Document:

Exhibit
4-e

 

ARTICLES OF AMENDMENT

OF

RESTATED ARTICLES OF INCORPORATION

OF

ADC TELECOMMUNICATIONS, INC.

(a Minnesota Corporation)

 

The undersigned, the President and Secretary,
respectively, of ADC Telecommunications, Inc., a corporation organized under the
laws of the State of Minnesota (the “Company”), hereby certify that:

 

1.                                       The
Board of Directors of the Company adopted the following resolution at a duly
called and held meeting of Directors:

 

RESOLVED, that the first sentence of Article 3 of the
Company’s Restated Articles of Incorporation is hereby amended to read in its
entirety as follows:

 

The aggregate number of shares which this corporation
shall have authority to issue is 2,410,000,000 shares, divided into
2,400,000,000 shares of Common Stock, par value $.20 per share, and 10,000,000
shares of Preferred Stock, no par value.

 

2.                                       The
Shareholders of the Company approved the foregoing amendment at a duly called
and held meeting of shareholders.

 

3.                                       The
foregoing amendment was adopted pursuant to the applicable provisions of
Chapter 302A of the Minnesota Statues, more specifically, Section 302A.135 of
the Minnesota Statues.

 

IN WITNESS WHEREOF, these Articles of Amendment have
been executed by the President and the Secretary of ADC Telecommunications, Inc.
as of this 9th day of March, 2004.

 

	
   

  	
  ADC TELECOMMUNICATIONS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert E. Switz

  	
   

  
	
   

  	
   

  	
  Robert E. Switz

  	
  President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  AND

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey D. Pflaum

  	
   

  
	
   

  	
   

  	
  Jeffrey D. Pflaum

  	
  SecretaryExhibit 10-a

 

ADC TELECOMMUNICATIONS, INC.

GLOBAL STOCK INCENTIVE PLAN

 

(as amended and restated through March 2, 2004)

 

Section 1.  Purpose.

 

The purposes of the ADC Telecommunications, Inc.
Global Stock Incentive Plan (the “Plan”) are to:  (i) aid in maintaining and developing key employees capable of
assuring the future success of ADC Telecommunications, Inc. (the “Company”),
and to offer such personnel incentives to put forth maximum efforts for the
success of the Company’s business; (ii) to enhance the Company’s ability to
attract and retain the services of experienced and knowledgeable outside
directors; and (iii) to afford such key employees and outside directors an
opportunity to acquire a proprietary interest in the Company, thereby aligning
their interests with the interests of the Company’s shareholders.

 

Section 2. 
Definitions.

 

As used in the Plan, the following terms shall have
the meanings set forth below:

 

(a)           “Affiliate”
shall mean (i) any entity that, directly or indirectly through one or more
intermediaries, is controlled by the Company and (ii) any entity in which the
Company has a significant equity interest, as determined by the Committee.

 

(b)           “Award”
shall mean any Option, Stock Appreciation Right, Restricted Stock, Restricted
Stock Unit, Dividend Equivalent or Performance Award granted under the Plan.

 

(c)           “Award
Agreement” shall mean any written agreement, contract or other instrument or
document evidencing any Award granted under the Plan.

 

(d)           “Code”
shall mean the Internal Revenue Code of 1986, as amended from time to time, and
any regulations promulgated thereunder.

 

(e)           “Committee”
shall mean a committee of the Board of Directors of the Company designated by
such Board to administer the Plan and composed of not less than three directors,
each of whom is a “Non-Employee Director” within the meaning of Rule 16b-3.

 

(f)            “Dividend
Equivalent” shall mean any right granted under Section 6(e) of the Plan.

 

(g)           “Fair
Market Value” shall mean, with respect to any property (including, without
limitation, any Shares or other securities), the fair market value of such
property determined by such methods or procedures as shall be established from
time to time by the Committee. 
Notwithstanding the foregoing, for purposes of the Plan, the Fair Market
Value of Shares on a given date shall be (i) the last sale price of the Shares
as reported on the Nasdaq National Market System on such date, if the Shares
are then quoted on the Nasdaq National Market System or (ii) the closing price
of the Shares on such date on a national securities exchange, if the shares are
then being traded on a national securities exchange.

