Exhibit 10.2


 


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 David P. Reiland (“Executive”). 
Executive enters into this Agreement on behalf of himself, his spouse,
heirs, successors, assigns, executors and representatives of any kind, if any.


 


WHEREAS,
Executive’s employment with the Company shall terminate on January 15,
2009 (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 he 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 he has acted improperly or
unlawfully, or that it or he 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
Chairman of the Board of Directors, 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.  Executive’s transition
responsibilities may include extended travel and work at the Company’s
headquarters in Menomonee Falls, Wisconsin, as a general course of business
duties.  Up to the Termination Date,
Executive shall perform substantial services that shall not amount to less than
an average of thirty (30) 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.


 

















 


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 Three Hundred
Fifty Thousand Dollars ($350,000.00), minus required withholdings, representing
twelve (12) months of Executive’s base salary. 
The payment shall be made within ten (10) business days after the
Supplemental General Release Agreement becomes effective.


 


b.             Target Bonus Pay:  The
Company shall pay to Executive in a lump sum the gross amount of Three Hundred
Fifty Thousand Dollars ($350,000.00), minus required withholdings, representing
an amount equal to Executive’s Target Bonus paid at a level of 100% of
Executive’s base salary.  The payment
shall be made within ten (10) business days after the Supplemental General
Release Agreement becomes effective.


 


c.             Pro-Rated MICP Bonus Pay:  Provided the Company’s performance
with respect to the guidelines set forth in the Magnetek Incentive Compensation
Plan (“MICP”) in place for fiscal year 2009 merits the payment of an MICP
bonus, Executive shall be eligible to receive a pro-rated bonus for fiscal year
2009 based on the number of months worked during the fiscal year, to be paid at the same bonus payout percentage, if any,
that is received by all other MICP participants in FY 2009.  Payment of the prorated MICP bonus will occur
contemporaneous with the payment of bonuses to the other MICP participants
after the end of FY 2009.


 


d.             Incentive Bonus:  With respect to Executive’s
Incentive Bonus Agreement (“IBA”):


 


i.              The 2007 and 2008 Quarterly Bonus
amounts shall become payable pursuant to the terms of the Amended and Restated
Director and Officer Deferral Investment Plan (“DIP”) and the Executive’s
election thereunder.


 


ii.             Paragraph 1(g) and 2 of the
IBA shall hereby be amended to provide that the Quarterly Bonus Awards that
otherwise would have been made on March 1, 2009, June 30, 2009, September 30,
2009 and December 31, 2009 shall instead be credited to the Executive
under the DIP, as previously elected by the Executive, provided the Executive
continues to be employed in accordance with this Agreement through the
Termination Date.  Distribution of these
amounts will occur in accordance with the DIP the Executive’s election
thereunder.


 


e.             Health Plan Benefits: 
Executive’s family health benefit coverage will continue throughout the
Transition Period and will end on January 15, 2009.  Provided that Executive executes a COBRA
election, the Company will continue to contribute towards Executive’s COBRA coverage
for up to twelve (12) months after January 15, 2009 by paying the employer’s
portion of the monthly premium as applicable to then current employees covered
by the health plan.  This Company
contribution benefit shall terminate if Executive becomes eligible for
comparable benefits pursuant to a health plan sponsored by another
employer.  To maintain this Company
contribution benefit, Executive must submit his monthly contribution for family
medical coverage to the Magnetek HR Services Administrator, no later than the
tenth of each month that Executive seeks coverage, in the form of a check or
money order payable to Magnetek, Inc. 



 


2

















 


Specific information concerning Executive’s COBRA continuation rights
will be sent to Executive under separate cover upon termination of employment.


 


f.              Restricted Stock Award: 
Executive’s Restricted Stock Award granted on August 22, 2005 in
the amount of 57,000 shares of Magnetek, Inc. common stock will vest on January 1,
2009, 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.


 


g.             Stock Option Exercise Period:  Executive’s unvested Stock Option Grant will
vest on January 15, 2009, provided the Executive continues to be employed
in accordance with this Agreement through such date.  Executive will have a period of twenty-four
(24) months from January 15, 2009 to exercise all vested options, except
with regard to any options which expire prior to such date.   Executive is advised to consider
the Section 16(b) short-swing trade regulations under the Securities
and Exchange Act of 1934.


 


h.             Retirement and Savings Plans:   The rights and duties of Executive
and the Company with respect to the Magnetek FlexCare Plus Retirement Pension
Plan and 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.


 


i.              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 January 15, 2009.


 


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 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 


 


3

















 


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.


 


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 he has not brought, and covenants and agrees that he 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 his 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 his 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 his employment with the Company, he 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 his 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 his own
benefit, without the prior express written consent of the 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 


 


4





















 


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
he has given written notification to the Chairman of the Company’s Board of
Directors 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.


 


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 his
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.


 


5

















 


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.


 


12.           Consideration
and Revocation.  Executive
acknowledges that he 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 he otherwise would be entitled by any contract,
employment policy, or otherwise. 
Executive further acknowledges that he is entering into this Agreement
voluntarily, that he 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 he has a right to
obtain advice of legal counsel of his 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
his 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 Vice President
Legal Affairs within the seven-day revocation period.


 


13.           No
Other Inducements.  To induce the
Company to provide him 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 him 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.  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 Change of Control 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 modified,
except in writing signed by Executive and an agent of the Company specifically
authorized to sign on behalf of the Company in this matter.


 


16.           Severability.  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 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).


 


6

















 


EXECUTIVE
FULLY UNDERSTANDS THE MEANING AND INTENT OF THIS AGREEMENT AND ITS FINAL AND
BINDING EFFECT ON HIM.


 


[Signature page follows]


 


7

















 


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


 


	
    /s/ David
  P. Reiland

  	
   

  	
  Date:

  	
    October 30,
  2008

  
	
  David P. Reiland

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  MAGNETEK, INC.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
    /s/
  Mitchell I. Quain

  	
   

  	
  Date:

  	
    January 5,
  2009

  
	
  Its: Chairman, Mitchell I. Quain

  	
   

  	
   

  	
   

  
					



 


8

















 


EXHIBIT A


 


SUPPLEMENTAL
GENERAL RELEASE AGREEMENT


 


This
Supplemental General Release Agreement (this “Release”) is entered into by and
between Magnetek, Inc., a Delaware corporation (the “Company”), and David
P. Reiland (“Executive”).  Executive
enters into this Release on behalf of himself, his spouse, heirs, successors,
assigns, executors and representatives of any kind, if any.


 


WHEREAS,
Executive’s employment with the Company has terminated, and Executive desires
to be eligible for the benefits of the Transition, Separation and Complete
Release Agreement executed by Executive and the Company on January 5, 2009
(the “Transition Agreement”).


 


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 Release, nor any actions taken by either the Company or Executive
toward compliance with the terms of this Release, constitute an admission by
either the Company or Executive that it or he has acted improperly or
unlawfully, or that it or he has violated any state or federal law.


 


2.                                       Mutual
Complete Releases.


 


a.     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 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 


 


9

















 


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.


 


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.


 


2.             Reaffirmation.  Executive hereby reaffirms the promises made
and obligations undertaken as set forth in the Transition Agreement.


 


3.             Consideration
and Revocation.  Executive
acknowledges that he has carefully read and fully understands all of the
provisions of this Release.  Executive
further acknowledges that the benefits provided for in the Transition Agreement
that Executive will receive by executing this Release are greater than those to
which he otherwise would be entitled by any contract, employment policy, or
otherwise.  Executive further
acknowledges that he is entering into this Release voluntarily, that he has
been provided more than twenty-one (21) days to consider the provisions set
forth in this Release, or has voluntarily waived the twenty-one (21) day
consideration period upon advice of counsel. 
Executive understands that he has a right to obtain advice of legal
counsel of his choosing regarding this Release prior to signing it and is
encouraged by the Company to do so.  For
a period of seven (7) days following his signing of this Release, Executive
may revoke it, and this Release 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 Vice President Legal Affairs within the seven-day
revocation period.


 


4.             Severability.  If any portion of this Release 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.


 


5.             Signatures.  This Release, or any amendment hereto, may be
signed in any number of counterparts, including counterparts signed and
delivered by fax 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).


 


EXECUTIVE
FULLY UNDERSTANDS THE MEANING AND INTENT OF THIS RELEASE AND ITS FINAL AND
BINDING EFFECT ON HIM.


 


[Signature page follows]


 


10

















 


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


 


	
    /s/ David P. Reiland

  	
   

  	
  Date:

  	
    January 16, 2009

  
	
   

  	
   

  	
   

  	
   

  
	
  David P. Reiland

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  MAGNETEK, INC.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
    /s/ Mitchell I. Quain

  	
   

  	
  Date:

  	
    January 05, 2009

  
	
   

  	
   

  	
   

  	
   

  
	
  Its: Chairman, Mitchell I. Quain

  	
   

  	
   

  	
   

  
					



 


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