Exhibit 10.1


 


SETTLEMENT AGREEMENT


 


This agreement (“Agreement”)
is entered into between Ole K. Nilssen (“Nilssen”), Geo Foundation, Ltd. (“Geo”)
and Magnetek, Inc. (“Magnetek”).


 


WHEREAS, on May 17,
2005, Nilssen and Geo filed a petition in Nilssen
et al. v. Magnetek, Inc., Civil Action No. 05-C-2933 (N.D.
Ill.) (“Civil Action”) to confirm an arbitration award (“Award”) issued on April 29,
2005, and Magnetek opposed that petition and also filed a petition to vacate
the Award;


 


WHEREAS, on April 16,
2008, the United States District Court for the Northern District of Illinois
confirmed the Award, granting Nilssen and Geo’s petition to confirm the Award
and denying Magnetek’s petition to vacate the Award (“Confirmation Decision”);


 


WHEREAS, on April 21,
2008, Magnetek appealed the Confirmation Decision to the Court of Appeals for
the Seventh Circuit (“Appeal”);


 


WHEREAS, on April 30,
2008, Nilssen brought a motion pursuant to Rule 59(e), Fed.R.Civ.P, for
modification of the Confirmation Decision to include post-award prejudgment
interest (“Rule 59 Motion”), which Rule 59 Motion remains pending and
unresolved in the Civil Action;


 


NOW, THEREFORE, in
consideration of the mutual covenants and promises made herein and for other
good and valuable consideration, the parties agree as follows:


 


1.             In addition to
amounts already paid by Magnetek pursuant to the April 22, 2003 agreement
to arbitrate (i.e., $1,375,000.00 already
paid), Magnetek shall pay eighteen million, seven hundred fifty thousand United
States Dollars ($18,750,000.00) (“Payment Amount”) in full satisfaction of
Nilssen and/or Geo’s claims asserted in the arbitration, declared in the Award,
and confirmed in the Civil Action, as well as related claims to post-award,
prejudgment interest set forth in the Rule 59 Motion and related claims to
post-judgment interest.  The Payment
Amount shall be paid no later than June 14, 2008 in accordance with wire
transfer instructions to be separately provided.  Absent express written agreement from Nilssen
and Geo to the contrary, failure to timely pay the Payment Amount in accordance
with the wire transfer instructions shall render this Agreement null and void,
with Nilssen and Geo reserving all rights to pursue collection of the full
remaining balance of the Award, as well as post-award prejudgment interest and
post-judgment interest.


 


2.             Magnetek,
Nilssen and Geo hereby mutually release and forever discharge each other, and
all their respective agents, attorneys, principals, members, representatives,
successors, assigns, officers, directors and shareholders from the Award and
claims related to and/or arising from the Award, from all claims that were
asserted or 


 

















 


could
have been assert in the arbitration on which the Award is based, the Civil
Action to confirm the Award, and the underlying lawsuit that led the parties to
the arbitration on which the Award and claims related to and/or arising from
the Award is based (Nilssen v. Magnetek, Case
No. 98 C 2229, filed in the Northern District of Illinois).


 


3.             Nilssen and Geo
shall take such action as is necessary and appropriate to promptly withdraw the
Rule 59(e) Motion as soon as full payment is made by Magnetek in
accordance with paragraph 1 hereof.


 


4.             Magnetek shall
take such action as is necessary and appropriate to promptly have the Appeal
dismissed with prejudice.


 


5.             The parties
hereto shall bear their own respective costs and attorneys’ fees incurred in
connection with the Civil Action and Appeal.


 


6.             This Agreement
and its terms shall be maintained in confidence.  Notwithstanding the immediately preceding
sentence, each party may make one or more public statements regarding the
resolution of the Civil Action pursuant to this Agreement and the material
terms of this Agreement.  Further, to the
extent necessary to satisfy obligations imposed by applicable law, including
the requirements of the Securities and Exchange Commission and the New York
Stock Exchange, Magnetek may publicly disclose this Agreement and the material
terms set forth herein .  Otherwise,
neither this Agreement, nor its terms, shall be disclosed except as may be
required by a court of competent jurisdiction, but only pursuant to a
protective order agreeable to the non-producing party(ies) hereto.


 


7.             Any dispute
under this agreement shall be governed by Illinois law without regard to the
conflicts of law rules of the state of Illinois.


 


8.             This agreement
may not be amended or modified except in writing agreed to by the parties.


 


IN WITNESS WHEREOF, the parties hereto have caused to be signed by
their duly authorized representatives, this Agreement on the dates set forth
below.


 


	
   

  	
  Ole K. Nilssen

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
   June
  12, 2008

  	
   

  	
  /s/
  Ole K. Nilssen

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Geo Foundation, Ltd.

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
   June
  12, 2008

  	
   

  	
  By:

  	
   /s/
  Ole K. Nilssen

  
	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
   Authorized
  Agent

  



 

















 


	
   

  	
  Magnetek, Inc.

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
   June 10,
  2008

  	
   

  	
  By:

  	
  /s/
  David P. Reiland

  
	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
  President
  and Chief Executive Officer