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                                                                     EXHIBIT 4.1

                            VERSO TECHNOLOGIES, INC.
                            1999 STOCK INCENTIVE PLAN

                         (AS AMENDED NOVEMBER 16, 2001)

1.       PURPOSE OF PLAN

         The purpose of the Verso Technologies, Inc. 1999 Stock Incentive Plan
(the "Plan") is to advance the interests of Verso Technologies, Inc. (the
"Company") and its shareholders by enabling the Company and its Subsidiaries to
attract and retain persons of ability to perform services for the Company and
its Subsidiaries by providing an incentive to such individuals through equity
participation in the Company and by rewarding such individuals who contribute to
the achievement by the Company of its economic objectives.

2.       DEFINITIONS

         The following terms will have the meanings set forth below, unless the
context clearly otherwise requires:

         2.1      "BOARD" means the Board of Directors of the Company.

         2.2      "BROKER EXERCISE NOTICE" means a written notice pursuant to
                  which a Participant, upon exercise of an Option, irrevocably
                  instructs a broker or dealer to sell a sufficient number of
                  shares or loan a sufficient amount of money to pay all or a
                  portion of the exercise price of the Option and/or any related
                  withholding tax obligations and remit such sums to the Company
                  and directs the Company to deliver stock certificates to be
                  issued upon such exercise directly to such broker or dealer.

         2.3      "CHANGE IN CONTROL" means an event described in Section 11.1
                  of the Plan.

         2.4      "CODE" means the Internal Revenue Code of 1986, as amended.

         2.5      "COMMITTEE" means the group of individuals administering the
                  Plan, as provided in Section 3 of the Plan.

         2.6      "COMMON STOCK" means the common stock of the Company, par
                  value $.01 per share, or the number and kind of shares of
                  stock or other securities into which such Common Stock may be
                  changed in accordance with Section 4.5 of the Plan.

         2.7      "COMPANY" means Verso Technologies, Inc., a Minnesota
                  corporation.

         2.8      "DISABILITY" means the disability of the Participant such as
                  would entitle the Participant to receive disability income
                  benefits pursuant to the long-term disability plan of the
                  Company or Subsidiary then covering the Participant or, if

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                  no such plan exists or is applicable to the Participant, the
                  permanent and total disability of the Participant within the
                  meaning of Section 22(e)(3) of the Code.

         2.9      "ELIGIBLE RECIPIENTS" means all employees of the Company or
                  any Subsidiary and any non-employee directors, consultants and
                  independent contractors of the Company or any Subsidiary. An
                  Incentive Award may be granted to an employee, in connection
                  with hiring, retention or otherwise, prior to the date the
                  employee first performs services for the Company or the
                  Subsidiaries, provided that such Incentive Awards shall not
                  become vested prior to the date the employee first performs
                  such services.

         2.10     "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
                  amended.

         2.11     "FAIR MARKET VALUE" means, with respect to the Common Stock,
                  as of any date (or, if no shares were traded or quoted on such
                  date, as of the next preceding date on which there was such a
                  trade or quote) (a) the mean between the reported high and low
                  sale prices of the Common Stock if the Common Stock is listed,
                  admitted to unlisted trading privileges or reported on any
                  national securities exchange or on the Nasdaq National Market;
                  (b) if the Common Stock is not so listed, admitted to unlisted
                  trading privileges or reported on any national securities
                  exchange or on the Nasdaq National Market, the closing bid
                  price as reported by the Nasdaq SmallCap Market, OTC Bulletin
                  Board or the National Quotation Bureau, Inc. or other
                  comparable service; or (c) if the Common Stock is not so
                  listed or reported, such price as the Committee determines in
                  good faith in the exercise of its reasonable discretion. If
                  determined by the Committee, such determination will be final,
                  conclusive and binding for all purposes and on all persons,
                  including, without limitation, the Company, the shareholders
                  of the Company, the Participants and their respective
                  successors-in-interest. No member of the Committee will be
                  liable for any determination regarding the fair market value
                  of the Common Stock that is made in good faith.

         2.12     "INCENTIVE AWARD" means an Option, Restricted Stock Award or
                  Stock Bonus granted to an Eligible Recipient pursuant to the
                  Plan.

         2.13     "INCENTIVE STOCK OPTION" means a right to purchase Common
                  Stock granted to an Eligible Recipient pursuant to Section 6
                  of the Plan that qualifies as an "incentive stock option"
                  within the meaning of Section 422 of the Code.

         2.14     "NON-STATUTORY STOCK OPTION" means a right to purchase Common
                  Stock granted to an Eligible Recipient pursuant to Section 6
                  of the Plan that does not qualify as an Incentive Stock
                  Option.

         2.15     "OPTION" means an Incentive Stock Option or a Non-Statutory
                  Stock Option.

         2.16     "PARTICIPANT" means an Eligible Recipient who receives one or
                  more Incentive Awards under the Plan.


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         2.17     "PREVIOUSLY ACQUIRED SHARES" means shares of Common Stock that
                  are already owned by the Participant or, with respect to any
                  Incentive Award, that are to be issued upon the grant,
                  exercise or vesting of such Incentive Award.

         2.18     "PRIOR PLANS" means the Company's 1995 Stock Incentive Plan,
                  1997 Stock Incentive Plan, and 1998 Stock Incentive Plan.

