<SEC-DOCUMENT>0001299933-14-001873.txt : 20141205
<SEC-HEADER>0001299933-14-001873.hdr.sgml : 20141205
<ACCEPTANCE-DATETIME>20141205135157
ACCESSION NUMBER:		0001299933-14-001873
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		4
CONFORMED PERIOD OF REPORT:	20141203
ITEM INFORMATION:		Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers
ITEM INFORMATION:		Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year
FILED AS OF DATE:		20141205
DATE AS OF CHANGE:		20141205

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			DIGI INTERNATIONAL INC
		CENTRAL INDEX KEY:			0000854775
		STANDARD INDUSTRIAL CLASSIFICATION:	COMPUTER COMMUNICATIONS EQUIPMENT [3576]
		IRS NUMBER:				411532464
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			0930

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-34033
		FILM NUMBER:		141268839

	BUSINESS ADDRESS:	
		STREET 1:		11001 BREN ROAD EAST
		CITY:			MINNETONKA
		STATE:			MN
		ZIP:			55343
		BUSINESS PHONE:		(952) 912-3444

	MAIL ADDRESS:	
		STREET 1:		11001 BREN ROAD EAST
		CITY:			MINNETONKA
		STATE:			MN
		ZIP:			55343
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>htm_50943.htm
<DESCRIPTION>LIVE FILING
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<TITLE> Digi International Inc. (Form: 8-K) </TITLE>
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		UNITED STATES<BR>
	SECURITIES AND EXCHANGE COMMISSION
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	WASHINGTON, D.C. 20549
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	FORM 8-K
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	CURRENT REPORT
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	Pursuant to Section&nbsp;13 or 15(d) of the Securities Exchange Act of 1934
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	Date of Report (Date of Earliest Event Reported):
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	&nbsp;
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	December 3, 2014
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	Digi International Inc.
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<BR>__________________________________________<BR>
	(Exact name of registrant as specified in its charter)
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	Delaware
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	001-34033
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	41-1532464
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_____________________<BR>
	(State or other jurisdiction
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_____________<BR>
	(Commission
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______________<BR>
	(I.R.S. Employer
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	of incorporation)
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	File Number)
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	Identification No.)
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	11001 Bren Road East, Minnetonka, Minnesota
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	&nbsp;
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	55343
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_________________________________<BR>
	(Address of principal executive offices)
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	&nbsp;
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___________<BR>
	(Zip Code)
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	Registrant&#146;s telephone number, including area code:
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	952-912-3444
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	Not Applicable
<BR>______________________________________________<BR>
	Former name or former address, if changed since last report
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	&nbsp;
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Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any
of the following provisions:</FONT>
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<P><FONT SIZE="2">
[&nbsp;&nbsp;]&nbsp;&nbsp;Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)<br>
[&nbsp;&nbsp;]&nbsp;&nbsp;Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)<br>
[&nbsp;&nbsp;]&nbsp;&nbsp;Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))<br>
[&nbsp;&nbsp;]&nbsp;&nbsp;Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))<br>
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	Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
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<FONT SIZE="2">
On December 3, 2014, we announced that our Board of Directors elected Ron Konezny as our President and Chief Executive Officer, effective December 17, 2014. Mr. Konezny was also elected as a director effective upon the commencement of his employment.  Mr. Konezny succeeds Joseph T. Dunsmore, who previously announced his decision to retire as Chairman, President and Chief Executive Officer with us by December 31, 2014.  Mr. Dunsmore will cease serving as an officer and director on December 17, 2014 and will remain an employee through December 31, 2014 in order to facilitate a smooth transition pursuant to his previously disclosed transition agreement.  A copy of our press release announcing Mr. Konezny&#x2019;s appointment is attached hereto as Exhibit 99.1.  It includes a description of Mr. Konezny&#x2019;s business experience, which is incorporated herein by reference.<br><br>In connection with Mr. Konezny&#x2019;s election, we entered into an employment agreement with him setting forth the terms of his employment as President and Chief Executive Officer.  Pursuant to the agreement, we agreed to pay Mr. Konezny an annual base salary of $450,000, which will be reviewed annually and may be adjusted by the compensation committee, provided that his base salary can only be decreased as part of an across-the-board reduction affecting all senior executives.  Mr. Konezny will be entitled to an annual incentive cash bonus targeted at 100% of his base salary, provided that the objectives set by the compensation committee are met.  The compensation committee will determine any equity awards to be granted to Mr. Konezny beyond the initial grants below described.  Mr. Konezny will be entitled to the benefits and perquisites provided by us to the extent he satisfies the eligibility requirements, including a $500,000 supplemental life insurance policy.<br><br>In connection with the commencement of his employment, Mr. Konezny will receive an initial sign-on bonus in the amount of $400,000, which amount must be repaid to us if, during the first year of his employment, he resigns for any reason other than death, disability, or for good reason following a change in control.  <br><br>The employment agreement provides for two equity awards in connection with Mr. Konezny&#x2019;s commencement of employment.  He will receive a stock option to purchase 325,000 shares of our common stock, which will vest as to 25% of the shares on each of the first four anniversaries of the date of grant, and will have a term of eight years.  He will also receive a restricted stock unit in the amount of 175,000 shares of our common stock, which will vest as to 25% of the shares on each of the first four anniversaries of the grant date.  The equity awards granted to Mr. Konezny in connection with the commencement of his employment will, in connection with a change in control, vest as to the tranche of shares scheduled to vest on the immediately following vesting date.  They will vest as to all shares if his employment is terminated without cause or terminates for good reason within one year of the change in control.      <br><br>If Mr. Konezny&#x2019;s employment is terminated by us without cause after the first year of his employment, Mr. Konezny will receive (i) severance pay at a rate equal to his base salary for a period of 12 months following termination, paid in installments on regular payroll dates during that period, (ii) benefits continuation for a period of 12 months following termination and (iii) a pro rata portion of any bonus that would have been payable to him for the fiscal year during which his employment terminated, based on actual results.  If Mr. Konezny&#x2019;s employment is terminated by us without cause during the first year of his employment, he shall receive the same benefits as described above, except that the severance pay shall be equal to 18 months of base salary, the benefits continuation shall extend for 18 months and the amount of the bonus paid to him shall be $400,000, which is his initial target annual incentive bonus.  Payment of the severance benefits described above shall be subject to Mr. Konezny signing and not rescinding a release of claims in favor of us, and his continued compliance with the restrictive covenants in his employment agreement.<br><br>The employment agreement contains restrictive covenants that preclude Mr. Konezny from competing with us and from soliciting our customers, suppliers and employees during the term of his employment and for a period of one year thereafter.  A copy of Mr. Konezny&#x2019;s employment agreement is attached hereto as Exhibit 10.1.<br>
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	Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
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Effective upon the election of Mr. Konezny, the Board approved certain amendments to modernize our By-Laws.  The substantive amendments to the By-Laws include (i) clarifying that the role of Chairman of the Board is not itself an officer position (which change facilitates the appointment of an independent non-executive Chairman of the Board) and (ii) clarifying situations where electronic communications may be used for certain notices and communications.  The By-Laws, as amended and restated, are attached hereto as Exhibit 3.2.
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	SIGNATURES
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	Pursuant to the requirements of the Securities Exchange Act of 1934, the
	registrant has duly caused this report to be signed on its behalf by the
	undersigned hereunto duly authorized.
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	Digi International Inc.
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	&nbsp;&nbsp;
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<I>
	December 5, 2014
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	By:
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	&nbsp;
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<I>
	Steven E. Snyder
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<BR>
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<I>
	Name: Steven E. Snyder
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<I>
	Title: Senior Vice President, Chief Financial Officer and Treasurer
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	Exhibit&nbsp;Index
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	Exhibit No.
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	Description
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	3.2
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	&nbsp;
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Amended and Restated Bylaws Effective December 17, 2014
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	10.1
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	&nbsp;
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Employment Agreement between Digi International Inc. and Ronald E. Konezny dated November 26, 2014
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	99.1
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	&nbsp;
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Press Release dated December 3, 2014 Announcing New Chief Executive Officer
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<P align="center" style="font-size: 10pt"><FONT style="font-size: 11pt">BY-LAWS OF<BR>
DIGI INTERNATIONAL INC.<BR>
AS AMENDED AND RESTATED AS OF DECEMBER 17, 2014<BR>
I. OFFICES</FONT>



<P align="left" style="font-size: 11pt; text-indent: 3%">Section&nbsp;1.01. <U>Registered Office</U>. The Corporation shall maintain a registered office
and registered agent within the State of Delaware at such place within such State as may be
designated from time to time by the Board of Directors of the Corporation.


<P align="left" style="font-size: 11pt; text-indent: 3%">Section&nbsp;1.02. <U>Other Offices</U>. The Corporation also may have offices at such other
places both within and without the State of Delaware as the Board of Directors may from time to
time determine.


<P align="center" style="font-size: 11pt">II. STOCKHOLDERS



<P align="left" style="font-size: 11pt; text-indent: 3%">Section&nbsp;2.01. <U>Place of Meetings</U>. Meetings of stockholders may be held at the principal
executive offices of the Corporation or at such other place, either within or without the State of
Delaware, as may be designated by the Board of Directors or the chief executive officer of the
Corporation.


<P align="left" style="font-size: 11pt; text-indent: 3%">Section&nbsp;2.02. <U>Annual Meetings and Advance-Notice of Business, Other than Director
Nominations and Elections</U>. An annual meeting of stockholders shall be held in each calendar
year for the election of directors on such date and at such time as shall be designated from time
to time by the Board of Directors. At any annual meeting of stockholders of the Corporation, the
proposal of business (other than the nomination and election of directors, which shall be subject
to Section&nbsp;3.13) to be considered by the stockholders may be made (i)&nbsp;pursuant to the Corporation&#146;s
notice of the meeting (or any supplement thereto), (ii)&nbsp;by or at the direction of the Board of
Directors, or (iii)&nbsp;by any stockholder of record of the Corporation entitled to vote on the
business at the meeting who complies with the notice procedures hereinafter set forth in this
Section.



<P align="left" style="margin-left:3%; font-size: 11pt; text-indent: 2%">(a) <U>Timing of Notice</U>. For such business to be properly brought before any annual
meeting by a stockholder, a stockholder&#146;s notice of any such business to be conducted at such
meeting must be delivered to the Secretary of the Corporation, or mailed to and received at
the principal executive office of the Corporation, not less than one hundred twenty (120)&nbsp;days
before the first anniversary of the date of the preceding year&#146;s annual meeting of
stockholders. If, however, the date of the annual meeting of stockholders is more than thirty
(30)&nbsp;days before or sixty (60)&nbsp;days after such anniversary date, notice by a stockholder shall
be timely only if so delivered or so mailed and received not less than one hundred twenty
(120)&nbsp;days before such annual meeting or, if later, within ten (10)&nbsp;days after the first
public announcement of the date of such annual meeting. Except to the extent otherwise
required by law, the adjournment of an annual meeting of stockholders shall not commence a new
time period for the giving of a stockholder&#146;s notice as required above. Nothing in this
Section shall reduce or otherwise affect the notice period required under Rule&nbsp;14a-8 under the
Securities Exchange Act of 1934, as amended (the &#147;Exchange Act&#148;) in order for a stockholder to
have the right, under Rule&nbsp;14a-8, to include or have disseminated or described in the
Corporation&#146;s proxy statement or on the proxy card of the Board of Directors for any annual
meeting of stockholders any stockholder proposal.



<P align="left" style="margin-left:3%; font-size: 11pt; text-indent: 2%">(b) <U>Content of Notice</U>. A stockholder&#146;s notice to the Corporation for an annual
meeting of stockholders shall set forth as to each matter the stockholder proposes to bring
before the annual meeting (i)&nbsp;a brief description of the business desired to be brought before
the meeting and the reasons for conducting such business at the meeting, (ii)&nbsp;the name and
address, as they appear on the Corporation&#146;s books, of the stockholder proposing such business
and the name and address of any beneficial owner on whose behalf the proposal is made,
(iii)&nbsp;the information required by clause (b)(y)(ii) of Section&nbsp;3.13 with respect to such
stockholder and any such beneficial owner, (iv)&nbsp;any material interest in such business of the
stockholder or any such beneficial owner, and (v)&nbsp;a representation and other appropriate
evidence that the stockholder is a holder of record of shares of stock entitled to vote on
such business at the meeting, will continue to be a holder of record of shares of stock
entitled to vote on such business through the date of the meeting, and intends to appear in
person or by proxy at the meeting to make the proposal.



<P align="left" style="margin-left:3%; font-size: 11pt; text-indent: 2%">(c) <U>Consequences of Failure to Give Proper Notice</U>. Notwithstanding anything in
these By-Laws to the contrary, no business (other than the nomination and election of
directors, which shall be subject to Section&nbsp;3.13) shall be conducted at any annual meeting
except in accordance with the procedures set forth in this Section. The presiding Officer of
the meeting shall, if the facts warrant, determine that business was not properly brought
before the meeting in accordance with the procedures described in this Section and, if the
presiding Officer should so determine, the presiding Officer shall so declare to the meeting,
and any such business not properly brought before the meeting shall not be transacted. Nothing
in this Section shall be deemed to preclude discussion by any stockholder of any business
properly brought before the meeting in accordance with these By-Laws.



<P align="left" style="margin-left:3%; font-size: 11pt; text-indent: 2%">(d) <U>Public Announcement</U>. For purposes of this Section and Section&nbsp;3.13, &#147;public
announcement&#148; means disclosure (i)&nbsp;when made in a press release reported by the Dow Jones News
Service, Associated Press, or comparable national news service, (ii)&nbsp;when filed in a document
publicly filed by the Corporation with the Securities and Exchange Commission pursuant to
Section&nbsp;13, 14, or 15(d) of the Exchange Act, or (iii)&nbsp;when mailed as the notice of the
meeting (or any supplement) pursuant to Section&nbsp;2.04 of the By-Laws.



