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                                                                   EXHIBIT 10(b)

                          UNITED HEALTHCARE CORPORATION
                              AMENDED AND RESTATED
                         1991 STOCK AND INCENTIVE PLAN,
                   AMENDED AND RESTATED EFFECTIVE MAY 9, 2001

1. PURPOSE OF PLAN.

     This Plan shall be known as the "United HealthCare Corporation 1991 Stock
and Incentive Plan" and is hereinafter referred to as the "Plan". The purpose of
the Plan is to aid in maintaining and developing personnel capable of
contributing to the future success of United HealthCare Corporation, a Minnesota
corporation (the "Company"), to offer such personnel additional incentives to
put forth maximum efforts for the success of the business, and to afford them an
opportunity to acquire a proprietary interest in the Company through stock
options and other awards as provided herein. Options granted under this Plan may
be either incentive stock options ("Incentive Stock Options") within the meaning
of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code), or
options which do not qualify as Incentive Stock Options. Awards granted under
this Plan shall be SARs, restricted stock or performance awards as hereinafter
described.

2. STOCK SUBJECT TO PLAN.

     Subject to the adjustments authorized by Section 15 hereof and the
provisions of the remaining subsection of this Section 2, the stock to be
subject to options or other awards under the Plan shall be the Company's
authorized common shares, par value $.01 per share (the "Shares"). Such shares
may be either authorized but unissued shares, or issued shares which have been
reacquired by the Company. Subject to adjustment as provided in Section 15
hereof, the number of shares on which options may be exercised or other awards
issued under this Plan shall be 6,000,000 shares plus a number of shares equal
to the sum of (i) one and one-half percent of the number of shares of the
Company's Common Stock outstanding as of the December 31 immediately preceding
the year in which such options may be granted plus (ii) options for such number
of shares of Common Stock as were available for grant in any preceding year and
were not otherwise granted. If awards lapse, expire, terminate or are canceled
prior to the issuance of shares, or if shares issued under an option are
reacquired by the Company pursuant to this Plan, those shares will be available
for new awards. Notwithstanding the foregoing, the number of Shares that may be
subject to Incentive Stock Options granted under the Plan may not exceed
2,000,000; such number may be adjusted pursuant to Section 15.

3. ADMINISTRATION OF PLAN.

     (a) The Plan shall be administered by a committee (the "Committee") of two
or more directors of the Company, none of whom shall be officers or employees of
the Company and all of whom shall be "Non-Employee Directors" with respect to
the Plan within the meaning of Rule 16b-3 under the Securities Exchange Act of
1934, and any successor rule. The members of the Committee shall be appointed by
and serve at the pleasure of the Board of Directors.

     (b) The Committee shall have plenary authority in its discretion, but
subject to the express provisions of the Plan: (i) to determine the purchase
price of the Common Shares covered by each option, (ii) to determine the
employees to whom and the time or times at which such options and awards shall
be granted and the number of shares to be subject to each, (iii) to determine
the form of payment to be made upon the exercise of an SAR or in connection with
performance awards, either cash, Common Shares of the Company or a combination
thereof, (iv) to determine the terms of exercise of each option and award, (v)
to accelerate the time at which all or any part of an option or award may be
exercised, (vi) to amend or modify the terms of any option or award with the
consent of the holder of the optionee or grantee, (vii) to interpret the Plan,
(viii) to prescribe, amend and rescind rules and regulations relating to the
Plan, (ix) to determine the

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terms and provisions of each option or award agreement under the Plan (any of
which agreements need not be identical), including the designation of those
options intended to be Incentive Stock Options, (x) to delegate such of its
authority granted herein as it deems is in the best interests of the Company,
and (xi) to make all other determinations necessary or advisable for the
administration of the Plan, subject to the exclusive authority of the Board of
Directors under Section 16 herein to amend or terminate the Plan. The
Committee's determinations on the foregoing matters, unless otherwise
disapproved by the Board of Directors of the Company, shall be final and
conclusive; provided, however, that the Committee's determinations with respect
to the matters set forth in clauses (ii) and (iii) above, unless delegated as
provided in subsection 3(C) below, shall be final and conclusive without any
right of disapproval by the Board of Directors of the Company.

     (c) The Chief Executive Officer of the Company shall have the authority, as
granted by the Committee pursuant to clause (x) of the preceding subsection, to
grant, pursuant to the Plan, options or other awards to eligible persons who are
not considered by the Company as its officers or directors for purposes of
Section 16 of the Securities Exchange Act of 1934, as amended. The Chief
Executive Officer of the Company shall provide information as to any grants made
pursuant to this subsection to the Committee at its next meeting.

