EXHIBIT 10.1

 

Form of Change of Control Agreement between Stephen A. Tsoris and SPX
Corporation

 

[Date]

 

[Name]

13320 Ballantyne Corporate Place

Charlotte, NC 28277

 

Dear                 :

 

SPX Corporation (the “Company”) recognizes that your contribution to its growth
and success have been and will continue to be substantial and desires to assure
your continued employment.  In this regard, the Board of Directors of the
Company (the “Board”) recognizes that, as is the case with many publicly held
corporations, the possibility of a Change of Control (as defined in Section 2,
below) may exist and that such possibility, and the uncertainty and questions
that it may raise among management, may result in the departure or distraction
of management personnel to the detriment of the Company and its shareholders.

 

The Board has determined that appropriate steps should be taken to reinforce and
encourage the continued attention and dedication of members of the Company’s
management, including you, to their assigned duties without distraction in the
face of potentially disruptive circumstances arising from the possibility of a
Change of Control.

 

Further, it is the intent of the Board in adopting this agreement (the
“Agreement”) to assure the Company and its shareholders (i) of continuity of
management in the event of any actual or threatened Change of Control and
(ii) that key executive employees of the Company will be able to evaluate
objectively whether a potential Change of Control is in the best interests of
the shareholders.

 

In order to induce you to remain in the employ of the Company and to advance the
interests of the Company and its shareholders by providing you with appropriate
financial protection, the Board agrees that you shall receive the severance
benefits set forth in this Agreement in the event that you separate from service
due to a Change of Control as specifically provided in the remainder of this
Agreement.  For purposes of this Agreement, your employment with the Company
shall be deemed to be terminated when you have a “Separation from Service”
within the meaning of Section 409A of the Internal Revenue Code of 1986 (the
“Code”), and references to your termination of employment shall be deemed to
refer to a Separation from Service.

 

1.             Term of Agreement.  This Agreement will become effective on
[date] (the “Effective Date”), and shall continue in effect through the second
(2nd) anniversary of the Effective Date (the “Term”); provided, however, that
this Agreement shall remain in effect and the Term shall be extended
automatically from year to year thereafter for one (1) additional year unless,
not later than six (6) months prior to the second (2nd) anniversary of the
Effective Date, or any subsequent anniversary of the Effective Date, the Company
gives written notice to you that it has elected not to extend this Agreement. 
Notwithstanding anything in this Section 1 to the contrary, if a Change of
Control occurs during the Term of this Agreement, the Term of this Agreement
shall be extended automatically to the second (2nd) anniversary of the Change of
Control.

 

2.             Change of Control of the Company.  No benefits will be payable
under the terms of this Agreement unless a Change of Control of the Company has
occurred.  A “Change of Control” shall be deemed to have occurred if:

 

(a)           Any “Person” (as defined below), excluding for this purpose the
Company or any subsidiary of the Company, any employee benefit plan of the
Company or of any subsidiary of the Company, or any entity organized, appointed
or established for or pursuant to the terms of any such plan that

 

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acquires beneficial ownership of common shares of the Company, is or becomes the
“Beneficial Owner” (as defined below) of twenty-five percent (25%) or more of
the common shares of the Company then outstanding; provided, however, that no
Change of Control shall be deemed to have occurred as the result of an
acquisition of common shares of the Company by the Company which, by reducing
the number of shares outstanding, increases the proportionate beneficial
ownership interest of any Person to twenty-five percent (25%) or more of the
common shares of the Company then outstanding, but any subsequent increase in
the beneficial ownership interest of such a Person in common shares of the
Company shall be deemed a Change of Control; and provided further that if the
Board determines in good faith that a Person who has become the Beneficial Owner
of common shares of the Company representing twenty-five percent (25%) or more
of the common shares of the Company then outstanding has inadvertently reached
that level of ownership interest, and if such Person divests as promptly as
practicable a sufficient number of shares of the Company so that the Person no
longer has a beneficial ownership interest in twenty-five percent (25%) or more
of the common shares of the Company then outstanding, then no Change of Control
shall be deemed to have occurred.  For purposes of this Section 2(a), the
following terms shall have the meanings set forth below:

 

(i)            “Person” shall mean any individual, firm, limited liability
company, corporation or other entity, and shall include any successor (by merger
or otherwise) of any such entity.

 

(ii)           “Affiliate” and “Associate” shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

 

(iii)          A Person shall be deemed the “Beneficial Owner” of and shall be
deemed to “beneficially own” any securities:

 

(A)          that such Person or any of such Person’s Affiliates or Associates
beneficially owns, directly or indirectly (determined as provided in Rule 13d-3
under the Exchange Act);

 

(B)          that such Person or any of such Person’s Affiliates or Associates
has (1) the right to acquire (whether such right is exercisable immediately or
only after the passage of time) pursuant to any agreement, arrangement or
understanding (other than customary agreements with and between underwriters and
selling group members with respect to a bona fide public offering of
securities), or upon the exercise of conversion rights, exchange rights, rights,
warrants or options, or otherwise; provided, however, that a Person shall not be
deemed the Beneficial Owner of, or to beneficially own, securities tendered
pursuant to a tender or exchange offer made by or on behalf of such Person or
any of such Person’s Affiliates or Associates until such tendered securities are
accepted for purchase or exchange; or (2) the right to vote pursuant to any
agreement, arrangement or understanding; provided, however, that a Person shall
not be deemed the Beneficial Owner of, or to beneficially own, any security if
the agreement, arrangement or understanding to vote such security (a) arises
solely from a revocable proxy or consent given to such Person in response to a
public proxy or consent solicitation made pursuant to, and in accordance with,
the applicable rules and regulations promulgated under the Exchange Act and
(b) is not also then reportable on Schedule 13D under the Exchange Act (or any
comparable or successor report); or

 

(C)          that are beneficially owned, directly or indirectly, by any other
Person with which such Person or any of such Person’s Affiliates or Associates
has any agreement, arrangement or understanding (other than customary agreements
with and between underwriters and selling group members with respect to a bona
fide public offering of securities) for the purpose of acquiring, holding,
voting (except to the extent contemplated by the proviso to
Section 2(a)(iii)(B)(2) above) or disposing of any securities of the Company.

 

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Notwithstanding anything in this definition of Beneficial Ownership to the
contrary, the phrase “then outstanding,” when used with reference to a Person’s
beneficial ownership of securities of the Company, shall mean the number of such
securities then issued and outstanding together with the number of such
securities not then actually issued and outstanding that such Person would be
deemed to own beneficially hereunder.

 

(b)           During any period of two (2) consecutive years (not including any
period prior to the execution of this Agreement), individuals who at the
beginning of such two (2)-year period constitute the Board and any new director
or directors (except for any director designated by a person who has entered
into an agreement with the Company to effect a transaction described in
Section 2(a), above, or Section 2(c), below) whose election by the Board or
nomination for election by the Company’s shareholders was approved by a vote of
at least two-thirds of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to constitute at least
a majority of the Board; or

 

(c)           The consummation of: (i) a plan of complete liquidation of the
Company, (ii) an agreement for the sale or disposition of the Company or all or
substantially all of the Company’s assets, (iii) a plan of merger or
consolidation of the Company with any other corporation, or (iv) a similar
transaction or series of transactions involving the Company (any transaction
described in parts (i) through (iv) of this Section 2(c) being referred to as a
“Business Combination”), in each case unless after such a Business Combination
the shareholders of the Company immediately prior to the Business Combination
continue to own at least seventy-five percent (75%) of the voting securities of
the new (or continued) entity immediately after such Business Combination, in
substantially the same proportion as their ownership of the Company immediately
prior to such Business Combination.

 

Notwithstanding any provision in this Agreement to the contrary, a “Change of
Control” shall not include any transaction described in Section 2(a) or (c),
above, where, in connection with such transaction, you and/or any party acting
in concert with you substantially increase your, his or its, as the case may be,
ownership interest in the Company or a successor to the Company (other than
through conversion of prior ownership interests in the Company and/or through
equity awards received entirely as compensation for past or future personal
services).

 

For the avoidance of doubt, the Spinoff (as defined hereafter), if it occurs,
will not constitute a Change of Control under this Agreement.  For purposes of
this Agreement, the “Spinoff” means the Company’s proposed tax-free spin-off of
its “Flow” business into a new standalone, publicly-traded company (“Flowco”),
as announced on October 29, 2014.

 

3.             Definitions.  The following definitions shall be used in
determining whether, under the terms of Section 4 hereof, you are entitled to
receive Accrued Benefits and/or Severance Benefits:

 

(a)           Disability.   For purposes of this Agreement, “Disability” shall
mean, in the written opinion of a qualified physician selected by the Company,
you are by reason of any medically determinable physical or mental impairment
that can be expected to result in death or can be expected to last for a
continuous period of not less than twelve (12) months, (x) unable to engage in
any substantial gainful activity, or (y) receiving income replacement benefits
for a period of not less than three (3) months under a Company disability plan.

 

(b)          Retirement.  “Retirement” shall mean your voluntary separation from
service (other than for Good Reason, as defined below) at a time after you have
reached age sixty-five (65).

 

(c)           Cause.  “Cause” shall mean (i) your willful and continued failure
to substantially perform your duties with the Company (other than any such
failure resulting from Disability or occurring after issuance by you of a Notice
of Termination for Good Reason), after a demand for substantial performance is
delivered to you that specifically identifies the manner in which the Company
believes that you have not substantially performed your duties, and after you
have failed to resume substantial performance of your duties on a continuous
basis within fourteen (14) calendar days

 

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after receiving such demand, (ii) you willfully engage in conduct that is
demonstrably and materially injurious to the Company, monetarily or otherwise,
or (iii) your having been convicted of (or pleaded nolo contendere to) a felony
that impairs your ability substantially to perform your duties with the
Company.  In addition, your employment shall be deemed to have terminated for
Cause if, within 12 months after your employment has terminated, facts and
circumstances are discovered that would have justified a termination for Cause.

