Prepared by MERRILL CORPORATION




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Exhibit 10-d  


ADC The Broadband CompanyTM
 Management Incentive Plan Document

Fiscal Year 2002  





 
 
 

MANAGEMENT INCENTIVE PLAN DOCUMENT
  Fiscal Year 2002    
  


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, 2001 through
October 31, 2002. 


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 2002 is limited to full or part-time regular executives, certain management and higher-level individual contributor
positions. Temporary employees and independent contractors are not eligible for participation in this plan. In order to be eligible, an employee cannot participate in any other ADC incentive plan
other than the stock option program and must be employed in an eligible position on or before October 1, 2002. 


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. In the past, this payment date
has generally occurred in late December. All payments are subject to appropriate withholdings. 



Plan Goals  


        The Plan reinforces the key goals that support ADC's long-term strategic plans. These goals differ across business groups. 


        Although
EVA Improvement has been and continues to be a key measure of ADC success, it will not be directly measured in this year's Plan. Rather, the Plan will focus on the key EVA
Improvement drivers of revenue, expense as a percent of revenue and balance sheet measures. 


        The
balance sheet goal is a measurement of how well ADC manages cash flow and may be in the form of free cash flow, inventory turns or days sales outstanding depending upon business
unit. 


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        Following
is a description of each plan component: 



	Plan Goal
 
	 	Definition

	

Revenue	
 	

The value ADC can recognize for goods shipped or services provided to our customers, net of returns received and in accordance with U.S. accounting principles (GAAP).
	

Expense as a Percent of Revenue	
 	

Operating and fixed cost of sales expenses expressed as a percent of revenue:

Pro-Forma Operating Expense + Fixed Cost of Sales Expenses

Revenue
	

Free Cash Flow	
 	

Total cash provided by our operating activities less property and equipment purchases:

(Total Cash Provided by Operating Activities) — (Property and Equipment Purchases)
	

Inventory Turns	
 	

Measures how fast we move inventory through our factories and distribution centers. Payment will be based on a rolling three-month average as of October 2002. The following calculation will be used:

[Three-month sum of Direct Cost of Sales/# of working days in those months] * # of working days in fiscal year

(Mo. 1 Ending Direct Inventory + Mo. 2 + Mo. 3)/3
	

Days Sales Outstanding (DSO)	
 	

Measures how quickly we collect money owed to ADC for the products and services we sell. Payment will be based on the internal DSO calculation as of October 31, 2002:

Average Gross Accounts Receivable

Average Daily Net Sales over the previous 13-week period





Individual Performance  


        In addition to the business performance goals, an individual performance factor will be applied to the calculation of incentive payments for 2002. The individual
multiplier will be based on the performance ratings as defined in the new ADCperform performance management system and will be applied at the time of payment as follows: 



	Rating
 
	 	Individual Performance Adjustment

	

1 (Top 5-10%)	
 	

Business Performance × 1.5
	

2 (Middle 80-90%)	
 	

Business Performance × 1.0
	

3 (Bottom 5-10%)	
 	

Business Performance × 0.5






Minimum Performance Payment Requirement  


        To ensure protection of shareholder interest, a minimum level of operating income must be achieved before an incentive payment can be generated. 


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Calculation of Payment  


        Prior to making any payment under this Plan, the Board of Directors must agree that the claimed performance levels have been achieved. The size of an incentive
award will be based on four factors: 




	1.
	Target Incentive Opportunity  —expressed as a percentage of an individual's FY 2002 eligible base salary earnings.



	2.
	FY2002 Eligible Base Salary Earnings  . This is the amount actually paid to the participant during the fiscal year in Base Salary. Base Salary for purposes
of this Plan includes paid time off (such as vacation,
sick pay or PTO), and excludes any salary continuation pay paid through ADC payroll and any disability insurance paid by an insurer.



	3.
	Business Performance    against the established goals.



	4.
	Individual Performance Multiplier  . 





        The
range of potential awards can be from zero to three times the target award. At target business and Level 2 individual performance, the award would be 100% of the stated target
percent of Base Salary Earnings. 


        For
the business performance factors, this can be expressed as follows: 



	Threshold
 
	 	Annual Operating Plan (AOP)
	 	Target
	 	Maximum

	0% of Target Incentive Opportunity	 	50% of Target Incentive Opportunity	 	100% of Target Incentive Opportunity	 	300% of Target Incentive Opportunity





        Results
between threshold-target, AOP-target, and target-maximum are interpolated for each goal. 


        Here
is an example of a hypothetical award calculation. Refer to the Goal Sheet for the performance factors and weightings that apply. 


        Assume
a Business Unit Plan participant with the following facts: 



	

Target Opportunity:	
 	

15% of base salary earnings
	

Base Salary Earnings:	
 	

60,000
	

Performance Rating:	
 	

Level 2
	

ADC Operating Income:	
 	

Performance above threshold





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Metrics
 
	
 	

Measure Weighting
	
 	

Performance
	
 	

Wtd. Perf.
	
 
	ADC Level Metrics 	 	 	 	 	 	 	 
	 	ADC Revenue	 	33.3	%	105	%	35.0	%
	 	Expense % of Revenue	 	33.3	%	95	%	31.6	%
	 	Free Cash Flow	 	33.3	%	115	%	38.3	%
	 	 	 	 	 	 	
	 
	 	 	 	 	 	 	104.9	% 
	
Business Unit Level Metrics 	
 	

 	
 	

 	
 	

 	
 
	 	Revenue	 	33.3	%	110	%	36.6	%
	 	Expense % of Revenue	 	33.3	%	90	%	30.0	%
	 	Inventory Turns or DSO	 	33.3	%	98	%	32.6	%
	 	 	 	 	 	 	
	 
	 	 	 	 	 	 	99.2	% 
	
Overall Weighted Performance 	
 	

 	
 	

 	
 	

 	
 
	 	ADC Metrics	 	40	%	104.9	% 	42.0	%
	 	Business Unit Metrics	 	60	%	99.2	% 	59.5	%
	 	 	 	 	 	 	
	 
	 	 	 	 	 	 	101.5	% 
	
Payment Calculation: 

60,000 (base salary) * 15% (incentive target) * 101.5% (business performance) * 1.0 (individual performance factor)= 9,135	
 	

 	
 	

 	
 





Effect of Change in Employment Status  


         Termination of Employment  . If employment with ADC is terminated for any reason other than death 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. 


        
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 full months served in each position. The participant must be in the new position by the first of the month and remain in the position for a full month
in order to receive credit for that month under the new plan, target or goals. Full year earnings will be prorated based on the number of full months eligible under each plan. For example, a
participant transferring from Software Systems to Connectivity on June 10 would receive eight months payment under the Software Systems plan (November-June) and four months under
Connectivity (July-October). In order to receive payment under the plan during the plan year, a participant must have completed one full month of service under the plan. 


        
Death  . If a participant dies during the fiscal year, a pro-rated payment will be made to the participant's estate. The payment will be based upon the time the
participant served in the eligible position during the fiscal year. 


Administration  


        A Management Incentive Plan Committee ("Committee"), appointed and authorized by the Company's Board of Directors, will administer this Plan. Subject to the
complete and full discretion of the Board of Directors, the Committee is authorized to make all decisions as required in administration 


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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. The Participant explicitly agrees with this modification right of ADC. 



Governing Law  


        The Plan is made and shall be continued in accordance with the laws of the State of Minnesota, U.S.A. 


Severability  


        If any provision of this Plan shall be held invalid, illegal or unenforceable by a court or tribunal of 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. 


Amendment or Termination of Plan  


        The Plan shall not entitle Participants to any future compensation. The Plan is not an element of the employees' 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. 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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MANAGEMENT INCENTIVE PLAN DOCUMENT Fiscal Year 2002