     (d) The Committee shall select one of its members as its Chairperson and
shall hold its meetings at such times and places as it may determine. A majority
of its 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 grant of an option or award shall be
effective only if a written agreement shall have been duly executed and
delivered or if notice of such option or award shall have been duly communicated
by and on behalf of the Company following such grant. The Committee may appoint
a Secretary and may make such rules and regulations for the conduct of its
business as it shall deem advisable.

4. ELIGIBILITY.

     Incentive Stock Options may be granted under this Plan only to any full or
part-time employee (which term as used herein includes, but is not limited to,
officers and directors who are also employees) of the Company and of its present
and future subsidiary corporations within the meaning of Section 424(f) of the
Code (herein called "subsidiaries"). Full or part-time employees, consultants or
independent contractors to the Company or one of its subsidiaries shall be
eligible to receive awards and options which do not qualify as Incentive Stock
Options. In determining the persons to whom options and awards shall be granted
and the number of shares subject to each, the Committee may take into account
the nature of services rendered by the respective employees or consultants,
their present and potential contributions to the success of the Company and such
other factors as the Committee in its discretion shall deem relevant. A person
who has been granted an option or award under this Plan may be granted
additional options or awards under the Plan if the Committee shall so determine;
provided, however, that for Incentive Stock Options granted after December 31,
1986, to the extent the aggregate fair market value (determined at the time the
Incentive Stock Option is granted) of the Common Shares with respect to which
all Incentive Stock Options are exercisable for the first time by an employee
during any calendar year (under all plans described in subsection (d) of Section
422 of the Code of his or her employer corporation and its parent and subsidiary
corporations) exceeds $100,000, such options shall be treated as options which
do not qualify as Incentive Stock Options. Nothing in the Plan or in any
agreement thereunder shall confer on any employee any right to continue in the
employ of the Company or any of its subsidiaries or affect in any way the right
of the Company or any of its subsidiaries to terminate his or her employment at
any time.

5. PRICE.

     The option price for all Incentive Stock Options granted under the Plan
shall be determined by the Committee but shall not be less than 100% of the fair
market value of the Common Shares at the date of grant of such option. The
option price for options granted under the Plan which do not qualify as
Incentive Stock Options and, if applicable, the price for all awards shall also
be determined by the Committee. For purposes of this Section 5 and for all other
valuation purposes under the Plan, the fair market value of the Common Shares
shall be as reasonably determined by such methods or procedures as shall be
established from time to time by the Committee; provided, that for the purposes
of the first sentence of this Section 5, the fair market value of the Common
Shares shall not be less than the closing price of the stock on the date for
which fair market value is being determined, as reported on any national
securities exchange on which the Common Shares are then traded. If on the date
of grant of any option or award hereunder the Common Shares are not traded on an
established securities market, the Committee shall make a good faith attempt to
satisfy the requirements of this Section 5 and in connection therewith shall
take such action as it deems necessary or advisable.

6. TERM.

     Each option and award and all rights and obligations thereunder shall
expire on the date determined by the Committee and specified in the option or
award agreement. The Committee shall be under no duty to provide terms of like
duration for options or awards granted under the Plan, but the term of an
Incentive Stock Option may not extend more than ten (10) years from the date of
grant of such option and the term of options granted under the Plan which do not
qualify as Incentive Stock Options may not extend more than fifteen (15) years
from the date of grant of such option.

7. EXERCISE OF OPTION OR AWARD.

     (a) The Committee shall have full and complete authority to determine
whether the option or award will be exercisable in full at any time or from time
to time during the term thereof, or to provide for the exercise thereof in such
installments, upon the occurrence of such events, such as termination of
employment for any reason, and at such times during the term of the option or

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award as the Committee may determine and specify in the option or award
agreement.

     (b) The exercise of any option or award granted hereunder shall be
effective only at such time as the sale of Common Shares pursuant to such
exercise will not violate any state or federal securities or other laws. To the
extent required in order to comply with Rule 16b-3 of the Securities Exchange
Act of 1934, as amended, in the case of an option or award granted to a person
considered by the Company as one of its officers or directors for purposes of
Section 16 of the Securities Exchange Act of 1934, as amended, the terms of the
option or award will require that such shares are not disposed of by such
officer or director for a period of at least six months from the date of grant.

