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EXHIBIT 10.1



Rural Cellular Corporation

2006 Omnibus Incentive Plan



Effective May 25, 2006













Table of Contents




	 	 	 	 	 
	Article 1. Establishment, Purpose, and Duration

	 	 	1	 
	 
	 	 	 	 
	Article 2. Definitions

	 	 	1	 
	 
	 	 	 	 
	Article 3. Administration

	 	 	6	 
	 
	 	 	 	 
	Article 4. Shares Subject to this Plan and Maximum Awards

	 	 	7	 
	 
	 	 	 	 
	Article 5. Eligibility and Participation

	 	 	9	 
	 
	 	 	 	 
	Article 6. Stock Options

	 	 	10	 
	 
	 	 	 	 
	Article 7. Stock Appreciation Rights

	 	 	11	 
	 
	 	 	 	 
	Article 8. Restricted Stock and Restricted Stock Units

	 	 	13	 
	 
	 	 	 	 
	Article 9. Performance Units/Performance Shares

	 	 	14	 
	 
	 	 	 	 
	Article 10. Cash-Based Awards and Other Stock-Based Awards

	 	 	15	 
	 
	 	 	 	 
	Article 11. Transferability of Awards

	 	 	16	 
	 
	 	 	 	 
	Article 12. Performance Measures

	 	 	16	 
	 
	 	 	 	 
	Article 13. Nonemployee Director Awards

	 	 	18	 
	 
	 	 	 	 
	Article 14. Dividend Equivalents

	 	 	18	 
	 
	 	 	 	 
	Article 15. Beneficiary Designation

	 	 	18	 
	 
	 	 	 	 
	Article 16. Rights of Participants

	 	 	18	 
	 
	 	 	 	 
	Article 17. Change of Control

	 	 	19	 
	 
	 	 	 	 
	Article 18. Amendment, Modification, Suspension, and Termination

	 	 	20	 
	 
	 	 	 	 
	Article 19. Withholding

	 	 	21	 
	 
	 	 	 	 
	Article 20. Successors

	 	 	21	 
	 
	 	 	 	 
	Article 21. General Provisions

	 	 	21	 














 









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Rural Cellular Corporation

2006 Omnibus Incentive Plan








Article 1. Establishment, Purpose, and Duration




     1.1     Establishment. Rural Cellular Corporation, a Minnesota corporation (hereinafter
referred to as the “Company”), establishes an incentive compensation plan to be known as the Rural
Cellular Corporation 2006 Omnibus Incentive Plan (hereinafter referred to as the “Plan”), as set
forth in this document.



     This Plan permits the grant of Nonqualified Stock Options, Incentive Stock Options, Stock
Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Shares, Performance
Units, Cash-Based Awards, and Other Stock-Based Awards.



     This Plan shall become effective upon shareholder approval (the “Effective Date”) and shall
remain in effect as provided in Section 1.3 hereof.



     1.2     Purpose of this Plan. The purpose of the Rural Cellular Corporation 2006 Omnibus Incentive
Plan is to enable Rural Cellular Corporation, its Subsidiaries, and/or Affiliates to attract,
retain, and reward Employees, Directors, and Third Party Service Providers and to strengthen the
mutuality of interests between such individuals and the Company’s shareholders, by offering such
individuals equity-based incentives.



     1.3     Duration of this Plan. Unless sooner terminated as provided herein, this Plan shall
terminate ten (10) years from the Effective Date. After this Plan is terminated, no Awards may be
granted but Awards previously granted shall remain outstanding in accordance with their applicable
terms and conditions and this Plan’s terms and conditions. Notwithstanding the foregoing, no
Incentive Stock Options may be granted more than ten (10) years after the earlier of (a) adoption
of this Plan by the Board or (b) the Effective Date.







Article 2. Definitions




     Whenever used in this Plan, the following terms shall have the meanings set forth
below, and when the meaning is intended, the initial letter of the word shall be capitalized.




	 	2.1	 	“Affiliate” shall mean any corporation or other entity (including, but not limited
to, a partnership or a limited liability company), that is affiliated with the Company
through stock or equity ownership or otherwise, and is designated as an Affiliate for
purposes of this Plan by the Committee.
	 
	 	2.2	 	“Annual Award Limit” or “Annual Award Limits” shall have the meaning set forth in
Section 4.3.
	 
	 	2.3	 	“Award” means, individually or collectively, a grant under this Plan of Nonqualified
Stock Options, Incentive Stock Options, SARs, Restricted Stock, Restricted Stock Units,
Performance Shares, Performance Units, Cash-Based Awards, or Other Stock-Based Awards, in
each case subject to the terms of this Plan.




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	 	2.4	 	“Award Agreement” means either (i) an agreement entered into by the Company and a
Participant setting forth the terms and provisions applicable to an Award granted under
this Plan or (ii) a written or electronic statement issued by the Company to a Participant
describing the terms and provisions of such Award, including any amendment or modification
thereof. The Committee may provide for the use of electronic, internet or other non-paper
Award Agreements and the use of electronic, internet or other non-paper means for the
acceptance thereof and actions thereunder by a Participant.
	 
	 	2.5	 	“Beneficial Owner” or “Beneficial Ownership” shall have the meaning ascribed to such
term in Rule 13d-3 of the General Rules and Regulations under the Exchange Act.
	 
	 	2.6	 	“Board” or “Board of Directors” means the Board of Directors of the Company.
	 
	 	2.7	 	“Cash-Based Award” means an Award, denominated in cash, granted to a Participant as
described in Article 10.
	 
	 	2.8	 	“Change in Control” means the happening of any of the following:






(a)     A majority of the directors of the Company elected by the holders of Company’s
Common Stock shall be persons other than persons:




(i)     for whose election proxies shall have been solicited by the Board, or




(ii)     who are then serving as directors appointed by the Board to fill vacancies on
the Board caused by death or resignation (but not by removal) or to fill
newly-created directorships,




(b)     30% or more of the outstanding voting stock of the Company is acquired or
beneficially owned (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, or
any successor rule thereto) by any person (other than the Company or a subsidiary of the
Company) or group of persons acting in concert (other than the acquisition and beneficial
ownership by a parent corporation or its wholly-owned subsidiaries, as long as they remain
wholly-owned subsidiaries, of 100% of the outstanding voting stock of the Company as a
result of a merger which complies with paragraph (c)(i)(B) hereof in all respects), or




(c)     The consummation of:




(i)     a merger or consolidation of the Company with or into another entity other than




(A)     a merger or consolidation with a subsidiary of the Company, or




(B)     a merger in which the persons who were the beneficial owners,
respectively, of the outstanding Common Stock and outstanding voting stock
of the Company immediately prior to such merger beneficially own, directly
or indirectly, immediately after the merger, a majority of, respectively,
the then outstanding common stock and the then outstanding voting stock of the
surviving entity or its parent entity, or



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(ii)     an exchange, pursuant to a statutory exchange of shares of outstanding
voting stock of the Company held by shareholders of the Company immediately prior to
the exchange, of shares of one or more classes or series of outstanding voting stock
of the Company for cash, securities, or other property, except for voting securities
of a direct or indirect parent entity of the Company (after giving effect to the
statutory share exchange) owning directly, or indirectly through wholly-owned
subsidiaries, both beneficially and of record 100% of the outstanding voting stock
of the Company immediately after the statutory share exchange if (i) the persons who
were the beneficial owners, respectively, of the outstanding voting stock of the
Company and the outstanding Common Stock of the Company immediately before such
statutory share exchange own, directly or indirectly, immediately after the
statutory share exchange a majority of, respectively, the voting power of the then
outstanding voting securities and the then outstanding common stock (or comparable
equity interest) of such parent entity, and (ii) all holders of any class or series
of outstanding voting stock of the Company immediately prior to the statutory share
exchange have the right to receive substantially the same per share consideration in
exchange for their outstanding voting stock of the Company as all other holders of
such class or series (except for those exercising statutory dissenters’ rights), or




(iii)     the sale or other disposition of all or substantially all of the assets
of the Company (in one transaction or a series of transactions), or




	 	(d)	 	The approval by the shareholders of the Company of the liquidation or
dissolution of the Company.






	 	2.9	 	“Code” means the U.S. Internal Revenue Code of 1986, as amended from time to time.
For purposes of this Plan, references to sections of the Code shall be deemed to include
references to any applicable regulations thereunder and any successor or similar
provision.
	 