 

 

(h)           “Incentive
Stock Option” shall mean an option granted under Section 6(a) of the Plan that
is intended to meet the requirements of Section 422 of the Code or any
successor provision thereto.

 

(i)            “Key
Employee” shall mean any employee of the Company or any Affiliate who the
Committee determines to be a key employee.

 

(j)            “Non-Qualified
Stock Option” shall mean an option granted under Section 6(a) of the Plan that
is not intended to be an Incentive Stock Option.

 

(k)           “Option”
shall mean an Incentive Stock Option or a Non-Qualified Stock Option.

 

(l)            “Outside
Director” shall mean each member of the Board of Directors of the Company that is
not also an employee of the Company or any Affiliate of the Company.

 

(m)          “Participant”
shall mean either a Key Employee or an Outside Director designated to be
granted an Award under the Plan.

 

(n)           “Performance
Award” shall mean any right granted under Section 6(d) of the Plan.

 

(o)           “Person”
shall mean any individual, corporation, partnership, association or trust.

 

(p)           “Restricted
Stock” shall mean any Share granted under Section 6(c) of the Plan.

 

(q)           “Restricted
Stock Unit” shall mean any unit granted under Section 6(c) of the Plan
evidencing the right to receive a Share at some future date.

 

(r)            “Rule
16b-3” shall mean Rule 16b-3 promulgated by the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended, or any successor
rule or regulation thereto.

 

(s)           “Shares”
shall mean shares of Common Stock, $.20 par value, of the Company or such other
securities or property as may become subject to Awards pursuant to an
adjustment made under Section 4(c) of the Plan.

 

(t)            “Stock
Appreciation Right” shall mean any right granted under Section 6(b) of the
Plan.

 

Section 3. 
Administration.

 

(a)           Power and
Authority of the Committee. 
The Plan shall be administered by the Committee.  Subject to the terms of the Plan and
applicable law, the Committee shall have full power and authority to: (i)
designate Participants; (ii) determine the type or types of Awards to be
granted to each Participant under the Plan; (iii) determine the number of
Shares to be covered by (or with respect to which payments are to be calculated
in connection with) Awards; (iv) determine the terms and conditions of any
Award or Award Agreement; (v) amend the terms and conditions of any Award or
Award Agreement and accelerate the exercisability of Options or the lapse of
restrictions relating to Restricted Stock or Restricted Stock Units; (vi)
determine whether, to what extent and under what circumstances Awards may be
exercised in cash, Shares, other securities, other Awards or

 

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other property, or
canceled, forfeited or suspended; (vii) determine whether, to what extent and
under what circumstances cash or Shares payable with respect to an Award under
the Plan shall be deferred either automatically or at the election of the
holder thereof or the Committee; (viii) interpret and administer the Plan and
any instrument or agreement relating to, or Award made under, the Plan; (ix)
establish, amend, suspend or waive such rules and regulations and appoint such
agents as it shall deem appropriate for the proper administration of the Plan;
and (x) make any other determination and take any other action that the
Committee deems necessary or desirable for the administration of the Plan.  Unless otherwise expressly provided in the
Plan, all designations, determinations, interpretations and other decisions
under or with respect to the Plan or any Award shall be within the sole
discretion of the Committee, may be made at any time and shall be final,
conclusive and binding upon any Participant, any holder or beneficiary of any
Award and any employee of the Company or any Affiliate.

 

(b)           Meetings of
the Committee.  The Committee
shall select one of its members as its chairman and shall hold its meetings at
such times and places as the Committee may determine.  A majority of the Committee’s members shall constitute a
quorum.  All determinations of the
Committee shall be made by not less than a majority of its members.  Any decision or determination reduced to
writing and signed by all of the members of the Committee shall be fully
effective as if it had been made by a majority vote at a meeting duly called
and held.  The Committee may appoint a
secretary and may make such rules and regulations for the conduct of its
business as it shall deem advisable.

 

Section 4.  Shares
Available for Awards.

