Document:

Prepared by MERRILL CORPORATION

THIRD

AMENDMENT  TO OFFICE/WAREHOUSE LEASE

 

 

                THIS THIRD AMENDMENT TO

OFFICE/WAREHOUSE LEASE is made this 28th day of  February 2001, by and between AETNA LIFE

INSURANCE COMPANY, a Connecticut Corporation; as successor in interest to Opus

Northwest, LLC, a Delaware limited liability company , hereinafter referred to

as “Lessor”, and FARGO ELECTRONICS, INC., a Delaware corporation, hereinafter

referred to as “Lessee”.

 

WITNESSETH THAT:

 

                WHEREAS,  Lessor and Lessee entered

into that certain Office/Warehouse Lease dated June 10, 1996, as amended by

Amendment to Lease dated as of June 10, 1996, as amended by a Second Amendment

to Lease dated August 29, 1996, concerning certain Premises designated as Suite

1000A and 1000B in the Office/Warehouse Complex known and described as Flying

Cloud Business Centre located at 6601 Flying Cloud Drive, Eden Prairie, MN

55344 and consisting of approximately 70,576 square feet (hereinafter referred

to as the “Lease”) and

 

                WHEREAS, the

parties desire to modify the terms and provisions set forth in said Lease.

 

                NOW,

THEREFORE, in consideration of the foregoing, and for other good and

valuable consideration, the receipt and sufficiency of which is hereby

acknowledged, the parties hereto agree to as follows:

 

1.             The

Lease term shall be extended commencing September 15, 2001 and ending the 31st

day of December, 2006, unless the Lease shall sooner terminate as provided

therein.

 

2.             Commencing January 1, 2002,

paragraph 1 of the Second Amendment to Office/ Warehouse Lease shall be amended

as follows:

 

a.             The

Premises shall be expanded effective January 1, 2002, to include the  approximately 25,664 square foot space

indicated on Exhibit A to this Third Amendment to Office/ Warehouse Lease.  The new premises will consist of

approximately 96,240 square feet.    All

terms and conditions of the Lease shall apply to the Expansion Space except as

hereafter provided.

 

b.             The Base Rent shall be $16,433.60

payable in advance for the period 9/15/01 through 9/30/01 and then $30,813.00

per month, payable monthly, in advance, for the period from 10/01/01 through

12/31/01 and then $41,015.00 per month, payable monthly, in advance from 1/1/02

through 12/31/04 and then $43,165.00 per month, payable monthly, in advance,

from 1/1/05 through 12/31/06.

 

c.             Lessee’s prorata share of excess

Real Estate Taxes and Lessee’s prorata share of excess Operating Expenses shall

be escalated by 12.58% to 47.18%.

 

3.             Lessee

will be granted access to the 25,664 square foot Expansion Space for the month

of December 2001 for the purpose of wiring, setting up equipment, etc.

provided, however, Lessee is subject to all the terms, conditions and covenants

of the Lease, including specifically Article IX, (“Insurance”), except, there

shall be no Base Rent, real estate taxes or Operating Expenses payable by

Lessee on the Expansion Space for the month of December 2001.

 

4.             Lessor

shall provide the following improvements to the Expansion Space on orbefore

December 1, 2001:

 

a.             Infill the openings in the demising

wall, patch and finish tape seams.

b.             Separately meter the gas and

electrical service servicing the Expansion Space.

c.             Upgrade the existing electrical

service in the Expansion Space from 200 amps to 600 amps/480 volt.

 

5.             Lessor agrees to provide Lessee

with a $50,000.00 allowance for retrofitting the Premises.  Said allowance, provided Lessee is not in

default,  will be payable to Lessee upon

Lessor’s receipt of paid invoices and lien waivers from all contractors,

subcontractors and material suppliers associated with providing goods and

services for any improvements to Lessee’s Premises.  Subject to Lessor’s review and approval of plans and

specifications, pursuant to Article VIII of the Lease, Lessee shall have the

right to reconfigure the Premises and Expansion Space at Lessee’s expense.

 

6.             Lessor

agrees that there shall be no charge by Lessor for the review of plans or any

inspections that Lessor deems necessary with regard to any alterations.  The Lessor shall make no variation or

alterations on the work to be provided by Lessor if it has an impact on its

budget or the completion schedule without the prior written consent of Lessee.

 

 7.            Lessor shall not charge any

supervisor fee, surcharges or any other charges in connection with Lessee’s

alterations or any subsequent alterations during the Lease term.

 

8.     Lessor agrees to provide the Expansion

Space improved as identified herein and provide Lessee with a Certificate of

Occupancy for said space.

