Document:

<PAGE>   1

                                                                    EXHIBIT 10.2

                              CONSENT OF GUARANTOR

         The undersigned, Orient Power Holdings Limited, a Bermuda company
("Orient Power"), for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, hereby consents to the foregoing
Fifth Amendment to License Agreement ("Fifth Amendment") and reaffirms its
guarantee of the performance by Jiangsu Electronics Industries Limited ("Jiangsu
Electronics") or any sublicensee of Jiangsu Electronics (Jiangsu Electronics and
any sublicensee are hereinafter collectively referred to as "Jiangsu") of all of
Jiangsu's obligations under (a) the Fifth Amendment and (b) that certain License
Agreement between Koss Corporation, as Licensor, and Trabelco N.V., as Licensee,
dated November 15, 1991, as amended by an Amendment to License Agreement dated
November 15, 1991, and a Second Amendment to License Agreement dated September
29, 1995, and a Third Amendment and Assignment of License Agreement dated as of
March 31, 1997 between Trabelco N.V., Jiangsu Electronics, Hagemeyer Electronics
(N.A.), Inc., Hagemeyer Consumer Products, Inc. d/b/a/ Koss Electronics
Products, KCP Limited and Koss Corporation, and a Fourth Amendment to License
Agreement dated May 29, 1998 (collectively, that certain License Agreement and
the amendments thereto are hereinafter collectively referred to as the "License
Agreement"). Orient Power also guarantees the payment to Koss Corporation of any
and all amounts owed to Koss Corporation by Jiangsu under the Fifth Amendment
and the License Agreement, including but not limited to, the royalty obligations
and indemnity obligations of Jiangsu thereunder.

                                   ORIENT POWER HOLDINGS LIMITED

Dated: March 30, 2001          By: /s/ Poon Ka Hung
       -------------------        --------------------------------------------

                             Name:
                                  -------------------------------------------

                            Title: Chief Executive Officer

                                   -------------------------------------------<PAGE>   1
                                                                    EXHIBIT 10.3

                        AMENDMENT & EXTENSION AGREEMENT

     THIS AMENDMENT & EXTENSION AGREEMENT is made as of the 1 day of May, 2001,
by and between KOSS CORPORATION, a Delaware corporation with its principal place
of business at 4129 North Port Washington Avenue, Milwaukee, WI 53212 (the
"LICENSOR") and LOGITECH ELECTRONICS INC., an Ontario company, with its
principal place of business at 60 Bell Farm Road, Barrie, Ontario L4M 5G6 (the
"LICENSEE")

         WITNESSETH:

         WHEREAS LICENSOR and LICENSEE are parties to a certain License
Agreement dated the 30th day of June, 1998 (the "LICENSE AGREEMENT") and are
furthermore parties to a certain Addendum Agreement dated the 30th day of June,
1998 (the "ADDENDUM") with respect to the License Agreement;

         AND WHEREAS the parties now desire to amend and extend the terms and
conditions of the License Agreement and the Addendum as hereinafter provided;

         NOW THEREFORE for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

     1.  AMENDMENT TO ROYALTY.

         Section 6.1 of the License Agreement is hereby amended to replace the
         definition of "Royalties" as "an amount equal to ten percent (10%) of
         net sales" to read "AN AMOUNT EQUAL TO SIX AND ONE-HALF PERCENT (6.5%)
         OF NET SALES", said amendment to be effective as of the 1st day of
         July, 2000.

     2.  AMENDMENT TO MINIMUM ANNUAL ROYALTIES:

         Section 6.2 of the License Agreement is hereby amended to replace the
         "annual minimum Royalties" as referred to therein, for the period from
         July 1, 2000, to June 30, 2003, as follows:

<TABLE>
<CAPTION>
                "CONTRACT YEAR                MINIMUM ROYALTIES
                 --------------               -----------------
<S>                                   <C>
         JULY 1, 2000 - JUNE 30, 2001 U.S. $210,000
         JULY 1, 2001 - JUNE 30, 2002 U.S. $220,000
         JULY 1, 2002 - JUNE 30, 2003 U.S. $230,000"
</TABLE>
<PAGE>   2
                                      -2-

    3.   EXTENSION OF LICENSE AGREEMENT & ADDENDUM.

         It is agreed that the License Agreement and Addendum shall be renewed
         and extended for a further five (5) year term from the 1st day of July,
         2003, to the 30th day of June, 2008.  It is furthermore agreed that
         Section 6.3 of the License Agreement is hereby amended to replace the
         "Minimum Royalties for the first renewal period" as referred to
         therein, for the period from July 1, 2003, to June 30, 2008, as
         follows:
<TABLE>
<CAPTION>
              "CONTRACT YEAR                    MINIMUM ROYALTIES
              ---------------                   -----------------
<S>                                        <C>
              JULY 1, 2003 - JUNE 30, 2004 U.S. $241,000
              JULY 1, 2004 - JUNE 30, 2005 U.S. $252,000
              JULY 1, 2005 - JUNE 30, 2006 U.S. $265,000
              JULY 1, 2006 - JUNE 30, 2007 U.S. $278,000
              JULY 1, 2007 - JUNE 30, 2008 U.S. $292,000"
</TABLE>

    4.   MISCELLANEOUS

         Save and except as amended and extended herein, the License Agreement
         and Addendum shall remain in full force and effect, binding upon the
         parties thereto and hereto in accordance with the terms therein.

         IN WITNESS WHEREOF the parties hereto have caused this Amendment &
Extension Agreement to be executed as of the date set forth above. The
effective date of this Amendment & Extension Agreement is the 1st day of July,
2000.

                                             KOSS CORPORATION

                                             BY: /s/ Michael J. Koss
                                                     MICHAEL J. KOSS
                                                     PRESIDENT AND CEO

                                             LOGITECH ELECTRONICS INC.

                                             BY: /s/ Greg Bell
                                                     GREG BELL
                                                     PRESIDENT AND CEO<PAGE>   1
                              TRICORD SYSTEMS, INC.

                            1998 STOCK INCENTIVE PLAN

                    (AS AMENDED AND RESTATED MARCH 22, 2001)

1.       Purpose of Plan.

The purpose of the Tricord Systems, Inc. 1998 Stock Incentive Plan (the "Plan")
is to advance the interests of Tricord Systems, Inc. (the "Company") and its
stockholders by enabling the Company and its Subsidiaries to attract and retain
persons of ability to perform services for the Company and its Subsidiaries by
providing an incentive to such individuals through equity participation in the
Company and by rewarding such individuals who contribute to the achievement by
the Company of its economic objectives.

2.       Definitions.

The following terms will have the meanings set forth below, unless the context
clearly otherwise requires:

2.1.     "Board" means the Board of Directors of the Company.

2.2.     "Broker Exercise Notice" means a written notice pursuant to which a
         Participant, upon exercise of an Option, irrevocably instructs a broker
         or dealer to sell a sufficient number of shares or loan a sufficient
         amount of money to pay all or a portion of the exercise price of the
         Option and/or any related withholding tax obligations and remit such
         sums to the Company and directs the Company to deliver stock
         certificates to be issued upon such exercise directly to such broker or
         dealer.

2.3.     "Change in Control" means an event described in Section 13.1 of the
         Plan.

2.4.     "Code" means the Internal Revenue Code of 1986, as amended.

2.5.     "Committee" means the group of individuals administering the Plan, as
         provided in Section 3 of the Plan.

2.6.     "Common Stock" means the common stock of the Company, no par value, or
         the number and kind of shares of stock or other securities into which
         such Common Stock may be changed in accordance with Section 4.3 of the
         Plan.

2.7.     "Disability" means the disability of the Participant such as would
         entitle the Participant to receive disability income benefits pursuant
         to the long-term disability plan of the Company or Subsidiary then
         covering the Participant or, if no such plan exists or is applicable to
         the Participant, the permanent and total disability of the Participant
         within the meaning of Section 22(e)(3) of the Code.

2.8.     "Eligible Recipients" means all employees (including, without
         limitation, officers and directors who are also employees) of the
         Company or any Subsidiary and any non-employee consultants and
         independent contractors of the Company or any Subsidiary.

<PAGE>   2

2.9.     "Exchange Act" means the Securities Exchange Act of 1934, as amended.

2.10.    "Fair Market Value" means, with respect to the Common Stock, as of any
         date (or, if no shares were traded or quoted on such date, as of the
         next preceding date on which there was such a trade or quote) (a) the
         closing sale price of the Common Stock if the Common Stock is listed,
         admitted to unlisted trading privileges or reported on any foreign or
         national securities exchange or on the Nasdaq National Market System or
         an equivalent foreign market on which sale prices are reported; (b) if
         the Common stock is not so listed, admitted to unlisted trading
         privileges or reported, the closing bid price reported by the Nasdaq
         SmallCap Market, OTC Bulletin Board or the National Quotation Bureau,
         Inc. or other comparable reporting service; or (c) if the Common Stock
         is not so listed or reported, such price as the Committee determines in
         good faith in the exercise of its reasonable discretion.

2.11.    "Incentive Award" means an Option, Stock Appreciation Right, Restricted
         Stock Award, Performance Unit or Stock Bonus granted to an Eligible
         Recipient pursuant to the Plan.

2.12.    "Incentive Stock Option" means a right to purchase Common Stock granted
         to an Eligible Recipient pursuant to Section 6 of the Plan that
         qualifies as an "incentive stock option" within the meaning of Section
         422 of the Code.

2.13.    "Non-Statutory Stock Option" means a right to purchase Common Stock
         granted to an Eligible Recipient pursuant to Section 6 of the Plan that
         does not qualify as an Incentive Stock Option.

2.14.    "Option" means an Incentive Stock Option or a Non-Statutory Stock
         Option.

2.15.    "Participant" means an Eligible Recipient who receives one or more
         Incentive Awards under the Plan.

2.16.    "Performance Unit" means a right granted to an Eligible Recipient
         pursuant to Section 9 of the Plan to receive a payment from the
         Company, in the form of stock, cash or a combination of both, upon the
         achievement of established performance goals.

2.17.    "Previously Acquired Shares" means shares of Common Stock that are
         already owned by the Participant or, with respect to any Incentive
         Award, that are to be issued upon the grant, exercise or vesting of
         such Incentive Award.

2.18.    "Restricted Stock Award" means an award of Common Stock granted to an
         Eligible Recipient pursuant to Section 8 of the Plan that is subject to
         the restrictions on transferability and the risk of forfeiture imposed
         by the provisions of such Section 8.

2.19.    "Retirement" means normal or approved early termination of employment
         or service pursuant to and in accordance with the regular
         retirement/pension plan or practice of the Company or Subsidiary then
         covering the Participant, provided that if the Participant is not
         covered by any such plan or practice, the Participant will be deemed to
         be covered by the Company's plan or practice for purposes of this
         determination.

2.20.    "Securities Act" means the Securities Act of 1933, as amended.

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<PAGE>   3
         2.21. "Stock Appreciation Right" means a right granted to an
               Eligible Recipient pursuant to Section 7 of the Plan to receive a
               payment from the Company, in the form of stock, cash or a
               combination of both, equal to the difference between the Fair
               Market Value of one or more shares of Common Stock and the
               exercise price of such shares under the terms of such Stock
               Appreciation Right.

         2.22. "Stock Bonus" means an award of Common Stock granted to an
               Eligible Recipient pursuant to Section 10 of the Plan.

         2.23. "Subsidiary" means any entity that is directly or indirectly
               controlled by the Company or any entity in which the Company has
               a significant equity interest, as determined by the Committee.

         2.24. "Tax Date" means the date any withholding tax obligation
               arises under the Code for a Participant with respect to an
               Incentive Award.

3.       Plan Administration.

         3.1.  The Committee. The Plan will be administered by the Board or by a
               committee of the Board. So long as the Company has a class of its
               equity securities under section 12 of the Exchange Act, any
               committee administering the Plan will consist solely of two or
               more members of the Board who are "non-employee directors: within
               the meaning of Rule 16b-3 under the Exchange Act and, if the
               board so determines in its sole discretion, who are "outside
               directors within the meaning of section 162(m) of the Code. Such
               a committee, if established, will act by a majority approval of
               the members, and a majority of the members of such a committee
               will constitute a quorum. As used in this Plan, the term
               "Committee" will refer to the Board or to such a committee, if
               established. To the extent consistent with corporate law, the
               Committee may delegate to any officers of the Company the duties,
               power and authority of the Committee under the Plan pursuant to
               such conditions or limitations as the Committee may establish;
               provided, however, that only the Committee may exercise such
               duties, power and authority with respect to Eligible Recipients
               who are subject to Section 16 of the Exchange Act. The Committee
               may exercise its duties, power and authority under the Plan in
               its sole and absolute discretion without the consent of any
               Participant or other party, unless the Plan specifically provides
               otherwise. Each determination, interpretation or other action
               made or taken by the Committee pursuant to the provisions of the
               Plan will be conclusive and binding for all purposes and on all
               persons, and no member of the Committee will be liable for any
               action or determination made in good faith with respect to the
               Plan or any Incentive Award granted under the Plan.

3.2.     Authority of the Committee.

         (a)   In accordance with and subject to the provisions of the Plan, the
               Committee will have the authority to determine all provisions of
               Incentive Awards as the Committee may deem necessary or desirable
               and as consistent with the terms of the Plan, including, without
               limitation, the following: (i) the Eligible Recipients to be
               selected as Participants; (ii) the nature and extent of the
               Incentive Awards to be made to each Participant (including the
               number of shares of Common Stock to be subject to each Incentive
               Award, any exercise price, the manner in which

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<PAGE>   4

               Incentive Awards will vest or become exercisable and whether
               Incentive Awards will be granted in tandem with other Incentive
               Awards) and the form of written agreement, if any, evidencing
               such Incentive Award; (iii) the time or times when Incentive
               Awards will be granted; (iv) the duration of each Incentive
               Award; and (v) the restrictions and other conditions to which the
               payment or vesting of Incentive Awards may be subject. In
               addition, the Committee will have the authority under the Plan to
               pay the economic value of any Incentive Award in the form of
               cash, Common Stock or any combination of both.

         (b)   The Committee will have the authority under the Plan to amend or
               modify the terms of any outstanding Incentive Award in any
               manner, including, without limitation, the authority to modify
               the number of shares or other terms and conditions of an
               Incentive Award, extend the term of an Incentive Award,
               accelerate the exercisability or vesting or otherwise terminate
               any restrictions relating to an Incentive Award, accept the
               surrender of any outstanding Incentive Award or, to the extent
               not previously exercised or vested, authorize the grant of new
               Incentive Awards in substitution for surrendered Incentive
               Awards; provided, however that the amended or modified terms are
               permitted by the Plan as then in effect and that any Participant
               adversely affected by such amended or modified terms has
               consented to such amendment or modification. No amendment or
               modification to an Incentive Award, however, whether pursuant to
               this Section 3.2 or any other provisions of the Plan, will be
               deemed to be a regrant of such Incentive Award for purposes of
               this Plan.

         (c)   In the event of (i) any reorganization, merger, consolidation,
               recapitalization, liquidation, reclassification, stock dividend,
               stock split, combination of shares, rights offering,
               extraordinary dividend or divestiture (including a spin-off) or
               any other change in corporate structure or shares, (ii) any
               purchase, acquisition, sale or disposition of a significant
               amount of assets or a significant business, (iii) any change in
               accounting principles or practices, or (iv) any other similar
               change, in each case with respect to the Company or any other
               entity whose performance is relevant to the grant or vesting of
               an Incentive Award, the Committee (or, if the Company is not the
               surviving corporation in any such transaction, the board of
               directors of the surviving corporation) may, without the consent
               of any affected Participant, amend or modify the vesting criteria
               of any outstanding Incentive Award that is based in whole or in
               part on the financial performance of the Company (or any
               Subsidiary or division thereof) or such other entity so as
               equitably to reflect such event, with the desired result that the
               criteria for evaluating such financial performance of the Company
               or such other entity will be substantially the same (in the
               discretion of the Committee or the board of directors of the
               surviving corporation) following such event as prior to such
               event; provided, however, that the amended or modified terms are
               permitted by the Plan as then in effect.

