exv10w1






Exhibit 10.1




Digi International Inc.

2000 Omnibus Stock Plan

as Amended and Restated as of

December 4, 2009




(effective as of December 4, 2009)




     1. Purpose.   The purpose of the Digi International Inc. 2000 Omnibus Stock Plan (the
“Plan”) is to promote the interests of the Company and its stockholders by providing key personnel
of the Company and its Affiliates and Outside Directors with an opportunity to acquire a
proprietary interest in the Company and reward them for achieving a high level of corporate
performance and thereby develop a stronger incentive to put forth maximum effort for the continued
success and growth of the Company and its Affiliates. In addition, the opportunity to acquire a
proprietary interest in the Company will aid in attracting and retaining key personnel and Outside
Directors of outstanding ability.



     2. Definitions.  



     2.1  The capitalized terms used elsewhere in the Plan have the meanings set forth below.



     (a) “Affiliate” means any corporation that is a “parent corporation” or “subsidiary
corporation” of the Company, as those terms are defined in Code Sections 424(e) and (f), or any
successor provisions, and, for purposes other than the grant of Incentive Stock Options, any joint
venture in which the Company or any such “parent corporation” or “subsidiary corporation” owns an
equity interest.



     (b) “Agreement” means a written contract (i) consistent with the terms of the Plan entered
into between the Company or an Affiliate and a Participant and (ii) containing the terms and
conditions of an Award in such form and not inconsistent with the Plan as the Committee shall
approve from time to time, together with all amendments thereto, which amendments may be
unilaterally made by the Company (with the approval of the Committee) unless such amendments are
deemed by the Committee to be materially adverse to the Participant and not required as a matter of
law.



     (c) “Award” or “Awards” means a grant made under the Plan in the form of Restricted Stock,
Options, Stock Appreciation Rights, Performance Units, Stock or any other stock-based award.



     (d) “Board” means the Board of Directors of the Company.



     (e) “Code” means the Internal Revenue Code of 1986, as amended and in effect from time to time
or any successor statute.



     (f) “Committee” means two or more Non-Employee Directors designated by the Board to administer
the Plan under Plan Section 3.1 and constituted so as to permit grants thereby to comply with
Exchange Act Rule 16b-3 and Code Section 162(m).



     (g) “Company” means Digi International Inc., a Delaware corporation, or any successor to all
or substantially all of its businesses by merger, consolidation, purchase of assets or otherwise.



     (h) “Effective Date” means the date specified in Plan Section 12.1.



     (i) “Employee” means an employee (including an officer or director who is also an employee) of
the Company or an Affiliate.



     (j) “Exchange Act” means the Securities Exchange Act of 1934, as amended and in effect from
time to time or any successor statute.



     (k) “Exchange Act Rule 16b-3” means Rule 16b-3 promulgated by the Securities and Exchange
Commission under the Exchange Act, as now in force and in effect from time to time or any successor
regulation.



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     (l) “Fair Market Value” as of any date means, unless otherwise expressly provided in the Plan:







     (i) the closing sale price of a Share on such date, or, if no sale of Shares shall have
occurred on that date, on the next preceding day on which a sale of Shares occurred



     (A) on the composite tape for NASDAQ-listed shares, or



     (B) if the Shares are not quoted on the composite tape for NASDAQ-listed shares, on the
principal United States Securities Exchange registered under the Exchange Act on which the Shares
are listed, or



     (ii) if clause (i) is inapplicable, the mean between the closing “bid” and the closing “asked”
quotation of a Share on that date, or, if no closing bid or asked quotation is made on that date,
on the next preceding day on which a closing bid and asked quotation is made, on the National
Association of Securities Dealers, Inc. Automated Quotations System or any system then in use, or



     (iii) if clauses (i) and (ii) are inapplicable, what the Committee determines in good faith to
be 100% of the fair market value of a Share on that date, using such criteria as it shall
determine, in its sole discretion, to be appropriate for valuation.



     In the case of an Incentive Stock Option, if this determination of Fair Market Value is not
consistent with the then current regulations of the Secretary of the Treasury, Fair Market Value
shall be determined in accordance with those regulations. The determination of Fair Market Value
shall be subject to adjustment as provided in Plan Section 16.



     (m) “Full Value Award” means any Award other than an Option or Stock Appreciation Right.



     (n) “Fundamental Change” means a dissolution or liquidation of the Company, a sale of
substantially all of the assets of the Company, a merger or consolidation of the Company with or
into any other corporation, regardless of whether the Company is the surviving corporation, or a
statutory share exchange involving capital stock of the Company.



     (o) “Incentive Stock Option” means any Option designated as such and granted in accordance
with the requirements of Code Section 422 or any successor provision.



     (p) “Insider” as of a particular date means any person who, as of that date is an officer of
the Company as defined under Exchange Act Rule 16a-1(f) or its successor provision.



     (q) “Non-Employee Director” means a member of the Board who is considered a non-employee
director within the meaning of Exchange Act Rule 16b-3(b)(3) or its successor provision and an
outside director for purposes of Code Section 162(m).



     (r) “Non-Statutory Stock Option” means an Option other than an Incentive Stock Option.



     (s) “Option” means a right to purchase Stock, including both Non-Statutory Stock Options and
Incentive Stock Options.



     (t) “Outside Director” means a director who is not an Employee.



     (u) “Participant” means a person or entity to whom an Award is or has been made in accordance
with the Plan.



     (v) “Performance Cycle” means the period of time as specified in an Agreement over which
Performance Units are to be earned.



     (w) “Performance Units” means an Award made pursuant to Plan Section 11.



     (x) “Plan” means this Digi International Inc. 2000 Omnibus Stock Plan, as may be amended and
in effect from time to time.



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     (y) “Restricted Stock” means Stock granted under Plan Section 7 so long as such Stock remains
subject to one or more restrictions.



     (z) “Section 16” or “Section 16(b)” means Section 16 or Section 16(b), respectively, of the
Exchange Act or any successor statute and the rules and regulations promulgated thereunder as in
effect and as amended from time to time.



     (aa) “Share” means a share of Stock.



     (bb) “Stock” means the common stock, par value $.01 per share, of the Company.



     (cc) “Stock Appreciation Right” means a right, the value of which is determined in relation to
the appreciation in value of Shares pursuant to an Award granted under Plan Section 10.



     (dd) “Subsidiary” means a “subsidiary corporation,” as that term is defined in Code
Section 424(f) or any successor provision.



     (ee) “Successor” with respect to a Participant means the legal representative of an
incompetent Participant, and if the Participant is deceased the estate of the Participant or the
person or persons who may, by bequest or inheritance, or pursuant to the terms of an Award, acquire
the right to exercise an Option or Stock Appreciation Right or to receive cash and/or Shares
issuable in satisfaction of an Award in the event of the Participant’s death.



     (ff) “Term” means the period during which an Option or Stock Appreciation Right may be
exercised or the period during which the restrictions or terms and conditions placed on Restricted
Stock or any other Award are in effect.



     (gg) “Transferee” means any member of the Participant’s immediate family (i.e., his or her
children, step-children, grandchildren and spouse) or one or more trusts for the benefit of such
family members or partnerships in which such family members are the only partners.



     2.2  Gender and Number.   Except when otherwise indicated by the context, reference to
the masculine gender shall include, when used, the feminine gender and any term used in the
singular shall also include the plural.



     3. Administration and Indemnification.  



     3.1  Administration.  



     (a) The Committee shall administer the Plan. The Committee shall have exclusive power to
(i) make Awards, (ii) determine when and to whom Awards will be granted, the form of each Award,
the amount of each Award, and any other terms or conditions of each Award consistent with the Plan,
and (iii) determine whether, to what extent and under what circumstances, Awards may be settled,
paid or exercised in cash, Shares or other Awards, or other property or canceled, forfeited or
suspended. Each Award shall be subject to an Agreement authorized by the Committee. A majority of
the members of the Committee shall constitute a quorum for any meeting of the Committee, and acts
of a majority of the members present at any meeting at which a quorum is present or the acts
unanimously approved in writing by all members of the Committee shall be the acts of the Committee.
Notwithstanding the foregoing, the Board shall have the sole and exclusive power to administer the
Plan with respect to Awards granted to Outside Directors.



     (b) Solely for purposes of determining and administering Awards to Participants who are not
Insiders, the Committee may delegate all or any portion of its authority under the Plan to one or
more persons who are not Non-Employee Directors.



     (c) To the extent within its discretion and subject to Plan Sections 15 and 16, other than
price, the Committee may amend the terms and conditions of any outstanding Award.



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     (d) It is the intent that the Plan and all Awards granted pursuant to it shall be administered
by the Committee so as to permit the Plan and Awards to comply with Exchange Act Rule 16b-3, except
in such instances as the Committee, in its discretion, may so provide. If any provision of the Plan
or of any Award would otherwise frustrate or conflict with the intent expressed in this
Section 3.1(d), that provision to the extent possible shall be interpreted and deemed amended in
the manner determined by the Committee so as to avoid the conflict. To the extent of any remaining
irreconcilable conflict with this intent, the provision shall be deemed void as applicable to
Insiders to the extent permitted by law and in the manner deemed advisable by the Committee.



     (e) The Committee’s interpretation of the Plan and of any Award or Agreement made under the
Plan and all related decisions or resolutions of the Board or Committee shall be final and binding
on all parties with an interest therein. Consistent with its terms, the Committee shall have the
power to establish, amend or waive regulations to administer the Plan. In carrying out any of its
responsibilities, the Committee shall have discretionary authority to construe the terms of the
Plan and any Award or Agreement made under the Plan.



     3.2  Indemnification.   Each person who is or shall have been a member of the
Committee, or of the Board, and any other person to whom the Committee delegates authority under
the Plan, shall be indemnified and held harmless by the Company, to the extent permitted by law,
against and from any loss, cost, liability or expense that may be imposed upon or reasonably
incurred by such person in connection with or resulting from any claim, action, suit or proceeding
to which such person may be a party or in which such person may be involved by reason of any action
taken or failure to act, made in good faith, under the Plan and against and from any and all
amounts paid by such person in settlement thereof, with the Company’s approval, or paid by such
person in satisfaction of any judgment in any such action, suit or proceeding against such person,
provided such person shall give the Company an opportunity, at the Company’s expense, to handle and
defend the same before such person undertakes to handle and defend it on such person’s own behalf.
The foregoing right of indemnification shall not be exclusive of any other rights of
indemnification to which such person or persons may be entitled under the Company’s Certificate 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.



     4. Shares Available Under the Plan and Maximum Awards.  



     4.1 Number of Shares Available for Grants. Subject to adjustment as provided in
Sections 4.1(a) and 16 herein, the number of Shares hereby reserved for issuance to Participants
under the Plan shall be 3,250,000. Any Shares that are subject to Awards of Options shall be
counted against the maximum Share limitation as one Share for every one Share granted, and Awards
of Stock Appreciation Rights shall be counted against this maximum Share limitation as equal to the
number of Shares to which such Stock Appreciation Rights relate. Any Shares that are subject to
Full Value Awards shall be counted against this maximum Share limitation as 1.30 Shares for every
one Share granted. The Shares to be delivered under the Plan will be made available from
authorized but unissued Shares or issued Shares that are held in the Company’s treasury.



     (a) Any Shares subject to an Award under this Plan that expires, is forfeited, cancelled, or
returned to the Company for failure to satisfy vesting requirements, or otherwise terminates
without payment being made thereunder shall, to the extent of such expiration, forfeiture,
cancellation, return or termination, again be available for grant under the Plan. Each Share that
again becomes available for grant pursuant to the preceding sentence shall increase the total
number of Shares remaining available for Awards by (i) one Share if such Share was subject to an
Option or Stock Appreciation Right granted under the Plan, and (ii) 1.30 Shares if such Share was
subject to a Full Value Award. The following Shares will, however, continue to be charged against
the foregoing maximum Share limitations and will not again become available for grant: (i) Shares
tendered by the Participant or withheld by the Company in payment of the purchase price of an
Option, (ii) Shares tendered by the Participant or withheld by the Company to satisfy



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any tax withholding obligation with respect to an Award, and (iii) Shares subject to a Stock
Appreciation Right that are not issued in connection with the settlement of the Stock Appreciation
Right upon its exercise.



     (b) Where two or more types of Awards (all of which are payable in Shares) are granted to a
Participant in tandem with each other, such that the exercise of one type of Award with respect to
a number of Shares cancels at least an equal number of Shares of the other, each such joint Award
shall be deemed to be the equivalent of the maximum number of Shares available under the largest
single Award.



     Additional rules for determining the number of Shares granted under the Plan may be made by
the Committee as it deems necessary or desirable.



     (c) No fractional Shares may be issued under the Plan; however, cash shall be paid in lieu of
any fractional Share in settlement of an Award.



     4.2 Individual Award Limitations. Subject to adjustment pursuant to Plan Section 16,
the maximum number of Shares that may be awarded to a Participant in any calendar year in the form
of Options is 250,000, the maximum number of Shares that may be awarded to a Participant in any
calendar year in the form of Restricted Stock is 100,000, and the maximum number of Shares that may
be awarded to a Participant in any calendar year in the form of Stock Appreciation Rights is
100,000.



     5. Eligibility.   Participation in the Plan shall be limited to Employees and to
individuals or entities who are not Employees but who provide services to the Company or an
Affiliate, including services provided in the capacity of a consultant, advisor or director. The
granting of Awards is solely at the discretion of the Committee, except that Incentive Stock
Options may only be granted to Employees. References herein to “employed,” “employment” or similar
terms (except “Employee”) shall include the providing of services in any capacity or as a director.
Neither the transfer of employment of a Participant between any of the Company or its Affiliates,
nor a leave of absence granted to such Participant and approved by the Committee, shall be deemed a
termination of employment for purposes of the Plan.



     6. General Terms of Awards.  



     6.1  Amount of Award.   Each Agreement shall set forth the number of Shares of
Restricted Stock, Stock or Performance Units subject to the Agreement, or the number of Shares to
which the Option subject to the Agreement applies or with respect to which payment upon the
exercise of the Stock Appreciation Right subject to the Agreement is to be determined, as the case
may be, together with such other terms and conditions applicable to the Award as determined by the
Committee acting in its sole discretion.



     6.2  Term.   Each Agreement, other than those relating solely to Awards of Shares
without restrictions, shall set forth the Term of the Option, Stock Appreciation Right, Restricted
Stock or other Award or the Performance Cycle for the Performance Units, as the case may be.
Acceleration of the expiration of the applicable Term is permitted, upon such terms and conditions
as shall be set forth in the Agreement, which may, but need not, include, without limitation,
acceleration in the event of the Participant’s death or retirement. Acceleration of the Performance
Cycle of Performance Units shall be subject to Plan Section 11.2. Each award granted to a
Participant shall have such Term as the Committee shall determine at the time of grant; provided,
however, that any such Term shall not exceed 10 years.



     6.3  Transferability.   Except as provided in this Section, during the lifetime of a
Participant to whom an Award is granted, only that Participant (or that Participant’s legal
representative) may exercise an Option or Stock Appreciation Right, or receive payment with respect
to Performance Units or any other Award. No Award of Restricted Stock (before the expiration of the
restrictions), Options, Stock Appreciation Rights or Performance Units or other Award may be sold,
assigned, transferred, exchanged or otherwise encumbered other than to a Successor in the event of
a Participant’s death or pursuant to a qualified domestic relations order as defined in the Code or
Title 1 of the Employee



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Retirement Income Security Act of 1974, as amended (“ERISA”), or the rules thereunder; any
attempted transfer in violation of this Section 6.3 shall be of no effect. Notwithstanding the
immediately preceding sentence, the Committee, in an Agreement or otherwise at its discretion, may
provide that the Award (other than Incentive Stock Options) may be transferable to a Transferee if
the Participant does not receive any consideration for the transfer. Any Award held by a Transferee
shall continue to be subject to the same terms and conditions that were applicable to that Award
immediately before the transfer thereof to the Transferee. For purposes of any provision of the
Plan relating to notice to a Participant or to acceleration or termination of an Award upon the
death, disability or termination of employment of a Participant the references to “Participant”
shall mean the original grantee of an Award and not any Transferee.



