**Exhibit 4.2**

 

**MAGNETEK,INC.**

**AMENDEDAND RESTATED**

**1997NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN**

**JANUARY1, 2008**

 

**1.    ****Purpose of the Plan.** Under this 1997 Non-Employee Director Stock Option Plan (the “DirectorPlan”) of MagneTek, Inc., a Delaware corporation (the “Company”), optionsshall be granted to eligible persons, as set forth in Section 4, topurchase shares of the Company’s common stock (“Common Stock”). This DirectorPlan is designed to promote the long-term growth and financial success of theCompany by enabling it to attract, retain and motivate such persons byproviding for or increasing their interest in the Company. This Plan replacesthe Non-Employee Director Stock Option Plan of the Company (the “1995 Plan”).

 

**2.    ****Effective Dates.** This DirectorPlan became effective on April 22, 1997. Options may not be grantedsubsequent to (a) September 30, 2010 or (b) termination of thisDirector Plan by the Board of Directors of the Company (the “Board”), whicheveris earlier. However, there will be a grant on September 30, 2010 if theDirector Plan has not theretofore been terminated by the Board pursuant to theforegoing clause (b).

 

**3.    ****Plan Operation.** To the extentthat any questions of interpretation arise hereunder, these shall be resolvedby the Board.

 

**4.    ****Eligible Persons.** The personseligible to receive a grant of non-qualified stock options hereunder are anyDirector of the Board who on the date of said grant is not an employee of theCompany or a subsidiary of the Company (a “Qualifying Director”).

 

**5.    ****Stock Subject to Director Plan.**The maximum number of shares that may be subject to options grantedhereunder shall be 1,150,000 shares of Common Stock, subject to adjustmentsunder Section 6, of which 448,000 shares are being transferred from the1995 Plan. Shares of Common Stock subject to the unexercised portions of anyoptions granted under this Director Plan which expire, terminate or areforfeited or cancelled may again be subject to options under this DirectorPlan.

 

**6.    ****Adjustments.** In the eventthat the outstanding shares of Common Stock of the Company are hereafterchanged into or exchanged for a different number or kind of shares or othersecurities of the Company, or of another corporation, by reason ofreorganization, merger, consolidation, recapitalization, reclassification,stock split-up, spin-off, stock dividend or combination of shares, appropriateadjustments shall be made in the number and kind of shares: (a) that maybe subject to options granted under this Director Plan; (b) as to which optionsmay thereafter be granted or issued under this Director Plan and (c) forwhich options then outstanding under this Director Plan may thereafter beexercised. Any such adjustments in outstanding options shall be made withoutchanging the aggregate exercise price applicable to the unexercised portions ofsuch options.

 

**7. ****StockOptions.**

 

(a)   Upon initial election orappointment of any director to the Board or upon a continuing director becominga Non-Officer Qualifying Director, such Non-Officer Qualifying Director willreceive an option to purchase 7,500 shares of the Company’s Common Stockpursuant to the terms and conditions described in this Section 7.  In addition, Non-Officer Qualifying Directorswill be automatically granted, on an annual basis, a non-qualified stock optionto purchase 7,500 shares of the Company’s Common Stock on the last business dayof the Company’s fiscal year ending after the initial grant of such Non-OfficerQualifying Director’s 7,500 share option pursuant to this Section 7.  Each option granted pursuant to this Section 7(a) willhave a term of ten years and shall become exercisable as follows: options withrespect to 50% of the shares one year after the date of grant and options withrespect to the remaining 50% of the shares two years after the date of grant.

 

 

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(b)  TheBoard may from time to time, in its absolute discretion, grant non-qualifiedstock options to Qualifying Directors. Each option granted pursuant to this Section 7(b) willhave a term of ten years unless otherwise specified by the Board, and the Boardshall, in its absolute discretion, determine the exercisability and otherprovisions of such option.

 

(c)  The pershare exercise price of options granted under this Director Plan will be thefair market value of a share of the Company’s Common Stock on the date of grant(the “Fair Market Value”), defined as (i) the mean between the highest andlowest sales prices of a share of the Company’s stock on the principal exchangeon which shares of the. Company’s stock are then trading, if any, on suchdetermination date, or, if shares were not traded on such date, then on thenext preceding trading day during which a sale occurred, as such prices arequoted in The Wall Street Journal; or (ii) if such stock is not traded onan exchange but is quoted on NASDAQ or a successor quotation system, (1) themean between the highest and lowest sales prices (if the stock is then listedas a National Market Issue under the NASD National Market System) or (2) themean between the closing representative bid and asked prices (in all othercases) for the stock on such determination date as reported by NASDAQ or suchsuccessor quotation system; or (iii) if such stock is not publicly tradedon an exchange and not quoted on NASDAQ or a successor quotation system, themean between the closing bid and asked prices for the stock, on suchdetermination date, as determined in good faith by the Board; or (iv) ifthe Company’s stock is not publicly traded, the fair market value establishedby the Board in good faith. The Board shall use such procedures to determinefair market value in compliance with Code Section 409A and the regulationsor other guidance issued thereunder.

 

(d)  If on anydate upon which options are to be granted under this Director Plan the numberof shares of Common Stock remaining available under the Director Plan are lessthan the number of shares required for all grants to be made on such date, thenoptions to purchase a proportionate amount of such available number of sharesof Common Stock shall be granted to each Qualifying Director.

 

**8.    ****Documentationof Grants.** Awards made under this Director Plan may be evidenced by writtenagreements or such other appropriate documentation as the Board shallprescribe. The Board need not require the execution of any instrument oracknowledgment of notice of an award under Section 7(a) of thisDirector Plan, in which case continued service as a Qualifying Director by therespective optionees will constitute agreement to the terms of the award.

 

**9.    ****Nontransferability.** Unless otherwiseapproved by the Board, options granted under this Director Plan arenontransferable by the optionee otherwise than by will or the laws of descentand distribution, and are exercisable, during the optionee’s lifetime, only bythe optionee.

 

**10. ****Amendmentand Termination.** The Board may alter, amend, suspend, orterminate this Director Plan, provided that no such action shall deprive anyoptionee, without his consent, of any option theretofore granted to theoptionee pursuant to this Director Plan or of any of his rights under suchoption and provided further that the provisions of this Director Plandesignating persons eligible to participate in the Director Plan and specifyingthe amount, exercise price and timing of grants under the Director Plan shallnot be amended more than once every six months other than to comport withchanges in the Internal Revenue Code, the Employee Retirement Income SecurityAct, or the rules thereunder. Notwithstanding the foregoing, noalteration, amendment, suspension or termination of this Director Plan or anyother document evidencing an Award under this Director Plan shall cause all ora part of the payment under any Award to be subject to additional tax underCode Section 409A.

 

**11.Termination of Directorship.** All vestedoptions held by Qualifying Directors as of the date of cessation of service asa director may be exercised by the Qualifying Director or his heirs or legalrepresentatives for one year after such cessation of service.

 

**12.Merger, Consolidation, Acquisition, Liquidation or Dissolution.** Upon or inconnection with the merger or consolidation of the Company with or into anothercorporation, the acquisition by another corporation, person or group of all orsubstantially all of the Company’s assets or 40% or more of the Company’s thenoutstanding voting stock or the liquidation or dissolution of the Company:

 

 

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(a)   If so provided in the relevantagreement relating to a merger, consolidation, acquisition of assets,liquidation or dissolution, such option shall be either assumed or replaced bya substitute option, as applicable, issued by the successor or any corporationthat is a “parent” of the Company within the meaning of Rule 405 under theSecurities and Exchange Act of 1933, as amended (the “Securities Act”),resulting from such transaction, without any further action on the part of theBoard or the Qualifying Director.

 

(b)   If no provision is made as set forthin (a), or in the event of an acquisition of 40% or more of the Company’s thenoutstanding voting stock to which subsection (c) is inapplicable, suchoption shall become (to the extent not then fully vested) fully exercisablefrom and after the date which is thirty days prior to the effective date of thetransaction and until the normal expiration thereof.

 

(c)   In the event of an acquisition of 40%or more the Company’s then outstanding voting stock (other than pursuant to amerger resulting in the ownership of all of the Company’s outstanding CommonStock by another corporation), if as a result of the transaction the Company’sCommon Stock will cease to be traded on a national stock exchange, listed as aNational Market Issue on the National Market System or quoted on the NASDAQquotation system, each option which has not been exercised prior to theconsummation of the transaction shall be converted automatically into the rightto receive, within thirty days of such consummation, an amount in cash equal tothe difference between the aggregate exercise price for all shares subject tothe option (whether or not then subject to exercise) and the Fair Market Valueof such shares on the date which is the last trading date preceding theconsummation of such transaction.

 

(d)   Theforegoing provisions shall have no application to a merger in which (i) theCompany is the surviving corporation, (ii) no person or group acquires 40%or more of the Company’s outstanding voting stock. and (iii) the shares ofthe Company’s Common Stock outstanding prior to the merger remain outstandingthereafter.

 

**13.Manner of Exercise.** All or a portion of an exercisable optionshall be deemed exercised upon delivery to the Secretary of the Company at theCompany’s principal office of all of the following: (i) a written noticeof exercise specifying the number of shares to be purchased signed by theQualifying Director or other person then entitled to exercise the option, (ii) fullpayment of the exercise price for such shares by any of the following orcombination thereof: (a) cash, (b) certified or cashier’s checkpayable to the order of the Company, (c) the delivery of whole shares ofthe Company’s Common Stock owned by the option holder, or (d) by requestingthat the Company withhold whole shares of Company Common Stock then issuableupon exercise of the option (for purposes of such a transaction the shareswithheld by the Company shall be valued at the Fair Market Value as of the dateprior to the exercise date), (iii) such representations and documents asthe Board, in its sole discretion, deems necessary or advisable to effectcompliance with all applicable provisions of the Securities Act and otherfederal or state securities laws or regulations, (iv) in the event thatthe option shall be exercised by any person or persons other than theQualifying Director, appropriate proof of the right of such person or personsto exercise the option, and (v) such representations and documents as theBoard, in its sole discretion, deems necessary or advisable.

 

**14. Compliance with Law.** Common Stock shall not be issued upon exercise of an option grantedunder this Director Plan unless and until counsel for the Company shall besatisfied that any conditions necessary for such issuance to comply withapplicable federal, state or local tax, securities or other laws or rules orapplicable securities exchange requirements have been fulfilled.

 

**15. Compliance with Code Section 409A.**  The Awards granted hereunderare intended to comply with the exception to Code Section 409A set forthin Treas. Reg. § 1.409A-1(b)(5)(i)(A). However, to the extent any Award does not meet the requirements of thisexception and therefore is subject to the requirements of Code Section 409A,to the extent necessary to comply with Code Section 409A, any Award thatis subject to Code Section 409A may be modified, replaced or terminated inthe discretion of the Board. Notwithstanding any provision of this Director Plan or any documentevidencing an Award to the contrary, in the event that the Board determinesthat any Award is or may become subject to Code Section 409A, the Companymay adopt such amendments to this Director Plan and the related documentsevidencing any Awards, without the consent of the Participant, or adopt otherpolicies and procedures (including amendments, policies and procedures withretroactive effective dates), or take any other action that the Boarddetermines to be necessary or appropriate to either comply with Code Section 409Aor to exclude or exempt this Director Plan or any Award from the requirementsof Code Section 409A.

 

 

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