4.       SHARES AVAILABLE FOR ISSUANCE.

         4.1.  Maximum Number of Shares. Subject to adjustment as provided in
               Section 4.3 of the Plan, the maximum number of shares of Common
               Stock that will be available for issuance under the Plan will be
               11,000,000 shares, plus any shares of Common Stock which, as of

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<PAGE>   5
               the date the Plan is approved by the shareholders of the Company,
               are reserved for issuance under the Company's 1995 Stock
               Incentive Plan and which are not thereafter issued or which have
               been issued but are subsequently forfeited and which would
               otherwise have been available for further issuance under the
               Plan. Notwithstanding any other provision of the Plan to the
               contrary, no Participant in the Plan may be granted, during the
               term of the Plan, any Options or Stock Appreciation Rights, or
               any other Incentive Awards with a value based solely on an
               increase in the value of the Common Stock after the date of
               grant, relating to more than 500,000 shares of Common Stock in
               the aggregate in any fiscal year of the Company (subject to
               adjustment as provided in Section 4.3 of the Plan). The shares
               available for issuance under the Plan may, at the election of the
               Committee, be either treasury shares or shares authorized but
               unissued, and, if treasury shares are used, all references in the
               Plan to the issuance of shares will, for corporate law purposes,
               be deemed to mean the transfer of shares from treasury.

         4.2.  Accounting for Incentive Awards. Shares of Common Stock that are
               issued under the Plan or that are subject to outstanding
               Incentive Awards will be applied to reduce the maximum number of
               shares of Common Stock remaining available for issuance under the
               Plan. Any shares of Common Stock that are subject to an Incentive
               Award that lapses, expires, is forfeited or for any reason is
               terminated unexercised or unvested and any shares of Common Stock
               that are subject to an Incentive Award that is settled or paid in
               cash or any form other than shares of Common Stock will
               automatically again become available for issuance under the Plan.
               Any shares of Common Stock that constitute the forfeited portion
               of a Restricted Stock Award, however, will not become available
               for further issuance under the Plan.

         4.3.  Adjustments to Shares and Incentive Awards. In the event of any
               reorganization, merger, consolidation, recapitalization,
               liquidation, reclassification, stock dividend, stock split,
               combination of shares, rights offering, divestiture or
               extraordinary dividend (including a spin-off) or any other change
               in the corporate structure or shares of the Company, the
               Committee (or, if the Company is not the surviving corporation in
               any such transaction, the board of directors of the surviving
               corporation) will make appropriate adjustment (which
               determination will be conclusive) as to the number and kind of
               securities available for issuance under the Plan and, in order to
               prevent dilution or enlargement of the rights of Participants,
               the number, kind and, where applicable, exercise price of
               securities subject to outstanding Incentive Awards.

5.       PARTICIPATION.

Participants in the Plan will be those Eligible Recipients who, in the judgment
of the Committee, have contributed, are contributing or are expected to
contribute to the achievement of economic objectives of the Company or its
Subsidiaries. Eligible Recipients may be granted from time to time one or more
Incentive Awards, singly or in combination or in tandem with other Incentive
Awards, as may be determined by the Committee. Incentive Awards will be deemed
to be granted as of the date specified in the grant resolution of the Committee,
which date will be the date of any related agreement with the Participant.

6.       OPTIONS.

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<PAGE>   6

         6.1.  Grant. An Eligible Recipient may be granted one or more Options
               under the Plan, and such Options will be subject to such terms
               and conditions, consistent with the other provisions of the Plan,
               as may be determined by the Committee. The Committee may
               designate whether an Option is to be considered an Incentive
               Stock Option or a Non-Statutory Stock Option.

         6.2.  Exercise Price. The per share price to be paid by a Participant
               upon exercise of an Option will be determined by the Committee in
               its discretion at the time of the Option grant, provided that (a)
               such price will not be less than 100% of the Fair Market Value of
               one share of Common Stock on the date of grant with respect to an
               Incentive Stock Option (110% of the Fair Market Value if, at the
               time the Incentive Stock Option is granted, the Participant owns,
               directly or indirectly, more than 10% of the total combined
               voting power of all classes of stock of the Company or any parent
               or subsidiary corporation of the Company), and (b) such price
               will not be less than 100% of the Fair Market Value of one share
               of Common Stock on the date of grant with respect to a
               Non-Statutory Stock Option.

         6.3.  Exercisability and Duration. An Option will become exercisable at
               such times and in such installments as may be determined by the
               Committee at the time of grant; provided, however, that no Option
               may be exercisable prior to six months from its date of grant and
               no Incentive Stock Option may be exercisable after 10 years from
               its date of grant (five years from its date of grant if, at the
               time the Incentive Stock Option is granted, the Participant owns,
               directly or indirectly, more than 10% of the total combined
               voting power of all classes of stock of the Company or any parent
               or subsidiary corporation of the Company).

         6.4.  Payment of Exercise Price. The total purchase price of the shares
               to be purchased upon exercise of an Option will be paid entirely
               in cash (including check, bank draft or money order); provided,
               however, that the Committee may allow such payments to be made,
               in whole or in part and upon such terms and conditions as may be
               established by the Committee, by tender of a Broker Exercise
               Notice, Previously Acquired Shares, a promissory note (on terms
               and conditions acceptable to the Committee) or by a combination
               of such methods.

         6.5.  Manner of Exercise. An Option may be exercised by a Participant
               in whole or in part from time to time, subject to the conditions
               contained in the Plan and in the agreement evidencing such
               Option, by delivery in person, by facsimile or electronic
               transmission or through the mail of written notice of exercise to
               the Company (Attention: Chief Financial Officer) at its principal
               executive office in Plymouth, Minnesota and by paying in full the
               total exercise price for the shares of Common Stock to be
               purchased in accordance with Section 6.4 of the Plan.

         6.6.  Aggregate Limitation of Stock Subject to Incentive Stock Options.
               To the extent that the aggregate Fair Market Value (determined as
               of the date an Incentive Stock Option is granted) of the shares
               of Common Stock with respect to which incentive stock options
               (within the meaning of Section 422 of the Code) are exercisable
               for the first time by a Participant during any calendar year
               (under the Plan and any other incentive stock option plans of the
               Company or any subsidiary or parent corporation of the Company
               (within the meaning of the Code)) exceeds $100,000 (or such other
               amount as may be prescribed by the Code from time to time), such
               excess Options will be treated as Non-Statutory Stock

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<PAGE>   7

               Options. The determination will be made by taking incentive stock
               options into account in the order in which they were granted. If
               such excess only applies to a portion of an incentive stock
               option, the Committee will designate which shares will be treated
               as shares to be acquired upon exercise of an incentive stock
               option.

7.       STOCK APPRECIATION RIGHTS.

         7.1.  Grant. An Eligible Recipient may be granted one or more Stock
               Appreciation Rights under the Plan, and such Stock Appreciation
               Rights shall be subject to such terms and conditions, consistent
               with the other provisions of the Plan, as will be determined by
               the Committee.

         7.2.  Exercise Price. The exercise price of a Stock Appreciation Right
               will be determined by the Committee at the date of grant but will
               not be less than 100% of the Fair Market Value of one share of
               Common Stock on the date of grant.

         7.3.  Exercisability and Duration. A Stock Appreciation Right will
               become exercisable at such time and in such installments as may
               be determined by the Committee at the time of grant; provided,
               however, that no Stock Appreciation Right may be exercisable
               prior to six months or after 10 years from its date of grant. A
               Stock Appreciation Right will be exercised by giving notice in
               the same manner as for Options, as set forth in Section 6.5 of
               the Plan.

8.       RESTRICTED STOCK AWARDS.

         8.1.  Grant. An Eligible Recipient may be granted one or more
               Restricted Stock Awards under the Plan, and such Restricted Stock
               Awards will be subject to such terms and conditions, consistent
               with the other provisions of the Plan, as may be determined by
               the Committee. The Committee may impose such restrictions or
               conditions, not inconsistent with the provisions of the Plan, to
               the vesting of such Restricted Stock Awards as it deems
               appropriate, including, without limitation, that the Participant
               remain in the continuous employ or service of the Company or a
               Subsidiary for a certain period or that the Participant or the
               Company (or any Subsidiary or division thereof) satisfy certain
               performance goals or criteria; provided, however, that no
               Restricted Stock Award may vest prior to six months from its date
               of grant.

         8.2.  Rights as a Stockholder; Transferability. Except as provided in
               Sections 8.1, 8.3 and 14.3 of the Plan, a Participant will have
               all voting, dividend, liquidation and other rights with respect
               to shares of Common Stock issued to the Participant as a
               Restricted Stock Award under this Section 8 upon the Participant
               becoming the holder of record of such shares as if such
               Participant were a holder of record of shares of unrestricted
               Common Stock.

         8.3.  Dividends and Distributions. Unless the Committee determines
               otherwise (either in the agreement evidencing the Restricted
               Stock Award at the time of grant or at any time after the grant
               of the Restricted Stock Award), any dividends or distributions
               (including regular quarterly cash dividends) paid with respect to
               shares of Common Stock subject to the unvested portion of a
               Restricted Stock Award will be subject to the same restrictions
               as the shares to which such dividends or distributions relate. In
               the event the Committee determines not to pay such dividends or
               distributions currently, the Committee will

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<PAGE>   8

               determine whether any interest will be paid on such dividends or
               distributions. In addition, the Committee may require such
               dividends and distributions to be reinvested (and in such case
               the Participants consent to such reinvestment) in shares of
               Common Stock that will be subject to the same restrictions as the
               shares to which such dividends or distributions relate.

         8.4.  Enforcement of Restrictions. To enforce the restrictions referred
               to in this Section 8, the Committee may place a legend on the
               stock certificates referring to such restrictions and may require
               the Participant, until the restrictions have lapsed, to keep the
               stock certificates, together with duly endorsed stock powers, in
               the custody of the Company or its transfer agent or to maintain
               evidence of stock ownership, together with duly endorsed stock
               powers, in a certificateless book-entry stock account with the
               Company's transfer agent.

9.       PERFORMANCE UNITS.

An Eligible Recipient may be granted one or more Performance Units under the
Plan, and such Performance Units will be subject to such terms and conditions,
consistent with the other provisions of the Plan, as may be determined by the
Committee. The Committee may impose such restrictions or conditions, not
inconsistent with the provisions of the Plan, to the vesting of such Performance
Units as it deems appropriate, including, without limitation, that the
Participant remain in the continuous employ or service of the Company or any
Subsidiary for a certain period or that the Participant or the Company (or any
Subsidiary or division thereof) satisfy certain performance goals or criteria.
The Committee will have the discretion either to determine the form in which
payment of the economic value of vested Performance Units will be made to the
Participant (i.e., cash, Common Stock or any combination thereof) or to consent
to or disapprove the election by the Participant of the form of such payment.

10.      STOCK BONUSES.

An Eligible Recipient may be granted one or more Stock Bonuses under the Plan,
and such Stock Bonuses will be subject to such terms and conditions, consistent
with the other provisions of the Plan, as may be determined by the Committee.
The Participant will have all voting, dividend, liquidation and other rights
with respect to the shares of Common Stock issued to a Participant as a Stock
Bonus under this Section 10 upon the Participant becoming the holder of record
of such shares; provided, however, that the Committee may impose such
restrictions on the assignment or transfer of a Stock Bonus as it deems
appropriate.

11.      EFFECT OF TERMINATION OF EMPLOYMENT OR OTHER SERVICE.

         11.1. Termination Due to Death, Disability or Retirement. In the event
               a Participant's employment or other service with the Company and
               all Subsidiaries is terminated by reason of death, Disability or
               Retirement:

               (a)   All outstanding Options and Stock Appreciation Rights then
                     held by the Participant will remain exercisable to the
                     extent exercisable as of such termination for a period of
                     one year (three months in the case of termination by reason
                     of Retirement) after such termination (but in no event
                     after the expiration date of any such Option or Stock
                     Appreciation Right);

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<PAGE>   9

               (b)   All outstanding Restricted Stock Awards then held by the
                     Participant that have not vested will become fully vested
                     and non-forfeitable; and

               (c)   All outstanding Performance Units and Stock Bonuses then
                     held by the Participant will vest and/or continue to vest
                     in the manner determined by the Committee and set forth in
                     the agreement evidencing such Performance Units or Stock
                     Bonuses.

11.2.    Termination for Reasons Other than Death, Disability or Retirement.

         (a)   In the event a Participant's employment or other service is
               terminated with the Company and all Subsidiaries for any reason
               other than death, Disability or Retirement, or a Participant is
               in the employ or service of a Subsidiary and the Subsidiary
               ceases to be a Subsidiary of the Company (unless the Participant
               continues in the employ or service of the Company or another
               Subsidiary), all rights of the Participant under the Plan and any
               agreements evidencing an Incentive Award will immediately
               terminate without notice of any kind, and no Options or Stock
               Appreciation Rights then held by the Participant will thereafter
               be exercisable, all Restricted Stock Awards then held by the
               Participant that have not vested will be terminated and
               forfeited, and all Performance Units and Stock Bonuses then held
               by the Participant will vest and/or continue to vest in the
               manner determined by the Committee and set forth in the agreement
               evidencing such Performance Units or Stock Bonuses; provided,
               however, that if such termination is due to any reason other than
               voluntary termination by the Participant or termination by the
               Company or any Subsidiary for "cause," all outstanding Options
               and Stock Appreciation Rights then held by such Participant will
               remain exercisable to the extent exercisable as of such
               termination for a period of three months after such termination
               (but in no event after the expiration date of any such Option or
               Stock Appreciation Right).

         (b)   For purposes of this Section 11.2, "cause" (as determined by the
               Committee) will be as defined in any employment or other
               agreement or policy applicable to the Participant or, if no such
               agreement or policy exists, will mean (i) dishonesty, fraud,
               misrepresentation, embezzlement or deliberate injury or attempted
               injury, in each case related to the Company or any Subsidiary,
               (ii) any unlawful or criminal activity of a serious nature, (iii)
               any intentional and deliberate breach of a duty or duties that,
               individually or in the aggregate, are material in relation to the
               Participant's overall duties, or (iv) any material breach of any
               employment, service, confidentiality or non-compete agreement
               entered into with the Company or any Subsidiary.

11.3.    Modification of Rights Upon Termination. Notwithstanding the other
         provisions of this Section 11, upon a Participant's termination of
         employment or other service with the Company and all Subsidiaries, the
         Committee may in its discretion (which may be exercised at any time on
         or after the date of grant, including following such termination) cause
         Options and Stock Appreciation Rights (or any part thereof) then held
         by such Participant to become or continue to become exercisable and/or
         remain exercisable following such termination of employment or service
         and Restricted Stock Awards, Performance Units and Stock Bonuses then
         held by such Participant to vest and/or continue to vest or become free
         of transfer restrictions, as the case may be, following such

                                       9
<PAGE>   10

         termination of employment or service, in each case in the manner
         determined by the Committee; provided, however, that (a) no Option or
         Stock Appreciation may become exercisable, and no Restricted Stock
         Award may vest and become non-forfeitable, prior to six months from its
         date of grant, and (b) no Option or Stock Appreciation Right may remain
         exercisable beyond its expiration date.

11.4.    Breach of Confidentiality or Non-Compete Agreements. Notwithstanding
         anything in this Plan to the contrary, in the event that a Participant
         materially breaches the terms of any confidentiality or non-compete
         agreement entered into with the Company or any Subsidiary, whether such
         breach occurs before or after termination of such Participant's
         employment or other service with the Company or any Subsidiary, the
         Committee may immediately terminate all rights of the Participant under
         the Plan and any agreements evidencing an Incentive Award then held by
         the Participant without notice of any kind.

11.5.    Date of Termination of Employment or Other Service. Unless the
         Committee otherwise determines, a Participant's employment or other
         service will, for purposes of the Plan, be deemed to have terminated on
         the date recorded on the personnel or other records of the Company or
         the Subsidiary for which the Participant provides employment or other
         service, as determined by the Committee based upon such records.

