10-Q

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q

(Mark One)

ý         QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended:  September 30, 2001

OR

o         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from

Commission file number 1-10233

MAGNETEK, INC.

(Exact name of registrant as specified in its charter)

Delaware	95-3917584
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)
10900 Wilshire Blvd., Suite 850 Los Angeles, California	90024
(Address of principal executive offices)	(Zip Code)

(310) 208-1980

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes  ý  No  o

APPLICABLE ONLY TO CORPORATE ISSUERS:

The number of shares outstanding of Registrant’s Common Stock, as of November 1, 2001, 22,531,548 shares.

2002 MAGNETEK FORM 10-Q

TABLE OF CONTENTS FOR THE QUARTERLY REPORT ON 10Q

FOR THE FISCAL QUARTER ENDED SEPTEMBER 30, 2001

MAGNETEK, INC.

Part I.	Financial Information
Item 1.	Financial Statements
Item 2.	Management’s Discussion and Analysis of Financial Condition And Results of Operations
Part II.	Other Information
Item 1.	Legal Proceedings
Item 4.	Submission of Matters to a Vote of Security Holders
Item 6.	Exhibits on form 8-K

PART I.  FINANCIAL INFORMATION

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

In the opinion of management, the accompanying condensed consolidated financial statements contain all adjustments necessary to fairly present the financial position as of September 30, 2001 and the results of operations and cash flows for the three-month periods ended September 30, 2001 and 2000.  It is suggested that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and notes included in the Company’s latest Annual Report on Form 10-K.  Results for the three-months ended September 30, 2001 are not necessarily indicative of results which may be experienced for the full fiscal year.

This document contains “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995, that are subject to risks and uncertainties which, in many cases, are beyond the control of the Company.  These include but are not limited to economic conditions in general, business conditions in electrical and electronic equipment markets, competitive factors such as pricing and technology, and the risk that the Company’s ultimate costs of doing business exceeds present estimates.  Further information on factors which could affect Magnetek’s financial results are described in the Company’s filings with the Securities and Exchange Commission.

ITEM 1

MAGNETEK, INC.

CONDENSED CONSOLIDATED INCOME STATEMENTS

FOR THE THREE MONTHS ENDED

September 30, 2001 and 2000

(amounts in thousands except per share data)

(unaudited)

	2001			2000
Net sales	$	52,456		$	71,870
Cost of sales	40,616			54,924
Gross profit	11,840			16,946
Selling, general and administrative	10,230			13,723
Income from operations	1,610			3,223
Interest and other (income) expense	(136		)	1,613
Income from continuing operations before provision for income taxes	1,746			1,610
Provision for income taxes	664			612
Income from continuing operations	1,082			998
Discontinued operations -
Income from operations (net of taxes)	–			1,805
Net income	$	1,082		$	2,803
Earnings per common share
Basic:
Income from continuing operations	0.05			0.04
Income from discontinued operations	–			0.08
Net income	$	0.05		$	0.12
Diluted:
Income from continuing operations	0.05			0.04
Income from discontinued operations	–			0.08
Net income	$	0.05		$	0.12

See accompanying notes

MAGNETEK, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30, 2001 and JUNE 30, 2001

(amounts in thousands)

	September 30			June 30
	(unaudited)
ASSETS
Current assets:
Cash	$	7,922		$	5,310
Accounts receivable	46,670			51,074
Inventories	45,632			48,907
Prepaid expenses and other	10,136			11,677
Total current assets	110,360			116,968
Property, plant and equipment	83,112			76,602
Less-accumulated depreciation and amortization	50,869			45,664
	32,243			30,938
Net assets of discontinued operations	–			19,500
Goodwill	89,501			88,784
Prepaid pension and other assets	66,781			65,564
Total Assets	$	298,885		$	321,754
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	22,677		$	33,946
Accrued liabilities	23,415			33,743
Current portion of long-term debt	998			5,822
Total current liabilities	47,090			73,511
Long-term debt, net of current portion	4,119			4,312
Other long-term obligations	37,887			37,915
Deferred income taxes	23,504			22,309
Commitments and contingencies
Stockholders’ equity
Common stock	225			227
Paid in capital in excess of par value	95,370			97,951
Retained earnings	115,477			114,395
Accumulated other comprehensive loss	(24,787		)	(28,866		)
Total stockholders' equity	186,285			183,707
Total Liabilities and Stockholders' Equity	$	298,885		$	321,754

See accompanying notes

MAGNETEK, INC.

CONSOLIDATED STATEMENTS OF CASH FLOW

FOR THE THREE MONTHS ENDED

September 30, 2001 and 2000

(amounts in thousands except per share data)

(unaudited)

	2001			2000
Cash flows from operating activities:
Net income from continuing operations	$	1,082		$	998
Adjustments to reconcile income to net cash used in operating activities:
Depreciation	2,236			2,557
Amortization	–			767
Changes in operating assets and liabilities of continuing operations	(10,806		)	(13,984		)
Total adjustments	(8,570		)	(10,660		)
Net cash used in operating activities	(7,488		)	(9,662		)
Cash flows from investing activities:
Proceeds from sale of discontinued businesses and other assets	19,500			–
Capital expenditures	(1,800)			(1,282		)
Net cash provided by (used in) investing activities	17,700			(1,282		)
Cash flow from financing activities:
Borrowings under bank and other long-term obligations	–			12,441
Proceeds from issuance of common stock	596			407
Stock repurchases	(3,179		)	(3,858		)
Repayment of bank and other long term obligations	(5,017		)	–
Net cash provided by (used in) financing activities	(7,600		)	8,990
Net cash provided by (used in) continuing operations	2,612			(1,954		)
Cash flow from discontinued operations:
Income from discontinued operations	–			1,805
Adjustments to reconcile income to net cash provided by discontinued operations:
Depreciation and amortization	–			2,662
Changes in operating assets and liabilities of discontinued operations, including fees and expenses of disposal	–			(993		)
Capital expenditures	–			(1,357		)
Net cash provided by discontinued operations	–			2,117
Net increase in cash	$	2,612		$	163
Cash at the beginning of the period	5,310			343
Cash at the end of the period	$	7,922		$	506
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest	$	—		$	1,383
Income taxes	$	154		$	(337	)

See accompanying notes

MAGNETEK, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2001

(All dollar amounts are in thousands)

(unaudited)

1.             Summary of significant accounting policies

Fiscal period – The Company uses a fifty-two, fifty-three week fiscal year.  Fiscal periods end on the Sunday nearest the end of the month.  For clarity of presentation, all periods are presented as if they ended on the last day of the calendar period.  The three-month periods ended September 30, 2001 and 2000 each contained thirteen weeks.

Principles of consolidation – The consolidated financial statements include the accounts of Magnetek, Inc. and its subsidiaries (the “Company”).  All significant inter-company accounts and transactions have been eliminated.

Use of estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes.  Actual results could differ from these estimates.

Commodity Derivative Instruments – The Company historically utilized derivative financial instruments to reduce market fluctuations in commodity (copper wire) and foreign currency (peso related labor costs) exposures specific to businesses included as discontinued operations.  As a condition to the sale of its Lighting business on June 15, 2001, the Company agreed to provide for a period of five months following the sale, a fixed peso to dollar conversion rate for a specified amount of peso denominated costs.  The Company’s use of derivative instruments currently includes only peso futures contracts related to this obligation.  The contract terms of these derivatives extend only through November 30, 2001 and are completed through a financial settlement and not through the physical receipt of the currency.  This derivative does not qualify for hedge treatment under SFAS No. 133.  The Company included in its loss on sale of the Lighting business, the difference between the guaranteed conversion rate and the market rate at the sale date.  Changes in fair value are being recorded against the loss on sale of the Lighting business.  The Company has established policies and procedures that govern the management of these exposures through the use of financial instruments.  The Company’s policy prohibits the use of derivative financial instruments for speculative or trading purposes.

On July 1, 2000, the Company adopted Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging Activities and its amendments, Statements 137 and 138 (“SFAS 133”), which established new accounting and reporting guidelines for derivative instruments and hedging activities.  SFAS 133 requires all derivative instruments to be recognized as assets or liabilities in the balance sheet and measured at fair value.  Accounting for changes in the fair value of a derivative depends on the intended use of the derivative and the resulting designation.  For derivatives designated as cash flow hedges, changes in fair value are recognized in accumulated other comprehensive income in the balance sheet until the hedged item is recognized in earnings.  Changes in the fair value of derivative instruments, which are not designated as hedges, are recorded in earnings as the changes occur.

2.             Inventories

Inventories at September 30, 2001 and June 30, 2001 consist of the following:

	September 30		June 30
Raw materials and stock parts	$	23,953	$	26,186
Work-in-process	10,268		8,839
Finished goods	11,411		13,882
	$	45,632	$	48,907

3.             Commitments and Contingencies

The Company is defending against a number of product liability lawsuits involving fires allegedly caused by defective ballasts.  Management believes that insurance coverage for the alleged claims exists, subject to applicable deductibles, and that none of these proceedings individually or in the aggregate will materially affect the financial position or results of operations of the Company.  On June 15, 2001, the Company sold the assets, properties and interests of its Lighting business, as reported in Form 8-K filed with the Commission on July 2, 2001.  The sale limits the Company’s potential exposure to future product liability lawsuits of this type.

In April 1998, Ole K. Nilssen filed a lawsuit in the U.S. District Court for the Northern District of Illinois alleging infringement by the Company of seven of his patents pertaining to electronic ballast technology.  Nilssen seeks unspecified damages and injunctive relief to preclude the Company from making, using or selling products allegedly infringing his patents.  The Company denies that any of its products infringe any valid patent and has filed a response asserting its affirmative defenses, as well as a counterclaim for a judicial declaration that its products do not infringe the patents asserted by Nilssen and also that the asserted patents are invalid.  The Company intends to vigorously defend against Nilssen’s claims and although it cannot predict the outcome of the lawsuit, management does not believe that the financial impact of such litigation will be material to the financial position or results of operations of the Company.

In March 2001, the Company was named as the defendant in a lawsuit filed by VLT, Inc. and Vicor Corporation in the United States District Court of Massachusetts.  Plaintiffs allege that the Company is infringing a reissue patent owned by VLT and assigned and licensed to Vicor.  Plaintiffs seek a judgment that the Company willfully infringed the patent, an injunction against further infringement and unspecified damages, as well as attorney’s fees.  The Company denies that it has or is infringing any valid patent owned by Plaintiff and has filed a response, alleging various affirmative defenses.  In September 2001, a settlement was reached whereby Magnetek was issued a license to use Vicor/VLT technology in consideration for the payment of certain royalties set forth in the License Agreement and Vicor agreed to dismiss the lawsuit against Magnetek with prejudice.

The Company has from time to time discovered contamination by hazardous substances at certain of its facilities.  In response, the Company conducts remediation activities to bring its facilities into compliance with applicable laws and regulations.  The Company’s remediation activities for the first quarter of fiscal 2002 did not involve material expenditures and the Company does not expect its expenditures for the remainder of fiscal 2002 to be material.  The Company has also been identified by the United States Environmental Protection Agency and certain state agencies as a potentially responsible party for cleanup costs associated with alleged past waste disposal practices at several facilities and offsite locations.  Its remediation activities as a potentially responsible party were not material for the first quarter of fiscal 2002 and are not expected to be material for the remainder of fiscal 2002.  Although the materiality of future expenditures for environmental activities may be affected by the level and type of contamination, the extent and nature of cleanup activities required by the governmental authorities, the nature of the Company’s alleged connection to the contaminated property, the number and financial resources of other potentially responsible parties, the availability of indemnification rights against third parties and the identification of additional contaminated sites, the Company’s estimated share of liability, if any, for environmental remediation is not expected to be material to the Company’s finances or operations.

The Company is frequently named, along with numerous other defendants, in asbestos-related lawsuits.  While the outcome of these cases cannot be predicted with certainty, the Company is aggressively seeking to be dismissed from them and does not believe they will have a material adverse effect on its finances or operations, since it has never produced asbestos-containing products and is either contractually indemnified from or believes that it is not liable for these asbestos-related claims, all of which arise from business operations it acquired and no longer owns.

In connection with certain divestitures, the Company has agreed, from time to time, to indemnify buyers with respect to environmental liabilities associated with the divested operations, subject to various conditions and limitations.  Expenditures related to the Company’s indemnification obligations were not material in the first quarter of fiscal 2002 and are not expected to be material in the remainder of fiscal 2002.  Although future expenditures pursuant to such indemnification obligations could be material, depending upon the extent and nature of subsequently discovered contamination, the Company does not expect its obligations to require material expenditures.

Prior to the Company’s purchase of Century Electric, Inc. (“Century Electric”) in 1986, Century Electric acquired a business from Gould Inc. (“Gould”) in May 1983 that included a leasehold interest in a fractional horsepower electric motor manufacturing facility located in McMinnville, Tennessee.  In connection with this acquisition, Gould agreed to indemnify Century Electric from and against liabilities and expenses arising out of the handling and cleanup of certain waste materials, including but not limited to cleaning up any polychlorinated biphenyls (“PCBs”) at the McMinnville facility (the “1983 Indemnity”).  Investigation has revealed the presence of PCBs and other substances, including solvents, in the soil and in the groundwater underlying the facility and in certain offsite soil, sediment and biota samples.  Century Electric notified the Tennessee Department of Environment and Conservation, Division of Superfund, of the test results from its investigation and the McMinnville plant is listed as a Tennessee Inactive Hazardous Substance Site.  A report on the site was presented to the Tennessee legislature and community officials and plant employees were notified of the presence of contaminants at the McMinnville facility.  In 1995, Gould completed an interim remedial excavation and disposal of onsite soil containing PCBs.  Gould also conducted preliminary investigation and cleanup of certain onsite and offsite contamination.  The cost of any further investigation and cleanup of onsite and offsite contamination cannot presently be determined, but the Company believes such costs (including ancillary costs) are covered by the 1983 Indemnity.  The Company sold its leasehold interest in the McMinnville plant and while the Company believes that Gould will continue to perform substantially under its indemnity obligations, Gould’s substantial failure to perform such obligations could have a material adverse effect on the Company.

The Company acquired the stock of Universal Manufacturing Company (“Universal”) from a predecessor of Fruit of the Loom (“FOL”), and the predecessor agreed to indemnify the Company against certain environmental liabilities arising from Universal’s pre-acquisition activities.  Environmental liabilities covered by the indemnification agreement include completion of additional cleanup activities, if any, at the Bridgeport, Connecticut facility (recently sold in connection with the sale of the Transformer business) and defense and indemnification against liability related to offsite disposal locations where Magnetek may have a share of potential response costs.  FOL filed a petition for Reorganization under Chapter 11 of the Bankruptcy Code and the Company filed a proof of claim in the proceeding for obligations related to the environmental indemnification agreement.  While the Company believes that FOL has substantially completed the clean-up obligations required by the indemnification agreement, its ability to set aside any remaining obligations through bankruptcy or the discovery of additional environmental contamination at the Bridgeport facility could have an adverse effect on the Company.

4.             Discontinued Operations

The accompanying financial statements have been restated to conform to discontinued operations treatment for current and historical periods.  The results of the Company’s electrical product businesses (Lighting and Transformers) are included within discontinued operations.  As of June 30, 2001, the $19.5 million classified on the balance sheet as net assets of discontinued operations was the receivable value for the sale of the Transformer business on June 29, 2001 and was subsequently collected on July 2, 2001.

On June 15, 2001, the Company sold its Lighting business to Universal Lighting Technologies, Inc., a subsidiary of Littlejohn Fund II, L.P., and on June 29, 2001 sold its Transformer business to American Circuit Breaker Corporation.  Pre-tax proceeds received from the sale of the Lighting business were $105 million and were used to repay borrowings under the Bank Loan Agreement and repurchase shares of its common stock in fiscal year 2001.  Proceeds from the sale of the Transformer business were received July 2, 2001 and were used to repay borrowings under the Bank Loan Agreement and repurchase shares of its common stock in fiscal year 2002.  Both sale transactions are subject to post closing adjustments.

5.             Acquisitions and Goodwill

The Company adopted Statement of Financial Accounting Standards (“SFAS”) No. 142, Goodwill and Other Intangible Assets, effective July 1, 2001.  Under SFAS 142, goodwill is no longer amortized but rather reviewed for impairment annually, or more frequently if certain indicators arise.  The Company is required to complete the initial step of a transitional impairment test of goodwill within six months of adoption of SFAS No. 142 and to complete the final step of the transitional impairment test by the end of the fiscal year.  Any subsequent impairment loss resulting from the transitional impairment test will be recorded as a cumulative effect of a change of accounting principle for the quarter ending December 31, 2001.  Any subsequent impairment losses will be reflected in operating income in the income statement.  Had the Company been accounting for its goodwill under SFAS No. 142 for all periods presented, the Company’s net income and earnings per share would have been as follows:

	Three Months Ending September 30
	2001		2000
Reported net income	$	1,082	$	2,803
Add back goodwill amortization net of tax	-		293
	$	1,082	$	3,096
Basic earnings per share:
Reported net income	$	0.05	$	0.12
Goodwill amortization net of tax	-		0.01
Adjusted net income	$	0.05	$	0.13
Diluted earnings per share:
Reported net income	$	0.05	$	0.12
Goodwill amortization net of tax	-		0.01
Adjusted net income	$	0.05	$	0.13

6.             Comprehensive Income

During the first quarter of fiscal 2002 and 2001, total comprehensive income was $5,161 and $2,447 respectively.

7.             Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share.

(in thousands, except per share amounts)	FISCAL YEAR
	1Q 2002		1Q 2001
Basic earnings per share:
Income from continuing operations	$	1,082	$	998
Income from discontinued operations		-		1,805
Net income	$	1,082	$	2,803
Weighted average shares for basic earnings per share	22,542		22,780
Basic earnings per share:
Income from continuing operations	$	0.05	$	0.04
Income from discontinued operations		-		0.08
Basic earnings per share:	$	0.05	$	0.12
Diluted earnings per share:
Income from continuing operations	$	1,082	$	998
Income from discontinued operations		-		1,805
Net income	$	1,082	$	2,803
Weighted average shares for basic earnings per share	22,542		22,780
Effect of dilutive stock options	436		163
Weighted average shares for diluted earnings per share	22,978		22,943
Diluted earnings per share:
Income from continuing operations	$	0.05	$	0.04
Income from discontinued operations		-		0.08
Diluted earnings per share:	$	0.05	$	0.12

ITEM 2

MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS:

Three Months ended September 30, 2001 vs. 2000

Net Sales and Gross Profit

Magnetek’s net sales for the first quarter of fiscal 2002 were $52.5 million, a decrease of 27% from the first quarter of fiscal 2001 of $71.9 million.  Prior year sales included $20.7 million associated with the standard drives business that was sold on January 29, 2001.  Adjusting for the revenues of the standard drives business, sales increased 2.5% from the prior year levels.  The increase in sales from prior year levels (after adjusting for the sales attributable to standard drives) was a direct result of the Company’s acquisition of Telecom Power businesses in the second and third quarters of fiscal 2001.

The Company’s gross profit declined to $11.8 million (22.6% of net sales) in the first quarter of fiscal 2002 from $16.9 million (23.6% of net sales) in the first quarter of fiscal 2001.  The decline in gross profit was caused primarily by the sale of the standard drives business and currency related transaction losses incurred in Europe as the U.S. dollar declined against the lira.

Selling, General and Administrative

Selling, general and administrative expense was $10.2 million (19.5% of net sales) in the first quarter of fiscal 2002 compared to $13.7 million (19.1% of net sales) in the first quarter of fiscal 2001.  The reduction in spending levels from the prior year was due to the elimination of SG&A expense associated with the standard drives business with its divestiture in January of 2001 and lower overall spending levels offset by SG&A expense associated with acquisitions completed in the prior year.

Interest and Other Expense (Income)

Interest and other expense (income) was income of $.1 million in the first quarter of fiscal 2002 compared to $1.6 million of expense in the first quarter of fiscal 2001.  Lower interest expense occurred due to repayment of all domestic bank debt with proceeds received from the sale of the Lighting and Transformer businesses in June and July of 2001.  Other expense (income) in the first quarter of fiscal 2002 included the final purchase price adjustment related to the sale of the standard drives business of $.2 million of income.  The Company early adopted the new rules for accounting for goodwill and other intangible assets beginning in the first quarter of fiscal 2002 (See Note 5) and recorded no goodwill amortization in the first quarter of fiscal 2002.

Net Income

The Company recorded an after-tax profit from continuing operations of $1.1 million in the first quarter of fiscal 2002 compared to an after-tax profit of $1.0 million in the first quarter of fiscal 2001.  There were no results for discontinued operations in the first quarter of fiscal 2002 compared to an after-tax profit of $1.8 million in the first quarter of fiscal 2001.  The tax provision in the first quarter of fiscal 2002 was $.7 million (38% effective tax rate) versus $.6 million (38% effective tax rate) in the first quarter of fiscal 2001.  The Company expects tax rates used in the first quarter of fiscal 2002 to continue throughout the year.

Liquidity and Capital Resources

At September 30, 2001 the Company had an agreement with a group of banks to borrow up to $60 million under a revolving loan facility through June 2002.  Currently, borrowings under the Bank Loan Agreement bear interest at the bank’s prime lending rate plus one-half percent or, at the Company’s option, the London Interbank Offered Rate plus two percent.  These rates may be reduced or increased based upon the level of certain debt-to-cash flow ratios.  As of September 30, 2001, the Company had $53 million of borrowing availability under this facility.  During the first quarter of fiscal 2002, the Company repurchased 271,800 common shares for approximately $3.2 million in open market transactions.  Common stock repurchases made in the first quarter of fiscal 2002 completed the Company’s previously approved ten million share stock repurchase program and included purchases under an additional repurchase program of up to 2.26 million shares authorized on September 17, 2001 by the Board of Directors.

Qualitative and Quantitative Disclosure About Market Risk

The Company is exposed to market risks in the areas of commodity prices, foreign exchange and interest rates.  To mitigate the effect of such risks, the Company selectively utilizes specific financial instruments.  Company policy clearly prohibits the use of such financial instruments for trading or speculative purposes.  There have been no material changes in the reported market risks since that reported in the Company’s Annual Report on Form 10-K dated June 30, 2001.

PART II                 OTHER INFORMATION

ITEM 1.                  Legal Proceedings

                                See Part I, Item 1, Note 3.

ITEM 4.                  Submission of Matters to a Vote of Security Holders

(a)           The Annual Meeting of Stockholders of the Company was held on October 31, 2001.

