Document:

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                                                                     EXHIBIT 4.3

                             DIGI INTERNATIONAL INC.
                          NON-OFFICER STOCK OPTION PLAN

1. Purpose of Plan. The purpose of this Digi International Inc. Non-Officer
Stock Option Plan (the "Plan"), is to promote the interests of Digi
International Inc., a Delaware corporation (the "Company"), and its stockholders
by providing key personnel of the Company and its subsidiaries (other than
officers and directors of the Company) with an opportunity to acquire a
proprietary interest in the Company and thereby develop a stronger incentive to
put forth maximum effort for the continued success and growth of the Company and
its subsidiaries. In addition, the opportunity to acquire a proprietary interest
in the Company will aid in attracting and retaining key personnel of outstanding
ability.

2. Administration of Plan. This Plan shall be administered by a committee of two
or more directors (the "Committee") appointed by the Company's board of
directors (the "Board"). A majority of the members of the Committee shall
constitute a quorum for any meeting of the Committee, and the 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. Subject to the provisions of this Plan, the Committee may
from time to time adopt such rules for the administration of this Plan as it
deems appropriate. The decision of the Committee on any matter affecting this
Plan or the rights and obligations arising under this Plan or any option granted
hereunder, shall be final, conclusive and binding upon all persons, including
without limitation the Company, stockholders, employees and optionees. To the
full extent permitted by law, (i) no member of the Committee or the CEO Stock
Option Committee (as defined in this paragraph 2) shall be liable for any action
or determination taken or made in good faith with respect to this Plan or any
option granted hereunder and (ii) the members of the Committee and the CEO Stock
Option Committee shall be entitled to indemnification by the Company against and
from any loss incurred by such member or person by reason of any such actions
and determinations. The Committee may delegate all or any part of its authority
under this Plan to a one person committee consisting of the Chief Executive
Officer of the Company as its sole member (the "CEO Stock Option Committee") for
purposes of granting and administering awards.

3. Shares Subject to Plan. The shares that may be made subject to options
granted under this Plan shall be authorized and unissued shares of common stock
(the "Common Shares") of the Company, $.01 par value, or Common Shares held in
treasury, and they shall not exceed 2,750,000 in the aggregate, except that, if
any option lapses or terminates for any reason before such option has been
completely exercised, the Common Shares covered by the unexercised portion of
such option may again be made subject to options granted under this Plan.
Appropriate adjustments in the number of shares and in the purchase price per
share may be made by the Committee in its sole discretion to give effect to
adjustments made in the number of outstanding Common Shares of the Company
through a merger, consolidation, recapitalization, reclassification,
combination, stock dividend,

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stock split or other relevant change, provided that fractional shares shall be
rounded to the nearest whole share.

4. Eligible Participants. Options may be granted under this Plan to any key
employee of the Company or any subsidiary thereof, who is not an officer or
director of the Company, and may also be granted to other individuals or
entities who are not "employees" but who provide services to the Company or a
parent or subsidiary thereof in the capacity of an advisor or consultant.
References herein to "employed," "employment" and similar terms (except
"employee") shall include the providing of services in any such capacity or as a
director. The employees and other individuals and entities to whom options may
be granted pursuant to this paragraph 4 are referred to herein as "Eligible
Participants."

5. Terms and Conditions of Employee Options.

                  (a) Subject to the terms and conditions of this Plan, the
         Committee may, from time to time prior to December 1, 2006, grant to
         such Eligible Participants as the Committee may determine options to
         purchase such number of Common Shares of the Company on such terms and
         conditions as the Committee may determine. In determining the Eligible
         Participants to whom options shall be granted and the number of Common
         Shares to be covered by each option, the Committee may take into
         account the nature of the services rendered by the respective Eligible
         Participants, their present and potential contributions to the success
         of the Company, and such other factors as the Committee in its sole
         discretion shall deem relevant. The date and time of approval by the
         Committee of the granting of an option shall be considered the date and
         the time of the grant of such option.

