Document:

Exhibit 10.8

                             STOCK ESCROW AGREEMENT

                  STOCK ESCROW AGREEMENT, dated as of __________, 2005
("Agreement"), by and among INTERNATIONAL METAL ENTERPRISES, INC., a Delaware
corporation ("Company"), ALAN KESTENBAUM, MICHAEL BARENHOLTZ, JORDAN KESTENBAUM,
ARIELLE KESTENBAUM, JACOB KESTENBAUM and TED HEILMAN (collectively "Initial
Stockholders") and CONTINENTAL STOCK TRANSFER & TRUST COMPANY, a New York
corporation ("Escrow Agent").

                  WHEREAS, the Company has entered into an Underwriting
Agreement, dated __________, 2005 ("Underwriting Agreement"), with Sunrise
Securities Corp. ("Sunrise") acting as representative of the several
underwriters (collectively, the "Underwriters"), pursuant to which, among other
matters, the Underwriters have agreed to purchase 33,500,000 units ("Units") of
the Company. Each Unit consists of one share of the Company's Common Stock, par
value $.0001 per share, and two Warrants, each Warrant to purchase one share of
Common Stock, all as more fully described in the Company's final Prospectus,
dated ___________, 2005 ("Prospectus") comprising part of the Company's
Registration Statement on Form S-1 (File No. 333-122967) under the Securities
Act of 1933, as amended ("Registration Statement"), declared effective on
_________, 2005 ("Effective Date").

                  WHEREAS, the Initial Stockholders have agreed as a condition
of the sale of the Units to deposit their shares of Common Stock of the Company,
as set forth opposite their respective names in Exhibit A attached hereto
(collectively "Escrow Shares"), in escrow as hereinafter provided.

                  WHEREAS, the Company and the Initial Stockholders desire that
the Escrow Agent accept the Escrow Shares, in escrow, to be held and disbursed
as hereinafter provided.

                  IT IS AGREED:

         1. Appointment of Escrow Agent. The Company and the Initial
Stockholders hereby appoint the Escrow Agent to act in accordance with and
subject to the terms of this Agreement and the Escrow Agent hereby accepts such
appointment and agrees to act in accordance with and subject to such terms.

         2. Deposit of Escrow Shares. On or before the Effective Date, each of
the Initial Stockholders shall deliver to the Escrow Agent certificates
representing his respective Escrow Shares, to be held and disbursed subject to
the terms and conditions of this Agreement. Each Initial Stockholder
acknowledges that the certificate representing his Escrow Shares is legended to
reflect the deposit of such Escrow Shares under this Agreement.

         3. Disbursement of the Escrow Shares. The Escrow Agent shall hold the
Escrow Shares until the third anniversary of the Effective Date ("Escrow
Period"), on which date it shall, upon written instructions from each Initial
Stockholder, disburse each of the Initial Stockholder's Escrow Shares to such
Initial Stockholder; provided, however, that if the Escrow Agent is notified by
the Company pursuant to Section 6.7 hereof that the Company is being liquidated
at any time during the Escrow Period, then the Escrow Agent shall promptly
destroy the certificates representing the Escrow Shares and; provided further,
that if, after the Company consummates a Business Combination (as such term is
defined in the Registration Statement), it (or the surviving entity)
subsequently consummates a liquidation, merger, stock exchange or other similar
transaction which results in all of the stockholders of such entity having the
right to exchange their shares of Common Stock for cash, securities or other
property, then the Escrow Agent will, upon receipt of a certificate, executed by
the Chief Executive Officer or Chief Financial Officer of the Company, in form
reasonably acceptable to the Escrow Agent, that such transaction is then being
consummated, release the Escrow Shares to the Initial Stockholders upon
consummation of the transaction so that they can similarly participate. The
Escrow Agent shall have no further duties hereunder after the disbursement or
destruction of the Escrow Shares in accordance with this Section 3.

         4. Rights of Initial Stockholders in Escrow Shares.

                  4.1 Voting Rights as a Stockholder. Subject to the terms of
the Insider Letter described in Section 4.4 hereof and except as herein
provided, the Initial Stockholders shall retain all of their rights as
stockholders of the Company during the Escrow Period, including, without
limitation, the right to vote such shares.