     (c) An optionee or grantee electing to exercise an option or award, or his
or her representative, shall give notice to the Company of such election and of
the number of shares subject to such exercise. The Company will verify the
appropriateness of the election and determine the compensation and related
withholding tax amounts. The exercise amount and applicable taxes shall be
tendered either prior to the issuance of shares pursuant to the exercise or, if
such option is exercised pursuant to a cashless exercise and sale transaction,
on or prior to the settlement date of such transaction. Payment shall be made to
the Company in cash (including wire transfer, bank check, certified check,
personal check, or money order), or, at the discretion of the Committee and as
specified by the Committee, (i) by delivering Common Shares already owned by the
optionee or grantee having a fair market value as of such date equal to the full
purchase price of the shares, together with any applicable withholding taxes, or
(ii) a combination of cash and such shares; provided, however, that an optionee
shall not be entitled to tender shares of the Company's Common Stock pursuant to
successive, substantially simultaneous exercises of options granted under this
or any other stock option plan of the Company. The fair market value of such
tendered shares shall be determined as provided in Section 5 herein. Until such
person has been issued the shares subject to such exercise, he or she shall
possess no rights as a shareholder with respect to such shares.

8. ALTERNATIVE STOCK APPRECIATION RIGHTS.

     (a) Grant. At the time of grant of an option or award under the Plan (or at
any other time), the Committee, in its discretion, may grant a Stock
Appreciation Right ("SAR") evidenced by an agreement in such form as the
Committee shall from time to time approve. Any such SAR may be subject to
restrictions on the exercise thereof as may be set forth in the agreement
representing such SAR, which agreement shall comply with and be subject to the
following terms and conditions and any additional terms and conditions
established by the Committee that are consistent with the terms of the Plan.

     (b) Exercise. An SAR shall be exercised by the delivery to the Company of a
written notice which shall state that the holder thereof elects to exercise his
or her SAR as to the number of shares specified in the notice and which shall
further state what portion, if any, of the SAR exercise amount (hereinafter
defined) the holder thereof requests be paid to him or her in cash and what
portion, if any, is to be paid in Common Shares of the Company. The Committee
promptly shall cause to be paid to such holder the SAR exercise amount, less any
applicable withholding taxes, either in cash, in Common Shares of the Company,
or in any combination of cash and shares as the Committee may determine. Such
determination may be either in accordance with the request made by the holder of
the SAR or in the sole and absolute discretion of the Committee. The SAR
exercise amount is the excess of the fair market value of one share of the
Company's Common Shares on the date of exercise over the per share exercise
price in respect of which the SAR was granted, multiplied by the number of
shares as to which the SAR is exercised. For the purposes, hereof, the fair
market value of the Company's shares shall be determined as provided in Section
5 herein.

9. RESTRICTED STOCK AWARDS.

     Awards of Common Shares subject to forfeiture and transfer restrictions may
be granted by the Committee. Any restricted stock award shall be evidenced by an
agreement in such form as the Committee shall from time to time approve, which
agreement shall comply with and be subject to the following terms and conditions
and any additional terms and conditions established by the Committee that are
consistent with the terms of the Plan:

     (a) Grant of Restricted Stock Awards. Each restricted stock award made
under the Plan shall be for such number of Common Shares as shall be determined
by the Committee and set forth in the agreement containing the terms of such
restricted stock award. Such agreement shall set forth a period of time during
which the grantee must remain in the continuous employment of the Company in
order for the forfeiture and transfer restrictions to lapse. If the Committee so
determines, the restrictions may lapse during such restricted period in
installments with respect to specified portions of the shares covered by the
restricted stock award. The agreement may also, in the discretion of the
Committee, set forth performance or other conditions that will subject the
Common Shares to forfeiture and transfer restrictions. The Committee may, at its
discretion, waive all or any part of the restrictions applicable to any or all
outstanding restricted stock awards, provided that, in the case of restricted
stock awards made to a person considered by the Company as an officer or
director for purposes of Section 16 of the Securities Act of 1934, as amended,
the terms of such restricted stock agreement will provide that the stock so
awarded may not be disposed of for a period of at least six months from the date
the award was made.

