Document:

AutoCoded Document

Publish Date:    21 December 2004
Destroy Date:   31 December 2005

ADC

Management Incentive Plan Document
Fiscal Year 2005

 

MANAGEMENT INCENTIVE PLAN DOCUMENT
Fiscal Year 2005

Plan Name and Effective Date

The name of
this Plan is the ADC Telecommunications, Inc. Management Incentive Plan.  The plan is
effective from November 1, 2004 through October 31, 2005.

Purpose

The
purpose of the Plan is to provide, with full regard to the protection of
shareholder’s investments, a direct financial incentive for eligible
managers and individual contributors to make a significant contribution to
ADC’s established goals.

Eligibility

Eligibility
for Fiscal Year 2005 is limited to full or part-time regular employees in the
U.S. and in such other countries where ADC has specifically notified employees
of eligibility for participation in the Plan. Eligibility for participation in
this Plan is limited to such employees who hold executive, certain management
and higher-level individual contributor positions. Temporary employees and
independent contractors are not eligible for participation in this plan. In
order to be eligible, an employee cannot participate in any other ADC incentive
plan, except as approved by the Compensation and Organization Committee of the
Board of Directors or the CEO, and must be employed in an eligible position on
or before October 1, 2005.

Timing of Payment

Payments
that become due under this Plan are made as soon as administratively feasible
following the close of ADC’s fiscal year, generally in late December or
early January. All payments are subject to appropriate withholdings.

Plan Goals

The
Plan reinforces the key goals that support ADC’s long-term strategic plans.
The key factors in ADC’s FY 05 corporate and regional success are net sales
and pro forma operating income. For global business units, the key factors for
FY05 are net sales and global contribution margin. These goals will be set at
the ADC, regional, and global business unit levels. Accounting methodology
changes may dictate corresponding goal modifications during the plan year.

Page 2

Following
is a description of the plan components:

	Plan Goal
	Definition

	Net Sales	 	The amount ADC can recognize in accordance with GAAP for goods shipped or services provided to third party customers, net of returns received.	 
	
	
	

	Pro Forma Operating Income	 	Net sales less the everyday expenses of doing business, including cost of incentive payments. It does not take into account interest income, interest expense, or other income/loss or income tax. It also excludes restructuring and other one-time expenses that are not reflective of the ongoing business.
For FY05, any stock option expense will be excluded from pro forma operating
income for incentive calculation.	 
	
	
	

	Business Unit Contribution Margin	 	Net sales less the cost to produce the products or services sold and less certain costs directly associated with that business unit including but not limited to engineering, product management, and business-unit administration. It does not take  into account operating expenses deemed regional during the budgeting process,
interest  income, interest expense, other income/loss or income tax. It also excludes
restructuring  and other one-time expenses that are not reflective of the ongoing
business. For FY05, any  stock option expense will be excluded from business unit
contribution margin for incentive  calculation.	 

Goal Weightings

Employees
serving multiple business units and multiple regions have 100% of their
incentive plan based on ADC goals and results. Employees dedicated to only one
business unit have a portion of their incentive based on ADC results and a
portion on global business unit results. Employees serving only one region have
a portion of their incentive based on ADC results and a portion on regional
results. Each participant will be notified of their applicable business unit or
region, if any. The weightings for business unit or regional participation are
as follows:

	Grade
	
	ADC Weighting
	
	BU or Regional Weighting

	Grade 19+	 	 	 	 	50%	 	 	50%
	Grades 15-18	 	 	 	 	30%	 	 	70%

Individual Performance

Exceptional
individual performance can be recognized in the MIP program. An ADC-wide award
pool is available to supplement the financial-based awards for outstanding
performers.

Page 3

ADC Performance Gate

To
ensure protection of shareholder interest, an established level of ADC pro forma
operating income must be achieved before an incentive payment can be generated.

Calculation of Payment

Prior
to making any payment under this Plan, the Board of Directors must determine
that the claimed business performance levels have been achieved. The Board of
Directors has complete authority and discretion to determine whether performance
levels have been achieved, including without limitation the authority and
discretion to properly calculate pro forma operating income. The size of an
incentive award will be based on three factors:

	1.	 	
Target Incentive Opportunity – Determined on the basis of the ADC
salary grade associated with an individual’s job and country of work. It is
expressed as a percentage of an individual’s FY 2005 eligible base salary
earnings.

	2.	 	
FY2005 Eligible Base Salary – This is the amount paid to the
participant during the fiscal year in Base Salary. 

	3.	 	
Business   Performance in comparison with the established goals.

While
each goal has a threshold of 0% of target incentive opportunity, the minimum
individual payment is a total payment of 10% of an employee’s target. If
incentives earned total less than 10% of target, no payout will be made. The
maximum award attributable to each performance factor is 200% of its target. The
maximum total individual award is 200% of the target payout. This maximum
includes any MIP award also provided for exceptional individual performance.
Specific financial goals have been established for 0%, 100%, and 200% of target.
Results between these specific points are interpolated for each goal.

Here
is an example of a hypothetical award calculation.

Assume
a Regional Plan participant with the following facts, in a scenario where the
ADC performance gate has been met:

		
		
	Target Opportunity:	15% of base salary earnings
	FY05 Eligible Base Salary:	70,000 EUR
	Business Performance
Percentages:	Hypothetical ADC and
regional results shown in the
following table

Page 4

	Metrics
	Measure Weighting
	
	Performance
	
	Wtd. Perf.
	

	ADC Level Metrics	 	 	 		 	 		 	 		 
	   ADC Net Sales	 	 	 	50	%	 	107	%	 	53.5	%
	   Pro Forma Operating Income	 	 	 	50	%	 	95	%	 	47.5	%
				
	
	 	 	 	 	 	 	 	 	 	 	101.0	%
	
	
	
	
	
	
	
	
	
	
	

	Regional Level Metrics	 	 
	   Regional Net Sales	 	 	 	50	%	 	110	%	 	55.0	%
	   Regional Pro Forma Operating Income	 	 	 	50	%	 	95	%	 	47.5	%
				
	
	 	 	 	 	 	 	 	 	 	 	102.5	%
	
	
	
	
	
	
	
	
	
	
	

	 Overall Weighted Performance	 	 
	   ADC Metrics	 	 	 	30	%	 	101	.0%	 	30.3	%
	   Regional Metrics	 	 	 	70	%	 	102	.5%	 	71.8	%
				
	
	 	 	 	 	 	 	 	 	 	 	102.1	%

Payment Calculation:
70,000 (base salary) * 15% (incentive target) * 102.1% (business
performance) = 10,721 EUR

Effect of Change in Employment Status

Termination
of Employment. If employment with ADC is terminated for any reason other
than death and if the Employment Termination Date occurs prior to the end of the
Fiscal Year, a participant will not receive an award under the Plan. For
purposes of this Plan, the “Employment Termination Date” is the date
that the participant ceases to be an employee of ADC (as determined by the
company). In the case of termination of employment by ADC, the Employment
Termination Date shall be determined without regard to whether such termination
is with or without cause or with or without reasonable notice.

Transfer,
Promotion or Demotion to another position with a different ADC incentive plan,
target incentive opportunity or business goals. A participant, who
transfers, is promoted or demoted to another position with a different plan,
target incentive opportunity or business goals will receive a prorated
calculation of payment based upon the number of months served in each position.
The participant must be in the new position by the first of the month in order
to receive credit for that month under the new plan, target or goals. For
example, a participant transferring from Wireless to Connectivity on June 10
would receive eight months payment under the Wireless plan (November 1 —
June 30) and four months under Connectivity (July 1 – October 31). In order
to receive payment under MIP, a participant must have completed one full month
of service under the plan during that plan year.

Death.
If a participant dies during the fiscal year, a pro-rated payment will be made
to the participant’s estate after the end of the fiscal year. The payment
will be based upon the time the participant served in the eligible position
during the fiscal year.

Administration

A
Management Incentive Plan Committee (“Committee”), appointed and
authorized by the Compensation Committee of the Company’s Board of
Directors, will administer this Plan. Subject to the complete and full
discretion of the Compensation Committee of the Board of Directors, the
Committee is authorized to make all decisions as required in administration of
the Plan and to exercise its discretion to define, interpret, construe, apply,
approve, administer, withdraw and make any exceptions to the terms of the Plan.

Page 5

Right to Modify

ADC
reserves the right to modify or adjust the Plan at any time in its sole
discretion either in whole or with respect to a particular business unit. The
Participant explicitly agrees with this modification right of ADC.

Governing Law

The
Plan is made and shall be construed in accordance with the laws of the State of
Minnesota, U.S.A. without regard to conflicts of law principles thereof, or
those of any other state of the U.S.A. or of any other country, province or
city.

Severability

If any
provision of this Plan is held invalid, illegal or unenforceable by a court or
tribunal of a competent jurisdiction, this Plan shall be deemed severable and
such invalidity, illegality or unenforceability shall not affect any other
provision of this Plan which shall be enforced in accordance with the intent of
this Plan.

Assignment

The
Company shall have the right to assign this Plan to its successors and assigns
and this Plan shall inure to the benefit of and be enforceable by said
successors and assigns. Participant may not assign this Plan or any rights
hereunder.

Entire Understanding

This
Plan constitutes the entire understanding between the parties regarding the
payment of incentive compensation under this Plan, and it supercedes any and all
prior agreements or understandings, whether oral or written, express or implied,
on such subject matter.

No Acquired Rights or Entitlements/Plan Amendment or Termination

The
Plan shall not entitle Participants to any future compensation. The Plan is not
an element of the employees’ salary or base compensation and shall not be
considered as part of such in the event of severance, redundancy, or
resignation. ADC has no obligation to offer incentive plans to Participants in
the future, and the plan shall be effective only for the time period specified
in the plan and shall not be deemed to renew year over year. The Participant
understands and accepts that the incentive payments made under the Plan are
entirely at the sole discretion of ADC. Specifically, ADC assumes no obligation
to the Participant under this Plan with respect to any doctrine or principle of
acquired rights or similar concept. Subject to the provisions of the Plan, ADC
may amend or terminate the Plan or discontinue the payment of incentives under
the Plan at any time, at its sole discretion and without advance notice.AutoCoded Document

April  25, 2002

Michael Pratt

3409 Cabriolet Court
Plano, TX  75023

Dear Michael:

This offer
letter replaces in its entirety the offer letter that I sent to you on April 22, 2002.

I am very
pleased to offer you employment with ADC for the position of ADC Vice President and
President of ADC's Wireline Business  Unit.  You will report directly to ADC's CEO Rick
Roscitt. The terms of our offer are as follows:

Salary
Your
starting salary will be at an annualized rate of $350,000, payable bi-weekly.

Sign On Bonus

ADC will provide you a one-time sign on bonus of $75,000, less all-applicable
withholdings, to be paid to you within 30 days of your employment. 

Annual
Incentive
You are eligible to participate in the FY02 Management Incentive Plan. The
plan provides a target opportunity of 55% of salary paid during the fiscal year.

Stock Option
Grant
Effective the last trading day of the month in which your employment with ADC
begins, you will be granted non-qualified options in 325,000 shares of ADC stock. If
the closing value of ADC stock on that day exceeds $4.50 per share, your grant will be
limited to a face value of $1,462,500. The grant price will be ADC's closing price on
the date of grant. One-third of the options will vest on the one-year anniversary of
the grant date and the remaining balance of the options vest in one-eighth (1/8)
increments at each three-month period following the first year anniversary date. The
options will be fully vested on the third year anniversary of the grant. The next time
you may be eligible for a stock option grant under this program is in December 2002.

Restricted
Stock Grant
Also on the last trading day of the month in which
your employment with ADC begins, you will be granted 75,000 shares of restricted stock.
One-third of the restricted stock shares will vest on the one-year anniversary of the
grant date; one-third will vest on the two-year anniversary of the grant date, and the
grant will be fully vested on the three-year anniversary of the grant.

Michael Pratt

April 25, 2002
Page 2

Additional
Stock Programs
You will be eligible for ADC's Executive Stock Ownership Program, which
specifies ownership levels expected of ADC officers. The program also provides
additional stock options as part of December annual grants for executives who have
adequate ownership of ADC stock.

For Fiscal Year
2003, you will be eligible for any FY03 Executive Incentive Exchange Program.  Terms of
ADC's FY02 program provide  that eligible participants can exchange up to 50% of their
Management Incentive for stock options - the number of option shares  granted as a result
of the exchange will equal the dollar amount of the MIP award elected to be exchanged
multiplied by 4.5, with  this product being divided by the closing market value of ADC
common stock on the effective date of the grant.

Plan materials
for the Executive Stock Ownership Program and the FY02 Executive Incentive Exchange
Program are enclosed.

Perquisites

You will also be eligible to receive ADC's Executive Perquisites, which
includes an annual payment of $10,000. Currently, perquisite payments are made on a
monthly basis. In July, we anticipate moving to a bi-weekly payment schedule.

Benefits

As a regular full-time employee, you will be eligible to participate in ADC's
complete benefit programs. You will be eligible for coverage under the group medical
plan, dental insurance, life insurance and disability programs. You will be eligible to
enroll in the Global Employee Stock Purchase Plan during the next enrollment period and
to participate in the 401(k) plan. As a participant in the 401(k) plan, following one
year of employment, you will be eligible to receive the company match, which will be
fully vested as of the date of the contribution.

Relocation

Your immediate work location will be ADC's Richardson, Texas site, with
travel to other ADC and customer locations as required to support the business. Within
14 months of your hire date you will be expected to relocate your family residence as
required to most effectively support the business. The specific ADC work location will
be determined at that time by ADC's CEO, taking your recommendation into strong
consideration. Based on the current business profile, your relocation would to be to
Tustin, California or World Headquarters in Eden Prairie, Minnesota.

ADC will
support your relocation in a manner reflective of your executive status with ADC.  This
support will include home sale and  home purchase assistance.  Should your relocation be
to Tustin California, ADC will provide a special relocation provision to  partially
offset the living cost differential between the two locations. Prior to relocating your
family residence, ADC will provide  or reimburse expenses associated with a leased
accommodation in the Tustin area, as well as the limited movement of personal goods,
including an automobile.

Separation

Employment with ADC is for no specific period of time and is at-will. Either
you or ADC is free to terminate this employment relationship at any time, for any
reason, with or without cause. 

Michael Pratt

April 25, 2002
Page 3

In the event of
a Change in Control, as defined by ADC's Executive Change in Control Severance Plan, the
terms of that plan will  apply to you. If within three years from your start date and in
circumstances not covered by ADC's Change in Control Plan, you are  (a) involuntarily
terminated for reasons other than willful and continued failure to perform duties or
willful misconduct or (b) you  voluntarily terminate in association with a job
reassignment not of comparable responsibility or status, or a reduction in base pay,  ADC
will provide you severance payments totaling 18 months of your current base salary,
provided you sign an ADC waiver and release  agreement.

Requirements

This offer of employment is contingent upon each of the following:

	•	 	 Your
completion and passing of a drug test.  A copy of ADC's Drug Free Workplace Policy is
enclosed with this letter and  instructions are included which identify the place where
the testing is conducted.

	•	 	 Presentation
of valid proof that you are authorized to work in the United States (I-9 verification).

	•	 	 Your
review and signature acknowledging your agreement to comply with the ADC Invention,
Copyright and Trade Secret  Agreement and the ADC Code of Business Conduct.  A copy of
each document is enclosed for your review.  You will be asked to sign  and return an
accompanying signature page for these documents.

Because of your
position within ADC, we expect that you will be designated as a "Section 16"
reporting officer by ADC's Board of  Directors, which will subject you to the reporting
requirements and trading restrictions with respect to ADC common stock that are  imposed
by Section 16 of the Securities Exchange Act of 1934.  We will provide you with
additional materials regarding ADC's Section  16 compliance program shortly after your
commencement date.  We will, however, need to obtain all information regarding your
current  holdings in ADC common stock within a few days following your commencement date,
in order to make the required filings with the  Securities and Exchange Commission on a
timely basis.

ADC has hired
you because of your general background and experience and does not want or expect you to
use any confidential or trade  secret information in discharging your duties for ADC.  By
accepting ADC's offer employment, you are warranting that you are not  bringing any trade
secret or confidential materials with you to ADC, that you understand that ADC does not
want you to disclose any  trade secrets or confidential information from your former
employer, and that you will discharge your duties at ADC without relying  on any
confidential or trade secret information you may have acquired in your former employment.

Also included
is an employment application that we ask you to complete and return to us in the enclosed
envelope prior to your start  date.

Please confirm
your decision by acknowledging and returning one copy of this letter.  Your first day of
employment will be mutually  agreed upon.

Michael Pratt

April 25, 2002
Page 4

Michael, on
behalf of everyone here at ADC, we look forward to your joining the team. If you have any
questions, please do not  hesitate to call me at 952-917-0706.

Sincerely, 

/s/ Laura Owen 

Laura Owen
Vice President, Human Resources

	cc: 	 	Rick
Roscitt
Nelda Moffett 

Enclosures

To acknowledge
your acceptance of this offer and the terms and conditions, please sign and return this
original prior to your start  date.

	/s/ Michael
      K. Pratt	 	5/1/02
	Name	 	Date

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