                  (b) The purchase price of each Common Share subject to an
         option granted pursuant to this paragraph 5 shall be fixed by the
         Committee. Such purchase price may be set at not less that 50% of the
         Fair Market Value (as defined below) of a Common Share on the date of
         grant.

                  (c) For purposes of this Plan, the "Fair Market Value" of a
         Common Share at a specified date shall, unless otherwise expressly
         provided in this Plan, mean the closing sale price of a Common Share on
         the date immediately preceding such date or, if no sale of such shares
         shall have occurred on that date, on the next preceding day on which a
         sale of such shares occurred, on the Composite Tape for New York Stock
         Exchange listed shares or, if such shares are not quoted on the
         Composite Tape for New York Stock Exchange listed shares, on the
         principal United States securities exchange registered under the Act,
         on which the shares are listed, or, if such shares are not listed on
         any such exchange, on the Nasdaq Stock Market or any similar system
         then in use or, if such shares are not included on the Nasdaq Stock
         Market or any similar system then in use, the mean between the closing
         "bid" and the closing "asked" quotation of such a share on the date
         immediately preceding the date as of which such Fair Market Value is
         being determined, or, if no closing bid or asked quotation is made on
         that date, on the next preceding day on which a quotation is made, on
         an NASD System or any similar system then in use, provided that if the
         shares

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         in question are not quoted on any such system, Fair Market Value shall
         be what the Committee determines in good faith to be 100% of the fair
         market value of such a share as of the date in question.
         Notwithstanding anything stated in this paragraph, if the applicable
         securities exchange or system has closed for the day by the time the
         determination is being made, all references in this paragraph to the
         date immediately preceding the date in question shall be deemed to be
         references to the date in question.

                  (d) Each option agreement provided for in paragraph 13 hereof
         shall specify when each option granted under this Plan shall become
         exercisable.

                  (e) Each option granted pursuant to this paragraph 5 and all
         rights to purchase shares thereunder shall cease on the earliest of:

                           (i) ten years after the date such option is granted
                  or on such date prior thereto as may be fixed by the Committee
                  on or before the date such option is granted;

                           (ii) the expiration of the period after the
                  termination of the optionee's employment within which the
                  option is exercisable as specified in paragraph 7(b) or 7(c),
                  whichever is applicable; or

                           (iii) the date, if any, fixed for cancellation
                  pursuant to paragraph 7 of this Plan.

In no event shall any option be exercisable at any time after its original
expiration date. When an option is no longer exercisable, it shall be deemed to
have lapsed or terminated and will no longer be outstanding.

6. Manner of Exercising Options. A person entitled to exercise an option granted
under this Plan may, subject to its terms and conditions and the terms and
conditions of this Plan, exercise it in whole at any time, or in part from time
to time, by delivery to the Company at its principal executive office, to the
attention of its President, of written notice of exercise, specifying the number
of shares with respect to which the option is being exercised, accompanied by
payment in full of the purchase price of the shares to be purchased at the time.
The purchase price of each share on the exercise of any option shall be paid in
full in cash (including check, bank draft or money order) at the time of
exercise or, at the discretion of the holder of the option, by delivery to the
Company of unencumbered Common Shares having an aggregate Fair Market Value on
the date of exercise equal to the purchase price, or by a combination of cash
and such unencumbered Common Shares. Provided, however, that a person exercising
a stock option shall not be permitted to pay any portion of the purchase price
with stock if, in the opinion of the Committee, payment in such manner could
have adverse financial accounting consequences for the Company. No shares shall
be issued until full payment therefor has been made, and the granting of an
option to an individual shall give such individual no rights as a stockholder
except as to shares issued to such individual.

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7.  Transferability and Termination of Options.

