Document:

Exhibit 4.1

 

MAGNETEK,
INC.

 

AMENDED
AND RESTATED DIRECTOR AND OFFICER COMPENSATION

AND DEFERRAL INVESTMENT PLAN

 

JANUARY
1, 2008

 

Article 1.
Establishment and Purposes

 

1.1          Establishment.
Magnetek, Inc.,
a Delaware corporation (the “Company”), established, effective as of October 21,
1997, an amended and restated director pay and deferred compensation plan,
which shall be known as the “Magnetek, Inc. Amended and Restated Director
and Officer Compensation and Deferral Investment Plan” (the “Plan”), for members
of the Board of Directors who are not employees or officers of the Company. The
Plan is hereby amended and restated effective as of January 1, 2005 (the “2005
Restatement”), which amendment and restatement is intended as good faith
compliance with Section 409A of the Code (as defined below) and the
regulations and other Treasury Department guidance promulgated thereunder (“Section 409A”).
The 2005 Restatement shall only apply to (i) “amounts deferred” (within
the meaning of Section 409A) by Directors (as defined below) in taxable
years beginning both before and after December 31, 2004, and any earnings
thereon and (ii) all amounts deferred by Key Executives (as defined below)
under the Plan and any earnings thereon (collectively, “Section 409A
Deferrals”). The provisions of the Plan in existence prior to the 2005
Restatement shall continue to govern “amounts deferred” (within the meaning of Section 409A)
by Directors in taxable years beginning before January 1, 2005, and any
earnings thereon (collectively, “Grandfathered Deferrals”). In addition, this
amendment and restatement of the Plan extends participation in the Plan, with
respect to compensation earned on or after January 1, 2006, to certain Key
Executives of the Company. From and after January 1, 2006, the Plan shall
be comprised of two  separate sub-plans,
one for the benefit of Directors (the “Director Plan”) and one for the benefit
of Key Executives (the “Key Executive Plan”). The Key Executive Plan is a
nonqualified deferred compensation plan which is unfunded and is maintained
primarily for the purpose of providing deferred compensation for a select group
of management or highly compensated employees, within the meaning of Sections
201(2), 301(a)(3) and 401(a)(1) of ERISA, as defined below. The Director
Plan is not subject to ERISA. This document is also intended to constitute the
Summary Plan Description for the Plan.

 

1.2          Purpose.
The
primary purposes of the Plan are (i) to provide Directors with the
opportunity to defer voluntarily a portion of their Director’s Fees (as defined
below), subject to the terms of the Plan, (ii) to provide certain Key
Executives with the opportunity to defer voluntarily a portion of their
Compensation (as defined below), subject to the terms of the Plan and (iii) to
encourage ownership of common stock by Directors and Key Executives and thereby
align their interests more closely with the interests of the stockholders of
the Company. By adopting the Plan, the Company desires to enhance its ability
to attract and retain Directors and Key Executives of outstanding competence.

 

Article 2.
Definitions

 

Whenever used herein,
the following terms shall have the meanings set forth below, and, when the
defined meaning is intended, the term is capitalized:

 

(a)           “Board” or “Board of Directors” means
the Board of Directors of the Company.

 

(b)          “Board Meeting” means any meeting of
the Board of Directors or of any committee thereof on which the Director serves
and for which the Director is entitled to receive Meeting Fees.

 

(c)           “Bonus” means an incentive award
payable by the Company to a Key Executive with respect to the Key Executive’s
services under the Magnetek Incentive Compensation Plan, or such other bonus or
incentive compensation plan or program of the Company, and, in each case, shall
be deemed earned only upon award by the Company.

 

(d)          “Code” means the Internal Revenue Code
of 1986, as amended from time to time.

 

 

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(e)           “Committee” means the Compensation
Committee of the Board or such other committee of two (2) or more
Directors appointed by the Committee to administer the Plan pursuant to Article 3.

 

(f)           “Company” means Magnetek, Inc.,
a Delaware corporation.

 

(g)          “Compensation” means an Employee’s
gross Salary and Bonus.

 

(h)          “Director” means a member of the Board
of Directors of the Company who is neither an employee nor an officer of the
Company.

 

(i)            “Director’s Fees” means a Director’s
Retainer Fees and Meeting Fees, whether payable in cash or stock or any
combination thereof.

 

(j)            “Disability” means that a
Participant has become “disabled” as such term is defined under Section 409A.

 

(k)           “ERISA” means the Employee Retirement
Income Security Act of 1974, as amended from time to time.

 

(l)            “Fair Market Value” means (i) the
mean between the highest and lowest sales prices of a share of the Company’s
stock on the principal exchange on which shares of the Company’s stock are then
trading, if any, on such determination date, or, if shares were not traded on
such date, then on the next preceding trading day during which a sale occurred,
as such prices are quoted in The Wall Street Journal;
or (ii) if such stock is not traded on an exchange but is quoted on NASDAQ
or a successor quotation system, (1) the mean between the highest and
lowest sales prices (if the stock is then listed as a National Market Issue
under the NASD National Market System) or (2) the mean between the closing
representative bid and asked prices (in all other cases) for the stock on such
determination date as reported by NASDAQ or such successor quotation system; or
(iii) if such stock is not publicly traded on an exchange and not quoted
on NASDAQ or a successor quotation system, the mean between the closing bid and
asked prices for the stock, on such determination date, as determined in good
faith by the Board; or (iv)  if the Company’s stock is not publicly
traded, the fair market value established by the Board in good faith.

 

(m)          “Key Executive” means any non-union,
full-time, salaried employee of the Company who is an officer or other key
executive of the Company and who qualifies as a “highly compensated employee or
management employee” within the meaning of Title I of ERISA.

 

(n)          “Meeting Fees” means the fees paid to
a Director on a per meeting basis for attending a meeting of the Board of
Directors or a committee thereof.

 

(o)          “Participant” means a Director or Key
Executive who is actively participating in the Plan.

 

(p)          “Plan” means this Magnetek, Inc.
Amended and Restated Director and Officer Compensation and Deferral Investment
Plan, as it may be amended from time to time.

 

(q)          “Retainer Fees” means annual retainer
fees paid to a Director for serving as a member of the Board of Directors or as
a Chairman of a committee thereof for a full year’s service on the Board or
such lesser amount as may be payable to any Director in respect of services on
the Board of less than a full year.

 

(r)           “Salary” means all regular, basic
wages, before reduction for amounts deferred pursuant to the Plan or any other
plan of the Company, payable in cash to a Key Executive for services to be
rendered during the Year, exclusive of any Bonus, other special fees, awards,
or incentive compensation, allowances, or amounts designated by the Company as
payment toward or reimbursement of expenses.