 

(a)           Shares
Available.  Subject to
adjustment as provided in Section 4(c), as of November 1, 2001, the number of
Shares available for the issuance of shares under outstanding Awards and the
granting of future Awards under the Plan shall be 149,308,431.  If any Shares covered by an Award or to
which an Award relates are not purchased or are forfeited, or if an Award
otherwise terminates without delivery of any Shares or cash payments to be
received thereunder, then the number of Shares counted against the aggregate
number of Shares available under the Plan with respect to such Award, to the
extent of any such forfeiture or termination, shall again be available for
granting Awards under the Plan.  In addition,
any Shares that are used by a Participant as full or partial payment to the
Company of the purchase price of Shares acquired upon exercise of an Option or
to satisfy applicable tax withholding requirements (including social insurance
requirements) upon the exercise or vesting of an Award shall again be available
for granting Awards.

 

(b)           Accounting
for Awards.  For purposes of
this Section 4,

 

(i)            if an Award entitles the holder
thereof to receive or purchase Shares, the number of Shares covered by such
Award or to which such Award relates shall be counted on the date of grant of
such Award against the aggregate number of Shares available for granting Awards
under the Plan; and

 

(ii)           if an Award entitles the holder to
receive cash payments but the amount of such payments are denominated in or
based on a number of Shares, such number of Shares shall be counted on the date
of grant of such Award against the aggregate number of Shares available for
granting Awards under the Plan;

 

provided, however, that Awards that
operate in tandem with (whether granted simultaneously with or at a different
time from), or that are substituted for, other Awards

 

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may be counted or not
counted under procedures adopted by the Committee in order to avoid double
counting.

 

(c)           Adjustments.  In the event that the Committee shall
determine that any dividend or other distribution (whether in the form of cash,
Shares, other securities or other property), recapitalization, stock split,
reverse stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase or exchange of Shares or other securities of the
Company, issuance of warrants or other rights to purchase Shares or other
securities of the Company or other similar corporate transaction or event
affects the Shares such that an adjustment is determined by the Committee to be
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan, then the
Committee shall, in such manner as it may deem equitable, adjust any or all of
(i) the number and type of Shares (or securities or other property) which
thereafter may be made the subject of Awards, (ii) the number and type of Shares
(or securities or other property) subject to outstanding Awards and (iii) the
exercise price with respect to any Award; provided, however, that the number of
Shares covered by any Award or to which such Award relates shall always be a
whole number.

 

(d)           Incentive
Stock Options.  The aggregate
number of Shares available as of November 1, 2001 for outstanding Incentive
Stock Options and for granting Incentive Stock Options under the Plan shall not
exceed 149,308,431, subject to adjustment as provided in the Plan and Section
422 or 424 of the Code.

 

Section 5. 
Eligibility.

 

Any Key Employee, including any Key Employee who is an
officer or director of the Company or any Affiliate, and any Outside Director
shall be eligible to be designated a Participant; provided, however, that an
Incentive Stock Option shall not be granted to: (1) an Outside Director;
or (2) an employee of an Affiliate unless such Affiliate is also a “subsidiary
corporation” of the Company within the meaning of Section 424(f) of the Code.

 

Section 6.  Awards.

 

(a)           Options.  The Committee is hereby authorized to grant
Options to Participants with the following terms and conditions and with such
additional terms and conditions not inconsistent with the provisions of the
Plan as the Committee shall determine:

 

(i)            Exercise Price.  The purchase price per Share purchasable under an Option shall be
determined by the Committee; provided, however, that such purchase
price shall not be less than the average of the high and low daily trading prices (rounded
down to the nearest whole cent) of a Share on the date of grant as
reported on the Nasdaq National Market System, if the Shares are then quoted on
the Nasdaq National Market System or (ii) the average of the high and low daily trading prices (rounded
down to the nearest whole cent) of a Share on a national securities
exchange, if the shares are then being traded an a national securities exchange on the date of grant of such Option.

 

(ii)           Option Term.  The term of each Option shall be fixed by the Committee, but such
term shall not exceed 10 years from the date on which such Option is granted.

 

(iii)          Time and Method of Exercise.  The Committee shall determine the time or
times at which an Option may be exercised in whole or in part and the method or
methods by which, and the form or forms (including, without limitation, cash,

 

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Shares, other securities,
other Awards or other property, or any combination thereof, having a Fair
Market Value on the exercise date equal to the relevant exercise price) in
which payment of the exercise price with respect thereto may be made or deemed
to have been made.