	 	2.10	 	“Committee” means the Compensation Committee of the Board or a subcommittee thereof,
or any other committee designated by the Board to administer this Plan. The members of the
Committee shall be appointed from time to time by and shall serve at the discretion of the
Board. If the Committee does not exist or cannot function for any reason, the Board may
take any action under the Plan that would otherwise be the responsibility of the
Committee.
	 
	 	2.11	 	“Common Stock” means the Class A Common Stock, par value $.01 per share, and Class B
Common Stock, par value $.01 per share, of the Company.
	 
	 	2.12	 	“Company” means Rural Cellular Corporation, a Minnesota corporation, and any
successor thereto as provided in Article 20 herein.




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	 	2.13	 	“Covered Employee” means any key Employee who is or may become a “Covered Employee,”
as defined in Code Section 162(m), and who is designated, either as an individual Employee
or class of Employees, by the Committee prior to the earlier of (i) ninety (90) days after
the beginning of the Performance Period or (ii) the date on which twenty-five percent
(25%) of the Performance Period has elapsed, as a “Covered Employee” under this Plan for
such applicable Performance Period.
	 
	 	2.14	 	“Director” means any individual who is a member of the Board of Directors of the
Company.
	 
	 	2.15	 	“Effective Date” has the meaning set forth in Section 1.1.
	 
	 	2.16	 	“Employee” means any individual designated as an employee of the Company, its
Affiliates, and/or its Subsidiaries on the payroll records thereof. An Employee shall not
include any individual during any period he or she is classified or treated by the
Company, Affiliate, and/or Subsidiary as an independent contractor, a consultant, or any
employee of an employment, consulting, or temporary agency or any other entity other than
the Company, Affiliate, and/or Subsidiary, without regard to whether such individual is
subsequently determined to have been, or is subsequently retroactively reclassified as a
common-law employee of the Company, Affiliate, and/or Subsidiary during such period.
	 
	 	2.17	 	“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to
time, or any successor act thereto.
	 
	 	2.18	 	“Fair Market Value” or “FMV” means a price that is based on the opening, closing,
actual, high, low, or average selling prices of a Share reported on the NASDAQ or other
established stock exchange (or exchanges) on the applicable date, the preceding trading
day, the next succeeding trading day, or an average of trading days, as determined by the
Committee in its discretion. Unless the Committee determines otherwise, Fair Market Value
shall be the closing price of a Share on the most recent date on which Shares were
publicly traded. In the event Shares are not publicly traded at the time a determination
of their value is required to be made hereunder, the determination of their Fair Market
Value shall be made by the Committee in such manner as it deems appropriate. In each
case, the Committee shall determine Fair Market Value in a manner that satisfies the
requirements of Code Section 409A and shall apply the definition of Fair Market Value
consistently to the extent required by Code Section 409A. If Fair Market Value is a price
other than the closing price of a Share on the most recent date on which Shares were
publicly traded, the definition of FMV shall be specified in the Award Agreement.
	 
	 	2.19	 	“Grant Price” means the price established at the time of grant of an SAR pursuant to
Article 7, used to determine whether there is any payment due upon exercise of the SAR.
	 
	 	2.20	 	“Incentive Stock Option” or “ISO” means an Option to purchase Shares granted under
Article 6 to an Employee and that is designated as an Incentive Stock Option and that is
intended to meet the requirements of Code Section 422, or any successor provision.




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	 	2.21	 	“Insider” shall mean an individual who is, on the relevant date, an officer or a
Director of the Company, or a more than ten percent (10%) Beneficial Owner of any class of
the Company’s equity securities that is registered pursuant to Section 12 of the Exchange
Act, as determined by the Board in accordance with Section 16 of the Exchange Act.
	 
	 	2.22	 	“Nonemployee Director” means a Director who is not an Employee.
	 
	 	2.23	 	“Nonemployee Director Award” means any Award granted, whether singly, in combination,
or in tandem, to a Participant who is a Nonemployee Director pursuant to such applicable
terms, conditions, and limitations as the Board or Committee may establish in accordance
with this Plan.
	 
	 	2.24	 	“Nonqualified Stock Option” or “NQSO” means an Option that is not intended to meet
the requirements of Code Section 422, or that otherwise does not meet such requirements.
	 
	 	2.25	 	“Option” means an Incentive Stock Option or a Nonqualified Stock Option, as described
in Article 6.
	 
	 	2.26	 	“Option Price” means the price at which a Share may be purchased by a Participant
pursuant to an Option.
	 
	 	2.27	 	“Other Stock-Based Award” means an equity-based or equity-related Award not otherwise
described by the terms of this Plan, granted pursuant to Article 10.
	 
	 	2.28	 	“Participant” means any eligible individual as set forth in Article 5 to whom an
Award is granted.
	 
	 	2.29	 	“Performance-Based Compensation” means compensation under an Award that is intended
to satisfy the requirements of Code Section 162(m) for certain performance-based
compensation paid to Covered Employees. Notwithstanding the foregoing, nothing in this
Plan shall be construed to mean that an Award that does not satisfy the requirements for
performance-based compensation under Code Section 162(m) does not constitute
performance-based compensation for other purposes, including Code Section 409A.
	 
	 	2.30	 	“Performance Measures” means measures as described in Article 12 on which the
performance goals are based and which are approved by the Company’s shareholders pursuant
to this Plan in order to qualify Awards as Performance-Based Compensation.
	 
	 	2.31	 	“Performance Period” means the period of time during which the performance goals must
be met in order to determine the degree of payout and/or vesting with respect to
an Award.
	 
	 	2.32	 	“Performance Share” means an Award under Article 9 herein and subject to the terms of
this Plan, denominated in Shares, the value of which at the time it is payable is
determined as a function of the extent to which corresponding performance criteria have
been achieved.




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	 	2.33	 	“Performance Unit” means an Award under Article 9 herein and subject to the terms of
this Plan, denominated in units, the value of which at the time it is payable is
determined as a function of the extent to which corresponding performance criteria have
been achieved.
	 
	 	2.34	 	“Period of Restriction” means the period when Restricted Stock or Restricted Stock
Units are subject to a substantial risk of forfeiture (based on the passage of time, the
achievement of performance goals, or upon the occurrence of other events as determined by
the Committee, in its discretion), as provided in Article 8.
	 
	 	2.35	 	“Person” shall have the meaning ascribed to such term in Section 3(a)(9) of the
Exchange Act and used in Sections 13(d) and 14(d) thereof, including a “group” as defined
in Section 13(d) thereof.
	 
	 	2.36	 	“Plan” means the Rural Cellular Corporation 2006 Omnibus Incentive Plan.
	 
	 	2.37	 	“Plan Year” means the calendar year.
	 
	 	2.38	 	“Prior Plans” means the Company’s 1995 Stock Compensation Plan and the Stock Option
Plan for Nonemployee Directors.
	 
	 	2.39	 	“Restricted Stock” means an Award granted to a Participant pursuant to Article 8.
	 
	 	2.40	 	“Restricted Stock Unit” means an Award granted to a Participant pursuant to Article
8, except no Shares are actually awarded to the Participant on the date of grant.
	 
	 	2.41	 	“Share” means a share of Class A common stock of the Company, $.01 par value per
share.
	 
	 	2.42	 	“Stock Appreciation Right” or “SAR” means an Award, designated as an SAR, pursuant to
the terms of Article 7 herein.
	 
	 	2.43	 	“Subsidiary” means any corporation or other entity, whether domestic or foreign, in
which the Company has or obtains, directly or indirectly, a proprietary interest of more
than fifty percent (50%) by reason of stock ownership or otherwise.
	 
	 	2.44	 	“Third Party Service Provider” means any consultant, agent, adviser, or independent
contractor who renders services to the Company, a Subsidiary, or an Affiliate that (a) are
not in connection with the offer and sale of the Company’s securities in a capital raising
transaction and (b) do not directly or indirectly promote or maintain a market for the
Company’s securities.









Article 3. Administration




     3.1     General. The Committee shall be responsible for administering this Plan, subject to
this Article 3 and the other provisions of this Plan. The Committee may employ attorneys,
consultants, accountants, agents, and other individuals, any of whom may be an Employee, and the
Committee, the Company, and its officers and Directors shall be entitled to rely upon the advice,
opinions, or valuations of any such individuals. All actions taken and all interpretations and
determinations made by the Committee shall be final and binding upon the Participants, the Company, and all other
interested individuals.



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     3.2     Authority of the Committee. The Committee shall have full and exclusive discretionary
power to interpret the terms and the intent of this Plan and any Award Agreement or other agreement
or document ancillary to or in connection with this Plan, to determine eligibility for Awards and
to adopt such rules, regulations, forms, instruments, and guidelines for administering this Plan as
the Committee may deem necessary or proper. Such authority shall include, but not be limited to,
selecting Award recipients, establishing all Award terms and conditions, including the terms and
conditions set forth in Award Agreements, granting Awards as an alternative to or as the form of
payment for grants or rights earned or due under compensation plans or arrangements of the Company,
construing any ambiguous provision of the Plan or any Award Agreement, and, subject to Article 18,
adopting modifications and amendments to this Plan or any Award Agreement, including, without
limitation, any that are necessary to comply with the laws of the countries and other jurisdictions
in which the Company, its Affiliates, and/or its Subsidiaries operate.



     3.3     Delegation. The Committee may delegate to one or more of its members or to one or more
officers of the Company and/or its Subsidiaries and Affiliates or to one or more agents or advisers
such administrative duties or powers as it may deem advisable, and the Committee or any individuals
to whom it has delegated duties or powers as aforesaid may employ one or more individuals to render
advice with respect to any responsibility the Committee or such individuals may have under this
Plan. The Committee may, by resolution, authorize one or more officers of the Company to do one or
more of the following on the same basis as can the Committee: (a) designate Employees to be
recipients of Awards; (b) designate Third Party Service Providers to be recipients of Awards; and
(c) determine the size of any such Awards; provided, however, (i) the Committee shall not delegate
such responsibilities to any such officer for Awards granted to an Employee who is considered an
Insider; (ii) the resolution providing such authorization sets forth the total number of Awards
such officer(s) may grant; and (iii) the officer(s) shall report periodically to the Committee
regarding the nature and scope of the Awards granted pursuant to the authority delegated.







Article 4. Shares Subject to this Plan and Maximum Awards




     4.1     Number of Shares Available for Awards. Subject to adjustment as provided in Section
4.4 herein, the maximum number of Shares available for grant to Participants under this Plan (the
“Share Authorization”) shall be:




	 	(a)	 	1,000,000 Shares,
	 
	 	(b)	 	Plus:






	 	(i)	 	255,697 Shares not issued or subject to
outstanding awards under the Company’s Prior Plans as of the Effective
Date and
	 
	 	(ii)	 	any Shares subject to 1,772,569 outstanding
awards as of the Effective Date under the Prior Plans that on or after
the Effective Date cease for any reason to be subject to such awards
(other than by reason of exercise or settlement of the awards to the
extent they are exercised for or settled in vested and nonforfeitable
Shares),




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	 	(iii)	 	up to an aggregate maximum of 2,028,266
Shares.






	 	(c)	 	The maximum number of Shares of the Share Authorization that may be issued pursuant
to ISOs under this Plan shall be 3,028,266 Shares.





     4.2     Share Usage. Shares covered by an Award shall only be counted as used to the extent they
are actually issued. Any Shares related to Awards which terminate by expiration, forfeiture,
cancellation, or otherwise without the issuance of such Shares, are settled in cash in lieu of
Shares, or are exchanged with the Committee’s permission, prior to the issuance of Shares, for
Awards not involving Shares, shall be available again for grant under this Plan. Moreover, if the
Option Price of any Option granted under this Plan or the tax withholding requirements with respect
to any Award granted under this Plan are satisfied by tendering Shares to the Company (by either
actual delivery or by attestation), or if an SAR is exercised, only the number of Shares issued,
net of the Shares tendered, if any, will be deemed delivered for purposes of determining the
maximum number of Shares available for delivery under this Plan. The Shares available for issuance
under this Plan may be authorized and unissued Shares or repurchased Shares.



     4.3     Annual Award Limits. Unless and until the Committee determines that an Award to a Covered
Employee shall not be designed to qualify as Performance-Based Compensation, the following limits
(each an “Annual Award Limit” and, collectively, “Annual Award Limits”) shall apply to grants of
such Awards under this Plan:




	 	(a)	 	Options: The maximum aggregate number of Shares subject to Options
granted in any one Plan Year to any one Participant shall be one hundred thousand
(100,000).
	 
	 	(b)	 	SARs: The maximum number of Shares subject to Stock Appreciation Rights
granted in any one Plan Year to any one Participant shall be one hundred thousand
(100,000).
	 
	 	(c)	 	Restricted Stock or Restricted Stock Units: The maximum aggregate grant
with respect to Awards of Restricted Stock or Restricted Stock Units in any one
Plan Year to any one Participant shall be one hundred thousand (100,000) Shares.
	 
	 	(d)	 	Performance Units or Performance Shares: The maximum aggregate Award of
Performance Units or Performance Shares that a Participant may be awarded in any
one Plan Year shall be one hundred thousand (100,000) Shares, or equal to the value
of one hundred thousand (100,000) Shares determined as of the date of vesting.
	 
	 	(e)	 	Cash-Based Awards: The maximum aggregate amount awarded with respect to
Cash-Based Awards to any one Participant in any one Plan Year may not exceed the
value of two million ($2,000,000) dollars determined as of the date of vesting.




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	 	(f)	 	Other Stock-Based Awards. The maximum aggregate grant with respect to
Other Stock-Based Awards pursuant to Section 10.2 in any one Plan Year to any one
Participant shall be one hundred thousand (100,000) Shares.





     4.4     Adjustments in Authorized Shares. In the event of any corporate event or transaction
(including, but not limited to, a change in the Shares of the Company or the capitalization of the
Company) such as a merger, consolidation, reorganization, recapitalization, separation, partial or
complete liquidation, stock dividend, stock split, reverse stock split, split up, spin-off, or
other distribution of stock or property of the Company, combination of Shares, exchange of Shares,
dividend in kind, or other like change in capital structure, number of outstanding Shares or
distribution (other than normal cash dividends) to shareholders of the Company, or any similar
corporate event or transaction, the Committee, in its sole discretion, in order to prevent dilution
or enlargement of Participants’ rights under this Plan, shall substitute or adjust, as applicable,
the number and kind of Shares that may be issued under this Plan or under particular forms of
Awards, the number and kind of Shares subject to outstanding Awards, the Option Price or Grant
Price applicable to outstanding Awards, the Annual Award Limits, and other value determinations
applicable to outstanding Awards.



     The Committee, in its sole discretion, may also make appropriate adjustments in the terms of
any Awards under this Plan to reflect or related to such changes or distributions and to modify any
other terms of outstanding Awards, including modifications of performance goals and changes in the
length of Performance Periods. The Committee shall not make any adjustment pursuant to this Section
4.4 that would prevent Performance-Based Compensation from satisfying the requirements of Code
Section 162(m); that would cause an Award that is otherwise exempt from Code Section 409A to become
subject to Section 409A; or that would cause an Award that is subject to Code Section 409A to fail
to satisfy the requirements of Section 409A. The determination of the Committee as to the foregoing
adjustments, if any, shall be conclusive and binding on Participants under this Plan.



     Subject to the provisions of Article 18 and notwithstanding anything else herein to the
contrary, without affecting the number of Shares reserved or available hereunder, the Committee may
authorize the issuance or assumption of benefits under this Plan in connection with any merger,
consolidation, acquisition of property or stock, or reorganization upon such terms and conditions
as it may deem appropriate (including, but not limited to, a conversion of equity awards into
Awards under this Plan in a manner consistent with paragraph 53 of FASB Interpretation No. 44),
subject to compliance with the rules under Code Sections 409A, 422 and 424, as and where
applicable.







Article 5. Eligibility and Participation




     5.1     Eligibility. Individuals eligible to participate in this Plan include all
Employees, Directors, and Third Party Service Providers.



     5.2     Actual Participation. Subject to the provisions of this Plan, the Committee may, from time
to time, select from all eligible individuals, those individuals to whom Awards shall be granted
and shall determine, in its sole discretion, the nature of, any and all terms permissible by law,
and the amount of each Award.