 

(s)           “Specified Employee” means any
Participant who is a “specified employee” (as such term is defined under Section 409A)
of the Company. The “identification date” (as defined under Section 409A)
for purposes of identifying Specified Employees shall be September 30 of
each calendar year. Individuals identified on any identification date shall be
Specified Employees as of January 1 of the calendar year following the
year of the identification date. In determining whether or not an individual is
a Specified Employee as of an identification date, all individuals who are
nonresident aliens during the entire 12-month period ending on such
identification date shall be excluded for purposes of determining which
individuals will be Specified Employees.

 

 

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(t)           “Stock” means common stock of the
Company, par value $0.01 per share.

 

(u)          “Value” means the fair market value of
the cash and/or Stock a Director receives (or, absent deferrals hereunder, is
entitled to receive) as Director’s Fees.

 

(v)          “Year” means a calendar year.

 

Article 3.
Administration

 

3.1          Authority
of the Committee. The Plan shall be administered by the
Compensation Committee of the Board of Directors of the Company. In addition,
any power of the Committee hereunder may also be exercised by the full Board,
except to the extent that the grant or exercise of such authority would cause
any Stock issued hereunder or other transaction with respect to the Plan to
become subject to (or lose an exemption under) the short-swing profit recovery
provisions of Section 16 of the Securities Exchange Act of 1934, as
amended. Subject to the terms of this Plan, the Board may appoint a successor
Committee to administer the Plan, provided that such Committee consists solely
of two (2) or more non-employee directors within the meaning of Section 16(b) of
the Securities Exchange Act of 1934. In addition, subject to the terms of the
Plan, and to the extent permissible under Section 16 of the Securities
Exchange Act of 1934, as amended, the Board or the Committee may delegate
ministerial duties to any executive or executives of the Company.

 

Subject to the
provisions herein, the Committee shall have full power and discretion to issue
Stock to Participants in accordance with the terms of the Plan; to select Key
Executives for participation in the Plan; to determine the terms and conditions
of each Director’s or Key Executive’s participation in the Plan; to construe
and interpret the Plan and any agreement or instrument entered into under the
Plan; to establish, amend, or waive rules and regulations for the Plan’s
administration; to amend (subject to the provisions of Article 11 herein)
the terms and conditions of the Plan and any agreement entered into under the
Plan; and to make other determinations which may be necessary or advisable for
the administration of the Plan.

 

3.2          Decisions
Binding. All determinations and decisions of the Board and/or the
Committee as to any disputed question arising under the Plan, including
questions of construction and interpretation, shall be final, conclusive, and
binding on all parties and shall be given the maximum possible deference
allowed by law.

 

3.3          Claims
Procedure.

 

(a)           Director Claims.
Any Director making a claim for benefits under this Plan may contest the
Committee’s decision to deny such claim or appeal therefrom only by submitting
the matter to binding arbitration before a single arbitrator. Any arbitration
shall be held in Los Angeles, California, unless otherwise agreed to by the
Committee. The arbitration shall be conducted pursuant to the Commercial
Arbitration Rules of the American Arbitration Association. The arbitrator’s
authority shall be limited to the affirmation or reversal of the Committee’s
denial of the claim or appeal, and the arbitrator shall have no power to alter,
add to, or subtract from any provision of this Plan. The arbitrator’s decision
shall be final and binding on all parties, if warranted on the record and
reasonably based on applicable law and the provisions of this Plan. The
arbitrator shall have no power to award any punitive, exemplary, consequential,
or special damages, and under no circumstances shall an award contain any
amount that in any way reflects any of such types of damages. Each party shall
bear its own attorney’s fees and costs of arbitration. Judgment on the award
rendered by the arbitrator may be entered in any court having jurisdiction
thereof.

 

(b)          Key Executive Claims.

 

(1)                                Any
Participant who is a Key Executive has the right to make a written claim for
benefits under the Plan. If such a written claim is made, and the Committee
wholly or partially denies the claim, the Committee shall provide the claimant
with written notice of such denial, setting forth, in a manner calculated to be
understood by the claimant:

 

 

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(i)                                    the specific
reason or reasons for such denial;

 

(ii)                                 specific
reference to pertinent Plan provisions on which the denial is based;

 

(iii)                              a
description of any additional material or information necessary for the
claimant to perfect the claim and an explanation of why such material or
information is necessary; and

 

(iv)                             an
explanation of the Plan’s claims review procedure and time limits applicable to
those procedures, including a statement of the claimant’s right to bring a
civil action under ERISA Section 502(a) if the claim is denied on
appeal.

 

(2)                                The
written  notice of any claim denial
pursuant to Section 3.3(b) shall be given not later than thirty (30)
days after receipt of the claim by the Committee, unless the Committee
determines that special circumstances require an extension of time for
processing the claim, in which event:

 

(i)                                    written
notice of the extension shall be given by the Committee to the claimant prior
to thirty (30) days after receipt of the claim;

 

(ii)                                 the
extension shall not exceed a period of thirty (30) days from the end of the
initial thirty (30) day period for giving notice of a claim denial; and

 

(iii)                              the
extension notice shall indicate (A) the special circumstances requiring an
extension of time and (B) the date by which the Committee expects to
render the benefit determination.

 

(3)                                The decision
of the Committee shall be final unless the claimant, within sixty (60) days
after receipt of notice of the claims denial from the Committee, submits a
written request to the Committee for an appeal of the denial. During that sixty
(60) day period, the claimant shall be provided, upon request and free of
charge, reasonable access to, and copies of, all documents, records and other
information relevant  to the claim for
benefits. The claimant shall be provided the opportunity to submit written
comments, documents, records, and other information relating to the claim for
benefits as part of the claimant’s appeal. The claimant may act in these
matters individually, or through his or her authorized representative.

 

(4)                                After
receiving the written appeal, if the Committee, or its delegate, shall issue a
written decision notifying the claimant of its decision on review, not later
than thirty (30) days after receipt of the written appeal, unless the Committee
determines that special circumstances require an extension of time for
reviewing the appeal, in which event:

 

(i)                                    written
notice of the extension shall be given by the Committee prior to thirty (30)
days after receipt of the written appeal;

 

(ii)                                 the
extension shall not exceed a period of thirty (30) days from the end of the
initial thirty (30) day review period;

 

(iii)                              the
extension notice shall indicate (A) the special circumstances requiring an
extension of time and (B) the date by which the Committee expects to
render the appeal decision.

