FARGO ELECTRONICS, INC.
2001 EMPLOYEE STOCK PURCHASE PLAN

1.Purpose.The purpose of this 2001 Employee Stock Purchase Plan (the "Plan") is to advance the interests of Fargo
Electronics, Inc. ("the Company") and its stockholders by providing eligible employees of the Company and its Participating Subsidiaries with an opportunity to acquire an ownership interest in
the Company through the purchase of Common Stock of the Company on favorable terms through payroll deductions. The Company intends that the Plan qualify as an "employee stock purchase plan" under
Section 423 of the Code. Accordingly, provisions of the Plan will be construed so as to extend and limit participation in a manner consistent with the requirements of Section 423 of the
Code.

2.Definitions.

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

2.2"Change in Control"means an event described in Section 10.1 of the Plan.

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

2.4"Committee"means the group of individuals administering the Plan, as provided in Section 3
of the Plan.

2.5"Common Stock"means the common stock, par value $.01 per share, of the Company, 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.

2.6"Compensation"means all gross cash compensation (including wage, salary, incentive, bonus,
commission and overtime earnings) paid by the Company or any Participating Subsidiary to a Participant, including amounts that would have constituted compensation but for a Participant's election to
defer or reduce compensation pursuant to any deferred compensation, cafeteria, capital accumulation or any other similar plan of the Company; provided, however, that the Committee, in its sole
discretion, may expand or limit the amounts that will be deemed compensation for purposes of the Plan in such manner as it deems appropriate.

2.7"Designated Broker"has the meaning set forth in Section 5.1 of this Plan.

2.8"Eligible Employee"means any employee of the Company or a Participating Subsidiary (other than an
employee whose customary employment with the Company or a Participating Subsidiary is for 20 hours or less per week or five months or less per calendar year) who, with respect to any Offering
Period, has been continuously employed by the Company or a Participating Subsidiary for at least one month prior to the Offering Commencement Date for such Offering Period. With respect to a
Subsidiary that has been acquired by the Company and designated as a Participating Subsidiary or a Subsidiary that is otherwise subsequently designated by the Committee as a Participating Subsidiary,
the period of employment of employees of such Participating Subsidiary occurring prior to the time of such acquisition or designation will be included for purposes of determining whether an employee
has been employed for the requisite period of time under the Plan.

2.9"Exchange Act"means the Securities Exchange Act of 1934, as amended.

2.10"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 mean between the reported high and low sale prices of the Common Stock at the end
of the regular trading session, which as of the effective date of this Plan is 4:00 p.m., New York City time, 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

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unlisted trading privileges or reported, the closing bid price at the end of the regular trading session, which as of the effective date of this Plan is 4:00 p.m., New York City time, as
reported by the Nasdaq SmallCap Market, OTC Bulletin Board, National Quotation Bureau, Inc. or other comparable service; or (c) if the Common Stock is not so listed or reported, such
price as the Committee determines in good faith in the exercise of its reasonable discretion.

2.11"Offering Commencement Date"means the first day of an Offering Period.

2.12"Offering Period"means any of the offerings to Participants of Options under the Plan, each
continuing for a period of six months, as described in Section 6 of the Plan, except as otherwise set forth in Section 6.2 of the Plan.

2.13"Offering Termination Date"means the last day of an Offering Period.

2.14"Option"means a right to purchase shares of Common Stock granted to a Participant in connection
with an Offering Period pursuant to Section 8 of the Plan

2.15"Participant"means an Eligible Employee who elects to participate in the Plan pursuant to
Section 5 of the Plan.

2.16"Participating Subsidiary"means a Subsidiary that has been designated by the Committee from time
to time, in its sole discretion, as a corporation whose Eligible Employees may participate in the Plan.

2.17"Purchase Price"means, with respect to any Offering Period, the lower of (a) 85% of the
Fair Market Value of one share of Common Stock on the Offering Commencement Date, or (b) 85% of the Fair Market Value of one share of Common Stock on the Offering Termination Date.

2.18"Securities Act"means the Securities Act of 1933, as amended.

2.19"Subsidiary"means any subsidiary corporation of the Company within the meaning of
Section 424(f) of the Code.