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Article 6. Stock Options




     6.1     Grant of Options. Subject to the terms and provisions of this Plan, Options may be
granted to Participants in such number, and upon such terms, and at any time and from time to time
as shall be determined by the Committee, in its sole discretion; provided that ISOs may be granted
only to eligible Employees of the Company or of any parent or subsidiary corporation (as permitted
under Code Sections 422 and 424). However, if a Participant provides services to an Affiliate
and/or Subsidiary and not to the Company, the Participant may be granted an Option only to the
extent that the Company qualifies as a “service recipient” with respect to the Participant for
purposes of Code Section 409A (which generally requires that the Affiliate or Subsidiary be related
to the Company through at least 50% common ownership or control, or, in certain circumstances,
through at least 20% common ownership or control).



     6.2     Award Agreement. Each Option grant shall be evidenced by an Award Agreement that shall
specify the Option Price, the maximum duration of the Option, the number of Shares to which the
Option pertains, the conditions upon which an Option shall become vested and exercisable, and such
other provisions as the Committee shall determine which are not inconsistent with the terms of this
Plan. The Award Agreement also shall specify whether the Option is intended to be an ISO or a NQSO.



     6.3     Option Price. The Option Price for each grant of an Option under this Plan shall be
determined by the Committee in its sole discretion and shall be specified in the Award Agreement;
provided, however, the Option Price must be at least equal to one hundred percent (100%) of the FMV
of the Shares as determined on the date of grant.



     6.4     Term of Options. Each Option granted to a Participant shall expire at such time as the
Committee shall determine at the time of grant; provided, however, no Option shall be exercisable
later than the tenth (10th) anniversary date of its grant. Notwithstanding the
foregoing, for Nonqualified Stock Options granted to Participants outside the United States, the
Committee has the authority to grant Nonqualified Stock Options that have a term greater than ten
(10) years.



     6.5     Exercise of Options. Options granted under this Article 6 shall be exercisable at such
times and be subject to such restrictions and conditions as the Committee shall in each instance
approve, which terms and restrictions need not be the same for each grant or for each Participant.



     6.6     Payment. Options granted under this Article 6 shall be exercised by the delivery of a
notice of exercise to the Company or an agent designated by the Company in a form specified or
accepted by the Committee, or by complying with any alternative procedures which may be authorized
by the Committee, setting forth the number of Shares with respect to which the Option is to be
exercised, accompanied by full payment for the Shares.



     A condition of the issuance of the Shares as to which an Option shall be exercised shall be
the payment of the Option Price. The Option Price of any Option shall be payable to the Company in
full either: (a) in cash or its equivalent; (b) by tendering (either by actual delivery or
attestation) previously acquired Shares having an aggregate Fair Market Value at the time of
exercise equal to the Option Price prior to their tender to satisfy the Option Price if acquired
under this Plan or any other compensation plan maintained by the Company or have been purchased on
the open market);



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(c) by a cashless (broker-assisted) exercise; (d) by a combination of (a), (b) and/or (c); or
(e) any other method approved or accepted by the Committee in its sole discretion.




     Subject to any governing rules or regulations, as soon as practicable after receipt of written
notification of exercise and full payment (including satisfaction of any applicable tax
withholding), the Company shall deliver to the Participant evidence of book entry Shares, or upon
the Participant’s request, Share certificates in an appropriate amount based upon the number of
Shares purchased under the Option(s).



     Unless otherwise determined by the Committee, all payments under all of the methods indicated
above shall be paid in United States dollars.



     6.7     Restrictions on Share Transferability. The Committee may impose such restrictions on any
Shares acquired pursuant to the exercise of an Option granted under this Article 6 as it may deem
advisable, including, without limitation, minimum holding period requirements, restrictions under
applicable federal securities laws, under the requirements of any stock exchange or market upon
which such Shares are then listed and/or traded, or under any blue sky or state securities laws
applicable to such Shares.



     6.8     Termination of Employment. Each Participant’s Award Agreement shall set forth the extent
to which the Participant shall have the right to exercise the Option following termination of the
Participant’s employment or provision of services to the Company, its Affiliates, and/or its
Subsidiaries, as the case may be. Such provisions shall be determined in the sole discretion of the
Committee, shall be included in the Award Agreement entered into with each Participant, need not be
uniform among all Options issued pursuant to this Article 6, and may reflect distinctions based on
the reasons for termination.



     6.9     Notification of Disqualifying Disposition. If any Participant shall make any disposition
of Shares issued pursuant to the exercise of an ISO under the circumstances described in Code
Section 421(b) (relating to certain disqualifying dispositions), such Participant shall notify the
Company of such disposition within ten (10) days thereof.



     6.10   Compliance with Section 409A. The Committee shall not extend the period to exercise an
Option to the extent that the extension would cause the Option to become subject to Code Section
409A.







Article 7. Stock Appreciation Rights




     7.1     Grant of SARs. Subject to the terms and conditions of this Plan, SARs may be
granted to Participants at any time and from time to time as shall be determined by the Committee.
However, if a Participant provides services to an Affiliate and/or Subsidiary and not to the
Company, the Participant may be granted an SAR only to the extent that the Company qualifies as a
“service recipient” with respect to the Participant for purposes of Code Section 409A (which
generally requires that the Affiliate or Subsidiary be related to the Company through at least 50%
common ownership or control, or, in certain circumstances, through at least 20% common ownership or
control).



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     Subject to the terms and conditions of this Plan, the Committee shall have complete discretion
in determining the number of SARs granted to each Participant and, consistent with the provisions
of this Plan, in determining the terms and conditions pertaining to such SARs.



     The Grant Price for each grant of an SAR shall be determined by the Committee and shall be
specified in the Award Agreement; provided, however, the Grant Price on the date of grant must be
at least equal to one hundred percent (100%) of the FMV of the Shares as determined on the date of
grant.



     7.2     SAR Agreement. Each SAR Award shall be evidenced by an Award Agreement that shall specify
the Grant Price, the term of the SAR, and such other provisions as the Committee shall determine.



     7.3     Term of SAR. The term of an SAR granted under this Plan shall be determined by the
Committee, in its sole discretion, and except as determined otherwise by the Committee and
specified in the SAR Award Agreement, no SAR shall be exercisable later than the tenth
(10th) anniversary date of its grant. Notwithstanding the foregoing, for SARs granted to
Participants outside the United States, the Committee has the authority to grant SARs that have a
term greater than ten (10) years.



     7.4     Exercise of SARs. SARs may be exercised upon whatever terms and conditions the Committee,
in its sole discretion, imposes.



     7.5     Settlement of SARs. Upon the exercise of an SAR, a Participant shall be entitled to
receive payment from the Company in an amount determined by multiplying:




	 	(a)	 	The excess of the Fair Market Value of a Share on the date of exercise
over the Grant Price; by
	 
	 	(b)	 	The number of Shares with respect to which the SAR is exercised.





     At the discretion of the Committee, the payment upon SAR exercise may be in cash, Shares, or
any combination thereof, or in any other manner approved by the Committee in its sole discretion.
The Committee’s determination regarding the form of SAR payout shall be set forth in the Award
Agreement pertaining to the grant of the SAR.



     7.6     Termination of Employment. Each Award Agreement shall set forth the extent to which the
Participant shall have the right to exercise the SAR following termination of the Participant’s
employment with or provision of services to the Company, its Affiliates, and/or its Subsidiaries,
as the case may be. Such provisions shall be determined in the sole discretion of the Committee,
shall be included in the Award Agreement entered into with Participants, need not be uniform among
all SARs issued pursuant to this Plan, and may reflect distinctions based on the reasons for
termination.



     7.7     Other Restrictions. The Committee shall impose such other conditions and/or restrictions
on any Shares received upon exercise of an SAR granted pursuant to this Plan as it may deem
advisable or desirable. These restrictions may include, but shall not be limited to, a requirement
that the Participant hold the Shares received upon exercise of an SAR for a specified period of
time.



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     7.8     Compliance with Section 409A. The Committee shall not extend the period to exercise an SAR
to the extent that the extension would cause the SAR to become subject to Code Section 409A.







Article 8. Restricted Stock and Restricted Stock Units




     8.1     Grant of Restricted Stock or Restricted Stock Units. Subject to the terms and
provisions of this Plan, the Committee, at any time and from time to time, may grant Shares of
Restricted Stock and/or Restricted Stock Units to Participants in such amounts as the Committee
shall determine. Restricted Stock Units shall be similar to Restricted Stock except that no Shares
are actually awarded to the Participant on the date of grant.