<P align="left" style="margin-left:3%; font-size: 11pt; text-indent: 2%">(e) <U>Compliance with Laws</U>. Notwithstanding the foregoing provisions of this
Section, a stockholder shall also comply with all applicable requirements of Delaware law and
the Exchange Act and the rules and regulations thereunder with respect to the matters set
forth in this Section and in Section&nbsp;3.13.


<P align="left" style="font-size: 11pt; text-indent: 3%">Section&nbsp;2.03. <U>Special Meetings</U>. Unless otherwise specifically provided by law or the
Certificate of Incorporation, a special meeting of stockholders, for any purpose or purposes, may
be called only by the Chairman or the Chief Executive Officer and shall be called by either such
officer upon the written request of a majority of the Board of Directors or by a committee of the
Board of Directors which has been duly designated by the Board of Directors, and whose powers and
authority, as expressly provided in a resolution of the Board of Directors, include the power to
call such meetings. Such request shall state the purpose or purposes of the proposed meeting. If
the authorized officers fail to cause such meeting to be called within thirty (30)&nbsp;days after
receipt of such request and held within ninety (90)&nbsp;days after receipt of such request, the
directors making the request may call the meeting by giving notice as provided in these By-Laws at
the expense of the Corporation. Business transacted at any special meeting shall be limited to the
purposes stated in the notice of the meeting.


<P align="left" style="font-size: 11pt; text-indent: 3%">Section&nbsp;2.04. <U>Notice of Meetings</U>. A written notice stating the place, date and hour of
the meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is
called, or a separate written notice of the posting of such information on an electronic network
(such as a website), shall be personally delivered or mailed, postage prepaid, not less than ten
(10)&nbsp;nor more than sixty (60)&nbsp;days before the date of such meeting to each stockholder of record of
the Corporation entitled to vote at such meeting at the stockholder&#146;s mailing address shown upon
the records of the Corporation. Service of notice is complete upon mailing.


<P align="left" style="font-size: 11pt; text-indent: 3%">Section&nbsp;2.05. <U>Waiver of Notice</U>. Notice of any annual or special meeting of
stockholders may be waived either before, at or after such meeting in a writing signed by the
person or persons entitled to the notice. Attendance of a person at a meeting shall constitute a
waiver of notice of such meeting, except when the person attends a meeting for the express purpose
of objecting, at the beginning of the meeting, to the transacting of any business because the
meeting is not lawfully called or convened.


<P align="left" style="font-size: 11pt; text-indent: 3%">Section&nbsp;2.06. <U>Quorum</U>. At each meeting of stockholders, except where otherwise provided
by law or the Certificate of Incorporation or these By-Laws, the holders of a majority of the
outstanding capital stock entitled to vote at the meeting, present in person or represented by
proxy, shall constitute a quorum. If a quorum is once present at the meeting, the stockholders may
continue to transact business until adjournment notwithstanding the withdrawal of enough
stockholders to leave less than a quorum.


<P align="left" style="font-size: 11pt; text-indent: 3%">Section&nbsp;2.07. <U>Adjourned Meetings</U>. The Corporation may adjourn the meeting from time to
time to a later day or hour or to another place. If the adjournment is for more than thirty
(30)&nbsp;days, or if after adjournment a new record date is fixed for the adjourned meeting, a notice
of the adjourned meeting shall be given to each stockholder of record entitled to vote at the
meeting. Otherwise, notice of any adjourned meeting need not be given if the time and place thereof
are announced at the meeting at which the adjournment is taken. At an adjourned meeting at which a
quorum is present or represented by proxy, any business may be transacted which might have been
transacted at the meeting as originally convened.


<P align="left" style="font-size: 11pt; text-indent: 3%">Section&nbsp;2.08. <U>Voting</U>. Unless otherwise provided in the Certificate of Incorporation,
each stockholder entitled to vote at any meeting of stockholders shall have one vote for each share
of stock having voting power upon the matter in question which is held by such stockholder and
registered in the stockholder&#146;s name on the books of the Corporation as of the applicable record
date. All elections of directors shall be conducted by written ballot, unless the Certificate of
Incorporation otherwise provides. The vote upon any other question before a meeting need not be by
written ballot, and need not be conducted by inspectors, unless otherwise determined by the Board
of Directors or the officer presiding at the meeting. At all meetings of stockholders for the
election of directors a plurality of the votes cast shall be sufficient to elect such directors.
All other elections and questions at a meeting shall be decided by a majority vote of the number of
shares entitled to vote represented at the meeting at the time of the vote except where otherwise
required by statute, the Certificate of Incorporation or these By-Laws.


<P align="left" style="font-size: 11pt; text-indent: 3%">Section&nbsp;2.09. <U>Proxies</U>. Each stockholder entitled to vote at a meeting of stockholders
may authorize another person or persons to act for him or her by proxy in any manner, including
without limitation via telephone, Internet or such other manner as permitted by Section&nbsp;212 of the
Delaware General Corporation Law, as amended from time to time, provided that such authorization
sets forth or contains information from which the Corporation can determine that the authorization
was granted by the stockholder. If the authorization is granted in a manner other than in a written
form, the proxy holder shall provide such reasonable verification as required by the Corporation.
If any such authorization designates two or more persons to act as proxies, a majority of such
persons present at the meeting, or, if only one shall be present, then that one, shall have and may
exercise all of the powers conferred by such authorization upon all of the persons so designated
unless such authorization shall otherwise provide.


<P align="left" style="font-size: 11pt; text-indent: 3%">Section&nbsp;2.10. <U>Fixing Date for Determination of Stockholders of Record</U>.



<P align="left" style="margin-left:3%; font-size: 11pt; text-indent: 2%">(a)&nbsp;In order that the Corporation may determine the stockholders entitled (i)&nbsp;to notice
of or to vote at any meeting of stockholders or any adjournment thereof, or (ii)&nbsp;to express
consent to corporate action in writing without a meeting, or (iii)&nbsp;to receive payment of any
dividend or other distribution or allotment of any rights, or to exercise any rights in
respect of any change, conversion or exchange of stock, or for the purpose of any other lawful
action, the Board of Directors may fix, in advance, a record date, which shall be (X)&nbsp;not more
than sixty (60)&nbsp;nor less than ten (10)&nbsp;days before the date of any such meeting; (Y)&nbsp;not more
than ten (10)&nbsp;days after the date upon which the resolution fixing the record date for any
written action is adopted by the Board of Directors; and (Z)&nbsp;not more than sixty (60)&nbsp;days
prior to any other action.



<P align="left" style="margin-left:3%; font-size: 11pt; text-indent: 2%">(b)&nbsp;If no record date is fixed:



<P align="left" style="margin-left:5%; font-size: 11pt; text-indent: 3%">(i)&nbsp;The record date for determining stockholders entitled to notice of or to vote at
a meeting of stockholders shall be at the close of business on the day next preceding the
day on which notice is given, or, if notice is waived, at the close of business on the
day next preceding the day on which the meeting is held.



<P align="left" style="margin-left:5%; font-size: 11pt; text-indent: 3%">(ii)&nbsp;The record date for determining stockholders entitled to express consent to
corporate action in writing without a meeting, (A)&nbsp;when no prior action by the Board of
Directors is necessary, shall be the day on which the first signed written consent
setting forth the action taken or proposed to be taken is delivered to the Corporation,
and (B)&nbsp;when prior action by the Board of Directors is necessary, shall be at the close
of business on the day on which the Board of Directors adopts the resolution taking such
prior action.



<P align="left" style="margin-left:5%; font-size: 11pt; text-indent: 3%">(iii)&nbsp;The record date for determining stockholders for any other purpose shall be at
the close of business on the day on which the Board of Directors adopts the resolution
relating thereto.



<P align="left" style="margin-left:3%; font-size: 11pt; text-indent: 2%">(c)&nbsp;A determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that
the Board of Directors may fix a new record date for the adjourned meeting.


<P align="left" style="font-size: 11pt; text-indent: 3%">Section&nbsp;2.11. <U>Stockholder List</U>. The officer of the Corporation who has charge of the
stock ledger of the Corporation shall prepare and make, at least ten (10)&nbsp;days before every meeting
of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number of shares registered
in the name of each stockholder. Such list shall be open to the examination of any stockholder, for
any purpose germane to the meeting, during ordinary business hours, for a period of at least ten
(10)&nbsp;days prior to the meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so specified, at the place
where the meeting is to be held. The list also shall be produced and kept at the time and place of
the meeting during the whole time thereof, and may be inspected by any stockholder who is present.
The stock ledger shall be the only evidence as to who are the stockholders entitled to examine the
stock ledger, the list of stockholders or the books of the Corporation, or to vote in person or by
proxy at any meeting of stockholders.


<P align="center" style="font-size: 11pt">III. BOARD OF DIRECTORS



<P align="left" style="font-size: 11pt; text-indent: 3%">Section&nbsp;3.01. <U>General Powers; Organization</U>. The business of the Corporation shall be
managed by or under the direction of its Board of Directors, which may exercise all such powers of
the Corporation and do all such lawful acts and things as are not by statute or by the Certificate
of Incorporation or by these By-Laws directed or required to be exercised or done by the
stockholders. The Board of Directors may annually elect a Chairman of the Board from among its
members who shall preside at its meetings, or in his or her absence the Chief Executive Officer
shall so preside, or in his or her absence a chairman chosen at the meeting shall so preside. The
Secretary shall act as secretary of the meeting, but in his or her absence the chairman of the
meeting may appoint any person to act as secretary of the meeting. Any meeting of the Board of
Directors may be held within or without the State of Delaware.


<P align="left" style="font-size: 11pt; text-indent: 3%">Section&nbsp;3.02. <U>Number, Qualification and Term of Office</U>. The number of directors
constituting the Board of Directors shall be fixed from time to time by resolution of the Board of
Directors. The directors shall be elected at the annual meeting of the stockholders, except as
provided in Section&nbsp;3.03 of these By-Laws, and each director elected shall hold office for the term
elected and until his or her successor is duly elected and qualified. Any director may resign at
any time upon giving written notice to the Corporation. Directors need not be stockholders.


<P align="left" style="font-size: 11pt; text-indent: 3%">Section&nbsp;3.03. <U>Vacancies</U>.



<P align="left" style="margin-left:3%; font-size: 11pt; text-indent: 2%">(a)&nbsp;Vacancies and newly created directorships resulting from any increase in the
authorized number of directors may be filled by a majority of the directors then in office, in
their sole discretion and whether or not constituting less than a quorum, and the directors so
chosen shall hold office until the next election of the class for which such directors shall
have been chosen and until their successors to such class are duly elected and qualified, or
until their earlier resignation, retirement or removal.



<P align="left" style="margin-left:3%; font-size: 11pt; text-indent: 2%">(b)&nbsp;Whenever the holders of any class or classes of stock or series thereof are entitled
to elect one or more directors by the provisions of the Certificate of Incorporation of the
Corporation, vacancies and newly created directorships of such class or classes or series may
be filled by a majority of the directors elected by such class or classes or series thereof
then in office, or by a sole remaining director so elected.


<P align="left" style="font-size: 11pt; text-indent: 3%">Section&nbsp;3.04. <U>Regular Meetings</U>. Regular meetings of the Board of Directors may be held
without notice at such time and place as may be designated from time to time by the Board of
Directors.


<P align="left" style="font-size: 11pt; text-indent: 3%">Section&nbsp;3.05. <U>Special Meetings</U>. Special meetings of the Board of Directors may be
called from time to time by the Chairman, if any, or the Chief Executive Officer, and, upon request
by any two directors, shall be called by the Chairman or the Chief Executive Officer.


<P align="left" style="font-size: 11pt; text-indent: 3%">Section&nbsp;3.06. <U>Notice of Special Meetings</U>. Notice of each special meeting of the Board
of Directors stating the place, date and hour of the meeting shall be given to each director by
mail not less than forty-eight (48)&nbsp;hours, or personally or by telephone or electronic
communication not less than twenty-four (24)&nbsp;hours, before the date and hour of the meeting.


<P align="left" style="font-size: 11pt; text-indent: 3%">Section&nbsp;3.07. <U>Waiver of Notice</U>. Notice of any meeting of the Board of Directors may be
waived either before, at or after such meeting in a writing signed (or consented to by electronic
communication) by each director or directors to whom the notice was not duly given. Attendance of a
director at a meeting shall constitute a waiver of notice of such meeting, except when the director
attends the meeting for the express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or convened.


<P align="left" style="font-size: 11pt; text-indent: 3%">Section&nbsp;3.08. <U>Quorum</U>. Unless otherwise specifically provided by law, the Certificate
of Incorporation or these By-Laws, at all meetings of the Board of Directors, a majority of the
total number of directors shall constitute a quorum for the transaction of business, and the vote
of a majority of the directors present at a meeting at which a quorum is present shall be the act
of the Board of Directors. If a quorum shall not be present at any meeting of the Board of
Directors, the directors present thereat may adjourn the meeting from time to time, without notice
other than announcement at the meeting, until a quorum shall be present.


<P align="left" style="font-size: 11pt; text-indent: 3%">Section&nbsp;3.09. <U>Committees of Directors</U>.



<P align="left" style="margin-left:3%; font-size: 11pt; text-indent: 2%">(a)&nbsp;The Board of Directors may, by resolution adopted by a majority of the total number
of directors, designate one or more committees, each committee to consist of one or more of
the directors of the Corporation and to have such name as may be determined by the Board of
Directors. The Board of Directors may designate one or more directors as alternate members of
any committee, who may replace any absent or disqualified member at any meeting of the
committee.



<P align="left" style="margin-left:3%; font-size: 11pt; text-indent: 2%">(b)&nbsp;Any committee, to the extent allowed by law and provided in the resolution
designating the committee, may exercise the powers of the Board of Directors in the management
of the business and affairs of the Corporation and may authorize the corporate seal, if any,
to be affixed to all papers that may require it.