 

(5)                                The period
of time within which a benefit determination on review is required to be made
shall begin at the time an appeal is received by the Committee, without regard
to whether all the information necessary to make a benefit determination on
review accompanies the filing of the appeal. If the period of time for
reviewing the appeal is extended as permitted above, due to a claimant’s
failure to submit information necessary to decide the claim on appeal, then the
period for making the benefit determination on review shall be tolled from the
date on which the notification of the extension is sent to the claimant until
the date on which the claimant responds to the request for additional
information.

 

(6)                                In
conducting the review on appeal, the Committee shall take into account all
comments, documents, records, and other information submitted by the claimant
relating to the claim, without regard to whether such information was submitted
or considered in the initial benefit determination. 

 

 

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If
the Committee upholds the denial, the written notice of decision from the
Committee shall set forth, in a manner calculated to be understood by the
claimant:

 

(i)                                    the specific
reason or reasons for the denial

 

(ii)                                 specific
reference to pertinent Plan provisions on which the denial is based;

 

(iii)                              a statement
that the claimant is entitled to be receive, upon request and free of charge,
reasonable access to , and copies of, all documents, records and other
information relevant  to the claim for
benefits; and

 

(iv)                             a statement
of the claimant’s right to bring a civil action under ERISA 502(a).

 

(7)                                If the Plan
or any of its representatives fail to follow any of the above claims
procedures, the claimant shall be deemed to have duly exhausted the
administrative remedies available under the plan and shall be entitled to
pursue any available remedies under ERISA Section 502(a), including but
not limited to the filing of an action for immediate declaratory relief
regarding benefits due under the Plan.

 

(c)           The Secretary of the Company is
hereby designated as agent of the Plan for the service of legal process.

 

3.4          Indemnification.
Each
person who is or shall have been a member of the Board shall be indemnified and
held harmless by the Company against and from any loss, cost, liability, or
expense that may be imposed upon or reasonably incurred by him or her in
connection with or resulting from any claim, action, suit, or proceeding to
which he or she may be a defendant, or in which he or she may be a party by
reason of any act or omission by such Board member in his or her capacity as an
administrator of the Plan, and against and from any and all amounts paid by him
or her in settlement thereof, with the Company’s approval, or paid by him or
her in satisfaction of any judgment in any such action, suit, or proceeding
against him or her, provided he or she shall give the Company an opportunity,
at its own expense, to handle and defend the same before he or she undertakes
to handle and defend it on his or her own behalf.

 

The
foregoing right of indemnification shall not be exclusive of any other rights
of indemnification to which such persons may be entitled under the Company’s
Certificate of Incorporation or Bylaws, as a matter of law, or otherwise, or
any power that the Company may have to indemnify them or hold them harmless.

 

Article 4.  Participation

 

4.1          Participation.
Those
members of the Board of Directors who are not employees or officers of the
Company, and those Key Executives who has been designated as eligible to
participate in the Plan with respect to any Year beginning after December 31,
2005 by the Committee shall participate in the Plan. Notwithstanding anything
herein to the contrary, unless the Committee determines otherwise, the Company’s
Chief Executive Officer shall be eligible to participate in the Plan with
respect to any Year beginning after December 31, 2005.

 

In the event a
Participant no longer meets the requirements for participation in the Plan,
such Participant shall become an inactive Participant, retaining all the rights
described under the Plan, except the right to make any further deferrals or, if
applicable, receive payment of Directors’ Fees in Stock, until such time that
the Participant again becomes an active Participant.

 

4.2          Participation.
Participation in the Plan by Key Executives shall be determined by resolution
of the Committee annually or at such other time selected by the Committee.

 

4.3          Partial
Year Participation. In the event that a Director or Key
Executive first becomes a Participant during a Year, such Participant shall be
notified by the Company of his or her participation, and the Company shall
provide each such Participant with “Election to Defer Forms,” which must be
completed by the Participant as provided in Sections 6.2 and 6.3 herein
and “Election to Receive Stock Forms,” which must be completed by the
Participant as provided in Sections 5.2 and 5.3 herein; provided, however,
that such Participant may only make an election to defer with respect to that
portion of his or her Director’s Fees or Compensation, as 

 

 

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applicable, for such Year which are to be
earned after the filing of the election and
such Participant may only make an election to receive payment of Meeting Fees
in stock with respect to that portion of his or her Meeting Fees for such year
which are to be earned after the filing of the election.

 

Article 5.
Stock in Lieu of Cash Director’s Fees

 

5.1          Payment
in Stock. Subject to Section 5.5 herein, a
Director shall receive Stock in lieu of the annual cash Retainer Fees otherwise
payable to each Director each year for so long as this Plan is in effect, to
the extent and subject to the terms and conditions set forth in this Article 5.
In addition, a Director may elect to receive Stock in lieu of cash Meeting Fees
payable to such Director each year for so long as this Plan is in effect, to
the extent and subject to the terms and conditions set forth in this Article 5.

 

5.2          Stock
Payment Procedures. The number of shares of Stock to be paid
in lieu of cash Retainer Fees or cash Meeting Fees (in the event of an election
by a Director to so receive Stock in lieu of cash Meeting Fees) on each payment
date shall be equal to (i) the amount of the cash Retainer Fees or cash
Meeting Fees, as applicable, payable to each Director at the rates then in
effect divided by (ii) the Fair Market Value of Stock as determined on the
most recent practicable date preceding the payment date. No fractional shares
of Stock shall be granted; instead, the cash remainder shall be paid to the
Participant. The Company shall deliver to each Participant each month as
payment of Retainer Fees one or more certificates representing the Stock,
registered in the name of the Participant (or if directed by the Participant,
in the joint names of the Participant and his or her spouse). The Company shall
deliver to each Participant who has filed an “Election to Receive Stock Form”
as payment of Meeting Fees one or more certificates representing the Stock,
registered in the name of the Participant (or, if directed by the Participant,
in joint names of the Participant and his or her spouse) at the times such
Meeting Fees are customarily paid by the Company.

 

5.3          Method
of Electing to Receive Stock in Lieu of Cash Meeting Fees. In order to
receive Stock in lieu of cash Meeting Fees under the Plan, the Director must
complete and deliver to the Company a written “Election To Receive Stock Form”
on which he or she designates the election to receive Stock. Participants shall
make their elections to receive payment in Stock for their Meeting Fees under
the Plan no later than the date immediately prior to the date of the Board
Meeting to which such Meeting Fees relate. All elections to receive payment in
Stock for Meeting Fees shall be made on an “Election to Receive Stock Form,” as
described herein and shall be delivered by the Participant to the Committee (or
its delegate) as described in Section 12.1 herein. The election to receive
payment in Stock for Meeting Fees shall automatically remain in effect for all
periods the Participant participates in the Plan until revoked or changed by
the Participant.

