UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-K
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(Mark
One)
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[
X ]
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ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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For
the fiscal year ended June 27, 2010
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OR
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[ ]
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TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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Commission
file number 1-10233
MAGNETEK, INC.
(Exact
name of Registrant as specified in its charter)
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DELAWARE
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95-3917584
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(State
or other jurisdiction of incorporation or organization)
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(I.R.S.
Employer Identification No.)
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N49
W13650 Campbell Drive
Menomonee
Falls, Wisconsin
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53051
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(Address
of Principal Executive Offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code: (262) 783-3500
Securities
registered pursuant to Section 12(b) of the Act:
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Title
of each class
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Name
of each exchange
on
which registered
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Common
Stock, $.01 par value
Preferred
Stock Purchase Rights
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New
York Stock Exchange
New
York Stock Exchange
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| Securities registered pursuant to Section 12(g) of the Act: | None |
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Indicate
by check mark if the Registrant is a well known seasoned issuer, as
defined in Rule 405 of the Securities Act.
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Yes
[ ]
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No
[X]
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Indicate
by check mark if the Registrant is not required to file reports pursuant
to Section 13 or Section 15(d) of the Act.
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Yes
[ ]
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No
[X]
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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.
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Yes
[X]
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No
[ ]
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Indicate
by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File
required to be submitted and posted pursuant to Rule 405 of
Regulation S-T (§232.405 of this chapter) during the preceding 12 months
(or for such shorter period that the registrant was required to submit and
post such files).
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Yes
[ ]
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No
[ ]
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Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to
the best of Registrant’s knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K.
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[X]
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Indicate
by check mark whether the Registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company. See definition of “large accelerated filer,” “accelerated
filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange
Act. (Check one):
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Large
accelerated filer [ ]
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Accelerated
filer [X]
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Non-accelerated
filer [ ]
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Smaller
reporting company [ ]
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Indicate
by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).
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Yes
[ ]
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No
[X]
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The
aggregate market value of the voting stock held by non-affiliates of the
Registrant, based on the closing price of $1.70 per share as reported by the New
York Stock Exchange, on December 24, 2009 (the last business day of the
Company’s most recently completed second fiscal quarter), was
$52,317,605. Shares of common stock held by each executive officer
and director have been excluded since such persons may be deemed
affiliates. This determination of affiliate status is not necessarily
a conclusive determination for other purposes.
The
number of shares outstanding of the Registrant’s Common Stock, as of August 7,
2010, was 31,204,732 shares.
1
DOCUMENTS
INCORPORATED BY REFERENCE
Portions
of the Magnetek, Inc. 2010 Annual Report for the fiscal year ended June 27, 2010
(the “2010 Annual Report”) are incorporated by reference into Parts I and II of
this Form 10-K. With the exception of those portions that are
expressly incorporated by reference into this Form 10-K, the 2010 Annual Report
is not deemed as filed as part of this Form 10-K. Portions of the
Magnetek, Inc. definitive Proxy Statement to be filed with the Securities
and Exchange Commission within 120 days after the close of the fiscal year
ended June 27, 2010, are incorporated by reference into Part III of
this Form 10-K.
MAGNETEK, INC.
FOR
THE FISCAL YEAR ENDED JUNE 27, 2010
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Page
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PART
I
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BUSINESS
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3
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RISK
FACTORS
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6
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UNRESOLVED
STAFF COMMENTS
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6
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PROPERTIES
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7
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LEGAL
PROCEEDINGS
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7
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REMOVED
AND RESERVED
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9
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PART
II
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MARKET
FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS
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AND
ISSUER PURCHASES OF EQUITY SECURITIES
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9
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SELECTED
FINANCIAL DATA
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11
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MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
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RESULTS
OF OPERATIONS
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11
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QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
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11
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FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA
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11
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CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
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FINANCIAL
DISCLOSURE
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11
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CONTROLS
AND PROCEDURES
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11
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OTHER
INFORMATION
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14
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PART
III
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DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
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14
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EXECUTIVE
COMPENSATION
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14
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SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
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RELATED
STOCKHOLDER MATTERS
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14
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CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS,
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14
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AND
DIRECTOR INDEPENDENCE
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PRINCIPAL
ACCOUNTANT FEES AND SERVICES
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14
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PART
IV
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EXHIBITS
AND FINANCIAL STATEMENT SCHEDULES
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15
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17
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The
Company uses a 52-53 week fiscal year which ends on the Sunday nearest June
30. Fiscal years 2010, 2009 and 2008 each contained 52
weeks.
PART
I
General
Magnetek,
Inc. (“Magnetek,” the “Company,” “we,” or “us” ) is a global provider of digital
power control systems that are used to control motion and power primarily in
material handling, elevator, and energy delivery
applications. Magnetek was founded in 1984 and is listed on the New
York Stock Exchange (NYSE: MAG). Our products are sold directly or
through manufacturers’ representatives to original equipment manufacturers
(“OEMs”) for incorporation into their products, to system integrators and
value-added resellers for assembly and incorporation into end-user systems, to
distributors for resale to OEMs and contractors, and to end-users for repair and
replacement purposes. We operate in a single segment, Digital Power
Control Systems.
Magnetek’s systems consist primarily of
programmable motion control and power conditioning systems used in the following
applications: overhead cranes and hoists; elevators; coal mining
equipment; and renewable energy sources. We are North America's
largest independent supplier of digital drives, radio controls, software and
accessories for industrial cranes and hoists, and we are also the largest
independent supplier of digital direct current (“DC”) motion control systems for
elevators. Customers include most of the industrial crane and hoist
companies in North America and the world's leading elevator
builders. Our operations are located in North America, predominantly
in Menomonee Falls, Wisconsin, the location of our headquarters.
During fiscal 2008, we concluded that
our best growth prospects lay in our core power control and systems businesses,
and we decided to divest our telecom power systems (“TPS”)
business. We believe we can better achieve our sales growth
objectives by redirecting resources that were deployed in the TPS business to
our product offerings in the material handling and elevator markets, where we
believe we are a market leader, and energy delivery markets, which we believe
offer greater prospects for sales growth. We completed the
divestiture of the TPS business in September 2008.
Our goal is to become solidly
positioned in markets offering long-term stability, excellent growth potential
and profitability. Our primary focus is on markets where we can apply
both our industry expertise and our systems integration model to add value to
our customers by improving their production, energy efficiency, manufacturing
throughput or safety, while minimizing down time and maintenance
costs. We believe U.S. industry is in the midst of a shift from
electro-mechanical power controls to digital power controls, and believe we are
positioned to take advantage of this shift through many of our product
offerings. We also believe that wireless controls will be an area of
strategic growth for us. To that end, in February 2008, we acquired
the assets and business of Enrange, LLC, a wireless control manufacturer
providing radio remote controls for material handling, hydraulic and other
industries. The acquisition enhances our wireless technical
expertise, expands our wireless control product portfolio, and allows us to
penetrate additional markets. We will continue to pursue internal
growth opportunities in our core product lines, while also pursuing external
growth through acquisitions in our served or related markets, adding products,
technology, market opportunities or capabilities that complement our existing
business.
Product
Offerings
Magnetek is a leading provider of
innovative power control and delivery systems and solutions for overhead
material handling applications used in industries such as: aerospace,
automotive, steel, aluminum, paper, logging, mining, ship loading, nuclear power
plants, locomotive yards, and heavy movable structures. We believe
our product offerings have us well positioned to capitalize on the expected
increase in demand for renewable energy generation as well as energy saving
products.
