Document:

Exhibit
4.5

 

AMENDED
AND RESTATED

2004
STOCK INCENTIVE PLAN

OF MAGNETEK, INC.

JANUARY
1, 2008

 

SECTION 1.         PURPOSE OF PLAN

 

The purpose of this 2004 Stock Incentive Plan of
Magnetek, Inc. (this “Plan”) is to enable Magnetek, Inc., a
Delaware corporation (the “Company”), to attract, retain and motivate
its officers, employees and consultants, and to further align the interests of
such persons with those of the stockholders of the Company by providing for or
increasing the proprietary interest of such persons in the Company.

 

SECTION 2.         ADMINISTRATION
OF PLAN

 

2.1          Composition of Committee.  Subject to Section 2.4,
this Plan shall be administered by the Compensation Committee of the Board of
Directors (the “Committee”), as appointed
from time to time by the Board of Directors, provided,
however, that (a) with respect to
any Award (as defined in Section 5.1) that is intended to satisfy the
conditions of Rule 16b-3 under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”) the term “Committee” shall refer to a
committee of two or more “non-employee directors” as determined for purposes of
applying Exchange Act Rule 16b-3; and (b) with respect to any Award
that is intended to qualify as “performance-based compensation” within the
meaning of Section 162(m) of the Internal Revenue Code of 1986, as
amended (the “Code”), the term “Committee” shall refer to a committee of
two or more “outside directors” as determined for purposes of applying Code Section 162(m).  The
Board of Directors shall fill vacancies on and from time to time may remove or
add members to the Committee. The Committee shall act pursuant to a majority
vote or unanimous written consent.  The
Committee may designate the Secretary of the Company or other Company employees
to assist the Committee in the administration of this Plan, and may grant
authority to such persons to execute agreements or other documents evidencing
Awards made under this Plan or other documents entered into under this Plan on
behalf of the Committee or the Company.

 

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

 

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

 

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

 

(c)           to determine the
number of Shares subject to Awards and the exercise or purchase price of such
Shares;

 

(d)           to establish and
verify the extent of satisfaction of any performance goals applicable to
Awards; to prescribe and amend the terms of the agreements or other documents
evidencing Awards made under this Plan (which need not be identical); provided,
however, that the Committee shall not take any action or fail to take any
action with respect to the operation of the Plan or any documents evidencing
Awards that would cause all or part of the payment under any Award to be
subject to the additional tax under Code Section 409A.

 

 

 

 

(e)           to prescribe and
amend the terms of the agreements or other documents evidencing Awards made
under this Plan (which need not be identical);

 

(f)            to determine
whether, and the extent to which, adjustments are required pursuant to Section 12;

 

(g)           to interpret and
construe this Plan, any rules and regulations under this Plan and the
terms and conditions of any Award granted hereunder;  and

 

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

 

2.3          Determinations of the Committee. 
All decisions, determinations and interpretations by the Committee
regarding this Plan, any rules and regulations adopted hereunder and any
Award granted hereunder shall be final and binding on all Eligible Persons and
Participants.  The Committee shall
consider such factors as it deems relevant to making such decisions,
determinations and interpretations including, without limitation, the
recommendations or advice of any director, officer or employee of the Company
and such attorneys, consultants and accountants as it may select.

 

2.4          Authority of the Board of Directors. 
The Board of Directors, in its sole discretion, may exercise any
authority of the Committee under this Plan in lieu of the Committee’s exercise
thereof.

 

SECTION 3.         STOCK
SUBJECT TO PLAN

 

3.1          Aggregate Limits. 
At any time, the aggregate number of shares of the Company’s Common
Stock, $.01 par value (“Shares”), issued and issuable pursuant to all
Awards (including all ISOs (as defined in Section 5.1(a))) granted under
this Plan shall not exceed 2,100,000, plus (a) any authorized shares not
issued or subject to outstanding options under either (i) the 1999 Stock
Incentive Plan of Magnetek, Inc., or (ii) the 2000 Employee Stock
Plan of Magnetek, Inc. (collectively, the “Prior Plans”) and (b) the
number of shares subject to options granted under either of the Prior Plans,
but which shares, in either case, are not issued as a result of the
cancellation, expiration or forfeiture of such options; provided
that no more than 500,000 of such Shares may be issued pursuant to all Awards
of Incentive Bonuses, Incentive Stock and Incentive Stock Units (collectively
referred to herein as the “Non-Option Awards”) granted under this Plan,
and provided further that, notwithstanding Section 3.3,
the aggregate number of Shares that may be issued pursuant to the exercise of
ISOs granted under this Plan shall not exceed 2,100,000.  Such limits shall be subject to adjustment as
provided in Section 12.  The Shares
subject to this Plan may be either reacquired by the Company, including Shares
purchased in the open market, or authorized but unissued Shares.

 

3.2          Code Section 162(m) Limits. 
The aggregate number of Shares subject to Options and Stock Appreciation
Rights granted under this Plan during any calendar year to any one individual
shall not exceed 500,000.  The aggregate
number of Shares issued or issuable under all Awards granted under this Plan,
other than Options or Stock Appreciation Rights, during any calendar year to
any one individual shall not exceed 100,000. 
Notwithstanding anything to the contrary in this Plan, the foregoing
limitations shall be subject to adjustment under Section 12 only to the
extent that such adjustment will not affect the status of any Award intended to
qualify as “performance based compensation” under Code Section 162(m).  The foregoing limitations shall not apply to
the extent that they are no longer required in order for compensation in
connection with grants under this Plan to be treated as “performance-based
compensation” under Code Section 162(m).

 

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

 

 

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SECTION 4.         PERSONS
ELIGIBLE UNDER PLAN

 

Any person who is an officer, employee or consultant
of the Company as determined, in its discretion and for purposes only of this
Plan, by the Committee (an “Eligible Person”), shall be eligible to be
considered for the grant of Awards hereunder. 
A “Participant” is any current or former Eligible Person to whom
an Award has been made and any person (including any estate) to whom an Award
has been assigned or transferred pursuant to Section 9.1.

 

SECTION 5.         PLAN
AWARDS

 

5.1          Award Types. 
The Committee, on behalf of the Company, is authorized under this Plan
to enter into certain types of arrangements with Eligible Persons and to confer
certain benefits on them.  The following
arrangements or benefits are authorized under this Plan if their terms and
conditions are not inconsistent with the provisions of this Plan: Options,
Stock Appreciation Rights, Incentive Bonuses, Incentive Stock and Incentive
Stock Units.  Such arrangements and benefits
are sometimes referred to herein as “Awards.”  The authorized types of arrangements and
benefits for which Awards may be granted are defined as follows:

 

(a)           Options:  An “Option” is a right granted under Section 6
to purchase a number of Shares at such exercise price, at such times, and on such
other terms and conditions as are specified in the agreement or terms and
conditions or other document evidencing the Award (the “Option Document”).  Options intended to qualify as “incentive
stock options” as such term is defined under Code Section 422 (“ISOs”)
and Options not intended to qualify as ISOs (“Nonqualified Options”) may
be granted under Section 6.

 

(b)           Stock
Appreciation Rights:  A “Stock
Appreciation Right” is a right granted under Section 7 to receive all
or some portion of the increase in the value of the Shares on such terms and
conditions as are specified in the agreement or other document evidencing the
Award (the “SAR Document”).

 

(c)           Incentive
Bonus:  An “Incentive Bonus”
is a bonus opportunity awarded under Section 8 pursuant to which a
Participant may become entitled to receive an amount based on satisfaction of
such performance criteria as are specified in the agreement or other document
evidencing the Award (the “Incentive Bonus Document”).

 

(d)           Incentive
Stock:  “Incentive Stock”
is an award or issuance of Shares made under Section 9, the grant,
issuance, retention, vesting and/or transferability of which is subject during
specified periods of time to such conditions (including continued employment or
performance conditions) and terms as are expressed in the agreement or other
document evidencing the Award (the “Incentive Stock Document”).

 

(e)           Incentive
Stock Units:  An “Incentive
Stock Unit” is a right granted under the Section 10 to receive a
specified number of Shares, the issuance and vesting of which is subject to
such conditions (including continued employment or performance conditions) and
terms as are expressed in the agreement or other document evidencing the Award
(the “Incentive Stock Unit Document”).

 

5.2          Grants of Awards. 
An Award may consist of one such arrangement or benefit or two or more
of them in tandem or in the alternative.

 

SECTION 6.         OPTIONS

 

6.1          General.  The Committee
may grant an Option or provide for the grant of an Option, either from time to
time in the discretion of the Committee or automatically upon the occurrence of
specified events, including, without limitation, the achievement of performance
goals, the satisfaction of an event or condition within the control of the
recipient of the Award or within the control of others.

 

 

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6.2          Option Document. 
Each
Option Document shall contain provisions regarding (a) the number of
Shares that may be issued upon exercise of the Option, (b) the purchase
price of the Shares and the means of payment for the Shares, (c) the term
of the Option, (d) such terms and conditions of exercisability as may be
determined from time to time by the Committee, (e) restrictions on the
transfer of the Option and forfeiture provisions and (f) such further
terms and conditions, in each case not inconsistent with this Plan as may be
determined from time to time by the Committee. 
Option Documents evidencing ISOs shall contain such terms and conditions
as may be necessary to qualify, to the extent determined desirable by the
Committee, with the applicable provisions of Section 422 of the Code.

 

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

 

6.4          Option Term.   The “Term” of each Option
granted under this Plan, including any ISOs, shall be 10 years from the date of
its grant, or such shorter term provided in the Option Document.

 

6.5          Option Vesting. 
Options granted under this Plan shall be exercisable at such time and in
such installments during the period prior to the expiration of the Option’s
Term as determined by the Committee; provided, however, the period of continued
employment upon which vesting of the Shares is dependent (except in the event
of death or disability of the Participant or upon a Change of Control (as
defined in Section 13.2)) shall be not less than one year.  The Committee shall have the right to make
the timing of the ability to exercise any Option granted under this Plan
subject to such performance requirements as deemed appropriate by the
Committee.  At any time after the grant
of an Option the Committee may reduce or eliminate any restrictions surrounding
any Participant’s right to exercise all or part of the Option.

 

6.6          Termination of Employment.  Subject to Section 13, upon a termination of
employment by a Participant prior to the full exercise of an Option, the
unexercised portion of the Option shall be subject to such procedures as the
Committee may establish, as set forth in the Option Document.

 

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

 

6.8          No Option Repricing; No Reload
Options.  Without the approval of stockholders, the
Company shall not (a) reprice any Options or (b) provide for “reload
options.”  For purposes of this Plan, the
term “reprice” means amending, canceling or replacing Options within the
meaning of Item 402(i) under Securities and Exchange Commission
Regulation S-K including by (i) reducing the exercise price of
outstanding Options and (ii) canceling outstanding Options and granting
new Options to the holders of canceled Options. 
For the purposes of this Plan, “reload options” are Options
automatically granted in connection with and to the extent of the exercise of
other Options.

 

SECTION 7.         STOCK
APPRECIATION RIGHTS

 

7.1          General.  The Committee
may grant a Stock Appreciation Right or provide for the grant of a Stock
Appreciation Right, either from time to time in the discretion of the Committee
or automatically upon the occurrence of specified events, including, without
limitation, the achievement of performance goals, the satisfaction of an event
or condition within the control of the recipient of the Award or within the
control of others.  Stock Appreciation
Rights may be granted either alone or in connection with the grant of an
Option.

 

 

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7.2          SAR Document. 
Each SAR
Document shall contain provisions regarding (a) the number of Shares with
respect to which the Stock Appreciation Right is related, (b) the per
Share exercise price of the Shares subject to the Stock Appreciation Right, (c) the
term of the Stock Appreciation Right, (d) such terms and conditions of
exercisability as may be determined from time to time by the Committee, (e) restrictions
on the transfer of the Stock Appreciation Right and forfeiture provisions and (f) such
further terms and conditions, in each case not inconsistent with this Plan as
may be determined from time to time by the Committee.  If granted in connection with an Option, a
Stock Appreciation Right shall relate to the same Shares covered by the Option
(or such lesser number of Shares as the Committee may determine) and shall be
subject to the same terms and conditions as the related Option.

 

7.3          Stock Appreciation Rights Related to
an Option.

 

(a)           Exercise. 
A Stock Appreciation Right granted in connection with an Option shall be
exercisable at such time or times and only to the extent that the related
Options are exercisable, and will not be transferable except to the extent the
related Option may be transferable.

 

(b)           Amount Payable Upon Exercise.  Upon the exercise of a Stock Appreciation
Right related to an Option, the recipient of the Award shall be entitled to
receive an amount determined by multiplying (i) the excess of the fair
market value of a Share on the date of exercise of such Stock Appreciation
Right over the per Share purchase price under the related Option, by (ii) the
number of Shares as to which such Stock Appreciation Right is being
exercised.  Notwithstanding the
foregoing, the Committee may limit in any manner the amount payable with
respect to any Stock Appreciation Right by including such a limit in the SAR
Document.

 

(c)           Effect of Exercise.  Upon the exercise of a Stock Appreciation
Right granted in connection with an Option, the Option shall be canceled to the
extent of the number of Shares as to which the Stock Appreciation Right is
exercised, and upon the exercise of an Option granted in connection with a
Stock Appreciation Right, the Stock Appreciation Right shall be canceled to the
extent of the number of Shares as to which the Option is exercised or
surrendered.

 

7.4          Stock Appreciation Rights Unrelated
to an Option.

 

(a)           Amount Payable Upon Exercise.  Upon exercise of a Stock Appreciation Right
unrelated to an Option, the recipient of the Award shall be entitled to receive
an amount determined by multiplying (i) the excess of the fair market
value of a Share on the date of exercise of such Stock Appreciation Right over
the per Share exercise price of the Stock Appreciation Right, by (ii) the
number of Shares as to which the Stock Appreciation Right is being
exercised.  Notwithstanding the
foregoing, the Committee may limit in any manner the amount payable with
respect to any Stock Appreciation Right by including such a limit in the SAR
Document.

 

(b)           Exercise Price.  The per share exercise price of a Stock
Appreciation right unrelated to an Option shall equal or exceed 100% of the
fair market value of a Share on the date the Stock Appreciation Right is
granted, except that the exercise price of a Stock Appreciation Right may be
higher or lower in the case of Stock Appreciation Rights granted to an employee
of a company acquired by the Company in assumption and substitution of stock
appreciation rights held by such employee at the time such company is acquired.

 

(c)           Term.  The “Term”
of each Stock Appreciation Right unrelated to an Option granted under this Plan
shall be 10 years from the date of its grant, or such shorter term provided in
the SAR Document.

 

 

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(d)           Vesting. 
Stock Appreciation Rights unrelated to an Option granted under
this Plan shall be exercisable at such time and in such installments during the
period prior to the expiration of the Stock Appreciation Right’s Term as
determined by the Committee; provided, however, the period of continued
employment upon which vesting of the Stock Appreciation Right is dependent
(except in the event of death or disability of the Participant or upon a Change
of Control (as defined in Section 13.2)) shall be not less than one
year.  The Committee shall have the right
to make the timing of the ability to exercise any Stock Appreciation Right
granted under this Plan subject to such performance requirements as deemed
appropriate by the Committee.  At any
time after the grant of a Stock Appreciation Right the Committee may reduce or
eliminate any restrictions surrounding any Participant’s right to exercise all
or part of the Stock Appreciation Right.

 

7.5          Termination of Employment.  Subject to Section 13, upon a termination of
employment by a Participant prior to the full exercise of a Stock Appreciation
Right, the unexercised portion of the Stock Appreciation Right shall be subject
to such procedures as the Committee may establish, as set forth in the SAR
Document.

 

7.6          No Stock Appreciation Right
Repricing.  Without the approval of stockholders, the
Company shall not reprice any Stock Appreciation Rights.  For purposes of this Plan, the term “reprice”
with respect to Stock Appreciation Rights has the same meaning as such term has
with respect to Options.

 

SECTION 8.         INCENTIVE
BONUSES

 

8.1          General.  Each Award of
an Incentive Bonus will confer upon the Participant the opportunity to earn a
future payment tied to the level of achievement with respect to one or more
performance criteria established for a performance period of not less than one
year.

 

8.2          Incentive Bonus Document.  Each Incentive Bonus Document shall contain provisions
regarding (a) the target and maximum amount payable to the Participant as
an Incentive Bonus, (b) the performance criteria and level of achievement
versus these criteria that shall determine the amount of such payment, (c) the
term of the performance period as to which performance shall be measured for
determining the amount of any payment, (d) the timing of any payment
earned by virtue of performance, (e) restrictions on the alienation or
transfer of the Incentive Bonus prior to actual payment, (f) forfeiture
provisions and (g) such further terms and conditions, in each case not
inconsistent with this Plan as may be determined from time to time by the
Committee.  The maximum amount payable as
an Incentive Bonus may be a multiple of the target amount payable, but the
maximum amount payable pursuant to that portion of an Award of an Incentive
Bonus granted under this Plan for any fiscal year to any Participant that is intended
to satisfy the requirements for “performance based compensation” under Code Section 162(m) shall
not exceed $1,000,000.

 

8.3          Performance Criteria. 
The Committee shall establish the performance criteria and level of
achievement versus these criteria that shall determine the target and maximum
amount payable under an Award of an Incentive Bonus, which criteria may be
based on financial performance and/or personal performance evaluations.  The Committee may specify the percentage of
the target Incentive Bonus that is intended to satisfy the requirements for “performance-based
compensation” under Code Section 162(m). 
Notwithstanding anything to the contrary herein, the performance
criteria for any portion of an Incentive Bonus that is intended by the Committee
to satisfy the requirements for “performance-based compensation” under Code Section 162(m) shall
be a measure based on one or more Qualifying Performance Criteria (as defined
in Section 9.2) selected by the Committee and specified at the time the Award
of an Incentive Bonus is granted.  The
Committee shall certify the extent to which any Qualifying Performance Criteria
has been satisfied, and the amount payable as a result thereof, prior to
payment of any Incentive Bonus that is intended to satisfy the requirements for
“performance-based compensation” under Code Section 162(m).

 

8.4          Timing and Form of Payment.  The Committee shall determine the timing of payment of
any Incentive Bonus, provided that the timing of such payment shall satisfy an
exception to Code Section 409A or, if no such exception is available, the
timing of such payment shall comply with the requirements of Code Section 409A.

 

 

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8.5          Discretionary Adjustments. 
Notwithstanding satisfaction of any performance goals, the amount paid
under an Award of an Incentive Bonus on account of either financial performance
or personal performance evaluations may be reduced by the Committee on the
basis of such further considerations as the Committee shall determine.

 

SECTION 9.         INCENTIVE
STOCK

 

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

 

9.2          Incentive Stock Document. 
Each
Incentive Stock Document shall contain provisions regarding (a) the number
of Shares subject to such Award or a formula for determining such, (b) the
performance criteria, if any, and level of achievement versus these criteria
that shall determine the number of Shares granted, issued, retainable and/or
vested, (c) the period, if any, as to which performance shall be measured
for determining achievement of performance, which period in any case (except in
the event of death or disability of the Participant or upon a Change of Control
(as defined in Section 13.2)) shall be not less than one year, (d) if
the Award is not subject to performance criteria, the period of continued
employment upon which vesting of the Shares is subject, which period in any
case (except in the event of death or disability of the Participant or upon a
Change of Control (as defined in Section 13.2)) shall be not less than
three years; provided, however, that shares of Incentive Stock vesting solely
on the basis of continued employment may vest in installments so long as the
vesting schedule, at any point in time, does not exceed the rate of a monthly
pro rata installment schedule (i.e., 1/36 per month for 3 years), (e) forfeiture,
(f) transferability and (g) such further terms and conditions not
inconsistent with this Plan as may be determined from time to time by the
Committee.

 

9.3          Sale Price. 
Subject to the requirements of applicable law, the Committee shall
determine the price, if any, at which Shares of Incentive Stock shall be sold
or awarded to an Eligible Person, which may vary from time to time and among
Eligible Persons and which may be below the fair market value of such Shares at
the date of grant or issuance.

 

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

 

9.5          Discretionary Adjustments. 
Notwithstanding satisfaction of any performance goals, the number of
Shares granted, issued, retainable and/or vested under an Award of Incentive
Stock on account of either financial performance or personal performance
evaluations may be reduced by the Committee on the basis of such further
considerations as the Committee shall determine.

 

9.6          Termination of Employment.   Subject to Section 13,  upon a termination of employment by a Participant prior to
the vesting of or the lapsing of restrictions on Incentive Stock, the Awards of
Incentive Stock granted to such Participant shall be subject to such procedures
as determined by the Committee, as set forth in the Incentive Stock Document.

 

SECTION 10.       INCENTIVE
STOCK UNITS

 

10.1        General.  An Incentive
Stock Unit represents the right of the recipient of the Award of an Incentive
Stock Unit to receive, either (a) upon vesting of the Incentive Stock Unit
or (b) on any later date specified by the Committee in the Incentive Stock
Unit Document, a number of Shares as specified in the Incentive Stock Unit
Document.

 

 

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10.2        Incentive Stock Unit Document. 
Each
Incentive Stock Unit Document shall contain provisions regarding (a) the
number of Shares subject to such Award or a formula for determining such, (b) the
performance criteria, if any, and level of achievement versus these criteria
that shall determine the number of Shares granted, issued, retainable and/or
vested, (c) the period, if any, as to which performance shall be measured
for determining achievement of performance, which period in any case (except in
the event of death or disability of the Participant or upon a Change of Control
(as defined in Section 13.2)) shall be not less than one year, (d) if
the Award is not subject to performance criteria, the period of continued
employment upon which vesting of the Shares is subject, which period in any
case (except in the event of death or disability of the Participant or upon a
Change of Control (as defined in Section 13.2)) shall be not less than
three years; provided, however,
that Incentive Stock Units vesting solely on the basis of continued employment
may vest in installments so long as the vesting schedule, at any point in time,
is not more favorable than what would be vested under a monthly pro-rata
installment schedule (i.e., 1/36 per month for 3 years), (e) forfeiture, (f) transferability
and (g) such further terms and conditions not inconsistent with this Plan
as may be determined from time to time by the Committee.

 

10.3        Performance Criteria. 
The grant of an Incentive Stock Unit and the issuance and/or vesting of
each Share subject to an Incentive Share Unit may but need not be subject to
such performance criteria and level of achievement versus these criteria as the
Committee shall determine, which criteria may be based on financial performance
and/or personal performance evaluations. 
Notwithstanding anything to the contrary herein, the performance
criteria for any Incentive Stock that is intended to satisfy the requirements
for “performance-based compensation” under Code Section 162(m) shall
be a measure based on one or more Qualifying Performance Criteria selected by
the Committee and specified at the time the Incentive Stock Unit is granted.

 

10.4        Discretionary Adjustments. 
Notwithstanding satisfaction of any performance goals, the number of
Shares issued and/or vested under an Incentive Stock Unit on account of either
financial performance or personal performance evaluations may be reduced by the
Committee on the basis of such further considerations as the Committee shall
determine.

 

10.5        Termination of Employment.   Subject to Section 13,  upon a termination of employment by a Participant prior to
the vesting of or issuance of Shares under an Incentive Stock Unit, the
Incentive Stock Units granted to such Participant shall be subject to such
procedures as determined by the Committee, as set forth in the Incentive Stock
Unit Document.

 

SECTION 11.       OTHER
PROVISIONS APPLICABLE TO AWARDS

 

11.1        Transferability. 
Unless the agreement or other document evidencing an Award (or an
amendment thereto authorized by the Committee) expressly states that the Award
is transferable as provided hereunder, no Award granted under this Plan, nor
any interest in such Award, may be sold, assigned, conveyed, gifted, pledged,
hypothecated or otherwise transferred in any manner prior to the vesting or
lapse of any and all restrictions applicable thereto, other than by will or the
laws of descent and distribution or pursuant to a “domestic relations order,”
as defined in the Code.  The Committee
may grant an Award or amend an outstanding Award to provide that the Award is
transferable or assignable to a member or members of the Participant’s “immediate
family,” as such term is defined in Rule 16a-1(e) under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), or to
a trust for the benefit solely of a member or members of the Participant’s
immediate family, or to a partnership or other entity whose only owners are
members of the Participant’s immediate family, provided
that following any such transfer or assignment the Award will remain subject to
substantially the same terms applicable to the Award while held by the
Participant, as modified as the Committee shall determine appropriate, and the
transferee shall execute an agreement agreeing to be bound by such terms.

 

11.2        Qualifying Performance Criteria. 
For purposes of this Plan, the term “Qualifying Performance Criteria”
shall mean any one or more of the following performance criteria, either
individually, alternatively or in any combination, applied to either the
Company as a whole or to a business unit or subsidiary, either individually,
alternatively or in any combination, and measured either annually or
cumulatively over a period of years, on an absolute basis or relative to a
pre-established target, to previous years’ results or to a designated
comparison group, in each case as specified by the Committee in the Award:  (a) cash flow, (b) earnings per
share, (c) earnings before 

 

 

8

 

interest, taxes and
amortization), (d) return on equity, (e) total stockholder return, (f) return
on capital, (g) return on assets or net assets, (h) revenue, (i) income
or net income, (j) operating income or net operating income, (k) operating
profit or net operating profit, (l) operating margin, (m) return on
operating revenue, (n) market share and (o) overhead or other expense
reduction.  The Committee shall appropriately
adjust any evaluation of performance under a Qualifying Performance Criteria to
exclude any of the following events that occurs during a performance
period:  (i) asset write-downs, (ii) litigation
or claim judgments or settlements, (iii) the effect of changes in tax law,
accounting principles or other such laws or provisions affecting reported
results, (iv) accruals for reorganization and restructuring programs and (v) any
extraordinary non-recurring items as described in Accounting Principles Board
Opinion No. 30 and/or in management’s discussion and analysis of financial
condition and results of operations appearing in the Company’s annual report to
stockholders for the applicable year.

 

11.3        Dividends. 
Unless otherwise provided by the Committee, no adjustment shall be made
in Shares issuable under Awards on account of cash dividends that may be paid
or other rights that may be issued to the holders of Shares prior to their
issuance under any Award.  The Committee
shall specify whether dividends or dividend equivalent amounts shall be paid to
any Participant with respect to the Shares subject to any Award that have not
vested or been issued or that are subject to any restrictions or conditions on
the record date for dividends. Notwithstanding any provision of this Section 11.3
to the contrary, the Committee shall not condition the right to receive
dividends or dividend equivalent amounts, directly or indirectly, upon the
exercise of any Option or Stock Appreciation Right.  In addition, the Committee will ensure that
any right to dividend or dividend equivalent amounts that may be paid in
connection with the Shares subject to any Award granted hereunder  complies with the requirements of
Code Section 409A.

 

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

 

11.5        Tandem Stock or Cash Rights. 
Either at the time an Award is granted or by subsequent action, the
Committee may, but need not, provide that an Award shall contain as a term
thereof, a right, either in tandem with the other rights under the Award or as
an alternative thereto, of the Participant to receive, without payment to the
Company, a number of Shares, cash or a combination thereof, the amount of which
is determined by reference to the value of the Award.

 

11.6        Financing. 
The Committee may not provide financing to a Participant to pay the
purchase price of any Award or to pay the amount of taxes required by law to be
withheld with respect to any Award.

 

11.7        Compliance with Code Section 409A. 
Some of the Awards that may be granted pursuant to the Plan (including,
but not necessarily limited to, Incentive Bonus, Incentive Stock and Incentive
Stock Unit Awards) may be considered to be “non-qualified deferred compensation”
subject to Code Section 409A.  If an
Award is subject to Code Section 409A, the document evidencing such Award
and this Plan are intended to comply fully with and meet all of the
requirements of Code Section 409A. 
The document evidencing such Award shall include such provisions as may
be necessary to assure compliance with Code Section 409A.  An Award subject to Code Section 409A
also shall be administered in good faith compliance with the provisions of Code
Section 409A as well as applicable guidance issued by the Internal Revenue
Service and the Department of Treasury. 
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 Committee. 
Notwithstanding any provision of this Plan or any document evidencing an
Award to the contrary, in the event that the Committee determines that any
Award is or may become subject to Code Section 409A, the Company may adopt
such amendments to the Plan and the related 

 

 

9

 

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 Committee determines to be
necessary or appropriate to either comply with Code Section 409A or to
exclude or exempt the Plan or any Award from the requirements of Code Section 409A.

 

SECTION 12.       CHANGES
IN CAPITAL STRUCTURE

 

If the outstanding securities of the class then
subject to this Plan are increased, decreased or exchanged for or converted
into cash, property or a different number or kind of shares or securities, or
if cash, property or shares or securities are distributed in respect of such
outstanding securities, in either case as a result of a reorganization, merger,
consolidation, recapitalization, restructuring, reclassification, dividend
(other than a regular, quarterly cash dividend) or other distribution, stock
split, reverse stock split, spin-off or the like, or if substantially all of
the property and assets of the Company are sold, then, unless the terms of such
transaction shall provide otherwise, the Committee shall make appropriate and
proportionate adjustments in (a) the number and type of shares or other
securities or cash or other property that may be acquired pursuant to Awards
theretofore granted under this Plan and the exercise or settlement price of
such Awards, provided, however,
that such adjustment shall be made in such a manner that is consistent with the
requirements of Code Section 409A and that will not affect the status of
any Award intended to qualify as an ISO under Code Section 422 or as “performance
based compensation” under Code Section 162(m) and (b) the
maximum number and type of shares or other securities that may be issued
pursuant to such Awards thereafter granted under this Plan.

 

SECTION 13.       CHANGE
OF CONTROL

 

13.1        Effect of Change of Control. 
The Committee may, through the terms of the Award or otherwise, provide
that any or all of the following shall occur, in connection with a Change of
Control or a Change of Control Transaction (as defined in Section 13.2),
or upon termination of the Participant’s employment following a Change of
Control or a Change of Control Transaction: (a) in the case of an Option or
Stock Appreciation Right, the acceleration of the Participant’s ability to
exercise any portion of such Award not previously exercisable and/or the
payment to the Participant of cash equal to the difference between the exercise
price and the price being paid to the holders of Shares in connection with the
Change of Control or Change of Control Transaction, (b) in the case of an
Incentive Bonus, the acceleration of the Participant’s right to receive a
payment equal to the target amount payable or a payment based on performance
through a date determined by the Committee prior to the Change of Control, (c) in
the case of Shares issued in payment of any Incentive Bonus, and/or in the case
of Incentive Stock, the lapse and expiration of any conditions to the grant,
issuance, retention, vesting or transferability of, or any other restrictions
applicable to, such Award, and (d) in the case of Incentive Stock Units,
the acceleration of and expiration of any conditions on the grant, vesting and
issuance of the Shares subject to the Incentive Stock Unit.  The Committee also may, through the terms of
the Award or otherwise, provide for an absolute or conditional exercise,
payment acceleration or lapse of conditions or restrictions on an Award that
shall only be effective if, upon the announcement of a Change of Control
Transaction, no provision is made in such Change of Control Transaction for the
exercise, payment or lapse of conditions or restrictions on the Award, or other
procedure whereby the Participant may realize the full benefit of the
Award.  In the case of an acceleration of
payment of any Award hereunder on a Change of Control or Change of Control
Transaction, the payment shall be made on or before March 15 of the year
following the year in which the Change of Control or Change of Control
Transaction occurs in order to satisfy the “short-term deferral exception” to
Code Section 409A.

 

13.2        Definitions.

 

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

 

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

 

(b)           the acquisition,
directly or indirectly, 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;

 

 

10

 

(c)           the liquidation or
dissolution of the Company; or

 

(d)           during any period of
12 consecutive months, individuals who at the beginning of such 12-month period
constituted the Board of Directors (together with any new directors whose
election by the Board of Directors or whose nomination for election by the
stockholders of the Company was approved by a vote of a majority of the
directors then still in office who were either directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors then in office,

 

provided,
however, that a
Change of Control will not be deemed to have occurred in respect of a merger in
which (x) the Company is the surviving corporation, (y) no person or
group acquires, directly or indirectly, 40% or more of the Company’s
outstanding voting stock and (z) the Shares outstanding prior to the
merger remain outstanding thereafter; and provided further,
that a merger or consolidation will not be considered a Change of Control if
such transaction results only in the reincorporation of the Company in another
jurisdiction or its restructuring into holding company form.

 

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

 

SECTION 14.       TAXES

 

14.1        Withholding Requirements. 
The Committee may make such provisions or impose such conditions as it
may deem appropriate for the withholding or payment by a Participant of any
taxes that the Committee determines are required in connection with any Award granted
under this Plan, and a Participant’s rights in any Award are subject to
satisfaction of such conditions.

 

14.2        Payment of Withholding Taxes. 
Notwithstanding the terms of Section 14.1, the Committee may
provide in the agreement or other document evidencing an Award or otherwise
that all or any portion of the taxes required to be withheld by the Company or,
if permitted by the Committee, desired to be paid by the Participant, in
connection with the exercise of a Stock Appreciation Right or Nonqualified
Option or the exercise, vesting, settlement or transfer of any other Award
shall be paid or, at the election of the Participant, may be paid by the
Company by withholding shares of the Company’s capital stock otherwise issuable
or subject to such Award, or by the Participant delivering previously owned
shares of the Company’s capital stock, in each case having a fair market value
equal to the amount required or elected to be withheld or paid.  Any such election is subject to such
conditions or procedures as may be established by the Committee and may be
subject to disapproval by the Committee.

 

SECTION 15.       AMENDMENTS
OR TERMINATION

 

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

 

(a)           increase
the maximum number of shares of Common Stock for which Awards may be granted
under this Plan;

 

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

 

(c)           reduce the price at
which Stock Appreciation Rights may be granted below the price provided for in Section 7.4(b);

 

 

11

 

(d)           reduce the exercise
price of outstanding Options or Stock Appreciation Rights;

 

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

 

(f)            extend the term of
this Plan;

 

(g)           change the class of
persons eligible to be Participants;

 

(h)           provide for the
automatic grant of Options based upon the exercise of Options by holders of
Options; or

 

(i)            increase the number
of shares that are eligible for Non-Option Awards.

 

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

 

SECTION 16.       COMPLIANCE
WITH OTHER LAWS AND REGULATIONS.

 

This Plan, the
grant and exercise of Awards thereunder, and the obligation of the Company to
sell, issue or deliver Shares under such Awards, shall be subject to all
applicable federal, state and foreign laws, rules and regulations and to
such approvals by any governmental or regulatory agency as may be
required.  The Company shall not be
required to register in a Participant’s name or deliver any Shares prior to the
completion of any registration or qualification of such Shares under any
federal, state or foreign law or any ruling or regulation of any government
body which the Committee shall determine to be necessary or advisable.  This Plan is intended to constitute an
unfunded arrangement for a select group of management or other key employees,
directors and consultants.

 

No Option shall be
exercisable unless a registration statement with respect to the Option is
effective or the Company has determined that such registration is
unnecessary.  Unless the Awards and
Shares covered by this Plan have been registered under the Securities Act of
1933, as amended, or the Company has determined that such registration is
unnecessary, each person receiving an Award and/or Shares pursuant to any Award
may be required by the Company to give a representation in writing that such
person is acquiring such Shares for his or her own account for investment and
not with a view to, or for sale in connection with, the distribution of any
part thereof.

 

SECTION 17.       NO
RIGHT TO COMPANY EMPLOYMENT

 

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

 

SECTION 18.       EFFECTIVENESS
AND EXPIRATION OF PLAN

 

This Plan shall be
effective on the date the Company’s stockholders adopt this Plan.  All Awards granted under this Plan are
subject to, and may not be exercised before, the approval of this Plan by the
stockholders prior to the first anniversary date of the effective date of this
Plan, by the affirmative vote of the holders of a majority of the outstanding
shares of the Company present, or represented by proxy, and entitled to vote,
at a meeting of the Company’s stockholders or by written consent in accordance
with the laws of the State of Delaware; provided that
if such approval by the stockholders of the Company is not forthcoming, all
Awards previously granted under this Plan shall be void.  No Awards shall be granted pursuant to this
Plan more than 10 years after the effective date of this Plan.

 

 

12

 

SECTION 19.       NON-EXCLUSIVITY
OF PLAN

 

Neither the
adoption of this Plan by the Board nor the submission of this Plan to the
stockholders of the Company for approval shall be construed as creating any
limitations on the power of the Board or the Committee to adopt such other
incentive arrangements as either may deem desirable, including without
limitation, the granting of restricted stock, restricted stock units, stock
options or stock appreciation rights otherwise than under this Plan, and such
arrangements may be either generally applicable or applicable only in specific
cases.

 

SECTION 20.       GOVERNING
LAW

 

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

 

 

 

 

13Exhibit 4.6

Effective as of January 1, 2008

 

2004 STOCK INCENTIVE PLAN

OF

MAGNETEK, INC.

 

STANDARD TERMS AND CONDITIONS RELATING TO
NON-QUALIFIED OPTIONS

 

The following standard terms and conditions apply to
the non-qualified option to purchase $0.01 par value Common Stock of Magnetek, Inc.
granted under the 2004 Stock Incentive Plan of Magnetek, Inc. (the “2004
Plan”) (the applicable terms of which are hereby incorporated by reference and
made a part of these standard terms and conditions).  In turn, these standard terms and conditions
are incorporated by reference into each such option.

 

ARTICLE 1

DEFINITIONS

 

Whenever capitalized terms are used in these standard
terms and conditions, they shall have the meaning specified (i) in the
2004 Plan, (ii) in the Magnetek, Inc. Non-Qualified Stock Option
Agreement (the “Option Agreement”) into which these standard terms and
conditions are incorporated by reference or (iii) below, unless the
context clearly indicates to the contrary. 
The masculine pronoun shall include the feminine and neuter, and the
singular the plural, where the context so indicates.

 

“Board” shall mean the Board of Directors of the
Company.

 

“Code” shall mean the Internal Revenue Code of 1986,
as amended.

 

“Company” shall mean Magnetek, Inc., a Delaware
corporation.

 

“Consultant” shall mean any non-Employee providing
services to the Company, or of any corporation which is then a Parent
Corporation or a Subsidiary, whether such individual is providing services at
the time the 2004 Plan is adopted or begins providing services subsequent to
the adoption of the 2004 Plan.

 

“Employee” shall mean any employee (as defined in
accordance with the Regulations then applicable under Section 3401(c) of
the Code) of the Company, or of any corporation which is then a Parent
Corporation or a Subsidiary, whether such employee is so employed at the time
the 2004 Plan is adopted or becomes so employed subsequent to the adoption of
the 2004 Plan.

 

“Fair Market Value” of a share of the Company’s stock
on a given determination date shall mean: 
the closing price for a share of the Company’s stock reported for that
date by the New York Stock Exchange (or such other stock exchange or quotation
system on which shares of the Company’s stock are then listed or quoted) or, if
no shares of the Company’s stock are traded on the New York Stock Exchange (or
such other stock exchange or quotation system) on the date in question, then
for the next preceding date for which shares of the Company’s stock traded on
the New York Stock Exchange (or such other stock exchange or quotation system).

 

“Option” shall mean the non-qualified option to
purchase $0.01 par value Common Stock of the Company granted under the 2004
Plan and to which these standard terms and conditions apply.

 

“Optionee” shall mean the Employee or Consultant to
whom the Option is granted under the 2004 Plan.

 

“Parent Corporation” shall mean any corporation that
is a “parent” of the Company within the meaning of Rule 405 under the
Securities Act.

 

“Securities Act” shall mean the Securities Act of
1933, as amended.

 

“Shares” shall mean shares of the Company’s Common
Stock, $.01 par value.

 

 

“Subsidiary” shall mean any corporation of which the
Company has “control” within the meaning of Rule 405 under the Securities
Act.

 

“Termination of Employment or Service” shall mean the
time when the employee-employer or service relationship between the Optionee
and the Company, a Parent Corporation or a Subsidiary is terminated for any
reason, with or without cause, including, but not by way of limitation, a
termination by resignation, discharge, death or retirement, but excluding
terminations where there is a simultaneous reemployment by the Company, a
Parent Corporation or a Subsidiary.  The
Committee, in its absolute discretion, shall determine the effect of all
matters and questions relating to Termination of Employment or Service,
including, but not by way of limitation, the question of whether a Termination
of Employment or Service resulted from a discharge for good cause, and all questions
of whether particular leaves of absence constitute Terminations of Employment
or Service.  The term Termination of
Employment or Termination of Service shall be interpreted in a manner
consistent with the definition of “Separation from Service” under Code Section 409A.

 

ARTICLE 2

ADJUSTMENTS TO OPTION

 

SECTION 2.1 - ADJUSTMENTS IN OPTION

 

If the outstanding securities of the class then
subject to this Plan are increased, decreased or exchanged for or converted
into cash, property or a different number or kind of shares or securities, or
if cash, property or shares or securities are distributed in respect of such
outstanding securities, in either case as a result of a reorganization, merger,
consolidation, recapitalization, restructuring, reclassification, dividend
(other than a regular, quarterly cash dividend) or other distribution, stock
split, reverse stock split, spin-off or the like, or if substantially all of
the property and assets of the Company are sold, then, unless the terms of such
transaction shall provide otherwise, the Committee shall make appropriate and
proportionate adjustments in (a) the number and type of shares or other
securities or cash or other property that may be acquired pursuant to Awards
theretofore granted under this Plan and the exercise or settlement price of
such Awards, provided, however,
that such adjustment shall be made in such a manner that is consistent with the
requirements of Code Section 409A and that will not affect the status of
any Award intended to qualify as an ISO under Code Section 422 or as “performance
based compensation” under Code Section 162(m) and (b) the
maximum number and type of shares or other securities that may be issued
pursuant to such Awards thereafter granted under this Plan.

 

SECTION 2.2 - CHANGE OF CONTROL

 

(a)           Upon or in connection with a Change
of Control or a Change of Control Transaction (each as defined in Section 2.2(b)),
or upon a termination of the participant’s employment or service with the
Company following a Change of Control, the Option shall either (A) become
fully exercisable, or (B) be converted automatically into the right to
receive a payment equal to the difference between the exercise price for all
Shares subject to the Option (whether or not then subject to exercise) and the
price being paid to the holders of Shares in connection with the Change of
Control Transaction.

 

(b)           “Change of Control” shall mean the
first to occur of the following:

 

(i)            the merger or consolidation of the
Company with or into another corporation;

 

(ii)           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;

 

(iii)          the liquidation or dissolution of the
Company; or

 

(iv)          during any period of 12 consecutive
months, individuals who at the beginning of such 12-month period constituted
the Board (together with any new directors whose election by the Board or whose
nomination for election by the stockholders of the Company was approved by a vote
of a majority of the directors then still in office who were either directors
at the beginning of such period or whose election or nomination for election
was previously so approved) cease for any reason to constitute a majority of
the Board then in office,

 

2

 

provided,
however, that a
Change of Control will not be deemed to have occurred in respect of a merger in
which (x) the Company is the surviving corporation, (y) no person or
group acquires 40% or more of the Company’s outstanding voting stock and (z) the
Shares outstanding prior to the merger remain outstanding thereafter; and provided further, that a merger or consolidation will not be
considered a Change of Control if such transaction results only in the
reincorporation of the Company in another jurisdiction or its restructuring
into holding company form.

 

“Change of Control Transaction” shall mean any tender
offer, offer, exchange offer, solicitation, merger, consolidation,
reorganization or other transaction that is intended to or reasonably expected
to result in a Change of Control.

 

ARTICLE 3

PERIOD OF EXERCISABILITY

 

SECTION 3.1 - COMMENCEMENT OF EXERCISABILITY

 

(a)           Subject to Section 3.1(b), the
Option shall become exercisable as set fort in the Option Agreement.

 

(b)           No portion of the Option which is
unexercisable at Termination of Employment or Service shall thereafter become
exercisable.

 

SECTION 3.2 - EXPIRATION OF OPTION

 

The Option may not be exercised to any extent by
anyone after the first to occur of the following events:

 

(a)           The expiration of 10 years after the
date the Option was granted; or

 

(b)           The time of the Optionee’s
Termination of Employment or Service unless such Termination of Employment or
Service results from his death, his disability (with the meaning of Section 22(e)(3) of
the Code), his retirement or his voluntary or involuntary discharge other than
for cause; or

 

(c)           In the case of an Optionee who was an
executive officer on the date the Option was granted, the expiration of 12
months from the date of the Optionee’s Termination of Employment or Service by
reason of the Optionee’s retirement or the Optionee’s voluntary or involuntary
discharge other than for cause; or

 

(d)           In the case of an Optionee who was
not an executive officer on the date the Option was granted, the expiration of
three months from the date of the Optionee’s Termination of Employment or
Service by reason of the Optionee’s retirement or the Optionee’s voluntary or
involuntary discharge other than for cause, unless the Optionee dies within
said three-month period; or

 

(e)           The expiration of 12 months from the
date of the Optionee’s Termination of Employment or Service by reason of his
disability (with the meaning of Section 22(e)(3) of the Code) unless
the Optionee dies within said 12-month period; or

 

(f)            The expiration of 12 months from the
date of the Optionee’s death; or

 

(g)           The circumstances referred to in Section 2.2
in which the Option will automatically be converted into the right to receive a
cash payment.

 

 

3

 

SECTION 3.3 - CONSIDERATION TO THE COMPANY

 

In consideration of the granting of the Option by the
Company, the Participant agrees to render faithful and efficient services to
the Company, a Parent Corporation or a Subsidiary, with such duties and
responsibilities as the Company shall from time to time prescribe, for a period
of at least 12 months from the date the Option is granted.  Nothing in these standard terms and
conditions, in the Option Agreement or in the 2004 Plan shall confer upon the
Participant any right to continue in the employ or service of the Company, any
Parent Corporation or any Subsidiary or shall interfere with or restrict in any
way the rights of the Company, its Parent Corporations and its Subsidiaries,
which are hereby expressly reserved, to discharge the Participant at any time
for any reason whatsoever, with or without cause.

 

ARTICLE 4

EXERCISE OF OPTION

 

SECTION 4.1 - PERSON ELIGIBLE TO EXERCISE

 

During the lifetime of the Optionee, only he may
exercise the Option or any portion thereof. 
After the death of the Optionee, any exercisable portion of the Option
may, prior to the time when the Option becomes unexercisable under Section 2.2
or 3.2, be exercised by his personal representative or by any person empowered
to do so under the Optionee’s will or under the then applicable laws of descent
and distribution.

 

SECTION 4.2 - PARTIAL EXERCISE

 

Any exercisable portion of the Option or the entire
Option, if then wholly exercisable, may be exercised in whole or in part at any
time prior to the time when the Option or any portion thereof becomes
unexercisable under Section 3.2; provided, however,
that each partial exercise shall be for not less than the minimum number of Shares
specified in the Option Agreement and shall be for whole Shares only.

 

SECTION 4.3 - MANNER OF EXERCISE

 

The Option, or any exercisable portion thereof, may be
exercised solely by delivery to the Secretary of the Company or his office of
all of the following prior to the time when the Option or such portion becomes
unexercisable under Section 2.2 or 3.2:

 

(a)           Notice in writing signed by the
Optionee or the other person then entitled to exercise the Option or any
portion thereof, stating that the Option or portion thereof is thereby
exercised, such notice complying with all applicable rules established by
the Committee; and

 

(b)           Full payment:

 

(i)            By delivery of cash or a certified
or cashier’s check for the Shares with respect to which such Option or portion
thereof is thereby exercised; or

 

(ii)           To the extent provided by the terms
of the Option or otherwise with the consent of the Committee, by delivery to
the Company of Shares that have been held by the Optionee for a period of not
less than 12 months unless otherwise specified by the Committee, duly endorsed
for transfer to the Company by the Optionee or other person then entitled to
exercise the Option or portion thereof, with a Fair Market Value determined as
of the date of delivery equal to the aggregate Option price of the Share with
respect to which such Option or portion thereof is thereby exercised; or

 

(iii)          Other property acceptable by the
Committee; or

 

(iv)          To the extent provided by the terms of
the Option or otherwise with the consent of the Committee, by retention by the
Company of Shares to be issued with a Fair Market Value determined as of the
date of issuance equal to the aggregate Option price of the Shares with respect
to which such Option or portion thereof is thereby exercised; or

 

4

 

(v)           By means of any combination of the
consideration provided in the foregoing subsections (i), (ii) (iii) or
(iv); and

 

(c)           On or prior to the date the same is
required to be withheld:

 

(i)            Full payment (in cash or by check)
of any amount that must be withheld by the Company, any Parent Corporation or
any Subsidiary for federal, state and/or local tax purposes in connection with
the exercise of the Option; or

 

(ii)           To the extent provided by the terms
of the Option or otherwise with the consent of the Committee, full payment by
delivery to the Company of Shares owned by the Optionee, duly endorsed for
transfer to the Company by the Optionee or other person then entitled to
exercise the Option or portion thereof, with a Fair Market Value determined as
of the date of delivery equal to the amount that must be withheld by the
Company, any Parent Corporation or any Subsidiary for federal, state and/or
local tax purposes in connection with the exercise of the Option; or

 

(iii)          To the extent provided by the term of
the Option or otherwise with the consent of the Committee, full payment by
retention by the Company of Shares to be issued with a Fair Market Value
determined as of the date of issuance equal to the amount that must be withheld
by the Company, any Parent Corporation or any Subsidiary for federal, state
and/or local tax purposes in connection with the exercise of the Option; or

 

(iv)          Any combination of payments provided
in the foregoing subsections (i), (ii) or (iii); and

 

(d)           In the event the Option or portion
thereof shall be exercised pursuant to Section 4.1 by any person or
persons other than the Optionee, appropriate proof of the right of such person
or persons to exercise the Option or portion thereof.

 

The
Committee may, in its absolute discretion, take whatever additional actions it
deems appropriate in connection with the exercise of the Option and the
issuance of Shares pursuant thereto to insure compliance with the Securities
Act and any other federal or state securities laws or regulations.

 

SECTION 4.4 - CONDITIONS TO ISSUANCE OF STOCK
CERTIFICATES

 

The Shares deliverable upon the exercise of the
Option, or any portion thereof, may be either previously authorized but
unissued Shares or issued Shares which have then been reacquired by the
Company.  Such Shares shall be fully paid
and nonassessable.  The Company shall not
be required to issue or deliver any certificate or certificates for Shares
purchased upon the exercise of the Option or any portion thereof prior to
fulfillment of all of the following conditions:

 

(a)           The admission of such Shares to
listing on all stock exchanges on which such class of stock is then listed; and

 

(b)           The completion of any registration or
other qualification of such Shares under any state or federal law or under
rulings or regulations of the Securities and Exchange Commission or of any
other governmental regulatory body, which the Company shall deem necessary or
advisable; and

 

(c)           The obtaining of any approval or
other clearance from any state or federal governmental agency which the Company
shall determine to be necessary or advisable; and

 

(d)           The lapse of such reasonable period
of time following the exercise of the Option as the Committee may from time to
time establish for reasons of administrative convenience.

 

5

 

SECTION 4.5 - RIGHTS AS STOCKHOLDER

 

The holder of the Option shall not be, nor have any of
the rights or privileges of, a stockholder of the Company in respect of any
Shares purchasable upon the exercise of any part of the Option unless and until
certificates representing such Shares shall have been issued by the Company to
such holder.

 

ARTICLE 5

OTHER PROVISIONS

 

SECTION 5.1 - ADMINISTRATION

 

The Committee shall have the power to interpret the
2004 Plan, these standard terms and conditions and the Option Agreements, and
to adopt such rules for the administration, interpretation and application
of the 2004 Plan as are consistent therewith and to interpret or revoke any
such rules.  Without limiting the
generality of the foregoing, in connection with mergers, consolidations and
other corporate transactions referred to in Section 2.2 hereof, the
Committee may make such determinations and adopt such rules and conditions
as it, in its absolute discretion, deems appropriate in connection with (a) the
acceleration of exercisability of options (including conditioning such
acceleration upon consummation of the contemplated corporate transaction) and (b) determinations
as to whether the relevant agreement for the corporate transaction provides for
the assumption or substitution of options. 
All actions taken and all interpretations and determinations made by the
Committee in good faith shall be final and binding upon the Optionee, the
Company and all other interested persons. 
No member of the Committee shall be personally liable for any action,
determination or interpretation made in good faith with respect to the 2004
Plan or the Option.  In its absolute
discretion, the Board may at any time and from time to time exercise any and
all rights and duties of the Committee under the 2004 Plan and these standard
terms and conditions.

 

SECTION 5.2 - OPTION NOT TRANSFERABLE

 

Neither the Option nor any interest or right therein
or part thereof shall be liable for the debts, contracts or engagements of the
Optionee or his successors in interest or shall be subject to disposition by
transfer, alienation, anticipation, pledge, encumbrance, assignment or any
other means whether such disposition be voluntary or involuntary or by
operation of law by judgment, levy, attachment, garnishment or any other legal
or equitable proceedings (including bankruptcy), and an attempted disposition
thereof shall be null and void and of no effect; provided,
however, that this Section 5.2 shall not prevent transfers by
will or by the applicable laws of descent and distribution.

 

SECTION 5.3 - CONFIDENTIALITY AND
NON-DISPARAGEMENT

 

Each Optionee hereby agrees to maintain in confidence
and not disclose or use, either during or after the term of his or her
employment without the prior express written consent of the Company, any
proprietary or confidential information or know-how belonging to the Company (“Proprietary
Information”), whether or not it is in written or permanent form, except to the
extent required to perform duties on behalf of the Company in his or her
capacity as an Employee or Consultant. 
Proprietary Information refers to any information, not generally known
in the relevant trade or industry, which was obtained from the Company or which
was learned, discovered, developed, conceived, originated, or prepared by the
Optionee in the scope of Employment or Service. 
Such Proprietary Information includes, but is not limited to, software,
technical and business information relating to the Company’s inventions or
products, research and development, production processes, manufacturing and
engineering processes, machines and equipment, finances, customers, marketing,
production, future business plans, personnel information, and any other
information which is identified as confidential by the Company.  The Company considers all such Proprietary
Information to be its trade secrets. 
Upon Termination of Employment or Service or at the request of Optionee’s
supervisor before termination, Optionee agrees to deliver to the Company all
written and tangible material in his or her possession incorporating the
Proprietary Information or otherwise relating to the Company’s business.  These obligations with respect to Proprietary
Information extend to information belonging to customers and suppliers of the
Company who may have disclosed such information to the Optionee.

 

 

6

 

The Optionee further agrees not, either orally or in
writing, to speak critically or negatively about the Company, or its past,
present, or future officers, directors, or employees, whether by expressing his
or any other person’s opinion, or by speaking in any other manner whatsoever
that would reasonably be expected to result in the Company, or its past,
present, or future officers, directors, or employees being viewed by another
person in a false or negative light.  The
Optionee also agrees not to make any comments of a denigrating or disparaging
nature about any of the Company’s products, goods, or services.

 

SECTION 5.4 - AGREEMENT NOT TO SOLICIT EMPLOYEES

 

In order to remain eligible for the Option, Optionee
agrees that during Employment or Service and for a period of two years after
Termination of Employment or Service he or she will not solicit any employees
of the Company or any Subsidiary for purposes of providing services to or
employment with any business organization competitive with the Company or any
Subsidiary.

 

SECTION 5.5 — SHARES TO BE RESERVED

 

The Company shall at all times during the term of the
Option reserve and keep available such number of Shares as will be sufficient
to satisfy the requirements of the Option.

 

SECTION 5.6 - NOTICES

 

Any notice to be given under the terms of these standard
terms and conditions to the Company shall be addressed to the Company in care
of its Secretary, and any notice to be given to the Optionee shall be addressed
to him at the address given beneath his name on the Option Agreement.  By notice given pursuant to this Section 5.6,
either party may hereafter designate a different address for notices to be
given to him.  Any notice which is
required to be given to the Optionee shall, if the Optionee is then deceased,
be given to the Optionee’s personal representative if such representative has
previously informed the Company of his status and address by written notice
under this Section 5.6.  Any notice
shall be deemed duly given when enclosed in a properly sealed envelope or
wrapper addressed as aforesaid, deposited (with postage prepaid) in a post
office or branch post office regularly maintained by the United States Postal
Service.

 

SECTION 5.7 - TITLES

 

Titles are provided herein for convenience only and
are not to serve as a basis for interpretation or construction of the Option or
these standard terms and conditions.

 

SECTION 5.8 - CONSTRUCTION

 

The Option and these standard terms and conditions
shall be administered, interpreted and enforced under the laws of the State of
Delaware.

 

SECTION 5.9 — PLAN; OPTION DOCUMENT; AMENDMENT

 

(a)           The Option is granted pursuant to the
2004 Plan and is subject to all the terms and conditions of the 2004 Plan, as
the same may be amended from time to time by the Committee in its sole
discretion, and these standard terms and conditions, as they may be amended
from time to time by the Committee in its sole discretion.

 

(b)           The terms of the 2004 Plan, these
standard terms and conditions and the Option Agreement together constitute the “Option
Document” contemplated by the 2004 Plan, and the interpretation and
construction of the Option Document by the Committee shall be final and binding
upon the Optionee.

 

(c)           The Committee may amend the Option
Document without the consent of the Optionee; provided,
however, that the Option Document may not be amended following a
Change of Control except for any amendment (i) consented to in writing by
the Optionee or (ii) necessary to comply with applicable tax or securities
laws or regulations.

 

7

 

SECTION 5.10 - ARBITRATION

 

Any claim, dispute or other matter in question of any
kind relating to the 2004 Plan, this Option grant or any interpretation or
action or breach relating to the foregoing shall be settled by arbitration
conducted in the English language in Menomonee Falls, Wisconsin, administered
by the American Arbitration Association in accordance with the Commercial Rules of
the American Arbitration Association. 
Notice of demand for arbitration shall be made in writing to the
opposing party and to the American Arbitration Association within a reasonable
time after the claim, dispute or other matter in question has arisen.  In no event shall a demand for arbitration be
made after the date when the applicable statute of limitations would bar the
institution of a legal or equitable proceeding based on such claim, dispute or
other matter in question.  The award
rendered by the arbitrator shall be final and may be entered and enforced in
any court having jurisdiction thereof. 
In his award, the arbitrator will allocate, in his discretion, among the
parties to the arbitration all costs of arbitration, including the fees of the
arbitrator and reasonable attorneys’ fees, costs and expert witness expenses of
the parties.  In rendering the award, the
arbitrator shall determine the rights and obligations of the parties according
to the substantive and procedural law of Delaware.

 

 

8

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