                  4.2 Dividends and Other Distributions in Respect of the Escrow
Shares. During the Escrow Period, all dividends payable in cash with respect to
the Escrow Shares shall be paid to the Initial Stockholders, but all dividends
payable in stock or other non-cash property ("Non-Cash Dividends") shall be
delivered to the Escrow Agent to hold in accordance with the terms hereof. As
used herein, the term "Escrow Shares" shall be deemed to include the Non-Cash
Dividends distributed thereon, if any.

                  4.3 Restrictions on Transfer. During the Escrow Period, no
sale, transfer or other disposition may be made of any or all of the Escrow
Shares except (i) by gift to a member of Initial Stockholder's immediate family
or to a trust, the beneficiary of which is an Initial Stockholder or a member of
an Initial Stockholder's immediate family, (ii) by virtue of the laws of descent
and distribution upon death of any Initial Stockholder, or (iii) pursuant to a
qualified domestic relations order; provided, however, that such permissive
transfers may be implemented only upon the respective transferee's written
agreement to be bound by the terms and conditions of this Agreement and of the
Insider Letter signed by the Initial Stockholder transferring the Escrow Shares.
During the Escrow Period, the Initial Stockholders shall not pledge or grant a
security interest in the Escrow Shares or grant a security interest in their
rights under this Agreement.

                                       2

                  4.4 Insider Letters. Each of the Initial Stockholders has
executed a letter agreement with Sunrise and the Company, dated as indicated on
Exhibit A hereto, and which is filed as an exhibit to the Registration Statement
("Insider Letter"), respecting the rights and obligations of such Initial
Stockholder in certain events, including but not limited to the liquidation of
the Company.

         5. Concerning the Escrow Agent.

                  5.1 Good Faith Reliance. The Escrow Agent shall not be liable
for any action taken or omitted by it in good faith and in the exercise of its
own best judgment, and may rely conclusively and shall be protected in acting
upon any order, notice, demand, certificate, opinion or advice of counsel
(including counsel chosen by the Escrow Agent), statement, instrument, report or
other paper or document (not only as to its due execution and the validity and
effectiveness of its provisions, but also as to the truth and acceptability of
any information therein contained) which is believed by the Escrow Agent to be
genuine and to be signed or presented by the proper person or persons. The
Escrow Agent shall not be bound by any notice or demand, or any waiver,
modification, termination or rescission of this Agreement unless evidenced by a
writing delivered to the Escrow Agent signed by the proper party or parties and,
if the duties or rights of the Escrow Agent are affected, unless it shall have
given its prior written consent thereto.

                   5.2 Indemnification. The Escrow Agent shall be indemnified
and held harmless by the Company from and against any expenses, including
counsel fees and disbursements, or loss suffered by the Escrow Agent in
connection with any action, suit or other proceeding involving any claim which
in any way, directly or indirectly, arises out of or relates to this Agreement,
the services of the Escrow Agent hereunder, or the Escrow Shares held by it
hereunder, other than expenses or losses arising from the gross negligence or
willful misconduct of the Escrow Agent. Promptly after the receipt by the Escrow
Agent of notice of any demand or claim or the commencement of any action, suit
or proceeding, the Escrow Agent shall notify the other parties hereto in
writing. In the event of the receipt of such notice, the Escrow Agent, in its
sole discretion, may commence an action in the nature of interpleader in an
appropriate court to determine ownership or disposition of the Escrow Shares or
it may deposit the Escrow Shares with the clerk of any appropriate court or it
may retain the Escrow Shares pending receipt of a final, non-appealable order of
a court having jurisdiction over all of the parties hereto directing to whom and
under what circumstances the Escrow Shares are to be disbursed and delivered.
The provisions of this Section 5.2 shall survive in the event the Escrow Agent
resigns or is discharged pursuant to Sections 5.5 or 5.6 below.

