted under the Plan, unless (a) there is in effect with
respect to such shares a registration statement under the Securities Act and any
applicable state or foreign securities laws or an exemption from such
registration under the Securities Act and applicable state or foreign securities
laws, and (b) there has been obtained any other consent, approval or permit from
any other regulatory body which the Committee, in its sole discretion, deems
necessary or advisable. The Company may condition such issuance, sale or
transfer upon the receipt of any representations or agreements from the parties
involved, and the placement of any legends on certificates representing shares
of Common Stock, as may be deemed necessary or advisable by the Company in order
to comply with such securities law or other restrictions.

13.      PLAN AMENDMENT, MODIFICATION AND TERMINATION.

         The Board may suspend or terminate the Plan or any portion thereof at
any time, and may amend the Plan from time to time in such respects as the Board
may deem advisable in order that Incentive Awards under the Plan will conform to
any change in applicable laws or regulations or in any other respect the Board
may deem to be in the best interests of the Company; provided, however, that no
amendments to the Plan will be effective without approval of the shareholders of
the Company if shareholder approval of the amendment is then required pursuant
to Section 422 of the Code or the rules of any stock exchange or Nasdaq or
similar regulatory body. No termination, suspension or amendment of the Plan may
adversely affect any outstanding Incentive Award without the consent of the
affected Participant; provided, however, that this sentence will not impair the
right of the Committee to take whatever action it deems appropriate under
Sections 3.2, 4.3 and 10 of the Plan.

14.      EFFECTIVE DATE AND DURATION OF THE PLAN.

         The Plan is effective as of February 23, 2000, the date the Board
adopted the Plan subject to shareholder approval. The Plan will terminate at
midnight on February 22, 2010, and may be terminated prior to such time by Board
action, and no Incentive Award will be granted after such termination. Incentive
Awards outstanding upon termination of the Plan may continue to be exercised, or
become free of restrictions, in accordance with their terms.

15.      MISCELLANEOUS.

         15.1     GOVERNING LAW. The validity, construction, interpretation,
administration and effect of the Plan and any rules, regulations and actions
relating to the Plan will be governed by and construed exclusively in accordance
with the laws of the State of Minnesota, notwithstanding the conflicts of laws
principles of any jurisdictions.

         15.2     SUCCESSORS AND ASSIGNS. The Plan will be binding upon and
inure to the benefit of the successors and permitted assigns of the Company and
the Participants.

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