**Exhibit10-b**

 

**COMPENSATION PLAN FOR NONEMPLOYEEDIRECTORSOF ADC TELECOMMUNICATIONS, INC.AMENDED AND RESTATED AS OF JANUARY 1, 2004**

 

**1.****                                      Purpose**

 

The purpose of thisCompensation Plan (the “Plan”) is to enable Directors of ADCTelecommunications, Inc. (the “Company”) who are not employees of the Companyto elect to receive their fees as members of the Board of Directors in a formmost advantageous to them. The Plan permits such Directors to elect to receivethis compensation in one or more of the following methods:

 

a.                                       Incash on a current basis;

 

b.                                      Incash on a deferred basis (a “Deferred Cash Election”);

 

c.                                       InCompany stock on a deferred basis (a “Deferred Stock Election”); or

 

d.                                      Ifdetermined by the Compensation Committee of the Board of Directors each year,in options to acquire Company stock on a current basis (an “Option ExchangeElection”).

 

**2.****                                      EffectiveDate**

 

This Plan was originallyadopted on March 30, 1982.  Theeffective date of this restatement is January 1, 2004.

 

**3.****                                      Eligibility**

 

All members of the Boardof Directors who are not employees of the Company (“Participants”) are eligiblefor the Plan.

 

**4.****                                      CompensationCovered by the Plan**

 

The compensation coveredby the Plan which is eligible to be deferred or exchanged is as follows (the“Eligible Fees”):

 

a.                                       Fora Deferred Cash Election:  the annualcash retainer, any non-Executive Board or Committee Chair retainer, and allmeeting attendance fees;

 

b.                                      Fora Deferred Stock Election or an Option Exchange Election:  The annual cash retainer and any BoardCommittee Chair retainer.

 

No other compensation orfees otherwise payable to a Director shall be eligible for an election underthis Plan.

 

**5.****                                      Electionto Defer**

 

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Elections to deferEligible Fees must be made with respect to each Plan Year.  Each Participant may, in lieu of receivingcurrent covered compensation for any Plan Year, elect to defer Eligible Fees asfollows using the Deferral Election Form attached hereto as ***Exhibit A***:

 

a.                                       AllEligible Fees;

 

b.                                      Anydesignated percentage of his/her Eligible Fees; or

 

c.                                       Anydesignated dollar amount of his/her Eligible Fees.

 

To be effective for anyPlan Year, a Deferral Election Form must be submitted to the Company prior tothe first day of the Plan Year.  Thatportion of Eligible Fees for which a valid Deferral Election Form has not beentimely received by the Company will be paid in cash in accordance with theCompany’s customary practice of paying such Eligible Fees.  Once a Plan Year has commenced, all DeferralElections under this Plan for such Plan Year shall be irrevocable.

 

**6.****                                      PlanYear**

 

ThePlan shall operate on a calendar year basis.

 

**7.****                                      DeferredCash Election**

 

For Directors who make aDeferred Cash Election, the Company will establish an account (a “DeferralAccount”) and will credit to the Deferral Account the amount of the EligibleFees earned by him/her as of the date such fees would normally be payable bythe Company. In addition, the Company shall accrue as of the last day of eachmonth, interest on the balance in such Deferral Account at the prime commercialrate (the “Prime Rate”) of Wells Fargo Bank Minnesota, N.A., in effect for suchmonth.

 

a.                                       Fundingof the Deferral Account

 

The amounts credited toeach Participant’s Deferral Account shall not be held by the Company in atrust, escrow or similar fiduciary capacity, and neither the Participant, norany legal representative, shall have any right against the Company with respectto any portion of the Deferral Account except as a general unsecured creditorof the Company.