 

The election may be
revoked or changed with respect to future Board Meetings by filing with the
Committee (or its delegate) a new election on an “Election to Receive Stock
Form” no later than the day immediately prior to the date of the next Board
Meeting for which the Participant shall receive Meeting Fees.

 

5.4          Rights
of the Participant. Except for the terms and conditions set
forth in this Plan, a Participant paid Stock in lieu of the cash Retainer Fees
or cash Meeting Fees shall have all of the rights of a holder of the Stock,
including the right to receive dividends paid on such Stock and the right to
vote the Stock at meetings of stockholders of the Company. Upon delivery, such
Stock will be nonforfeitable.

 

5.5          Special
Circumstances.  The Committee shall have the authority,
in its sole discretion, to permit all of a Director’s Retainer Fees to be paid
in cash, rather than in Stock, in the event that a Director establishes, to the
satisfaction of the Committee, that special circumstances warrant such cash
payment. The merit of the Director’s special circumstances plea shall be judged
by the Committee. The Committee’s decision as to whether the Director’s special
circumstances plea justifies the cash payment of the Director’s Retainer Fees
shall be final, conclusive, and not subject to appeal.

 

Article 6.
Deferral Opportunity

 

6.1          Amount Which May Be Deferred.  A Participant who is a Director may elect to defer up to one
hundred percent (100%)  of his or her
Retainer Fees for any Year and up to one hundred percent (100%) of his or her
Meeting Fees for each Board Meeting during any Year. The amount of Retainer
Fees and Meeting Fees to be 

 

 

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deferred shall be expressed as a
percentage of the Value of the fees otherwise payable (in cash or Stock) for
the Participant’s service as a Director of the Company. A Participant who is a
Key Executive may elect to defer up to one hundred percent (100%) of Salary
and/or Bonus in any Year. The minimum amount of any single eligible component
of Compensation which may be deferred in any Year is the greater of five
percent (5%) of such component or one thousand dollars ($1,000). In addition,
an election to defer Compensation in any Year shall be expressed by each
Participant in minimum increments of either five percent (5%) of the applicable
component of Compensation or one thousand dollars ($1,000) or such other form
acceptable to the Committee.

 

6.2          Deferral
Election for Retainer Fees. Participants shall make their elections
under the Plan to defer their Retainer Fees no later than December 20
prior to the beginning of each Year, or not later than thirty (30) calendar
days following notification of initial eligibility to participate herein (with
respect to Retainer Fees not yet earned or paid). All elections to defer
Retainer Fees shall be made on an “Election to Defer Form,” as described herein
and shall be delivered by the Participant to the Committee (or its delegate) as
described in Section 12.1 herein. The deferral election with respect to
Retainer Fees shall automatically remain in effect for the Year in question
(for which it shall be irrevocable) and for all subsequent periods the
Participant participates in the Plan until revoked or changed by the
Participant. The deferral may be revoked or changed with respect to future
Years only by delivering a new election on an “Election to Defer Form” no later
than December 20 prior to the beginning of the Year.

 

 

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Participants who are
Directors shall make the following elections on an “Election to Defer Form”:

 

(a)           The
amount to be deferred with respect to his or her Retainer Fees for the Year,
pursuant to the terms of Section 6.1 herein; and

 

(b)           The
form of payment to be made to the Participant at the end of the deferral
period, pursuant to the terms of Section 6.6 herein.

 

6.3          Deferral
Election for Meeting Fees. Participants shall make their elections
to defer their Meeting Fees under the Plan no later than December 20 prior
to the beginning of each Year or no later than thirty (30) calendar days
following notification of initial eligibility to participate in the Plan (with
respect to Meeting Fees not yet earned or paid). All elections to defer Meeting
Fees shall be made on an “Election to Defer Form,” as described in Section 6.2
herein and shall be delivered by the Participant to the Committee (or its
delegate) as described in Section 12.1 herein. On the “Election to Defer
Form” described in Section 6.2, the Participant shall elect (in addition
to any other relevant elections described in Section 6.2 herein) the
amount to be deferred with respect to his or her Meeting Fees for each Board
Meeting, pursuant to the terms of Section 6.1 herein. The deferral
election with respect to Meeting Fees shall automatically remain in effect for
the Year in question (for which it shall be irrevocable) and for all subsequent
periods the Participant participates in the Plan until revoked or changed by
the Participant. The deferral may be revoked or changed with respect to future
Board Meetings by filing with the Committee (or its delegate) a new election on
an “Election to Defer Form” no later than December 20 prior to the
beginning of the Year.

 

6.4          Deferral
Election for Compensation. Participants shall make their elections
under the Plan to defer their Compensation no later than December 20 prior
to the beginning of each Year, or not later than thirty (30) calendar days
following notification of initial eligibility to participate herein (with
respect to Compensation not yet earned or paid). All elections to defer
Compensation shall be made on an “Election to Defer Form,” as described herein
and shall be delivered by the Participant to the Committee (or its delegate) as
described in Section 12.1 herein. The deferral election with respect to
Compensation shall automatically remain in effect for the Year in question (for
which it shall be irrevocable) and for all subsequent periods the Participant
participates in the Plan until revoked or changed by the Participant. The
deferral may be revoked or changed with respect to future Years only by
delivering a new election on an “Election to Defer Form” no later than December 20
prior to the beginning of the Year.

 

Participants who are Key
Executives shall make the following elections on an “Election to
Defer Form”:

 

(a)           The
amount to be deferred with respect to his or her Salary and/or Bonus for the
Year, pursuant to the terms of Section 6.1 herein; and

 

(b)           The
form of payment to be made to the Participant at the end of the deferral
period, pursuant to the terms of Section 6.6 herein.

 

6.5          Length
of Deferral. Except as otherwise provided in Section 6.8,
the amounts deferred by each Participant and the accumulated earnings thereon
shall be paid (or commence to be paid) to the Participant as provided in
Sections 6.6 and 6.7 herein in January following the Year in which
the termination of the Participant’s service as a Director or Key Executive of
the Company occurs for any reason other than death. Notwithstanding anything
herein to the contrary, a Participant who is a Director and subsequently ceases
to qualify as a Director as a result of his or her becoming a Key Executive
shall not be deemed to have terminated service for purposes of the Plan until
such time as the Participant terminates service as both a Key Executive and a
member of the Board. In the event of the Participant’s death, the payment of
the amounts deferred and the accumulated earnings thereon (or, in the event of
death following commencement of installment payments, the remaining unpaid
balance thereof) shall be made in a single lump sum payment in the form
provided in Section 6.7 herein as soon as administratively practical after
the Participant’s death.