Our material handling products include
drive systems, radio remote controls, and braking, collision-avoidance, and
electrification subsystems, sold primarily to original equipment manufacturers
of overhead cranes and hoists. We have a significant market share in
North America in alternating current (“AC”) control systems and see revenue
growth opportunities in DC control systems for retrofit applications and in
wireless remote controls.
Magnetek also designs, builds, sells,
and supports elevator application specific drive products and is recognized as a
leader for DC high performance elevator drives, as well as AC drives for low and
high performance traction elevators. Our elevator product offerings are
comprised of highly integrated subsystems and drives used to control motion
primarily in high-rise, high speed elevator applications. Our
products are sold mainly to elevator OEMs and we have a significant share of the
available
market
for DC drives and subsystems used in high-rise elevators. Magnetek
elevator drives currently operate in many of the most recognizable high-rise
buildings in the world. We believe opportunities for growth exist in available
elevator markets through the introduction of new energy-saving product
offerings, the expansion of the breadth of available product offerings to
include competitive low-end products for lower performance AC applications, and
the use of new product offerings to expand geographically.
Magnetek’s energy delivery product
offerings include power inverters for fuel cells, solar panels and wind
turbines, which deliver AC power from these energy sources to the utility power
grid. We believe there are revenue growth opportunities in the wind
and solar markets which are expected to grow rapidly in North America as these
renewable sources of power become increasingly competitive from a cost
standpoint with more traditional methods of power generation. We also
provide drives for underground coal mining equipment.
We intend to continue to build on our
competitive strengths in established material handling and elevator markets and
continue to invest in research and development to expand our product portfolio
aimed at penetrating growing and emerging markets for digital power-based
systems, such as renewable energy.
Seasonality
Our power control systems for material
handling applications currently represent nearly 57% of our annual
revenues. Sales of these products tend to follow capital budgeting
and spending patterns of the customer base. As a result, our revenues
are generally strongest in the second and fourth fiscal quarters, with
relatively lower revenues in the first and third fiscal quarters.
Backlog
Our backlog as of the end of fiscal
2010 was $22.8 million versus $9.0 million at the end of fiscal
2009. The increase in backlog is primarily due to an increase of
$11.7 million in our backlog of wind inverters as well as an increase of nearly
$2.0 million in our backlog of material handling systems. While we
use our backlog figure as an indicator of future sales activity, we have
historically had a significant amount of revenue derived from orders that are
booked and shipped within the same reporting period. We expect most
of the orders in our backlog to be filled during the first half of fiscal
2011.
Competition
Our primary competitors during fiscal
2010 included: Konecranes Inc., Cattron Group International, Conductix-Wampfler
(a division of Delachaux Group), Control Techniques (a division of Emerson
Electric), OMRON Corporation, Yaskawa, KEB GmbH, Fujitec, SMA, SatCon
Technology, and Xantrex (a division of Schneider Electric). Some of these
companies have substantially greater financial, marketing and other resources,
larger product portfolios and greater brand recognition than us.
Competitive
Strengths
We believe that we benefit most from
competitive advantages in the following areas:
Technological Capabilities and
Industry Expertise. We emphasize and leverage our ability to
provide custom-designed and customized solutions for power and motion control
applications through digital power-electronic technology. Our
technical personnel possess substantial expertise in disciplines central to
digital power systems and applications. These include
analog-to-digital circuit design, thermal management technology, and the
application of microprocessors, digital signal processors and software
algorithms in the development of smart power products.
Customer
Relationships. We have established long-term relationships
with major manufacturers of cranes and hoists, elevators and mining equipment,
among others. We believe that these relationships have resulted from
our reliability and responsiveness, readiness to meet special customer
requirements based on innovative technology and application expertise, and the
quality and performance of our products.
Product Breadth and Systems Sales
Channels. We provide a variety of products in each of our
major product lines. For material handling customers, we serve as a
one-stop source providing a full range of crane controls as well as subsystems,
including radio controls, brakes and electrification products. We
believe that our well established distribution network constitutes a significant
competitive advantage in the North American material handling
marketplace.
Competitive
Weaknesses
We consider our primary competitive
weaknesses to be our limited size and financial resources. Based upon
current plans and business conditions, we believe that available cash and
short-term investments, borrowing capacity under our revolving credit facility,
and internally generated cash flows will be sufficient to fund anticipated
operational needs, capital expenditures and other
commitments over the next 12 months. However, some of our competitors
have substantially greater financial resources than us.
Suppliers
and Raw Materials
Virtually all materials and components
that we purchase are available from multiple suppliers. During fiscal
2009, raw material purchases accounted for approximately 71% of our cost of
sales. Production of digital power control systems depends heavily on
various electronic components as well as steel and aluminum enclosures and wire
harnesses. We seek to obtain competitive pricing on these raw
materials by utilizing multiple suppliers and leveraging our total purchasing
requirements.
Research
and Development
Our research and development
activities, which are conducted primarily in Menomonee Falls, Wisconsin, are
directed toward developing new products, improving existing products and
customizing or modifying products to meet customers’ specific
needs. Total research and development expenditures were approximately
$3.8 million, $3.5 million and $3.2 million for our 2010, 2009 and 2008 fiscal
years, respectively.
Intellectual
Property
Magnetek holds numerous patents,
trademarks and copyrights, and we believe that we hold or license all of the
patent, trademark, copyright and other intellectual property rights necessary to
conduct our business. We generally rely upon patents, copyrights,
trademarks and trade secret laws to establish and maintain our proprietary
rights in our technology and products. There can be no assurance that
any of our patents, trademarks or other intellectual property rights will not be
challenged, invalidated or circumvented, or that any rights granted there under
will provide competitive advantages to us. In addition, there can be
no assurance that patents will be issued from pending patent applications filed
by us, or that claims allowed on any future patents will be sufficiently broad
to protect Magnetek's technology. Further, the laws of some foreign
countries may not permit the protection of our proprietary rights to the same
extent as do the laws of the United States. Although we believe the
protection afforded by our patents, patent applications, trademarks and
copyrights have value, Magnetek's future success will depend primarily on the
innovative skills, technological expertise, research and development and
management capabilities of our employees rather than on patent, copyright, and
trademark protection.
International
Operations
International sales accounted for 12%
of our net sales in fiscal 2010. We define international sales as
sales of products manufactured by our facilities outside the U.S. that are sold
outside of the U.S., as well as sales of products manufactured in the U.S. to
purchasers outside of the U.S. For our 2010, 2009 and 2008
fiscal years, revenues derived from domestic sales were $71.1 million, $84.4
million and $88.8 million respectively, and revenues derived from international
sales were $9.5million, $13.8 million and $11.2 million,
respectively. We hold assets in Canada and the United Kingdom
totaling $5.2 million, of which $4.0 million are held in Canada and $1.2 million
are in the United Kingdom.
Employee
Relations
As of August 1, 2010, we had
108 salaried employees and 192 hourly employees, none of whom were
covered by collective bargaining agreements with unions. We believe
that our relationships with our employees are favorable.
Available
Information
Our Internet website address is www.magnetek.com. Our
annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on
Form 8-K and any amendments to these reports that are filed by the Company with
the Securities and Exchange Commission (SEC) pursuant to Section 13(a) or 15(d)
of the Securities Exchange Act of 1934 are available free of charge at or
through our website.
Environmental
Matters
From time to time, Magnetek has taken
action to bring certain facilities associated with previously owned
businesses into compliance with applicable environmental laws and
regulations. Upon the subsequent sale of certain businesses, we agreed to
indemnify the buyers against environmental claims associated with the divested
operations, subject to certain conditions and limitations. Remediation
activities, including those related to our indemnification obligations, did not
involve material expenditures during fiscal years 2010, 2009 or
2008.