 

The Company shall make any decision that Cause exists in good faith.  For
purposes of this Agreement, no act or failure to act on your part shall be
considered “willful” unless it is done, or omitted to be done, by you in bad
faith or without reasonable belief that your action or omission was in the best
interests of the Company or any successor or affiliate.  Any act, or failure to
act, on your part, based upon authority given pursuant to a resolution duly
adopted by the Board or based upon the advice of counsel for the Company or any
successor or affiliate shall be conclusively presumed to be done, or omitted to
be done, in good faith and in the best interests of the Company or any successor
or affiliate thereof.

 

(d)           Good Reason.  You shall be entitled to terminate your employment
for Good Reason.  For purposes of this Agreement, “Good Reason” shall mean,
without your express written consent, the occurrence within two (2) years
following a Change of Control of the Company of any one (1) or more of the
following:

 

(i)            A material reduction or alteration in your duties and
responsibilities, or the status of your position from those in effect on the day
prior to the Change of Control;

 

(ii)           A material reduction by the Company in your base salary or in
your most recent annual target incentive award opportunity as in effect on the
date hereof or as the same shall be increased from time to time;

 

(iii)          The Company’s requiring you to be based at a location in excess
of fifty (50) miles from the location where you are currently based;

 

(iv)          The failure by the Company to continue in effect the Company’s 
employee benefit plans, policies, practices or arrangements in which you
participate prior to the Change of Control, unless an equitable arrangement
(embodied in an ongoing substitute or alternative plan) to provide similar
benefits has been made with respect to such plan(s); or the failure by the
Company to continue your participation therein (or in such substitute or
alternative plan) on substantially the same basis, both in terms of the amount
of benefits provided and the level of your participation relative to other
participants, as existed as of the time of the Change of Control;

 

(v)           The failure of the Company to obtain a satisfactory agreement from
any successor to the Company to assume and agree to perform this Agreement, as
contemplated in Section 5 hereof; and

 

(vi)          Any purported termination by the Company of your employment that
is not effected pursuant to a Notice of Termination which substantially
satisfies the requirements of Section 3(f), below, and for purposes of this
Agreement, no such purported termination shall be effective.

 

Your right to separate from service pursuant to this Section 3(d) shall not be
affected by your suspension due to Disability.  Your continued employment shall
not constitute a waiver of your rights with respect to any circumstance
constituting Good Reason hereunder, except that you must provide notice to the
Company of the existence of the condition described in above within a period not
to exceed ninety (90) calendar days of the initial existence of the condition,
and the Company will have a period of at least thirty (30) calendar days
following the notice during which it may remedy the condition.

 

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(e)           Notice of Termination.  Any termination by the Company for Cause
or by you for Good Reason shall be communicated by Notice of Termination to the
other party hereto.  For purposes of this Agreement, a “Notice of Termination”
shall mean a written notice that shall indicate the specific termination
provision in this Agreement relied upon and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination of your
employment under the provisions so indicated.

 

(f)            Date of Termination.  “Date of Termination” shall mean the date
specified in the Notice of Termination where required (but not less than thirty
(30) calendar days following delivery of the Notice of Termination, except that
termination for Cause may be effective immediately) or in any other case upon
ceasing to perform services to the Company; provided that if within twenty (20)
calendar days after any Notice of Termination one party notifies the other party
that a dispute exists concerning the termination, the Date of Termination shall
be the date finally determined to be the Date of Termination, either by written
agreement of the parties or by a binding and final arbitration decision.  In the
event that a dispute exists concerning the Date of Termination, you shall
continue to receive your full compensation (including participation in all
benefit and insurance plans in which you were participating) in effect when the
notice giving rise to the dispute was given, until the Date of Termination is
finally determined.  In such event, you will be required to reimburse the
Company for all compensation received beyond the finally determined Date of
Termination either by direct cash reimbursement within thirty (30) calendar days
of resolving the conflict or by appropriately reducing your remaining benefits
to be received under the terms of this Agreement.

 

(g)           Earned Bonus Amount.  For any year prior to the year during which
a Change of Control occurs, your “Earned Bonus Amount” means your actual bonus
for that year.  For the year during which a Change of Control occurs, your
“Earned Bonus Amount” means your total potential bonus for the year as
determined under the 2005 Executive Bonus Plan or applicable successor bonus
plan (the “Bonus Plan”), according to the business performance metric achieved,
and prorated to reflect your length of service during the Bonus Plan year.  For
any year following the year during which a Change of Control occurs, your
“Earned Bonus Amount” means the greater of (i) your actual bonus for the year
prior to the year during which the Change of Control occurs and (ii) your total
potential bonus for the year as determined under the Bonus Plan, according to
the business performance metric achieved, and prorated to reflect your length of
service during the Bonus Plan year.