     8.2     Restricted Stock or Restricted Stock Unit Agreement. Each Restricted Stock and/or
Restricted Stock Unit grant shall be evidenced by an Award Agreement that shall specify the
Period(s) of Restriction, the number of Shares of Restricted Stock or the number of Restricted
Stock Units granted, and such other provisions as the Committee shall determine.



     8.3     Other Restrictions. The Committee shall impose such other conditions and/or restrictions
on any Shares of Restricted Stock or Restricted Stock Units granted pursuant to this Plan as it may
deem advisable including, without limitation, a requirement that Participants pay a stipulated
purchase price for each Share of Restricted Stock or each Restricted Stock Unit, restrictions based
upon the achievement of specific performance goals, time-based restrictions on vesting following
the attainment of the performance goals, time-based restrictions, and/or restrictions under
applicable laws or under the requirements of any stock exchange or market upon which such Shares
are listed or traded, or holding requirements or sale restrictions placed on the Shares by the
Company upon vesting of such Restricted Stock or Restricted Stock Units.



     To the extent deemed appropriate by the Committee, the Company may retain the certificates
representing Shares of Restricted Stock in the Company’s possession until such time as all
conditions and/or restrictions applicable to such Shares have been satisfied or lapse.



     Except as otherwise provided in this Article 8, Shares of Restricted Stock covered by each
Restricted Stock Award shall become freely transferable by the Participant after all conditions and
restrictions applicable to such Shares have been satisfied or lapse (including satisfaction of any
applicable tax withholding obligations), and Restricted Stock Units shall be paid in cash, Shares,
or a combination of cash and Shares as the Committee, in its sole discretion shall determine.



     8.4     Certificate Legend. In addition to any legends placed on certificates pursuant to Section
8.3, each certificate representing Shares of Restricted Stock granted pursuant to this Plan may
bear a legend such as the following or as otherwise determined by the Committee in its sole
discretion:



     The sale or transfer of Shares of stock represented by this certificate, whether voluntary,
involuntary, or by operation of law, is subject to certain restrictions on transfer as set forth in
the Rural Cellular Corporation 2006 Omnibus Incentive Plan and in the associated Award Agreement. A
copy of this Plan and such Award Agreement may be obtained from Rural Cellular Corporation.



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     8.5     Voting Rights. Unless otherwise determined by the Committee and set forth in a
Participant’s Award Agreement, to the extent permitted or required by law, as determined by the
Committee, Participants holding Shares of Restricted Stock granted hereunder may be granted
the right to exercise full voting rights with respect to those Shares during the Period of
Restriction. A Participant shall have no voting rights with respect to any Restricted Stock Units
granted hereunder.



     8.6     Termination of Employment. Each Award Agreement shall set forth the extent to which the
Participant shall have the right to retain Restricted Stock and/or Restricted Stock Units following
termination of the Participant’s employment with or provision of services to the Company, its
Affiliates, and/or its Subsidiaries, as the case may be. Such provisions shall be determined in the
sole discretion of the Committee, shall be included in the Award Agreement entered into with each
Participant, need not be uniform among all Shares of Restricted Stock or Restricted Stock Units
issued pursuant to this Plan, and may reflect distinctions based on the reasons for termination.



     8.7     Section 83(b) Election. The Committee may provide in an Award Agreement that the Award of
Restricted Stock is conditioned upon the Participant making or refraining from making an election
with respect to the Award under Code Section 83(b). If a Participant makes an election pursuant to
Code Section 83(b) concerning a Restricted Stock Award, the Participant shall be required to file
promptly a copy of such election with the Company.



     8.8     Compliance with Section 409A. Unless the Committee provides otherwise in an Award
Agreement, each Restricted Stock Unit shall be paid in full to the Participant no later than the
15th day of the third month after the end of the first calendar year in which the Restricted Stock
Unit is no longer subject to a “substantial risk of forfeiture” within the meaning of Code Section
409A. If the Committee provides in an Award Agreement that a Restricted Stock Unit is intended to
be subject to Code Section 409A, the Award Agreement shall include terms that are designed to
satisfy the requirements of Section 409A.







Article 9. Performance Units/Performance Shares




     9.1     Grant of Performance Units/Performance Shares. Subject to the terms and provisions
of this Plan, the Committee, at any time and from time to time, may grant Performance Units and/or
Performance Shares to Participants in such amounts and upon such terms as the Committee shall
determine.



     9.2     Value of Performance Units/Performance Shares. Each Performance Unit shall have an initial
value that is established by the Committee at the time of grant. Each Performance Share shall have
an initial value equal to the Fair Market Value of a Share on the date of grant. The Committee
shall set performance goals in its discretion which, depending on the extent to which they are met,
will determine the value and/or number of Performance Units/Performance Shares that will be paid
out to the Participant.



     9.3     Earning of Performance Units/Performance Shares. Subject to the terms of this Plan, after
the applicable Performance Period has ended, the holder of Performance Units/Performance Shares
shall be entitled to receive payout on the value and number of Performance Units/Performance Shares
earned by the Participant over the Performance Period, to be determined as a function of the extent
to which the corresponding performance goals have been achieved.



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     9.4     Form and Timing of Payment of Performance Units/Performance Shares. Payment of earned
Performance Units/Performance Shares shall be as determined by the Committee and as
evidenced in the Award Agreement. Subject to the terms of this Plan, the Committee, in its
sole discretion, may pay earned Performance Units/Performance Shares in the form of cash or in
Shares (or in a combination thereof) equal to the value of the earned Performance Units/Performance
Shares at the close of the applicable Performance Period, or as soon as practicable after the end
of the Performance Period. Any Shares may be granted subject to any restrictions deemed appropriate
by the Committee. The determination of the Committee with respect to the form of payout of such
Awards shall be set forth in the Award Agreement pertaining to the grant of the Award.



     9.5     Termination of Employment. Each Award Agreement shall set forth the extent to which the
Participant shall have the right to retain Performance Units and/or Performance Shares following
termination of the Participant’s employment with or provision of services to the Company, its
Affiliates, and/or its Subsidiaries, as the case may be. Such provisions shall be determined in the
sole discretion of the Committee, shall be included in the Award Agreement entered into with each
Participant, need not be uniform among all Awards of Performance Units or Performance Shares issued
pursuant to this Plan, and may reflect distinctions based on the reasons for termination.



     9.6     Compliance with Section 409A. Unless the Committee provides otherwise in an Award
Agreement, each Performance Share or Performance Unit shall be paid in full to the Participant no
later than the 15th day of the third month after the end of the first calendar year in which the
Performance Share or Performance Unit is no longer subject to a “substantial risk of forfeiture”
within the meaning of Code Section 409A. If the Committee provides in an Award Agreement that a
Performance Share or Performance Unit is intended to be subject to Code Section 409A, the Award
Agreement shall include terms that are designed to satisfy the requirements of Section 409A.







Article 10. Cash-Based Awards and Other Stock-Based Awards




     10.1     Grant of Cash-Based Awards. Subject to the terms and provisions of the Plan, the
Committee, at any time and from time to time, may grant Cash-Based Awards to Participants in such
amounts and upon such terms as the Committee may determine.



     10.2     Grant of Other Stock-Based Awards. The Committee may grant other types of equity-based or
equity-related Awards not otherwise described by the terms of this Plan (including the grant or
offer for sale of unrestricted Shares) in such amounts and subject to such terms and conditions, as
the Committee shall determine. Such Awards may involve the transfer of actual Shares to
Participants, or payment in cash or otherwise of amounts based on the value of Shares and may
include, without limitation, Awards designed to comply with or take advantage of the applicable
local laws of jurisdictions other than the United States.



     10.3     Value of Cash-Based and Other Stock-Based Awards. Each Cash-Based Award shall specify a
payment amount or payment range as determined by the Committee. Each Other Stock-Based Award shall
be expressed in terms of Shares or units based on Shares, as determined by the Committee. The
Committee may establish performance goals in its discretion. If the Committee exercises its
discretion to establish performance goals, the number and/or value of Cash-Based Awards or Other
Stock-Based Awards that will be paid out to the Participant will depend on the extent to which the
performance goals are met.



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     10.4     Payment of Cash-Based Awards and Other Stock-Based Awards. Payment, if any, with respect
to a Cash-Based Award or an Other Stock-Based Award shall be made in accordance with the terms of
the Award, in cash or Shares as the Committee determines.