     (b) Delivery of Common Shares and Restrictions. At the time of a restricted
stock award, the number of Common Shares awarded thereunder shall be registered
in the name of the grantee. If a certificate representing such shares is issued,
such certificate shall be held by the Company or any custodian appointed by the
Company for the account of the grantee subject to the terms and conditions of
the Plan, and shall bear such a legend setting forth the restrictions imposed
thereon as the Committee, in its discretion, may determine. The grantee shall
have all rights of a shareholder with respect to the Common Shares, including
the right to receive dividends and the right to vote such shares, subject to the
following restrictions: (i) the grantee shall not be entitled to delivery of the
stock certificate, if one is issued, until the expiration of the restricted
period and the fulfillment of any other

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restrictive conditions set forth in the restricted stock agreement with respect
to such Common Shares; (ii) none of the Common Shares may be sold, assigned,
transferred, pledged, hypothecated or otherwise encumbered or disposed of during
such restricted period or until after the fulfillment of any such other
restrictive conditions; and (iii) except as otherwise determined by the
Committee, all of the shares shall be forfeited and all rights of the grantee to
such shares shall terminate, without further obligation on the part of the
Company, unless the grantee remains in the continuous employment of the Company
for the entire restricted period in relation to which such Common Shares were
granted and unless any other restrictive conditions relating to the restricted
stock award are met. Any Common Shares, any other securities of the Company and
any other property (except for cash dividends) distributed with respect to the
Common Shares subject to restricted stock awards shall be subject to the same
restrictions, terms and conditions as such restricted Common Shares.

     (c) Termination of Restrictions. At the end of the restricted period and
provided that any other restrictive conditions of the restricted stock award are
met, or at such earlier time as otherwise determined by the Committee, all
restrictions set forth in any agreement relating to the restricted stock award
or in the Plan shall lapse as to the restricted Common Shares subject thereto.
Upon payment by the grantee to the Company of any withholding tax required to be
paid, a stock certificate, if one is requested, for the appropriate number of
Common Shares, free of the restrictions and the restricted stock legend, shall
be delivered to the grantee or his or her beneficiary or estate, as the case may
be.

10. PERFORMANCE AWARDS.

     The Committee is further authorized to grant performance awards. Subject to
the terms of this Plan and any applicable award agreement, a performance award
granted under the Plan (i) may be denominated or payable in cash, Common Shares
(including, without limitation, restricted stock), other securities, other
awards, or other property and (ii) shall confer on the holder thereof rights
valued as determined by the Committee, in its discretion, and payable to, or
exercisable by, the holder of the performance awards, in whole or in part, upon
achievement of such performance goals during such performance periods as the
Committee, in its discretion, shall establish. Subject to the terms of this 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 amount of any payment or transfer to be made
by the grantee and by the Company under any performance award shall be
determined by the Committee.

11. INCOME TAX WITHHOLDING AND TAX BONUSES.

     (a) In order to comply with all applicable federal, state or local income
tax laws or regulations, the Company may take such action as it deems
appropriate to ensure that all applicable federal, state or local payroll,
withholding, income or other taxes, which are the sole and absolute
responsibility of an optionee or grantee under the Plan, are withheld or
collected from such optionee or grantee prior to his or her receipt of Common
Shares pursuant to the exercise of an option or the satisfaction of the
conditions of any other award. In order to assist an optionee or grantee in
paying all federal and state taxes to be withheld or collected upon exercise of
an option or award which does not qualify as an Incentive Stock Option
hereunder, the Committee, in its absolute discretion and subject to such
additional terms and conditions as it may adopt, shall permit the optionee or
grantee to satisfy such tax obligation by (i) electing to have the Company
withhold a portion of the shares otherwise to be delivered upon exercise of such
option or award with a fair market value, determined in accordance with Section
5 herein, equal to such taxes or (ii) delivering to the Company Common Shares
other than the shares issuable upon exercise of such option or award with a fair
market value, determined in accordance with Section 5, equal to such taxes. The
election must be made on or before the date that the amount of tax to be
withheld is determined.

     (b) The Committee shall have the authority, at the time of grant of an
option under the Plan or at any time thereafter, to approve tax bonuses to
designated optionees or grantees to be paid upon their exercise of options or
awards granted hereunder. The amount of any such payments shall be determined by
the Committee but shall not exceed one hundred percent (100%) of the excess of
the fair market value of the shares received upon exercise of an option or award
over the price paid therefor. The Committee shall have full authority in its
absolute discretion to determine the amount of any such tax bonus and the terms
and conditions affecting the vesting and payment thereof.

12. ADDITIONAL RESTRICTIONS.

     The Committee shall have full and complete authority to determine whether
all or any part of the Common Shares of the Company acquired upon exercise of
any of the options or awards granted under the Plan shall be subject to
restrictions on the transferability thereof or any other restrictions affecting
in any manner the optionee's or grantee's rights with respect thereto, but any
such restriction shall be contained in the agreement relating to such options or
awards.