 

4.             Compensation Upon Separation from Service Following a Change of
Control.

 

(a)           Accrued Benefits.  In the event that you separate from service for
any reason during the Term of this Agreement following a Change of Control of
the Company, you shall receive your Accrued Benefits through the Date of
Termination to the extent unpaid.  For purposes of this Agreement, your “Accrued
Benefits” shall include the following:

 

(i)            All base salary for the time period ending with your Date of
Termination, at the rate in effect at the time Notice of Termination is given or
on the Date of Termination if no Notice of Termination is required;

 

(ii)           A bonus payment equal to one hundred percent (100%) of the
greater of (A) your target bonus for the year in which the Date of Termination
occurs (the “Year of Termination”), prorated based upon the ratio of the number
of months (full credit for a partial month) you were employed during that bonus
year to the total months in that bonus year, and (B) your Earned Bonus Amount
for the Year of Termination, calculated as if the Date of Termination were the
end of that year for purposes of the Bonus Plan;

 

(iii)          A cash equivalent of all unused vacation to which you were
entitled through your Date of Termination;

 

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(iv)          Reimbursement for any and all monies advanced in connection with
your employment for reasonable and necessary expenses incurred by you on behalf
of the Company for the time period ending with your Date of Termination (as
evidenced and determined in accordance with applicable Company policy); and

 

(v)           All other amounts to which you are entitled under any compensation
or benefit plan, program, practice or policy of the Company in effect as of the
Date of Termination.

 

(vi)          Subject to Sections 4(e) and 4(f), the payments provided for in
Section 4(a)(i), (ii), (iii), and (iv) above shall be made in a lump sum cash
payment as soon as administratively practicable (but in no event more than
thirty (30) calendar days) following your Date of Termination.  If the total
amount of annual bonus is not determinable on that date, the Company shall pay
the amount of bonus that is determinable and the remainder shall be paid in a
lump sum cash payment at the time such bonuses are paid generally and in all
events no later than the two and one-half (2½) months following the end of the
calendar year in which the bonus is earned.

 

(b)           Severance Benefits.  In the event that you separate from service
during the Term of this Agreement following a Change of Control, unless your
separation from service is (i) because of your death, Disability, or Retirement;
(ii) a termination by the Company for Cause; or (iii) a termination by you other
than for Good Reason, you shall receive, in addition to your Accrued Benefits,
the Severance Benefits.  For purposes of this Agreement, your “Severance
Benefits” shall include the following:

 

(i)            Your annual base salary at the rate in effect immediately prior
to the Change of Control of the Company or, if greater, at the rate in effect at
the time Notice of Termination is given, or on the Date of Termination if no
Notice of Termination is required, multiplied by two (2);

 

(ii)           An amount equal to two (2) times the greatest of (A) the highest
of your Earned Bonus Amounts for the three (3) years immediately preceding the
Year of Termination or (B) your target bonus under the Bonus Plan for the Year
of Termination or (C) your Earned Bonus Amount for the Year of Termination,
calculated as if the Date of Termination were the end of that year for purposes
of the Bonus Plan;

 

(iii)          For a two (2) -year period after your Date of Termination, the
Company will arrange to provide to you the same group health care coverage you
had prior to your Date of Termination, at the Company’s expense, which includes,
but is not limited to, hospital, surgical, medical, dental, and dependent
coverages, provided you timely apply and you and your dependents remain eligible
for the coverage, and provided further that such continued coverage does not
result in adverse tax or monetary penalties to the Company (or other applicable
adverse effects to the Company based on coverage discrimination rules then in
effect).  Nothing herein shall be construed to extend the period of time over
which COBRA continuation coverage shall be provided to you or your dependents
beyond that mandated by law (that is, the coverage under this
Section 4(b)(iii) will be concurrent with, and not consecutive to, the coverage
period mandated by law).  Health care benefits otherwise receivable by you
pursuant to this Section 4(b)(iii) shall be discontinued to the extent
comparable benefits are actually received by you from a subsequent employer
(including an employer of your spouse) during the two (2) -year period following
your Date of Termination, and any such benefits actually received by you shall
be reported to the Company.  To the extent the provision of health care benefits
receivable by you pursuant to this Section 4(b)(iii) extends beyond the COBRA
continuation period, such benefits will be provided in accordance with the
requirements of Code Section 409A and Treasury Regulation
§1.409A-3(i)(1)(iv) (or any similar or successor provisions);

 

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(iv)          For a two (2) -year period after your Date of Termination, the
Company will arrange to provide to you, at the Company’s expense, life insurance
coverage in the amount of two (2) times your base salary in effect at your Date
of Termination and, at the end of the two (2)-year period, for the remainder of
your life the Company will provide to you life insurance coverage in the amount
of your base salary in effect at your Date of Termination provided that such
coverage will be provided in accordance with the requirements of Code
Section 409A and Treasury Regulation §1.409A-3(i)(1)(iv) (or any similar or
successor provisions;

 

(v)           Each stock option that you have been granted by the Company and
that is not yet vested shall become immediately vested and exercisable and shall
continue to be exercisable for the lesser of (A) two (2) years following your
Date of Termination or (B) the time remaining until the originally designated
expiration date, unless a longer exercise period is provided for in the
applicable plan or award agreement;

 

(vi)          Any contractual restrictions placed on shares of restricted stock
or other equity-based compensation awards that you have been awarded pursuant to
the Company’s 2002 Stock Compensation Plan, as amended, and any similar or
successor equity compensation plan adopted or maintained by the Company, shall
lapse as of your Date of Termination;

 

