EXHIBIT 10.1
MAGNETEK, INC.
AMENDED AND RESTATED DIRECTOR AND
OFFICER
COMPENSATION AND DEFERRAL
INVESTMENT PLAN
January 1,
2009
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 was amended and
restated effective as of January 1, 2005 (the “2005
Restatement”), which amendment and restatement was 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 only applied to (i) “amounts
deferred” (within the meaning of Section 409A) by
Directors (as defined below) in taxable years beginning 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 continued 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, the 2005
Restatement extended 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 was 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
Amendment.
Since January 1, 2005, the
Company has been treating Section 409A Deferrals in good faith
compliance with Section 409A. The Company now
wishes to further amend and restate the Plan, effective
January 1, 2009, in order to comply with Section 409A and
the regulations (including the final regulations) and other
Treasury Department guidance promulgated thereunder.
1.3
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.
(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 would be considered to be disabled 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.
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(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)
“Newly Eligible
Participant” means a Director or Key Executive who first
becomes eligible to participate in the Plan following the
commencement of a given Year.
(p)
“Participant” means a
Director or Key Executive who is actively participating in the
Plan.
(q)
“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.
(r)
“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.
(s)
“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.
(t)
“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” (as defined under
Section 409A) during the entire 12-month period ending on such
identification date shall be excluded for purposes of determining
which individuals will be Specified Employees.
(u)
“Separation from
Service” means a Participant’s “separation from
service,” as determined by the Committee in accordance with
the definition of “separation from service” under
Section 409A. Notwithstanding anything herein to the
contrary, a Participant who is a Director and subsequently ceases
to qualify as a Director as a result of his or her becoming a Key
Executive shall not be deemed to have had a Separation from Service
for purposes of the Plan until such time as the Participant has a
Separation from Service as both a Key Executive and a
Director.
(v)
“Stock” means common
stock of the Company, par value $0.01 per share.
(w)
“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.
(x)
“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
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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 Milwaukee, Wisconsin, 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. 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:
(i)
the specific reason or reasons for
such denial;
(ii)
reference to the specific 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
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(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.
(1)
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.
(2)
The period of time within which a
benefit determination is required to be made shall begin at the
time a claim is received by the Committee, without regard to
whether all the information necessary to make a benefit
determination accompanies the filing. If the period of time for
determining the claim is extended as permitted above, due to a
claimant’s failure to submit information necessary to decide
the claim, then the period for making the benefit determination
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.
(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,
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.
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(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. 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)
reference to the specific Plan
provisions on which the denial is based;
(iii)
a statement that the claimant is
entitled to 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
Section 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)
Service of Process.
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.
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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 have been designated as eligible to
participate in the Plan with respect to any Year beginning after
December 31, 2005 by the Committee shall be eligible to
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. Each Year, the Committee shall notify
Directors and Key Executives of their eligibility to participate in
the Plan during the following Year. A Director or Key
Executive who is eligible to participate in the Plan shall commence
participation in the Plan by completing the “Election to
Defer Forms” and delivering such forms to the Company as
provided in Article 6 herein, and in the case of Directors
electing to receive Stock in lieu of cash Meeting Fees, by
completing the “Election to Receive Stock Forms” and
delivering such forms to the Company as provided in Sections 5.2
and 5.3 herein.
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.
The eligibility of Key Executives to
participate in the Plan 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 eligible to participate in the Plan following the
co