         2.19     "RESTRICTED STOCK AWARD" means an award of Common Stock
                  granted to an Eligible Recipient pursuant to Section 7 of the
                  Plan that is subject to the restrictions on transferability
                  and the risk of forfeiture imposed by the provisions of such
                  Section 7.

         2.20     "RETIREMENT" means termination of employment or service
                  pursuant to and in accordance with the regular (or, if
                  approved by the Board for purposes of the Plan, early)
                  retirement/pension plan or practice of the Company or
                  Subsidiary then covering the Participant, provided that if the
                  Participant is not covered by any such plan or practice, the
                  Participant will be deemed to be overed by the Company's plan
                  or practice for purposes of this determination.

         2.21     "SECURITIES ACT" means the Securities Act of 1933, as amended.

         2.22     "STOCK BONUS" means an award of Common Stock granted to an
                  Eligible Recipient pursuant to Section 8 of the Plan.

         2.23     "SUBSIDIARY" means any entity that is directly or indirectly
                  controlled by the Company or any entity in which the Company
                  has a significant equity interest, as determined by the
                  Committee.

         2.24     "TAX DATE" means the date any withholding tax obligation
                  arises under the Code for a Participant with respect to an
                  Incentive Award.

3.       PLAN ADMINISTRATION

         3.1      THE COMMITTEE. The Plan will be administered by the Board or
                  by a committee of the Board. So long as the Company has a
                  class of its equity securities registered under Section 12 of
                  the Exchange Act, any committee administering the Plan will
                  consist solely of two or more members of the Board who are
                  "non-employee directors" within the meaning of Rule 16b-3
                  under the Exchange Act and, if the Board so determines in its
                  sole discretion, who are "outside directors" within the
                  meaning of Section 162(m) of the Code. Such a committee, if
                  established, will act by majority approval of the members
                  (including written consent of a majority of the members), and
                  a majority of the members of such a committee will constitute
                  a quorum. As used in the Plan, "Committee" will refer to the
                  Board or to such a committee, if established. To the extent
                  consistent with corporate law, the Committee may delegate to
                  any officers of the Company the duties, power and authority of
                  the Committee under the Plan pursuant to such conditions or
                  limitations as the Committee may establish; provided, however,
                  that only the Committee may exercise such duties, power and

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                  authority with respect to Eligible Recipients who are subject
                  to Section 16 of the Exchange Act. The Committee may exercise
                  its duties, power and authority under the Plan in its sole and
                  absolute discretion without the consent of any Participant or
                  other party, unless the Plan specifically provides otherwise.
                  Each determination, interpretation or other action made or
                  taken by the Committee pursuant to the provisions of the Plan
                  will be conclusive and binding for all purposes and on all
                  persons, and no member of the Committee will be liable for any
                  action or determination made in good faith with respect to the
                  Plan or any Incentive Award granted under the Plan.

3.2      AUTHORITY OF THE COMMITTEE.

         (a)      In accordance with and subject to the provisions of the Plan,
                  the Committee will have the authority to determine all
                  provisions of Incentive Awards as the Committee may deem
                  necessary or desirable and as consistent with the terms of the
                  Plan, including, without limitation, the following: (i) the
                  Eligible Recipients to be selected as Participants; (ii) the
                  nature and extent of the Incentive Awards to be made to each
                  Participant including the number of shares of Common Stock to
                  be subject to each Incentive Award, any exercise price, the
                  manner in which Incentive Awards will vest or become
                  exercisable and whether Incentive Awards will be granted in
                  tandem with other Incentive Awards) and the form of written
                  agreement, if any, evidencing such Incentive Award; (iii) the
                  time or times when Incentive Awards will be granted; (iv) the
                  duration of each Incentive Award; and (v) the restrictions and
                  other conditions to which the payment or vesting of Incentive
                  Awards may be subject. In addition, the Committee will have
                  the authority under the Plan in its sole discretion to pay the
                  economic value of any Incentive Award in the form of cash,
                  Common Stock or any combination of both.

         (b)      The Committee will have the authority under the Plan to amend
                  or modify the terms of any outstanding Incentive Award in any
                  manner, including, without limitation, the authority to modify
                  the number of shares or other terms and conditions of an
                  Incentive Award, extend the term of an Incentive Award,
                  accelerate the exercisability or vesting or otherwise
                  terminate any restrictions relating to an Incentive Award,
                  accept the surrender of any outstanding Incentive Award or, to
                  the extent not previously exercised or vested, authorize the
                  grant of new Incentive Awards in substitution for surrendered
                  Incentive Awards; provided, however that the amended or
                  modified terms are permitted by the Plan as then in effect and
                  that any Participant adversely affected by such amended or
                  modified terms has consented to such amendment or
                  modification. No amendment or modification to an Incentive
                  Award, however, whether pursuant to this Section 3.2 or any
                  other provisions of the Plan, will be deemed to be a regrant
                  of such Incentive Award for purposes of this Plan.


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         (c)      In the event of (i) any reorganization, merger, consolidation,
                  recapitalization, liquidation, reclassification, stock
                  dividend, stock split, combination of shares, rights offering,
                  extraordinary dividend or divestiture (including a spin-off)
                  or any other change in corporate structure or shares, (ii) any
                  purchase, acquisition, sale or disposition of a significant
                  amount of assets or a significant business, (iii) any change
                  in accounting principles or practices, or (iv) any other
                  similar change, in each case with respect to the Company or
                  any other entity whose performance is relevant to the grant or
                  vesting of an Incentive Award, the Committee (or, if the
                  Company is not the surviving corporation in any such
                  transaction, the board of directors of the surviving
                  corporation) may, without the consent of any affected
                  Participant, amend or modify the vesting criteria of any
                  outstanding Incentive Award that is based in whole or in part
                  on the financial performance of the Company (or any Subsidiary
                  or division thereof) or such other entity so as equitably to
                  reflect such event, with the desired result that the criteria
                  for evaluating such financial performance of the Company or
                  such other entity will be substantially the same (in the sole
                  discretion of the Committee or the board of directors of the
                  surviving corporation) following such event as prior to such
                  event; provided, that the amended or modified terms are
                  permitted by the Plan as then in effect.

4.       SHARES AVAILABLE FOR ISSUANCE

         4.1      MAXIMUM NUMBER OF SHARES AVAILABLE. Subject to adjustment as
                  provided in Section 4.5 of the Plan, the maximum number of
                  shares of Common Stock that will be available for issuance
                  under the Plan will be 15,000,000 shares of Common Stock less
                  the number of shares of Common Stock issued pursuant to the
                  Prior Plans. Notwithstanding any other provisions of the Plan
                  to the contrary other than Section 6.7, no Participant in the
                  Plan may be granted any Options or any other Incentive Awards
                  with a value based solely on an increase in the value of the
                  Common Stock after the date of grant, relating to more than
                  300,000 shares of Common Stock in the aggregate in any fiscal
                  year of the Company (subject to adjustment as provided in
                  Section 4.5 of the Plan); provided, however, that a
                  Participant who is first appointed or elected as an officer,
                  hired as an employee or retained as a consultant by the
                  Company or who receives a promotion that results in an
                  increase in responsibilities or duties may be granted, during
                  the fiscal year of such appointment, election, hiring,
                  retention or promotion Options or such other Incentive Awards
                  relating to up to 500,000 shares of Common Stock (subject to
                  adjustment as provided in Section 4.5 of the Plan).

         4.2      ACCOUNTING FOR INCENTIVE AWARDS. Shares of Common Stock that
                  are issued under the Plan or that are subject to outstanding
                  Incentive Awards will be applied to reduce the maximum number
                  of shares of Common Stock remaining available for issuance
                  under the Plan. Any shares of Common Stock that are subject to
                  an Incentive Award that lapses, expires, is forfeited or for
                  any reason is terminated unexercised or unvested and any
                  shares of Common Stock that are subject to an Incentive Award
                  that is settled or paid in cash or any form other than shares
                  of Common Stock, or used to satisfy the applicable tax
                  withholding


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                  obligation will automatically again become available for
                  issuance under the Plan. Any shares of Common Stock that
                  constitute the forfeited portion of a Restricted Stock Award,
                  however, will not become available for further issuance under
                  the Plan.

         4.3      GENERAL RESTRICTIONS. Delivery of shares of Common Stock or
                  other amounts under the Plan shall be subject to the
                  following:

                  (a)      Notwithstanding any other provision of the Plan, the
                           Company shall have no liability to deliver any shares
                           of Common Stock under the Plan or make any other
                           distribution of benefits under the Plan unless such
                           delivery or distribution would comply with all
                           applicable laws (including, without limitation, the
                           requirements of the Securities Act of 1933), and the
                           applicable requirements of any securities exchange or
                           similar entity.

                  (b)      To the extent that the Plan provides for issuance of
                           stock certificates to reflect the issuance of shares
                           of Common Stock, the issuance may be reflected on a
                           non-certificated basis, to the extent not prohibited
                           by applicable law or the applicable rules of any
                           securities exchange or similar entity.

         4.4      SHARES OF COMMON STOCK ISSUED PURSUANT TO INCENTIVE STOCK
                  OPTIONS. Subject to Section 4.5, the maximum number of shares
                  of Common Stock that may be issued by Options intended to be
                  Incentive Stock Options pursuant to the Plan shall be
                  15,000,000 less the number of shares of Common Stock issued
                  pursuant to the Prior Plans

         4.5      ADJUSTMENTS TO SHARES AND INCENTIVE AWARDS. In the event of
                  any reorganization, merger, consolidation, recapitalization,
                  reclassification, stock dividend, stock split, of shares,
                  rights offering, divestiture or extraordinary dividend
                  (including a spin-off) or any other change in the corporate
                  structure or shares of the Company, the Committee (or, if the
                  Company is not the surviving corporation in any such
                  transaction, the board of directors of the surviving
                  corporation) will make appropriate adjustment (which
                  determination will be conclusive) as to the number and kind of
                  securities or other property (including cash) available for
                  issuance or payment under the Plan and, in order to prevent
                  dilution or enlargement of the rights of Participants, (a) the
                  number and kind of securities or other property (including
                  cash) to outstanding Options, and (b) the exercise price of
                  outstanding Options.

5.       PARTICIPATION

         Participants in the Plan will be those Eligible Recipients who, in the
judgment of the Committee, have contributed, are contributing or are expected to
contribute to the achievement of economic objectives of the Company or its
Subsidiaries. Eligible Recipients may be granted from time to time one or more
Incentive Awards, singly or in combination or in tandem with other Incentive
Awards, as may be determined by the Committee in its sole discretion. Incentive

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Awards will be deemed to be granted as of the date specified in the grant
resolution of the Committee, which date will be the date of any related
agreement with the Participant.