 

b.                                      Timingof Distributions

 

At the time aParticipant’s **initial** Deferred Cash Election is made, each Participant shallspecify the time and manner in which the balance in his/her Deferral Accountshall be distributed.  The time andmanner for distributions specified on a Participant’s **initial**election form shallremain in effect for **all** successive elections until amended in accordance with Section7(d).  If a Participant does not specifyan election for the timing and manner of a distribution, the balance of aParticipant’s Deferral Account shall be distributed in a lump sum within 30days following such Participant’s cessation of service as a member of the Boardof Directors.  The Participant shall beentitled to receive, or to commence receiving, his/her deferred cash compensationas follows:

 

i.                              On adate set by him/her;

 

ii.                           On theoccurrence of a stated event, such as his/her death, retirement from his/herprincipal business activity, termination of services as a Director, disability

 

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or anyother event or occurrence stipulated by him/her and approved by the Company.

 

c.                                       Mannerof Distribution

 

Each Participant shall beentitled to receive the balance in his/her Deferral Account in any one of thefollowing manners:

 

i.                            Ina lump sum;

 

ii.                         Inapproximately equal quarterly installments over a period of years stipulated byhim/her;

 

iii.                      Inapproximately equal quarterly installments of a value stipulated by him/heruntil the Deferral Account is exhausted; or

 

iv.                     Anyother form or manner of distribution determined by him/her and approved by theCompany.

 

d.                                      Amendmentsto Timing or Form of Distribution

 

A Participant may rescindthe initial designation of the timing and manner of distribution made pursuantto Section 7(b) by making a new designation on the Distribution Amendment Formattached hereto as ***Exhibit B***.  To be effective, such Distribution AmendmentForm must be made no later than the last day of the second Plan Year precedingthe Plan Year in which distribution is to commence.  (By way of example, a Participant who receives a distribution in2004 must have made a new designation no later than December 31, 2002, for thenew designation to be effective.)  Oncedistributions have commenced pursuant to a valid distribution election, nofurther amendments to the manner of such distribution may be made.

 

**8.****                                      DeferredStock Election**

 

a.                                       ExchangeElection

 

Eligible Participants mayelect to exchange part or all of their Eligible Fees for a Plan Year for theCompany’s commitment to issue to such Participants a fixed number of shares ofcommon stock of the Company at a future date. No actual shares of common stock shall be issued until the distributiondate described in Section 8(c) hereof. The Company’s commitment to issue shares shall be referred to as“Phantom Shares.”  The Phantom Sharesshall not be considered issued and outstanding shares for purposes ofshareholder voting rights, but shall be treated the same as outstanding sharesfor purposes of dividends and other distributions.

 

The number of shareswhich the Company shall be obligated to issue as a result of a Deferred StockElection will equal the dollar amount of the Eligible Fee elected to bedeferred divided by the closing price of ADC common stock on first business dayof the Plan Year for which the election is effective, rounded to the nearestwhole number of shares.  An example ofthis calculation is attached hereto as ***Exhibit C***.

 

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b.                                      Termsand Vesting of Phantom Shares

 

The Phantom Shares shallbe subject to forfeiture if the Participant ceases to serve as a Director atany time during the Plan Year for which such Phantom Shares were issued.  All Phantom Shares issued under and subjectto the terms of this Plan will be issued under the Company’s Global StockIncentive Plan and/or its successor plans and shall be deemed to be “restrictedstock units” for purposes of such Plan.

 

c.                                       Distributionof Phantom Shares

 

Providedthat the Phantom Shares have not been forfeited, the actual shares of theCompany’s common stock represented by the Phantom Shares will be distributed assoon as administratively feasible following the Participant’s cessation ofservice as a member of the Board of Directors.

 

**9.****                                      OptionExchange Election**

 

a.                                       ExchangeElection

 

If so determined by theCompensation Committee of the Board of Directors prior to the start of eachPlan Year, participants may elect to exchange part or all of their EligibleFees for a Plan Year for options to purchase common stock of the Company.  The number of option shares granted as aresult of the exchange will equal the dollar amount of the Eligible Feeselected to be exchanged multiplied by 4.5, with this product being divided bythe closing price of ADC common stock on the effective date of the grant.  The final number of option shares will berounded to the nearest whole number of shares. An example of this exchange calculation is attached hereto as ***Exhibit D***.