(b)           The following named person were elected as directors at such meeting:

Andrew G. Galef

Thomas G. Boren

Dewain K. Cross

Paul J. Kofmehl

Frederick D. Lawrence

Mitchell I. Quain

Robert E. Wycoff

(c)           The votes cast for and withheld with respect to each nominee for director are as follows:

Nominee	For	Withheld
Andrew G. Galef	19,835,631	575,552
Thomas G. Boren	19,866,692	544,491
Dewain K. Cross	19,866,892	544,291
Paul J. Kofmehl	19,865,892	545,291
Frederick D. Lawrence	19,396,883	1,014,300
Mitchell I. Quain	19,866,692	545,491
Robert E. Wycoff	19,865,692	545,491

(d)           The votes cast for, against and abstaining with respect to the adoption of the 2002 Magnetek, Inc. Employee
 Stock Purchase Plan are as follows:

For	Against	Abstaining	Broker Non-Votes
19,942,899	462,914	5,370	0

ITEM 6.                  Exhibits and Reports on Form 8-K

(a)           Exhibits

10.1	2002 Magnetek, Inc. Employee Stock Purchase Plan.
10.2	Change of Control Agreement dated October 31, 2001 between Richard L. Pratt and Magnetek, Inc.

(b)           Reports on Form 8-K

Form 8K dated July 2, 2001, reported under Item 7, the sale of the assets, properties and interests of the Company’s Lighting business to Universal Lighting Technologies, Inc., a Delaware Corporation, a subsidiary of Littlejohn Fund II, L.P.

SIGNATURES

      Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

MAGNETEK, INC.

(Registrant)

Date: November 13, 2001	/s/ David P. Reiland
	David P. Reiland
	Executive Vice President
	and Chief Financial Officer
	(Duly authorized officer of the
	registrant and principal
	financial officer)

EX-10.1

Exhibit 10.1

2002 MAGNETEK, INC.

EMPLOYEE STOCK PURCHASE PLAN

I
INTRODUCTION

1.1           Purpose.  The Magnetek, Inc. Employee Stock Purchase Plan (the “Plan”) is intended to provide employees of Magnetek, Inc. (the “Company”) and its Designated Subsidiaries (as defined below) with an opportunity to purchase shares of the Common Stock of the Company through accumulated payroll deductions.  It is the intention of the Company to have the Plan qualify as an “Employee Stock Purchase Plan” under Section 423 of the Internal Revenue Code of 1986, as amended (the “Code”).  The provisions of the Plan, accordingly, shall be construed so as to extend and limit participation in a manner consistent with the requirements of that Section of the Code.

II
DEFINITIONS

2.01         “Board” shall mean the Board of Directors of the Company.
2.02         “Code” shall mean the Internal Revenue Code of 1986, as amended.
2.03         “Committee” shall mean the individuals described in Section 11.01

2.04         “Common Stock” shall mean the Common Stock of the Company.

2.05         “Company” shall mean Magnetek, Inc., a Delaware corporation.

2.06         “Compensation”shall mean the total cash compensation paid to the participant, including overtime pay, bonuses (e.g. sales, variable compensation, profit-sharing, signing bonus), shift differential pay, and commissions, but excluding severance pay, moving expense reimbursement, expatriate allowances, wellness bonuses, authors’ guild awards, patent awards, performance plus awards, tuition reimbursement, Christmas bonuses, employee referral awards, distributions from nonqualified deferred compensation plans and any other extraordinary or incentive compensation determined by the plan administrator not to be a part of  the basic compensation package of the Company.

2.07         “Designated Subsidiary” shall mean any shall mean any present or future, domestic or foreign, corporation which (i) is or becomes a “subsidiary corporation” of the Company as that term is defined in 'Section 424(f) of the Code and (ii) is designated as a participant in the Plan by the Board, in its sole discretion and subject to amendment from time to time.

2.08         “Employee” shall mean any person employed by the Company or any Designated Subsidiary whose customary employment with the Company is at least twenty (20) hours per week.  For purposes of the Plan, the employment relationship shall be treated as continuing intact while the individual is on sick leave or other leave of absence approved by the Company.  Where the period of leave exceeds 90 days and the individual’s right to reemployment is not guaranteed either by statute or by contract, the employment relationship shall be deemed to have terminated on the 91st day of such leave.

2.09         “Enrollment Date” shall mean the first day of each Offering Period.

2.10         “Exercise Date” shall mean the last day of each Offering Period.

2.11         “Fair Market Value” shall mean the closing sales price for the Company’s Common Stock (or the closing bid if no sales were reported) as quoted on any established stock exchange on which the stock is listed for the last market trading day on the date of determination, as reported in The Wall Street Journal or such other source as the Board deems reliable.

2.12         “Offering Period" shall mean a period of approximately three (3) months during which an option granted pursuant to the Plan may be exercised, commencing on the first Trading Day on or after the first day of each calendar quarter and terminating on the last Trading Day on or before the last day of each calendar quarter; provided, however, that the first Offering Period under the Plan shall commence with the first Trading Day on or after the date on which the Securities and Exchange Commission declares the Company's Registration Statement with respect to the Plan effective and ending on the last Trading Day on or before the last day of the calendar quarter. The duration of Offering Periods may be changed pursuant to Section 4 of this Plan.

2.13         “Plan" shall mean this Employee Stock Purchase Plan.

2.14         “Plan Representative” shall mean any person designated from time to time by the Committee to receive certain notices and take certain other administrative actions relating to participation in the Plan.

2.15         “Purchase Price” shall mean an amount equal to 85% of the Fair Market Value of a share of Common Stock on the Enrollment Date or on the Exercise Date, whichever is lower; provided, however, that the Purchase Price may be adjusted by the Board pursuant to Section 12.03 of the Plan.

2.16         “Trading Day” shall mean a day on which the national stock exchanges and the NASDAQ System are open for trading.

III

ELIGIBILITY AND PARTICIPATION

3.01         Initial Eligibility.  Any Employee who is employed by the Company or any Designated Subsidiary on a given Enrollment Date shall be eligible to participate in the Plan with respect to any offerings of Common Stock under the Plan that commence after the Employee becomes eligible to participate.  Persons who are not Employees are not eligible to participate in the Plan.

3.02         Restrictions on Participation.  Notwithstanding any provision of the Plan to the contrary, no Employee shall be granted an option to purchase shares of Common Stock under the Plan:

(a)           if, immediately after the grant, the Employee would own stock and/or hold outstanding options to purchase stock possessing 5% or more of the total combined voting power or value of all classes of stock of the Company (for purposes of this paragraph, the attribution rules of Section 424(d) of the Code shall apply in determining stock ownership of any Employee); or

(b)           which permits the Employee’s right to purchase stock under all Code Section 423 Employee stock purchase plans of the Company to accrue at a rate that exceeds $12,500 of fair market value of the stock (determined at the time such option is granted) for each calendar year in which such option is outstanding at any time.

3.03         Commencement of Participation.  An eligible Employee may become a participant by completing an authorization for payroll deductions on the form provided by the Company and filing the completed form with the Plan Representative on or before the filing date set by the Committee, which date shall be prior to the commencement of the next Offering Period.  Payroll deductions for a participant shall commence on the next following payday after commencement of the first Offering Period after the Employee’s authorization for payroll deductions becomes effective and shall continue until termination of the Plan or the participant’s earlier termination of participation in the Plan.  Each participant in the Plan shall be deemed to continue participation until termination of the Plan or the participant’s earlier termination of participation in the Plan pursuant to Section 8 below.

IV

STOCK SUBJECT TO THE PLAN AND OFFERINGS

4.01         Stock Subject to the Plan.  The Board of Directors shall reserve initially for issuance under the Plan an aggregate of one million (1,000,000) shares of the Company’s Common Stock, which shares shall be authorized but unissued shares of Common Stock.  The Company’s Board of Directors may from time to time reserve additional shares of authorized and unissued Common Stock for issuance pursuant to the Plan, subject to any required shareholder approval; provided, however, that at no time shall the number of shares of Common Stock reserved be greater than permitted by applicable law.

4.02         Offerings.  The Plan will be implemented by four annual offerings of the Company's Common Stock each calendar year (the “Offerings”).  The first offering for each year that the Plan is in effect will begin on January 1 or the first Trading Day thereafter and end on March 31 or the last Trading Day prior to March 31, the second Offering will begin on April 1 or the first Trading Day thereafter and end on June 30 or the last Trading Day prior to June 30, the third Offering will begin on July 1 or the first Trading Day thereafter and end on September 30 or the last Trading Day prior to September 30, and the fourth Offering will begin on October 1 or the first Trading Day thereafter and end on December 31 or the last Trading Day prior to December 31.  The first day of each Offering shall be deemed the “Offering Commencement Date” and the last day the “Offering Termination Date” for such Offering.  The first offering under this plan will begin on January 1, 2002, or the first Trading Day thereafter.

V

PAYROLL DEDUCTIONS

5.01         Amount of Deduction.  Participants in the Plan will be permitted to elect payroll deductions of any whole percentage from one percent (1%) through ten percent (10%) of such participant's Compensation for each pay period during an Offering Period, provided such participant’s total deduction does not exceed $12,500 per annum, as specified in Section 3.02(b).

5.02         Participant's Account.  All payroll deductions made for a participant shall be credited to an account established for such participant under the Plan

5.03         Changes in Payroll Deductions.  A participant may reduce or increase future payroll deductions (within the limits described in Section 5.01) by filing with the Plan Representative a form provided by the Company for such purpose.  The effective date of any increase or reduction in future payroll deductions will be the first day of the next pay period following the processing of the change form by the Plan Representative.

VI

GRANTING OF OPTION

6.01         Number of Option Shares.  On the Commencement Date of each Offering Period, each participating Employee shall be deemed to have been granted an option to purchase on the Exercise Date of the Offering Period, a maximum number of shares of Common Stock equal to the amount of the Employee’s payroll deductions accumulated prior to the Exercise Date and held in the Participant’s Account, divided by the applicable Purchase Price determined as provided in Section 6.02 below; provided that such purchase shall be subject to the limitations set forth in Section 3.02 hereof, and further provided that no fractional shares shall be issued, but instead any remaining Account balance shall be carried over to the next Offering Period. Exercise of the Option shall occur as provided in Section 7 hereof, unless the participant has withdrawn pursuant to Section 8 hereof.  The Option shall expire on the last day of the Offering Period if not exercised.

6.02         Purchase Price.  The Purchase Price of stock purchased with payroll deductions made during any Offering Period shall be the lower of:

(a)           85% of the closing price of the stock on the commencement date for such Offering Period or the next business day on which trading occurred on the national stock exchange; or

(b)           85% of the closing price on the termination date for such Offering Period or the nearest prior business day on which trading occurred on the national stock exchange.

VII

EXERCISE OF OPTION

7.01         Automatic Exercise.  Each participant’s option for the purchase of stock with payroll deductions made during any Offering Period will be deemed to have been exercised automatically on the applicable Offering Termination Date for the purchase of the number of full shares of Common Stock which the accumulated payroll deductions in the participant's account at the time will purchase at the applicable Purchase Price.

7.02         Withdrawal of Account.  No participant in the Plan shall be entitled to withdraw any amount from the accumulated payroll deductions in his or her account; provided, however, that a participant’s accumulated payroll deductions shall be refunded to the participant as and to the extent specified in Section 8.01 below upon termination of such participant’s participation in the Plan.

7.03         Fractional Shares.  Fractional shares of Common Stock will not be issued under the Plan.  Any accumulated payroll deductions that would have been used to purchase fractional shares, unless refunded pursuant to Section 7.02 above, will be held, without interest, for the purchase of Common Stock in the following Offering Period.

7.04         Exercise of Options.  During a participant’s lifetime, options held by such participant shall be exercisable only by such participant.

7.05         Delivery of Stock to Trust.  After the Offering Termination Date of each Offering Period, the Company will deliver to a trust account held by the Representative the shares of Common Stock purchased by each participant during that Offering Period.

7.06          Stock Transfer Restrictions.  The Plan is intended to satisfy the requirements of Section 423 of the Code.  A participant will not obtain the benefits of this provision if such participant disposes of shares of Common Stock acquired pursuant to the Plan within two (2) years from the Offering Commencement Date.  Therefore, each participant’s shares will be held in trust until such time as the shares can be disposed of without losing the benefits of Section 423.  Thereafter, certificates representing the shares held by a participant will be distributed pursuant to the participant’s written instructions on file with the Plan Representative.  Notwithstanding the foregoing, the restriction period on disposition of shares does not apply if the participant experiences a “financial hardship,” which includes an immediate and heavy financial need attributable to (i) certain medical expenses of the participant, his spouse and dependents, (ii) costs directly related to the purchase of a principal residence, (iii) tuition for the next 12 months of post-secondary education for the participant or his spouse or dependents, or (iv) payments necessary to prevent eviction from or foreclosure on the mortgage of the participant’s principal residence.  The Committee or the Plan Representative may eliminate this financial hardship exception to the stock restriction rules at any time.

VIII

WITHDRAWAL

8.01         In General.  A participant may stop participating in the Plan at any time by giving written notice to the Plan Representative.  Upon processing of any such written notice, no further payroll deductions will be made from the participant’s Compensation during such Offering Period or thereafter, unless and until such participant elects to resume participation in the Plan by providing written notice to the Plan Representative pursuant to Section 3.03 above.  Such participant’s payroll deductions accumulated prior to processing of such notice shall be applied toward purchasing full shares of Common Stock in the then-current Offering Period as provided in Section 7.01 above.  Any cash balance remaining after the purchase of shares in such Offering Period shall be refunded promptly to such participant.

8.02         Effect on Subsequent Participation.  A participant’s withdrawal from participation during any Offering Period will not have any effect upon such participant’s eligibility to participate in any succeeding Offering Period or in any similar plan that may hereafter be adopted by the Company and for which such participant is otherwise eligible.

8.03         Termination of Employment.  Upon termination of a participant’s employment with the Company or any Designated Subsidiary for any reason, including retirement or death, the participant's payroll deductions accumulated prior to such termination, if any, shall be applied toward purchasing full shares of Common Stock in the then-current Offering Period, and any cash balance remaining after the purchase of shares in such Offering shall be refunded to him or her, or, in the case of his or her death, to the person or persons entitled thereto under Section 12.01, and his or her participation in the Plan shall be deemed to be terminated.

IX

INTEREST

9.01         Payment of Interest.  No interest will be paid or allowed on any money paid into the Plan or credited to the account of or distributed to any participant Employee.

X

STOCK

10.01       Participant’s Interest in Option Stock.  No participant will have any interest in shares of Common Stock covered by any Option held by such participant until such Option has been exercised as provided in Section 7.01 above.

10.02       Registration of Stock.  Shares of Common Stock purchased by a participant under the Plan will be registered in the name of the participant, or, if the participant so directs by written notice to the Plan Representative prior to the termination of the Offering Period, in the names of the participant and one such other person as may be designated by the participant, as joint tenants with rights of survivorship or as tenants in common or tenants by the entireties, to the extent permitted by applicable law.

10.03       Restrictions on Exercise.  The Board of Directors or its delegate may, in its discretion, require as conditions to the exercise of any Option that the shares of Common Stock reserved for issuance upon the exercise of such Option shall have been duly listed, upon official notice of issuance, upon a stock exchange or market, and that either:

(a)           a registration statement under the Securities Act of 1933, as amended, with respect to said shares shall be effective, or

(b)           the issuance qualifies for an exemption from registration and the participant shall have represented at the time of purchase, in form and substance satisfactory to the Company, that it is his or her intention to purchase the shares for investment and not for resale or distribution.

