following the dateof a Change in Control of the Company. The Company shall notify the Optionee in writing of theacceleration within 10 days of the Change in Control.     A “Change in Control” of the Company shall be deemed to have occurred if (a) a change incontrol occurs of a nature that would be required to be reported in response to Item 6(e) ofSchedule 14A of Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended,whether or not the Company is then subject to such reporting requirement; (b) more than 25 percentof the then outstanding common shares of the Company is acquired by any person or group; or (c)individuals who at the date hereof constitute the Board of Directors of the Company cease for anyreason to constitute at least a majority thereof (unless the election or the nomination forelection of each new director was approved by a vote of at least two-thirds of directors then stillin office who were directors at the beginning of the period and/or their successor directors whowere recommended or elected to succeed a beginning director by at least two-thirds of the directorswho were directors at the beginning of the period).     4. Exercise of Option after Death or Termination of Employment. This Option shallterminate and may no longer be exercised if the Optionee ceases to be employed by the Company orits subsidiaries, if any, except that:     (a) In the event that the Optionee shall cease to be employed by the Company or itssubsidiaries, if any, for the reason other than the Optionee’s gross and willful misconductor death or disability, the Optionee shall have the right to exercise this Option at anytime within three months after such termination of employment to the extent of the fullnumber of Shares the Optionee was entitled to purchase under this Option on the date oftermination.     (b) In the event that the Optionee shall cease to be employed by the Company or itssubsidiaries, if any, by reason of the Optionee’s gross and willful misconduct during thecourse of employment, including but not limited to wrongful appropriation of funds of theCompany or the commission of a gross misdemeanor or felony, this Option shall be terminatedas of the date of the misconduct.     (c) In the event that the Optionee shall die while in the employ of the Company or anysubsidiary, if any, or within three months after termination of employment for any reasonother than gross and willful misconduct, or become disabled (within the meaning of Section22(e)(3) of the Code) while in the employ of the Company or a subsidiary, if any, and theOptionee shall not have fully exercised this Option, this Option may be exercised at anytime within twelve months after the Optionee’s death or disability by the Optionee, thepersonal representatives, administrators, or, if applicable, guardian of the Optionee or byany person or persons to whom this Option is transferred by will or the applicable laws ofdescent and distribution, to the extent of the full number of Shares the Optionee wasentitled to purchase under this Option on the date of death, disability or termination ofemployment, if earlier.     (d) Notwithstanding the above, in no case may this Option be exercised to any extent byanyone after the Termination Date.
2

 
     5. Method of Exercise of Option. Subject to the foregoing, this Option may beexercised in whole or in part from time to time by serving written notice of exercise on theCompany at its principal office within the Option period. The notice shall state the number ofShares as to which the Option is being exercised and shall be accompanied by payment of theexercise price. Payment of the exercise price shall be made by certified or bank cashier’s checkpayable to the Company, or by tender of shares of the Company’s Common Stock, previously owned bythe Optionee, having a fair market value on the date of exercise equal to the exercise price of theOption, or a combination of cash and shares equal to such exercise price.     6. Miscellaneous.     (a) Plan Provisions Control. In the event that any provision of this agreementconflicts with or is inconsistent in any respect with the terms of the Plan, the terms of the Planshall control.     (b) No Rights of Shareholders. Neither Optionee, Optionee’s legal representative nora permissible assignee of this Option shall have any of the rights and privileges of a shareholderof the Company with respect to the Shares, unless and until such Shares have been issued in thename of the Optionee, Optionee’s legal representative or permissible assignee, as applicable.     (c) No Right to Employment. This agreement shall not confer on the Optionee any rightwith respect to continuance of employment with the Company or any subsidiary of the Company, norwill it interfere in any way with the right of the Company to terminate such employment at anytime.     (d) Governing Law. The validity, construction and effect of the Plan and thisagreement, and any rules and regulations relating to the Plan and this agreement, shall bedetermined in accordance with the laws of the State of Minnesota.     (e) Severability. If any provision of this agreement is or becomes or is deemed to beinvalid, illegal or unenforceable in any jurisdiction or would disqualify this agreement under anylaw deemed applicable by the Committee (as defined in the Plan), such provision shall be construedor deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amendedwithout, in the determination of the Committee, materially altering the purpose or intent of thePlan or this agreement, such provision shall be stricken as to such jurisdiction or this agreement,and the remainder of this agreement shall remain in full force and effect.     (f) No Trust or Fund Created. Neither the Plan nor this agreement shall create or beconstrued to create a trust or separate fund of any kind or a fiduciary relationship between theCompany or any affiliate and the Optionee or any other person.     (g) Headings. Headings are given to the sections and subsections of this agreementsolely as a convenience to facilitate reference. Such headings shall not be deemed in any waymaterial or relevant to the construction or interpretation of this agreement or any provisionthereof.     (h) Conditions Precedent to Issuance of Shares. Shares shall not be issued pursuantto the exercise of the Option unless such exercise and the issuance and delivery of the applicable
3

 
Shares pursuant thereto shall comply with all relevant provisions of law, including, withoutlimitation, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, asamended, the rules and regulations promulgated thereunder, the requirements of the NASDAQ GlobalMarket or any other applicable stock exchange and the Minnesota Business Corporation Act. As acondition to the exercise of the purchase price relating to the Option, the Company may requirethat the person exercising or paying the purchase price represent and warrant that the Shares arebeing purchased only for investment and without any present intention to sell or distribute suchShares if, in the opinion of counsel for the Company, such a representation and warranty isrequired by law.     (i) Withholding. If the Optionee shall dispose of any of the Shares acquired uponexercise of this Option within two years from the date this Option was granted or within one yearafter the date of exercise of this Option, then, in order to provide the Company with theopportunity to claim the benefit of any income tax deduction, Optionee shall promptly notify theCompany of the dates of acquisition and disposition of such Shares, the number of Shares sodisposed of, and the consideration, if any, received for such Shares. In order to comply with allapplicable federal or state income tax laws or regulations, the Company may take such action as itdeems appropriate to assure (i) notice to the Company of any disposition of the Shares of theCompany within the time periods described above, and (ii) that, if necessary, all applicablefederal or state payroll, withholding, income or other taxes are withheld or collected from theOptionee.     (j) Consultation With Professional Tax and Investment Advisors. The Optioneeacknowledges that the grant, exercise, vesting or any payment with respect to this Option, andthe sale or other taxable disposition of the Shares acquired pursuant to the exercise thereof,may have tax consequences pursuant to the Code or under local, state or international tax laws.The Optionee further acknowledges that such Optionee is relying solely and exclusively on theOptionee’s own professional tax and investment advisors with respect to any and all such matters(and is not relying, in any manner, on the Company or any of its employees or representatives).Finally, the Optionee understands and agrees that any and all tax consequences resulting from thisOption and its grant, exercise, vesting or any payment with respect thereto, and the sale or othertaxable disposition of the Shares acquired pursuant to the Plan, is solely and exclusively theresponsibility of the Optionee without any expectation or understanding that the Company or any ofits employees or representatives will pay or reimburse such holder for such taxes or other items.
4