exv10wd



 






Exhibit 10-d




ADC Telecommunications, Inc.




Management Incentive Plan Document

Fiscal Year 2008





 









 








MANAGEMENT INCENTIVE PLAN DOCUMENT

Fiscal Year 2008




Plan Name and Effective Date




The name of this Plan is the ADC Telecommunications, Inc. Management Incentive Plan. The plan is
effective from November 1, 2007 through October 31, 2008.



Purpose




The purpose of the Plan is to provide, with full regard to the protection of shareholder’s
investments, a direct financial incentive for eligible managers to make a significant contribution
to ADC’s established annual goals.



Eligibility




Eligibility for Fiscal Year 2008 is limited to full or part-time regular employees in the U.S. and
in such other countries where ADC has specifically notified employees of eligibility for
participation in the Plan. Eligibility for participation in this Plan is limited to such employees
who hold executive officer and certain management positions reporting to the Chief Executive
Officer. The CEO does not participate in the Plan. In order to be eligible, an employee cannot
participate in any other ADC incentive plan, except as approved by the Compensation Committee of
the Board of Directors, and must be employed in an eligible position on or before October 1, 2008.



Timing of Payment




Payments that become due under this Plan are made as soon as administratively feasible following
the close of ADC’s fiscal year, but within seventy-five days of that event, generally in late
December or early January. All payments are subject to appropriate withholdings.



Plan Goals




The Plan reinforces the key goals that support ADC’s long-term strategic plans. The key factors in
ADC’s FY08 corporate success are Pro Forma Operating Income and Net Sales. These factors are the
same for ADC’s operating units: Global Connectivity Solutions, Active Infrastructure, and APS.
Accounting methodology changes may dictate corresponding goal modifications during the plan year.
Additionally, beginning with FY2008, each participant will be eligible for a portion of his/her MIP
based upon individual contribution.



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Following is a description of the Plan’s financial components:



	 	 	 	 	 	 
	 
	 	Plan Goal	 	 	Definition	 
	 	Pro Forma Operating Income
	 	 	Net Sales less all relevant expenses
incurred to produce the products or
deliver services. Expenses include
direct material and labor costs as
well as regional and Business Unit
costs, including engineering, sales
& marketing expenses, and corporate
overhead costs. Pro Forma
Operating Income does not include
interest income, interest expense,
income tax or other non-operating
income. It also excludes
restructuring and other one-time
expenses that are not reflective of
the ongoing business.


Corporate overhead costs not
directly attributable to the
Business Unit are assessed as a
shared service charge set at a fixed
percentage of Revenue. ADC-level
Pro Forma Operating Income will
reflect absorption of ALL corporate
expenses including variances above
or below the level of the shared
service charge.
	 
	 	Net Sales / Revenue
	 	 	The amount ADC can recognize in
accordance with Generally Accepted
Accounting Principles (GAAP) for
goods shipped or services provided
to third party customers, net of
returns received and discounts.
	 
	 





NOTE: For the Business Units, Net Sales, and Pro-Forma Operating Income are measured on Plan
foreign exchange rates.



Goal Weightings




Executives participating in the Plan will have the following business/corporate weightings:



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	75% of Total Award	 	 
	 	 	 	 	Business	 	 	 	OI Metric	 	 	 	Net Sales	 	 
	 	 	 	 	Weight	 	 	 	 	 	 	 	Metric	 	 
	 	BU Leader
	 	 	50% BU	 	 	 	50	%	 	 	 	25	%	 
	 	 
	 	 	50% ADC	 	 	 	50	%	 	 	 	25	%	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	Corporate Function Leader
	 	 	100% ADC	 	 	 	50	%	 	 	 	25	%	 
	 





For purposes of this Plan, Global Connectivity Solutions, Active Infrastructure and APS will be
treated as separate Business Units.



Individual Performance




Beginning with the FY08 fiscal year, each participant will have twenty-five percent (25%) of their
target MIP award tied to one (1) to three (3) individual goals mutually agreed upon by the
participant and the CEO. Achievement of the agreed-upon goals yields a 100% award payout. An
additional overachievement award may be made as recommended by the CEO at his sole discretion to
the Compensation Committee. The maximum individual performance award is 50% of the participant’s
total target MIP award.



Modifications may be made to individual goals before September 1, 2008. Documentation must occur
for any changes made to an existing plan and approval of the CEO, Chief Financial Officer and Vice
President, Human Resources must occur. Undocumented modifications of individual plans will not be
honored for award payment.



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Performance Gates




To ensure protection of shareholder interest, no payment will be provided as the result of any
ADC-wide financial performance factor unless ADC achieves its threshold Pro-Forma Operating Income
for the year. Similarly, no payment will be provided as the result of any Business Unit financial
performance factor unless the Business Unit achieves its threshold Pro-Forma Operating Income.



Calculation of Payment




Prior to making any payment under this Plan, the Board of Directors must determine that the claimed
Business Performance levels have been achieved. The Board of Directors has complete authority and
discretion to determine whether performance levels have been achieved, including without limitation
the authority and discretion to properly calculate Pro-Forma Operating Income. The size of an
incentive award will be based on three factors:




	 	1.	 	Target Incentive Opportunity — Determined on the basis of the ADC salary grade
associated with an individual’s job and country of work. It is expressed as a
percentage of an individual’s FY 2008 Eligible Base Salary earnings.
	 
	 	2.	 	FY2008 Eligible Base Salary — This is the amount paid to the participant
during the fiscal year in Base Salary.
	 
	 	3.	 	Business Performance in comparison with the established goals.





The maximum award attributable to each performance factor is 200% of its target. The maximum total
individual award is 200% of the target payout. This maximum includes any MIP award also provided
for exceptional individual performance. Specific financial goals have been established for 0%,
100%, and 200% of target. Results between these specific points are interpolated for each goal.



Here is an example of a hypothetical award calculation.



Assume a GCS Plan participant with the following facts, where the ADC performance gate has been
met:



	 	 	 
	Target Opportunity:
	 	55% of Eligible Base Salary earnings

	FY08 Eligible Base Salary:  
	 	250,000 USD

	Business Performance Percentages:
	 	Hypothetical ADC and GCS results shown
in the following table







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	 	Metrics	 	 	Measure Weighting	 	 	Performance	 	 	Wtd. Perf.	 	 	 	 	 
	 	ADC Level Metrics — 37.5%
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	Pro Forma Operating Income
	 	 	28.1% (75% X 37.5%)	 	 	107%	 	 	30.1%	 	 	 	 	 
	 	Net Sales
	 	 	9.4% (25% X 37.5%)	 	 	102%	 	 	9.6%	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	39.7%	 	 	 	 	 
	 	GCS Level Metrics — 37.5%
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	Pro Forma Operating Income
	 	 	28.1% (75% X 37.5%)	 	 	110%	 	 	30.9%	 	 	 	 	 
	 	Net Sales
	 	 	9.4% (25% X 37.5%)	 	 	108%	 	 	10.2%	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	41.1%	 	 	 	 	 
	 	Individual Goals - 25%
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	Goal #1
	 	 	Completed	 	 	100%	 	 	 	 	 	 	 	 
	 	Goal #2
	 	 	Completed	 	 	100%	 	 	100%	 	 	 	 	 
	 	Overall Weighted Performance
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	ADC Metrics
	 	 	37.5%	 	 	105.9%	 	 	39.7%	 	 	 	 	 
	 	GCS Metrics
	 	 	37.5%	 	 	110.0%	 	 	41.1%	 	 	 	 	 
	 	Individual Portion
	 	 	25.0%	 	 	100.0%	 	 	 25.0%	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	105.8%	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	Payment Calculation:

250,000 (Eligible Base Salary) * 55% (incentive target) * 105.8% (Business Performance) = $145,475 USD

Additionally, the participant is eligible for a discretionary overachievement bonus at the sole discretion of the CEO and
Compensation Committee.
	 
	 










Effect of Change in Employment Status




Termination of Employment. If employment with ADC is terminated for any reason other than
death, disability or as a result of a reduction in force implemented by the Company, and if the
Employment Termination Date occurs prior to the end of the Fiscal Year, a participant will not
receive an award under the Plan. For purposes of this Plan, the “Employment Termination Date” is
the date that the participant ceases to be an employee of ADC (as determined by the company). In
the case of termination of employment by ADC, the Employment Termination Date shall be determined
without regard to whether such termination is with or without cause or with or without reasonable
notice. For the purposes of this Plan, if employment with ADC is involuntarily terminated as a
result of the participant’s death or disability or as a result of a reduction in force implemented
by the Company, the employee may be entitled to receive a prorated payment. To be eligible, the
employee must have been employed by the Company for at least 3 full calendar months during FY07 and
involuntarily terminated as described above. In such cases, the prorated payment, if any, will be
subject to the achievement of the applicable Business Performance criteria for the plan year and
would not be adjusted for individual performance. Such prorated payment will be payable following
the end of the fiscal year in accordance with the Company’s Incentive Plan payment practices.



Transfer, Promotion or Demotion to another position with a different ADC incentive plan, Target
Incentive Opportunity or business goals. A participant, who transfers, is promoted or demoted
to another position with a different plan, Target Incentive Opportunity or business goals will
receive a prorated calculation of payment based upon the number of months served in each position.
The participant must be in the new position by the first of the month in order to receive credit
for that month under the new plan, target or goals. For example, a participant transferring from
AI to GCS on June 10 would receive eight months payment under the AI plan (November 1 — June 30)
and four months under GCS (July 1 — October 31). In order to receive payment under MIP, a
participant must have completed one full month of service under the plan during that plan year.



Administration

A Management Incentive Plan Committee (“Committee”), appointed and authorized by the Compensation
Committee of the Company’s Board of Directors, will administer this Plan.



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Subject to the complete and full discretion of the Compensation Committee of the Board of
Directors, the Committee is authorized to make all decisions as required in administration of the
Plan and to exercise its discretion to define, interpret, construe, apply, approve, administer,
withdraw and make any exceptions to the terms of the Plan.



Right to Modify

ADC reserves the right to modify or adjust the Plan at any time in its sole discretion either in
whole or with respect to a particular Business Unit. The Participant explicitly agrees with this
modification right of ADC.



Governing Law

The Plan is made and shall be construed in accordance with the laws of the State of Minnesota,
U.S.A. without regard to conflicts of law principles thereof, or those of any other state of the
U.S.A. or of any other country, province or city.



Severability

If any provision of this Plan is held invalid, illegal or unenforceable by a court or tribunal of a
competent jurisdiction, this Plan shall be deemed severable and such invalidity, illegality or
unenforceability shall not affect any other provision of this Plan which shall be enforced in
accordance with the intent of this Plan.



Assignment

The Company shall have the right to assign this Plan to its successors and assigns and this Plan
shall inure to the benefit of and be enforceable by said successors and assigns. Participant may
not assign this Plan or any rights hereunder.



Entire Understanding

This Plan constitutes the entire understanding between the parties regarding the payment of
incentive compensation under this Plan, and it supercedes any and all prior agreements or
understandings, whether oral or written, express or implied, on such subject matter.



No Acquired Rights or Entitlements/Plan Amendment or Termination

The Plan shall not entitle Participants to any future compensation. The Plan is not an element of
the employees’ Base Salary or base compensation and shall not be considered as part of such in the
event of severance, redundancy, or resignation. ADC has no obligation to offer incentive plans to
Participants in the future, and the plan shall be effective only for the time period specified in
the plan and shall not be deemed to renew year over year. The Participant understands and accepts
that the incentive payments made under the Plan are entirely at the sole discretion of ADC.
Specifically, ADC assumes no obligation to the Participant under this Plan with respect to any
doctrine or principle of acquired rights or similar concept. Subject to the provisions of the Plan,
ADC may amend or terminate the Plan or discontinue the payment of incentives under the Plan at any
time, at its sole discretion and without advance notice.




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