XI

ADMINISTRATION

11.01        Appointment of Committee.  The Board of Directors shall appoint a Committee to administer the Plan.  The Board or Committee shall have full and exclusive discretionary authority to construe, interpret and apply the terms of the Plan, to determine eligibility to participate in the Plan and to adjudicate all disputed claims filed under the Plan.  Every finding, decision and determination made by the Board or Committee shall, to the full extent permitted by law, be final and binding upon all parties.  The Committee’s discretionary authority shall include the ability to make such adjustments or modifications to the terms and conditions of the Plan and the Offerings thereunder to Employees who are working outside the United States as are advisable to fulfill the purposes of the Plan or to comply with local law, and to authorize foreign Designated Subsidiaries to adopt foreign sub-plans as provided in Section 12.08.  The Committee's discretionary authority shall also include the ability to delegate its duties and responsibilities hereunder with respect to such foreign sub-plans, except its duties and responsibilities with respect to any Section 16 Persons, and the acts of such delegates shall be treated hereunder as acts of the Committee.

XII

MISCELLANEOUS

12.01       Designation of Beneficiary.  A participant may file with the Plan Representative a written designation of a beneficiary who is to receive any shares of Common Stock and/or cash under the Plan upon the participant’s death.  The participant may change such designation of beneficiary at any time by written notice to the Plan Representative.  Upon the death of a participant and receipt by the Company of proof of identity and existence at the participant's death of a beneficiary validly designated by the participant under the Plan, and subject to Section 8 above concerning withdrawal from the Plan, the Company shall deliver such shares of Common Stock and/or cash to such beneficiary.  In the event of the death of a participant lacking a beneficiary validly designated under the Plan who is living at the time of such participant's death, the Company shall deliver such shares of Common Stock and/or cash to the executor or administrator of the estate of the participant, or if no such executor or administrator has been appointed (to the knowledge of the Company), the Company, in its discretion, may deliver such shares of Common Stock and/or cash to the spouse or to any one or more dependents of the participant, in each case without any further liability of the Company whatsoever under or relating to the Plan.  No beneficiary shall, prior to the death of the participant by whom he or she has been designated, acquire any interest in the shares of Common Stock and/or cash credited to the participant under the Plan.

12.02       Transferability.  Neither payroll deductions credited to any participant’s account nor any option or rights with regard to the exercise of an option or to receive Common Stock under the Plan may be assigned, transferred, pledged, or otherwise disposed of in any way by the participant other than by will or the laws of descent and distribution.  Any such attempted assignment, transfer, pledge or other disposition shall be without effect, except that the Company may, in its discretion, treat such act as an election to withdraw from participation in the Plan in accordance with Section 8.01.

12.03       Adjustment Upon Changes in Capitalization.

(a)          If, while any options are outstanding under the Plan, the outstanding shares of Common Stock of the Company have increased, decreased, changed into, or been exchanged for a different number or kind of shares or securities of the Company through any reorganization, merger, recapitalization, reclassification, stock split, reverse stock split or similar transaction, appropriate and proportionate adjustments may be made by the Committee in the number and/or kind of shares which are subject to purchase under outstanding options and in the Option Price or Prices applicable to such outstanding options.  In addition, in any such event, the number and/or kind of shares that may be offered in the Offerings described in Section 4 hereof shall also be proportionately adjusted.  No such adjustments shall be made for or in respect of stock dividends.  For purposes of this paragraph, any distribution of shares of Common Stock to shareholders in an amount aggregating 20% or more of the outstanding shares of Common Stock shall be deemed a stock split, and any distribution of shares aggregating less than 20% of the outstanding shares of Common Stock shall be deemed a stock dividend.

(b)            Upon the dissolution or liquidation of the Company, or upon a reorganization, merger or consolidation of the Company with one or more corporations as a result of which the Company is not the surviving corporation, or upon a sale of substantially all of the property or capital stock of the Company to another corporation, the Committee may either terminate the Offering Period early, so as to end immediately before the closing date of such transaction, such that the Company Common Stock is issued before the consummation of such event, or, if the Committee does not accelerate the Exercise Date, then the holder of each option then outstanding under the Plan will thereafter be entitled to receive at the next Offering Termination Date, upon the exercise of such option, for each share as to which such option shall be exercised, as nearly as reasonably may be determined, the cash, securities and/or property which a holder of one share of the Common Stock was entitled to receive upon and at the time of such transaction.  The Board of Directors shall take such steps in connection with such transactions as the Board shall deem necessary to assure that the provisions of this Section 12.03 shall thereafter be applicable, as nearly as reasonably may be determined, in relation to the said cash, securities and/or property as to which each such holder of any such option might hereafter be entitled to receive.

12.04       Amendment and Termination.  The Board of Directors shall have complete power and authority to terminate or amend the Plan; provided, however, that the Board of Directors shall not, without the approval of the shareholders of the Company, alter (i) the aggregate number of shares of Common Stock which may be issued under the Plan (except pursuant to Section 12.03 above), or (ii) the class of employees eligible to receive options under the Plan, other than to designate additional Subsidiary Corporations as Designated Subsidiaries; and provided further, however, that no termination, modification, or amendment of the Plan may, without the consent of an Employee then having an option under the Plan to purchase shares of Common Stock, adversely affect the rights of such Employee under such option.

12.05       Effective Date.  The Plan shall become effective upon approval by the holders of a majority of the shares of Common Stock present and represented at the annual meeting of the shareholders of the Company to be held October 31, 2001.  If the Plan is not so approved, the Plan shall not become effective.

12.06       No Employment Rights.  The Plan does not, directly or indirectly, create in any person any right with respect to continuation of employment by the Company or any Subsidiary Corporation, and it shall not be deemed to interfere in any way with the Company’s or any Subsidiary Corporation’s right to terminate, or otherwise modify, any employee’s employment at any time.

12.07       Effect of Plan.  The provisions of the Plan shall, in accordance with its terms, be binding upon, and inure to the benefit of, all successors of each Employee participating in the Plan, including, without limitation, such Employee's estate and the executors, administrators or trustees thereof, heirs and legatees, and any receiver, trustee in bankruptcy or representative of creditors of such Employee.

12.08       Foreign Sub-Plans.  The Committee may authorize any foreign Designated Subsidiary to adopt a sub-plan to facilitate offerings of Common Stock hereunder.  All grants of Options to purchase Common Stock under such foreign sub-plan shall be treated as grants under the Plan, and shall be subject to the overall Plan limits on the number of shares of Common Stock subject to the Plan.  Such foreign sub-plan shall have such terms and provisions as the Committee permits, not inconsistent with the purposes of the Plan, but which may be more or less restrictive than those contained in the Plan, in order to conform with local law or practices.  Options granted under such foreign sub-plans shall be governed by the terms of the Plan except to the extent expressly provided in the foreign sub-plan, in which case the terms of such foreign sub-plan shall control.

12.09       Governing Law.  The laws of the State of California will govern all matters relating to this Plan except to the extent superseded by the federal laws of the United States.

Schedule A

Designated Subsidiaries

1.     Each Subsidiary Corporation organized under the laws of any of the United States of America.

2.     Magnetek S.p.A

ADDENDUM FOR EMPLOYEES DOMICILED IN ITALY

(Appendix A to Plan)

Notwithstanding any other provision of this Plan to the contrary, the following terms shall apply to any individuals employed by an entity incorporated or otherwise domiciled in Italy:

1.            Section 2.08 shall read as follows:

“Employee” shall mean any person employed by the Company or any Designated Subsidiary.  For purposes of the Plan, the employment relationship shall be treated as continuing intact while the individual is on sick leave or other leave of absence as set forth in the Employee’s employment agreement or the leave of absence approved by the Company, as applicable.  Where the period of leave exceeds 90 days and the individual’s right to reemployment is not guaranteed either by statute or by contract, the employment relationship shall be deemed to have terminated on the 91st day of such leave.

