EXHIBIT 10.40


 





 


 


November 20, 2008


 


Mr. Patrick O’Leary


13515 Ballantyne Corporate
Place


Charlotte, NC 28277


 


Dear Patrick:


 


SPX
Corporation (the “Company”) recognizes that your contribution to its growth and
success will 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 which 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 yourself, to their assigned duties without distraction, in the face
of potentially disturbing circumstances arising from the possibility of a
Change of Control.


 


Further, it is
the intent of the Board in adopting this agreement, originally agreed to March 10,
1999 (the “Commencement Date”), and as amended and restated herein (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 your employment is terminated 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.


 













 


Executive Change of Control Agreement


Patrick J. O’Leary


Page 2


 


1.                                       Term of Agreement.    This Agreement will become effective on the
date hereof, and shall continue in effect through the third anniversary of the
Commencement Date (the “Date of Expiration”). However, on that initial Date of
Expiration, and on each extended Date of Expiration thereafter, the term of
this Agreement will be extended automatically for one additional year unless,
not later than six (6) months prior to such Date of Expiration, the
Company gives written notice to you that it has elected not to extend this
Agreement. However, if a Change of Control occurs during the term of this
Agreement, this Agreement will continue in effect for thirty-six (36) months
beyond the end of the month in which the Change of Control occurred.


 


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 which acquires beneficial
ownership of common shares of the Company, is or becomes the “Beneficial Owner”
(as defined below) of twenty percent (20%) 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 percent (20%) 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 of Directors of the Company
determines in good faith that a Person who has become the Beneficial Owner of
common shares of the Company representing twenty percent (20%) 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 percent (20%) 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 paragraph (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”).


 













 


Executive Change of Control Agreement


Patrick J. O’Leary


Page 3


 


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


 


(A)                              which
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)                                which
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)                                which
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 subparagraph
(a)(iii)(B)(2), above) or disposing of any securities of the Company.


 


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 


 













 


Executive Change of Control Agreement


Patrick J. O’Leary


Page 4


 


securities
then issued and outstanding together with the number of such securities not
then actually issued and outstanding which 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-year period constitute the Board of Directors of the Company 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
paragraph (a), above, or paragraph (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)                                  Approval
by the shareholders of (or if such approval is not required, 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 paragraph (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 eighty percent (80%) 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.


 


Any other
provision of this Agreement to the contrary notwithstanding, a “Change of
Control” shall not include any transaction described in paragraph (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).


 


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.    “Disability” shall mean that, as a result
of your incapacity due to physical or mental injury or illness, you shall have
been absent from the full-time performance of your duties with the Company for
at least six (6) consecutive 


 













 


Executive Change of Control Agreement


Patrick J. O’Leary


Page 5


 


months and,
within thirty (30) calendar days after written notice of suspension is given,
you shall not have returned to the full-time performance of your duties.


 


(b)                                 Retirement.    “Retirement” shall mean your voluntary
termination of your employment (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 after receiving such demand, (ii) you
willfully engaging in conduct which is demonstrably and materially injurious to
the Company, monetarily or otherwise, or (iii) your having been convicted
of a felony which impairs your ability substantially to perform your duties
with the Company. For purposes of this paragraph (c), no act, or failure to
act, on your part shall be deemed “willful” unless done, or omitted to be done,
by you not in good faith and without reasonable belief that your action or
omission was in the best interest of the Company.


 


(d)                                 Good Reason.    You shall be entitled to terminate your
employment for Good Reason. For purpose of this Agreement, “Good Reason” shall
mean, without your express written consent, the occurrence within three (3) years
following a Change of Control of the Company of any one or more of the
following:


 


(i)                                     The
assignment to you of duties inconsistent with your duties, responsibilities,
and the status of your position as of the day prior to the Change of Control of
the Company, or a reduction or alteration in the nature or status of your
responsibilities from those in effect on the day prior to the Change of
Control;


 


(ii)                                  A
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 two hundred and
fifty (250) miles from the location where you are currently based;


 


(iv)                              The
failure by the Company to continue in effect the Company’s Pension Plan,
Retirement Savings Plan, Supplemental Retirement Savings Plan, Supplemental
Retirement Plan, Executive Bonus Plan, Stock 


 













 


Executive Change of Control Agreement


Patrick J. O’Leary


Page 6


 