                  5.3 Compensation. The Escrow Agent shall be entitled to
reasonable compensation from the Company for all services rendered by it
hereunder. The Escrow Agent shall also be entitled to reimbursement from the
Company for all expenses paid or incurred by it in the administration of its
duties hereunder including, but not limited to, all counsel, advisors' and
agents' fees and disbursements and all taxes or other governmental charges.

                  5.4 Further Assurances. From time to time on and after the
date hereof, the Company and the Initial Stockholders shall deliver or cause to
be delivered to the Escrow Agent such further documents and instruments and
shall do or cause to be done such further acts as the Escrow Agent shall
reasonably request to carry out more effectively the provisions and purposes of
this Agreement, to evidence compliance herewith or to assure itself that it is
protected in acting hereunder.

                                       3

                  5.5 Resignation. The Escrow Agent may resign at any time and
be discharged from its duties as escrow agent hereunder by its giving the other
parties hereto written notice and such resignation shall become effective as
hereinafter provided. Such resignation shall become effective at such time that
the Escrow Agent shall turn over to a successor escrow agent appointed by the
Company, the Escrow Shares held hereunder. If no new escrow agent is so
appointed within the 60 day period following the giving of such notice of
resignation, the Escrow Agent may deposit the Escrow Shares with any court it
reasonably deems appropriate.

                  5.6 Discharge of Escrow Agent. The Escrow Agent shall resign
and be discharged from its duties as escrow agent hereunder if so requested in
writing at any time by the Company and a majority of the Initial Stockholders,
jointly, provided, however, that such resignation shall become effective only
upon acceptance of appointment by a successor escrow agent as provided in
Section 5.5.

                  5.7 Liability. Notwithstanding anything herein to the
contrary, the Escrow Agent shall not be relieved from liability hereunder for
its own gross negligence or its own willful misconduct.

         6. Miscellaneous.

                  6.1 Governing Law. This Agreement shall for all purposes be
deemed to be made under and shall be construed in accordance with the laws of
the State of New York.

                  6.2 Third Party Beneficiaries. Each of the Initial
Stockholders hereby acknowledges that the Underwriters are third party
beneficiaries of this Agreement and this Agreement may not be modified or
changed without the prior written consent of Sunrise.

                  6.3 Entire Agreement. This Agreement contains the entire
agreement of the parties hereto with respect to the subject matter hereof and,
except as expressly provided herein, may not be changed or modified except by an
instrument in writing signed by the party to be charged.

                  6.4 Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation thereof.

                  6.5 Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the respective parties hereto and their legal
representatives, successors and assigns.

                  6.6 Notices. Any notice or other communication required or
which may be given hereunder shall be in writing and either be delivered
personally or be mailed, certified or registered mail, or by private national
courier service, return receipt requested, postage prepaid, and shall be deemed
given when so delivered personally or, if mailed, two days after the date of
mailing, as follows:

                  If to the Company, to:

                           International Metal Enterprises, Inc.
                           1 Penn Plaza

                                       4

                           Suite 2514
                           New York, New York 10119
                           Attn: Chief Executive Officer

                  If to a Stockholder, to his address set forth in Exhibit A.

                  and if to the Escrow Agent, to:

                           Continental Stock Transfer & Trust Company
                           17 Battery Place
                           New York, New York 10004
                           Attn: Chairman

                  A copy of any notice sent hereunder shall be sent to:

                           Meister Seelig & Fein LLP
                           2 Grand Central Tower
                           140 East 45th Street, 19th Floor
                           New York, New York 10017
                           Attn: Mark J. Seelig, Esq.

                  and:

                           Sunrise Securities Corp.
                           641 Lexington Avenue
                           25th Floor
                           New York, New York 10022
                           Attn: Nathan Low, President

                  and:

                           Graubard Miller
                           The Chrysler Building
                           405 Lexington Avenue
                           New York, New York 10174
                           Attn: David Alan Miller, Esq.

                  The parties may change the persons and addresses to which the
notices or other communications are to be sent by giving written notice to any
such change in the manner provided herein for giving notice.

