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.
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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
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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,
includi
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