 

b.                                      EffectiveDate of Stock Option Grant

 

The effective date of thestock options granted under the Plan will be the first business day of the PlanYear for which an election is made.

 

c.                                       Termsand Vesting of Options

 

The exercise price of thestock options granted under this Plan will be the closing price of theCompany’s common stock on the effective date of the grant.  All options granted under this Plan shallvest and become exercisable one (1) year after the effective date of the grant,provided that the Participant continues to serve as a Director of the Companyduring such one (1) year period.  Theterm of the options granted under this Plan shall be ten (10) years, subject toearlier termination in the case of death. All options granted under this Plan will be nonqualified stock options,and not “incentive stock options” within the meaning of Section 422 of theInternal Revenue Code of 1986, as amended.

 

d.                                      StockOption Issuance

 

All stock options issuedunder this Plan will be granted under the Company’s Global Stock Incentive Planand/or its successor plans.  The termsof each option grant will be detailed in the Global Stock Incentive Plan and astock option agreement provided as soon as administratively feasible followingthe date of the grant.

 

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**10.****                               GeneralProvisions**

 

a.                                       Distributionin Event of Death

 

In the event of death,distribution of the Deferral Account or actual shares of common stockrepresented by Phantom Shares will be made to the Beneficiary named by theParticipant or to that person who would have a right to receive suchdistribution by will or by the applicable laws of descent anddistribution.  The transfer ofoutstanding stock options in the event of death shall be determined by theterms of the stock option agreement and the Company’s Global Stock IncentivePlan.

 

b.                                      Distributionin Event of Change of Control

 

Notwithstanding any otherprovision of this Plan, in the event of a Change of Control (as defined below),each Participant shall receive within ten (10) business days after the date ofsuch Change of Control, the following:

 

i.                                          Ifa Participant has a balance in the Deferral Account, a lump sum payment of theentire balance contained in his/her Deferral Account, together with interest atthe Prime Rate, on the average daily balance in such Deferral Account for theperiod since the last interest accrual pursuant to Section 7 through the dateof such Change of Control;

 

ii.                                       Ifa Deferred Stock Election is in effect, a distribution of the number of sharesrepresented by the Phantom Shares issued pursuant to such election, includingany Phantom Shares that have not yet vested pursuant to Section 8(b) hereof.

 

iii.                                    Ifan Option Exchange Election is in effect, the exercisability of the optionswill be determined by the terms of the stock option agreement.

 

For purposes of thisSection 10(c), a “Change in Control” shall have the meaning given to suchphrase in the Company’s Executive Change in Control Severance Pay Plan (2002Restatement), effective July 1, 2001.

 

d.                                      Administrationof the Plan

 

The Plan shall beadministered by the Board of Directors or Compensation Committee of the Boardof Directors.

 

e.                                       Amendmentor Termination

 

This Plan may be amendedor terminated at any time by the Board of Directors or the CompensationCommittee of the Board of Directors.

 

f.                                         CautionaryStatement

 

Participants should beaware that their participation in the Plan involves the following risks, amongothers:

 

i.                                          Balancesin the Deferral Account represented unfunded, unsecured general obligations ofthe Company.  If the Company is unableto pay its debts as they become due, Participants may not be able to collectthe balances in their Deferral Accounts.

 

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ii.                                       Thevalue of the Phantom Shares issued and the stock options granted pursuant tothe Plan will depend on the value of ADC common stock.  An investment in ADC common stock involvesrisk.  Participants are encouraged toreview ADC’s filings with the U.S. Securities and Exchange Commission for adescription of some of the risk factors associated with an investment in ADC’scommon stock.

 

iii.                                    Exceptas otherwise provided in the Plan, stock options and the Phantom Shares issuedpursuant to the Plan are subject to forfeiture if a Participant does notmaintain service as a Director through the end of the Plan Year of suchissuance.