13. TEN PERCENT SHAREHOLDER RULE.

     Notwithstanding any other provision in the Plan, if at the time an option
is otherwise to be granted pursuant to the Plan the optionee owns directly or
indirectly (within the meaning of Section 424(d) of the Code) Common Shares of
the Company possessing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or its parent or subsidiary
corporations (within the meaning of Section 422(b)(5) of the Code), then any
Incentive Stock Option to be granted to such optionee pursuant to the Plan shall
satisfy the requirements of Section 422(c)(5) of the Code, and the option price
shall be not less than 110% of the fair market value of the Common Shares of the
Company determined as described herein, and such option by its terms shall not
be exercisable after the expiration of five (5) years from the date such option
is granted.

14. NONTRANSFERABILITY.

     No option or award granted under the Plan shall be transferable by an
optionee or grantee, otherwise than by will or the laws of descent or
distribution. Except as otherwise provided

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in an option or award agreement, during the lifetime of an optionee or grantee,
the option or award shall be exercisable only by such optionee or grantee. The
Committee shall have the authority to waive the provisions of this Section with
respect to any grant of options under the Plan subject to such terms, conditions
or limitations as they may, in their discretion impose.

15. DILUTION OR OTHER ADJUSTMENTS.

     If there shall be any change in the Common Shares through merger,
consolidation, reorganization, recapitalization, dividend in the form of stock
(of whatever amount), stock split or other change in the corporate structure,
appropriate adjustments in the Plan and outstanding options and awards shall be
made by the Committee. In the event of any such changes, adjustments shall
include, where appropriate, changes in the aggregate number of shares subject to
the Plan, the number of shares and the price per share subject to outstanding
options and awards and the amount payable upon exercise of outstanding awards,
in order to prevent dilution or enlargement of option or award rights.

16. AMENDMENT OR DISCONTINUANCE OF PLAN.

     The Board of Directors may amend or discontinue the Plan at any time.
Subject to the provisions of Section 15 no amendment of the Plan, however, shall
without shareholder approval: (a) increase the number of shares authorized under
the Plan as provided in Section 2 herein, (b) decrease the minimum price
provided in Section 5 herein, (c) extend the maximum term under Section 6, or
(d) modify the eligibility requirements for participation in the Plan. The
Committee, or the Company's Chief Executive Officer as authorized by the
Committee, may grant, each year, options and awards for the number of shares
authorized by Section 2 herein without further amendment to the Plan increasing
the number of shares authorized for distribution. The Board of Directors shall
not alter or impair any option or award theretofore granted under the Plan
without the consent of the holder of the option or award.

17. TIME OF GRANTING.

     Nothing contained in the Plan or in any resolution adopted or to be adopted
by the Board of Directors or by the shareholders of the Company, and no action
taken by the Committee, the Chief Executive Officer or the Board of Directors
(other than the execution and delivery of an option or award agreement), shall
constitute the granting of an option or award hereunder.

18. EFFECTIVE DATE AND TERMINATION OF PLAN.

     (a) The Plan was approved by the Board of Directors on February 15, 1993,
and shall be approved by the shareholders of the Company within twelve (12)
months thereof.

     (b) Unless the Plan shall have been discontinued as provided in Section 16
hereof, the Plan shall terminate on February 14, 2003. No option or award may be
granted after such termination, but termination of the Plan shall not, without
the consent of the optionee or grantee, alter or impair any rights or
obligations under any option or award theretofore granted.

19. OPTION AND AWARD LIMITATIONS UNDER THE PLAN.

     No participant who is an employee of the Company at the time of grant may
be granted an option or award the value of which is based solely on an increase
in the value of the shares after the date of grant of such option or awards for
more than 2,000,000 shares, in the aggregate, in any one calendar year period
beginning with the period commencing on January 1, 1996 and ending December 31,
1996. The foregoing annual limitation specifically includes the grant of any
options or awards representing qualified performance-based compensation within
the meaning of Section 162(m) of the Code.

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                                                                   EXHIBIT 10(c)

                         UNITEDHEALTH GROUP INCORPORATED
                     NONEMPLOYEE DIRECTOR STOCK OPTION PLAN
                 AMENDED AND RESTATED EFFECTIVE OCTOBER 30, 2001

SECTION 1. PURPOSE.

         This plan shall be known as the "UnitedHealth Group Incorporated
Nonemployee Director Stock Option Plan, Amended and Restated Effective October
30, 2001" and is hereinafter referred to as the "Plan." The purpose of the Plan
is to promote the interests of UnitedHealth Group Incorporated, a Minnesota
corporation (the "Company"), by enhancing its ability to attract and retain the
services of experienced and knowledgeable independent directors and by providing
additional incentive for these directors to increase their interest in the
Company's long-term success and progress. Nonqualified stock options or
restricted stock may be granted under the Plan.