 

(b)           Stock
Appreciation Rights.  The
Committee is hereby authorized to grant Stock Appreciation Rights to Participants
subject to the terms of the Plan and any applicable Award Agreement.  A Stock Appreciation Right granted under the
Plan shall confer on the holder thereof a right to receive upon exercise
thereof the excess of (i) the Fair Market Value of one Share on the date of
exercise (or, if the Committee shall so determine, at any time during a
specified period before or after the date of exercise) over (ii) the grant
price of the Stock Appreciation Right as specified by the Committee, which
price shall not be less than the exercise price for an Option as described in
Section 6(a)(i) hereof on the date of grant of the Stock Appreciation
Right.  Subject to the terms of the Plan
and any applicable Award Agreement, the grant price, term, methods of exercise,
dates of exercise, methods of settlement and any other terms and conditions of
any Stock Appreciation Right shall be as determined by the Committee.  The Committee may impose such conditions or
restrictions on the exercise of any Stock Appreciation Right as it may deem
appropriate.

 

(c)           Restricted
Stock and Restricted Stock Units. 
The Committee is hereby authorized to grant Awards of Restricted Stock and Restricted Stock Units to
Participants with the following terms and conditions and with such additional
terms and conditions not inconsistent with the provisions of the Plan as the
Committee shall determine:

 

(i)            Restrictions.  Shares of Restricted Stock and
Restricted Stock Units shall be subject to such restrictions as the
Committee may impose (including, without limitation, any limitation on the
right to vote a Share of Restricted Stock or the right to receive any dividend
or other right or property with respect thereto), which restrictions may lapse
separately or in combination at such time or times, in such installments or
otherwise as the Committee may deem appropriate.

 

(ii)           Stock Certificates.  Any Restricted Stock granted under the Plan
shall be evidenced by issuance of a stock certificate or certificates.  Such certificate or certificates shall be
registered in the name of the Participant and shall bear an appropriate legend
referring to the terms, conditions and restrictions applicable to such
Restricted Stock.

 

(iii)          Forfeiture; Delivery of Shares.  Except as otherwise determined by the
Committee, upon termination of employment or upon resignation or removal as an
Outside Director (as determined under criteria established by the Committee)
during the applicable restriction period, all Shares of Restricted Stock and
all Restricted Stock Units at
such time subject to restriction shall be forfeited and reacquired by the
Company; provided,
however, that the Committee may, when it finds that a waiver would
be in the best interest of the Company, waive in whole or in part any or all
remaining restrictions with respect to Shares of Restricted Stock or Restricted
Stock Units.  Shares representing
Restricted Stock that are no longer subject to restrictions shall be delivered
to the holder thereof promptly after the applicable restrictions lapse or are
waived.  In the case of Restricted Stock
Units, no Shares shall be issued at the time such Awards are granted.  Upon the lapse or waiver of restrictions and
the restricted period relating to Restricted Stock Units evidencing the right
to receive Shares, such Shares shall be issued and delivered to the holders of
the Restricted Stock Units.

 

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(iv)          Limit on Restricted Stock and Restricted Stock Units
Awards.  Grants of Restricted
Stock and Restricted Stock Units shall be subject to the limitations set forth
in Section 6(f) hereof.

 

(d)           Performance
Awards.  The Committee is
hereby authorized to grant Performance Awards to Participants subject to the
terms of the Plan and any applicable Award Agreement.  A Performance Award granted under the Plan (i) shall be granted
and payable in Shares (including, without limitation, Restricted Stock) and
(ii) shall confer on the holder thereof the right to receive Shares upon the
achievement of such performance goals during such performance periods as the
Committee shall establish.  Subject to
the terms of the Plan and any applicable Award Agreement, the performance goals
to be achieved during any performance period, the length of any performance
period, the amount of any Performance Award granted and the number of shares to
be issued pursuant to any Performance Award shall be determined by the
Committee.  Grants of Performance Awards
shall be subject to the limitations set forth in Section 6(f) hereof.