 

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** **

**EXHIBIT A**

 

**DEFERRAL ELECTION FORM**

 

I, the undersigned, aDirector of ADC Telecommunications, Inc., am making the following elections forthe deferral of any Eligible Fees I may receive, as described in theCompensation Plan for Nonemployee Directors of ADC Telecommunications, Inc.(restated as of January 1, 2004).

 

I elect to defer theEligible Fees for the Plan Year commencing **January 1,             **(specify dollar amount or percent of Eligible Fees):

 
|                                 |   | **Deferred  Cash  Election** |   | **Deferred  Stock  Election** |   | **Option  Exchange  Election*** |   |
|--------------------------------------|--------|------------------------------|--------|-------------------------------|--------|---------------------------------|--------|
| Annual  Retainer                     |   |                         |   |                          |   |                            |   |
| Chair  Retainer (Board or Committee) |   |                         |   |                          |   |                            |   |
| Meeting  Attendance Fees             |   |                         |   | N/A                           |   | N/A                             |   |

 

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*This column to beincluded in the annual election form only if applicable based on the discretionof the Compensation Committee of the Board.

 

If you are making an **initial**DeferredCash Election, please specify the timing and manner for distribution of yourDeferred Account:

 

I elect to beginreceiving deferred cash compensation on:

 

Specified Date               

Specified Event                                                       

 

I elect to receivedeferred cash compensation in the following manner:

 

    LumpSum

    EqualQuarterly Installments for     number of years.

    EqualQuarterly Installments of       dollars.

    OtherManner                                           

 

I understand that anyelection I make to defer Eligible Fees will be covered by the terms of theCompensation Plan for Nonemployee Directors of ADC Telecommunications, Inc.(restated as of January 1, 2004), a copy of which I have received.

 
| Date   |         |   | By |   |   |
|--------|--------------|--------|----|--------|--------|
|   |         |   |
|   |         |   |
|   | (Print Name) |   |
|        |              |        |    |        |        |  |

 

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**EXHIBIT B**

 

**DISTRIBUTION AMENDMENT FORM**

 

 

I, the undersigned, aDirector of ADC Telecommunications, Inc., hereby amend the distribution planfor the balance in my Deferred Account maintained pursuant to the CompensationPlan for Nonemployee Directors of ADC Telecommunications, Inc. (restated as ofJanuary 1, 2004), as follows:

 

 

I elect to beginreceiving deferred cash compensation on:

 

Specified Date               

Specified Event                                                       

 

I elect to receivedeferred cash compensation in the following manner:

 

    LumpSum

    EqualQuarterly Installments for     number of years.

    EqualQuarterly Installments of       dollars.

    OtherManner                                           

 

 

I understand that thisamendment is only effective if my distributions commence on or after the firstday of the second Plan Year after the Plan Year during which this amendment isfiled.

 
| Date   |         |   | By |   |   |
|--------|--------------|--------|----|--------|--------|
|   |         |   |
|   |         |   |
|   | (Print Name) |   |
|        |              |        |    |        |        |  |

 

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**EXHIBIT C**

 

**DEFERRED STOCK EXAMPLE – PHANTOMSHARES**

 

Assumptions

 
| Deferred Stock  Election:                         | 50% of Eligible Fees             |
|---------------------------------------------------|----------------------------------|
| Annual Cash Retainer  Fee:                        | $25,000                          |
| FMV of stock on first  business day of Plan Year: | $5.00                            |
| Effective Date of Grant:                          | First business day of  Plan Year |

 

 
| Exchange Calculation | (Number of Phantom  Shares awarded) |    |   |
|----------------------|-------------------------------------|---------|--------|
|                 |                                |    |   |   |
|                 | Fee x Exchange  Election%           |    | =      |
|                 | FMV per share on  Effective Date    |    |   |
|                 |                                |    |   |   |
|                 | $25,000 x 50%                       |    | =      |
|                 | $5.00                               |    |
|                 |                                |    |
|                 |                                | $12,500 |   | =  2,500 Phantom Shares |
|                 |                                | $5.00   |   |
|                      |                                     |         |        |  |  |  |  |  |  |