 

9.     Lessee shall have the right in common with

other tenants to park passenger

 vehicles in the common vehicle

parking facilities at the Office/Warehouse Complex.  Upon Lessee’s request, Lessor shall designate as exclusive

parking spaces to be used by Lessee, its agents, employees and invitees 262

parking stalls as indicated on Exhibit B attached hereto and incorporated

herein by reference.  In the event

Lessee so requests Lessor to make such designation, Lessee shall not be

entitled to use any of the balance of the parking facilities of the Office/Warehouse

Complex.  In the event Lessee reasonably

determines that the tenants of the Office/Warehouse Complex are failing to

abide by the parking designations made by Lessor pursuant to the provisions

hereof, Lessor shall cooperate with Lessee in the enforcement of Lessee’s

exclusive parking rights except for signs in connection therewith, which are at

Lessee’s cost and expense.  All other

costs and expenses of any special parking control in regard to exclusive

designations and any cost and enforcement shall be an operating expense of the

Office/Warehouse complex as identified in Article II, Additional Rent, of the

Lease.   Anything herein to the contrary

notwithstanding, Lessee shall have no rights to use the reserved parking spaces

for any other Lessees at the Office/Warehouse Complex.

10.           Lessor will give

written notice to Lessee of space that becomes available to Lessor for leasing

during the term of this Lease in the Office/Warehouse Complex (“Offer Space”)

Lessor’s notice will include the Base Rent for the Offer Space calculated at

the market rate which Lessor would, as of the date upon which Lessor submits

written notice to Lessee, expect to charge a new tenant for such space for the

term in question, considering the condition of the Offer Space;

provided, however, that

space that is available as of the date of the Third Amendment to

Office/Warehouse Lease shall not be included within the definition of Offer

Space until it has been leased and has again become available for leasing.  Lessee shall have the right (“Right of

Opportunity”), provided Lessee is not in default,  to lease Offer Space, if and only if:

 

a.             Lessee is not in default under the

Lease;

b.             The party in possession of the

Offer Space has no desire to remain in possession;

c.             Other tenants in the Building with

rights to lease the Offer Space have no desire to lease it; and

d.             Lessee delivers to Lessor written

notice exercising its Right of Opportunity with respect to a given Offer Space

(“Expansion Election Notice”) within 

thirty  (30) days following

receipt of Lessor’s notice of availability of the Offer Space.

 

If Lessee fails to timely exercise its right to lease Offer Space,

Lessee shall have no further right to lease the Offer Space pursuant to this

Section 12 until it has been leased and has again become available.  If Lessee exercises its right to lease Offer

Space, Lessor and Lessee shall enter into an amendment to the Lease, subject to

the following terms and conditions:

 

(i)The Base Rent for the

Offer Space shall be at the rate which Lessor submits in its written notice to

Lessee identified hereinabove.

 

(ii)Lessee’s prorata share of excess real estate taxes

and excess operating expenses pursuant to the Lease shall be increased

accordingly.

 

(iii)The Offer Space shall be delivered to and

accepted by Lessee in its “as-is” condition when it becomes available.

 

(iv)The rental obligations of Lessee with respect to

the Offer Space will commence on the date possession of the Offer Space is

tendered by Lessor to Lessee.

 

(v)The Offer Space shall be added to the Premises for

a term concurrent with the term of the Lease.

 

(vi)Except as herein specifically provided to the

contrary, all of the terms, provisions and conditions set forth in the Lease

shall apply to the Offer Space upon its addition to the Premises.

 

(vii)Lessee shall not have the right hereunder to

exercise its Right of Opportunity with respect to part, but not all, of an

Offer Space which becomes available.

 

(viii)Any improvements to be made to any Offer Space

will be constructed by Lessee, at Lessee’s sole cost and expense, in accordance

with plans and specifications submitted by Lessee and approved by Lessor, which

approval will not be unreasonably withheld.

 

(ix)Within 15 days after receipt from Lessor, Lessee

shall execute and deliver to Lessor those instruments Lessor may reasonably

request to evidence any lease of Offer space under this Section 12.

 

(x)Lessor shall not be liable for failure to deliver

possession of the Offer Space by reason of holding over by third parties, nor

shall such failure impair the validity of the Lease or extend the term hereof.

 

(xi)The right of Lessee under this Section 12 will not

be severed from the Lease or separately sold, assigned or transferred, and will

expire on the expiration or earlier termination of the Lease.

 

11.           Lessee

shall have the right, provided Lessee is not in default, to be exercised as

hereinafter provided, to extend the term of the Lease for either one (1) period

of two (2) years, or one (1) period of five (5) years, on the following terms

and conditions and subject to the limitations hereinafter set forth, such

extension period being in the Lease sometimes referred to as the “Renewal

Term.”

 

(a)           That at the time hereinafter set

forth for the exercise of the renewal option, the Lease shall be in full force

and effect and Lessee shall not be in default in the performance of any of the

terms, covenants and conditions therein contained in respect to a matter as to

which notice of default has been given under the Office/Warehouse Lease which

has not been remedied within the time limited in the Lease, but Lessor shall

have the right, at its sole discretion, to waive the non-default conditions

therein.