         6.7 Liquidation of Company. The Company shall give the Escrow Agent
written notification of the liquidation and dissolution of the Company in the
event that the Company fails to consummate a Business Combination within the
time period(s) specified in the Prospectus.

                                       5

                  This Agreement may be signed in any number of counterparts,
all of which taken together shall constitute one and the same instrument.

                  WITNESS the execution of this Agreement as of the date first
above written.

                                      INTERNATIONAL METAL ENTERPRISES, INC.

                                      By:
                                          -----------------------------------
                                          Name: Alan Kestenbaum
                                          Title: Chief Executive Officer

                                      INITIAL STOCKHOLDERS:

                                      ---------------------------
                                      ALAN KESTENBAUM

                                      ---------------------------
                                      MICHAEL BARENHOLTZ

                                      ---------------------------
                                      JORDAN KESTENBAUM

                                      ---------------------------
                                      ARIELLE KESTENBAUM

                                      ---------------------------
                                      JACOB KESTENBAUM

                                      ---------------------------
                                      TED HEILMAN

                                      CONTINENTAL STOCK TRANSFER
                                        & TRUST COMPANY

                                      By:
                                         ------------------------------------
                                         Name:
                                         Title:

                                       6

                                    EXHIBIT A

Name and Address of           Number           Stock               Date of
Initial Stockholder        of Shares     Certificate Number     Insider Letter
-------------------        ---------     ------------------     --------------

Alan Kestenbaum            4,794,442            1, 7, 13       February 18, 2005

Michael Barenholtz         1,472,029            2, 8, 14       February 18, 2005

Jordan Kestenbaum            670,000            3, 9, 15       February 18, 2005

Arielle Kestenbaum           670,000           4, 10, 16       February 18, 2005

Jacob Kestenbaum             670,000           5, 11, 17       February 18, 2005

Ted Heilman                   98,529           6, 12, 18       February 18, 2005exv10w32

 

Exhibit 10.32

KNOWLES ELECTRONICS HOLDINGS, INC.

2004 STOCK OPTION PLAN

	 	1.  	Purpose

          The purpose of this Knowles Electronics Holdings, Inc. 2004 Stock Option Plan (the “Plan”)
established by Knowles Electronics Holdings, Inc., a Delaware corporation (the “Corporation”), is
to advance the interests of the Corporation’s shareholders by enhancing the Corporation’s ability
to attract, retain and motivate persons who are expected to make important contributions to the
Corporation and its Affiliates by providing such persons with equity ownership opportunities and
performance-based incentives through the grant of options (“Options”) to purchase the Corporation’s
Stock and thereby better aligning the interests of such persons with those of the Corporation’s
shareholders.

	 	2.  	Eligibility and Options

          Eligibility for participation in the Plan from among the employees of the Corporation and its
Affiliates, the granting of Options under the Plan, and the establishment of the aggregate number
of shares of Stock which may be issued under Options granted under the Plan will be recommended by
the Chief Executive Officer of the Corporation’s Affiliate, Knowles Electronics, LLC (“Company”)
for approval by the Board of Directors (“Board”) of the Corporation. The Board, in its discretion,
will determine the employees eligible to participate in the Plan, the number of shares of stock
granted to each Participant in each Option and the aggregate number of shares of stock which may be
issued under Options granted under the Plan. Each person who has been granted an Option under the
Plan shall be deemed a “Participant.”

	 	3.  	Administration

      Administration. Except as provided in Section 2 above, the Plan will be
administered by the CEO of the Company. The CEO may adopt, amend and repeal such
administrative rules, guidelines and practices relating to the Plan, as he shall deem
advisable. The CEO may correct any defect or omission or reconcile any inconsistency in the
Plan or any Option in the manner and to the extent he shall deem necessary or advisable to
carry out the terms and purposes of the Plan. However, no such amendment shall in any
manner adversely affect any Participant’s rights with respect to Options previously granted
under the Plan without the written consent of the Participant. Any decisions under the Plan
with respect to just the CEO as a Participant shall be made by the Board. The CEO may
delegate to one or more other executive officers of the Company, the power to exercise such
of his duties under the Plan as the CEO may determine, except as provided in Section 2
above.