6.       OPTIONS

         6.1      GRANT. An Eligible Recipient may be granted one or more
                  Options under the Plan, and such Options will be subject to
                  such terms and conditions, consistent with the other
                  provisions of the Plan, may be determined by the Committee in
                  its sole discretion. Committee may designate whether an Option
                  is to be considered an Incentive Stock Option or a
                  Non-Statutory Stock Option. To the extent that any Incentive
                  Stock Option granted under the Plan ceases for any reason to
                  qualify as an "incentive stock option" purposes of Section 422
                  of the Code, such Incentive Stock Option will continue to be
                  outstanding for purposes of the Plan but will thereafter be
                  deemed to be a Non-Statutory Stock Option.

         6.2      EXERCISE PRICE. The per share price to be paid by a
                  Participant upon exercise of an Option will be determined by
                  the Committee in its discretion at the time of the Option
                  grant, provided that price will not be less than 100% of the
                  Fair Market Value of one share of Common Stock on the date of
                  grant with respect to an Incentive Stock Option (110% of the
                  Fair Market Value if, at the time the Incentive Stock Option
                  is granted, the Participant owns, or indirectly, more than 10%
                  of the total combined voting power of all classes of stock of
                  the Company or any parent or subsidiary corporation of the
                  Company).

         6.3      EXERCISABILITY AND DURATION. An Option will become exercisable
                  at such times and in such installments as may be determined by
                  the Committee in its sole discretion at the time of grant;,
                  however, that no Option may be exercisable after 10 years from
                  its date of grant or, in the case of an Eligible Participant
                  who owns, directly or indirectly (as determined pursuant to
                  Section 424(d) of the Code), more than 10% of the combined
                  voting power of all classes of stock of the Company or any
                  subsidiary or parent corporation of the Company (within the
                  meaning of Sections 424(f) and 424(e), respectively, of the
                  Code), five years from its date of grant. Notwithstanding the
                  foregoing, each Option granted to a participant shall vest at
                  a rate of at least 20% per year over 5 years from the date the
                  Option is granted.

         6.4      PAYMENT OF EXERCISE PRICE. The total purchase price of the
                  shares to be purchased upon exercise of an Option will be paid
                  entirely in cash (including check, bank draft or money
                  order);, however, that the Committee, in its sole discretion
                  and upon terms and conditions established by the Committee,
                  may allow such payments to be made, in whole or in part, by
                  tender of a Broker Exercise Notice, Previously Acquired
                  Shares, by tender of a promissory note (on terms acceptable to
                  the Committee in its sole discretion) or by a combination of
                  such methods.

         6.5      MANNER OF EXERCISE. An Option may be exercised by a
                  Participant in whole or in part from time to time, subject to
                  the conditions contained in the Plan


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                  and in the agreement evidencing such Option, by delivery in
                  person, by facsimile or electronic transmission or through the
                  mail of written notice of exercise to the Company (Attention:
                  Chief Financial Officer) at its office at 400 Galleria
                  Parkway, Suite 300, Atlanta, Georgia 30339 (or such other
                  office as the Company may designate), and by paying in full
                  the total exercise price for the shares of Common Stock to be
                  purchased in accordance with Section 6.4 of the Plan.

         6.6      AGGREGATE LIMITATION OF COMMON STOCK SUBJECT TO INCENTIVE
                  STOCK OPTIONS. To the extent that the aggregate Fair Market
                  Value (determined as of the date an Incentive Stock Option is
                  granted) the shares of Common Stock with respect to which
                  Incentive Stock Options are exercisable for the first time by
                  a Participant during any calendar year (under the Plan and any
                  other incentive stock option plans of the Company, any
                  subsidiary or any parent corporation of the Company (within
                  the meaning of Sections 424(f) 424(e), respectively, of the
                  Code)) exceeds $100,000 (or such other amount as may be
                  prescribed by the Code from time to time), excess Incentive
                  Stock Options shall be treated as Non-Statutory Stock Options.
                  The determination shall be made by taking Incentive Stock
                  Options into account in the order in which they were granted.
                  If such excess only applies to a portion of an Incentive Stock
                  Option, the Committee, in its discretion, designate which
                  shares shall be treated as shares to be acquired upon exercise
                  of an Incentive Stock Option.

         6.7      OPTIONS TO PURCHASE STOCK OF ACQUIRED COMPANIES. After any
                  reorganization, merger or consolidation involving the Company
                  or a subsidiary of the Company, the Committee may grant
                  Options in substitution of options issued under a plan of
                  another party to the reorganization, merger or consolidation,
                  where such party's stock may no longer be outstanding
                  following such transaction. to Section 424(a) of the Code, the
                  Committee shall have sole discretion to determine all terms
                  and conditions of Options issued under this Section 6.7,
                  including, but not limited to, exercise price and expiration
                  date.

7.       RESTRICTED STOCK AWARDS

         7.1      GRANT. An Eligible Recipient may be granted one or more
                  Restricted Stock Awards under the Plan, and such Restricted
                  Stock Awards will be subject to such terms and conditions,
                  consistent with the other provisions of the Plan, as may be
                  determined by the Committee in its sole discretion. The
                  Committee may impose such restrictions or conditions, not
                  inconsistent with the provisions of the Plan, to the vesting
                  of such Restricted Stock Awards as it deems appropriate,
                  including, without limitation, the Participant remain in the
                  continuous employ or service of the Company or a Subsidiary
                  for a certain period or that the Participant or the Company
                  (or any Subsidiary or division thereof) satisfy certain
                  performance goals or criteria.

         7.2      RIGHTS AS A SHAREHOLDER; TRANSFERABILITY. Except as provided
                  in Sections 7.1, 7.3 and 12.3 of the Plan, a Participant will
                  have all voting, dividend, liquidation and other rights with
                  respect to shares of Common Stock issued to the


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                  Participant as a Restricted Stock Award under this Section 7
                  upon the Participant becoming the holder of record of such
                  shares as if such Participant were a holder of record of
                  shares of unrestricted Common Stock.

         7.3      DIVIDENDS AND DISTRIBUTIONS. Unless the Committee determines
                  otherwise in its sole discretion (either in the agreement
                  evidencing the Restricted Stock Award at the time of grant or
                  at any time after the grant of the Restricted Stock Award),
                  any dividends or distributions (including regular quarterly
                  cash dividends) paid with respect to shares of Common Stock
                  subject to the unvested portion of a Restricted Stock Award
                  will be subject to the same restrictions as the shares to
                  which such dividends or distributions relate. In the event the
                  Committee determines not to pay such dividends or
                  distributions currently, the Committee will determine in its
                  sole discretion whether any interest will be paid on such
                  dividends or distributions. In addition, the Committee in its
                  sole discretion may require such dividends and distributions
                  to be reinvested (and in such case the Participants consent to
                  such reinvestment) in shares of Common Stock that will be
                  subject to the same restrictions as the shares to which such
                  dividends or distributions relate.

         7.4      ENFORCEMENT OF RESTRICTIONS. To enforce the restrictions
                  referred to in this Section 7, the Committee may place a
                  legend on the stock certificates referring to such
                  restrictions and may require the Participant, until the
                  restrictions have lapsed, to keep the stock certificates,
                  together with duly endorsed stock powers, in the custody of
                  the Company or its transfer agent or to maintain evidence of
                  stock ownership, together with duly endorsed stock powers, in
                  a certificateless book-entry stock account with the Company's
                  transfer agent.

8.       STOCK BONUSES

         An Eligible Recipient may be granted one or more Stock Bonuses under
the Plan, and such Stock Bonuses will be subject to such terms and conditions,
consistent with the other provisions of the Plan, as may be determined by the
Committee. The Participant will have all voting, dividend, liquidation and other
rights with respect to the shares of Common Stock issued to a Participant as a
Stock Bonus under this Section 10 upon the Participant becoming the holder of
record of such shares; provided, however, that the Committee may impose such
restrictions on the assignment or transfer of a Stock Bonus as it deems
appropriate.

9.       EFFECT OF TERMINATION OF EMPLOYMENT OR OTHER SERVICE

         9.1      TERMINATION DUE TO DEATH, DISABILITY OR RETIREMENT. In the
                  event a Participant's employment or other service with the
                  Company and all Subsidiaries is terminated by reason of death,
                  Disability or Retirement:

                  (a)      All outstanding Options then held by the Participant
                           will become immediately exercisable in full and will
                           remain exercisable for a period of one year after
                           such termination (but in no event after the
                           expiration date of any such Option);


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                  (b)      All Restricted Stock Awards then held by the
                           Participant will become fully vested; and

                  (c)      All Stock Bonuses then held by the Participant will
                           vest and/or continue to vest in the manner determined
                           by the Committee and set forth in the agreement
                           evidencing such Stock Bonuses.

         9.2      TERMINATION FOR REASONS OTHER THAN DEATH, DISABILITY OR
                  RETIREMENT.

                  (a)      Subject to the second sentence of this Section
                           9.2(a), in the event a Participant's employment or
                           other service is terminated with the Company and all
                           Subsidiaries for any reason other than death,
                           Disability or Retirement, or a Participant is in the
                           employ or service of a Subsidiary and the Subsidiary
                           ceases to be a Subsidiary of the Company (unless the
                           Participant continues in the employ or service of the
                           Company or another Subsidiary), all rights of the
                           Participant under the Plan and any agreements
                           evidencing an Incentive Award will immediately
                           terminate without notice of any kind, and no Options
                           then held by the Participant will thereafter be
                           exercisable, Restricted Stock Awards then held by the
                           Participant that have not vested will be terminated
                           and forfeited, all Stock Bonuses then held by the
                           Participant will vest and/or continue to vest in the
                           manner determined by the Committee and set forth in
                           the agreement evidencing such Stock Bonuses. However,
                           (i) if such termination is due to any reason other
                           than termination by the Company or any Subsidiary for
                           "cause," all outstanding Options or Stock
                           Appreciation Rights then held by such Participant
                           will remain exercisable to the extent exercisable as
                           of such termination for a period of three months
                           after such termination (but in no event after the
                           expiration date of any such Option), and (ii) if such
                           termination is due to termination by the Company or
                           any Subsidiary for "cause", outstanding Options then
                           held by such Participant will remain exercisable as
                           of such termination for a period of one month after
                           such termination (but in no event after the
                           expiration date of any such Option).