 

(b)           That the Renewal Term shall be upon

the same terms, covenants and conditions as in the Lease provided; provided, however,

the annual Base Rent for the Renewal Term shall be the fair market Base Rent

rate for such space on the date such Renewal Term shall commence in relation to

comparable (in quality and location) space located in the Minneapolis – St.

Paul metropolitan area.  The fair market

Base Rent for the Premises shall be determined as of the date six (6) months

prior to commencement of the Renewal Term. 

Provided Lessee has properly elected to renew the term of the Lease, and

if Lessor and Lessee fail to agree at least four (4) months prior to

commencement of the Renewal Term upon the fair market Base Rent of the

Premises, the amount of the fair market Base Rent of the Premises shall be

determined by arbitration in accordance with the provisions of Article XXXI of

the Office/Warehouse Lease.  The fair

market Base Rent of the Premises shall be based upon the highest and best use

of the Premises; provided, however, the non-office areas of the Premises

(production and warehouse areas) shall be based on the market rate for

non-air-conditioned warehouse space only. 

The rate for the office areas shall be based upon market rates for

office areas.  In no event shall the

Base Rent of the Premises for the Renewal Term be either less than the Base

Rent rate payable nor more than 120% of the Base Rent rate payable (absent

temporary abatements) by Lessee immediately prior to commencement of the

Renewal Term.

 

(c)           That Lessee shall exercise its rights

to extend the term of the Lease for the Renewal Term by notifying Lessor, in writing,

of its election to exercise the right to renew and extend the term of the Lease

no later than the date six (6) months prior to the expiration of the initial

term of the Lease.  Upon notification

with respect to such renewal, and for a period of sixty (60) days thereafter,

the parties hereto shall make a good faith effort to agree upon the fair market

Base Rent of the Premises for such Renewal Term.  In the event that Lessor and Lessee fail to agree within the

sixty (60) day time period set forth in this subparagraph (c), the fair market

Base Rent of the Premises for such Renewal Term shall be determined by

Arbitration in the manner set forth in Article XXXI (“Arbitration”) of the

Office/Warehouse Lease.  However, such

arbitrators shall be directed to determine the fair market Base Rent for the

Premises as above provided and in determining the same said appraisers shall be

instructed to make said appraisal independently, without consulting with each

other.  Any determination by arbitration

or any agreement reached by the parties hereto with respect to such fair market

Base Rent and resulting Base Rent of the Premises for such Renewal Term shall

be expressed in writing and shall be executed by the parties hereto, and a copy

thereof delivered to each of the parties.

 

12.   Lessor, at its sole cost and expense, will

cause the Office/Warehouse Complex and the underlying land to be in compliance

with all codes and regulations pursuant to any Federal, State or local

governmental law, and shall so represent such compliance to Tenant.

 

13.   Except as amended herein, all other terms and

conditions of the Lease shall remain in full force and effect.

 

                IN WITNESS

WHEREOF, the parties hereto have executed this Third Amendment to

Office/Warehouse Lease as of the day and year first above written.

 

	

   

  	

  AETNA LIFE INSURANCE COMPANY

  	

   

  
	

   

  	

  A Connecticut Corporation

  	

   

  
	

   

  	

  (Lessor)

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:  

  	

  UBS

  Realty Investors LLC

  	

   

  
	

   

  	

  (f/k/a Allegis Realty Investors LLC),

  a Massachusetts limited liability company

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  Its:  

  	

  Investment

  Advisor and Agent

  	

   

  
	

   

  	

  By  /s/ 

  Joseph E. Gaukler

  	

   

  
	

   

  	

  Its   Director

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  FARGO

  ELECTRONICS, INC.

  	

   

  
	

   

  	

  A Delaware Corporation

  	

   

  
	

   

  	

  (Lessee)

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By  /s/ Gary R. Holland

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  Its   PresidentPrepared by MERRILL CORPORATION

Exhibit

10.1

 

2002 MAGNETEK, INC.

EMPLOYEE STOCK PURCHASE PLAN

I

INTRODUCTION

1.1           Purpose.  The Magnetek, Inc. Employee Stock Purchase

Plan (the “Plan”) is intended to provide employees of Magnetek, Inc. (the

“Company”) and its Designated Subsidiaries (as defined below) with an

opportunity to purchase shares of the Common Stock of the Company through

accumulated payroll deductions.  It is

the intention of the Company to have the Plan qualify as an “Employee Stock Purchase

Plan” under Section 423 of the Internal Revenue Code of 1986, as amended (the

“Code”).  The provisions of the Plan,

accordingly, shall be construed so as to extend and limit participation in a

manner consistent with the requirements of that Section of the Code.

 

II

DEFINITIONS

 

2.01         “Board”

shall mean the Board of Directors of the Company.

2.02         “Code” shall mean the

Internal Revenue Code of 1986, as amended.

2.03         “Committee” shall mean

the individuals described in Section 11.01

2.04         “Common

Stock” shall mean the Common Stock of the Company.

2.05         “Company”

shall mean Magnetek, Inc., a Delaware corporation.

2.06         “Compensation”  shall mean the total cash

compensation paid to the participant, including overtime pay, bonuses (e.g.

sales, variable compensation, profit-sharing, signing bonus), shift

differential pay, and commissions, but excluding severance pay, moving expense

reimbursement, expatriate allowances, wellness bonuses, authors’ guild awards,

patent awards, performance plus awards, tuition reimbursement, Christmas

bonuses, employee referral awards, distributions from nonqualified deferred

compensation plans and any other extraordinary or incentive compensation

determined by the plan administrator not to be a part of  the basic compensation package of the

Company.

2.07         “Designated

Subsidiary” shall mean any shall mean any present or future, domestic or

foreign, corporation which (i) is or becomes a “subsidiary corporation” of the

Company as that term is defined in 'Section 424(f) of the Code and (ii) is

designated as a participant in the Plan by the Board, in its sole discretion

and subject to amendment from time to time.

2.08         “Employee”

shall mean any person employed by the Company or any Designated Subsidiary

whose customary employment with the Company is at least twenty (20) hours per

week.  For purposes of the Plan, the

employment relationship shall be treated as continuing intact while the

individual is on sick leave or other leave of absence approved by the Company.  Where the period of leave exceeds 90 days

and the individual’s right to reemployment is not guaranteed either by statute

or by contract, the employment relationship shall be deemed to have terminated

on the 91st day of such leave.

2.09         “Enrollment Date” shall mean the

first day of each Offering Period.

2.10         “Exercise Date” shall mean the last day of each

Offering Period.

2.11         “Fair Market Value” shall mean the closing sales

price for the Company’s Common Stock (or the closing bid if no sales were

reported) as quoted on any established stock exchange on which the stock is listed

for the last market trading day on the date of determination, as reported in The Wall

Street Journal or such other source as the Board deems reliable.

2.12         “Offering Period" shall

mean a period of approximately three (3) months during which an option granted

pursuant to the Plan may be exercised, commencing on the first Trading Day on

or after the first day of each calendar quarter and terminating on the last

Trading Day on or before the last day of each calendar quarter; provided,

however, that the first Offering Period under the Plan shall commence with the

first Trading Day on or after the date on which the Securities and Exchange

Commission declares the Company's Registration Statement with respect to the

Plan effective and ending on the last Trading Day on or before the last day of

the calendar quarter. The duration of Offering Periods may be changed pursuant

to Section 4 of this Plan.

2.13         “Plan" shall mean this Employee Stock Purchase

Plan.

2.14         “Plan

Representative” shall mean any person designated from time to time by the

Committee to receive certain notices and take certain other administrative

actions relating to participation in the Plan.

2.15         “Purchase Price” shall mean an amount equal to 85% of

the Fair Market Value of a share of Common Stock on the Enrollment Date or on

the Exercise Date, whichever is lower; provided, however, that the Purchase

Price may be adjusted by the Board pursuant to Section 12.03 of the Plan.

2.16         “Trading Day” shall mean a day on which the national

stock exchanges and the NASDAQ System are open for trading.

III

ELIGIBILITY

AND PARTICIPATION

3.01         Initial Eligibility. 

Any Employee who is employed by the Company or any Designated Subsidiary

on a given Enrollment Date shall be eligible to participate in the Plan with

respect to any offerings of Common Stock under the Plan that commence after the

Employee becomes eligible to participate. 

Persons who are not Employees are not eligible to participate in the

Plan.

3.02         Restrictions on Participation.  Notwithstanding any provision of the Plan to

the contrary, no Employee shall be granted an option to purchase shares of

Common Stock under the Plan:

(a)           if,

immediately after the grant, the Employee would own stock and/or hold

outstanding options to purchase stock possessing 5% or more of the total

combined voting power or value of all classes of stock of the Company (for

purposes of this paragraph, the attribution rules of Section 424(d) of the Code

shall apply in determining stock ownership of any Employee); or

(b)           which

permits the Employee’s right to purchase stock under all Code Section 423

Employee stock purchase plans of the Company to accrue at a rate that exceeds

$12,500 of fair market value of the stock (determined at the time such option

is granted) for each calendar year in which such option is outstanding at any

time.

3.03         Commencement of Participation.  An eligible Employee may become a

participant by completing an authorization for payroll deductions on the form

provided by the Company and filing the completed form with the Plan

Representative on or before the filing date set by the Committee, which date

shall be prior to the commencement of the next Offering Period.  Payroll deductions for a participant shall

commence on the next following payday after commencement of the first Offering

Period after the Employee’s authorization for payroll deductions becomes

effective and shall continue until termination of the Plan or the participant’s

earlier termination of participation in the Plan.  Each participant in the Plan shall be deemed to continue

participation until termination of the Plan or the participant’s earlier

termination of participation in the Plan pursuant to Section 8 below.

 

 

IV

STOCK

SUBJECT TO THE PLAN AND OFFERINGS

4.01         Stock Subject to

the Plan.  The Board of Directors

shall reserve initially for issuance under the Plan an aggregate of one million

(1,000,000) shares of the Company’s Common Stock, which shares shall be

authorized but unissued shares of Common Stock.  The Company’s Board of Directors may from time to time reserve

additional shares of authorized and unissued Common Stock for issuance pursuant

to the Plan, subject to any required shareholder approval; provided, however,

that at no time shall the number of shares of Common Stock reserved be greater

than permitted by applicable law.

4.02         Offerings.  The Plan will be implemented by four annual

offerings of the Company's Common Stock each calendar year (the

“Offerings”).  The first offering for

each year that the Plan is in effect will begin on January 1 or the first

Trading Day thereafter and end on March 31 or the last Trading Day prior to

March 31, the second Offering will begin on April 1 or the first Trading Day

thereafter and end on June 30 or the last Trading Day prior to June 30, the

third Offering will begin on July 1 or the first Trading Day thereafter and end

on September 30 or the last Trading Day prior to September 30, and the fourth

Offering will begin on October 1 or the first Trading Day thereafter and end on

December 31 or the last Trading Day prior to December 31.  The first day of each Offering shall be

deemed the “Offering Commencement Date” and the last day the “Offering

Termination Date” for such Offering. 

The first offering under this plan will begin on January 1, 2002, or the

first Trading Day thereafter.

V

PAYROLL

DEDUCTIONS

5.01         Amount of Deduction.  Participants in the Plan will be permitted

to elect payroll deductions of any whole percentage from one percent (1%)

through ten percent (10%) of such participant's Compensation for each pay

period during an Offering Period, provided such participant’s total deduction

does not exceed $12,500 per annum, as specified in Section 3.02(b).

5.02         Participant's Account.  All payroll deductions made for a

participant shall be credited to an account established for such participant

under the Plan

5.03         Changes in Payroll Deductions.  A participant may reduce or increase future

payroll deductions (within the limits described in Section 5.01) by filing with

the Plan Representative a form provided by the Company for such purpose.  The effective date of any increase or

reduction in future payroll deductions will be the first day of the next pay

period following the processing of the change form by the Plan Representative.

 

VI

GRANTING OF

OPTION

6.01         Number of Option

Shares.  On the Commencement Date of

each Offering Period, each participating Employee shall be deemed to have been

granted an option to purchase on the Exercise Date of the Offering Period, a

maximum number of shares of Common Stock equal to the amount of the Employee’s

payroll deductions accumulated prior to the Exercise Date and held in the

Participant’s Account, divided by the applicable Purchase Price determined as

provided in Section 6.02 below; provided that such purchase shall be subject to

the limitations set forth in Section 3.02 hereof, and further provided

that no fractional shares shall be issued, but instead any remaining Account

balance shall be carried over to the next Offering Period. Exercise of the

Option shall occur as provided in Section 7 hereof, unless the participant has

withdrawn pursuant to Section 8 hereof. 

The Option shall expire on the last day of the Offering Period if not

exercised.

6.02         Purchase Price.  The Purchase Price of stock purchased with

payroll deductions made during any Offering Period shall be the lower of:

(a)           85% of the closing

price of the stock on the commencement date for such Offering Period or the

next business day on which trading occurred on the national stock exchange; or

(b)           85%

of the closing price on the termination date for such Offering Period or the

nearest prior business day on which trading occurred on the national stock

exchange.

VII

EXERCISE OF

OPTION

7.01         Automatic Exercise.  Each participant’s option for the purchase

of stock with payroll deductions made during any Offering Period will be deemed

to have been exercised automatically on the applicable Offering Termination

Date for the purchase of the number of full shares of Common Stock which the

accumulated payroll deductions in the participant's account at the time will

purchase at the applicable Purchase Price.

7.02         Withdrawal of Account.  No participant in the Plan shall be entitled

to withdraw any amount from the accumulated payroll deductions in his or her

account; provided, however, that a participant’s accumulated payroll deductions

shall be refunded to the participant as and to the extent specified in Section

8.01 below upon termination of such participant’s participation in the Plan.

7.03         Fractional Shares.  Fractional shares of Common Stock will not

be issued under the Plan.  Any

accumulated payroll deductions that would have been used to purchase fractional

shares, unless refunded pursuant to Section 7.02 above, will be held, without

interest, for the purchase of Common Stock in the following Offering Period.

7.04         Exercise of Options.  During a participant’s lifetime, options

held by such participant shall be exercisable only by such participant.

7.05         Delivery of Stock to Trust.  After the Offering Termination Date of each

Offering Period, the Company will deliver to a trust account held by the

Representative the shares of Common Stock purchased by each participant during

that Offering Period.

7.06          Stock Transfer Restrictions.  The Plan is intended to satisfy the

requirements of Section 423 of the Code. 

A participant will not obtain the benefits of this provision if such

participant disposes of shares of Common Stock acquired pursuant to the Plan

within two (2) years from the Offering Commencement Date.  Therefore, each participant’s shares will be

held in trust until such time as the shares can be disposed of without losing

the benefits of Section 423. 

Thereafter, certificates representing the shares held by a participant

will be distributed pursuant to the participant’s written instructions on file

with the Plan Representative. 

Notwithstanding the foregoing, the restriction period on disposition of

shares does not apply if the participant experiences a “financial hardship,”

which includes an immediate and heavy financial need attributable to

(i) certain medical expenses of the participant, his spouse and

dependents, (ii) costs directly related to the purchase of a principal

residence, (iii) tuition for the next 12 months of post-secondary

education for the participant or his spouse or dependents, or

(iv) payments necessary to prevent eviction from or foreclosure on the

mortgage of the participant’s principal residence.  The Committee or the Plan Representative may eliminate this

financial hardship exception to the stock restriction rules at any time.

 

 

VIII

WITHDRAWAL

8.01         In General.  A participant may stop participating in the

Plan at any time by giving written notice to the Plan Representative.  Upon processing of any such written notice,

no further payroll deductions will be made from the participant’s Compensation

during such Offering Period or thereafter, unless and until such participant

elects to resume participation in the Plan by providing written notice to the

Plan Representative pursuant to Section 3.03 above.  Such participant’s payroll deductions accumulated prior to

processing of such notice shall be applied toward purchasing full shares of

Common Stock in the then-current Offering Period as provided in Section 7.01

above.  Any cash balance remaining after

the purchase of shares in such Offering Period shall be refunded promptly to

such participant.

8.02         Effect on Subsequent Participation.  A participant’s withdrawal from

participation during any Offering Period will not have any effect upon such

participant’s eligibility to participate in any succeeding Offering Period or

in any similar plan that may hereafter be adopted by the Company and for which

such participant is otherwise eligible.

8.03         Termination of Employment.  Upon termination of a participant’s employment

with the Company or any Designated Subsidiary for any reason, including

retirement or death, the participant's payroll deductions accumulated prior to

such termination, if any, shall be applied toward purchasing full shares of

Common Stock in the then-current Offering Period, and any cash balance

remaining after the purchase of shares in such Offering shall be refunded to

him or her, or, in the case of his or her death, to the person or persons

entitled thereto under Section 12.01, and his or her participation in the Plan

shall be deemed to be terminated.

IX

INTEREST

9.01         Payment of Interest.  No interest will be paid or allowed on any

money paid into the Plan or credited to the account of or distributed to any

participant Employee.

 

X

STOCK

10.01       Participant’s Interest in Option

Stock.  No participant will have any

interest in shares of Common Stock covered by any Option held by such

participant until such Option has been exercised as provided in Section 7.01

above.

10.02       Registration of

Stock.  Shares of Common Stock

purchased by a participant under the Plan will be registered in the name of the

participant, or, if the participant so directs by written notice to the Plan

Representative prior to the termination of the Offering Period, in the names of

the participant and one such other person as may be designated by the

participant, as joint tenants with rights of survivorship or as tenants in

common or tenants by the entireties, to the extent permitted by applicable law.

10.03       Restrictions on Exercise.  The Board of Directors or its delegate may,

in its discretion, require as conditions to the exercise of any Option that the

shares of Common Stock reserved for issuance upon the exercise of such Option

shall have been duly listed, upon official notice of issuance, upon a stock

exchange or market, and that either:

(a)           a registration statement under the

Securities Act of 1933, as amended, with respect to said shares shall be

effective, or

(b)           the issuance qualifies for an

exemption from registration and the participant shall have represented at the

time of purchase, in form and substance satisfactory to the Company, that it is

his or her intention to purchase the shares for investment and not for resale

or distribution.

XI

ADMINISTRATION

11.01        Appointment

of Committee.  The Board of

Directors shall appoint a Committee to administer the Plan.  The Board or Committee shall have full and

exclusive discretionary authority to construe, interpret and apply the terms of

the Plan, to determine eligibility to participate in the Plan and to adjudicate

all disputed claims filed under the Plan. 

Every finding, decision and determination made by the Board or Committee

shall, to the full extent permitted by law, be final and binding upon all

parties.  The

Committee’s discretionary authority shall include the ability to make such

adjustments or modifications to the terms and conditions of the Plan and the

Offerings thereunder to Employees who are working outside the United

States as are advisable to fulfill the purposes of the Plan or to comply with

local law, and to authorize foreign Designated Subsidiaries to adopt foreign

sub-plans as provided in Section 12.08. 

The Committee's discretionary authority shall also include the ability to

delegate its duties and responsibilities hereunder with respect to such foreign

sub-plans, except its duties and responsibilities with respect to any Section

16 Persons, and the acts of such delegates shall be treated hereunder as acts

of the Committee.

 

XII

MISCELLANEOUS

12.01       Designation of Beneficiary.  A participant may file with the Plan

Representative a written designation of a beneficiary who is to receive any

shares of Common Stock and/or cash under the Plan upon the participant’s death.  The participant may change such designation

of beneficiary at any time by written notice to the Plan Representative.  Upon the death of a participant and receipt

by the Company of proof of identity and existence at the participant's death of

a beneficiary validly designated by the participant under the Plan, and subject

to Section 8 above concerning withdrawal from the Plan, the Company shall

deliver such shares of Common Stock and/or cash to such beneficiary.  In the event of the death of a participant

lacking a beneficiary validly designated under the Plan who is living at the

time of such participant's death, the Company shall deliver such shares of

Common Stock and/or cash to the executor or administrator of the estate of the

participant, or if no such executor or administrator has been appointed (to the

knowledge of the Company), the Company, in its discretion, may deliver such

shares of Common Stock and/or cash to the spouse or to any one or more

dependents of the participant, in each case without any further liability of

the Company whatsoever under or relating to the Plan.  No beneficiary shall, prior to the death of the participant by

whom he or she has been designated, acquire any interest in the shares of

Common Stock and/or cash credited to the participant under the Plan.

12.02        Transferability.  Neither payroll deductions credited to any

participant’s account nor any option or rights with regard to the exercise of

an option or to receive Common Stock under the Plan may be assigned,

transferred, pledged, or otherwise disposed of in any way by the participant

other than by will or the laws of descent and distribution.  Any such attempted assignment, transfer,

pledge or other disposition shall be without effect, except that the Company

may, in its discretion, treat such act as an election to withdraw from

participation in the Plan in accordance with Section 8.01.

12.03       Adjustment Upon Changes in

Capitalization.

(a)          If,

while any options are outstanding under the Plan, the outstanding shares of

Common Stock of the Company have increased, decreased, changed into, or been

exchanged for a different number or kind of shares or securities of the Company

through any reorganization, merger, recapitalization, reclassification, stock

split, reverse stock split or similar transaction, appropriate and proportionate

adjustments may be made by the Committee in the number and/or kind of shares

which are subject to purchase under outstanding options and in the Option Price

or Prices applicable to such outstanding options.  In addition, in any such event, the number and/or kind of shares

that may be offered in the Offerings described in Section 4 hereof shall also

be proportionately adjusted.  No such

adjustments shall be made for or in respect of stock dividends.  For purposes of this paragraph, any

distribution of shares of Common Stock to shareholders in an amount aggregating

20% or more of the outstanding shares of Common Stock shall be deemed a stock

split, and any distribution of shares aggregating less than 20% of the

outstanding shares of Common Stock shall be deemed a stock dividend.

(b)            Upon the

dissolution or liquidation of the Company, or upon a reorganization, merger or

consolidation of the Company with one or more corporations as a result of which

the Company is not the surviving corporation, or upon a sale of substantially

all of the property or capital stock of the Company to another corporation, the

Committee may either terminate the Offering Period early, so as to end

immediately before the closing date of such transaction, such that the Company

Common Stock is issued before the consummation of such event, or, if the

Committee does not accelerate the Exercise Date, then the holder of each option

then outstanding under the Plan will thereafter be entitled to receive at the

next Offering Termination Date, upon the exercise of such option, for each

share as to which such option shall be exercised, as nearly as reasonably may

be determined, the cash, securities and/or property which a holder of one share

of the Common Stock was entitled to receive upon and at the time of such

transaction.  The Board of Directors

shall take such steps in connection with such transactions as the Board shall

deem necessary to assure that the provisions of this Section 12.03 shall

thereafter be applicable, as nearly as reasonably may be determined, in

relation to the said cash, securities and/or property as to which each such

holder of any such option might hereafter be entitled to receive.

 

12.04       Amendment and

Termination.  The Board of Directors

shall have complete power and authority to terminate or amend the Plan;

provided, however, that the Board of Directors shall not, without the approval

of the shareholders of the Company, alter (i) the aggregate number of shares of

Common Stock which may be issued under the Plan (except pursuant to Section

12.03 above), or (ii) the class of employees eligible to receive options under

the Plan, other than to designate additional Subsidiary Corporations as

Designated Subsidiaries; and provided further, however, that no termination,

modification, or amendment of the Plan may, without the consent of an Employee

then having an option under the Plan to purchase shares of Common Stock,

adversely affect the rights of such Employee under such option.