	 	4.  	Stock to be Issued Under the Plan.

      (a) Stock. The stock to be issued upon the exercise of Options granted under
the Plan shall be shares of the $.01 par value per share Common Stock of the Corporation

 

 

(“Stock”) which may either be authorized and unissued shares or issued shares held in
or hereafter acquired for the Corporation’s treasury. In the event that any outstanding
Option under the Plan expires or is terminated, the shares of Stock allocable to the
unexercised portion of such Option may again be subject to an Option under the Plan.

      (b) Certificates. The Corporation shall not be required to issue or deliver
any certificate for shares of Stock purchased upon the exercise of all or any part of an
Option before completion of any registration or other qualification of such shares under any
state or federal law or ruling or regulation of any governmental regulatory body that the
Board shall, in its sole discretion, determine is necessary or advisable.

	 	5.  	Terms and Conditions of Options.

          Each Option granted under the Plan is intended to be a “non-qualified” stock option and shall
be subject to the following terms and conditions:

      (a) Term and Exercise of Options. The Option shall only be exercisable on the
date prior to the date of the occurrence of a Liquidity Event; provided, however, that
anything contained herein to the contrary notwithstanding, no Option granted hereunder shall
be exercisable after the expiration of ten (10) years from the date of grant of such Option
(the “Final Exercise Date”). Subject to the terms of the Plan, any Option may be exercised,
in whole or in part, as to one or more whole shares of Stock covered by the Option. In the
case of any fractional share resulting from any calculation under the Plan, the shares
available for exercise shall be determined to the nearest lower number of whole shares.
Each election to exercise an Option shall be made in writing on such form and at such time
and in such manner as shall be provided in the agreement governing such Option. The
exercise of any Option and the issuance of shares of Stock pursuant thereto, shall be
subject to any rules and restrictions imposed thereon by any applicable Federal or state
security laws or by any restrictions or contractual obligations established by or in
connection with the Liquidity Event.

      (b) Exercise Price. The price per share at which Stock may be acquired
pursuant to exercise of an Option, will be $1.00 per share.

      (c) Execution of Executive Stock Purchase Agreement. An Option may only be
exercised by a Participant, if the Participant has entered into the Executive Stock Purchase
Agreement attached to the Plan as Exhibit A prior to the exercise of the Option.

      (d) Medium and Time of Payment. The Option price shall be payable to the
Corporation in United States dollars upon the exercise of the Option, and the exercise of
any Option and the delivery of the optioned shares shall be contingent upon receipt by the
Corporation of the full purchase price paid in cash or by check.

      (e) Vesting. Each Option shall become and remain exercisable for 100% of the
shares covered thereby as of the date of grant of the Option, except as otherwise
specifically provided in the Plan.

- 2 -

 

      (f) Termination of Employment.

	 	(i)  	Continuous Relationship with the Company
Required.

              Except as otherwise provided in this paragraph (f), no Option may be exercised
unless the Participant, at the time he or she exercised the Option, is, and has been
at all times since the date of the grant of the Option, an employee of the
Corporation or an Affiliate (an “Eligible Participant”).

	 	(ii)  	Termination of Relationship with the Company.

              If a Participant ceases to be an Eligible Participant for any reason, then,
except as provided in subparagraph (iii) below, the right of such Participant to
exercise any Option shall terminate immediately upon such cessation.

	 	(iii)  	Exercise Period Upon Death, Disability or
Retirement.

              If the Participant dies, becomes disabled (within the meaning of Section
22(e)(3) of the Internal Revenue Code of 1986, as amended (“Code”), or retires
(voluntarily terminates employment with the Company while eligible for an early or
normal retirement benefit under a defined benefit pension plan sponsored by the
Corporation or any of its Affiliates) prior to the Final Exercise Date while he or
she is an Eligible Participant, such Participant’s Option shall remain exercisable
by the Participant (the Participant’s estate in the event of his death) until the
date preceding the date of the Liquidity Event, provided, however, that an Option
shall be exercisable only to the extent that such Option was exercisable by the
Participant on the date of his or her death, disability or retirement and provided
further that no Option shall be exercisable after the Final Exercise Date. All
determinations with respect to a Participant’s disability or retirement shall be
made in good faith by the CEO.