     6.4  Termination of Employment.   Except as otherwise determined by the Committee or
provided by the Committee in an Agreement, in case of a Participant’s termination of employment,
the following provisions shall apply:



     (a) Options and Stock Appreciation Rights.  



     (i) If a Participant’s employment or other relationship with the Company and its Affiliates
terminates because of the Participant’s death, then any Option or Stock Appreciation Right that has
not expired or been terminated shall become exercisable in full if the Participant’s employment or
other relationship with the Company and its Affiliates has been continuous between the date the
Option or Stock Appreciation Right was granted and a date not more than three months prior to such
death, and may be exercised by the Participant’s Successor at any time, or from time to time,
within one year after the date of the Participant’s death.



     (ii) If a Participant’s employment or other relationship with the Company and its Affiliates
terminates because the Participant is disabled (within the meaning of Section 22(e)(3) of the
Code), then any Option or Stock Appreciation Right that has not expired or been terminated shall
become exercisable in full if the Participant’s employment or other relationship with the Company
and its Affiliates has been continuous between the date the Option or Stock Appreciation Right was
granted and the date of such disability, and the Participant or the Participant’s Successor may
exercise such Option or Stock Appreciation Right at any time, or from time to time, within one year
after the date of the Participant’s disability.



     (iii) If a Participant’s employment terminates for any reason other than death or disability,
then any Option or Stock Appreciation Right that has not expired or been terminated shall remain
exercisable for three months after termination of the Participant’s employment, but, unless
otherwise provided in the Agreement, only to the extent that such Option or Stock Appreciation
Right was exercisable immediately prior to such Participant’s termination of employment; provided,
however, that if the Participant is an Outside Director, the Option or Stock Appreciation Right
shall remain exercisable until the expiration of the Term after such Outside Director ceases to be
a director of the Company but, unless otherwise provided in the Agreement, only to the extent that
such Option or Stock Appreciation Right was exercisable immediately prior to such Outside Director
ceasing to be a director.



     (iv) Notwithstanding the foregoing Plan Sections 6.4(a)(i), (ii) and (iii), in no event shall
an Option or a Stock Appreciation Right be exercisable after the expiration of the Term of such
Award. Any Option or Stock Appreciation Right that is not exercised within the periods set forth in
Plan Sections 6.4 (i), (ii) and (iii), except as otherwise provided by the Committee in the
Agreement, shall terminate as of the end of the periods described in such Sections.



     (b) Performance Units.   If a Participant’s employment or other relationship with the
Company and its Affiliates terminates during a Performance Cycle because of death or disability, or
under other circumstances provided by the Committee in its discretion in the Agreement or
otherwise, the Participant, unless the Committee shall otherwise provide in the Agreement, shall be
entitled to a payment with



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respect to Performance Units at the end of the Performance Cycle based upon the extent to
which achievement of performance targets was satisfied at the end of such period (as determined at
the end of the Performance Cycle) and prorated for the portion of the Performance Cycle during
which the Participant was employed by the Company or its Affiliates. Except as provided in this
Section 6.4(b) or in the Agreement, if a Participant’s employment or other relationship with the
Company and its Affiliates terminates during a Performance Cycle, then such Participant shall not
be entitled to any payment with respect to that Performance Cycle.



     (c) Restricted Stock Awards.   Unless otherwise provided in the Agreement, in case of
a Participant’s death or disability, the Participant shall be entitled to receive a number of
Shares of Restricted Stock under outstanding Awards that has been prorated for the portion of the
Term of the Awards during which the Participant was employed by the Company and its Affiliates,
and, with respect to such Shares, all restrictions shall lapse. Any Shares of Restricted Stock as
to which restrictions do not lapse under the preceding sentence shall terminate at the date of the
Participant’s termination of employment and such Shares of Restricted Stock shall be forfeited to
the Company.



     6.5  Rights as Stockholder.   Each Agreement shall provide that a Participant shall
have no rights as a stockholder with respect to any securities covered by an Award unless and until
the date the Participant becomes the holder of record of the Stock, if any, to which the Award
relates.



     7. Restricted Stock Awards.  



     (a) An Award of Restricted Stock under the Plan shall consist of Shares subject to
restrictions on transfer and conditions of forfeiture, which restrictions and conditions shall be
included in the applicable Agreement. The Committee may provide for the lapse or waiver of any such
restriction or condition based on such factors or criteria as the Committee, in its sole
discretion, may determine.



     (b) Except as otherwise provided in the applicable Agreement, each Stock certificate issued
with respect to an Award of Restricted Stock shall either be deposited with the Company or its
designee, together with an assignment separate from the certificate, in blank, signed by the
Participant, or bear such legends with respect to the restricted nature of the Restricted Stock
evidenced thereby as shall be provided for in the applicable Agreement.



     (c) The Agreement shall describe the terms and conditions by which the restrictions and
conditions of forfeiture upon awarded Restricted Stock shall lapse. Upon the lapse of the
restrictions and conditions, Shares free of restrictive legends, if any, relating to such
restrictions shall be issued to the Participant or a Successor or Transferee.



     (d) A Participant or a Transferee with a Restricted Stock Award shall have all the other
rights of a stockholder including, but not limited to, the right to receive dividends and the right
to vote the Shares of Restricted Stock.



     (e) No more than 1,000,000 of the total number of Shares available for Awards under the Plan
shall be issued during the term of the Plan as Restricted Stock. This limitation shall be
calculated pursuant to the applicable provisions of Plan Sections 4 and 16.



     8. Other Awards.   The Committee may from time to time grant Stock and other Awards
under the Plan including, without limitation, those Awards pursuant to which Shares are or may in
the future be acquired, Awards denominated in Stock units, securities convertible into Stock and
phantom securities. The Committee, in its sole discretion, shall determine the terms and conditions
of such Awards provided that such Awards shall not be inconsistent with the terms and purposes of
the Plan. The Committee may, at its sole discretion, direct the Company to issue Shares subject to
restrictive legends and/or stop transfer instructions that are consistent with the terms and
conditions of the Award to which the Shares relate. No more than 50,000 of the total number of
Shares available for Awards under the Plan shall be issued during



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the term of the Plan in the form of Stock without restrictions. This limitation shall be
calculated pursuant to the applicable provisions of Plan Sections 4 and 16.



     9. Stock Options.



     9.1  Terms of All Options.



     (a) An Option shall be granted pursuant to an Agreement as either an Incentive Stock Option or
a Non-Statutory Stock Option. The purchase price of each Share subject to an Option shall be
determined by the Committee and set forth in the Agreement, but shall not be less than the Fair
Market Value of a Share as of the date the Option is granted (except as provided in Plan
Sections 9.2 and 19).



     (b) The purchase price of the Shares with respect to which an Option is exercised shall be
payable in full at the time of exercise, provided that to the extent permitted by law, the
Agreement may permit some or all Participants to simultaneously exercise Options and sell the
Shares thereby acquired pursuant to a brokerage or similar relationship and use the proceeds from
the sale as payment of the purchase price of the Shares. The purchase price may be payable in cash,
by delivery or tender of Shares having a Fair Market Value as of the date the Option is exercised
equal to the purchase price of the Shares being purchased pursuant to the Option, or a combination
thereof, as determined by the Committee, but no fractional Shares will be issued or accepted.
Provided, however, that a Participant exercising a stock option shall not be permitted to pay any
portion of the purchase price with Shares if, in the opinion of the Committee, payment in such
manner could have adverse financial accounting consequences for the Company.



     (c) Each Option shall be exercisable in whole or in part on the terms provided in the
Agreement. In no event shall any Option be exercisable at any time after the expiration of its
Term. When an Option is no longer exercisable, it shall be deemed to have lapsed or terminated.



     (d) Each Option granted to a Participant shall expire at such time as the Committee shall
determine at the time of grant; provided, however, that no Option shall be exercisable later than
the 10th anniversary date of its grant.



     9.2  Incentive Stock Options.  In addition to the other terms and conditions
applicable to all Options:



     (i) the purchase price of each Share subject to an Incentive Stock Option shall not be less
than 100% of the Fair Market Value of a Share as of the date the Incentive Stock Option is granted
if this limitation is necessary to qualify the Option as an Incentive Stock Option (except as
provided in Plan Section 20);



     (ii) the aggregate Fair Market Value (determined as of the date the Option is granted) of the
Shares with respect to which Incentive Stock Options held by an individual first become exercisable
in any calendar year (under the Plan and all other incentive stock option plans of the Company and
its Affiliates) shall not exceed $100,000 (or such other limit as may be required by the Code) if
this limitation is necessary to qualify the Option as an Incentive Stock Option and to the extent
an Option or Options granted to a Participant exceed this limit the Option or Options shall be
treated as a Non-Statutory Stock Option;  



     (iii) the Agreement covering an Incentive Stock Option shall contain such other terms and
provisions that the Committee determines necessary to qualify this Option as an Incentive Stock
Option; and



     (iv) notwithstanding any other provision of the Plan to the contrary, no Participant may
receive an Incentive Stock Option under the Plan if, at the time the Award is granted, the
Participant owns (after application of the rules contained in Code Section 424(d), or its successor
provision), Shares possessing more than 10% of the total combined voting power of all classes of
stock of the Company or its Subsidiaries, unless (i) the exercise price for that Incentive Stock
Option is at least 110% of the Fair Market Value of the Shares subject to that Incentive Stock
Option on the date of grant and (ii) that Option is not exercisable after the date five years from
the date that Incentive Stock Option is granted.



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     10. Stock Appreciation Rights.  An Award of a Stock Appreciation Right shall entitle
the Participant (or a Successor or Transferee), subject to terms and conditions determined by the
Committee, to receive upon exercise of the Stock Appreciation Right all or a portion of the excess
of (i) the Fair Market Value of a specified number of Shares as of the date of exercise of the
Stock Appreciation Right over (ii) a specified price that shall not be less than 100% of the Fair
Market Value of such Shares as of the date of grant of the Stock Appreciation Right. A Stock
Appreciation Right may be granted in connection with part or all of, in addition to, or completely
independent of an Option or any other Award under the Plan. If issued in connection with a
previously or contemporaneously granted Option, the Committee may impose a condition that exercise
of a Stock Appreciation Right cancels a pro rata portion of the Option with which it is connected
and vice versa. Each Stock Appreciation Right may be exercisable in whole or in part on the terms
provided in the Agreement. No Stock Appreciation Right shall be exercisable at any time after the
expiration of its Term. When a Stock Appreciation Right is no longer exercisable, it shall be
deemed to have lapsed or terminated. Upon exercise of a Stock Appreciation Right, payment to the
Participant or a Successor or Transferee shall be made at such time or times as shall be provided
in the Agreement in the form of cash, Shares or a combination of cash and Shares as determined by
the Committee. The Agreement may provide for a limitation upon the amount or percentage of the
total appreciation on which payment (whether in cash and/or Shares) may be made in the event of the
exercise of a Stock Appreciation Right. The Term of a Stock Appreciation Right granted under the
Plan shall be determined by the Committee, in its sole discretion; provided, however, that such
Term shall not exceed 10 years.



     11. Performance Units.



     11.1  Initial Award.



     (a) An Award of Performance Units under the Plan shall entitle the Participant or a Successor
or Transferee to future payments of cash, Shares or a combination of cash and Shares, as determined
by the Committee, based upon the achievement of pre-established performance targets. These
performance targets may, but need not, include, without limitation, targets relating to one or more
of the Company’s or a group’s, unit’s, Affiliate’s or an individual’s performance. The Agreement
may establish that a portion of a Participant’s Award will be paid for performance that exceeds the
minimum target but falls below the maximum target applicable to the Award. The Agreement shall also
provide for the timing of the payment.



     (b) Following the conclusion or acceleration of each Performance Cycle, the Committee shall
determine the extent to which (i) performance targets have been attained, (ii) any other terms and
conditions with respect to an Award relating to the Performance Cycle have been satisfied and
(iii) payment is due with respect to an Award of Performance Units.



     11.2  Acceleration and Adjustment.  The Agreement may permit an acceleration of the
Performance Cycle and an adjustment of performance targets and payments with respect to some or all
of the Performance Units awarded to a Participant, upon the occurrence of certain events, which
may, but need not include, without limitation, a Fundamental Change, a recapitalization, a change
in the accounting practices of the Company, a change in the Participant’s title or employment
responsibilities, the Participant’s death or retirement or, with respect to payments in Shares with
respect to Performance Units, a reclassification, stock dividend, stock split or stock combination
as provided in Plan Section 16. The Agreement also may provide for a limitation on the value of an
Award of Performance Units that a Participant may receive.



     12. Effective Date and Duration of the Plan.



     12.1  Effective Date.  The Plan is effective as of November 6, 2000.



     12.2  Duration of the Plan.  The Plan shall remain in effect until all Stock subject
to it shall be distributed, all Awards have expired or lapsed, the Plan is terminated pursuant to
Plan Section 15, or



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November 27, 2016 (the “Termination Date”); provided, however, that Awards made before the
Termination Date may be exercised, vested or otherwise effectuated beyond the Termination Date
unless limited in the Agreement or otherwise. No Award of an Incentive Stock Option shall be made
more than 10 years after the Effective Date (or such other limit as may be required by the Code) if
this limitation is necessary to qualify the Option as an Incentive Stock Option. The date and time
of approval by the Committee of the granting of an Award shall be considered the date and time at
which the Award is made or granted.



     13. Plan Does Not Affect Employment Status.



     (a) Status as an eligible Employee shall not be construed as a commitment that any Award will
be made under the Plan to that eligible Employee or to eligible Employees generally.



     (b) Nothing in the Plan or in any Agreement or related documents shall confer upon any
Employee or Participant any right to continue in the employment of the Company or any Affiliate or
constitute any contract of employment or affect any right that the Company or any Affiliate may
have to change such person’s compensation, other benefits, job responsibilities, or title, or to
terminate the employment of such person with or without cause.



     14. Tax Withholding.  The Company shall have the right to withhold from any cash
payment under the Plan to a Participant or other person (including a Successor or a Transferee) an
amount sufficient to cover any required withholding taxes. The Company shall have the right to
require a Participant or other person receiving Shares under the Plan to pay the Company a cash
amount sufficient to cover any required withholding taxes before actual receipt of those Shares. In
lieu of all or any part of a cash payment from a person receiving Shares under the Plan, the
Committee may permit the individual to cover all or any part of the required withholdings through a
reduction of the number of Shares delivered or delivery or tender return to the Company of Shares
held by the Participant or other person, in each case valued in the same manner as used in
computing the withholding taxes under the applicable laws.



     15. Amendment, Modification and Termination of the Plan.



     (a) The Board may at any time and from time to time terminate, suspend or modify the Plan.
Except as limited in (b) below, the Committee may at any time alter or amend any or all Agreements
under the Plan to the extent permitted by law.



     (b) No termination, suspension, or modification of the Plan will materially and adversely
affect any right acquired by any Participant or Successor or Transferee under an Award granted
before the date of termination, suspension, or modification, unless otherwise agreed to by the
Participant in the Agreement or otherwise, or required as a matter of law; but it will be
conclusively presumed that any adjustment for changes in capitalization provided for in Plan
Sections 11.2 or 16 does not adversely affect these rights.



     16. Adjustment for Changes in Capitalization.  In the event of any equity
restructuring (within the meaning of authoritative guidance issued by the Financial Accounting
Standards Board relating to stock-based compensation) that causes the per Share value of Shares to
change, such as a stock dividend, stock split, spin off, rights offering, or recapitalization
through a large, nonrecurring cash dividend, the Committee shall cause there to be made an
equitable adjustment to (i) the number and kind of Shares that may be issued under the Plan,
(ii) the limitations on the number of Shares that may be issued to an individual Participant as an
Option or a Stock Appreciation Right or in the form of Restricted Stock in any calendar year or
that may be issued in the form of Restricted Stock or Shares without restrictions and (iii) the
number and kind of Shares or, subject to Plan Section 11.2, Performance Units, subject to and the
exercise price (if applicable) of any then outstanding Awards of Options, Stock Appreciation
Rights, Restricted Stock, Performance Units or any other Awards related to shares of Stock (to the
extent such other Awards would not otherwise automatically adjust in the equity restructuring);
provided, in each case, that with respect to Incentive Stock Options, no such adjustment shall be
authorized to the extent that such adjustment would cause such options to violate Section 422(b) of
the Code or any successor



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provision; provided further, with respect to all Awards, no such adjustment shall be
authorized to the extent that such adjustment would cause the Awards to be subject to adverse tax
consequences under Section 409A of the Code. In the event of any other change in corporate
capitalization, such as a merger, consolidation, any reorganization (whether or not such
reorganization comes within the definition of such term in Section 368 of the Code), including a
Fundamental Change (subject to Plan Section 17), or any partial or complete liquidation of the
Company, such equitable adjustments described in the foregoing sentence may be made as determined
to be appropriate and equitable by the Committee to prevent dilution or enlargement of rights. In
either case, any such adjustment shall be conclusive and binding for all purposes of the Plan.
Unless otherwise determined by the Committee, the number of Shares subject to an Award shall always
be a whole number. In no event shall an outstanding Option or Stock Appreciation Right be amended
for the sole purpose of reducing the exercise price or grant price thereof.



     17. Fundamental Change.  In the event of a proposed Fundamental Change, the Committee
may, but shall not be obligated to:



     (a) if the Fundamental Change is a merger or consolidation or statutory share exchange, make
appropriate provision for the protection of the outstanding Options and Stock Appreciation Rights
by the substitution of options, stock appreciation rights and appropriate voting common stock of
the corporation surviving any merger or consolidation or, if appropriate, the parent corporation of
the Company or such surviving corporation; or



     (b) at least ten days before the occurrence of the Fundamental Change, declare, and provide
written notice to each holder of an Option or Stock Appreciation Right of the declaration, that
each outstanding Option and Stock Appreciation Right, whether or not then exercisable, shall be
canceled at the time of, or immediately before the occurrence of the Fundamental Change in exchange
for payment to each holder of an Option or Stock Appreciation Right, within ten days after the
Fundamental Change, of cash equal to (i) for each Share covered by the canceled Option, the amount,
if any, by which the Fair Market Value (as defined in this Section) per Share exceeds the exercise
price per Share covered by such Option or (ii) for each Stock Appreciation Right, the price
determined pursuant to Section 10, except that Fair Market Value of the Shares as of the date of
exercise of the Stock Appreciation Right, as used in clause (i) of Plan Section 10, shall be deemed
to mean Fair Market Value for each Share with respect to which the Stock Appreciation Right is
calculated determined in the manner hereinafter referred to in this Section. At the time of the
declaration provided for in the immediately preceding sentence, each Stock Appreciation Right and
each Option shall immediately become exercisable in full and each person holding an Option or a
Stock Appreciation Right shall have the right, during the period preceding the time of cancellation
of the Option or Stock Appreciation Right, to exercise the Option as to all or any part of the
Shares covered thereby or the Stock Appreciation Right in whole or in part, as the case may be. In
the event of a declaration pursuant to Plan Section 17(b), each outstanding Option and Stock
Appreciation Right granted pursuant to the Plan that shall not have been exercised before the
Fundamental Change shall be canceled at the time of, or immediately before, the Fundamental Change,
as provided in the declaration.



     Notwithstanding the foregoing, no person holding an Option or a Stock Appreciation Right shall
be entitled to the payment provided for in this Section 17(b) if such Option or Stock Appreciation
Right shall have terminated, expired or been cancelled. For purposes of this Section only, “Fair
Market Value” per Share means the cash plus the fair market value, as determined in good faith by
the Committee, of the non-cash consideration to be received per Share by the stockholders of the
Company upon the occurrence of the Fundamental Change.



     18. Prohibition on Repricing.  Without the approval of the Company’s stockholders, the
Committee will not reprice, adjust or amend the exercise price of any Option or the grant price of
any Stock Appreciation Right previously awarded, whether through amendment, cancellation and
replacement grant or any other means, except pursuant to Section 16 of the Plan in connection with
an equity restructuring,



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or pursuant to Section 17 of the Plan in connection with a Fundamental Change, in order to
prevent dilution or enlargement of the benefits, or potential benefits intended to be provided
under the Plan.



     19. Forfeitures



     (a) Forfeiture for Cause.  With respect to Awards made on or after December 4, 2009,
notwithstanding any other provision of the Plan or an Agreement, if the Committee finds by a
majority vote that a Participant, before or after his termination of employment with the Company
and its Affiliates: (i) committed a felony or a crime involving moral turpitude or committed any
other act or omission involving fraud, embezzlement or any other act of dishonesty in the course of
his employment by the Company or an Affiliate which conduct damaged the Company or an Affiliate;
(ii) substantially and repeatedly failed to perform duties of the office held by the Participant as
reasonably directed by the Company or an Affiliate; (iii) committed gross negligence or willful
misconduct with respect to the Company or an Affiliate; (iv) committed a material breach of any
employment agreement between the Participant and the Company or an Affiliate that is not cured
within ten (10) days after receipt of written notice thereof from the Company or the Affiliate, as
applicable; (v) failed, within ten (10) days after receipt by the Participant of written notice
thereof from the Company or an Affiliate, to correct, cease or otherwise alter any failure to
comply with instructions or other action or omission which the Board reasonably believes does or
may materially or adversely affect the Company’s or an Affiliate’s business or operations;
(vi) committed misconduct which is of such a serious or substantial nature that a reasonable
likelihood exists that such misconduct will materially injure the reputation of the Company or an
Affiliate; (vii) harassed or discriminated against the Company’s or an Affiliate’s employees,
customers or vendors in violation of the Company’s policies with respect to such matters;
(viii) misappropriated funds or assets of the Company or an Affiliate for personal use or willfully
violated the Company policies or standards of business conduct as determined in good faith by the
Board; (ix) failed, due to some action or inaction on the part of the Participant, to have
immigration status that permits the Participant to maintain full-time employment with the Company
or an Affiliate in the United States in compliance with all applicable immigration law;
(x) disclosed trade secrets of the Company or an Affiliate, then as of the date the Committee makes
its finding, any Awards awarded to the Participant that have not been exercised by the Participant
(including all Awards that have not yet vested) will be forfeited to the Company.  The findings and
decision of the Committee or the Board, if applicable, with respect to such matter, including those
regarding the acts of the Participant and the damage done to the Company, will be final for all
purposes.  No decision of the Committee, however, will affect the finality of the discharge of the
individual by the Company or an Affiliate.



     (b) Forfeiture Events.  With respect to Awards made on or after December 4, 2009, the
Committee may specify in an 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 employment for any other reason, violation of
material policies of the Company and its Affiliates, 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 and its Affiliates.



     20. Corporate Mergers, Acquisitions, Etc.  The Committee may also grant Options, Stock
Appreciation Rights, Restricted Stock or other Awards under the Plan in substitution for, or in
connection with the assumption of, existing options, stock appreciation rights, restricted stock or
other award granted, awarded or issued by another corporation and assumed or otherwise agreed to be
provided for by the Company pursuant to or by reason of a transaction involving a corporate merger,
consolidation, acquisition of property or stock, separation, reorganization or liquidation to which
the Company or a Subsidiary is a party. The terms and conditions of the substitute Awards may vary
from the terms and



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conditions set forth in the Plan to the extent as the Board at the time of the grant may deem
appropriate to conform, in whole or in part, to the provisions of the awards in substitution for
which they are granted.



     21. Unfunded Plan.  The Plan shall be unfunded and the Company shall not be required
to segregate any assets that may at any time be represented by Awards under the Plan. Neither the
Company, its Affiliates, the Committee, nor the Board of Directors shall be deemed to be a trustee
of any amounts to be paid under the Plan nor shall anything contained in the Plan or any action
taken pursuant to its provisions create or be construed to create a fiduciary relationship between
the Company and/or its Affiliates, and a Participant or Successor or Transferee. To the extent any
person acquires a right to receive an Award under the Plan, this right shall be no greater than the
right of an unsecured general creditor of the Company.



     22. Limits of Liability.



     (a) Any liability of the Company to any Participant with respect to an Award shall be based
solely upon contractual obligations created by the Plan and the Award Agreement.



     (b) Except as may be required by law, neither the Company nor any member of the Board of
Directors or of the Committee, nor any other person participating in any determination of any
question under the Plan, or in the interpretation, administration or application of the Plan, shall
have any liability to any party for any action taken, or not taken, in good faith under the Plan.



     23. Compliance with Applicable Legal Requirements.  No certificate for Shares
distributable pursuant to the Plan shall be issued and delivered unless the issuance of the
certificate complies with all applicable legal requirements including, without limitation,
compliance with the provisions of applicable state securities laws, the Securities Act of 1933, as
amended and in effect from time to time or any successor statute, the Exchange Act and the
requirements of the exchanges on which the Company’s Shares may, at the time, be listed.



     24. Deferrals and Settlements.  The Committee may require or permit Participants to
elect to defer the issuance of Shares or the settlement of Awards in cash under such rules and
procedures as it may establish under the Plan. It may also provide that deferred settlements
include the payment or crediting of interest on the deferral amounts.



     25. Other Benefit and Compensation Programs.  Payments and other benefits received by
a Participant under an Award made pursuant to the Plan shall not be deemed a part of a
Participant’s regular, recurring compensation for purposes of the termination, indemnity or
severance pay laws of any country and shall not be included in, nor have any effect on, the
determination of benefits under any other employee benefit plan, contract or similar arrangement
provided by the Company or an Affiliate unless expressly so provided by such other plan, contract
or arrangement, or unless the Committee expressly determines that an Award or portion of an Award
should be included to accurately reflect competitive compensation practices or to recognize that an
Award has been made in lieu of a portion of competitive cash compensation.



     26. Beneficiary Upon Participant’s Death.  To the extent that the transfer of a
Participant’s Award at his or her death is permitted under an Agreement, a Participant’s Award
shall be transferable at death to the estate or to the person who acquires the right to succeed to
the Award by bequest or inheritance.



     27. Requirements of Law.



     (a) To the extent that federal laws do not otherwise control, the Plan and all determinations
made and actions taken pursuant to the Plan shall be governed by the laws of the State of Minnesota
without regard to its conflicts-of-law principles and shall be construed accordingly.



     (b) If any provision of the Plan shall be held illegal or invalid for any reason, the
illegality or invalidity shall not effect the remaining parts of the Plan, and the Plan shall be
construed and enforced as if the illegal or invalid provision had not been included.




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