Exhibit 4.1
MAGNETEK, INC.
AMENDED AND RESTATED DIRECTOR AND OFFICER
COMPENSATION
AND DEFERRAL INVESTMENT PLAN
JANUARY 1, 2008
Article 1. Establishment and
Purposes
1.1
Establishment. Magnetek, Inc., a Delaware corporation (the
“Company”), established, effective as of
October 21, 1997, an amended and restated director pay and
deferred compensation plan, which shall be known as the
“Magnetek, Inc. Amended and Restated Director and
Officer Compensation and Deferral Investment Plan” (the
“Plan”), for members of the Board of Directors who are
not employees or officers of the Company. The Plan is hereby
amended and restated effective as of January 1, 2005 (the
“2005 Restatement”), which amendment and restatement is
intended as good faith compliance with Section 409A of the
Code (as defined below) and the regulations and other Treasury
Department guidance promulgated thereunder
(“Section 409A”). The 2005 Restatement shall only
apply to (i) “amounts deferred” (within the
meaning of Section 409A) by Directors (as defined below) in
taxable years beginning both before and after December 31,
2004, and any earnings thereon and (ii) all amounts deferred
by Key Executives (as defined below) under the Plan and any
earnings thereon (collectively, “Section 409A
Deferrals”). The provisions of the Plan in existence prior to
the 2005 Restatement shall continue to govern “amounts
deferred” (within the meaning of Section 409A) by
Directors in taxable years beginning before January 1, 2005,
and any earnings thereon (collectively, “Grandfathered
Deferrals”). In addition, this amendment and restatement of
the Plan extends participation in the Plan, with respect to
compensation earned on or after January 1, 2006, to certain
Key Executives of the Company. From and after January 1, 2006,
the Plan shall be comprised of two separate sub-plans, one
for the benefit of Directors (the “Director Plan”) and
one for the benefit of Key Executives (the “Key Executive
Plan”). The Key Executive Plan is a nonqualified deferred
compensation plan which is unfunded and is maintained primarily for
the purpose of providing deferred compensation for a select group
of management or highly compensated employees, within the meaning
of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA, as
defined below. The Director Plan is not subject to ERISA. This
document is also intended to constitute the Summary Plan
Description for the Plan.
1.2
Purpose. The primary
purposes of the Plan are (i) to provide Directors with the
opportunity to defer voluntarily a portion of their
Director’s Fees (as defined below), subject to the terms of
the Plan, (ii) to provide certain Key Executives with the
opportunity to defer voluntarily a portion of their Compensation
(as defined below), subject to the terms of the Plan and
(iii) to encourage ownership of common stock by Directors and
Key Executives and thereby align their interests more closely with
the interests of the stockholders of the Company. By adopting the
Plan, the Company desires to enhance its ability to attract and
retain Directors and Key Executives of outstanding
competence.
Article 2. Definitions
Whenever used herein, the following terms shall
have the meanings set forth below, and, when the defined meaning is
intended, the term is capitalized:
(a)
“Board” or “Board of Directors” means the
Board of Directors of the Company.
(b)
“Board Meeting” means any meeting of the Board of
Directors or of any committee thereof on which the Director serves
and for which the Director is entitled to receive Meeting
Fees.
(c)
“Bonus” means an incentive award payable by the Company
to a Key Executive with respect to the Key Executive’s
services under the Magnetek Incentive Compensation Plan, or such
other bonus or incentive compensation plan or program of the
Company, and, in each case, shall be deemed earned only upon award
by the Company.
(d)
“Code” means the Internal Revenue Code of 1986, as
amended from time to time.
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(e)
“Committee” means the Compensation Committee of the
Board or such other committee of two (2) or more Directors
appointed by the Committee to administer the Plan pursuant to
Article 3.
(f)
“Company” means Magnetek, Inc., a Delaware
corporation.
(g)
“Compensation” means an Employee’s gross Salary
and Bonus.
(h)
“Director” means a member of the Board of Directors of
the Company who is neither an employee nor an officer of the
Company.
(i)
“Director’s Fees” means a Director’s
Retainer Fees and Meeting Fees, whether payable in cash or stock or
any combination thereof.
(j)
“Disability” means that a Participant has become
“disabled” as such term is defined under
Section 409A.
(k)
“ERISA” means the Employee Retirement Income Security
Act of 1974, as amended from time to time.
(l)
“Fair Market Value” means (i) the mean between the
highest and lowest sales prices of a share of the Company’s
stock on the principal exchange on which shares of the
Company’s stock are then trading, if any, on such
determination date, or, if shares were not traded on such date,
then on the next preceding trading day during which a sale
occurred, as such prices are quoted in The Wall Street
Journal ; or (ii) if such stock is not traded on an
exchange but is quoted on NASDAQ or a successor quotation system,
(1) the mean between the highest and lowest sales prices (if
the stock is then listed as a National Market Issue under the NASD
National Market System) or (2) the mean between the closing
representative bid and asked prices (in all other cases) for the
stock on such determination date as reported by NASDAQ or such
successor quotation system; or (iii) if such stock is not
publicly traded on an exchange and not quoted on NASDAQ or a
successor quotation system, the mean between the closing bid and
asked prices for the stock, on such determination date, as
determined in good faith by the Board; or (iv) if the
Company’s stock is not publicly traded, the fair market value
established by the Board in good faith.
(m)
“Key Executive” means any non-union, full-time,
salaried employee of the Company who is an officer or other key
executive of the Company and who qualifies as a “highly
compensated employee or management employee” within the
meaning of Title I of ERISA.
(n)
“Meeting Fees” means the fees paid to a Director on a
per meeting basis for attending a meeting of the Board of Directors
or a committee thereof.
(o)
“Participant” means a Director or Key Executive who is
actively participating in the Plan.
(p)
“Plan” means this Magnetek, Inc. Amended and
Restated Director and Officer Compensation and Deferral Investment
Plan, as it may be amended from time to time.
(q)
“Retainer Fees” means annual retainer fees paid to a
Director for serving as a member of the Board of Directors or as a
Chairman of a committee thereof for a full year’s service on
the Board or such lesser amount as may be payable to any Director
in respect of services on the Board of less than a full
year.
(r)
“Salary” means all regular, basic wages, before
reduction for amounts deferred pursuant to the Plan or any other
plan of the Company, payable in cash to a Key Executive for
services to be rendered during the Year, exclusive of any Bonus,
other special fees, awards, or incentive compensation, allowances,
or amounts designated by the Company as payment toward or
reimbursement of expenses.
(s)
“Specified Employee” means any Participant who is a
“specified employee” (as such term is defined under
Section 409A) of the Company. The “identification
date” (as defined under Section 409A) for purposes of
identifying Specified Employees shall be September 30 of each
calendar year. Individuals identified on any identification date
shall be Specified Employees as of January 1 of the calendar
year following the year of the identification date. In determining
whether or not an individual is a Specified Employee as of an
identification date, all individuals who are nonresident aliens
during the entire 12-month period ending on such identification
date shall be excluded for purposes of determining which
individuals will be Specified Employees.
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(t)
“Stock” means common stock of the Company, par value
$0.01 per share.
(u)
“Value” means the fair market value of the cash and/or
Stock a Director receives (or, absent deferrals hereunder, is
entitled to receive) as Director’s Fees.
(v)
“Year” means a calendar year.
Article 3. Administration
3.1
Authority of the Committee. The Plan shall be administered by the
Compensation Committee of the Board of Directors of the Company. In
addition, any power of the Committee hereunder may also be
exercised by the full Board, except to the extent that the grant or
exercise of such authority would cause any Stock issued hereunder
or other transaction with respect to the Plan to become subject to
(or lose an exemption under) the short-swing profit recovery
provisions of Section 16 of the Securities Exchange Act of
1934, as amended. Subject to the terms of this Plan, the Board may
appoint a successor Committee to administer the Plan, provided that
such Committee consists solely of two (2) or more non-employee
directors within the meaning of Section 16(b) of the
Securities Exchange Act of 1934. In addition, subject to the terms
of the Plan, and to the extent permissible under Section 16 of
the Securities Exchange Act of 1934, as amended, the Board or the
Committee may delegate ministerial duties to any executive or
executives of the Company.
Subject to the provisions herein, the Committee
shall have full power and discretion to issue Stock to Participants
in accordance with the terms of the Plan; to select Key Executives
for participation in the Plan; to determine the terms and
conditions of each Director’s or Key Executive’s
participation in the Plan; to construe and interpret the Plan and
any agreement or instrument entered into under the Plan; to
establish, amend, or waive rules and regulations for the
Plan’s administration; to amend (subject to the provisions of
Article 11 herein) the terms and conditions of the Plan and
any agreement entered into under the Plan; and to make other
determinations which may be necessary or advisable for the
administration of the Plan.
3.2
Decisions Binding. All
determinations and decisions of the Board and/or the Committee as
to any disputed question arising under the Plan, including
questions of construction and interpretation, shall be final,
conclusive, and binding on all parties and shall be given the
maximum possible deference allowed by law.
3.3
Claims Procedure.
(a)
Director Claims. Any Director making a claim for benefits
under this Plan may contest the Committee’s decision to deny
such claim or appeal therefrom only by submitting the matter to
binding arbitration before a single arbitrator. Any arbitration
shall be held in Los Angeles, California, unless otherwise agreed
to by the Committee. The arbitration shall be conducted pursuant to
the Commercial Arbitration Rules of the American Arbitration
Association. The arbitrator’s authority shall be limited to
the affirmation or reversal of the Committee’s denial of the
claim or appeal, and the arbitrator shall have no power to alter,
add to, or subtract from any provision of this Plan. The
arbitrator’s decision shall be final and binding on all
parties, if warranted on the record and reasonably based on
applicable law and the provisions of this Plan. The arbitrator
shall have no power to award any punitive, exemplary,
consequential, or special damages, and under no circumstances shall
an award contain any amount that in any way reflects any of such
types of damages. Each party shall bear its own attorney’s
fees and costs of arbitration. Judgment on the award rendered by
the arbitrator may be entered in any court having jurisdiction
thereof.
(b)
Key Executive Claims.
(1)
Any Participant who is a Key Executive
has the right to make a written claim for benefits under the Plan.
If such a written claim is made, and the Committee wholly or
partially denies the claim, the Committee shall provide the
claimant with written notice of such denial, setting forth, in a
manner calculated to be understood by the claimant:
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(i)
the specific reason or reasons for
such denial;
(ii)
specific reference to pertinent Plan
provisions on which the denial is based;
(iii)
a description of any additional
material or information necessary for the claimant to perfect the
claim and an explanation of why such material or information is
necessary; and
(iv)
an explanation of the Plan’s
claims review procedure and time limits applicable to those
procedures, including a statement of the claimant’s right to
bring a civil action under ERISA Section 502(a) if the
claim is denied on appeal.
(2)
The written notice of any claim
denial pursuant to Section 3.3(b) shall be given not
later than thirty (30) days after receipt of the claim by the
Committee, unless the Committee determines that special
circumstances require an extension of time for processing the
claim, in which event:
(i)
written notice of the extension shall
be given by the Committee to the claimant prior to thirty (30) days
after receipt of the claim;
(ii)
the extension shall not exceed a
period of thirty (30) days from the end of the initial thirty (30)
day period for giving notice of a claim denial; and
(iii)
the extension notice shall indicate
(A) the special circumstances requiring an extension of time
and (B) the date by which the Committee expects to render the
benefit determination.
(3)
The decision of the Committee shall be
final unless the claimant, within sixty (60) days after receipt of
notice of the claims denial from the Committee, submits a written
request to the Committee for an appeal of the denial. During that
sixty (60) day period, the claimant shall be provided, upon request
and free of charge, reasonable access to, and copies of, all
documents, records and other information relevant to the
claim for benefits. The claimant shall be provided the opportunity
to submit written comments, documents, records, and other
information relating to the claim for benefits as part of the
claimant’s appeal. The claimant may act in these matters
individually, or through his or her authorized
representative.
(4)
After receiving the written appeal, if
the Committee, or its delegate, shall issue a written decision
notifying the claimant of its decision on review, not later than
thirty (30) days after receipt of the written appeal, unless the
Committee determines that special circumstances require an
extension of time for reviewing the appeal, in which
event:
(i)
written notice of the extension shall
be given by the Committee prior to thirty (30) days after receipt
of the written appeal;
(ii)
the extension shall not exceed a
period of thirty (30) days from the end of the initial thirty (30)
day review period;
(iii)
the extension notice shall indicate
(A) the special circumstances requiring an extension of time
and (B) the date by which the Committee expects to render the
appeal decision.
(5)
The period of time within which a
benefit determination on review is required to be made shall begin
at the time an appeal is received by the Committee, without regard
to whether all the information necessary to make a benefit
determination on review accompanies the filing of the appeal. If
the period of time for reviewing the appeal is extended as
permitted above, due to a claimant’s failure to submit
information necessary to decide the claim on appeal, then the
period for making the benefit determination on review shall be
tolled from the date on which the notification of the extension is
sent to the claimant until the date on which the claimant responds
to the request for additional information.
(6)
In conducting the review on appeal,
the Committee shall take into account all comments, documents,
records, and other information submitted by the claimant relating
to the claim, without regard to whether such information was
submitted or considered in the initial benefit
determination.
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If
the Committee upholds the denial, the written notice of decision
from the Committee shall set forth, in a manner calculated to be
understood by the claimant:
(i)
the specific reason or reasons for the
denial
(ii)
specific reference to pertinent Plan
provisions on which the denial is based;
(iii)
a statement that the claimant is
entitled to be receive, upon request and free of charge, reasonable
access to , and copies of, all documents, records and other
information relevant to the claim for benefits;
and
(iv)
a statement of the claimant’s
right to bring a civil action under ERISA 502(a).
(7)
If the Plan or any of its
representatives fail to follow any of the above claims procedures,
the claimant shall be deemed to have duly exhausted the
administrative remedies available under the plan and shall be
entitled to pursue any available remedies under ERISA
Section 502(a), including but not limited to the filing of an
action for immediate declaratory relief regarding benefits due
under the Plan.
(c)
The Secretary of the Company is hereby designated as agent of the
Plan for the service of legal process.
3.4
Indemnification. Each
person who is or shall have been a member of the Board shall be
indemnified and held harmless by the Company against and from any
loss, cost, liability, or expense that may be imposed upon or
reasonably incurred by him or her in connection with or resulting
from any claim, action, suit, or proceeding to which he or she may
be a defendant, or in which he or she may be a party by reason of
any act or omission by such Board member in his or her capacity as
an administrator of the Plan, and against and from any and all
amounts paid by him or her in settlement thereof, with the
Company’s approval, or paid by him or her in satisfaction of
any judgment in any such action, suit, or proceeding against him or
her, provided he or she shall give the Company an opportunity, at
its own expense, to handle and defend the same before he or she
undertakes to handle and defend it on his or her own
behalf.
The
foregoing right of indemnification shall not be exclusive of any
other rights of indemnification to which such persons may be
entitled under the Company’s Certificate of Incorporation or
Bylaws, as a matter of law, or otherwise, or any power that the
Company may have to indemnify them or hold them
harmless.
Article 4. Participation
4.1
Participation. Those
members of the Board of Directors who are not employees or officers
of the Company, and those Key Executives who has been designated as
eligible to participate in the Plan with respect to any Year
beginning after December 31, 2005 by the Committee shall
participate in the Plan. Notwithstanding anything herein to the
contrary, unless the Committee determines otherwise, the
Company’s Chief Executive Officer shall be eligible to
participate in the Plan with respect to any Year beginning after
December 31, 2005.
In
the event a Participant no longer meets the requirements for
participation in the Plan, such Participant shall become an
inactive Participant, retaining all the rights described under the
Plan, except the right to make any further deferrals or, if
applicable, receive payment of Directors’ Fees in Stock,
until such time that the Participant again becomes an active
Participant.
4.2
Participation. Participation in the Plan by Key Executives shall
be determined by resolution of the Committee annually or at such
other time selected by the Committee.
4.3
Partial Year Participation. In the event that a Director or Key Executive
first becomes a Participant during a Year, such Participant shall
be notified by the Company of his or her participation, and the
Company shall provide each such Participant with “Election to
Defer Forms,” which must be completed by the Participant as
provided in Sections 6.2 and 6.3 herein and “Election to
Receive Stock Forms,” which must be completed by the
Participant as provided in Sections 5.2 and 5.3 herein;
provided, however, that such Participant may only make an election
to defer with respect to that portion of his or her
Director’s Fees or Compensation, as
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applicable, for such Year which are to be
earned after the filing of the election and such Participant
may only make an election to receive payment of Meeting Fees in
stock with respect to that portion of his or her Meeting Fees for
such year which are to be earned after the filing of the
election.
Article 5. Stock in Lieu of Cash
Director’s Fees
5.1
Payment in Stock. Subject
to Section 5.5 herein, a Dir
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