**Exhibit4.3**

 

**AMENDEDAND RESTATED**

**1999STOCK INCENTIVE PLANOF MAGNETEK, INC.**

**JANUARY1, 2008**

 

**SECTION 1.PURPOSE OF PLAN**

 

The purpose of this 1999 Stock Incentive Plan of MagneTek, Inc.(this “Plan”) is to enable MagneTek, Inc., a Delaware corporation (the “Company”), to attract, retain and motivateits officers and other key employees, and to further align the interestsof such persons with those of the stockholders of the Company by providing foror increasing the proprietary interest of such persons in the Company.

 

**SECTION 2.ADMINISTRATION OF PLAN**

 

2.1 *Composition ofCommittee.*Subject to Section 2.4, this Plan shall beadministered by the CompensationCommittee of the Board of Directors (the “Committee”), as appointed from timeto time by the Board of Directors, *provided, however,*that (a) withrespect to any Award (as defined in Section 5.1) that is intended to satisfy the conditions of Rule 16b-3under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) the term “Committee” shall referto a committee of two or more “non-employee directors” as determined for purposes of applying Exchange Act Rule 16b-3;and (b) with respect to any Awardthat is intended to qualify as “performance-based compensation” within themeaning of Section 162(m) ofthe Internal Revenue Code of 1986, as amended (the “Code”), the term “Committee”shall refer to a committee of two ormore “outside directors” as determined for purposes of applying Code Section 162(m). The Board of Directors shallfill vacancies on and from time to time may remove or add members to the Committee. The Committee shall actpursuant to a majority vote or unanimous written consent. The Committee may designate the Secretary of the Company orother Company employees to assist theCommittee in the administration of this Plan, and may grant authority to suchpersons to execute agreements or otherdocuments evidencing Awards made under this Plan or other documents enteredinto under this Plan on behalf of the Committee or the Company.

 

2.2 *Powers of theCommittee.*Subject to the express provisions of this Plan, theCommittee shall be authorized and empowered to do all things necessaryor desirable, in its sole discretion, in connection with the administration ofthis Plan, including, without limitation, the following:

 

(a)     to prescribe, amend and rescind rules and regulationsrelating to this Plan and to define terms not otherwise defined herein; *provided*that, unless the Committee shall specify otherwise, for purposes of this Plan (i) the term “fair market value”shall mean, as of any date, the closing price for a Share (as defined in Section 3.1) reported for thatdate by the New York Stock Exchange (or such other stock exchange or quotation system on which Shares arethen listed or quoted) or, if no Shares are traded on the New York Stock Exchange (or such other stockexchange or quotation system) on the date in question, then for the next preceding date for which Shares traded onthe New York Stock Exchange (or suchother stock exchange or quotation system); and (ii) the term “Company”shall mean the Company and its subsidiaries and affiliates, unless thecontext otherwise requires;

 

(b)     to determine whichpersons are Eligible Persons (as defined in Section 4), to which of such Eligible Persons, if any, Awards shall be grantedhereunder and the timing of any such Awards, and to grant Awards;

 

(c)   todetermine the number of Shares subject to Awards and the exercise or purchaseprice of such Shares;

 

(d)   toestablish and verify the extent of satisfaction of any performance goalsapplicable to Awards;

 

(e)    toprescribe and amend the terms of the agreements or other documents evidencingAwards made under this Plan (which need not be identical); provided, however,that the Committee shall not take any action or fail to take any action withrespect to the operation of the Plan or any documents evidencing Awards thatwould cause all or part of the payment under any Award to be subject to theadditional tax under Code Section 409A;

 

 

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(f)      todetermine whether, and the extent to which, adjustments are required pursuantto Section 10;

 

(g)     tointerpret and construe this Plan, any rules and regulations under thisPlan and the terms and conditions of anyAward granted hereunder, and to make exceptions to any such provisions in goodfaith and for the benefit of the Company; and

 

(h)     to make all other determinations deemed necessaryor advisable for the administration of this Plan.

 

2.3 *Determinations of the Committee.*All decisions,determinations and interpretations by the Committee regarding this Plan shall be final and binding on all EligiblePersons and Participants. The Committee shall consider such factors asit deems relevant to making such decisions, determinations and, interpretationsincluding, without limitation, therecommendations or advice of any director, officer or employee of the Companyand such attorneys, consultants and accountants as it may select.

 

2.4. *Authority ofthe Board of Directors.*The Board of Directors, in its solediscretion, may exercise any authority of the Committee under this Plan in lieuof the Committee’s exercise thereof.

 

**SECTION 3.STOCK SUBJECT TO PLAN**

 

3.1 *Aggregate Limits.*At any time, the aggregate number ofshares of the Company’s Common Stock, $.01par value (“Shares”), issued and issuable pursuant to all Awards (including allISOs (as defined in Section 5.1(a))) granted under this Plan shall not exceed 1,500,000, plus the number ofshares subject to options granted underthe second Amended and Restated 1989 Incentive Stock Compensation Plan of MagneTek, Inc.but which shares are not issued as of the cancellation, expiration orforfeiture of such options; *provided*that no morethan 350,000 of such Shares may be issued pursuant to all Incentive Bonuses andIncentive Stock Awards granted under this Plan, and *provided further*that, notwithstanding Section 3.3,the aggregate number of Shares that may beissued pursuant to the exercise of ISOs granted under this Plan shall not exceed 1,500,000. Such limits shall be subjectto adjustment as provided in Section 10. The Shares subject to this Plan may be either reacquired by theCompany, including Shares purchased in the open market, or authorizedbut unissued Shares.

 

3.2 *Code Section 162 (m) Limits.*The aggregate numberof Shares subject to Options granted under this Plan during any calendar year to any one Employee shall not exceed500,000. The aggregate number of Shares issued or issuable under all Awardsgranted under this Plan, other than Options, during any calendar year toany one Employee shall not exceed 100,000. Notwithstanding anything to thecontrary in this Plan, the foregoinglimitations shall be subject to adjustment under Section 10 only to theextent that such adjustment will not affect the status of any Awardintended to qualify as “performance based compensation” under Code Section 162(m). The foregoing limitationsshall not apply to the extent that they are no longer required in order for compensation in connection with grantsunder this Plan to be treated as “performance-based compensation” underCode Section 162(m).

 

3.3 *Issuance of Shares.*For purposes of Section 3.1, theaggregate number of Shares issued under this Plan at any time shall equal only the number of Shares actually issuedupon exercise or settlement of an Award and shall not include Sharessubject to Awards that have been canceled, expired or forfeited or Sharessubject to Awards that have been used in payment or satisfaction of thepurchase price, exercise price or tax withholding obligation of an Award.

 

**SECTION 4.PERSONS ELIGIBLE UNDER PLAN**

 

Any person who is an officer orother key employee of the Company as determined, in its discretion and forpurposes only of this Plan, by the Committee (an “Eligible Person”), shall beeligible to be considered for thegrant of Awards hereunder. A “Participant” is any current or former EligiblePerson to whom an Award has been madeand any person (including any estate) to whom an Award has been assigned or transferredpursuant to Section 9.1.

 

 

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**SECTION 5.PLAN AWARDS**

 

5.1 *Award Types.*The Committee, on behalf of the Company, isauthorized under this Plan to enter into certain types of arrangementswith Employees and to confer certain benefits on them. The following arrangements or benefits are authorized under thisPlan if their terms and conditions are not inconsistent with the provisions ofthis Plan: Options, Incentive Bonuses and Incentive Stock. Such arrangementsand benefits are sometimes referred toherein as “Awards.” The authorized types of arrangements and benefits for whichAwards may be granted are defined as follows:

 

*(a)    Options:*An Option is aright granted under Section 6 to purchase a number of Shares at such exercise price, at such times, and on such otherterms and conditions as are specified in the agreement or terms and conditions or other document evidencingthe Award (the “Option Document”). Options intended to qualify as Incentive Stock Options (“ISOs”) pursuant to CodeSection 422 and Options not intended to qualify as ISOs (“NonqualifiedOptions”) may be granted under Section 6.

 

*(b)    IncentiveBonus:*An IncentiveBonus is a bonus opportunity awarded under Section 7 pursuant to which a Participant may become entitled toreceive an amount based on satisfaction of such performance criteria as are specified in the agreement or other documentevidencing the Award (the “Incentive Bonus Document”).

 

*(c)    IncentiveStock:*IncentiveStock is an award or issuance of Shares made under Section 8, the grant, issuance, retention, vesting and/ortransferability of which is subject during specified periods of time to suchconditions (including continued employment or performance conditions) and termsas are expressed in the agreement or other document evidencing the Award(the “Incentive Stock Document”).

 

5.2 *Grants of Awards.*An Award may consist of one sucharrangement or benefit or two or more of them in tandem or in thealternative.

 

**SECTION 6.OPTIONS**

 

The Committee may grant an Optionor provide for the grant of an Option, either from time to time in thediscretion of the Committee or automatically upon the occurrence of specifiedevents, including, without limitation, theachievement of performance goals, the satisfaction of an event or conditionwithin the control of the recipient of the Award or within the controlof others.

 

6.1 *Option Document.*Each Option Document shall containprovisions regarding (a) the number of Shares that may be issuedupon exercise of the Option, (b) the purchase price of the Shares and themeans of payment for the Shares, (c) the term of the Option, (d) suchterms and conditions of exercisability as may be determined from time to time by the Committee, (e) restrictions onthe transfer of the Option and forfeiture provisions and (f) suchfurther terms and conditions, in each case not inconsistent with this Plan asmay be determined from time to time by theCommittee. Option Documents evidencing ISOs shall contain such terms and conditions as may be necessary toqualify, to the extent determined desirable by the Committee, with theapplicable provisions of Section 422 of the Code.

 

6.2 *Option Price.*The purchase price per share of the Shares subject to each Optiongranted under this Plan shall equal or exceed 100% of the fair market value ofsuch Stock on the date the Option is granted, except that the exercise price ofan Option may be higher or lower in the case of Options granted to an employeeof a company acquired by the Company in assumption and substitution of optionsheld by such employee at the time such company is acquired.

 

6.3 *Option Term.*The “Term” of each Option granted under thisPlan, including any ISOs, shall be 10 years from the date of its grant,unless the Committee provides otherwise.

 

6.4 *Option Vesting.*Options granted under this Plan shall beexercisable at such time and in such installmentsduring the period prior to the expiration of the Option’s Term as determined bythe Committee. The Committee shall have the right to make the timing ofthe ability to exercise any Option granted under this

 

 

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Plan subject to such performance requirements as deemed appropriate bythe Committee. At any time after thegrant of an Option the Committee may reduce or eliminate any restrictionssurrounding any Participant’s right to exercise all or part of theOption.

 

6.5 *Termination of Employment.*Subject to Section 11, upona termination of employment by a Participantprior to the full exercise of an Option, the unexercised portion of the Optionshall be subject to such procedures as the Committee may establish.

 

6.6 *Payment of Exercise Price.*The exercise price of an Optionshall be paid in the form of one of more of the following, as the Committee shall specify, either through theterms of the Option Document or at the timeof exercise of an Option: (a) cash or certified or cashiers’ check, (b) sharesof capital stock of the Company that have been held by the Participant for suchperiod of time as the Committee may specify, (c) other property deemed acceptable by the Committee, (d) areduction in the number of Shares or other property otherwise issuablepursuant to such Option or (e) any combination of (a) through (d).

 

6.7 *No Option Repricing; No Reload Options.*Without the approvalof stockholders, the Company shall not (a) reprice any Options or (b) providefor “reload options,” which means that unless approved by stockholders the Company shall not provide forOptions to be granted automatically in connection with and to the extent of the exercise of other Options. Forpurposes of this Plan, the term “reprice” means amending, canceling or replacing Options within the meaningof Item 402(i) under Securities and Exchange Commission Regulation S-Kincluding by (i) reducing the exercise price of outstanding Options and (ii) cancelingoutstanding Options and granting new Options to the holders of canceledOptions.

 

**SECTION **7.**INCENTIVE BONUSES**

 

Each Incentive Bonus Award willconfer upon the Employee the opportunity to earn a future payment tiedto the level of achievement with respect to one or more performance criteriaestablished for a performance period of not less than one year.

 

7.1 *Incentive Bonus Document.*Each Incentive Bonus Documentshall contain provisions regarding (a) thetarget and maximum amount payable to the Participant as an Incentive Bonus, (b) theperformance criteria and level ofachievement versus these criteria that shall determine the amount of suchpayment, (c) the term of theperformance period as to which performance shall be measured for determiningthe amount of any payment, (d) thetiming of any payment earned by virtue of performance, (e) restrictions onthe alienation or transfer of the Incentive Bonus prior to actualpayment, (f) forfeiture provisions and (g) such further terms and conditions, in each case notinconsistent with this Plan as may be determined from time to time bythe Committee. The maximum amount payable as an Incentive Bonus may be amultiple of the target amount payable, butthe maximum amount payable pursuant to that portion of an Incentive Bonus Awardgranted under this Plan for any fiscal year to any Participant that isintended to satisfy the requirements for “performance based compensation” underCode Section 162(m) shall not exceed $1,000,000.

 

7.2 *Performance Criteria.*The Committee shall establish theperformance criteria and level of achievementversus these criteria that shall determine the target and maximum amountpayable under an Incentive Bonus Award, which criteria may be based onfinancial performance and/or personal performance evaluations. The Committee may specify the percentage of the targetIncentive Bonus that is intended to satisfythe requirements for “performance-based compensation” under Code Section 162(m).Notwithstanding anything to thecontrary herein, the performance criteria for any portion of an Incentive Bonusthat is intended by the Committee tosatisfy the requirements for “performance-based compensation” under Code Section 162(m) shall be a measure basedon one or more Qualifying Performance Criteria (as defined in Section 9.2)selected by the Committee and specified at the time the Incentive Bonus Awardis granted. The Committee shall certify theextent to which any Qualifying Performance Criteria has been satisfied, and theamount payable as a result thereof, prior to payment of any IncentiveBonus that is intended to satisfy the requirements for “performance-basedcompensation” under Code Section 162(m).

 

*7.3 Timing and Form ofPayment.*The Committee shall determine the timing of payment of any IncentiveBonus, provided that the timing of such payment shall satisfy an exception toCode Section 409A or, if no such exception is available, the timing ofsuch payment shall comply with the requirements of Code Section 409A.

 

 

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7.4 *Discretionary Adjustments.*Notwithstanding satisfaction ofany performance goals, the amount paid under an Incentive Bonus Award onaccount of either financial performance or personal performance evaluations may be reduced by the Committee on thebasis of such further considerations as the Committee shall determine.

 

**SECTION 8.INCENTIVE STOCK**

 

Incentive Stock is an award orissuance of Shares the grant, issuance, retention, vesting and/or transferabilityof which is subject during specified periods of time to such conditions(including continued employment or performance conditions) and terms as theCommittee deems appropriate.

 

8.1 *Incentive Stock Document.*Each Incentive Stock Documentshall contain provisions regarding (a) thenumber of Shares subject to such Award or a formula for determining such, (b) theperformance criteria, if any, andlevel of achievement versus these criteria that shall determine the number ofShares granted, issued, retainable and/or vested, (c) the period,if any, as to which performance shall be measured for determining achievementof performance or, if not subject to performance criteria, the period of continuedemployment upon which vesting of the Sharesis subject, which period in any case (except in the event of death or disability of the Participant or upon aChange of Control (as defined in Section 11.2) ) shall be not less than one year, (d) forfeiture, (e) transferabilityand (f) such further terms and conditions not inconsistent withthis Plan as may be determined from time to time by the Committee.

 

8.2 *Sale Price.*Subject to the requirements of applicable law,the Committee shall determine the price, if any, at which Shares ofIncentive Stock shall be sold or awarded to an Eligible Person, which may varyfrom time to time and among Eligible Personsand which may be below the fair market value of such Shares at the dateof grant or issuance.

 

8.3 *Performance Criteria.*The grant, issuance, retention and/orvesting of each Incentive Share may but need not be subject to such performancecriteria and level of achievement versus these criteria as the Committee shall determine, which criteria may bebased on financial performance and/or personal performance evaluations. Notwithstanding anything to thecontrary herein, the performance criteria for any Incentive Stock that is intended to satisfy the requirementsfor “performance-based compensation” under Code Section 162(m) shall be a measure based on one or moreQualifying Performance Criteria selected by the Committee and specifiedat the time the Incentive Stock Award is granted.

 

8.4 *Discretionary Adjustments.*Notwithstanding satisfaction ofany performance goals, the number of Sharesgranted, issued, retainable and/or vested under an Incentive Stock Award onaccount of either financialperformance or personal performance evaluations may be reduced by the Committeeon the basis of such further considerations as the Committee shalldetermine.

 

8.5 *Termination of Employment.*Subject to Section 11, upona termination of employment by a Participant prior to the vesting of orthe lapsing of restrictions on Incentive Stock, the Incentive Stock Awardsgranted to such Participant shall be subject to such procedures as determinedby the Committee.

 

**SECTION 9.OTHER PROVISIONS APPLICABLE TO AWARDS**

 

9.1 *Transferability.*Unless the agreement or other documentevidencing an Award (or an amendment theretoauthorized by the Committee) expressly states that the Award is transferable asprovided hereunder, no Award granted under this Plan, nor any interest in suchAward, may be sold, assigned, conveyed, gifted, pledged, hypothecated or otherwise transferred in any manner prior tothe vesting or lapse of any and all restrictions applicable thereto, other thanby will or the laws of descent and distribution or pursuant to a “domestic relations order,” as defined in the Code.The Committee may grant an Award or amend an outstanding Award toprovide that the Award is transferable or assignable to a member or members ofthe Participant’s “immediate family,” as suchterm is defined in Rule 16a-1 (e) under the Securities Exchange Actof 1934, as amended (the “Exchange Act”), or to a trust for the benefit solelyof a member or members of

 

 

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the Participant’s immediate family, or to apartnership or other entity whose only owners are members of the Participant’simmediate family, *provided*thatfollowing any such transfer or assignment the Award will remain subject to substantially the same terms applicableto the Award while held by the Participant, as modified as the Committee shall determine appropriate, and thetransferee shall execute an agreement agreeing to be bound by suchterms.

 

9.2 *Qualifying Performance Criteria.*For purposes of this Plan,the term “Qualifying Performance Criteria”shall mean any one or more of the following performance criteria, eitherindividually, alternatively or in anycombination, applied to either the Company as a whole or to a business unit orsubsidiary, either individually,alternatively or in any combination, and measured either annually orcumulatively over a period of years, on an absolute basis or relative toa pre-established target, to previous years’ results or to a designated comparison group, in each case as specified by theCommittee in the Award: (a) cash flow, (b) earnings per share, (c) earningsbefore interest, taxes and amortization), (d) return on equity, (e) totalstockholder return, (f) returnon capital, (g) return on assets or net assets, (h) revenue, (i) incomeor net income, (j) operating incomeor net operating income, (k) operating profit or net operating profit, (1) operatingmargin, (m) return on operating revenue, (n) market share and (o) overheador other expense reduction. The Committee shall appropriately adjust any evaluation of performance under a QualifyingPerformance Criteria to exclude any of thefollowing events that occurs during a performance period: (i) assetwrite-downs, (ii) litigation or claim judgments or settlements, (iii) theeffect of changes in tax law, accounting principles or other such laws or provisionsaffecting reported results, (iv) accruals for reorganization andrestructuring programs and (v) any extraordinary non-recurring items asdescribed in Accounting Principles Board Opinion No. 30 and/or in management’s discussion and analysis of financialcondition and results of operations appearing in the Company’s annualreport to stockholders for the applicable year.

 

9.3 *Dividends.*Unless otherwise provided by the Committee, no adjustment shall be madein Shares issuable under Award on account of cash dividends that may be paid orother rights that may be issued to the holders of Shares prior to theirissuance under any Award.  The Committeeshall specify whether dividends or dividend equivalent amounts shall be paid toany Participant with respect to the Shares subject to any Award that have notvested or been issued or that are subject to any restrictions or conditions onthe record date for dividends. Notwithstanding any provision of this Section 9.3to the contrary, the Committee shall not condition the right to receivedividends or dividend equivalent amounts, directly or indirectly, upon theexercise of any Option.  In addition, theCommittee will ensure that any right to dividend or dividend equivalent amountsthat may be paid in connection with the Shares subject to any Award grantedhereunder******complies with therequirements of Code Section 409A.

 

9.4 *Documents Evidencing Awards.*The Committee shall, subject toapplicable law, determine the date anAward is deemed to be granted, which for purposes of this Plan shall not beaffected by the fact that an Award is contingent on subsequentstockholder approval of this Plan. The Committee or, except to the extent prohibited under applicable law, its delegate (s) mayestablish the terms of agreements or other documents evidencing Awardsunder this Plan and may, but need not, require as a condition to any suchagreement’s or document’s effectiveness thatsuch agreement or document be executed by the Participant and that such Participant agree to such further terms andconditions as specified in such agreement or document. The grant of an Award under this Plan shall not confer anyrights upon the Participant holding such Award other than such terms, and subject to such conditions, as arespecified in this Plan as being applicable to such type of Award (or to all Awards)or as are expressly set forth in the agreement or other document evidencingsuch Award.

 

9.5 *Tandem Stock orCash Rights.*Either at the time an Award is granted or by subsequentaction, the Committee may, but need not,provide that an Award shall contain as a term thereof, a right, either intandem with the other rights under theAward or as an alternative thereto, of the Participant to receive, without payment to the Company, a number of Shares, cash ora combination thereof, the amount of which is determined by reference tothe value of the Award.

 

9.6 *Financing.*The Committee may not provide financing to aParticipant to pay the purchase price of any Award or to pay the amountof taxes required by law to be withheld with respect to any Award.

 

 

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9.7 *Sub-Committees.*The Board of Directors or the Committee mayfrom time to time appoint one or more Sub-Committees (as defined below)comprised of one or more officers, directors or others, which Sub-Committee shall have the powers of the Committeedescribed in Section 6 of this Plan solely with respect to thegrant of Options (as defined in Section 5.1(a)) to employees who are notthen officers of the Company withinthe meaning of Rule 16a-1 (f) promulgated under the Exchange Act, ifand as such Rule is then in effect.Each such Sub-Committee may be subject to any such additional restrictions orlimitation as the Board of Directorsor the Committee may impose at any time. Each Sub-Committee so appointed may bedisbanded by the Board of Directorsor the Committee at any time, *provided*thatno such termination shall affect the validity of any Option theretoforeapproved by any such Sub-Committee. “Sub-Committee” shall mean any Sub-Committee, comprised of one or moreindividuals, of the Committee appointed as provided in Section 2.1. The aggregate number of Sharessubject to Options granted by a Sub-Committee hereunder during anycalendar year to any one Employee shall not exceed 15,000.

 

9.8 *Compliance with Code Section 409A.*Some of the Awards that may begranted pursuant to the Plan (including Incentive Bonus Awards and IncentiveStock Awards) may be considered to be “non-qualified deferred compensation”subject to Code Section 409A.  If anAward is subject to Code Section 409A, the document evidencing such Awardand this Plan are intended to comply fully with and meet all of therequirements of Code Section 409A. The document evidencing such Award shall include such provisions as maybe necessary to assure compliance with Code Section 409A.  An Award subject to Code Section 409Aalso shall be administered in good faith compliance with the provisions of CodeSection 409A as well as applicable guidance issued by the Internal RevenueService and the Department of Treasury. To the extent necessary to comply with Code Section 409A, any Awardthat is subject to Code Section 409A may be modified, replaced orterminated in the discretion of the Committee. Notwithstanding any provision of this Plan or any document evidencing anAward to the contrary, in the event that the Committee determines that anyAward is or may become subject to Code Section 409A, the Company may adoptsuch amendments to the Plan and the related documents evidencing any Awards,without the consent of the Participant, or adopt other policies and procedures(including amendments, policies and procedures with retroactive effectivedates), or take any other action that the Committee determines to be necessaryor appropriate to either comply with Code Section 409A or to exclude orexempt the Plan or any Award from the requirements of Code Section 409A.

 

**SECTION 10.CHANGES IN CAPITAL STRUCTURE**

 

  If the outstanding securities of the classthen subject to this Plan are increased, decreased or exchanged for orconverted into cash, property or a different number or kind of shares orsecurities, or if cash, property or shares or securities are distributed inrespect of such outstanding securities, in either case as a result of areorganization, merger, consolidation, recapitalization, restructuring,reclassification, dividend (other than a regular, quarterly cash dividend) orother distribution, stock split, reverse stock split, spin-off or the like, orif substantially all of the property and assets of the Company are sold, then,unless the terms of such transaction shall provide otherwise, the Committeeshall make appropriate and proportionate adjustments in (a) the number andtype of shares or other securities or cash or other property that may beacquired pursuant to Awards theretofore granted under this Plan and theexercise or settlement price of such Awards, *provided*,*however*, that such adjustment shall bemade in such a manner that is consistent with the requirements of Code Section 409Aand that will not affect the status of any Award intended to qualify as an ISOunder Code Section 422 or as “performance based compensation” under Code Section 162(m) and(b) the maximum number and type of shares or other securities that may beissued pursuant to such Awards thereafter granted under this Plan.

 

**SECTION 11.CHANGE OF CONTROL**

 

11.1 *Effect of Changeof Control.*The Committee may, through the terms of the Award orotherwise, provide that any or all ofthe following shall occur, in connection with a Change of Control or a Changeof Control Transaction (as defined inSection 11.2), or upon termination of the Participant’s employment following a Change of Control or a Change ofControl Transaction: (a) in the case of an Option, the accelerationof the Participant’s ability to exercise any portion of the Option notpreviously exercisable or the payment to theParticipant of cash equal to the difference between the exercise price and theprice being paid to 

 

 

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the holders of Shares, (b) in the case of an Incentive Bonus, theacceleration of the Participant’s right to receive a payment equal to the target amount payable or, if greater, apayment based on performance through adate determined by the Committee prior to the Change of Control and (c) inthe case of Shares issued in paymentof any Incentive Bonus, and/or in the case of Incentive Stock, the lapse andexpiration of any conditions to thegrant, issuance, retention, vesting or transferability of, or any other restrictionsapplicable to, such Award. TheCommittee also may, through the terms of the Award or otherwise, provide for anabsolute or conditional exercise,payment or lapse of conditions or restrictions on an Award that shall only beeffective if, upon the announcement ofa Change of Control Transaction, no provision is made in such Change of Control Transaction for the exercise, payment orlapse of conditions or restrictions on the Award, or other procedurewhereby the Participant may realize the full benefit of the Award. In the caseof an acceleration of payment of any Award hereunder on a Change of Control orChange of Control Transaction, the payment shall be made on or before March 15of the year following the year in which the Change of Control or Change ofControl Transaction occurs in order to satisfy the “short-term deferralexception” to Code Section 409A.

 

11.2 *Definitions.*Unless the Committee providesotherwise,

 

“Changeof Control” means the first to occur of the following:

 

(a)     themerger or consolidation of the Company with or into another corporation;

 

(b)     the acquisition by another corporation person orgroup of all or substantially all of the Company’s assets or 40% or moreof the Company’s then outstanding voting stock;

 

(c)   theliquidation or dissolution of the Company; or

 

(d)     duringany period of 12 consecutive months, individuals who at the beginning of such12-month period constituted the Board of Directors (together with any newdirectors whose election by the Board of Directorsor whose nomination for election by the stockholders of the Company wasapproved by a vote of a majority of the directors then still in officewho were either directors at the beginning of such period or whose election ornomination for election was previously so approved) cease for any reason toconstitute a majority of the Board of Directors then in office,

 

*provided, however,*that a Change of Control will not be deemed tohave occurred in respect of a merger in which (x) the Company is the surviving corporation, (y) noperson or group acquires 40% or more of the Company’s outstanding voting stock and (z) the Shares outstandingprior to the merger remain outstanding thereafter;and *provided further,*that amerger or consolidation will not be considered a Change of Control if suchtransaction results only in the reincorporation of the Company in anotherjurisdiction or its restructuring into holding company form.

 

“Changeof Control Transaction” shall mean any tender offer, offer, exchange offer,solicitation, merger, consolidation,reorganization or other transaction that is intended to or reasonably expectedto result in a Change of Control. For any Award subject to therequirements of Code Section 409A, the document evidencing such Award mayprescribe a different definition of the term “Change of Control” or “Change ofControl Transaction” that will apply for purposes of such document and thatcomplies with the requirements of Code Section 409A.

 

**SECTION 12.TAXES**

 

12.1 *WithholdingRequirements.*The Committee may make such provisions or impose suchconditions as it may deem appropriate for the withholding or payment bya Participant of any taxes that the Committee determinesare required in connection with any Award granted under this Plan, and aParticipant’s rights in any Award are subject to satisfaction of suchconditions.

 

12.2 *Payment ofWithholding Taxes.*Notwithstanding the terms of Section 12.1,the Committee may provide in theagreement or other document evidencing an Award or otherwise that all or anyportion of the taxes required to be withheld by the Company or, ifpermitted by the Committee, desired to be paid by the Participant, in connection with the exercise of a Nonqualified Option orthe exercise, vesting, settlement or transfer of any other Award shallbe paid or, at the election of the Participant, may be paid by the Company by withholding shares of the Company’s capital stockotherwise issuable or subject to such Award, or by the Participant deliveringpreviously owned shares of the Company’s capital stock, in each case having afair 

 

 

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market value equal to the amount required or elected to be withheld orpaid. Any such election is subject to suchconditions or procedures as may be established by the Committee and may besubject to disapproval by the Committee.

 

**SECTION 13.AMENDMENTS OR TERMINATION**

 

TheBoard may amend, alter or discontinue this Plan or any agreement or otherdocument evidencing an Award made under this Plan, but no such amendment shall,without the approval of the stockholders of the Company:

 

(a)     increasethe maximum number of shares of Common Stock for which Awards may be grantedunder this Plan;

 

(b)     reducethe price at which Options may be granted below the price provided for in Section 6.2;

 

(c)     reducethe exercise price of outstanding Options;

 

(d)     after any Change of Control, impair the rights ofany Award holder without such holder’s consent;

 

(e)     extendthe term of this Plan;

 

(f)      changethe class of persons eligible to be Participants;

 

(g)     provide for the automatic grant of Options basedupon the exercise of Options by holders of Options; or

 

(h)     increasethe number of shares that are eligible for non-Option Awards.

 

Notwithstanding the foregoing, no amendment, alterationor discontinuance of this Plan or any other document evidencing an Award underthe Plan shall cause all or a part of the payment under any Award to be subjectto additional tax under Code Section 409A

 

**SECTION 14.COMPLIANCE WITH OTHER LAWS AND REGULATIONS**

 

This Plan, the grant and exerciseof Awards thereunder, and the obligation of the Company to sell, issue ordeliver Shares under such Awards, shall be subject to all applicable federal,state and foreign laws, rules and regulationsand to such approvals by any governmental or regulatory agency as may berequired. The Company shall not berequired to register in a Participant’s name or deliver any Shares prior to thecompletion of any registration orqualification of such Shares under any federal, state or foreign law or anyruling or regulation of any governmentbody which the Committee shall determine to be necessary or advisable. This Plan is intended to constitute an unfundedarrangement for a select group of management or other key employees,directors and consultants.

 

No Option shall be exercisableunless a registration statement with respect to the Option is effective or the Company has determined that such registrationis unnecessary. Unless the Awards and Shares covered by this Plan have been registeredunder the Securities Act of 1933, as amended, or the Company has determined that such registration is unnecessary, each personreceiving an Award and/or Shares pursuant to any Award may be required by the Company to give arepresentation in writing that such person is acquiring such Shares for his or her own account for investment and notwith a view to, or for sale in connection with, the distribution of anypart thereof.

 

**SECTION 15.NO RIGHT TO COMPANY EMPLOYMENT**

 

Nothing in this Plan or as a resultof any Award granted pursuant to this Plan shall confer on any individual any right to continue in the employ ofthe Company or interfere in any way with the right of the Company to terminate an individual’s employment atany time. The agreements or other documents evidencing Awards maycontain such provisions as the Committee may approve with reference to theeffect of approved leaves of absence.

 

 

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**SECTION 16.EFFECTIVENESS AND EXPIRATION OF PLAN**

 

This Plan shall be effective onthe date the Company’s stockholders adopt this Plan. All Awards granted underthis Plan are subject to, and may not be exercised before, the approval of thisPlan by the stockholders prior to the first anniversary date of the effectivedate of this Plan, by the affirmative vote of the holders of a majority of theoutstanding shares of the Company present, or represented by proxy, andentitled to vote, at a meeting of theCompany’s stockholders or by written consent in accordance with the laws of theState of Delaware; *provided*that ifsuch approval by the stockholders of the Company is not forthcoming, all Awardspreviously granted under this Plan shall bevoid. No Awards shall be granted pursuant to this Plan more than 10years after the effective date of this Plan.

 

**SECTION 17.NON-EXCLUSIVITY OF PLAN**

 

Neither the adoption of this Plan by the Board nor thesubmission of this Plan to the stockholders of the Company for approval shall be construed as creating any limitations onthe power of the Board or the Committeeto adopt such other incentive arrangements as either may deem desirable,including without limitation, thegranting of restricted stock or stock options otherwise than under this Plan,and such arrangements may be either generally applicable or applicableonly in specific cases.

 

**SECTION 18.GOVERNING LAW**

 

This Plan and any agreements orother documents hereunder shall be interpreted and construed in accordance with the laws of the State of Delawareand applicable federal law. The Committee may provide that any dispute as to any Award shall be presentedand determined in such forum as the Committee may specify, including through binding arbitration.Any reference in this Plan or in the agreement or other documentevidencing any Award to a provision of law or to a rule or regulationshall be deemed to include any successor law, rule or regulation ofsimilar effect or applicability.

 

 

 

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