 

(e)           Dividend Equivalents.  The Committee is hereby authorized to grant
to Participants Dividend Equivalents under which such Participants who hold
Restricted Stock Units or Performance Awards shall be entitled to receive
payments (in cash or Shares, as determined in the discretion of the Committee)
equivalent to the amount of cash dividends paid by the Company to holders of
Shares.  Subject to the terms of the
Plan and any applicable Award Agreement, such Dividend Equivalents may have
such terms and conditions as the Committee shall determine.

 

(f)            Limit on
Restricted Stock, Restricted Stock Units and Performance Awards.  The maximum number of Shares under the Plan
available for grants of Restricted Stock, Restricted Stock Units and
Performance Awards made from and after March 2, 2004, in the aggregate, shall
be 30,000,000 Shares.

 

(g)           General.

 

(i)            No Cash Consideration for Awards.  Except as otherwise determined by the
Committee, Awards shall be granted for no cash consideration or for such
minimal cash consideration as may be required by applicable law.

 

(ii)           Awards May Be Granted Separately or Together.  Awards may, in the discretion of the
Committee, be granted either alone or in addition to, in tandem with or in
substitution for any other Award or any award granted under any plan of the
Company or any Affiliate other than the Plan. 
Awards granted in addition to or in tandem with other Awards or in
addition to or in tandem with awards granted under any such other plan of the
Company or any Affiliate may be granted either at the same time as or at a
different time from the grant of such other Awards or awards.

 

(iii)          Forms of Payment Under Awards.  Subject to the terms of the Plan and of any
applicable Award Agreement, payments to be made by the Company or an Affiliate
upon the grant, exercise or payment of an Award may be made in Shares, cash or
a combination thereof as the Committee shall determine, and may be made in a
single payment, in installments or on a deferred basis, in each case in
accordance with rules and procedures established by the Committee.  Such rules and procedures may include,
without limitation, provisions for the payment or crediting of reasonable
interest on installments or deferred payments.

 

(iv)          Limits On Transfer of Awards.  No Award and no right under any such Award
shall be assignable, alienable, salable or transferable by a Participant

 

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otherwise than by will or
by the laws of descent and distribution; provided, however, that a Participant may,
in the manner established by the Committee,

 

(A)          designate a beneficiary or
beneficiaries to exercise the rights of the Participant and receive any
property distributable with respect to any Award upon the death of the
Participant, or

 

(B)           transfer a Non-Qualified Stock Option
to any “family member” (as such term is used in Form S-8 under the Securities
Act of 1933) of such Participant, provided that (1) there is no
consideration for such transfer or such transfer is effected pursuant to a
domestic relations order in settlement of marital property rights, and (2) the
Non-Qualified Stock Options held by such transferees continue to be subject to
the same terms and conditions (including restrictions or subsequent transfers)
as were applicable to such Non-Qualified Stock Options immediately prior to
their transfer.

 

Each Award or right under
any Award shall be exercisable during the Participant’s lifetime only by the
Participant, by a transferee pursuant to a transfer permitted by clause (B) of
this Section 6(g)(iv), or, if permissible under applicable law, by the
Participant’s or such transferee’s guardian or legal representative.  No Award or right under any such Award may
be pledged, alienated, attached or otherwise encumbered, and any purported
pledge, alienation, attachment or encumbrance thereof shall be void and
unenforceable against the Company or any Affiliate.

 

(v)           Term of Awards.  Subject to the terms of the Plan, the term of each Award shall be
for such period as may be determined by the Committee.

 

(vi)          Rule 16b-3 Six-Month Limitations.  To the extent required in order to comply
with Rule 16b-3 only, any equity security offered pursuant to the Plan may not
be sold for at least six months after acquisition, except in the case of death
or disability, and any derivative security issued pursuant to the Plan shall
not be exercisable for at least six months, except in case of death or
disability.  Terms used in the preceding
sentence shall, for the purposes of such sentence only, have the meanings, if
any, assigned or attributed to them under Rule 16b-3.