We have 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 previously utilized, owned or leased
facilities and offsite locations. Our remediation activities as a potentially
responsible party were not material in fiscal years 2010, 2009 or
2008. 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 governmental
authorities, the nature of
our
alleged connection to the contaminated sites, 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, our estimated share of liability, if any, for environmental remediation,
including our indemnification obligations, is not expected to be
material.
For a discussion of
environmental-related litigation matters in which we are engaged, please refer
to Item 3 - “Legal Proceedings” of this Annual Report on Form 10-K.
Supplemental
Information-Executive Officers of the Company
The
following table sets forth certain information regarding the current executive
officers of the Company, each of whom serves a one year term of office, as
appointed by the Board of Directors.
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Name
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Age
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Position
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Peter
M. McCormick
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50
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President
and Chief Executive Officer
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Marty
J. Schwenner
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49
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Vice
President and Chief Financial Officer
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Ryan
D. Gile
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41
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Vice
President, Controller
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Scott
S. Cramer
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58
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Vice
President, General Counsel and Corporate
Secretary
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Peter McCormick has been President and
Chief Executive Officer of Magnetek since October 2008. Prior to
that, Mr. McCormick served as Chief Operating Officer of Magnetek since November
2006 and served as the Executive Vice President responsible for the Company's
Power Control Systems Group since 2002. Prior to that, he served as the
President of the Company’s Industrial Controls Group from 1999 until 2002. Since
joining the Company in 1996, Mr. McCormick has also served as the Vice
President of Operations for the Company’s drives group from 1998 until 1999 and
as Vice President of the custom products business group from 1996 until
1998.
Marty
Schwenner has been Chief Financial Officer of Magnetek since November
2006. Mr. Schwenner has served as a Vice President of the Company
since 2003 and was Controller of the Company from 2002 until November
2006. Mr. Schwenner was Vice President of Finance for the Company’s
power electronics group from 1998 until 2002. Mr. Schwenner also served as
the Chief Financial Officer of the Company's European operations from 1992 to
1998 and as Internal Audit Manager from 1991 until 1992. Mr. Schwenner
joined Magnetek as an Internal Auditor in 1989. Mr. Schwenner is
a Certified Public Accountant and a Certified Internal Auditor.
Ryan Gile has been Vice
President and Controller of Magnetek since November 2006. Prior to
that, Mr. Gile had served as Magnetek’s Vice President of Finance and
Business Systems for the Company’s power control systems group since
2002. Before joining Magnetek, Mr. Gile was a Finance Manager at
Rockwell Automation since 1995 and was also a Financial Auditor and Tax
Associate at Coopers & Lybrand LLP. Mr. Gile is a Certified
Public Accountant.
Scott Cramer has been Vice President,
General Counsel and Corporate Secretary of Magnetek since March
2010. Prior to joining Magnetek, Mr. Cramer served as Senior Vice
President and General Counsel with Bucyrus International, Inc. in South
Milwaukee, WI from 2006 until 2010. From 2005 to 2006, Mr. Cramer was
Senior Legal Counsel with Regal Beloit Corporation following private practice
from 2004 to 2005. Mr. Cramer served as Vice President, General
Counsel and Secretary from 1997 until 2004 with Superior Services, Inc.
following his tenure with Browning-Ferris Industries in Houston, TX and Utrecht,
The Netherlands, where he served respectively as Senior Counsel and EMEA General
Counsel from 1984 to 1997.
ITEM 1A. RISK FACTORS
The information called for by this Item
1A is hereby incorporated by reference to the section of the Company’s 2010
Annual Report entitled “Risk Factors.”
ITEM 1B. UNRESOLVED STAFF COMMENTS
Not applicable.
ITEM 2. PROPERTIES
Magnetek’s headquarters and each of our
manufacturing facilities for the continuing operations of the Company are listed
below, each of which is leased.
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Location
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Lease
Term
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Approximate
Size
(Sq.Ft.)
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Principal
Use
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Menomonee
Falls, Wisconsin
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2014
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155,000
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Power
control systems manufacturing and corporate
headquarters
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Mississauga,
Canada
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2011
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18,000
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Power
control systems manufacturing
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Pittsburgh,
Pennsylvania
|
2012
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9,000
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Power
control systems manufacturing
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Canonsburg,
Pennsylvania
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2012
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5,000
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Power
control systems manufacturing
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We believe our facilities are in
satisfactory condition and are adequate for our continuing
operations.
ITEM 3. LEGAL PROCEEDINGS
We are
involved from time to time in legal actions for product liability and other
matters that arise in the ordinary course of our business. We are also involved
in legal actions associated with our discontinued business operations, including
product liability, asbestos-related liability, patent matters, and environmental
proceedings relating to cleanup costs associated with alleged past waste
disposal practices at several previously utilized, owned or leased facilities
and offsite locations. It is not possible to predict with certainty the outcome
of any of these unresolved legal actions or proceedings or the range of possible
loss or recovery. A more detailed discussion of these matters appears in
Note 11 of the Notes to Consolidated Financial Statements, including a
discussion of whether or not these unresolved matters will have a material
impact on our financial position or results of operations
Litigation—Product
Liability
In August 2006, Pamela L. Carney,
Administrator of the Estate of Michael J. Carney, filed a lawsuit in the Court
of Common Pleas of Westmoreland County, Pennsylvania, against Magnetek and other
defendants, alleging that a product manufactured by the Telemotive Industrial
Controls business (a business that we acquired in December 2002) contributed to
an accident that resulted in the death of Michael J. Carney in August
2004. The claim has been tendered to our insurance carrier and legal
counsel has been retained to represent us. In March 2010, the
Company’s primary carrier, Travelers, denied coverage under a reservation of
rights. This followed the Company’s excess coverage carrier,
AIG/AISLIC, denying coverage in June 2009. Travelers has agreed to
continue to pay defense counsel to defend the case and has authorized defense
counsel to undertake the defense of the “pass through” vendor
PDS. Plaintiff’s claim for damages is unknown at this
time. The case is in the discovery phase and no trial date has been
set.
We have
been named, along with multiple other defendants, in asbestos-related lawsuits
associated with business operations we previously acquired, but which are no
longer owned. During our ownership, none of the businesses produced or sold
asbestos-containing products. With respect to these claims, we are either
contractually indemnified against liability for asbestos-related claims or
believe that we have no liability for such claims. We aggressively seek
dismissal from these proceedings and have tendered the defense of these cases to
the insurers of the companies from which we acquired the businesses. Management does not
believe the asbestos proceedings, individually or in the aggregate, will have a
material adverse effect on the Company’s financial position or results of
operations.
Given the nature of the above issues,
uncertainty of the ultimate outcome, and inability to estimate the potential
loss, no amounts have been reserved for these matters.
Litigation—Patent
Infringement and Related Proceedings
As
previously reported by the Company, Universal Lighting Technologies, Inc.
(“ULT”) and Ole K. Nilssen (“Nilssen”) entered into a consent judgment in April
2008, for dismissal, on collateral estoppel grounds, of the patent infringement
lawsuit filed by Nilssen against ULT. We had provided the defense in
the lawsuit pursuant to an indemnification claim from ULT subject to the terms
of the sale agreement under which ULT purchased Magnetek’s lighting business in
2003. In September 2009, Nilssen and ULT entered into a settlement
agreement relating to attorney’s fees. Under the settlement
agreement, Nilssen paid to us an amount of $0.75 million as attorney’s fees as
well as a nominal amount for costs. However, if Nilssen files a Rule
60 Motion and is successful such that ULT ceases to be the “prevailing party”
and is no longer entitled to attorney’s fees, then we are obligated to refund
the $0.75 million attorney’s fees settlement amount.
In
August, 2008, we filed a complaint in the Circuit Court of Cook County,
Illinois, County Department, Law Division, against Kirkland &
Ellis, LLP (“K&E”) (Magnetek, Inc. vs.
Kirkland & Ellis, LLP, Civil Action
No. 2008-L-008970). The lawsuit
involves
a claim for breach of professional responsibility arising out of K&E’s
representation of Magnetek in the previously reported patent infringement action
against us by Ole K. Nilssen (“Nilssen”). We allege that, as a result
of K&E’s negligent breach of professional duty in failing to discover or
investigate the existence of prior art and prior misconduct which would have
made Nilssen’s patent claim unenforceable or invalidated his patent, we suffered
an arbitration award and judgment in the amount of $23.4 million, which
judgment was ultimately settled by our payment to Nilssen of $18.8 million.
We are seeking damages in the amount of $18.8 million, reimbursement of our
reasonable costs and attorneys fees incurred in the proceeding to vacate the
arbitration award and settlement thereof, and our costs incurred in connection
with this lawsuit.
On April 5, 2010, the Circuit Court of
Cook County dismissed the complaint against K&E for lack of subject matter
jurisdiction. The Court relied upon a November 2009 Illinois
appellate decision in which the Court held that attorney malpractice cases
arising out of the prosecution or defense of federal patent claims raised
federal questions for which the federal courts have exclusive
jurisdiction. An appeal has been taken to the Illinois Appellate
Court. On April 7, 2010, we filed a substantially identical complaint
in the United States District Court for the Northern District of
Illinois. The new federal complaint seeks damages in the amount of
$18.8 million, plus any additional damages as may be warranted by the evidence
introduced at trial. On June 7, 2010, K&E entered a motion in
federal court to have our complaint dismissed as being “time-barred” or filed
beyond the applicable two year statute of limitations. We filed our
responsive brief on July 15, 2010, arguing, among other things, that the
doctrine of equitable tolling applies effectively suspending the running of the
statute of limitations.
Litigation
– Environmental Proceedings
We have
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 previously utilized, owned
and leased facilities and offsite locations. Our remediation activities as a
potentially responsible party were not material in fiscal years 2009, 2008 or
2007. 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 governmental
authorities, the nature of our alleged connection to the contaminated sites, 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, our estimated share of
liability, if any, for environmental remediation, including our indemnification
obligations, is not expected to be material.
Bridgeport,
Connecticut Facility
In 1986,
we acquired the stock of Universal Manufacturing Company (“Universal”) from a
predecessor of Fruit of the Loom (“FOL”), and the predecessor agreed to
indemnify us against certain environmental liabilities arising from
pre-acquisition activities at a facility in Bridgeport, Connecticut.
Environmental liabilities covered by the indemnification agreement included
completion of additional cleanup activities, if any, at the Bridgeport facility
and defense and indemnification against liability for potential response costs
related to offsite disposal locations. Our leasehold interest in the Bridgeport
facility was assigned to the buyer in connection with the sale of our
transformer business in June 2001. FOL, the successor to the indemnification
obligation, filed a petition for Reorganization under Chapter 11 of the
Bankruptcy Code in 1999 and we filed a proof of claim in the proceeding for
obligations related to the environmental indemnification agreement. We believe
that FOL had substantially completed the clean-up obligations required by the
indemnification agreement prior to the bankruptcy filing. In November 2001, we
entered into an agreement with FOL involving the allocation of certain potential
tax benefits and we withdrew our claims in the bankruptcy proceeding. FOL’s
obligation to the state of Connecticut was not discharged in the reorganization
proceeding.
In October 2006, Sergy
Company, LLC (“Sergy”), the owner of the Bridgeport facility, filed a
lawsuit in Superior Court, Fairfield, Connecticut alleging that we are obligated
to remediate environmental contamination at the facility. The case was
transferred to the Complex Litigation Docket, Waterbury, Connecticut. Sergy
filed an amended complaint alleging a breach of lease obligations and violation
of Connecticut environmental statutory requirements, which allegations were
denied in our amended answer, affirmative defenses and counterclaims. Sergy
amended its complaint to include additional claims against us under the
Connecticut Transfer Act. Our request to add additional potentially responsible
parties as defendants was granted by the Court, and we filed declaratory
judgment complaints against the FOL successor and Merrit Gavin, trustee of the
Sergy Trust, a former owner of the Bridgeport facility, seeking a declaration
that the obligations that Sergy seeks to enforce against us are the obligations
of these other parties. In July 2009, the Court granted Gavin’s motion to
dismiss him from the lawsuit, and in February 2010, the Court granted FOL’s
motion to dismiss it from the lawsuit. We filed an appeal of such
rulings. The lawsuit is in the discovery phase, and the trial is scheduled to
begin in January, 2011.
In January 2007, the Connecticut
Department of Environmental Protection (“DEP”) requested parties, including us,
to submit reports summarizing the investigations and remediation performed to
date at the site and the proposed additional investigations and remediation
necessary to complete those actions at the site. The DEP requested additional
information from us relating to site investigations and remediation. We retained
an environmental consultant to review and prepare reports on historical
operations and environmental activities at the Bridgeport facility. In November
2009, we submitted our report and proposed work plan to the DEP. We are
currently in discussion with the DEP regarding the scope of the proposed work
plan.
In April 2008, the Commissioner of
Environmental Protection (“CTCEP”) filed an action in Superior Court, Judicial
District of Hartford-New Britain at Hartford seeking injunctive relief against
Sergy and us, which action was commenced after Sergy cut off power to the
Bridgeport facility, thereby disabling a groundwater pump and treatment system
previously installed by FOL and currently operated by us on a voluntary basis.
Although we entered into a stipulation with Sergy relating to the start up and
operation of the groundwater pump and treatment system, the CTCEP filed a
request to amend the complaint to assert additional claims and to seek further
remedies, including injunctive relief and civil penalties, for alleged failure
to investigate and remediate pollution under the Connecticut Transfer
Act. In September 2008, the Hartford Court ordered the case
transferred to the Waterbury Court, where the above referenced action filed by
Sergy against us is currently pending. In July 2009, the Court denied
our motion to join Gavin and FOL in the CTCEP lawsuit and also denied the motion
to consolidate the Sergy and CTCEP actions. Following certain discovery, the
CTCEP amended the complaint to drop claims against us regarding the
interruptions of power, and to hold the managing member of Sergy as an
individual defendant. The lawsuit is currently in the discovery
phase.
FOL’s
inability to satisfy its remaining obligations related to the Bridgeport
facility and any offsite disposal locations, or an unfavorable ruling in the
lawsuits with the owner of the Bridgeport facility or the CTCEP, or the
discovery of additional environmental contamination at the Bridgeport facility
could have a material adverse effect on the our financial position, cash flows
or results of operations.
Litigation—Other
In
November 2007, a lawsuit was filed by Antonio Canova in Italy, in the Court of
Arezzo, Labour Law Section, against Magnetek and Power-One Italy, S.p.A.
Mr. Canova is a former Executive Vice President of Magnetek and was Deputy
Chairman and Managing Director of our former Italian subsidiary,
Magnetek S.p.A. Mr. Canova asserted various claims for damages in the
amount of 3.5 million Euros (approximately $4.5 million USD) allegedly
incurred in connection with the termination of his employment at the time of the
sale of our power electronics business to Power-One, Inc. in October
2006. The claims against us relate to a change of control agreement
and restricted stock grant. The Court has postponed the final hearing in the
lawsuit until February 2011 due to reassignment of the case to a new
judge. We believe the claim is without merit and intend to vigorously
defend against it.
ITEM 4. REMOVED AND RESERVED
PART
II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED
STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
The
following table sets forth the high and low sales prices of our common stock
during each quarter of fiscal 2010 and 2009:
|
Fiscal
Year 2010
|
High
|
Low
|
||||||
|
First
Quarter
|
$ | 1.75 | $ | 1.32 | ||||
|
Second
Quarter
|
2.01 | 1.20 | ||||||
|
Third
Quarter
|
1.75 | 1.34 | ||||||
|
Fourth
Quarter
|
2.15 | 0.99 | ||||||
|
Fiscal
Year 2009
|
||||||||
|
First
Quarter
|
$ | 4.80 | $ | 3.71 | ||||
|
Second
Quarter
|
4.50 | 1.65 | ||||||
|
Third
Quarter
|
2.87 | 1.18 | ||||||
|
Fourth
Quarter
|
2.01 | 1.30 | ||||||
Our common stock is listed for trading
on the New York Stock Exchange under the ticker symbol “MAG.” As of
August 10, 2010, there were 175 record holders of Magnetek’s common
stock.
Stock
Performance Graph – Return to Shareholders
The table
and line graph shown below compare the cumulative total return for the last five
years to holders of Magnetek common stock with the cumulative total return of
the Russell 2000 Index and the NASDAQ Electronics Components index.
The table
and line graph below assume an investment of $100 in the Company’s common stock
and in each of the comparison groups beginning June 30, 2005, and assumes
the reinvestment of all dividends. The stock price performance
information shown below should not be considered indicative of potential future
stock price performance.
|
Jun-05
|
Jun-06
|
Jun-07
|
Jun-08
|
Jun-09
|
Jun-10
|
|
|
Magnetek,
Inc.
|
100.00
|
105.06
|
200.39
|
164.59
|
54.09
|
35.80
|
|
Russell
2000
|
100.00
|
114.58
|
133.41
|
111.80
|
83.84
|
101.85
|
|
NASDAQ
Electronic Components
|
100.00
|
94.09
|
110.15
|
100.35
|
72.87
|
88.63
|
We have not paid any cash dividends
on our common stock and do not anticipate paying cash dividends in the near
future. Our ability to pay dividends on our common stock is
restricted by provisions in our 2007 bank loan agreement, which provides that we
may not declare or pay any dividend or make any distribution with respect to our
capital stock.
There were no unregistered sales of
equity securities during fiscal year 2010.
During the fourth quarter of fiscal
2010, we purchased shares of our common stock as follows:
|
Period
|
Total
number of shares purchased (1)
|
Average
price paid per share
|
Total
number of shares purchased as part of publicly announced
plans
or programs
|
Maximum
number of shares that may yet
be
purchased under the plans or programs
|
||||||||||||
|
June
2010
|
12,854 | $ | 1.82 | - | - | |||||||||||
|
(1)
|
Represents
shares repurchased by the Company from employees for payment of applicable
tax withholding obligations on the vesting of restricted stock awards.
Shares are repurchased by the Company pursuant to the applicable award
agreements and not pursuant to publicly-announced share repurchase
programs.
|
ITEM 6. SELECTED FINANCIAL DATA
The
information called for by this Item 6 is hereby incorporated by reference to the
section of the Company’s 2010 Annual Report entitled “Selected Financial
Data.”
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The
information called for by this Item 7 is hereby incorporated by reference to the
section of the Company’s 2010 Annual Report entitled “Management’s Discussion
and Analysis of Financial Condition and Results of Operations.”
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK
The
information called for by this Item 7A is hereby incorporated by reference
to the section of the Company’s 2010 Annual Report entitled “Quantitative and
Qualitative Disclosures About Market Risk.”
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY
DATA
The
information called for by this Item 8 is hereby incorporated by reference to the
Company’s Consolidated Financial Statements and the corresponding Report of
Independent Registered Public Accounting Firm in the Company’s 2010 Annual
Report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
Magnetek
had no disagreements with its independent accountants in fiscal 2010 with
respect to accounting and financial disclosure, and has not changed its
independent accountants during the two most recent fiscal years.
ITEM 9A. CONTROLS AND PROCEDURES
(a)
Evaluation of Disclosure Controls and Procedures
Our
management, under the supervision of and with the participation of our Chief
Executive Officer and Chief Financial Officer, has evaluated the effectiveness
of our disclosure controls and procedures, as such term is defined in Rules
13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), as of the end of the period covered by this Annual Report on Form
10-K. Based on such evaluation, our Chief Executive Officer and Chief
Financial Officer have concluded that our disclosure controls and procedures
were effective as of June 27, 2010.
(b)
Management’s Annual Report on Internal Control Over Financial
Reporting
Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of
the Exchange Act) to provide reasonable assurance regarding the reliability of
our financial reporting and the preparation of financial statements for external
purposes in accordance with U.S. generally accepted accounting
principles.
Internal control over financial
reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting
principles. Our internal control over financial reporting includes
those policies and procedures that (i) pertain to the maintenance of
records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the Company; (ii) provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the Company are
being made only in accordance with authorizations of management and directors of
the Company; and (iii) provide reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, use, or disposition of the
Company’s assets that could have a material effect on the Company’s financial
statements.
Our management assessed the
effectiveness of our internal control over financial reporting as of June 27,
2010, the end of our fiscal year. Our management’s assessment was
based on the criteria set forth in Internal Control-Integrated
Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission.
Based on the assessment, our management
has concluded that our internal control over financial reporting was effective
as of June 27, 2010, the end of our fiscal year. Our independent
registered public accounting firm, Ernst & Young LLP, independently
assessed the effectiveness of our internal control over financial reporting as
of June 27, 2010, and has issued an attestation report, included
herein.
Because of inherent limitations,
internal control over financial reporting, no matter how well designed, may not
prevent or detect misstatements. Therefore, even effective internal
control over financial reporting can only provide reasonable assurance with
respect to the reliability of financial reporting and the preparation and
presentation of financial statements. Also, projections of any
evaluation about the effectiveness of internal control over financial reporting
to future periods are subject to the risk that controls may become inadequate
due to changes in conditions, or that the degree of compliance with the policies
or procedures may deteriorate.
(c)
Changes in Controls and Procedures
No
change in internal control over financial reporting occurred during the period
ended June 27, 2010, that has materially affected, or is reasonably
likely to materially affect, such internal control over financial
reporting.
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board
of Directors and Stockholders
Magnetek,
Inc.
We have audited Magnetek’s internal
control over financial reporting as of June 27, 2010, based on criteria
established in Internal Control—Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (the COSO criteria).
Magnetek’s management is responsible for maintaining effective internal control
over financial reporting, and for its assessment of the effectiveness of
internal control over financial reporting included in the accompanying Annual
Report. Our responsibility is to express an opinion on the effectiveness of the
company’s internal control over financial reporting based on our
audit.
We conducted our audit in accordance
with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether effective internal control over financial
reporting was maintained in all material respects. Our audit included obtaining
an understanding of internal control over financial reporting, assessing the
risk that a material weakness exists, testing and evaluating the design and
operating effectiveness of internal control based on the assessed risk, and
performing such other procedures as we considered necessary in the
circumstances. We believe that our audit provides a reasonable basis for our
opinion.
A
company’s internal control over financial reporting is a process designed to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles. A company’s internal control over
financial reporting includes those policies and procedures that (1) pertain to
the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the company; (2)
provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the company are
being made only in accordance with authorizations of management and directors of
the company; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the company’s
assets that could have a material effect on the financial
statements.
Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Also, projections of any evaluation
of effectiveness to future periods are subject to the risk that controls may
become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.
In
our opinion, Magnetek maintained, in all material respects, effective internal
control over financial reporting as of June 27, 2010, based on the COSO
criteria.
We have also audited, in accordance
with the standards of the Public Company Accounting Oversight Board (United
States), the consolidated balance sheets of Magnetek, Inc. as of June 27, 2010
and June 28, 2009 and the related consolidated statements of operations,
stockholders' equity and cash flows for each of the three years in the period
ended June 27, 2010 and our report dated August 31, 2010, expressed an
unqualified opinion thereon.
/s/ Ernst & Young
LLP
Milwaukee,
Wisconsin
August
31, 2010
ITEM 9B. OTHER INFORMATION
No
other information is required to be reported for matters not disclosed on Form
8-K during the period ended June 27, 2010.
PART
III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE
The
information called for by this Item 10 is hereby incorporated by reference
to the sections of the Company’s 2010 Proxy Statement entitled “Proposal No. 1 –
Election of Board of Directors,” “Section 16(a) Beneficial Ownership
Reporting Compliance,” “Corporate Governance Principles,” “Standing Committees
of the Board” and by reference to Part I of this Annual Report on Form 10-K
under the heading “Supplemental Information – Executive Officers of the
Company.”
Supplemental
Information - Code of Business Conduct and Ethics
We
have adopted a Code of Business Conduct and Ethics (“Code of Ethics”) for all of
our directors and employees that contains portions specifically applicable to
executives and officers of the Company, including the Chief Executive Officer,
the Chief Financial Officer, the Controller and employees performing financial
functions for the Company. The Code of Ethics is posted on Magnetek’s
website at www.magnetek.com. A
copy of the Code of Ethics is available, without charge, to any shareholder who
sends a written request to our Corporate Secretary at N49 W13650 Campbell Drive,
Menomonee Falls, Wisconsin, 53051. We intend to satisfy the
disclosure requirements of Form 8-K regarding any amendment to, or waiver of, a
provision of the Code of Ethics by posting such information on our website, at
the web address and location specified above.
ITEM 11. EXECUTIVE COMPENSATION
The
information called for by this Item 11 is hereby incorporated by reference to
the section of the Company’s 2010 Proxy Statement entitled “Compensation
Discussion and Analysis” and the tables, narrative and notes relating to
Executive and Director compensation, “Summary Compensation Table,” “All Other
Compensation Table,” “Grants of Plan-Based Awards Fiscal 2010,” “Outstanding
Equity Awards at Fiscal 2010 Year End,” “Option Exercises and Stock Vested,”
“Pension Benefits for Fiscal Year 2010,” “Employment, Severance and Change in
Control Agreements and Arrangements for Fiscal Year 2010,” “Director
Compensation for Fiscal 2010,” “Compensation Committee Interlocks and Insider
Participation” and “Compensation Committee Report.”
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
Security
Ownership of Certain Beneficial Owners and Management
The
information called for by this Item 12 is hereby incorporated by reference to
the sections of the Company’s 2010 Proxy Statement entitled “Equity Compensation
Plan Information” and “Beneficial Ownership of Magnetek, Inc. Common Stock by
Directors, Officers and Certain Other Owners.”
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The
information required by this Item 13 is hereby incorporated by reference to the
sections of the Company’s 2010 Proxy Statement entitled “Proposal 1 – Election
of Directors,” “Relationships and Related Transactions,” and “Corporate
Governance Principles.”
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND
SERVICES
The
information called for by this Item 14 is hereby incorporated by reference to
the section of the Company’s 2010 Proxy Statement entitled “Proposal No. 2 –
Ratification of the Appointment of Independent Registered Public Accounting
Firm.”
PART
IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT
SCHEDULES
(a) Index
to Consolidated Financial Statements, Consolidated Financial Statement Schedules
and Exhibits:
|
Consolidated
Financial Statements
|
Annual
Report to
Stockholders
Page
|
|
|
Consolidated
Statements of Operations for Years
Ended
June 27, 2010, June 28, 2009, and June 29, 2008
|
14
|
|
|
Consolidated
Balance Sheets at June 27, 2010 and June 28, 2009
|
15
|
|
|
Consolidated
Statements of Stockholders’ Deficit for
Years
Ended June 27, 2010, June 28, 2009 and June 29, 2008
|
16
|
|
|
Consolidated
Statements of Cash Flows for
Years
Ended June 27, 2010, June 28, 2009 and June 29, 2008
|
17
|
|
|
Notes
to Consolidated Financial Statements
|
18
|
|
|
Report
of Independent Registered Public Accounting Firm
|
38
|
All other financial statement schedules
have been omitted because of the absence of conditions under which they are
required or applicable, or because the information required is included in the
Consolidated Financial Statements and related notes.
3. Exhibit
Index
The
following exhibits are filed as part of this Annual Report Form 10-K, or
are incorporated herein by reference. Where an exhibit is
incorporated by reference, the number which precedes the description of the
exhibit indicates the documents to which the cross-reference is
made.
|
Exhibit
No.
|
Note
|
Description
of Exhibit
|
||
|
3.1
|
(1)
|
Restated
Certificate of Incorporation of the Company, as filed with the Delaware
Secretary of State on November 21, 1989.
|
||
|
3.2
|
(2)
|
Magnetek,
Inc. Amended and Restated By-laws.
|
||
|
4.1
|
(3)
|
Registration
Rights Agreement, dated as of April 29, 1991, by and among the Company,
Andrew G. Galef, Frank Perna, Jr. and the other entities named
therein.
|
||
|
4.2
|
(4)
|
Registration
Rights Agreement, dated as of June 28, 1996, by and between the Company
and U.S. Trust Company of California, N.A.
|
||
|
4.3
|
(13)
|
Registration
Rights Agreement, dated as of June 26, 2002, by and between the Company
and U. S. Trust Company N.A.
|
||
|
4.4
|
(7)
|
Rights
Agreement, dated as of April 30, 2003, by and between the Company and The
Bank of New York, as Rights Agent.
|
||
|
4.5
|
(13)
|
Agreement
for Registration Rights, dated as of September 15, 2003, by and between
the Company and SEI Private Trust Company.
|
||
|
4.6
|
(16)
|
Registration
Rights Agreement, dated as of October 3, 2003, by and between the Company
and each B. Riley Investor.
|
||
|
10.1*
|
(5)
|
Second
Amended and Restated 1989 Incentive Stock Compensation Plan of Magnetek,
Inc. (“1989 Plan”).
|
||
|
10.2*
|
(4)
|
Amendment
No. 1 to 1989 Plan.
|
||
|
10.3*
|
(4)
|
Standard
Terms and Conditions Relating to Non-Qualified Stock Options, revised as
of July 24, 1996, pertaining to the 1989 Plan.
|
||
|
10.4*
|
(4)
|
Form
of Non-Qualified Stock Option Agreement Pursuant to the Second Amended and
Restated 1989 Incentive Stock Compensation Plan of the
Company.
|
||
|
10.5*
|
(22)
|
Magnetek,
Inc. Amended and Restated 1997 Non-Employee Director Stock Option
Plan.
|
||
|
10.6*
|
(3)
|
1991
Discretionary Director Incentive Compensation Plan of the
Company.
|
||
|
10.7*
|
(22)
|
Amended
and Restated 1999 Stock Incentive Plan of Magnetek, Inc. (the “1999
Plan”)
|
||
|
10.8*
|
(22)
|
Amended
and Restated 2000 Employee Stock Plan of Magnetek, Inc. (the “2000
Plan”).
|
||
|
10.9*
|
(6)
|
Standard
Terms and Conditions Relating to Non-Qualified Stock Options, effective as
of October 19, 1999, pertaining to the 1999 Plan and the 2000
Plan.
|
||
|
10.10*
|
(27)
|
Magnetek,
Inc. Amended and Restated Director and Officer Compensation and Deferral
Investment Plan.
|
||
|
10.11*
|
(8)
|
Non-Qualified
Stock Option Agreement, dated as of January 27, 1997, by and between the
Company and David P. Reiland.
|
||
|
10.12*
|
(9)
|
Change
of Control Agreement, dated as of October 20, 1998, by and between David
P. Reiland and the Company.
|
||
|
10.13*
|
(11)
|
Change
of Control Agreement, dated as of December 11, 2002, by and between Peter
McCormick and the Company.
|
||
|
10.14*
|
(13)
|
Change
of Control Agreement, dated as of July 29, 2003, by and between Marty
Schwenner and the Company.
|
||
|
10.15*
|
(22)
|
Amended
Form of Change of Control Agreement for named executive officers David P.
Reiland, Peter M. McCormick and Marty J. Schwenner, effective as of
January 1, 2008.
|
||
|
10.16*
|
(23)
|
Amended
Form of Change of Control Agreement for named executive officers David P.
Reiland, Peter M. McCormick and Marty J. Schwenner, effective as of
January 1, 2009.
|
||
|
10.17
|
(10)
|
Tax
Agreement, dated as of February 12, 1986, by and between the Company and
Farley Northwest Industries, Inc.
|
||
|
10.18
|
(14)
|
Contract,
dated as of July 10, 2003, for Current Account Credit With Mortgage Lien
Pursuant to Article 38 and Subsequent Articles of Legislative Decree No.
385/1993 (Republic of Italy).
|
||
|
10.19
|
(15)
|
Joinder
Agreement, dated as of April 23, 2004, by and among the Company, SEI
Private Trust Company and LaSalle Bank, N.A.
|
||
|
10.20
|
(18)
|
Agreement
for the Sale of Magnetek, Inc. Power Electronics Group, dated as of
September 28, 2006, by and between the Company and Power-One,
Inc.
|
||
|
10.21*
|
(19)
|
Incentive
Bonus Agreement, dated as of January 5, 2007, by and between the Company
and David P. Reiland.
|
||
|
10.22
|
(20)
|
Settlement
Agreement and Release, dated as of May 1, 2007, by and between the Company
and Samsung Electro-Mechanics Co.
|
||
|
10.23
|
(21)
|
Settlement
Agreement, dated as of May 24, 2007, by and among the Company, Magnetek
Controls, Inc., Magnetek National Electric Coil, Inc., Federal-Mogul
Corporation, Federal-Mogul Products, Inc., and certain other parties
thereto.
|
||
|
10.24
|
(12)
|
Lease
of Menomonee Falls, Wisconsin facility, dated as of July 23,
1999.
|
||
|
10.25
|
(2)
|
Industrial
Building Lease dated as of November 26, 2006, and Amendment of Industrial
Building Lease dated as of April 5, 2007, by and between the Company and
W.C. Bradley Co.
|
||
|
10.26
|
(24)
|
Revolving
Credit Agreement dated as of November 6, 2007, by and between the Company
and Associated Bank, N.A.
|
||
|
Exhibit
No.
|
Note
|
Description
of Exhibit
|
||
|
10.27
|
(25)
|
Asset
Purchase Agreement dated February 4, 2008 by and among Magnetek, Inc.,
Enrange LLC, W. Christopher Dulin, William Gibson and David
Ashburn.
|
||
|
10.28
|
(26)
|
Settlement
Agreement, dated as of June 12, 2008, by and among Magnetek, Inc., Ole K.
Nilssen and Geo Foundation, Ltd.
|
||
|
10.29*
|
(30)
|
Transition,
Separation and Complete Release Agreement by and between the Company and
David P. Reiland dated as of February 5, 2009.
|
||
|
10.30*
|
(28)
|
Form
of Retention Agreement for named executive officers Ryan D. Gile and Scott
S. Cramer.
|
||
|
10.31
|
(29)
|
First
Amendment to Credit Agreement dated as of December 15, 2008 by and between
the Company and Associated Bank, N.A.
|
||
|
10.32*
|
(30)
|
Advisory
Services Agreement by and between the Company and David A. Bloss, Sr.
dated as of December 15, 2008.
|
||
|
10.33*
|
(31)
|
Amendment
to Advisory Services Agreement by and between the Company and David A.
Bloss, Sr., dated as of August 28, 2009.
|
||
|
10.34
|
(32)
|
Transition,
Separation and Complete Release Agreement by and between the Company and
Jolene A. Shellman, dated as of March 2, 2010.
|
||
|
10.35*
|
(33)
|
Second
Amended and Restated 2004 Stock Incentive Plan of Magnetek, Inc. (the
“2004 Plan”).
|
||
|
10.36*
|
(4)
|
Management
Incentive Stock Compensation Plan.
|
||
|
10.37*
|
(30)
|
Amended
Form of Restricted Stock Agreement Pursuant to Amended and Restated 2004
Stock Incentive Plan of Magnetek, Inc.
|
||
|
10.38*
|
(34)
|
Form
of Restricted Stock Award Agreement Pursuant to 2004
Plan.
|
||
|
10.39*
|
**
|
Standard
Terms and Conditions Relating to Non-Qualified Options for the 2004
Plan.
|
||
|
21.1
|
**
|
Subsidiaries
of the Registrant as of June 29, 2008.
|
||
|
23.1
|
**
|
Consent
of Independent Registered Public Accounting Firm.
|
||
|
31.1
|
**
|
Certification
Pursuant to 15 U.S.C. Section 7241.
|
||
|
31.2
|
**
|
Certification
Pursuant to 15 U.S.C. Section 7241.
|
||
|
32.1
|
**
|
Certifications
Pursuant to 18 U.S.C. Section 1350.
|
||
|
*
|
Indicates
a management contract or compensatory plan or arrangement
|
|||
|
**
|
Filed
with this Form 10-K.
|
|||
|
(1)
|
Previously
filed with the Registration Statement on Form S-3 filed on
August 1, 1991, Commission File No. 33-41854, and incorporated herein
by this reference.
|
|||
|
(2)
|
Previously
filed with Form 8-K filed February 9, 2009, and incorporated herein by
this reference.
|
|||
|
(3)
|
Previously
filed with Form 10-K for Fiscal Year ended June 30, 1991, and
incorporated herein by this reference.
|
|||
|
(4)
|
Previously
filed with Form 10-K for Fiscal Year ended June 30, 1996, and
incorporated herein by this reference.
|
|||
|
(5)
|
Previously
filed with Form 10-Q for quarter ended December 31, 1994, and
incorporated herein by this reference.
|
|||
|
(6)
|
Previously
filed with Form 10-Q/A for quarter ended September 30, 1999, and
incorporated herein by this reference.
|
|||
|
(7)
|
Previously
filed with Form 8-K filed May 12, 2003, and incorporated herein by
this reference.
|
|||
|
(8)
|
Previously
filed with Form 10-Q for quarter ended March 31, 1997, and
incorporated herein by this reference.
|
|||
|
(9)
|
Previously
filed with Form 10-Q for quarter ended December 31, 1998, and
incorporated herein by this reference
|
|||
|
(10)
|
Previously
filed with Amendment No. 1 to Registration Statement of Form S-1 filed on
February 14, 1986, Commission File No. 002-97500, and incorporated
herein by this reference.
|
|||
|
(11)
|
Previously
filed with Form 10-Q for Quarter ended December 31, 2002, and incorporated
herein by this reference.
|
|||
|
(12)
|
Previously
filed with Form 10-K for Fiscal Year ended June 27, 1999, and
incorporated herein by this reference
|
|||
|
(13)
|
Previously
filed with Form 10-Q for quarter ended September 30, 2003, and
incorporated herein by this reference.
|
|||
|
(14)
|
Previously
filed with Registration Statement on Form S-3 filed on November 13, 2003,
Commission File No. 333-110460, and incorporated herein by this
reference.
|
|||
|
(15)
|
Previously
filed with Registration Statement on Form S-3 filed on May 21, 2004,
Commission File No. 333-115724, and incorporated herein by this
reference.
|
|||
|
(16)
|
Previously
filed with Form 8-K dated October 21, 2003, and incorporated herein by
this reference.
|
|||
|
(18)
|
Previously
filed with Form 10-K for Fiscal Year ended July 2, 2006, and incorporated
herein by this reference.
|
|||
|
(19)
|
Previously
filed with Form 8-K filed January 11, 2007, and incorporated herein by
this reference.
|
|||
|
(20)
|
Previously
filed with Form 8-K filed May 1, 2007, and incorporated herein by this
reference.
|
|||
|
(21)
|
Previously
filed with Form 8-K filed June 4, 2007, and incorporated herein by this
reference.
|
|||
|
(22)
|
Previously
filed with Form 10-Q for quarter ended December 30, 2007, and incorporated
herein by this reference.
|
|||
|
(23)
|
Previously
filed with Form 8-K filed August 8, 2008, and incorporated herein by this
reference.
|
|||
|
(24)
|
Previously
filed with Form 8-K filed November 7, 2007, and incorporated herein by
this reference.
|
|||
|
(25)
|
Previously
filed with Form 8-K filed February 2, 2008, and incorporated herein by
this reference.
|
|||
|
(26)
|
Previously
filed with Form 8-K filed June 12, 2008, and incorporated herein by this
reference.
|
|||
|
(27)
|
Previously
filed with Form 8-K filed August 5, 2008, and incorporated herein by this
reference.
|
|||
|
(28)
|
Previously
filed with Form 8-K filed February 9, 2009, and incorporated herein by
this reference.
|
|||
|
(29)
|
Previously
filed with Form 8-K filed December 18, 2008, and incorporated herein by
this reference.
|
|||
|
(30)
|
Previously
filed with Form 10-Q for quarter ended December 28, 2008, and incorporated
herein by this reference.
|
|||
|
(31)
|
Previously
filed with Form 10-Q for quarter ended September 27, 2009, and
incorporated herein by this reference.
|
|||
|
(32)
|
Previously
filed with Form 8-K filed March 3, 2010, and incorporated herein by this
reference.
|
|||
|
(33)
|
Previously
filed with Company’s Proxy Statement dated September 6, 2009, for the 2009
Annual Meeting of the Shareholders, and incorporated herein by this
reference.
|
|||
|
(34)
|
Previously
filed with Form 10-Q for quarter ended December 27, 2009, and incorporated
herein by this reference.
|
|||
Chief
Executive Officer and Chief Financial Officer Certifications
The certifications of Magnetek’s Chief
Executive Officer and Chief Financial Officer required under Section 302 and 906
of the Sarbanes-Oxley Act of 2002 have been filed with the Securities and
Exchange Commission as Exhibits 31.1, 31.2, and 32.1 to the Company’s Annual
Report on Form 10-K for the fiscal year ended June 27, 2010.
Additionally, in November 2009,
Magnetek’s Chief Executive Officer filed with the New York Stock Exchange
(“NYSE”) the annual certification required to be furnished pursuant to Section
303A.12 of the NYSE Listed Company Manual. The certification
confirmed that Magnetek’s Chief Executive Officer was not aware of any violation
by Magnetek of the NYSE’s corporate governance listing standards.
Pursuant
to the requirements of Section 13 or 15(d) 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 in the City of Menomonee Falls,
State of Wisconsin, on the 31st day of August, 2010.
Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the Registrant and in the
capacities and on the dates indicated:
|
Signature
|
Title
|
Date
|
|
/s/ MITCHELL I.
QUAIN
|
Chairman
of the Board of Directors
|
August
31, 2010
|
|
Mitchell
I. Quain
|
||
|
/s/ DAVID A. BLOSS,
SR.
|
Director
|
August
31, 2010
|
|
David
A. Bloss, Sr.
|
||
|
/s/ YON Y.
JORDEN
|
Director
|
August
31, 2010
|
|
Yon
Y. Jorden
|
||
|
/s/ DAVID P.
REILAND
|
Director
|
August
31 2010
|
|
David
P. Reiland
|
||
|
/s/ PETER M.
MCCORMICK
|
President
and Chief Executive Officer
|
August
31, 2010
|
|
Peter
M. McCormick
|
||
|
/s/ MARTY J.
SCHWENNER
|
Vice
President and Chief Financial Officer
|
August
31, 2010
|
|
Marty
J. Schwenner
|
(Principal
Financial Officer)
|
|
|
/s/ RYAN D. GILE
|
Vice
President and Controller
|
August
31, 2010
|
|
Ryan
D. Gile
|
(Principal
Accounting Officer)
|
SCHEDULE
II
MAGNETEK, INC.
VALUATION
AND QUALIFYING ACCOUNTS
YEARS
ENDED JUNE 29, 2008, JUNE 28, 2009 AND JUNE 27, 2010
(amounts
in thousands)
|
Balance
at
|
Additions
charged
|
Deductions
|
||||||||||||||||||
|
beginning
|
(recoveries
added)
|
from
|
Balance
at
|
|||||||||||||||||
|
of
year
|
to
earnings
|
allowance
|
Other
|
end
of year
|
||||||||||||||||
|
June
29, 2008
|
||||||||||||||||||||
|
Allowance
for doubtful accounts
|
$ | 726 | $ | (36 | ) | $ | (173 | ) | $ | - | $ | 517 | ||||||||
|
June
28, 2009
|
||||||||||||||||||||
|
Allowance
for doubtful accounts
|
$ | 517 | $ | (26 | ) | $ | (208 | ) | $ | - | $ | 283 | ||||||||
|
June
27, 2010
|
||||||||||||||||||||
|
Allowance
for doubtful accounts
|
$ | 283 | $ | 66 | $ | (102 | ) | $ | 2 | $ | 249 | |||||||||
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board
of Directors and Stockholders
Magnetek,
Inc.
We have
audited the consolidated financial statements of Magnetek, Inc. as of June
27, 2010, and June 28, 2009, and for each of the three years in the period ended
June 27, 2010, and have issued our report thereon dated August 31, 2010
(included elsewhere in this Annual Report on Form 10-K). Our
audits also included the financial statement schedule listed in Item 15(a) of
this Annual Report on Form 10-K. This schedule is the
responsibility of the Company’s management. Our responsibility is to
express an opinion based on our audits.
In our
opinion, the financial statement schedule referred to above, when considered in
relation to the basic financial statements taken as a whole, presents fairly in
all material respects the information set forth therein.
|
/s/
Ernst & Young LLP
|
|||
|
Milwaukee,
Wisconsin
|
|||
August
31, 2010
19