Exhibit
10-b


 


COMPENSATION PLAN FOR NONEMPLOYEE
DIRECTORS

OF ADC TELECOMMUNICATIONS, INC.

AMENDED AND RESTATED AS OF JANUARY 1, 2004


 


1.                                      Purpose


 


The purpose of this
Compensation Plan (the “Plan”) is to enable Directors of ADC
Telecommunications, Inc. (the “Company”) who are not employees of the Company
to elect to receive their fees as members of the Board of Directors in a form
most advantageous to them. The Plan permits such Directors to elect to receive
this compensation in one or more of the following methods:


 


a.                                       In
cash on a current basis;


 


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


 


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


 


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


 


2.                                      Effective
Date


 


This Plan was originally
adopted on March 30, 1982.  The
effective date of this restatement is January 1, 2004.


 


3.                                      Eligibility


 


All members of the Board
of Directors who are not employees of the Company (“Participants”) are eligible
for the Plan.


 


4.                                      Compensation
Covered by the Plan


 


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


 


a.                                       For
a Deferred Cash Election:  the annual
cash retainer, any non-Executive Board or Committee Chair retainer, and all
meeting attendance fees;


 


b.                                      For
a Deferred Stock Election or an Option Exchange Election:  The annual cash retainer and any Board
Committee Chair retainer.


 


No other compensation or
fees otherwise payable to a Director shall be eligible for an election under
this Plan.


 


5.                                      Election
to Defer


 

















 


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


 


a.                                       All
Eligible Fees;


 


b.                                      Any
designated percentage of his/her Eligible Fees; or


 


c.                                       Any
designated dollar amount of his/her Eligible Fees.


 


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


 


6.                                      Plan
Year


 


The
Plan shall operate on a calendar year basis.


 


7.                                      Deferred
Cash Election


 


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


 


a.                                       Funding
of the Deferral Account


 


The amounts credited to
each Participant’s Deferral Account shall not be held by the Company in a
trust, escrow or similar fiduciary capacity, and neither the Participant, nor
any legal representative, shall have any right against the Company with respect
to any portion of the Deferral Account except as a general unsecured creditor
of the Company.


 


b.                                      Timing
of Distributions


 


At the time a
Participant’s initial Deferred Cash Election is made, each Participant shall
specify the time and manner in which the balance in his/her Deferral Account
shall be distributed.  The time and
manner for distributions specified on a Participant’s initial election form shall
remain in effect for all  successive elections until amended in accordance with Section
7(d).  If a Participant does not specify
an election for the timing and manner of a distribution, the balance of a
Participant’s Deferral Account shall be distributed in a lump sum within 30
days following such Participant’s cessation of service as a member of the Board
of Directors.  The Participant shall be
entitled to receive, or to commence receiving, his/her deferred cash compensation
as follows:


 


i.                              On a
date set by him/her;


 


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


 


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


 


c.                                       Manner
of Distribution


 


Each Participant shall be
entitled to receive the balance in his/her Deferral Account in any one of the
following manners:


 


i.                            In
a lump sum;


 


ii.                         In
approximately equal quarterly installments over a period of years stipulated by
him/her;


 


iii.                      In
approximately equal quarterly installments of a value stipulated by him/her
until the Deferral Account is exhausted; or


 


iv.                     Any
other form or manner of distribution determined by him/her and approved by the
Company.


 


d.                                      Amendments
to Timing or Form of Distribution


 


A Participant may rescind
the initial designation of the timing and manner of distribution made pursuant
to Section 7(b) by making a new designation on the Distribution Amendment Form
attached hereto as Exhibit B.  To be effective, such Distribution Amendment
Form must be made no later than the last day of the second Plan Year preceding
the Plan Year in which distribution is to commence.  (By way of example, a Participant who receives a distribution in
2004 must have made a new designation no later than December 31, 2002, for the
new designation to be effective.)  Once
distributions have commenced pursuant to a valid distribution election, no
further amendments to the manner of such distribution may be made.


 


8.                                      Deferred
Stock Election


 


a.                                       Exchange
Election


 


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


 


The number of shares
which the Company shall be obligated to issue as a result of a Deferred Stock
Election will equal the dollar amount of the Eligible Fee elected to be
deferred divided by the closing price of ADC common stock on first business day
of the Plan Year for which the election is effective, rounded to the nearest
whole number of shares.  An example of
this calculation is attached hereto as Exhibit C.


 


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b.                                      Terms
and Vesting of Phantom Shares


 


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


 


c.                                       Distribution
of Phantom Shares


 


Provided
that the Phantom Shares have not been forfeited, the actual shares of the
Company’s common stock represented by the Phantom Shares will be distributed as
soon as administratively feasible following the Participant’s cessation of
service as a member of the Board of Directors.


 


9.                                      Option
Exchange Election


 


a.                                       Exchange
Election


 


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


 


b.                                      Effective
Date of Stock Option Grant


 


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


 


c.                                       Terms
and Vesting of Options


 


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


 


d.                                      Stock
Option Issuance


 


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


 


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10.                               General
Provisions


 


a.                                       Distribution
in Event of Death


 


In the event of death,
distribution of the Deferral Account or actual shares of common stock
represented by Phantom Shares will be made to the Beneficiary named by the
Participant or to that person who would have a right to receive such
distribution by will or by the applicable laws of descent and
distribution.  The transfer of
outstanding stock options in the event of death shall be determined by the
terms of the stock option agreement and the Company’s Global Stock Incentive
Plan.


 


b.                                      Distribution
in Event of Change of Control


 


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


 


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


 


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


 


iii.                                    If
an Option Exchange Election is in effect, the exercisability of the options
will be determined by the terms of the stock option agreement.


 


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


 


d.                                      Administration
of the Plan


 


The Plan shall be
administered by the Board of Directors or Compensation Committee of the Board
of Directors.


 


e.                                       Amendment
or Termination


 


This Plan may be amended
or terminated at any time by the Board of Directors or the Compensation
Committee of the Board of Directors.


 


f.                                         Cautionary
Statement


 


Participants should be
aware that their participation in the Plan involves the following risks, among
others:


 


i.                                          Balances
in the Deferral Account represented unfunded, unsecured general obligations of
the Company.  If the Company is unable
to pay its debts as they become due, Participants may not be able to collect
the balances in their Deferral Accounts.


 


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ii.                                       The
value of the Phantom Shares issued and the stock options granted pursuant to
the Plan will depend on the value of ADC common stock.  An investment in ADC common stock involves
risk.  Participants are encouraged to
review ADC’s filings with the U.S. Securities and Exchange Commission for a
description of some of the risk factors associated with an investment in ADC’s
common stock.


 


iii.                                    Except
as otherwise provided in the Plan, stock options and the Phantom Shares issued
pursuant to the Plan are subject to forfeiture if a Participant does not
maintain service as a Director through the end of the Plan Year of such
issuance.


 


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EXHIBIT A


 


DEFERRAL ELECTION FORM


 


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


 


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


 


	
   

  	
   

  	
  Deferred
  Cash

  Election

  	
   

  	
  Deferred
  Stock

  Election

  	
   

  	
  Option
  Exchange

  Election*

  	
   

  
	
  Annual
  Retainer

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Chair
  Retainer (Board or Committee)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Meeting
  Attendance Fees

  	
   

  	
   

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  



 












*This column to be
included in the annual election form only if applicable based on the discretion
of the Compensation Committee of the Board.


 


If you are making an initial Deferred
Cash Election, please specify the timing and manner for distribution of your
Deferred Account:


 


I elect to begin
receiving deferred cash compensation on:


 


Specified Date
               


Specified Event
                                                       


 


I elect to receive
deferred cash compensation in the following manner:


 


    Lump
Sum


    Equal
Quarterly Installments for     number of years.


    Equal
Quarterly Installments of       dollars.


    Other
Manner 
                                          


 


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


 


	
  Date 

  	
   

  	
   

  	
  By 

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Print Name)

  	
   

  
							



 


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EXHIBIT B


 


DISTRIBUTION AMENDMENT FORM


 


 


I, the undersigned, a
Director of ADC Telecommunications, Inc., hereby amend the distribution plan
for the balance in my Deferred Account maintained pursuant to the Compensation
Plan for Nonemployee Directors of ADC Telecommunications, Inc. (restated as of
January 1, 2004), as follows:


 


 


I elect to begin
receiving deferred cash compensation on:


 


Specified Date
               


Specified Event
                                                       


 


I elect to receive
deferred cash compensation in the following manner:


 


    Lump
Sum


    Equal
Quarterly Installments for     number of years.


    Equal
Quarterly Installments of       dollars.


    Other
Manner 
                                          


 


 


I understand that this
amendment is only effective if my distributions commence on or after the first
day of the second Plan Year after the Plan Year during which this amendment is
filed.


 


	
  Date 

  	
   

  	
   

  	
  By 

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Print Name)

  	
   

  
							



 


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EXHIBIT C


 


DEFERRED STOCK EXAMPLE – PHANTOM
SHARES


 


Assumptions


 


	
  Deferred Stock
  Election:

  	
  50% of Eligible Fees

  
	
  Annual Cash Retainer
  Fee:

  	
  $25,000

  
	
  FMV of stock on first
  business day of Plan Year:

  	
  $5.00

  
	
  Effective Date of Grant:

  	
  First business day of
  Plan Year

  



 


 


	
  Exchange Calculation

  	
  (Number of Phantom
  Shares awarded)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Fee x Exchange
  Election%

  	
   

  	
  =

  
	
   

  	
  FMV per share on
  Effective Date

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  $25,000 x 50%

  	
   

  	
  =

  
	
   

  	
  $5.00

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  $12,500

  	
   

  	
  =  2,500 Phantom Shares

  
	
   

  	
   

  	
  $5.00

  	
   

  
										



 


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EXHIBIT D


 


EXCHANGE EXAMPLE – STOCK OPTIONS*


 


Assumptions


 


	
  Option Exchange
  Election:

  	
  50% of Eligible Fees

  
	
  Annual Cash Retainer
  Fee:

  	
  $25,000

  
	
  FMV of stock on first
  business day of Plan Year:

  	
  $5.00

  
	
  Effective Date of
  Grant:

  	
  First business day of
  Plan Year

  



 


 


	
  Exchange Calculation

  	
  (Number of Phantom
  Shares awarded)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Fee x Exchange
  Election% x 4.5

  	
   

  	
  =

  
	
   

  	
  FMV per share on
  Effective Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   $25,000 x 50% x  4.5

  	
   

  	
  =

  
	
   

  	
  $5.00

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  $56,250

  	
   

  	
  =  11,250 option shares

  
	
   

  	
   

  	
  $5.00

  	
   

  	
   

  
										



 


 


Exercise Price of
Options:  $5.00 (FMV on grant date)


 












*This Example to be
included in annual form only if applicable based on the discretion of the
Compensation Committee of the Board.


 


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EXHIBIT
E


BENEFICIARY
ELECTION FORM


 


COMPENSATION
PLAN FOR NONEMPLOYEE DIRECTORS OF

ADC TELECOMMUNICATIONS, INC.


 


I.                                         DIRECTOR
INFORMATION 


 


	
  Last Name

  	
  First

  	
  MI (if applicable)

  



 


Mailing Address (If you have
an address change, contact your Human Resources Department)


 


	
  City

  	
  Province (if
  applicable) Country

  	
  Postal Code

  



 


II.                  BENEFICIARY
DESIGNATION


 


In accordance with the
provisions of the Plan, I hereby designate any and all deferral amounts payable
under the Plan by reason of my death to the following beneficiary(ies).  Further, I understand that should my primary
beneficiary(ies) precede me in death, my contingent beneficiary(ies) will
become the primary beneficiary(ies) of my Plan account and any accumulated
contributions.  I understand that this
beneficiary designation revokes any previous designation(s).  I understand that in the event any persons
designated below survive me, any and all death benefits payable will be
distributed in accordance with the provisions of the Plan.  I also reserve the right to change this
designation at any time by completing a new Beneficiary Election Form.


 


PRIMARY BENEFICIARY(IES)


 


	
  Name

  	
   

  	
  Relationship

  (Date of Birth)

  	
   

  	
  Address
  & Phone Number

  	
   

  	
  Percent Of
  Benefit

  (Total = 100%)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


CONTINGENT BENEFICIARY(IES)


 


	
  Name

  	
   

  	
  Relationship

  (Date of Birth)

  	
   

  	
  Address
  & Phone Number

  	
   

  	
  Percent Of
  Benefit

  (Total = 100%)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


III.                                 SIGNATURE


 


	
  Signature

  	
  Date

  



 


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