12.05       Effective Date.  The Plan shall become effective upon

approval by the holders of a majority of the shares of Common Stock present and

represented at the annual meeting of the shareholders of the Company to be held

October 31, 2001.  If the Plan is not so

approved, the Plan shall not become effective.

12.06       No Employment

Rights.  The Plan does not, directly

or indirectly, create in any person any right with respect to continuation of

employment by the Company or any Subsidiary Corporation, and it shall not be

deemed to interfere in any way with the Company’s or any Subsidiary

Corporation’s right to terminate, or otherwise modify, any employee’s

employment at any time.

12.07       Effect of Plan.  The provisions of the Plan shall, in

accordance with its terms, be binding upon, and inure to the benefit of, all successors

of each Employee participating in the Plan, including, without limitation, such

Employee's estate and the executors, administrators or trustees thereof, heirs

and legatees, and any receiver, trustee in bankruptcy or representative of

creditors of such Employee.

12.08       Foreign Sub-Plans.  The Committee may authorize any foreign

Designated Subsidiary to adopt a sub-plan to facilitate offerings of

Common Stock hereunder.  All grants

of Options to purchase Common Stock under such foreign sub-plan shall be

treated as grants under the Plan, and shall be subject to the overall Plan

limits on the number of shares of Common Stock subject to the Plan.  Such foreign sub-plan shall have such terms

and provisions as the Committee permits, not inconsistent with the purposes of

the Plan, but which may be more or less restrictive than those contained

in the Plan, in order to conform with local law or practices.  Options granted under such foreign sub-plans

shall be governed by the terms of the Plan except to the extent expressly

provided in the foreign sub-plan, in which case the terms of such

foreign sub-plan shall control.

12.09       Governing Law.  The laws of the State of California will

govern all matters relating to this Plan except to the extent superseded by the

federal laws of the United States.

 

Schedule A

Designated Subsidiaries 

 

1.     Each Subsidiary Corporation

organized under the laws of any of the United States of America.

2.     Magnetek S.p.A

ADDENDUM FOR EMPLOYEES DOMICILED IN ITALY

(Appendix A to Plan)

 

Notwithstanding

any other provision of this Plan to the contrary, the following terms shall

apply to any individuals employed by an entity incorporated or otherwise

domiciled in Italy:

1.            Section 2.08 shall read as follows:

“Employee”

shall mean any person employed by the Company or any Designated

Subsidiary.  For purposes of the Plan,

the employment relationship shall be treated as continuing intact while the

individual is on sick leave or other leave of absence as set forth in the

Employee’s employment agreement or the leave of absence approved by the

Company, as applicable.  Where the

period of leave exceeds 90 days and the individual’s right to reemployment is

not guaranteed either by statute or by contract, the employment relationship

shall be deemed to have terminated on the 91st day of such leave.

2.             The

definition of “Purchase Price” shall be amended by adding the following

paragraph to the end thereof:

The Purchase Price may be increased by the Committee in its discretion

to limit the Total Value of the Fiscal Discount to four million (4,000,000)

Lira or the Euro equivalent of four million (4,000,000) Lira, or such other

amount as permissible under Italian law.

3.             The following definition shall be

added to the end of Section 2 of the Plan:

“Total

Value of the Fiscal Discount” shall mean with respect to the stock granted

under the Plan to each participant in any one calendar year a maximum of four

million (4,000,000) Lira or Euro equivalent of four million (4,000,000) Lira,

or such other amount as permissible under Italian Law.  The value of the fiscal discount for this

purpose is calculated as the difference between the stock price paid at the

grant and the arithmetical average of the stock prices as quoted on the New

York Stock Exchange for the month ending on the purchase date.  For the purpose of this definition, the

“last month” is the period of time ending on the purchase date and beginning on

the same day of the previous month.  In

no event may the Total Value of the Fiscal Discount be exceeded by any

participant during a year.

4.             Section 3.02 shall not apply.

5.             Section 7.06 reads as follows:

Stock

Transfer Restrictions.  A

participant is not permitted to dispose of shares of Common Stock acquired

pursuant to the Plan within a period of time beginning on the day in which

Common Stock is purchased by the participant and ending on the third annual

anniversary thereof.  Therefore, each

participant’s shares will be held in trust until such time.  Thereafter, certificates representing the

shares held by a participant will be distributed pursuant to the participant’s

written instructions on file with the Plan Representative.

6.             Section 10.02 reads as follows:

Registration

of Stock.  Shares of

Common Stock purchased by a participant under the Plan will be registered in

the name of the participant.

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