 

Notwithstanding anything
herein to the contrary: no distributions to a Specified Employee that are to be
made as a result of the Specified Employee’s termination from service for any
reason other than death or Disability shall be made or commence prior to the
date that is six months after the date of termination from service, or such
shorter period that, in the opinion of counsel, is sufficient to avoid the
imposition of the

 

 

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additional tax under Section 409A(a)(1)(B) of
the Code or any other taxes or penalties imposed under Section 409A (the “Section 409A
Taxes”); provided that any distributions that otherwise would have been payable
during such six-month (or shorter) period shall continue to accrue earnings
under Section 7.2 and shall be distributed (together with any earnings
thereon) in lump sum on the first day following the expiration of such
six-month (or shorter) period.

 

6.6          Form of
Payment of Deferred Amounts. Subject to Section 6.8, Participants
shall be entitled to elect to receive payment of amounts deferred in any Year,
together with earnings accrued thereon, at the end of the deferral period in a
single lump sum payment or by means of installments, pursuant to the form
elected by the Participant at the time the Participant elected to defer such
amounts. If no election is made with respect to amounts deferred in one or more
Years (and earnings accrued thereon), the Participant will be paid such amounts
in a single lump sum. Notwithstanding anything herein to the contrary, all of a
Participant’s Grandfathered Deferrals shall be paid in the same form.

 

(a)           Lump Sum Payment. Such
payment of deferred amounts and earnings accrued thereon shall be made to the
Participant in January following the Year in which he ceases to serve as a
Director and/or Key Executive, or at such later date, in each case, as set
forth in Section 6.5 herein.

 

(b)          Installment Payments. Participants
may elect to receive the payout of deferred amounts and earnings accrued
thereon in annual installments, with a minimum number of installments of two
(2), and a maximum number of installments of ten (10). The initial payment
shall be made in January following the Year in which he ceases to serve as
a Director and/or Key Executive, or at such later date, in each case, as set
forth in described in Section 6.5 herein. The remaining installment
payments shall be made in January of each Year thereafter, until the
Participant’s entire deferred account has been paid in full. Earnings shall
continue to accrue on the deferred amounts in the Participant’s deferred
account, as provided in Section 7.2 of this Plan. The amount of each
installment payment shall be equal to the balance remaining in the Participant’s
deferred account immediately prior to each such payment, multiplied by a
fraction, the numerator of which is one (1), and the denominator of which is
the number of installment payments remaining.

 

Subject to the following
rules, with respect to Grandfathered Deferrals a Participant may elect to
change a form of benefit elected pursuant to this Section 6.6 by filing a
revised election form on an “Election to Defer Form,” as described in Section 6.2
herein, specifying the new form of distribution:

 

(1)                                An election
to change the form of distribution must be made no later than December 31
at least one (1) full Year prior to the payout commencement date as
described in Section 6.5 herein. If a new election is submitted after this
date, the election shall be null and void, and the form of distribution shall
be determined under the Participant’s original election.

 

(2)                                Any election
to change the form of distribution from installments to a lump sum is subject
in all cases to the approval of the Board.

 

(3)                                No further
election to change a form of distribution shall be permitted with respect to
amounts already subject to a revised election submitted pursuant to this Section 6.6.

 

Participants
shall not be permitted to change the form of their distributions with respect
to Section 409A Deferrals.

 

Notwithstanding
anything to the contrary herein, if the deferred amounts and accumulated
earnings thereon to be paid to a Participant in the form of installments is
less than $50,000, such amounts shall be paid to the Participant in a single
lump sum, notwithstanding the Participant’s election to receive such amounts in
the form of installments.

 

6.7          Type
of Payment of Deferred Amounts. All payment of deferred amounts hereunder
shall be made in shares of Stock, provided that cash in lieu of fractional
shares of Stock may be distributed.

 

6.8          Financial
Hardship. The Committee shall have the authority to
alter the timing or manner of payment of deferred amounts in the event that the
Participant establishes, to the satisfaction of the Committee, severe financial
hardship. In such event, the Committee may, in its sole discretion:

 

 

A-9

 

(a)           Authorize
the cessation of deferrals by such Participant under the Plan; or

 

(b)           Provide
that all, or a portion, of the amount previously deferred by the Participant
shall immediately be paid in a lump sum payment; or

 

(c)           Provide
that all, or a portion, of the installments payable over a period of time shall
immediately be paid in a lump sum payment.

 

For
purposes of this Section 6.8, with respect to Grandfathered Deferrals, “severe
financial hardship” shall mean any financial hardship resulting from
extraordinary and unforeseeable circumstances arising as a result of one or
more recent events beyond the control of the Participant. For purposes of this Section 6.8,
with respect to Section 409A Deferrals, “severe financial hardship” shall
mean shall mean an unforeseeable emergency which constitutes a severe financial
hardship of the Participant or beneficiary resulting from an illness or
accident of the Participant or beneficiary, the Participant’s or beneficiary’s
spouse, or the Participant’s or beneficiary’s “dependent” (as defined in Section 152(a) of
the Code); loss of the Participant’s or beneficiary’s property due to casualty
(including the need to rebuild a home following damage to a home not otherwise
covered by insurance, for example, not as a result of a natural disaster); or
other similar extraordinary and unforeseeable circumstances arising as a result
of events beyond the control of the Participant or beneficiary. In any event,
payment may not be made to the extent such emergency is or may be relieved: (i) through
reimbursement or compensation by insurance or otherwise; (ii) by
liquidation of the Participant’s assets, to the extent the liquidation of such
assets would not itself cause severe financial hardship; and (iii) by
cessation of deferrals under the Plan. Withdrawals of amounts because of a
severe financial hardship may only be permitted to the extent reasonably
necessary to satisfy the hardship, plus to pay taxes on the withdrawal.
Examples of what are not considered to be severe financial hardships include
the need to send a Participant’s child to college or the desire to purchase a
home. The Participant’s account will be credited with earnings in accordance
with the Plan up to the date of distribution.

 

The
severity of the financial hardship shall be judged by the Committee. The
Committee’s decision with respect to the severity of financial hardship and the
manner in which, if at all, the Participant’s future deferral opportunities
shall be ceased, and/or the manner in which, if at all, the payment of deferred
amounts to the Participant shall be altered or modified, shall be final and
conclusive.

 

Article 7.
Deferred Compensation Accounts

 

7.1          Participants’
Accounts. The Company shall establish and maintain
an individual bookkeeping account for deferrals made by each Participant under Article 6
herein. Each account shall be credited as of the date the amount deferred
otherwise would have become due and payable to the Participant and as provided
in Section 7.2. Each Participant’s account shall be one hundred percent
(100%) vested at all times.

 

 

A-10

 

7.2          Gains
and Losses on Deferred Amounts. Each Participant’s account for deferrals
will be deemed to be invested in Stock, including any dividends paid thereon
(which will be deemed to be reinvested in such Stock). Each Participant’s
account will thus be adjusted and increased or decreased by the results of such
deemed investment from the time Plan deferrals are credited under Section 7.1
until distributed pursuant to Article 6 hereof.

 

7.3          Charges
Against Accounts. There shall be charged against each Participant’s
deferred account any payments made to the Participant or  to
his or her beneficiary.

 

7.4          Designation
of Beneficiary. Each Participant shall designate a
beneficiary or beneficiaries who, upon the Participant’s death, will receive
the deferred amounts that otherwise would have been paid to the Participant
under the Plan. All designations shall be signed by the Participant, and shall
be in such form as prescribed by the Committee. Each designation shall be
effective as of the date delivered to the Chief Human Resources Officer of the
Company by the Participant.

 

Participants
may change their designations of beneficiary on such form as prescribed by the
Committee. The payment of amounts deferred under the Plan shall be in
accordance with the last unrevoked written designation of beneficiary that has
been signed by the Participant and delivered by the Participant to the Chief
Human Resources Officer of the Company prior to the Participant’s death.

 

In
the event that all the beneficiaries named by a Participant pursuant to this Section 7.4
predecease the Participant, the deferred amounts that would have been paid to
the Participant or the Participant’s beneficiaries shall be paid to the
Participant’s estate.

 

In
the event a Participant does not designate a beneficiary, or for any reason
such designation is ineffective, in whole or in part, the amounts that
otherwise would have been paid to the Participant or  the
Participant’s beneficiaries under the Plan shall be paid to the Participant’s
estate.

 

Article 8.
Rights of Participants

 

8.1          Contractual
Obligation. The Plan shall create a contractual
obligation on the part of the Company to make payments from the Participants’
accounts when due. Payment of account balances shall be made out of the general
funds of the Company.

 

8.2          Unsecured
Interest. No Participant or party claiming an
interest in deferred amounts of a Participant shall have any interest
whatsoever in any specific asset of the Company. To the extent that any party
acquires a right to receive payments under the Plan, such right shall be
equivalent to that of an unsecured general creditor of the Company. The Company
shall have no duty to set aside or invest any amounts credited to Participants’
accounts under this Plan.

 

Nothing contained in
this Plan shall create a trust of any kind or a fiduciary relationship between
the Company and any Participant. Nevertheless, the Company may establish one or
more trusts, with such trustee as the Committee may approve, for the purpose of
providing for the payment of deferred amounts and earnings thereon. Such trust
or trusts may be irrevocable, but the assets thereof shall be subject to the
claims of the Company’s general creditors in the event of the Company’s
bankruptcy or insolvency. To the extent any deferred amounts and earnings
thereon under the Plan are actually paid from any such trust, the Company shall
have no further obligation with respect thereto, but to the extent not so paid,
such deferred amounts and earnings thereon shall remain the obligation of, and
shall be paid by, the Company.

 

8.3          No
Guarantee of Principal or Earnings. Nothing
contained in the Plan shall constitute a guarantee by the Company or any other
person or entity that the amounts deferred hereunder will increase or shall not
decrease in value due to the deemed investment of such amounts in Stock. The
Stock may be a volatile investment and decreases in the value thereof may
result in a loss of some or all of the principal amounts deferred hereunder.
Thus, it is possible for the value of a Participant’s account to decrease as a
result of its deemed investment in Stock, if the value of the Stock decreases.

 

Article 9.  Number and Source of Shares Available
Under the Plan

 

Subject
to adjustments as provided in this Article 9, the shares of Stock that may
be issued under the Plan shall not exceed an aggregate of 1,100,000 shares of
Stock. The Company shall reserve a sufficient number of shares of Stock for
purposes of the Plan, as determined by the Committee. Such shares may be
previously issued and outstanding shares of Stock reacquired by the Company and
held in its treasury, or may be authorized but unissued shares of Stock, or may
consist partly of each. If the Company shall at any time increase or decrease
the number of outstanding shares of Stock or change in any way the rights and
privileges of such shares by means of the payment of a stock dividend or any
other distribution upon such shares payable in Stock, or through a stock split,
subdivision, consolidation, combination, reclassification, or recapitalization
involving the Stock, and in each case not involving the receipt of
consideration by the Company, then the Committee shall, in such manner as shall
be reasonably determined by the Committee, increase, decrease, or change in like
manner the number, rights and privileges of the shares issuable under the Plan
as if such shares had been issued and outstanding, fully paid, and
non-assessable at the time of such occurrence in order to prevent dilution or
enlargement of Participants’ rights under the Plan.

 

 

A-11

 

Article 10.  Withholding of Taxes

 

The
Company shall have the right to require Participants to remit to the Company an
amount sufficient to satisfy any Federal, state, and local withholding tax
requirements, or  to deduct from all payments made
pursuant to the Plan amounts sufficient to satisfy any withholding tax
requirements.

 

Article 11.  Amendment and Termination

 

The
Company hereby reserves the right to amend, modify, or  terminate
the Plan at any time by action of the Board, with or without prior notice. No
such amendment or termination shall in any material manner adversely affect any
Participant’s rights to amounts already deferred or earned or earnings thereon
up to the point of amendment or termination or any rights of such Participant
under any Stock theretofore paid to him or her hereunder, without the consent
of the Participant. Notwithstanding anything herein to the contrary, to the
extent permissible under Section 409A without the imposition of the Section 409A
Taxes, in the event of any termination, the Board, in its sole and absolute
discretion may elect to liquidate the Plan and distribute to each Participant
all amounts deferred under the Plan (and earnings thereon) in a lump sum or in
installments; provided that all such distributions (i) commence no earlier
than the date that is twelve (12) months following the date of such termination
(or such earlier date permitted under Section 409A without the imposition
of the Section 409A Taxes) and (ii) are completed by the date that is
twenty-four (24) months following the date of such termination (or such later
date permitted under Section 409A without the imposition of the Section 409A
Taxes).