 

(vii)         Restrictions; Securities Exchange Listing.  All certificates for Shares delivered under
the Plan pursuant to any Award or the exercise thereof shall be subject to such
stop transfer orders and other restrictions as the Committee may deem advisable
under the Plan or the rules, regulations and other requirements of the
Securities and Exchange Commission and any applicable federal, state or foreign
securities laws, and the Committee may cause a legend or legends to be placed
on any such certificates to make appropriate reference to such
restrictions.  If the Shares are traded
on a securities exchange, the Company shall not be required to deliver any
Shares covered by an Award unless and until such Shares have been admitted for
trading on such securities exchange.

 

(viii)        Award Limitations Under the Plan.  No Participant may be granted any Award or
Awards under the Plan, the value of which Award or Awards are based solely on
an increase in the value of Shares after the date of grant of such Award or
Awards, for more than 4,000,000 Shares, in the aggregate, in any one calendar
year period beginning with the 1994 calendar year.  The foregoing annual limitation specifically includes the grant
of any Awards representing qualified performance-based compensation, within the
meaning of Section 162(m) of the Code.

 

7

 

Section 7.  Amendment
and Termination; Adjustments.

 

Except to the extent prohibited by applicable law and
unless otherwise expressly provided in an Award Agreement or in the Plan:

 

(a)           Amendments
to the Plan.  The Board of
Directors of the Company may amend, alter, suspend, discontinue or terminate
the Plan; provided,
however, that, notwithstanding any other provision of the Plan or
any Award Agreement, without the approval of the shareholders of the Company,
no such amendment, alteration, suspension, discontinuation or termination shall
be made that:

 

(i)            absent such approval, would cause
Rule 16b-3 to become unavailable with respect to the Plan;

 

(ii)           requires the approval of the
Company’s shareholders under any rules or regulations of the National
Association of Securities Dealers, Inc. or any securities exchange that are
applicable to the Company; or

 

(iii)          requires the approval of the Company’s
shareholders under the Code in order to permit Incentive Stock Options to be
granted under the Plan.

 

(b)           Amendments
to Awards.  The Committee may
waive any conditions of or rights of the Company under any outstanding Award,
prospectively or retroactively, subject to Section 7(c) of the Plan.  The Committee may not amend, alter, suspend,
discontinue or terminate any outstanding Award, prospectively or retroactively,
without the consent of the Participant or holder or beneficiary thereof.

 

(c)           Prohibition
on Option Repricing.  The
Committee shall not reduce the exercise price of any outstanding Option,
whether through amendment, cancellation or replacement grants, or any other
means, without shareholder approval.  In
accordance with shareholder approval granted on March 4, 2003, the Company may
offer to exchange certain outstanding Options in accordance with the provisions
set forth on Exhibit A attached hereto and made a part hereof.

 

(d)           Correction
of Defects, Omissions and Inconsistencies.  The Committee may correct any defect, supply any omission or
reconcile any inconsistency in the Plan or any Award in the manner and to the
extent it shall deem desirable to carry the Plan into effect.

 

Section 8.  Income Tax
Withholding; Tax Bonuses.

 

(a)           Withholding.  In order to comply with all applicable
federal, state or foreign income tax or social insurance contribution laws or
regulations, the Company may take such action as it deems appropriate to ensure
that all applicable federal, state or foreign payroll, withholding, income,
social insurance contributions or other taxes, which are the sole and absolute
responsibility of a Participant, are withheld or collected from such
Participant.  In order to assist a
Participant in paying all federal, state and foreign taxes to be withheld or
collected upon exercise or receipt of (or the lapse of restrictions relating
to) an Award, the Committee, in its discretion and subject to such additional
terms and conditions as it may adopt, may permit the Participant to satisfy
such tax obligation by (i) electing to have the Company withhold a portion of
the Shares otherwise to be delivered upon exercise or receipt of (or the lapse
of restrictions relating to) such Award with a Fair Market Value equal to the
amount of such taxes or (ii) delivering to the Company Shares other than Shares
issuable upon exercise or receipt of (or the lapse of restrictions relating to)
such Award with a Fair

 

8

 

 Market Value equal to the amount
of such taxes.  The election, if any,
must be made on or before the date that the amount of tax to be withheld is
determined.

