**Exhibit10.9**

# **CHANGE OF CONTROL AGREEMENT**

This Change of Control Agreement (“Agreement”) is entered into on July29, 2003 by and between Marty J. Schwenner, an individual (the “Officer”), andMagnetek, Inc., a Delaware corporation (the “Company”).

RECITALS

WHEREAS, the Board of Directors of the Company (the “Board”) recognizesthat the possibility of a Change of Control (as hereinafter defined) exists andthat the threat or the occurrence of a Change of Control can result insignificant distractions of its key management personnel because of theuncertainties inherent in such a situation;

WHEREAS, the Board has determined that it is essential and in the bestinterest of the Company and its stockholders to retain the services of theOfficer in the event of a threat or occurrence of a Change of Control and toensure the Officer’s continued dedication and efforts in such event withoutundue concern for personal financial and employment security; and

WHEREAS, in order to induce the Officer to remain in the employ of theCompany, particularly in the event of a threat or the occurrence of a Change ofControl, the Company desires to enter into this Agreement with the Officer toprovide the Officer with certain benefits in the event his or her employment isterminated as a result of, or in connection with, a Change of Control.

AGREEMENT

NOW THEREFORE, in consideration of the mutualcovenants set forth herein, and for other good and valuable consideration,receipt of which is hereby acknowledged, the parties do hereby agree asfollows:

1.             Term ofAgreement.  This Agreement shallcommence as of the date hereof and shall continue in effect until December 31,2004; *provided*,*however*,that on December 31, 2004 and on each anniversary thereof, the term of thisAgreement shall automatically be extended for one year unless either theCompany or the Officer shall have given written notice to the other priorthereto that the term of this Agreement shall not be so extended; *provided*,*further*,*however*,that notwithstanding any such notice by the Company or the Officer not toextend, the term of this Agreement shall not expire prior to the secondanniversary of a Change of Control Date. The benefits payable pursuant to Section 2 hereof shall be due inall events if a Change of Control occurs during the term of this Agreement, anda Change of Control will be deemed to have occurred during the term hereof ifan agreement for a transaction resulting in a Change of Control is entered intoduring the term hereof, notwithstanding that the Change of Control Date occursafter the expiration of the term of this Agreement.

2.             Benefits Upon Change of Control.

(a)           Events Giving Rise to Benefits.  The Company agrees to pay or cause to bepaid to the Executive the benefits specified in this Section 2 if(i) there is a Change of Control, and (ii) within the Change ofControl Period, (a) the Company or the Successor terminates the employmentof the Executive for any reason other than Cause, death or Disability or(b) the Executive voluntarily terminates employment for Good Reason.

 

----

 

(b)           Benefits Upon Termination ofEmployment.  If the Executive isentitled to benefits pursuant to this Section 2, the Company agrees to payor provide to the Executive as severance payment, the following:

(i)            A single lump sum payment, payablein cash within five days of the Termination Date (or if later, the Change ofControl Date), equal to the sum of:

(A)          the accrued portion of any of theExecutive’s unpaid base salary and vacation through the Termination Date andany unpaid portion of the Executive’s bonus for the prior fiscal year; plus

(B)           a portion of the Executive’s bonusfor the fiscal year in progress, prorated based upon the number of days elapsedsince the commencement of the fiscal year and calculated assuming that 100% ofthe target under the bonus plan is achieved; plus

(C)           an amount equal to the Executive’sBase Compensation times the Compensation Multiplier.

(ii)           Continuation, on the same basis as ifthe Executive continued to be employed by the Company, of Benefits for theBenefit Period commencing on the Termination Date.  The Company’s obligation hereunder with respect to the foregoingBenefits shall be limited to the extent that the Executive obtains any suchbenefits pursuant to a subsequent employer’s benefit plans, in which case theCompany may reduce the coverage of any Benefits it is required to provide theExecutive hereunder as long as the aggregate coverage and benefits of thecombined benefit plans is no less favorable to the Executive than the Benefitsrequired to be provided hereunder.

(iii)          Outplacement services to be providedby an outplacement organization of national repute, which shall include theprovision of office space and equipment (including telephone and personalcomputer) but in no event shall the Company be required to provide suchservices for a value exceeding 17% of the Executive’s Base Compensation.

(iv)          Accelerated vesting of all outstandingstock options and of all previously granted restricted stock awards.

3.             Definitions. When used in this Agreement, the following terms have the meanings setforth below:

“Base Compensation”means the sum of (i) the Executive’s annual salary in effect on theearlier of the Change of Control Date and the Termination Date and(ii) 100% of the target under the bonus plan for the fiscal year duringwhich the Change of Control Date occurs.

“Benefits” meansbenefits that would be available under any health and welfare plan of theCompany on the Termination Date.

“Benefit Period”means 18 months.

 

----

 

“Cause”means:  (A) conviction of a felonyor misdemeanor involving moral turpitude, or (B) willful gross neglect orwillful gross misconduct in carrying out the Executive’s duties, resulting inmaterial economic harm to the Company or any Successor.

“Change of Control”means (i) any event described in Section 11.2 of the 1999 StockIncentive Plan of the Company or any event so defined in any stock incentive orsimilar plan adopted by the Company in the future unless, in either case, suchevent occurs in connection with a Distress Sale and (ii) any event whichresults in the Board ceasing to have at least a majority of its members be“continuing directors.”  For thispurpose, a “continuing director” means a director of the Company who held suchposition on July 29, 2003 or who thereafter was appointed or nominated tothe Board by a majority of continuing directors.

“Change of ControlDate” means the date on which a Change of Control is consummated.

“Change of Control Period” means the periodcommencing on the earlier of (i) 180 days prior to the Change of ControlDate and (ii) the announcement of a transaction expected to result in aChange of Control, and ending on the second anniversary of the Change ofControl Date.

“Code” means the Internal Revenue Code of 1986,as amended.  References herein to aspecific section of the Code shall be deemed to include comparable or analogousprovisions of state, local and foreign law.

“CompensationMultiplier” means 1.5.

“Disability” meansthe inability of the Executive due to illness (mental or physical), accident,or otherwise, to perform his or her duties for any period of 180 consecutivedays, as determined by a qualified physician.

“DistressSale” means a Change of Control occurring within 18 months of any of thefollowing:  (i) the Company’sindependent public accountants shall have made a “going concern” qualificationin their audit report (other than by reason of extraordinary occurrences, suchas material litigation, not attributable to poor management practices); (ii) theCompany shall lack sufficient capital for its operations by reason oftermination of its existing credit lines or the Company’s inability to securecredit facilities upon acceptable terms; or (iii) the Company shall havevoluntarily sought relief under, consented to or acquiesced in the benefit ofapplication to it of the Bankruptcy Code of the United States of America or anyother liquidation, conservatorship, bankruptcy, moratorium, rearrangement,receivership, insolvency, reorganization, suspension of payments or similarlaws, or shall have been the subject of proceedings under such laws (unless theapplicable involuntary petition is dismissed within 60 days after its filing).

“Good Reason”means (A) without the Executive’s prior written consent, assignment to theExecutive of duties materially inconsistent in any respect with his or herposition immediately prior to the Change of Control Date or any other action bya Successor that results in a material diminution in the Executive’s position,authority, duties, responsibilities, annual base salary or target bonus whencompared with the same immediately prior to the Change of Control Date; or(B) assignment of the Executive, without his or her prior written 

----

consent,to a place of business that is not within the metropolitan area of theExecutive’s current place of business.

“Stay and PayAgreement” means a “stay and pay” or retention agreement entered into incontemplation of a sale by the Company of a division or business unit.

“Successor” meansany acquiror of all or substantially all of the stock, assets or business ofthe Company.

“Termination Date”means the last day of the Executive’s employment.

4.             Eligibility; Effect on OtherAgreements and Plans.

(a)           In the event the Executive is also a partyto a Stay and Pay Agreement or severance agreement and becomes entitled to anypayment thereunder, this Agreement shall be null and void and the Executiveshall not be entitled to any payment or benefit hereunder.  Nothing in this Agreement shall prevent orlimit the Executive’s continuing or future participation in any benefit, bonus,incentive or other plan or program provided by the Company and for which theExecutive may qualify, nor shall anything herein limit or reduce such rights asthe Executive may have under any other agreements with the Company.  Amounts that are vested benefits or that theExecutive is otherwise entitled to receive under any plan or program of theCompany shall be payable in accordance with such plan or program, except as explicitlymodified by this Agreement.

(b)           Plan Amendments.  The Company shall adopt such amendments toits employee benefit plans and insurance policies, including, withoutlimitation, the Plans, as are necessary to effectuate the provisions of thisAgreement.  If and to the extent anybenefits under Section 2 are not paid or payable or otherwise provided tothe Executive or his or her dependents or beneficiaries under any such plan orpolicy (whether due to the terms of the plan or policy, the termination thereof,applicable law, or otherwise), then the Company itself shall pay or provide forsuch benefits (including any gross-up needed to account for the less favorabletax treatment if the payments are made from the Company and not from the Plansor other employee benefit plans).

5.             Golden Parachute Tax.

(a)           Ifthe Value (as hereinafter defined) attributable to the payments and benefitsprovided in Section 2 above, without regard to this Section 5(“Agreement Payments”), in combination with the Value attributable to otherpayments or benefits in the nature of compensation to or for the benefit ofExecutive (including but not limited to the value attributable to acceleratedvesting of options and, collectively with Agreement Payments, “Payments”)would, but for this Section 5, constitute an “excess parachute payment”under Code Section 280G, then Agreement Payments will be made to theExecutive under Section 2 hereof only to the extent provided in thisSection 5.  If (i) the excess ofthe Value of all Payments over the sum of all taxes (including but not limitedto income and excise taxes under Code Section 4999) that would be payableby the Executive with respect to such Payments, is equal to or greater than110% of (ii) the excess of the greatest Value of all such Payments thatcould be paid to or for the benefit of the Executive and not result in an“excess parachute payment” (the “Cap”), over the amount of taxes that would bepayable by Executive thereon, then the full amount of Agreement Payments shallbe paid to the Executive.  Otherwise,Agreement Payments 

 

----

 

shall be made only to the extent that such paymentscause the Value of all Payments to equal the Cap.

(b)           Forpurposes of this Section 5, the Company and the Executive herebyirrevocably appoint the persons who constituted the Compensation Committee ofthe Board immediately prior to the Change of Control, or a three person panelnamed by a majority of them, as arbitrators (the “Arbitrators”) to make alldeterminations required under this Section 5, including but not limited tothe Value of all Payments (and the components thereof) and the amount andnature of any reduction of Agreement Payments required by thisSection 5.  For purposes of thisSection 5, “Value” shall mean value as determined by the Arbitrators applyingthe valuation procedures and methodologies established pursuant to CodeSection 280G, including any non-binding interpretive guidance as theArbitrators determine appropriate.  Thedeterminations of the Arbitrators shall be final and binding on both theCompany and Executive, and their successors, assignees, heirs andbeneficiaries, for purposes of determining the amount payable underSection 2.  All fees and expensesof the Arbitrators (including attorneys’ and accountants’ fees) shall be borneby the Company.  The arbitrators will becompensated, to the extent they are not then members of the Board’sCompensation Committee, at the rates at which they would have been compensatedfor their work as Committee members in effect immediately prior to the Changeof Control Date.

6.             Employment At-Will.  Notwithstanding anything to the contrary contained herein, theExecutive’s employment with the Company is not for any specified term and maybe terminated by the Executive or by the Company at any time, for any reason,with or without cause, without liability except with respect to the paymentsprovided hereunder or as required by law or any other contract or employeebenefit plan.

7.             General.

(a)           Entire Agreement.  This document constitutes the final,complete, and exclusive embodiment of the entire agreement and understandingbetween the parties related to the subject matter hereof and supersedes andpreempts any prior or contemporaneous understandings, agreements, orrepresentations by or between the parties, written or oral.

(b)           Successors and Assigns.  This Agreement is intended to bind and inureto the benefit of and be enforceable by the Executive and the Company, andtheir respective successors and assigns, except that the Executive may not assignany of his or her duties hereunder and he or she may not assign any of his orher rights hereunder without the prior written consent of the Company.

(c)           Amendments.  No amendments or other modifications to thisAgreement may be made except by a writing signed by both parties.  No amendment or waiver of this Agreementrequires the consent of any individual, partnership, corporation or otherentity not a party to this Agreement. Nothing in this Agreement, express or implied, is intended to conferupon any third person any rights or remedies under or by reason of thisAgreement.

(d)           No Amounts Due.  The Executive acknowledges that no paymentsor benefits whatsoever shall become due hereunder in the absence of a Change ofControl.

(e)           No Mitigation Obligation.  The parties hereto expressly agree that thepayment of the benefits by the Company to the Executive in accordance with theterms of this 

----

 

Agreementwill be liquidated damages, and that the Executive shall not be required tomitigate the amount of any payment provided for in this Agreement by seekingother employment or otherwise, nor shall any profits, income, earnings or otherbenefits from any source whatsoever create any mitigation, offset, reduction orany other obligation on the part of the Executive hereunder or otherwise exceptas expressly provided in Sections 2(b)(ii) and 4(a).

(f)            Changes to Benefits.  In the event that, within 90 days of theexecution of this Agreement, the Company enters into an agreement for a Changeof Control in connection with a merger to be accounted for as a “pooling ofinterests,” the Board will be entitled to modify or reduce the payments orbenefits due hereunder, or to abrogate this Agreement entirely, if and to theextent that Ernst & Young opines to the Board such measures are necessaryin order to ensure that the proposed merger will be accounted for as a “poolingof interests.”  The Board will have nosuch authority after such 90-day period and, in the event such mergerdoes not eventuate or is ultimately not accounted for as a “pooling ofinterests,” this Agreement, with or without any action by the Board or theExecutive, shall be automatically reinstated.

(g)           Choice of Law.  All questions concerning the construction,validity and interpretation of this Agreement will be governed by the laws ofthe State of Tennessee without giving effect to principles of conflicts of law.

(h)           ERISA.  This Agreement is pursuant to the Company’sseverance plan for Executives (the “Plan”) which is unfunded and maintained by theCompany primarily for the purpose of providing deferred compensation for aselect group of management or highly compensated employees.  The Plan constitutes an employee welfarebenefit plan (“Welfare Plan”) within the meaning of Section 3(1) of theEmployee Retirement Income Security Act of 1974, as amended (“ERISA”).  Any payments pursuant to this Agreementwhich could cause the Plan not to constitute a Welfare Plan shall be deemedinstead to be made pursuant to a separate “employee pension benefit plan”within the meaning of Section 3(2) of ERISA as to which the applicableportions of the document constituting the Plan shall be deemed to beincorporated by reference.  None of thebenefits hereunder may be assigned in any way.

(i)            Representation.  The Executive acknowledges that he has hadthe opportunity to consult with counsel before executing this Agreement.

(j)            Mutual Non-Disparagement.  The Company and subsidiaries agree, and theCompany shall use its best efforts to cause its respective executive officersand directors to agree, that they will not make or publish any statementcritical of the Executive, or in any way adversely affecting or otherwisemaligning the Executive’s reputation. The Executive agrees that he or she will not make or publish anystatement critical of the Company, its affiliates and their respectiveexecutive officers and directors, or in any way adversely affecting orotherwise maligning the business or reputation of the Company, its affiliatesand subsidiaries and their respective officers, directors and employees.

8.             Arbitration.

(a)           Except as provided in Section 5hereof, any disputes or claims arising out of or concerning the Executive’semployment or termination by the Company, whether arising under theories ofliability or damages based upon contract, tort or statute, will be determinedexclusively by arbitration before a single arbitrator in accordance with theemployment arbitration rules of the American Arbitration Association, except asmodified by this Agreement.  

----

Thearbitrator’s decision will be final and binding on both parties.  Judgment upon the award rendered by thearbitrator may be entered in any court of competent jurisdiction.  In recognition of the fact that resolutionof any disputes or claims in the courts is rarely timely or cost effective foreither party, the Company and the Executive enter this mutual agreement toarbitrate in order to gain the benefits of a speedy, impartial andcost-effective dispute resolution procedure. The parties further intend that the arbitration hereunder be conductedin as confidential a manner as is practicable under the circumstances, andintend for the award to be confidential unless that confidentiality wouldfrustrate the purpose of the arbitration or render the remedy awardedineffective.

(b)           Any arbitration will be held in LosAngeles, California.  The arbitratormust be an attorney with substantial experience in employment matters, selectedby the parties alternately striking names from a list of five such persons providedby the American Arbitration Association (AAA) office located nearest to theplace of employment, following a request by the party seeking arbitration for alist of five such attorneys with substantial professional experience inemployment matters.  If either partyfails to strike names from the list, the arbitrator will be selected from thelist by the other party.

(c)           Each party will have the right totake the deposition of one individual and any expert witness designated by theother party.  Each party will also havethe right to propound requests for production of documents to any party and theright to subpoena documents and witnesses for the arbitration.  Additional discovery may be made only wherethe arbitrator selected so orders upon a showing of substantial need.  The arbitrator will have the authority toentertain a motion to dismiss and/or a motion for summary judgment by any partyand will apply the standards governing such motions under the Federal Rules ofCivil Procedure.

(d)           The Company and the Executive agreethat they will attempt, and they intend that they and the arbitrator should usetheir best efforts in that attempt, to conclude the arbitration proceeding andhave a final decision from the arbitrator within 120 days from the date ofselection of the arbitrator; *provided, however*, that the arbitratorwill be entitled to extend such 120-day period for one additional 120-dayperiod.  The arbitrator will deliver awritten award with respect to the dispute to each of the parties, who mustpromptly act in accordance therewith.

(e)           The Company will pay any and allreasonable fees and expenses incurred by the Executive in seeking to obtain orenforce any rights or benefits provided by this Agreement, including allreasonable attorneys’ and experts’ fees and expenses, accountants’ fees andexpenses, and court costs (if any) that may be incurred by the Executive inpursuing a claim for payment of compensation or benefits or other right orentitlement under this Agreement, *provided* that the Executive is successfulas to material issues, resulting in an award of at least $50,000.  In addition, the Company will pay withoutregard to the results of the arbitration all costs and fees not normallyassociated with a civil proceeding, such as any fees charged by the arbitratoror any room rental charges.

(f)            In a contractual claim under thisAgreement, the arbitrator must act in accordance with the terms and provisionsof this Agreement and applicable legal principles and will have no authority toadd, delete or modify any term or provision of this Agreement.  In addition, the arbitrator will have noauthority to award punitive damages under any circumstances unless repudiatingthe arbitrator’s authority to do so would cause this arbitration clause to beruled ineffective under applicable law.

----

IN WITNESS WHEREOF, the parties have executed this Agreement effectiveas of the date it is last executed below by either party.

 

 

 

 
| /s/ Marty J. Schwenner                                       |
|--------------------------------------------------------------|
|                                                         | Marty J. Schwenner |
|                                                         |   |
|                                                         |   |
|                                                         |   |
|                                                         |   |
| **MAGNETEK,  INC.**                                          |
|                                                         |   |
| By:                                                          | /s/  Andrew G. Galef |
| Name: Andrew G. Galef                                   |
| Title:   Chairman and Chief Executive Officer |

 

 

----