12.      Payment of Withholding Taxes.

         12.1. General Rules. The Company is entitled to (a) withhold and deduct
               from future wages of the Participant (or from other amounts that
               may be due and owing to the Participant from the Company or a
               Subsidiary), or make other arrangements for the collection of,
               all legally required amounts necessary to satisfy any and all
               federal, state and local withholding and employment-related tax
               requirements attributable to an Incentive Award, including,
               without limitation, the grant, exercise or vesting of, or payment
               of dividends with respect to, an Incentive Award or a
               disqualifying disposition of stock received upon exercise of an
               Incentive Stock Option, or (b) require the Participant promptly
               to remit the amount of such withholding to the Company before
               taking any action, including issuing any shares of Common Stock,
               with respect to an Incentive Award.

         12.2. Special Rules. The Committee may, upon terms and conditions
               established by the Committee, permit or require a Participant to
               satisfy, in whole or in part, any withholding or
               employment-related tax obligation described in Section 12.1 of
               the Plan by electing to tender Previously Acquired Shares, a
               Broker Exercise Notice or a promissory note (on terms acceptable
               to the Committee), or by a combination of such methods.

13.      Change in Control.

         13.1. Change in Control. For purposes of this Section 13.1, a "Change
               in Control" of the Company will mean the following:

               (a)   the sale, lease, exchange or other transfer, directly or
                     indirectly, of substantially all of the assets of the
                     Company (in one transaction or in a series of related
                     transactions) to a person or entity that is not controlled
                     by the Company;

                                       10
<PAGE>   11

               (b)   the approval by the stockholders of the Company of any plan
                     or proposal for the liquidation or dissolution of the
                     Company;

               (c)   a merger or consolidation to which the Company is a party
                     if the stockholders of the Company immediately prior to the
                     effective date of such merger or consolidation have
                     "beneficial ownership" (as defined in Rule 13d-3 under the
                     Exchange Act), immediately following the effective date of
                     such merger or consolidation, of securities of the
                     surviving corporation representing 70% or less of the
                     combined voting power of the surviving corporation's then
                     outstanding securities ordinarily having the right to vote
                     at elections of directors;

               (d)   any person becomes after the effective date of the Plan the
                     "beneficial owner" (as defined in Rule 13d-3 under the
                     Exchange Act), directly or indirectly, of 30% or more of
                     the combined voting power of the Company's outstanding
                     securities ordinarily having the right to vote at elections
                     of directors;

               (e)   the Incumbent Directors cease for any reason to constitute
                     at least a majority of the Board; or

               (f)   a change in control of the Company of a nature that would
                     be required to be reported pursuant to Section 13 or 15(d)
                     of the Exchange Act, whether or not the Company is then
                     subject to such reporting requirements.

         13.2. Incumbent Directors. For purposes of this Section 13, "Incumbent
               Directors" of the Company means any individuals who are members
               of the Board on the effective date of the Plan and any individual
               who subsequently becomes a member of the Board whose election, or
               nomination for election by the Company's shareholders, was
               approved by a vote of at least a majority of the Incumbent
               Directors (either by specific vote or by approval of the
               Company's proxy statement in which such individual is named as a
               nominee for director without objection to such nomination).

         13.3. Acceleration of Vesting. Without limiting the authority of the
               Committee under Section 3.2 of the Plan, if a Change in Control
               of the Company occurs, then, unless otherwise provided in the
               agreement evidencing an Incentive Award, (a) all outstanding
               Options and Stock Appreciation Rights that have been held by a
               Participant for at least six months will become immediately
               exercisable in full and will remain exercisable for the remainder
               of their terms, regardless of whether the Participant to whom
               such Options or Stock Appreciation Rights have been granted
               remains in the employ or service of the Company or any
               Subsidiary; (b) all outstanding Restricted Stock Awards that have
               been held by the Participant for at least six months will become
               immediately fully vested and non-forfeitable; and (c) all
               outstanding Performance Units and Stock Bonuses then held by the
               Participant will vest and/or continue to vest in the manner
               determined by the Committee and set forth in the agreement
               evidencing such Performance Units or Stock Bonuses.

         13.4. Cash Payment for Options. If a Change in Control of the Company
               occurs, then the Committee, if approved by the Committee either
               in an agreement evidencing an Incentive Award at the time of
               grant or at any time after the grant of an Incentive Award, may
               determine that some or all Participants holding outstanding
               Options will receive, with respect to some or all of the shares
               of Common Stock subject to such Options, as of the

                                       11
<PAGE>   12

               effective date of any such Change in Control of the Company, cash
               in an amount equal to the excess of the Fair Market Value of such
               shares immediately prior to the effective date of such Change in
               Control of the Company over the exercise price per share of such
               Options.

         13.5. Limitation on Change in Control Payments. Notwithstanding
               anything in Section 13.3 or 13.4 of the Plan to the contrary, if,
               with respect to a Participant, the acceleration of the vesting of
               an Incentive Award as provided in Section 13.3 or the payment of
               cash in exchange for all or part of an Incentive Award as
               provided in Section 13.4 (which acceleration or payment could be
               deemed a "payment" within the meaning of Section 280G(b)(2) of
               the Code), together with any other payments which such
               Participant has the right to receive from the Company or any
               corporation that is a member of an "affiliated group" (as defined
               in Section 1504(a) of the Code without regard to Section 1504(b)
               of the Code) of which the Company is a member, would constitute a
               "parachute payment" (as defined in Section 280G(b)(2) of the
               Code), then the payments to such Participant pursuant to Section
               13.3 or 13.4 will be reduced to the largest amount as will result
               in no portion of such payments being subject to the excise tax
               imposed by Section 4999 of the Code; provided, however, that if
               such Participant is subject to a separate agreement with the
               Company or a Subsidiary that specifically provides that payments
               to such Participant will not be reduced even if such payments
               would constitute excess parachute payments or provides that the
               Participant will have the discretion to determine which payments
               will be reduced in order to avoid excess parachute payments
               (regardless of whether such separate agreement specifically
               references Incentive Awards under this Plan), then the
               limitations of this Section 13.5 will, to that extent, not apply.

14.      RIGHTS OF ELIGIBLE RECIPIENTS AND PARTICIPANTS; TRANSFERABILITY.

         14.1. Employment or Service. Nothing in the Plan will interfere with or
               limit in any way the right of the Company or any Subsidiary to
               terminate the employment or service of any Eligible Recipient or
               Participant at any time, nor confer upon any Eligible Recipient
               or Participant any right to continue in the employ or service of
               the Company or any Subsidiary.

         14.2. Rights as a Stockholder. As a holder of Incentive Awards (other
               than Restricted Stock Awards and Stock Bonuses), a Participant
               will have no rights as a stockholder unless and until such
               Incentive Awards are exercised for, or paid in the form of,
               shares of Common Stock and the Participant becomes the holder of
               record of such shares. Except as otherwise provided in the Plan,
               no adjustment will be made for dividends or distributions with
               respect to such Incentive Awards as to which there is a record
               date preceding the date the Participant becomes the holder of
               record of such shares, except as the Committee may determine.

         14.3. Restrictions on Transfer. Except pursuant to testamentary will or
               the laws of descent and distribution or as otherwise expressly
               permitted by the Plan, no right or interest of any Participant in
               an Incentive Award prior to the exercise or vesting of such
               Incentive Award will be assignable or transferable, or subjected
               to any lien, during the lifetime of the Participant, either
               voluntarily or involuntarily, directly or indirectly, by
               operation of law or otherwise. A Participant will, however, be
               entitled to designate a beneficiary to receive an Incentive Award
               upon such Participant's death,

                                       12
<PAGE>   13

               and in the event of a Participant's death, payment of any amounts
               due under the Plan will be made to, and exercise of any Options
               or Stock Appreciation Rights (to the extent permitted pursuant to
               Section 11 of the Plan) may be made by, the Participant's legal
               representatives, heirs and legatees.

         14.4. Non-Exclusivity of the Plan. Nothing contained in the Plan is
               intended to modify or rescind any previously approved
               compensation plans or programs of the Company or create any
               limitations on the power or authority of the Board to adopt such
               additional or other compensation arrangements as the Board may
               deem necessary or desirable.

15.      SECURITIES LAW AND OTHER RESTRICTIONS.

Notwithstanding any other provision of the Plan or any agreements entered into
pursuant to the Plan, the Company will not be required to issue any shares of
Common Stock under this Plan, and a Participant may not sell, assign, transfer
or otherwise dispose of shares of Common Stock issued pursuant to Incentive
Awards granted under the Plan, unless (a) there is in effect with respect to
such shares a registration statement under the Securities Act and any applicable
state securities laws or an exemption from such registration under the
Securities Act and applicable state securities laws, and (b) there has been
obtained any other consent, approval or permit from any other regulatory body
which the Committee deems necessary or advisable. The Company may condition such
issuance, sale or transfer upon the receipt of any representations or agreements
from the parties involved, and the placement of any legends on certificates
representing shares of Common Stock, as may be deemed necessary or advisable by
the Company in order to comply with such securities law or other restrictions.

16.      PLAN AMENDMENT, MODIFICATION AND TERMINATION.

The Board may suspend or terminate the Plan or any portion thereof at any time,
and may amend the Plan from time to time in such respects as the Board may deem
advisable in order that Incentive Awards under the Plan will conform to any
change in applicable laws or regulations or in any other respect the Board may
deem to be in the best interests of the Company; provided, however, that no
amendments to the Plan will be effective without approval of the stockholders of
the Company if stockholder approval of the amendment is then required pursuant
to Rule 16b-3 under the Exchange Act, Section 422 of the Code or the rules of
Nasdaq or any stock exchange. No termination, suspension or amendment of the
Plan may adversely affect any outstanding Incentive Award without the consent of
the affected Participant; provided, however, that this sentence will not impair
the right of the Committee to take whatever action it deems appropriate under
Sections 3.2(c) and 4.3 of the Plan.

17.      EFFECTIVE DATE AND DURATION OF THE PLAN.

The Plan is effective as of February 20, 1998, the date it was adopted by the
Board. The Plan will terminate at midnight on February 20, 2008, and may be
terminated prior to such time by Board action, and no Incentive Award will be
granted after such termination. Incentive Awards outstanding upon termination of
the Plan may continue to be exercised, or vest or become free of restrictions,
in accordance with their terms.

18.      MISCELLANEOUS

         18.1. Governing Law. The validity, construction, interpretation,
               administration and effect of the Plan and any rules, regulations
               and actions relating to the Plan will be governed by and
               construed exclusively in accordance with the laws of the State of
               Minnesota, without

                                       13
<PAGE>   14

               regard to the conflicts of laws provisions of the State of
               Minnesota or any other jurisdictions.

         18.2. Successors and Assigns. The Plan will be binding upon and inure
               to the benefit of the successors and permitted assigns of the
               Company and the Participants.

                                       14

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