2.20"Termination of Employment"means a Participant's complete termination of employment with the
Company and all Participating Subsidiaries for any reason, including death, disability or retirement. In the event that a Participant is in the employ of a Participating Subsidiary and the
Participating
Subsidiary ceases to be a Participating Subsidiary of the Company for any reason, such event will be deemed a termination of employment unless the Participant continues in the employ of the Company or
another Participating Subsidiary.

3.Administration.

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 12 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. 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 Participants 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 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 final,

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conclusive and binding for all purposes and on all persons, including, without limitation, the Company, the stockholders 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 Option granted under the
Plan.

4.Shares Available for Issuance; Adjustments for Certain Events.

4.1Maximum 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 250,000 shares of Common Stock, which may either be authorized but unissued shares or
shares held by the Company in its treasury. If the total number of shares of Common Stock that would otherwise be issuable upon the exercise of Options granted pursuant to Section 8 of the Plan
on any Offering Termination Date exceeds the number of shares then available for issuance under the Plan, the Committee will make a pro rata allocation of the shares of Common Stock remaining
available for issuance under the Plan in as uniform and equitable a manner as it deems appropriate.

4.2Accounting for Options.Shares of Common Stock that are issued under the Plan or that are subject
to outstanding Options 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 Option
that is terminated unexercised will automatically again become available for issuance under the Plan.

4.3Adjustments to Shares and Options.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 similar 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, the number and kind of securities or other property (including cash) subject to, and the exercise
price of, outstanding Options.

5.Participation.

5.1Participation.Participation in the Plan is voluntary and is not a condition of employment.
Eligible Employees may elect to participate in the Plan, beginning with the first Offering Period to commence after such person becomes an Eligible Employee, by properly completing a participation
agreement authorizing payroll deductions on the form of participation agreement provided by the Company and filing the participation agreement with the Company's Human Resources Department or the
stock brokerage or other financial services firm designated by the Company ("Designated Broker") not later than the 10th business day immediately preceding the Offering Commencement Date
of the first Offering Period in which the Participant wishes to participate. An Eligible Employee who elects to participate with respect to an Offering Period will be deemed to have elected to
participate in each subsequent Offering Period, unless such Participant properly completes and files a notice of withdrawal form in the manner described in Section 9.1 of the Plan.

5.2Limitation on Participation.Notwithstanding Section 8.1 or any other provisions of the Plan
to the contrary, an Eligible Employee will not be granted an Option under the Plan:



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6.Offering Periods.

6.1Generally.Options to purchase shares of Common Stock will be offered to Participants under the
Plan through a continuous series of Offering Periods, each continuing for three months, commencing on January 1, April 1, July 1 and October 1 of each year and terminating
on March 31, June 30, September30 and December 31 of each year, as the case may be, except as otherwise provided in Sections 6.2 and 6.3 of the Plan. The first Offering Period
will commence on January 1, 2001.

6.2Discretion to Change Offering Periods.Notwithstanding the foregoing, and without limiting the
authority of the Committee under Section 3, 4.3 and 14 of the Plan, the Committee, in its sole discretion, may (a) accelerate the Offering Termination Date of the then current Offering
Period and provide for the exercise of Options thereunder by Participants in accordance with Section 8.2 of the Plan, or (b) accelerate the Offering Termination Date of the then current
Offering Period and provide that all payroll deductions credited to the accounts of Participants will be paid to Participants as soon as practicable after such Offering Termination Date and that all
Options for such Offering Period will automatically be canceled and will no longer be exercisable, if such change is announced at least five (5) days prior to the newly scheduled Offering
Termination Date. In addition, the Board of Directors of the Company will have the power to change the duration and/or frequency of Offering Periods with respect to future offerings without
stockholder approval if such change is announced at least five (5) days prior to the scheduled beginning of the first Offering Period to be affected.

7.Payroll Deductions.

7.1Payroll Deduction Plan.This Plan will be operated as a payroll deduction plan. By completing and
filing a participation agreement, a Participant will elect to have payroll deductions made from such Participant's total Compensation (in whole percentages from a minimum of 1% to a maximum of 10%, or
such other minimum or maximum percentages as the Committee may from time to time establish, but not to exceed 10%) on each payday during the time he or she is a Participant in the Plan in such amount
as such Participant designates on the participation agreement.