SECTION 2. ADMINISTRATION.

         The Plan shall be administered by a committee (the "Committee") of two
or more persons appointed by the Board of Directors of the Company. Except as
set forth in Section 6(c) hereof, grants of stock options under the Plan and the
amount and nature of the awards to be granted shall be automatic as described in
Sections 6(a) and 6(b). Grants of restricted stock under the Plan and the amount
and nature of restricted stock to be granted shall be at the discretion of the
Committee. All questions of interpretation of the Plan or of any options or
restricted stock granted under it shall be determined by the Committee and such
determination shall be final and binding upon all persons having an interest in
the Plan.

SECTION 3. PARTICIPATION IN THE PLAN.

         Each director of the Company shall be eligible to participate in the
Plan unless such director is also an employee of the Company or any subsidiary
or affiliate of the Company. Notwithstanding the foregoing, no single director
shall be eligible to acquire under the Plan more than 1% of the shares of the
Company's common stock outstanding as of May 12, 1999.

SECTION 4. STOCK SUBJECT TO THE PLAN.

         Subject to the provisions of Section 11 hereof, the stock to be subject
to grants under the Plan shall be authorized but unissued shares of the
Company's common stock, par value $.01 per share (the "Common Stock"). Subject
to adjustment as provided in Section 11 hereof, the maximum number of shares
with respect to which grants may be authorized under this Plan shall be
1,700,000 shares of Common Stock. If a grant under the Plan expires or for any
reason is terminated prior to the exercise of an option or the lapse of a
restriction on the shares underlying a restricted stock grant, the shares

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underlying such grant shall again be available for grants thereafter during the
term of the Plan.

SECTION 5. NONQUALIFIED STOCK OPTIONS.

         All options granted under the Plan shall be nonqualified stock options
that do not qualify as incentive stock options within the meaning of Section 422
of the Internal Revenue Code of 1986, as amended.

SECTION 6. TERMS AND CONDITIONS OF OPTIONS.

         Each option granted under this plan may, but is not required to, be
evidenced by a written agreement or certificate in such form as the Committee
shall from time to time approve. Each option granted under this plan shall
comply with and be subject to the following terms and conditions:

      a) Annual Option Grants. Each eligible director of the Company in office
         on the first business day immediately following each annual meeting of
         the Company's shareholders (the "Annual Option Grant Date") held during
         the term of the Plan shall be granted automatically an option to
         purchase 10,000 shares of Common Stock (the "Annual Option Grant"),
         granted in 4 installments of 2,500 each on the first business day of
         each fiscal quarter following the Annual Option Grant Date. A director
         must be in office on the day of each installment of the Annual Option
         Grant or that installment will be forfeited. Notwithstanding the
         foregoing, no director shall be granted an Annual Option Grant if such
         director has been granted an option under Section 6(b) hereof within 12
         months of such Annual Option Grant Date. Each option granted pursuant
         to this Section 6(a) shall have an exercise price as determined
         pursuant to Section 7 hereof.

      b) Initial Option Grants. Each eligible director of the Company that is
         elected to the Board of Directors shall be granted automatically on the
         date that the director is elected to the Board of Directors an option
         to purchase 18,000 shares of Common Stock. Notwithstanding Section
         6(f), the options granted pursuant to this Section 6(b) shall not be
         exercisable for a period of one year after the date on which they were
         granted, but thereafter will become exercisable as to one-third of the
         shares covered by the option on each anniversary date of the option
         grant. Each option granted pursuant to this Section 6(b) shall have an
         exercise price as determined pursuant to Section 7 hereof.

      c) Stock Option Conversion Program. Each eligible director of the Company
         in office on the last business day of any calendar year may elect to
         convert into options to purchase Common Stock any percentage of the
         annual retainer and Board of Director and committee meeting fees to be
         paid to such director in the following year (the "Conversion Option").
         With respect to any eligible director who is not a director on the last
         business day of any calendar year, such director shall have thirty (30)
         days after his or her election as a director in which to elect

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         the Conversion Option. Options granted pursuant to this Section 6(c)
         shall be granted on the dates of regularly scheduled Board of Director
         meetings, and each such option shall enable the holder thereof to
         purchase that number of shares of Common Stock as is equal to (i) four
         (4) times the sum of (A) the annual retainer that would have been
         received by the electing director (including any retainer that would
         have been received for acting as the chairperson of any committee of
         the Board of Directors), had such director not elected the Conversion
         Option, divided by the number of regularly scheduled Board of Director
         meetings for the calendar year and (B) the total Board of Director and
         committee meeting fees that would have been received by such director,
         had such director not elected the Conversion Option, for meetings
         attended subsequent to the date of the immediately preceding regularly
         scheduled Board of Directors meeting but prior to and including the
         date of the regularly scheduled Board of Directors meeting on which
         such option is to be granted, divided by (ii) the closing per share
         price of Common Stock on the date of grant; provided, however, that if
         such number is not a multiple of ten (10), such number shall be rounded
         up to the nearest multiple of ten (10) exceeding such number.