 

Article 12.  Miscellaneous

 

12.1       Notice.
Unless
otherwise prescribed by the Committee, any notice or filing required or
permitted to be given to the Company under the Plan shall be sufficient if in
writing and hand delivered, or sent by registered or certified mail to the
Chief Human Resources Officer of the Company. Notice to the Chief Human
Resources Officer of the Company, if mailed, shall be addressed to the
principal executive offices of the Company. Notice mailed to a Participant
shall be at such address as is given in the records of the Company. Notices
shall be deemed given as of the date of delivery or, if delivery is made by
mail, as of the date shown on the postmark on the receipt for registration or
certification.

 

12.2       Consideration
for Stock Issued. Stock will be paid under the Plan in
consideration of the services of Participants as directors, employees and/or
officers of the Company.

 

12.3       Compliance
with Securities Laws, Listing Requirements, and Other Laws and Obligations. The Company
shall not be obligated to deliver any shares of Stock under this Plan, (a) until,
in the opinion of the Company’s counsel, all applicable federal and state laws
and regulations have been complied with, (b) if the outstanding Stock
is at the time listed on any stock exchange, or quoted on any automated
quotation system, until the shares to be delivered have been listed or
authorized to be listed or quoted on such exchange or system upon official
notice of issuance, and (c) until all other legal matters in connection
with the issuance and delivery of such shares have been approved by the Company’s
counsel. If the sale of Stock has not been registered under the Securities Act
of 1933, as amended, the Company may require, as a condition to the payment of
Stock, such representations or agreements as counsel for the Company may
consider appropriate to avoid violation of such Act and may require that the
certificates evidencing such Stock bear an appropriate legend restricting
transfer.

 

12.4       No
Shareholder Rights Conferred. Nothing contained in the Plan or any
agreement hereunder will confer upon any Participant any rights of a
shareholder of the Company unless and until shares of Stock are issued to such
Participant upon the payment of Stock.

 

12.5       No
Right to Stock. Nothing in the Plan shall be construed to
give any Director or Key Executive any right to a grant of common stock under
the Plan unless all conditions described within the Plan are met as determined
in the sole discretion of the Committee.

 

12.6       Granted
Shares Have Same Status as Issued Shares. Any shares
of common stock of the Company issued as a stock dividend, or as a result of
stock splits, combinations, exchanges of shares, reorganizations, mergers,
consolidations or otherwise with respect to shares of common stock granted
pursuant to the Plan shall have the same status and be subject to the same
restrictions as the shares granted.

 

12.7       Nontransferability.
Except
as provided below, Participants’ rights to deferred amounts, contributions, and
earnings accrued thereon under the Plan may not be sold, transferred, assigned,
or otherwise alienated or hypothecated, other than by will or by the laws of
descent and distribution, nor shall the Company make any payment under the Plan
to any assignee or creditor of a Participant.

 

Notwithstanding
the foregoing, the Committee shall provide for distributions from a Participant’s
deferred compensation account to the extent required by a court order that the
Committee determines to satisfy the requirements of a qualified domestic
relations order within the meaning of Section 206(d)(3) of ERISA. The
amounts assigned to an alternate payee under such an order shall be paid in a
lump sum distribution as soon as administratively practical after the Committee
determines that the order meets the requirements of a qualified domestic
relations order. All payments made pursuant to any such order shall be charged
against the Participant’s deferred compensation account.

 

 

A-12

 

12.8       Severability.
In
the event any provision of the Plan shall be  held
illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining parts of the Plan, and the Plan shall be construed and
enforced as if the illegal or invalid provision had not been included.

 

12.9       Gender
and Number. Except where otherwise indicated by the
context, any masculine term used herein also shall include the feminine; the
plural shall include the singular, and the singular shall include the plural.

 

12.10     Costs
of the Plan. All costs of implementing and
administering the Plan shall be borne by the Company.

 

12.11     Successors.
All
obligations of the Company under the Plan shall be binding on any successor to
the Company, whether the existence of such successor is the result of a direct
or indirect purchase, merger, consolidation, or otherwise, of all or
substantially all of the business and/or assets of the Company

 

12.12     Applicable
Law. Except to the extent preempted by applicable federal law,
the Plan shall be governed by and construed in accordance with the laws of the
state of Tennessee.

 

12.13     Effective
Date. This amendment and restatement of the Plan shall become
effective at the time that it is approved by the Board, subject to approval by
the stockholders of the Company by a majority of the votes cast by the holders
of the common stock, present in person or represented by proxy, and entitled to
vote.

 

 

 

 

A-13Exhibit 4.2

 

MAGNETEK,
INC.

AMENDED
AND RESTATED

1997
NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN

JANUARY
1, 2008

 

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

 

2.     Effective Dates. This Director
Plan became effective on April 22, 1997. Options may not be granted
subsequent to (a) September 30, 2010 or (b) termination of this
Director Plan by the Board of Directors of the Company (the “Board”), whichever
is earlier. However, there will be a grant on September 30, 2010 if the
Director Plan has not theretofore been terminated by the Board pursuant to the
foregoing clause (b).

 

3.     Plan Operation. To the extent
that any questions of interpretation arise hereunder, these shall be resolved
by the Board.

 

4.     Eligible Persons. The persons
eligible to receive a grant of non-qualified stock options hereunder are any
Director of the Board who on the date of said grant is not an employee of the
Company 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 granted
hereunder shall be 1,150,000 shares of Common Stock, subject to adjustments
under Section 6, of which 448,000 shares are being transferred from the
1995 Plan. Shares of Common Stock subject to the unexercised portions of any
options granted under this Director Plan which expire, terminate or are
forfeited or cancelled may again be subject to options under this Director
Plan.

 

6.     Adjustments. In the event
that the outstanding shares of Common Stock of the Company are hereafter
changed into or exchanged for a different number or kind of shares or other
securities of the Company, or of another corporation, by reason of
reorganization, merger, consolidation, recapitalization, reclassification,
stock split-up, spin-off, stock dividend or combination of shares, appropriate
adjustments shall be made in the number and kind of shares: (a) that may
be subject to options granted under this Director Plan; (b) as to which options
may thereafter be granted or issued under this Director Plan and (c) for
which options then outstanding under this Director Plan may thereafter be
exercised. Any such adjustments in outstanding options shall be made without
changing the aggregate exercise price applicable to the unexercised portions of
such options.

 

7.  Stock
Options.

 

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

 

 

1

 

(b)  The
Board may from time to time, in its absolute discretion, grant non-qualified
stock options to Qualifying Directors. Each option granted pursuant to this Section 7(b) will
have a term of ten years unless otherwise specified by the Board, and the Board
shall, in its absolute discretion, determine the exercisability and other
provisions of such option.

 

(c)  The per
share exercise price of options granted under this Director Plan will be the
fair 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 and
lowest sales prices of a share of the Company’s stock on the principal exchange
on which shares of the. Company’s stock are then trading, if any, on such
determination date, or, if shares were not traded on such date, then on the
next preceding trading day during which a sale occurred, as such prices are
quoted in The Wall Street Journal; or (ii) if such stock is not traded on
an exchange but is quoted on NASDAQ or a successor quotation system, (1) the
mean between the highest and lowest sales prices (if the stock is then listed
as a National Market Issue under the NASD National Market System) or (2) the
mean between the closing representative bid and asked prices (in all other
cases) for the stock on such determination date as reported by NASDAQ or such
successor quotation system; or (iii) if such stock is not publicly traded
on an exchange and not quoted on NASDAQ or a successor quotation system, the
mean between the closing bid and asked prices for the stock, on such
determination date, as determined in good faith by the Board; or (iv) if
the Company’s stock is not publicly traded, the fair market value established
by the Board in good faith. The Board shall use such procedures to determine
fair market value in compliance with Code Section 409A and the regulations
or other guidance issued thereunder.

 

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

 

8.     Documentation
of Grants. Awards made under this Director Plan may be evidenced by written
agreements or such other appropriate documentation as the Board shall
prescribe. The Board need not require the execution of any instrument or
acknowledgment of notice of an award under Section 7(a) of this
Director Plan, in which case continued service as a Qualifying Director by the
respective optionees will constitute agreement to the terms of the award.

 

9.     Nontransferability. Unless otherwise
approved by the Board, options granted under this Director Plan are
nontransferable by the optionee otherwise than by will or the laws of descent
and distribution, and are exercisable, during the optionee’s lifetime, only by
the optionee.

 

10.  Amendment
and Termination. The Board may alter, amend, suspend, or
terminate this Director Plan, provided that no such action shall deprive any
optionee, without his consent, of any option theretofore granted to the
optionee pursuant to this Director Plan or of any of his rights under such
option and provided further that the provisions of this Director Plan
designating persons eligible to participate in the Director Plan and specifying
the amount, exercise price and timing of grants under the Director Plan shall
not be amended more than once every six months other than to comport with
changes in the Internal Revenue Code, the Employee Retirement Income Security
Act, or the rules thereunder. Notwithstanding the foregoing, no
alteration, amendment, suspension or termination of this Director Plan or any
other document evidencing an Award under this Director Plan shall cause all or
a part of the payment under any Award to be subject to additional tax under
Code Section 409A.

 

11.
Termination of Directorship. All vested
options held by Qualifying Directors as of the date of cessation of service as
a director may be exercised by the Qualifying Director or his heirs or legal
representatives for one year after such cessation of service.

 

12.
Merger, Consolidation, Acquisition, Liquidation or Dissolution. Upon or in
connection with the merger or consolidation of the Company with or into another
corporation, the acquisition by another corporation, person or group of all or
substantially all of the Company’s assets or 40% or more of the Company’s then
outstanding voting stock or the liquidation or dissolution of the Company:

 

 

2

 

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

 

(b)   If no provision is made as set forth
in (a), or in the event of an acquisition of 40% or more of the Company’s then
outstanding voting stock to which subsection (c) is inapplicable, such
option shall become (to the extent not then fully vested) fully exercisable
from and after the date which is thirty days prior to the effective date of the
transaction 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 a
merger resulting in the ownership of all of the Company’s outstanding Common
Stock by another corporation), if as a result of the transaction the Company’s
Common Stock will cease to be traded on a national stock exchange, listed as a
National Market Issue on the National Market System or quoted on the NASDAQ
quotation system, each option which has not been exercised prior to the
consummation of the transaction shall be converted automatically into the right
to receive, within thirty days of such consummation, an amount in cash equal to
the difference between the aggregate exercise price for all shares subject to
the option (whether or not then subject to exercise) and the Fair Market Value
of such shares on the date which is the last trading date preceding the
consummation of such transaction.

 

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

 

13.
Manner of Exercise. All or a portion of an exercisable option
shall be deemed exercised upon delivery to the Secretary of the Company at the
Company’s principal office of all of the following: (i) a written notice
of exercise specifying the number of shares to be purchased signed by the
Qualifying Director or other person then entitled to exercise the option, (ii) full
payment of the exercise price for such shares by any of the following or
combination thereof: (a) cash, (b) certified or cashier’s check
payable to the order of the Company, (c) the delivery of whole shares of
the Company’s Common Stock owned by the option holder, or (d) by requesting
that the Company withhold whole shares of Company Common Stock then issuable
upon exercise of the option (for purposes of such a transaction the shares
withheld by the Company shall be valued at the Fair Market Value as of the date
prior to the exercise date), (iii) such representations and documents as
the Board, in its sole discretion, deems necessary or advisable to effect
compliance with all applicable provisions of the Securities Act and other
federal or state securities laws or regulations, (iv) in the event that
the option shall be exercised by any person or persons other than the
Qualifying Director, appropriate proof of the right of such person or persons
to exercise the option, and (v) such representations and documents as the
Board, in its sole discretion, deems necessary or advisable.

 

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

 

15. Compliance with Code Section 409A.  The Awards granted hereunder
are intended to comply with the exception to Code Section 409A set forth
in Treas. Reg. § 1.409A-1(b)(5)(i)(A). 
However, to the extent any Award does not meet the requirements of this
exception and therefore is subject to the requirements of Code Section 409A,
to the extent necessary to comply with Code Section 409A, any Award that
is subject to Code Section 409A may be modified, replaced or terminated in
the discretion of the Board. 
Notwithstanding any provision of this Director Plan or any document
evidencing an Award to the contrary, in the event that the Board determines
that any Award is or may become subject to Code Section 409A, the Company
may adopt such amendments to this Director 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 effective dates), or take any other action that the Board
determines to be necessary or appropriate to either comply with Code Section 409A
or to exclude or exempt this Director Plan or any Award from the requirements
of Code Section 409A.

 

 

3

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00136-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00136-of-00352.parquet"}]]