 

(b)           Tax Bonuses.  The Committee, in its discretion, shall have
the authority, at the time of grant of any Award under this Plan or at any time
thereafter to approve bonuses to designated Participants to be paid upon their
exercise or receipt of (or the lapse of restrictions relating to) Awards in
order to provide funds to pay all or a portion of federal, state and foreign
taxes due as a result of such exercise or receipt (or the lapse of such
restrictions).  The Committee shall have
full authority in its discretion to determine the amount of any such tax bonus.

 

Section 9.  General
Provisions.

 

(a)           No Rights to
Awards.  No Key Employee,
Participant or other Person shall have any claim to be granted any Award under
the Plan, and there is no obligation for uniformity of treatment of Key
Employees, Participants or holders or beneficiaries of Awards under the Plan.  The terms and conditions of Awards need not
be the same with respect to different Participants.

 

(b)           Delegation.  The Committee may delegate to one or more
officers of the Company or any affiliate or a committee of such officers the
authority, subject to such terms and limitations as the Committee shall
determine, to grant Awards to Key Employees who are not officers or directors
of the Company for purposes of Section 16 of the Securities Exchange Act of
1934, as amended.

 

(c)           Terms of Awards.  The specific terms of an Award pursuant to the Plan shall be set
forth in an Award Agreement duly executed (by manual, facsimile or electronic
signature) on behalf of the Company.

 

(d)           No Limit on
Other Compensation Arrangements. 
Nothing contained in the Plan shall prevent the Company or any Affiliate
from adopting or continuing in effect other or additional compensation
arrangements, and such arrangements may be either generally applicable or
applicable only in specific cases.

 

(e)           No Right to
Employment or Directorship. 
The grant of an Award shall not be construed as giving a Participant the
right to be retained in the employ of the Company or any Affiliate or any right
to remain as a member of the Board of Directors, as the case may be.  In addition, the Company or an Affiliate may
at any time dismiss a Participant from employment (or remove an Outside
Director), free from any liability or any claim under the Plan, unless
otherwise expressly provided in the Plan or in any Award Agreement.

 

(f)            Governing
Law.  The validity, construction
and effect of the Plan and any rules and regulations relating to the Plan shall
be determined in accordance with the laws of the State of Minnesota.

 

(g)           Severability.  If any provision of the Plan or any Award is
or becomes or is deemed to be invalid, illegal or unenforceable in any
jurisdiction or would disqualify the Plan or any Award under any law deemed
applicable by the Committee, such provision shall be construed or deemed
amended to conform to applicable laws, or if it cannot be so construed or deemed
amended without, in the determination of the Committee, materially altering the
purpose or intent of the Plan or the Award, such provision shall be stricken as
to such jurisdiction or Award, and the remainder of the Plan or any such Award
shall remain in full force and effect.

 

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(h)           No Trust or
Fund Created.  Neither the
Plan nor any Award shall create or be construed to create a trust or separate
fund of any kind or a fiduciary relationship between the Company or any
Affiliate and a Participant or any other Person.  To the extent that any Person acquires a right to receive
payments from the Company or any Affiliate pursuant to an Award, such right
shall be no greater than the right of any unsecured general creditor of the
Company or any Affiliate.

 

(i)            No
Fractional Shares.  No
fractional Shares shall be issued or delivered pursuant to the Plan or any
Award, and the Committee shall determine whether cash shall be paid in lieu of
any fractional Shares or whether such fractional Shares or any rights thereto
shall be canceled, terminated or otherwise eliminated.

 

(j)            Headings.  Headings are given to the Sections and
subsections of the Plan solely as a convenience to facilitate reference.  Such headings shall not be deemed in any way
material or relevant to the construction or interpretation of the Plan or any
provision thereof.

 

Section 10.  Effective
Date of the Plan.

 

The Plan shall be effective as of the date of its
approval by the shareholders of the Company.

 

Section 11.  Term of
the Plan.

 

Awards shall be granted under the Plan during a period
commencing February 26, 1991, the date the Plan was approved by the
shareholders of the Company, through March 2, 2009, the date to which the
shareholders of the Company extended the expiration date of the Plan.  However, unless otherwise expressly provided
in the Plan or in an applicable Award Agreement, any Award theretofore granted
may extend beyond the ending date of the period stated above, and the authority
of the Committee provided for hereunder with respect to the Plan and any
Awards, and the authority of the Board of Directors of the Company to amend the
Plan, shall extend beyond the end of such period.