<P align="left" style="margin-left:3%; font-size: 11pt; text-indent: 2%">(c)&nbsp;Each committee shall keep regular minutes of its proceedings and report the same to
the Board of Directors when required. Unless the Board of Directors otherwise provides, each
committee may make, alter and repeal rules for the conduct of its business. In the absence of
such rules each committee shall conduct its business in the same manner as the Board of
Directors conducts its business pursuant to these By-Laws.


<P align="left" style="font-size: 11pt; text-indent: 3%">Section&nbsp;3.10. <U>Conference Communications</U>. Directors may participate in any meeting of
the Board of Directors, or of any duly constituted committee thereof, by means of a conference
telephone conversation or other comparable method of communication by which all persons
participating in the meeting can hear and communicate with each other. For the purpose of
establishing a quorum and taking any action at the meeting, such directors participating pursuant
to this Section&nbsp;3.10 shall be deemed present in person at the meeting; and the place of the meeting
shall be the place of origination of the conference telephone conversation or other comparable
method of communication.


<P align="left" style="font-size: 11pt; text-indent: 3%">Section&nbsp;3.11. <U>Action by Written Consent of Directors</U>. Any action required or permitted
to be taken at a meeting of the Board of Directors or any committee thereof may be taken without a
meeting if all directors or committee members consent thereto in writing (including electronic
communication) and the writing or writings are filed with the minutes of proceedings of the Board
of Directors or the committee.


<P align="left" style="font-size: 11pt; text-indent: 3%">Section&nbsp;3.12. <U>Compensation</U>. The Board of Directors shall have the authority to fix the
compensation of directors.


<P align="left" style="font-size: 11pt; text-indent: 3%"><U>Section&nbsp;3.13</U>. <U>Advance-Notice of Stockholder-Sponsored Director Nominations</U>.
No person (other than a person nominated by or at the direction of the Board of Directors) shall be
eligible for election as a director at any annual or special meeting of stockholders unless timely
notice is given in writing of such nomination by a stockholder of record of the Corporation
entitled to vote for the election of directors at the meeting who complies with the notice
procedures hereinafter set forth in this Section.



<P align="left" style="margin-left:3%; font-size: 11pt; text-indent: 2%">(a) <U>Timing of Notice</U>. To be timely, a stockholder&#146;s notice of nominations to be
made (i)&nbsp;at an annual meeting of stockholders must be delivered to the Secretary of the
Corporation, or mailed to and received at the principal executive office of the Corporation,
not less than one hundred twenty (120)&nbsp;days before the first anniversary of the date of the
preceding year&#146;s annual meeting of stockholders; provided, however, that if the date of the
annual meeting of stockholders is more than thirty (30)&nbsp;days before or sixty (60)&nbsp;days after
such anniversary date, notice by a stockholder shall be timely only if so delivered or so
mailed and received not less than one hundred twenty (120)&nbsp;days before such annual meeting or,
if later, within ten (10)&nbsp;days after the first public announcement of the date of such annual
meeting, and (ii)&nbsp;in the case of a special meeting of stockholders called for the purpose of
electing directors, within ten (10)&nbsp;days after the first public announcement of the date of
such special meeting. Except to the extent otherwise required by law, the adjournment of a
meeting of stockholders shall not commence a new time period for the giving of a stockholder&#146;s
notice as described above.



<P align="left" style="margin-left:3%; font-size: 11pt; text-indent: 2%">(b) <U>Content of Notice</U>. A stockholder&#146;s notice to the Corporation of nominations
for a meeting of stockholders shall set forth (x)&nbsp;as to each person whom the stockholder
proposes to nominate for election as a director: (i)&nbsp;such person&#146;s name, (ii)&nbsp;all information
relating to such person that is required to be disclosed in solicitations of proxies for
election of directors in an election contest, or that is otherwise required, pursuant to
Regulation&nbsp;14A under the Exchange Act, and (iii)&nbsp;such person&#146;s signed written consent to being
a nominee and to serving as a director if elected; and (y)&nbsp;as to the stockholder giving the
notice: (i)&nbsp;the name and address, as they appear on the Corporation&#146;s books, of such
stockholder and the name and address of any beneficial owner on whose behalf the nomination is
made, (ii)&nbsp;(A)&nbsp;the number of shares of stock of the Corporation of each class or series that
is beneficially owned by such stockholder or any such beneficial owner, (B)&nbsp;any option,
warrant, convertible security, stock appreciation right, swap, or similar right with an
exercise or conversion privilege or a settlement payment or mechanism at a price related to
any class or series of shares of stock of the Corporation or with a value derived in whole or
in part from the value of any class or series of shares of stock of the Corporation, whether
or not such instrument or right shall be subject to settlement in the underlying class or
series of capital stock of the Corporation or otherwise (a &#147;Derivative Instrument&#148;) owned
beneficially by such stockholder or any such beneficial owner and any other opportunity to
profit or share in any profit derived from any increase or decrease in the value of shares of
the Corporation, (C)&nbsp;any proxy, contract, arrangement, understanding, or relationship pursuant
to which such stockholder or any such beneficial owner has a right to vote any shares of the
Corporation, (D)&nbsp;any short interest in any security of the Corporation (for purposes of these
By-Laws, a person shall be deemed to have a &#147;short interest&#148; in a security if such person has
the opportunity to profit or share in any profit derived from any decrease in the value of the
subject security), (E)&nbsp;any rights to dividends on the shares of stock of the Corporation owned
beneficially by such stockholder or any such beneficial owner that are separated or separable
from the underlying shares of stock of the Corporation, (F)&nbsp;any proportionate interest in
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of stock of the Corporation or Derivative Instruments held, directly or indirectly, by
a general or limited partnership in which such stockholder or any such beneficial owner is a
general partner or, directly or indirectly, beneficially owns an interest in a general partner
and (G)&nbsp;any performance-related fees (other than an asset-based fee) that such stockholder or
any such beneficial owner is entitled to based on any increase or decrease in the value of
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of stock of the Corporation or Derivative Instruments, if any, as of the date of such
notice, including without limitation any such interests held by members of such stockholder&#146;s
or any such beneficial owner&#146;s immediate family sharing the same household (which information
shall be supplemented by such stockholder not later than ten (10)&nbsp;days after the record date
for the meeting to disclose such ownership as of the record date), (iii)&nbsp;a description of any
material relationships, including financial transactions and compensation, between the
stockholder and the proposed nominee(s), and (iv)&nbsp;a representation and other appropriate
evidence that the stockholder is a holder of record of shares of stock of the Corporation
entitled to vote for the election of directors, will continue to be a holder of record of
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of stock entitled to vote for the election of directors through the date of the
meeting, and intends to appear in person or by proxy at the meeting to nominate the person or
persons specified in the notice.



<P align="left" style="margin-left:3%; font-size: 11pt; text-indent: 2%">(c) <U>Consequences of Failure to Give Proper Notice</U>. Notwithstanding anything in
these By-Laws to the contrary, no stockholder-sponsored nominees shall be eligible for
election as a director of the Corporation except in accordance with the procedures set forth
in this Section. The presiding Officer of the meeting shall, if the facts warrant, determine
that the nomination(s) were not properly brought before the meeting in accordance with the
procedures described in this Section and, if the presiding Officer should so determine, the
presiding Officer shall so declare to the meeting, and the defective nomination(s) shall be
disregarded.


<P align="center" style="font-size: 11pt">IV. OFFICERS



<P align="left" style="font-size: 11pt; text-indent: 3%">Section&nbsp;4.01. <U>Number</U>. The Board of Directors shall elect a Chief Executive Officer, a
Secretary and a Treasurer. The Board of Directors also may choose a President, one or more
Vice-Presidents, one or more Assistant Secretaries, one or more Assistant Treasurers or any other
officers or agents as the Board of Directors by a majority vote of the total number of directors
may designate. Any person may hold two or more offices.


<P align="left" style="font-size: 11pt; text-indent: 3%">Section&nbsp;4.02. <U>Election, Term of Office and Qualifications</U>. The Board of Directors
shall elect the officers of the Corporation, who shall hold their offices for such terms and shall
exercise such powers and perform such duties not inconsistent with these By-Laws as shall be
determined from time to time by the Board of Directors. All officers of the Corporation shall hold
their offices until their respective successors are elected and qualified, or until their
respective offices are eliminated by vote of the majority of all directors, or until their earlier
resignation, retirement or removal. Officers may be, but need not be, directors. Any officer may
resign at any time upon written notice to the Corporation.


<P align="left" style="font-size: 11pt; text-indent: 3%">Section&nbsp;4.03. <U>Compensation</U>. The salaries of the officers of the Corporation shall be
fixed from time to time by the Board of Directors or by the Chief Executive Officer if authorized
by the Board of Directors.


<P align="left" style="font-size: 11pt; text-indent: 3%">Section&nbsp;4.04. <U>Removal and Vacancies</U>. Any officer may be removed from office, with or
without cause, by the Board of Directors, but such removal shall be without prejudice to the
contract rights of such officer, if any, with the Corporation. Any vacancy occurring in any office
of the Corporation may be filled by the Board of Directors.


<P align="left" style="font-size: 11pt; text-indent: 3%">Section&nbsp;4.05. <U>Chief Executive Officer</U>. The Chief Executive Officer shall have the
general powers and duties of management and supervision usually vested in and imposed upon the
chief executive officer of a corporation. Subject to the control of the Board of Directors, the
Chief Executive Officer shall have general supervision of the business of the Corporation and shall
see that all orders and resolutions of the Board of Directors are carried into effect.


<P align="left" style="font-size: 11pt; text-indent: 3%">Section&nbsp;4.06. <U>Secretary</U>. The Secretary shall keep the minutes of the meetings of the
stockholders, the Board of Directors and any committees in a book to be kept for that purpose and
shall perform such other ministerial duties as the Board of Directors of the Corporation may
direct. The Secretary shall duly give notice of all meetings of the stockholders, special meetings
of the Board of Directors and meetings of its committees, if any.


<P align="left" style="font-size: 11pt; text-indent: 3%">Section&nbsp;4.07. <U>Treasurer</U>. The Treasurer shall keep accurate accounts of all moneys of
the Corporation received or disbursed. He or she shall deposit all moneys, drafts and checks in the
name of and to the credit of the Corporation in such banks and depositaries as a majority of the
whole Board of Directors shall from time to time designate. The Treasurer shall have power to
endorse for deposit all notes, checks and drafts received by the Corporation. He or she shall
disburse the funds of the Corporation as ordered by the Board of Directors, making proper vouchers
therefor. The Treasurer shall render to the Board of Directors or the chief executive officer of
the Corporation, whenever required, an account of all his or her transactions as Treasurer and of
the financial condition of the Corporation.


<P align="left" style="font-size: 11pt; text-indent: 3%">Section&nbsp;4.08. <U>Other Officers Elected by the Board.</U> The Board of Directors may elect a
President, Vice Presidents, a Chief Financial Officer, Assistant Treasurers, Assistant Secretaries,
or such other officers of the Corporation as the Board of Directors may deem necessary, to serve at
the pleasure of the Board of Directors. Other officers elected by the Board of Directors shall
have such powers and performance such duties as may be assigned to such officers by or pursuant to
authorization of the Board of Directors or by the Chief Executive Officer.


<P align="left" style="font-size: 11pt; text-indent: 3%">Section&nbsp;4.09. <U>Other Officers.</U> The Board of Directors may authorize the Corporation
to elect or appoint other officers, including Vice Presidents, Assistant Treasurers, Assistant
Secretaries and other officers of the Corporation, each of whom shall serve at the pleasure of the
Corporation. Officers elected or appointed by the Corporation shall have such powers and perform
such duties as may be assigned to them by the Corporation.


<P align="left" style="font-size: 11pt; text-indent: 3%">Section&nbsp;4.10. <U>Authority and Other Duties</U>. All officers of the Corporation shall be
subject to the supervision and direction of the Board of Directors and, in addition to the
foregoing authority and duties, all officers of the Corporation shall respectively have such
authority and perform such other duties in the management of the business of the Corporation as may
be designated from time to time by the Board of Directors. Unless prohibited by a resolution
approved by the affirmative vote of a majority of the directors present, an officer elected or
appointed by the Board may, without the approval of the Board, delegate some or all of the duties
and powers of his or her office to other persons.


<P align="center" style="font-size: 11pt">V. INDEMNIFICATION



<P align="left" style="font-size: 11pt; text-indent: 4%">Section&nbsp;5.01. Indemnification. The Corporation shall indemnify any person (a &#147;Covered Person&#148;)
who was or is made or is threatened to be made a party or is otherwise involved in any action, suit
or proceeding, whether civil, criminal, administrative or investigative (a &#147;proceeding&#148;), by reason
of the fact that he or she, or a person for whom he or she is the executor, administrator or other
legal representative, is or was a director or officer (which term, for purposes of this Article&nbsp;V,
includes all officers, whether elected or appointed) of the Corporation or, while a director or
officer of the Corporation, is or was serving at the request of the Corporation as a director,
officer, employee or agent of another corporation or of a partnership, joint venture, trust,
enterprise or nonprofit entity, including service with respect to employee benefit plans, for such
expenses and liabilities, in such manner, under such circumstances, and to such extent, as required
or permitted by subsections (a)&nbsp;through (e)&nbsp;of Section&nbsp;145 of the Delaware General Corporation Law,
as amended from time to time.


<P align="left" style="font-size: 11pt; text-indent: 4%">Section&nbsp;5.02. <U>Insurance</U>. The Corporation may purchase and maintain insurance on behalf
of any person who is or was a director or officer of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against any liability asserted against and
incurred by such person in or arising from that capacity, whether or not the Corporation would
otherwise be required or permitted to indemnify the person against the liability. The Company shall
not be obligated under these By-Laws to make any payment in connection with any claim made against
any person if and to the extent that such person has actually received payment therefor under any
insurance policy or policies.


<P align="left" style="font-size: 11pt; text-indent: 4%">Section&nbsp;5.03. <U>Indemnification Upon a Change of Control</U>.