7.2Commencement of Payroll Deductions.All payroll deductions will commence on the first payroll paid
following the Offering Commencement Date of the first Offering Period in which the Participant wishes to participate and will continue until terminated by the Participant as provided in
Section 9.1 of this Plan.

7.3Participants' Accounts.All payroll deductions authorized by a Participant will be credited as of
each payday to an account established under the Plan for the Participant. Such account will be solely for bookkeeping purposes, no separate fund, trust or other segregation of such amounts will be
established or made and the amounts represented by such account will be held as part of the Company's general assets, usable for any corporate purpose. A Participant may not make any separate cash
payment or contribution to such Participant's account. No interest will accrue on amounts held in such accounts under the Plan.

7.4Ability to Increase or Decrease Payroll Deductions.A Participant may increase or decrease the
amount of his or her payroll deductions under the Plan (subject to such limitations on the frequency of

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such changes as may be imposed by rules adopted by the Committee from time to time) by properly completing an amended participation agreement and filing it with the Company's Human Resources
Department or Designated Broker not less than 15 days prior to the commencement of the pay period for which such change in payroll deductions is to be effective or, with respect to commissions,
bonuses or other Compensation that is indeterminate and subject to performance goals or criteria, not less than 10 days prior to the date that such performance related Compensation is paid. A
Participant may withdraw from participation in the Plan at any time as provided in Section 9.1 of the Plan.

7.5Limitations on Payroll Deductions.Notwithstanding the foregoing, a Participant's payroll
deductions may be decreased by the Company to zero percent (0%) at any time during any Offering Period scheduled to end during the then current calendar year as a result of the limitations set forth
in
Section 5.2(b) of the Plan or in order to avoid unnecessary payroll contributions as a result of application of the maximum share limit set forth in Section 5.2(c) of the Plan. Payroll
deductions will re-commence at the rate provided in such Participant's participation agreement at the beginning of the first Offering Period that is scheduled to end in the following
calendar year, unless terminated by the Participant as provided in Section 9.1 of the Plan.

8.Options.

8.1Grant of Options.With respect to any Offering Period, each Participant participating in such
Offering Period will be granted, by operation of the Plan on the Offering Commencement Date for such Offering Period, subject to the limitations contained in Section 5.2 of the Plan, an Option
to purchase (at the Purchase Price) as many full shares of Common Stock as such Participant will be able to purchase with the accumulated payroll deductions credited to such Participant's account
during such Offering Period plus the balance (if any) carried forward from the Participant's payroll deduction account from the preceding Offering Period.

8.2Exercise of Options.



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9.Withdrawal From Plan.

9.1Voluntary Withdrawal.A Participant may, at any time on or before 5:00 p.m., Minnesota time,
on the 15th day of the last month of an Offering Period, terminate his or her participation in the Plan and withdraw all, but not less than all, of the payroll deductions credited to such
Participant's account under the Plan by giving written notice to the Company's Human Resources Department or the Designated Broker, as directed by the Company. Such notice must state that the
Participant wishes to terminate his or her participation in the Plan and request the withdrawal of all of the Participant's payroll deductions held under the Plan. All of the Participant's payroll
deductions credited to his or her account will be paid to such Participant as soon as practicable after receipt of the notice of withdrawal, such Participant's Option for such Offering Period will
automatically be canceled and will no longer be exercisable, and no further payroll deductions for the purchase of shares of Common Stock under the Plan will be made.

9.2Termination of Employment.



9.3Effect of Withdrawal.A Participant's withdrawal pursuant to Section 9.1 of the Plan will
not have any effect upon such Participant's eligibility to participate in a subsequent Offering Period (so long as such Participant completes and files a new participation agreement pursuant to
Section 5 of the Plan) or in any similar plan that may hereafter be adopted by the Company.

10.Change in Control.