      (g) Transfer of Option. Neither the whole nor any part of any Option shall be
transferable by a Participant or by operation of law during said Participant’s lifetime and
at said Participant’s death an Option or any part thereof shall only be transferable by said
Participant’s Will or by the laws of descent and distribution. An Option may be exercised
during the lifetime of the Participant only by the Participant. Any Option, and any and all
rights granted to a Participant thereunder, to the extent not theretofore effectively
exercised shall automatically terminate and expire upon any sale, transfer or hypothecation
or any attempted sale, transfer or hypothecation of such Option or rights, or upon the
bankruptcy or insolvency of the Participant.

	 	6.  	Adjustments for Changes in Stock or Capitalization.

          In the event of any stock split, reverse stock split, stock dividend, recapitalization,
combination of shares, reclassification of shares, spin-off or other similar change in
capitalization or event, or any distribution to holders of Stock other than a normal cash dividend,
(i) the number and class of securities available under this Plan, (ii) the number and class of
securities and exercise price per share subject to each outstanding Option, and (iii) the terms of

- 3 -

 

each other outstanding Option shall be appropriately adjusted by the Corporation (or
substituted Options may be awarded, if applicable) to the extent the Board shall determine, in good
faith, that such an adjustment (or substitution) is necessary and appropriate. The grant of an
Option pursuant to the Plan shall not affect in any way the right or power of the Corporation to
make adjustments, reclassifications, reorganizations or changes of its capital or business
structure or to merge or to consolidate or to dissolve, liquidate or sell, or transfer all or any
part of its business or assets.

	 	7.  	General Provisions Applicable to Options

      (a) Documentation. Each Option shall be evidenced by a written agreement in
such form as the CEO shall determine which shall be signed by the Corporation and the
Participant. Each Option may contain terms and conditions in addition to those set forth in
the Plan. Upon the grant of an option hereunder to a Participant, there shall be delivered
to the Participant such other information or documents as the CEO shall deem necessary or
advisable.

      (b) Discretion. Except as otherwise provided by the Plan, each Option may be
made alone or in addition or in relation to any other Option. The terms of each Option need
not be identical, and all Participants need not be treated uniformly.

      (c) Withholding. Each Participant shall pay to the Corporation, or make
provision satisfactory to the Corporation for payment of, any taxes required to be withheld
in connection with Options granted to or exercised by such Participant. The Corporation or
the Company may, to the extent permitted by law, deduct any such tax obligations from any
payment of any kind otherwise due to a Participant.

      (d) Conditions on Delivery of Stock. The Corporation shall not be obligated to
deliver any shares of Stock pursuant to the Plan or to remove restrictions from shares
previously delivered under the Plan until (i) all conditions of the Option have been met or
removed to the satisfaction of the Corporation, (ii) in the opinion of the Corporation’s
counsel, all other legal matters in connection with the issuance and delivery of such shares
have been satisfied, including any applicable securities laws and any applicable stock
exchange or stock market rules and regulations, and (iii) the Participant has executed and
delivered to the Corporation such representations or agreements as the Corporation may
consider appropriate to satisfy the requirements of any applicable laws, rules or
regulations.

      (e) Notice of Intent to Exercise Options. An Optionee desiring to exercise an
Option granted hereunder as to one or more of the shares covered thereby must, in order to
so exercise the Option, notify the Corporation in writing to that effect, specifying the
number of shares to be purchased in a form satisfactory to the CEO.

	 	8.  	Special Definitions

     The following words and phrases as used herein shall have the following meanings, unless a
different meaning is plainly required by the context. Pronouns shall be interpreted so that the
masculine pronoun shall include the feminine and the singular shall include the plural:

- 4 -

 

      (a) “Affiliate” means any corporation, organization, or entity which is under
common control with the Corporation or which is otherwise required to be aggregated with the
Corporation pursuant to paragraphs (b), (c), (m), or (o) of Code Section 414.