<P align="left" style="font-size: 11pt; text-indent: 4%">(a)&nbsp;If a Change in Control (as defined in this Section&nbsp;5.03) has occurred and the person
seeking indemnification so requests, a determination of whether a Covered Person is eligible for
indemnification under Section&nbsp;5.01 hereof shall be made in a written opinion rendered by
independent legal counsel chosen by the person seeking indemnification and not reasonably objected
to by the Board of Directors (whose fees and expenses shall be paid by the Corporation) and such
determination shall be binding on the Corporation.


<P align="left" style="font-size: 11pt; text-indent: 4%">(b)&nbsp;For purposes of Section&nbsp;5.03(a), &#147;independent legal counsel&#148; shall mean legal counsel
other than an attorney, or a firm having associated with it an attorney, who has been retained by
or has performed services for the Corporation or the person seeking indemnification within the
previous three years.


<P align="left" style="font-size: 11pt; text-indent: 4%">(c)&nbsp;For purposes of Section&nbsp;5.03(a), a &#147;Change in Control&#148; shall be deemed to have occurred
if:


<P align="left" style="font-size: 11pt; text-indent: 7%">(i)&nbsp;a majority of the directors of the Corporation shall be persons other than persons (A)&nbsp;who
were directors of the Corporation at July&nbsp;1, 1989, (B)&nbsp;for whose election proxies shall have been
solicited by the Board of Directors, or (C)&nbsp;who are then serving as directors appointed by the
Board of Directors to fill vacancies on the Board of Directors caused by newly-created
directorships or the death or resignation (but not removal) of a director;


<P align="left" style="font-size: 11pt; text-indent: 7%">(ii)&nbsp;any &#147;person&#148; (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended (the &#147;Act&#148;)), other than the Corporation, a subsidiary of the Corporation
or the person seeking indemnification, and other than a person who acquires or becomes the
beneficial owner (as defined in Rule&nbsp;13d-3 under the Act, or any successor rule thereto), directly
or indirectly, of twenty percent or more of the then outstanding shares of voting stock of the
Corporation as a result of the merger of Digiboard, Inc., a Minnesota corporation, with and into
the Corporation, together with its &#147;affiliates&#148; and &#147;associates&#148; (as those terms are defined in
Rule&nbsp;12b-2 under the Act), or any group of persons acting in concert, not including the person
seeking indemnification, acquires or becomes a beneficial owner (as so defined in Rule&nbsp;13d-3),
directly or indirectly, of twenty percent or more of the then outstanding shares of voting stock of
the Corporation; or


<P align="left" style="font-size: 11pt; text-indent: 7%">(iii)&nbsp;the stockholders of the Corporation approve a definitive agreement or plan to (A)&nbsp;merge
or consolidate the Corporation with or into another corporation (other than (1)&nbsp;a merger or
consolidation with a subsidiary of the Corporation, or (2)&nbsp;a merger in which the Corporation is the
surviving corporation and no outstanding voting stock of the Corporation (other than fractional
shares) held by stockholders immediately prior to the merger is converted into cash, securities, or
other property), (B)&nbsp;exchange, pursuant to a statutory exchange of shares of voting stock of the
Corporation held by stockholders of the Corporation immediately prior to the exchange, shares of
one or more classes or series of voting stock of the Corporation for shares of another corporation,
(C)&nbsp;sell or otherwise dispose of all or substantially all of the assets of the Corporation (in one
transaction or a series of transactions), or (D)&nbsp;liquidate or dissolve the Corporation, unless a
majority of the voting stock (or the voting equity interest) of the surviving corporation or of any
corporation (or other entity) acquiring all or substantially all of the assets of the Corporation
(in the case of a merger, consolidation or disposition of assets) or the Corporation (in the case
of a statutory share exchange) is, immediately following the merger, consolidation, statutory share
exchange or disposition of assets, beneficially owned by the person seeking indemnification or a
group of persons, including the person seeking indemnification, acting in concert; or


<P align="left" style="font-size: 11pt; text-indent: 7%">(iv)&nbsp;the Corporation enters into an agreement in principle or a definitive agreement relating
to an event described in clause (i), (ii)&nbsp;or (iii)&nbsp;above which ultimately results in an event
described therein, or a tender or exchange offer or proxy contest is commenced which ultimately
results in an event described therein.


<P align="left" style="font-size: 11pt; text-indent: 4%">Section&nbsp;5.04. <U>Good Faith Defined, Etc</U>. For purposes of any determination of whether a
person is entitled to indemnification, such person shall be deemed to have acted in good faith and
in a manner he or she reasonably believed to be in or not opposed to the best interests of the
Corporation, or, with respect to any criminal proceeding, to have had no reasonable cause to
believe his or her conduct was unlawful, if such person relied on the records or books of account
of the Corporation or other enterprise, or on information supplied to him or her by the officers of
the Corporation or other enterprise, or on information or records given or reports made to the
Corporation or other enterprise by an independent certified public accountant or by an appraiser or
other expert selected with reasonable care by the Corporation or other enterprise. The term &#147;other
enterprise&#148; as used in this Section&nbsp;5.04 shall mean any enterprise other than the Corporation,
including any corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise as to which such person is or was serving at the request of the Corporation as a
director, officer, employee, agent or trustee. The provisions of this Section&nbsp;5.04 shall not be
deemed to be exclusive or to limit in any way the circumstances in which a person may be deemed to
have met the applicable standard of conduct set forth in Section&nbsp;145 of the Delaware General
Corporation Law, as amended from time to time.


<P align="left" style="font-size: 11pt; text-indent: 4%">Section&nbsp;5.05. <U>Right to Indemnification</U>. Upon Application; Procedure Upon Application;
Etc.


<P align="left" style="font-size: 11pt; text-indent: 4%">(a)&nbsp;Any indemnification under these By-Laws shall be made no later than forty-five (45)&nbsp;days
after receipt by the Corporation of the written request of the Covered Person, unless a
determination is made within said 45-day period in accordance with Section&nbsp;5.03 that such person
has not met the applicable standard of conduct.


<P align="left" style="font-size: 11pt; text-indent: 4%">(b)&nbsp;The right to indemnification or expense advances under these By-Laws shall be enforceable
by the Covered Person, in any court of competent jurisdiction. Following a Change in Control (as
defined in Section&nbsp;5.03(c)), the burden of proving that indemnification is not appropriate shall be
on the Corporation. Neither the absence of any prior determination that indemnification is proper
in the circumstances, nor a prior determination that indemnification is not proper in the
circumstances, shall be a defense to the action or create a presumption that the Covered Person has
not met the applicable standard of conduct. The expenses (including attorneys&#146; fees and expenses)
incurred by a Covered Person in connection with successfully establishing his or her right to
indemnification, in whole or in part, in any proceeding (or in any proceeding brought by him or her
to recover under any insurance policy or policies referred to in Section&nbsp;5.02) also shall be
indemnified by the Corporation.


<P align="left" style="font-size: 11pt; text-indent: 4%">(c)&nbsp;If any person is entitled under any provision of these By-Laws to indemnification by the
Corporation for some or a portion of expenses, judgments, fines, penalties or amounts paid in
settlement incurred by him or her, but not, however, for the total amount thereof, the Corporation
shall nevertheless indemnify such person for the portion of such expenses, judgments, fines,
penalties and amounts to which he or she is entitled.


<P align="left" style="font-size: 11pt; text-indent: 4%">Section&nbsp;5.06. <U>Certain Persons Not Entitled to Indemnification</U>. Notwithstanding any
other provision of these By-Laws, no person shall be entitled to indemnification or expense
advances under these By-Laws with respect to any proceeding brought or made by him or her against
the Corporation, other than a proceeding seeking, or defending such person&#146;s right to,
indemnification and/or expense advances pursuant to these By-Laws or otherwise.


<P align="left" style="font-size: 11pt; text-indent: 4%">Section&nbsp;5.07. <U>Non-Exclusivity and Survival of Indemnification</U>. Except as otherwise
provided in Section&nbsp;5.06, but notwithstanding any other provision of these By-Laws, it is the
policy of the Corporation that indemnification and expense advances in respect of Covered Persons
shall be made to the fullest extent permitted by law, and, accordingly, in the event of any change
in law, by legislation or otherwise, permitting greater indemnification and/or expense advances,
the provisions of these By-Laws shall be construed so as to require such greater indemnification
and/or expense advances. The provisions of these By-Laws shall not be deemed to preclude the
indemnification of any person who is not a Covered Person and whom the Corporation has the power to
indemnify under the provisions of the General Corporation Law of the State of Delaware or
otherwise. All rights to indemnification and advancement of expenses under these By-Laws shall be
deemed to be provided by a contract between the Corporation and the director or officer who serves
in such capacity at any time while these By-Laws are in effect. Any repeal or modification of the
indemnification provisions of these By-Laws shall not affect any rights or obligations then
existing. The Corporation may provide additional indemnification rights to a Covered Person by
separate agreement.


<P align="left" style="font-size: 11pt; text-indent: 4%">Section&nbsp;5.08. <U>Successors; Meaning of &#147;Corporation&#148;</U>. The indemnification provisions of
these By-Laws shall be binding upon and enforceable against any direct or indirect successor by
purchase, merger, consolidation or otherwise to all or substantially all of the business and/or
assets of the Corporation. For purposes of these By-Laws, but subject to the provisions of any
agreement relating to any merger or consolidation of the kind referred to in clause (a)&nbsp;below or of
any agreement relating to the acquisition of any corporation of the kind referred to in clause (b)
below, references to &#147;the Corporation&#148; shall include (a)&nbsp;any constituent corporation (including any
constituent of a constituent) absorbed in a consolidation or merger with the Corporation which, if
its separate existence had continued, would have had power and authority to indemnify its directors
and officers, so that any person who is or was a director or officer of such constituent
corporation, or is or was serving at the request of such constituent corporation as a director,
officer, employee or trustee of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise, shall stand in the same position under the provisions of these
By-Laws with respect to the Corporation as he or she would have with respect to such constituent
corporation if its separate existence had continued; and (b)&nbsp;any corporation of which at least a
majority of the voting power (as represented by its outstanding stock having voting power generally
in the election of directors) is owned directly or indirectly by the Corporation.


<P align="left" style="font-size: 11pt; text-indent: 4%">Section&nbsp;5.09. <U>Severability</U>. The indemnification provisions of these By-Laws shall be
severable in the event that any provision hereof (including any provision within a single section,
subsection, clause, paragraph or sentence) is held invalid, void or otherwise unenforceable on any
ground by any court of competent jurisdiction. In the event of any such holding, the remaining
indemnification provisions of these By-Laws shall continue in effect and be enforceable to the
fullest extent permitted by law.


<P align="center" style="font-size: 11pt">VI. STOCK



<P align="left" style="font-size: 11pt; text-indent: 3%">Section&nbsp;6.01. <U>Certificated and Uncertificated Shares</U>. Shares of stock of the
Corporation shall be represented by certificates, provided that the Board of Directors may provide
by resolution or resolutions that some or all of any or all classes or series of stock may be
uncertificated shares. Any such resolution shall not apply to shares represented by a certificate
until such certificate is surrendered to the Corporation. Certificates representing shares shall be
in such form as shall be prescribed by the Board of Directors, certifying the number of shares
owned by the holder. Shares represented by certificates shall be numbered in the order in which
they shall be issued and shall be signed in the name of the Corporation by the Chairman, the Chief
Executive Officer, the President or a Vice-President, and by the Treasurer or an Assistant
Treasurer, or the Secretary or an Assistant Secretary, and the seal of the Corporation, if any,
shall be affixed thereto.


<P align="left" style="font-size: 11pt; text-indent: 3%">Section&nbsp;6.02. <U>Issuance of Stock</U>. The Board of Directors is authorized to cause to be
issued stock of the Corporation up to the full amount authorized by the Certificate of
Incorporation in such amounts and for such consideration as may be determined by the Board of
Directors. No shares shall be allotted except in consideration of cash, labor, personal property,
or real property, or leases thereof, or of an amount transferred from surplus to stated capital
upon a stock dividend. At the time of such allotment of stock, the Board of Directors shall state
its determination of the fair value to the Corporation in monetary terms of any consideration other
than cash for which shares are allotted. The amount of consideration to be received in cash or
otherwise shall not be less than the par value of the shares so allotted. Stock so issued shall be
fully paid and nonassessable. Treasury shares may be disposed of by the Corporation for such
consideration as may be fixed by the Board of Directors.


<P align="left" style="font-size: 11pt; text-indent: 3%">Section&nbsp;6.03. <U>Partly Paid Stock</U>. The Corporation may issue the whole or any part of
its stock as partly paid and subject to call for the remainder of the consideration to be paid
therefor. Upon the face or back of each certificate issued to represent any such partly paid stock,
or upon the stock ledger in the case of uncertificated shares, the total amount of the
consideration to be paid therefor and the amount paid thereon shall be stated. The Board of
Directors may, from time to time, demand payment in respect of each share of stock not fully paid,
of such sum of money as the necessities of the business may, in the judgment of the Board of
Directors, require, not exceeding in the whole the balance remaining unpaid on such stock, and such
sum so demanded shall be paid to the Corporation at such times and by such installments as the
Board of Directors shall direct.


<P align="left" style="font-size: 11pt; text-indent: 3%">Section&nbsp;6.04. <U>Registered Stockholders</U>. The Corporation shall be entitled to recognize
the exclusive right of a person registered on its books as the owner of shares to receive
dividends, and to vote as such owner, and shall not be bound to recognize any equitable or other
claim to or interest in such share or shares on the part of any other person, whether or not it
shall have express or other notice thereof, except as otherwise provided by the laws of Delaware.


<P align="left" style="font-size: 11pt; text-indent: 3%">Section&nbsp;6.05. <U>Transfers of Stock</U>. Transfers of stock shall be made on the books of the
Corporation only by the record holder of such stock, or such holder&#146;s legal representative or duly
authorized attorney-in-fact, and, in the case of stock represented by a certificate, upon surrender
of the certificate or the certificates for such stock. Upon surrender to the Corporation or the
transfer agent of the Corporation of a certificate for shares duly endorsed or accompanied by
proper evidence of succession, assignation or authority to transfer, it shall be the duty of the
Corporation to issue a new certificate to the person entitled thereto, cancel the old certificate
and record the transaction upon its books. No new certificate or certificates shall be issued in
exchange for any existing certificate until such certificate shall have been so cancelled, except
in cases provided for in Section&nbsp;6.06.


<P align="left" style="font-size: 11pt; text-indent: 3%">Section&nbsp;6.06. <U>Lost, Stolen or Destroyed Certificates</U>. Any stockholder claiming a
certificate for stock to be lost, stolen or destroyed shall make an affidavit of that fact in such
form as the Corporation may require and shall, if the Corporation so requires, give the Corporation
a bond of indemnity in form, in an amount, and with one or more sureties satisfactory to the
Corporation, to indemnify the Corporation against any claims which may be made against it on
account of the alleged loss, theft or destruction of the certificate or issuance of such new
certificate. A new certificate may then be issued in the same tenor and for the same number of
shares as the one claimed to have been lost, stolen or destroyed.


<P align="left" style="font-size: 11pt; text-indent: 3%">Section&nbsp;6.07. <U>Facsimile Signatures</U>. Whenever any certificate is countersigned by a
transfer agent or by a registrar other than the Corporation or one of its employees, then the
signatures of the officers or agents of the Corporation may be facsimiles. In case any officer,
transfer agent or registrar who has signed or whose facsimile signature has been placed on any such
certificate shall cease to be such officer, transfer agent or registrar before such certificate is
issued, it nevertheless may be issued by the Corporation as though the person who signed such
certificate or whose facsimile signature or signatures had been placed thereon were such officer,
transfer agent or registrar at the date of issue.


<P align="center" style="font-size: 11pt">VII. MISCELLANEOUS



<P align="left" style="font-size: 11pt; text-indent: 3%">Section&nbsp;7.01. <U>Dividends</U>. The Board of Directors may declare at any regular or special
meeting dividends from the Corporation&#146;s surplus, or if there be none, out of its net profits for
the current fiscal year and/or the preceding fiscal year, in such amounts as in their opinion the
condition of the affairs of the Corporation shall render it advisable unless otherwise restricted
by law. Dividends may be paid in cash, in property or in shares of capital stock of the
Corporation, subject to the provisions of the Certificate of Incorporation.


<P align="left" style="font-size: 11pt; text-indent: 3%">Section&nbsp;7.02. <U>Interested Directors and Officers</U>. No contract or transaction between
the Corporation and one or more of its directors or officers, or between the Corporation and any
other corporation, partnership, association or other organization in which one or more of its
directors or officers are directors or officers, or have a financial interest, shall be void or
voidable solely for that reason, or solely because the director or officer is present at or
participates in the meeting of the Board of Directors or committee thereof which authorizes the
contract or transaction, or solely because his, her or their votes are counted for such purpose,
if: (a)&nbsp;the material facts as to his or her relationship or interest and as to the contract or
transaction are disclosed or are known to the Board of Directors or the committee, and the Board of
Directors or committee in good faith authorizes the contract or transaction by the affirmative
votes of a majority of the disinterested directors, even though the disinterested directors be less
than a quorum; or (b)&nbsp;the material facts as to his or her relationship or interest and as to the
contract or transaction are disclosed or are known to the stockholders entitled to vote thereon,
and the contract or transaction is specifically approved in good faith by vote of the stockholders;
or (c)&nbsp;the contract or transaction is fair as to the Corporation as of the time it is authorized,
approved or ratified, by the Board of Directors, a committee thereof, or the stockholders. Common
or interested directors may be counted in determining the presence of a quorum at a meeting of the
Board of Directors or of a committee which authorizes the contract or transaction.


<P align="left" style="font-size: 11pt; text-indent: 3%">Section&nbsp;7.03. <U>Voting Securities Held by the Corporation</U>. Unless otherwise ordered by
the Board of Directors, powers of attorney, proxies, waivers of notice of meeting, consents and
other instruments relating to securities owned by the Corporation may be executed in the name of
and on behalf of the Corporation by the Chairman, the Chief Executive Officer or the President, and
either such officer may, in the name of and on behalf of the Corporation, take all such action as
such officer may deem advisable to vote in person or by proxy at any meeting of security holders of
other corporations in which the Corporation may hold securities, and at any such meeting such
officer shall possess and may exercise any and all rights and powers incident to the ownership of
such securities that the Corporation might have possessed and exercised if it had been present. The
Board of Directors may from time to time confer like powers upon any other person or persons.


<P align="left" style="font-size: 11pt; text-indent: 3%">Section&nbsp;7.04. <U>Execution of Instruments</U>.



<P align="left" style="margin-left:3%; font-size: 11pt; text-indent: 2%">(a)&nbsp;All deeds, mortgages, bonds, checks, contracts and other instruments pertaining to
the business and affairs of the Corporation shall be signed on behalf of the Corporation by
the Chief Executive Officer, the President or any Vice President, or by such other person or
persons as may be designated from time to time by the Board of Directors.



<P align="left" style="margin-left:3%; font-size: 11pt; text-indent: 2%">(b)&nbsp;If a document must be executed by persons holding different offices or functions and
one person holds such offices or exercises such functions, that person may execute the
document in more than one capacity if the document indicates each such capacity.


<P align="left" style="font-size: 11pt; text-indent: 3%">Section&nbsp;7.05. <U>Advances</U>. The Corporation may, without a vote of the directors, advance
money to its directors, officers or employees to cover expenses that can reasonably be anticipated
to be incurred by them in the performance of their duties and for which they would be entitled to
reimbursement in the absence of an advance.


<P align="left" style="font-size: 11pt; text-indent: 3%">Section&nbsp;7.06. <U>Fiscal Year</U>. The fiscal year end of the Corporation shall be
September&nbsp;30 or such other date as may be fixed from time to time by resolution of the Board of
Directors.


<P align="left" style="font-size: 11pt; text-indent: 3%">Section&nbsp;7.07. <U>Corporate Seal</U>. The corporate seal, if one is adopted by the Board of
Directors, shall be circular in form and shall have inscribed thereon the name of the Corporation,
the word &#147;Delaware&#148; and the words &#147;Corporate Seal.&#148; The seal may be used by causing it or a
facsimile thereof to be impressed or affixed or reproduced or otherwise placed on any document
requiring it.


<P align="left" style="font-size: 11pt; text-indent: 3%">Section&nbsp;7.08. <U>Power to Amend</U>. These By-Laws may be altered, amended or repealed or new
By-Laws may be adopted as provided in the Certificate of Incorporation of the Corporation.



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<P align="center" style="font-size: 10pt"><FONT style="font-size: 12pt"><B>EMPLOYMENT AGREEMENT</B></FONT>



<P align="left" style="font-size: 12pt; text-indent: 4%">This Employment Agreement (&#147;<U>Agreement</U>&#148;) is entered into as of November&nbsp;26, 2014, by
and between Digi International Inc., a Delaware corporation (the &#147;<U>Company</U>&#148;), Ronald E.
Konezny (the &#147;<U>Executive</U>&#148;).


<P align="center" style="font-size: 12pt"><U><B>RECITALS</B></U>



<P align="left" style="font-size: 12pt; text-indent: 4%">WHEREAS, the Company is in the business of providing for the sale of hardware, software or
other products and services related to Machine-to-Machine communications / Internet of Things
solutions;


<P align="left" style="font-size: 12pt; text-indent: 4%">WHEREAS, the Company desires to employ Executive as its President and Chief Executive Officer
and Executive desires to be employed by the Company as President and Chief Executive Officer of the
Company in accordance with the terms and conditions set forth herein; and


<P align="left" style="font-size: 12pt; text-indent: 4%">WHEREAS, in connection with Executive&#146;s employment with the Company, Executive will have
access to confidential, proprietary and trade secret information of the Company, which
confidential, proprietary and trade secret information the Company desires to protect from
disclosure and unfair competition.


<P align="center" style="font-size: 12pt"><B>AGREEMENT</B>



<P align="left" style="font-size: 12pt; text-indent: 4%">NOW, THEREFORE, in consideration of the foregoing premises and the respective agreements of
the Company and Executive set forth below, the Company and Executive, intending to be legally
bound, agree as follows:


<P align="left" style="margin-right:1%; font-size: 12pt">1. <U>Term of Employment</U>. The term of Executive&#146;s employment under this Agreement will
commence on December&nbsp;17, 2014 (the &#147;<U>Effective Date</U>&#148;), and will continue until Executive&#146;s
employment is terminated pursuant to Section&nbsp;8 below (such period being the &#147;<U>Employment
Term</U>&#148;).


<P align="left" style="margin-right:1%; font-size: 12pt">2. <U>Position and Duties</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">(a)&nbsp;<U>Employment with the Company</U>. While Executive is employed by the Company during
the Employment Term, Executive shall report to the Company&#146;s Board of Directors (the
&#147;<U>Board</U>&#148;) and shall perform such duties and responsibilities for the Company and its
Affiliates (defined below) as the Board shall assign to him from time to time consistent with his
position. Executive&#146;s title during the Employment Term shall be President and Chief Executive
Officer. For purposes of this Agreement, &#147;<U>Affiliate</U>&#148; means an individual, a partnership, a
corporation, a limited liability company, an association, a joint stock company, a trust, a joint
venture, or an unincorporated organization, that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with, the Company.


<P align="left" style="font-size: 12pt; text-indent: 4%">(b)&nbsp;<U>Performance of Duties and Responsibilities</U>. Executive shall serve the Company
faithfully and to the best of his ability and shall devote his full working time, attention and
efforts to the business of the Company during his employment with the Company. Executive will
follow and comply with applicable policies and procedures adopted by the Company from time to time,
including without limitation policies relating to business ethics, conflict of interest,
non-discrimination, confidentiality and protection of trade secrets. Executive will not engage in
other employment or other material business activity, except as approved in writing by the Board.
Executive hereby represents and confirms that he is under no contractual or legal commitments that
would prevent him from fulfilling his duties and responsibilities as set forth in this Agreement.
During his employment with the Company, Executive may participate in civic, religious and
charitable activities and personal investment activities to a reasonable extent, so long as such
activities do not interfere with the performance of his duties and responsibilities hereunder. The
Board and Executive will evaluate any directorship Executive holds as of the Effective Date, and
Executive agrees to resign from any directorship if, in the sole discretion of the Board, it is
determined that such directorship poses a conflict of interest.


<P align="left" style="margin-right:1%; font-size: 12pt">3. <U>Board Appointment</U>. On the Effective Date, the Board shall appoint Executive as a
director of the Company and shall during the Employment Term nominate and recommend Executive for
election as a director. Executive acknowledges and agrees that Executive is not entitled to any
additional compensation in respect of Executive&#146;s appointment as a director of the Company. If
during the Employment Term Executive ceases to be a director of the Company for any reason,
Executive&#146;s employment with the Company will continue (unless terminated in accordance with
Section&nbsp;8) and all terms of this Agreement (other than those relating to Executive&#146;s position as
a director of the Company) will continue in full force and effect and Executive will have no
claims in respect of such cessation of office. Executive agrees to abide by all statutory,
fiduciary or common law duties arising under applicable law that apply to Executive as a director
of the Company.


<P align="left" style="margin-right:1%; font-size: 12pt">4. <U>Compensation</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">(a)&nbsp;<U>Base Salary</U>. While Executive is employed by the Company during the Employment
Term, the Company shall pay to Executive a base salary at the annual rate determined from time to
time by the Company (the &#147;<U>Base Salary</U>&#148;), which base salary will be paid in accordance with
the Company&#146;s normal payroll policies and procedures. Upon commencement of the Employment Term,
Executive&#146;s initial annualized base salary will be $450,000, less all legally required and
authorized deductions and withholdings<B>. </B>The Company will review Executive&#146;s Base Salary no less
than annually and may, in its sole discretion, adjust Executive&#146;s base salary upon such review;
provided that the Company may not decrease Executive&#146;s base salary during the Employment Term
unless such decrease is part of an across-the-board uniformly applied reduction affecting all
senior executives of the Company and not disproportionately more to Executive.


<P align="left" style="font-size: 12pt; text-indent: 4%">(b)&nbsp;<U>Sign-On Bonus</U>. The Company shall pay to Executive an initial sign-on bonus in
the amount of $400,000 (the &#147;<U>Sign-On Bonus</U>&#148;), less all legally required and authorized
deductions and withholdings, paid within twenty-one (21)&nbsp;days after the Effective Date. If
Executive resigns his employment with the Company for any reason other than as a result of death or
Disability (defined below) prior to the first anniversary of the Effective Date, Executive shall
repay to the Company the full $400,000 Sign-On Bonus (inclusive of any deductions and withholdings
made by the Company) no later than 30&nbsp;days following the effective date of such resignation. No
repayment shall be required in the event of (i)&nbsp;Executive&#146;s death or Disability, (ii)&nbsp;the Company&#146;s
termination of Executive&#146; employment without Cause, or (iii)&nbsp;Executive&#146;s resignation for good
reason within one year following a change in control (for purposes of this Section&nbsp;4(b), the term
Cause shall have the meaning given to it in this Agreement and the terms change in control and good
reason shall have the same meanings given to those terms in the form of equity award agreements
under the Company&#146;s 2014 Omnibus Incentive Plan that were provided to Executive).


<P align="left" style="font-size: 12pt; text-indent: 4%">(c)&nbsp;<U>Incentive Compensation</U>. During the Employment Term, Executive shall be eligible
to receive an annual incentive bonus. During the first fiscal year of Executive&#146;s employment the
annual incentive bonus will be targeted at 100% of base salary paid. The Board of Directors will
define a bonus plan annually within the first 90&nbsp;days of each fiscal year, determining the
objectives for the fiscal year off of which the annual incentive bonus will be calculated. Such
objectives may include, in the sole discretion of the Board, the achievement of financial
objectives set forth in the Board-approved business plan for a particular fiscal year, or such
other objectives as the Board, in its sole discretion, shall determine. For fiscal year 2015,
Executive&#146;s incentive compensation will be based 50% on quarterly and annual revenue results and
50% on quarterly and annual EBITDA results. Payment of the actual bonus for each fiscal year shall
be paid to Executive as soon as the Company determines whether the objectives for such bonus have
been met. Any such payments shall be made by no later than March&nbsp;15<sup> </sup>of the year
following the calendar year in which the bonus was earned.


<P align="left" style="font-size: 12pt; text-indent: 4%">(d)&nbsp;<U>Equity Compensation</U>.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%">(i) <U>Stock Options</U>. On the Effective Date (the &#147;<U>Grant Date</U>&#148;), the
Company will grant to Executive an option to purchase 325,000 shares of the common stock of
the Company (the &#147;<U>Options</U>&#148;) . The Options will have a per share exercise price
equal to the closing sale price of a share of common stock on the Grant Date. Twenty-five
percent of the Options will vest on each of the first four anniversary dates of the Grant
Date (except for such earlier vesting as otherwise provided in the Company&#146;s 2014 Omnibus
Incentive Plan or in the applicable grant agreement between the Company and Executive). If,
within one year following a change in control, Executive&#146;s employment is terminated either
by the Company without cause or by Executive for good reason, then any unvested Options
shall be accelerated and immediately vested. The Options will have a term of eight years.
The applicable grant agreement between the Company and Executive shall incorporate the terms
of this Agreement.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%">(ii) <U>Restricted Stock Units</U>. On the Grant Date, the Company will also grant to
Employee a restricted stock unit (the &#147;<U>RSU Award</U>&#148;) in the amount of 175,000 shares
of the Company&#146;s common stock. Twenty-five percent of the RSU Award will vest on each of
the first four anniversary dates of the Grant Date (except for such earlier vesting as
otherwise provided in the Company&#146;s 2014 Omnibus Incentive Plan or in the applicable RSU
agreement between the Company and Executive). If, within one year following a change in
control, Executive&#146;s employment is terminated either by the Company without cause or by
Executive for good reason, then any unvested units shall be accelerated and immediately
vested. Vested units shall be settled in shares of the Company&#146;s common stock as soon as
practicable (but no later than March&nbsp;15 of the year following the calendar year in which
such units vest). The applicable RSU agreement between the Company and Executive shall
incorporate the terms of this Agreement.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%">(iii)&nbsp;If there is a change in control during the four-year vesting period provided for
in the RSU Award or the Options, then any shares that would have vested on the immediately
following vesting date shall be accelerated and vested as of the change in control. For
purposes of clarity, this accelerated vesting shall only apply to the Options and RSU Award
provided for by this Agreement.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%">(iv)&nbsp;Additional equity awards are subject to annual review by the Compensation
Committee of the Board of Directors.


<P align="left" style="font-size: 12pt; text-indent: 4%">(e)&nbsp;<U>Employee Benefits</U>. While Executive is employed by the Company during the
Employment Term, Executive shall be entitled to participate in each employee benefit plan and
program of the Company to the extent that Executive meets the eligibility requirements for such
individual plan or program. In addition, following a medical exam the Company shall provide
$500,000 of term life insurance to Executive payable to a beneficiary designated by Executive.
Executive may receive other benefits commensurate with Executive&#146;s position as may be approved from
time to time by the Compensation Committee.


<P align="left" style="font-size: 12pt; text-indent: 4%">(f)&nbsp;<U>Expenses</U>. While Executive is employed by the Company during the Employment Term,
the Company shall reimburse Executive for all reasonable and necessary out-of-pocket business,
travel and entertainment expenses incurred by him in the performance of his duties and
responsibilities hereunder, including without limitation cell phone costs and expenses incurred in
connection with the business of the Company, subject to the Company&#146;s normal policies and
procedures for expense verification and documentation.


<P align="left" style="font-size: 12pt">5.&nbsp;<U>Confidential Information</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">(a)&nbsp;<U>Definition of Confidential Information</U>. Except as expressly permitted by the
Board in writing, Executive shall at all times keep confidential and not disclose, divulge, furnish
or make accessible to anyone or use in any way other than in the ordinary course of the business of
the Company, any confidential, proprietary, nonpublic or secret knowledge or information of the
Company or any of its Affiliates that Executive acquires during his employment with the Company,
whether developed by himself or by others, concerning (i)&nbsp;any trade secrets, (ii)&nbsp;any confidential,
proprietary, nonpublic or secret design, process, formula, plan, model, specifications, device or
material (whether or not patented or patentable) directly or indirectly useful in any aspect of the
business of the Company or any of its Affiliates, (iii)&nbsp;any customer or supplier list of the
Company or any of its Affiliates, or any requirements, specifications or other confidential
information about or received from any customer or supplier, (iv)&nbsp;any confidential, proprietary,
nonpublic or secret development or research work of the Company or any of its Affiliates, (v)&nbsp;any
strategic or other business, marketing or sales plan of the Company or any of its Affiliates, (vi)
any financial data or plan respecting the Company or any of its Affiliates, or (vii)&nbsp;any other
confidential, nonpublic or proprietary information or secret aspects of the business of the Company
or any of its Affiliates (&#147;<U>Confidential Information</U>&#148;).


<P align="left" style="font-size: 12pt; text-indent: 4%">(b)&nbsp;<U>Acknowledgement</U>. Executive acknowledges that the above described Confidential
Information constitutes a unique and valuable asset of the Company and its Affiliates and
represents a substantial investment of time and expense by the Company and its Affiliates, and that
any disclosure or other use of such Confidential Information other than for the sole benefit of the
Company would be wrongful and may cause irreparable harm to the Company and its Affiliates. The
parties acknowledge and agree that Executive&#146;s obligations under this Agreement to maintain the
confidentiality of the Company&#146;s Confidential Information are in addition to any obligations of
Executive under applicable statutory or common law.


<P align="left" style="font-size: 12pt; text-indent: 4%">(c)&nbsp;<U>Exceptions</U>. The foregoing obligations of confidentiality shall not apply to any
Confidential Information to the extent that it (i)&nbsp;is now or subsequently becomes generally
publicly known or generally known in the industry in which the Company operates, (ii)&nbsp;is
independently made available to Executive in good faith by a third party who Executive reasonably
believes has not violated an obligation of confidentiality to the Company or any of its Affiliates,
or (iii)&nbsp;is required to be disclosed by legal process. Nothing contained in the preceding sentence
shall be interpreted to legitimize any disclosure of Confidential Information by Executive that
occurs outside of any of the events described in items (i)&nbsp;through (iii)&nbsp;of the preceding sentence.


<P align="left" style="font-size: 12pt">6.&nbsp;<U>Ventures</U>. If, during Executive&#146;s employment with the Company, Executive is engaged in
or associated with the planning or implementing of any project, program or venture involving the
Company (or any of its Affiliates) and a third party or parties, all rights in such project,
program or venture shall belong to the Company. Except as approved in writing by the Board,
Executive shall not be entitled to any interest in any such project, program or venture or to any
commission, finder&#146;s fee or other compensation in connection therewith, other than the compensation
to be paid to Executive by the Company as provided herein. Executive shall have no interest,
direct or indirect, in any customer or supplier that conducts business with the Company (or any of
its Affiliates), unless such interest has been disclosed in writing to and approved by the Board
before such customer or supplier seeks to do business with the Company (or any of its Affiliates).
Ownership by Executive, as a passive investment, of less than 1.0% of the outstanding shares of
capital stock of any corporation traded on a national securities exchange or publicly traded in the
over-the-counter market shall not constitute a breach of this Section&nbsp;6. In addition, it shall not
constitute a breach of this Section&nbsp;6 for Executive to have an ownership interest of up to 5% in
any company for which Executive serves on its board of directors as of the date Executive signs
this Agreement.


<P align="left" style="font-size: 12pt">7.&nbsp;<U>Patents, Copyrights and Related Matters</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">(a)&nbsp;<U>Disclosure and Assignment</U>. Executive shall promptly disclose to the Company any
and all improvements, discoveries, processes, know-how, trade-secrets and inventions that Executive
may conceive and/or reduce to practice individually or jointly or commonly with others
(&#147;Discoveries&#148;) while he is employed with the Company or any of its Affiliates. Executive agrees
to assign and does hereby immediately assign, transfer and set over to the Company his entire
right, title and interest in and to any and all Discoveries, and in and to any and all intellectual
property rights thereto. Executive agrees to execute all instruments deemed reasonably necessary
by the Company to protect and perfect rights in and to the Discoveries. This Section 7(a) shall not
apply to any invention for which no equipment, supplies, facilities, Confidential Information, or
other trade secret information of the Company was used and that was developed entirely on
Executive&#146;s own time, and (i)&nbsp;that does not relate (A)&nbsp;directly to the business of the Company, or
(B)&nbsp;to the Company&#146;s actual or demonstrably anticipated research or development, or (ii)&nbsp;that does
not result from any work performed by Executive for the Company.


<P align="left" style="font-size: 12pt; text-indent: 4%">(b)&nbsp;<U>Copyrightable Material</U>. Executive hereby agrees to assign and does assign to the
Company all right, title and interest in all copyrightable material (including intellectual
property rights therein) that Executive conceives or originates individually or jointly or commonly
with others, and that arise during the Employment Term with the Company or any of its Affiliates
and out of the performance of his duties and responsibilities under this Agreement. Executive
shall execute any and all papers and perform all other acts reasonably necessary to assist the
Company to obtain and register copyrights on such materials. Where applicable, works of authorship
created by Executive for the Company in performing his duties and responsibilities hereunder shall
be considered &#147;works made for hire,&#148; as defined in the U.S. Copyright Act.


<P align="left" style="font-size: 12pt">8.&nbsp;<U>Termination of Employment</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">(a)&nbsp;Executive&#146;s employment with the Company shall terminate upon:



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%">(i)&nbsp;the date specified in written notice from the Company to Executive notifying him
of the termination of his employment for any reason, provided that if Executive&#146;s employment
is terminated by the Company without Cause, then the Company shall provide Executive at
least sixty days&#146; notice of termination or pay in lieu of notice;



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%">(ii)&nbsp;Executive providing to the Company not less than 60&nbsp;days&#146; prior written notice of
his resignation of employment effective at the end of such period, provided that the Company
may in its sole discretion elect to relieve Executive from his duties and place him on paid
leave during all or any portion of the notice period; or



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%">(iii)&nbsp;Executive&#146;s death or Disability (defined below).


<P align="left" style="font-size: 12pt; text-indent: 4%">(b)&nbsp;The date upon which Executive&#146;s termination of employment with the Company is effective is
the &#147;<U>Termination Date</U>.&#148; For purposes of Section 9(a) and 9(b) of this Agreement only, with
respect to the entitlement to and timing of any payments thereunder, the Termination Date shall
mean the date on which a &#147;separation from service&#148; has occurred for purposes of Section&nbsp;409A of the
Internal Revenue Code and the regulations and guidance thereunder (&#147;<U>Section&nbsp;409A</U>&#148;).


<P align="left" style="font-size: 12pt">9.&nbsp;<U>Payments upon Termination of Employment</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">(a)&nbsp;If Executive&#146;s employment with the Company is terminated by the Company without Cause on
or prior to the one-year anniversary of the Effective Date, then, subject to Section 9(h) below,
and in addition to his Base Salary earned through the Termination Date:



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%">(i)&nbsp;the Company shall pay to Executive severance pay at the rate of his Base Salary for
a period of eighteen (18)&nbsp;consecutive months after the Termination Date;



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%">(ii)&nbsp;if Executive is eligible for and takes all steps necessary to continue his group
health insurance coverage with the Company following the termination of his employment with
the Company, the Company shall pay for the portion of the premium costs for such coverage
that the Company pays for then active employees of the Company, at the same level of
coverage that was in effect as of the Termination Date, for a period of eighteen (18)
consecutive months after the Termination Date; and



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%">(iii)&nbsp;the Company shall pay to Executive $400,000, which represents his target annual
incentive bonus as of the Effective Date.


<P align="left" style="font-size: 12pt">Any amount payable to Executive as severance pay under Section&nbsp;9(a)(i) shall be paid to Executive
by the Company in accordance with the Company&#146;s regular payroll cycle, commencing on the first
regular payroll date of the Company that occurs more than 60&nbsp;days after the Termination Date (and
including any installment that would have otherwise been paid on regular payroll dates during the
period of 60&nbsp;days following the Termination Date), <I>provided </I>the conditions specified in Section
9(h) have been satisfied. Any amount payable to Executive pursuant to Section&nbsp;9(a)(iii) shall be
paid to Executive at the same time and in the same manner as bonuses are paid to other executives
of the Company for the 2015 fiscal year, <I>provided </I>the conditions specified in Section 9(h) have
been satisfied.


<P align="left" style="font-size: 12pt; text-indent: 4%">(b)&nbsp;If Executive&#146;s employment with the Company is terminated by the Company without Cause
after the one-year anniversary of the Effective Date, then, subject to Section 9(h) below, and in
addition to his Base Salary earned through the Termination Date:



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%">(i)&nbsp;the Company shall pay to Executive severance pay at the rate of his Base Salary for
a period of twelve (12)&nbsp;consecutive months after the Termination Date;



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%">(ii)&nbsp;if Executive is eligible for and takes all steps necessary to continue his group
health insurance coverage with the Company following the termination of his employment with
the Company, the Company shall pay for the portion of the premium costs for such coverage
that the Company pays for then active employees of the Company, at the same level of
coverage that was in effect as of the Termination Date, for a period of twelve (12)
consecutive months after the Termination Date; and



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%">(iii)&nbsp;the Company shall pay to Executive a pro rata portion (based on the number of
days of employment during the fiscal year) of any bonus that would have been payable to him
for such fiscal year pursuant to Section 4(c) hereof, waiving any employment condition
applicable to payment.


<P align="left" style="font-size: 12pt">Any amount payable to Executive as severance pay under Section&nbsp;9(b)(i) shall be paid to Executive
by the Company in accordance with the Company&#146;s regular payroll cycle, commencing on the first
regular payroll date of the Company that occurs more than 60&nbsp;days after the Termination Date (and
including any installment that would have otherwise been paid on regular payroll dates during the
period of 60&nbsp;days following the Termination Date), <I>provided </I>the conditions specified in Section
9(h) have been satisfied. Any amount payable to Executive as a bonus shall be paid to Executive at
the same time and in the same manner as bonuses are paid to other executives of the Company for
such fiscal year, <I>provided </I>the conditions specified in Section 9(h) have been satisfied.


<P align="left" style="font-size: 12pt; text-indent: 4%">(c)&nbsp;If Executive&#146;s employment with the Company is terminated due to either (x)&nbsp;Executive&#146;s
death or Disability, or (y)&nbsp;Executive providing to the Company not less than 60&nbsp;days&#146; prior written
notice of his resignation of employment, then Company shall pay to Executive or his beneficiary or
his estate, as the case may be, only his Base Salary earned through the Termination Date and a pro
rata portion (based on the number of calendar days of employment during the fiscal year) of any
bonus that would have been payable to him for such fiscal year pursuant to Section 4(c) hereof,
with such bonus paid at the same time and in the same manner as bonuses are paid to other
executives of the Company for such fiscal year, and, in the event of death or Disability, the
rights set forth in Section&nbsp;4(d). Executive&#146;s beneficiary shall be entitled to the life insurance
benefit provided in Section&nbsp;4(e).


<P align="left" style="font-size: 12pt; text-indent: 4%">(d)&nbsp;If Executive&#146;s employment with the Company is terminated by the Company for Cause or for
any reason not covered by Sections&nbsp;9(a), (b)&nbsp;or (c), then the Company shall pay to Executive only
his Base Salary earned through the Termination Date.


<P align="left" style="font-size: 12pt; text-indent: 4%">(e)&nbsp;&#147;<U>Cause</U>&#148; hereunder shall mean:



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%">(i)&nbsp;indictment or conviction of, or a plea of nolo contendere to, (A)&nbsp;any felony (other
than any felony arising out of negligence), or any misdemeanor involving moral turpitude
with respect to the Company, or (B)&nbsp;any crime or offense involving dishonesty with respect
to the Company;



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%">(ii)&nbsp;theft or embezzlement of Company property or commission of similar acts involving
dishonesty or moral turpitude;



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%">(iii)&nbsp;repeated material negligence in the performance of Executive&#146;s duties;



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%">(iv)&nbsp;Executive&#146;s repeated failure to devote to the Company substantially all of his
working time and efforts during normal business hours;



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%">(v)&nbsp;knowing engagement in conduct that is materially injurious to the Company;



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%">(vi)&nbsp;knowing failure, for Executive&#146;s own benefit, to comply with the covenants
contained in Sections&nbsp;5, 6, or 10 of this Agreement; or



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%">(vii)&nbsp;knowingly providing materially misleading information concerning the Company to
the Company&#146;s Board of Directors, any governmental body or regulatory agency or to any
lender or other financing source or proposed financing source of the Company,


<P align="left" style="font-size: 12pt"><I>provided, however, </I>that the above events shall not constitute Cause unless (x)&nbsp;the Board, within 90
days of the date the Board becomes aware of the occurrence of an event constituting Cause, provides
Executive written notice of termination for Cause setting forth the reason or reasons constituting
Cause (the &#147;Written Notice&#148;), and (y)&nbsp;if Executive&#146;s employment is terminated for Cause pursuant to
Section&nbsp;9(e)(iii) or (iv), Executive has had a period of at least thirty (30)&nbsp;days to attempt to
remedy or cure the basis on which the Board is considering terminating his employment, except that
no cure period need be provided to the extent that the act or omission is not curable.


<P align="left" style="font-size: 12pt; text-indent: 4%">(f)&nbsp;&#147;<U>Disability</U>&#148; hereunder shall mean the inability of Executive to perform on a
full-time basis the duties and responsibilities of his employment with the Company by reason of his
illness or other physical or mental impairment or condition, if such inability continues for an
uninterrupted period of 120&nbsp;days or more during any 180-day period. A period of inability shall be
&#147;uninterrupted&#148; unless and until Executive returns to full-time work for a continuous period of at
least thirty (30)&nbsp;days.


<P align="left" style="font-size: 12pt; text-indent: 4%">(g)&nbsp;In the event of termination of Executive&#146;s employment, the sole obligation of the Company
shall be its obligation to make the payments called for by Section&nbsp;9(a), (b), (c)&nbsp;or (d)&nbsp;hereof, as
the case may be, and the Company shall have no other obligation to Executive or to his beneficiary
or his estate, except for compensation earned for services performed through the Termination Date
or as otherwise provided by law, under the terms of any other applicable agreement between
Executive and the Company or under the terms of any equity and employee benefit plans or programs
then maintained by the Company in which Executive participates.


<P align="left" style="font-size: 12pt; text-indent: 4%">(h)&nbsp;Notwithstanding the foregoing provisions of this Section&nbsp;9, the Company will not be
obligated to make any payments to or on behalf of Executive under Section 9(a) or Section&nbsp;9(b), as
applicable, unless (i)&nbsp;Executive signs a release of claims in favor of the Company in a form to be
prescribed by the Company (the &#147;<U>Release</U>&#148;), (ii)&nbsp;all applicable consideration periods and
rescission periods provided by law with respect to the Release have expired without Executive
rescinding the Release, and (iii)&nbsp;Executive is in strict compliance with the terms of this
Agreement as of the dates of the payments. The cessation of these payments will be in addition to,
and not as an alternative to, any other remedies at law or in equity available to the Company,
including without limitation the right to seek specific performance or an injunction.


<P align="left" style="font-size: 12pt">10.&nbsp;<U>Non-Competition/Non-Solicitation</U>. Executive acknowledges that the Company has spent
significant time, effort and resources protecting its Confidential Information, including its trade
secrets, customer goodwill, and employee, supplier, and vendor relationships. Executive has had
access to the Company&#146;s Confidential Information, and has significant control and influence over
the Company&#146;s customers, suppliers, vendors and employees, and he will continue to do so under this
Agreement. In order to protect the Company&#146;s Confidential Information, trade secrets, customer
goodwill and the stability of the Company&#146;s workforce, and other legitimate business interests,
Executive agrees to the following covenants:


<P align="left" style="font-size: 12pt; text-indent: 4%">(a)&nbsp;<U>Non-Competition</U>. During Executive&#146;s employment with the Company or any Affiliate
and for a period of one (1)&nbsp;year following the termination of such employment, whether initiated by
Executive or the Company, Executive shall not, either directly or indirectly in any manner or
capacity, including without limitation as a proprietor, principal, agent, partner, officer,
director, stockholder, employee, member of any association, consultant or otherwise, perform
services for or have any interest in any Competitive Business in the Territory. &#147;<U>Competitive
Business</U>&#148; means any person, entity or business operation (other than the Company) that engages
in any other business that is competitive with the then-current businesses of the Company or with
any business or market the Company is actively preparing to enter as of the date of termination of
Executive&#146;s employment. Executive acknowledges that the Company conducts its business throughout
the United States and internationally, and, therefore, that the term &#147;Territory&#148; as used herein
shall be worldwide. Ownership by Executive, as a passive investment, of less than 1.0% of the
outstanding shares of capital stock of any corporation traded on a national securities exchange or
publicly traded in the over-the-counter market shall not constitute a breach of this Section&nbsp;10(a).
In addition, it shall not constitute a breach of this Section 10(a) for Executive to have an
ownership interest of up to 5% in any company for which Executive serves on its board of directors
as of the date Executive signs this Agreement.


<P align="left" style="font-size: 12pt; text-indent: 4%">(b)&nbsp;<U>Non-Solicitation of Customers and Suppliers</U>. During Executive&#146;s employment with
the Company or any Affiliate and for a period of one (1)&nbsp;year following the termination of such
employment, whether initiated by Executive or the Company, Executive shall not, either directly or
indirectly on behalf of himself or any third party (i)&nbsp;call on or solicit any customers for the
purpose of marketing or selling any products or services competitive with the business of the
Company, or for the purpose of diverting any business away from the Company; (ii)&nbsp;persuade or
attempt to persuade, or induce or attempt to induce, any actual or prospective customer, client,
vendor, service provider, supplier, contractor or any other person having business dealings with
the Company to cease doing business or otherwise transacting business with the Company or to reduce
the amount of business it conducts or will conduct with the Company; (iii)&nbsp;call on or solicit any
suppliers of the Company; or (iv)&nbsp;otherwise disrupt, damage or interfere in any manner with the
relationship between the Company and its actual or prospective customers, clients, vendors, service
providers, or suppliers. Executive acknowledges that the Company has invested material time and
resources in the identification and qualification of its customers and/or suppliers and that the
identity, nature and details of its relationships with customers and/or suppliers are unique and
proprietary.


<P align="left" style="font-size: 12pt; text-indent: 4%">(c)&nbsp;<U>Non-Solicitation of Employees</U>. During Executive&#146;s employment with the Company or
any Affiliate and for a period of one (1)&nbsp;year following the termination of such employment,
whether initiated by Executive or the Company, Executive shall not, either directly or indirectly
on behalf of himself or any third party, in any manner or capacity, including without limitation as
a proprietor, principal, agent, partner, officer, director, stockholder, employee, member of any
association, consultant or otherwise, hire, engage, recruit, solicit, or otherwise interfere with
the employment or retention of any person who is then an employee or independent contractor of the
Company or any of its Affiliates or who was an employee or independent contractor of the Company or
any of its Affiliates as of the Termination Date. Anonymous job postings in a general publication
or website to which an employee responds shall not violate this Section&nbsp;10(c).


<P align="left" style="font-size: 12pt; text-indent: 4%">(d)&nbsp;<U>Reasonableness of Covenants</U>. Executive agrees that the scope and duration of
Section&nbsp;10 are reasonable and necessary to protect the Company&#146;s legitimate business interests.
If, at any time, any term or provision contained in Section&nbsp;10 is finally adjudicated by a court or
arbitrator of competent jurisdiction as invalid or unenforceable, the parties hereby agree that the
court or arbitrator making this determination will have the power to reform the scope and/or
duration of the term or provision to delete specific words or phrases, or to replace any invalid or
unenforceable term or provision with a term or provision that is valid and enforceable which comes
closest to expressing the intention of the invalid or unenforceable term or provision; and that
such reformation will not impact the other provisions of this Agreement and will be enforceable as
so modified.


<P align="left" style="font-size: 12pt">11.&nbsp;<U>Non-Disparagement</U>. During the Employment Term and thereafter, to the fullest extent
permitted by law, Executive shall not make any statement that is disparaging or reflects negatively
upon the Company or its Affiliates, or any of their officers, directors or employees, to, or that
is likely to come to the attention of, (a)&nbsp;any customer, vendor, supplier, distributor or other
trade related business relation of the Company or any of its Affiliates, (b)&nbsp;any employee of the
Company or its Affiliates, or (c)&nbsp;any member of the media. Nothing herein shall prevent Executive
from responding truthfully to any inquiry from a governmental entity.


<P align="left" style="font-size: 12pt">12.&nbsp;<U>Other Post-Termination Obligations</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">(a)&nbsp;<U>Resignation From Positions</U>. Unless otherwise requested by the Board in writing,
upon Executive&#146;s termination of employment with the Company for any reason Executive shall
automatically resign as of the Termination Date from all titles, positions and appointments
Executive then holds with the Company, whether as an officer, director, trustee, fiduciary or
employee (without any claim for compensation related thereto), and Executive hereby agrees to take
all actions necessary to effectuate such resignations.


<P align="left" style="font-size: 12pt; text-indent: 4%">(b)&nbsp;<U>Return of Property</U>. Upon termination of his employment with the Company, or at
such earlier time requested by the Company, Executive shall promptly deliver to the Company any and
all Company records and any and all Company property in his possession or under his control,
including without limitation manuals, books, blank forms, documents, letters, memoranda, notes,
notebooks, reports, printouts, computer storage devices, source codes, data, tables or calculations
and all copies thereof, documents that in whole or in part contain any trade secrets or
confidential, proprietary or other secret information of the Company or any of its Affiliates, and
all copies thereof, and keys, vehicles, access cards, access codes, passwords, credit cards,
personal computers, telephones and other electronic equipment belonging to the Company or any of
its Affiliates. Executive&#146;s retention of information and materials related to his personal
compensation and benefits, which will not violate this subsection.


<P align="left" style="font-size: 12pt; text-indent: 4%">(c)&nbsp;<U>Cooperation</U>. Following termination of Executive&#146;s employment with the Company for
any reason, Executive will, upon reasonable request of the Company or its designee and provided the
Company is not in material breach of any provision of this Agreement, respond to inquiries and
cooperate with the Company in connection with the transition of his duties and responsibilities for
the Company for up to six months following the Termination Date; and be reasonably available at
mutually convenient times, with or without subpoena, to be interviewed, review documents or things,
give depositions, testify, or engage in other reasonable activities in connection with any
litigation or investigation, with respect to matters that Executive then has or may have knowledge
of by virtue of his employment by or service to the Company or any of its Affiliates. In
connection with such cooperation requested by the Company, the Company shall reimburse Executive
for reasonable out-of-pocket costs incurred as a result of his compliance with his obligations,
and, with respect to such cooperation provided by Executive during any period for which he is not
receiving payments under Section&nbsp;9(a)(i) or 9(b)(i), as applicable, the Company shall compensate
Executive at a daily rate comparable to his regular salary rate in effect as of the Termination
Date. The Company will endeavor to schedule such activities taking into account other obligations
Executive may have and so as not to materially interfere with Executive&#146;s then-current employment
or other business activities.


<P align="left" style="font-size: 12pt">13.&nbsp;<U>Remedies</U>. Executive acknowledges that it would be difficult to fully compensate the
Company for monetary damages resulting from any breach by him of the provisions of Sections&nbsp;5, 6,
7, 10 or 11 hereof. Accordingly, in the event of any actual or threatened breach of any such
provisions, the Company shall, in addition to any other remedies it may have, be entitled to
injunctive and other equitable relief to enforce such provisions, and such relief may be granted
without the necessity of proving actual monetary damages.


<P align="left" style="font-size: 12pt">14.&nbsp;<U>Miscellaneous</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">(a)&nbsp;<U>Taxes</U>. The Company will deduct or withhold from any payment made or benefit
provided hereunder all federal, state and local taxes which the Company is required or authorized
by law to deduct or withhold therefrom or otherwise collect in connection with the wages and
benefits provided in connection with Executive&#146;s employment with the Company. This Agreement and
the payments and benefits provided hereunder are intended to be exempt from the requirements of
Sections&nbsp;409A to the maximum extent possible, whether pursuant to the short-term deferral exception
described in Treasury Regulation&nbsp;Section&nbsp;1.409A-1(b)(4), the involuntary separation pay plan
exception described in Treasury Regulation&nbsp;Section&nbsp;1.409A-1(b)(9)(iii), or otherwise.
Notwithstanding anything in this Agreement to the contrary, this Agreement and the payments and
benefits provided hereunder shall be interpreted, operated and administered in a manner consistent
with such intentions. Without limiting the generality of the foregoing, if and to the extent
required to comply with Section&nbsp;409A, (i)&nbsp;each payment made under this Agreement shall be treated
as a separate payment and the right to a series of installment payments under this Agreement shall
be treated as a right to a series of separate payments; (ii)&nbsp;any expenses eligible for
reimbursement in one taxable year shall not affect the expenses eligible for reimbursement in any
other taxable year, the reimbursement of an eligible expense shall be made no later than the end of
the year after the year in which such expense was incurred, and the right to reimbursement shall
not be subject to liquidation or exchange for another benefit; and (iii)&nbsp;no payment or benefit
required to be paid under this Agreement on account of a termination of Executive&#146;s employment
shall be made unless and until Executive incurs a &#147;separation from service&#148; within the meaning of
Section&nbsp;409A. If Executive is a &#147;specified employee&#148; within the meaning of Section
409A(a)(2)(B)(i), then to the extent necessary to avoid subjecting Executive to the imposition of
any additional tax under Section&nbsp;409A with respect to amounts that are not otherwise exempt from
Code 409A, amounts that would otherwise be payable under this Agreement during the six-month period
immediately following a &#147;separation from service&#148; within the meaning of Section&nbsp;409A(a)(2)(A)(i)
shall not be paid during such period, but shall instead be accumulated and paid in a lump sum on
the first business day following the earlier of (a)&nbsp;the date that is six months after the
separation from service or (b)&nbsp;Executive&#146;s death.


<P align="left" style="font-size: 12pt; text-indent: 4%">(b)&nbsp;<U>Jurisdiction and Venue</U>. Executive and the Company consent to jurisdiction of the
courts of the State of Minnesota and/or the federal district courts of the District of Minnesota
for the purpose of resolving all issues of law, equity, or fact, arising out of or in connection
with this Agreement. Any action involving claims for interpretation, breach or enforcement of this
Agreement shall be brought in such courts. Each party consents to personal jurisdiction over such
party in the state and/or federal courts of Minnesota and hereby waives any defense of lack of
personal jurisdiction or inconvenient forum.


<P align="left" style="font-size: 12pt; text-indent: 4%">(c)&nbsp;<U>Governing Law</U>. All matters relating to the interpretation, construction,
application, validity and enforcement of this Agreement shall be governed by the laws of the State
of Minnesota without giving effect to any choice or conflict of law provision or rule, whether of
the State of Minnesota or any other jurisdiction, that would cause the application of laws of any
jurisdiction other than the State of Minnesota.


<P align="left" style="font-size: 12pt; text-indent: 4%">(d)&nbsp;<U>Entire Agreement</U>. This Agreement and the documents referenced herein contain the
entire agreement and understanding of the parties concerning the terms and conditions of
Executive&#146;s employment with the Company, and supersedes, terminates and nullifies all prior
commitments, agreements and understandings with respect to such relationship between the parties.
The parties hereto have made no agreements, representations or warranties relating to the subject
matter of this Agreement that are not set forth herein.


<P align="left" style="font-size: 12pt; text-indent: 4%">(e)&nbsp;<U>Amendments</U>. No amendment or modification of this Agreement shall be deemed
effective unless made in writing and signed by the parties hereto.


<P align="left" style="font-size: 12pt; text-indent: 4%">(f)&nbsp;<U>No Waiver</U>. No term or condition of this Agreement shall be deemed to have been
waived, except by a statement in writing signed by the party against whom enforcement of the waiver
is sought. Any written waiver shall not be deemed a continuing waiver unless specifically stated,
shall operate only as to the specific term or condition waived and shall not constitute a waiver of
such term or condition for the future or as to any act other than that specifically waived.


<P align="left" style="font-size: 12pt; text-indent: 4%">(g)&nbsp;<U>Assignment</U>. Neither party may, without the written consent of the other, assign
or delegate any of its rights or obligations under this Agreement, except that the Company may,
without the consent of Executive, assign or delegate any of its rights or obligations under this
Agreement to (i)&nbsp;any corporation or other business entity with which the Company may merge or
consolidate, or (ii)&nbsp;any corporation or other business entity to which the Company may sell or
transfer all or substantially all of its assets or capital stock or equity. After any such
assignment or delegation by the Company, the Company shall be discharged from all further liability
hereunder and such assignee shall thereafter be deemed to be the &#147;Company&#148; for purposes of all
terms and conditions of this Agreement, including this Section&nbsp;14.


<P align="left" style="font-size: 12pt; text-indent: 4%">(h)&nbsp;<U>Counterparts</U>. This Agreement may be executed in two counterparts and delivered by
facsimile or other means of electronic communication, each of which shall be deemed an original but
both of which shall constitute but one instrument.


<P align="left" style="font-size: 12pt; text-indent: 4%">(i)&nbsp;<U>Notices</U>. All notices, requests, demands or other communications required by or
otherwise with respect to this Agreement shall be in writing and shall be deemed to have been duly
given to the other party on the date delivered when delivered personally, one business day
following the date when sent by nationally recognized overnight delivery service for next business
day delivery, or three business days following the date of postmark if sent by first-class U.S.
registered or certified mail, postage prepaid and return receipt requested, <I>provided </I>in each case
such notice is properly addressed to the applicable addresses set forth below (or such other
address as such party may indicate in writing to the other party pursuant to this Section&nbsp;14(i)):



<P align="left" style="margin-left:8%; font-size: 12pt">If to the Company:



<P align="left" style="margin-left:8%; font-size: 12pt">Digi International Inc.
<BR>
11001 Bren Road East
<BR>
Minnetonka, MN 55343
<BR>
Attention: General Counsel



<P align="left" style="margin-left:8%; font-size: 12pt">If to Executive:



<P align="left" style="margin-left:8%; font-size: 12pt">At the last known address in the personnel records of the Company.



<P align="left" style="margin-left:8%; font-size: 12pt">With a copy to his attorney:
<BR>
Edward J. Wegerson
<BR>
Lindquist & Vennum LLP
<BR>
80 South 8th Street, Ste. 4200
<BR>
Minneapolis, MN 55402


<P align="left" style="font-size: 12pt; text-indent: 4%">(j)&nbsp;<U>Severability</U>. To the extent that any portion of any provision of this Agreement
shall be invalid or unenforceable, it shall be considered deleted herefrom and the remainder of
such provision and this Agreement shall be unaffected and shall continue in full force and effect.


<P align="left" style="font-size: 12pt; text-indent: 4%">(k)&nbsp;<U>Captions and Headings</U>. The captions and paragraph headings used in this Agreement
are for convenience of reference only and shall not affect the construction or interpretation of
this Agreement or any of the provisions hereof.


<P align="left" style="font-size: 12pt; text-indent: 4%">IN WITNESS WHEREOF, the undersigned have executed this Agreement on the date set forth below:


<P align="left" style="margin-left:19%; margin-right:2%; font-size: 12pt; text-indent: 4%">DIGI INTERNATIONAL INC.



<P align="left" style="margin-left:23%; font-size: 12pt">By: <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>/s/ Ahmed Nawaz</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>


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    <TD width="1%">&nbsp;</TD>
    <TD>Its: <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>Lead Director</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></TD>
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<P align="left" style="margin-left:19%; margin-right:19%; font-size: 12pt; text-indent: 4%">EXECUTIVE



<P align="left" style="margin-left:19%; font-size: 12pt; text-indent: 4%"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>/s/ Ronald E. Konezny</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>


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    <TD width="1%" nowrap align="right">&nbsp;</TD>
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    <TD>Ronald E. Konezny</TD>
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<P align="center" style="font-size: 10pt"><FONT style="font-size: 11pt"><B>Digi International Inc. Announces Appointment of Ron Konezny as New Chief Executive Officer</B></FONT>



<P align="center" style="font-size: 11pt"><B><I>Experienced M2M Solutions Leader to Start in Mid-December</I></B>



<P align="left" style="font-size: 11pt"><B>(Minneapolis, MN, December&nbsp;3, 2014) </B>- Digi International<sup>&#174;</sup> Inc. (NASDAQ: DGII,
<U>www.digi.com</U>) announced that Ron Konezny has been elected to the roles of President and
Chief Executive Officer effective December&nbsp;17, 2014. As previously announced by Digi, Joseph T.
Dunsmore will retire as President, Chief Executive Officer and Chairman of the Board when Mr.
Konezny&#146;s election as his successor becomes effective.


<P align="left" style="font-size: 11pt">Konezny, 46, most recently served as the Vice President, Global Transportation and Logistics
division of Trimble Navigation Limited (NASDAQ:TRMB) where he achieved an outstanding track record
of consistent, profitable revenue growth of his division which included nearly 1,500 employees and
more than two million remotely managed assets. Prior to Trimble, Ron was the co-founder and CEO of
PeopleNet, a leading provider of Telematics solutions to the transportation industry. Under
Konezny&#146;s leadership PeopleNet grew from a startup in 1996 to a high growth company that is a
recognized fleet management leader. PeopleNet was acquired by Trimble in 2011.


<P align="left" style="font-size: 11pt">&#147;I am extremely pleased to announce Ron&#146;s appointment as Chief Executive Officer of Digi,&#148; said
Ahmed Nawaz, the independent Lead Director of the Board. &#147;Ron has a proven leadership record of
growth, profitability and solution innovations and knows the wireless M2M industry well. His
success and breadth of experience, his understanding of M2M solutions comprised of hardware and
cloud-based applications and his past success at Trimble in identifying and successfully completing
and integrating acquisition transactions all appealed to the Board. The Board conducted a
comprehensive search process and is confident that Ron has the experience, leadership and vision to
propel Digi forward.&#148;


<P align="left" style="font-size: 11pt">&#147;I am excited to join the Digi team and lead the company forward in the wireless M2M and Internet
of Things marketplace,&#148; said Konezny. &#147;Digi provides high-quality networking solutions, and we
will build on this foundation as we sharpen our execution on the products and services Digi offers
in this dynamic marketplace to better serve our customers and enhance value for our shareholders.&#148;


<P align="left" style="font-size: 11pt">Nawaz continued, &#147;On behalf of the Board, I want to thank Joe Dunsmore for his many years of
leadership at Digi, and for his assistance in facilitating this smooth transition after announcing
his retirement. I wish Joe much success in the next chapter of his personal and professional
endeavors.&#148; As part of the transition, Dunsmore will remain employed by Digi through December&nbsp;31,
2014.


<P align="left" style="font-size: 11pt">The Board of Directors also elected Konezny as a director of Digi effective December&nbsp;17, 2014. The
Board of Directors intends to appoint an independent director to serve as the non-executive
Chairman of the Board once Konezny has started his employment with the Digi.&nbsp; &nbsp;


<P align="left" style="font-size: 11pt">Prior to co-founding PeopleNet, Konezny worked as a senior consultant for Cap Gemini Ernst & Young
Consulting, where he specialized in international telecommunications. Mr.&nbsp;Konezny received a
Bachelor of Arts degree from Northwestern University.


<P align="left" style="font-size: 11pt"><B>About Digi International</B>


<P align="left" style="font-size: 11pt">Digi International is the M2M expert, combining products and services as end-to-end solutions to
drive business efficiencies. Digi provides the industry&#146;s broadest range of wireless products, a
cloud computing platform tailored for devices and development services to help customers get to
market fast with wireless devices and applications. Digi&#146;s entire solution set is tailored to allow
any device to communicate with any application, anywhere in the world. For more information, visit
Digi&#146;s website at <U>www.digi.com</U>, or call 877-912-3444.

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    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Investor Contacts:</B></DIV></TD>
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<TR valign="bottom" style="font-size: 11pt">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Steve Snyder</DIV></TD>
</TR>
<TR valign="bottom" style="font-size: 11pt">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Digi International</DIV></TD>
</TR>
<TR valign="bottom" style="font-size: 11pt">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">952-912-3637</DIV></TD>
</TR>
<TR valign="bottom" style="font-size: 11pt">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Email: steve.snyder@digi.com</DIV></TD>
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    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
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    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Media Contacts:</B></DIV></TD>
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<TR valign="bottom" style="font-size: 11pt">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Jeff Liebl<BR>
Digi International<BR>
952-912-3053</DIV></TD>
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<P align="left" style="font-size: 11pt">For more information, visit our Web site at <U>www.digi.com</U>, or call 877-912-3444 (U.S.) or
952-912-3444 (International).



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