                  (b)      For purposes of this Section 9.2, "cause" (as
                           determined by the Committee) will be as defined in
                           any employment or other agreement or policy
                           applicable to the Participant or, if no such
                           agreement or policy exists, will mean (i), fraud,
                           misrepresentation, embezzlement or deliberate injury
                           or attempted injury, in each case related to the
                           Company or any Subsidiary, (ii) any unlawful or
                           criminal activity of a serious nature, (iii) any
                           intentional and deliberate breach of a duty or duties
                           that, individually or in the aggregate, are material
                           in relation to the Participant's overall duties, or
                           (iv) any material breach of any employment, service,
                           or noncompete agreement entered into with the Company
                           or any Subsidiary.

         9.3      MODIFICATION OF RIGHTS UPON TERMINATION. Notwithstanding the
                  other provisions of this Section 9, upon a Participant's
                  termination of employment


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                  or other service with the Company and all Subsidiaries, the
                  Committee may, in its sole discretion (which may be exercised
                  at any time on or after the date of grant, including following
                  such termination), cause Options and Stock Appreciation Rights
                  (or any part thereof) then held by such Participant to become
                  or continue to become exercisable and/or remain exercisable
                  following such termination of employment or service and
                  Restricted Stock Awards, Performance Units and Stock Bonuses
                  then held by such Participant to vest and/or continue to vest
                  or become free of transfer restrictions, as the case may be,
                  such termination of employment or service, in each case in the
                  manner determined by the Committee; provided, however, no
                  Option or Stock Appreciation Right may remain exercisable
                  beyond its expiration date.

         9.4      BREACH OF CONFIDENTIALITY OR NONCOMPETE AGREEMENTS.
                  Notwithstanding anything in the Plan to the contrary, in the
                  event that a Participant materially breaches the terms of any
                  confidentiality or noncompete agreement entered into with the
                  Company or any Subsidiary, such breach occurs before or after
                  termination of such Participant's employment or other service
                  with the Company or any Subsidiary, the Committee in its sole
                  discretion may immediately terminate all rights of the
                  Participant under the Plan and any agreements evidencing an
                  Incentive Award then held by the Participant without notice of
                  any kind.

         9.5      DATE OF TERMINATION OF EMPLOYMENT OR OTHER SERVICE. Unless the
                  Committee otherwise determines in its sole discretion, a
                  Participant's employment or other service will, for purposes
                  of the Plan, be deemed to have terminated on the date recorded
                  on the personnel or other records of the Company or the
                  Subsidiary for which the Participant provides employment or
                  other service, determined by the Committee in its sole
                  discretion based upon such records.

10.      PAYMENT OF WITHHOLDING TAXES

         10.1     GENERAL RULES. The Company is entitled to (a) withhold and
                  deduct from future wages of the Participant (or from other
                  amounts that may be due and owing to the Participant from the
                  Company or a Subsidiary), or make other arrangements for the
                  collection of, all legally required amounts necessary to
                  satisfy any and all federal, state and local withholding and
                  employment-related tax requirements attributable to an
                  Incentive Award, including, without limitation, the grant,
                  exercise or vesting of, or payment of dividends with respect
                  to, an Incentive Award or a disqualifying disposition of stock
                  received upon exercise of an Incentive Stock Option, or (b)
                  require the Participant promptly to remit the amount of such
                  withholding to the Company before taking any action, including
                  issuing any shares of Common Stock, with respect to an
                  Incentive Award.

         10.2     SPECIAL RULES. The Committee may, in its sole discretion and
                  upon terms and conditions established by the Committee, permit
                  or require a Participant to satisfy, in whole or in part, any
                  withholding or employment-related tax obligation described in
                  Section 10 of the Plan by electing to tender Previously
                  Acquired


                                      -11-
<PAGE>

                  Shares, a Broker Exercise Notice or a promissory note (on
                  terms acceptable to the Committee in its sole discretion), or
                  by a combination of such methods.

11.      CHANGE IN CONTROL

         11.1     CHANGE IN CONTROL. For purposes of this Section 11, a "Change
                  in Control" of the Company will mean the following:

                  (a)      the sale, lease, exchange or other transfer, directly
                           or indirectly, of substantially all of the assets of
                           the Company (in one transaction or in a series of
                           related transactions) to a person or entity that is
                           not controlled by the Company;

                  (b)      the approval by the shareholders of the Company of
                           any plan or proposal for the liquidation or
                           dissolution of the Company;

                  (c)      any person becomes after the effective date of the
                           Plan the "beneficial owner" (as defined in Rule 13d-3
                           under the Exchange Act), directly or indirectly, of
                           (A) 20% or more, but less than 50%, of the combined
                           voting power of the Company's outstanding securities
                           ordinarily having the right to vote at elections of
                           directors, unless the transaction resulting in such
                           ownership has been approved in advance by the
                           Incumbent Directors, or (B) 50% or more of the
                           combined voting power of the Company's outstanding
                           securities ordinarily having the right to vote at
                           elections of directors (regardless of any approval by
                           the Incumbent Directors);

                  (d)      a merger or consolidation to which the Company is a
                           party if the shareholders of the Company immediately
                           prior to effective date of such merger or
                           consolidation have "beneficial ownership" (as defined
                           in Rule 13d-3 under the Exchange Act), immediately
                           following the effective date of such merger or
                           consolidation, of securities of the surviving
                           corporation representing (i) more than 50%, but less
                           than 80%, of the combined voting power of the
                           surviving corporation's then outstanding securities
                           ordinarily having the right to vote at elections of
                           directors, unless such merger or consolidation has
                           been approved in advance by the Incumbent Directors
                           (as defined in Section 11.2 below), or (ii) 50% or
                           less of the combined voting power of the surviving
                           corporation's then outstanding securities ordinarily
                           having the right to vote at elections of directors
                           (regardless of any approval by the Incumbent
                           Directors);

                  (e)      the Incumbent Directors cease for any reason to
                           constitute at least a majority of the Board; or

                  (f)      any other change in control of the Company of a
                           nature that would be required to be reported pursuant
                           to Section 13 or 15(d) of the Exchange Act, whether
                           or not the Company is then subject to such reporting
                           requirements.


                                      -12-
<PAGE>

         11.2     INCUMBENT DIRECTORS. For purposes of this Section 11,
                  "Incumbent Directors" of the Company will mean any individuals
                  who are members of the Board on the effective date of the Plan
                  and any individual who subsequently becomes a member of the
                  Board whose election, or nomination for election by the
                  Company's shareholders, was approved by a vote of at least a
                  majority of the Incumbent Directors (either by specific vote
                  or by approval of the Company's proxy statement in which such
                  individual is named as a nominee for director without
                  objection to such nomination).

         11.3     ACCELERATION OF VESTING. Without limiting the authority of the
                  Committee under Sections 3.2 and 4.5 of the Plan, if a Change
                  in Control of the Company occurs, then, unless otherwise
                  provided by the Committee in its sole discretion either in the
                  agreement evidencing an Incentive Award at the time of grant
                  or at any time after the grant of an Incentive Award, (a) all
                  outstanding Options will become immediately exercisable in
                  full and will remain exercisable for the remainder of their
                  terms, regardless of whether the Participant to whom such
                  Options have been granted remains in the employ or service of
                  the Company or any Subsidiary; (b) all outstanding Restricted
                  Stock Awards will become immediately fully vested and
                  non-forfeitable; and (c) all outstanding Stock Bonuses then
                  held by the Participant will vest and/or continue to vest in
                  the manner determined by the Committee and set forth in the
                  agreement evidencing such Stock Bonuses.

         11.4     CASH PAYMENT FOR OPTIONS. If a Change in Control of the
                  Company occurs, then the Committee, if approved by the
                  Committee in its sole discretion either in an agreement
                  evidencing an Incentive Award at the time of grant or at any
                  time after the grant of an Incentive Award, and without the
                  consent of any Participant effected thereby, may determine
                  that some or all Participants holding outstanding Options will
                  receive, with respect to some or all of the shares of Common
                  Stock subject to such Options, as of the effective date of any
                  such Change in Control of the Company, cash in an amount equal
                  to the excess of the Fair Market Value of such shares
                  immediately prior to the effective date of such Change in
                  Control of the Company over the exercise price per share of
                  such Options.

         11.5     LIMITATION ON CHANGE IN CONTROL PAYMENTS. Notwithstanding
                  anything in Section 11.3 or 11.4 of the Plan to the contrary,
                  if, respect to a Participant, the acceleration of the vesting
                  of an Incentive Award as provided in Section 11.3 or the
                  payment of cash in exchange for all or part of an Incentive
                  Award as provided in Section 11.4 (which acceleration or
                  payment could be deemed a "payment" within the meaning of
                  Section 280G(b)(2) of the Code), together with any other
                  "payments" which such Participant has the right to receive
                  from the Company or any corporation that is a member of an
                  "affiliated group" (as defined in Section 1504(a) of the Code
                  without regard to Section 1504(b) the Code) of which the
                  Company is a member, would constitute a "parachute payment"
                  (as defined in Section 280G(b)(2) of the Code), then the
                  "payments" to such Participant pursuant to Section 11.3 or
                  11.4 of the Plan will be reduced to the


                                      -13-
<PAGE>

                  largest amount as will result in no portion of such "payments"
                  being subject to the excise tax imposed by Section 4999 of the
                  Code;, however, that if a Participant is subject to a separate
                  agreement with the Company or a Subsidiary that expressly
                  addresses the potential application of Sections 280G or 4999
                  of the Code (including, without limitation, that "payments"
                  under such agreement or otherwise will be reduced, that such
                  "payments" not be reduced or that the Participant will have
                  the discretion to determine which "payments" will be reduced),
                  then this Section 11.5 will not apply, and any "payments" to a
                  Participant pursuant to Section 11.3 or 11.4 of the Plan will
                  be treated as "payments" arising under such separate
                  agreement.

12.      RIGHTS OF ELIGIBLE RECIPIENTS AND PARTICIPANTS; TRANSFERABILITY.

         12.1     EMPLOYMENT OR SERVICE. Nothing in the Plan will interfere with
                  or limit in any way the right of the Company or any Subsidiary
                  to terminate the employment or service of any Eligible
                  Recipient or Participant at any time, nor confer upon any
                  Eligible Recipient or Participant any right to continue in the
                  employ or service of the Company or any Subsidiary.