 

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**EXHIBIT D**

 

**EXCHANGE EXAMPLE – STOCK OPTIONS***

 

Assumptions

 
| Option Exchange  Election:                        | 50% of Eligible Fees             |
|---------------------------------------------------|----------------------------------|
| Annual Cash Retainer  Fee:                        | $25,000                          |
| FMV of stock on first  business day of Plan Year: | $5.00                            |
| Effective Date of  Grant:                         | First business day of  Plan Year |

 

 
| Exchange Calculation | (Number of Phantom  Shares awarded) |    |   |
|----------------------|-------------------------------------|---------|--------|
|                 |                                |    |   |   |
|                 | Fee x Exchange  Election% x 4.5     |    | =      |
|                 | FMV per share on  Effective Date    |    |
|                 |                                |    |   |   |
|                 |  $25,000 x 50% x  4.5     |    | =      |
|                 | $5.00                               |    |
|                 |                                |    |
|                 |                                | $56,250 |   | =  11,250 option shares |
|                 |                                | $5.00   |   |   |
|                      |                                     |         |        |  |  |  |  |  |  |

 

 

Exercise Price ofOptions:  $5.00 (FMV on grant date)

 

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*This Example to beincluded in annual form only if applicable based on the discretion of theCompensation Committee of the Board.

 

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**EXHIBITE**

**BENEFICIARYELECTION FORM**

** **

**COMPENSATIONPLAN FOR NONEMPLOYEE DIRECTORS OFADC TELECOMMUNICATIONS, INC.**

 

# **I.**                                         DIRECTORINFORMATION 

 
| Last Name | First | MI (if applicable) |
|-----------|-------|--------------------|

 

Mailing Address *(If you havean address change, contact your Human Resources Department)*

 
| City | Province (if  applicable) Country | Postal Code |
|------|-----------------------------------|-------------|

 

**II.**                  BENEFICIARYDESIGNATION

 

In accordance with theprovisions of the Plan, I hereby designate any and all deferral amounts payableunder the Plan by reason of my death to the following beneficiary(ies).  Further, I understand that should my primarybeneficiary(ies) precede me in death, my contingent beneficiary(ies) willbecome the primary beneficiary(ies) of my Plan account and any accumulatedcontributions.  I understand that thisbeneficiary designation revokes any previous designation(s).  I understand that in the event any personsdesignated below survive me, any and all death benefits payable will bedistributed in accordance with the provisions of the Plan.  I also reserve the right to change thisdesignation at any time by completing a new Beneficiary Election Form.

 

PRIMARY BENEFICIARY(IES)

 
| **Name** |   | **Relationship  (Date of Birth)** |   | **Address  & Phone Number** |   | **Percent Of  Benefit  (Total = 100%)** |   |
|----------|--------|-----------------------------------|--------|---------------------------------|--------|-----------------------------------------|--------|
|     |   |                              |   |                            |   |                                    |   |
|     |   |                              |   |                            |   |                                    |   |
|     |   |                              |   |                            |   |                                    |   |

 

CONTINGENT BENEFICIARY(IES)

 
| **Name** |   | **Relationship  (Date of Birth)** |   | **Address  & Phone Number** |   | **Percent Of  Benefit  (Total = 100%)** |   |
|----------|--------|-----------------------------------|--------|---------------------------------|--------|-----------------------------------------|--------|
|     |   |                              |   |                            |   |                                    |   |
|     |   |                              |   |                            |   |                                    |   |
|     |   |                              |   |                            |   |                                    |   |

 

# **III.**                                 SIGNATURE

 
| **Signature** | **Date** |
|---------------|----------|

 

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