Document:

Employment Agreement

 

Exhibit 10.45

EMPLOYMENT AGREEMENT

     This EMPLOYMENT AGREEMENT (this “Agreement”) is made as of the first day
of January, 2001, by and between Illinois Superconductor Corporation, a
Delaware corporation (the “Company”), and Dennis Craig (the “Employee”).

W I T N E S S E T H :

     WHEREAS, the Employee is now employed by the Company as the Senior Vice
President — Manufacturing;

     WHEREAS, the Company wishes to ensure that it will continue to have the
benefits of the Employee’s services on the terms and conditions hereinafter set
forth; and

     WHEREAS, the Employee desires to continue to work for the Company on the
terms and conditions hereinafter set forth;

     NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained, the parties hereto hereby agree as follows:

             1. Employment; Term. The Company hereby employs the Employee, and the
Employee hereby accepts employment with the Company, in accordance with and
subject to the terms and conditions set forth herein. The term of this
Agreement shall commence on the date hereof (the “Effective Date”) and, unless
earlier terminated in accordance with Paragraph 5, shall end on December 31,
2002, with the term of employment being that period between the Effective Date
and December 31, 2002 (that period, as extended pursuant to the following
sentence, the “Term”). As of January 1, 2003, and as of each subsequent
January 1st, (each an “Automatic Renewal Date”), unless either party shall have
given to the other written notice of non-extension at least sixty (60) days
prior to such Automatic Renewal Date, the Term shall, unless earlier terminated
in accordance with Paragraph 5, extend automatically for a period of one (1)
year to the anniversary of the then otherwise scheduled expiration date of this
Agreement. If there is a “Change of Control” (as defined in Paragraph 6(e)
below), the Term shall, unless earlier terminated in accordance with Paragraph
5, extend automatically to the second anniversary of the date of the Change of
Control, provided that the second anniversary of the date of the Change of
Control is later than the last day of the Term as determined without regard to
the Change of Control. Certain provisions of this Agreement shall continue in
effect after the Term as specifically set forth herein.

 

 

             2.     Employment.

                     (a)  The Employee shall serve as the Company’s Chief Technology Officer.
The Employee shall report to the Chief Executive Officer of the Company.

                     (b)  The Employee shall have such authority and responsibility as may
reasonably be assigned by the Chief Executive Officer or the Board of Directors
of the Company (the “Board”).

                     (c)  During the period the Employee is employed by the Company, the
Employee shall devote the Employee’s normal full business time and attention to
the business and affairs of the Company and use the Employee’s best efforts to
perform faithfully the duties and responsibilities of the Employee’s position
as described herein.

             3.     Compensation.

                     (a)  The Company shall pay the Employee a base salary (the “Base Salary”)
of not less than One Hundred Sixty Thousand Dollars ($160,000) per annum,
payable at least monthly, in accordance with the Company’s payroll practices
less such deductions as shall be required to be withheld by applicable law and
regulations. The Board shall conduct an annual review of the Employee’s Base
Salary and Bonus (as defined in Paragraph 3(b)below), but in no event shall the
Base Salary be decreased without the consent of the Employee. Any increase in
the Base Salary or change in the Bonus shall be in the sole discretion of the
Board.

                     (b)  Subject to Paragraph 6(c) hereof, for each calendar year completed
during the Term, the Employee shall be eligible to receive a bonus (the
“Bonus”) of an amount up to 50% of the Base Salary for such year. The amount
of the Bonus payable to the Employee for a particular year, if any, shall be
based on the accomplishment of corporate and individual performance goals as
determined by the Board. The corporate and individual performance goals
referenced in the preceding sentence shall be established by the Board and
communicated to the Employee before the end of the first quarter of the
applicable year. In the event of a disagreement over the attainment of such
goals and objectives, the Compensation Committee of the Board shall have final
authority to determine the award of the Bonus. The Bonus payable for a
particular year, if any, shall be paid no later than March 15th of the
following year and may be paid in cash, Company stock or a combination of the
two as determined by the Board in its sole discretion.

             4.     Benefits.

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                     (a)  The Company agrees to reimburse the Employee for all reasonable and
necessary travel, business entertainment and other business expenses incurred
by the Employee in connection with the performance of the Employee’s duties
under this Agreement. Such reimbursements shall be made by the Company within
a reasonable time after submission by the Employee of vouchers in accordance
with the Company’s standard policies and procedures.

                     (b)  The Employee shall be entitled to participate in any and all medical
insurance, group health, disability insurance, pension and other similar
benefit plans which are made generally available by the Company to its senior
executives, which shall not be less favorable than those available to any other
group of employees of the Company. The Company, in its sole discretion, may at
any time amend or terminate its benefit plans or programs.

                     (c)  The Employee shall be entitled to receive four (4) weeks of annual
paid vacation in accordance with the Company’s vacation policy for its senior
executives. The Employee shall be entitled to all paid holidays the Company
makes available to its employees.

             5.     Termination. The Employee’s employment hereunder may be terminated
prior to the end of the Term under the following circumstances:

                     (a)  Death. The Employee’s employment hereunder shall terminate upon the
Employee’s death.

                     (b)  Total Disability. The Company may terminate the Employee’s employment
hereunder at any time after the Employee’s “Total Disability.” “Total
Disability” means (i) the Employee becomes entitled to receive disability
benefits under the Company’s long-term disability plan, or, in the absence of
such a plan, (ii) the Employee’s inability to perform the duties and
responsibilities contemplated under this Agreement for a period of more than
one hundred eighty (180) consecutive days due to physical or mental incapacity
or impairment. Such termination shall become effective five (5) business days
after the Company gives notice of such termination to the Employee, or to the
Employee’s spouse or legal representative (in case of mental incapacitation).

                     (c)  Termination by the Company With or Without Cause. The Company may
terminate the Employee’s employment hereunder with or without Cause at any time
after the Company provides thirty (30) days’ written notice (or a shorter
period of time, to be determined in good faith by the Board to be essential to
prevent serious damage to the

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 Company) to the Employee to such effect. The term “Cause” shall mean any
of the following: (i) willful malfeasance or willful misconduct by the Employee
in connection with the Employee’s employment; (ii) the Employee’s gross
negligence in performing any of the Employee’s duties under this Agreement;
(iii) the Employee’s conviction of, or entry of a plea of guilty to, or entry
of a plea of nolo contendere with respect to any crime other than a traffic
violation or infraction which is a misdemeanor; (iv) the Employee’s willful and
continuing breach of any written policy applicable to all employees adopted by
the Company concerning conflicts of interest, political contributions,
standards of business conduct or fair employment practices, procedures with
respect to compliance with securities laws or any similar matters, or adopted
pursuant to the requirements of any government contract or regulation; or (v)
any other material breach by the Employee of this Agreement after the Company
provides written notification to the Employee of such breach and the Employee
fails within five (5) days of receipt of such notification to cure the
circumstances which gave rise to such breach.

                     (d)  Termination by the Employee With or Without Good Reason. The
Employee’s employment hereunder may be terminated by the Employee as specified
below with, or upon thirty (30) days’ prior notice without, Good Reason. For
purposes of this Agreement, “Good Reason” means any of the following, without
the consent of the Employee: (i) any change in, or diminution of, the
Employee’s duties or responsibilities that is inconsistent in any material and
adverse respect with the Employee’s duties and responsibilities as contemplated
under Section 2 of this Agreement, provided that neither a change in the
Employee’s title nor a change in the Employee’s duties and responsibilities
alone, without a corresponding material adverse change in the Employee’s duties
or other responsibilities shall constitute Good Reason, and provided further
that changes in reporting relationships of other employees to the Employee,
including those which occur as a result of strategic business developments such
as the sale of a business unit or the outsourcing of a business function, shall
not be construed as “adverse” to the Employee for purposes of determining
whether Good Reason exists; (ii) any reduction of the Employee’s Base Salary or
maximum Bonus level; (iii) any other material breach by the Company of this
Agreement after the Employee provides written notification to the Company of
such breach and the Company fails within thirty (30) days of receipt of such
notification to cure the circumstances which gave rise to such breach, or (iv)
any requirement by the Company that the Employee relocate the Employee’s
principal office (currently located in Mount Prospect, Illinois) to a location
more than thirty-five (35) miles from the Employee’s principal office at the
time the Company makes such request. Notwithstanding the foregoing, no act or
omission by the Company shall constitute Good Reason hereunder unless the
Employee gives the Company written notice thereof within thirty (30) days after
he has actual knowledge of such act or

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 omission, and the Company fails to remedy such act or omission within
thirty (30) days after receiving such notice.