 

10

 

EXHIBIT
A

 

The Company may offer, on a one-time basis, to
exchange outstanding Options with an exercise price per share equal to or
greater than $4.00 and an expiration date on or after January 1, 2004, whether
or not such options were granted under the Plan (the “Eligible Options”), other
than Options granted to the Company’s five most highly compensated executive
officers named in the proxy statement for the Company’s 2003 Annual Meeting of
Shareholders, members of the Board of Directors, former employees, retirees and
such employees in countries outside the United States as may be deemed
ineligible for the exchange program, for replacement Options (“Replacement
Options”) to be granted under the Plan on a date that is at least six months
and one day from the latest date on which an Eligible Option is validly
surrendered.  The Replacement Options
will have an exercise price as described in Section 6(a)(i) of the Plan.

 

The exchange ratios for shares covered by Eligible
Options surrendered in exchange for shares covered by Replacement Options shall
be as follows, assuming a fair market value of the Company’s Common Stock on
the date of commencement of the stock option exchange program of $1.00, $2.00,
$3.00, $4.00, $5.00 or $7.50 per share. 
For purposes of calculating the exchange ratios, the fair market value
of the Common Stock will be the average of the closing prices of the Common
Stock over a period of 20 consecutive trading days ending no earlier than 45
days and no later than 25 days prior to the commencement of the exchange
program (the “Current Stock Price”).

 

	
  Tier

  	
   

  	
  Current

  Exercise Price

  	
   

  	
  $1.00/share

  Exchange Ratio

  	
   

  	
  $2.00/share

  Exchange Ratio

  	
   

  	
  $3.00/share

  Exchange Ratio

  	
   

  	
  $4.00/share

  Exchange Ratio

  	
   

  	
  $5.00/share

  Exchange Ratio

  	
   

  	
  $7.50/share

  Exchange Ratio

  	
   

  
	
  1

  	
   

  	
  $

  	
  4.00 - 5.49

  	
   

  	
  2.00 to 1

  	
   

  	
  1.50 to 1

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  
	
  2

  	
   

  	
  $

  	
  5.50 - 7.99

  	
   

  	
  3.00 to 1

  	
   

  	
  2.00 to 1

  	
   

  	
  1.75 to 1

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  
	
  3

  	
   

  	
  $

  	
  8.00 - 14.99

  	
   

  	
  6.00 to 1

  	
   

  	
  3.25 to 1

  	
   

  	
  2.25 to 1

  	
   

  	
  2.00 to 1

  	
   

  	
  1.75 to 1

  	
   

  	
  N/A

  	
   

  
	
  4

  	
   

  	
  $

  	
  15.00 or higher

  	
   

  	
  11.25 to 1

  	
   

  	
  5.50 to 1

  	
   

  	
  3.75 to 1

  	
   

  	
  3.00 to 1

  	
   

  	
  2.75 to 1

  	
   

  	
  2.00 to 1

  	
   

  

 

If the Current Stock Price is between the Current
Stock Prices listed in the table above, the final exchange ratios will be
determined by interpolating between these prices and rounding to the nearest
..25 of a share.  If the actual Current
Stock Price is below $1.00 per share, the exchange ratios will be increased
appropriately.  The exchange program will
be cancelled in its entirety if the Current Stock Price is equal to or greater
than $7.50  per share.

 

To participate in the stock option exchange program,
an employee must surrender all of the Eligible Options issued to such employee
with an exercise price at or above the lowest tier exercise price of Eligible
Options the employee chooses to surrender.

 

Each Replacement Option shall be a Non-Qualified Stock
Option; shall vest 25% on the six-month anniversary of the date of grant, with
an additional 25% vesting at the end of each subsequent six-month period; and
shall have a term of seven years from the date of grant.  All other terms of the Replacement Options
shall be consistent with the Company’s standard terms for Non-Qualified Stock
Options granted under the Plan.

 

All other terms and conditions of the stock option
exchange program shall be determined in the sole discretion of the Board of
Directors or the Compensation Committee.

 

11

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