         12.2     RIGHTS AS A SHAREHOLDER. As a holder of Incentive Awards
                  (other than Restricted Stock Awards and Stock Bonuses), a
                  Participant will have no rights as a shareholder unless and
                  until such Incentive Awards are exercised for, or paid in the
                  form of, of Common Stock and the Participant becomes the
                  holder of record of such shares. Except as otherwise provided
                  in the Plan, adjustment will be made for dividends or
                  distributions with respect to such Incentive Awards as to
                  which there is a record date preceding the date the
                  Participant becomes the holder of record of such shares,
                  except as the Committee may determine in its discretion.

         12.3     RESTRICTIONS ON TRANSFER. Except as otherwise provided in this
                  Section 12.3, a Participant's rights and interest under the
                  Plan may not be assigned or transferred other than by will or
                  the laws of descent and distribution, or pursuant to the terms
                  of a domestic relations order, as defined in Section
                  414(p)(1)(B) of the Code, which satisfies the requirements of
                  Section 414(p)(1)(A) of the Code (a "Qualified Domestic
                  Relations Order"). During the lifetime of a Participant, only
                  the Participant personally (or the Participant's personal
                  representative or attorney-in-fact) or the alternate payee
                  named in a Qualified Domestic Relations Order may exercise the
                  Participant's rights under the Plan. The Participant's
                  Beneficiary may exercise a Participant's rights to the extent
                  they are exercisable under the Plan following the death of the
                  Participant. Notwithstanding the foregoing, or any other
                  provision of this Plan, a Participant who holds Non-Qualified
                  Stock Options may transfer such Options to his or her spouse,
                  ascendants, lineal descendants, or to a duly established trust
                  for the benefit of one or more of these individuals. Options
                  so transferred may thereafter be transferred only to the
                  Participant who originally received the Options or to an
                  individual or trust to whom the Participant could have
                  initially transferred the Option pursuant to this Section
                  12.3. Options which are transferred pursuant to this Section
                  12.3


                                      -14-
<PAGE>

                  shall be exercisable by the transferee according to the same
                  terms and conditions as applied to the Participant.

         12.4     NON-EXCLUSIVITY OF THE PLAN. Nothing contained in the Plan is
                  intended to modify or rescind any previously approved
                  compensation plans or programs of the Company or create any
                  limitations on the power or authority of the Board to adopt
                  such additional or other compensation arrangements as the
                  Board may deem necessary or desirable.

13.      SECURITIES LAW AND OTHER RESTRICTIONS

         Notwithstanding any other provision of the Plan or any agreements
entered into pursuant to the Plan, the Company will not be required to issue any
shares of Common Stock under this Plan, and a Participant may not sell, assign,
transfer or otherwise dispose of shares of Common Stock issued pursuant to
Incentive Awards granted under the Plan, unless (a) there is in effect with
respect to such shares a registration statement under the Securities Act and any
applicable state securities laws or an exemption from such registration under
the Securities Act and applicable state securities laws, and (b) there has been
obtained any other consent, approval or permit from any other regulatory body
which the Committee, in its sole discretion, deems necessary or advisable. The
Company may condition such issuance, sale or transfer upon the receipt of any
representations or agreements from the parties involved, and the placement of
any legends on certificates representing shares of Common Stock, as may be
deemed necessary or advisable by the Company in order to comply with such
securities law or other restrictions.

14.      PLAN AMENDMENT, MODIFICATION AND TERMINATION

         The Board may suspend or terminate the Plan or any portion thereof at
any time, and may amend the Plan from time to time in such respects as the Board
may deem advisable in order that Incentive Awards under the Plan will conform to
any change in applicable laws or regulations or in any other respect the Board
may deem to be in the best interests of the Company; provided, however, that no
amendments to the Plan will be effective without approval of the shareholders of
the Company if shareholder approval of the amendment is then required pursuant
to Section 422 of the Code or the rules of any stock exchange or Nasdaq. No
termination, suspension or amendment of the Plan may adversely affect any
outstanding Incentive Award without the consent of the affected Participant;
provided, however, that this sentence will not impair the right of the Committee
to take whatever action it deems appropriate under Sections 3.2, 4.5 and 13 of
the Plan.

15.      EFFECTIVE DATE AND DURATION OF THE PLAN

         The Plan is effective as of June 24, 1999, the date it was adopted by
the Board and the shareholders. The Plan will terminate at midnight on June 23,
2009, and may be terminated prior to such time to by Board action, and no
Incentive Award will be granted after such termination. Incentive Awards
outstanding upon termination of the Plan may continue to be exercised, or become
free of restrictions, in accordance with their terms.


                                      -15-
<PAGE>

16.      MISCELLANEOUS

         16.1     GOVERNING LAW. The validity, construction, interpretation, and
                  effect of the Plan and any rules, regulations and actions
                  relating to the Plan will be governed by and construed
                  exclusively in accordance with the laws of the State of
                  Minnesota, notwithstanding the conflicts of laws principles of
                  any jurisdictions.

         16.2     SUCCESSORS AND ASSIGNS. The Plan will be binding upon and
                  inure to the benefit of the successors and permitted assigns
                  of the Company and the Participants.

         16.3     ANNUAL REPORT. Each year the Company will provide a copy of
                  its Annual Report to Shareholders on Form 10-K (or Form
                  10-KSB, as applicable) to all Participants.


                                      -16-