                  (a) During the lifetime of an optionee, only such optionee or
         his or her guardian or legal representative may exercise options
         granted under this Plan, and no option granted under this Plan shall be
         assignable or transferable by the optionee otherwise than by will or
         the laws of descent and distribution or pursuant to a domestic
         relations order as defined in the Internal Revenue Code of 1986, as
         amended, or any amendment thereto (the "Code") or Title I of the
         Employee Retirement Income Security Act ("ERISA"), or the rules
         thereunder; provided, however, that any optionee may transfer a stock
         option granted under this Plan to a member or members of his or her
         immediate family (i.e., his or her children, grandchildren and spouse)
         or to one or more trusts for the benefit of such family members or
         partnerships in which such family members are the only partners, if (i)
         the option agreement with respect to such options, which must be
         approved by the Committee, expressly so provides either at the time of
         initial grant or by amendment to an outstanding option agreement and
         (ii) the optionee does not receive any consideration for the transfer.
         Any options held by any such transferee shall continue to be subject to
         the same terms and conditions that were applicable to such options
         immediately prior to their transfer and may be exercised by such
         transferee as and to the extent that such option has become exercisable
         and has not terminated in accordance with the provisions of the Plan
         and the applicable option agreement. For purposes of any provision of
         this Plan relating to notice to an optionee or to vesting or
         termination of an option upon the death, disability or termination of
         employment of an optionee, the references to "optionee" shall mean the
         original grantee of an option and not any transferee.

                  (b) During the lifetime of an optionee, an option may be
         exercised only while the optionee is employed by the Company or a
         parent or subsidiary thereof, and only if such optionee has been
         continuously so employed since the date the option was granted, except
         that:

                           (i) unless otherwise provided in a stock option
                  agreement, an option granted to an optionee shall continue to
                  be exercisable for three months after termination of such
                  optionee's employment but only to the extent that the option
                  was exercisable immediately prior to such optionee's
                  termination of employment;

                           (ii) in the case of an optionee who is disabled
                  (within the meaning of Section 22(e)(3) of the Code) while
                  employed, the option granted to such optionee may be exercised
                  within one year after termination of such optionee's
                  employment; and

                           (iii) as to any optionee whose termination occurs
                  following a declaration pursuant to paragraph 7 of this Plan,
                  the option granted to such optionee may be exercised at any
                  time permitted by such declaration.

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                  (c) An option may be exercised after the death of the
         optionee, but only within one year after the death of such optionee.

                  (d) In the event of the disability (within the meaning of
         Section 22(e)(3) of the Code) or death of an optionee, any option
         granted to such optionee that was not previously exercisable shall
         become immediately exercisable in full if the disabled or deceased
         optionee shall have been continuously employed by the Company or a
         parent or subsidiary thereof between the date such option was granted
         and the date of such disability, or, in the event of death, a date not
         more than three months prior to such death.

8. Dissolution, Liquidation, Merger. In the event of (a) a proposed merger or
consolidation of the Company with or into any other corporation, regardless of
whether the Company is the surviving corporation, unless appropriate provision
shall have been made for the protection of the outstanding options granted under
this Plan by the substitution, in lieu of such options, of options to purchase
appropriate voting common stock (the "Survivor's Stock") of the corporation
surviving any such merger or consolidation or, if appropriate, the parent
corporation of the Company or such surviving corporation, or, alternatively, by
the delivery of a number of shares of the Survivor's Stock which has a Fair
Market Value as of the effective date of such merger or consolidation equal to
the product of (i) the excess of (x) the Event Proceeds per Common Share (as
hereinafter defined) covered by the option as of such effective date, over (y)
the option price per Common Share, times (ii) the number of Common Shares
covered by such option, or (b) the proposed dissolution or liquidation of the
Company (such merger, consolidation, dissolution or liquidation being herein
called an "Event"), the Committee shall declare, at least ten days prior to the
actual effective date of an Event, and provide written notice to each optionee
of the declaration, that each outstanding option, whether or not then
exercisable, shall be cancelled at the time of, or immediately prior to the
occurrence of, the Event (unless it shall have been exercised prior to the
occurrence of the Event) in exchange for payment to the holder of each cancelled
option, within ten days after the Event, of cash equal to the amount (if any),
for each Common Share covered by the cancelled option, by which the Event
Proceeds per Common Share (as hereinafter defined) exceeds the exercise price
per Common Share covered by such option. At the time of the declaration provided
for in the immediately preceding sentence, each option shall immediately become
exercisable in full and each holder of an option shall have the right, during
the period preceding the time of cancellation of the option, to exercise his or
her option as to all or any part of the Common Shares covered thereby. Each
outstanding option granted pursuant to this Plan that shall not have been
exercised prior to the Event shall be cancelled at the time of, or immediately
prior to, the Event, as provided in the declaration, and this Plan shall
terminate at the time of such cancellation, subject to the payment obligations
of the Company provided in this paragraph 8. For purposes of this paragraph,
"Event Proceeds per Common Share" shall mean the cash plus the fair market
value, as determined in good faith by the Committee, of the non-cash
consideration to be received per Common Share by the stockholders of the Company
upon the occurrence of the Event.