(vii)         In the event that a Change of Control occurs and payments are made
under this Section 4(b), and a final determination is made by legislation,
regulation, ruling, or court decision directed to you or the Company that the
aggregate amount of any payments made to you under this Agreement and any other
agreement, plan, program, or policy of the Company in connection with, on
account of, or as a result of, such Change of Control (the “Total Payments”)
will be subject to an excise tax under the provisions of Code Section 4999, or
any successor section thereof (“Excise Tax”), the Total Payments shall be
reduced (beginning with those amounts that are exempt from Code Section 409A and
then from amounts that are subject to Code Section 409A, beginning with the
amounts scheduled to be paid furthest from the first date of the Total Payments)
so that the maximum amount of the Total Payments (after reduction) shall be one
dollar ($1.00) less than the amount that would cause the Total Payments to be
subject to the Excise Tax; provided, however, that the Total Payments shall only
be reduced to the extent that the after-tax value of amounts received by you
after application of the above reduction would exceed the after-tax value of the
Total Payments received without application of such reduction.  For this
purpose, the after-tax value of an amount shall be determined taking into
account all federal, state, and local income, employment, and excise taxes
applicable to such amount.  In making any determination as to whether the Total
Payments would be subject to an Excise Tax, consideration shall be given to
whether any portion of the Total Payments could reasonably be considered, based
on the relevant facts and circumstances, to be reasonable compensation for
services rendered (whether before or after the consummation of the applicable
Change of Control).

 

(A)          In the event that upon any audit by the Internal Revenue Service,
or by a state or local taxing authority, of the Total Payments, a change is
formally determined to be required in the amount of taxes paid by, or Total
Payments made to, you, appropriate adjustments will be made under this Agreement
such that the net amount that is payable to you after taking into account the
provisions of Code Section 4999 will reflect the intent of the parties as
expressed in this Section 4(b)(vii).  You shall notify the Company in writing of
any claim by the Internal Revenue Service that, if successful, would require
payment of an Excise Tax or an additional Excise Tax on the Total Payments (a
“Claim”).  Such notification shall be given as soon as practicable but no later
than ten (10) business days after you are informed in writing of such Claim and
shall apprise the Company of the nature of such Claim and the date on which such
Claim is requested to be paid.  You shall not pay such Claim prior to the
expiration of the thirty (30)-calendar day period following the date on which
you give such notice to the

 

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Company (or such shorter period ending on the date that any payment of taxes
with respect to such Claim is due).  If the Company notifies you in writing
prior to the expiration of such period that it desires to contest such Claim,
you shall: (1) give the Company any information reasonably requested by the
Company relating to such Claim, (2) take such action in connection with
contesting such Claim as the Company shall reasonably request in writing from
time to time, including, without limitation, accepting legal representation with
respect to such Claim by an attorney reasonably selected by the Company,
(3) cooperate with the Company in good faith in order to contest effectively
such Claim, and (4) permit the Company to participate in any proceedings
relating to such Claim; provided, however, that the Company shall bear and pay
directly all costs and expenses (including additional interest and penalties)
incurred in connection with such contest and shall indemnify and hold you
harmless, on an after-tax basis, for any Excise Tax, additional Excise Tax, or
income tax (including interest and penalties with respect thereto) imposed as a
result of such representation and payment of costs and expenses.  Without
limitation on the foregoing provisions of this paragraph, the Company, at its
sole option, may pursue or forgo any and all administrative appeals,
proceedings, hearings and conferences with the taxing authority in respect of
such Claim and may, at its sole option, either direct you to pay the tax claimed
and sue for a refund or contest the Claim in any permissible manner, and you
agree to prosecute such contest to a determination before any administrative
tribunal, in a court of initial jurisdiction and in one (1) or more appellate
courts, as the Company shall determine, provided, however, that if the Company
directs you to pay such Claim and sue for a refund, the Company shall advance
the amount of such payment to you on an interest-free basis or, if such an
advance is not permissible under applicable law, pay the amount of such payment
to you as additional compensation, and shall indemnify and hold you harmless, on
an after-tax basis, from any Excise Tax, additional Excise Tax, or income tax
(including interest or penalties with respect thereto) imposed with respect to
such advance or additional compensation; and further provided that any extension
of the statute of limitations relating to payment of taxes for the taxable year
of you with respect to which such contested amount is claimed to be due is
limited solely to such contested amount.  The Company shall reimburse any fees
and expenses provided for under this Section 4(b)(vii) on or before the last day
of your taxable year following the taxable year in which the fee or expense was
incurred, and in accordance with the other requirements of Code Section 409A and
Treasury Regulation § 1.409A-3(i)(1)(v) (or any similar or successor
provisions).

 

(B)          If, after your receipt of an amount advanced or paid by the Company
pursuant to the immediately preceding paragraph, you become entitled to receive
any refund with respect to such Claim, you shall (subject to the Company’s
compliance with the requirements of the immediately preceding paragraph)
promptly pay to the Company the amount of such refund (together with any
interest paid or credited thereon after taxes applicable thereto).  If, after
your receipt of an amount advanced by the Company pursuant to the immediately
preceding paragraph, a determination is made that you shall not be entitled to
any refund with respect to such Claim and the Company does not notify you in
writing of its intent to contest such denial of refund prior to the expiration
of thirty (30) calendar days after such determination, then such advance shall
be forgiven and shall not be required to be repaid.