2.             The definition of “Purchase Price” shall be amended by adding the following paragraph to the end thereof:
The Purchase Price may be increased by the Committee in its discretion to limit the Total Value of the Fiscal Discount to four million (4,000,000) Lira or the Euro equivalent of four million (4,000,000) Lira, or such other amount as permissible under Italian law.

3.             The following definition shall be added to the end of Section 2 of the Plan:

“Total Value of the Fiscal Discount” shall mean with respect to the stock granted under the Plan to each participant in any one calendar year a maximum of four million (4,000,000) Lira or Euro equivalent of four million (4,000,000) Lira, or such other amount as permissible under Italian Law.  The value of the fiscal discount for this purpose is calculated as the difference between the stock price paid at the grant and the arithmetical average of the stock prices as quoted on the New York Stock Exchange for the month ending on the purchase date.  For the purpose of this definition, the “last month” is the period of time ending on the purchase date and beginning on the same day of the previous month.  In no event may the Total Value of the Fiscal Discount be exceeded by any participant during a year.

4.             Section 3.02 shall not apply.

5.             Section 7.06 reads as follows:

Stock Transfer Restrictions.  A participant is not permitted to dispose of shares of Common Stock acquired pursuant to the Plan within a period of time beginning on the day in which Common Stock is purchased by the participant and ending on the third annual anniversary thereof.  Therefore, each participant’s shares will be held in trust until such time.  Thereafter, certificates representing the shares held by a participant will be distributed pursuant to the participant’s written instructions on file with the Plan Representative.

6.             Section 10.02 reads as follows:

Registration of Stock.  Shares of Common Stock purchased by a participant under the Plan will be registered in the name of the participant.

EX-10.2

CHANGE OF CONTROL AGREEMENT
EXHIBIT 10.2

This Change of Control Agreement ("Agreement") is entered into on October 31, 2001 by and between Richard L. Pratt, an individual (the "Executive"), and MagneTek, Inc., a Delaware corporation (the "Company").

RECITALS

WHEREAS, the Board of Directors of the Company (the "Board") recognizes that the possibility of a Change of Control (as hereinafter defined) exists and that the threat or the occurrence of a Change of Control can result in significant distractions of its key management personnel because of the uncertainties inherent in such a situation;

WHEREAS, the Board has determined that it is essential and in the best interest of the Company and its stockholders to retain the services of the Executive in the event of a threat or occurrence of a Change of Control and to ensure the Executive's continued dedication and efforts in such event without undue concern for personal financial and employment security; and

WHEREAS, in order to induce the Executive to remain in the employ of the Company, particularly in the event of a threat or the occurrence of a Change of Control, the Company desires to enter into this Agreement with the Executive to provide the Executive with certain benefits in the event his or her employment is terminated as a result of, or in connection with, a Change of Control.

AGREEMENT

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

1.             Term of Agreement.  This Agreement shall commence as of the date hereof and shall continue in effect until November 1, 2002; provided, however, that on November 1, 2002 and on each anniversary thereof, the term of this Agreement shall automatically be extended for one year unless either the Company or the Executive shall have given written notice to the other prior thereto that the term of this Agreement shall not be so extended; provided, further, however, that notwithstanding any such notice by the Company or the Executive not to extend, the term of this Agreement shall not expire prior to the second anniversary of a Change of Control Date.  The benefits payable pursuant to Section 2 hereof shall be due in all events if a Change of Control occurs during the term of this Agreement, and a Change of Control will be deemed to have occurred during the term hereof if an agreement for a transaction resulting in a Change of Control is entered into during the term hereof, notwithstanding that the Change of Control Date occurs after 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 be paid to the Executive the benefits specified in this Section 2 if (i) there is a Change of Control, and (ii) within the Change of Control Period, (a) the Company or the Successor terminates the employment of 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 of Employment.  If the Executive is entitled to benefits pursuant to this Section 2, the Company agrees to pay or provide to the Executive as severance payment, the following:

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

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

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

(C)           an amount equal to the Executive's Base Compensation times the Compensation Multiplier.

(ii)           Continuation, on the same basis as if the Executive continued to be employed by the Company, of Benefits for the Benefit Period commencing on the Termination Date.  The Company's obligation hereunder with respect to the foregoing Benefits shall be limited to the extent that the Executive obtains any such benefits pursuant to a subsequent employer's benefit plans, in which case the Company may reduce the coverage of any Benefits it is required to provide the Executive hereunder as long as the aggregate coverages and benefits of the combined benefit plans is no less favorable to the Executive than the Benefits required to be provided hereunder.

(iii)          Outplacement services to be provided by an outplacement organization of national repute, which shall include the provision of office space and equipment (including telephone and personal computer) but in no event shall the Company be required to provide such services for a value exceeding 17% of the Executive's Base Compensation.

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

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

"Base Compensation" means the sum of (i) the Executive's annual salary in effect on the earlier of the Change of Control Date and the Termination Date and (ii) 100% of the target under the bonus plan for the fiscal year during which the Change of Control Date occurs.

"Benefits" means benefits that would be available under the Company's Medical Plan, Dental Plan, Life Insurance and Disability Insurance Plans and any similar health and welfare plan of the Company.

"Benefit Period" means 18 months.

"Cause" means:  (A) conviction of a felony or misdemeanor involving moral turpitude, or (B) willful gross neglect or willful gross misconduct in carrying out the Executive's duties, resulting in material economic harm to the Company or any Successor.

"Change of Control" means (i) any event described in Section 11.2 of the 1999 Stock Incentive Plan of the Company or any event so defined in any stock incentive or similar plan adopted by the Company in the future unless, in either case, such event occurs in connection with a Distress Sale and (ii) any event which results in the Board ceasing to have at least a majority of its members be "continuing directors."  For this purpose, a "continuing director" shall mean a director of the Company who held such position on June 1, 2001 or who thereafter was appointed or nominated to the Board by a majority of continuing directors.

"Change of Control Date" means the date on which a Change of Control is consummated.

"Change of Control Period" means the period commencing on the earlier of (i) 180 days prior to the Change of Control Date and (ii) the announcement of a transaction expected to result in a Change of Control, and ending on the second anniversary of the Change of Control Date.

"Code" means the Internal Revenue Code of 1986, as amended.  References herein to a specific section of the Code shall be deemed to include comparable or analogous provisions of state, local and foreign law.

"Compensation Multiplier" means 1.5.

"Disability" means the inability of the Executive due to illness (mental or physical), accident, or otherwise, to perform his or her duties for any period of 180 consecutive days, as determined by a qualified physician.

"Distress Sale" means a Change of Control occurring within 18 months of any of the following:  (i) the Company's independent public accountants shall have made a "going concern" qualification in their audit report (other than by reason of extraordinary occurrences, such as material litigation, not attributable to poor management practices); (ii) the Company shall lack sufficient capital for its operations by reason of termination of its existing credit lines or the Company's inability to secure credit facilities upon acceptable terms; or (iii) the Company shall have voluntarily sought relief under, consented to or acquiesced in the benefit of application to it of the Bankruptcy Code of the United States of America or any other liquidation, conservatorship, bankruptcy, moratorium, rearrangement, receivership, insolvency, reorganization, suspension of payments or similar laws, or shall have been the subject of proceedings under such laws (unless the applicable involuntary petition is dismissed within 60 days after its filing).

"Good Reason" means (A) without the Executive's prior written consent, assignment to the Executive of duties materially inconsistent in any respect with his or her position immediately prior to the Change of Control Date or any other action by a Successor that results in a material diminution in the Executive's position, authority, duties, responsibilities, annual base salary or target bonus when compared 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 the Executive's current place of business.

"Stay and Pay Agreement" means a "stay and pay" or retention agreement entered into in contemplation of a sale by the Company of a division or business unit.

"Successor" means any acquiror of all or substantially all of the stock, assets or business of the Company.

"Termination Date" means the last day of the Executive's employment.

4.             Eligibility; Effect on Other Agreements and Plans.

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

(b)           Plan Amendments.  The Company shall adopt such amendments to its employee benefit plans and insurance policies, including, without limitation, the Plans, as are necessary to effectuate the provisions of this Agreement.  If and to the extent any benefits under Section 2 are not paid or payable or otherwise provided to the Executive or his or her dependents or beneficiaries under any such plan or policy (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 for such benefits (including any gross-up needed to account for the less favorable tax treatment if the payments are made from the Company and not from the Plans or other employee benefit plans).

5.             Golden Parachute Tax.

(a)           If the Value (as hereinafter defined) attributable to the payments and benefits provided in Section 2 above, without regard to this Section 5 ("Agreement Payments"), in combination with the Value attributable to other payments or benefits in the nature of compensation to or for the benefit of Executive (including but not limited to the value attributable to accelerated vesting 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 the Executive under Section 2 hereof only to the extent provided in this Section 5.  If (i) the excess of the Value of all Payments over the sum of all taxes (including but not limited to income and excise taxes under Code Section 4999) that would be payable by the Executive with respect to such Payments, is equal to or greater than 110% of (ii) the excess of the greatest Value of all such Payments that could 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 be payable by Executive thereon, then the full amount of Agreement Payments shall be paid to the Executive.  Otherwise, Agreement Payments shall be made only to the extent that such payments cause the Value of all Payments to equal the Cap.

(b)           For purposes of this Section 5, the Company and the Executive hereby irrevocably appoint the persons who constituted the Compensation Committee of the Board immediately prior to the Change of Control, or a three person panel named by a majority of them, as arbitrators (the "Arbitrators") to make all determinations required under this Section 5, including but not limited to the Value of all Payments (and the components thereof) and the amount and nature of any reduction of Agreement Payments required by this Section 5.  For purposes of this Section 5, "Value" shall mean value as determined by the Arbitrators applying the valuation procedures and methodologies established pursuant to Code Section 280G, including any non-binding interpretive guidance as the Arbitrators determine appropriate.  The determinations of the Arbitrators shall be final and binding on both the Company and Executive, and their successors, assignees, heirs and beneficiaries, for purposes of determining the amount payable under Section 2.  All fees and expenses of the Arbitrators (including attorneys' and accountants' fees) shall be borne by the Company.  The arbitrators will be compensated, to the extent they are not then members of the Board's Compensation Committee, at the rates at which they would have been compensated for their work as Committee members in effect immediately prior to the Change of Control Date.

6.             Employment At-Will.  Notwithstanding anything to the contrary contained herein, the Executive's employment with the Company is not for any specified term and may be 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 payments provided hereunder or as required by law or any other contract or employee benefit plan.

7.             General.

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

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

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

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

(e)           No Mitigation Obligation.  The parties hereto expressly agree that the payment of the benefits by the Company to the Executive in accordance with the terms of this Agreement will be liquidated damages, and that the Executive shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise, nor shall any profits, income, earnings or other benefits from any source whatsoever create any mitigation, offset, reduction or any other obligation on the part of the Executive hereunder or otherwise except as expressly provided in Sections 2(b)(ii) and 4(a).

(f)            Changes to Benefits.  In the event that, within 90 days of the execution of this Agreement, the Company enters into an agreement for a Change of Control in connection with a merger to be accounted for as a "pooling of interests," the Board will be entitled to modify or reduce the payments or benefits due hereunder, or to abrogate this Agreement entirely, if and to the extent that Ernst & Young opines to the Board such measures are necessary in order to ensure that the proposed merger will be accounted for as a "pooling of interests."  The Board will have no such authority after such 90–day period and, in the event such merger does not eventuate or is ultimately not accounted for as a "pooling of interests," this Agreement, with or without any action by the Board or the Executive, 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 of the State of Tennessee without giving effect to principles of conflicts of law.

(h)           ERISA.  This Agreement is pursuant to the Company's severance plan for Executives (the "Plan") which is unfunded and maintained by the Company primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees.  The Plan constitutes an employee welfare benefit plan ("Welfare Plan") within the meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA").  Any payments pursuant to this Agreement which could cause the Plan not to constitute a Welfare Plan shall be deemed instead to be made pursuant to a separate "employee pension benefit plan" within the meaning of Section 3(2) of ERISA as to which the applicable portions of the document constituting the Plan shall be deemed to be incorporated by reference.  None of the benefits hereunder may be assigned in any way.

(i)            Representation.  The Executive acknowledges that neither Tina McKnight nor Gibson, Dunn & Crutcher LLP has represented the Executive in connection with this Agreement and that he or she has had the opportunity to consult with counsel before executing this Agreement.

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

8.             Arbitration.

(a)           Except as provided in Section 5 hereof, any disputes or claims arising out of or concerning the Executive's employment or termination by the Company, whether arising under theories of liability or damages based upon contract, tort or statute, will be determined exclusively by arbitration before a single arbitrator in accordance with the employment arbitration rules of the American Arbitration Association, except as modified by this Agreement.  The arbitrator's decision will be final and binding on both parties.  Judgment upon the award rendered by the arbitrator may be entered in any court of competent jurisdiction.  In recognition of the fact that resolution of any disputes or claims in the courts is rarely timely or cost effective for either party, the Company and the Executive enter this mutual agreement to arbitrate in order to gain the benefits of a speedy, impartial and cost-effective dispute resolution procedure.  The parties further intend that the arbitration hereunder be conducted in as confidential a manner as is practicable under the circumstances, and intend for the award to be confidential unless that confidentiality would frustrate the purpose of the arbitration or render the remedy awarded ineffective.

(b)           Any arbitration will be held in Los Angeles, California.  The arbitrator must be an attorney with substantial experience in employment matters, selected by the parties alternately striking names from a list of five such persons provided by the American Arbitration Association (AAA) office located nearest to the place of employment, following a request by the party seeking arbitration for a list of five such attorneys with substantial professional experience in employment matters.  If either party fails to strike names from the list, the arbitrator will be selected from the list by the other party.

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

(d)           The Company and the Executive agree that they will attempt, and they intend that they and the arbitrator should use their best efforts in that attempt, to conclude the arbitration proceeding and have a final decision from the arbitrator within 120 days from the date of selection of the arbitrator; provided, however, that the arbitrator will be entitled to extend such 120–day period for one additional 120-day period.  The arbitrator will deliver a written award with respect to the dispute to each of the parties, who must promptly act in accordance therewith.

(e)           The Company will pay any and all reasonable fees and expenses incurred by the Executive in seeking to obtain or enforce any rights or benefits provided by this Agreement, including all reasonable attorneys' and experts' fees and expenses, accountants' fees and expenses, and court costs (if any) that may be incurred by the Executive in pursuing a claim for payment of compensation or benefits or other right or entitlement under this Agreement, provided that the Executive is successful as to material issues, resulting in an award of at least $100,000.  In addition, the Company will pay without regard to the results of the arbitration all costs and fees not normally associated with a civil proceeding, such as any fees charged by the arbitrator or any room rental charges.

(f)            In a contractual claim under this Agreement, the arbitrator must act in accordance with the terms and provisions of this Agreement and applicable legal principles and will have no authority to add, delete or modify any term or provision of this Agreement.  In addition, the arbitrator will have no authority to award punitive damages under any circumstances unless repudiating the arbitrator's authority to do so would cause this arbitration clause to be ruled ineffective under applicable law.

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

RICHARD L. PRATT

MAGNETEK, INC.

By:

Name:

Title: