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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



SCHEDULE 14D-9

SOLICITATION/RECOMMENDATION STATEMENT UNDER
SECTION 14(d)(4) OF THE SECURITIES EXCHANGE ACT OF 1934



ADC Telecommunications, Inc.
(Name of Subject Company)

ADC Telecommunications, Inc.
(Name of Person Filing Statement)

Common Stock Par Value $0.20 Per Share
(including the associated preferred stock purchase rights)
(Title of Class of Securities)

000886309
(CUSIP Number of Class of Securities)

Jeffrey D. Pflaum
ADC Telecommunications, Inc.
13625 Technology Drive
Eden Prairie, MN 55344
(952) 938-8080
(Name, address and telephone number of person authorized to receive notices
and communications on behalf of filing persons)

Copies to:

Robert A. Rosenbaum
Dorsey & Whitney LLP
50 South Sixth Street,
Suite 1500
Minneapolis, Minnesota
55402
(612) 340-2600

o
Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer.



Item 1.    SUBJECT COMPANY INFORMATION.

(a)   Name and Address.

        The name of the subject company is ADC Telecommunications, Inc., a Minnesota corporation (the "Company"). The address and telephone number of its principal executive offices are 13625 Technology Drive, Eden Prairie, MN 55344, and (952) 938-8080, respectively.

(b)   Securities.

        The securities sought to be acquired are all of the outstanding shares of common stock, par value $0.20 per share, of the Company, including the associated preferred stock purchase rights (the "Shares"). As of July 23, 2010, there were 97,030,661 Shares outstanding.

Item 2.    IDENTITY AND BACKGROUND OF FILING PERSON.

(a)   Name and Address.

        The person filing this statement is the Company, which is the subject company. The name, business address and business telephone number of the Company are set forth in Item 1 above.

(b)   Tender Offer.

        This Solicitation/Recommendation Statement on Schedule 14D-9 (this "Statement") relates to the cash tender offer by Tyco Electronics Minnesota, Inc. ("Purchaser"), a Minnesota corporation and an indirect wholly owned subsidiary of Tyco Electronics Ltd., a Swiss corporation ("Parent"), to purchase all of the outstanding Shares at a price of $12.75 per Share (the "Offer Price"). If the Offer is completed, Parent shall pay the Offer Price net to the sellers in cash, without interest, upon the terms and subject to the conditions set forth in the Offer to Purchase dated July 26, 2010 (together with any amendments or supplements thereto, the "Offer to Purchase"), and the related Letter of Transmittal (together with any amendments or supplements thereto, the "Letter of Transmittal") contained in the Schedule TO filed by Purchaser and Parent with the United States Securities and Exchange Commission (the "SEC") on July 26, 2010 (the "Schedule TO"). The Offer to Purchase and the Letter of Transmittal together constitute the "Offer." Copies of the Offer to Purchase and the Letter of Transmittal are filed as Exhibits (a)(1)(A) and (a)(1)(B) to this Statement, respectively, and are incorporated herein by reference.

        The Offer is being made pursuant to an Agreement and Plan of Merger, dated as of July 12, 2010, by and among Parent, Purchaser, and the Company as amended by Amendment No. 1 to Agreement and Plan of Merger, dated July 24, 2010 (as amended, the "Merger Agreement"). The Merger Agreement is filed as Exhibits (e)(1) and (e)(2) to this Statement and is incorporated herein by reference. The Merger Agreement provides, among other things, for the making of the Offer by Purchaser. It further provides that, upon the terms and subject to the conditions contained in the Merger Agreement, following completion of the Offer and the satisfaction or waiver of certain conditions, Purchaser will merge with and into the Company (the "Merger") and the Company will continue as the surviving corporation under the laws of the State of Minnesota (the "Surviving Corporation"), and the separate corporate existence of Purchaser will cease. In the Merger, Shares issued and outstanding immediately prior to the consummation of the Merger (other than Shares owned by Parent or Purchaser, all of which will be cancelled, Shares owned by any other subsidiary of Parent or any subsidiary of the Company, all of which will be converted such that each subsidiary maintains its percentage ownership in the Surviving Corporation, and other than Shares held by shareowners who have properly exercised dissenters' rights under the Minnesota Business Corporation Act (the "MBCA")), will be converted into the right to receive the Offer Price in cash, without interest (the "Merger Consideration").

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        The forgoing description of the Merger Agreement and the Offer is qualified in its entirety by reference to the Merger Agreement, the Offer to Purchase, and the Letter of Transmittal filed as Exhibits (e)(1), (e)(2), (a)(1)(A), and (a)(1)(B) to this Statement and incorporated herein by reference.

        The principal executive offices of Purchaser are located at 1050 Westlakes Drive, Berwyn, Pennsylvania 19312. The telephone number of Purchaser is (610) 893-9800.

Item 3.    PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS.

        Except as described in this Statement, in the Information Statement (as defined below) or as incorporated herein by reference, to the knowledge of the Company, as of the date of this Statement, there are no material agreements, arrangements or understandings or any actual or potential conflicts of interest between the Company or its affiliates and (a) Parent, Purchaser or their respective executive officers, directors or affiliates or (b) the Company or its executive officers, directors or affiliates.

(a)   Arrangements with Current Executive Officers and Directors of the Company.

        In considering the recommendation of the Board of Directors of the Company (the "Board") with respect to the Offer, the Merger and the Merger Agreement, and the fairness of the consideration to be received in the Offer and the Merger, shareowners should be aware that certain executive officers and directors of the Company have interests in the Offer and the Merger that are described below and in the Information Statement provided pursuant to Section 14(f) of the Exchange Act and Rule 14f-1 thereunder (the "Information Statement"), which is attached as Annex A to this Statement and incorporated herein by reference, and which may present them with certain potential conflicts of interest.

        The Board was aware of such contacts, agreements, arrangements and understandings and any actual or potential conflicts of interest and considered them along with other matters described below in "Item 4. The Solicitation or Recommendation—Reasons for the Board's Recommendation."

Change of Control and Severance Plans

        The consummation of the transactions contemplated by the Merger Agreement will constitute a "change in control" for purposes of the (i) Executive Employment Agreement, dated August 13, 2003, by and between Robert E. Switz and the Company, as amended by the Amendment to Employment Agreement, dated December 28, 2008, and the Second Amendment to Employment Agreement, dated July 1, 2009 (collectively, the "Switz Employment Agreement"), (ii) the ADC Telecommunications, Inc. Executive Change in Control Severance Pay Plan (2007 Restatement) (the "Executive Plan"), and the ADC Telecommunications, Inc. Change in Control Severance Pay Plan (2007 Restatement) (the "CIC Plan"). The Switz Employment Agreement, the Executive Plan, and the CIC Plan provide for severance payments to Mr. Switz and certain executives of the Company whose employment is terminated either voluntarily with "good reason" (as defined in the Executive Plan) or involuntarily, during a two-year period following a change in control. The Executive Plan applies to all below named executive officers (applicable to Mr. Switz pursuant to the Switz Employment Agreement), other than Mr. Nemitz, to whom the CIC Plan applies. Payments under the Executive Plan and the CIC Plan will be made on the first day of the seventh month following termination of employment in a lump sum. Under the Executive Plan, any severance payment to an eligible executive is increased by the amount, if any, necessary to take into account any additional taxes as a result of such payments being treated as "excess parachute payments" within the meaning of Section 280G of the Internal Revenue Code. Upon

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a qualifying termination of any of the below named executive officers following the Effective Time such executive officer will be entitled to receive an estimated amount as stated in the following table.

Executive Officers
  Estimated Potential Payment
Upon Termination after
Change in Control
 

Kimberly Hartwell

  $ 1,812,444  

Christopher Jurasek

    1,492,638  

James G. Mathews

    2,087,299  

Steven G. Nemitz

    462,761  

Patrick D. O'Brien

    2,012,051  

Laura N. Owen

    1,555,070  

Richard B. Parran, Jr. 

    1,603,889  

Jeffrey D. Pflaum

    1,635,808  

Robert E. Switz

    8,870,074  

        The foregoing is qualified in its entirety by reference to the Switz Employment Agreement, the Executive Plan, and the CIC Plan filed as Exhibits (e)(3), (e)(4), (e)(5), (e)(6) and (e)(7) to this Statement and the Information Statement attached to this Statement as Annex A, each of which is incorporated herein by reference.

Effect of the Offer and the Merger on Stock Options

        As of the time at which Shares are first accepted for payment under the Offer (the "Acceptance Time"), all outstanding and unvested options to purchase Shares ("Options") shall fully vest, if and as provided under the terms of the applicable option award agreement. At the effective time of the Merger (the "Effective Time"), each Option shall be assumed by Parent. Each Option so assumed will continue to have, and be subject to, the same terms and conditions set forth in the applicable Option (including, as applicable, the terms and conditions set forth in the Company incentive plan under which such Option was granted, and any applicable stock option agreement or other document evidencing such Option) immediately prior to the Effective Time, except that (i) each Option will be exercisable for that number of whole shares of Parent common stock equal to the product of (X) the number of Shares that were issuable upon exercise of such Option immediately prior to the Effective Time, multiplied by (Y) a fraction, the numerator of which shall be the Offer Price and the denominator of which shall be the volume weighted average trading price per share of Parent common stock on the New York Stock Exchange (or in the event that Parent common stock is no longer listed for trading on such exchange, then the senior stock exchange on which the Parent common stock is then-listed) for the 10 trading days immediately preceding the Effective Time (the "Conversion Ratio"), rounded down to the nearest whole number of shares of Parent common stock, and (ii) the per share exercise price for the shares of Parent common stock issuable upon exercise of such assumed Option will be equal to the quotient determined by dividing the exercise price per share of such Option by the Conversion Ratio, rounded up to the nearest whole cent.

        The approximate aggregate number of whole shares of Parent common stock issuable upon exercise of the assumed Options held by the Company's executive officers and directors will be calculated via the Conversion Ratio, based in part on the number of Shares issuable upon exercise of

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Options held by the Company's executive officers and directors as of July 23, 2010, as stated in the following table.

Executive Officers
  Option Shares  

Kimberly Hartwell

    140,042  

Christopher Jurasek

    221,500  

James G. Mathews

    270,100  

Steven G. Nemitz

    56,936  

Patrick D. O'Brien

    275,252  

Laura N. Owen

    246,218  

Richard B. Parran, Jr. 

    168,961  

Jeffrey D. Pflaum

    174,225  

Robert E. Switz

    1,548,730  

 

Non-Employee Directors
  Option Shares  

John J. Boyle III

    10,535  

Mickey P. Foret

    20,564  

Lois M. Martin

    16,696  

Krish Prabhu, Ph.D. 

    0  

John E. Rehfeld

    16,696  

David A. Roberts

    0  

William R. Spivey, Ph.D. 

    16,696  

Larry W. Wangberg

    34,945  

John D. Wunsch

    23,409  

        The foregoing is qualified in its entirety by reference to the Merger Agreement filed as Exhibits (e)(1) and (e)(2) to this Statement and the Information Statement attached to this Statement as Annex A, each of which is incorporated herein by reference.

Treatment of Time-Based Restricted Stock Units

        As of the Acceptance Time, all outstanding and unvested time-based restricted stock units ("RSUs") shall fully vest in accordance with the respective Company incentive plan under which each such RSU was granted and at the Effective Time the Shares issued thereunder will be cancelled and converted into a right to receive the Offer Price (subject to any applicable withholding taxes required by applicable law). The approximate value of the cash payments that each director and executive officer of the Company will receive in exchange for cancellation of his or her RSUs (other than RSUs granted in connection with the Company's Superior Performance Long-Term Incentive Program) is set forth in the table below. This information is based on the number of RSUs held by the Company's directors and executive officers as of July 23, 2010.

Executive Officers
  Total Number
of RSUs
  Cash Consideration
for RSUs
 

Kimberly Hartwell

    48,600   $ 619,650  

Christopher Jurasek

    0     0  

James G. Mathews

    18,000     229,500  

Steven G. Nemitz

    21,167     269,879  

Patrick D. O'Brien

    54,444     694,161  

Laura N. Owen

    29,600     377,400  

Richard B. Parran, Jr. 

    40,133     511,696  

Jeffrey D. Pflaum

    25,578     326,120  

Robert E. Switz

    125,524     1,600,431  

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Non-Employee Directors
  Total Number
of RSUs
  Cash Consideration
for RSUs
 

John J. Boyle III

    42,302   $ 539,351  

Mickey P. Foret

    45,237     576,772  

Lois M. Martin

    45,237     576,772  

Krish Prabhu, Ph.D. 

    38,544     491,436  

John E. Rehfeld

    44,591     568,535  

David A. Roberts

    38,544     491,436  

William R. Spivey, Ph.D. 

    45,923     585,518  

Larry W. Wangberg

    45,237     576,772  

John D. Wunsch

    47,732     608,583  

        The foregoing is qualified in its entirety by reference to the Merger Agreement filed as Exhibits (e)(1) and (e)(2) to this Statement and the Information Statement attached to this Statement as Annex A, each of which is incorporated herein by reference.

Treatment of Performance-Based Restricted Stock Units

        As of the Acceptance Time, all outstanding and unvested performance-based restricted stock units ("PSUs") shall fully vest in accordance with the respective Company incentive plan under which each such PSU was granted and at the Effective Time the Shares issued thereunder will be cancelled and converted into a right to receive the Offer Price (subject to any applicable withholding taxes required by applicable law). The approximate value of the cash payments that each executive officer of the Company will receive in exchange for cancellation of his or her PSUs is set forth in the table below. This information is based on the number of PSUs held by the Company's directors and executive officers as of July 23, 2010.

Executive Officers
  Number of
PSUs
  Cash Consideration
for PSUs
 

Kimberly Hartwell

    10,500   $ 133,875  

Christopher Jurasek

    0     0  

James G. Mathews

    16,750     213,563  

Steven G. Nemitz

    2,500     31,875  

Patrick D. O'Brien

    11,167     142,379  

Laura N. Owen

    12,000     153,000  

Richard B. Parran, Jr. 

    8,000     102,000  

Jeffrey D. Pflaum

    14,217     181,267  

Robert E. Switz

    279,832     3,567,858  

        Additionally, Mr. Pflaum has 37,500 performance cash units which will vest at the Acceptance Time at target, yielding $37,500 in cash consideration.

        The foregoing is qualified in its entirety by reference to the Merger Agreement filed as Exhibits (e)(1) and (e)(2) to this Statement and the Information Statement attached to this Statement as Annex A, each of which is incorporated herein by reference.

Treatment of SPLTI Plan Rights Awards and RSUs

        As of the Acceptance Time, pursuant to the Company's Superior Performance Long-Term Incentive program (which program applies to the Company's executive officers and certain other key employees, but which does not apply to Mr. Switz) (the "SPLTI Program"), a pro rata amount of the outstanding and unvested rights awards granted under the SPLTI Program ("SPLTI Rights") and RSUs granted under the SPLTI Program ("SPLTI RSUs"), shall vest and be converted into cash. The SPLTI Rights and SPLTI RSUs, respectively, vest pro rata with a value that is the product of (X) the

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full-period SPLTI Rights award amount or SPLTI RSU award amount (as applicable) determined by the Company's Compensation Committee (reflected in the table below) multiplied by (Y) a fraction, the numerator of which shall be the number of calendar days such officer was actively employed following the grant of his or her SPLTI Rights or SPLTI RSUs and the denominator is 1,189 (the number of days over which the full SPLTI rights were to ratably vest).

        SPLTI Rights and SPLTI RSUs will vest at a pro rata amount based on the actual date of the Effective Time; solely for purposes of illustration, the table below assumes an Acceptance Time of November 15, 2010, which results in a pro rata ratio equal to approximately 34.7%. The pro rata amounts and the approximate value of the cash payments calculated based on an Acceptance Time of November 15, 2010, that each executive officer of the Company will receive in exchange for conversion of his or her SPLTI Rights and SPLTI RSUs are set forth in the table below.

Executive Officers
  Full-Period
SPLTI Rights
Award Amount
  Cash
Consideration
for SPLTI
Rights
  Full-Period
SPLTI
RSUs
Award
Amount
  Pro Rata
Number of
SPLTI RSUs
  Cash
Consideration
for SPLTI
RSUs
 

Kimberly Hartwell

    612,000   $ 212,064     34,000     11,781   $ 150,208  

Christopher Jurasek

    570,000     197,511     31,666     10,972     139,893  

James G. Mathews

    680,000     235,627     37,777     13,090     166,898  

Steven G. Nemitz

    407,000     141,029     22,611     7,834     99,884  

Patrick D. O'Brien

    690,000     239,092     38,333     13,282     169,346  

Laura N. Owen

    582,000     201,669     32,333     11,203     142,838  

Richard B. Parran, Jr. 

    590,000     204,441     32,777     11,357     144,802  

Jeffrey D. Pflaum

    612,000     212,064     34,000     11,781     150,208  

        The foregoing is qualified in its entirety by reference to the Merger Agreement filed as Exhibits (e)(1) and (e)(2) to this Statement and the Information Statement attached to this Statement as Annex A, each of which is incorporated herein by reference.

Effect of the Offer and the Merger on Directors' and Officers' Indemnification and Insurance

        The Merger Agreement provides that Parent will cause the Surviving Corporation, for six years after the Effective Time, to indemnify and hold harmless present and former directors and officers of the Company or any of its subsidiaries at any time prior to the Effective Time in respect of acts or omissions occurring at or prior to the Effective Time, to the fullest extent permitted by the MBCA or other applicable law. In addition, Parent will cause the Surviving Corporation to maintain provisions in its organizational documents regarding elimination of liability of directors, indemnification of officers, directors and employees, and advancement of expenses that are no less advantageous to the intended beneficiaries than the corresponding provisions in existence on the date of the Merger Agreement.

        Parent will, or will cause the Surviving Corporation to continue to maintain, for six years after the Effective Time, and fully pay the premium for, the non-cancellable extension of the directors' and officers' liability coverage of the Company's existing fiduciary liability insurance policies. In each case the policies shall be maintained for a claims reporting or discovery period of at least six years from and after the Effective Time with respect to any claim related to any period or time at or prior to the Effective Time, and with terms, conditions, retentions and limits of liability that are no less favorable than the coverage provided under the Company's existing policies. However, in no event shall Parent or the Surviving Corporation be required to expend for such policies an annual premium in excess of 175% of the amount per annum the Company paid in its last full fiscal year. If Parent, the Surviving Corporation or any of its successors or assigns consolidates with or merges into any other entity and shall not be the continuing or surviving corporation or entity of such consolidation or merger, or transfers all or substantially all of its properties and assets, proper provision shall be made so that the successors and assigns of Parent or the Surviving Corporation, as the case may be, shall assume the obligations described above.

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        The foregoing is qualified in its entirety by reference to the Merger Agreement filed as Exhibits (e)(1) and (e)(2) to this Statement and incorporated herein by reference.

Effect of the Offer and the Merger on the Company's Employee Benefits

        The Merger Agreement provides that, for the one-year period beginning on the consummation of the Merger, all employees of the Company and its subsidiaries who continue employment with the Surviving Corporation or any of its affiliates shall receive base salary or base wages and benefits (other than pursuant to equity-based compensation plans) that are, in the aggregate, substantially comparable to those provided by the Company and its subsidiaries immediately prior to the consummation of the Merger. With respect to any employee benefit plan, program or arrangement maintained by Parent or any of its subsidiaries in which any continuing employee becomes a participant, such employee shall be given full credit for service with the Company or any of its subsidiaries (or predecessor employers to the extent the Company provides such past service credit) for purposes of eligibility to participate, vesting and, for purposes of vacation, severance and other paid time off, benefit level to the same extent such service was recognized as of the consummation of the Merger under a comparable plan of the Company and its subsidiaries in which such employee participated. In addition, to the extent they would have been satisfied or waived under the comparable plan of the Company and its subsidiaries, all such plans shall waive any pre-existing conditions, actively-at-work requirements and waiting periods under any welfare benefit plan with respect to participation by and coverage of such employees and shall provide that any expenses, co-payments, and deductibles paid or incurred on or before the consummation of the Merger shall be taken into account under analogous Parent benefit plans for purposes of satisfying applicable deductible, coinsurance and maximum out-of-pocket provisions.

        Arrangements under the Merger Agreement with respect to employee benefits do not (i) constitute any amendment of, or undertaking to amend, any benefit plan, (ii) prohibit Parent or any of its subsidiaries, including the Surviving Corporation, from amending any employee benefit plan or (iii) confer any rights or benefits on any person other than the parties to the Merger Agreement.

        The foregoing is qualified in its entirety by reference to the Merger Agreement filed as Exhibits (e)(1) and (e)(2) to this Statement and incorporated herein by reference.

Section 16 Matters

        The Board has taken steps to cause any dispositions of Shares or Options in connection with the Merger to be exempt from the effects of Section 16 of the Exchange Act by virtue of Rule 16b-3 promulgated under the Exchange Act.

(b)   Arrangements with Parent and Purchaser.

        In connection with the transactions contemplated by the Merger Agreement, the Company, Parent and Purchaser entered into the Merger Agreement (which includes the grant of a top-up option to Purchaser, which is exercisable under certain conditions following the Acceptance Time (the "Top-Up Option")), and the Company and Parent entered into a Confidentiality Agreement, dated March 26, 2010, and an Exclusivity Letter Agreement, dated July 11, 2010.

Merger Agreement

        The summary of the material terms of the Merger Agreement, including the material terms of the Top-Up Option, set forth in Section 13 of the Offer to Purchase and the description of the conditions of the Offer contained in Section 15 of the Offer to Purchase are incorporated by reference herein.

        The summary of the Merger Agreement, including the conditions to the Offer and the Top-Up Option, contained in the Offer to Purchase are qualified in their entirety by reference to the Merger Agreement filed as Exhibits (e)(1) and (e)(2) to this Statement and incorporated herein by reference.

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Confidentiality Agreement

        On March 26, 2010, the Company and Parent entered into a Confidentiality Agreement (the "Confidentiality Agreement") to (a) facilitate the mutual sharing of information in order to allow Parent and the Company to evaluate a potential transaction, (b) restrict for a period of twelve months the ability of both parties to: (i) pursue transactions involving the other party's securities or property (including that of its subsidiaries), (ii) propose to enter into any merger or business combination with or purchase a material portion of the assets of the other party or its subsidiaries, or (iii) seek to influence the voting of securities or control or influence the management or board of directors of the other party or its subsidiaries, and (c) restrict for a period of six months the ability of both parties to hire or solicit for hire certain employees of the other party.

        The foregoing is qualified in its entirety by reference to the Confidentiality Agreement filed as Exhibit (e)(8) to this Statement, incorporated herein by reference.

Exclusivity Agreement

        During the evening of July 11, 2010, the Company and Parent entered in an Exclusivity Letter Agreement (the "Exclusivity Letter") whereby, in order to provide the necessary assurance to Parent during the final negotiations of the Merger Agreement, the Company agreed that, for a period beginning as of the execution of the Exclusivity Letter and ending on the opening of the U.S. stock markets on July 14, 2010, the Company would cease any negotiations with respect to transactional alternatives to the Offer and the Merger, not solicit proposals which constituted (or could reasonably have been expected to lead to) transactional alternatives to the Offer and the Merger and not grant any waiver or release under any standstill agreement with respect to the Company's securities or property.

        The foregoing is qualified in its entirety by reference to the Exclusivity Letter filed as Exhibit (e)(9) to this Statement, incorporated herein by reference.

Ownership of Company Securities

        The Offer to Purchase states that Parent owns no Shares.

Board Designees

        The Merger Agreement provides that, after Purchaser first accepts Shares for payment pursuant to the Offer, Parent will be entitled to designate the number of directors, rounded to the nearest whole number, on the Board that equals the product of (a) the total number of directors on the Board, giving effect to the election of any additional directors, and (b) the percentage that the number of Shares beneficially owned by Parent and/or Purchaser (including Shares accepted for payment) bears to the total number of Shares outstanding. The Company will take all actions reasonably necessary to cause Parent's designees to be elected or appointed to the Board, including increasing the number of directors and seeking and accepting resignations of incumbent directors, provided that, at all times prior to the consummation of the Merger, the Board shall include at least three directors who were on the Board prior to the Acceptance Time (the "Continuing Directors"). In the event that, prior to the consummation of the Merger, the number of Continuing Directors is reduced below three, the remaining Continuing Directors or Continuing Director (if only one remains) shall be entitled to designate any other person who is not an affiliate, stockholder or employee of Parent or any of its subsidiaries to fill the vacancy left by such departed Continuing Director(s) and such person(s) shall be deemed to be Continuing Director(s). Moreover, the Company will take all necessary action to cause individuals designated by Parent to constitute the number of members, rounded to the nearest whole number, on each committee of the Board, and each board of directors of each subsidiary of the Company and each committee thereof (to the extent requested by Parent), that represents the same

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percentage as the individuals represent on the Board, in each case to the fullest extent permitted by applicable law.

        Following the election or appointment of Parent's designees and until the consummation of the Merger, the approval of a majority of the Continuing Directors, or the approval of the sole Continuing Director if there is only one Continuing Director, will be required to authorize: (i) any termination of the Merger Agreement by the Company, (ii) any amendment of the Merger Agreement requiring action by the Board, (iii) any extension of time for performance of any obligation or action under the Merger Agreement by Parent or Purchaser, (iv) any waiver of compliance with any of the agreements or conditions contained in the Merger Agreement for the benefit of the Company, and (v) any other consent, action or recommendation by the Company or the Board relating to the Merger Agreement, the Offer or the Merger. Following the election or appointment of Parent's designees and until the consummation of the Merger, the Continuing Directors will have the authority to retain counsel and advisors and to institute any action on behalf of the Company to enforce the performance of the Merger Agreement.

        The foregoing is qualified in its entirety by reference to the Merger Agreement filed as Exhibits (e)(1) and (e)(2) to this Statement and incorporated herein by reference.

        If Parent exercises its right to designate representatives to the Board, such designees will likely be drawn from the directors of Parent. Background information on these individuals is found in the Information Statement attached to this Statement as Annex A and incorporated herein by reference.

Item 4.    THE SOLICITATION OR RECOMMENDATION.

(a)   Solicitation/Recommendation.

        The Board, during a meeting held on July 12, 2010, unanimously determined that it is in the best interests of the Company and its shareowners for the Company to be acquired on the terms set forth in the Merger Agreement. At that meeting the Board also unanimously determined that the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, are advisable, fair to and in the best interests of the Company's shareowners and unanimously approved the form, terms and provisions of the Merger Agreement, including the Offer and the Merger.

        Accordingly, the Board unanimously recommends that the holders of the Shares accept the Offer and tender their Shares pursuant to the Offer, and, if the Merger is required to be submitted to a vote of the Company's shareowners, vote their Shares in favor of the Merger, the Merger Agreement and adoption of the Plan of Merger meeting the requirements of Section 302A.611 of the MBCA (the "Plan of Merger").

(b)   Background and Reasons for the Board's Recommendation.

Background of the Offer and Merger

        For much of the past decade, the Company has concurrently trimmed its portfolio of non-core businesses, right-sized its operations to the available market opportunities and aggressively sought to grow its core businesses and product offerings to achieve significant scale in an industry in which its primary customer base was consolidating. Throughout that period, the Board supported management's ongoing and active efforts to explore opportunities through which the Company, on a stand-alone basis, could achieve the necessary scale in its operations and geographic reach to be able to achieve greater efficiencies and to supply customers with a sufficiently broad and deep product line to generate profitable growth in a very competitive, global marketplace. From time to time, the Company conducted senior executive-level discussions with other industry participants over a number of years, none of which resulted in a transformational transaction.

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        In connection with these efforts, and over the past several years, management met periodically with several different investment banking firms, which provided their assessments of the Company's business and prospects, various strategic alternatives that may be available to the Company, their views on the industry and its prospects, and potential specific acquisition or disposition opportunities that may be available to the Company. In addition, certain of these firms presented to the Board on these topics in the past, thereby giving the Board ongoing insights into the industry, as well as opportunities and risks to the Company as a stand-alone enterprise.

        As part of these ongoing efforts, during 2009, management explored a potential opportunity to acquire the assets of an international-based business focused on the radio frequency transmitter segment (the "RF Opportunity"), and, starting in June 2009, began concurrently to have exploratory discussions with "Company A" regarding the potential of forming a joint venture to combine some of their respective businesses to achieve economies of scale. Company A is a large, diversified manufacturing company participating in the telecommunications equipment industry. At a regular meeting of the Board held during July 2009, management updated the Board on both potential opportunities, noting that both were at very early stages of exploration. After discussion, the Board authorized management to continue exploring both of these potential strategic opportunities.

        At the next regularly scheduled meeting of the Board, held in August 2009, management updated the Board with respect to both potential strategic opportunities. Also during this meeting, management reported to the Board on the continuing difficult market conditions and the Company's competitive realignment project, which would result in a worldwide workforce reduction of between 350 and 400 employees. At the annual Board strategy meetings, held at the end of August 2009, management updated the Board on the current strategies for each business unit, as well as with respect to the RF Opportunity and joint venture matters described above. During the meeting, management presented a proposed three-year, flat-to-low-growth plan, which reflected continuing difficult market conditions. The Board did not approve that plan at that meeting.

        Early in the fall of 2009, Company A informed management that Company A was considering alternatives to the joint venture proposal, and that it needed to complete an internal strategic assessment before continuing discussions with the Company. At the same time, management was continuing to explore the RF Opportunity. Management updated the Board as to both matters at a meeting held in late October 2009. Management also presented a revised proposed three-year plan, which did not show significant change from the plan proposed at the August meeting. At this time, in light of the continuing difficult market conditions and management's current outlook for the next three years, the Board discussed retaining an independent strategy and consulting firm to provide it with an independent assessment of the Company's strategic positioning, opportunities and risks as a stand-alone enterprise. Following a formal search process that was commenced in the fall of 2009, the Company retained such a firm in early March 2010, to perform this assessment.

        In early November 2009, Robert Switz, Chairman, President and Chief Executive Officer of the Company ("Switz"), was contacted by a senior executive of Company A (the "Company A Executive") stating that Company A had completed its strategic assessment and would like to re-engage to explore further strategic alternatives with the Company (although no specific transaction structures were discussed). The Company A Executive proposed exchanges of relevant confidential information.

        On November 16, 2009, the Company and Company A entered into a mutual confidentiality agreement to enable each company to conduct further discussions and confidential due diligence with respect to a possible strategic transaction. The confidentiality agreement contained mutual, customary standstill provisions, as well as a mutual employee nonsolicitation covenant.

        From mid-November 2009 through mid-January 2010, management of the Company continued to explore the RF Opportunity, including meeting with the potential selling company's management. Also during this time, management teams from Company A and the Company exchanged confidential information about their respective businesses, including potential synergies.

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        On January 22, 2010, members of senior management of both the Company and Company A, together with financial advisors for each of the parties, including Morgan Stanley & Co., Incorporated ("Morgan Stanley"), representing the Company, met to discuss the possibility of a broader strategic transaction between the two companies. While no specific structure or terms were discussed, the parties discussed potential benefits to a strategic alignment of their businesses. Management of the Company left this meeting believing that Company A might be considering an acquisition of the Company, rather than a joint venture with the Company. At this meeting, Company A requested a period of exclusivity during which to conduct confidential due diligence and to engage in exclusive discussions with the Company. Management noted that it would need to discuss such a request with the Board.

        On January 25, 2010, management updated the Board with respect to the RF Opportunity (which management had determined presented strategic risks and did not appear to be available on terms acceptable to the Company) and the latest meetings with Company A. The Company's primary external corporate counsel, Dorsey & Whitney LLP ("Dorsey"), was present and advised the Board with respect to its fiduciary duties in connection with its possible contemplation of potential significant strategic alternatives for the Company. At this time, the Board requested that Morgan Stanley prepare an update to be discussed with the Board at a subsequent meeting regarding a valuation analysis of the Company, its perspective on the industry and market in which the Company competes and an update on strategic alternatives that may be available to the Company. Management agreed to work with Morgan Stanley to provide it with the information Morgan Stanley would need to prepare for such discussion.

        On February 1, 2010, at a meeting of the Board, Morgan Stanley presented its update of market and industry conditions, a financial analysis of the Company and preliminary considerations with respect to a possible strategic transaction with Company A. Morgan Stanley also reviewed with the Board a range of other strategic alternatives available to the Company, along with its perspective on such alternatives. Management also updated the Board, noting that the Company was awaiting a response from Company A as to the current level of Company A's interest in the possibility of exploring further a strategic transaction. Dorsey was also present and met with the Board in executive session during this meeting.

        On February 2, 2010, the Company and Morgan Stanley entered into an engagement letter with respect to Morgan Stanley acting as financial advisor to the Company concerning a possible strategic transaction with Company A or a similar transaction with another company.

        On February 3, 2010, the Company A Executive contacted Switz and informed him that the Company A board was supportive of continuing discussions with the Company but needed more Company financial information and business unit-level diligence from the Company in order to support its valuation analysis. The Company A Executive noted that, thereafter, Company A may be able to supply a proposed valuation range for the Company's consideration.

        On February 8, 2010, during a Board meeting, management provided the Board with an update on further discussions with Company A. Management also provided the Board with its current three-year outlook, along with the significant risks and opportunities to achieving the outlook results. Morgan Stanley also provided the Board with its views on growth and consolidation in the telecommunications equipment industry, possible alternative transactions to one with Company A and its views on the Company's prospects as a stand-alone enterprise. During this meeting, the Board met in executive session, both with and without Switz, to discuss the possibility of moving ahead with exploring potential strategic alternatives for the Company. The Board authorized management to supply the confidential information requested to Company A, but also instructed management to inform Company A that the Board had made no decision with respect to a possible sale of the Company.

        Following the Board meeting, Switz delivered the Board's message to the Company A Executive. During the next two weeks, management of the Company supplied Company A with certain confidential information to enable Company A to develop its valuation analysis of the Company. The

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Company A Executive contacted Switz during this time to discuss Company A's then-current views on valuation.

        On February 22, 2010, Company A delivered to the Company a letter setting forth its non-binding indication of interest in acquiring 100% of the Company in an all-cash transaction for a price in the range of $9.00 to $10.00 per share. The indication of interest was subject to a number of conditions, including satisfactory completion of due diligence by Company A. The letter also requested a period of exclusivity in which to conduct due diligence and negotiate a definitive agreement.

        On February 23, 2010, the Board convened a meeting to hear an update from management on the exploratory discussions with Company A and to discuss a process for considering the indication of interest received from Company A. Representatives of Morgan Stanley and Dorsey were present for this meeting. The parties present then determined that it would be advisable to schedule an in-person meeting at which a thorough and careful analysis of the indication of interest, and various alternatives, including continuing as an independent enterprise, could be explored fully and without competing demands on the Board's time.

        The Board, management, Morgan Stanley and Dorsey met at an airport hotel in Chicago on Sunday, March 7, 2010, for the purposes outlined above. During the meeting, management made a detailed presentation of the current and three-year business outlook under alternative scenarios. Management also discussed potential cost and revenue synergies, as well as certain potentially undervalued assets of the Company, that were possible in a combination with Company A. There was also a discussion regarding continued and expected low growth rates in the telecommunications equipment industry. Morgan Stanley also reviewed and discussed with the Board current industry conditions, its preliminary analysis of the current and projected stand-alone value of the Company, including a review of possible strategies for optimizing the Company's capital structure, an assessment of Company A's indication of interest, potential additional strategic alternatives, including other potential partners for a strategic combination, and a review of recent transactions, including premiums paid, involving selected technology companies. During the meeting, Dorsey reviewed with the Board members their fiduciary duties in the context of a potential strategic transaction. The Board then held an executive session of outside directors to discuss and consider the information supplied at the meeting. Following the executive session, the Board met with management, Morgan Stanley and Dorsey, and determined that, while the range of values proposed by Company A was unacceptable, continuing exploratory discussions with Company A, without reaching any determination with respect to a sale of the Company, was appropriate. The Board also determined that it was premature to consider granting a period of exclusivity to Company A.

        Following the Board meeting, both Switz and Morgan Stanley communicated with their Company A counterparts to express the Board's belief that the $9.00-$10.00 per share range contained in Company A's indication of interest was unacceptable. They also discussed the possibility of Company A meeting with management of the Company and Morgan Stanley for the purpose of enabling the Company to provide further information that may enable Company A to improve its valuation range.

        On March 11, 2010, Switz and Morgan Stanley met with the Company A Executive and Company A's financial advisor at Company A's offices and discussed information regarding potentially undervalued assets of the Company, including its auction rate securities ("ARS") portfolio and certain other assets. This information was made available to Company A to enable it to consider increasing its proposed valuation range.

        On March 15, 2010, at the request of Thomas Lynch ("Lynch"), the Chief Executive Officer of Parent, Switz met with Lynch at the Company's headquarters in Minneapolis. Lynch and Switz discussed, among other things, current industry conditions and dynamics. They also preliminarily discussed Parent's interest in exploring a possible combination of Parent's connectivity business unit with the Company, and a process that might lead to exploratory discussion around that topic. Switz informed Lynch that he would discuss this matter with the Board.

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        On March 18, 2010, the Company A Executive telephoned Switz to inform him that Company A, having considered the information supplied at their recent meeting, had concluded that it was comfortable with an offer of $10.00 per share, and had eliminated the lower end of its range. Switz responded that, while he would inform his Board, he believed that it was unlikely that the Board would view favorably an offer at that price. Switz also reiterated that the Board had made no decision to sell the Company.

        On March 19, 2010, the Board held a meeting with management of the Company, Morgan Stanley and Dorsey present for the purpose of receiving an update on the status of the exploratory discussions with Company A, as well as a report on the meeting between Switz and Lynch. Management and Morgan Stanley then provided the Company A update. Management and Morgan Stanley also discussed with the Board the implications of the meeting between Switz and Lynch, particularly with respect to the current situation with Company A. Everyone present then discussed the merits of continuing discussions with Company A, while also providing Parent with the information about the Company that Company A already had received from the Company. Although the Board did not reach any decision with respect to a possible sale of the Company, it determined to continue exploratory discussions with both Company A and Parent.

        On March 22, 2010, the Company A Executive telephoned Switz to inform him that Company A would require significantly more and deeper due diligence conducted on the Company before Company A could become comfortable exceeding $10.00 per share in value. He also noted that Company A was likely to cease all work on the matter until after its Board meeting, set for the end of April 2010. Morgan Stanley received a similar call from Company A's financial advisor on or around the same date.

        Effective March 26, 2010, the Company and Parent entered into a mutual confidentiality agreement that would enable each party to conduct further discussions and confidential due diligence. The agreement also contained mutual standstill and employee nonsolicitation covenants. The parties agreed to have their management teams meet on March 31, 2010 to begin the diligence process.

        On March 31, 2010, senior officers of each of the Company and Parent, including Switz and Lynch, met to conduct exploratory discussions, including business presentations by each party and an initial discussion of the strategic rationale for a possible transaction between the companies. At this meeting, Parent delivered to the Company a proposed, detailed timeline and process proposal for the parties to continue and complete exploratory discussions by the end of April. The timeline contemplated that Parent would deliver a non-binding indication of value during the first week of May.

        On April 5, 2010, at a telephonic meeting of the Board at which Morgan Stanley and Dorsey were present, Switz updated the other directors with respect to both Company A's decision not to continue working with the Company until after its Board meeting, and Parent's desire to conduct and potentially to conclude preliminary due diligence during the month of April. Both Switz and Morgan Stanley noted that this schedule would potentially generate a competitive bidding process between two of the strongest and most likely potential strategic buyers of the Company. The Board discussed possible next steps with management and its advisors and, noting that it could stop the process with one or both interested parties at any time, requested management and its advisors to continue exploratory discussions with both parties. The Board did not reach any decision with respect to a possible sale of the Company.

        On April 15, 2010, management teams from the Company and Parent held a preliminary due diligence process call and, on April 28, 2010, they met at an airport conference center in Minneapolis and discussed business diligence and potential synergies.

        On May 7, 2010, management teams from the Company and Parent, along with Morgan Stanley and Parent's financial advisor, met at an airport conference center in Minneapolis to discuss Parent's preliminary valuation of the Company. At the conclusion of the meeting, Parent delivered its indication of interest letter containing its preliminary range of value of $10.55 to $11.55 per share for an all-cash

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acquisition of the Company. Parent also requested a period of exclusivity in which to continue diligence and negotiate a transaction agreement with the Company.

        Later that day, the Board, along with management, Morgan Stanley and Dorsey, held a telephonic meeting to receive an update from management regarding the status of discussions with both Company A and Parent. Switz and others reported on their recent contacts with each party. Morgan Stanley noted that Company A may engage more quickly and positively if it were alerted to the fact that there was another interested party. The Board, reaching no decision with respect to a possible sale of the Company, requested that management and its advisors continue exploratory discussions with each party in order to determine whether there was additional value available to be obtained for the Company's shareowners from either party.

        On May 14 and 15, 2010, Switz and the Company A Executive had telephonic discussions in which the Company A Executive stated that Company A's board preferred additional time to understand further the market dynamics and growth opportunities in the industry, as well as to consider further the potential benefits of a potential transaction with the Company. Switz noted that, while the decision regarding timing was Company A's alone to make, they were not the only interested party, explaining that an unsolicited indication of interest from another party had been received by the Company. Switz further noted that, if Company A remained interested, it would likely have to re-engage aggressively in the process and increase its valuation above the high end of its previously submitted range (i.e., above $10.00 per share).

        Following those discussions, members of management of Company A and the Company met at an airport hotel in Minneapolis on May 20, 2010 to discuss, in greater depth, potential synergies that may result from a strategic transaction.

        On May 17, 2010, senior management (not including Switz) and Morgan Stanley met with their counterparts from Parent at an airport hotel in Minneapolis to provide them with information regarding potentially undervalued assets of the Company, including its ARS portfolio and certain other assets, to enable Parent to consider increasing its valuation of the Company. Parent's representatives stated that they would reconsider the $10.55 to $11.55 per share range previously proposed and respond to the Company in the near future.

        On May 21, 2010, the Board conducted a telephonic meeting with management, Morgan Stanley and Dorsey for the purpose of updating the Board on recent activity with both Company A and Parent. Following the update, the parties present discussed possible next steps with each interested party. The Board requested management and its advisors to continue exploratory discussions with each of Company A and Parent, although it had made no decision with respect to a possible sale of the Company.

        On May 25, 2010, Parent delivered a revised indication of interest letter to the Company. The range of value indicated was increased to $11.00 to $11.80 per share, for an all-cash acquisition of the Company. Parent also requested a period of exclusivity in which to complete due diligence and negotiate a definitive agreement with the Company. Along with the letter, Parent delivered a detailed draft transaction timeline outlining the process to signing and then closing. It appeared to the Company's management that Parent's process to signing was more clear and precise than was Company A's at that time.

        On June 2, 2010, at its regularly scheduled meeting, the Board received a report from the independent business and strategy consulting firm that it had commissioned in March 2010. The firm reported on its findings with respect to the overall strategy and growth prospects of the Company as a stand-alone operation. Among its findings, the firm advised that, because the Company, on a stand-alone basis, lacked scale in several areas of its business, the Company should consider focusing on strengthening and achieving greater efficiencies in its core business and should also consider trimming certain product lines and exiting certain markets that the Company could not serve efficiently on a

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stand-alone basis. To provide assurance that the Board would receive an independent view of the Company as a stand-alone operation, this firm was not made aware of the fact that the Company had been engaged in exploratory discussions with any third party regarding a strategic alternative transaction. The Board took into account this firm's recommendations and conclusions as part of its ongoing deliberations in connection with its consideration of the alternative strategic proposals in process from Company A and Parent.

        On June 3, 2010, Company A delivered an updated indication of interest letter to the Company, in which it increased its non-binding proposed price to $12.00 per share for an all-cash acquisition of the Company. It renewed its request for a period of exclusivity in which to complete due diligence and negotiate a definitive agreement with the Company.

        On June 4, 2010, the Board held a meeting, with management, Morgan Stanley and Dorsey present, for the primary purpose of hearing an update on activity with Company A and Parent. Initially, the Board heard a report on and approved the final terms of a settlement with Merrill Lynch with respect to the Company's ARS portfolio. Management noted that it was possible that this settlement would have some effect on the valuation discussions with each interested party, although both were aware of the Company's ARS portfolio and that the financial terms of the proposed settlement with Merrill Lynch would be publicly available shortly. Switz then went on to summarize for the Board the two updated indications of interest received from Company A and Parent, noting that Company A's revised bid reflected that it was now aware of a competing bidder. Morgan Stanley then reviewed its financial analysis of Parent's recent indication of interest. Morgan Stanley noted that there was now a competitive dynamic involving two, high-quality strategic buyers, each with a strong interest in acquiring the Company. They further noted that both parties had increased their initial bids after limited diligence. Morgan Stanley noted, and the Board acknowledged, that, should the Board consider a strategic transaction, there would be three principal factors that would drive a competitive process with these two potential bidders: value, certainty of closing and timing. Morgan Stanley then provided an update of its preliminary valuation analysis, reflecting among other things changes in market conditions and more recent information provided by management, as well as considerations based on the Company's industry and a review of the non-binding indication of interest received from Parent on May 25, 2010. Morgan Stanley also reviewed an illustrative analysis of a private equity sponsor's valuation of the Company, indicating that it was unlikely that a sponsor would be competitive in the price ranges currently being offered by Company A and Parent. The Board also discussed with management and Morgan Stanley certain other related issues. The full Board then met in executive session with Dorsey and discussed various matters, including the process going forward, views on competition law risk with each party, and other matters. The Board concluded by authorizing management and its advisors to continue exploratory discussions with both Company A and Parent, although making no decision with respect to a possible sale of the Company.

        Following the Board meeting, on June 4, 2010, Switz contacted the Company A Executive and Lynch, respectively, and Morgan Stanley contacted the financial advisors representing Company A and Parent, respectively. They were each informed that, while the Company's Board had made no decision with respect to a sale of the Company, a party seeking to acquire the Company would need to satisfy the Company as to three principal factors: value, certainty of closing and timing. They also explained to Parent the competitive dynamic of the current process. Finally, they informed each party that the Company was expecting to receive by June 11, 2010 such party's best proposal regarding value, and to do whatever they could to demonstrate certainty and timing to the Company. Switz and Morgan Stanley also informed each party that the Board had not authorized the granting of exclusivity to any party, but would consider doing so at the appropriate time.

        Early in the week of June 7, 2010, the Company A Executive contacted Switz to inform him that the finance committee of Company A's board of directors would be meeting on June 10, 2010 to consider an updated valuation proposal. In addition, the Company A Executive proposed a definitive agreement signing date of July 12, 2010, with remaining diligence to commence on June 21, 2010. He

15



also offered to deliver a draft merger agreement on June 21, 2010. He further outlined the remaining areas of confirmatory due diligence that Company A wanted to conduct prior to signing.

        During the week of June 7, 2010, Company management held two telephonic meetings with Parent management to discuss the financial impact to the Company of the recently announced ARS settlement and Parent's due diligence requests. Parent also expressed its desire to target an announcement on July 19, 2010.

        During June 10 and 11, 2010, and prior to the submission of updated indications of interest, Switz was contacted by the Chairman and Chief Executive Officer of Company A (the "Company A CEO"), who reaffirmed Company A's seriousness about completing an acquisition of the Company, and its willingness to move very quickly on due diligence matters. In addition, during that period, the Company A CEO contacted Dr. William Spivey, the Independent Lead Director of the Board of the Company ("Spivey"), for the purpose of conveying Company A's serious interest in completing a transaction with the Company.

        On Friday, June 11, 2010, each party submitted its updated indications of interest. Company A submitted a proposal for an all-cash acquisition at $12.50 per share, and a request for 30 days of exclusivity. Parent submitted an all-cash proposal with a range of $11.50 to $12.00 per share, with no request for exclusivity. In addition, Parent delivered a proposed agreement and plan of merger for the transaction, and a draft proposed summary timeline to signing and closing. The Company's management continued to believe that Parent was creating more certainty around achieving completion of the diligence process and around timing to signing than was Company A at that time.

        Over the ensuing weekend of June 12 and 13, 2010, the financial advisor for Company A contacted Morgan Stanley for the purpose of conveying three messages: Company A was committed to getting a transaction accomplished, that Company A would not increase its offered price of $12.50 per share, and that exclusivity was very important to Company A. In addition, during the evening of June 14, 2010, the Company A Executive contacted Switz to reiterate the same messages.

        On June 15, 2010, the Board held a meeting, at which management, Morgan Stanley and Dorsey were present, for the purpose of receiving an update on the status of the discussions with Company A and Parent. Morgan Stanley reported to the Board on the two updated indications of interest received, comparing the proposals and updating its preliminary valuation analyses. The Board and others present discussed the status of each proposal, the efficiency of each party's process and the seriousness of each bidder. Morgan Stanley recommended a dual-track due diligence process as the best means to enable both parties to put forth their best proposals. The Board, including Switz, then discussed, in executive session, the proposals and related matters. After this session ended, all other participants rejoined the meeting and Switz noted the Board's support for an exploratory, dual-track, diligence process with Company A and Parent, with a goal of obtaining more certain and better proposals from each following the diligence process. The Board formed a special committee (the "Special Committee"), which included all directors other than Switz, and empowered it to investigate, evaluate and decide whether or not to move forward with a transaction with either party. Spivey, as Lead Director, acted as Chair of the Special Committee. The Board then discussed the merits, if a transaction were negotiated, of obtaining a second opinion as to the fairness, from a financial point of view, of the consideration to be received in such transaction, and requested that management facilitate the engagement of a second firm for that purpose. While no decision had been made, the Board recognized that the process was leading in a direction that could result in a strategic transaction, and, taking everything into account, was comfortable allowing management and the Company's advisors to proceed as discussed.

        Following the Board meeting, Morgan Stanley and Switz contacted their respective counterparts at each of Company A and Parent to explain the dual-track process to each party. The companies were informed that neither party would receive exclusivity, and each party would have access to management personnel and Company information to conduct their remaining diligence. Each would be expected to deliver its best proposal on value, along with a mark-up of a definitive agreement (to be delivered by

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the Company) that each would be prepared to sign, to the Company by Friday, July 9, 2010. Morgan Stanley and Switz reminded their counterparts at each company that, in addition to value, the Board would seriously consider the certainty and timing associated with each proposal.

        The Company arranged for two days of in-person, in-depth management presentations and diligence discussions to be held at an offsite location in the Twin Cities with each party during the two weeks of June 21 and 28, 2010, and also arranged for visits to select Company plants around the world by each party. In addition, the Company provided additional confidential information to each party.

        Also, on June 22, 2010, Morgan Stanley delivered a proposed agreement and plan of merger (the "Draft Agreement") prepared by Dorsey, in consultation with the Company and Morgan Stanley, to each party's financial advisor. Also during the week of June 21, 2010, Dorsey's antitrust counsel began working with their counterparts at the law firms representing Company A and Parent in order to assess the parties' respective competition law considerations. In addition, the Company made Dorsey's corporate counsel available to each party's legal counsel to discuss any questions with respect to the Draft Agreement.

        In addition to the due diligence contacts occurring in the three-week period prior to the delivery of final indications of interest, Morgan Stanley was in contact with the financial advisors for each of Company A and Parent, confirming with each that July 9, 2010, was a firm deadline, and urging each to present whatever it could to convince the Company as to certainty and timing.

        During the week of July 5, 2010, representatives of the Company and Dorsey had several discussions with counsel for each of the parties regarding the Draft Agreement.

        At the Board's request, during the week of July 5, 2010, the Company engaged Houlihan Lokey Howard & Zukin Financial Advisors, Inc. ("Houlihan Lokey") to render an opinion regarding the fairness, from a financial point of view, of the consideration to be received by holders of Company Common Stock in a possible transaction with either Company A or Parent. Also during that week, Company management provided information requested by Houlihan Lokey in connection with its financial analysis. In addition to Houlihan Lokey's experience, Houlihan Lokey was retained because it was familiar with the Company from its work on prior opinion assignments for the Company, and also because it had not been engaged previously by the Company to provide other types of financial advisory services.

        At the close of business on July 9, 2010, Company A delivered its updated indication of interest letter, along with its mark-up of the Draft Agreement (a copy of which it had previously delivered on July 8, 2010). Company A continued to offer a price per share of $12.50, subject to further diligence and its board's approval. Company A also requested exclusivity through July 18, 2010. The Company A CEO also contacted Spivey that day to reinforce that Company A remained serious about making the transaction occur.

        Also at the close of business on July 9, 2010, Parent delivered its updated indication of interest letter, reflecting an updated price of $11.75 per share, and its mark-up of the Draft Agreement. In addition, Parent delivered a detailed draft communications plan leading up to announcement and a proposed draft press release announcing a transaction with the Company.

        On July 10, 2010, Company management, Morgan Stanley and Dorsey met to compare the competing proposals from Company A and Parent and discuss next steps. Company management, Morgan Stanley and Dorsey evaluated the proposals on the criteria that the Board had established (value, certainty and timing) and noted that, while Company A's proposal represented superior value to Parent's proposal, Company A's proposal was significantly disadvantaged as to the other two criteria. Following the meeting, Morgan Stanley contacted the financial advisor for Company A to discuss the status of the process, to alert Company A that its proposal was disadvantaged as to certainty and timing when compared to the proposal submitted by Parent and to suggest how Company A could

17



improve its proposal. Also, following the meeting, Switz contacted the Company A Executive to convey a similar message regarding Company A's proposal.

        For the remainder of the day, Dorsey separately negotiated the Draft Agreement with counsel for each of Parent and Company A. At the end of July 10, 2010, the Draft Agreement was largely negotiated with Parent in a form substantially satisfactory to the Company, with few issues remaining to be resolved. At the same time, there were many more significant issues with the Draft Agreement as negotiated with Company A. Dorsey, Morgan Stanley and management of the Company all informed their counterparts that the mark-up submitted by Company A still had significant issues that directly affected certainty and timing. Morgan Stanley also informed Company A's financial advisor that no exclusivity would be forthcoming at this stage, based on the draft document. Company A was provided an opportunity to present revisions to its Draft Agreement on the following day, in advance of the upcoming Company Board meeting on Sunday evening, July 11, 2010.

        On July 11, 2010, counsel to Parent and Dorsey resolved the few remaining substantive issues in the Draft Agreement with Parent. During the afternoon of July 11, 2010, the Company received Company A's proposed modifications to the Draft Agreement, which were reviewed by the management team, Dorsey and Morgan Stanley. The proposed modifications still left significant issues open, and reflected positions that were not as favorable to the Company as the terms that had been negotiated with Parent, such as continuing to request a termination fee materially in excess of the 3% termination fee to which Parent had previously agreed. Following the July 10, 2010, negotiations between Dorsey and Company A and the revisions to the Draft Agreement submitted by Company A on July 11, 2010, Company A's proposal remained disadvantaged relative to the proposal submitted by Parent with respect to the principal factors of certainty and timing.

        Also, in the afternoon of July 11, 2010, Morgan Stanley informed Parent's financial advisor that Parent's proposal was not competitive with respect to value, and that Parent would not be granted an exclusivity period at the current valuation. The financial advisor for Parent responded later in the afternoon by informing Morgan Stanley that Parent would not improve the per share price contained in its proposal unless the Company provided Parent with meaningful price guidance, a revised Draft Agreement reflecting the current status of negotiations between those parties and a timing commitment for the Board's prompt consideration of its possible revised proposal.

        During the early evening of July 11, 2010, the Board convened a telephonic meeting with management, Morgan Stanley and Dorsey present, to be updated as to the status of the two proposals. Morgan Stanley updated the Board as to, and compared, the valuation and key business terms of the two proposals presented on July 9, 2010. Morgan Stanley also updated the Board with respect to its discussions with the respective financial advisor for each of the parties that occurred over the weekend up to the point of the meeting. Morgan Stanley specifically noted that Company A had not increased its proposed purchase price of $12.50 per share since its June 11, 2010, proposal. Morgan Stanley also reported to the Board Parent's stated requirements relating to certainty and timing for its consideration of an improved valuation, as described in the preceding paragraph. Dorsey then reviewed, in detail, the two competing Draft Agreements submitted by the parties, as updated by subsequent negotiations with each party prior to the Board meeting. Dorsey noted the current status of the two agreements, with an expectation of significant, time-consuming negotiations remaining with Company A, and a relatively quick process to signing a Draft Agreement with Parent. Morgan Stanley then reviewed with the Board certain tactical alternatives for proceeding with each party. The tactical alternatives were evaluated in terms of their effectiveness in producing a revised proposal which would achieve the Board's goals of value to the Company's shareowners, certainty of closing and timing. The Board also considered the risks associated with the proposed tactical alternatives. Specifically, the Board considered the risk that either party might exit the process at any time, that such risk was likely to increase as the process extended, the risk associated with the additional time required to negotiate and execute a definitive agreement with Company A, the risk that Parent would not improve its proposed purchase price sufficiently to remain viable in the process, and the risk presented by Parent's stated requirements for

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considering an improved valuation. After discussion with Morgan Stanley, Dorsey and management, the Board formed a consensus as to a process that it believed would achieve the best combination of value, certainty and timing for the Company's shareowners. The Board also discussed the conditions under which a short period of exclusivity could be granted to either party, concluding that exclusivity could only be granted at the time when a party had submitted a proposal which satisfied a combination of value, certainty and timing and such proposal was capable of being executed within a very short timeframe.

        At that point in the meeting, all members of management present, including Switz, left the meeting and Spivey called a meeting of the Special Committee to order. The members of the Special Committee then discussed with Morgan Stanley and Dorsey various differences between the two proposals, including competition law (particularly United States), filing matters and negotiation and timing risks. Based on this discussion, the Special Committee considered that the terms of the Draft Agreement negotiated with Parent and the other risks and matters considered suggested that the certainty and timing factors were more favorable with Parent compared to Company A. The Special Committee then revisited with Morgan Stanley mechanisms by which the value portion of Parent's bid could be improved, while maintaining the viability of Company A's bid in the event that Parent's bid could not be improved. The Special Committee also explored the comparative value of the bids as they existed at the time of the meeting.

        Spivey then invited Switz and the other members of management to return to the meeting, and the Board meeting was reconvened. After further discussion with management, particularly with Switz, as to the current status of the two bids and means to improve each of them, the Board authorized the transaction team to negotiate further with each party. The Board also authorized granting a very short window of exclusivity to Parent if it would increase its proposed purchase price to $12.75 per share in cash. At that price, the Board believed that all three factors of value, certainty and timing would have been met to the Board's satisfaction with Parent. In addition, the Board authorized the transaction team to negotiate the best possible terms of the Draft Agreement with Company A in the event that Parent did not agree to increase sufficiently its proposed purchase price.

        Promptly after the Board meeting adjourned, Morgan Stanley contacted Parent's financial advisor and offered a short period of exclusivity to consummate a transaction if Parent would increase its proposed price per share to $12.75 in cash. Parent's financial advisor, noting that it expected to be able to respond with a definitive answer, requested a short period of time to contact Parent's executives.

        At or about the same time as Morgan Stanley was communicating with Parent's financial advisor after the Board meeting, the Company A Executive and Switz had a conversation in which the Company A Executive expressed Company A's displeasure with recent developments in the process, noting that Company A was considering re-evaluating its continued participation in the process. After further discussion, Switz informed the Company A Executive that, if the Board determined to move ahead with Company A, Switz would arrange for the Company A Executive, Switz and their companies' respective legal counsel to meet later that evening, or the following morning, to attempt to address the remaining significant open issues in the Company A mark-up of the Draft Agreement.

        Very shortly after concluding that call, Switz was contacted by an executive of Parent and, concurrently, Morgan Stanley was contacted by Parent's financial advisor, each with the same response to the Company's proposal: Parent would offer a purchase price of $12.75 per share in cash only if the Company would immediately enter into an exclusivity agreement with Parent, the Company's Board would be in a position to hold a meeting after the major U.S. stock exchanges (the "U.S. Exchanges") closed on Monday, July 12, 2010, for the purpose of considering and approving a transaction with Parent, and the Company would be in a position to announce the transaction prior to the opening of the U.S. Exchanges on Tuesday, July 13, 2010. Consistent with the alternative processes authorized by the Board earlier that evening to obtain the best combination of value, timing and certainty for the Company's shareowners, the Company agreed to Parent's conditions. Shortly after those concurrent

19



discussions concluded, the parties entered into an exclusivity letter during the evening of July 11, 2010 that prohibited the Company from soliciting or continuing negotiations with any other party for a period ending at the time that the U.S. Exchanges opened on Wednesday, July 14, 2010.

        From that point during the evening of July 11, 2010, until the evening of July 12, 2010, the Company's management, Morgan Stanley and Dorsey, and Parent's management, financial and legal advisors negotiated and finalized the Draft Agreement and communications plan. The Company also provided to Parent the last remaining requested items of due diligence during July 12, 2010.

        The Board convened a meeting after the close of the U.S. Exchanges in the early evening of July 12, 2010. Also present were members of senior management, Morgan Stanley, Dorsey and Houlihan Lokey. Switz provided an update to the Board of the activity occurring following the conclusion of the Board's meeting on July 11, 2010, noting that the Company had entered into a short-term exclusivity arrangement with Parent, that the Draft Agreement was almost completely negotiated and that the communications plan was progressing well.

        Following Switz's update, Spivey then convened a meeting of the Special Committee. At Spivey's request, Dorsey reviewed, in detail, the terms and conditions of the proposed Merger Agreement with Parent. Dorsey also reviewed with the directors their fiduciary duties under Minnesota law. Also at this meeting, each of Morgan Stanley and Houlihan Lokey separately reviewed with the Board its financial analysis of the $12.75 per share consideration and rendered to the Board an oral opinion, which was confirmed by delivery of separate written opinions, each dated July 12, 2010. Morgan Stanley's opinion was to the effect that, as of July 12, 2010, and based on and subject to the assumptions made, matters considered and qualifications and limitations on the scope of the review undertaken by Morgan Stanley, as described in its opinion, the Offer Price to be received by the holders of shares of Company Common Stock pursuant to the Merger Agreement was fair from a financial point of view to such holders. Houlihan Lokey's opinion was to the effect that, as of July 12, 2010, and based on and subject to the matters described in its opinion, the $12.75 per share consideration to be received in the Offer and the Merger, taken together, by holders of shares of Company Common Stock (other than Parent, Sub and their respective affiliates) was fair, from a financial point of view, to such holders. (The projections which Morgan Stanley and Houlihan Lokey utilized were delivered to them by the Company's management prior to this meeting, and the "upside case" of those projections was identical to the projections delivered to Parent by the Company during its due diligence on the Company. For more information regarding the projections supplied by the Company, see "Item 8: Additional Information—Projections" of this Statement.) After deliberation, the Special Committee then unanimously approved the transactions contemplated by the Merger Agreement for purposes of applicable Minnesota law, and recommended approval to the full Board.

        The Special Committee then adjourned and the full Board convened a meeting. The Board, after further deliberation, then unanimously (i) approved the Merger Agreement, including the Top-Up Option contained therein, the Offer and the Merger; (ii) determined that the terms of the Offer, the Merger and the Merger Agreement were fair to and in the best interests of the holders of the Company's shares of common stock; and (iii) recommended that such holders accept the Offer and tender their shares into the Offer and, if a shareholder meeting to approve the Merger were necessary, such holders vote any shares held by them at such time in favor of the Merger.

        On the evening of July 12, 2010, the Merger Agreement was executed by the Company and Parent. Prior to the U.S. Exchanges opening on July 13, 2010, Parent and the Company issued a press release announcing the execution of the Merger Agreement. The Merger Agreement is summarized in Section 13 of the Offer to Purchase.

        On July 26, 2010, Purchaser commenced the Offer.

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Reasons for the Board's Recommendation

        In evaluating the Merger Agreement and the transactions contemplated thereby, and making its recommendations to the holders of Shares, the Board consulted with the Company's senior management, legal counsel and Morgan Stanley and considered a number of factors. The Board viewed the following material factors as supporting its recommendation to the holders of Shares.

        The Board did not assign relative weights to the following factors or determine that any one factor was of particular importance relative to the other factors. Rather, the members of the Board viewed their position and recommendations as being based on the totality of the information presented to and considered by them.

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22


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        In evaluating the Merger Agreement and the transactions contemplated thereby, and making its recommendation to the holders of Shares, the Board (in consultation with the Company's senior management, legal counsel and Morgan Stanley) considered a number of risks, uncertainties and other countervailing factors. The Board considered the following material risks, uncertainties and other countervailing factors in formulating its recommendation.

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Opinion of Morgan Stanley & Co. Incorporated

        Morgan Stanley was retained by the Board to provide it with financial advisory services and a financial opinion in connection with the proposed transaction. The Company selected Morgan Stanley to act as its financial advisor based on Morgan Stanley's qualifications, expertise and reputation and its knowledge of the business and affairs of the Company. At the meeting of the Board on July 12, 2010, Morgan Stanley rendered its oral opinion to the Board, which opinion was subsequently confirmed in writing that, as of that date, based upon and subject to the assumptions made, matters considered and qualifications and limitations on the scope of review undertaken by Morgan Stanley, as set forth in its opinion, the Offer Price to be received by the holders of Shares pursuant to the Merger Agreement was fair, from a financial point of view, to the holders of Shares.

        The full text of Morgan Stanley's written fairness opinion, dated July 12, 2010, is attached as Annex B to this document. You should read the opinion in its entirety for a discussion of the assumptions made, procedures followed, factors considered and limitations upon the review undertaken by Morgan Stanley in rendering the opinion. This summary is qualified in its entirety by reference to the full text of such opinion. Morgan Stanley's opinion is directed to the Board and addresses only the fairness from a financial point of view of the Offer Price pursuant to the Merger Agreement to holders of Shares as of the date of the opinion. It does not address any other aspects of the Offer or the Merger and does not constitute a recommendation to any shareowner of the Company as to whether to participate in the Offer or how to vote at any shareowners' meeting related to the Merger or take any other action with respect to the proposed transaction.

        In arriving at its opinion, Morgan Stanley, among other things:

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        In arriving at its opinion, Morgan Stanley assumed and relied upon, without independent verification, the accuracy and completeness of the information that was publicly available or supplied or otherwise made available to Morgan Stanley by the Company, which information formed a substantial basis for this opinion. With respect to the financial projections, including information relating to certain strategic, financial and operational benefits anticipated from the Offer and the Merger, Morgan Stanley assumed that they had been reasonably prepared on bases reflecting the best currently available estimates and judgments of the management of the Company of the future financial performance of the Company. In addition, Morgan Stanley assumed that the Offer and the Merger will be consummated in accordance with the terms set forth in the Merger Agreement without any waiver, amendment or delay of any terms or conditions. Morgan Stanley assumed that in connection with the receipt of all the necessary governmental, regulatory or other approvals and consents required for the proposed offer and merger, no delays, limitations, conditions or restrictions will be imposed that would have a material adverse effect on the contemplated benefits expected to be derived in the proposed offer and merger. Morgan Stanley is not a legal, tax, or regulatory advisor. Morgan Stanley is a financial advisor only and relied upon, without independent verification, the assessment of the Company and its legal, tax, or regulatory advisors with respect to legal, tax, or regulatory matters. Morgan Stanley expressed no opinion with respect to the fairness of the amount or nature of the compensation to any of the Company's officers, directors or employees, or any class of such persons, relative to the consideration to be received by the holders of Shares in the transaction. Morgan Stanley did not make any independent valuation or appraisal of the assets or liabilities of the Company, nor was Morgan Stanley furnished with any such appraisals. Morgan Stanley's opinion was necessarily based on financial, economic, market and other conditions as in effect on, and the information made available to Morgan Stanley as of, the date of the opinion. Events occurring after the date of the opinion may

26



affect Morgan Stanley's opinion and the assumptions used in preparing it, and Morgan Stanley did not assume any obligation to update, revise or reaffirm its opinion.

        In arriving at its opinion, Morgan Stanley was not authorized to solicit, and did not solicit, interest from any party with respect to the acquisition, business combination or other extraordinary transaction, involving the Company.

        The following is a summary of the material financial analyses performed by Morgan Stanley in connection with its oral opinion and the preparation of its written opinion to the Board. The financial analyses summarized below include information presented in tabular format. In order to fully understand the financial analyses used by Morgan Stanley, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses. The analyses listed in the tables and described below must be considered as a whole; considering any portion of such analyses and of the factors considered, without considering all analyses and factors, could create a misleading or incomplete view of the process underlying Morgan Stanley's fairness opinion.

        For purposes of its financial analyses, Morgan Stanley relied on three sets of projections prepared by the Company's management: a downside case, a base case and an upside case (collectively and as adjusted as explained below, the "Company Projections").

        For the purposes of its financial analysis, when Morgan Stanley calculated the Company's current amount of cash and cash equivalents, it adjusted for actual and projected proceeds, based on the Company management figures, related to the sale of the Company's holdings of certain auction rate securities since the Company's last reported balance sheet information as of April 2, 2010. Morgan Stanley also included in the current amount of cash and cash equivalents the $56.5 million in proceeds the Company has received from its announced settlement agreement with Merrill Lynch regarding certain auction rate securities. Morgan Stanley also included in cash and cash equivalents certain of the Company's investments in corporate commercial paper, CDs and bonds as well as government bonds, which are classified as current and long-term available-for-sale securities on the Company's balance sheet.

ADC Trading Range Analysis

        Morgan Stanley reviewed the historical trading range of Shares for various periods ending July 9, 2010.

        Morgan Stanley noted that, as of July 9, 2010, the closing price for Shares was $8.83.

        Morgan Stanley also noted that, for the last twelve months ended July 9, 2010 the maximum closing price for Shares was $9.70, the minimum closing price for Shares was $5.31 and the volume-weighted average price, rounded to the nearest $0.25, was $7.50.

ADC Equity Research Price Target Analysis

        Morgan Stanley reviewed the price targets for the Shares prepared and published by equity research analysts. These targets reflect each analyst's estimate of the future public market-trading price of Shares and are not discounted to reflect present value. The range of undiscounted price targets for Shares as of July 9, 2010 was $8.00 to $13.00, with a median of $10.00.

        In order to better compare the published price targets with the Offer Price for each Share, Morgan Stanley discounted the published price targets by an assumed cost of equity of 14.0% for an illustrative one-year period. On a discounted basis, rounded to the nearest $0.25, the range of price targets for Shares as of July 9, 2010, was $7.00 to $11.50, with a median of $8.75.

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        The public market trading price targets published by securities research analysts do not necessarily reflect current market trading prices for Shares and these estimates are subject to uncertainties, including the future financial performance of the Company and future financial market conditions.

Comparable Company Analysis

        Morgan Stanley reviewed and compared, using publicly available information, certain current and historical financial information for the Company corresponding to current and historical financial information, ratios and public market multiples for other companies that share similar business characteristics with the Company. The following list sets forth the selected comparable companies that were reviewed in connection with this analysis:

        Morgan Stanley analyzed the following statistics for comparative purposes:

        The following table reflects the results of the analysis and the corresponding multiples for the Company based on the representative ranges of adjusted EBITDA and adjusted EPS estimates for these companies:

 
  Aggregate Value /
2010E Adjusted
EBITDA
  Stock Price / 2011E
Adjusted EPS
 

Range Derived from Comparable Companies

    6.0x - 7.0x     10.0x - 13.0x  

Implied Per Share Value of ADC Common Stock, Rounded to the Nearest $0.25

             
 

—Downside Case

  $ 8.75 - 10.00   $ 5.25 - 7.00  
 

—Base Case

  $ 9.00 - 10.25   $ 7.50 - 9.75  
 

—Upside Case

  $ 9.00 - 10.50   $ 9.75 - 12.75  

No company utilized in the comparable company analysis is identical to the Company. In evaluating the comparable companies, Morgan Stanley made judgments and assumptions with regard to industry performance, general business, economic, market and financial conditions and other matters, many of which are beyond the control of the Company, such as the impact of competition on the businesses of the Company and the industry generally, industry growth and the absence of any adverse material change in the financial condition and prospects of the Company or the industry or in the financial

28



markets in general. Mathematical analysis (such as determining the average or median) is not in itself a meaningful method of using comparable company data.

Discounted Equity Value Analysis

        Morgan Stanley performed a discounted equity value analysis, which is designed to provide insight into the potential future price of a company's common equity as a function of the company's future earnings and an assumed stock price to next-twelve-months adjusted EPS multiple. The resulting value is subsequently discounted to arrive at an estimate of the present value for the company's potential future stock price.

        Morgan Stanley calculated ranges of implied equity values per share for the Company as of June 30, 2010. In arriving at the estimated equity values per Share, Morgan Stanley applied both a 15.0x and 12.0x stock price to next-twelve-months adjusted EPS multiple to the Company's expected 2011 and 2012 adjusted EPS as of September 30, 2010 and September 30, 2011, respectively, to calculate a potential future stock price. Morgan Stanley then discounted that equity value to June 30, 2010 using an assumed cost of equity of 14.0%.

        Based on these calculations, this analysis implied value ranges for Shares, rounded to the nearest $0.25, as shown on the table below.

 
  12.0x Stock Price /
Next-Twelve-Months
Adjusted EPS
  15.0x Stock Price /
Next-Twelve-Months
Adjusted EPS
 

Implied Per Share Value of ADC Common Stock, Rounded to the Nearest $0.25

             
 

—Downside Case

  $ 5.75 - 6.25   $ 7.25 - 7.75  
 

—Base Case

  $ 8.50 - 9.25   $ 10.75 - 11.50  
 

—Upside Case

  $ 11.00 - 12.25   $ 13.75 - 15.25  

Discounted Cash Flow Analysis.

        Morgan Stanley performed a discounted cash flow analysis, which is designed to provide an implied value of a company by calculating the present value of the estimated future cash flows and terminal value of the Company. Morgan Stanley calculated a range of implied equity values per share of common stock of the Company based on estimates of future cash flows for calendar years 2010 through 2015. In preparing its analysis, Morgan Stanley relied upon Company Projections with respect to the future financial performance of the Company for fiscal years 2010 through 2013 (downside case and base case) or 2012 (upside case). The forecasts for 2013 or 2014 through 2015 used in the discounted cash flow analysis were extrapolated from the last year of estimates in the Company Projections and were reviewed and approved by the Company's management. Morgan Stanley first calculated the estimated "unlevered free cash flows" (calculated as adjusted EBITDA less taxes at a normalized rate of 35% on adjusted operating income, less the amount of any increase or plus the amount of any decrease in net working capital, less capital expenditures and, if applicable, less restructuring charges) of the Company for the period from June 30, 2009 to September 30, 2015, assuming a normalized tax rate of 35.0%. Morgan Stanley then calculated a terminal value for the Company by applying a range of perpetual growth rates to the unlevered free cash flow after 2015 ranging from 3.0% to 3.5%. These values were then discounted to present values as of June 30, 2010 assuming a range of discount rates between 12.0% and 14.0% to calculate an aggregate value for the Company. This aggregate value was further adjusted for the Company's total debt, minority interest, cash and cash equivalents, to calculate a range of implied equity value per share. Morgan Stanley also separately calculated the present value of certain of the Company's tax assets, including the Company's existing U.S. federal net operating loss carry-forwards and existing goodwill amortization, which was

29



then added to the aggregate value of the Company. In calculating the present value of the Company's tax assets, Morgan Stanley assumed a 35% tax rate on U.S. income and used the same range of perpetual growth rates and discount rate assumptions as used to calculate the present value of the unlevered free cash flows.

 
  Excluding the
Company's Tax Assets
  Including the
Company's Tax Assets
 

Implied Per Share Value of ADC Common Stock, Rounded to the Nearest $0.25

             
 

—Downside Case

  $ 6.50 - 8.00   $ 8.25 - 10.00  
 

—Base Case

  $ 8.75 - 10.75   $ 11.00 - 13.25  
 

—Upside Case

  $ 9.25 - 11.75   $ 12.00 - 14.50  

Premiums Paid Analysis

        Morgan Stanley reviewed the premiums paid in acquisition transactions from September 2004 to July 2010. The acquisition transactions reviewed by Morgan Stanley were limited to those transactions that involved all-cash consideration with a transaction value greater than $500 million and where the target company was a U.S.- or Canadian-based public company in the technology industry. Morgan Stanley reviewed the premium paid to the target company's stock price 30 days prior to the announcement date for each transaction. In certain cases, the premium was adjusted to reflect the presence of information or speculation in the public domain regarding a transaction prior to the formal announcement date. Morgan Stanley noted that, for the last 50 transactions, the median premium paid was 34%, with the top of the third quartile being 43% and the top of the first quartile being 25%.

        Morgan Stanley applied a premium range of 25% to 45% to the Company's stock price as of July 9, 2010 of $8.83. The range of the Company's implied stock prices, rounded to the nearest $0.25, was $11.00 to $12.75.

        No company or transaction utilized in the premiums paid analysis is identical to the Company, Parent or this specific transaction. In evaluating the precedent transactions, Morgan Stanley made judgments and assumptions with regard to general business, market and financial conditions and other matters, which are beyond the control of the Company and Parent, such as the impact of competition on the business of the Company, Parent or the industry generally, industry growth and the absence of any material adverse change in the financial condition of the Company, Parent or the industry or in the financial markets in general, which could affect the public trading value of the companies and the value of the transactions to which they are being compared.

Illustrative Financial Sponsor Analysis

        Morgan Stanley performed a hypothetical leveraged buyout analysis to determine the prices at which a financial sponsor would effect a leveraged buyout of the Company. Morgan Stanley assumed a transaction date of September 30, 2010 and a ratio of total debt to last-twelve-months adjusted EBITDA at the transaction date of 4.0x. Morgan Stanley also assumed a subsequent exit transaction by the financial sponsor at September 30, 2013 with a valuation of the Company realized by the financial sponsor in such subsequent exit transaction based on a 6.0x aggregate value to next-twelve-months adjusted EBITDA ratio and the Company's estimated total debt and cash and cash equivalents balances as of September 30, 2013. The implied acquisition price per share paid by the financial sponsor was based on a target range of internal rates of return for the financial sponsor between September 30, 2010 and September 30, 2013 of 20% to 25%.

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        Based on this analysis, the range of implied acquisition prices per share is shown in the table below.

Implied Per Share Value of ADC Common Stock, Rounded to the Nearest $0.25

       
 

—Downside Case

  $ 7.75 - 8.25  
 

—Base Case

  $ 9.25 - 10.00  
 

—Upside Case

  $ 10.00 - 10.75  

General

        In connection with the review of the Offer and the Merger by the Board, Morgan Stanley performed a variety of financial and comparative analyses for purposes of rendering its opinion. The preparation of a financial opinion is a complex process and is not necessarily susceptible to a partial analysis or summary description. In arriving at its opinion, Morgan Stanley considered the results of all of its analyses as a whole and did not attribute any particular weight to any analysis or factor it considered. Morgan Stanley believes that selecting any portion of its analyses, without considering all analyses as a whole, would create an incomplete view of the process underlying its analyses and opinion. In addition, Morgan Stanley may have given various analyses and factors more or less weight than other analyses and factors, and may have deemed various assumptions more or less probable than other assumptions. As a result, the ranges of valuations resulting from any particular analysis described above should not be taken to be Morgan Stanley's view of the actual value of the Company. In performing its analyses, Morgan Stanley made numerous assumptions with respect to industry performance, general business, regulatory, economic, market and financial conditions and other matters. Many of these assumptions are beyond the control of the Company. Any estimates contained in Morgan Stanley's analyses are not necessarily indicative of future results or actual values, which may be significantly more or less favorable than those suggested by such estimates.

        Morgan Stanley conducted the analyses described above solely as part of its analysis of the fairness of the Offer Price pursuant to the Merger Agreement from a financial point of view, to the holders of Shares and in connection with the delivery of its opinion to the Board. These analyses do not purport to be appraisals or to reflect the prices at which Shares might actually trade.

        The offer price was determined through arm's-length negotiations between the Board and Parent and was approved by the Board. Morgan Stanley provided advice to the Board during these negotiations. Morgan Stanley did not, however, recommend any specific merger consideration to the Board or that any specific offer price constituted the only appropriate offer price for the Offer and/or the Merger.

        Morgan Stanley's opinion and its presentation to the Board was one of many factors taken into consideration by the Board in deciding to approve, adopt and authorize the Merger Agreement and to recommend the Offer. Consequently, the analyses as described above should not be viewed as determinative of the opinion of the Board with respect to the Offer Price or of whether the Board would have been willing to recommend a different offer price.

        Morgan Stanley's opinion was approved by a committee of Morgan Stanley investment banking and other professionals in accordance with its customary practice.

        Morgan Stanley is a global financial services firm engaged in the securities, investment management and individual wealth management businesses. Its securities business is engaged in securities underwriting, trading and brokerage activities, foreign exchange, commodities and derivatives trading, prime brokerage, as well as providing investment banking, financing and financial advisory services. Morgan Stanley, its affiliates, directors and officers may at any time invest on a principal basis or manage funds that invest, hold long or short positions, finance positions, and may trade or otherwise

31



structure and effect transactions, for their own account or the accounts of its customers, in debt or equity securities or loans of the Company, Parent, or any other company, or any currency or commodity, that may be involved in this transaction, or any related derivative instrument. During the two fiscal years prior to the date of Morgan Stanley's opinion, Morgan Stanley provided financial advisory and financing services for Parent and the Company and received fees in connection with such services. Morgan Stanley may also seek to provide such services to Parent in the future and expects to receive fees for the rendering of these services.

        For a description of the terms of Morgan Stanley's engagement, see the discussion under Item 5 below.

Opinion of Houlihan Lokey Howard & Zukin Financial Advisors, Inc.

        The Company retained Houlihan Lokey to render an opinion as to the fairness, from a financial point of view and as of the date of the opinion, of the $12.75 per Share consideration to be received in the Offer and the Merger, taken together, by holders of Shares (other than Parent, Purchaser and their respective affiliates). On July 12, 2010, at a meeting of the Board held to evaluate the Offer and the Merger, Houlihan Lokey rendered to the Board an oral opinion, which was confirmed by delivery of a written opinion dated July 12, 2010, to the effect that, as of that date and based on and subject to the procedures followed, assumptions made, qualifications and limitations in the review undertaken and other matters considered by Houlihan Lokey in the preparation of its opinion, the $12.75 per Share consideration to be received in the Offer and the Merger, taken together, by holders of Shares (other than Parent, Purchaser and their respective affiliates) was fair, from a financial point of view, to such holders.

        Houlihan Lokey's opinion was furnished for the use and benefit of the Board (in its capacity as such) in connection with its evaluation of the $12.75 per Share consideration, only addressed the fairness, from a financial point of view, of such consideration and did not address any other aspect or implication of the Offer or the Merger. The summary of Houlihan Lokey's opinion in this Statement is qualified in its entirety by reference to the full text of its written opinion, which is attached as Annex C. Houlihan Lokey's opinion should not be construed as creating any fiduciary duty on Houlihan Lokey's part to any party. Houlihan Lokey's opinion was not intended to be, and does not constitute, a recommendation to the Board, any security holder or any other person as to how to act or vote with respect to any matter relating to, or whether to tender Shares in connection with, the Offer or the Merger.

        In connection with its opinion, Houlihan Lokey made such reviews, analyses and inquiries as it deemed necessary and appropriate under the circumstances. Among other things, Houlihan Lokey:

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        Houlihan Lokey relied upon and assumed, without independent verification, the accuracy and completeness of all data, material and other information furnished, or otherwise made available, to it, discussed with or reviewed by it, or publicly available, and did not assume any responsibility with respect to such data, material and other information. In addition, the Company's management advised Houlihan Lokey, and Houlihan Lokey assumed, that the financial projections (and adjustments thereto) reviewed by Houlihan Lokey were reasonably prepared in good faith on bases reflecting the best currently available estimates and judgments of such management as to the future financial results and condition of the Company under the alternative business scenarios reflected therein, and Houlihan Lokey expressed no opinion with respect to such projections or the assumptions on which they were based. Houlihan Lokey relied upon and assumed, without independent verification, that there was no change in the business, assets, liabilities, financial condition, results of operations, cash flows or prospects of the Company since the respective dates of the most recent financial statements and other information, financial or otherwise, provided to Houlihan Lokey or the Company's recent public filings that would be material to Houlihan Lokey's analyses or opinion, and that there was no information or any facts that would make any of the information reviewed by Houlihan Lokey incomplete or misleading. In addition, Houlihan Lokey relied upon, without independent verification, the assessments of the Company's management as to (i) the existing and future products, technology and intellectual property of the Company and the risks associated with such products, technology and intellectual property, and (ii) regulatory matters and industry trends relating to, and the potential impact thereof on, the business of the Company. Houlihan Lokey assumed, with the Company's consent, that there would be no developments with respect to any of the foregoing that would have an effect on the Company or the Offer and the Merger that would be material to Houlihan Lokey's analyses or opinion.

        Houlihan Lokey relied upon and assumed, without independent verification, that (a) the representations and warranties of all parties to the Merger Agreement are true and correct, (b) each party to the Merger Agreement would fully and timely perform all of the covenants and agreements required to be performed by such party, (c) all conditions to the consummation of the Offer and the Merger would be satisfied without waiver, and (d) the Offer and the Merger would be consummated in a timely manner in accordance with the terms described in the Merger Agreement, without any amendments or modifications. Houlihan Lokey also relied upon and assumed, without independent verification, that (i) the Offer and the Merger would be consummated in a manner that complied in all respects with all applicable federal and state statutes, rules and regulations, and (ii) all governmental, regulatory, and other consents and approvals necessary for the consummation of the Offer and the Merger would be obtained and that no delay, limitations, restrictions or conditions would be imposed or amendments, modifications or waivers made that would have an effect on the Company or the Offer and the Merger that would be material to Houlihan Lokey's analyses or opinion.

        Furthermore, in connection with Houlihan Lokey's opinion, Houlihan Lokey was not requested to make, and did not make, any physical inspection or independent appraisal or evaluation of any of the assets, properties or liabilities (fixed, contingent, derivative, off-balance sheet or otherwise) of the Company or any other party, nor was Houlihan Lokey provided with any such appraisal or evaluation. Houlihan Lokey relied upon, without independent verification, the assessments of the Company's management and the Company's public filings as to certain outstanding litigation relating to, and

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pension and other liabilities of, the Company and assumed, with the Company's consent, that there would be no developments relating to any such liabilities that would be material to Houlihan Lokey's analysis or opinion. Houlihan Lokey did not estimate, and expressed no opinion regarding, the liquidation value of the Company or any entity or business. Houlihan Lokey did not undertake an independent analysis of any potential or actual litigation, regulatory action, possible unasserted claims or other contingent liabilities to which the Company is or may be a party or is or may be subject, or of any governmental investigation of any possible unasserted claims or other contingent liabilities to which the Company is or may be a party or is or may be subject.

        Houlihan Lokey was not requested to, and did not, (a) initiate or participate in any discussions or negotiations with, or solicit any indications of interest from, third parties with respect to the Offer or the Merger, the securities, assets, businesses or operations of the Company or any other party, or any alternatives to the Offer or the Merger, (b) negotiate the terms of the Offer or the Merger, or (c) advise the Board, the Company or any other party with respect to alternatives to the Offer or the Merger. Houlihan Lokey's opinion was necessarily based on financial, economic, market and other conditions as in effect on, and the information made available to it as of, the date of its opinion. Houlihan Lokey did not undertake, and is under no obligation, to update, revise, reaffirm or withdraw its opinion, or otherwise comment on or consider events occurring or coming to its attention after the date of its opinion. Houlihan Lokey's opinion did not purport to address potential developments in the credit, financial or stock markets, including, without limitation, the market for Shares. Houlihan Lokey did not express any opinion as to the price or range of prices at which Shares would trade at any time.

        Houlihan Lokey was not requested to opine as to, and its opinion did not express an opinion as to or otherwise address, among other things: (i) the underlying business decision of the Company, its security holders or any other party to proceed with or effect the Offer or the Merger, (ii) the terms of any arrangements, understandings, agreements or documents related to, or the form, structure or any other portion or aspect of, the Offer or the Merger (other than the per Share consideration to the extent expressly specified in Houlihan Lokey's opinion) or otherwise, including, without limitation, any repurchase or restructuring of, or other transactions or arrangements relating to, outstanding convertible notes of the Company, (iii) the fairness of any portion or aspect of the Offer or the Merger to the holders of any class of securities, creditors or other constituencies of the Company, or to any other party, except if and only to the extent expressly set forth in the last sentence of Houlihan Lokey's opinion, (iv) the relative merits of the Offer or the Merger as compared to any alternative business strategies that might exist for the Company or any other party or the effect of any other transaction in which the Company or any other party might engage, (v) the fairness of any portion or aspect of the Offer or the Merger to any one class or group of the Company's or any other party's security holders or other constituents vis-à-vis any other class or group of the Company's or such other party's security holders or other constituents (including, without limitation, the allocation of any consideration amongst or within such classes or groups of security holders or other constituents), (vi) whether or not the Company, its security holders or any other party is receiving or paying reasonably equivalent value in the Offer and the Merger, (vii) the solvency, creditworthiness or fair value of the Company or any other participant in the Offer or the Merger, or any of their respective assets, under any applicable laws relating to bankruptcy, insolvency, fraudulent conveyance or similar matters, or (viii) the fairness, financial or otherwise, of the amount, nature or any other aspect of any compensation to or consideration payable to or received by any officers, directors or employees of any party to the Offer or the Merger, any class of such persons or any other party, relative to the per Share consideration or otherwise. Furthermore, no opinion, counsel or interpretation was intended in matters that require legal, regulatory, accounting, insurance, tax or other similar professional advice. Houlihan Lokey assumed that such opinions, counsel or interpretations were or would be obtained from appropriate professional sources. Furthermore, Houlihan Lokey relied, with the Company's consent, on the assessments by the Company and its advisors as to all legal, regulatory, accounting, insurance and tax matters with respect to the Company and the Offer and the Merger. The issuance of Houlihan Lokey's

34



opinion was approved by an internal Houlihan Lokey committee authorized to approve opinions of this nature.

        In preparing its opinion to the Board, Houlihan Lokey performed a variety of analyses, including those described below. This summary is not a complete description of Houlihan Lokey's opinion or the financial analyses performed and factors considered by Houlihan Lokey in connection with its opinion. The preparation of a financial opinion is a complex analytical process involving various quantitative and qualitative judgments and determinations as to the most appropriate and relevant financial, comparative and other analytical methods employed and the adaptation and application of those methods to the particular facts and circumstances presented. Therefore, a financial opinion and its underlying analyses are not readily susceptible to summary description. Houlihan Lokey arrived at its ultimate opinion based on the results of all analyses undertaken by it and assessed as a whole and did not draw, in isolation, conclusions from or with regard to any one factor or method of analysis for purposes of its opinion. Accordingly, Houlihan Lokey believes that its analyses and the following summary must be considered as a whole and that selecting portions of its analyses, methodologies, and factors or focusing on information presented in tabular format, without considering all analyses, methodologies, and factors or the narrative description of the analyses, could create a misleading or incomplete view of the processes underlying Houlihan Lokey's analyses and opinion. Each analytical technique has inherent strengths and weaknesses, and the nature of the available information may further affect the value of particular techniques.

        In performing its analyses, Houlihan Lokey considered industry performance, general business, economic, market and financial conditions and other matters as they existed on, and could be evaluated as of, July 12, 2010, many of which are beyond the Company's control. Accordingly, the information may not reflect current or future market conditions. No company, business or transaction used in the analyses for comparative purposes is identical to the Company or the Offer and the Merger, and an evaluation of the results of those analyses is not entirely mathematical. Rather, the analyses involve complex considerations, judgments, and assumptions concerning financial and operating characteristics and other factors that could affect the acquisition, public trading or other values of the companies, business segments or transactions analyzed. Houlihan Lokey believes that mathematical derivations (such as determining an average or median) of financial data are not by themselves meaningful and should be considered together with judgments and informed assumptions. The assumptions and estimates contained in Houlihan Lokey's analyses and the reference ranges resulting from any particular analysis are not necessarily indicative of actual values or predictive of future results or values, which may be significantly more or less favorable than those suggested by its analyses. In addition, analyses relating to the value of assets, businesses or securities do not purport to be appraisals or to reflect the prices at which assets, businesses or securities actually may be sold. Accordingly, the assumptions and estimates used in, and the results derived from, Houlihan Lokey's analyses are inherently subject to substantial uncertainty.

        Houlihan Lokey's opinion and financial analysis provided to the Board in connection with its evaluation of the per Share consideration, from a financial point of view, were only one of many factors considered by the Board in its evaluation of the Offer and the Merger and should not be viewed as determinative of the views of the Board or management with respect to the Offer and the Merger or the consideration payable in the Offer and the Merger. Houlihan Lokey was not requested to, and it did not, recommend the specific consideration payable in the Offer and the Merger. The type and amount of the consideration payable in the Offer and the Merger was determined through negotiation between the Company and Parent, and the decision to enter into the Offer and the Merger was solely that of the Board.

        The following is a summary of the material financial analyses reviewed by Houlihan Lokey with the Board in connection with Houlihan Lokey's opinion dated July 12, 2010. The order of analyses does not represent relative importance or weight given to those analyses by Houlihan Lokey. The

35



financial analyses summarized below include information presented in tabular format. In order to fully understand Houlihan Lokey's financial analyses, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses. Considering the data in the tables below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying and the qualifications and evaluations affecting the analyses, could create a misleading or incomplete view of Houlihan Lokey's financial analyses. The implied per Share references ranges for the Company set forth below were calculated after taking into account, among other things, payments received by the Company as disclosed in the Company's public filings in connection with its recently settled litigation relating to its purchase of certain auction-rate securities and the estimated present values of (i) net operating loss carryforwards anticipated by the Company's management to be utilized by the Company, (ii) earn-out payments as estimated by the Company's management relating to the Company's prior acquisition of Shenzhen Century Man Communication Equipment Co., Ltd. and certain affiliated entities and (iii) estimated costs as disclosed in the Company's public filings relating to certain outstanding litigation involving the Company.

        Houlihan Lokey reviewed financial information of the Company and financial and stock market information for the following nine selected publicly held companies with operations in the broadband communications network infrastructure industry, which is the industry in which the Company operates:

Houlihan Lokey reviewed, among other things, enterprise values of the selected companies, calculated as market value, based on reported fully-diluted common shares outstanding and closing stock prices on July 9, 2010, plus debt outstanding, preferred stock, and minority interest, less cash and cash equivalents, as multiples of latest 12 months and estimated one fiscal year forward and two fiscal years forward (calendarized for the Company's September 30 fiscal year-end) revenue and earnings before interest, taxes, depreciation and amortization, referred to as EBITDA, as adjusted for certain items, referred to as adjusted EBITDA. Houlihan Lokey then applied a range of selected multiples of latest 12 months, one fiscal year forward, and two fiscal years forward revenue and adjusted EBITDA derived from the selected companies to the Company's latest 12 months (as of May 31, 2010) and fiscal years ending September 30, 2010 and 2011 revenue and adjusted EBITDA. Financial data for the Company were based on internal latest 12 months data and the base case projections prepared by the Company's management. Financial data for the selected companies were based on publicly available research analysts' estimates, public filings and other publicly available information. This analysis indicated the

36



following implied per Share reference ranges for the Company, as compared to the $12.75 per Share consideration:

 
  Implied Per Share
Reference Range Based On:
   
 
 
  Per Share
Consideration
 
 
  Revenue   Adjusted EBITDA  

Latest 12 Months (as of May 31, 2010)

    $8.92 - $11.06     $7.01 - $  9.24        

Fiscal Year Ending September 30, 2010

    $8.67 - $10.90     $7.30 - $  9.91   $ 12.75  

Fiscal Year Ending September 30, 2011

    $8.39 - $10.71     $7.27 - $10.20        

        Houlihan Lokey reviewed transaction values of the following 27 selected transactions announced between July 1, 2006, and July 9, 2010, involving companies with operations in the broadband communications network infrastructure industry, which is the industry in which the Company operates:

Acquiror   Target

•       HgCapital and CPS Partners LLP

 

•       Manx Telecom Ltd.

•       Francisco Partners II, L.P.

 

•       EF Johnson Technologies, Inc.

•       Comtech Telecommunications Corp.

 

•       CPI International, Inc.

•       JDS Uniphase Corporation

 

•       Agilent Technologies, Inc.

•       ZelnickMedia LLC; Sankaty Advisors LLC, GSO Capital Partners LP; S.A.C. Private Capital Group, LLC

 

•       Airvana, Inc.

•       Carlisle Companies Incorporated

 

•       Electronic Cable Specialists, Inc.

•       Aviat Networks, Inc.

 

•       Telsima Corp.

•       Ikanos Communications, Inc.

 

•       Conexant Systems, Inc. (Broadband Access Product Lines)

•       Miranda Technologies Inc.

 

•       NVISION, Inc.

•       Gilo Ventures LLC

 

•       Vyyo Inc.

•       Brocade Communication Systems, Inc.

 

•       Foundry Networks, Inc.

•       Comtech Telecommunications Corp.

 

•       Radyne Corporation

•       Digi International Inc.

 

•       Sarian Systems, Ltd.

•       Rostelecom OAO

 

•       RTComm.RU, OJSC

•       Resilience Capital Partners,  LLC

 

•       ASC Signal Corporation

•       Arris Group, Inc.

 

•       C-Cor, Incorporated

•       Ashmore Investment Management Limited

 

•       ECI Telecom Ltd.

•       CommScope, Inc.

 

•       Andrew Corporation

•       AVX Corporation

 

•       American Technical Ceramics Corp.

•       Harris Corporation

 

•       Multimax, Inc.

•       Sierra Wireless, Inc.

 

•       AirLink Communications, Inc.

•       Laird plc

 

•       Cushcraft Corporation

•       Belden Inc.

 

•       LTK Wiring Co.

•       Motorola, Inc.

 

•       Tut Systems, Inc.

•       Motorola, Inc.

 

•       Netopia, Inc.

•       Aviat Networks, Inc.

 

•       Stratex Networks, Inc.

•       Thrane & Thrane A/S

 

•       Thrane & Thrane Norge AS (Nera SatCom AS)

Houlihan Lokey reviewed, among other things, transaction values in the selected transactions, calculated as the purchase price paid for the target company's equity, plus debt outstanding and preferred stock, less cash and cash equivalents, as multiples of such target companies' latest 12 months revenue and EBITDA. Houlihan Lokey then applied a range of selected multiples of latest 12 months

37



revenue and EBITDA derived from the selected transactions to the Company's latest 12 months (as of May 31, 2010) revenue and adjusted EBITDA. Financial data for the Company were based on internal latest 12 months data prepared by the Company's management. Financial data for the selected transactions were based on publicly available information at the time of announcement of the relevant transaction. This analysis indicated the following implied per Share reference range for the Company, as compared to the $12.75 per Share consideration:

Implied Per Share
Reference Range Based On:
   
  Per Share
Consideration
Revenue   Adjusted EBITDA
$9.99 - $12.13   $9.24 - $11.47   $12.75

        Houlihan Lokey performed a discounted cash flow analysis of the Company by calculating the estimated net present value of the "unlevered free cash flows" (calculated as earnings before interest and taxes, as adjusted for certain items, less taxes at a normalized rate of 35% per the Company's management, less capital expenditures, less the amount of any increase or plus the amount of any decrease in net working capital, plus depreciation and amortization) that the Company was forecasted to generate through the fiscal year ending September 30, 2015. Estimated financial data of the Company utilized in this analysis were based on both the base case projections through fiscal year ending September 30, 2013 and the upside case projections through fiscal year ending September 30, 2012, each of which was prepared by the Company's management, and extrapolations provided to Houlihan Lokey, which were reviewed and approved by the Company's management, derived from such cases for subsequent periods through fiscal year ending September 30, 2015. Houlihan Lokey calculated terminal values for the Company by applying a range of perpetuity growth rates of 2.5% to 3.5% to the Company's fiscal year 2015 estimated unlevered free cash flow. The present values of the cash flows and terminal values were then calculated using discount rates ranging from 10.0% to 12.0%. This analysis indicated the following implied per Share reference range for the Company, as compared to the $12.75 per Share consideration:

Implied Per Share
Reference Range Based On:
   
  Per Share
Consideration
Base Case   Upside Case
$10.35 - $14.08   $11.66 - $15.88   $12.75

Miscellaneous

        In the ordinary course of business, certain of Houlihan Lokey's affiliates, as well as investment funds in which such affiliates may have financial interests, may acquire, hold or sell, long or short positions, or trade or otherwise effect transactions, in debt, equity, and other securities and financial instruments (including loans and other obligations) of, or investments in, the Company, Parent or any other party that may be involved in the Offer and the Merger and their respective affiliates or any currency or commodity that may be involved in the Offer and the Merger.

        Houlihan Lokey and certain of its affiliates in the past have provided certain financial advisory services to the Company and certain affiliates of Parent, for which Houlihan Lokey and such affiliates have received compensation. In addition, Houlihan Lokey and certain of its affiliates may provide investment banking, financial advisory and other financial services to the Company, Parent and their respective affiliates in the future, for which Houlihan Lokey and such affiliates may receive compensation.

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        For a description of the terms of Houlihan Lokey's engagement, see the discussion under Item 5 below.

(c)   Intent to tender.

        To the Company's knowledge after reasonable inquiry, all of the Company's executive officers and directors currently intend to tender all Shares held of record or beneficially owned by them pursuant to the Offer. The foregoing does not include any Shares over which, or with respect to which, any executive officer or director acts in a fiduciary or representative capacity or is subject to the instructions of a third party with respect to such tender.

Item 5.    PERSONS/ASSETS, RETAINED, EMPLOYED, COMPENSATED OR USED.

        Pursuant to a letter agreement dated February 2, 2010, the Company engaged Morgan Stanley to act as its financial advisor in connection with the contemplated transaction. Pursuant to the terms of this engagement letter, the Company has agreed to pay Morgan Stanley a transaction fee of approximately $12 million, payable upon the earlier of the closing of a strategic transaction involving the Company or the Acceptance Time. In addition, the Company has agreed to indemnify Morgan Stanley and its affiliates, their respective directors, officers, agents and employees and each person, if any, controlling Morgan Stanley or any of its affiliates against certain liabilities and expenses, including certain liabilities under the federal securities laws, related to or arising out of Morgan Stanley's engagement.

        Pursuant to a letter agreement, dated July 10, 2010, the Company engaged Houlihan Lokey to render an opinion to the Board with respect to the $12.75 per Share consideration to be received in the Offer and the Merger, and the Company has agreed to pay Houlihan Lokey an aggregate fee for such services of $450,000, which is not contingent upon the successful completion of the Offer or the conclusion reached in such opinion. The Company also agreed to reimburse Houlihan Lokey for reasonable out-of-pocket expenses incurred in connection with Houlihan Lokey's engagement, including fees and expenses of Houlihan Lokey's legal counsel, and to indemnify Houlihan Lokey for certain potential liabilities arising out of Houlihan Lokey's engagement.

        Neither the Company nor any person acting on its behalf has employed, retained or agreed to compensate any person to make solicitations or recommendations to the Company's shareowners concerning the Offer or the Merger.

Item 6.    INTEREST IN SECURITIES OF THE SUBJECT COMPANY.

        Except as set forth in Annex A and in the ordinary course of business in connection with the Company's employee benefit plans (including payroll contributions to the Company's 401(k) plan), during the past 60 days no transactions in the Shares have been effected by the Company or, to the best of the Company's knowledge, by any director, executive officer, affiliate or subsidiary of the Company.

Item 7.    PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS.

Subject Company Negotiations

        Except as set forth in this Statement, the Company is not undertaking or engaged in any negotiation in response to the Offer that relates to (a) an extraordinary transaction, such as a merger, reorganization or liquidation, involving the Company or any subsidiary of the Company, (b) a purchase, sale or transfer of a material amount of assets of the Company or any subsidiary of the Company, (c) a tender offer for or other acquisition of the Company's securities by the Company, any subsidiary of the Company, or any other person, or (d) a material change in the present dividend rate or policy, indebtedness or capitalization of the Company. As described in the summary of the Merger Agreement contained in the Offer to Purchase, the Board, in connection with the exercise of its fiduciary duties, is permitted under certain conditions to engage in negotiations in response to an unsolicited acquisition proposal.

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Transactions and Other Matters

        Except as set forth in this Statement, there is no transaction, resolution of the Board, agreement in principle, or signed contract that is entered into in response to the Offer that relates to or would result in one or more of the matters referred to in the immediately preceding paragraph of this Item 7.

Item 8.    ADDITIONAL INFORMATION.

Projections

        The Company's management provided to Parent certain projected financial information concerning the Company in connection with Parent's due diligence review of the Company. The projections provided by the Company's management to Parent were a set of "upside" case projections. The Company's management provided to each of Morgan Stanley and Houlihan Lokey the same upside case projections as were provided to Parent, along with two additional sets of projections—a "downside" case and a "base" case.

        These projections are subjective in many respects and, thus, susceptible to multiple interpretations and periodic revisions based on actual experience and business developments. The projections also reflect numerous estimates and assumptions of the Company's management with respect to general business, economic, market and financial conditions and other matters. These estimates and assumptions regarding future events are difficult to predict, and many are beyond the Company's control. Accordingly, there can be no assurance that the estimates and assumptions made by the Company in preparing these projections will be realized and actual results may be materially greater or less than those contained in these projections.

        The inclusion of the projections in this Statement should not be regarded as an indication that any of Parent, Purchaser, the Company or their respective affiliates or representatives consider the projections to be necessarily predictive of actual future events, and the projections should not be relied upon as such. These projections are being provided in this document only because the Company made the "upside" case available to Parent in connection with Parent's due diligence review of the Company and because, in addition to the "upside" case, the "base" case and, for purposes of Morgan Stanley's financial analyses, the "downside" case were utilized by each of Morgan Stanley and Houlihan Lokey in its financial analyses in connection with its opinion. None of Parent, Purchaser, the Company, or any of their respective affiliates or representatives makes any representation to any person regarding the projections by virtue of their inclusion in this Statement. The Company does not intend to update or otherwise revise the projections to reflect circumstances existing after the date when made or to reflect the occurrence of future events, even in the event that any or all of the assumptions underlying the projections are shown to be in error. In this regard, investors are cautioned not to place undue reliance on the projected information provided.

        The Company's projections were not prepared with a view to public disclosure or compliance with published guidelines of the SEC or the guidelines established by the American Institute of Certified Public Accountants regarding projections or forecasts. The projections do not purport to present operations in accordance with U.S. generally accepted accounting principles ("GAAP"), and the Company's independent auditors have not examined, compiled or performed any procedures with respect to the projections presented in this Statement, nor have they expressed any opinion or any other form of assurance of such information or the likelihood that the Company may achieve the results contained in the projections, and accordingly assume no responsibility for them.

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        The projections provided by the Company's management described above included the following:

 
  Downside Case
(in millions)
 
 
  FY10   FY11   FY12   FY13  

Revenue

  $ 1,142   $ 1,124   $ 1,152   $ 1,204  

Adjusted Gross Margin

    416     395     404     422  

Adjusted Operating Income

    88     84     88     101  

Free Cash Flow

    51     72     74     78  

 
  Base Case
(in millions)
 
 
  FY10   FY11   FY12   FY13  

Revenue

  $ 1,142   $ 1,189   $ 1,272   $ 1,342  

Adjusted Gross Margin

    416     426     448     471  

Adjusted Operating Income

    88     106     124     145  

Free Cash Flow

    51     80     97     116  

 
  Upside Case
(in millions)
 
 
  Q1   Q2   Q3   Q4   Total   FY11   FY12  

Revenue

  $ 266   $ 274   $ 302   $ 300   $ 1,142   $ 1,283   $ 1,430  

Adjusted Gross Margin

    92     100     113     111     416     440     479  

Adjusted Operating Income

    10     18     30     29     88     128     157  

EBITDA

    22     30     42     41     134     172     199  

Free Cash Flow

                            45     75     109  

Section 14(f) Information Statement

        The Information Statement attached as Annex A to this Statement is being furnished pursuant to Section 14(f) under the Exchange Act in connection with the possible designation by Parent, pursuant to the Merger Agreement, of certain persons to be appointed, other than at a meeting of the Company's shareowners, to the Board and to constitute a majority of the Board, as described in the Information Statement, and is incorporated herein by reference.

Shareholder Litigation

        Beginning on July 14, 2010, ten putative shareholder class action complaints challenging the transaction were filed in the District Court of Hennepin County, Minnesota, Fourth Judicial District against various combinations of Parent, Purchaser, the Company, the individual members of the Board, and one of the Company's non-director officers. The complaints generally allege, among other things, that the members of the Board breached their fiduciary duties owed to the public shareowners of the Company by entering into the Merger Agreement, approving the Offer and the proposed Merger and failing to take steps to maximize the value of the Company to its public shareowners, and that the Company, Parent and Purchaser aided and abetted such breaches of fiduciary duties. In addition, the complaints allege that the transaction improperly favors Parent; that certain provisions of the Merger Agreement unduly restrict the Company's ability to negotiate with rival bidders; and that Company shareowners have been deprived of the ability to make an informed decision as to whether to tender their shares. In several of these actions, plaintiffs also purport to bring derivative actions on behalf of the Company against the individual members of the Board, alleging that the individual members of the Board are wasting corporate assets, abusing their ability to control the Company and breaching their fiduciary duties. The complaints generally seek, among other things, declaratory and injunctive relief

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concerning the alleged fiduciary breaches, injunctive relief prohibiting the defendants from consummating the Merger and other forms of equitable relief.

Vote Required to Approve the Merger and Section 302A.621 of the MBCA

        Under Section 302A.621 of the MBCA, if Purchaser acquires, pursuant to the Offer, the Top-Up Option or otherwise, at least 90% of the outstanding Shares, Purchaser will be able to effect the Merger after consummation of the Offer without a vote by the Company's shareowners. If Purchaser acquires less than 90% of the outstanding Shares, the affirmative vote of the holders of a majority of the outstanding Shares will be required under the MBCA to effect the Merger. If Purchaser purchases Shares pursuant to the Offer, Purchaser will own a sufficient number of Shares to ensure approval of the Merger Agreement and the Plan of Merger regardless of the vote of any other shareowners. Purchaser has agreed to vote all of its Shares in favor of the Merger Agreement and the Plan of Merger.

Minnesota Law

        Under the MBCA and other Minnesota statutes, the Company is subject to several state takeover laws including, but not limited to, Section 302A.671 of the MBCA (the "Control Share Acquisition Act") and Section 302A.673 of the MBCA (the "Combination Act"). As described below, the Company has taken appropriate action in connection with its approval of the Merger Agreement and the consummation of the transactions contemplated thereby so that these laws do not affect the ability of Parent and the Purchaser to consummate the Offer or the Merger.

Minnesota Control Share Acquisition Act

        The Company is currently subject to the Control Share Acquisition Act, which provides that, absent certain exceptions, a person who becomes the beneficial owner of a new range of the voting power of the shares of an issuing publicly held Minnesota corporation (i.e., from less than 20% to 20% or more, from less than 331/3% to 331/3% or more, or from less than a majority to a majority) will lose voting rights with respect to the shares above any such new percentage level of voting control, in the absence of special shareholder approval. That approval can be obtained only by a resolution adopted by (i) the affirmative vote of the holders of a majority of the voting power of all shares entitled to vote, including all shares held by the acquiring person, and (ii) the affirmative vote of the holders of a majority of the voting power of all shares entitled to vote, excluding all "interested shares" (generally, shares held by the acquiring person, any officer of the issuing public corporation, or any director who is also an employee of the issuing public corporation). If such approval is not obtained, the issuing public corporation may redeem the shares that exceed the new percentage level of voting control at their market value. A shareholders' meeting to vote on whether to grant voting power to the acquiring person may not be held unless the acquiring person has delivered an information statement to the issuing public corporation. These provisions do not apply if the issuing public corporation's articles of incorporation or bylaws approved by the corporation's shareholders provide that the statute is inapplicable or if there is an applicable exception.

        The statute contains several exceptions, including an exception for cash tender offers (i) approved by a majority vote of the members of a committee composed solely of one or more disinterested directors of the issuing public corporation formed pursuant to MBCA Section 302A.673, subdivision 1, paragraph (d), prior to the commencement of, or the public announcement of the intent to commence, the offer, and (ii) pursuant to which the acquiring person will become the owner of over 50% of the voting stock of the issuing public corporation. Under MBCA Section 302A.673, a director or person is "disinterested" if the director or person is neither an officer nor an employee, nor has been an officer or employee within five years preceding the formation of the committee, of the publicly held Minnesota corporation or of a related organization. The Company's articles of incorporation and bylaws do not

42



exclude the Company from the restrictions imposed by the Control Share Acquisition Act. However, because a special committee of disinterested directors of the Board has approved the Merger Agreement and the transactions contemplated thereby, the restrictions of Section 302A.671 are inapplicable to the Merger Agreement and the transactions contemplated thereby, including the Offer, the Top-Up Option and the Merger.

Minnesota Business Combination Act

        The Company is currently subject to the Combination Act, which prohibits a publicly held Minnesota corporation, like the Company, from engaging in any "business combination," including a merger, with an "interested shareholder" (defined generally as any beneficial owner, directly or indirectly, of 10% or more of the voting power of the outstanding shares of such corporation entitled to vote) for a period of four years after the date of the transaction in which the person became an interested shareholder, unless, among other things, a committee of that corporation's board of directors comprised solely of one or more disinterested directors has given its approval of either the business combination or the transaction which resulted in the shareholder becoming an "interested shareholder" prior to the shareholder becoming an interested shareholder. Under the Combination Act, a director or person is "disinterested" if the director or person is neither an officer nor an employee, nor has been an officer or employee within five years preceding the formation of the committee, of the publicly held Minnesota corporation or of a related organization. However, because a special committee of disinterested directors of the Board has approved the Merger Agreement and the transactions contemplated thereby, the restrictions of Section 302A.673 are inapplicable to the Merger Agreement and the transactions contemplated thereby, including the Offer, the Top-Up Option and the Merger.

"Fair Price" Provision

        MBCA Section 302A.675 provides that an offeror may not acquire shares of a Minnesota publicly held corporation from a shareholder within two years following the offeror's last purchase of shares of the same class pursuant to a takeover offer, including, but not limited to, acquisitions made by purchase, exchange or merger, unless the selling shareholder is afforded, at the time of the proposed acquisition, a reasonable opportunity to dispose of the shares to the offeror upon substantially equivalent terms as those provided in the earlier takeover offer. The provision described above does not apply if the proposed acquisition of shares is approved, before the purchase of any shares by the offeror pursuant to the earlier takeover offer, by a committee of the board of directors of the corporation, comprised solely of directors who: (i) are not, nor have been in the preceding five years, officers or directors of the corporation or a related organization, (ii) are not the offerors in the takeover offer or any affiliates or associates of the offeror, (iii) were not nominated for election as directors by the offeror or any affiliates or associates of the offeror and (iv) were directors at the time of the first public announcement of the earlier takeover offer or were nominated, elected, or recommended for election as directors by a majority of the directors who were directors at that time. However, because a special committee of disinterested directors of the Board has approved the Merger Agreement and the transactions contemplated thereby, the restrictions of Section 302A.675 are inapplicable to the Merger Agreement and the transactions contemplated thereby, including the Offer, the Top-Up Option and the Merger.

Takeover Disclosure Statute

        The Minnesota Takeover Disclosure Law (the "Takeover Disclosure Statute"), Minnesota Statutes Sections 80B.01-80B.13, by its terms requires the filing of a registration statement (the "Minnesota Registration Statement") with specified disclosures with the Minnesota Commissioner of Commerce (the "Commissioner") with respect to any tender offer for shares of a corporation, such as the Company, that (i) has its principal place of business or principal executive office in Minnesota, or owns

43



and controls assets in Minnesota having a fair market value of at least $1,000,000 and (ii) has a certain number or percentage of shareholders resident in Minnesota or a specified percentage of its shares owned by Minnesota residents. The Purchaser will file the Minnesota Registration Statement with the Commissioner on the date of the Offer to Purchase. Although the Commissioner does not have an approval right with respect to the Offer, the Commissioner will review the Minnesota Registration Statement for the adequacy of disclosure and is empowered to suspend summarily the Offer in Minnesota within three business days of the filing if the Commissioner determines that the registration statement does not (or the material provided to beneficial owners of the Shares residing in Minnesota does not) provide adequate disclosure under Chapter 80B of the Minnesota Statutes. If this summary suspension occurs, the Commissioner must hold a hearing within 10 calendar days of the summary suspension to determine whether to permanently suspend the Offer in Minnesota, subject to corrective disclosure. If the Commissioner takes action to suspend the effectiveness of the Offer, this action may have the effect of significantly delaying the Offer. In filing the Minnesota Registration Statement, the Purchaser does not concede that some or all of the provisions of the Takeover Disclosure Statute are applicable, valid, enforceable or constitutional.

Antitrust Compliance

        Under the HSR Act and the rules that have been promulgated thereunder, certain acquisition transactions may not be consummated unless Premerger Notification and Report Forms have been filed with the Federal Trade Commission (the "FTC") and the Antitrust Division of the United States Department of Justice (the "Antitrust Division") and certain waiting period requirements have been satisfied. The purchase of Shares pursuant to the Offer is subject to such requirements. The Company currently anticipates filing a Premerger Notification and Report Form under the HSR Act with respect to the Offer with the Antitrust Division and the FTC on August 2, 2010. The waiting period applicable to the purchase of Shares pursuant to the Offer will expire at 11:59 p.m., New York City time, 15 calendar days after such filing, unless earlier terminated by the FTC or the Antitrust Division.

        However, before such time, the Antitrust Division or the FTC may extend the waiting period by requesting additional information or documentary material relevant to the Offer from the Company. If such a request is made, the waiting period will be extended until 11:59 p.m., New York City time, ten calendar days after the Company's substantial compliance with such request. Thereafter, such waiting period can be extended only by court order or agreement of Tyco Electronics, Purchaser, the Company and the Antitrust Division or the FTC, as applicable. The Company intends to make a request pursuant to the HSR Act for early termination of the waiting period applicable to the Offer. There can be no assurance, however, that the 15-day HSR Act waiting period will be terminated early.

European Union Approval

        The Company also intends to seek approval of the Offer and the Merger in the European Union ("EU"). Since the transaction is reportable under local merger control rules in at least three countries in the EU, the transaction is eligible for a single review at the EU level pursuant to Article 4(5) of the European Union Council Regulation (EEC) No. 139/2004. The Company must first submit to the European Commission ("EC") a reasoned submission (Form RS) and, thereafter, a formal notification (Form CO). The EC has 25 business days (beginning on the first business day following the date on which a complete formal notification is received), which period may be extended to 35 business days under certain circumstances, to issue a decision as to whether to clear the Offer and the Merger or to initiate a formal investigation. The EC will initiate a formal investigation if it finds that the Offer and the Merger gives rise to serious doubts as to its compatibility with the European common market and such doubts cannot be satisfied by remedial commitments offered by the parties during the initial review period. Alternatively, the EC could decide at the end of the initial review period not to oppose

44



the Offer and the Merger and declare it compatible with the European common market. If the EC initiates a formal investigation, it has 90 business days, which period may be extended by up to 35 business days under certain circumstances, following the decision to open the investigation to consider whether the Offer and the Merger will significantly impede effective competition in the European common market, or a substantial part of it, in particular as a result of the creation or strengthening of a dominant position in any market within the European Economic Area. At the end of this period, the EC will issue a decision, either declaring the Offer and the Merger compatible with the European common market or prohibiting its implementation.

People's Republic of China

        Under the Antimonopoly Law and implementing regulations, certain acquisition transactions may not be consummated unless notification has been filed with the Chinese authorities and certain review period requirements have been satisfied. The purchase of Shares pursuant to the Offer is subject to such requirements. The initial statutory review period is 30 working days from the date that the Chinese authorities deem the notification to be complete and formally accept it. The authorities may initiate a "Phase II" investigation which could extend the review period by 90 days or more.

Other Foreign Filings

        The Company and its subsidiaries own property and conduct business in a number of countries outside of the United States and the European Union. Based on the Company's review of the information currently available about the businesses in which the Company and its subsidiaries are engaged, in connection with the acquisition of Shares pursuant to the Offer and/or in the Merger, filings are required to be made under the antitrust and competition laws of a number of foreign jurisdictions, including Mexico, Russia and Ukraine, and may also be required to be made under the analogous laws of Brazil, Israel, Saudi Arabia, Taiwan and Vietnam. The Company expects to make all the necessary filings as expeditiously as possible.

Regulatory Review

        While the Company believes that either the required pre-merger notification approvals or exemptions can be obtained in each of these countries, the Company cannot be certain that such approvals or exemptions will be granted, and if such approvals or exemptions are granted, the Company cannot be certain as to the date of those approvals or exemptions. The Antitrust Division, the FTC, the EC and other foreign antitrust authorities frequently scrutinize the legality of transactions such as the acquisition of Shares pursuant to the Offer under applicable antitrust and competition laws. At any time before or after the consummation of any such transactions, these authorities could take such actions as they deem necessary or desirable in the public interest, including seeking to enjoin the purchase of Shares pursuant to the Offer, divestiture of the Shares so acquired or divestiture of Parent's or the Company's substantial assets. In some cases, private parties may also bring legal action under the antitrust laws. There can be no assurance that a challenge to the Offer on antitrust or competition grounds will not be made, or if such a challenge is made, what the result will be. If any applicable waiting period has not expired or been terminated or any approval or exemption required to consummate the Offer has not been obtained, Purchaser will not be obligated to accept for payment or pay for any tendered Shares unless and until such approval has been obtained or such applicable waiting period has expired or exemption been obtained.

Dissenters' Rights

        No dissenters' rights are available in connection with the Offer. However, under the MBCA, shareholders who do not sell their Shares in the Offer will have the right, by fully complying with the applicable provisions of Sections 302A.471 and 302A.473 of the MBCA, to dissent with respect to the

45



Merger and to receive payment in cash for the "fair value" of their Shares after the Merger is completed. The term "fair value" means the value of the Shares immediately before the Effective Time and may be less than, equal to or greater than the Offer Price. Any dilutive impact on the value of the Shares as a result of Parent's exercise of the Top-Up Option will not be taken into account in the determination of the "fair value" of the Shares.

        To be entitled to payment, the dissenting shareholder must not accept the Offer. In addition, if a vote of shareholders is required to approve the Merger under the MBCA, a dissenting shareholder also (i) must file with the Company, prior to the vote for the Merger, a written notice of intent to demand payment of the fair value of the dissenting shareholder's Shares, (ii) must not vote in favor of the Merger and (iii) must satisfy the other procedural requirements of the MBCA. Any shareholder contemplating the exercise of such dissenters' rights should review carefully the provisions of Sections 302A.471 and 302A.473 of the MBCA, particularly the procedural steps required to perfect such rights, and should consult legal counsel. Dissenters' rights will be lost if the procedural requirements of the statute are not fully and precisely satisfied.

        If a vote of shareholders is required to approve the Merger under the MBCA, the notice and proxy or information statement for the meeting of the shareholders will again inform each shareholder of record as of the record date of the meeting of the shareholders (excluding persons who tender all of their Shares pursuant to the Offer if such Shares are purchased in the Offer) of their dissenters' rights and will include a copy of Sections 302A.471 and 302A.473 of the MBCA and a summary description of the procedures to be followed to obtain payment of fair value for their Shares. If a vote of the shareholders is not required to approve the Merger, the Surviving Corporation will send a notice to those persons who are shareholders of the Surviving Corporation immediately prior to the Effective Time which, among other things, will include a copy of Sections 302A.471 and 302A.473 of the MBCA and a summary description of the procedures to be followed to obtain payment of fair value for their Shares.

        Dissenters' rights cannot be exercised at this time. The information set forth above is for informational purposes only with respect to alternatives available to shareowners if the Merger is consummated. Shareowners who will be entitled to dissenters' rights in connection with the Merger will receive additional information concerning dissenters' rights and the procedures to be followed in connection therewith before such shareowners have to take any action relating thereto.

        This foregoing description of dissenters' rights is not intended to be complete and is qualified in its entirety by reference to Sections 302A.471 and 302A.473 of the MBCA.

46


Item 9.    EXHIBITS.

Exhibit No.   Description
  (a)(1)(A)   Offer to Purchase, dated July 26, 2010 (incorporated by reference to Exhibit (a)(1) to the Schedule TO filed by Tyco Electronics Ltd. on July 26, 2010)*

 

(a)(1)(B)

 

Form of Letter of Transmittal (including Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9) (incorporated by reference to Exhibit (a)(2) to the Schedule TO filed by Tyco Electronics Ltd. on July 26, 2010)*

 

(a)(1)(C)

 

Form of Notice of Guaranteed Delivery (incorporated by reference to Exhibit (a)(3) to the Schedule TO filed by Tyco Electronics Ltd. on July 26, 2010)*

 

(a)(1)(D)

 

Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees (incorporated by reference to Exhibit (a)(4) to the Schedule TO filed by Tyco Electronics Ltd. on July 26, 2010)*

 

(a)(1)(E)

 

Form of Letter to Clients (incorporated by reference to Exhibit (a)(5) to the Schedule TO filed by Tyco Electronics Ltd. on July 26, 2010)*

 

(a)(1)(F)

 

Summary Advertisement, dated July 26, 2010 (incorporated by reference to Exhibit (a)(6) to the Schedule TO filed by Tyco Electronics Ltd. on July 26, 2010)

 

(a)(1)(G)

 

Form of Notice to Participants in the ADC Telecommunications, Inc. Retirement Savings Plan, dated July 26, 2010 (incorporated by reference to Exhibit (a)(7) to the Schedule TO filed by Tyco Electronics Ltd. on July 26, 2010)*

 

(a)(2)(A)

 

Information Statement pursuant to Section 14(f) of the Securities Exchange Act of 1934 and Rule 14f-1 thereunder (incorporated by reference to Annex A to this Schedule 14D-9)*

 

(a)(2)(B)

 

Letter to shareowners, dated July 26, 2010*

 

(a)(5)(A)

 

Transcript of conference call of Tyco Electronics Ltd. executives with analysts held on July 13, 2010 (incorporated by reference to the Schedule TO filed by Tyco Electronics Ltd. on July 15, 2010).

 

(a)(5)(B)

 

Presentation materials from conference call of Tyco Electronics Ltd. executives with analysts held on July 13, 2010 (incorporated by reference to Exhibit 99.2 to the current report on Form 8-K filed by Tyco Electronics Ltd. on July 13, 2010).

 

(a)(5)(C)

 

Transcript from a meeting of Robert E. Switz, CEO of ADC Telecommunications, Inc., and Tom Lynch, CEO of Tyco Electronics Ltd., with employees of ADC Telecommunications, Inc. held on July 14, 2010 (incorporated by reference to the Schedule 14D-9 filed by ADC Telecommunications, Inc. on July 15, 2010).

 

(a)(5)(D)

 

Presentation materials from a meeting of Robert E. Switz, CEO of ADC Telecommunications, Inc., and Tom Lynch, CEO of Tyco Electronics Ltd., with employees of ADC Telecommunications, Inc. held on July 14, 2010 (incorporated by reference to the Schedule 14D-9 filed by ADC Telecommunications, Inc. on July 14, 2010).

 

(a)(5)(E)

 

Letter to employees of ADC Telecommunications, Inc. from Robert E. Switz, CEO of ADC Telecommunications, Inc. (incorporated by reference to Schedule 14D-9 filed by ADC Telecommunications, Inc. on July 13, 2010).

 

(a)(5)(F)

 

Letter to employees of ADC Telecommunications, Inc. from Tom Lynch, CEO of Tyco Electronics Ltd. (incorporated by reference to the Schedule TO filed by Tyco Electronics Ltd on July 14, 2010).

47


Exhibit No.   Description
  (a)(5)(G)   Key facts regarding Tyco Electronics Ltd. (incorporated by reference to the Schedule TO filed by Tyco Electronics Ltd. on July 14, 2010).

 

(a)(5)(H)

 

Letter to Star Tribune newspaper in Minneapolis, Minnesota, from Robert Switz, CEO of ADC Telecommunications, Inc. (incorporated by reference to the Schedule 14D-9 filed by ADC Telecommunications, Inc. on July 19, 2010)

 

(a)(5)(I)

 

Complaint filed by Lawrence Barone, individually and on behalf of all others similarly situated, on July 14, 2010, in the District Court of the State of Minnesota, Hennepin County (incorporated by reference to exhibit (a)(8) to the Schedule TO filed by Tyco Electronics Ltd. on July 26, 2010)

 

(a)(5)(J)

 

Complaint filed by Robert Freeman, individually and on behalf of all others similarly situated, and derivatively on behalf of Nominal Defendant ADC Telecommunications, Inc., on July 14, 2010, in the District Court of the State of Minnesota, Hennepin County (incorporated by reference to exhibit (a)(9) to the Schedule TO filed by Tyco Electronics Ltd. on July 26, 2010)

 

(a)(5)(K)

 

Complaint filed by Thomas Haller, individually and on behalf of all others similarly situated, on July 14, 2010, in the District Court of the State of Minnesota, Hennepin County (incorporated by reference to exhibit (a)(10) to the Schedule TO filed by Tyco Electronics Ltd. on July 26, 2010)

 

(a)(5)(L)

 

Complaint filed by Gunter Jacobius, individually and on behalf of all others similarly situated, and derivatively on behalf of Nominal Defendant ADC Telecommunications, Inc., on July 14, 2010, in the District Court of the State of Minnesota, Hennepin County (incorporated by reference to exhibit (a)(11) to the Schedule TO filed by Tyco Electronics Ltd. on July 26, 2010)

 

(a)(5)(M)

 

Complaint filed by Asbestos Workers Local Union 42 Pension Fund, individually and on behalf of all others similarly situated, on July 15, 2010, in the District Court of the State of Minnesota, Hennepin County (incorporated by reference to exhibit (a)(12) to the Schedule TO filed by Tyco Electronics Ltd. on July 26, 2010)

 

(a)(5)(N)

 

Complaint filed by Joel Gerber, individually and on behalf of all others similarly situated, on July 15, 2010, in the District Court of the State of Minnesota, Hennepin County (incorporated by reference to exhibit (a)(13) to the Schedule TO filed by Tyco Electronics Ltd. on July 26, 2010)

 

(a)(5)(O)

 

Complaint filed by Gary Novitsky, individually and on behalf of all others similarly situated, and derivatively on behalf of Nominal Defendant ADC Telecommunications, Inc., on July 15, 2010, in the District Court of the State of Minnesota, Hennepin County (incorporated by reference to exhibit (a)(14) to the Schedule TO filed by Tyco Electronics Ltd. on July 26, 2010)

 

(a)(5)(P)

 

Complaint filed by Michael Partansky, individually and on behalf of all others similarly situated, on July 16, 2010, in the District Court of the State of Minnesota, Hennepin County (incorporated by reference to exhibit (a)(15) to the Schedule TO filed by Tyco Electronics Ltd. on July 26, 2010)

 

(a)(5)(Q)

 

Complaint filed by Brad Bjorkland and Karl A. Lacher, individually and on behalf of all others similarly situated, on July 20, 2010, in the District Court of the State of Minnesota, Hennepin County (incorporated by reference to exhibit (a)(16) to the Schedule TO filed by Tyco Electronics Ltd. on July 26, 2010)

48


Exhibit No.   Description
  (a)(5)(R)   Complaint filed by Jack Borror and Pat Borror, individually and on behalf of all others similarly situated, on July 23, 2010, in the District Court of the State of Minnesota, Hennepin County (incorporated by reference to exhibit (a)(17) to the Schedule TO filed by Tyco Electronics Ltd. on July 26, 2010)

 

(e)(1)

 

Agreement and Plan of Merger, dated as of July 12, 2010, by and among Tyco Electronics Ltd., Tyco Electronics Minnesota, Inc., and ADC Telecommunications, Inc. (incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K, filed on July 13, 2010)

 

(e)(2)

 

Amendment No. 1 to Agreement and Plan of Merger, dated as of July 24, 2010, by and among Tyco Electronics, Ltd., Tyco Electronics Minnesota, Ltd. and ADC Telecommunications, Inc. (incorporated by reference to Exhibit (d)(2) to the Schedule TO filed by Tyco Electronics Ltd. on July 26, 2010)

 

(e)(3)

 

Executive Employment Agreement, effective August 13, 2003, by and between Robert E. Switz and ADC Telecommunications, Inc. (incorporated by reference to Exhibit 10-e to the Company's Quarterly Report on Form 10-Q for the quarter ended July 31, 2003)

 

(e)(4)

 

Amendment to Employment Agreement, dated December 28, 2008, by and between Robert E. Switz and ADC Telecommunications, Inc. (incorporated by reference to Exhibit 10.10 to the Company's Quarterly Report on Form 10-Q for the quarter ended January 30, 2009)

 

(e)(5)

 

Second Amendment to Employment Agreement, dated July 1, 2009, by and between Robert E. Switz and ADC Telecommunications, Inc. (incorporated by reference to Exhibit 99.1 to the Company's Current Report on Form 8-K dated July 1, 2009)

 

(e)(6)

 

ADC Telecommunications, Inc. Executive Change in Control Severance Pay Plan (2007 Restatement) (incorporated by reference to Exhibit 10-a to the Company's Current Report on Form 8-K dated September 30, 2007)

 

(e)(7)

 

ADC Telecommunications, Inc. Change in Control Severance Pay Plan (2007 Restatement) (incorporated by reference to Exhibit 10-d to the Company's Current Report on Form 8-K dated September 30, 2007)

 

(e)(8)

 

Confidentiality Agreement, dated March 26, 2010, by and between ADC Telecommunications, Inc. and Tyco Electronics Ltd. (incorporated by reference to Exhibit (d)(3) to the Schedule TO filed by Tyco Electronics Ltd. on July 26, 2010)

 

(e)(9)

 

Exclusivity Letter Agreement, dated July 11, 2010, by and between ADC Telecommunications, Inc. and Tyco Electronics Ltd. (incorporated by reference to Exhibit (d)(4) to the Schedule TO filed by Tyco Electronics Ltd. on July 26, 2010)

*
Included in mailing of tender offer materials to the Company's shareowners by Parent.

49



SIGNATURES

        After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

    ADC TELECOMMUNICATIONS, INC.

 

 

By:

 

/s/ ROBERT E. SWITZ

        Robert E. Switz
Chairman, President, and
Chief Executive Officer

Date: July 26, 2010



Annex A

ADC Telecommunications, Inc.
13625 Technology Drive
Eden Prairie, MN 55344
(952) 938-8080

INFORMATION STATEMENT PURSUANT TO
SECTION 14(f) OF THE SECURITIES EXCHANGE
ACT OF 1934 AND RULE 14f-1 THEREUNDER

GENERAL INFORMATION

        This Information Statement is mailed on or about July 26, 2010, as part of the Solicitation/ Recommendation Statement on Schedule 14D-9 of ADC Telecommunications, Inc. (referred to herein as "ADC", the "Company", "us", "our" or "ours") to the holders of record of shares of the common stock, par value $0.20 per share (together with the associated preferred stock purchase rights) (the "Shares"), of the Company. You are receiving this Information Statement in connection with the possible election of persons designated by Tyco Electronics Ltd. ("Parent") to a majority of the seats on the board of directors of the Company (the "Board").


BACKGROUND

        On July 12, 2010, the Company entered into an Agreement and Plan of Merger (as amended by Amendment No. 1 to Agreement and Plan of Merger, dated July 24, 2010, the "Merger Agreement") with Parent and Tyco Electronics Minnesota, Inc., an indirect wholly owned subsidiary of Parent ("Purchaser"). Pursuant to the Merger Agreement, Purchaser has commenced an offer to purchase all outstanding Shares at a price per Share of $12.75 (the "Offer Price"). If the proposed tender offer is completed, the Offer Price will be paid net to the sellers in cash without interest, upon the terms and subject to the conditions of the Merger Agreement as described in the Offer to Purchase and in the related Letter of Transmittal (which, together with the Offer to Purchase, as each may be amended or supplemented from time to time, collectively constitute the "Offer"). Copies of the Offer to Purchase and the Letter of Transmittal have been mailed to shareowners of the Company and are filed as Exhibits (a)(1) and (a)(2), respectively, to the Schedule TO filed by Parent and Purchaser with the United States Securities and Exchange Commission (the "SEC") on July 26, 2010.

        The Merger Agreement provides, among other things, for the making of the Offer by Purchaser and further provides that, upon the terms and subject to the conditions contained in the Merger Agreement, following completion of the Offer and the satisfaction or waiver of certain conditions, Purchaser will merge with and into the Company (the "Merger") and the Company will continue as the surviving corporation under the laws of the State of Minnesota, and the separate corporate existence of Purchaser will cease. In the Merger, Shares issued and outstanding immediately prior to the consummation of the Merger (other than Shares owned by the Company, Parent or Purchaser, all of which will be cancelled, Shares owned by any subsidiary of Parent (excluding the Purchaser) or any subsidiary of the Company, all of which will be converted such that each subsidiary maintains its percentage ownership in the Surviving Corporation, and other than Shares held by shareowners who have properly exercised dissenters' rights under the Minnesota Business Corporation Act), will be converted into the right to receive an amount in cash equal to the Offer Price, without interest.

        The Offer, the Merger and the Merger Agreement are more fully described in the Schedule 14D-9, to which this Information Statement is attached, which was filed by the Company with the SEC on July 26, 2010, and which is being mailed to shareowners of the Company along with this Information Statement.

A-1


        This Information Statement is being mailed to you in accordance with Section 14(f) of the Securities Exchange Act of 1934, as amended, and Rule 14f-1 promulgated thereunder. Information set forth herein relating to Parent, Purchaser or the Parent Designees (as defined below) has been provided by Parent. You are urged to read this Information Statement carefully. You are not, however, required to take any action in connection with the matters set forth herein.

        The Purchaser commenced the Offer on July 26, 2010. As set forth in the Offer to Purchase, the Offer is currently scheduled to expire 12:00 Midnight, New York City time, on Monday, August 23, 2010, unless the Offer is extended by the Purchaser in accordance with the terms of the Merger Agreement.


DIRECTORS DESIGNATED BY PARENT

Right to Designate Directors

        The Merger Agreement provides that, after Purchaser first accepts Shares for payment pursuant to the Offer, Parent will be entitled (but not obligated) to designate the number of directors, rounded to the nearest whole number, on the Board that equals the product of (a) the total number of directors on the Board, giving effect to the election of any additional directors pursuant to the Merger Agreement, and (b) the percentage that the number of Shares beneficially owned by Parent and/or Purchaser (including Shares accepted for payment) bears to the total number of Shares outstanding. The Company will cause Parent's designees to be elected or appointed to the Board, which may include increasing the number of directors and seeking and accepting resignations of incumbent directors, provided that, at all times prior to the consummation of the Merger, the Board will include at least three directors who were on the Board prior to Parent's designation of directors to the Board or who were appointed to the Board as described in the following sentence (the "Continuing Directors"). In the event that, prior to the consummation of the Merger, the number of Continuing Directors is reduced below three, the remaining Continuing Directors or Continuing Director (if only one remains) will be entitled to designate any other person who is not an affiliate, shareholder or employee of Parent or any of its subsidiaries to fill the vacancy left by such departed Continuing Director(s). Moreover, the Company will cause individuals designated by Parent to constitute the number of members, rounded to the nearest whole number, on each committee of the Board, and each board of directors of each subsidiary of the Company and each committee thereof (to the extent requested by Parent), that represents the same percentage as the individuals represent on the Board, in each case to the fullest extent permitted by applicable law and the rules of the NASDAQ Global Select Market.

        Following the election or appointment of Parent's designees and until the consummation of the Merger, the approval of a majority of the Continuing Directors, or the approval of the sole Continuing Director if there is only one Continuing Director, will be required to authorize (and such authorization will constitute the authorization of the Board): (i) any termination of the Merger Agreement by the Company, (ii) any amendment of the Merger Agreement requiring action by the Board, (iii) any extension of time for performance of any obligation or action under the Merger Agreement by Parent or Purchaser, (iv) any waiver of compliance with any of the agreements or conditions contained in the Merger Agreement for the benefit of the Company, and (v) any other consent, action or recommendation by the Company or the Board relating to the Merger Agreement, the Offer or the Merger or any other transaction contemplated thereby or in connection therewith. Following the election or appointment of Parent's designees and until the consummation of the Merger, the Continuing Directors will have the authority to retain counsel and advisors and to institute any action on behalf of the Company to enforce the performance of the Merger Agreement.

A-2


Information with Respect to the Designees

        As of the date of this Information Statement, Parent has not determined who it will designate to the Board. However, such designees will be selected from the list of potential designees provided below (the "Potential Designees"). The Potential Designees have consented to serve as directors of the Company if so designated. None of the Potential Designees currently is a director of, or holds any position with, the Company or any of its subsidiaries. To our knowledge, none of the Potential Designees beneficially owns any equity securities, or rights to acquire any equity securities of the Company, has a familial relationship with any director or executive officer of the Company or any of its subsidiaries or other Potential Designee or has been involved in any transactions with the Company or any of its subsidiaries or any of the Company's directors, other nominees, executive officers or affiliates that are required to be disclosed pursuant to the rules of the SEC. To our knowledge, there are no material pending legal proceedings, other than ordinary routine litigation incidental to the business, to which any Potential Designee or any associate of any Potential Designee is a party adverse to the Company or any of its subsidiaries or has a material interest adverse to the Company or any of its subsidiaries. To our knowledge, none of the Potential Designees listed below has, during the past ten years, (1) been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors), or (2) been a party to any judicial or administrative proceeding that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws.

List of Potential Designees

        The name, current principal occupation or employment and material occupations, positions, offices or employment for the past five years, of each of the Potential Designees are set forth below. Unless otherwise indicated, each occupation set forth opposite an individual's name refers to employment with Parent. The business address of each Potential Designee is Tyco Electronics Ltd., Rheinstrasse 20, CH-8200 Schaffhausen, Switzerland. All Potential Designees listed below are United States citizens, except for Pierre R. Brondeau who is a citizen of France and Juergen W. Gromer who is a citizen of Germany.

Name
  Age   Current Principal Occupation or Employment and Five-Year Employment History
Pierre R. Brondeau     52   Dr. Brondeau joined Parent's Board of Directors in June 2007, immediately following Parent's separation from Tyco International Ltd. ("Tyco International"). Dr. Brondeau has been President, Chief Executive Officer and a Director of FMC Corporation, a specialty chemical and agricultural products manufacturer, since January 1, 2010. Prior to joining FMC Corporation, he was President and Chief Executive Officer of Rohm & Haas Company, a U.S.-based manufacturer of specialty materials and a wholly owned subsidiary of the Dow Chemical Company, upon the April 2009 merger of Rohm & Haas Company and Dow Chemical Company until September 2009. From 2006 to 2009, Dr. Brondeau served as Executive Vice President of electronics materials and specialty materials of Rohm & Haas Company. He also has served as Vice-President, Business Group Executive, Electronic Materials, President and Chief Executive Officer, Rohm & Haas Electronic Materials LLC, and Regional Director, Europe, from 2003 to 2006, and previously as Vice-President, Business Group Director, Electronic Materials, President and Chief Executive Officer, Shipley

 

 

 

 

 

 

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Name
  Age   Current Principal Occupation or Employment and Five-Year Employment History
          Company, LLC, from 1999 to 2003. Dr. Brondeau received a masters degree from Universite de Montpellier and a Doctorate from Institut National des Sciences appliquees de Toulouse.

Ram Charan

 

 

70

 

Dr. Charan joined Parent's Board of Directors in June 2007, immediately following Parent's separation from Tyco International. Since 1978, Dr. Charan has served as an advisor to executives and corporate boards and provides expertise in corporate governance, global strategy and succession. Dr. Charan received a bachelor's degree from Banaras Hindu University and an MBA and a DBA from Harvard Business School.

Juergen W. Gromer

 

 

65

 

Dr. Gromer joined Parent's Board of Directors in June 2007, immediately following Parent's separation from Tyco International. Dr. Gromer was President of Parent from April 1999 until he retired from that position on December 31, 2007. From September 2006 until Parent's separation from Tyco International, he also held the position of President of the Electronic Components Business segment of Tyco International. Dr. Gromer held a number of senior executive positions over the previous 16 years with AMP Incorporated, which was acquired by Tyco International in 1999. Dr. Gromer received his undergraduate degree and doctorate in physics from the University of Stuttgart. Dr. Gromer is a Director of WABCO Holdings Inc. and Marvell Technology Group Ltd. He is also Chairman of the Board of the Society for Economic Development of the District Bergstrasse/Hessen, a member of the Advisory Board of Commerzbank, and a Director of the Board and Vice President of the American Chamber of Commerce Germany.

Thomas J. Lynch

 

 

55

 

Mr. Lynch serves on Parent's Board of Directors and has been Chief Executive Officer of Parent since January 2006 and was previously President of Tyco Engineered Products and Services since joining Tyco International in September 2004. Prior to joining Tyco International, Mr. Lynch was at Motorola where he was Executive Vice President and President and Chief Executive Officer, Personal Communications Sector from August 2002 to September 2004; Executive Vice President and President, Integrated Electronic Systems Sector from January 2001 to August 2002; Senior Vice President and General Manager, Satellite & Broadcast Network Systems, Broadband Communications Sector from February 2000 to January 2001; and Senior Vice President and General Manager, Satellite & Broadcast Network Systems, General Instrument Corporation from May 1998 to February 2000. Mr. Lynch holds a bachelor of science degree in commerce from Rider University. Mr. Lynch is a Director of Thermo Fisher Scientific Inc.

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Name
  Age   Current Principal Occupation or Employment and Five-Year Employment History
Daniel J. Phelan     60   Mr. Phelan joined Parent's Board of Directors in June 2007, immediately following Parent's separation from Tyco International. Mr. Phelan has served as Chief of Staff of GlaxoSmithKline, a manufacturer of pharmaceuticals and consumer health related products, from May 2008 to the present and previously was Senior Vice President, Human Resources from 1994. Mr. Phelan is responsible for information technology, human resources, corporate strategy and development, world wide real estate and facilities, environmental health and safety, and global security. Mr. Phelan received bachelor's and law degrees from Rutgers University and a master's degree from Ohio State University.

Frederic M. Poses

 

 

67

 

Mr. Poses joined Parent's Board of Directors as Chairman in June 2007, immediately following Parent's separation from Tyco International. Mr. Poses is Chief Executive Officer and Partner of Ascend Performance Materials, a private manufacturer of nylon related chemicals, resins and fibers for commercial and industrial products, since June 2009. He previously was Chairman and Chief Executive Officer of Trane Inc. (formerly American Standard Companies Inc.), a manufacturer and provider of air conditioning systems and services, vehicle control systems and bath and kitchen products, from 1999 until its acquisition by Ingersoll Rand in 2008. From 1998 to 1999, Mr. Poses was President and Chief Operating Officer of AlliedSignal, Inc., where he served in various capacities over his career, beginning in 1969. Mr. Poses holds a bachelor's degree in business administration from New York University. Mr. Poses is a Director of Raytheon Company.

Lawrence S. Smith

 

 

62

 

Mr. Smith joined Parent's Board of Directors in June 2007, immediately following Parent's separation from Tyco International. Mr. Smith was named Executive Vice President in 1995 and Co-Chief Financial Officer in 2002 of Comcast Corporation, a broadband cable provider, from which he retired in March 2007. He served in finance and administration positions at Comcast from 1988 to 1995. Prior to joining Comcast, Mr. Smith was the Chief Financial Officer of Advanta Corporation. He also worked for Arthur Andersen LLP for 18 years, where he was a tax partner. Mr. Smith has a bachelor's degree from Ithaca College. Mr. Smith is a Director of Air Products and Chemicals, Inc. and GSI Commerce Inc.

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Name
  Age   Current Principal Occupation or Employment and Five-Year Employment History
Paula A. Sneed     62   Ms. Sneed joined Parent's Board of Directors in June 2007, immediately following Parent's separation from Tyco International. Ms. Sneed is Chair and Chief Executive Officer of Phelps Prescott Group, LLC, a strategy and management consulting firm, since 2008. Previously she was Executive Vice President of Global Marketing Resources and Initiatives for Kraft Foods, Inc., a worldwide producer of branded food and beverage products, until her retirement in December 2006. She served as Group Vice President and President of Electronic Commerce and Marketing Services for Kraft Foods North America, part of Kraft Foods, Inc., from 2000 until 2004, and Senior Vice President, Global Marketing Resources and Initiatives from December 2004 to July 2005. She joined General Foods Corporation (which later merged with Kraft Foods) in 1977 and has held a variety of management positions. Ms. Sneed received a bachelor's degree from Simmons College and an MBA from Harvard Graduate School of Business. Ms. Sneed is a Director of Airgas Inc. and Charles Schwab Corporation.

David P. Steiner

 

 

50

 

Mr. Steiner joined Parent's Board of Directors in June 2007, immediately following Parent's separation from Tyco International. Since March 2004, Mr. Steiner has served as Chief Executive Officer and a Director of Waste Management, Inc., a provider of integrated waste management services, and has also been its President since June 2010. His previous positions at Waste Management included Executive Vice President and Chief Financial Officer from 2003 to 2004, Senior Vice President, General Counsel and Corporate Secretary from 2001 to 2003 and Vice President and Deputy General Counsel from 2000 to 2001. Mr. Steiner received a bachelor's degree from Louisiana State University and a law degree from the University of California, Los Angeles. Mr. Steiner is a Director of FedEx Corporation.

John C. Van Scoter

 

 

49

 

Mr. Van Scoter joined Parent's Board of Directors on December 1, 2008. Since February 1, 2010, Mr. Van Scoter has been Chief Executive Officer of eSolar, Inc., a producer of modular, scalable concentrating solar thermal power technology. He is also a Director of eSolar, Inc. From 2005 through 2010, he was Senior Vice President of Texas Instruments Incorporated, a global semiconductor company. During his 25 year career at Texas Instruments, he also served as General Manager of the Digital Light Processing (DLP®) Products Division and various Digital Signal Processor business units, manager of application specific integrated circuit (ASIC) product development and engineering, product engineer and technical sales engineer. Mr. Van Scoter holds a bachelor of science degree in mechanical engineering from the University of Vermont.

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CERTAIN INFORMATION REGARDING THE COMPANY

        The Shares are the only class of voting securities of the Company outstanding. Each Share has one vote on each matter on which holders of Shares are entitled to vote. As of close of business on July 23, 2010, there were 97,030,661 Shares outstanding.


INFORMATION CONCERNING CURRENT
DIRECTORS AND OFFICERS OF ADC TELECOMMUNICATIONS, INC.

Directors

        Our Board currently consists of ten directors who are elected to staggered, three-year terms at our annual meeting of shareowners. If elected, each director nominee serves until the next annual meeting of shareowners at which his or her three-year term expires and until his or her successor has been elected and qualified.

        The following sets forth the name, ages and present principal occupation or employment, and material occupations, positions, offices or employments for the past five years, of each director and executive officer of the Company. Unless otherwise indicated, each such person is a citizen of the United States and the business address of such person is c/o ADC Telecommunications, Inc. c/o Secretary, 13625 Technology Drive, Eden Prairie, MN 55344. There are no family relationships between any director or executive officer and any other director or executive of the Company.

Name
  Age   Position   Term Expires
John J. Boyle III     63   Director   2011
William R. Spivey, Ph.D.      63   Independent Lead Director   2013
Robert E. Switz     63   Chairman, President and Chief Executive Officer   2013
Larry W. Wangberg     68   Director   2013
Lois M. Martin     47   Director   2012
Krish A. Prabhu, Ph.D.      55   Director   2012
John D. Wunsch     62   Director   2012
David A. Roberts     62   Director   2012
Mickey P. Foret     64   Director   2011
John E. Rehfeld     70   Director   2011

        John J. Boyle III, 63, has been a director of the Company since November, 1999. From June, 2005 until October, 2009, Mr. Boyle served as Chief Executive Officer of Arbor Networks, Inc., a company that researches next-generation cyber threats and develops solutions to prevent network attacks. Prior to joining Arbor Networks, Mr. Boyle served as President and Chief Executive Officer of Equallogic, Inc., a company that develops networked storage by building intelligent storage solutions that extend the benefits of consolidated storage throughout the enterprise, from 2003 to 2004. From April, 2000 to July, 2003, Mr. Boyle served as Chief Executive Officer of Cogentric, Inc., a provider of solutions to enable decision makers to evaluate and enhance their Web-based capabilities. He served as Senior Vice President of the Company from October, 1999 to April, 2000 following our acquisition of Saville Systems PLC. Prior to joining the Company, Mr. Boyle served as President and Chief Executive Officer of Saville Systems PLC from August, 1994 to October, 1999 and as Saville's Chairman of the Board from April, 1998 to October, 1999.

        William R. Spivey, Ph.D., 63, has been a director of the Company since September, 2004. Dr. Spivey most recently served as President and Chief Executive Officer of Luminent, Inc., a fiber optics transmission products manufacturer, from July, 2000 to November, 2001. From 1997 to 2000, Dr. Spivey served as Network Products Group President for Lucent Technologies. He also served as Vice President of the Systems & Components Group at AT&T Corporation/Lucent Technologies from

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1994 to 1997. Dr. Spivey is also a director of Novellus Systems, Inc., Raytheon Company, Laird, PLC and Cascade Microtech, Inc.

        Robert E. Switz, 63, has been a director of the Company since August, 2003, and was appointed Chairman of the Board in August, 2008. Mr. Switz has been President and Chief Executive Officer of the Company since August, 2003. From January, 1994 until August, 2003, Mr. Switz served the Company as Chief Financial Officer as well as Executive Vice President and Senior Vice President. Mr. Switz also served as President of the Company's former Broadband Access and Transport Group from November, 2000 to April, 2001. Prior to joining the Company, Mr. Switz was employed by Burr-Brown Corporation, a manufacturer of precision micro-electronics, most recently as Vice President, Chief Financial Officer and Director, Ventures & Systems Business. Mr. Switz is also a director of Broadcom Corporation, Micron Technology, Inc. and the Telecommunication Industry Association (TIA).

        Larry W. Wangberg, 68, has been a director of the Company since October, 2001. Mr. Wangberg served as Chief Executive Officer and Chairman of the Board of TechTV (formerly ZDTV, Inc.), a cable television network focused on technology information, news and entertainment, from August 1997 until his retirement from these positions in July, 2002. Previously, Mr. Wangberg was Chief Executive Officer and Chairman of the Board of StarSight Telecast, Inc., an interactive navigation and program guide company, from February, 1995 to August, 1997. Mr. Wangberg is also a director of Charter Communications, Inc.

        Lois M. Martin, 47, has been a director of the Company since March 2004. Ms. Martin has served as Senior Vice President and Chief Financial Officer for Capella Education Company, the publicly held parent company of Capella University, an accredited on-line university, since 2004. Ms. Martin announced her resignation from this position on May 6, 2010. The resignation will be effective at the end of 2010 unless her successor is identified prior to that date. From 2002 to 2004, Ms. Martin served as Executive Vice President and Chief Financial Officer of World Data Products, Inc., an industry-leading provider of server, storage, network and telecom solutions worldwide. From 1993 to 2001, Ms. Martin served in a number of executive positions with Deluxe Corporation, including Senior Vice President and Chief Financial Officer, Vice President and Corporate Controller, Vice President and Controller of Deluxe Financial Services Group, Vice President and Controller of Paper Payment Systems Division, Director of Accounting Services, and Director of Internal Audit. Prior to joining Deluxe Corporation, Ms. Martin served as International Controller for Carlson Companies, a privately held international conglomerate. Ms. Martin is also a director of MTS Systems Corporation, although she has announced she will not seek re-election to this Board at the company's 2010 annual shareowners' meeting.

        Krish A. Prabhu, Ph.D., 55, has been a director of the Company since November, 2008. From February, 2004 until his retirement in February, 2008, Dr. Prabhu served as Chief Executive Officer and President of Tellabs, Inc., a company that designs, develops, deploys and supports telecommunications networking products around the world. Prior to joining Tellabs, Dr. Prabhu held various engineering and management positions at Alcatel, including Chief Operating Officer of Alcatel and Chief Executive Officer of Alcatel USA. From November, 2001 until February, 2004, Dr. Prabhu was a venture partner in Morgenthaler Ventures, a venture capital firm. Dr. Prabhu is also a director of Altera Corp., Tekelec, Inc., and ADVA Optical Networking.

        John D. Wunsch, 62, has been a director of the Company since 1991. Mr. Wunsch served in executive positions with Harris Bank N. A. and Harris myCFO, Inc., which are subsidiaries of the Bank of Montreal, from March, 2002 through September, 2006. He was an independent consultant in the financial services industry from December, 2001 to March, 2002. He was President and Chief Executive Officer of Family Financial Strategies, Inc., a registered investment advisory company, from 1997 to

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2002. From 1990 to 1997, he served as President of Perrybell Investments, Inc., a registered investment advisory company.

        David A. Roberts, 62, has been a director of the Company since November, 2008. Since June, 2007, Mr. Roberts has served as Chairman of the Board, President and Chief Executive Officer of Carlisle Companies, a diversified global manufacturing company. Previously he served as Chairman (from April, 2006 to June, 2007) and President and Chief Executive Officer (from June, 2001 to June, 2007) of Graco Inc., a manufacturer of fluid handling systems and components used in vehicle lubrication, commercial and industrial settings. Mr. Roberts is also a director of Franklin Electric Co., Inc.

        Mickey P. Foret, 64, has been a director of the Company since February, 2003. From September, 1998 to September, 2002, Mr. Foret served as Executive Vice President and Chief Financial Officer of Northwest Airlines, Inc., a commercial airline company. From September, 1998 to September, 2002, he also served as Chairman and Chief Executive Officer of Northwest Airlines Cargo Inc., a subsidiary of Northwest Airlines that specializes in cargo transport. From May, 1998 to September, 1998, Mr. Foret served as a Special Projects Officer of Northwest Airlines, Inc. Prior to that time he served as President and Chief Operating Officer of Atlas Air, Inc. from June, 1996 to September, 1997 and as Executive Vice President and Chief Financial Officer of Northwest Airlines, Inc. from September, 1993 to May, 1996. Mr. Foret previously held other senior management positions with various companies including Continental Airlines Holdings, Inc. and KLH Computers, Inc. Mr. Foret is also a director of Delta Air Lines, Inc., URS Corporation and Nash Finch Company.

        John E. Rehfeld, 70, has been a director of the Company since September, 2004. Mr. Rehfeld has served as an adjunct professor for the Executive MBA program at Pepperdine University in California since 1998 and at the University of Southern California since 2009. Mr. Rehfeld served as Chief Executive Officer of Spruce Technologies, Inc., a DVD authoring software company, during 2001. From 1997 to 2001, Mr. Rehfeld served as Chairman and Chief Executive Officer of ProShot Golf, Inc. He also served as President and Chief Executive Officer of Proxima Corporation from 1995 to 1997 and as President and Chief Executive Officer of ETAK, Inc. from 1993 to 1995. Mr. Rehfeld is also a director of Local.com Corporation. He is also a past Chairman of the Forum of Corporate Directors in Orange County, California.

Executive Officers

        The current Executive Officers of the Company are:

Name
  Age   Position   Officer Since
Robert E. Switz     63   Chairman, President and Chief Executive Officer   1994
James G. Mathews     59   Vice President and Chief Financial Officer   2005
Patrick D. O'Brien     46   Vice President, President, Global Connectivity Solutions   2002
Kimberly S. Hartwell     48   Vice President, Global Go-To-Market   2008
Richard B. Parran, Jr.      54   Vice President, President, Network Solutions   2006
Christopher Jurasek     44   Vice President, Professional Services Business Unit, Chief Information Officer   2009
Steven G. Nemitz     35   Vice President and Controller   2007
Laura N. Owen     54   Vice President and Chief Administrative Officer   1999
Jeffrey D. Pflaum     50   Vice President, General Counsel, and Secretary   1999

        Mr. Switz, 63, joined ADC in January 1994 as ADC's Chief Financial Officer. He served in this capacity until he was appointed as our Chief Executive Officer in August 2003. He was appointed Chairman of our Board of Directors in July 2008. From 1988 to 1994, Mr. Switz was employed by Burr- Brown Corporation, a manufacturer of precision micro-electronics. His last position at Burr-Brown was as Vice President, Chief Financial Officer and Director, Ventures and Systems Business.

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        Mr. Mathews, 59, joined ADC in 2005 as our Vice President and Controller. He served in this capacity until he was appointed as our Chief Financial Officer in April 2007. From 2000 to 2005 Mr. Mathews served as Vice President-Finance and Chief Accounting Officer for Northwest Airlines, which filed for Bankruptcy Reorganization under Chapter 11 in U.S. Bankruptcy Court in September 2005. Prior to joining Northwest Airlines, Mr. Mathews was Chief Financial and Administrative Officer at CARE-USA, a private relief and development agency. Mr. Mathews also held a variety of positions at Delta Air Lines, including service as Delta's Corporate Controller and Corporate Treasurer.

        Mr. O'Brien, 46, joined ADC in 1993 as a product manager for the company's DSX products. During the following eight years, he held a variety of positions of increasing responsibility in the product management area, including Vice President and General Manager of copper and fiber connectivity products. Mr. O'Brien served as President of our Copper and Fiber Connectivity Business Unit from October 2002 to May 2004. From May 2004 through August 2004, Mr. O'Brien served as our President and Regional Director of the Americas Region. He was named President of ADC's Global Connectivity Solutions Business Unit in September 2004. Prior to joining ADC, Mr. O'Brien was employed by Contel Telephone for six years in a network planning capacity.

        Ms. Hartwell, 48, joined ADC in July 2004 as Vice President of Sales, National Accounts and became Vice President, Go-To-Market Americas in 2007. She became Vice President, Global Go-To-Market in July 2008. In this role, she leads our sales, marketing, customer service and technical support functions worldwide. Prior to joining ADC, Ms. Hartwell was Vice President of Marquee Accounts at Emerson Electric Corporation, a manufacturer of electrical, electronic and other products for consumer, commercial, communications and industrial markets from June 2003 to June 2004.

        Mr. Parran, 54, joined ADC in November 1995 and served in our business development group. From November 2001 to November 2005 he held the position of Vice President, Business Development. In November 2005, Mr. Parran became the interim leader of our Professional Services Business Unit and in March 2006 he was appointed Vice President, President, Professional Services Business Unit. In January 2009, he was named President of our Network Solutions Business Unit. Prior to joining ADC, Mr. Parran served as a general manager of the business services telecommunications business for Paragon Cable and spent 10 years with Centel in positions of increasing responsibility in corporate development and cable and cellular operations roles.

        Mr. Jurasek, 44, joined ADC in May 2007 as our Chief Information Officer. In this position, he oversees ADC's information systems worldwide. In January 2009, he was also named President of ADC Professional Services. In this role, he leads the company's services business that helps network operators plan, deploy and maintain their networks. Prior to joining ADC, Mr. Jurasek served as Vice President and Chief Information Officer at Rexnord Corporation, a global industrial and aerospace equipment manufacturer, from September 2002 to May 2007. Prior to that, he held a variety of IT management positions at Solo Cup Company, Komatsu Dresser Company, and Dana Corporation.

        Mr. Nemitz, 35, joined ADC in January 2000 as a financial analyst. In September 2002, Mr. Nemitz left ADC to work for Zomax Incorporated, a provider of media and supply chain solutions, where he held the position of Corporate Accounting Manager. In September 2003, Mr. Nemitz returned to ADC as a Corporate Finance Manager. He became the Finance Manager of our Global Connectivity Solutions business unit in October 2004, Americas Region Controller in November 2005 and Assistant Corporate Controller in August 2006. In May 2007, he began service as our Corporate Controller.

        Ms. Owen, 54, joined ADC as Vice President, Human Resources in December 1997. In October 2007 she was named Vice President, Chief Administrative Officer. As a part of this role, she continues to oversee our human resources function. Prior to joining ADC, Ms. Owen was employed by Texas Instruments and Raytheon (which purchased the Defense Systems and Electronics Group of Texas Instruments in 1997), manufacturers of high-technology systems and components. From 1995 to 1997,

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she served as Vice President of Human Resources for the Defense Systems and Electronics Group of Texas Instruments.

        Mr. Pflaum, 50, joined ADC in April 1996 as Associate General Counsel and became Vice President, General Counsel and Secretary of ADC in March 1999. Prior to joining ADC, Mr. Pflaum was an attorney with the Minneapolis-based law firm of Popham Haik Schnobrich & Kaufman.

Board Independence

        Our Board makes an annual determination regarding the independence of each Board member under the current NASDAQ Global Select Market listing standards. Our Board has determined that all of our directors are independent under these standards, except for our Chairman, Robert E. Switz, who also serves as our President and Chief Executive Officer. Dr. Spivey currently serves as the Independent Lead Director to our Board. A description of the roles of Independent Lead Director and Executive Chairman can be found on our website at http://investor.adc.com/governance.cfm.

Board Meetings and Committees

        Each of our directors is expected to make reasonable efforts to attend all meetings of the Board, meetings of each committee on which he or she serves and our annual shareowners' meeting. All ten of our directors who were serving on the Board at the time of our 2009 annual meeting attended that meeting. During fiscal 2009, the Board held nine meetings. During fiscal 2009, each of our directors attended at least 75% of the aggregate of the total number of these meetings plus the total number of meetings of all committees of the Board on which he or she served.

        Our Board and committees may take formal action by written consent from time-to-time, in accordance with Minnesota law, rather than holding formal Board and committee meetings.

        Our Board has four standing committees, the Audit Committee, the Compensation Committee, the Finance and Strategic Planning Committee, and the Governance Committee.

Audit Committee

Members:   Mickey P. Foret
    Lois M. Martin, Chair
    Krish A. Prabhu, Ph.D.
    John E. Rehfeld
    John D. Wunsch

        The Audit Committee has sole authority to appoint, review and discharge our independent registered public accounting firm. The Audit Committee also reviews and approves in advance the services provided by our independent registered public accounting firm, oversees our internal audit function, reviews our internal accounting controls and administers our Global Business Conduct Program. The Audit Committee currently is composed of Ms. Martin, Dr. Prabhu and Messrs. Foret, Rehfeld, and Wunsch, all of whom meet the existing independence and experience requirements of the NASDAQ Global Select Market and the SEC. Ms. Martin is the Chair of this committee. The Board has determined that each of Mr. Foret and Ms. Martin may be considered an "audit committee financial expert" under the rules of the SEC. During fiscal 2009, the Audit Committee held six meetings. The Audit Committee appointed Ernst & Young LLP as our independent registered public accounting firm for fiscal 2010.

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Compensation Committee

Members:   John E. Rehfeld, Chair
    David A. Roberts
    William R. Spivey, Ph.D.
    Larry W. Wangberg
    John D. Wunsch

        The Compensation Committee determines the compensation for our executive officers and non-employee directors, establishes our compensation policies and practices, and reviews annual financial performance under our employee incentive plans. The Compensation Committee currently is composed of Dr. Spivey and Messrs. Rehfeld, Roberts, Wangberg and Wunsch, all of whom are independent under the current NASDAQ Global Select Market listing standards. Mr. Rehfeld is the Chair of this committee. During fiscal 2009, the Compensation Committee held 12 meetings.

Finance and Strategic Planning Committee

Members:   John J. Boyle III, Chair
    William R. Spivey, Ph.D.
    Krish A. Prabhu, Ph.D.
    Mickey P. Foret

        The Finance and Strategic Planning Committee assists the Board with respect to strategic planning, the evaluation of investment, acquisition and divestiture transactions, and the review of any proposed changes to the Company's capital structure. The Finance and Strategic Planning Committee is composed of Drs. Prabhu and Spivey and Messrs. Boyle and Foret, all of whom are independent under the current NASDAQ Global Select Market listing standards. Mr. Boyle is the Chair of this committee. During fiscal 2009, the Finance and Strategic Planning Committee held four meetings.

Governance Committee

Members:   Larry W. Wangberg, Chair
    Lois M. Martin
    John J. Boyle III
    David A. Roberts

        The Governance Committee reviews and makes recommendations to the Board regarding nominees for director, establishes and monitors compliance with our Principles of Corporate Governance and conducts an annual review of the effectiveness of our Board and the performance of our President and Chief Executive Officer. The Governance Committee will consider qualified director nominees recommended by shareowners. Our process for receiving and evaluating Board member nominations from our shareowners is described below under the caption "Nominations." The Governance Committee currently is composed of Ms. Martin and Messrs. Boyle, Roberts and Wangberg, all of whom are independent under the current NASDAQ Global Select Market listing standards. Mr. Wangberg is the Chair of this committee. During fiscal 2009, the Governance Committee held four meetings.

        Our Governance Committee is the standing committee responsible for selecting the slate of director nominees for election by our shareowners. The committee recommends these nominees to the Board for approval. All director nominees approved by the Board and all directors appointed to fill any vacancies created between our annual meetings of shareowners are required to stand for election by our shareowners at the next annual shareowners' meeting.

        Our Governance Committee determines the selection criteria and qualifications for director nominees. As set forth in our Principles of Corporate Governance, a candidate must possess the ability

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to apply good business judgment and properly exercise his or her duties of loyalty and care. Candidates should also exhibit proven leadership capabilities, high integrity and experience in senior levels of responsibility in their chosen fields, and have the ability to grasp complex business and financial concepts and communications technologies. In general, candidates will be preferred who hold a senior level position in business, finance, law, education, research or government. The Governance Committee considers these criteria in evaluating nominees recommended to the Governance Committee by shareowners. When current Board members are considered for nomination for reelection, the Governance Committee also takes into consideration their prior contributions, performance and meeting attendance records with the Company.

        The Governance Committee will consider for possible nomination qualified Board candidates who are submitted by our shareowners. Shareowners wishing to make such a submission may do so by sending the following information to the ADC Governance Committee, c/o ADC Corporate Secretary, P.O. Box 1101, Minneapolis, MN 55440: (1) the name, age, business address and personal address of the person being nominated; (2) the principal occupation of the person being nominated; (3) the number of shares of our common stock beneficially owned by the person being nominated; (4) a description of all arrangements, undertakings or material relationships between the shareowner making the nomination and the person being nominated; and (5) any other information relating to the person being nominated that is required to be disclosed in solicitations of proxies for elections of directors or otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (including, without limitation, the written consent of the person being nominated, if any, as a nominee and to serving as a director of the Company and a completed questionnaire concerning the person's business experience, beneficial ownership of our common stock, relations and transactions with our company, independence and other matters typically contained in our directors and officers questionnaire).

        The Governance Committee will make a preliminary assessment of each proposed nominee based upon his or her resume or biographical summary, willingness to serve as a director and other information obtained by the committee. Each proposed nominee is evaluated against the criteria set forth above and our specific needs at the time. Based upon the preliminary assessment, those candidates who appear best suited to be directors of the Company may be invited to participate in a series of interviews, which are used as a further means of evaluating potential candidates. On the basis of information obtained during this process, the Governance Committee determines which nominees to recommend to the Board for submission to our shareowners at the next annual meeting. The Governance Committee uses the same process for evaluating all proposed nominees, regardless of the original source of the candidate.

Executive Sessions of the Board

        During fiscal 2009, our independent directors met in an executive session of the Board without management on eight occasions. Under our Principles of Corporate Governance, executive sessions of the Board are led by our Independent Lead Director, or, in his absence, by the Chair of the Governance Committee. In addition, each of our Board's standing committees regularly meets in an executive session led by the Chair of the committee.

Policy Regarding Attendance at Annual Meetings

        We encourage, but do not require, our Board members to attend the annual meeting of shareowners. All of our directors attended our last annual meeting of shareowners held in February, 2010.

A-13


Shareowner Communication with Directors

        The Board has implemented a process by which our shareowners may send written communications to the Board. Any shareowner desiring to communicate with the Board, or one or more of our directors, may send a letter addressed to the ADC Board of Directors, c/o ADC Corporate Secretary, P.O. Box 1101, Minneapolis, MN 55440. Our Corporate Secretary has been instructed by the Board to forward promptly all such communications to the Board or to the individual Board members specifically addressed in the communication.

Code of Business Conduct and Ethics

        We maintain a Global Business Conduct Program which sets forth our standards for ethical behavior and legal compliance and governs the manner in which we conduct our business. Our Global Business Conduct Program includes a Financial Code of Ethics applicable to all directors, officers and employees. We conduct required ethics training for our employees. A copy of our Global Business Conduct Program and our Financial Code of Ethics can be found on our website at http://investor.adc.com/governance.cfm.

A-14



DIRECTOR COMPENSATION

Fiscal 2009 Compensation

        Cash Fees.    During fiscal 2009, we paid our non-employee directors:

        In addition, we provided a retainer to each of Messrs. Gilligan and Spivey at an annualized rate of $75,000 for their respective service as the Company's Independent Lead Director during portions of fiscal 2009. During February of 2009, Mr. Gilligan resigned from his service on our Board and as the Company's Independent Lead Director in connection with his appointment as President and Chief Executive Officer of Capella Education, Inc. We then appointed Dr. Spivey as our Independent Lead Director.

        The Chair of each standing committee of the Board also received cash retainers which were paid in quarterly installments at the following annualized rates:

        Equity Awards.    Time-based restricted stock unit awards ("RSUs") having an approximate value of $70,000 on the date of grant are made to each non-employee director on the first business day after each annual shareowners' meeting. For fiscal 2009, each non-employee director received those RSUs on March 5, 2009. The RSUs vest on the first business day of the calendar year following the grant date, however, the shares underlying the restricted stock units are not distributed until 90 days following termination of Board service. Dr. Prabhu and Mr. Roberts each also received RSUs upon their appointment to the Board on November 1, 2008. These awards each had a value of approximately $23,600 as of that date. These awards represented a pro-rated portion of the annual grant made to other non-employee directors in March, 2008 and served as equity compensation for Dr. Prabhu's and Mr. Robert's Board service from November 1, 2008 until the date of our annual meeting held in March, 2009.

        Deferred Compensation Plan.    Directors may defer any portion of their cash or stock compensation pursuant to the Compensation Plan for Non-Employee Directors of ADC Telecommunications, Inc. Cash compensation may be deferred into an interest bearing account based upon the prime commercial rate of Wells Fargo Bank, N.A. Stock compensation deferred is converted to phantom stock indexed to the Company's common stock. Any stock deferrals are converted into the Company's common stock at the time of the director's termination from the Board. None of our non-employee directors deferred compensation pursuant to the Compensation Plan for Non-Employee Directors of ADC Telecommunications, Inc. during fiscal 2009.

        Charitable Donation Programs.    We offer two charitable donation programs in which our non-employee directors may participate. Under our Corporate Leaders in Community Program (the "CLIC Program"), we will make a charitable contribution of up to $5,000 in any one year period to a charitable organization in which a non-employee director is involved. Under our Matching Gift Program (the "Matching Gift Program"), we will match dollar for dollar up to $1,000 per year for donations made by our non-employee directors to charitable organizations.

A-15


        Reimbursements.    Non-employee directors are reimbursed for expenses (including costs of travel, food and lodging) incurred in attending Board, committee and shareowner meetings. Directors generally use commercial transportation or their own transportation. Directors also are reimbursed for reasonable expenses associated with other business activities related to their Board service, including participation in director education programs and memberships in director organizations.

        Liability Insurance.    We also pay premiums on directors' and officers' liability insurance policies covering directors as well as our officers.

        Director Compensation Table.    The following table discloses the cash, equity awards and other compensation earned by or paid or awarded to, as the case may be, each of our non-employee directors for fiscal 2009.

Fiscal 2009 Non-Employee Director Compensation

Name
  Fees Earned or
Paid in Cash
($)
  Stock
Awards
($)(1)
  All Other
Compensation
($)(2)
  Total
($)(3)
 

J. Kevin Gilligan(4)

    36,250     0     0     36,250  

John A. Blanchard III(5)

    23,637     0     0     23,637  

John J. Boyle III

    76,750     69,997     0     146,747  

Mickey P. Foret

    82,333     69,997     0     152,330  

Lois M. Martin

    74,167     69,997     6,000     150,164  

Krish A. Prabhu, Ph.D

    69,667     69,997     0     139,664  

John E. Rehfeld

    89,250     69,997     5,000     164,247  

David A. Roberts

    73,167     69,997     0     143,164  

William R. Spivey, Ph.D

    126,167     69,997     0     196,164  

Larry W. Wangberg

    80,750     69,997     0     150,747  

John D. Wunsch

    84,667     69,997     0     154,664  

(1)
The amounts in this column are calculated based on Statement of Financial Accounting Standards No. 123(R) ("SFAS 123(R)"), which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and directors. The amounts reflect (a) the grant date fair value of each award computed in accordance with SFAS 123(R) and (b) the dollar amount recognized for financial statement reporting purposes for fiscal 2009 for share-based awards. Assumptions used in the calculation of these amounts generally are discussed in footnote 12 to our audited financial statements included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2009.

(2)
The amounts represent charitable contributions made by the Company on behalf of the directors under the CLIC Program and the Matching Gift Program.

(3)
As of September 30, 2009, the members of our Board held a number of RSUs and shares issuable pursuant to stock options as follows: for Mr. Boyle, (a) 34,550 RSUs and (b) 50,723 stock options; for Mr. Foret, (a) 34,550 RSUs and (b) 20,564 stock options; for Ms. Martin, (a) 34,550 RSUs and (b) 16,696 stock options; for Dr. Prabhu, (a) 27,857 RSUs and (b) 0 stock options; for Mr. Rehfeld, (a) 33,904 RSUs and (b) 16,696 stock options; for Mr. Roberts, (a) 27,857 RSUs and (b) 0 stock options; for Dr. Spivey, (a) 35,236 RSUs and (b) 16,696 stock options; for Mr. Wangberg, (a) 34,550 RSUs and (b) 34,945 stock options; and for Mr. Wunsch (a) 37,045 RSUs and (b) 31,408 stock options.

(4)
Mr. Gilligan resigned from our Board in February, 2009.

(5)
Mr. Blanchard retired from our Board in March, 2009.

A-16


Review of Director Compensation

        The Compensation Committee periodically reviews Board compensation based on market analysis provided by the Compensation Committee's compensation consultant. In establishing compensation for fiscal 2009, this consultant was F. W. Cook & Co., Inc. ("F.W. Cook"). The compensation consultant advises the Compensation Committee regarding the competitive position of Board compensation relative to our peer group (as described in the CD&A later in this Information Statement). Beginning July 21, 2009, the Committee appointed Pearl Meyer & Partners ("PM&P") as its independent consultant on Board and executive management compensation matters. This change was considered as part of the Compensation Committee's periodic review of its need for outside support and guidance relative to executive compensation and its commitment to good governance practices. There are no planned changes to director compensation for fiscal 2010.


SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

        The following table sets forth certain information with respect to the beneficial ownership of our common stock as of July 19, 2010, by: (1) each of our directors, (2) each of our named executive officers, (3) all of our directors and executive officers as a group and (4) each person or entity known by us to own beneficially more than five percent of our common stock. Unless otherwise noted, the shareowners listed in the table below have sole voting and investment power with respect to the shares of our common stock they beneficially own.

Name of Beneficial Owner
  Amount and Nature of
Beneficial Ownership
  Percent of Common
Stock Outstanding
 

Advisory Research, Inc. 

    10,421,517 (1)   10.74 %
 

180 North Stetson Street, Suite 5500

             
 

Chicago, IL 60601

             

BlackRock Inc. 

    8,828,328 (2)   9.10 %
 

55 East 52nd Street

             
 

New York, NY 10055

             

Robert E. Switz

    1,287,706 (3)   1.31 %

James G. Mathews

    117,595 (3)   *  

Patrick D. O'Brien

    209,094 (3)   *  

Laura N. Owen

    215,780 (3)   *  

Richard B. Parran, Jr. 

    101,683 (3)   *  

William R. Spivey, Ph.D. 

    16,696 (4)   *  

John J. Boyle III

    23,008 (4)   *  

Mickey P. Foret

    42,343 (4)(5)   *  

Lois M. Martin

    17,696 (4)   *  

Krish A. Prabhu, Ph.D. 

    0 (4)   *  

John E. Rehfeld

    17,696 (4)   *  

David A. Roberts

    0 (4)   *  

Larry W. Wangberg

    35,659 (4)   *  

John D. Wunsch

    30,228 (4)   *  

All executive officers and directors as a group (14 persons)

    2,115,184 (6)   2.15 %

*
Less than 1%.

(1)
Based on information in a Schedule 13G/A dated February 12, 2010, Advisory Research, Inc., an investment adviser, reported that it had sole power to vote and to dispose of 10,421,517 shares as of December 31, 2009.

A-17


(2)
Based on information in a Schedule 13G dated January 20, 2010, BlackRock Inc. reported that it had sole power to vote and to dispose of 8,828,328 shares as of December 31, 2009.

(3)
Includes (a) shares issuable pursuant to stock options exercisable within 60 days after July 19, 2010 and (b) shares held in trust for the benefit of the executive officers pursuant to our Retirement Savings Plan, which we call the "401(k) Plan" in this Information Statement as follows: for Mr. Switz, options to purchase 914,587 shares; for Mr. Mathews, (a) options to purchase 88,950 shares and (b) 2,917 401(k) Plan shares; for Mr. O'Brien, (a) options to purchase 155,161 shares and (b) 5,296 401(k) Plan shares; for Ms. Owen, (a) options to purchase 163,093 shares and (b) 9,431 401(k) Plan shares; and for Mr. Parran, options to purchase 81,161 shares.

(4)
Includes the following shares issuable pursuant to options exercisable within 60 days after July 19, 2010: for Dr. Spivey, 16,696 shares; for Mr. Boyle, 10,535 shares; for Mr. Foret, 20,564 shares; for Ms. Martin, 16,696 shares; for Mr. Rehfeld, 16,696 shares; for Mr. Wangberg, 34,945 shares; and for Mr. Wunsch 23,409 shares.

(5)
During December 2008, Mr. Foret acquired the equivalent of 1,779 shares of our variable rate convertible unsecured subordinated notes at 48.5% of face value. The notes mature on June 15, 2013 and have a variable interest rate equal to 6-month LIBOR plus 0.375%. Holders of these 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 $28.091 per share.

(6)
Includes (a) 1,542,493 shares issuable pursuant to stock options exercisable within 60 days after July 19, 2010 and (b) 17,644 shares held in trust for the benefit of executive officers pursuant to the 401(k) Plan.


SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

        Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our directors and executive officers, and persons who own more than 10% of our common stock, to file initial reports of ownership and reports of changes in ownership of our common stock and other equity securities with the SEC. Executive officers, directors and greater-than-10% shareowners are required by SEC regulation to furnish us with copies of all Section 16(a) reports they file. To our knowledge, based solely on a review of the copies of Section 16(a) reports furnished to us during fiscal 2009, all Section 16(a) filing requirements applicable to our executive officers, directors and greater-than-10% beneficial owners were satisfied on a timely basis in fiscal 2009.

A-18



EXECUTIVE COMPENSATION

Summary Compensation Table

        The following table shows the cash and non-cash compensation for the last three fiscal years awarded to, earned by or paid to individuals who served as our chief executive officer or chief financial officer and each of our three other most highly compensated executive officers during fiscal 2009 (collectively, the "named executive officers").


Summary Compensation Table(1)

Name and Principal Position
  Fiscal
Year
  Salary
($)(2)
  Stock
Awards
($)(3)(4)
  Option
Awards
($)(3)
  Non-equity
Incentive Plan
Compensation
($)(5)
  Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)(6)
  All Other
Compensation
($)(7)
  Total
($)
 

Robert E. Switz

    2009 (7)   695,711     1,429,220     1,098,045         6,537     76,169     3,305,683  
 

Chairman, Chief Executive

    2008     742,415     2,444,830     1,059,179     673,205     5,180     109,740     5,034,440  
 

Officer and President

    2007     703,269     1,468,156     960,740     886,822     2,975     54,224     4,076,185  

James G. Mathews

   
2009

(7)
 
311,808
   
158,364
   
206,106
   
49,110
   
   
29,153
   
754,541
 
 

Vice President and

    2008     329,231     266,916     111,644     208,001         38,567     954,358  
 

Chief Financial Officer

    2007     274,246     91,126     77,801     204,485         19,477     667,135  

Patrick D. O'Brien

   
2009

(7)
 
316,525
   
235,161
   
193,019
   
52,622
   
   
28,204
   
825,352
 
 

Vice President, President,

    2008     335,435     357,445     181,021     211,235         43,892     1,129,028  
 

Global Connectivity Solutions

    2007     317,673     182,469     182,320     222,594         28,623     933,679  

Laura N. Owen

   
2009

(7)
 
267,392
   
148,510
   
168,691
   
36,766
   
   
21,558
   
642,918
 
 

Vice President and

    2008     284,050     309,793     163,676     142,907         30,679     931,105  
 

Chief Administrative Officer

    2007     264,096     142,403     155,981     183,164         17,786     763,430  

Richard B. Parran, Jr. 

   
2009

(7)
 
260,058
   
171,566
   
132,674
   
50,729
   
   
24,860
   
639,888
 
 

Vice President and

    2008     250,021     183,267     106,584     97,175         22,907     659,955  
 

President, Network Solutions

    2007     235,904     114,203     98,506     121,443         16,906     586,962  

(1)
Salary, Non-equity Incentive Compensation, Change in Pension Value and Nonqualified Deferred Compensation Earnings and All Other Compensation amounts represented in the Summary Compensation Table above reflect payments made to the named executive officers during fiscal 2009, an 11-month, shortened transition fiscal year. In addition, on September 30, 2009 our executives other than Mr. Switz received two equity award grants under our Superior Performance program. These awards included (i) a restricted stock rights agreement pursuant to which if certain performance criteria are met during our fiscal 2011 the executive will be granted a time-based RSU at the end of fiscal 2011 with a one-year vesting period, and (ii) an RSU that vests in January, 2013. The targeted value of the RSUs that would be issued pursuant to the rights agreements is equal to two times the executive's base salary as of October 1, 2009. The actual value of the RSUs to be issued pursuant to the rights agreements will be an amount ranging from zero to three times the targeted value depending on the level of our adjusted operating income as a percentage of net sales in fiscal 2011. This table does not reflect the grant of the restricted stock rights agreement as at this time it is uncertain whether and to what extent any RSUs subject to such rights agreement will ever be granted. It does reflect the grant of the RSUs that vest in January, 2013.

(2)
Includes amount deferred at the election of the named executive officer pursuant to the ADC Telecommunications, Inc. Retirement Savings Plan and the ADC Telecommunications, Inc. 401(k) Excess Plan.

(3)
The amounts in these columns are calculated based on SFAS 123(R) and reflect the dollar amount recognized in each fiscal year for financial statement reporting purposes for awards granted in that fiscal year and in prior fiscal years. Assumptions used in the calculation of these amounts generally are discussed in footnote 12 to our audited financial statements included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2009, but do not include forfeitures.

(4)
In the first quarter of fiscal 2008, a determination was made to expense the PSUs we granted to employees in December, 2005 covering the performance period of fiscal 2006, 2007 and 2008. This decision was based on our belief that these PSUs, which vest on an all-or-nothing basis, would vest due to our financial estimates for fiscal 2008. This action primarily accounts for the significant differential in fiscal 2007 to fiscal 2008 stock award compensation for the named executive

A-19


(5)
All of the annual cash incentives paid to the named executive officers are performance-based. As a result of actual financial business performance against pre-established goals, each of the named executive officers earned awards under our MIP (or in Mr. Switz's case, the EMIP) as depicted on the Fiscal 2009 Annual Incentive Summary table later in the CD&A. Cash incentive awards for fiscal 2009 earned under the EMIP and MIP were paid in December, 2009.

(6)
The amount in this column reflects the actuarial increase in the present value of the named executive officer's benefits under the ADC Telecommunications, Inc. Pension Excess Plan, which utilizes the mortality table prescribed in Section 417(e)(3) of the Internal Revenue Code at 4.0%. We do not have any above market earnings under our nonqualified deferred compensation plan.

(7)
Amounts shown in this column include the information detailed in the following table:


Fiscal 2009 All Other Compensation

Name
  Company
Match on
Qualified
401(k)
Plan ($)
  Company
Match on
401(k)
Excess
Plan ($)
  Perquisite
Allowance
($)(1)
  Reimbursement
Of Club
Dues and
Fees ($)
  Other
($)(2)
  Totals ($)  

Robert E. Switz

    7,089     33,717     21,969     6,805     6,588     76,169  

James G. Mathews

    6,262     8,244     14,646             29,153  

Patrick D. O'Brien

    5,075     8,483     14,646             28,204  

Laura N. Owen

    6,706     5,603     9,154         95     21,558  

Richard B. Parran, Jr. 

    7,206     3,501     9,154         5,000     24,860  

(1)
Allowance paid to named executive officers in lieu of providing them with certain perquisites.

(2)
The amount for Mr. Switz represents the aggregate incremental cost to the company of an ADC fleet vehicle. The amounts for Mr. Parran represent a charitable contribution made by the Company on his behalf under the CLIC Program. The amounts for Ms. Owen represent a matching gift under our Matching Gift Program.

A-20


Grants of Plan-Based Awards

        The following table summarizes the fiscal 2009 grants of equity and non-equity plan-based awards to the named executive officers. All of these equity and non-equity plan-based awards were granted under our 2008 Global Stock Incentive Plan ("GSIP"), Executive Management Incentive Plan ("EMIP") and 2009 Management Incentive Plan ("MIP").

 
   
   
   
   
   
   
   
   
  All Other
Stock
Awards:
Number
of Shares
of Stock
or Units
(#)(3)(6)
  All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)(4)
   
   
 
 
   
   
  Estimated Future
Payouts Under Non-Equity
Incentive Plan Awards
  Estimated Future
Payouts Under Equity
Incentive Plan Awards
  Exercise
or Base
Price of
Option
Awards
($/Sh)
  Grant
Date Fair
Value
of Stock
and
Option
Awards(5)
 
Name
  Grant
Date
  Date of
Committee
Action
  Threshold
($)(1)
  Target
($)(1)
  Maximum
($)(1)
  Threshold
(#)(2)
  Target
(#)(2)
  Maximum
(#)(2)
 

Robert E. Switz

    n/a     n/a         695,711     2,087,133                              

    12/23/2008     12/23/2008                                 20,621     4.85     52,812  

    12/23/2008     12/23/2008                                 405,379     4.85     1,038,213  

    9/30/2009     9/30/2009                     209,832 (7)   209,832 (7)           8.34     1,749,999  

James G. Mathews

   
n/a
   
n/a
   
   
218,266
   
436,531
   
   
   
   
   
   
   
 

    12/15/2008     12/15/2008                                 20,622     4.85     52,815  

    12/15/2008     12/15/2008                                 129,378     4.85     331,349  

    9/30/2009 (6)   9/30/2009                             37,777         8.34     315,060  

Patrick D. O'Brien

   
n/a
   
a/a
   
0
   
221,568
   
443,135
   
   
   
   
   
   
   
 

    12/15/2008     12/15/2008                                 17,050     4.85     43,667  

    12/15/2008     12/15/2008                                 50,450     4.85     129,207  

    12/15/2008     12/15/2008                             27,000         4.85     130,950  

    9/30/2009 (6)   9/30/2009                             38,333         8.34     319,697  

Laura N. Owen

   
n/a
   
n/a
   
0
   
147,066
   
294,132
   
   
   
   
   
   
   
 

    12/15/2008     12/15/2008                                 9,381     4.85     24,026  

    12/15/2008     12/15/2008                                 28,119     4.85     72,015  

    12/15/2008     12/15/2008                             15,000         4.85     72,750  

    9/30/2009 (6)   9/30/2009                             32,333         8.34     269,657  

Richard B. Parran, Jr. 

   
n/a
   
n/a
   
0
   
143,032
   
286,064
   
   
   
0
   
   
   
   
 

    12/15/2008     12/15/2008                         0         15,346     4.85     39,303  

    12/15/2008     12/15/2008                         0         22,154     4.85     56,738  

    12/15/2008     12/15/2008                         0     15,000         4.85     72,750  

    1/30/2009     1/30/2009                         0         7,500     5.07     20,079  

    1/30/2009     1/30/2009                         0         7,500     5.07     20,079  

    1/30/2009     1/30/2009                         0     6,000         5.07     30,420  

    9/30/2009 (6)   9/30/2009                         0     32,777         8.34     273,360  

(1)
Represents the possible payout amounts under our EMIP and MIP for fiscal 2009. The actual cash incentive payout amounts for fiscal 2009 are reflected in the Non-Equity Incentive Plan Compensation column in the Summary Compensation Table.

(2)
The awards reflected in this column are PSUs that have a three-year performance period from November 1, 2008 through September 30, 2011, vest on January 9, 2012 and were granted pursuant to our 2008 GSIP. Vesting of PSUs is contingent on both continued employment during the vesting period and the achievement by the Company of one- and three-year cumulative adjusted EPS target over the three-year performance measurement period. If the named executive officer's employment terminates during the performance period as a result of death or disability, a pro-rata portion will be awarded as soon as administratively feasible after termination of employment. If the award recipient's employment terminates during the performance period as a result of retirement, involuntary job elimination or due to divestiture of a company business unit, a pro-rata portion will be awarded only if the performance measure is achieved by the company by the end of the performance period. In the event of a change in control of the company, the award will vest in full.

(3)
The awards reflected in this column are RSUs granted that have a three-year vesting period. The RSUs vest in full on December 15, 2011. If the named executive officer's employment terminates prior to the vesting date as a result of death or disability, a pro-rata portion will be awarded as soon as administratively feasible after termination of employment. If the named executive officer's employment terminates prior to the vesting date as a result of retirement, involuntary job elimination or due to divestiture of a company business unit, a pro-rata portion will be awarded by the company by the end of the scheduled vest date. In the event of a change in control of the company, the award will vest in full.

(4)
The stock options reflected in this column were granted pursuant to our 2008 GSIP and vest in 25% increments on each of December 15, 2009, December 15, 2010, December 15, 2011 and December 15, 2012, as long as the named executive officer is still an employee as of these dates. The entire option will be fully vested as of December 15, 2012. The smaller value relates to those options granted as Incentive Stock Options within the meaning of Section 422.

(5)
ADC utilizes the Black-Scholes methodology to value its stock options granted to named executive officers. The assumptions were: exercise price based on closing price of the date of grant, seven year term, 4.6 years average time to exercise, 4.00% risk-free interest rate, and dividend yield of 0%. The calculated Black-Scholes co-efficient was 0.52806.

(6)
The values listed for the grants made to executives other than Mr. Switz on September 30, 2009 are time-based RSUs which vest on January 2, 2013 as part of our Superior Performance program. In addition, on September 30, 2009 each of the named executive officers other than Mr. Switz were granted a rights agreement under the Superior Performance program. Pursuant to these rights agreements, if certain performance criteria are met during fiscal 2011 each executive will be granted RSUs with a one-year resting period. The targeted value of the RSUs to be issued pursuant to the rights agreements is equal to two times the executive's base salary as of October 1, 2009. The actual value of the RSUs to be issued under the Rights Agreements will be an amount ranging from zero to three times the targeted value depending on the level of our adjusted operating income as a percentage of net sales in fiscal 2011.

(7)
These PSUs vest as a result of the successful implementation of a CEO succession planning and transition process.

A-21


Outstanding Equity Awards at Fiscal Year-End

        The following table shows the unexercised stock options, unvested time-based restricted stock unit awards ("RSUs"), and unvested performance-based restricted stock unit awards ("PSUs") held as of September 30, 2009, by the named executive officers.

 
   
   
   
   
   
  Stock Awards(1)  
 
   
   
   
   
   
   
   
   
  Equity
Incentive
Plan
Awards:
Market
or Payout
Value of
Unearned
Shares,
Units or
Other
Rights That
Have Not
Vested
($)(3)
 
 
   
   
   
   
   
   
   
  Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights That
Have Not
Vested
(#)(4)
 
 
   
   
   
   
   
  Number
of
Shares
or Units
of Stock
That
Have
Not
Vested
(#)(2)
   
 
 
   
  Option Awards(1)    
 
 
   
  Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)(3)
 
Name
  Grant Date   Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
  Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
  Option
Exercise
Price
($)
  Option
Expiration
Date
 

Robert E. Switz

    11/1/1999     21,428     0     83.78     11/1/2009                  

    10/29/1999     5,060     0     83.46     10/29/2009                  

    10/31/2000     5,686     0     149.63     10/31/2010                  

    11/1/2000     18,571     0     155.31     11/1/2010                  

    5/31/2001     21,428     0     53.76     5/31/2011                  

    11/1/2001     51,833     0     30.59     11/1/2011                  

    11/27/2002     96,285     0     15.82     11/27/2012                  

    8/29/2003     171,428     0     17.43     8/29/2013                  

    12/16/2004     142,856 (5)   0     18.76     12/16/2014                  

    12/15/2005     93,750 (5)   31,250 (5)   23.91     12/15/2015                  

    12/18/2006     70,000 (9)   70,000 (9)   14.59     12/18/2013                  

    12/17/2007     35,000 (9)   105,000 (9)   17.76     12/17/2014                  

    12/23/2008         426,000 (9)   4.85     12/23/2015                  

    12/18/2006                             70,000 (7)   583,800  

    12/18/2006                     225,000     1,876,500          

    12/17/2007                             70,000 (8)   583,800  

    9/30/2009                             209,832 (11)   1,749,999  

James G. Mathews

   
12/30/2005
   
10,500

(5)
 
3,500

(5)
 
22.39
   
12/30/2015
   
   
   
   
 

    12/18/2006     6,800 (9)   6,800 (9)   14.59     12/18/2013                  

    4/30/2007     7,000 (9)   7,000 (9)   18.40     4/30/2014                  

    12/17/2007     8,375 (9)   25,125 (9)   17.76     12/17/2014                  

    12/15/2008     0     150,000 (9)   4.85     12/15/2015                  

    12/18/2006                             2,800 (7)   23,352  

    12/18/2006                     2,800     23,352          

    4/30/2007                     11,000     91,740          

    4/30/2007                             11,000 (7)   91,740  

    12/17/2007                             16,750 (8)   139,695  

    9/30/2009                     37,777 (10)   315,060              

Patrick D. O'Brien

   
11/27/2002
   
21,428
   
0
   
15.82
   
11/27/2012
   
   
   
   
 

    12/30/2003     18,530     0     19.67     12/30/2013                  

    3/3/2004     12,500 (5)   0     20.44     3/3/2014                  

    12/16/2004     15,457 (5)   0     18.76     12/16/2014                  

    12/15/2005     13,500 (5)   4,500 (5)   23.91     12/15/2015                  

    12/29/2003     16,304     0     19.81     12/29/2010                  

    12/18/2006     16,600 (9)   16,600 (9)   14.59     12/18/2013                  

    12/17/2007     5,584 (9)   16,749 (9)   17.76     12/17/2014                  

    12/15/2008           67,500 (9)   4.85     12/15/2015                          

    3/3/2004                                  

    12/18/2006                     16,600     138,444          

    12/18/2006                             16,600 (7)   138,444  

    12/17/2007                     7,444     62,083          

    12/17/2007                             11,167 (8)   93,133  

    12/15/2008                     27,000     225,180          

    9/30/2009                     38,333 (10)   319,697          

Laura N. Owen

   
11/1/2001
   
11,757
   
0
   
30.59
   
11/1/2011
   
   
   
   
 

    11/27/2002     22,856     0     15.82     11/27/2012                  

    3/3/2004     9,500     0     20.44     3/3/2014                  

A-22


 
   
   
   
   
   
  Stock Awards(1)  
 
   
   
   
   
   
   
   
   
  Equity
Incentive
Plan
Awards:
Market
or Payout
Value of
Unearned
Shares,
Units or
Other
Rights That
Have Not
Vested
($)(3)
 
 
   
   
   
   
   
   
   
  Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights That
Have Not
Vested
(#)(4)
 
 
   
   
   
   
   
  Number
of
Shares
or Units
of Stock
That
Have
Not
Vested
(#)(2)
   
 
 
   
  Option Awards(1)    
 
 
   
  Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)(3)
 
Name
  Grant Date   Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
  Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
  Option
Exercise
Price
($)
  Option
Expiration
Date
 

    12/16/2004     12,099 (5)   0     18.76     12/16/2014                  

    12/15/2005     13,500 (5)   4,500 (5)   23.91     12/15/2015                  

    12/29/2003     48,006     0     19.81     12/29/2010                  

    12/18/2006     13,000 (9)   13,000 (9)   14.59     12/18/2013                  

    12/17/2007     6,000 (9)   18,000 (9)   17.76     12/17/2014                  

    12/15/2008         37,500 (9)   4.85     12/15/2015                  

    12/18/2006                     13,000     108,420          

    12/18/2006                             13,000 (7)   108,420  

    12/17/2007                             12,000 (8)   100,080  

    12/15/2008                     15,000     125,100          

    9/30/2009                     32,333 (10)   269,657          

Richard B. Parran, Jr. 

   
11/27/2002
   
8,571
         
15.82
   
11/27/2012
   
   
   
   
 

    3/3/2004     3,714 (5)       20.44     3/3/2014                  

    12/16/2004     6,385 (5)       18.76     12/16/2014                  

    12/15/2005     4,875 (5)   1,625     23.91     12/15/2015                  

    3/31/2006     3,375 (9)   1,125 (9)   25.82     3/30/2016                  

    12/18/2006     11,850 (9)   11,850 (9)   14.59     12/18/2013                  

    12/29/2003     12,591 (9)         19.81     12/29/2010                  

    12/17/2007     4,000 (9)   12,000 (9)   17.76     12/17/2014                  

    12/15/2008         37,500 (9)   4.85     12/15/2015                  

    1/30/2009         15,000 (9)   5.07     1/30/2016                  

    12/18/2006                     11,850     98,829          

    12/18/2006                             11,850 (7)   98,829  

    12/17/2007                     5,333     44,447          

    12/17/2007                             8,000 (8)   66,720  

    12/15/2008                     15,000     125,100          

    1/30/2009                     6,000     50,040          

    9/30/2009                     32,777 (10)   273,360          

(1)
All awards were made pursuant to our 1991 GSIP or 2008 GSIP.

(2)
Awards in this column consist of RSUs granted that have a three-year vesting period. For RSUs if the named executive officer's employment is terminated prior to the vesting date as a result of death or disability, a pro-rata portion will be awarded as soon as administratively feasible after termination of employment. Additionally, if the named executive officer's employment terminates prior to the vesting date as a result of retirement, involuntary job elimination or due to divestiture of a company business unit, a pro-rata portion will be awarded by the company by the end of the scheduled vest date. In the event of a change in control of the company, the RSUs with a three-year vesting period will vest in full.

(3)
The value of an outstanding unvested award was calculated based upon the closing price of ADC common stock on September 30, 2009 of $8.34.

(4)
Awards in this column consist of PSUs. Vesting of PSUs is contingent on both continued employment during the vesting period and the achievement by ADC of a three-year cumulative adjusted EPS target over a one- and three-year performance measurement period. If the named executive officer's employment terminates during the performance period as a result of death or disability, a pro-rata portion will be awarded as soon as administratively feasible after termination of employment. If the award recipient's employment terminates during the performance period as a result of retirement, involuntary job elimination or due to divestiture of a company business unit, a pro-rata portion will be awarded only if the performance measure is achieved by the company by the end of each fiscal year within the performance period. In the event of a change in control of the company, the award will vest in full.

(5)
These stock options vest at a rate of 8.3% per quarter so long as the recipient remains continuously employed by ADC.

(6)
These PSUs are for the performance period from November 1, 2006 through October 31, 2009.

(7)
These PSUs are for the performance period from November 1, 2007 through October 31, 2010.

(8)
These PSUs are for the performance period for November 1, 2008 through September 30, 2011.

A-23


(9)
These stock options vest at a rate of 25% a year for four years so long as the recipient remains continuously employed by ADC.

(10)
On September 30, 2009 our executives other than Mr. Switz received two long-term incentive awards under our Superior Performance program. These awards included (i) a restricted stock rights agreement pursuant to which if certain performance criteria are met during our fiscal 2011 the executive will be granted a time-based RSU at the end of fiscal 2011 with a further one-year vesting period, and (ii) an RSU that vests in January, 2013. The targeted value of the RSUs that would be issued pursuant to the rights agreements is equal to two times the executive's base salary as of October 1, 2009. The actual value of the RSUs to be issued pursuant to the rights agreements will be an amount ranging from zero to three times the targeted value depending on the level of our adjusted operating income as a percentage of net sales in fiscal 2011. This table does not reflect the grant of the restricted stock rights agreement as at this time it is uncertain whether and to what extent any RSUs subject to such rights agreement will ever be granted. It does reflect the grant of the RSUs that vest in January, 2013.

(11)
These PSUs vest as a result of the successful implementation of a CEO succession planning and transition process.

Stock Vested During Fiscal 2009

        The following table summarizes information with respect to RSU awards that vested during fiscal 2009 for each named executive officer. None of the named executive officers exercised stock options during fiscal 2009.

Name
  Number of Shares
Acquired on Vesting
(#)
  Value Realized
on Vesting
($)(1)
 

Robert E. Switz

    75,000     413,125  

James G. Mathews

    7,500     42,075  

Patrick D. O'Brien

    10,286     56,920  

Laura N. Owen

    10,007     55,525  

Richard B. Parran, Jr. 

    6,032     30,770  

(1)
The value is based upon the closing market price of the Company's common stock on the date of vesting.

Pension Benefits

        We maintain a Pension Excess Plan, which is a non-qualified, unfunded deferred compensation arrangement. The plan is intended to compensate employees for the amount of benefits foregone under our former defined benefit pension plan (which was terminated on December 31, 1997) as a result of past elections under our Deferred Compensation Plan and the Executive Incentive Exchange Plan. It also is intended to compensate employees for the amount of benefits that could not be paid from the pension plan due to maximum benefit and compensation limitations under the Internal Revenue Code. Within 30 days of termination of employment, participants in the Pension Excess Plan receive a lump-sum payment equal to the amount of these benefits. Benefits payable under the Pension Excess Plan were frozen as of January 5, 1998, and participation in the Pension Excess Plan is limited to existing participants as of December 31, 1997. Of the named executive officers, only Mr. Switz participates in the Pension Excess Plan. Mr. Switz is fully vested in the plan and may retire at any time without reduction in benefit.

A-24


        The table below summarizes information with respect to the Pension Excess Plan.

Name
  Plan Name   Number of
Years
Credited
Service
(#)
  Present
Value of
Accumulated
Benefit
($)(1)
  Payments
During
Last
Fiscal Year
($)
 

Robert E. Switz

  Pension Excess Plan     16     71,717     0  

James G. Mathews

               

Patrick D. O'Brien

               

Laura N. Owen

               

Richard B. Parran, Jr. 

               

(1)
An actuarially equivalent value calculated by reference to the interest and mortality factor in effect at the time of the participant's assumed termination of employment (September 30, 2009, the end of our fiscal year) is used to calculate the present value of the accumulated benefit. The annual interest rate used is the average of the rates for 30-year treasury securities on each day of the month of November in the year preceding the assumed termination date. That interest rate was 4.0%. We used mortality assumptions as described in Section 417(e)(3) of the Internal Revenue Code. The year-over-year change in the actuarial present value of Mr. Switz's accumulated benefit under the Pension Excess Plan is disclosed in the "Change in Pension Value and Nonqualified Deferred Compensation Earnings" column of the Summary Compensation Table.

Nonqualified Deferred Compensation

        We sponsor a defined contribution retirement plan under Section 401(k) of the Internal Revenue Code and the Employee Retirement Income Security Act of 1974, as amended. U.S.-based executives are eligible to participate in this plan, as are all U.S.-based employees, following the completion of one year of employment in which they work at least 1,000 hours. These employees also are eligible to receive an employer matching contribution of one-half of the first 6% of their pay deferred into the plan.

        The ADC Telecommunications, Inc. 401(k) Excess Plan (the "401(k) Excess Plan") is designed to provide certain employees benefits that would be provided under our 401(k) plan except for the Internal Revenue Code limits placed on contributions to qualified 401(k) plans. The 401(k) Excess Plan is a non-qualified, unfunded deferred compensation arrangement. Record keeping accounts are held in each participant's name and are 100% vested at all times. Hypothetical contributions to these accounts are made by both the participant and the Company according to the Internal Revenue Code limits. Hypothetical earnings to accounts are made based upon the participant's preference of investment in an ADC phantom stock fund as well as other funds substantially similar to those found in our qualified 401(k) plan. Distributions are made to participants at the time of termination of employment in a lump sum or through regular installments over a five-year timeframe.

        The following table shows the contributions, earnings and account balances for the named executive officers in our 401(k) Excess Plan. Other than the 401(k) Excess Plan, we do not sponsor any

A-25



other non-qualified deferred compensation plans into which named executive officers voluntarily defer part of the total cash compensation.

Name
  Executive
Contributions
in Last FY
($)(1)
  Registrant
Contributions
in Last FY
($)(2)
  Aggregate
Earnings in
Last FY
($)(3)
  Aggregate
Withdrawals/
Distributions
  Aggregate
Balance at
Last FYE
($)(4)
 

Robert E. Switz

    78,674     33,717     20,844     0     729,268  

James G. Mathews

    16,489     8,244     18,393     0     76,236  

Patrick D. O'Brien

    28,276     8,483     39,981     0     317,436  

Laura N. Owen

    11,205     5,603     20,000     0     97,840  

Richard B. Parran, Jr. 

    11,669     3,501     37,253     0     243,610  

(1)
The amounts in this column also are reported in the "Salary" column of the Summary Compensation Table for fiscal 2009.

(2)
ADC's contributions listed in this column also are reported in the "All Other Compensation" column of the Summary Compensation Table for fiscal 2009.

(3)
The earnings listed in this column represent the change during the last fiscal year in the value of the underlying mutual fund or the Company's stock fund in which the executive officers' deferred amounts were invested and increases in the deferred amounts due to dividends payable upon those funds.

(4)
The amounts in this column include deferrals of cash compensation from prior years that were reported in the Summary Compensation Table in our proxy statement as follows for the relevant years: for Mr. Switz, $542,910; for Mr. Mathews, $18,174; for Mr. O'Brien, $223,561; for Ms. Owen, $120,141; and for Mr. Parran, $141,226. The balance for each named executive officer includes the cumulative increase in value of the investment alternatives in which the deferred amounts are deemed to be invested.

Employment Agreements and Potential Payments Upon Termination or Change in Control

Employment and Severance Agreement with Robert E. Switz

        We entered into an employment agreement with Mr. Switz in conjunction with his appointment as Chief Executive Officer effective August 13, 2003. On July 1, 2009 we entered into the Extension of this existing employment agreement with Mr. Switz. The Extension reflects our Board's desire to provide stability in the direction and management of ADC through a challenging economic environment. It also reflects our Board's intent to act proactively in the area of succession planning in response to the prospect of the eventual future retirement of Mr. Switz, currently age 63.

        Mr. Switz has agreed with the Board to remain with ADC at least until the end of 2011 or, if sooner, until the end of a transition period following the appointment of a successor CEO. Through continued performance as CEO for the agreed period under the Extension, Mr. Switz would earn the right to receive a one-time payment and acceleration of equity compensation awards that have not previously vested at the time of his retirement.

        Among other things, the Extension also clarifies provisions of the existing employment agreement regarding the calculation of the amount of the payment to which Mr. Switz would be entitled in the case of (1) termination by the company without cause; (2) termination by Mr. Switz for good reason; or (3) Mr. Switz' retirement after the date specified in the Extension. Specifically, under these circumstances, the amount of the one-time payment is now stated as a specific dollar amount ($3.275 million) rather than an amount derived from a formula-driven calculation.

A-26


Voluntary Termination or Termination for Cause

        In the event that Mr. Switz voluntarily terminates his employment without "good reason" or if we terminate his employment for "cause" (both as defined in the agreement), no compensation will be provided other than the normal payment of salary already earned and other benefits to which he legally is entitled as an employee.

        In addition, option, RSU and PSU award agreements entered into by Mr. Switz may contain acceleration of vesting clauses upon the occurrence of certain events.

Severance Arrangements with Other Named Executive Officers

        We do not have employment or severance agreements with the named executive officers other than Mr. Switz. However, we have established severance practices as they relate to involuntary, other-than-for-cause separations for our named executive officers. For the named executive officers, salaries are continued for a period of from 12 to 18 months depending on grade level. All executives separated under this practice are eligible to receive reimbursement for benefits continuation of two months (12 months in the case of a disability) and outplacement assistance in the amount of $9,000. The named executive officer receiving severance pay under this practice must sign a waiver and release of claims including non-solicitation and non-disparagement clauses. These severance practices may be changed at any time at the discretion of the Compensation Committee.

Executive Change in Control Severance Pay Plan

        We maintain an Executive Change in Control Severance Pay Plan (the "Severance Plan") to provide severance pay in the event of a "change in control" of the Company for executive officers (including the named executive officers) and certain other high-level executives. The plan and agreements are intended to provide for continuity of management if there is a change in control of the Company. Generally, under the Severance Plan and various equity award agreements currently in effect, a change in control is defined to include:

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        The Severance Plan provides for severance payments to eligible employees whose employment is terminated, either voluntarily with "good reason" (as defined in the Severance Plan) or involuntarily, during the two-year period following a change in control. This is often referred to as a "double trigger" severance provision. The Compensation Committee believes that a double trigger design is more appropriate than the single trigger approach because it prevents severance payments in the event of a change in control where the executive continues to be employed without an adverse effect on compensation, role and responsibility or job location.

        The amount of severance pay to be received by the CEO is three times his annual base salary and annual target bonus, and for other eligible executives is two times their annual base salary and target bonus. The Severance Plan also provides for payment of a pro rata portion of the employee's bonus under the MIP or other applicable incentive bonus plan for the year in which employment termination occurs to the extent that the applicable incentive plan does not otherwise require a payment. This pro rata amount is the higher of the pro rata target incentive or pro rata actual incentive based on financial performance during the year. Payments under the Severance Plan will be made on the first day of the seventh month following termination of employment in a lump sum. Under the Severance Plan, any severance payment to an eligible executive is increased by the amount, if any, necessary to take into account any additional taxes as a result of such payments being treated as "excess parachute payments" within the meaning of Section 280G of the Internal Revenue Code.

Change in Control Provisions in Equity Award Agreements

        We have other compensatory arrangements with our executive officers relating to a change in control of ADC. All stock option agreements outstanding under our 1991 GSIP and 2008 GSIP provide for the acceleration of exercisability of options upon a change in control (or, in certain cases, only if the optionee's employment is terminated without cause within two years following a change in control). In addition, our outstanding RSU, PSU, and PCU award agreements provide for accelerated vesting of certain outstanding RSUs, PSUs and PCUs following a change in control.

Potential Payments Upon Certain Terminations or Changes in Control

        The following table shows potential payments to the named executive officers upon voluntary termination, death, disability, termination without cause, retirement or termination upon a change in control of the Company, assuming that any such termination of employment occurred on September 30, 2009. The retirement benefits that are listed in the table are available after the named executive officer attains age 55 and has at least 10 years of eligible service.

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Potential Payments Upon Certain Terminations, Death, Disability or Termination After
a Change in Control

Name
  Description   Voluntary
Termination,
Disability or
Death
  Without Cause
Termination
  Retirement   Termination After
Change in Control
 

Robert E. Switz

  Severance Amount     0     3,275,000     0     4,452,000  

  Bonus     0     0     0     695,711  

  Value of Accelerated Options(1)     0     0     0     1,488,740  

  Value of Accelerated RSUs(2)     0     0     1,250,875     1,876,500  

  Value of Accelerated PSUs(3)     0     0     583,742     2,917,599  

  Value of Benefits Continuation     0     3,870     0     0  

  Value of Outplacement Services     0     9,000     0     0  

  Excise Tax Gross Up Payment(4)             0     3,758,499  

      Total     0     3,287,870     1,834,617     15,277,049  
                       

James G. Mathews

  Severance Amount     0     425,000     0     1,156,000  

  Bonus     49,110     49,110     49,110     218,265  

  Value of Accelerated Options(1)     0     0     0     523,500  

  Value of Accelerated RSUs(2)     0     0     0     115,357  

  Value of Accelerated PSUs(3)     0     0     0     254,767  

  Value of Benefits Continuation     0     2,018     0     0  

  Value of Outplacement Services     0     9,000     0     0  

  Excise Tax Gross Up Payment(4)                 845,356  

      Total     49,110     485,128     49,110     3,113,265  
                       

Patrick D. O'Brien

  Severance Amount     0     431,250     0     1,173,000  

  Bonus     52,622     52,622     52,622     221,568  

  Value of Accelerated Options(1)     0     0     0     235,575  

  Value of Accelerated RSUs(2)     0     0     0     301,376  

  Value of Accelerated PSUs(3)     0     0     0     231,577  

  Value of Benefits Continuation     0     2,018     0     0  

  Value of Outplacement Services     0     9,000     0     0  

  Excise Tax Gross Up Payment(4)                 783,187  

      Total     52,622     494,890   $ 52,622     2,946,283  
                       

Laura N. Owen

  Severance Amount     0     363,750     0     902,100  

  Bonus     36,766     36,766     36,766     147,066  

  Value of Accelerated Options(1)     0     0     0     130,875  

  Value of Accelerated RSUs(2)     0     0     0     233,747  

  Value of Accelerated PSUs(3)     0     0     0     208,500  

  Value of Benefits Continuation     0     1,290     0     0  

  Value of Outplacement Services     0     9,000     0     0  

  Excise Tax Gross Up Payment(4)                 565,932  

      Total     36,766     410,806   $ 36,766     2,188,220  
                       

Richard B. Parran, Jr. 

  Severance Amount           368,750     0     914,500  

  Bonus     50,729     50,729     50,729     143,032  

  Value of Accelerated Options(1)     0     0     0     179,925  

  Value of Accelerated RSUs(2)     0     0     0     318,676  

  Value of Accelerated PSUs(3)     0     0     0     165,549  

  Value of Benefits Continuation     0     2,018     0     0  

  Value of Outplacement Services     0     9,000     0     0  

  Excise Tax Gross Up Payment(4)                 633,160  

      Total     50,729     430,497     50,729     2,354,842  
                       

(1)
Value computed for each stock option grant by multiplying (i) the difference between (a) $8.34 which was the closing market price of a share of our common stock on September 30, 2009, the last business day of fiscal 2009 and (b) the exercise price per share for that option grant, by (ii) the number of shares subject to that option grant.

(2)
Value determined by multiplying the number of RSUs that vest by $8.34, the closing market price of a share of our common stock on September 30, 2009, the last business day of fiscal 2009.

(3)
Value determined by multiplying the number of PSUs that vest by $8.34, the closing market price of a share of our common stock on September 30, 2009, the last business day of fiscal 2009.

(4)
In the case of a change in control, the standard calculations as specified under the Internal Revenue Code Section 280(g) regulations were applied to the various benefits the named executive officers would receive in order to determine if any 280(g) excise taxes would be triggered and if so, what amount of 280(g) gross-up payments would be required under the terms of the change in control arrangements.

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COMPENSATION DISCUSSION AND ANALYSIS

Overview

        This Compensation Discussion and Analysis (the "CD&A") describes our compensation philosophy, objectives, and processes, including the methodology used in 2009 for determining executive compensation for the named executive officers. A section at the end of the CD&A describes action regarding executive compensation taken or effective after the 2009 fiscal year end. Please also refer to the more detailed compensation disclosures beginning with and the Summary Compensation Table contained in this Information Statement.

Executive Summary

        Our executive compensation programs continue to be guided by the following general principles: (1) providing competitive pay relative to our peers, (2) assuring that a significant portion of executive compensation is tied directly to company performance (3) aligning the interests of our executives with those of our shareowners through the use of equity compensation awards, and (4) utilizing compensation elements that help retain our executives. In using these principles to structure compensation programs we seek to assure that median levels of performance for our company relative to the performance of our peers will result in median levels of compensation relative to that paid to executives of our peers and that above median levels of performance relative to our peers will result in above median levels of compensation relative to that paid to executives of our peers. In structuring compensation programs we also take into account the industry and macro-economic conditions in which we operate as well as the need to provide incentives towards specific financial or operating goals.

        Unprecedented industry and macro economic conditions began to impact our business significantly late in fiscal 2008. At the time we were planning compensation for fiscal 2009, we took into account the possibility there would be a prolonged recession and that we would need to monitor our operating costs appropriately. As a result, we made several key decisions regarding compensation for fiscal 2009. Payouts under incentive programs also were impacted by economic and industry conditions in fiscal 2009. For instance:

        During fiscal 2009, in preparation for the development and implementation of a proactive process to determine the successor to our Chief Executive Officer ("CEO") and to ensure an orderly transition for this position, we extended the term of the employment contract of our CEO, Mr. Switz, and granted him a performance-based restricted stock award. These actions were designed to retain Mr. Switz, currently age 63, as we prepare to transition his position and to reward him for a successful transition.

        At the end of fiscal 2009, we also implemented a special one-time, long-term incentive program that we call the Superior Performance Long Term Incentive Program (the "Superior Performance" program). The Superior Performance program was developed in light of Board planning concerning the

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eventual retirement of Mr. Switz as well as the Board's desire to drive higher levels of performance in the face of a very challenging economic environment. This program has been extended to members of our executive team other than Mr. Switz and will reward them if they significantly improve our financial performance from the level of performance in fiscal 2009. It also provides a significant retention incentive for participating executives. Details of the Superior Performance program are found in the "Compensation Discussion and Analysis" of this Information Statement.

        This CD&A will disclose who determines compensation for our executives, the objectives and philosophies of our executive compensation program, the means by which levels of compensation for executives are determined and the elements of compensation we use in our compensation program.

        The principal elements of our executive compensation program for fiscal 2009 were:

The Role of the Compensation Committee

        The Compensation Committee reviews and approves executive compensation programs and specific compensation arrangements with the named executive officers. The Compensation Committee is composed entirely of independent outside directors, as currently defined by the SEC and the NASDAQ Global Select Market. A brief summary of the role of the Compensation Committee is found in the section entitled "Information Concerning Current Directors and Officers of ADC Telecommunications, Inc." in this Information Statement. For more information on the role and responsibilities of the Compensation Committee, we encourage you to review the Compensation Committee Charter, which is posted on our website at http://investor.adc.com/governance.cfm.

The Role of the Compensation Consultant

        The Compensation Committee charter permits the Compensation Committee to engage independent outside advisors to assist the Compensation Committee in the fulfillment of its responsibilities. The Compensation Committee engages an independent executive compensation consultant, who provides it with information, advice and counsel. Typically, the consultant assists the Compensation Committee by independently reviewing:

        F.W. Cook served as independent consultant to the Compensation Committee through July, 2009. Beginning July 21, 2009, the Committee engaged Pearl Meyer & Partners as its independent consultant. The selection and engagement of each consultant was made directly by the Compensation Committee. Neither F.W. Cook nor Pearl Meyer & Partners provide any other compensation or benefit consulting services to the Company.

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        Throughout fiscal 2009, each of the consultants met periodically with the Compensation Committee in the regularly scheduled committee meetings that occurred during the respective engagement terms for that consultant. Separately, the consultants also met with the Chair of the Compensation Committee and management representatives in preparation for scheduled Compensation Committee meetings. In these preparation meetings, the efficacy of executive compensation programs was discussed, market survey and peer group data were reviewed, and new programs and modifications to existing programs were reviewed. The consultants offered their opinions concerning management recommendations, made their own recommendations and otherwise advised the Compensation Committee concerning executive compensation at the Company, including compensation for Mr. Switz and the other named executive officers. The consultants also advised the Compensation Committee on the composition of the below described peer group. On occasion, the consultants were directed to perform analysis concerning potential new programs or other matters of interest to the Compensation Committee.

The Role of Executive Management in the Process of Determining Executive Compensation

        The Compensation Committee makes the final determination of the executive compensation package provided to each of our named executive officers. Mr. Switz makes recommendations to the Compensation Committee and participates in the decisions regarding executive compensation for named executive officers other than himself. Each of these other executives reports directly to Mr. Switz. Ms. Owen, our Vice President and Chief Administrative Officer, is responsible for administering our executive compensation program. Ms. Owen also reviews significant proposals or topics impacting executive compensation with the Compensation Committee. Mr. Mathews, our Chief Financial Officer, is responsible for providing information and analysis on various aspects of our executive compensation plans, including financial analysis relevant to the process of establishing performance targets for our Management Incentive Plan ("MIP") and our Executive Management Incentive Plan ("EMIP") as well for performance-based restricted stock unit awards ("PSUs"). Mr. Pflaum, our Vice President and General Counsel, acts as Secretary to the Compensation Committee as well as the full Board and other Board committees. Although members of our management team participate in the process of determining executive compensation at the request of the Compensation Committee, the Compensation Committee also meets regularly in executive session without any members of the management team present. The compensation arrangements for Mr. Switz were approved in such executive sessions.

Key Considerations and Process

        Program Objectives and Reward Philosophy.    Our Compensation Committee is guided by the following key objectives and reward philosophies in the design and implementation of our executive compensation program:

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        Analysis of Risk Taking Behaviors.    In structuring our compensation program we work to balance the above objectives. Thus while we place a strong emphasis on pay for performance, the Compensation Committee strives to structure a program that provides sufficient incentives for executives to drive business and financial results, but not to the point of encouraging excessive and unnecessary risk taking behaviors that would threaten the long-term sustainability of our business. The Compensation Committee helps to ensure this balance is achieved through the following means:

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        References in the CD&A to "total compensation" refer to the sum of base salary, target annual cash incentives and the fair value of long-term equity incentives on the date of grant. Because SEC rules presently require the value of equity awards disclosed in the Summary Compensation Table contained this Information Statement to be measured based on the value recognized for financial reporting purposes as opposed to their fair value, the references to total compensation in this Information Statement may not tie to the values found in the Summary Compensation Table and other supplemental tables.

        In applying our program objectives and reward philosophies, the Compensation Committee takes into account the following key considerations and uses the following processes:

        Competitive Market Assessment.    We regularly conduct a competitive market assessment for each of the primary elements of our executive compensation program. The Compensation Committee does not apply any formulaic approach in setting compensation resulting from the market assessment. Instead, as described above, this information is used to help determine a potential range of compensation, which is then balanced against a variety of other factors in making a final determination of each executive's compensation. The Compensation Committee used the following sources of information in setting total compensation for fiscal 2009:


Fiscal 2009 Comparison Peer Group

 
   
   
3Com Corporation   CommScope, Inc.   Powerwave Technologies
Adtran, Inc.   General Cable Corporation   Quanta Services, Inc.
Amphenol Corporation   Harris Corporation   Superior Essex, Inc.
Arris Group   Hughes Communications, Inc.   Tellabs, Inc.
Avocent Inc.   JDS Uniphase, Inc.   Thomas & Betts Corp.
Belden, Inc.   Molex, Inc.    
Ciena Corporation   Polycom, Inc.    

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        Survey sources generally are utilized to supplement compensation peer group data analyzed by our consultants, especially for those officer positions outside the named executive officers where little or no peer data is available. Peer group data is used exclusively in providing a market view for our CEO. For named executive officers other than the CEO, survey data is weighted approximately evenly with available peer group data.

        Financial and Strategic Objectives.    Our management team developed our fiscal 2009 annual operating plan and our fiscal 2009 three-year strategic plan, approved by our Board. The Compensation Committee utilizes these financial and strategic plans in the development of compensation plans and performance goals for our named executive officers for the next fiscal year.

        Considerations for Mr. Switz.    In fiscal 2009 the total compensation for Mr. Switz was within the median range of chief executive officers of companies within our peer group. The Compensation Committee considers the following additional factors in setting the compensation arrangements for Mr. Switz: An annual assessment of his performance conducted by our Governance Committee (based on evaluations from the entire Board); Mr. Switz's tenure, skills and experience; the financial and strategic results achieved by the Company for the last fiscal year relative to the pre-established objectives in our annual operating plan and three-year strategic plan; the financial plans and strategic objectives for the next fiscal year; and other strategic and operational factors critical to the long-term success of our business (e.g. Succession planning and transition).

        In determining Mr. Switz's total compensation for fiscal 2009, the Compensation Committee met with F.W. Cook. The Compensation Committee's desire was to recognize the Company's financial performance in fiscal 2008, Mr. Switz's sustained leadership and contributions to the organization through both positive and negative business cycles, his management of the transition of certain senior executive positions during the past fiscal year and to reinforce the company's overall compensation philosophy.

        The Compensation Committee reviewed analysis by F.W. Cook regarding the Company's performance relative to our identified peer group. Specific financial and business measures reviewed were company size, profitability on a GAAP net income basis, company growth, and shareholder return all weighted evenly. On this basis, our overall composite performance was deemed to be at approximately the 48th percentile of our peer group and, therefore, within the median range. It also reviewed information concerning Mr. Switz's total compensation compared to the median range of total compensation of the CEOs of companies within our peer group. Mr. Switz's total compensation was within the median range.

        Considerations for Other Named Executive Officers.    In fiscal 2009 the total compensation of each of our named executive officers other than Mr. Switz was within the median range of similarly situated employees of companies within our peer group and the salary surveys we utilize. The Compensation

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Committee considers the following factors in setting the compensation arrangements for each of the other named executive officers: