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EXHIBIT 10.1
 
TRANSITION, SEPARATION AND COMPLETE RELEASE AGREEMENT
 
This Transition, Separation and Complete Release Agreement (this “Agreement”) is
entered into by and between Magnetek, Inc., a Delaware corporation (the
“Company”), and Jolene L. Shellman (“Executive”).  Executive enters into this
Agreement on behalf of herself, her spouse, heirs, successors, assigns,
executors and representatives of any kind, if any.
 
WHEREAS, Executive’s employment with the Company shall terminate on April 23,
2010 (the “Termination Date”), and the Company shall continue Executive’s
current level of salary and benefits during the period between the date of this
Agreement and the Termination Date (the “Transition Period”), provided that
Executive performs the transition duties as described in this Agreement.
 
WHEREAS, in recognition of Executive’s years of loyal service with the Company,
and to provide an incentive for Executive both to assist in the transition
process and to make the other promises contained in this Agreement, the Company
will offer Executive additional benefits as set forth in this Agreement.
 
WHEREAS, Executive accepts these additional benefits in return for a full
release of any claims she might have against the Company and related others, and
for the other promises contained herein.
 
THEREFORE, in consideration of the mutual promises and agreements made herein
and the good and valuable consideration described herein, the sufficiency of
which is hereby expressly acknowledged, the Company and Executive, intending to
be legally bound, agree as follows:
 
1.           Non-Liability.  Neither the Company’s or Executive’s signing of
this Agreement,  nor any actions taken by either the Company or Executive toward
compliance with the terms of this Agreement, constitute an admission by either
the Company or Executive that it or she has acted improperly or unlawfully, or
that it or she has violated any state or federal law.
 
2.           Transition Period Duties.  During the Transition Period, Executive
shall, to the reasonable satisfaction of the Company’s President and Chief
Executive Officer, diligently assist with the transfer of Executive’s
responsibilities to other employees, consultants or third-party service
providers, and otherwise advise and assist the Company as requested.  Up to the
Termination Date, Executive shall perform or be available to perform, at the
discretion of the President and Chief Executive Officer or his designee,
substantial services that shall not amount to less than an average of forty (40)
hours per week, including such services as the Company may request in connection
with the transition.  Accordingly, Executive shall not maintain other full-time
employment until after the Termination Date.  The Company shall continue
Executive’s existing base salary and benefits during the Transition
Period.  Upon completion of the Transition Period, to be eligible for the
additional benefits described in this Agreement, Executive must execute and
deliver to the Company a Supplemental General Release Agreement, releasing the
Company and related others from any and all claims, in the form attached to this
Agreement as Exhibit A.
 

 

 
 

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3.           Separation Benefits.  Subject to Executive’s strict compliance with
the terms of this Agreement, the Company shall provide the following benefits:
 
a.           Separation Pay:  The Company shall pay to Executive in a lump sum
the gross amount of Eighty-Seven Thousand and Five Hundred Dollars ($87,500.00),
minus required withholdings, representing twenty-six (26) weeks of Executive’s
base salary.  The payment shall be made within ten (10) business days after the
Supplemental General Release Agreement becomes effective.
 
b.           Restricted Stock Award:  Executive’s Restricted Stock Awards
granted on January 30, 2008 (in the amount of 9,000 shares) and November 11,
2009 (in the amount of 24,114 shares) of Magnetek, Inc. common stock will vest
on April 23, 2010 provided the Executive continues to be employed in accordance
with this Agreement through such date.  Executive is advised to consider the
Section 16(b) short-swing trade regulations under the Securities and Exchange
Act of 1934.
 
c.           Stock Option Exercise Period:  Executive’s unvested Stock Option
Grants will vest on April 23, 2010, provided the Executive continues to be
employed in accordance with this Agreement through such date.  Executive will
have a period of twelve (12) months from April 23, 2010 to exercise all vested
options.  Executive is advised to consider the Section 16(b) short-swing trade
regulations under the Securities and Exchange Act of 1934.
 
d.           Retirement Savings Plan:   The rights and duties of Executive and
the Company with respect to the Magnetek FlexCare Plus Retirement Savings Plan
will be discharged by Executive and the Company or the relevant plan in
accordance with the terms and provisions of the respective plans.
 
e.           Expenses:  The Company shall reimburse Executive for all
pre-approved business expenses incurred by Executive prior to the Termination
Date, pursuant to its regular policies and practices in this regard, provided
that Executive submits a final expense report with customary documentation on or
before April 23, 2010.
 
4.           Mutual Complete Releases.
 
a.           In consideration for the benefits to be received by Executive
pursuant to this Agreement, Executive hereby releases and forever discharges the
Company, its related and affiliated entities, and its and their past and present
owners, employees, directors, officers, agents, insurers, attorneys, executors,
assigns and other representatives of any kind (collectively referred to in this
Agreement as “Released Parties”), from any and all claims, liabilities or causes
of action of any kind, known or unknown, arising through the date Executive
executes this Agreement, including, but not limited to, any claims, liabilities
or causes of action arising in connection with Executive’s employment or
termination of employment with the Company.  Executive hereby releases and
waives any claim or right to further compensation, salary, bonuses, commissions,
benefits, equity, incentive awards, damages, penalties, attorneys’ fees, costs
or expenses of any kind from either the Company or any of the other Released
Parties, except as provided in this Agreement.
 
b.           This release specifically includes, but is not limited to, a
release of any and all claims under the Age Discrimination in Employment Act of
1967; the Older Workers
 

 

 
 

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Benefit Protection Act of 1990; the Employee Retirement Income Security Act of
1974; the Consolidated Omnibus Budget Reconciliation Act of 1985; Title VII of
the Civil Rights Act of 1964; Section 1981 of the Civil Rights Act of 1866; the
Civil Rights Act of 1991; the Americans with Disabilities Act; the Family
Medical Leave Act; any state or federal wage payment laws; any state and local
fair employment law(s), including the Wisconsin Fair Employment Act; and any
other federal, state or local laws or regulations of any kind, whether statutory
or decisional.  This release also includes, but is not limited to, a release of
any claims for wrongful termination, any tort, any breach of express or implied
contract, estoppel, defamation, misrepresentation, violation of public policy or
invasion of privacy and any other common law claim of any kind, but this release
does not release or waive any claims that cannot be released or waived as a
matter of law.  Executive understands and agrees that the Company is not using
this Agreement to interfere with Executive’s right to file a charge with the
Equal Employment Opportunity Commission (“EEOC”) or to participate in an EEOC
investigation or proceeding for claims arising under the Age Discrimination in
Employment Act or under any other federal law that the EEOC enforces.
 
c.           The Company hereby releases and forever discharges Executive from
any and all claims, liabilities or causes of action of any kind, known or
unknown, arising through the date the Company executes this Agreement,
including, but not limited to, any claims, liabilities or causes of action
arising in connection with Executive’s employment or termination of employment
with the Company.
 
5.           Covenant Not to Sue.  Executive represents that she has not
brought, and covenants and agrees that she will not bring, or join or cause to
be filed in court, any claims, demands, suits or actions, against the Company or
any of the Released Parties arising out of, connected with or related in any way
to her dealings with the Company or any of the Released Parties that occurred
prior to the date of this Agreement, and/or that are released pursuant to this
Agreement or the Supplemental General Release Agreement, including, without
limitation, claims related to her employment or the termination of that
employment.  Notwithstanding the foregoing, nothing herein prevents Executive
from enforcing the terms of this Agreement or from filing in good faith any
charge with an appropriate government enforcement agency, provided that
Executive shall refuse to receive and will not obtain any recovery or anything
of economic value in relation to such charge.
 
6.           Confidentiality Covenant.  Executive acknowledges that during the
course of her employment with the Company, she has been entrusted with certain
personnel, business, financial, technical, sales, marketing, and other
proprietary information and materials which are the property of the Company and
which involve confidential information concerning the Company’s business,
services, products, dealings, strategies, plans and employees (“Proprietary
Information”).  Proprietary Information includes 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
Executive in the course of her employment.  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, pricing, suppliers, production,
future business plans, personnel information, and any other information which is
identified as confidential by the Company.
 
Executive will maintain in strictest confidence, and will not communicate or
disclose to any third party, or use for her own benefit, without the prior
express written consent of the
 

 
 
 

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Company, any Proprietary Information, except as required by law, unless and
until such information becomes generally available to the public through no
fault of Executive.  In the event the disclosure of Proprietary Information is
required by law, Executive will give immediate written notice to the Company so
as to enable it to seek an appropriate protective order.  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
Executive.
 
To the extent that such Proprietary Information constitutes a “trade secret” as
defined by applicable law, this confidentiality obligation shall remain for so
long as the particular information remains a “trade secret.”  However, to the
extent that any particular Proprietary Information does not constitute a “trade
secret” as defined by applicable law, this confidentiality obligation shall
remain for a period of two (2) years following the Termination Date or the
termination of Executive’s employment, if earlier, and shall only prohibit
disclosures that are likely to or do in fact cause competitive harm to the
Company in a country in which the Company conducts business or is actively
pursuing business as of the time of the termination of Executive’s employment.
 
7.           Non-solicitation.  For a period ending two (2) years after the
Termination Date or termination of employment if earlier, Executive shall not,
in any capacity whatsoever, directly or indirectly, solicit any persons who
either are, or within the ninety (90) days prior to the solicitation were,
employees of the Company or any of its subsidiaries, for purposes of providing
services to or employment with any business.  This non-solicitation covenant
shall only apply to those individuals with whom Executive interacted during the
last two (2) years of employment with the Company, and any others about whom
Executive learned Proprietary Information.
 
8.           Return of Company Property and Information.  Executive shall return
to the Company, no later than the Termination Date or the date of termination of
employment if earlier, all of the following:
 
a.           The originals and all copies of any business records or documents
of any kind belonging to, or related to, the Company, regardless of the sources
from which such records were obtained, together with all notes and summaries
relating thereto.  This obligation extends to paper and electronic versions of
such records and documents.
 
b.           All keys, security cards and other means of access to the Company’s
facilities, offices, files and other property.
 
c.           All computer equipment, hardware and software belonging to the
Company, including any and all program and/or data disks, manuals and all hard
copies of the Company’s information and data, and shall disclose to the Company
any and all passwords utilized by Executive with regard to the Company’s
computer, hardware and software so that the Company has immediate, full and
complete access to all of the Company’s data and information stored, used and
maintained by Executive, or to which Executive had access.
 
9.           Full Disclosure.  Executive confirms that she has given written
notification to the President and Chief Executive Officer  of every circumstance
of which Executive is aware that may constitute a violation of any law,
regulation, licensing requirement, contract requirement, Company policy or
ethical practice of any kind by the Company, any of its affiliated
organizations, or any of its or their directors, officers, employees or agents,
including Executive.
 

 
 
 

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10.           Acknowledgment of Intellectual Property Rights.  Executive agrees
that all ideas, inventions, trade secrets, know-how, documents and data of any
kind developed in connection with or pursuant to her employment with the Company
are and shall remain the exclusive property of the Company.  Therefore, to the
extent not already assigned, Executive hereby assigns all such intellectual
property rights to the Company and agrees to provide any reasonable assistance
required by the Company to perfect or enforce such rights.
 
11.           Non-disparagement.  Executive shall not make any oral or written
comments that disparage, discredit or otherwise refer to the Company or its
officers, directors, employees, products, services or business practices in a
negative or otherwise detrimental manner.  The Company shall not make any oral
or written comments that disparage, discredit or otherwise refer to the
Executive in a negative or otherwise detrimental manner.
 
12.           Consideration and Revocation.  Executive acknowledges that she has
carefully read and fully understands all of the provisions of this
Agreement.  Executive further acknowledges that the benefits provided for in
this Agreement are greater than those to which she otherwise would be entitled
by any contract, employment policy, or otherwise.  Executive further
acknowledges that she is entering into this Agreement voluntarily, that she has
been provided more than twenty-one (21) days to consider the provisions set
forth in this Agreement, or has voluntarily waived the twenty-one (21) day
consideration period upon advice of counsel.  Executive understands that she has
a right to obtain advice of legal counsel of her choosing regarding this
Agreement prior to signing it and is encouraged by the Company to do so.  For a
period of seven (7) days following her signing of this Agreement, Executive may
revoke it, and this Agreement will not become enforceable or effective until the
seven-day revocation period has expired.  To revoke, Executive must send a
written notice of revocation that is received by the Company’s Director of
Corporate Human Relations within the seven-day revocation period.
 
13.           No Other Inducements.  To induce the Company to provide her the
consideration recited in this Agreement, Executive voluntarily executes this
Agreement, and acknowledges that the only consideration for executing this
Agreement is that recited herein, and that no other promise, inducement, threat,
agreement or understanding of any kind has been made by anyone to cause her to
execute this Agreement.
 
14.           Consequences of Breach.  In the event that Executive breaches any
of the promises contained in this Agreement, the Company shall be entitled to
immediately terminate, and be relieved of providing, all remaining
benefits.  Any such termination, however, shall not relieve Executive of any of
the obligations contained in this Agreement, all of which shall remain in full
force and effect, and the Company shall be entitled to pursue any and all
remedies available to it as a result of such breach, whether at law or in
equity.  Additionally, if any court of competent jurisdiction determines that
either party breached this Agreement, the breaching party shall be obligated to
pay to the other party, in addition to any damages and other relief awarded, an
amount equal to the reasonable attorney’s fees and costs incurred to enforce the
Agreement.
 
15.           Entire Agreement.  This Agreement sets forth the entire agreement
between the Company and Executive and supersedes all prior oral and written
agreements between the parties, except as provided herein, including, without
limitation, the Retention Agreement between the Company and Executive and any
other previous letters or agreements regarding compensation, benefits or
termination of Executive’s employment.  This Agreement cannot be amended or
 

 
 
 

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modified, except in writing signed by Executive and a representative  of the
Company  authorized to sign on behalf of the Company in this matter.
 
16.           Choice of Law and Severability.  This Agreement will be
interpreted and construed and all rights and remedies determined under the
present and future laws of the State of Wisconsin without reference to the
conflict of laws provisions of the State of Wisconsin. If any portion of this
Agreement is found to be unenforceable, all other portions that can be separated
from it, or appropriately limited in scope, shall remain fully valid and
enforceable to the full extent permitted by law.
 
17.           Signatures.  This Agreement, or any amendment hereto, may be
signed in any number of counterparts, including counterparts signed and
delivered by fax or electronic transmission, each of which shall be and deemed
an original, but all of which taken together shall constitute one agreement (or
amendment as the case may be).
 
18.           Other Agreement.  The Executive acknowledges and agrees that the
Employee Proprietary Information and Invention Agreement (Current Employee)
dated August 6, 2008 remains in full force and effect, and she remains subject
to the terms of that Agreement notwithstanding the execution and delivery of
this agreement.
 
EXECUTIVE FULLY UNDERSTANDS THE MEANING AND INTENT OF THIS AGREEMENT AND ITS
FINAL AND BINDING EFFECT ON HER.
 

 
 
 

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IN WITNESS WHEREOF, Executive and the Company, by its duly authorized
representative agent, have each placed their signatures on the dates indicated
below.

 

               
/s/ Jolene L. Shellman
 
Date:
 March 2, 2010
 
 Jolene L. Shellman
             

 
 MAGNETEK, INC.
             
/s/ Peter M. McCormick
 
Date:
 March 2, 2010
 
Peter M. McCormick
     
 President & Chief Executive Officer
     

 
 

 

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