     10.5     Termination of Employment. The Committee shall determine the extent to which the
Participant shall have the right to receive Cash-Based Awards or Other Stock-Based Awards following
termination of the Participant’s employment with or provision of services to the Company, its
Affiliates, and/or its Subsidiaries, as the case may be. Such provisions shall be determined in the
sole discretion of the Committee, be included in an agreement entered into with each Participant,
need not be uniform among all Awards of Cash-Based Awards or Other Stock-Based Awards issued
pursuant to the Plan, and may reflect distinctions based on the reasons for termination.



     10.6     Compliance with Section 409A. Unless the Committee provides otherwise in an Award
Agreement, each Cash-Based Award or Other Stock-Based Award shall be paid in full to the
Participant no later than the 15th day of the third month after the end of the first calendar year
in which the Cash-Based Award or Other Stock-Based Award is no longer subject to a “substantial
risk of forfeiture” within the meaning of Code Section 409A. If the Committee provides in an Award
Agreement that a Cash-Based Award or Other Stock-Based Award is intended to be subject to Code
Section 409A, the Award Agreement shall include terms that are designed to satisfy the requirements
of Section 409A.







Article 11. Transferability of Awards




     11.1     Transferability of Incentive Stock Options. No ISO granted under this Plan may be
sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or
by the laws of descent and distribution. Further, all ISOs granted to a Participant under Article 6
shall be exercisable during his or her lifetime only by such Participant.



     11.2     All Other Awards. Except for Qualified Domestic Relations Orders or as provided in a
Participant’s Award Agreement or otherwise determined at any time by the Committee, no Award
granted under this Plan may be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, other than by will or by the laws of descent and distribution; provided that the
Board or Committee may permit further transferability, on a general or a specific basis, and may
impose conditions and limitations on any permitted transferability. Further, except as otherwise
provided in a Participant’s Award Agreement or otherwise determined at any time by the Committee,
or unless the Board or Committee decides to permit further transferability, all Awards granted to a
Participant under this Plan shall be exercisable during his or her lifetime only by such
Participant. With respect to those Awards (other than ISOs), if any, that are permitted to be
transferred to another individual, references in this Plan to exercise or payment related to such
Awards by or to the Participant shall be deemed to include, as determined by the Committee, the
Participant’s permitted transferee.







Article 12. Performance Measures




     12.1     Performance Measures. The performance goals upon which the payment or vesting of
an Award to a Covered Employee that is intended to qualify as Performance-Based Compensation shall
be limited to the following Performance Measures:




	 	(a)	 	Net earnings or net income (before or after taxes);
	 	(b)	 	Earnings per share;




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	 	(c)	 	Net sales, revenue growth, or local service revenue;
	 	(d)	 	Net operating profit;
	 	(e)	 	Operating income;
	 	(f)	 	Return measures (including, but not limited to, return on assets, capital, invested
capital, equity, sales, or revenue);
	 	(g)	 	Cash flow (including, but not limited to, operating cash flow, free cash flow, cash
flow return on equity, and cash flow return on investment);
	 	(h)	 	Earnings before or after taxes, interest, depreciation, and/or amortization
(including adjusted EBITDA);
	 	(i)	 	EBITDA margin
	 	(j)	 	Gross or operating margins;
	 	(k)	 	Productivity ratios;
	 	(l)	 	Share price (including, but not limited to, growth measures and total shareholder
return);
	 	(m)	 	Expense targets;
	 	(n)	 	Margins;
	 	(o)	 	Operating efficiency;
	 	(p)	 	Market share;
	 	(q)	 	Customer satisfaction;
	 	(r)	 	Working capital targets;
	 	(s)	 	Capital expenditures;
	 	(t)	 	Customer growth, net customer growth, or local service revenue growth; and
	 	(u)	 	Economic value added or EVA® (net operating profit after tax minus the sum
of capital multiplied by the cost of capital).





     Any Performance Measure(s) may be used to measure the performance of the Company, Subsidiary,
and/or Affiliate as a whole or any business unit of the Company, Subsidiary, and/or Affiliate or
any combination thereof, as the Committee may deem appropriate, or any of the above Performance
Measures may be compared to the performance of a group of comparative companies, or published or
special index that the Committee, in its sole discretion, deems appropriate, or the Company may
select Performance Measure (l) above as compared to various stock market indices. The Committee
also has the authority to provide for accelerated vesting of any Award based on the achievement of
performance goals pursuant to the Performance Measures specified in this Article 12.



     12.2     Evaluation of Performance. The Committee may provide in any such Award that any
evaluation of performance may include or exclude any of the following events that occurs during a
Performance Period: (a) asset write-downs, (b) litigation or claim judgments or settlements, (c)
the effect of changes in tax laws, accounting principles, or other laws or provisions affecting
reported results, (d) any reorganization and restructuring programs, (e) extraordinary nonrecurring
items as described in Accounting Principles Board Opinion No. 30 and/or in management’s discussion
and analysis of financial condition and results of operations appearing in the Company’s annual
report to shareholders for the applicable year, (f) acquisitions or divestitures, and (g) foreign
exchange gains and losses. To the extent such inclusions or exclusions affect Awards to Covered
Employees, they shall be prescribed in a form that meets the requirements of Code Section 162(m)
for deductibility.



     12.3     Adjustment of Performance-Based Compensation. Awards that are intended to qualify as
Performance-Based Compensation may not be adjusted upward. The Committee shall retain the discretion to adjust such Awards downward,
either on a formula or discretionary basis or any
combination, as the Committee determines.



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     12.4     Committee Discretion. In the event that applicable tax and/or securities laws change to
permit Committee discretion to alter the governing Performance Measures without obtaining
shareholder approval of such changes, the Committee shall have sole discretion to make such changes
without obtaining shareholder approval. In addition, in the event that the Committee determines
that it is advisable to grant Awards that shall not qualify as Performance-Based Compensation, the
Committee may make such grants without satisfying the requirements of Code Section 162(m) and base
vesting on Performance Measures other than those set forth in Section 12.1.







Article 13. Nonemployee Director Awards




     The Board or Committee shall determine all Awards to Nonemployee Directors. The terms
and conditions of any grant to any such Nonemployee Director shall be set forth in an Award
Agreement. The Company shall have the ability to grant a Nonemployee Director an Award under the
Plan in lieu of cash compensation for services rendered by the Nonemployee Director.







Article 14. Dividend Equivalents




     Any Participant selected by the Committee may be granted dividend equivalents based on
the dividends declared on Shares that are subject to any Award, to be credited as of dividend
payment dates, during the period between the date the Award is granted and the date the Award is
exercised, vests or expires, as determined by the Committee. Such dividend equivalents shall be
converted to cash or additional Shares by such formula and at such time and subject to such
limitations as may be determined by the Committee. Unless the Award Agreement provides otherwise,
such dividend equivalents shall be paid to the Participant at least annually, not later than the
15th day of the third month following the end of the calendar year in which the dividend
equivalents are credited (or, if later, the 15th day of the third month following the end of the
calendar year in which the dividend equivalents are no longer subject to a substantial risk of
forfeiture within the meaning of Code Section 409A). Any dividend equivalents that are accumulated
and paid after the date specified in the preceding sentence shall be explicitly set forth in a
separate arrangement that provides for the payment of the dividend equivalents at a time and in a
manner that satisfies the requirements of Code Section 409A.







Article 15. Beneficiary Designation




     Each Participant under this Plan may, from time to time, name any beneficiary or
beneficiaries (who may be named contingently or successively) to whom any benefit under this Plan
is to be paid in case of his death before he receives any or all of such benefit. Each such
designation shall revoke all prior designations by the same Participant, shall be in a form
prescribed by the Committee, and will be effective only when filed by the Participant in writing
with the Company during the Participant’s lifetime. In the absence of any such beneficiary
designation, benefits remaining unpaid or rights remaining unexercised at the Participant’s death
shall be paid to or exercised by the Participant’s executor, administrator, or legal
representative.







Article 16. Rights of Participants




     16.1     Employment. Nothing in this Plan or an Award Agreement shall interfere with or
limit in any way the right of the Company, its Affiliates, and/or its Subsidiaries, to terminate
any



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Participant’s employment or service on the Board or to the Company, its Affiliates and/or its
Subsidiaries at any time or for any reason not prohibited by law, nor confer upon any Participant
any right to continue his employment or service as a Director or Third Party Service Provider for
any specified period of time.




     Neither an Award nor any benefits arising under this Plan shall constitute an employment
contract with the Company, its Affiliates, and/or its Subsidiaries and, accordingly, subject to
Articles 3 and 18, this Plan and the benefits hereunder may be terminated at any time in the
sole and exclusive discretion of the Committee without giving rise to any liability on the part of
the Company, its Affiliates, and/or its Subsidiaries.



     16.2     Participation. No individual shall have the right to be selected to receive an Award
under this Plan, or, having been so selected, to be selected to receive a future Award.



     16.3     Rights as a Shareholder. Except as otherwise provided herein, a Participant shall have
none of the rights of a shareholder with respect to Shares covered by any Award until the
Participant becomes the record holder of such Shares.







Article 17. Change of Control




     17.1     Treatment of Awards Upon a Change of Control. Upon the occurrence of a Change of
Control, unless otherwise specifically prohibited under applicable laws, or by the rules and
regulations of any governing governmental agencies or national securities exchanges, or unless the
Committee shall determine otherwise in the Award Agreement:




	 	(a)	 	Any and all Options and SARs granted hereunder shall become immediately
exercisable;
	 
	 	(b)	 	Any Period of Restriction and restrictions imposed on Restricted Stock
or Restricted Stock Units shall lapse;
	 
	 	(c)	 	The target payout opportunities attainable under all outstanding Awards
of performance-based Restricted Stock, performance-based Restricted Stock Units,
Performance Units, Performance Shares, and performance-based Cash-Based Awards
shall be deemed to have been earned based on an assumed achievement of all relevant
targeted performance goals as of the effective date of the Change of Control.






	 	(i)	 	The vesting of all Awards denominated in
Shares shall be accelerated as of the effective date of the Change of
Control and shall be paid out to Participants within thirty (30) days
following the effective date of the Change of Control.
	 
	 	(ii)	 	Awards denominated in cash shall be paid to
Participants in cash within thirty (30) days following the effective
date of the Change of Control.




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	 	(d)	 	The Committee may, in its sole discretion, elect to pay out all Awards
in cash in lieu of shares.





     17.2     Cash Out of the Awards. The Committee may, in its sole discretion: (i) determine that any
or all outstanding Awards granted under the Plan, will be canceled and terminated and that in
connection with such cancellation and termination the holder of such Award may receive for each
Share subject to such Award a cash payment (or the delivery of shares of stock, other securities or
a combination of cash, stock and securities equivalent to such cash payment) equal to the
difference, if any, between the consideration received by shareholders of the Company in respect of
a Share in connection with such transaction and the purchase price per share, if any, under the
Award multiplied by the number of Shares subject to such Award; provided that if such product is
zero or less, the Awards may be canceled and terminated without payment therefor.







Article 18. Amendment, Modification, Suspension, and Termination




     18.1     Amendment, Modification, Suspension, and Termination. Subject to Section 18.3, the
Committee may, at any time and from time to time, alter, amend, modify, suspend, or terminate this
Plan and any Award Agreement in whole or in part; provided, however, that, without the prior
approval of the Company’s shareholders and except as provided in Section 4.4, Options or SARs
issued under this Plan will not be repriced, replaced, or regranted through cancellation, or by
lowering the Option Price of a previously granted Option or the Grant Price of a previously granted
SAR, and no material amendment of this Plan shall be made without shareholder approval if
shareholder approval is required by law, regulation, or stock exchange rule; including, but not
limited to, the Securities Exchange Act of 1934, as amended, the Internal Revenue Code of 1986, as
amended, and, if applicable, the New York Stock Exchange Listed Company Manual/the Nasdaq issuer
rules.



     18.2     Adjustment of Awards Upon the Occurrence of Certain Unusual or Nonrecurring Events. The
Committee may make adjustments in the terms and conditions of, and the criteria included in, Awards
in recognition of unusual or nonrecurring events (including, without limitation, the events
described in Section 4.4 hereof) affecting the Company or the financial statements of the Company
or of changes in applicable laws, regulations, or accounting principles, whenever the Committee
determines that such adjustments are appropriate in order to prevent unintended dilution or
enlargement of the benefits or potential benefits intended to be made available under this Plan.
The Committee shall not make any adjustment pursuant to this Section 18.2 that would prevent
Performance-Based Compensation from satisfying the requirements of Code Section 162(m); that would
cause an Award that is otherwise exempt from Code Section 409A to become subject to Section 409A;
or that would cause an Award that is subject to Code Section 409A to fail to satisfy the
requirements of Section 409A. The determination of the Committee as to the foregoing adjustments,
if any, shall be conclusive and binding on Participants under this Plan.



     18.3     Awards Previously Granted. Notwithstanding any other provision of this Plan to the
contrary (other than Section 18.4), no termination, amendment, suspension, or modification of this
Plan or an Award Agreement shall adversely affect in any material way any Award previously granted
under this Plan, without the written consent of the Participant holding such Award.





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     18.4     
Amendment to Conform to Law. Notwithstanding any other provision of this Plan to the
contrary, the Board of Directors may amend the Plan or an Award Agreement, to take effect retroactively or otherwise, as deemed necessary or advisable for the purpose of conforming the
Plan or an Award Agreement to any present or future law relating to plans of this or similar nature
(including, but not limited to, Code Section 409A), and to the administrative regulations and
rulings promulgated thereunder.








Article 19. Withholding




     19.1     Tax Withholding. The Company shall have the power and the right to deduct or
withhold, or require a Participant to remit to the Company, the minimum statutory amount to satisfy
federal, state, and local taxes, domestic or foreign, required by law or regulation to be withheld
with respect to any taxable event arising as a result of this Plan.



     19.2     Share Withholding. With respect to withholding required upon the exercise of Options or
SARs, upon the lapse of restrictions on Restricted Stock and Restricted Stock Units, or upon the
achievement of performance goals related to Performance Shares, or any other taxable event arising
as a result of an Award granted hereunder, Participants may elect, subject to the approval of the
Committee, to satisfy the withholding requirement, in whole or in part, by having the Company
withhold Shares having a Fair Market Value on the date the tax is to be determined equal to the
minimum statutory total tax that could be imposed on the transaction. All such elections shall be
irrevocable, made in writing, and signed by the Participant, and shall be subject to any
restrictions or limitations that the Committee, in its sole discretion, deems appropriate.







Article 20. Successors




     All obligations of the Company under this Plan with respect to Awards granted hereunder
shall be binding on any successor to the Company, whether the existence of such successor is the
result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or
substantially all of the business and/or assets of the Company.







Article 21. General Provisions




     21.1     Forfeiture Events.




	 	(a)	 	The Committee may specify in an Award Agreement that the Participant’s
rights, payments, and benefits with respect to an Award shall be subject to
reduction, cancellation, forfeiture, or recoupment upon the occurrence of certain
specified events, in addition to any otherwise applicable vesting or performance
conditions of an Award. Such events may include, but shall not be limited to,
termination of employment for cause, termination of the Participant’s provision of
services to the Company, Affiliate, and/or Subsidiary, violation of material
Company, Affiliate, and/or Subsidiary policies, breach of noncompetition,
confidentiality, or other restrictive covenants that may apply to the Participant,
or other conduct by the Participant that is detrimental to the business or
reputation of the Company, its Affiliates, and/or its Subsidiaries.
	 
	 	(b)	 	If the Company is required to prepare an accounting restatement due to
the material noncompliance of the Company, as a result of misconduct, with any
financial reporting requirement under the securities laws, if the Participant
knowingly or grossly negligently





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	 	 	 	engaged in the misconduct, or knowingly or grossly negligently failed to prevent the misconduct, or if the Participant is
one of the individuals subject to automatic forfeiture under Section 304 of the
Sarbanes-Oxley Act of 2002, the Participant shall reimburse the Company the
amount of any payment in settlement of an Award earned or accrued during the
twelve- (12-) month period following the first public issuance or filing with the
United States Securities and Exchange Commission of the financial document
embodying such financial reporting requirement.





     21.2     Legend. The certificates for Shares may include any legend which the Committee deems
appropriate to reflect any restrictions on transfer of such Shares.



     21.3     Gender and Number. Except where otherwise indicated by the context, any masculine term
used herein also shall include the feminine, the plural shall include the singular, and the
singular shall include the plural.



     21.4     Severability. In the event any provision of this Plan shall be held illegal or invalid
for any reason, the illegality or invalidity shall not affect the remaining parts of this Plan, and
this Plan shall be construed and enforced as if the illegal or invalid provision had not been
included.



     21.5     Requirements of Law. The granting of Awards and the issuance of Shares under this Plan
shall be subject to all applicable laws, rules, and regulations, and to such approvals by any
governmental agencies or national securities exchanges as may be required.



     21.6     Delivery of Title. The Company shall have no obligation to issue or deliver evidence of
title for Shares issued under this Plan prior to:




	 	(a)	 	Obtaining any approvals from governmental agencies that the Company
determines are necessary or advisable; and
	 
	 	(b)	 	Completion of any registration or other qualification of the Shares
under any applicable national, state, or foreign law or ruling of any governmental
body that the Company determines to be necessary or advisable.





     21.7     Inability to Obtain Authority. The inability of the Company to obtain authority from any
regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be
necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any
liability in respect of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.



     21.8     Investment Representations. The Committee may require any individual receiving Shares
pursuant to an Award under this Plan to represent and warrant in writing that the individual is
acquiring the Shares for investment and without any present intention to sell or distribute such
Shares.



     21.9     Employees Based Outside of the United States. Notwithstanding any provision of this Plan
to the contrary, in order to comply with



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the laws in other countries in which the Company, its Affiliates, and/or its Subsidiaries operate or have Employees, Directors, or Third Party
Service Providers, the Committee, in its sole discretion, shall have the power and authority to:





	 	(a)	 	Determine which Affiliates and Subsidiaries shall be covered by this
Plan;
	 
	 	(b)	 	Determine which Employees and/or Directors, or Third Party Service
Providers outside the United States are eligible to participate in this Plan;
	 
	 	(c)	 	Modify the terms and conditions of any Award granted to Employees
and/or Directors or Third Party Service Providers outside the United States to
comply with applicable foreign laws;
	 
	 	(d)	 	Establish subplans and modify exercise procedures and other terms and
procedures, to the extent such actions may be necessary or advisable. Any
subplans and modifications to Plan terms and procedures established under this
Section 21.9 by the Committee shall be attached to this Plan document as
appendices; and
	 
	 	(e)	 	Take any action, before or after an Award is made, that it deems
advisable to obtain approval or comply with any necessary local government
regulatory exemptions or approvals.





     Notwithstanding the above, the Committee may not take any actions hereunder, and no Awards
shall be granted, that would violate applicable law.



     21.10     Uncertificated Shares. To the extent that this Plan provides for issuance of
certificates to reflect the transfer of Shares, the transfer of such Shares may be effected on a
noncertificated basis, to the extent not prohibited by applicable law or the rules of any stock
exchange.



     21.11     Unfunded Plan. Participants shall have no right, title, or interest whatsoever in or to
any investments that the Company, and/or its Subsidiaries, and/or its Affiliates may make to aid it
in meeting its obligations under this Plan. Nothing contained in this Plan, and no action taken
pursuant to its provisions, shall create or be construed to create a trust of any kind, or a
fiduciary relationship between the Company and any Participant, beneficiary, legal representative,
or any other individual. To the extent that any individual acquires a right to receive payments
from the Company, its Subsidiaries, and/or its Affiliates under this Plan, such right shall be no
greater than the right of an unsecured general creditor of the Company, a Subsidiary, or an
Affiliate, as the case may be. All payments to be made hereunder shall be paid from the general
funds of the Company, a Subsidiary, or an Affiliate, as the case may be and no special or separate
fund shall be established and no segregation of assets shall be made to assure payment of such
amounts except as expressly set forth in this Plan.



     21.12     No Fractional Shares. No fractional Shares shall be issued or delivered pursuant to this
Plan or any Award. The Committee shall determine whether cash, Awards, or other property shall be
issued or paid in lieu of fractional Shares or whether such fractional Shares or any rights thereto
shall be forfeited or otherwise eliminated.



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     21.13     Retirement and Welfare Plans. Neither Awards made under this Plan nor Shares or cash
paid pursuant to such Awards may be included as “compensation” for purposes of computing the
benefits payable to any Participant under the Company’s or any Subsidiary’s or Affiliate’s
retirement plans (both qualified and non-qualified) or welfare benefit plans unless such other plan
expressly provides that such compensation shall be taken into account in computing a Participant’s
benefit.



     21.14     Deferred Compensation. If any Award would be considered deferred compensation as defined
under Code Section 409A and would fail to meet the requirements of Code Section 409A, then such
Award shall be null and void. However, the Committee may permit deferrals of compensation pursuant
to the terms of a Participant’s Award Agreement, a separate plan, or a subplan which (in each case)
meets the requirements of Code Section 409A. Additionally, to the extent any Award is subject to
Code Section 409A, notwithstanding any provision herein to the contrary, this Plan does not permit
the acceleration of the time or schedule of any distribution related to such Award, except as
permitted by Code Section 409A.



     21.15     Nonexclusivity of this Plan. The adoption of this Plan shall not be construed as
creating any limitations on the power of the Board or Committee to adopt such other compensation
arrangements as it may deem desirable for any Participant.



     21.16     No Constraint on Corporate Action. Nothing in this Plan shall be construed to: (i)
limit, impair, or otherwise affect the Company’s or a Subsidiary’s or an Affiliate’s right or power
to make adjustments, reclassifications, reorganizations, or changes of its capital or business
structure, or to merge or consolidate, or dissolve, liquidate, sell, or transfer all or any part of
its business or assets; or (ii) limit the right or power of the Company or a Subsidiary or an
Affiliate to take any action which such entity deems to be necessary or appropriate.



     21.17     Governing Law. The Plan and each Award Agreement shall be governed by the laws of the
State of Minnesota, excluding any conflicts or choice of law rule or principle that might otherwise
refer construction or interpretation of this Plan to the substantive law of another jurisdiction.
Unless otherwise provided in the Award Agreement, recipients of an Award under this Plan are deemed
to submit to the exclusive jurisdiction and venue of the federal or state courts of Minnesota to
resolve any and all issues that may arise out of or relate to this Plan or any related Award
Agreement.



     21.18     Indemnification. Subject to requirements of Minnesota law, each individual who is or
shall have been a member of the Board, or a Committee appointed by the Board, or an officer of the
Company to whom authority was delegated in accordance with Article 3, shall be indemnified and held
harmless by the Company against and from any loss, cost, liability, or expense that may be imposed
upon or reasonably incurred by him or her in connection with or resulting from any claim, action,
suit, or proceeding to which he or she may be a party or in which he or she may be involved by
reason of any action taken or failure to act under this Plan and against and from any and all
amounts paid by him or her in settlement thereof, with the Company’s approval, or paid by him or
her in satisfaction of any judgment in any such action, suit, or proceeding against him or her,
provided that he or she shall give the Company an opportunity, at its own expense, to handle and
defend the same before he or she undertakes to handle and defend it on his/her own behalf, unless such loss, cost, liability, or
expense is a result of his/her own willful misconduct or except
as expressly provided by statute.



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     The foregoing right of indemnification shall not be exclusive of any other rights of
indemnification to which such individuals may be entitled under the Company’s Articles of
Incorporation or Bylaws, as a matter of law, or otherwise, or any power that the Company may have
to indemnify them or hold them harmless.



     21.19     No Guarantee of Favorable Tax Treatment. Although the Company intends to administer the
Plan so that Awards will be exempt from, or will comply with, the requirements of Code Section
409A, the Company does not warrant that any Award under the Plan will qualify for favorable tax
treatment under Code Section 409A or any other provision of federal, state, local, or foreign law.
The Company shall not be liable to any Participant for any tax the Participant might owe as a
result of the grant, holding, vesting, exercise, or payment of any Award under the Plan.



     21.20     Prior Plan Awards. Awards previously made under Prior Plans shall remain outstanding
and in effect and the adoption of this Plan shall in no way modify such awards. However, Shares
subject to outstanding awards under Prior Plans that cease for any reason to be subject to such
awards (other than by reason of exercise or settlement of the awards to the extent they are
exercised for or settled in vested and nonforfeitable Shares) may be added to the Share
Authorization under this Plan as provided in Section 4.1 hereof.




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