9. Substitution Options. Options may be granted under this Plan from time to
time in substitution for stock options held by employees of other corporations
who are about to become employees of the Company or a subsidiary of the Company,
or whose employer is about to become a subsidiary

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of the Company, as the result of a merger or consolidation of the Company or a
subsidiary of the Company with another corporation, the acquisition by the
Company or a subsidiary of the Company of all or substantially all the assets of
another corporation or the acquisition by the Company or a subsidiary of the
Company of at least 50% of the issued and outstanding stock of another
corporation. The terms and conditions of the substitute options so granted may
vary from the terms and conditions set forth in this Plan to such 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 stock options in substitution for which they are
granted.

10. Tax Withholding. Delivery of Common Shares upon exercise of any nonstatutory
stock option granted under this Plan shall be subject to any required
withholding taxes. A person exercising such an option may, as a condition
precedent to receiving the Common Shares, be required to pay the Company a cash
amount equal to the amount of any required withholdings. In lieu of all or any
part of such a cash payment, the Committee may, but shall not be required to,
permit the optionee to elect to cover all or any part of the required
withholdings, and to cover any additional withholdings up to the amount needed
to cover such optionee's full FICA and federal, state and local income tax
liability with respect to income arising from the exercise of the option,
through a reduction of the number of Common Shares delivered to the person
exercising the option or through a subsequent return to the Company of shares
delivered to the person exercising the option.

11. Termination of Employment. Neither the transfer of employment of an optionee
between any combination of the Company, a parent corporation or a subsidiary
thereof, nor a leave of absence granted to such optionee and approved by the
Committee, shall be deemed a termination of employment for purposes of this
Plan. The terms "parent" or "parent corporation" and "subsidiary" as used in
this Plan shall have the meaning ascribed to "parent corporation" and
"subsidiary corporation", respectively, in Sections 424(e) and (f) of the Code.

12. Other Terms and Conditions. The Committee shall have the power, subject to
the other limitations contained herein, to fix any other terms and conditions
for the grant or exercise of any option under this Plan. Nothing contained in
this Plan, or in any option granted pursuant to this Plan, shall confer upon any
optionee any right to continued employment by the Company or any parent or
subsidiary of the Company or limit in any way the right of the Company or any
such parent or subsidiary to terminate an optionee's employment at any time.

13. Option Agreements. All options granted under this Plan shall be evidenced by
a written agreement in such form or forms as the Committee may from time to time
determine.

14. Amendment and Discontinuance of Plan. The Board may at any time amend,
suspend or discontinue this Plan. No amendment to this Plan shall, without the
consent of the holder of an option previously granted under this Plan, shall
alter or impair any option.

15. Effective Date. This Plan shall be effective April 2, 1998.

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                                                                     EXHIBIT 4.3

                             DIGI INTERNATIONAL INC.
                          EMPLOYEE STOCK PURCHASE PLAN

         1. PURPOSE AND SCOPE OF PLAN. The purpose of this Digi International
Inc. Employee Stock Purchase Plan (the "Plan") is to provide the employees of
Digi International Inc. (the "Company") with an opportunity to acquire a
proprietary interest in the Company through the purchase of its Common Stock
and, thus, to develop a stronger incentive to work for the continued success of
the Company. The Plan is intended to be an "employee stock purchase plan" within
the meaning of Section 423(b) of the Internal Revenue Code of 1986, as amended,
and shall be interpreted and administered in a manner consistent with such
intent.

         2. DEFINITIONS.

         2.1. The terms defined in this section are used (and capitalized)
elsewhere in this Plan:

                  (a) "Affiliate" means any corporation that is a "parent
         corporation" or "subsidiary corporation" of the Company, as defined in
         Sections 424(e) and 424(f) of the Code or any successor provision, and
         whose participation in the Plan has been approved by the Board of
         Directors.

                  (b) "Board Of Directors" means the Board of Directors of the
         Company.

                  (c) "Code" means the Internal Revenue Code of 1986, as amended
         from time to time.

                  (d) "Committee" means three or more Disinterested Persons
         designated by the Board of Directors to administer the Plan under
         Section 13.

                  (e) "Common Stock" means the common stock, par value $.01 per
         share (as such par value may be adjusted from time to time), of the
         Company.

                  (f) "Company" means Digi International Inc.

                  (g) "Compensation" means the gross cash compensation
         (including wage, salary, commission, bonus, and overtime earnings) paid
         by the Company or any Affiliate to a Participant in accordance with the
         terms of employment.

                  (h) "Disinterested Persons" means a member of the Board of
         Directors who is considered a disinterested person within the meaning
         of Exchange Act Rule 16b-3 or any successor definition.

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                  (i) "Eligible Employee" means any employee of the Company or
         an Affiliate who has been employed for at least 90 days and whose
         customary employment is at least 20 hours per week; provided, however,
         that "Eligible Employee" shall not include any person who would be
         deemed for purposes of Section 423(b)(3) of the Code, to own stock
         possessing 5% or more of the total combined voting power or value of
         all classes of stock of the Company.

                  (j) "Exchange Act" means the Securities Exchange Act of 1934,
         as amended from time to time.

                  (k) "Fair Market Value" of a share of Common Stock as of any
         date means, if the Company's Common Stock is listed on a national
         securities exchange or traded in the national market system, the mean
         between the high and low sale prices for such Common Stock on such
         exchange or market on said date, or, if no sale has been made on such
         exchange or market on said date, on A-1 the last preceding day on which
         any sale shall have been made. If such determination of Fair Market
         Value is not consistent with the then current regulations of the
         Secretary of the Treasury applicable to plans intended to qualify as an
         "employee stock purchase plan" within the meaning of Section 423(b) of
         the Code, however, Fair Market Value shall be determined in accordance
         with such regulations. The determination of Fair Market Value shall be
         subject to adjustment as provided in Section 14.

                  (l) "Participant" means an Eligible Employee who has elected
         to participate in the Plan in the manner set forth in Section 4.

                  (m) "Plan" means this Digi International Inc. Employee Stock
         Purchase Plan, as amended from time to time.

                  (n) "Purchase Period" means each quarter of the Company's
         fiscal year. The first Purchase Period will be the quarter that starts
         April 1, 1996 and ends June 30, 1996.

                  (o) "Recordkeeping Account" means the account maintained in
         the books and records of the Company recording the amount withheld from
         each Participant through payroll deductions made under the Plan.

         3. SCOPE OF THE PLAN. Shares of Common Stock may be sold by the Company
to Eligible Employees commencing April 1, 1996, as hereinafter provided, but not
more than 1,250,000 shares of Common Stock (subject to adjustment as provided in
Section 14) shall be sold to Eligible Employees pursuant to this Plan. All sales
of Common Stock pursuant to this Plan shall be subject to the same terms,
conditions, rights and privileges. The shares of Common Stock delivered by the
Company pursuant to this Plan may be acquired shares having the status of any
combination of authorized but unissued shares, newly issued shares, or treasury
shares.

         4. ELIGIBILITY AND PARTICIPATION. To be eligible to participate in the
Plan for a given Purchase Period, an employee must be an Eligible Employee on
the first day of such

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Purchase Period. An Eligible Employee may elect to participate in the Plan by
filing an enrollment form with the Company before the first day of such Purchase
Period that authorizes regular payroll deductions from Compensation beginning
with the first payday in such Purchase Period and continuing until the Eligible
Employee withdraws from the Plan, modifies his or her authorization, or ceases
to be an Eligible Employee, as hereinafter provided.

         5. AMOUNT OF COMMON STOCK EACH ELIGIBLE EMPLOYEE MAY PURCHASE.

         5.1. Subject to the provisions of the Plan, each Eligible Employee
shall be offered the right to purchase on the last day of the Purchase Period
the number of shares of Common Stock (including fractional shares) that can be
purchased at the price specified in Section 5.2 with the entire credit balance
in the Participant's Recordkeeping Account; provided, however, that the Fair
Market Value (determined on the first day of any Purchase Period) of shares of
Common Stock that may be purchased by a Participant during such Purchase Period
shall not exceed the excess, if any, of (i) $25,000 over (ii) the Fair Market
Value (determined on the first day of the relevant Purchase Period) of shares of
Common Stock previously acquired by the Participant in any prior Purchase Period
during such calendar year. Notwithstanding the foregoing, no Eligible Employee
shall be granted an option to acquire shares of Common Stock under this Plan
which permits the Eligible Employee's rights to purchase shares of Common Stock
under this Plan and all employee stock purchase plans of the Company and the
Affiliates to accrue at a rate which exceeds $25,000 of Fair A-2 Market Value
(determined at the time such option is granted) for each calendar year in which
such option is outstanding at any time. If the purchases by all Participants
would otherwise cause the aggregate number of shares of Common Stock to be sold
under the Plan to exceed the number specified in Section 3, however, each
Participant shall be allocated at a ratable portion of the maximum number of
shares of Common Stock which may be sold.

         5.2. The purchase price of each share of Common Stock sold pursuant to
this Plan will be the lesser of (a) or (b) below: (a) 85% of the Fair Market
Value of such share on the first day of the Purchase Period. (b) 85% of the Fair
Market Value of such share on the last day of the Purchase Period.

         6. METHOD OF PARTICIPATION.

         6.1. The Company shall give notice to each Eligible Employee of the
opportunity to purchase shares of Common Stock pursuant to this Plan and the
terms and conditions for such offering. Such notice is subject to revision by
the Company at any time prior to the date of purchase of such shares. The
Company contemplates that for tax purposes the first day of a Purchase Period
will be the date of the offering of such shares.

         6.2. Each Eligible Employee who desires to participate in the Plan for
a Purchase Period shall signify his or her election to do so by signing an
election form developed by the Committee. An Eligible Employee may elect to have
any whole percent of Compensation

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withheld, but not exceeding ten percent (10%) per pay period. An election to
participate in the Plan and to authorize payroll deductions as described herein
must be made before the first day of the Purchase Period to which it relates and
shall remain in effect unless and until such Participant withdraws from this
Plan, modifies his or her authorization, or terminates his or her employment
with the Company, as hereinafter provided.

         6.3. Any Eligible Employee who does not make a timely election as
provided in Section 6.2, shall be deemed to have elected not to participate in
the Plan. Such election shall be irrevocable for such Purchase Period.

         7. RECORDKEEPING ACCOUNT.

         7.1. The Company shall maintain a Recordkeeping Account for each
Participant. Payroll deductions pursuant to Section 6 will be credited to such
Recordkeeping Accounts on each payday.

         7.2. No interest will be credited to a Participant's Recordkeeping
Account.

         7.3. The Recordkeeping Account is established solely for accounting
purposes, and all amounts credited to the Recordkeeping Account will remain part
of the general assets of the Company.

         7.4. A Participant may not make any separate cash payment into the
Recordkeeping Account.

         8. RIGHT TO ADJUST PARTICIPATION OR TO WITHDRAW.

         8.1. A Participant may, at any time during a Purchase Period, direct
the Company to make no further deductions from his or her Compensation or to
adjust the amount of such deductions. Upon either of such actions, future
payroll deductions with respect to such Participant shall cease or be adjusted
in accordance with the Participant's direction. A-3

         8.2. Any Participant who stops payroll deductions may not thereafter
resume payroll deductions during such Purchase Period.

         8.3. At any time before the end of a Purchase Period, any Participant
may also withdraw from the Plan. In such event, all future payroll deductions
shall cease and the entire credit balance in the Participant's Recordkeeping
Account will be paid to the Participant, without interest, in cash within 15
days. A Participant who withdraws from the Plan will not be eligible to reenter
the Plan until the next succeeding Purchase Period.

         8.4. Notification of a Participant's election to adjust or terminate
deductions, or to withdraw from the Plan, shall be made by the filing of an
appropriate notice to such effect with the Company.

<PAGE>

         9. TERMINATION OF EMPLOYMENT. If the employment of a Participant is
terminated for any reason, including death, disability, or retirement, the
entire balance in the Participant's Recordkeeping Account will be applied to the
purchase of shares as provided in Section 10.1 as of the last day of the
Purchase Period in which the Participant's employment terminated; except that if
such Participant so requests prior to the last day of such Purchase Period, the
Company shall refund in cash within 15 days all amounts credited to his or her
Recordkeeping Account.

         10. PURCHASE OF SHARES.

         10.1. As of the last day of the Purchase Period, the entire credit
balance in each Participant's Recordkeeping Account will be used to purchase
shares (including fractional shares) of Common Stock (subject to the limitations
of Section 5) unless the Participant has filed an appropriate form with the
Company in advance of that date (which either elects to purchase a specified
number of shares which is less than the number described above or elects to
receive the entire credit balance in cash). Any amount in a Participant's
Recordkeeping Account that is not used to purchase shares pursuant to this
Section 10.1 will be refunded to the Participant.

         10.2. Shares of Common Stock acquired by each Participant shall be held
in a general account maintained for the benefit of all Participants.

         10.3. Certificates for the number of whole shares of Common Stock,
determined as aforesaid, purchased by each Participant shall be issued and
delivered to him or her only upon request of the Participant or his or her
representative directed to the Company. No Certificates for fractional shares
will be issued. Instead, Participants will receive a cash distribution
representing any fractional shares.

         10.4. Dividends with respect to a Participant's shares held in the
general account will, at the election of the Participant, either be paid to the
Participant in cash or reinvested in additional shares of Common Stock. If a
Participant fails to make such an election, all dividends with respect to the
Participant's shares held in the general account will automatically be
reinvested to purchase additional shares of Common Stock.

         10.5. Each Participant will be entitled to vote all shares held for the
benefit of such Participant in the general account.

         11. RIGHTS AS A STOCKHOLDER. A Participant shall not be entitled to any
of the rights or privileges of a stockholder of the Company with respect to such
shares, including the right to receive any dividends which may be declared by
the Company, until (i) he or she actually has paid the purchase price for such
shares and (ii) either the shares have been credited to his or her account or
certificates have been issued to him or her, both as provided in Section 10. A-4

         12. RIGHTS NOT TRANSFERABLE. A Participant's rights under this Plan are
exercisable only by the Participant during his or her lifetime, and may not be
sold, pledged,

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assigned or transferred in any manner other than by will or the laws of descent
and distribution. Any attempt to sell, pledge, assign or transfer the same shall
be null and void and without effect. The amounts credited to a Recordkeeping
Account may not be assigned, transferred, pledged or hypothecated in any way,
and any attempted assignment, transfer, pledge, hypothecation or other
disposition of such amounts will be null and void and without effect.

         13. ADMINISTRATION OF THE PLAN. This Plan shall be administered by the
Committee, which is authorized to make such uniform rules as may be necessary to
carry out its provisions. The Committee shall determine any questions arising in
the administration, interpretation and application of this Plan, and all such
determinations shall be conclusive and binding on all parties.

         14. ADJUSTMENT UPON CHANGES IN CAPITALIZATION. In the event of any
change in the Common Stock of the Company by reason of stock dividends,
split-ups, corporate separations, recapitalizations, mergers, consolidations,
combinations, exchanges of shares and the like, the aggregate number and class
of shares available under this Plan and the number, class and purchase price of
shares available but not yet purchased under this Plan, shall be adjusted
appropriately by the Committee.

         15. REGISTRATION OF CERTIFICATES. Stock certificates will be registered
in the name of the Participant, or jointly in the name of the Participant and
another person, as the Participant may direct on an appropriate form.

         16. AMENDMENT OF PLAN. The Board of Directors may at any time amend
this Plan in any respect which shall not adversely affect the rights of
Participants pursuant to shares previously acquired under the Plan, except that,
without stockholder approval on the same basis as required by Section 19.1, no
amendment shall be made (i) to increase the number of shares to be reserved
under this Plan, (ii) to decrease the minimum purchase price, (iii) to withdraw
the administration of this Plan from the Committee, or (iv) to change the
definition of employees eligible to participate in the Plan.

         17. EFFECTIVE DATE OF PLAN. This Plan shall consist of an offering
commencing April 1, 1996, and ending June 30, 1996, and continuing on a
quarterly basis thereafter. All rights of Participants in any offering hereunder
shall terminate at the earlier of (i) the day that Participants become entitled
to purchase a number of shares of Common Stock equal to or greater than the
number of shares remaining available for purchase or (ii) at any time, at the
discretion of the Board of Directors, after 30 days' notice has been given to
all Participants. Upon termination of this Plan, shares of Common Stock shall be
issued to Participants in accordance with Section 10, and cash, if any,
remaining in the Participant's Recordkeeping Accounts shall be refunded to them,
as if the Plan were terminated at the end of a Purchase Period.

         18. GOVERNMENTAL REGULATIONS AND LISTING. All rights granted or to be
granted to Eligible Employees under this Plan are expressly subject to all
applicable laws and regulations and to the approval of all governmental
authorities required in connection with the

<PAGE>

authorization, issuance, sale or transfer of the shares of Common Stock reserved
for this Plan, including, without limitation, there being a current registration
statement of the Company under the Securities Act of 1933, as amended, covering
the shares of Common Stock purchasable on the last day of the Purchase Period
applicable to such shares, and if such a registration statement shall not then
be effective, the term of such Purchase Period shall be extended until the first
business day after the effective date of such a registration A-5 statement, or
post-effective amendment thereto. If applicable, all such rights hereunder are
also similarly subject to effectiveness of an appropriate listing application to
a national securities exchange or a national market system, covering the shares
of Common Stock under the Plan upon official notice of issuance.

         19. MISCELLANEOUS.

         19.1. This Plan shall be submitted for approval by the stockholders of
the Company prior to June 30, 1996. If not so approved prior to such date, this
Plan shall terminate on June 30, 1996.

         19.2. This Plan shall not be deemed to constitute a contract of
employment between the Company and any Participant, nor shall it interfere with
the right of the Company to terminate any Participant and treat him or her
without regard to the effect which such treatment might have upon him or her
under this Plan.

         19.3. Wherever appropriate as used herein, the masculine gender may be
read as the feminine gender, the feminine gender may be read as the masculine
gender, the singular may be read as the plural and the plural may be read as the
singular.

         19.4. The Plan, and all agreements hereunder, shall be construed in
accordance with and governed by the laws of the State of Minnesota.

         19.5. Delivery of shares of Common Stock or of cash pursuant to this
Plan shall be subject to any required withholding taxes. A person entitled to
receive shares of Common Stock may, as a condition precedent to receiving such
shares, be required to pay the Company a cash amount equal to the amount of any
required withholdings.

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