      d) Options Non-Transferable. No option granted under the Plan shall be
         transferable by the optionee otherwise than by will or by the laws of
         descent and distribution as provided in Section 6(g) hereof. During the
         lifetime of the optionee, the options shall be exercisable only by such
         optionee. No option or interest therein may be transferred, assigned,
         pledged or hypothecated by the optionee during such optionee's
         lifetime, whether by operation of law or otherwise, or be made subject
         to execution, attachment or similar process. The Committee shall have
         the authority to waive the provisions of this Section with respect to
         any grant of options under the Plan subject to such terms, conditions
         or limitations as they may, in their discretion, impose.

      e) Period of Options. Options shall terminate upon the expiration of 10
         years from the date on which they were granted.

      f) Exercise of Options.

         i.       Options granted under the Plan shall not be exercisable for a
                  period of six months after the date on which they were
                  granted, but thereafter will be exercisable in full at any
                  time or from time to time during the term of the option,
                  provided that options granted under the Plan may become fully
                  exercisable upon a director's resignation from the Board of
                  Directors or the death of the optionee.

         ii.      The exercise of any option granted hereunder shall only be
                  effective at such time as counsel to the Company shall have
                  determined that the issuance and delivery of Common Stock
                  pursuant to such exercise will not violate any federal or
                  state securities or other laws. An optionee desiring to
                  exercise an option may be required by the Company, as a
                  condition of

                                       3
<PAGE>

                  the effectiveness of any exercise of an option granted
                  hereunder, to agree in writing that all Common Stock to be
                  acquired pursuant to such exercise shall be held for his or
                  her own account without a view to any distribution thereof,
                  that the certificates that may be issued for such shares shall
                  bear an appropriate legend to that effect and that such shares
                  will not be transferred or disposed of except in compliance
                  with applicable federal and state securities laws.

         iii.     An optionee electing to exercise an option, or his or her
                  representative, shall give notice to the Company of such
                  election and of the number of shares subject to such exercise.
                  The full purchase price of such shares shall be tendered
                  either prior to the issuance of shares pursuant to the
                  exercise or, if such option is exercised pursuant to a
                  cashless exercise and sale transaction, on or prior to the
                  settlement date of such transaction. Payment shall be made to
                  the Company in cash (including check, bank draft, money order
                  or wire transfer).

      g) Effect of Death. If the optionee shall die prior to the time the option
         is fully exercised, such option may be exercised at any time within one
         year after his or her death by the personal representatives or
         administrators of the optionee or by any person or persons to whom the
         option is transferred by will or the applicable laws of descent and
         distribution, to the extent of the full number of shares the optionee
         was entitled to purchase under the option on the date of death and
         subject to the condition that no option shall be exercisable after the
         expiration of the term of the option.

SECTION 7. OPTION EXERCISE PRICE.

         The option exercise price per share for the shares covered by each
option shall be equal to the "fair market value" of a share of Common Stock as
of the date on which the option is granted. For purposes of Section 6(a), the
date on which the option is granted shall be the date of each quarterly
installment. For the purposes of the Plan, the fair market value of the Common
Stock on a given date shall be the closing price of the Common Stock on such
date on the New York Stock Exchange, Inc. (the "NYSE") Composite Tape, if the
Common Stock is then being traded on the NYSE. If on the date as of which the
fair market value is being determined the Common Stock is not publicly traded,
the Committee shall make a good faith attempt to determine such fair market
value and, in connection therewith, shall take such actions and consider such
factors as it deems necessary or advisable.

SECTION 8. GRANTS OF RESTRICTED STOCK

         The Committee may grant restricted stock to eligible directors from
time to time in its discretion. Any grant of restricted stock shall be evidenced
by an agreement in such form as the Committee shall from time to time approve,
which agreement shall comply

                                       4
<PAGE>

with and be subject to the following terms and conditions and any additional
terms and conditions established by the Committee that are consistent with the
terms of the Plan:

      a) Grant of Restricted Stock. Each grant of restricted stock under the
         Plan shall be for such number of shares of Common Stock as shall be
         determined by the Committee and set forth in an agreement containing
         the terms of the restricted stock grant. Each agreement shall set forth
         the restrictions which apply to the grant of restricted stock and the
         circumstances under which such restrictions lapse. The Committee may,
         in its discretion, waive any or all of the restrictions applicable to
         any or all outstanding grants of restricted stock, provided that for
         purposes of Section 16 of the Securities Exchange Act of 1934, as
         amended (the "Exchange Act"), restricted stock may not be transferable
         for a period of at least six months from the date of the grant.

      b) Delivery of Common Shares and Restrictions. At the time of a restricted
         stock grant, the number of shares of Common Stock granted thereunder
         shall be registered in the name of the grantee. If a certificate
         representing such shares is issued, such certificate shall bear a
         legend referencing the restrictions imposed thereon as the Committee,
         in its discretion, may determine. The grantee shall have all rights of
         a shareholder with respect to the restricted stock granted, including
         the right to receive dividends and the right to vote such shares,
         provided, however, that none of the shares of restricted stock may be
         sold, assigned, transferred, pledged, hypothecated or otherwise
         encumbered or disposed of during such restricted period or until after
         the fulfillment of any such other restrictive conditions. Any other
         securities of the Company and any other property (except for cash
         dividends) distributed with respect to the restricted stock shall be
         subject to the same restrictions, terms and conditions as the
         restricted stock.

      c) Termination of Restrictions. At the end of the restricted period and
         provided that any other restrictive conditions of the restricted stock
         are met, or at such earlier time as otherwise determined by the
         Committee, all restrictions set forth in the agreement relating to the
         restricted stock award or in the Plan shall lapse as to the restricted
         stock subject thereto.

SECTION 9. TIME FOR GRANTING OPTIONS.

         Unless the Plan shall have been discontinued as provided in Section 12
hereof, the Plan shall terminate upon the expiration of 10 years from the date
upon which it takes effect as provided in Section 12 hereof. No grants shall be
made after such termination, but termination of the Plan shall not, without the
consent of the grantee, alter or impair any rights or obligations under any
option or restricted stock theretofore granted.

SECTION 10. LIMITATION OF RIGHTS.

      a) No Right to Continue as a Director. Neither the Plan, nor the granting
         of an option or restricted stock nor any other action taken pursuant to
         the Plan, shall constitute,

                                       5
<PAGE>

         or be evidence of, any agreement or understanding, express or implied,
         that the Company will retain a director for any period of time, or at
         any particular rate of compensation.

      b) No Shareholder Rights for Options. An optionee shall have no rights as
         a shareholder with respect to the shares covered by options until the
         date of the issuance to such optionee of a stock certificate therefor,
         and no adjustment will be made for cash dividends or other rights for
         which the record date is prior to the date such certificate is issued.

SECTION 11. ADJUSTMENTS TO COMMON STOCK.

         If there shall be any change in the Common Stock through merger,
consolidation, reorganization, recapitalization, stock dividend (of whatever
amount), stock split or other change in the corporate structure, appropriate
adjustments in the Plan and outstanding options shall be made. In the event of
any such changes, adjustments shall include, where appropriate, changes in the
aggregate number of shares subject to the Plan, the number of shares subject to
outstanding grants and the option exercise prices thereof in order to prevent
dilution or enlargement of rights previously granted.

SECTION 12. EFFECTIVE DATE OF THE PLAN.

         The Plan shall take effect immediately upon its approval by the
affirmative vote of the holders of a majority of the shares present in person or
by proxy and voted at a duly held meeting of shareholders of the Company.

SECTION 13. AMENDMENT OF THE PLAN.

         The Board may suspend or discontinue the Plan or revise or amend it in
any respect whatsoever; provided, however, that without approval of the
shareholders of the Company no revision or amendment shall be made that (a)
absent such shareholder approval, would cause Rule 16b-3 of the Exchange Act, or
any successor rule or regulation thereto, to become unavailable with respect to
the Plan, or (b) requires the approval of the Company's shareholders under any
rules or regulations of the NYSE that are applicable to the Company. The Board
shall not alter or impair any grant previously granted under the Plan without
the consent of the grantee.

SECTION 14. GOVERNING LAW.

         The Plan and all determinations made and actions taken pursuant hereto
shall be governed by the laws of the State of Minnesota and construed
accordingly.

SECTION 15. COMPLIANCE WITH EXCHANGE ACT.

         Transactions under the Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the Exchange Act. To the extent
any provision of

                                       6
<PAGE>

the Plan or action by the Committee fails to so comply, such provision or action
shall be deemed null and void to the extent permitted by law and deemed
advisable by the Committee.

                                       7

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