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



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10.2Continuity Directors.For purposes of this Section 10, "Continuity Directors" of the
Company will mean any individuals who are members of the Board on the effective date of the Plan and any individual who subsequently becomes a member of the Board whose election, or nomination for
election by the Company's stockholders, was approved by a vote of at least a majority of the Continuity Directors (either by specific vote or by approval of the Company's proxy statement in which such
individual is named as a nominee for director without objection to such nomination).

10.3Adjustment of Offering Period.Without limiting the authority of the Committee under Sections 3,
4.3 and 14 of the Plan, if a Change in Control of the Company occurs, the Committee, in its sole discretion, may (a) accelerate the Offering Termination Date of the then current Offering Period
and provide for the exercise of Options thereunder by Participants in accordance with Section 8.3 of the Plan, or (b) accelerate the Offering Termination Date of the then current
Offering Period and provide that all payroll deductions credited to the accounts of Participants will be paid to Participants as soon as practicable after such Offering Termination Date and that all
Options for such Offering Period will automatically be canceled and will no longer be exercisable.

11.Designation of Beneficiary.

A
Participant may file with the Company's Human Resources Department a written designation of a beneficiary who is to receive shares of Common Stock and cash, if any, under the Plan
in the event of such Participant's death prior to delivery of such shares or cash to such Participant. Such designation of beneficiary may be changed by the Participant at any time by written notice
the Company's Human Resources Department. In the event of the death of a Participant in the absence of a valid designation of a beneficiary who is living at the time of such Participant's death,
(a) the Company will deliver such shares of Common Stock and cash to the executor or administrator of the estate of the Participant, or (b) if to the Company's knowledge no such executor
or administrator has been appointed, the Company, in its sole discretion, may deliver such shares of Common Stock and cash to the spouse or to any one or more dependents or relatives of the
Participant or, if no spouse, dependent or relative is known to the Company, to such other person as the Company may designate.

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12.Rights of Eligible Employees and Participants; Transferability.

12.1No Right to Employment.Nothing in the Plan will interfere with or limit in any way the right of
the Company or any Participating Subsidiary to terminate the employment of any Eligible Employee or Participant at any time, nor confer upon any Eligible Employee or Participant any right to continue
in the employ of the Company or any Participating Subsidiary.

12.2Rights as a Stockholder.As a holder of an Option under the Plan, a Participant will have no
rights as a stockholder unless and until such Option is exercised and the Participant becomes the holder of record of shares of Common Stock. Except as otherwise provided in the Plan, no adjustment
will be made for dividends or distributions with respect to Options 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 sole discretion.

12.3Restrictions on Transfer.Neither payroll deductions credited to a Participant's account nor any
rights with regard to the exercise of an Option or to receive shares of Common Stock under the Plan may be assigned, transferred, pledged or otherwise disposed of in any way (other than by will, the
laws of descent and distribution, or as provided in Section 11 of the Plan) by the Participant. Any such attempt at assignment, transfer, pledge or other disposition will be without effect,
except that the Company may treat such act as an election to withdraw from the Plan in accordance with Section 9.1 of the Plan. During his or her lifetime, a Participant's Option to purchase
shares of Common Stock under the Plan is exercisable only by such Participant.

13.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 the
Plan, and a Participant may not sell, assign, transfer or otherwise dispose of shares of Common Stock issued pursuant to Options 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 that 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.

14.Amendment or 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
Options 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 stockholders of the Company if stockholder approval of the amendment is then required pursuant to Section 423 of the Code or the
rules of any stock exchange or Nasdaq or similar regulatory body. Upon termination of the Plan, the Committee, in its sole discretion, may take any of the actions described in Section 10.3 of
the Plan.

15.Effective Date of Plan.

Subject
to shareholder approval, the Plan will be effective as of January 1, 2001. If shareholder approval is not obtained prior to October 1, 2001, the Plan will no
longer be deemed effective, and all Options will automatically be canceled and will no longer be exercisable. The Plan will terminate at midnight on December 31, 2010 and may be terminated
prior to such time by Board action, and no Option will be granted after such termination.

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16.Miscellaneous.

16.1Governing 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 Delaware, notwithstanding the conflicts of laws
principles of any jurisdictions.

16.2Successors 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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