 

(viii)        To the full extent permitted by law, the Company shall indemnify
you (including the advancement of expenses) for any judgments, fines, amounts
paid in settlement and reasonable expenses, including attorneys’ fees, incurred
by you in connection with the defense of any lawsuit or other claim to which you
are made a party by reason of being or

 

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having been an officer, director or employee of the Company or any of its
subsidiaries.  In addition, you will be covered by director and officer
liability insurance to the maximum extent that such insurance maintained by the
Company from time to time covers any officer or director (or former officer or
director) of the Company.  Any costs and expenses that are to be paid or
reimbursed pursuant to the preceding provisions of this Section 4(b)(viii) shall
be reimbursed in accordance with the requirements of Code Section 409A and
Treasury Regulation §1.409A-3(i)(1)(iv) (or any similar or successor
provisions).

 

(ix)          The Company will pay the expense of outplacement services from a
provider reasonably selected by you and acceptable to the Company, up to a
maximum of $35,000.  Such outplacement services must be incurred by you no later
than the first anniversary of your separation from service.

 

(x)           To the extent that you prevail in any contest or dispute with
respect to any interpretation, enforcement or defense of your rights under this
Agreement by litigation or otherwise, the Company shall pay to you or reimburse
you for all legal fees and expenses incurred by you as a result of such contest
or dispute (including all such fees and expenses, if any, incurred in contesting
or disputing any separation from service or in seeking to obtain or enforce any
right or benefit provided by this Agreement or in connection with any tax audit
or proceeding to the extent attributable to the application of Code Section 4999
to any payment or benefit provided hereunder, as described in
Section 4(b)(vii) above), provided that such fees and expenses that are to be
paid or reimbursed pursuant to the preceding provisions of this
Section 4(b)(x) shall be reimbursed in accordance with the requirements of Code
Section 409A and Treasury Regulation §1.409A-3(i)(1)(iv) (or any similar or
successor provisions); and

 

(xi)          Subject to Sections 4(e) and 4(f) and except as otherwise provided
in this Agreement, the payments provided in Sections 4(b)(i) and (ii) shall be
made in a lump sum cash payment as soon as administratively practicable (but in
no event more than thirty (30) calendar days) following your separation from
service.  If the total amount of annual bonus is not determinable on that date,
the Company shall pay the amount of bonus that is determinable and the remainder
shall be paid in a lump sum cash payment at the time such bonuses are paid
generally and in all events no later the two and one-half (2½) months following
the end of the calendar year in which the bonus is earned.

 

(c)           Notwithstanding any provision in this Agreement to the contrary,
if a Change of Control occurs and you separate from service other than for Cause
within six (6) months prior to the date on which the Change of Control occurs
and you assert in writing to the Board within thirty (30) calendar days
following the Change of Control that such separation from service (i) was at the
request of a third party who had taken steps reasonably calculated to effect the
Change of Control, (ii) otherwise arose in connection with or anticipation of
the Change of Control, or (iii) would not have occurred if the Change of Control
were not anticipated, then for all purposes of this Agreement your separation
from service shall be deemed to have occurred following the Change of Control
and any payments owed to you hereunder as a result of such Change of Control
shall be paid to you within sixty (60) calendar days following the Change of
Control, unless the Board determines in good faith that your separation from
service (i) was not at the request of a third party who had taken steps
reasonably calculated to effect the Change of Control, (ii) did not otherwise
arise in connection with or anticipation of the Change of Control, and
(iii) would have occurred if the Change of Control were not anticipated.

 

(d)           You shall not be required to mitigate the amount of any payment
provided for in this Section 4 by seeking other employment or otherwise, nor
shall the amount of any payment provided for in this Section 4 be reduced by any
compensation earned by you as the result of employment by another employer after
your Date of Termination, or otherwise, with the exception of a reduction in
your insurance benefits as provided in Section 4(b)(iii), and as provided in
Section 13.

 

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(e)           If, at the time you become entitled to your Accrued Benefits and
your Severance Benefits under this Section 4, you are a “specified employee” (as
defined under  Code Section 409A), then, notwithstanding any provision in this
Agreement to the contrary, the following provisions shall apply.

 

(i)            None of your Accrued Benefits and Severance Benefits considered
deferred compensation under Code Section 409A and not subject to an exception or
exemption thereunder shall be paid to you until the date that is six (6) months
after your separation from service or, if earlier, the date of your death (the
“Six-Month Delay Rule”). Any such Accrued Benefits and Severance Benefits that
would otherwise have been paid to you during this six-month period (the
“Six-Month Delay”) shall instead be aggregated and paid (without interest) to
you no later than ten (10) calendar days following the date that is six
(6) months after your separation from service.  Any Accrued Benefits and
Severance Benefits to which you are entitled to be paid under this Section 4
after the date that is six (6) months after your separation from service shall
be paid to you in accordance with the applicable terms of Section 4.