                     6.     Compensation Following Termination Prior to the End of the Term. In
the event that the Employee’s employment hereunder is terminated prior to the
end of the Term, the Employee shall be entitled only to the following
compensation and benefits upon such termination:

                             (a)  Termination by Reason of Death or Total Disability. In the event that
the Employee’s employment is terminated prior to the expiration of the Term by
reason of the Employee’s death or Total Disability, pursuant to Paragraph 5(a)
or 5(b) hereof, respectively, the Employee (or the Employee’s spouse or estate,
as the case may be) shall be entitled to the following amounts or benefits:

	 	i.	 	any accrued but unpaid Base Salary (as determined pursuant to
Paragraph 3(a) hereof) for services rendered to the date of
termination in accordance with the Company’s standard payroll
practices and any unpaid Bonus previously awarded by the Board in
respect of a completed calendar year pursuant to Paragraph 3(b)
hereof;
	 
	 	ii.	 	any incurred but unreimbursed expenses required to be
reimbursed pursuant to Paragraph 4(a) hereof; and
	 
	 	iii.	 	the benefits to which the Employee and/or the Employee’s
family may be entitled upon such termination pursuant to the plans,
programs and arrangements referred to in Paragraph 4 hereof, as
determined and paid in accordance with the terms of such plans,
programs and arrangements.

                             (b)  Termination by the Company Without Cause or Termination by the
Employee With Good Reason. In the event that the Employee’s employment is
terminated by the Company without Cause pursuant to Paragraph 5(c) hereof, or
by the Employee with Good Reason pursuant to Paragraph 5(d) hereof, the
Employee shall be entitled to the following amounts or benefits:

	 	i.	 	any accrued but unpaid Base Salary (as determined pursuant to
Paragraph 3(a) hereof) for services rendered to the date of
termination in accordance with the Company’s standard payroll
practices and any unpaid Bonus previously awarded by the Board
pursuant to Paragraph 3(b) hereof;

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	 	ii.	 	any incurred but unreimbursed expenses required to be
reimbursed pursuant to Paragraph 4(a) hereof;
	 
	 	iii.	 	subject to Paragraph 6(e) hereof, continued payment of the
Base Salary (as determined under Paragraph 3(a) hereof) in
accordance with the Company’s standard payroll practices for one (1)
year following the date of such termination; provided that such
continued payments shall be offset by any salary, wage, or similar
payments paid or payable, directly or indirectly, to the Employee
during the year following the date of termination from another
employer or recipient of the Employee’s services (such payments
being determined without regard to any individual waivers or other
similar arrangements).
	 
	 	iv.	 	the benefits to which the Employee and/or the Employee’s
family may be entitled upon such termination pursuant to the plans,
programs and arrangements referred to in Paragraph 4 hereof, as
determined and paid in accordance with the terms of such plans,
programs and arrangements; and
	 
	 	v.	 	subject to Paragraph 6(e) hereof, continuation of health and
insurance benefits (other than disability insurance benefits) for
one (1) year following the date of such termination on the same
terms and conditions as in effect immediately prior to the
termination; provided that the Company shall not be required to
provide benefits otherwise required by this clause (v) after such
time as the Employee becomes entitled to receive benefits of the
same type from another employer or recipient of the Employee’s
services (such entitlement being determined without regard to any
individual waivers or other similar arrangements).

        
        
        
     (c)  Termination by the Company for Cause or Termination by the Employee
Without Good Reason. In the event that the Employee’s employment is terminated
prior to the expiration of the Term of this Agreement by the Company for Cause
pursuant to Paragraph 5(c) hereof or by the Employee without Good Reason
pursuant to Paragraph 5(d) hereof, the Employee shall be entitled to the
following amounts or benefits:

	 	i.	 	any accrued but unpaid Base Salary (as determined pursuant to
Paragraph 3(a) hereof) for services rendered to the date of
termination in accordance with the Company’s standard payroll
practices;
	 
	 	ii.	 	any incurred but unreimbursed expenses required to be
reimbursed pursuant to Paragraph 4(a) hereof; and

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	 	iii.	 	the benefits to which the Employee and/or the Employee’s
family may be entitled upon such termination pursuant to the plans,
programs and arrangements referred to in Paragraph 4 hereof, as
determined and paid in accordance with the terms of such plans,
programs and arrangements.

Notwithstanding the foregoing, in no event shall any unpaid Bonus previously
awarded by the Board pursuant to Paragraph 3(b) hereof be paid following a
termination by the Company for Cause pursuant to Paragraph 5(c) hereof or by
the Employee without Good Reason pursuant to Paragraph 5(d) hereof.

        
        
        
     (d)  Termination due to Company’s Notice of Non-Extension. In the event
that during the Term the Company provides the Employee with a notice of
non-extension as described in Section 1 hereof, upon the termination of the
Employee’s employment by the Company pursuant to such notice, the Employee
shall be entitled to the following amounts or benefits:

	 	i.	 	any accrued but unpaid Base Salary (as determined pursuant to
Paragraph 3(a) hereof) for services rendered to the date of
termination in accordance with the Company’s standard payroll
practices and any unpaid Bonus previously awarded by the Board
pursuant to Paragraph 3(b) hereof;
	 
	 	ii.	 	any incurred but unreimbursed expenses required to be
reimbursed pursuant to Paragraph 4(a) hereof;
	 
	 	iii.	 	continued payment of the Base Salary (as determined under
Paragraph 3(a) hereof) in accordance with the Company’s standard
payroll practices for six (6) months following the date of such
termination; provided that such continued payments shall be offset
by any salary, wage, or similar payments paid or payable, directly
or indirectly, to the Employee during the year following the date of
termination from another employer or recipient of the Employee’s
services (such payments being determined without regard to any
individual waivers or other similar arrangements);
	 
	 	iv.	 	the benefits to which the Employee and/or the Employee’s
family may be entitled upon such termination pursuant to the plans,
programs and arrangements referred to in Paragraph 4 hereof, as
determined and paid in accordance with the terms of such plans,
programs and arrangements; and

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	 	v.	 	continuation of health and insurance benefits (other than
disability insurance benefits) for six (6) months following the date
of such termination on the same terms and conditions as in effect
immediately prior to the termination; provided that the Company
shall not be required to provide benefits otherwise required by this
clause (v) after such time as the Employee becomes entitled to
receive benefits of the same type from another employer or recipient
of the Employee’s services (such entitlement being determined
without regard to any individual waivers or other similar
arrangements).

        
        
        
     (e)  Termination Upon or Following a Change of Control. If there is a
“Change of Control” (as defined below) and the Employee’s employment is
terminated by the Company without Cause or by the Employee with Good Reason
prior to the expiration of the Term of this Agreement and within two (2) years
following a Change of Control, the words “two (2) years” shall replace the
words “one (1) year” in clauses (iii) and (v) of Paragraph 6(b). For purposes
of this Agreement, a Change of Control shall be deemed to have occurred if:

	 	i.	 	the stock of the Company ceases to be registered pursuant to
Section 12 of the Securities Exchange Act of 1934, as amended; or
	 
	 	ii.	 	the stockholders of the Company approve a definitive
agreement (A) to merge or consolidate the Company with or into
another corporation other than a majority-owned subsidiary of the
Company, pursuant to which (x) the Company is not the surviving or
resulting entity or (y) the persons who were the members of the
Board prior to such approval do not represent a majority of the
directors of the surviving, resulting or acquiring entity or the
parent thereof, or (B) to sell or otherwise dispose of all or
substantially all of the Company’s assets; or
	 
	 	iii.	 	during any period of two (2) consecutive years, individuals
who at the beginning of such period constitute the Board and any new
director whose election by the Board or nomination for election by
the Company’s stockholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either
were directors at the beginning of such period or whose election or
nomination for election was previously so approved, cease for any
reason to constitute a majority of the Board.

        
        
        
     (f)  No Other Benefits or Compensation. Except as may be specifically
provided under this Agreement or under the terms of any incentive compensation,
employee benefit or fringe benefit plan applicable to the Employee at the time
of the termination

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 of the Employee’s employment prior to the end of the Term, the Employee
shall have no right to receive any other compensation, or to participate in any
other plan, arrangement or benefit, with respect to any future period after
such termination.

        
        
        
     (g)  Waiver of Personal Liability. To the extent permitted by applicable
law, Executive hereby acknowledges that he shall have recourse only to the
Company (and its successors-in-interest) with respect to any claims he may have
for compensation or benefits arising in connection with his employment, whether
or not under this Agreement or under any other plan, program, or arrangement,
including, but not limited to any agreement relating to the grant or exercise
of stock options or other equity rights in the Company. To the extent
permitted by applicable law, the Executive hereby waives any such claims for
compensation, benefits and equity rights against officers, directors,
stockholders or other representatives in their personal or separate capacities.

        
        
     7.     Confidentiality, Ownership, and Covenants of Non-Competition and
Non-Solicitation.

        
        
        
     (a)  Confidentiality. The Employee recognizes that the Company’s business
interests require the fullest practical protection and confidential treatment
of all information not generally known within the relevant trade group or by
the public, including all documents, writings, memoranda, business plans,
illustrations, designs, plans, processes, programs, inventions, computer
software, reports, sources of supply, customer lists, supplier lists, trade
secrets and all other valuable or unique information and techniques acquired,
developed or used by the Company relating to its businesses, operations,
employees and customers (hereinafter collectively termed “Protected
Information”). The Employee expressly acknowledges and agrees that Protected
Information constitutes trade secrets and confidential and proprietary business
information of the Company. No Protected Information shall include information
which is or becomes part of the public domain through no breach of this
Agreement by the Employee. The Employee agrees that Protected Information is
essential to the success of the Company’s business, and it is the policy of the
Company to maintain as secret and confidential Protected Information which
gives the Company a competitive advantage over those who do not know the
Protected Information and is expressly and implicitly protected by the Company
from unauthorized disclosure. Accordingly, the Employee agrees to keep secret
Protected Information and to treat confidentially and not to knowingly permit
any other entity to, directly or indirectly, appropriate, divulge, disclose or
otherwise disseminate to any other entity nor use in any manner for the
Employee, and not to intentionally use or aid others in using any such
Protected Information in competition with the Company or its Affiliates except
to the extent that disclosure is required by law; provided, however, that the
Employee shall provide the

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 Company with notice as far in advance of any required disclosure as is
practicable in order for the Company to obtain an order for the assurance that
any information required to be disclosed will be treated as Protected
Information and the Employee shall use all reasonable efforts to cooperate with
the Company in connection therewith and in furtherance thereof. The obligation
of non-disclosure of information shall continue to exists for so long as such
information remains Protected Information. For purposes of this Agreement,
trade secrets are subject to the protection of the Illinois Trade Secret Act.
The provisions of this Paragraph 7(a) are not intended to supersede or limit
the effect of any prior confidentiality or proprietary rights agreements
previously executed by the Employee including the Confidential Information,
Proprietary Rights and Non-Competition Agreement between the Company and the
Employee, a copy of which is attached hereto as Exhibit B. However, if there
is any conflict between the terms and conditions of this Agreement and the
Confidential Information, Proprietary Rights and Non-Competition Agreement
attached hereto as Exhibit B, then the terms and conditions of this Agreement,
as interpreted by the Board, shall govern.

        
        
        
     (b)  Ownership. The Employee hereby assigns to the Company all of the
Employee’s right (including patent rights, copyrights, trade secret rights, and
all other rights throughout the world), title and interest in and to
Inventions, whether or not patentable or registrable under copyright or similar
statutes, made or conceived or reduced to practice or learned by the Employee,
either alone or jointly with others, during the course of the performance of
services for the Company. The Employee shall also assign to, or as directed
by, the Company, all of the Employee’s right, title and interest in and to any
and all Inventions, the full title to which is required to be in the United
States government by a contract between the Company and the United States
government or any of its agencies. For the purpose of this Agreement, the term
“Inventions” collectively refers to any and all inventions, trade secrets,
improvements, ideas, processes, formulas, source and object codes, data,
programs, other works of authorship, know-how, improvements, discoveries,
developments, designs, and techniques regarding any of the foregoing. The
provisions of this Paragraph 7(b) are not intended to supersede or limit the
effect of any prior confidentiality or proprietary rights agreements previously
executed by the Employee including the Confidential Information, Proprietary
Rights and Non-Competition Agreement between the Company and the Employee, a
copy of which is attached hereto as Exhibit B. However, if there is any
conflict between the terms and conditions of this Agreement and the
Confidential Information, Proprietary Rights and Non-Competition Agreement
attached hereto as Exhibit B, then the terms and conditions of this Agreement,
as interpreted by the Board, shall govern.

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     (c)  Covenants of Non-Competition and Non-Solicitation. The Employee
acknowledges that the Employee’s services pursuant to this Agreement are unique
and extraordinary, that the Company will be dependent upon the Employee for the
development and growth of its business and related functions, and that the
Employee will continue to develop personal relationships with significant
customers of the Company and to have control of confidential information
concerning, and lists of customers of, the Company. The Employee further
acknowledges that the business of the Company is international in scope and
cannot be confined to any particular geographic area of the United States. For
the foregoing reasons, the Employee covenants and agrees that at no time during
the Restriction Period (as defined below) shall the Employee either alone or as
a stockholder, partner, consultant, owner, agent, creditor, co-venturer of any
other entity or in any other capacity, directly or indirectly, engage in the
Business (as defined below); provided that nothing herein shall prohibit the
Employee from being an owner of not more than 5% of the outstanding stock of
any class of a corporation which is publicly traded, so long as the Employee
does not actively participate in the business of such corporation. For the
purpose of this Paragraph 7(c), the “Business” means the business of
developing, manufacturing and marketing high temperature superconductivity
products designed to enhance the quality, capacity, coverage and flexibility of
cellular, personal communication services and other wireless telecommunications
services.

        
        
     For the reasons acknowledged by the Employee at the beginning of this
Paragraph 7(c), the Employee additionally acknowledges, covenants, and agrees
that at no time during the Term nor during the period commencing on the date of
termination of the Employee’s employment with the Company and ending the day
following the first anniversary of the date of termination of the Employee’s
employment with the Company for any reason, shall the Employee, directly or
indirectly, either alone or as a stockholder, partner, consultant, adviser,
owner, agent, creditor, co-venturer of any other entity, or in any other
capacity, (i) knowingly sell to or solicit sales of products produced in the
Business to any customer or account which was a customer or account of the
Company during the Employee’s employment with the Company, or (ii) (other than
through general, non targeted advertisements) intentionally solicit, hire,
knowingly attempt to solicit or hire, or knowingly participate in any attempt
to solicit or hire any person who was an employee of the Company or any of its
Affiliates during the Employee’s employment with the Company.

        
        
     For purposes of this Agreement, the Restriction Period means the Term and
the period commencing on the date of termination of the Employee’s employment
with the Company and ending the day following the first anniversary of the date
of termination of the Employee’s employment with the Company for any reason;
provided that the Company may

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 elect to extend the Restriction Period for up to one (1) year beyond the
first anniversary of the date of termination of the Employee’s employment with
the Company if (A) the Company provides written notice of its intent to so
extend the Restriction Period at least six (6) months prior to the date on
which the Restriction Period would otherwise expire and (B) the Company pays to
the Employee the Base Salary, without offset for salary, wages or similar
payments from another employer during such extended period, at the rate such
Base Salary was being paid to the Employee at the time of termination, for one
(1) year beyond the period for which the Company would otherwise be obligated
to continue the Base Salary pursuant to this Agreement in the absence of the
extension of the Restriction Period.

        
        
     (d)  Equitable Remedies. The Employee acknowledges, covenants and agrees
that, in the event the Employee shall violate any provisions of this Section 8,
the Company will have the right to enforce this Agreement by all remedies that
may be available at law or in equity.

        
        
     8.     Assignability; Binding Effect. This Agreement is a personal contract
calling for the provision of unique services by the Employee, and the
Employee’s rights and obligations hereunder may not be sold, transferred,
assigned or pledged. In the event of any attempted assignment or transfer of
rights hereunder by the Employee contrary to the provisions hereof (other than
as may be required by law), the Company will have no further liability for
payments hereunder. The rights and obligations of the Company hereunder will
be binding upon and run in favor of the successors and assigns of the Company
and, in connection therewith, and notwithstanding any other provision of this
Agreement to the contrary, in the event that there is such a successor or
assign, on and after the date of such succession or assignment, “Company” shall
thereupon instead refer to such successor or assign, as the case may be. This
Agreement does not create, and shall not be interpreted or construed to create,
any rights enforceable by any person not a party to this Agreement, except as
specifically provided herein.

