Exhibit
10-h


 


ADC
EXECUTIVE STOCK OWNERSHIP POLICY

FOR SECTION 16 OFFICERS

(Effective January 1, 2004)


 


 


Overview


 


ADC executives that are
designated by ADC as reporting officers under Section 16 of the Securities
Exchange Act of 1934 (“Section 16 Officers”) are generally the most senior
executives of ADC.  As such, ADC
believes that it is important for them to build and maintain a long-term
ownership position in ADC stock to strengthen their financial alignment with
shareholders’ interests. The ADC Executive Stock Ownership Policy for Section
16 Officers specifies target ownership levels of ADC common stock for each
participant. This policy replaces the previous program (“The ADC Executive
Stock Ownership Policy” as last modified in February 2002).  The program consists of three core
components.  The first is a statement of
targeted ownership, expressed as a fixed number of shares of ADC common
stock.  The second is a means of progressing
toward the targeted ownership: a holding requirement imposed on a portion of
exercised stock options or full-value grants of stock provided by ADC unless
the ownership target is satisfied.  The
third is a prohibition against certain stock transactions that would mitigate
the desired financial alignment with shareholders’ interests and could also
raise certain legal risks associated with these types of transactions.


 


Participation and Effective Date


 


All Section 16 Officers
are subject to this policy.  This policy
is effective as of January 1, 2004, and the holding requirements set forth
herein will apply to any and all grants of stock options or full value grants
made on or after January 1, 2004, provided such grant was made while an
executive was a Section 16 Officer.  For
purposes of this policy “full-value grants” includes all grants or awards of
shares of restricted stock, restricted stock units, performance shares, or
performance share units.  These are all
grants or potential grants of ADC common stock or the right to receive ADC common
stock, without payment of monetary consideration to ADC, that are made
contingent on either continued employment over a period of time or the
achievement of specified performance levels. 
Section 16 Officers will remain subject to the holding requirements
under this policy for so long as they remain Section 16 Officers of ADC, unless
this policy is expressly terminated.


 


Ownership Targets


 


The
ownership target is expressed as a fixed number of shares, based on the salary
grade of the Section 16 Officer.  Except
for adjustments necessary to reflect any stock splits or similar non-economic
events, these numbers of shares will remain constant until the salary grade of
the Section 16 Officer’s position changes or the Compensation Committee of the
Board changes the targeted level of ownership. 
Although the Compensation Committee reserves the right to change the
targeted number of shares, we do not expect frequent changes to the targets.


 


The
target ownership levels are as follows:


 


	
  Position/Grade

  	
   

  	
  Number of Shares

  	
   

  
	
  CEO

  	
   

  	
  860,000

  	
   

  
	
  Grade 25

  	
   

  	
  210,000

  	
   

  
	
  Grade 24

  	
   

  	
  190,000

  	
   

  
	
  Grade 23

  	
   

  	
  170,000

  	
   

  
	
  Grade 22

  	
   

  	
  120,000

  	
   

  
	
  Grade 21

  	
   

  	
  105,000

  	
   

  
	
  Grade 20

  	
   

  	
  95,000

  	
   

  



 

















 


Measurement
of Ownership Targets and Achievement


 


For purposes of this
policy “ownership” is defined as any shares deemed as beneficially owned for purposes
of Section 16 reporting, excluding however any shares that are not yet vested,
even if they are deemed to be beneficially owned for Section 16 reporting
purposes. Included within this definition would be ADC common stock acquired
and currently held through open market purchases, the 401(k), 401(k) Excess and
Supplemental Retirement Plans, employee stock purchase plan holdings, retained
shares from stock option exercises, and vested shares from full-value
grants.  Shares owned or credited in any
form not recognized for Section 16 reporting will not be counted for purposes
of this program.


 


Stock
Holding Requirement


 


ADC does not expect or
require Section 16 Officers to engage in extraordinary out-of-pocket investment
transactions to meet these ownership targets. Rather, the ownership obligations
of Section 16 Officers are limited to complying with certain holding
requirements as applied to the stock option grants and full-value grants that
they are awarded on or after January 1, 2004. 
Grants made prior to the time an individual becomes a Section 16 Officer
are not subject to this holding requirement, even if they were made on or after
January 1, 2004.


 


For full-value grants
subject to the holding requirement, the Section 16 Officer must hold at least 50%
of all vested shares remaining after withholding or sale of vested shares to
cover the cost of withholding taxes. 
For stock options subject to the holding requirement, the Section 16
Officer must hold at least 50% of all the exercised options after the
withholding or sale of shares to cover the exercise price and the withholding
taxes related to the option exercise. 
Once the net ownership target is achieved, this holding requirement will
not apply to the extent that the sale of shares would still result in a net
ownership position that equals or exceeds the ownership target.


 


Prohibited
Transactions


 


In furtherance of the
objectives of this Policy, and in addition to prohibitions under the Federal
securities laws, Section 16 Officers are prohibited from purchasing, selling or
writing any exchange-traded call and put options that have Company stock as
their underlying security.  In addition,
Section 16 Officers may not engage in any hedging transaction on Company stock
that they beneficially own, including but not limited to “forward contracts,”
“collars,” “equity swaps,” or “straddles.”


 


No
Compensation for Achieving the Ownership Target; No Entitlement to Receive
Grants


 


The Section 16 Officer
will obtain no additional compensation or reward for achieving the targeted
ownership level.  In addition, ADC does
not make any commitment to any persons covered by this policy that they will
receive any particular level of stock option grants or full-value grants.  While no Section 16 Officer has any
entitlement to receive any such grants, if a grant is made, it will be subject
to the requirements of this policy.


 

















 


Administration


 


Annually in October, ADC
will tally each Section 16 Officer’s ownership position and report it to them
in conjunction with this ownership policy. 
This tally will also be available to each Section 16 Officer upon
request.  Each Section 16 Officer is
responsible for promptly bringing to ADC’s attention any discrepancy between
ADC’s records and any records maintained by the executive with respect to his
or her ownership position.


 


Each Section 16 Officer
shall be required to sign a certificate that they understand this policy and
will comply with its terms.  A copy of
this certificate is attached to this document as “Exhibit A.”


 


Amendment
and Termination


 


ADC reserves the right to
terminate or amend this program at any time. 
This program is not a contract of employment or compensation or
guarantee thereof.


 


Attachment:  Exhibit A


 

















 


Exhibit
A


 


 


CERTIFICATE


FOR


ADC EXECUTIVE STOCK OWNERSHIP POLICY


FOR SECTION 16 OFFICERS


 


 


I, the undersigned
Section 16 Officer of ADC, understand and acknowledge that I have received a
copy of the ADC Executive Stock Ownership Policy for Section 16 Officers
effective January 1, 2004, and that I will comply with the terms and
requirements of such policy.


 


This Certificate was
acknowledged and signed on the date indicated below.


 


 


	
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