 

(ii)           During the Six-Month Delay, the Company will pay to you the
applicable payments set forth in this Section 4, to the extent any of the
following exceptions to the Six-Month Delay Rule apply:

 

(A)          the short-term deferral rule of Code Section 409A and Treasury
Regulation §1.409A-1(b)(4) (or any similar or successor provisions) (including
with the treatment of each payment as one of a series of separate payments for
purposes of Code Section 409A and Treasury Regulation §1.409A-2(b)(2)(iii)) (or
any similar or successor provisions),

 

(B)          payments permitted under the separation pay exception of Code
Section 409A and Treasury Regulation §1.409A-1(b)(9)(iii) (or any similar or
successor provisions), and

 

(C)          payments permitted under the limited payments exception of Code
Section 409A and Treasury Regulation §1.409A-1(b)(9)(v)(D) (or any similar or
successor provisions),

 

provided that the amount paid under this Section 4(e)(ii) will count toward, and
will not be in addition to, the total payment amount required to be made to you
by the Company under this Section 4 on account of your separation from service
and any applicable Company benefit plan.

 

(f)            The Company shall deliver to you a form general release and
waiver of claims in favor of the Company that is acceptable to the Company (the
“Release”) as soon as administratively feasible following your separation from
service, but no later than thirty (30) calendar days following such date. 
Notwithstanding any provision in this Agreement to the contrary, no payments
pursuant to Section 4(a)(ii) or Section 4(b) shall be made prior to the date
that both (i) you have delivered an original, signed Release to the Company and
(ii) the revocability period (if any) has elapsed; provided, however, that any
payments that would otherwise have been made prior to such date but for the fact
that you had not yet delivered an original, signed Release (or the revocability
period had not yet elapsed) shall be made as soon as administratively
practicable but not later than the seventy-fourth (74th) calendar day following
your separation from service.  If you do not deliver an original, signed Release
to the Company within ten (10) business days (or longer if required by
applicable law) after receipt of the same from the Company, (i) your rights
shall be limited to those made available to you under Section 4(a) above
(excluding Section 4(a)(ii)), and (ii) the Company shall have no obligation to
pay or provide to you any amount or benefits described in Section 4(a)(ii) or
Section 4(b), or any other monies on account of your separation from service. 
Notwithstanding any language in this Agreement to the contrary, if the
seventy-fourth (74th) calendar day following the date of your termination occurs
in a different calendar year than the

 

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calendar year of your date of termination, then the payment of any Severance
Benefits subject to Code Section 409A shall be made no earlier than January 1 of
the calendar year following the year in which your date of termination occurred.

 

5.             Successors; Binding Agreements.

 

(a)           The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company or of any
division or subsidiary thereof employing you to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place;
provided, however, for the avoidance of doubt, (i) if the Spinoff occurs and
your employment following the Spinoff is with Flowco, the Company shall assign
this Agreement to Flowco, with Flowco expressly assuming and agreeing to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform this Agreement if no such assignment and assumption had
taken place, but (ii) if the Spinoff occurs and your employment following the
Spinoff is with the Company, the Company will continue to be bound by this
Agreement and Flowco will not be required to assume and agree to perform this
Agreement.  Failure of the Company to obtain such assumption and agreement prior
to the effectiveness of any such succession shall be a breach of this Agreement
and shall entitle you to compensation from the Company in the same amount and on
the same terms to which you would be entitled hereunder if you terminated your
employment for Good Reason following a Change of Control, except that for
purposes of implementing the foregoing, the date on which any such succession
becomes effective shall be deemed your Date of Termination.

 

(b)           This Agreement shall inure to the benefit of and be enforceable by
your personal and legal representatives, executors, administrators, successors,
heirs, distributees, devisees, and legatees.  If you should die while any amount
would still be payable to you hereunder if you had continued to live, all such
amounts, unless otherwise provided herein, shall be paid in accordance with the
terms of this Agreement, to your devisee, legatee or other designee or, if there
is no such designee, to your estate.

 

6.             No Funding of Benefits.  Nothing herein contained shall require
or be deemed to require the Company to segregate, earmark, or otherwise set
aside any funds or other assets to provide for any payments to be made
hereunder.  Your rights under this Agreement shall be solely those of a general
creditor of the Company.  However, in the event of a Change of Control, the
Company may deposit cash or property, or both, equal in value to all or a
portion of the benefits anticipated to be payable hereunder into a trust, the
assets of which are to be distributed at such times as are otherwise provided
for in this Agreement and are subject to the rights of the general creditors of
the Company.  The Company also may deposit additional amounts to cover any
administrative fees and expenses associated with the trust.

 

7.             Withholding of Taxes.  The Company may withhold from any amounts
payable under this Agreement all federal, state, city, or other taxes as legally
shall be required.  The Company may, at its option (a) require you to pay to the
Company in cash such amount as may be required to satisfy such withholding
obligations or (b) make other satisfactory arrangements with you to satisfy such
withholding obligations.

 

8.            Notice.  For the purpose of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth on the first page of this Agreement.

 

9.             Miscellaneous.  No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by you and such officer as may be specifically designated
by the Board.  The validity, interpretation, construction, and performance of
this Agreement shall be governed by the laws of the State of Delaware.  The
Company and you agree that the jurisdiction and venue for any disputes arising
under, or any action brought to enforce, or otherwise relating to, this
Agreement shall be exclusively in the courts in the State of North Carolina,
Mecklenburg County,

 

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including the Federal Courts located therein or responsible therefor (should
Federal jurisdiction exist), and the Company and you hereby submit and consent
to said jurisdiction and venue.

