10-Q

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)
ý	QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 31, 2004
OR
o	TRANSACTION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from N/A to N/A

Commission file number 0-1424

ADC Telecommunications, Inc.
(Exact name of registrant as specified in its charter)
Minnesota	41-0743912
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
13625 Technology Drive, Eden Prairie, MN 55344-2252
(Address of principal executive offices) (Zip code)
(952) 938-8080
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

YES  ý NO  o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

YES  ý NO  o

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common stock, $.20 par value:  807,277,031shares as of March 8, 2004

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ADC TELECOMMUNICATIONS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS—UNAUDITED

(In millions)

	January 31, 2004		October 31, 2003
ASSETS:
CURRENT ASSETS:
Cash and cash equivalents	$	724.6	$	718.0
Available-for-sale securities	25.0		26.7
Accounts receivable, net	97.3		99.8
Unbilled revenue	27.1		30.6
Inventories, net	68.6		66.3
Assets of discontinued operations	23.4		21.6
Prepaid and other current assets	53.4		48.4
Total current assets	1,019.4		1,011.4
PROPERTY AND EQUIPMENT, NET	182.7		190.6
ASSETS HELD FOR SALE	20.5		25.1
RESTRICTED CASH	16.0		15.8
AVAILABLE-FOR-SALE SECURITIES	17.1		19.5
OTHER ASSETS	34.4		38.2
Total assets	$	1,290.1	$	1,300.6
LIABILITIES AND SHAREOWNERS’ INVESTMENT:
CURRENT LIABILITIES:
Accounts payable	$	49.2	$	46.4
Accrued compensation and benefits	45.0		52.8
Restructuring accrual	25.6		29.3
Other accrued liabilities	103.7		111.7
Liabilities of discontinued operations	23.4		25.7
Notes payable	7.5		8.3
Total current liabilities	254.4		274.2
LONG-TERM NOTES PAYABLE	400.0		400.0
OTHER LONG-TERM LIABILITIES	2.5		2.5
Total liabilities	656.9		676.7
SHAREOWNERS’ INVESTMENT (807.7 and 806.6 shares outstanding, respectively)	633.2		623.9
Total liabilities and shareowners’ investment	$	1,290.1	$	1,300.6

See accompanying notes to condensed consolidated financial statements.

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ADC TELECOMMUNICATIONS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS—UNAUDITED

(In millions, except per share amounts)

	Three Months Ended January 31,
	2004			2003
NET SALES:
Product	$	123.9		$	146.5
Service	44.6			48.1
TOTAL NET SALES	168.5			194.6
COST OF SALES:	64.5			83.1
Product	37.7			42.4
Service	102.2			125.5
TOTAL COST OF SALES
GROSS PROFIT	66.3			69.1
OPERATING EXPENSES:
Research and development	21.7			30.3
Selling and administration	42.1			61.4
Impairment charges	—			10.3
Restructuring charges	6.9			8.2
Total Operating Expenses	70.7			110.2
OPERATING LOSS	(4.4		)	(41.1		)
OTHER INCOME (EXPENSE), NET	7.8			(0.5		)
INCOME (LOSS) BEFORE INCOME TAXES	3.4			(41.6		)
PROVISION (BENEFIT) FOR INCOME TAXES	—			—
INCOME (LOSS) FROM CONTINUING OPERATIONS	3.4			(41.6		)
DISCONTINUED OPERATIONS, NET OF TAX:
(Loss) Income from discontinued operations	(2.2		)	0.1
Loss on divestiture of subsidiary	(3.6		)	—
	(5.8		)	0.1
NET LOSS	$	(2.4	)	$	(41.5	)
AVERAGE COMMON SHARES OUTSTANDING (BASIC)	806.8			801.1
AVERAGE COMMON SHARES OUTSTANDING (DILUTED)	812.2			801.1
BASIC AND DILUTED EARNINGS (LOSS) PER SHARE:
Continuing operations	$	0.00		$	(0.05	)
Discontinued operations	$	(0.01	)	$	0.00
Basic and diluted earnings (loss) per share	$	0.00		$	(0.05	)

See accompanying notes to condensed consolidated financial statements.

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ADC TELECOMMUNICATIONS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS—UNAUDITED

(In millions)

	Three Months Ended January 31,
	2004			2003
OPERATING ACTIVITIES:
Net loss	$	(2.4	)	$	(41.5	)
Adjustments to reconcile net loss to net cash from operating activities:
Inventory and fixed asset impairments	—			10.3
Depreciation and amortization	11.4			15.3
(Recoveries) Provision for losses on receivables	(4.5		)	1.1
Inventory reserves	1.5			1.1
Non-cash stock compensation	0.6			2.1
Loss on write-down of investments	—			2.7
Gain on sale of investments	(4.4		)	(4.7		)
Loss on sale of business and product lines	0.3			2.8
Gain on sale of fixed assets	(0.4		)	(0.5		)
Other, net	(0.7		)	0.3
Changes in operating assets and liabilities, net of acquisitions and divestitures:
Accounts and unbilled receivables	9.8			24.1
Inventories	(3.8		)	0.6
Prepaid and other assets	1.7			105.3
Accounts payable	3.1			(17.4		)
Accrued liabilities	(18.4		)	(51.4		)
Total cash (used for) provided by operating activities	(6.2		)	50.2
INVESTING ACTIVITIES:
Divestitures, net of cash disposed	5.0			0.5
Property and equipment additions	(2.9		)	(5.7		)
Property and equipment disposals	5.6			—
Change in restricted cash	(0.2		)	34.5
Sale of available-for-sale securities, net	4.4			4.0
Total cash provided by investing activities	11.9			33.3
FINANCING ACTIVITIES:
Issuance (repayments) of debt	(0.8		)	3.1
Common stock issued	1.8			0.3
Total cash provided by financing activities	1.0			3.4
EFFECT OF EXCHANGE RATE CHANGES ON CASH	(0.1		)	0.5
INCREASE IN CASH AND CASH EQUIVALENTS	6.6			87.4
CASH AND CASH EQUIVALENTS, beginning of period	718.0			278.9
CASH AND CASH EQUIVALENTS, end of period	$	724.6		$	366.3

See accompanying notes to condensed consolidated financial statements.

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ADC TELECOMMUNICATIONS, INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—UNAUDITED

Note 1 - Basis of Presentation:

The interim information furnished in this report is unaudited but reflects all normal recurring adjustments, which are necessary, in the opinion of our management, for a fair statement of the results for the interim periods.  The operating results for the quarter ended January 31, 2004, are not necessarily indicative of the operating results to be expected for the full fiscal year. These statements should be read in conjunction with our most recent Annual Report filed on Form 10-K for the fiscal year ended October 31, 2003.

Recently Issued Accounting Pronouncements.  In January 2003, the FASB issued Interpretation No. 46, “Consolidation of Variable Interest Entities, an Interpretation of Accounting Research Bulletin No. 51,” which requires companies to consolidate certain types of variable interest entities.  A variable interest entity is an entity that has inadequate invested equity at risk to meet expected future losses, or whose holders of the equity investments lack any of the following three characteristics:  (i) the ability to make decisions about the entity’s activities; (ii) the obligation to absorb the entity’s losses if they occur; or (iii) the right to receive the entity’s future returns if they occur.  Interpretation No. 46 is applicable immediately for all variable interests created after January 31, 2003.  For all variable interest entities created before February 1, 2003, the provisions of this interpretation are effective in the first fiscal year or interim period beginning after June 15, 2003 (our fourth quarter of fiscal 2003). We are currently a party to a transaction involving a variable interest entity relating to our divestiture of the BroadAccess40 business (See Note 2).  After performing an analysis, we determined we are not the primary beneficiary of the divested business.  As such, we will not consolidate the variable interest entity.

Summary of Significant Accounting Policies.  A detailed description of our significant accounting policies can be found in our most recent Annual Report filed on Form 10-K for the fiscal year ended October 31, 2003.

Note 2 - Discontinued Operations:

During the first quarter of fiscal 2004, we entered into an agreement to sell our BroadAccess40 business, which was included in our Broadband Infrastructure and Access segment.  In accordance with SFAS 144, the financial results of this business is reported separately as discontinued operations for all periods presented.  This transaction closed on February 24, 2004.

    The purchasers acquired all of the stock of our subsidiary that owns rights to BroadAccess40 and as such assumed substantially all liabilities associated with this business with the exception of a $7.5 million note payable that was paid in full by us prior to the closing.  The purchasers did not pay cash consideration but issued a promissory note to us for approximately $3.8 million that is payable within two years of the closing and a warrant to acquire up to 15% of the stock of the entity they purchased.  We also received certain contingent payment rights based upon future revenues of the BroadAccess40 business.

The financial results of BroadAccess40 included in discontinued operations were as follows (in millions):

	Three months ended January 31,
	2004			2003
Revenue	$	5.0		$	5.3
Net (Loss) Income from discontinued operations	(2.2		)	0.1
Loss from divestiture of discontinued operations	(3.6		)	—
(Loss) Income from discontinued operations	(5.8		)	0.1

Note 3 - Inventories:

Inventories include material, labor and overhead and are stated at the lower of first-in, first-out cost or market. Inventories consisted of (in millions):

5

	January 31, 2004			October 31, 2003
Purchased materials and manufactured products	$	100.8		$	98.7
Work-in-process	2.8			2.3
Less:  Inventory reserve	(35.0		)	(34.7		)
	$	68.6		$	66.3

Note 4 - Income Taxes:

A deferred tax asset generally represents future tax benefits to be received when certain expenses previously recognized in U.S. GAAP-based income statements become deductible expenses under applicable income tax laws.  Thus, realization of a deferred tax asset is dependent on future taxable income against which these deductions can be applied.  SFAS No. 109, “Accounting for Income Taxes,” requires that a valuation allowance be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.  In fiscal 2003 and for the three months ended January 31, 2004, we recorded a full valuation allowance against the increase in our deferred tax assets. We expect to provide a full valuation allowance on any future tax benefits until we can sustain a level of profitability that demonstrates our ability to utilize these assets. We will not record tax benefits or significant provisions for pre-tax income (loss) until either our deferred tax assets are fully utilized to reduce future income tax liabilities or the value of our deferred tax assets are restored on the balance sheet.  As of January 31, 2004, we had $818.1 million of deferred tax assets that have a full valuation allowance against them and, therefore, such deferred tax assets are not reflected on the Condensed Consolidated Balance Sheet.  Our deferred tax assets expire through October 31, 2024.

Note 5 - Property Plant & Equipment:

We record our property, plant and equipment, net of accumulated depreciation, at the appropriate carrying valuein accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.”

	January 31, 2004			October 31, 2003
Land and buildings	$	127.1		$	126.7
Machinery and equipment	367.5			367.1
Furniture and fixtures	37.6			37.4
Less: accumulated depreciation	(355.3		)	(343.7		)
Total	176.9			187.5
Construction in progress (CIP)	5.8			3.1
Total	$	182.7		$	190.6

Note 6- Comprehensive Loss:

The following table presents the calculation of comprehensive loss as required by SFAS No. 130 “Reporting Comprehensive Income.” Comprehensive loss has no impact on our net loss but is reflected in our balance sheet through adjustments to shareowners’ investment.  The components of comprehensive loss are as follows (in millions):

	Three Months Ended January 31,
	2004			2003
Net loss	$	(2.4	)	$	(41.5	)
Change in cumulative translation adjustments	4.4			(3.6		)
Reclassification adjustment for realized (gains) losses on securities classified as available for sale, net-of-tax	(4.1		)	—
Unrealized gain (loss) from securities classified as available for sale, net-of-tax	(0.2		)	2.2
Comprehensive loss	$	(2.3	)	$	(42.9	)

Note 7 – Net Income (Loss) from Continuing Operations Per Share:

The following table presents a reconciliation of the numerators and denominators of basic and diluted earnings per share from continuing operations (in millions, except for per share amounts):

	Three months Ended January 31,
	2004		2003
Numerator:
Net income (loss) from continuing operations	$	3.4	$	(41.6	)
Denominator:
Weighted average common shares outstanding	806.8		801.1
Employee stock options and other	5.4		—
Weighted average common shares outstanding, assuming dilution	812.2		801.1
Basic and diluted earnings (loss) per share from continuing operations	$	0.00	$	(0.05	)

Employee stock options to acquire 39.0 million shares were excluded from the dilutive securities described above for the three months ended January 31, 2004, because the excercise prices of these options were greater than the average market price of the common stock.  Employee stock options to acquire 115.6 million shares were excluded from the dilutive securities described above for the three months ended January 31, 2003, as our net loss for that period would have made their inclusion anti-dilutive.

Warrants to acquire 99.7 million shares that were issued in connection with our convertible notes were excluded from the dilutive securities described above for the quarter ended January 31, 2004, because the strike price of these warrants was greater than the average market price of the common stock.  See Note 10 for a discussion of the warrants.

Because of their anti-dilutive effect, all shares reserved for issuance upon conversion of our convertible notes were excluded for the three months ended January 31, 2004.  Upon achieving positive net income in a reporting period, our recent issuance of convertible notes will require us to use the “if-converted” method for computing diluted earnings per share with respect to the shares reserved for issuance upon conversion of the notes.  Under this method, we will add back the net-of-tax interest expense on the convertible notes to net income and then divide this amount by outstanding shares, including all 99.7 million shares reserved for issuance upon conversion of the notes.  If this calculation results in further dilution of the earnings per share, our diluted earnings per share will include all 99.7 million shares of common stock reserved for issuance upon conversion of our convertible notes.  If this calculation is anti-dilutive, the net-of-tax interest on the convertible notes will not be added back and the 99.7 million shares of common stock reserved for issuance upon conversion of our convertible notes will not be included.  See Note 10 for a discussion of our convertible notes.

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Note 8 - Segment Reporting:

The “management approach” required by SFAS No. 131, “Disclosures about Segments of an Enterprise and Related Information,” requires us to disclose selected financial data by operating segment. This approach is based on the way we organize segments within an enterprise for making operating decisions and assessing performance. We have identified two reportable segments based on our internal organizational structure, management of operations and performance evaluation. These segments are Broadband Infrastructure and Access, and Integrated Solutions. Segment detail is summarized as follows (in millions):

	Broadband Infrastructure and Access			Integrated Solutions			Unallocated Items			Consolidated
Three Months Ended January 31, 2004
External sales:
Product	$	106.0		$	17.9		$	—		$	123.9
Service				44.6			—			44.6
Total external sales	106.0			62.5			—			168.5
Impairment, restructuring and other disposal charges (1)	—			—			(6.9		)	(6.9		)
Operating loss	4.5			(3.4		)	(5.5		)	(4.4		)
Other income (expense), net	—			—			7.8			7.8
Income from continuing operations before income taxes	4.5			(3.4		)	2.3			3.4
Assets	184.6			168.2			937.3			1,290.1
Three Months Ended January 31, 2003
External sales:
Product	$	127.2		$	19.3		$	—		$	146.5
Service	—			48.1			—			48.1
Total external sales	127.2			67.4			—			194.6
Impairment, restructuring and other disposal charges (1)	—			—			(18.5		)	(18.5		)
Operating loss	(7.9		)	(8.6		)	(24.6		)	(41.1		)
Other income (expense), net	—			—			(0.5		)	(0.5		)
Loss from continuing operations before income taxes	(7.9		)	(8.6		)	(25.1		)	(41.6		)
Assets	259.7			208.5			832.4			1,300.6

7

(1)These impairment, restructuring and other disposal charges were not allocated to a specific segment.  See Note 9 for a discussion of these charges.

Note 9 - Impairment, Restructuring and Other Disposal Charges:

During the three months ended January 31, 2004 and 2003, we continued our plan to improve operating performance by restructuring and streamlining our operations.  As a result, we incurred impairment charges related to the disposal of excess equipment, restructuring charges associated with workforce reductions as well as the consolidation of excess facilities, and other disposal charges associated with inventory write-offs and certain administrative charges related to product line divestitures or shutdowns. The impairment, restructuring and other disposal charges resulting from our actions, by category of expenditures, are as follows for the three months ended January 31, 2004 and 2003, respectively (in millions):

Three Months Ended January 31, 2004	Impairment Charges		Restructuring Charges		Total
Employee severance costs	$	—	$	3.3	$	3.3
Facility consolidation and lease termination	—		3.6		3.6
Total	$	—	$	6.9	$	6.9

Three Months Ended January 31, 2003	Impairment Charges		Restructuring Charges			Total
Employee severance costs	$	—	$	11.7		$	11.7
Fixed asset write-downs	10.3		—			10.3
Facility consolidation and lease termination	—		(3.5		)	(3.5		)
Total	$	10.3	$	8.2		$	18.5

Impairment Charges: As a result of our intention to sell, scale-back or exit non-strategic businesses, we evaluated our property and equipment assets for impairment. For the three months ended January 31, 2003, we recognized $10.3 million of impairment charges in accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.”

Restructuring Charges:  Restructuring charges relate principally to employee severance costs and facility consolidation costs resulting from the closure of facilities and other workforce reductions attributable to our efforts to reduce costs.  During the three months ended January 31, 2004 and 2003, approximately 65 and 670 employees, respectively, were impacted by reductions in force.

Facility consolidation and lease termination costs represent lease termination and other costs associated with our decision to consolidate and close duplicative or excess manufacturing and office facilities.  The charge was a negative number during the three months ended January 31, 2003, because we negotiated a favorable lease termination settlement with a landlord of a leased facility.  As a result, we reversed $4.2 million of the restructuring accrual we had established in fiscal 2002 for this lease termination.

Effect of Restructuring Charges on Future Cash Flows: The following table provides detail on the activity and our remaining restructuring accrual balance by category as of January 31, 2004 (in millions):

Type of Charge	Accrual October 31, 2003		Net Additions		Cash Charges		Accrual January 31, 2004
Employee severance costs	$	5.3	$	3.3	$	3.3	$	5.3
Facilities consolidation	24.0		3.6		7.3		20.3
Other	—		—		—		—
Total	$	29.3	$	6.9	$	10.6	$	25.6

We expect that substantially all of the remaining $5.3 million accrual relating to employee severance costs as of January 31, 2004, will be paid from unrestricted cash by the end of the first quarter of fiscal 2005. Of the $20.3 million to be paid for the consolidation of facilities, we expect that approximately $5.0 million will be paid from unrestricted cash through January 31, 2005, and that the balance will be paid from unrestricted cash over the respective lease terms of the facilities through 2015. Based on our intention to continue to consolidate and close duplicative or excess manufacturing operations in order to reduce our cost structure, we may incur additional restructuring charges (both cash and non-cash) in future periods.  These restructuring charges may have a material effect on our operating results.

In addition to the restructuring accrual described above, we have $20.5 million of assets held for sale (of which $5.4 million relates to our Broadband Infrastructure and Access segment and $15.1 million was not allocated to either of our segments). We classified these assets as “Held for Sale” pursuant to our decision to exit non-strategic product lines and to reduce the size of our operations.  We expect to sell or dispose of these assets before January 31, 2005.  During the three months ended January 31, 2004, we sold two properties, previously classified as held for sale, for proceeds of $5.2 million and a gain of $0.2 million.

8

Note 10 - Long-Term Debt:

On June 4, 2003, we issued $400.0 million of convertible unsecured subordinated notes in two separate transactions pursuant to Rule 144A under the Securities Act of 1933.  The net proceeds to us from this offering were $355.5 million after underwriting discounts of $10.0 million and the net payment for the purchased call options and warrant transactions described below.  In the first transaction, we issued $200.0 million of 1.0% fixed rate convertible unsecured subordinated notes that mature on June 15, 2008.  In the second transaction, we issued $200.0 million of convertible unsecured subordinated notes that have a variable interest rate and mature on June 15, 2013.  The interest rate for the variable rate notes is equal to 6-month LIBOR plus 0.375%.  The interest rate for the variable rate notes will be reset on each semi-annual interest payment date (i.e. which are June 15 and December 15 of each year beginning on December 15, 2003 for both the fixed and variable rate notes). The interest rate on the variable note is 1.605% for the period ending June 15, 2004. The holders of both the fixed and variable rate notes may convert all or some of their notes into shares of our common stock at any time prior to maturity at a conversion price of $4.013 per share.  We may not redeem the fixed rate notes anytime prior to their maturity date.  We may redeem any or all of the variable rate notes at any time on or after June 23, 2008.

Concurrent with the issuance of the fixed and variable rate notes, we purchased five and ten-year call options on our common stock to reduce the potential dilution from conversion of the notes.  These call options become exercisable upon conversion of the notes.  Under the call options we have the right to purchase from the counterparty at a purchase price of $4.013 per share the aggregate number of shares that we are obligated to issue upon conversion of the fixed and variable notes (i.e. 99.7 million shares).  We also have the option to settle the call options with the counterparty through a net share settlement or cash settlement, either of which would be based on the extent to which the then-current market price of our common stock exceeds $4.013 per share.  The total cost of the call options was $137.3 million, which was recognized in shareowners’ investment.  The cost of the call options was partially offset by the sale of warrants to acquire shares of our common stock with terms of five and ten years to the same counterparty with whom we entered into the call options.  The warrants are exercisable for an aggregate of 99.7 million shares at an exercise price of $5.28 per share.  The warrants become exercisable upon conversion of the notes, and may be settled, at our option, either through a net share settlement or a net cash settlement, either of which would be based on the extent to which the then-current market price of our common stock exceeds $5.28 per share.  The sale of the warrants produced gross proceeds of $102.8 million which was recognized in shareowners’ investment.  The call options and the warrants are subject to early expiration upon conversion of the notes.  The net effect of the call options and the warrants is either to reduce the potential dilution from the conversion of the notes (if we elect net share settlement) or to increase the net cash proceeds of the offering (if we elect net cash settlement) if the notes are converted at a time when the current market price of our common stock is greater than $4.013 per share.

We plan to use the cash proceeds from this offering for general corporate purposes and strategic opportunities, including financing for possible acquisitions or investments in complementary businesses, technologies or products.

Note 11 – Employee Benefit Plans:

In fiscal 2003, we adopted the disclosure provisions of SFAS No. 148 “Accounting for Stock-Based Compensation”.  However, we did not adopt the transition provisions of SFAS No. 148.  As a result of adopting the disclosure provisions of SFAS No. 148, we are required to disclose the method we use to account for stock-based compensation on a quarterly basis.  Stock compensation is awarded to certain key employees in the form of stock options and restricted stock and beginning on March 2, 2004 in the form of restricted stock units.  We account for our stock compensation in accordance with APB Opinion 25, “Accounting for Stock Issued to Employees,” and related interpretations. All stock options are issued at fair market value on the date of grant.  Accordingly, we did not recognize stock compensation expense for stock options granted during the periods presented.  SFAS No. 148 also requires disclosure of how stock compensation expense would be computed under SFAS No. 123, “Accounting for Stock Based Compensation,” using the fair value method.  Under the fair value method, compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period.  Fair value is determined using an option-pricing model, such as Black-Scholes, that takes into account the stock price at the grant date, the exercise price, the expected life of the option, the volatility of the underlying stock, the expected dividends, and the risk-free interest rate over the expected life of the option.  The following table summarizes what our operating results would have been if the fair value method of accounting for stock options had been utilized (in millions, except for per share amounts):

9

	Three months Ended January 31,
	2004			2003
Net Loss
As reported	$	(2.4	)	$	(41.5	)
Add: Stock-based employee compensation expense included in reported loss	0.6			2.1
Deduct: Stock compensation expense – fair value based method	(7.0		)	(14.7		)
Pro Forma Net Loss	$	(8.8	)	(54.1		)
Loss Per Share – Basic and Diluted
As reported	$	0.00		$	(0.05	)
Pro forma	$	(0.01	)	(0.07		)

During the third quarter of fiscal 2003, we offered to eligible employees the right to exchange certain of their employee stock options for a lesser number of new options to be granted six months and one day following the surrender of their existing options.  The new options, which were granted on December 29, 2003, have an exercise price of $2.83 per share, which was equal to the average of the high and low trading price of our common stock on the grant date.  These options will vest over a two-year period from the grant date.  For purposes of the above tabular disclosure of operating results under the fair value method of accounting stock options, the unrecognized compensation cost of the cancelled options and the incremental fair value of the replacement options will be amortized over a 30 month period, which consists of the 24 month vesting period for the replacement options and the six month and one day period between the cancellation of the surrendered options and the grant of the replacement options.

We have issued restricted stock as part of employee incentive programs as well as in conjunction with our fiscal year 2000 purchase of Broadband Access Systems, Inc.  The fair market value of the restricted stock is amortized over the projected remaining vesting period.

Note 12 -Contingencies:

On March 5, 2003 we were served with a shareowner lawsuit brought by Wanda Kinermon that was filed in the United States District Court for the District of Minnesota.  The complaint names ADC, William J. Cadogan, our former Chairman and Chief Executive Officer, and Robert E. Switz, our Chief Executive Officer, as defendants.  During the period the lawsuit covers Mr. Switz held the position of Executive Vice President and Chief Financial Officer.  Since this lawsuit was served we have been named as a defendant in 11 other substantially similar lawsuits.  These shareowner lawsuits have been consolidated into a single lawsuit, that is now captioned In Re ADC Telecommunications, Inc. Securities Litigation.  This lawsuit purports to bring suit on behalf of a class of purchasers of our publicly traded securities from August 17, 2000 to March 28, 2001.  The complaint alleges that we violated the securities laws by making false and misleading statements about our financial performance and business prospects during this period.  On November 24, 2003 we filed a motion to dismiss this lawsuit.  This motion is pending before the court.  We believe that this lawsuit is without merit and intend to defend this action vigorously.  However, because litigation by its nature is uncertain, we cannot predict the ultimate outcome of this matter with certainty and an unfavorable resolution of this matter could materially adversely affect our business, results of operations or financial condition.

On May 19, 2003 we were served with a lawsuit brought by Lorraine Osborne that was filed in the United States District Court for the District of Minnesota.  The complaint names ADC and several of our current and former officers, employees and directors as defendants.  After this lawsuit was served, we were served with two substantially similar lawsuits.  All three of these lawsuits were then consolidated into a single lawsuit, that is captioned In Re ADC Telecommunications, Inc. ERISA Litigation.  This lawsuit has been brought by individuals who seek to represent a class of participants in our Retirement Savings Plan who elected our common stock as one of the investment alternatives under the plan from February 2000 to present.  The lawsuit alleges a breach of fiduciary duties under the Employee Retirement Income Security Act.  On February 2, 2004 we filed a motion to dismiss this lawsuit.  This motion is pending before the court.  We believe that this lawsuit is without merit and intend to defend this action vigorously.  However, because litigation by its nature is uncertain, we cannot predict the ultimate outcome of this matter with certainty and an unfavorable resolution of this matter could materially adversely affect our business, results of operations or financial condition.

On January 22, 2004 we were served with a lawsuit brought by Theodore Pardo that was filed in the United States District Court for the District of Minnesota.  The complaint is structured as a shareholder derivative case and includes our company as a plaintiff and as a nominal defendant and names several of our current and former officers and directors as defendants.  This lawsuit was brought by the plaintiff who seeks to represent the interests of ADC and its shareholders.  The complaint alleges that the defendants breached their fiduciary duties to us and our shareholders by failing to maintain proper accounting controls and by making allegedly false and misleading statements about our financial performance and business prospects that resulted in violations of the securities laws.  We expect that a motion to dismiss this lawsuit will be filed during the second quarter of fiscal 2004.  We cannot at this time predict the ultimate outcome of this matter and an unfavorable resolution of this matter could materially adversely affect our business, results of operations or financial condition.

We believe that the three lawsuits described above are without merit and intend to defend these actions vigorously.  However, litigation is by its nature uncertain and unfavorable resolutions of these lawsuits could materially adversely affect our business, results of operations or financial condition.

We are a party to various other lawsuits, proceedings and claims arising in the ordinary course of business or otherwise.  The amount of monetary liability that could result from an adverse result in many of those lawsuits, proceedings or claims cannot be determined at this time.  As of January 31, 2004, we had recorded $8.9 million in loss reserves in the event of such adverse outcomes in these other matters. However, because litigation by its nature is uncertain, we cannot predict the ultimate outcome of these matters with certainty and unfavorable resolution of these matters could materially adversely affect our business, results of operations or financial condition.

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Note 15 - Subsequent Events:

On March 2, 2004, our shareowners approved proposals to amend our Global Stock Incentive Plan and to amend our Articles of Incorporation to increase our authorized shares of common stock by 1.2 billion shares.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Business

We are a leading global supplier of broadband network equipment, software and systems integration services that enable communications service providers to deliver high-speed Internet, data, video and voice services to consumers and businesses worldwide.  Telephone companies, cable television operators, Internet and data service providers, wireless service providers and other communications service providers are building and upgrading the broadband network infrastructure required to offer high-speed Internet access as well as data, video, telephony and other interactive multimedia services.  Our product offerings and development efforts are focused on increasing the speed and efficiency of the last mile/kilometer portion of broadband communications networks, and our product and service offerings help connect communications service providers’ offices to businesses and end users’ homes as well as to wireless communications devices.

Our customers include local and long-distance telephone companies, cable television operators, wireless service providers, new competitive service providers, broadcasters, governments, businesses, system integrators and communications equipment manufacturers and distributors.  We offer broadband connectivity components and systems, broadband access and network equipment, software and systems integration services to our customers through the following two segments of product and service offerings:

•Broadband Infrastructure and Access; and

•Integrated Solutions.

Our Broadband Infrastructure and Access business provides network infrastructure products for wireline, cable and wireless communications network applications; Digital Subscriber Line (DSL) offerings for the telecommunications industry; and Internet Protocol (IP)-based offerings for the cable industry.These products consist of:

•connectivity systems and components that provide the infrastructure to wireline, cable and wireless service providers to connect Internet, data, video and voice services to the network over copper, coaxial and fiber-optic cables; and

•access systems used by wireline, cable and wireless service providers to deliver high-speed Internet, data and voice services to consumers and businesses in the last mile/kilometer of communications networks.

Our Integrated Solutions business provides system integration services and operations support system (OSS) software for broadband, multiservice communications over wireline and wireless networks.  Systems integration services are used to design, equip and build communications networks that deliver Internet, data, video and voice services to consumers and businesses.  OSS software includes communications billing, customer management, network performance and service-level assurance software used by service providers to operate communications networks.

Marketplace Conditions

Our operating results during the three months ended January 31, 2004 continued to stabilize, a trend that began in fiscal 2003.  However, spending on communications equipment and services remains at significantly lower levels compared to pre-2001 levels, and we cannot predict with certainty whether stability in revenue levels will continue or when growth may occur in the future.  The reasons for this lower level of spending have been well documented in the past and include general economic conditions that have resulted in lower end-user demand for communications services, excess capacity within communications networks, the absence of communications network buildouts by new competitive entrants in the service provider market and a related decline in competitive spending by incumbent service providers.  We continue to see deferred capital spending by some of our customers as well as reduced equipment purchases.  For example, a significant customer significantly reduced capital spending for the time being, a factor that has most notably impacted the results of our systems integration business in our first quarter.  In addition, we have experienced and expect to continue to experience increased pricing pressures from many of our customers.

We continue to be dependent on telecommunications service providers for a majority of our revenues, with the four major U.S. incumbent local exchange carriers (Verizon, SBC, Bellsouth and Qwest) acounting for approximately 26.9% and 24.9% of our revenues during the three months ended January 31, 2004 and 2003, respectively.  In addition, our top ten customers accounted for approximately 44.6% and 49.9% of our revenues for the three months ended January 31, 2004 and 2003, respectively.

We believe the downturn in the communications service industry will cause consolidation among our customers and our competitors in order for them to increase market share, diversify product portfolios and/or achieve greater economies of scale.  We expect this activity to have an impact on our results of operations.   There can be no assurance that we will be a supplier to the surviving company in a merger of service providers.  As an example, the acquisition of AT&T Broadband by Comcast Corporation resulted in our loss of a significant amount of business for our IP cable products in fiscal 2003 when Comcast did not approve us as a

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significant vendor for the future.  In addition to consolidation among our customers, we expect several forms of structural correction in the communications equipment industry.  Over the next twelve months, we expect some competitors to drop out of the marketplace due to bankruptcy or liquidation. We also believe that companies in the communications equipment industry will seek to form more strategic alliances or consolidate to diversify product portfolios or obtain greater economies of scale.  Finally, we expect continuing product line rationalization as companies divest unprofitable product lines in an effort to focus on profitable business operations.

We plan to acquire additional product lines or businesses that are complimentary to our communications infrastructure business.  We intend to pursue acquisition opportunities that will enable us to expand our core business of supplying communications infrastructure products and services to communications service providers, as well as opportunities that will bolster our position as a supplier to private, or enterprise, network customers.  We expect to fund these potential acquisitions with all or a portion of the net proceeds of our $400 million convertible note offering that was completed in June 2003, with the issuance of shares of common or preferred stock or through some combination of cash or stock.  We also may divest non-strategic product lines as we focus on growing our business profitably.  For instance, in the first quarter of 2004 we signed a definitive purchase agreement to divest our BroadAccess40 business, and that transaction closed in February 2004.  This business accounted for approximately 3% of our net sales in fiscal 2003 and the first quarter of fiscal 2004.

When the downturn in communications equipment spending first became evident in fiscal 2001, we implemented a cost restructuring plan through which we took steps to reduce operating expenses and capital spending. As it became evident in 2002 and 2003 that our industry was experiencing a more pronounced and prolonged economic downturn, we took additional cost restructuring measures to realize further cost savings.  These cost cutting measures have been well documented in our previous filings.  We will continue to look for ways to conduct our operations more efficiently and to reduce costs without compromising our ability to operate effectively.  Despite the significant cost reductions we have made over the past 3 years, we may be unable to meet expected revenue levels in any particular quarter, in which case our operating results could be materially adversely affected if we are unable to further reduce our expenses in time to counteract such a decline in revenues.

On February 20, 2003, the Federal Communications Commission (FCC) adopted rules under the U.S. Telecommunications Act of 1996 concerning the obligation of the established telecommunication service providers to share their networks with competitors, a practice known as “unbundling.” The FCC essentially retained the existing unbundling obligations of the carriers (known as UNE-P) with respect to their historic copper-based network infrastructure, and ruled not to require the unbundling of certain network elements in their next generation hybrid and fiber networks. In August 2003, the FCC issued its final rules on unbundling obligations, and it is too early to predict what effect these rules will have on capital spending by our customers.  Portions of these rules have already been subjected to legal challenges by various constituents within the telecommunications industry, and additional legal challenges and appeals are likely. Overall, we do not anticipate that this aspect of the decision will result in increased capital spending by the incumbent carriers or insurgent competitors in the near term.

Prior to the downturn in our business beginning in fiscal 2001, our results of operations had been subject to seasonal factors, with stronger demand for our products during our fourth fiscal quarter ending October 31 (primarily as a result of customer budget cycles and our fiscal year-end initiatives) and weaker demand for our products during our first fiscal quarter ending January 31 (primarily as a result of the number of holidays in that quarter, the development of annual capital budgets during that period and a general industry slowdown during that period).  There can be no assurance that these historical trends will return.  A more detailed description of the risks to our business related to seasonality, along with other risk factors associated with our business, can be found in our Form 10-K for the year ended October 31, 2003 in Item 1 of such report under the caption “Risk Factors”.

Results of Operations

The following table contains information regarding the percentage to net sales of certain income and expense items for the three months ended January 31, 2004 and 2003:

	Percentage of Net Sales
	Three Months Ended January 31,
	2004		2003
Net Sales:
Product	73.5	%	75.3	%
Service	26.5		24.7
Total Net Sales	100.0		100.0
Cost of Sales:
Product	(38.2	)	(42.7	)
Service	(22.5	)	(21.8	)
Total Cost of Sales	(60.7	)	(64.5	)
Gross Profit	39.3		35.5
Expenses:
Research and development	(12.9	)	(15.6	)
Selling and administration	(25.0	)	(31.5	)
Impairment charges	—		(5.3	)
Restructuring charges	(4.1	)	(4.2	)
Total Expenses	(42.0	)	(56.6	)
Operating Income / (Loss)	(2.6	)	(21.1	)
Other Income (Expense), Net	4.6		(0.3	)
Income (Loss) From Continuing Operations	2.0		(21.4	)
Net Loss	(1.4	)	(21.4	)

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Net Sales

The following table sets forth our net sales for the three months ended January 31, 2004 and 2003, respectively, for each of our segments described above (in millions):

	Three Months Ended January 31,
	2004				2003
	Net Sales		%		Net Sales		%
Broadband Infrastructure and Access	$	106.0	62.9	%	$	127.2	65.4	%
Integrated Solutions:
Product	17.9		28.6		19.3		28.6
Service	44.6		71.4		48.1		71.4
Total Integrated Solutions	62.5		37.1		67.4		34.6
Total	$	168.5	100	%	$	194.6	100.0	%

Net sales were $168.5 million for the three months ended January 31, 2004, respectively, reflecting a 13.4 % decrease over the three-month period ending January 31, 2003.  International sales comprised 34.4 % and 38.6% of our net sales for the three months ended January 31, 2004 and 2003, respectively.

During the three months ended January 31, 2004, net sales of Broadband Infrastructure and Access products declined by 16.7% over the comparable 2003 period.  Net sales of our IP cable and wireline products decreased by approximately 73% and 24% respectively over the comparable 2003 period.  The decrease in IP cable product sales was primarily due to recognition of revenue in the first quarter of fiscal 2003 that had been previously deferred on a significant international sale and was not repeated in the first quarter of 2004.  The decrease in wireline product sales was caused primarily by decreased volumes and pricing concessions made to key customers.  Our wireline product line continues to face strong competition that has eroded market share positions for these products.  We are taking actions designed to defend our market share position and recently executed a new sales contract for our wireline products with a significant existing customer.  During the first quarter of fiscal 2004, these decreases in net sales were partially offset by increases of 5% and 108% for our connectivity and wireless products, respectively, over the comparable 2003 period.  The increase in connectivity sales was attributable primarily to increased spending by our customers in the core central office space.  The increase in wireless sales was a result of an increased acceptance of our products across a growing customer base.

During the three months ended January 31, 2004, net sales of our Integrated Solutions products declined by 7.3% compared to the comparable 2003 period.  Sales increased year-over-year for our systems integration services by about 1%, but were more than offset by a year-over-year 17% decrease in software sales primarily because customers continued to extend sales cycles.  In addition, a significant customer significantly reduced spending during the first quarter of 2004, a factor that negatively impacted sales of our systems integration services in the first quarter by about 15% from the fiscal 2003 fourth quarter.  This development is expected to continue to negatively impact revenues for systems integration services in the second quarter of fiscal 2004 and possibly further into the future.  We anticipate that future revenue in our Integrated Solutions segment also will be more variable primarily because we intend to focus our software sales efforts on major accounts, which typically have longer sales cycles.

The decrease in international sales as a percentage of net sales was due to two large contracts with European customers entered into in fiscal 2003.

Gross Profit

During the three months ended January 31, 2004 and 2003, the gross profit percentages were 39.3 % and 35.5%, respectively.  The increase in gross profit percentage was primarily due to a more favorable sales mix toward higher margin connectivity products, our decision not to bid on low margin systems integration projects and a reduction in our fixed cost of sales as a result of our restructuring activities.

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In addition to a more favorable sales mix, we benefited from production efficiencies and reduced production costs resulting from more favorable supplier pricing and the outsourcing of portions of our manufacturing operations.  We anticipate that our future gross profit percentage will vary based on many factors, including sales mix, competitive pricing, timing of new product introductions, timing of customer acceptance and collectibility of large-scale sales transactions and manufacturing volume.

Operating Expenses

Total operating expenses for the three months ended January 31, 2004 and 2003, were $70.7 million and $110.2 million, respectively, representing 42.0% and 56.6% of net sales, respectively. Included in these operating expenses were restructuring charges of $6.9 million and $8.2 million and impairment charges of $0.0 million and $10.3 million for the three months ended January 31, 2004 and 2003, respectively.  The decrease in our operating expenses in absolute dollars and as a percentage of revenue was primarily due to a reduction in the amount of our restructuring and impairment charges, the ongoing cost savings from our restructuring efforts, bad debt recoveries and the divestiture of certain business units and product lines during the earlier period.

Research and development expenses were $21.7 million and $30.3 million for the three months ended January 31, 2004 and 2003, respectively.   This represents a decrease of 28.4%.This decrease was largely due to the divestiture or discontinuance of certain product lines.  We believe that, given the rapidly changing technological and competitive environment in the communications equipment industry, continued commitment to product development efforts will be required for us to remain competitive. Accordingly, we intend to continue to allocate substantial resources, as a percentage of our net sales, to product development in each of our operating segments.

Selling and administration expenses were $42.1 million and $61.4 million for the three months ended January 31, 2004 and 2003, respectively. This decrease of 31.4% reflects the effects of workforce reductions of 927 employees resulting from our continued restructuring efforts.  In addition, the decrease is attributable to approximately $4.5 million of bad debt recoveries achieved primarily through the sale of customer account receivables with the remaining amount primarily resulting from lower costs due to the divestiture or discontinuance of certain product lines.

Impairment charges were $0.0 million and $10.3 million for the three months ended January 31, 2004 and 2003, respectively.  For the three months ended January 31, 2003, the impairment charges consisted solely of property and equipment impairments, which impacted both the Broadband Infrastructure and Access and Integrated Solutions segments.  The impairment charges were the result of our plan to dispose of excess equipment that resulted from our decision to streamline and reduce the size of our operations.  The fair market value of the disposed equipment was determined using external sources, primarily proceeds received from previous equipment sales.

Restructuring charges for the three months ended January 31, 2004 and 2003, were $6.9 million and $8.2 million, respectively.  For the three months ended January 31, 2004, restructuring charges consist of $3.3 million of severance costs and $3.6 million for facility consolidation and lease termination costs.  Restructuring charges consist of $11.7 million for employee severance costs and $(3.5) for facility consolidation and lease termination costs for the three months ended January 31, 2003.  Approximately 65 employees and 670 employees were impacted by reductions in force for the three months ended January 31, 2004 and 2003, respectively.  The employee terminations affected both the Broadband Infrastructure and Access and Integrated Solutions segments.

Other Income (Expense), Net

The following table provides a breakdown of other income and expenses for the three months ended January 31, 2004 and 2003 (in millions):

	Three months ended January 31,
	2004			2003
Interest income	$	0.8		$	1.2
Gain (Loss) on sale of product lines	3.3			(2.8		)
Gain on sale of investments	4.4			1.1
Impairment of investments	—			(2.2		)
Gain (loss) on sale of fixed assets	0.4			0.5
Other	(1.1		)	1.7
Total Other Income (Expense)	$	7.8		$	(0.5	)

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Income Taxes

As a result of our cumulative losses over the past two fiscal years and the full utilization of our loss carryback potential, we are not recognizing income tax expense or benefit on our pretax income or losses until we can sustain a level of profitability that demonstrates our ability to utilize our deferred tax assets. Therefore, the effective income tax rate for the three months ended January 31, 2004 and 2003, is zero.

Discontinued Operations

During the first quarter of fiscal 2004, we entered into an agreement to sell our BroadAccess40 business, which was included in our Broadband Infrastructure and Access segment.  In accordance with SFAS 144, the financial results of this business is reported separately as discontinued operations for all periods presented.  This transaction closed on February 24, 2004.  For a general description of the terms of the transaction refer to Note 2 to the financial statements included in this Form 10-Q.

The financial results of BroadAccess40 included in discontinued operations were as follows (in millions):

	Three months ended January 31,
	2004			2003
Revenue	$	5.0		$	5.3
Net (Loss) Income from discontinued operations	(2.2		)	0.1
Loss from divestiture of discontinued operations	(3.6		)	—
(Loss) Income from discontinued operations	(5.8		)	0.1

Net Loss

Net loss was $2.4 million (or $0.00 per diluted share) for the three months ended January 31, 2004, respectively, compared to net loss of $41.5 million (or $0.05 per diluted share) for the three months ended January 31, 2003, respectively.

Application of Critical Accounting Policies and Estimates

There were no significant changes to our critical accounting policies during the three ended January 31, 2004.  See our most recent Annual Report filed on Form 10-K for fiscal 2003 for a discussion of our critical accounting policies.

Liquidity and Capital Resources

Cash

Cash and cash equivalents, consisting primarily of short-term investments in commercial paper with maturities of less than 90 days and other short-term investments, had a balance of $749.6 million at January 31, 2004.  This amount was an increase of $4.9 million from cash and cash equivalents at October 31, 2003.

As of January 31, 2004, we had restricted cash of $16.0 million.  Restricted cash represents cash pledged to various financial institutions to secure certain of our obligations, primarily cash collateral for letters of credit and lease obligations.  As a result, restricted cash is not available to us for working capital.  The restricted cash is expected to become available to us upon satisfaction of the obligations pursuant to which the letters of credit arrangements were issued.  We are entitled to the interest earnings on our restricted cash balances.

Cash used in operating activities was $6.2 million for the three months ended January 31, 2004.  This use of cash was primarily due to a loss of $2.4 million, and negative changes in operating assets and liabilities of $7.6 million which were partially offset by $3.8 million of non-cash items included in net income.  The changes in other operating liabilities included net cash payments of $3.7 million for restructuring liabilities and payment of fiscal 2003 incentive bonuses of $6.0 million to employees of two product groups which met their targets under our management and employee incentive plans.  These decreases were partially offset by improved accounts receivable collections, which in total were $9.8 million.  Overall, working capital (current assets less current liabilities) increased by $27.8 million during the three months ended January 31, 2004 primarily due to the payment of liabilities.  Working capital will increase or decrease, in general, with quarterly sales levels and the timing of revenue and billings during the quarter.

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Cash provided by investing activities of $11.9 million was primarily due to the net sale of investments of  $4.4 million, proceeds of sales of assets held for sale of $5.6 million and proceeds of $5.0 million from the sale of a non-operating subsidiary that had substantial tax losses.  These cash inflows were offset by $2.9 million of capital expenditures.

Cash provided by financing activities of $1.0 million was due to the issuance of common stock of $1.8 million related to employee benefit plans.  This increase was partially offset by the repayment of debt of $0.8 million.

During the three months ended January 31, 2003, cash increased $87.4 million compared to October 31, 2002.  Our primary sources of cash for the three months ended January 31, 2003, were:  a $103.4 million income tax refund; $15.3 million in proceeds from the sale of two facilities; $26.6 million from more effective working capital management such as account receivable collections; lower inventory requirements and lower prepaid assets; and other net cash gains from operations.  These cash inflows were partially offset by $68.8 million used to pay current liabilities and $5.7 million of net property, plant and equipment additions.

Vendor Financing

We have worked with customers and third-party financiers to find a means of funding customer equipment purchases from us.  As of January 31, 2004 and 2003, we had commitments to extend credit of approximately $21.5 million and $58.6 million, respectively, under such arrangements. The total amount drawn and outstanding under the commitments was approximately $18.2 million and $23.9 million as of January 31, 2004 and 2003, respectively. The commitments to extend credit are conditional agreements generally having fixed expiration or termination dates and specific interest rates, conditions and purposes. These commitments may expire without being drawn.   Some of these commitments enable the customer to draw on the commitment after the customer has made payment to us for the products we sold, up to the amount the customer previously paid to us.  Accordingly, amounts committed may affect future cash flows. We regularly review all outstanding commitments, and the results of these reviews are considered in assessing the overall risk for possible credit losses. At January 31, 2004, we have recorded approximately $17.7 million in loss reserves in the event of non-performance under these financing arrangements.

Working Capital Outlook

We believe that our current unrestricted cash on hand is adequate to fund our working capital requirements, planned capital expenditures and restructuring costs through fiscal 2004 and beyond.  We also believe that our unrestricted cash on hand will enable us to pursue strategic opportunities, including possible product line or business acquisitions.  However, if the cost of one or more acquisition opportunities exceeds our existing capital resources, additional sources of capital may be required.  We do not currently have any committed lines of credit or other available credit facilities, and it is uncertain whether such facilities could be obtained in sufficient amounts or on acceptable terms.  Thus, any plan to raise additional capital may involve an equity-based or equity-linked financing, such as another issuance of convertible debt or the issuance of common stock or preferred stock, which would be dilutive to existing shareholders.

Cautionary Statement for Purposes of the “Safe Harbor” Provisions of the Private Securities Litigation Reform Act of 1995

The foregoing Management’s Discussion and Analysis of Financial Condition and Results of Operations, as well as the Notes to the Condensed Consolidated Financial Statements, contain various “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements represent our expectations or beliefs concerning future events, including but not limited to the following: any statements regarding future sales, profit percentages, earnings per share and other results of operations, our estimates of probable liabilities relating to pending litigation, the continuation of historical trends, the sufficiency of our cash balances and cash generated from operating and financing activities for our future liquidity and capital resource needs and the effect of regulatory changes.  We caution that any forward-looking statements made by us in this report or in other announcements made by us are qualified by important factors that could cause actual results to differ materially from those in the forward-looking statements.  These factors include, without limitation:  the magnitude and duration of the significant downturn in the communications equipment industry which began in 2001, particularly with respect to the demand for equipment by telecommunication service providers, from which a majority of our revenues are derived; our ability to restructure our business to achieve and maintain operating profitability; macroeconomic factors that influence the demand for telecommunications services and the consequent demand for communications equipment; possible consolidation among our customers or competitors, which could cause disruption in our customer relationships or displacement of us as an equipment vendor to one or more customers; our ability to keep pace with rapid technological change in our industry; our ability to make the proper strategic choices with respect to product line acquisitions or divestitures; increased competition within our industry and increased pricing pressure from our customers; our dependence on relatively few customers for a majority of our revenues; fluctuations in our operating results from quarter-to-quarter, which are influenced by many factors outside of

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our control, including variations in demand for particular products in our portfolio which have varying profit margins; the impact of regulatory changes on our customers’ willingness to make capital expenditures for our equipment, software and services; financial problems, work interruptions in operations or other difficulties faced by some of our customers, which can influence future sales to these customers as well as our ability to collect amounts due us; economic and regulatory conditions outside of the United States, as approximately 25% to 40% of our sales come from non-U.S. jurisdictions; our ability to protect our intellectual property rights and defend against infringement claims made by third parties; possible limitations on our ability to raise additional capital if required, either due to unfavorable market conditions, lack of investor demand; our ability to attract and retain qualified employees; our ability to maintain key competencies during a period of reduced resources and restructuring; potential liabilities that could arise if there are design or manufacturing defects with respect to any of our products; our ability to obtain raw materials and components, and our increased dependence on contract manufacturers to make certain of our products; changes in interest rates, foreign currency exchange rates and equity securities prices, all of which will impact our operating results; our ability to successfully defend or satisfactorily settle our pending litigation; and other risks and uncertainties, including those identified in our Form 10-K for the period ended October 31, 2003 in Item 1 of such report under the caption “Risk Factors”.  We disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risk from changes in security prices, foreign exchange rates and interest rates. Market fluctuations could affect our results of operations and financial condition adversely. We, at times, reduce this risk through the use of derivative financial instruments. We do not enter into derivative financial instruments for the purpose of speculation.

We are exposed to interest rate risk as a result of issuing $200.0 million of convertible unsecured subordinated notes that have a variable interest rate on June 4, 2003.  The interest rate on these notes is equal to 6-month LIBOR plus 0.375%.  The interest rate on these notes will reset semiannually on each interest payment date, which is June 15 and December 15 of each year until their maturity in fiscal 2013.  Assuming interest rates rise 1%, 5% and 10%, our annual interest expense would increase by $2.0 million, $10.0 million and $20.0 million, respectively.

We offer a non-qualified 401(k) excess plan to allow certain executives to defer earnings in excess of the annual individual contribution and compensation limits on 401(k) plans imposed by the U.S. Internal Revenue Code.  Under this plan, the salary deferrals and our matching contributions are not placed in a separate fund or trust account. Rather, the deferrals represent our unsecured general obligation to pay the balance owing to the executives upon termination of their employment.  In addition, the executives are able to elect to have their account balances indexed to a variety of diversified mutual funds (stock, bond and balanced), as well as to our common stock.  Accordingly, our outstanding deferred compensation obligation under this plan is subject to market risk.  As of January 31, 2004, our outstanding deferred compensation obligation related to the 401(k) excess plan was $13.8 million, of which approximately $1.7 million was indexed to ADC common stock.  Assuming a 20%, 50% and 100% aggregate increase in the value of the investment alternatives to which the account balances may be indexed, our outstanding deferred compensation obligation would increase by $2.8 million, $6.9 million and $13.8 million, respectively, and we would incur an expense of a like amount.

We are exposed to market risk from changes in foreign exchange rates. To mitigate the risk from these exposures, we have instituted a balance sheet hedging program. The objective of this program is to protect our net monetary assets and liabilities in non-functional currencies from fluctuations due to movements in foreign exchange rates. The program operates in markets where hedging costs are beneficial. We attempt to minimize exposure to currencies in which hedging instruments are unavailable or prohibitively expensive by managing our operating activities and net asset positions. The majority of hedging instruments utilized are forward contracts with maturities of less than one year.  Foreign exchange contracts reduce our overall exposure to exchange rate movements, since gains and losses on these contracts offset losses and gains on the underlying exposure.

ITEM 4.  DISCLOSURE CONTROLS AND PROCEDURES

Under the supervision and with the participation of our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)).  Based on that evaluation, our CEO and CFO have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures are adequately designed to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the applicable rules and forms.  During the period covered by this Quarterly Report on Form 10-Q, there was no change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

On March 5, 2003 we were served with a shareowner lawsuit brought by Wanda Kinermon that was filed in the United States District Court for the District of Minnesota.  The complaint names ADC, William J. Cadogan, our former Chairman and Chief Executive Officer, and Robert E. Switz, our Chief Executive Officer, as defendants.  During the period the lawsuit covers Mr. Switz held the position of Executive Vice President and Chief Financial Officer.  Since this lawsuit was served we have been named as a defendant in 11 other substantially similar lawsuits.  These shareowner lawsuits have been consolidated into a single lawsuit, that is now captioned In Re ADC Telecommunications, Inc. Securities Litigation.  This lawsuit purports to bring suit on behalf of a class of purchasers of our publicly traded securities from August 17, 2000 to March 28, 2001.  The complaint alleges that we violated the securities laws by making false and misleading statements about our financial performance and business prospects during this period.  On November 24, 2003 we filed a motion to dismiss this lawsuit.  This motion is pending before the court.  We believe that this lawsuit is without merit and intend to defend this action vigorously.  However, because litigation by its nature is uncertain we cannot predict the ultimate outcome of this matter with certainty and on unfavorable resolutions of this matter could materially adversely affect our business, results of operations or financial condition.

On May 19, 2003 we were served with a lawsuit brought by Lorraine Osborne that was filed in the United States District Court for the District of Minnesota.  The complaint names ADC and several of our current and former officers, employees and directors as defendants.  After this lawsuit was served, we were served with two substantially similar lawsuits.  All three of these lawsuits were then consolidated into a single lawsuit, that is captioned In Re ADC Telecommunications, Inc. ERISA Litigation.  This lawsuit has been brought by individuals who seek to represent a class of participants in our Retirement Savings Plan who elected our common stock as one of the investment alternatives under the plan from February 2000 to present.  The lawsuit alleges a breach of fiduciary duties under the Employee Retirement Income Security Act.  On February 2, 2004 we filed a motion to dismiss this lawsuit.  This motion is pending before the court.  We believe that this lawsuit is without merit and intend to defend this action vigorously.  However, because litigation by its nature is uncertain we cannot predict the ultimate outcome of this matter with certainty and on unfavorable resolutions of this matter could materially adversely affect our business, results of operations or financial condition.

On January 22, 2004 we were served with a lawsuit brought by Theodore Pardo that was filed in the United States District Court for the District of Minnesota.  The complaint is structured as a shareholder derivative case and includes our company as a plaintiff and as a nominal defendant and names several of our current and former officers and directors as defendants.  This lawsuit was brought by the plaintiff who seeks to represent the interests of ADC and its shareholders.  The complaint alleges that the defendants breached their fiduciary duties to us and our shareholders by failing to maintain proper accounting controls and by making allegedly false and misleading statements about our financial performance and business prospects that resulted in violations of the securities laws.  We expect that a motion to dismiss this lawsuit will be filed during the second quarter of fiscal 2004.  We cannot at this time predict the ultimate outcome of this matter and an unfavorable resolution of this matter could materially adversely affect our business, results of operations financial condition.

We are a party to various other lawsuits, proceedings and claims arising in the ordinary course of business or otherwise.  The amount of monetary liability that could result from an adverse result in many of those lawsuits, proceedings or claims cannot be determined at this time.  As of January 31, 2004, we had recorded $8.9 million in loss reserves in the event of such adverse outcomes in these other matters.  However, because litigation by its nature is uncertain, we cannot predict the ultimate outcome of these matters with certainty and unfavorable resolution of these matters could materially adversely affect our business, results of operations or financial condition.

ITEM 2. CHANGES IN SECURITIES

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

a.                     Our annual meeting of shareowners was held on March 2, 2004.

b and c.          At the annual meeting, Robert Annunziata, John J. Boyle III, Robert E. Switz and Larry W. Wangberg were elected as directors for terms expiring at the annual meeting of our shareowners in 2007.  The following table shows the vote totals with respect to the election of these directors:

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Name	Votes For	Authority Withheld
Robert Annunziata	664,288,311	64,631,835
John J. Boyle  III	670,391,685	58,528,461
Robert E. Switz	671,724,768	57,195,378
Larry W. Wangberg	671,356,058	57,564,088

John A. Blanchard III, B. Kristine Johnson and Jean-Pierre Rosso continued as directors for terms expiring at the annual meeting of shareowners in 2006 and James C. Castle, Mickey P. Foret and John D. Wunsch continued as directors for terms expiring at the annual meeting of shareowners in 2005.

At the annual meeting, our shareowners also approved an amendment to our Global Stock Incentive Plan to: (a) provide us with greater flexibility to grant “full value” awards (such as restricted stock and restricted stock units) as part of our long term incentive compensation program, and (b) extend the term of the Plan for three years.  This proposal did not increase the aggregate shares authorized under the Plan.  The following table shows the vote totals with respect to the amendment to our Global Stock Incentive Plan:

Votes For	Votes Against	Abstentions
302,564,832	120,155,448	6,922,619

At the annual meeting our shareowners also approved an amendment to our Articles of Incorporation to increase the authorized shares of common stock that we may issue from 1,200,000,000 shares to 2,400,000,000 shares.  The following table shows the vote totals with respect to the amendment to our Articles of Incorporation:

Votes For	Votes Against	Abstentions
611,792,337	111,642,993	5,483,211

At the annual meeting our shareowners also ratified the appointment of Ernst & Young LLP as our independent auditors for the fiscal year ending October 31, 2004.  The following table shows the vote totals with respect to this ratification of Ernst & Young LLP as our independent auditors:

Votes For	Votes Against	Abstentions
714,587,874	9,200,900	5,131,370

ITEM 5.  OTHER INFORMATION

Charles D. Yost’s term as a director expired at the annual meeting of shareowners on March 2, 2004, and he did not seek re-election.

Lois M. Martin was appointed as a director of our company on March 2, 2004.  Ms. Martin was appointed by the other members of our Board of Directors and is scheduled to stand for election as a director by our shareowners at our next annual meeting.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

a.Exhibits

See Exhibit Index on page 21 for a description of the documents that are filed as exhibits to this Quarterly Report on Form 10-Q or are incorporated by reference herein.  Any document incorporated by reference is identified by a parenthetical referencing the SEC filing which included the document.  We will furnish to a securityholder upon request a copy of any Exhibit at cost.

b.Reports on Form 8-K

We filed or furnished the following Current Reports on Form 8-K during the quarter ended January 31, 2004:

Date	Item Reported
December 2, 2003	Items 7, 9 and Item 12 – December 2, 2003 – news release announcing our fourth quarter 2003 earnings.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated:  March 12, 2004	ADC TELECOMMUNICATIONS, INC.
	By:	/s/ Gokul V. Hemmady
		Gokul V. Hemmady
		Vice President, Chief Financial Officer and Controller (Principal Financial Officer and Duly Authorized Officer)

20

ADC TELECOMMUNICATIONS, INC.

EXHIBIT INDEX TO FORM 10-Q
FOR THE THREE MONTHS ENDED JANUARY 31, 2004

Exhibit No.	Description
4-a	Form of certificate for shares of common stock of ADC Telecommunications, Inc. (Incorporated by reference to Exhibit 4-a to ADC’s Form 10-Q for the quarter ended April 30, 1996.)
4-b	Restated Articles of Incorporation of ADC Telecommunications, Inc., as amended prior to January 20, 2000. (Incorporated by reference to Exhibit 4.1 to ADC’s Registration Statement on Form S-3 dated April 15, 1997.)
4-c	Articles of Amendment to Restated Articles of Incorporation of ADC Telecommunications, Inc. dated January 20, 2000. (Incorporated by reference to Exhibit 4.6 to ADC’s Registration Statement on Form S-8 dated March 14, 2000.)
4-d	Articles of Amendment to Restated Articles of Incorporation of ADC Telecommunications, Inc., dated June 30, 2000. (Incorporated by reference to Exhibit 4-g to ADC’s Quarterly Report on Form 10-Q for the quarter ended July 31, 2000.)
4-e	Articles of Amendment to Restated Articles of Incorporation of ADC Telecommunications, Inc., dated March 9, 2004.
4-f	Restated Bylaws of ADC Telecommunications, Inc., as amended effective July 30, 2002.  (Incorporated by reference to exhibit 4-e ADC’s Quarterly Report on Form 10-Q for the quarter ended July 31, 2002)
4-g	Rights Agreement, as amended and restated July 30, 2003, between ADC Telecommunications, Inc. and Computershare Investor Services, LLC as Rights Agent (Incorporated by reference to Exhibit 4-b to ADC’s Form 8-A/A filed on July 31, 2003)
4-h	Indenture dated as of June 4, 2003 between ADC Telecommunications, Inc. and U.S. Bank National Association (Incorporated by reference to Exhibit 4-g of ADC’s Quarterly Report on Form 10-Q for the quarter ended July 31, 2003).
4-i	Registration Rights Agreement dated as of June 4, 2003 between ADC Telecommunications, Inc. and Banc of America Securities LLC, Credit Suisse First Boston LLC and Merrill Lynch Pierce Fenner & Smith Incorporated as representatives of the Initial Purchase of ADC’s 1% Convertible Subordinated Notes due 2008 and Floating Rate Convertible Subordinated Notes due 2013 (Incorporated by reference to Exhibit 4-h to ADC’s Quarterly Report on Form 10-Q for quarter ended July 31, 2003).
10-a	ADC Telecommunications, Inc. Global Stock Incentive Plan, as amended and restated through March 2, 2004.
10-b	Compensation Plan for Non-Employee Directors of ADC Telecommunications, Inc., restated as of January 1, 2004.
10-c	Form of ADC Telecommunications, Inc. Restricted Stock Unit Award Agreement provided to Non-Employee Directors of ADC with respect to Restricted Stock Unit awards made under the Compensation Plan for Non-Employee Directors of ADC Telecommunications, Inc., restated as of January 1, 2004.
10-d	Third Amendment to ADC Telecommunications, Inc. Deferred Compensation Plan (1989 Restatement), effective as of December 9, 2003.
10-e	Restricted Stock Award Agreement, dated as of December 11, 2003, between ADC Telecommunications, Inc. and Hilton M. Nicholson.
10-f	Form of ADC Telecommunications, Inc. Incentive Stock Option Agreement provided to employees with respect to option grants made under the ADC Telecommunications, Inc. Global Stock Incentive Plan.
10-g	Form of ADC Telecommunications, Inc. Non-qualified Stock Option Agreement provided to employees with respect to option grants made under the ADC Telecommunications, Inc. Global Stock Incentive Plan.
10-h	ADC Telecommunications, Inc. Executive Stock Ownership Policy for Section 16 Officers, effective as of January 1, 2004.
31-a	Certification of principal executive officer required by Exchange Act Rule 13a-14(a)
31-b	Certification of principal financial officer required by Exchange Act Rule 13a-14(a)
32	Certifications furnished pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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EX-4.E

Exhibit 4-e

ARTICLES OF AMENDMENT
OF
RESTATED ARTICLES OF INCORPORATION
OF
ADC TELECOMMUNICATIONS, INC.
(a Minnesota Corporation)

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

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

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

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

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

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

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

ADC TELECOMMUNICATIONS, INC.
By:	/s/ Robert E. Switz
	Robert E. Switz		President
AND
By:	/s/ Jeffrey D. Pflaum
	Jeffrey D. Pflaum	Secretary

EX-10.A

Exhibit 10-a

ADC TELECOMMUNICATIONS, INC.
GLOBAL STOCK INCENTIVE PLAN

(as amended and restated through March 2, 2004)

Section 1.  Purpose.

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

Section 2.  Definitions.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Section 3.  Administration.

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

2

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

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

Section 4.  Shares Available for Awards.

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

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

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

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

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

3

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

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

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

Section 5.  Eligibility.

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

Section 6.  Awards.

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

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

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

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

4

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

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

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

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

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

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

5

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

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

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

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

(g)           General.

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

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

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

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

6

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

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

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

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

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

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

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

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

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Section 7.  Amendment and Termination; Adjustments.

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

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

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

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

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

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

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

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

Section 8.  Income Tax Withholding; Tax Bonuses.

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

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

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

Section 9.  General Provisions.

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

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

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

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

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

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

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

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

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

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

Section 10.  Effective Date of the Plan.

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

Section 11.  Term of the Plan.

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

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EXHIBIT A

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

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

Tier	Current Exercise Price		$1.00/share Exchange Ratio	$2.00/share Exchange Ratio	$3.00/share Exchange Ratio	$4.00/share Exchange Ratio	$5.00/share Exchange Ratio	$7.50/share Exchange Ratio
1	$	4.00 - 5.49	2.00 to 1	1.50 to 1	N/A	N/A	N/A	N/A
2	$	5.50 - 7.99	3.00 to 1	2.00 to 1	1.75 to 1	N/A	N/A	N/A
3	$	8.00 - 14.99	6.00 to 1	3.25 to 1	2.25 to 1	2.00 to 1	1.75 to 1	N/A
4	$	15.00 or higher	11.25 to 1	5.50 to 1	3.75 to 1	3.00 to 1	2.75 to 1	2.00 to 1

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

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

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

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

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EX-10.B

Exhibit 10-b

COMPENSATION PLAN FOR NONEMPLOYEE DIRECTORS
OF ADC TELECOMMUNICATIONS, INC.
AMENDED AND RESTATED AS OF JANUARY 1, 2004

1.Purpose

The purpose of this Compensation Plan (the “Plan”) is to enable Directors of ADC Telecommunications, Inc. (the “Company”) who are not employees of the Company to elect to receive their fees as members of the Board of Directors in a form most advantageous to them. The Plan permits such Directors to elect to receive this compensation in one or more of the following methods:

a.In cash on a current basis;

b.In cash on a deferred basis (a “Deferred Cash Election”);

c.In Company stock on a deferred basis (a “Deferred Stock Election”); or

d.If determined by the Compensation Committee of the Board of Directors each year, in options to acquire Company stock on a current basis (an “Option Exchange Election”).

2.Effective Date

This Plan was originally adopted on March 30, 1982.  The effective date of this restatement is January 1, 2004.

3.Eligibility

All members of the Board of Directors who are not employees of the Company (“Participants”) are eligible for the Plan.

4.Compensation Covered by the Plan

The compensation covered by the Plan which is eligible to be deferred or exchanged is as follows (the “Eligible Fees”):

a.For a Deferred Cash Election:  the annual cash retainer, any non-Executive Board or Committee Chair retainer, and all meeting attendance fees;

b.For a Deferred Stock Election or an Option Exchange Election:  The annual cash retainer and any Board Committee Chair retainer.

No other compensation or fees otherwise payable to a Director shall be eligible for an election under this Plan.

5.Election to Defer

Elections to defer Eligible Fees must be made with respect to each Plan Year.  Each Participant may, in lieu of receiving current covered compensation for any Plan Year, elect to defer Eligible Fees as follows using the Deferral Election Form attached hereto as Exhibit A:

a.All Eligible Fees;

b.Any designated percentage of his/her Eligible Fees; or

c.Any designated dollar amount of his/her Eligible Fees.

To be effective for any Plan Year, a Deferral Election Form must be submitted to the Company prior to the first day of the Plan Year.  That portion of Eligible Fees for which a valid Deferral Election Form has not been timely received by the Company will be paid in cash in accordance with the Company’s customary practice of paying such Eligible Fees.  Once a Plan Year has commenced, all Deferral Elections under this Plan for such Plan Year shall be irrevocable.

6.Plan Year

The Plan shall operate on a calendar year basis.

7.Deferred Cash Election

For Directors who make a Deferred Cash Election, the Company will establish an account (a “Deferral Account”) and will credit to the Deferral Account the amount of the Eligible Fees earned by him/her as of the date such fees would normally be payable by the Company. In addition, the Company shall accrue as of the last day of each month, interest on the balance in such Deferral Account at the prime commercial rate (the “Prime Rate”) of Wells Fargo Bank Minnesota, N.A., in effect for such month.

a.Funding of the Deferral Account

The amounts credited to each Participant’s Deferral Account shall not be held by the Company in a trust, escrow or similar fiduciary capacity, and neither the Participant, nor any legal representative, shall have any right against the Company with respect to any portion of the Deferral Account except as a general unsecured creditor of the Company.

b.Timing of Distributions

At the time a Participant’s initial Deferred Cash Election is made, each Participant shall specify the time and manner in which the balance in his/her Deferral Account shall be distributed.  The time and manner for distributions specified on a Participant’s initial election form shall remain in effect for all  successive elections until amended in accordance with Section 7(d).  If a Participant does not specify an election for the timing and manner of a distribution, the balance of a Participant’s Deferral Account shall be distributed in a lump sum within 30 days following such Participant’s cessation of service as a member of the Board of Directors.  The Participant shall be entitled to receive, or to commence receiving, his/her deferred cash compensation as follows:

i.On a date set by him/her;

ii.On the occurrence of a stated event, such as his/her death, retirement from his/her principal business activity, termination of services as a Director, disability

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or any other event or occurrence stipulated by him/her and approved by the Company.

c.Manner of Distribution

Each Participant shall be entitled to receive the balance in his/her Deferral Account in any one of the following manners:

i.In a lump sum;

ii.In approximately equal quarterly installments over a period of years stipulated by him/her;

iii.In approximately equal quarterly installments of a value stipulated by him/her until the Deferral Account is exhausted; or

iv.Any other form or manner of distribution determined by him/her and approved by the Company.

d.Amendments to Timing or Form of Distribution

A Participant may rescind the initial designation of the timing and manner of distribution made pursuant to Section 7(b) by making a new designation on the Distribution Amendment Form attached hereto as Exhibit B.  To be effective, such Distribution Amendment Form must be made no later than the last day of the second Plan Year preceding the Plan Year in which distribution is to commence.  (By way of example, a Participant who receives a distribution in 2004 must have made a new designation no later than December 31, 2002, for the new designation to be effective.)  Once distributions have commenced pursuant to a valid distribution election, no further amendments to the manner of such distribution may be made.

8.Deferred Stock Election

a.Exchange Election

Eligible Participants may elect to exchange part or all of their Eligible Fees for a Plan Year for the Company’s commitment to issue to such Participants a fixed number of shares of common stock of the Company at a future date.  No actual shares of common stock shall be issued until the distribution date described in Section 8(c) hereof.  The Company’s commitment to issue shares shall be referred to as “Phantom Shares.”  The Phantom Shares shall not be considered issued and outstanding shares for purposes of shareholder voting rights, but shall be treated the same as outstanding shares for purposes of dividends and other distributions.

The number of shares which the Company shall be obligated to issue as a result of a Deferred Stock Election will equal the dollar amount of the Eligible Fee elected to be deferred divided by the closing price of ADC common stock on first business day of the Plan Year for which the election is effective, rounded to the nearest whole number of shares.  An example of this calculation is attached hereto as Exhibit C.

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b.Terms and Vesting of Phantom Shares

The Phantom Shares shall be subject to forfeiture if the Participant ceases to serve as a Director at any time during the Plan Year for which such Phantom Shares were issued.  All Phantom Shares issued under and subject to the terms of this Plan will be issued under the Company’s Global Stock Incentive Plan and/or its successor plans and shall be deemed to be “restricted stock units” for purposes of such Plan.

c.Distribution of Phantom Shares

Provided that the Phantom Shares have not been forfeited, the actual shares of the Company’s common stock represented by the Phantom Shares will be distributed as soon as administratively feasible following the Participant’s cessation of service as a member of the Board of Directors.

9.Option Exchange Election

a.Exchange Election

If so determined by the Compensation Committee of the Board of Directors prior to the start of each Plan Year, participants may elect to exchange part or all of their Eligible Fees for a Plan Year for options to purchase common stock of the Company.  The number of option shares granted as a result of the exchange will equal the dollar amount of the Eligible Fees elected to be exchanged multiplied by 4.5, with this product being divided by the closing price of ADC common stock on the effective date of the grant.  The final number of option shares will be rounded to the nearest whole number of shares.  An example of this exchange calculation is attached hereto as Exhibit D.

b.Effective Date of Stock Option Grant

The effective date of the stock options granted under the Plan will be the first business day of the Plan Year for which an election is made.

c.Terms and Vesting of Options

The exercise price of the stock options granted under this Plan will be the closing price of the Company’s common stock on the effective date of the grant.  All options granted under this Plan shall vest and become exercisable one (1) year after the effective date of the grant, provided that the Participant continues to serve as a Director of the Company during such one (1) year period.  The term of the options granted under this Plan shall be ten (10) years, subject to earlier termination in the case of death.  All options granted under this Plan will be nonqualified stock options, and not “incentive stock options” within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended.

d.Stock Option Issuance

All stock options issued under this Plan will be granted under the Company’s Global Stock Incentive Plan and/or its successor plans.  The terms of each option grant will be detailed in the Global Stock Incentive Plan and a stock option agreement provided as soon as administratively feasible following the date of the grant.

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10.General Provisions

a.Distribution in Event of Death

In the event of death, distribution of the Deferral Account or actual shares of common stock represented by Phantom Shares will be made to the Beneficiary named by the Participant or to that person who would have a right to receive such distribution by will or by the applicable laws of descent and distribution.  The transfer of outstanding stock options in the event of death shall be determined by the terms of the stock option agreement and the Company’s Global Stock Incentive Plan.

b.Distribution in Event of Change of Control

Notwithstanding any other provision of this Plan, in the event of a Change of Control (as defined below), each Participant shall receive within ten (10) business days after the date of such Change of Control, the following:

i.If a Participant has a balance in the Deferral Account, a lump sum payment of the entire balance contained in his/her Deferral Account, together with interest at the Prime Rate, on the average daily balance in such Deferral Account for the period since the last interest accrual pursuant to Section 7 through the date of such Change of Control;

ii.If a Deferred Stock Election is in effect, a distribution of the number of shares represented by the Phantom Shares issued pursuant to such election, including any Phantom Shares that have not yet vested pursuant to Section 8(b) hereof.

iii.If an Option Exchange Election is in effect, the exercisability of the options will be determined by the terms of the stock option agreement.

For purposes of this Section 10(c), a “Change in Control” shall have the meaning given to such phrase in the Company’s Executive Change in Control Severance Pay Plan (2002 Restatement), effective July 1, 2001.

d.Administration of the Plan

The Plan shall be administered by the Board of Directors or Compensation Committee of the Board of Directors.

e.Amendment or Termination

This Plan may be amended or terminated at any time by the Board of Directors or the Compensation Committee of the Board of Directors.

f.Cautionary Statement

Participants should be aware that their participation in the Plan involves the following risks, among others:

i.Balances in the Deferral Account represented unfunded, unsecured general obligations of the Company.  If the Company is unable to pay its debts as they become due, Participants may not be able to collect the balances in their Deferral Accounts.

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ii.The value of the Phantom Shares issued and the stock options granted pursuant to the Plan will depend on the value of ADC common stock.  An investment in ADC common stock involves risk.  Participants are encouraged to review ADC’s filings with the U.S. Securities and Exchange Commission for a description of some of the risk factors associated with an investment in ADC’s common stock.

iii.Except as otherwise provided in the Plan, stock options and the Phantom Shares issued pursuant to the Plan are subject to forfeiture if a Participant does not maintain service as a Director through the end of the Plan Year of such issuance.

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EXHIBIT A

DEFERRAL ELECTION FORM

I, the undersigned, a Director of ADC Telecommunications, Inc., am making the following elections for the deferral of any Eligible Fees I may receive, as described in the Compensation Plan for Nonemployee Directors of ADC Telecommunications, Inc. (restated as of January 1, 2004).

I elect to defer the Eligible Fees for the Plan Year commencing January 1,               (specify dollar amount or percent of Eligible Fees):

	Deferred Cash Election	Deferred Stock Election	Option Exchange Election*
Annual Retainer
Chair Retainer (Board or Committee)
Meeting Attendance Fees		N/A	N/A

*This column to be included in the annual election form only if applicable based on the discretion of the Compensation Committee of the Board.

If you are making an initial Deferred Cash Election, please specify the timing and manner for distribution of your Deferred Account:

I elect to begin receiving deferred cash compensation on:

Specified Date                

Specified Event                                                        

I elect to receive deferred cash compensation in the following manner:

    Lump Sum

    Equal Quarterly Installments for     number of years.

    Equal Quarterly Installments of       dollars.

    Other Manner                                            

I understand that any election I make to defer Eligible Fees will be covered by the terms of the Compensation Plan for Nonemployee Directors of ADC Telecommunications, Inc. (restated as of January 1, 2004), a copy of which I have received.

Date	By
	(Print Name)

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EXHIBIT B

DISTRIBUTION AMENDMENT FORM

I, the undersigned, a Director of ADC Telecommunications, Inc., hereby amend the distribution plan for the balance in my Deferred Account maintained pursuant to the Compensation Plan for Nonemployee Directors of ADC Telecommunications, Inc. (restated as of January 1, 2004), as follows:

I elect to begin receiving deferred cash compensation on:

Specified Date                

Specified Event                                                        

I elect to receive deferred cash compensation in the following manner:

    Lump Sum

    Equal Quarterly Installments for     number of years.

    Equal Quarterly Installments of       dollars.

    Other Manner                                            

I understand that this amendment is only effective if my distributions commence on or after the first day of the second Plan Year after the Plan Year during which this amendment is filed.

Date	By
	(Print Name)

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EXHIBIT C

DEFERRED STOCK EXAMPLE – PHANTOM SHARES

Assumptions

Deferred Stock Election:	50% of Eligible Fees
Annual Cash Retainer Fee:	$25,000
FMV of stock on first business day of Plan Year:	$5.00
Effective Date of Grant:	First business day of Plan Year

Exchange Calculation	(Number of Phantom Shares awarded)
	Fee x Exchange Election%				=
	FMV per share on Effective Date
	$25,000 x 50%			=
	$5.00
		$12,500	=  2,500 Phantom Shares
		$5.00

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EXHIBIT D

EXCHANGE EXAMPLE – STOCK OPTIONS*

Assumptions

Option Exchange Election:	50% of Eligible Fees
Annual Cash Retainer Fee:	$25,000
FMV of stock on first business day of Plan Year:	$5.00
Effective Date of Grant:	First business day of Plan Year

Exchange Calculation	(Number of Phantom Shares awarded)
	Fee x Exchange Election% x 4.5				=
	FMV per share on Effective Date
	$25,000 x 50% x  4.5			=
	$5.00
		$56,250	=  11,250 option shares
		$5.00

Exercise Price of Options:  $5.00 (FMV on grant date)

*This Example to be included in annual form only if applicable based on the discretion of the Compensation Committee of the Board.

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EXHIBIT E

BENEFICIARY ELECTION FORM

COMPENSATION PLAN FOR NONEMPLOYEE DIRECTORS OF
ADC TELECOMMUNICATIONS, INC.

I.DIRECTOR INFORMATION

Last Name First MI (if applicable)

Mailing Address (If you have an address change, contact your Human Resources Department)

City Province (if applicable) Country Postal Code

II.BENEFICIARY DESIGNATION

In accordance with the provisions of the Plan, I hereby designate any and all deferral amounts payable under the Plan by reason of my death to the following beneficiary(ies).  Further, I understand that should my primary beneficiary(ies) precede me in death, my contingent beneficiary(ies) will become the primary beneficiary(ies) of my Plan account and any accumulated contributions.  I understand that this beneficiary designation revokes any previous designation(s).  I understand that in the event any persons designated below survive me, any and all death benefits payable will be distributed in accordance with the provisions of the Plan.  I also reserve the right to change this designation at any time by completing a new Beneficiary Election Form.

PRIMARY BENEFICIARY(IES)

Name Relationship
(Date of Birth) Address & Phone Number Percent Of Benefit
(Total = 100%)

CONTINGENT BENEFICIARY(IES)

Name Relationship
(Date of Birth) Address & Phone Number Percent Of Benefit
(Total = 100%)

III.SIGNATURE

Signature Date

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EX-10.C

Exhibit 10-c

ADC TELECOMMUNICATIONS, INC.

RESTRICTED STOCK UNIT AWARD AGREEMENT

(Nonemployee Director – Director Compensation Plan)

TO:              <<Participant>>

You have been granted this restricted stock unit award (the “Award”) of ADC Telecommunications, Inc. (the “Company”) pursuant to the Company’s Global Stock Incentive Plan (the “Plan”) by reason of your election to exchange director fees for this Award under the Company’s Compensation Plan for Nonemployee Directors.  The Award represents the right to receive shares of Common Stock of the Company subject to the fulfillment of the vesting conditions set forth in this agreement (this “Agreement”).

The terms of the Award are as set forth in this Agreement and in the Plan.  The Plan is incorporated into this Agreement by reference, which means that this Agreement is limited by and subject to the express terms and provisions of the Plan.  In the event of a conflict between the terms of this Agreement and the terms of the Plan, the terms of the Plan shall control.  Capitalized terms that are not defined in this Agreement have the meanings given to them in the Plan.  The terms of the Award are as follows:

1.             Grant Date:                                

2.             Number of Restricted Stock Units Subject to this Award:                          

3.             Vesting Date:  January 1 of the year immediately following the year in which the  Grant Date occurs.  No Shares shall be distributed on the Vesting Date.  Shares will be distributed pursuant to Section 4 hereof.

4.             Conversion of Restricted Stock Units and Issuance of Shares.  Subject to your continued service as a director until the Vesting Date, you shall receive, in accordance with the terms and provisions of the Plan and this Agreement, one share of Common Stock for each restricted stock unit on the earliest practicable date (as determined by the Company) following your retirement, resignation or removal as a director of the Company.

5.             Cessation of Service as a Director.  If you cease to be a director of the Company at any time prior to the Vesting Date, all restricted stock units that are subject to this Award shall be forfeited and cancelled.

6.             Right to Shares; Dividends.  You shall not have any right in, to or with respect to any of the Shares (including any voting rights issuable under the Award) until the Award is settled by the issuance of Shares to you.  Notwithstanding the foregoing, if the Company declares and pays cash dividends on it Shares, you will be entitled to receive such cash dividends in the form of Dividend Equivalents at the same rate and at the same time as such cash dividends are paid with respect to Shares.

8.             Transfer of Award.  Your rights under the Award may not be sold, assigned, transferred, pledged or disposed of in any way, except by will or by the laws of descent and distribution, without the prior written consent of the Company.

9.             Acceleration of Vesting Date.  In the event of a “Change in Control” of the Company prior to the Vesting Date, the Vesting Date shall be accelerated to the effective

date of such Change in Control.  The distribution date set forth in Section 4 hereof shall not be effected by such Change in Control.  For purposes of this Agreement, the following terms shall have the definitions set forth below:

(a)           “Change in Control” shall mean:

(i)a change in control of the Company of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), whether or not the Company is then subject to such reporting requirement;

(ii)the public announcement (which, for purposes of this definition, shall include, without limitation, a report filed pursuant to Section 13(d) of the Exchange Act) by the Company or any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) that such person has become the “beneficial owner” (as defined in Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of securities of the Company representing 20% or more of the combined voting power of the Company’s then outstanding securities, determined in accordance with Rule 13d-3, excluding, however, any securities acquired directly from the Company (other than an acquisition by virtue of the exercise of a conversion privilege unless the security being so converted was itself acquired directly from the Company); however, that for purposes of this clause the term “person” shall not include the Company, any subsidiary of the Company or any employee benefit plan of the Company or of any subsidiary of the Company or any entity holding shares of Common Stock organized, appointed or established for, or pursuant to the terms of, any such plan;

(iii)the Continuing Directors cease to constitute a majority of the Company’s Board of Directors;

(iv)consummation of a reorganization, merger or consolidation of, or a sale or other disposition of all or substantially all of the assets of, the Company (a “Business Combination”), in each case, unless, following such Business Combination, (A) all or substantially all of the persons who were the beneficial owners of the Company’s outstanding voting securities immediately prior to such Business Combination beneficially own voting securities of the corporation resulting from such Business Combination having more than 50% of the combined voting power of the outstanding voting securities of such resulting Corporation and (B) at least a majority of the members of the Board of Directors of the corporation resulting from such Business Combination were Continuing Directors at the time of the action of the Board of Directors of the Company approving such Business Combination;

(v)approval by the shareholders of the Company of a complete liquidation or dissolution of the Company; or

(vi)the majority of the Continuing Directors determine in their sole and absolute discretion that there has been a change in control of the Company.

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(b)“Continuing Director” shall mean any person who is a member of the Board of Directors of the Company, while such person is a member of the Board of Directors, who is not an Acquiring Person (as defined below) or an Affiliate or Associate (as defined below) of an Acquiring Person, or a representative of an Acquiring Person or of any such Affiliate or Associate, and who (x) was a member of the Board of Directors on the date of this Agreement as first written above or (y) subsequently becomes a member of the Board of Directors, if such  person’s initial nomination for election or initial election to the Board of Directors is recommended or approved by a majority of the Continuing Directors.  For purposes of this subparagraph (b), “Acquiring Person” shall mean any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) who or which, together with all Affiliates and Associates of such person, is the “beneficial owner” (as defined in Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of securities of the Company representing 20% or more of the combined voting power of the Company’s then outstanding securities, but shall not include the Company, any subsidiary of the Company or any employee benefit plan of the Company or of any subsidiary of the Company or any entity holding shares of Common Stock organized, appointed or established for, or pursuant to the terms of, any such plan; and “Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in Rule 12b-2 promulgated under the Exchange Act.

9.Further Acts.  You agree to execute and deliver any additional documents and to perform any other acts necessary to give full force and effect to the terms of this Agreement.

10.New, Substituted or Additional Securities.  In the event of any stock dividend, stock split or consolidation or any like capital adjustment of any of the outstanding securities of the Company, all new, substituted or additional securities or other property to which you become entitled by reason of the Award shall be subject to forfeiture to the Company with the same force and effect as is the Award immediately prior to such event.

11.Severability.  In the event that any provision of this Agreement is deemed to be invalid or unenforceable, the remaining provisions shall nevertheless remain in full force and effect without being impaired or invalidated in any way.

12.Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of Minnesota without regard to conflict of laws principles.

13.Limitation on Rights; No Right to Future Grants; Extraordinary Item.  By entering into this Agreement and accepting the Award, you acknowledge that: (a) the Plan is discretionary and may be modified, suspended or terminated by the Company at any time as provided in the Plan; (b) the grant of the Award is a one-time benefit and does not create any contractual or other right to receive future grants of awards or benefits in lieu of awards; (c) all determinations with respect to any such future grants, including, but not limited to, the times when awards will be granted, the number of Shares subject to each award, the award price, if any, and the time or times when each award will be settled, will be at the sole discretion of the Company; (d) your participation in the Plan is voluntary; (e)  the future value of the Common Stock subject to the Award is unknown and cannot be predicted with certainty, and (f) neither the Plan, the Award nor the issuance of the Shares confers upon you any right to continue as a director of the Company, nor do they limit in any respect the right of the Company to terminate your relationship with the Company at any time.

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14.          Execution of Award Agreement.  Please acknowledge your acceptance of the terms and conditions of the Award by signing one copy of this Agreement and returning it to the address indicated below.  If you have not notified the Company of your rejection of the Award within thirty (30) days after your receipt of this Agreement, you will have consented to all of the terms and provisions hereof.

ADC TELECOMMUNICATIONS, INC.

By:

Name:

Title:

ACCEPTANCE AND ACKNOWLEDGMENT

I accept the Restricted Stock Unit Award described in this Agreement and in the Plan, and acknowledge receipt of a copy of this Agreement, the Plan and the applicable Plan Summary, and acknowledge that I have read them carefully and that I fully understand their contents.

Dated:
	<<Participant>>
Return to:
ADC Telecommunications, Inc.
Office of the General Counsel
P.O. Box 1101
Minneapolis, MN 55440-1101
Fax:  952-917-0893

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EX-10.D

Exhibit 10-d

THIRD AMENDMENT
OF
ADC TELECOMMUNICATIONS, INC.
DEFERRED COMPENSATION PLAN
(1989 Restatement)

The “ADC Telecommunications, Inc. Deferred Compensation Plan (1989 Restatement)” adopted by the Board of Directors of ADC Telecommunications, Inc., a Minnesota Corporation, on September 24, 1989, effective November 1, 1989, as amended by First and Second Amendments effective March 12, 1996 (hereinafter collectively referred to as the “Plan Statement”), is hereby further amended as follows:

1.Effective December 9, 2003, the following Section 2.5 shall be added to Section 2 of the Plan Statement as follows:

2.5Plan Termination Transition – Effective December 9, 2003, no further deferrals of Deferrable Compensation may be made by any Participant, and no otherwise Eligible Employees may become Participants in the Plan.  The Plan shall remain in existence until such time as all Account balances have been fully paid to Participants in accordance with their elections, at which time the Plan shall be automatically terminated.

2.Except as herein expressly amended, the Plan Statement shall continue in full force and effect.

IN WITNESS WHEREOF, ADC Telecommunications, Inc. has caused this Third Amendment to be executed by a duly authorized officer.

December 9, 2003	ADC TELECOMMUNICATIONS, INC.
	By:	/s/ Jeffrey D. Pflaum
		Jeffrey D. Pflaum
	Its:	Corporate Secretary

EX-10.E

Exhibit 10-e

ADC TELECOMMUNICATIONS, INC.

RESTRICTED STOCK AWARD AGREEMENT

THIS AGREEMENT is made as of this 11th day of December 2003, by and between ADC Telecommunications, Inc., a Minnesota corporation (the “Company”), and Hilton M. Nicholson (“Participant”).

The Company, pursuant to its Global Stock Incentive Plan (the “Plan”), hereby grants the following stock award to Participant, which award shall have the terms and conditions set forth in this Agreement:

1.Award

The Company, effective as of the date of this Agreement, hereby grants to Participant a restricted stock award of 80,000 shares (the “Shares”) of common stock, par value $.20 per share, of the Company (the “Common Stock”), subject to the terms and conditions set forth herein.

2.Vesting

Subject to the terms and condition of this Agreement, the Shares shall vest in Participant as follows:  one-third (1/3) of the Shares shall vest on each of December 11, 2004, 2005 and 2006, if, and only if, Participant remains continuously employed by the Company from the date hereof until each respective vesting date.  Vesting of the Shares shall be accelerated to an earlier date only under the following conditions:

a) in the event of a Change in Control of Company (as defined in the attached Exhibit A), and provided that Participant remains continuously employed by the Company until the effective date of such Change in Control, all unvested Shares granted under this Agreement shall become immediately vested on the effective date of the Change in Control;

b) in the event that Participant’s employment by the Company is terminated because Participant becomes employed by a new owner of the IP Cable business in connection with an “IP Cable Divestiture Event” (as defined in Exhibit A), and provided that Participant remains continuously employed by the Company until the date of closing of the IP Cable Divestiture Event, all unvested Shares granted under this Agreement shall become immediately vested as of the last date of Participant’s employment with the Company; or

c) in the event that Participant’s employment by the Company is involuntarily terminated by the Company without cause within one year following an IP Cable Divestiture Event, and provided that Participant remains continuously employed by the Company until the date of such involuntary termination, all unvested Shares granted under this Agreement shall become immediately vested as of the last date of Participant’s employment with the Company.

3.Restriction on Transfer

Until the Shares vest pursuant to Section 2 hereof, none of the Shares may be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of or encumbered, and no attempt to transfer the Shares, whether voluntary

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or involuntary, by operation of law or otherwise, shall vest the transferee with any interest or right in or with respect to the Shares.

4.Forfeiture

If Participant ceases to be an employee of the Company or any majority-owned affiliate of the Company for any reason prior to the vesting of the Shares pursuant to Section 2 hereof, Participant’s rights to the unvested portion of the Shares shall be immediately and irrevocably forfeited.

5.Issuance and Custody of Certificate

(a) The Company shall cause to be issued one or more stock certificates, registered in the name of Participant, evidencing the Shares.  Each such certificate shall bear the following legend:

“The shares of common stock represented by this certificate are subject to forfeiture, and the transferability of this certificate and the shares of stock represented hereby are subject to the restrictions, terms and conditions (including restrictions against transfer) contained in the ADC Telecommunications, Inc. Global Stock Incentive Plan and a Restricted Stock Award Agreement entered into between ADC Telecommunications, Inc. and the registered owner of such shares.  Copies of the Plan and the Agreement are on file in the office of the Secretary of ADC Telecommunications, Inc., 13625 Technology Drive, Eden Prairie, Minnesota.”

(b)  Participant shall execute stock powers relating to the Shares and deliver the same to the Company.  Company shall use such stock powers only for the purpose of canceling any unvested Shares that are forfeited.

(c)  Each certificate issued pursuant to Section 5(a) hereof, together with the stock powers relating to the Shares, shall be deposited by the Company with the Secretary of the Company or a custodian designated by the Secretary.  The Secretary or such custodian shall issue a receipt to Participant evidencing the certificate or certificates held which are registered in the name of Participant.

(d)  After any Shares vest pursuant to Section 2 hereof, the Company shall promptly cause to be issued a certificate or certificates evidencing such vested Shares, free of the legend provided in section 5(a) hereof, and shall cause such certificate or certificates to be delivered to Participant or Participant’s legal representatives, beneficiaries or heirs.

6.Distributions and Adjustments

(a)  If all or any portion of the Shares vest in Participant subsequent to any change in the number or character of Shares of Common Stock (through stock dividend, recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of Shares of Common Stock or other securities of the Company, issuance of warrants or other rights to purchase Shares of Common Stock or other securities of the Company or other similar corporate transaction or event affecting the Shares such that an adjustment is determined by the Compensation and Organization Committee of the Board of Directors (the “Committee”) to be appropriate in order to prevent dilution or enlargement of the interest represented by the Shares), Participant shall

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then receive upon such vesting the number and type of securities or other consideration which he would have received if the Shares had vested prior to the event changing the number or character of outstanding Shares of Common Stock.

(b)  Any additional Shares of Common Stock, any other securities of the Company and any other property (except for cash dividends) distributed with respect to the Shares prior to the date the Shares vest shall be subject to the same restrictions, terms and conditions as the Shares.  Any cash dividends payable with respect to the Shares shall be distributed to Participant at the same time cash dividends are distributed to shareholders of the Company generally.

(c)  Any additional Shares of Common Stock, any securities and any other property (except for cash dividends) distributed with respect to the Shares prior to the date such Shares vest shall be promptly deposited with the Secretary or the custodian designated by the Secretary to be held in custody in accordance with Section 5(c) hereof.

7.Taxes

(a)  In order to provide the Company with the opportunity to claim the benefit of any income tax deduction which may be available to it in connection with this restricted stock award, and in order to comply with all applicable federal or state tax laws or regulations, the Company may take such action as it deems appropriate to insure that, if necessary, all applicable federal or state income and social security taxes are withheld or collected from Participant.

(b)  Participant may elect to satisfy his federal and state income tax withholding obligations in connection with this restricted stock award by (i) having the Company withhold a portion of the shares of Common Stock otherwise to be delivered upon vesting of this restricted stock award having a fair market value equal to the amount of federal and state income taxes required to be withheld in connection with this restricted stock award, in accordance with the rules of the Committee, or (ii) delivering to the Company shares of Common Stock other than the shares to be delivered upon vesting of this restricted stock award having a fair market value equal to such taxes, in accordance with the rules of the Committee.

(c)  Notwithstanding clause 7(b) above, if Participant elects, in accordance with Section 83(b) of the Internal Revenue Code of 1986, as amended, to recognize ordinary income in the year of acquisition of the Shares, the Company may require at the time of such election an additional payment for withholding tax purposes based on the fair market value of such Shares as of the date of the acquisition of such Shares by Participant.

8.Miscellaneous

(a)  This Agreement is issued pursuant to the Plan and is subject to its terms.  Participant hereby acknowledges receipt of a copy of the Plan.  The Plan is also available for inspection during business hours at the principal office of the Company.

(b)  This Agreement shall not confer on Participant any right with respect to continuance of employment by the Company or any of its subsidiaries.

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(c) This Agreement shall be governed by and construed under the internal laws of the State of Minnesota, without regard for conflicts of laws principles thereof.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on the day and year first above written.

ADC TELECOMMUNICATIONS, INC.
By:		/s/ Laura N. Owen
		Laura N. Owen
Its:		Vice President, Human Resources
PARTICIPANT
	/s/ Hilton M. Nicholson
Hilton M. Nicholson

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Exhibit A

Change In Control.

(i)For purposes of this Agreement and this Exhibit A, a Change in Control” of the Company shall mean:

(a)a change in control of the Company of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), whether or not the Company is then subject to such reporting requirement;

(b)the public announcement (which, for purposes of this definition, shall include, without limitation, a report filed pursuant to Section 13(d) of the Exchange Act) by the Company or any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) that such person has become the “beneficial owner” (as defined in Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of securities of the Company representing 20% or more of the combined voting power of the Company’s then outstanding securities, determined in accordance with Rule 13d-3, excluding, however, any securities acquired directly from the Company (other than an acquisition by virtue of the exercise of a conversion privilege unless the security being so converted was itself acquired directly from the Company); however, that for purposes of this clause the term “person” shall not include the Company, any subsidiary of the Company or any employee benefit plan of the Company or of any subsidiary of the Company or any entity holding shares of Common Stock organized, appointed or established for, or pursuant to the terms of, any such plan;

(c)the Continuing Directors cease to constitute a majority of the Company’s Board of Directors;

(d)consummation of a reorganization, merger or consolidation of, or a sale or other disposition of all or substantially all of the assets of, the Company (a “Business Combination”), in each case, unless, following such Business Combination, (A) all or substantially all of the persons who were the beneficial owners of the Company’s outstanding voting securities immediately prior to such Business Combination beneficially own voting securities of the corporation resulting from such Business Combination having more than 50% of the combined voting power of the outstanding voting securities of such resulting Corporation and (B) at least a majority of the members of the Board of Directors of the corporation resulting from such Business Combination were Continuing Directors at the time of the action of the Board of Directors of the Company approving such Business Combination;

(e)approval by the shareholders of the Company of a complete liquidation or dissolution of the Company; or

(f)the majority of the Continuing Directors determine in their sole and absolute discretion that there has been a change in control of the Company.

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(ii)“Continuing Director” shall mean any person who is a member of the Board of Directors of the Company, while such person is a member of the Board of Directors, who is not an Acquiring Person (as defined below) or an Affiliate or Associate (as defined below) of an Acquiring Person, or a representative of an Acquiring Person or of any such Affiliate or Associate, and who (x) was a member of the Board of Directors on the date of this Agreement as first written above or (y) subsequently becomes a member of the Board of Directors, if such  person’s initial nomination for election or initial election to the Board of Directors is recommended or approved by a majority of the Continuing Directors.  For purposes of this subparagraph (ii), “Acquiring Person” shall mean any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) who or which, together with all Affiliates and Associates of such person, is the “beneficial owner” (as defined in Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of securities of the Company representing 20% or more of the combined voting power of the Company’s then outstanding securities, but shall not include the Company, any subsidiary of the Company or any employee benefit plan of the Company or of any subsidiary of the Company or any entity holding shares of Common Stock organized, appointed or established for, or pursuant to the terms of, any such plan; and “Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in Rule 12b-2 promulgated under the Exchange Act.

IP Cable Divestiture Event.  For purposes of this Agreement and this Exhibit A, an “IP Cable Divestiture Event” shall mean the closing of a sale or other divestiture by the Company of at least a majority ownership interest in substantially all of the business and assets of the Company’s IP Cable business unit (including the Cuda CMTS product line) to a third party which continues the IP Cable business.  The sale of the business and assets of only the Fastflow and/or Homeworx product line shall not constitute an IP Cable Divestiture Event.  In the event that the Company engages in a transaction in which the Company divests a minority interest but retains at least a majority ownership interest in a business entity or new joint venture which continues the IP Cable business including the Cuda CMTS product Line, such transaction shall also be deemed an IP Cable Divestiture Event if the Participant is not offered continued employment by either the Company or the entity or joint venture which continues the business of the IP Cable business unit.   The Company may or may not engage in an IP Cable Divestiture Event as it evaluates its business portfolio and strategy on an on-going basis.  This Agreement is not intended to and shall not impose any commitment on the Company to proceed with a divestiture of the IP Cable business unit.  The Company retains complete discretion as to if and when it would proceed with any such transaction.

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EX-10.F

Exhibit 10-f

ADC TELECOMMUNICATIONS, INC.

INCENTIVE STOCK OPTION AGREEMENT

Optionee:	«First_Name» «MI» «Last_Name»	Option Number:	«Num»
ID:	«ID»	Plan:	«Plan»

This Incentive Stock Option Agreement (the “Agreement”) is entered into effective «Effective_Date» by and between ADC Telecommunications, Inc., a Minnesota corporation, (the “Company”), and the above-identified Optionee pursuant to the Company’s Global Stock Incentive Plan (the “Plan”).

Effective the date written above, the Optionee has been granted an option (the “Option”) to purchase all or any part of an aggregate of «SHARES_GRANTED» shares of common stock, par value US$.20 per share, of the Company (the “Common Stock”) at the price of US$«OPTION_PRICE» per share subject to the terms and conditions set forth herein and in the Plan and Exhibit A to this Agreement.  This Option is intended to be an incentive stock option within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”).

The total aggregate purchase price for all of the shares purchasable under this Option is US$«Total_option_price».

Subject to the terms and conditions of this Agreement, Exhibit A to this Agreement and the Plan, this Option shall in all events terminate ten (10) years after the date of grant (the “Expiration Date”).  The shares subject to this Option shall vest and may be exercised in whole or in part by the Optionee according to the following vesting schedule:

Vesting Date Number of Option
Shares Vesting Expiration Date

Subject to the provisions of the Plan and Exhibit A, the Optionee must be actively employed by the Company or any of its Affiliates on each Vesting Date for vesting to occur.  Termination of employment after a Vesting Date may accelerate the Expiration Date (see terms of the Plan and Exhibit A).

Optionee and the Company agree that these Options are granted under and governed by the terms and conditions of this Agreement, Exhibit A to this Agreement, and the Plan.  Each of these documents and a Prospectus related to shares covered by the Plan has been provided to Optionee.  Optionee specifically acknowledges that Exhibit A to this Agreement contains an agreement by Optionee not to solicit employees of the Company or its Affiliates on behalf of any other employer, a data privacy consent by Optionee and certain other acknowledgements by Optionee.

Optionee acknowledges that this Option is subject to the ongoing discretionary authority of the Company to determine: (i) the permissible manner of exercise of the Option (including but not limited to the authority of the Company to require a mandatory cashless exercise);

-Over-

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(ii) the permissible timing of exercise of the Option; and (iii) any other restrictions that the Company deems necessary and advisable, including but not limited to restrictions pertaining to applicable law.  Optionee further acknowledges that in the event the Optionee chooses to effect a simultaneous exercise and sale of all or a portion of the shares that are subject to this Option, neither the Company nor its third party stock option administrator will guarantee any particular market price for the sale of the shares, nor shall the Company or its third party administrator be responsible for any failure to obtain any particular market price due to delays in the exercise of this Option or any other reason.

ADC TELECOMMUNICATIONS, INC.

	«Effective Date»
Jeffrey D. Pflaum, Vice President, Corporate Secretary & General Counsel	Date

OPTIONEE

«First_Name» «MI» «Last_Name»	Date
Government/Taxpayer ID#
Home Address

THE OPTIONEE MUST PROMPTLY SIGN AND RETURN THIS AGREEMENT TO THE COMPANY AT THE ADDRESS LISTED BELOW.  IF THIS AGREEMENT IS NOT SIGNED AND RETURNED WITHIN SIXTY (60) DAYS FROM THE DATE OF MAILING THIS AGREEMENT, THIS OPTION SHALL BE VOID AND HAVE NO FORCE OR EFFECT.

Postal Mail:

ADC

Attn:  HR Stock Compensation, MS 56

P.O. Box 1101

Minneapolis, MN 55440-1101 USA

Express Mail:

ADC

Attn:  HR Stock Compensation, MS 56

13625 Technology Drive

Eden Prairie, MN 55344 USA

For questions regarding this Option, please contact ADC’s HR Stock Compensation Group as follows:

Email:	stockprograms@adc.com
Facsimile:	952-238-1525
Telephone:	952-917-0576

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800-366-3889 ext. 70576

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EXHIBIT A

TO THE

ADC TELECOMMUNICATIONS, INC.

INCENTIVE STOCK OPTION AGREEMENT

This Exhibit A is part of and incorporated by reference into the Incentive Stock Option Agreement (the “Agreement”) issued by ADC Telecommunications, Inc. (the “Company”) pursuant to the Company’s Global Stock Incentive Plan (the “Plan”).

Unless otherwise defined herein, capitalized terms shall have the meaning given such term in the Agreement.

1.Grant of Option

Refer to the Agreement for a description of the Option grants, including the total number of shares of Common Stock covered by this Option, the exercise price per share, and the schedule for vesting.  This Option is intended to be an incentive stock option within the meaning of Section 422 of the U.S. Internal Revenue Code.

2.Duration and Exercisability

(a)This Option shall vest and become exercisable in accordance with the schedule set forth on the Agreement.  This Option shall in all events terminate ten (10) years after the date of grant, if not earlier in the event of termination of employment.

(b)Notwithstanding the provisions contained in Section 2(a) above, but subject to the other terms and conditions set forth herein, this Option shall become fully vested and exercisable on the date of a “Change in Control” (as hereinafter defined).  For purposes of the Agreement and this Exhibit A to the Agreement, the following terms shall have the definitions set forth below:

(i)“Change in Control” shall mean:

(A)a change in control of the Company of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), whether or not the Company is then subject to such reporting requirement;

(B)the public announcement (which, for purposes of this definition, shall include, without limitation, a report filed pursuant to Section 13(d) of the Exchange Act) by the Company or any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) that such person has become the “beneficial owner” (as defined in Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of securities of the Company representing 20% or more of the combined voting power of the Company’s then outstanding securities, determined in accordance with Rule 13d-3, excluding, however, any securities acquired directly from the Company (other than an acquisition by virtue of the exercise of a conversion privilege

4

unless the security being so converted was itself acquired directly from the Company); however, that for purposes of this clause the term “person” shall not include the Company, any subsidiary of the Company or any employee benefit plan of the Company or of any subsidiary of the Company or any entity holding shares of Common Stock organized, appointed or established for, or pursuant to the terms of, any such plan;

(C)the Continuing Directors cease to constitute a majority of the Company’s Board of Directors;

(D)consummation of a reorganization, merger or consolidation of, or a sale or other disposition of all or substantially all of the assets of, the Company (a “Business Combination”), in each case, unless, following such Business Combination, (A) all or substantially all of the persons who were the beneficial owners of the Company’s outstanding voting securities immediately prior to such Business Combination beneficially own voting securities of the corporation resulting from such Business Combination having more than 50% of the combined voting power of the outstanding voting securities of such resulting Corporation and (B) at least a majority of the members of the Board of Directors of the corporation resulting from such Business Combination were Continuing Directors at the time of the action of the Board of Directors of the Company approving such Business Combination;

(E)approval by the shareholders of the Company of a complete liquidation or dissolution of the Company; or

(F)the majority of the Continuing Directors determine in their sole and absolute discretion that there has been a change in control of the Company.

(ii)“Continuing Director” shall mean any person who is a member of the Board of Directors of the Company, while such person is a member of the Board of Directors, who is not an Acquiring Person (as defined below) or an Affiliate or Associate (as defined below) of an Acquiring Person, or a representative of an Acquiring Person or of any such Affiliate or Associate, and who (x) was a member of the Board of Directors on the date of this Agreement as first written above or (y) subsequently becomes a member of the Board of Directors, if such  person’s initial nomination for election or initial election to the Board of Directors is recommended or approved by a majority of the Continuing Directors.  For purposes of this subparagraph (ii), “Acquiring Person” shall mean any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) who or which, together with all Affiliates and Associates of such person, is the “beneficial owner” (as defined in Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of securities of the Company representing 20% or more of the combined voting power of the Company’s then outstanding securities, but shall not include the Company, any subsidiary of the Company or any employee benefit plan of the Company or of any

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subsidiary of the Company or any entity holding shares of Common Stock organized, appointed or established for, or pursuant to the terms of, any such plan; and “Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in Rule 12b-2 promulgated under the Exchange Act.

(c)This Option shall not be assignable or transferable except to a designated beneficiary (under procedures established by the Company) or by the laws of descent and distribution in the case of the death of Optionee, and except that for U.S. resident employees, upon written notice to the Company, U.S. resident employees may transfer this Option during his or her lifetime to any “family member” (as such term is used on Form S-8 under the Securities Act of 1933) of Optionee provided that (i) there is no consideration for such transfer or such transfer is effected pursuant to a domestic relations order in settlement of marital property rights, and (ii) this Option held by such transferees shall continue to be subject to the same terms and conditions (including restrictions on subsequent transfers) as were applicable to this Option immediately prior to such transfer.  This Option may not be pledged, alienated, attached or otherwise encumbered, and any purported pledge, alienation, attachment or encumbrance thereof shall be void and unenforceable against the Company or any Affiliate of the Company.

(d)This Option may be exercised, during the lifetime of Optionee, only by Optionee, a permitted transferee pursuant to a transfer permitted by Section 2(c) above, or, if permissible under applicable law, by Optionee’s or such transferee’s guardian or legal representative.

3.Effect of Termination of Employment

(a)For all purposes of the Agreement and this Exhibit A, the term “Employment Termination Date” shall mean the earlier of:

(i)the date, as determined by the Company, that Optionee is no longer actively employed by the Company or an Affiliate of the Company, and in the case of an involuntarily termination, such date shall not be extended by any notice period mandated under local law (e.g., active employment would not include a period of “garden leave” or similar period pursuant to local law); or

(ii)the date, as determined by the Company, that Optionee’s employer is no longer an Affiliate of the Company.

(b)In the event the Optionee ceases to be an employee of the Company or any of its Affiliates for any reason other than death, Optionee shall have the right to exercise the Option at any time within one year after the Employment Termination Date to the extent of the number of vested shares Optionee was entitled to purchase under the Option on the Employment Termination Date, subject to the condition that no Option shall be exercisable after the Expiration Date.

(c)In the event the Optionee dies while an employee of the Company or any of its Affiliates or within three months after the Employment Termination Date, this Option may be exercised at any time within two years after his or her

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death by the executors or administrators of Optionee, or by any person or persons to whom the Option is transferred by the prior designation of a beneficiary or the applicable laws of descent and distribution, to the extent of the number of vested shares Optionee was entitled to purchase under the Option on the date of death, subject to the condition that no Option shall be exercisable after the Expiration Date.

(d)No further vesting of this Option shall occur after the Employment Termination Date, and this Option shall be exercisable in accordance with this Section 3 following the Employment Termination Date only to the extent that it is exercisable on the Employment Termination Date, pursuant to the vesting schedule set forth in the Agreement and Section 2 hereof.

4.Manner of Exercise

The Option can be exercised only by Optionee or other proper party within the option period by notice to the Company or the Company’s third-party stock option administrator (UBS PaineWebber Inc. as of the date of this grant) in a form specified by the Company or such third-party stock option administrator, or in such other manner as the Company may specify from time-to-time.  The Company shall have the right to specify all conditions of the manner of exercise, and such conditions may vary by country and may be subject to change from time to time.

5.Adjustments

If Optionee exercises all or any portion of the Option subsequent to any change in the number or character of the Common Stock (through stock dividend, recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of shares of Common Stock or other securities of the Company, issuance of warrants or other rights to purchase shares of Common Stock or other securities of the Company or other similar corporate transaction or event affecting the Common Stock such that an adjustment is determined by the Committee to be appropriate in order to prevent dilution or enlargement of the Option), Optionee shall then receive for the aggregate price paid by him or her on such exercise of the Option, the number and type of securities or other consideration which he would have received if such Option had been exercised prior to the event changing the number or character of outstanding shares.

6.Responsibility for Taxes

Regardless of any action taken by the Company or Optionee’s employer (the “Employer”) with respect to any or all income tax, social insurance, payroll tax, payment on account or other tax-related withholding (“Tax-Related Items”), Optionee acknowledges that the ultimate liability for all Tax-Related Items is and remains Optionee’s responsibility and that the Company and/or the Employer (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Option grant, including the grant, vesting or exercise of the Option, the subsequent sale of shares acquired pursuant to such exercise and the receipt of any dividends; and (ii) do not commit to structure the terms of the grant or any aspect of the Option to reduce or eliminate Optionee’s liability for Tax-Related Items.  Without limiting the foregoing, the Company specifically disclaims any representation or guarantee that this Option will qualify as an Incentive Stock Option under Section 422 of the Internal Revenue Code, or if the Option initially so qualifies, that it will continue to qualify.  Optionee should consult his or her own tax advisor regarding the status of and tax treatment for this Option.

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Prior to exercise of the Option, Optionee shall pay or make adequate arrangements satisfactory to the Company and/or the Employer to satisfy all withholding and payment on account obligations of the Company and/or the Employer.  In this regard, Optionee authorizes the Company and/or the Employer to withhold all applicable Tax-Related Items legally payable by Optionee from Optionee’s wages or other cash compensation paid to Optionee by the Company and/or the Employer or from proceeds of the sale of the shares.  Alternatively, or in addition, if permissible under local law, the Company may (i) sell or arrange for the sale of shares that Optionee acquires to meet the withholding obligation for Tax-Related Items, and/or (ii) withhold in shares, provided that the Company only withholds the amount of shares necessary to satisfy the minimum withholding amount.  Finally, Optionee shall pay to the Company or the Employer any amount of Tax-Related Items that the Company or the Employer may be required to withhold as a result of Optionee’s participation in the Plan or Optionee’s purchase of shares that cannot be satisfied by the means previously described.  The Company may refuse to honor the exercise and refuse to deliver the shares if Optionee fails to comply with his or her obligations in connection with the Tax-Related Items as described in this section.

7.Non-solicitation Agreement

(a)In consideration of the grant of the Option, the Optionee shall not, directly or indirectly, during the period the Optionee is employed by the Company or its Affiliates and for a period of one year after the Employment Termination Date:  (i) induce or attempt to induce any other employee to leave the employ of the Company or any of its Affiliates, or in any way interfere adversely with the relationship between any such employee and the Company or any of its Affiliates; (ii) induce or attempt to induce any other employee of the Company or any of its Affiliates to work for, render services or provide advice to or supply confidential business information or trade secrets of the Company or its Affiliates to any person or entity other than the Company or its Affiliates; or (iii) employ, or otherwise pay for services rendered by, any other employee of the Company or any of its Affiliates in any other business enterprise.

(b)The Optionee acknowledges that breach of this Section 7 would be highly injurious to the Company, and the Company reserves its rights to pursue all available remedies, including but not limited to equitable and injunctive relief and damages.  The Optionee specifically agrees that the Company shall be entitled to obtain temporary and permanent injunctive relief from a court of law to enforce the provisions of this Section 7, and that such relief may be granted without the necessity of proving actual damages and without necessity of posting any bond.  This provision with respect to injunctive relief shall not, however, diminish the right of the Company to claim and recover damages or to seek and obtain any other relief available to it.  The Optionee further acknowledges that this Section 7 shall be enforceable by the Company even if no portion of the Option becomes vested and exercisable.

8.Data Privacy Consent

Optionee hereby explicitly consents to the collection, use and transfer, in electronic or other form, of his or her personal data as described in this document by and among, as applicable, the Company and its Affiliates for the exclusive purpose of implementing, administering and managing Optionee’s participation in the Plan.

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Optionee understands that the Company and its Affiliates hold certain personal information about Optionee, including, but not limited to, Optionee’s name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company or its Affiliates, details of all options or any other entitlement to shares of stock awarded, cancelled, exercised, vested, unvested or outstanding in Optionee’s favor, for the purpose of implementing, administering and managing the Plan (“Data”).  Optionee understands that Data may be transferred to any third parties assisting in the implementation, administration and management of the Plan, that these recipients may be located in Optionee’s country or elsewhere, and that the recipient’s country may have different data privacy laws and protections than Optionee’s country.  Optionee understands that Optionee may request a list with the names and addresses of any potential recipients of the Data by contacting ADC’s HR Stock Compensation Group.  Optionee authorizes the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing Optionee’s participation in the Plan, including any requisite transfer of such Data as may be required to a broker or other third party with whom Optionee may elect to deposit any shares of stock acquired upon exercise of the Option.  Optionee understands that Data will be held only as long as is necessary to implement, administer and manage Optionee’s participation in the Plan and that Optionee may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing ADC’s HR Stock Compensation Group.  Optionee understands, however, that refusing or withdrawing his or her consent may affect Optionee’s ability to participate in the Plan.  For more information on the consequences of Optionee’s refusal to consent or withdrawal of consent, Optionee may contact ADC’s HR Stock Compensation Group.

9.Nature of Grant

In accepting the grant, Optionee acknowledges that:

(a)The Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, suspended or terminated by the Company at any time, as provided in the Plan and this Agreement.  The Option is subject in all respects to the terms and conditions of the Plan and this Agreement.

(b)The grant of the Option is voluntary and occasional and does not create any contractual or other right to receive future grants of options, or benefits in lieu of options, even if options have been granted repeatedly in the past.

(c)All decisions with respect to future option grants, if any, will be at the sole discretion of the Company.

(d)Optionee’s participation in the Plan shall not create a right to further employment with the Company or any of its Affiliates and shall not interfere with the ability of the Company or its Affiliates to terminate Optionee’s employment relationship at any time with or without cause.

(e)Optionee is voluntarily participating in the Plan.

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(f)The Option is an extraordinary item that does not constitute compensation of any kind for services of any kind rendered to the Company or the Employer, and is outside the scope of Optionee’s employment contract, if any.

(g)The Option is not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, termination, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments.

(h)In the event that Optionee is not an employee of the Company, the Option grant will not be interpreted to form an employment contract or relationship with the Company; and furthermore, the Option grant will not be interpreted to form an employment contract with any Affiliate of the Company.

(i)The future value of the underlying shares is unknown and cannot be predicted with certainty.

(j)If the underlying shares do not increase in value, the Option will have no value.

(k)If Optionee exercises the Option and obtains shares, the value of those shares acquired upon exercise may increase or decrease in value, even below the exercise price.

(l)No claim or entitlement to compensation or damages arises from termination of the Option or diminution in value of the Option or shares purchased through exercise of the Option which results from the termination of Optionee’s employment by the Company or the Employer (for any reason and regardless of whether in breach of contract), and Optionee irrevocably releases the Company and its Affiliates from any such claim that may arise; if, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen, Optionee shall be deemed irrevocably to have waived his/her entitlement to pursue such claim.

(m)Optionee consents to the delivery by electronic means of any documents related to the Option, the Plan or future options that may be granted under the Plan.

10.Miscellaneous

(a)Optionee shall have none of the rights of a shareholder with respect to shares subject to this Option until such shares shall have been issued upon exercise of this Option.

(b)This Agreement shall be governed by and construed in accordance with the domestic laws of the State of Minnesota without giving effect to any choice or conflict of law provision or rule (whether of the State of Minnesota or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Minnesota.  The Company and the Optionee submit to the jurisdiction of any state or federal court sitting in Minneapolis, Minnesota, in any action or proceeding arising out of or relating to this Agreement, and agree that all claims in respect of the action or proceeding may be heard and determined in any such court.  Each of the

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Company and the Optionee also agrees not to bring any action or proceeding arising out of or relating to this Agreement in any other court.  Each of the Company and the Optionee waives any defense of inconvenient forum to the maintenance of any action or proceeding so brought and waives any bond, surety, or other security that might be required of the other party with respect thereto.  The Company and the Optionee agree that a final judgment in any action or proceeding so brought shall be conclusive and may be enforced by suit on the judgment or in any other manner provided by law or in equity.

(c)To the extent any provision of this Agreement shall be determined by any court to be invalid or unenforceable in any jurisdiction, such provision shall be deemed to be deleted from this Agreement, and the validity and enforceability of the remainder of such provision and of this Agreement shall be unaffected.  In furtherance of and not in limitation of the foregoing, the Optionee expressly agrees that should the duration of, geographical extent of, or business activities covered by Section 7 of this Agreement be in excess of that which is valid or enforceable under applicable law, then such provision shall be construed to cover only that duration, extent or activities that may validly or enforceably be covered.  The Optionee expressly stipulates that this Agreement shall be construed in a manner that renders its provisions valid and enforceable to the maximum extent (not exceeding its express terms) possible under applicable law.

(d)If Optionee has received this Agreement or any other document related to the Plan translated into a language other than English and if the translated version is different than the English version, the English version will control.

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EX-10.G

Exhibit 10-g

ADC TELECOMMUNICATIONS, INC.

NONQUALIFIED STOCK OPTION AGREEMENT

Optionee:	«First_Name» «MI» «Last_Name»	Option Number:	«Num»
ID:	«ID»	Plan:	«Plan»

This Nonqualified Stock Option Agreement (the “Agreement”) is entered into effective «Effective_Date» by and between ADC Telecommunications, Inc., a Minnesota corporation, (the “Company”), and the above-identified Optionee pursuant to the Company’s Global Stock Incentive Plan (the “Plan”).

Effective the date written above, the Optionee has been granted an option (the “Option”) to purchase all or any part of an aggregate of «SHARES_GRANTED» shares of common stock, par value US$.20 per share, of the Company (the “Common Stock”) at the price of US$«OPTION_PRICE» per share subject to the terms and conditions set forth herein, the Plan and Exhibits A and B to this Agreement.  This Option is not intended to be an incentive stock option within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”).

The total aggregate purchase price for all of the shares purchasable under this Option is US$«Total_option_price».

Subject to the terms and conditions of this Agreement, Exhibits A and B to this Agreement and the Plan, this Option shall in all events terminate ten (10) years after the date of grant (the “Expiration Date”).  The shares subject to this Option shall vest and may be exercised in whole or in part by the Optionee according to the following vesting schedule:

Vesting Date Number of Option
Shares Vesting Expiration Date

Subject to the provisions of the Plan and Exhibits A and B, the Optionee must be actively employed by the Company or any of its Affiliates on each Vesting Date for vesting to occur.  Termination of employment after a Vesting Date may accelerate the Expiration Date (see terms of the Plan and Exhibits A and B).

Optionee and the Company agree that these Options are granted under and governed by the terms and conditions of this Agreement, Exhibits A and B to this Agreement, and the Plan.  Each of these documents and a Prospectus related to shares covered by the Plan has been provided to Optionee.  Optionee specifically acknowledges that Exhibit A to this Agreement contains an agreement by Optionee not to solicit employees of the Company or its Affiliates on behalf of any other employer, a data privacy consent by Optionee and certain other acknowledgements by Optionee.  In addition, Optionee acknowledges that Exhibit B includes country-specific terms which apply to the Option.

Optionee acknowledges that this Option is subject to the ongoing discretionary authority of the Company to determine: (i) the permissible manner of exercise of the Option (including but not limited to the authority of the Company to require a mandatory cashless exercise); (ii) the permissible timing of exercise of the Option; and (iii) any other restrictions that the

Company deems necessary and advisable, including but not limited to restrictions pertaining to applicable law.  Optionee further acknowledges that in the event the Optionee chooses to effect a simultaneous exercise and sale of all or a portion of the shares that are subject to this Option, neither the Company nor its third party stock option administrator will guarantee any particular market price for the sale of the shares, nor shall the Company or its third party administrator be responsible for any failure to obtain any particular market price due to delays in the exercise of this Option or any other reason.

ADC TELECOMMUNICATIONS, INC.
	«Effective  Date»
Jeffrey D. Pflaum, Vice President, Corporate Secretary & General Counsel	Date
OPTIONEE
«First_Name» «MI» «Last_Name»	Date
Government/Taxpayer ID#
Home Address

THE OPTIONEE MUST PROMPTLY SIGN AND RETURN THIS AGREEMENT TO THE COMPANY AT THE ADDRESS LISTED BELOW.  IF THIS AGREEMENT IS NOT SIGNED AND RETURNED WITHIN SIXTY (60) DAYS FROM THE DATE OF MAILING THIS AGREEMENT, THIS OPTION SHALL BE VOID AND HAVE NO FORCE OR EFFECT.

Postal Mail:

ADC

Attn:  HR Stock Compensation, MS 56

P.O. Box 1101

Minneapolis, MN 55440-1101 USA

Express Mail:

ADC

Attn:  HR Stock Compensation, MS 56

13625 Technology Drive

Eden Prairie, MN 55344 USA

For questions regarding this Option, please contact ADC’s HR Stock Compensation Group as follows:

Email:	stockprograms@adc.com
Facsimile:	952-238-1525

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Telephone:	952-917-0576
	800-366-3889 ext. 70576

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EXHIBIT A

TO THE

ADC TELECOMMUNICATIONS, INC.

NONQUALIFIED STOCK OPTION AGREEMENT

This Exhibit A is part of and incorporated by reference into the Nonqualified Stock Option Agreement (the “Agreement”) issued by ADC Telecommunications, Inc. (the “Company”) pursuant to the Company’s Global Stock Incentive Plan (the “Plan”).

Unless otherwise defined herein, capitalized terms shall have the meaning given such term in the Agreement.

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1.Grant of Option

Refer to the Agreement for a description of the Option grants, including the total number of shares of Common Stock covered by this Option, the exercise price per share, and the schedule for vesting.  This Option is not intended to be an incentive stock option within the meaning of Section 422 of the U.S. Internal Revenue Code.

2.Duration and Exercisability

(a)This Option shall vest and become exercisable in accordance with the schedule set forth on the Agreement.  This Option shall in all events terminate ten (10) years after the date of grant, if not earlier in the event of termination of employment.

(b)Notwithstanding the provisions contained in Section 2(a) above, but subject to the other terms and conditions set forth herein, this Option shall become fully vested and exercisable on the date of a “Change in Control” (as hereinafter defined).  For purposes of the Agreement and this Exhibit A to the Agreement, the following terms shall have the definitions set forth below:

(i)“Change in Control” shall mean:

(A)a change in control of the Company of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), whether or not the Company is then subject to such reporting requirement;

(B)the public announcement (which, for purposes of this definition, shall include, without limitation, a report filed pursuant to Section 13(d) of the Exchange Act) by the Company or any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) that such person has become the “beneficial owner” (as defined in Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of securities of the Company representing 20% or more of the combined voting power of the Company’s then outstanding securities, determined in accordance with Rule 13d-3, excluding, however, any securities acquired directly from the Company (other than an acquisition by virtue of the exercise of a conversion privilege unless the security being so converted was itself acquired directly from the Company); however, that for purposes of this clause the term “person” shall not include the Company, any subsidiary of the Company or any employee benefit plan of the Company or of any subsidiary of the Company or any entity

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holding shares of Common Stock organized, appointed or established for, or pursuant to the terms of, any such plan;

(C)the Continuing Directors cease to constitute a majority of the Company’s Board of Directors;

(D)consummation of a reorganization, merger or consolidation of, or a sale or other disposition of all or substantially all of the assets of, the Company (a “Business Combination”), in each case, unless, following such Business Combination, (A) all or substantially all of the persons who were the beneficial owners of the Company’s outstanding voting securities immediately prior to such Business Combination beneficially own voting securities of the corporation resulting from such Business Combination having more than 50% of the combined voting power of the outstanding voting securities of such resulting Corporation and (B) at least a majority of the members of the Board of Directors of the corporation resulting from such Business Combination were Continuing Directors at the time of the action of the Board of Directors of the Company approving such Business Combination;

(E)approval by the shareholders of the Company of a complete liquidation or dissolution of the Company; or

(F)the majority of the Continuing Directors determine in their sole and absolute discretion that there has been a change in control of the Company.

(ii)“Continuing Director” shall mean any person who is a member of the Board of Directors of the Company, while such person is a member of the Board of Directors, who is not an Acquiring Person (as defined below) or an Affiliate or Associate (as defined below) of an Acquiring Person, or a representative of an Acquiring Person or of any such Affiliate or Associate, and who (x) was a member of the Board of Directors on the date of this Agreement as first written above or (y) subsequently becomes a member of the Board of Directors, if such  person’s initial nomination for election or initial election to the Board of Directors is recommended or approved by a majority of the Continuing Directors.  For purposes of this subparagraph (ii), “Acquiring Person” shall mean any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) who or which, together with all Affiliates and Associates of such person, is the “beneficial owner” (as defined in Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of securities of the Company representing 20% or more of the combined voting power of the Company’s then outstanding securities, but shall not include the Company, any subsidiary of the Company or any employee benefit plan of the Company or of any subsidiary of the Company or any entity holding shares of Common Stock organized, appointed or established for, or pursuant to the terms of, any such plan; and “Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in Rule 12b-2 promulgated under the Exchange Act.

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(c)This Option shall not be assignable or transferable except to a designated beneficiary (under procedures established by the Company) or by the laws of descent and distribution in the case of the death of Optionee, and except that for U.S. resident employees, upon written notice to the Company, U.S. resident employees may transfer this Option during his or her lifetime to any “family member” (as such term is used on Form S-8 under the Securities Act of 1933) of Optionee provided that (i) there is no consideration for such transfer or such transfer is effected pursuant to a domestic relations order in settlement of marital property rights, and (ii) this Option held by such transferees shall continue to be subject to the same terms and conditions (including restrictions on subsequent transfers) as were applicable to this Option immediately prior to such transfer.  This Option may not be pledged, alienated, attached or otherwise encumbered, and any purported pledge, alienation, attachment or encumbrance thereof shall be void and unenforceable against the Company or any Affiliate of the Company.

(d)This Option may be exercised, during the lifetime of Optionee, only by Optionee, a permitted transferee pursuant to a transfer permitted by Section 2(c) above, or, if permissible under applicable law, by Optionee’s or such transferee’s guardian or legal representative.

3.Effect of Termination of Employment

(a)For all purposes of the Agreement and this Exhibit A, the term “Employment Termination Date” shall mean the earlier of:

(i)the date, as determined by the Company, that Optionee is no longer actively employed by the Company or an Affiliate of the Company, and in the case of an involuntarily termination, such date shall not be extended by any notice period mandated under local law (e.g., active employment would not include a period of “garden leave” or similar period pursuant to local law); or

(ii)the date, as determined by the Company, that Optionee’s employer is no longer an Affiliate of the Company.

(b)In the event the Optionee ceases to be an employee of the Company or any of its Affiliates for any reason other than death, Optionee shall have the right to exercise the Option at any time within one year after the Employment Termination Date to the extent of the number of vested shares Optionee was entitled to purchase under the Option on the Employment Termination Date, subject to the condition that no Option shall be exercisable after the Expiration Date.

(c)In the event the Optionee dies while an employee of the Company or any of its Affiliates or within three months after the Employment Termination Date, this Option may be exercised at any time within two years after his or her death by the executors or administrators of Optionee, or by any person or persons to whom the Option is transferred by the prior designation of a beneficiary or the applicable laws of descent and distribution, to the extent of the number of vested shares Optionee was entitled to purchase under the

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Option on the date of death, subject to the condition that no Option shall be exercisable after the Expiration Date.

(d)No further vesting of this Option shall occur after the Employment Termination Date, and this Option shall be exercisable in accordance with this Section 3 following the Employment Termination Date only to the extent that it is exercisable on the Employment Termination Date, pursuant to the vesting schedule set forth in the Agreement and Section 2 hereof.

4.Manner of Exercise

The Option can be exercised only by Optionee or other proper party within the option period by notice to the Company or the Company’s third-party stock option administrator (UBS PaineWebber Inc. as of the date of this grant) in a form specified by the Company or such third-party stock option administrator, or in such other manner as the Company may specify from time-to-time.  The Company shall have the right to specify all conditions of the manner of exercise, and such conditions may vary by country and may be subject to change from time to time.

5.Adjustments

If Optionee exercises all or any portion of the Option subsequent to any change in the number or character of the Common Stock (through stock dividend, recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of shares of Common Stock or other securities of the Company, issuance of warrants or other rights to purchase shares of Common Stock or other securities of the Company or other similar corporate transaction or event affecting the Common Stock such that an adjustment is determined by the Committee to be appropriate in order to prevent dilution or enlargement of the Option), Optionee shall then receive for the aggregate price paid by him or her on such exercise of the Option, the number and type of securities or other consideration which he would have received if such Option had been exercised prior to the event changing the number or character of outstanding shares.

6.Responsibility for Taxes

Regardless of any action taken by the Company or Optionee’s employer (the “Employer”) with respect to any or all income tax, social insurance, payroll tax, payment on account or other tax-related withholding (“Tax-Related Items”), Optionee acknowledges that the ultimate liability for all Tax-Related Items is and remains Optionee’s responsibility and that the Company and/or the Employer (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Option grant, including the grant, vesting or exercise of the Option, the subsequent sale of shares acquired pursuant to such exercise and the receipt of any dividends; and (ii) do not commit to structure the terms of the grant or any aspect of the Option to reduce or eliminate Optionee’s liability for Tax-Related Items.

Prior to exercise of the Option, Optionee shall pay or make adequate arrangements satisfactory to the Company and/or the Employer to satisfy all withholding and payment on account obligations of the Company and/or the Employer.  In this regard, Optionee authorizes the Company and/or the Employer to withhold all applicable Tax-Related Items legally payable by Optionee from Optionee’s wages or other cash compensation paid to Optionee by the Company and/or the Employer or from proceeds of the sale of the shares.  Alternatively, or in addition, if permissible under local law, the Company may (i) sell or

4

arrange for the sale of shares that Optionee acquires to meet the withholding obligation for Tax-Related Items, and/or (ii) withhold in shares, provided that the Company only withholds the amount of shares necessary to satisfy the minimum withholding amount.  Finally, Optionee shall pay to the Company or the Employer any amount of Tax-Related Items that the Company or the Employer may be required to withhold as a result of Optionee’s participation in the Plan or Optionee’s purchase of shares that cannot be satisfied by the means previously described.  The Company may refuse to honor the exercise and refuse to deliver the shares if Optionee fails to comply with his or her obligations in connection with the Tax-Related Items as described in this section.

7.Non-solicitation Agreement

(a)In consideration of the grant of the Option, the Optionee shall not, directly or indirectly, during the period the Optionee is employed by the Company or its Affiliates and for a period of one year after the Employment Termination Date:  (i) induce or attempt to induce any other employee to leave the employ of the Company or any of its Affiliates, or in any way interfere adversely with the relationship between any such employee and the Company or any of its Affiliates; (ii) induce or attempt to induce any other employee of the Company or any of its Affiliates to work for, render services or provide advice to or supply confidential business information or trade secrets of the Company or its Affiliates to any person or entity other than the Company or its Affiliates; or (iii) employ, or otherwise pay for services rendered by, any other employee of the Company or any of its Affiliates in any other business enterprise.

(b)The Optionee acknowledges that breach of this Section 7 would be highly injurious to the Company, and the Company reserves its rights to pursue all available remedies, including but not limited to equitable and injunctive relief and damages.  The Optionee specifically agrees that the Company shall be entitled to obtain temporary and permanent injunctive relief from a court of law to enforce the provisions of this Section 7, and that such relief may be granted without the necessity of proving actual damages and without necessity of posting any bond.  This provision with respect to injunctive relief shall not, however, diminish the right of the Company to claim and recover damages or to seek and obtain any other relief available to it.  The Optionee further acknowledges that this Section 7 shall be enforceable by the Company even if no portion of the Option becomes vested and exercisable.

8.Data Privacy Consent

Optionee hereby explicitly consents to the collection, use and transfer, in electronic or other form, of his or her personal data as described in this document by and among, as applicable, the Company and its Affiliates for the exclusive purpose of implementing, administering and managing Optionee’s participation in the Plan.

Optionee understands that the Company and its Affiliates hold certain personal information about Optionee, including, but not limited to, Optionee’s name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company or its Affiliates, details of all options or any other entitlement to shares of stock awarded, cancelled, exercised, vested, unvested or outstanding in Optionee’s favor, for the purpose of implementing, administering and managing the Plan (“Data”).  Optionee understands that

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Data may be transferred to any third parties assisting in the implementation, administration and management of the Plan, that these recipients may be located in Optionee’s country or elsewhere, and that the recipient’s country may have different data privacy laws and protections than Optionee’s country.  Optionee understands that Optionee may request a list with the names and addresses of any potential recipients of the Data by contacting ADC’s HR Stock Compensation Group.  Optionee authorizes the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing Optionee’s participation in the Plan, including any requisite transfer of such Data as may be required to a broker or other third party with whom Optionee may elect to deposit any shares of stock acquired upon exercise of the Option.  Optionee understands that Data will be held only as long as is necessary to implement, administer and manage Optionee’s participation in the Plan and that Optionee may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing ADC’s HR Stock Compensation Group.  Optionee understands, however, that refusing or withdrawing his or her consent may affect Optionee’s ability to participate in the Plan.  For more information on the consequences of Optionee’s refusal to consent or withdrawal of consent, Optionee may contact ADC’s HR Stock Compensation Group.

9.Nature of Grant

In accepting the grant, Optionee acknowledges that:

(a)The Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, suspended or terminated by the Company at any time, as provided in the Plan and this Agreement.  The Option is subject in all respects to the terms and conditions of the Plan and this Agreement.

(b)The grant of the Option is voluntary and occasional and does not create any contractual or other right to receive future grants of options, or benefits in lieu of options, even if options have been granted repeatedly in the past.

(c)All decisions with respect to future option grants, if any, will be at the sole discretion of the Company.

(d)Optionee’s participation in the Plan shall not create a right to further employment with the Company or any of its Affiliates and shall not interfere with the ability of the Company or its Affiliates to terminate Optionee’s employment relationship at any time with or without cause.

(e)Optionee is voluntarily participating in the Plan.

(f)The Option is an extraordinary item that does not constitute compensation of any kind for services of any kind rendered to the Company or the Employer, and is outside the scope of Optionee’s employment contract, if any.

(g)The Option is not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, termination, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments.

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(h)In the event that Optionee is not an employee of the Company, the Option grant will not be interpreted to form an employment contract or relationship with the Company; and furthermore, the Option grant will not be interpreted to form an employment contract with any Affiliate of the Company.

(i)The future value of the underlying shares is unknown and cannot be predicted with certainty.

(j)If the underlying shares do not increase in value, the Option will have no value.

(k)If Optionee exercises the Option and obtains shares, the value of those shares acquired upon exercise may increase or decrease in value, even below the exercise price.

(l)No claim or entitlement to compensation or damages arises from termination of the Option or diminution in value of the Option or shares purchased through exercise of the Option which results from the termination of Optionee’s employment by the Company or the Employer (for any reason and regardless of whether in breach of contract), and Optionee irrevocably releases the Company and its Affiliates from any such claim that may arise; if, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen, Optionee shall be deemed irrevocably to have waived his/her entitlement to pursue such claim.

(m)Optionee consents to the delivery by electronic means of any documents related to the Option, the Plan or future options that may be granted under the Plan.

10.Miscellaneous

(a)Optionee shall have none of the rights of a shareholder with respect to shares subject to this Option until such shares shall have been issued upon exercise of this Option.

(b)This Agreement shall be governed by and construed in accordance with the domestic laws of the State of Minnesota without giving effect to any choice or conflict of law provision or rule (whether of the State of Minnesota or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Minnesota.  The Company and the Optionee submit to the jurisdiction of any state or federal court sitting in Minneapolis, Minnesota, in any action or proceeding arising out of or relating to this Agreement, and agree that all claims in respect of the action or proceeding may be heard and determined in any such court.  Each of the Company and the Optionee also agrees not to bring any action or proceeding arising out of or relating to this Agreement in any other court.  Each of the Company and the Optionee waives any defense of inconvenient forum to the maintenance of any action or proceeding so brought and waives any bond, surety, or other security that might be required of the other party with respect thereto.  The Company and the Optionee agree that a final judgment in any action or proceeding so brought shall be conclusive and may be enforced by suit on the judgment or in any other manner provided by law or in equity.

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(c)To the extent any provision of this Agreement shall be determined by any court to be invalid or unenforceable in any jurisdiction, such provision shall be deemed to be deleted from this Agreement, and the validity and enforceability of the remainder of such provision and of this Agreement shall be unaffected.  In furtherance of and not in limitation of the foregoing, the Optionee expressly agrees that should the duration of, geographical extent of, or business activities covered by Section 7 of this Agreement be in excess of that which is valid or enforceable under applicable law, then such provision shall be construed to cover only that duration, extent or activities that may validly or enforceably be covered.  The Optionee expressly stipulates that this Agreement shall be construed in a manner that renders its provisions valid and enforceable to the maximum extent (not exceeding its express terms) possible under applicable law.

(d)If Optionee has received this Agreement or any other document related to the Plan translated into a language other than English and if the translated version is different than the English version, the English version will control.

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EXHIBIT B
TO THE
ADC TELECOMMUNICATIONS, INC.
NONQUALIFIED STOCK OPTION AGREEMENT

If Optionee is resident in any country named below, his/her Option grant is subject to the further terms provided below for that country.  These terms are in addition to the terms stated in the Agreement and Exhibit A to the Agreement.

Argentina

The benefits received under the Plan, if any, do not accrue on a monthly basis and will not be granted on a regular or monthly basis.  In addition, the Option is granted by Company on behalf of the local employer.

The Option granted pursuant to the Plan, and the shares which may be purchased upon exercise of the Option, are offered in a private transaction and are not subject to the supervision of any Argentine governmental authority.  This is not an offer to the public.

Please note that exchange controls in Argentina are currently in a state of flux.  Therefore, Optionee should consult with his/her legal advisor regarding any approval or reporting obligations that Optionee may have with respect to the exercise of options, the ownership of foreign shares and/or the receipt of cash payments from abroad.

Australia

Optionee’s Option is granted pursuant to the Australian Addendum which is an addendum to the Plan, and therefore, Optionee’s Option is subject to the terms and conditions as stated in the Australian Addendum, the Plan, the Agreement and Exhibits A and B to the Agreement.

Belgium

Optionee must accept the Option within 60 days after this Agreement is distributed to him/her.  Failure to do so will result in forfeiture of the Option.  In order to properly accept, Optionee must sign the Acceptance Form and return it to ADC’s HR Stock Option Group (at the address specified in the Agreement) within 60 days of the offer date specified in Optionee’s offer letter.  If Optionee’s Option is forfeited, he/she will not be entitled to any payment or compensation in lieu of the Option.

Optionee is required to report any security or bank account maintained outside of Belgium on his/her annual tax return.

Brazil

Due to exchange control restrictions in Brazil, Optionee must exercise the Option using the cashless sell-all method of exercise.  Pursuant to a cashless sell-all exercise, Optionee will authorize the stockbroker to sell all the shares that he/she is entitled to at exercise and remit the sale proceeds less the exercise price, broker’s fees and any applicable taxes to Optionee in cash.

By accepting this Option, Optionee acknowledges that he/she agrees to comply with applicable Brazilian laws and pay any and all applicable taxes associated with the exercise of

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the Option, sale of shares obtained pursuant to exercise of the Option.

Canada (Quebec only)

The parties acknowledge that it is their express wish that this Agreement, as well as all documents, notices and legal proceeds entered into, given or instituted pursuant hereto or relating directly or indirectly hereto, be provided to them in English.

Les parties reconnaissent avoir exigé la rédaction en anglais de cette convention, ainsi que de tous documents exécutés, avis donnés et procédures judiciaries intentées, directement ou indirectement, relativement à ou suite à la présente convention.

Canada (all provinces)

Optionee is permitted to sell shares acquired upon exercise of the Option through the designated broker appointed by the Company provided the resale of shares takes place outside of Canada through the facilitates of the stock exchange which the shares are listed.  Currently, the Company’s shares are listed on NASDAQ.

China

Due to legal restrictions in China, Optionee must exercise the Option using the cashless sell-all method of exercise.  Pursuant to a cashless sell-all exercise, Optionee will authorize the stockbroker to sell all the shares that he/she is entitled to at exercise and remit the sale proceeds less the exercise price, broker’s fees and any applicable taxes to Optionee in cash.

France

Optionee may hold shares purchased under the Option outside of France provided he/she declares all foreign accounts, whether open, current, or closed, in his/her income tax return.  Optionee must also declare to the customs and excise authorities any cash or securities he/she imports or exports without the use of a financial institution when the value of the cash or securities is equal to or exceeds €7,600.

Germany

Cross-border payments in excess of €12,500 must be reported monthly.  If Optionee uses a German bank to transfer a cross-border payment in excess of €12,500 in connection with the purchase or sale of Company shares, the bank will make the report.  In addition, Optionee must report any receivables or payables or debts in foreign currency exceeding an amount of €5,000,000 on a monthly basis.  Finally, Optionee must also report his/her holding annually in the unlikely event that Optionee holds shares representing 10% or more of the total or voting capital of the Company.

Hong Kong

Company specifically intends that the Plan will not be an occupational retirement scheme for the purposes of the Occupational Retirement Schemes Ordinance (“ORSO”).  Notwithstanding the foregoing, if the Plan is deemed to constitute an occupational retirement scheme for the purposes of ORSO, Optionee’s option grant shall be void.

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India

Due to exchange control restrictions in India, Optionee must exercise the Option using the cashless sell-all method of exercise.  Pursuant to a cashless sell-all exercise, Optionee will authorize the stockbroker to sell all the shares that he/she is entitled to at exercise and remit the sale proceeds less the exercise price, broker’s fees and any applicable taxes to Optionee in cash.

All proceeds from the exercise of the Option must be repatriated to India within a reasonable time of receiving payment.  Optionee will receive a foreign inward remittance certificate (“FIRC”) from the bank where he/she deposits the foreign currency.  Optionee should maintain the FIRC as evidence of the repatriation of funds in the event that the Reserve Bank of India or his/her employer requests proof of repatriation.

Optionee acknowledges and agrees that:  (i) his/her decision to exercise the Option is voluntary; and (ii) an Option granted under the Plan does not constitute a customary right or privilege.

Ireland

This Option is granted pursuant to the Plan and the shares which may be purchased on exercise of the Option are offered in a private transaction.  This is not an offer to the public.

Optionee must exercise his/her Option by using a handwritten letter, an electronic notification, or a voice response system.  Optionee may not use a standard option exercise form provided by the Company or its agent, if any.

If Optionee is a director, shadow director or secretary of an Irish subsidiary of Company, Optionee is subject to certain notification requirements under the Companies Act, 1990.  Among these requirements is an obligation to notify the Irish subsidiary in writing when Optionee receives an interest (e.g., options, shares) in Company and the number and class of shares or rights to which the interest relates.  In addition, Optionee must notify the Irish subsidiary when Optionee sells shares acquired through the exercise of options.  Optionee must notify the Irish subsidiary of the acquisition or disposal of an interest in shares within five days following the day of acquisition or disposal of the interest in shares.  These notification requirements also apply to any rights or shares acquired by Optionee’s spouse or children under the age of 18.  Please contact Company to obtain a copy of the notification form.

Israel

Optionee must exercise the Option using the cashless sell-all method of exercise.  Pursuant to a cashless sell-all exercise, Optionee will authorize the stockbroker to sell all the shares that he/she is entitled to at exercise and remit the sale proceeds less the exercise price, broker’s fees and any applicable taxes to Optionee in cash.

Italy

By accepting this Option, Optionee acknowledges that he/she has received a copy of the Plan, reviewed the Plan and this Agreement in their entirety and fully understands and accepts all provisions of the Plan and this Agreement.  In addition, Optionee acknowledges that the Option is not meant to incentivize, compensate or reward Optionee for his/her efforts for his/her employer.

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In addition, by accepting this Option, Optionee further acknowledges that he/she has read and specifically and expressly approves the following clauses in the Plan and this Agreement:  Section 2(a) - the term of the Option is ten years; Section 2(c) - the Option cannot be transferred other than by will or the laws of descent and distribution; Section 3(a)(i) - in the event of involuntary termination of Optionee’s employment, Optionee’s right to vest in Options, if any, will terminate as of the date that Optionee is no longer actively employed by Optionee’s current employer; Section 6 - Optionee is responsible for all Tax-Related Items, as defined in this Agreement; Section 7 - Optionee is subject to non-solicitation provisions, as specified in this Agreement; Section 8 - Optionee consents to the collection, use and transfer of his/her personal data as described in this Agreement; Section 9(a) - the Plan is discretionary in nature and may be suspended or terminated by the Company at any time; and Section 9(c) - all decisions with respect to future grants will be at the sole discretion of the Company.

Exchange control reporting is required if Optionee transfers cash or shares to or from Italy in excess of €12,500 or the equivalent amount in U.S. dollars.  If the payment is made through an authorized broker resident in Italy, the broker will comply with the reporting obligation.  In addition, the Optionee will have exchange control reporting obligations if Optionee has any foreign investment (including stock) held outside Italy in excess of €12,500 or the equivalent amount in U.S. dollars.  The reporting must be done on Optionee’s individual tax return.

Japan

If Optionee acquires shares valued at more than ¥100,000,000 in a single transaction, Optionee must file a report with the Ministry of Finance through the Bank of Japan within 20 days of the purchase of the shares.  The reporting requirements vary depending on whether or not the relevant payment is made through a bank in Japan.

Malaysia

Optionee must comply with the following exchange control reporting obligations if Optionee is a Malaysian resident for exchange control purposes:  (i) if Optionee remits more than RM50,000 (or its equivalent in foreign currency) to exercise his/her Option, Optionee will be required to file a Form P with the Foreign Exchange Department of Bank Negara; (ii) Optionee must repatriate all proceeds from the sale of shares and all dividend payments (if any) to Malaysian as soon as the proceeds/dividends are received; (iii) Optionee must file a Form R with Bank Negara if the amount of funds repatriated exceeds RM50,000 (or its equivalent in foreign currency); and (iv) if Company and/or Optionee’s employer do not obtain a blanket exchange control approval, then Optionee must notify Bank Negara of the remittance of funds to exercise his/her Option at least seven working days before the remittance (Optionee can estimate the amount that he/she intends to remit).  These requirements apply to both cash and cashless exercises.

If Optionee is a director of a Malaysian affiliate of ADC, he/she is subject to certain notification requirements under the Malaysian Companies Act, 1965.  Among these requirements is an obligation to notify the Malaysian affiliate in writing when Optionee receives an interest (e.g., stock options, shares, etc.) in Company or any related companies.  In addition, Optionee must notify the Malaysian affiliate when he/she sells shares of Company or any related company (including when Optionee sells shares acquired through exercise of his/her Option).  Additionally, Optionee must also notify the Malaysian affiliate of Company if there are any subsequent changes in Optionee’s interest in Company or any related companies.  These notifications must be made within 14 days of acquiring or

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disposing of any interest in Company or any related company.

Mexico

The invitation the Company is making under the Plan is unilateral and discretionary and, therefore, the Company reserves the absolute right to amend it and discontinue it at any time without any liability to Optionee.

This invitation and, in Optionee’s case, the acquisition of shares does not, in any way, establish a labor relationship between Optionee and the Company, and it does not establish any rights between Optionee and his/her employer.

La invitación que the Company hace en relación con el Plan es unilateral y discrecional, por lo tanto, the Company se reserva el derecho absoluto para modificar o terminar el mismo, sin ninguna responsabilidad para usted.

Esta invitación y, en su caso, la adquisición de acciones, de ninguna manera establecen relación laboral alguna entre usted y the Company y tampoco establece derecho alguno entre usted y su empleador.

The Netherlands

By accepting this Option, Optionee acknowledges that:  (i) the grant is intended as an incentive for the Optionee to remain employed with his/her current employer and is not intended as remuneration for labor performed; (ii) the grant is not intended to replace any pension rights or compensation; and (iii) in the case of a merger, take-over or transfer of liability, the benefits granted under the Plan will not transfer automatically to another company.

If Optionee would like to defer taxation until the time of exercise, he/she must sign a deferral election form and accompanying documents for the purposes of deferring tax until exercise.

Statistical reporting of payments of €50,000 or more to or from a foreign country must be reported to the Nederlandsche Bank.  If a Dutch bank is involved in sending or receiving the payment, the bank will report the transaction.

Singapore

If Optionee is a director, associate director or shadow director of a Singapore affiliate of Company, Optionee is subject to certain notification requirements under the Singapore Companies Act.  Among these requirements is an obligation to notify the Singaporean affiliate in writing when Optionee receives an interest (e.g., options, shares) in Company or any related companies.  Please contact Company to obtain a copy of the notification form.In addition, Optionee must notify the Singapore affiliate when Optionee sells shares of Company or any related company (including when Optionee sell shares acquired through exercise of his/her Option).  These notifications must be made within two days of acquiring or disposing of any interest in Company or any related company.  In addition, a notification must be made of Optionee’s interests in Company or any related company within two days of becoming a director.

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South Africa

To participate in the Plan, Optionee must comply with exchange control regulations in South Africa.  The Exchange Control Department of the South African Reserve Bank (the “Exchange Control”) requires that approval be sought for the participation by South African residents in foreign share incentive schemes.  Although this approval is Optionee’s obligation (not Company’s or Optionee’s Employer obligation), the Company may obtain this approval on Optionee’s behalf.

Optionee must exercise the Option using the cashless sell-all method of exercise.  Pursuant to a cashless sell-all exercise, Optionee will authorize the stockbroker to sell all the shares that he/she is entitled to at exercise and remit the sale proceeds less the exercise price, broker’s fees and any applicable taxes to Optionee in cash.

Because the exchange control regulations change frequently and without notice, Optionee should consult his/her legal advisor prior to exercise of this Option to ensure compliance with current regulations.  It is Optionee’s responsibility to comply with South African exchange control laws, and neither Company nor Optionee’s employer will be liable for any resulting fines or penalties.

South Korea

When Optionee exercises an Option, his/her remittance of funds must be “confirmed” by a foreign exchange bank in Korea.  This procedure does not require approval of the remittance from the bank.  Optionee must submit the following documents to the bank with a confirmation application available from the bank:  (i) the notice of grant, if any; (ii) the Plan; (iii) the Agreement indicating the type of shares to be acquired and the amount of shares; and (iv) a certificate of employment from Optionee’s local employer.

Exchange control laws also require Korean residents who realize US$100,000 or more from the sale of shares to repatriate the proceeds back to Korea within six months of the sale.

Spain

By accepting this Option, Optionee acknowledges that:  (i) he/she understands and agrees to the terms of the Plan; (ii) he/she consents to participation in the Plan; (iii) and he/she has received a copy of the Plan.

Optionee understands that Company has unilaterally, gratuitously, and discretionally decided to distribute Options under the Plan to individuals who may be employees of the Company or its affiliates throughout the world.  The decision is a temporary decision that is entered into upon the express assumption and condition that any grant will not economically or otherwise bind Company or any of its affiliates presently or in the future.  Consequently, Optionee understands that any grant is given on the assumption and condition that it shall not become a part of any employment contract (either with Company or any of its affiliates) and shall not be considered a mandatory benefit, salary for any purpose (including severance compensation) or any other right whatsoever.  Further, Optionee understands and freely accepts that there is no guarantee that any benefit whatsoever shall arise from any gratuitous and discretionary grant since the future value of the Options and underlying shares is unknown and unpredictable.  In addition, Optionee understands that this grant would not be made to Optionee but for the assumptions and conditions referred to above; thus, Optionee acknowledges and freely accepts that should any or all of the assumptions be mistaken or should any of the conditions not be met for

14

any reason, then any grant of Options shall be null and void and the Plan shall not have any effect whatsoever.

It is Optionee’s responsibility to comply with exchange control regulations in Spain.  The purchase of Company shares must be declared for the purchaser for statistical purposes to the Spanish Dirección General de Comercio e Inversiones of the Ministry of Economy (the “DGCI”).  If Optionee purchases shares through the use of a Spanish financial institution, that institution will automatically make the declaration to the DGCI for Optionee.  Otherwise, Optionee must make the declaration himself/herself by filing the appropriate form with the DGCI.

When receiving foreign currency payments derived from the ownership of Company shares (i.e., as a result of the sale of the shares), Optionee must inform the financial institution receiving the payment, the basis upon which such payment is made.  Optionee will need to provide the institution with the following information:  (i) Optionee’s name, address, and fiscal identification number; (ii) the name and corporate domicile of Company; (iii) the amount of the payment; (iv) the currency used; (v) the country of origin; (vi) the reasons for the payment; and (vii) additional information that may be required.

If Optionee wishes to import the ownership title of the Company shares (i.e., share certificates) into Spain, Optionee must declare the importation of such securities to the DGCI.

This offer is considered a private placement outside of the scope of Spanish law on public offerings and issuances.

United Kingdom

Optionee agrees that if Company does not withhold the amount of income tax and National Insurance Contributions that Optionee is responsible for as a result of the exercise, release, assignment or cancellation of the Option (the “Taxable Event”) from Optionee within 90 days after the Taxable Event, that the amount that should have been withheld from Optionee shall constitute a loan owed by Optionee to Optionee’s employer (“Employer”), effective 90 days after the Taxable Event.  Optionee agrees that the loan will bear interest at the UK official rate of interest and it will be immediately due and repayable and Company and/or Employer may recover it at any time thereafter by withholding the funds from Optionee’s salary, bonus or any other funds due by Employer to Optionee, by withholding in shares acquired upon exercise of the Option or by demanding cash or a check from Optionee.

Venezuela

Optionee acknowledges and agrees that any modification of the Plan or its termination shall not constitute a change or impairment of the terms and conditions of Optionee’s employment.

Optionee also acknowledges that:  (i) this offer is personal, private, exclusive and non-transferable; (ii) Optionee has been selected to receive a grant only because he/she meets the eligibility requirements contained in the Plan; and (iii) this offer is not being communicated using any means of publicity.

Recently, the Government of Venezuela established an exchange control regime.  Optionee should consult with his/her legal advisor to determine how these new requirements impact

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his/her participation in the Plan.

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EX-10.H

Exhibit 10-h

ADC EXECUTIVE STOCK OWNERSHIP POLICY
FOR SECTION 16 OFFICERS
(Effective January 1, 2004)

Overview

ADC executives that are designated by ADC as reporting officers under Section 16 of the Securities Exchange Act of 1934 (“Section 16 Officers”) are generally the most senior executives of ADC.  As such, ADC believes that it is important for them to build and maintain a long-term ownership position in ADC stock to strengthen their financial alignment with shareholders’ interests. The ADC Executive Stock Ownership Policy for Section 16 Officers specifies target ownership levels of ADC common stock for each participant. This policy replaces the previous program (“The ADC Executive Stock Ownership Policy” as last modified in February 2002).  The program consists of three core components.  The first is a statement of targeted ownership, expressed as a fixed number of shares of ADC common stock.  The second is a means of progressing toward the targeted ownership: a holding requirement imposed on a portion of exercised stock options or full-value grants of stock provided by ADC unless the ownership target is satisfied.  The third is a prohibition against certain stock transactions that would mitigate the desired financial alignment with shareholders’ interests and could also raise certain legal risks associated with these types of transactions.

Participation and Effective Date

All Section 16 Officers are subject to this policy.  This policy is effective as of January 1, 2004, and the holding requirements set forth herein will apply to any and all grants of stock options or full value grants made on or after January 1, 2004, provided such grant was made while an executive was a Section 16 Officer.  For purposes of this policy “full-value grants” includes all grants or awards of shares of restricted stock, restricted stock units, performance shares, or performance share units.  These are all grants or potential grants of ADC common stock or the right to receive ADC common stock, without payment of monetary consideration to ADC, that are made contingent on either continued employment over a period of time or the achievement of specified performance levels.  Section 16 Officers will remain subject to the holding requirements under this policy for so long as they remain Section 16 Officers of ADC, unless this policy is expressly terminated.

Ownership Targets

The ownership target is expressed as a fixed number of shares, based on the salary grade of the Section 16 Officer.  Except for adjustments necessary to reflect any stock splits or similar non-economic events, these numbers of shares will remain constant until the salary grade of the Section 16 Officer’s position changes or the Compensation Committee of the Board changes the targeted level of ownership.  Although the Compensation Committee reserves the right to change the targeted number of shares, we do not expect frequent changes to the targets.

The target ownership levels are as follows:

Position/Grade	Number of Shares
CEO	860,000
Grade 25	210,000
Grade 24	190,000
Grade 23	170,000
Grade 22	120,000
Grade 21	105,000
Grade 20	95,000

Measurement of Ownership Targets and Achievement

For purposes of this policy “ownership” is defined as any shares deemed as beneficially owned for purposes of Section 16 reporting, excluding however any shares that are not yet vested, even if they are deemed to be beneficially owned for Section 16 reporting purposes. Included within this definition would be ADC common stock acquired and currently held through open market purchases, the 401(k), 401(k) Excess and Supplemental Retirement Plans, employee stock purchase plan holdings, retained shares from stock option exercises, and vested shares from full-value grants.  Shares owned or credited in any form not recognized for Section 16 reporting will not be counted for purposes of this program.

Stock Holding Requirement

ADC does not expect or require Section 16 Officers to engage in extraordinary out-of-pocket investment transactions to meet these ownership targets. Rather, the ownership obligations of Section 16 Officers are limited to complying with certain holding requirements as applied to the stock option grants and full-value grants that they are awarded on or after January 1, 2004.  Grants made prior to the time an individual becomes a Section 16 Officer are not subject to this holding requirement, even if they were made on or after January 1, 2004.

For full-value grants subject to the holding requirement, the Section 16 Officer must hold at least 50% of all vested shares remaining after withholding or sale of vested shares to cover the cost of withholding taxes.  For stock options subject to the holding requirement, the Section 16 Officer must hold at least 50% of all the exercised options after the withholding or sale of shares to cover the exercise price and the withholding taxes related to the option exercise.  Once the net ownership target is achieved, this holding requirement will not apply to the extent that the sale of shares would still result in a net ownership position that equals or exceeds the ownership target.

Prohibited Transactions

In furtherance of the objectives of this Policy, and in addition to prohibitions under the Federal securities laws, Section 16 Officers are prohibited from purchasing, selling or writing any exchange-traded call and put options that have Company stock as their underlying security.  In addition, Section 16 Officers may not engage in any hedging transaction on Company stock that they beneficially own, including but not limited to “forward contracts,” “collars,” “equity swaps,” or “straddles.”

No Compensation for Achieving the Ownership Target; No Entitlement to Receive Grants

The Section 16 Officer will obtain no additional compensation or reward for achieving the targeted ownership level.  In addition, ADC does not make any commitment to any persons covered by this policy that they will receive any particular level of stock option grants or full-value grants.  While no Section 16 Officer has any entitlement to receive any such grants, if a grant is made, it will be subject to the requirements of this policy.

Administration

Annually in October, ADC will tally each Section 16 Officer’s ownership position and report it to them in conjunction with this ownership policy.  This tally will also be available to each Section 16 Officer upon request.  Each Section 16 Officer is responsible for promptly bringing to ADC’s attention any discrepancy between ADC’s records and any records maintained by the executive with respect to his or her ownership position.

Each Section 16 Officer shall be required to sign a certificate that they understand this policy and will comply with its terms.  A copy of this certificate is attached to this document as “Exhibit A.”

Amendment and Termination

ADC reserves the right to terminate or amend this program at any time.  This program is not a contract of employment or compensation or guarantee thereof.

Attachment:  Exhibit A

Exhibit A

CERTIFICATE

FOR

ADC EXECUTIVE STOCK OWNERSHIP POLICY

FOR SECTION 16 OFFICERS

I, the undersigned Section 16 Officer of ADC, understand and acknowledge that I have received a copy of the ADC Executive Stock Ownership Policy for Section 16 Officers effective January 1, 2004, and that I will comply with the terms and requirements of such policy.

This Certificate was acknowledged and signed on the date indicated below.

Date	By
	Printed Name
	Title

EX-31.A

Exhibit 31-a

Certification of Principal Executive Officer Required by Exchange Act Rule 13a-14(a)

CERTIFICATIONS

I, Robert E. Switz, the Chief Executive Officer of ADC Telecommunications, Inc., certify that:

1.I have reviewed this quarterly report on Form 10-Q of ADC Telecommunications, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  March 12, 2004
	/s/ Robert E. Switz
	Robert E. Switz
	Chief Executive Officer

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EX-31.B

Exhibit 31-b

Certification of Principal Financial Officer Required by Exchange Act Rule 13a-14(a)

I, Gokul V. Hemmady, the Chief Financial Officer of ADC Telecommunications, Inc., certify that:

1.I have reviewed this quarterly report on Form 10-Q of ADC Telecommunications, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information related to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  March 12, 2004
	/s/ Gokul V. Hemmady
	Gokul V. Hemmady
	Chief Financial Officer

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EX-32

Exhibit 32

Certifications Furnished Pursuant to 18 U.S.C. 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Robert E. Switz and Gokul V. Hemmady, the Chief Executive Officer and Chief Financial Officer, respectively, of ADC Telecommunications, Inc., hereby certify that:

1.The quarterly report on form 10-Q of ADC Telecommunications, Inc. for the period ended January 31, 2004, as filed with the Securities and Exchange Commission on the date hereof, fully complies with the requirements of sections 13(a) and 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the above-mentioned report fairly presents, in all material respects, the financial condition and results of operations of ADC Telecommunications, Inc.

/s/ Robert E. Switz

Robert E. Switz

March 12, 2004

/s/ Gokul V. Hemmady

Gokul V. Hemmady

March 12, 2004

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