      (b) “Initial Public Offering” means an initial public offering and sale of the
Corporation’s equity securities pursuant to an effective registration statement under the
Securities Act of 1933, as amended.

      (c) “Liquidity Event” means the occurrence of:

	 	(i)  	an Initial Public Offering; or
	 
	 	(ii)  	the Sale of the Corporation.

      (d) “Sale of the Corporation” means the sale of the Corporation, other than an
Initial Public Offering, in a single transaction or a series of transactions, to a purchaser
who is not affiliated with the Corporation pursuant to which such purchaser acquires all or
a material portion of the outstanding capital stock (whether by merger, consolidation,
recapitalization, reorganization, purchase of the outstanding capital stock or otherwise) or
all or a material portion of the consolidated assets of the Corporation.

	 	9.  	Miscellaneous

      (a) No Right to Employment or Other Status. No person shall have any claim or
right to be granted an Option, and the grant of an Option shall not be construed as giving a
Participant the right to continued employment or any other relationship with the Corporation
or the Company. The Corporation and the Company expressly reserves the right at any time to
dismiss or otherwise terminate its relationship with a Participant free from any liability
or claim under the Plan.

      (b) No Rights as Shareholder. No Participant shall have any rights as a
shareholder with respect to any Option until becoming the record holder of such shares.

      (c) Amendment of Plan.

     (1) The Board hereby reserves the right to amend, modify, and/or terminate the
Plan at any time. However, no such amendment or termination shall in any manner
adversely affect any Participant’s rights with respect to Options previously granted
under the Plan without the written consent of the Participant.

     (2) In addition, the CEO, by written instrument may (i) make any amendment
which may be necessary or desirable to ensure any compliance of the Plan may be
necessary to comply with the requirements of any applicable law or regulation, and
(ii) may make any another amendment to the Plan which in the CEO’s discretion is
necessary or desirable to carry out the purposes of the Plan, as long as the cost of
such amendment to he Corporation is not material in the judgment of the CEO.
However, no such amendment shall in any manner

- 5 -

 

adversely affect any Participant’s rights with respect to Options previously granted
under the Plan without the written consent of the Participant.

      (d) Compliance with Securities Exchange Act. Notwithstanding anything herein
to the contrary, options shall always be granted and exercised in such a manner as to
conform to the provisions of Rule 16b-3, or any replacement rule, adopted pursuant to the
provisions of the Securities Exchange Act of 1934 as the same now exists or may, from time
to time, be amended.

      (e) Government Regulations. This Plan and the granting and exercise of any
Option hereunder and the obligations of the Corporation to sell and deliver shares under any
such Option shall be subject to all applicable laws, rules and regulations, and to such
approvals by any governmental agencies as may be required.

      (f) Proceeds form Sale of Stock. Proceeds of the purchase of optioned shares
by any Participant shall be for the general business purposes of the Corporation.

      (g) Reporting Requirements. The Board shall furnish each Participant hereunder
with such information relating to the exercise of any Option granted hereunder to said
Participant as is required under applicable State and Federal Tax and Security laws.

      (h) Governing Law. The provisions of the Plan and all Options made hereunder
shall be governed by and interpreted in accordance with the laws of the State of Illinois,
without regard to any applicable conflicts of law.

      (i) Effective Date. The Plan shall become effective as of November 1, 2004.

     IN WITNESS WHEREOF, the Corporation has caused the Plan to be signed by its duly authorized
officer as of the aforesaid Effective Date.

	 	 	 	 	 	 	 
	

	 	 	 	KNOWLES ELECTRONICS HOLDINGS, INC.
	 	 
	 
	 	 	 	 	 	 
	

	 	By:
	 	/s/ John J. Zei	 	 
	

	 	 	 	
	 	 
	

	 	 	 	John J. Zei	 	 
	

	 	Title:
	 	President and CEO	 	 

- 6 -

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00081-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00081-of-00352.parquet"}]]