        
        
     9.     Entire Agreement. This Agreement represents the entire agreement
between the parties concerning the Employee’s employment with the Company and
supersedes all prior negotiations, discussions, understandings and agreements,
whether written or oral, between the Employee and the Company relating to the
subject matter of this Agreement. All prior employment agreements, between the
Company and the Employee shall remain in full force and effect with respect all
matters addressed in such prior employment agreements occurring on or before
the effective date of this Agreement.

        
        
     10.     Amendment or Modification, Waiver. No provision of this Agreement may
be amended or waived unless such amendment or waiver is agreed to in writing
signed by

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 the Employee and by a duly authorized officer of the Company other that
the Employee. No waiver by any party to this Agreement of any breach by
another party of any condition or provision of this Agreement to be performed
by such other party shall be deemed a waiver of a similar or dissimilar
condition or provision at the same time, any prior time or any subsequent time.

        
        
     11.     Notices. All notices, demands or other communications of any kind to
be given or delivered under this Agreement shall be in writing and shall be
deemed to have been properly given if (a) delivered by hand, (b) delivered by a
nationally recognized overnight courier service, (c) sent by registered or
certified United States Mail, return receipt requested and first class postage
prepaid, or (d) facsimile transmission followed by a confirmation copy
delivered by a nationally recognized overnight courier service. Such
communications shall be sent to the parties at their respective addresses as
follows:

	 	 	 
	If to the Employee	 	
Dennis Craig

	 
	If to the Company:	 	
Illinois Superconductor Corporation
	 	 	
451 Kingston Court
	 	 	
Mount Prospect, IL 60056
	 	 	
Attention: Vice President of Human Resources
	 
	with a copy to:	 	
Barry M. Abelson, Esquire
	 	 	
Pepper Hamilton LLP
	 	 	
3000 Two Logan Square
	 	 	
18th & Arch Streets
	 	 	
Philadelphia, PA 19103-2799
	 	 	
FAX: 215-981-4750

Either party may change such address for delivery to the other party by
delivery of a notice in conformity with the provisions of this Section
specifying such change. Notice shall be deemed to have been properly given (i)
on the date of delivery, if delivery is by hand, (ii) three (3) days after the
date of mailing if sent by certified or registered mail, (iii) one (1) day
after date of delivery to the overnight courier if sent by overnight courier,
or (iv) the next business day after the date of transmission by facsimile.

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12.     Severability. If any provision of this Agreement or the application
of any such provision to any party or circumstances shall be determined by any
court of competent jurisdiction to be invalid and unenforceable to any extent,
the remainder of this Agreement or the application of such provision to such
person or circumstances other than those to which it is so determined to be
invalid and unenforceable shall not be affected, and each provision of this
Agreement shall be validated and shall be enforced to the fullest extent
permitted by law. If for any reason any provision of this Agreement containing
restrictions is held to cover an area or to be for a length of time that is
unreasonable or in any other way is construed to be too broad or to any extent
invalid, such provision shall not be determined to be entirely null, void and
of no effect; instead, it is the intention and desire of both the Company and
the Employee that, to the extent that the provision is or would be valid or
enforceable under applicable law, any court of competent jurisdiction shall
construe and interpret or reform this Agreement to provide for a restriction
having the maximum enforceable area, time period and such other constraints or
conditions (although not greater than those currently contained in this
Agreement) as shall be valid and enforceable under the applicable law.

        
        
     13.     Survivorship. The respective rights and obligations of the parties
hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations.

        
        
     14.     Headings. All descriptive headings of sections and paragraphs in this
Agreement are intended solely for convenience of reference, and no provision of
this Agreement is to be construed by reference to the heading of any section or
paragraph.

        
        
     15.     Withholding Taxes. All salary, benefits, reimbursements and any other
payments to the Employee under this Agreement shall be subject to all
applicable payroll and withholding taxes and deductions required by any law,
rule or regulation of any federal, state or local authority.

[THIS SPACE INTENTIONALLY LEFT BLANK]

-14-

 

        
        
     16.     Applicable Law/ Jurisdiction. The laws of the State of Illinois shall
govern the interpretation, validity and performance of the terms of this
Agreement, without reference to rules relating to conflicts of law. The
parties select and irrevocably submit to the exclusive jurisdiction of a court
of competent jurisdiction located in the State of Illinois for any action to
enforce, construe or interpret this Agreement. The Employee and the Company
each hereby waives any objection to venue in such state on the basis of forum
non-conveniens.

        
        
     IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement as of the date first above written.

	 	 	 	 
	 	ILLINOIS SUPERCONDUCTOR CORPORATION
	 
	 	By:	 	
/s/ George Calhoun
	 	 	 	

	 	 	 	
GEORGE CALHOUN
	 	 	 	
Chief Executive Officer
	 
	 	 	 	
/s/ Dennis Craig
	 	 	 	

	 	 	 	
DENNIS CRAIG

-15-<PAGE>

                                                                   EXHIBIT 10.34

                            INTRANET SOLUTIONS, INC.
                              AMENDED AND RESTATED
                       2000 EMPLOYEE STOCK INCENTIVE PLAN

     1. PURPOSE. The purpose of this 2000 Stock Incentive Plan (the "Plan") is
to motivate key personnel to produce a superior return to the shareholders of
IntraNet Solutions, Inc. (the "Company") and its Affiliates by offering such
individuals an opportunity to realize Stock appreciation, by facilitating Stock
ownership, and by rewarding them for achieving a high level of corporate
performance. This Plan is also intended to facilitate recruiting and retaining
key personnel of outstanding ability.

     2. DEFINITIONS. The capitalized terms used in this Plan have the meanings
set forth below.

          (a) "Affiliate" means any corporation that is a "parent corporation"
     or "subsidiary corporation" of the Company, as those terms are defined in
     Sections 424(e) and (f) of the Code, or any successor provision, and any
     joint venture in which the Company or any such "parent corporation" or
     "subsidiary corporation" owns an equity interest.

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

          (c) "Award" means a grant made under this Plan in the form of Options,
     Stock Appreciation Rights, Restricted Stock, Performance Shares or any
     Other Stock-Based Award.

          (d) "Board" means the Board of Directors of the Company.

          (e)  "Change in Control" means:

               (i)  a majority of the directors of the Company shall be persons
                    other than persons

                    (A)  for whose election proxies shall have been solicited by
                         the Board or

                    (B)  who are then serving as directors appointed by the
                         Board to fill vacancies on the Board caused by death or
                         resignation (but not by removal) or to fill
                         newly-created directorships,

<PAGE>

               (ii) 30% or more of the (1) combined voting power of the then
                    outstanding voting securities of the Company entitled to
                    vote generally in the election of directors ("Outstanding
                    Company Voting Securities") or (2) the then outstanding
                    Shares of Stock ("Outstanding Company Common Stock") is
                    directly or indirectly acquired or beneficially owned (as
                    defined in Rule 13d-3 under the Exchange Act, or any
                    successor rule thereto) by any individual, entity or group
                    (within the meaning of Section 13(d)(3) or 14(d)(2) of the
                    Exchange Act), provided, however, that the following
                    acquisitions and beneficial ownership shall not constitute
                    Changes in Control pursuant to this paragraph 2(e)(ii):

                    (A)  any acquisition or beneficial ownership by the Company
                         or a Subsidiary, or

                    (B)  any acquisition or beneficial ownership by any employee
                         benefit plan (or related trust) sponsored or maintained
                         by the Company or one or more of its Subsidiaries,

                    (C)  any acquisition or beneficial ownership by the
                         Participant or any group that includes the Participant,
                         or

                    (D)  any acquisition or beneficial ownership by a Parent or
                         its wholly-owned subsidiaries, as long as they shall
                         remain wholly-owned subsidiaries, of 100% of the
                         Outstanding Company Voting Securities as a result of a
                         merger or statutory share exchange which complies with
                         paragraph 2(e)(iii)(A)(2) or the exception in paragraph
                         2(e)(iii)(B) hereof in all respects,

               (iii) the shareholders of the Company approve a definitive
                    agreement or plan to

                    (A)  merge or consolidate the Company with or into another
                         corporation (other than (1) a merger or consolidation
                         with a Subsidiary or (2) a merger in which

                    (a)  the Company is the surviving corporation,

                    (b)  no Outstanding Company Voting Securities or Outstanding
                         Company Common Stock (other than fractional shares)
                         held by shareholders of the Company immediately prior
                         to the merger is converted into cash, securities, or
                         other property (except (i) voting stock of a Parent
                         owning directly or indirectly through wholly-owned
                         subsidiaries, both beneficially and of record 100% of
                         the Outstanding Company Voting Securities immediately
                         after the Merger or (ii) cash upon the exercise by
                         holders of Outstanding Company Voting Securities of
                         statutory dissenters' rights),

                                       2

<PAGE>

                    (c)  the persons who were the beneficial owners,
                         respectively, of the Outstanding Company Voting
                         Securities and Outstanding Company Common Stock
                         immediately prior to such merger beneficially own,
                         directly or indirectly, immediately after the merger,
                         more than 70% of, respectively, the then outstanding
                         common stock and the voting power of the then
                         outstanding voting securities of the surviving
                         corporation or its Parent entitled to vote generally in
                         the election of directors, and

                    (d)  if voting securities of the Parent are exchanged for
                         Outstanding Company Voting Securities in the merger,
                         all holders of any class or series of Outstanding
                         Company Voting Securities immediately prior to the
                         merger have the right to receive substantially the same
                         per share consideration in exchange for their
                         Outstanding Company Voting Securities as all other
                         holders of such class or series),

               (B)  exchange, pursuant to a statutory share exchange,
                    Outstanding Company Voting Securities of any one or more
                    classes or series held by shareholders of the Company
                    immediately prior to the exchange for cash, securities or
                    other property, except for (a) voting stock of a Parent
                    owning directly, or indirectly through wholly-owned
                    subsidiaries, both beneficially and of record 100% of the
                    Outstanding Company Voting Securities immediately after the
                    statutory share exchange if (i) the persons who were the
                    beneficial owners, respectively, of the Outstanding Company
                    Voting Securities and Outstanding Company Common Stock
                    immediately prior to such statutory share exchange own,
                    directly or indirectly, immediately after the statutory
                    share exchange more than 70% of, respectively, the then
                    outstanding common stock and the voting power of the then
                    outstanding voting securities of such Parent entitled to
                    vote generally in the election of directors, and (ii) all
                    holders of any class or series of Outstanding Company Voting
                    Securities immediately prior to the statutory share exchange
                    have the right to receive substantially the same per share
                    consideration in exchange for their Outstanding Company
                    Voting Securities as all other holders of such class or
                    series or (b) cash with respect to fractional shares of
                    Outstanding Company Voting Securities or payable as a result
                    of the exercise by holders of Outstanding Company Voting
                    Securities of statutory dissenters' rights,

                                       3

<PAGE>

               (C)  sell or otherwise dispose of all or substantially all of the
                    assets of the Company (in one transaction or a series of
                    transactions), or

               (D)  liquidate or dissolve the Company,

          except that it shall not constitute a Change in Control with respect
          to any Participant if a majority of the voting stock (or the voting
          equity interest) of the surviving corporation or its parent
          corporation or of any corporation (or other entity) acquiring all or
          substantially all of the assets of the Company (in the case of a
          merger, consolidation or disposition of assets) or the Company or its
          Parent (in the case of a statutory share exchange) is, immediately
          following the merger, consolidation, statutory share exchange or
          disposition of assets, beneficially owned by the Participant or a
          group of persons, including the Participant, acting in concert.

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

          (g) "Committee" means three or more directors designated by the Board
     to administer this Plan under Section 3 hereof; provided that if no
     Committee is designated by the Board, the Board shall constitute the
     Committee.

          (h) "Company" means IntraNet Solutions, Inc., a Minnesota corporation,
     or any successor to all or substantially all of its businesses by merger,
     consolidation, purchase of assets or otherwise.

          (i) "Disability" means the disability of a Participant such that the
     Participant is considered disabled under any retirement plan of the Company
     which is qualified under Section 401 of the Code, or as otherwise
     determined by the Committee.

          (j) "Employee" means any full-time or part-time employee of the
     Company or an Affiliate. For purposes of this Plan, the term "Employee"
     shall not include persons who are officers or directors of the Company.

          (k) "Exchange Act" means the Securities Exchange Act of 1934, as
     amended.

          (l) "Fair Market Value" as of any date means, unless otherwise
     expressly provided in this Plan:

               (i) the closing sale price of a Share (A) on the National
          Association of Securities Dealers, Inc. Automated Quotation System
          National Market System, or (B) if the Shares are not traded on such
          system, on the composite tape for New York Stock Exchange ("NYSE")
          listed shares, or (C) if the Shares are not quoted on the NYSE
          composite tape, on the principal United States securities exchange
          registered under the Exchange Act on which the Shares are listed, in
          any case on the date immediately preceding that date, or, if no sale
          of Shares shall have occurred on that date, on the next preceding day
          on which a sale of Shares occurred, or

                                       4

<PAGE>

               (ii) if clause (i) is not applicable, what the Committee
          determines in good faith to be 100% of the fair market value of a
          Share on that date.

          However, if the applicable securities exchange or system has closed
     for the day at the time the event occurs that triggers a determination of
     Fair Market Value, all references in this paragraph to the "date
     immediately preceding that date" shall be deemed to be references to "that
     date." The determination of Fair Market Value shall be subject to
     adjustment as provided in Section 12(f) hereof.

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

          (n) "Other Stock-Based Award" means an Award of Stock or an Award
     based on Stock other than Options, Stock Appreciation Rights, Restricted
     Stock or Performance Shares.

          (o) "Option" means a right to purchase Stock.

          (p) "Parent" means a "parent corporation", as that term is defined in
     Section 424(e) of the Code, or any successor provision.

          (q) "Participant" means an Employee to whom an Award is made.

          (r) "Performance Period" means the period of time as specified in an
     Agreement over which Performance Shares are to be earned.

          (s) "Performance Shares" means a contingent award of a specified
     number of Performance Shares, with each Performance Share equivalent to one
     Share, a variable percentage of which may vest depending upon the extent of
     achievement of specified performance objectives during the applicable
     Performance Period.

          (t) "Plan" means this 2000 Employee Stock Incentive Plan, as amended
     and in effect from time to time.

          (u) "Restricted Stock" means Stock granted under Section 10 hereof so
     long as such Stock remains subject to one or more restrictions.

          (v) "Retirement" means termination of employment on or after age 55,
     provided the Employee has been employed by the Company and/or one or more
     Affiliates for at least ten years, or termination of employment on or after
     age 62, provided in either case that the Employee has given the Company at
     least six months' prior written notice of such termination, or as otherwise
     determined by the Committee.

          (w) "Share" means a share of Stock.

          (x) "Stock" means the common stock of the Company.

                                       5

<PAGE>

          (y) "Stock Appreciation Right" means a right, the value of which is
     determined relative to appreciation in value of Shares pursuant to an Award
     granted under Section 8 hereof.

          (z) "Subsidiary" means a "subsidiary corporation," as that term is
     defined in Section 424(f) of the Code, or any successor provision.

          (aa) "Successor" with respect to a Participant means the legal
     representative of an incompetent Participant and, if the Participant is
     deceased, the legal representative of the estate of the Participant or the
     person or persons who may, by bequest or inheritance, or under the terms of
     an Award or of forms submitted by the Participant to the Committee under
     Section 12(i) hereof, acquire the right to exercise an Option or Stock
     Appreciation Right or receive cash and/or Shares issuable in satisfaction
     of an Award in the event of a Participant's death.

          (bb) "Term" means the period during which an Option or Stock
     Appreciation Right may be exercised or the period during which the
     restrictions placed on Restricted Stock or any other Award are in effect.

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

     3. ADMINISTRATION.

          (a) AUTHORITY OF COMMITTEE. The Committee shall administer this Plan.
     The Committee shall have exclusive power to make Awards and to determine
     when and to whom Awards will be granted, and the form, amount and other
     terms and conditions of each Award, subject to the provisions of this Plan.
     The Committee may determine whether, to what extent and under what
     circumstances Awards may be settled, paid or exercised in cash, Shares or
     other Awards or other property, or canceled, forfeited or suspended. The
     Committee shall have the authority to interpret this Plan and any Award or
     Agreement made under this Plan, to establish, amend, waive and rescind any
     rules and regulations relating to the administration of this Plan, to
     determine the terms and provisions of any Agreements entered into hereunder
     (not inconsistent with this Plan), and to make all other determinations
     necessary or advisable for the administration of this Plan. The Committee
     may correct any defect, supply any omission or reconcile any inconsistency
     in this Plan or in any Award in the manner and to the extent it shall deem
     desirable. The determinations of the Committee in the administration of
     this Plan, as described herein, shall be final, binding and conclusive.

          (b) DELEGATION OF AUTHORITY. The Committee may delegate all or any
     part of its authority under this Plan to one or more persons for purposes
     of determining and administering Awards.

          (c) INDEMNIFICATION. To the full extent permitted by law, each member
     and former member of the Committee and each person to whom the Committee
     delegates or has delegated authority under this Plan shall be entitled to
     indemnification by the Company against and from any loss, liability,
     judgment, damage, cost and reasonable expense incurred by such member,
     former member or other person by reason of any action taken, failure to act
     or determination made in good faith under or with respect to this Plan.

                                       6

<PAGE>

     4. SHARES AVAILABLE; MAXIMUM PAYOUTS.

          (a) SHARES AVAILABLE. The number of Shares available for distribution
     under this Plan is 3,100,000 (subject to adjustment under Section 12(f)
     hereof).

          (b) SHARES AGAIN AVAILABLE. Any Shares subject to the terms and
     conditions of an Award under this Plan which are not used because the Award
     expires without all Shares subject to such Award having been issued or
     because the terms and conditions of the Award are not met may again be used
     for an Award under this Plan. Any Shares that are the subject of Awards
     which are subsequently forfeited to the Company pursuant to the
     restrictions applicable to such Award may again be used for an Award under
     this plan. If a Participant exercises a Stock Appreciation Right, any
     Shares covered by the Stock Appreciation Right in excess of the number of
     Shares issued (or, in the case of a settlement in cash or any other form of
     property, in excess of the number of Shares equal in value to the amount of
     such settlement, based on the Fair Market Value of such Shares on the date
     of such exercise) may again be used for an Award under this Plan. If, in
     accordance with the Plan, a Participant uses Shares to (i) pay a purchase
     or exercise price, including an Option exercise price, or (ii) satisfy tax
     withholdings, such Shares may again be used for an Award under this Plan.

          (c) UNEXERCISED AWARDS. Any unexercised or undistributed portion of
     any terminated, expired, exchanged, or forfeited Award or any Award settled
     in cash in lieu of Shares (except as provided in Section 4(b) hereof) shall
     be available for further Awards.

          (d) NO FRACTIONAL SHARES. No fractional Shares may be issued under
     this Plan; fractional Shares will be rounded to the nearest whole Share.

          (e) MAXIMUM PAYOUTS. No more than 25% of all Shares subject to this
     Plan may be granted in the aggregate pursuant to Restricted Stock (if
     vesting is based on a period of time without regard to the attainment of
     specified performance conditions) and Other Stock-Based Awards.

     5. ELIGIBILITY. Awards may be granted under this Plan to any Employee at
the discretion of the Committee.

     6. GENERAL TERMS OF AWARDS.

          (a) AWARDS. Awards under this Plan may consist of Options, Stock
     Appreciation Rights, Performance Shares, Restricted Stock and Other
     Stock-Based Awards. No incentive stock options, as that term is defined in
     Section 422 of the Code, may be granted under this Plan. Awards of
     Restricted Stock may, in the discretion of the Committee, provide the
     Participant with dividends or dividend equivalents and voting rights prior
     to vesting (whether vesting is based on a period of time, the attainment of
     specified performance conditions or otherwise).

          (b) AMOUNT OF AWARDS. Each Agreement shall set forth the number of
     Shares of Restricted Stock, Stock or Performance Shares subject to such
     Agreement, or the number of Shares to which the Option applies or with
     respect to which payment upon the exercise of the Stock Appreciation Right
     is to be determined, as the case may be, together with such other terms and
     conditions applicable to the Award (not inconsistent with this Plan) as
     determined by the Committee in its sole discretion.

                                       7

<PAGE>

          (c) TERM. Each Agreement, other than those relating solely to Awards
     of Stock without restrictions, shall set forth the Term of the Award and
     any applicable Performance Period for Performance Shares, as the case may
     be. An Agreement with a Participant may permit acceleration of vesting
     requirements and of the expiration of the applicable Term upon such terms
     and conditions as shall be set forth in the Agreement, which may, but need
     not, include (without limitation) acceleration resulting from the
     occurrence of a Change in Control, a Fundamental Change, or in the event of
     the Participant's death, Disability or Retirement. Acceleration of the
     Performance Period of Performance Shares shall be subject to Section 9(b)
     hereof. Notwithstanding the provisions of any Agreement, the Committee may,
     in its discretion, declare at any time that any Award granted under this
     Plan shall be immediately exercisable.

          (d) AGREEMENTS. Each Award under this Plan shall be evidenced by an
     Agreement setting forth the terms and conditions, as determined by the
     Committee, which shall apply to such Award, in addition to the terms and
     conditions specified in this Plan.

          (e) TRANSFERABILITY. During the lifetime of a Participant to whom an
     Award is granted, only such Participant (or such Participant's legal
     representative or, if so provided in the applicable Agreement in the case
     of an Option, a permitted transferee as hereafter described) may exercise
     an Option or Stock Appreciation Right or receive payment with respect to
     Performance Shares or any other Award. No Award of Restricted Stock (prior
     to the expiration of the restrictions), Options, Stock Appreciation Rights,
     Performance Shares or other Award (other than an award of Stock without
     restrictions) may be sold, assigned, transferred, exchanged, or otherwise
     encumbered, and any attempt to do so shall be of no effect. Notwithstanding
     the immediately preceding sentence, (i) an Agreement may provide that an
     Award shall be transferable to a Successor in the event of a Participant's
     death and (ii) an Agreement may provide that an Option shall be
     transferable to any member of a Participant's "immediate family" (as such
     term is defined in Rule 16a-1(e) promulgated under the Exchange Act or any
     successor rule or regulation) or to one or more trusts whose beneficiaries
     are members of such Participant's "immediate family" or partnerships in
     which such family members are the only partners; provided, however, that
     the Participant receives no consideration for the transfer. Any Option held
     by a permitted transferee shall continue to be subject to the same terms
     and conditions that were applicable to such Option immediately prior to its
     transfer and may be exercised by such permitted transferee as and to the
     extent that such Option has become exercisable and has not terminated in
     accordance with the provisions of this Plan and the applicable Agreement.
     For purposes of any provision of this Plan relating to notice to a
     Participant or to vesting or termination of a Option upon the termination
     of employment of a Participant, the references to "Participant" shall mean
     the original grantee of the Option and not any permitted transferee.

          (f) TERMINATION OF EMPLOYMENT. No Option or Stock Appreciation Right
     may be exercised by a Participant, all Restricted Stock held by a
     Participant or any other Award then subject to restrictions shall be
     forfeited, and no payment with respect to Performance Shares for which the
     applicable Performance Period has not been completed shall be made, if the
     Participant's employment or other relationship with the Company and its
     Affiliates shall be voluntarily terminated or

                                       8

<PAGE>

     involuntarily terminated with or without cause before the expiration of the
     Term of the Option, Stock Appreciation Right, Restricted Stock or other
     Award, or the completion of the Performance Period, as the case may be,
     except as, and to the extent, provided in the Agreement applicable to that
     Award. An Award may be exercised by, or paid to, a transferee or the
     Successor of a Participant following the death of the Participant to the
     extent, and during the period of time, if any, provided in the applicable
     Agreement.

          (g) RIGHTS AS SHAREHOLDER. A Participant shall have no rights as a
     shareholder with respect to any securities covered by an Award until the
     date the Participant becomes the holder of record.

     7. STOCK OPTIONS. The purchase price of each Share subject to an Option
shall be determined by the Committee and set forth in the Agreement, but shall
not be less than 100% of the Fair Market Value of a Share as of the date the
Option is granted. The purchase price of the Shares with respect to which an
Option is exercised shall be payable in full at the time of exercise, provided
that, to the extent permitted by law, Participants may simultaneously exercise
Options and sell the Shares thereby acquired pursuant to a brokerage or similar
relationship and use the proceeds from such sale to pay the purchase price of
such Shares. The purchase price may be paid in cash or, if the Committee so
permits, through a reduction of the number of Shares delivered to the
Participant upon exercise of the Option or delivery or tender to the Company of
Shares held by such Participant (in each case, such Shares having a Fair Market
Value as of the date the Option is exercised equal to the purchase price of the
Shares being purchased pursuant to the Option), or a combination thereof, unless
otherwise provided in the Agreement. If the Committee so determines, the
Agreement relating to any Option may provide for the issuance of "reload"
Options pursuant to which, subject to the terms and conditions established by
the Committee and any applicable requirements of any applicable law, the
Participant will, either automatically or subject to subsequent Committee
approval, be granted a new Option when the payment of the exercise price of the
original Option, or the payment of tax withholdings pursuant to Section 12(d)
hereof, is made through the delivery or tender to the Company of Shares held by
such Participant, such new "reload" Option (i) being an Option to purchase the
number of Shares provided as consideration for the exercise price and in payment
of taxes in connection with the exercise of the original Option, and (ii) having
a per Share exercise price equal to the Fair Market Value as of the date of
exercise of the original Option. Each Option shall be exercisable in whole or in
part on the terms provided in the Agreement. In no event shall any Option be
exercisable at any time after its Term. When an Option is no longer exercisable,
it shall be deemed to have lapsed or terminated. No Participant may receive any
combination of Options and Stock Appreciation Rights relating to more than
500,000 Shares in the aggregate pursuant to Awards in any year under this Plan.

     8. STOCK APPRECIATION RIGHTS. An Award of a Stock Appreciation Right shall
entitle the Participant, subject to terms and conditions determined by the
Committee, to receive upon exercise of the Stock Appreciation Right all or a
portion of the excess of (i) the Fair Market Value of a specified number of
Shares as of the date of exercise of the Stock Appreciation Right over (ii) a
specified price which shall not be less than 100% of the Fair Market Value of
such Shares as of the date of grant of the Stock Appreciation Right. A Stock
Appreciation Right may be granted in connection with a previously or
contemporaneously granted Option, or independent of any Option. If issued in
connection with an Option, the Committee may impose a condition that exercise of
a Stock Appreciation Right cancels the Option with which it is connected and
exercise of the connected Option cancels the Stock Appreciation Right. Each
Stock Appreciation Right may be exercisable in whole or in part on the terms
provided in the Agreement. No Stock Appreciation Right shall be exercisable at
any time after its Term. When a Stock Appreciation Right is no longer

                                       9

<PAGE>

exercisable, it shall be deemed to have lapsed or terminated. Except as
otherwise provided in the applicable Agreement, upon exercise of a Stock
Appreciation Right, payment to the Participant (or to his or her Successor)
shall be made in the form of cash, Stock or a combination of cash and Stock as
promptly as practicable after such exercise. The Agreement may provide for a
limitation upon the amount or percentage of the total appreciation on which
payment (whether in cash and/or Stock) may be made in the event of the exercise
of a Stock Appreciation Right. As specified in Section 7 hereof, no Participant
may receive any combination of Options and Stock Appreciation Rights relating to
more than 500,000 Shares in the aggregate pursuant to Awards in any year under
this Plan.

     9. PERFORMANCE SHARES.

          (a) INITIAL AWARD. An Award of Performance Shares shall entitle a
     Participant (or a Successor) to future payments based upon the achievement
     of performance targets established in writing by the Committee. Payment
     shall be made in Stock, or a combination of cash and Stock, as determined
     by the Committee. With respect to those Participants who are "covered
     employees" within the meaning of Section 162(m) of the Code and the
     regulations thereunder, such performance targets shall consist of one or
     any combination of two or more of gross revenues, license revenues,
     earnings or earnings per share before income tax (profit before taxes), net
     earnings or net earnings per share (profit after tax), operating income,
     total shareholder return, return on equity, pre-tax and pre-interest
     expense return on average invested capital, which may be expressed on a
     current value basis, or sales growth, and any such targets may relate to
     one or any combination of two or more of corporate, group, unit, division,
     Affiliate or individual performance. The Agreement may establish that a
     portion of the maximum amount of a Participant's Award will be paid for
     performance which exceeds the minimum target but falls below the maximum
     target applicable to such Award. The Agreement shall also provide for the
     timing of such payment. Following the conclusion or acceleration of each
     Performance Period, the Committee shall determine the extent to which (i)
     performance targets have been attained, (ii) any other terms and conditions
     with respect to an Award relating to such Performance Period have been
     satisfied, and (iii) payment is due with respect to a Performance Share
     Award. No Participant may receive Performance Shares relating to more than
     500,000 Shares pursuant to Awards in any year under this Plan.

          (b) ACCELERATION AND ADJUSTMENT. The Agreement may permit an
     acceleration of the Performance Period and an adjustment of performance
     targets and payments with respect to some or all of the Performance Shares
     awarded to a Participant, upon such terms and conditions as shall be set
     forth in the Agreement, upon the occurrence of certain events, which may,
     but need not, include without limitation a Change in Control, a Fundamental
     Change, the Participant's death, Disability or Retirement, a change in
     accounting practices of the Company or its Affiliates, or, with respect to
     payments in Stock for Performance Share Awards, a reclassification, stock
     dividend, stock split or stock combination as provided in Section 12(f)
     hereof.

          (c) VALUATION. Each Performance Share earned after conclusion of a
     Performance Period shall have a value equal to the Fair Market Value of a
     Share on the last day of such Performance Period.

     10. RESTRICTED STOCK. Subject to Section 4(e), Restricted Stock may be
granted in the form of Shares registered in the name of the Participant but held
by the Company until the end of the Term of the Award. Any employment

                                      10

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conditions, performance conditions and the Term of the Award shall be
established by the Committee in its discretion and included in the applicable
Agreement. The Committee may provide in the applicable Agreement for the lapse
or waiver of any such restriction or condition based on such factors or criteria
as the Committee, in its sole discretion, may determine. No Award of Restricted
Stock may vest earlier than one year from the date of grant, except as provided
in the applicable Agreement.

     11. OTHER STOCK-BASED AWARDS. Subject to Section 4(e), the Committee may
from time to time grant Awards of Stock, and other Awards under this Plan
(collectively herein defined as "Other Stock-Based Awards"), including without
limitation those Awards pursuant to which Shares may be acquired in the future,
such as Awards denominated in Stock units, securities convertible into Stock and
phantom securities. The Committee, in its sole discretion, shall determine the
terms and conditions of such Awards provided that such Awards shall not be
inconsistent with the terms and purposes of this Plan. The Committee may, in its
sole discretion, direct the Company to issue Shares subject to restrictive
legends and/or stop transfer instructions which are consistent with the terms
and conditions of the Award to which such Shares relate.

     12. GENERAL PROVISIONS.

          (a) EFFECTIVE DATE OF THIS PLAN. This Plan shall become effective as
     of May 31, 2000.

          (b) DURATION OF THIS PLAN. This Plan shall remain in effect until all
     Stock subject to it shall be distributed or all Awards have expired or
     lapsed, whichever is latest to occur, or this Plan is terminated pursuant
     to Section 12(e) hereof. The date and time of approval by the Committee of
     the granting of an Award shall be considered the date and time at which
     such Award is made or granted, notwithstanding the date of any Agreement
     with respect to such Award; provided, however, that the Committee may grant
     Awards to be effective and deemed to be granted on the occurrence of
     certain specified contingencies.

          (c) RIGHT TO TERMINATE EMPLOYMENT. Nothing in this Plan or in any
     Agreement shall confer upon any Participant who is an Employee the right to
     continue in the employment of the Company or any Affiliate or affect any
     right which the Company or any Affiliate may have to terminate or modify
     the employment of the Participant with or without cause.

          (d) TAX WITHHOLDING. The Company may withhold from any payment of cash
     or Stock to a Participant or other person under this Plan an amount
     sufficient to cover any required withholding taxes, including the
     Participant's social security and Medicare taxes (FICA) and federal, state
     and local income tax with respect to income arising from payment of the
     Award. The Company shall have the right to require the payment of any such
     taxes before issuing any Stock pursuant to the Award. In lieu of all or any
     part of a cash payment from a person receiving Stock under this Plan, the
     Committee may, in the applicable Agreement or otherwise, permit a person to
     cover all or any part of the required withholdings, and to cover any
     additional withholdings up to the amount needed to cover the person's full
     FICA and federal, state and local income tax with respect to income arising
     from payment of the Award, through a reduction of the number of Shares
     delivered to such person or a delivery or tender to the Company of Shares
     held by such person, in each case valued in the same manner as used in
     computing the withholding taxes under applicable laws.

                                       11

<PAGE>

          (e) AMENDMENT, MODIFICATION AND TERMINATION OF THIS PLAN. Except as
     provided in this Section 12(e), the Board may at any time amend, modify,
     terminate or suspend this Plan. Except as provided in this Section 12(e),
     the Committee may at any time alter or amend any or all Agreements under
     this Plan to the extent permitted by law. Amendments are subject to
     approval of the shareholders of the Company only if such approval is
     necessary to maintain this Plan in compliance with the requirements of any
     applicable law or regulation. No termination, suspension or modification of
     this Plan may materially and adversely affect any right acquired by any
     Participant (or a Participant's legal representative) or any Successor or
     permitted transferee under an Award granted before the date of termination,
     suspension or modification, unless otherwise provided in an Agreement or
     otherwise or required as a matter of law. It is conclusively presumed that
     any adjustment for changes in capitalization provided for in Section 9(b)
     or 12(f) hereof does not adversely affect any right of a Participant or
     other person under an Award.

          (f) ADJUSTMENT FOR CHANGES IN CAPITALIZATION. Appropriate adjustments
     in the aggregate number and type of securities available for Awards under
     this Plan, in the limitations on the number and type of securities that may
     be issued to an individual Participant, in the number and type of
     securities and amount of cash subject to Awards then outstanding, in the
     Option exercise price as to any outstanding Options and, subject to Section
     9(b) hereof, in outstanding Performance Shares and payments with respect to
     outstanding Performance Shares may be made by the Committee in its sole
     discretion to give effect to adjustments made in the number or type of
     Shares through a Fundamental Change (subject to Section 12(g) hereof),
     recapitalization, reclassification, stock dividend, stock split, stock
     combination, spin-off or other relevant change, provided that fractional
     Shares shall be rounded to the nearest whole Share.

          (g) FUNDAMENTAL CHANGE. In the event of a proposed Fundamental Change:

               (a) involving a merger, consolidation or statutory share
          exchange, unless appropriate provision shall be made (which the
          Committee may, but shall not be obligated to, make) for the protection
          of the outstanding Options and Stock Appreciation Rights by the
          substitution of options, stock appreciation rights and appropriate
          voting common stock of the corporation surviving any such merger or
          consolidation or, if appropriate, the Parent of such surviving
          corporation, to be issuable upon the exercise of Options or used to
          calculate payments upon the exercise of Stock Appreciation Rights in
          lieu of Options, Stock Appreciation Rights and capital stock of the
          Company, or

               (b) involving the dissolution or liquidation of the Company,

     the Committee may, but shall not be obligated to, declare, at least twenty
     days prior to the occurrence of the Fundamental Change, and provide written
     notice to each holder of an Option or Stock Appreciation Right of the
     declaration, that each outstanding Option and Stock Appreciation Right,
     whether or not then exercisable, shall be canceled at the time of, or
     immediately prior to the occurrence of, the Fundamental Change in exchange
     for payment to each holder of an Option or Stock Appreciation Right, within
     20 days after the Fundamental Change, of cash (or with respect to an
     Option, if the Committee so elects in lieu of solely cash, of such form(s)
     of consideration, including cash and/or property, singly or in such
     combination as the Committee shall determine, that such holder of an Option
     would have received as a result of the Fundamental Change if such holder
     had exercised such holder's Option immediately prior to the Fundamental
     Change) equal to (i) for each Share covered by the canceled Option, the

                                       12

<PAGE>

     amount, if any, by which the Fair Market Value (as defined in this Section
     12(g)) per Share exceeds the exercise price per Share covered by such
     Option or (ii) for each Stock Appreciation Right, the price determined
     pursuant to Section 8 hereof, except that Fair Market Value of the Shares
     as of the date of exercise of the Stock Appreciation Right, as used in
     clause (i) of Section 8, shall be deemed to mean Fair Market Value for each
     Share with respect to which the Stock Appreciation Right is calculated
     determined in the manner hereinafter referred to in this Section 12(g). At
     the time of the declaration provided for in the immediately preceding
     sentence, each Stock Appreciation Right and each Option shall immediately
     become exercisable in full and each person holding an Option or a Stock
     Appreciation Right shall have the right, during the period preceding the
     time of cancellation of the Option or Stock Appreciation Right, to exercise
     the Option as to all or any part of the Shares covered thereby or the Stock
     Appreciation Right in whole or in part, as the case may be. In the event of
     a declaration pursuant to this Section 12(g), each outstanding Option and
     Stock Appreciation Right that shall not have been exercised prior to the
     Fundamental Change shall be canceled at the time of, or immediately prior
     to, the Fundamental Change, as provided in the declaration. Notwithstanding
     the foregoing, no person holding an Option or Stock Appreciation Right
     shall be entitled to the payment provided for in this Section 12(g) if such
     Option or Stock Appreciation Right shall have terminated, expired or been
     cancelled. For purposes of this Section 12(g) only, "Fair Market Value" per
     Share means the cash plus the fair market value, as determined in good
     faith by the Committee, of the non-cash consideration to be received per
     Share by the shareholders of the Company upon the occurrence of the
     Fundamental Change, notwithstanding anything to the contrary provided in
     this Plan.

          (h) OTHER BENEFIT AND COMPENSATION PROGRAMS. Payments and other
     benefits received by a Participant under an Award shall not be deemed a
     part of a Participant's regular, recurring compensation for purposes of any
     termination, indemnity or severance pay laws and shall not be included in,
     nor have any effect on, the determination of benefits under any other
     employee benefit plan, contract or similar arrangement provided by the
     Company or an Affiliate, unless expressly so provided by such other plan,
     contract or arrangement or the Committee determines that an Award or
     portion of an Award should be included to reflect competitive compensation
     practices or to recognize that an Award has been made in lieu of a portion
     of competitive cash compensation.

          (i) BENEFICIARY UPON PARTICIPANT'S DEATH. To the extent that the
     transfer of a Participant's Award at death is permitted by this Plan or
     under an Agreement, (i) a Participant's Award shall be transferable to the
     beneficiary, if any, designated on forms prescribed by and filed with the
     Committee and (ii) upon the death of the Participant, such beneficiary
     shall succeed to the rights of the Participant to the extent permitted by
     law and this Plan. If no such designation of a beneficiary has been made,
     the Participant's legal representative shall succeed to the Awards, which
     shall be transferable by will or pursuant to laws of descent and
     distribution to the extent permitted by this Plan or under an Agreement.

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

                                       13

<PAGE>

          (k) LIMITS OF LIABILITY.

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

               (ii) Except as may be required by law, neither the Company nor
          any member or former member of the Board or of the Committee, nor any
          other person participating (including participation pursuant to a
          delegation of authority under Section 3(b) hereof) in any
          determination of any question under this Plan, or in the
          interpretation, administration or application of this Plan, shall have
          any liability to any party for any action taken, or not taken, in good
          faith under this Plan.

          (l) COMPLIANCE WITH APPLICABLE LEGAL REQUIREMENTS. No certificate for
     Shares distributable pursuant to this Plan shall be issued and delivered
     unless the issuance of such certificate complies with all applicable legal
     requirements including, without limitation, compliance with the provisions
     of applicable state securities laws, the Securities Act of 1933, as amended
     and in effect from time to time or any successor statute, the Exchange Act
     and the requirements of the exchanges, if any, on which the Company's
     Shares may, at the time, be listed.

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

     13. GOVERNING LAW. To the extent that federal laws do not otherwise
control, this Plan and all determinations made and actions taken pursuant to
this Plan shall be governed by the laws of Minnesota and construed accordingly.

     14. SEVERABILITY. In the event any provision of this Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of this Plan, and this Plan shall be construed and enforced
as if the illegal or invalid provision had not been included.

     15. PRIOR PLANS. Notwithstanding the adoption of this Plan by the Board,
the Company's 1994-1997 Stock Option Plan, the 1997 Director Stock Option Plan,
the 2000 Stock Incentive Plan and the 1999 Employee Stock Option and
Compensation Plan, as the same may have been amended from time to time (the
"Prior Plans"), shall remain in effect and the Committee may continue to make
grants of awards pursuant to and subject to the limitations of the Prior Plans.
All grants and awards heretofore or hereafter made under the Prior Plans shall
be governed by the terms of the Prior Plans.

                                       14

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