FAIR MARKET
VALUE (DETERMINED AS OF THE DATE OF GRANT) OF THE SHARES OF COMMON STOCK WITH
RESPECT TO WHICH INCENTIVE STOCK OPTIONS (WITHIN THE MEANING OF SECTION 422 OF
THE CODE) ARE EXERCISABLE FOR THE FIRST TIME BY THE OPTIONEE DURING ANY CALENDAR
YEAR (UNDER THE PLAN AND ANY OTHER INCENTIVE STOCK OPTION PLANS OF THE COMPANY
OR ANY SUBSIDIARY OR PARENT CORPORATION OF THE COMPANY (WITHIN THE MEANING OF
THE CODE)) EXCEEDS $100,000 (OR SUCH OTHER AMOUNT AS MAY BE PRESCRIBED BY THE
CODE FROM TIME TO TIME), SUCH EXCESS INCENTIVE STOCK OPTIONS WILL BE TREATED AS
NON-STATUTORY STOCK OPTIONS IN THE MANNER SET FORTH IN THE PLAN.
6
9.2
LIMITATION ON EXERCISABILITY; DISPOSITION OF OPTION SHARES. ANY
INCENTIVE STOCK OPTION THAT REMAINS UNEXERCISED MORE THAN ONE YEAR FOLLOWING
TERMINATION OF EMPLOYMENT BY REASON OF DEATH OR DISABILITY OR MORE THAN THREE
MONTHS FOLLOWING TERMINATION FOR ANY REASON OTHER THAN DEATH OR DISABILITY WILL
THEREAFTER BE DEEMED TO BE A NON-STATUTORY STOCK OPTION. IN ADDITION, IN THE
EVENT THAT A DISPOSITION (AS DEFINED IN SECTION 424(C) OF THE CODE) OF SHARES OF
COMMON STOCK ACQUIRED PURSUANT TO THE EXERCISE OF AN INCENTIVE STOCK OPTION
OCCURS PRIOR TO THE EXPIRATION OF TWO YEARS AFTER ITS DATE OF GRANT OR THE
EXPIRATION OF ONE YEAR AFTER ITS DATE OF EXERCISE (A "DISQUALIFYING
DISPOSITION"), SUCH INCENTIVE STOCK OPTION WILL, TO THE EXTENT OF SUCH
DISQUALIFYING DISPOSITION, BE TREATED IN A MANNER SIMILAR TO A NON-STATUTORY
STOCK OPTION.
9.3
NO REPRESENTATION OR WARRANTY. SECTION 422 OF THE CODE AND THE
RULES AND REGULATIONS THEREUNDER ARE COMPLEX, AND NEITHER THE PLAN NOR THIS
AGREEMENT PURPORTS TO SUMMARIZE OR OTHERWISE SET FORTH ALL OF THE CONDITIONS
THAT NEED TO BE SATISFIED IN ORDER FOR THIS OPTION TO QUALIFY AS AN INCENTIVE
STOCK OPTION. IN ADDITION, THIS OPTION MAY CONTAIN TERMS AND CONDITIONS THAT
ALLOW FOR EXERCISE OF THIS OPTION BEYOND THE PERIODS PERMITTED BY SECTION 422 OF
THE CODE, INCLUDING, WITHOUT LIMITATION, THE PERIODS DESCRIBED IN SECTION 9.2 OF
THIS AGREEMENT. ACCORDINGLY, THE COMPANY MAKES NO REPRESENTATION OR WARRANTY
REGARDING WHETHER THE EXERCISE OF THIS OPTION WILL QUALIFY AS THE EXERCISE OF AN
INCENTIVE STOCK OPTION, AND THE COMPANY RECOMMENDS THAT THE OPTIONEE CONSULT
WITH THE OPTIONEE'S OWN ADVISORS BEFORE MAKING ANY DETERMINATION REGARDING THE
EXERCISE OF THIS OPTION OR THE SALE OF THE OPTION SHARES.
10.
MISCELLANEOUS.
10.1
BINDING EFFECT. THIS AGREEMENT WILL BE BINDING UPON THE HEIRS,
EXECUTORS, ADMINISTRATORS AND SUCCESSORS OF THE PARTIES TO THIS AGREEMENT.
10.2
GOVERNING LAW. THIS AGREEMENT AND ALL RIGHTS AND OBLIGATIONS UNDER
THIS AGREEMENT WILL BE CONSTRUED IN ACCORDANCE WITH THE PLAN AND GOVERNED BY THE
LAWS OF THE STATE OF MINNESOTA, WITHOUT REGARD TO CONFLICTS OF LAWS PROVISIONS.
ANY LEGAL PROCEEDING RELATED TO THIS AGREEMENT WILL BE BROUGHT IN AN APPROPRIATE
MINNESOTA COURT, AND THE PARTIES TO THIS AGREEMENT CONSENT TO THE EXCLUSIVE
JURISDICTION OF THE COURT FOR THIS PURPOSE.
10.3
ENTIRE AGREEMENT. THIS AGREEMENT AND THE PLAN SET FORTH THE ENTIRE
AGREEMENT AND