Compensation
Plan, any plans substituted for the above adopted prior to the Change of
Control, or any other of the Company’s employee benefit plans, policies,
practices or arrangements in which you participate, 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 reinstate your employment in full (in the same
capacity that you were employed, or in a mutually agreeable capacity) in the
event that your employment was suspended due to a Disability and, within three
years, you request to be reinstated and are ready, willing, and able to
adequately perform your employment duties;


 


(vi)                              The
termination, replacement, or reassignment of twenty-five percent (25%) or more
of the elected officers of the Company existing as of the day prior to a Change
of Control, unless the officer is terminated due to death, Disability, or
Retirement, or by the Company for Cause, or by the officer other than for Good
Reason (all as herein defined);


 


(vii)                           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


 


(viii)                        Any
purported termination by the Company of your employment that is not effected
pursuant to a Notice of Termination satisfying the requirements of paragraph
(f), below, and for purposes of this Agreement, no such purported termination
shall be effective.


 


(ix)                                At
any time during the one (l) year period beginning thirty (30) days
following a Change of Control, you shall be entitled to terminate your
employment for any reason, and such termination shall be deemed to be for Good
Reason for all purposes of this Agreement.


 


Your right to
terminate your employment pursuant to this paragraph (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.


 


(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 


 













 


Executive Change of Control Agreement


Patrick J. O’Leary


Page 7


 


mean a written
notice which 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.


 


4.                                       Compensation Upon Termination Following a
Change of Control.


 


(a)                                  Accrued Benefits.    In the event that your employment is
terminated for any reason during the term of this Agreement following a Change
of Control of the Company (as defined in Section 2 herein), you shall
receive your Accrued Benefits through the Date of Termination. 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;


 













 


Executive Change of Control Agreement


Patrick J. O’Leary


Page 8


 


(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, 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 in which the Date of
Termination occurs, 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;


 


(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;


 


(v)                                 Any
and all other cash earned through the Date of Termination and deferred at your
election or pursuant to any deferred compensation plan then in effect;


 


(vi)                              Credited
service in the Company’s Pension Plan (or its successor) through the Date of
Termination for purposes of computing your accrued pension benefit;


 


(vii)                           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; and


 


(viii)                        Subject to
Section 4(e), the payments provided for in paragraphs (i), (ii), (iii),
(iv), and (v) above shall be made in a lump sum cash payment as soon as
administratively practicable (but in no event more than ten (10) days)
following your termination of employment. 
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 within the two and one-half (21⁄2) months
following the end of the calendar year in which the bonus is earned.


 


(b)                                 Severance Benefits.    In the event that your employment is terminated
during the term of this Agreement following a Change of Control of the Company
(as described in Section 2 herein), unless your termination is (i) because
of your death, Disability, or Retirement; (ii) by the Company for Cause;
or (iii) 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:










 


Executive Change of Control Agreement


Patrick J. O’Leary


Page 9


 


(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 three (3);


 


(ii)                                  An
amount equal to three (3) times the greatest of (I) the highest of
your Earned Bonus Amounts for the three (3) years immediately preceding
the year in which the Date of Termination occurs (the “Year of Termination”) or
(II) your target bonus under the Bonus Plan for the Year of Termination or
(III) 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 three (3) year period after your Date of Termination, the Company will
arrange to provide to you the same health care coverage you had prior to your
termination, at the Company’s expense, which includes, but is not limited to,
hospital, surgical, medical, dental, and dependent coverages. For purposes of
the Retirement Plan health care coverage, you will receive the same number of
additional years of credited service, for computing your benefit, as normally
computed under the terms of the Plan. Health care benefits otherwise receivable
by you pursuant to this subparagraph (iii) shall be reduced to the extent
comparable benefits are actually received by you from a subsequent employer
during the three (3) 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 subparagraph (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);


 


(iv)                              For
a three (3) 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 three (3) 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)                                 Under
the Company’s Pension Plan and Supplemental Retirement Plan for Top Management,
you will receive immediate full vesting as of your Date of Termination and
receive three (3) additional full years of service credit 


 













 


Executive Change of Control Agreement


Patrick J. O’Leary


Page 10


 


for computing
your accrued retirement benefit under both plans. Further, in computing the
accrued retirement benefits under both plans, three (3) years will be
added to your actual age, and the definition of “Final Average Pay” (base and
bonus) shall be the greater of (A) your highest three (3) year
average or (B) the sum of your actual base salary in effect at your Date
of Termination plus the greatest of the bonus amounts described in parts
(B)(I), (II) and (III) of subparagraph (ii), above, with the
additional benefits, to the extent not payable under the Pension Plan, to be
paid as an additional benefit under the Supplemental Retirement Plan for Top
Management;


 


(vi)                              Under
the Company’s Supplemental Retirement Savings Plan (the “SRSP”), you will
receive a cash lump sum payment of the full balance (vested and unvested) of
your Pre-2005 Account (as defined in the SRSP);


 


(vii)                           Each
stock option which you have been granted by the Company and which 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;


 


(viii)                        Any
contractual restrictions placed on shares of restricted stock or other
equity-based compensation awards which you have been awarded pursuant to the
Company’s Stock Compensation Plan shall lapse as of your Date of Termination;


 


(ix)                                If
any portion of the Severance Payments (in the aggregate, “Total Payments”) will
be subject to the golden parachute “Excise Tax” imposed by Section 4999 of
the Code, the Company shall pay to you an additional amount (the “Gross-Up
Payment”) such that the net amount retained by you after deduction of any
Excise Tax (including any related penalties and interest) on the Total Payments
(but not any federal, state, or local income tax on the Total Payments), and
any federal, state, and local income tax and Excise Tax (including any related
penalties and interest) on the Gross-Up Payment, shall be equal to the Total
Payments. The determination of whether any Excise Tax will be imposed and of
the amount of the Gross-Up Payment will be made by tax counsel selected by the
Company’s independent auditors and acceptable to you. For purposes of
determining whether any of the Total Payments will be subject to the Excise Tax
and the amount of such Excise
Tax, (A) any other payments or benefit received or to be received by you
in connection with a Change of Control of the Company or your termination of
employment (whether pursuant to the terms of this Agreement or any other plan,
arrangement, or agreement with the Company) shall be treated as “parachute
payments” within the 


 













 


Executive Change of Control Agreement


Patrick J. O’Leary


Page 11


 


meaning of Section 280G(b)(2) of
the Code, and all “excess parachute payments” within the meaning of Section 280G(b)(l) shall
be treated as subject to the Excise Tax, unless in the opinion of such tax
counsel such other payments or benefits (in whole or in part) do not constitute
parachute payments, or such excess parachute payments (in whole or in part)
represent reasonable compensation for services actually rendered within the
meaning of Section 280G(b)(4)(B) of the Code, and (B) the value
of any noncash benefits or any deferred payment or benefit shall be determined
by the Company’s independent auditors in accordance with the principles of
Sections 280G(d)(3) and (4) of the Code. For purposes of determining
the amount of the Gross-Up Payment, you shall be deemed to pay federal income
taxes at the highest marginal rate of federal income taxation for the calendar
year in which the Gross-Up Payment is made and state and local income taxes at
the highest marginal rates of taxation in the state and locality of your
residence (at the time at which the Gross-Up Payment is made) as effective for
the calendar year in which the Gross-Up Payment is made, net of the maximum
reduction in federal income taxes which could be obtained from deduction of
such state and local taxes.


 


The payments
provided for in this subparagraph (ix) shall be made not later than thirty
(30) calendar days following your Date of Termination; provided, however, that
if the amounts of such payments cannot be finally determined on or before such
day, the Company shall pay to you on such day an estimate, as determined in
good faith by such tax counsel, of the minimum amount of such payments and
shall pay the remainder of such payments (together with interest at the rate
provided in Section 1274(b)(2)(B) of the Code) as soon as the amount
thereof can be determined but in no event later than sixty (60) calendar days
after your Date of Termination. In the event that the amount of the estimated
payment exceeds the amount subsequently determined to have been due, such
excess shall be repaid as soon as practicable after demand by the Company.
Notwithstanding the foregoing, the sixty (60) day period for deferment of the
Gross-Up Payment shall not preempt or otherwise eliminate your right to receive
any other payments to which you are entitled under this subparagraph or
otherwise under the terms of this Agreement and to receive additional Gross-Up
Payments based on such additional payments pursuant to this subparagraph;


 


(x)                                   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 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 


 













 


Executive Change of Control Agreement


Patrick J. O’Leary


Page 12


 


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 paragraph (x) shall
be reimbursed in accordance with the requirements of Section 409A and
Treasury Regulation §1.409A-3(i)(1)(iv) (or any similar or successor
provisions).


 


(xi)                                You
will be entitled to receive outplacement services, at the expense of the
Company, from a provider reasonably selected by you. Such outplacement services
must be incurred by you no later than the end of the calendar year that
includes the second anniversary of the termination of your employment.  If applicable, reimbursement of such expenses
shall be made to you no later than the end of the calendar year that includes
the third anniversary of the termination of your employment.


 


(xii)                             The
Company also shall pay to you all legal fees and expenses incurred by you as a
result of such termination of employment (including all such fees and expenses,
if any, incurred in contesting or disputing any such termination 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 Section 4999
of the Code to any payment or benefit provided hereunder), provided that such
fees and expenses that are to be paid or reimbursed pursuant to the preceding
provisions of this paragraph (xii) shall be reimbursed in accordance with the
requirements of Section 409A and Treasury Regulation §1.409A-3(i)(1)(iv) (or
any similar or successor provisions); and


 


(xiii)                          Subject
to Section 4(e) and except as otherwise provided in this Agreement,
the payments provided in paragraphs (i), (ii), (v) if a lump sum has been
elected previously in accordance with the terms of the applicable plan, (vi) and
(xii) above shall be made in a lump sum cash payment as soon as
administratively practicable (but in no event more than ten (10) days)
following your termination of employment. 
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 within the two and one-half (21⁄2) months
following the end of the calendar year in which the bonus is earned. As all of
the payments referenced in the first sentence of this subparagraph (xiii) are
included for purposes of determining the Gross-Up Payment, the thirty (30)-day
period identified above shall not preempt or otherwise eliminate your right to
receive any other payments to which you are entitled under the terms of this
Agreement and to receive additional Gross-Up Payments based on such additional
payments.


 













 


Executive Change of Control Agreement


Patrick J. O’Leary


Page 13


 


(c)                                  Any
provision in this Agreement to the contrary notwithstanding, if a Change of
Control occurs and if your employment with the Company is terminated within six
(6) months prior to the date on which the Change of Control occurs, and if
you reasonably demonstrate that such termination of employment (i) was at
the request of a third party who has 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 or
would be less likely to have occurred if the Change of Control were not
anticipated, then for all purposes of this Agreement the termination of your
employment shall be deemed to have occurred following the Change of Control.


 


(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).


 


(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 Section 409A), then, notwithstanding any other 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 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 termination 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 to you no later than ten (10) days
following the date that is six (6) months after your termination (together
with interest at the interest credit rate provided in the SPX Corporation
Individual Account Retirement Plan).  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
termination 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 


 













 


Executive Change of Control Agreement


Patrick J. O’Leary


Page 14


 


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 paragraph 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 release in favor of the Company that is
acceptable to the Company (the “Release”) as soon as administratively feasible
following your termination of employment. 
Notwithstanding anything 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) day following your termination of employment.  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 the termination of your
employment.


 


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. Failure of the Company to obtain such
assumption and agreement prior to the effectiveness of any such succession
shall 


 













 


Executive Change of Control Agreement


Patrick J. O’Leary


Page 15


 


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.


 


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.


 


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
Michigan.


 


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.


 













 


Executive Change of Control Agreement


Patrick J. O’Leary


Page 16


 


11.                                 No Vested Interest.    Neither you nor your beneficiaries 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.                                 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.


 


14.                                 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.


 


15.                                 Arbitration.    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 then
in effect. 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.


 


16.                                 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 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 Section 409A, including the
exceptions for short-term deferrals, separation pay arrangements,
reimbursements, and in-kind distributions, and this Agreement shall be
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 Section 409A. The
preceding shall not be construed as a guarantee of any particular tax effect
for your compensation and benefits.


 













 


Executive Change of Control Agreement


Patrick J. O’Leary


Page 17


 


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

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/Patrick J. O’Leary

  	
   

  	
  By:/s/Christopher J. Kearney

  
	
  Patrick J. O’Leary

  	
       Christopher J. Kearney

  
	
   

  	
   

  
	
   

  	
  Its:

  	
  Chairman, President and Chief 

  Executive Officer

  
	
   

  	
   

  
	
   

  	
  Date:December 16, 2008