 

10.          Employment Rights.  This Agreement shall not confer upon you any
right to continue in the employ of the Company or its subsidiaries and, except
to the extent that benefits may become payable under Section 4, above, shall not
in any way affect the right of the Company or its subsidiaries to dismiss or
otherwise terminate your employment at any time and for any reason with or
without Cause.

 

11.          No Vested Interest.  Neither you nor your estate shall have any
right, title or interest in any benefit under this Agreement prior to the
occurrence of all of the events specified herein as necessary conditions to such
right, title or interest.

 

12.          Prior Agreements.  This Agreement contains the understanding
between the parties hereto with respect to severance benefits in connection with
a Change of Control of the Company and supersedes any prior such agreement
between the Company (or any predecessor of the Company) and you.  If there is
any discrepancy or conflict between this Agreement and any plan, policy and
program of the Company regarding any term or condition of severance benefits in
connection with a Change of Control of the Company, the language of this
Agreement shall govern.

 

13.          Coordination with Other Arrangements.  Payments and benefits under
this Agreement shall be in lieu of any severance payments or benefits provided
to you under any other severance pay plan, policy or arrangement of or with the
Company.

 

14.          Validity.  The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.

 

15.          Counterparts.  This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.

 

16.          Dispute Resolution.  Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration in
accordance with the rules of the American Arbitration Association (“AAA”) then
in effect, in Charlotte, North Carolina in accordance with the AAA’s National
Rules for the Resolution of Employment Disputes.  Judgment may be entered on the
arbitrator’s award in any court having jurisdiction.  However, you shall be
entitled to seek in court specific performance of your right, pursuant to
Section 3(f), above, to be paid until the Date of Termination during the
pendency of any dispute or controversy arising under or in connection with this
Agreement.  You acknowledge that by accepting this arbitration provision you are
waiving any right to a jury trial in the event of a covered dispute.  The
arbitrator may, but is not required to, order that the prevailing party shall be
entitled to recover from the losing party its attorneys’ fees and costs incurred
in any arbitration arising out of this Agreement.  The arbitrator will have the
right only to interpret and apply the provisions of this Agreement and may not
change any of its provisions.  The arbitrator will permit reasonable pre-hearing
discovery of facts, to the extent necessary to establish a claim or a defense to
a claim, subject to supervision by the arbitrator.  The determination of the
arbitrator will be conclusive and binding upon the parties and judgment upon the
same may be entered in any court having jurisdiction thereof.  The arbitrator
will give written notice to the parties stating the arbitrator’s determination,
and will furnish to each party a signed copy of such determination.  Any
arbitration or action pursuant to this Section 16 will be governed by and
construed in accordance with the substantive laws of the State of Delaware and,
where applicable, federal law, without giving effect to the principles of
conflict of laws of Delaware.  The Company will not be required to seek or
participate in arbitration regarding any actual or threatened breach of any
applicable non-compete, non-solicitation, confidentiality or similar restrictive
covenants applicable to you, but may pursue its remedies in a court of competent
jurisdiction.

 

17.          Code Section 409A Compliance.  To the extent any provision of this
Agreement or action by the Company would subject you to liability for interest
or additional taxes under Code Section 409A, it will be deemed null and void, to
the extent permitted by law and deemed advisable by the Company. It is intended
that this Agreement will comply with Code Section 409A, including the exceptions
for short-term deferrals, separation pay arrangements, reimbursements, and
in-kind distributions, and this Agreement shall be

 

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administered accordingly, and interpreted and construed on a basis consistent
with such intent. Each payment under Section 4 of this Agreement or any Company
benefit plan is intended to be treated as one of a series of separate payments
for purposes of Code Section 409A and Treasury Regulation
§1.409A-2(b)(2)(iii) (or any similar or successor provisions). This Agreement
may be amended to the extent necessary (including retroactively) by the Company
in order to preserve compliance with Code Section 409A. The preceding shall not
be construed as a guarantee of any particular tax effect for your compensation
and benefits.

 

18.          Payments to Estate.  The executor of your estate shall be entitled
to receive all amounts owing to you at the time of death under this Agreement in
full settlement and satisfaction of all claims and demands on your behalf.  Such
payments shall be in addition to any other death benefits of the Company and in
full settlement and satisfaction of all severance benefit payments provided for
in this Agreement.  In the event of your death or a judicial determination of
your incompetence, reference in this Agreement to “you” will be deemed to refer,
where appropriate, to your estate or other legal representative.

 

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If this letter properly sets forth our agreement on the subject matter hereof,
kindly date, sign and return to the Company the enclosed copy of this letter,
which will then constitute our agreement on this subject.

 

EXECUTIVE ACCEPTANCE

 

SPX CORPORATION

 

 

 

 

 

By:

 

[Name]

 

 

Christopher J. Kearney

 

 

 

 

 

 

Its: Chairman, President and Chief Executive Officer

 

 

 

 

 

 

 

Date:

 

 

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