EXECUTIVE MANAGEMENT AGREEMENT
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This Agreement is made and entered into as of the 1st day of July, 1994, by
and between MagneTek, Inc. (the "Company"), a Delaware corporation, and The
Spectrum Group, Inc. ("Spectrum"), a California corporation.
W I T N E S S E T H :
WHEREAS, during the past five years, Spectrum has provided the Company with
certain management services as contemplated below pursuant to that certain
Executive Management Agreement (the "Prior Agreement"), dated April 10, 1989,
between the Company and Spectrum; and
WHEREAS, the Company and Spectrum desire to continue the provision of said
services on the terms and conditions set forth herein.
A G R E E M E N T
NOW, THEREFORE, the Company and Spectrum agree as follows:
SECTION 1. SERVICES
A. The Company hereby retains Spectrum to provide the Company with
executive management services as contemplated herein for the period commencing
on the date first set forth above and ending on July 1, 1999, subject to renewal
as set forth in
Section 3 below. Such services shall include consultation, advice and direct
management assistance to the Company with respect to operations, strategic
planning, financing and other aspects of the business of the Company. Spectrum
shall devote such time as is reasonably necessary to provide such services.
B. The executive management services contemplated hereby shall be
performed personally by and/or under the personal direction of Andrew G. Galef.
C. Spectrum accepts the appointment provided in Section 1.A above and
agrees to provide executive management services to the Company in accordance
with the terms hereof.
D. Notwithstanding anything to the contrary herein, in the event Andrew
G. Galef ceases active employment with Spectrum or to provide the personal
services or direction contemplated in Section 1.B above, the Company may
terminate this Agreement upon thirty (30) days' written notice to Spectrum;
except that in the event of Andrew G. Galef's death or disability, the Company
may terminate this Agreement upon six (6) months' written notice to Spectrum.
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SECTION 2. CONSIDERATION
A. In consideration for the executive management services to be provided
by Spectrum to the Company, during the term of this Agreement the Company shall
pay and Spectrum shall be entitled to receive $732,000 per Company fiscal year,
payable in monthly installments of $61,000, such monthly payments to be made in
advance commencing on the date hereof and continuing thereafter and on the first
day of each succeeding month. In addition, Spectrum shall also be entitled to
reimbursement for all reasonable out-of-pocket expenses incurred by Spectrum or
its personnel, payable by the Company when billed by Spectrum, in connection
with the performance of Spectrum's duties hereunder. The fee payable to
Spectrum hereunder shall be adjusted at the commencement of each of the
Company's fiscal years (July 1st) subsequent to the effective date hereof to
reflect the cumulative increase in the Consumer Price Index for the metropolitan
Los Angeles-Long Beach area, as reported by the U.S. Department of Labor, Bureau
of Labor Statistics, during the directly preceding fiscal year and thereafter
shall be adjusted at the commencement of each renewal period to reflect the
cumulative increase in such Consumer Price Index during the prior renewal
period.
B. The Company shall pay Spectrum or its designee a bonus in an amount to
be determined by, and within the discretion of, the Compensation Committee of
the Board of Directors; said
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payment shall be made at the same time payments are made to participants in the
Company's bonus plan.
SECTION 3. TERM
This Agreement shall take effect as of the date first above written and
shall continue until July 1, 1999, unless sooner terminated by the Board of
Directors of the Company as a result of criminal misconduct or fraud by Spectrum
or by Andrew G. Galef or as otherwise provided herein. This Agreement shall
thereafter be renewed, subject to the approval by the Board of Directors of the
Company, for successive annual periods unless the Company or Spectrum terminates
this Agreement by ninety (90) days' notice to the other party prior to the
commencement of a renewal period or unless sooner terminated by the Board of
Directors of the Company as a result of criminal misconduct or fraud by Spectrum
or as otherwise provided herein.
SECTION 4. PRIOR AGREEMENT TERMINATED
The Prior Agreement is hereby terminated and neither party thereto shall
have any further liability or responsibility thereunder to the other except to
the extent accrued, but unsatisfied as of the date first set forth above.
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SECTION 5. MISCELLANEOUS
A. Any notice required or desired to be given hereunder shall be in
writing and shall be personally served or shall be deemed given three business
days after deposit in the United States mail, registered or certified, postage
and fee prepaid, and addressed as follows:
If to the Company:
MagneTek, Inc.
15th Floor
11150 Santa Monica Boulevard
Los Angeles, CA 90025
Attention: General Counsel
If to Spectrum:
The Spectrum Group, Inc.
14th Floor
11150 Santa Monica Boulevard
Los Angeles, CA 90025
Attention: Chairman
B. This Agreement shall not be assigned or transferred by Spectrum except
with the express prior written consent of the Company. This Agreement shall be
binding upon the successors and assigns of the parties hereto, including, but
not limited to, any corporation or other entity into which the Company is
merged, liquidated or otherwise combined.
C. This Agreement shall not be amended except by a written instrument
executed by the parties.
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D. This Agreement is made under the and shall be construed in accordance
with the laws of the State of Delaware.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date above written:
MAGNETEK, INC.
By: ___________________________
THE SPECTRUM GROUP, INC.
By: ___________________________
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