Exhibit 10.1


 


Employment Agreement of
Kevin Lilly


 


This Employment Agreement
(the “Agreement”) is effective as of the date of execution shown below (the “Effective
Date”), by and between SPX Corporation (the “Company”), and Kevin Lilly (the “Executive”).


 


WHEREAS, the Company
desires to employ the Executive as its Vice President, Secretary and General
Counsel; and


 


WHEREAS, the Company and
the Executive have reached agreement concerning the terms and conditions of his
continued employment and wish to formalize that agreement;


 


NOW, THEREFORE, in
consideration of the mutual terms, covenants and conditions stated in this
Agreement, the Company and the Executive hereby agree as follows:


 


1.             Employment.  The Company employs the Executive and the
Executive hereby accepts continued employment with the Company and appointment
as its Vice President, Secretary and General Counsel.  During the Employment Term (as hereinafter
defined), the Executive will have the title, status and duties of the Vice
President, Secretary and General Counsel and will report directly to the
Company’s Chief Executive Officer.  The
Executive’s principal business office shall be at the Company’s principal
business office located in Charlotte, North Carolina, and Executive’s principal
family residence shall be located within 50 miles of the Company’s principal
business office for the duration of the Employment Term.   If domiciled elsewhere on the date of
Executive’s execution of this Agreement, Executive shall relocate his principal
family residence to the area specified in this Paragraph.  Executive’s failure to complete such
relocation on or before April 30, 2006 shall render this Agreement null
and void.


 


2.             Term of Employment.  The term of
employment (“Employment Term”) will commence on the Effective Date, and will
continue thereafter until one (1) year from the Effective Date and will be
automatically extended for subsequent one (1) day periods for each day of
the Employment Term that passes after the Effective Date, unless sooner
terminated by either party in accordance with the provisions of this
Agreement.  The intent of the foregoing
provision is that the Agreement becomes “evergreen” on the Effective Date so
that on each passing day after the Effective Date the Employment Term
automatically extends to a full one-year period.


 


3.             Duties.  During the Employment Term:


 


(a)           The
Executive will perform duties assigned by the Company’s Chief Executive Officer
or the Company’s Board of Directors (the “Board”), from time to time; provided
that the Executive shall not be assigned tasks inconsistent with those of the
Vice President, Secretary and General Counsel.


 


(b)           The
Executive will devote his full time and best efforts, talents, knowledge and
experience to serving as the Company’s Vice President, Secretary and


 





















 


General
Counsel.  However, the Executive may
devote reasonable time to activities such as supervision of personal
investments and activities involving professional, charitable, educational,
religious and similar types of activities, speaking engagements and membership
on other boards of directors, provided such activities do not interfere in any
material way with the business of the Company; provided  that, the
Executive cannot serve on the board of directors of more than one publicly-traded
company without the Board’s written consent. 
The time involved in such activities shall not be treated as vacation
time.  The Executive shall be entitled to
keep any amounts paid to him in connection with such activities (e.g., director fees and honoraria).


 


(c)           The
Executive will perform his duties diligently and competently and shall act in
conformity with the Company’s written and oral policies and within the limits,
budgets and business plans set by the Company. 
The Executive will at all times during the Employment Term strictly
adhere to and obey all of the rules and regulations in effect from time to
time relating to the conduct of executives of the Company.  Except as provided in (b) above, the
Executive shall not engage in consulting work or any trade or business for his
own account or for or on behalf of any other person, firm or company that
competes, conflicts or interferes with the performance of his duties hereunder
in any material way.


 


4.             Compensation and Benefits.  During the
Executive’s employment hereunder, the Company shall provide to the Executive,
and the Executive shall accept from the Company as full compensation for the
Executive’s services hereunder, compensation and benefits as follows:


 


(a)           Base
Salary.  The Company shall pay the
Executive at an annual base salary (“Base Salary”) of Three Hundred Fifty
Thousand Dollars ($350,000).  The Board,
or such committee of the Board as is responsible for setting the compensation
of officers, shall review the Executive’s performance and Base Salary annually
in January of each year, and determine whether to adjust the Executive’s
Base Salary on a prospective basis.  The
first review shall be in January 2007. 
Such adjusted annual salary then shall become the Executive’s “Base
Salary” for purposes of this Agreement. 
The Executive’s annual Base Salary shall not be reduced after any
increase, without the Executive’s consent. 
The Company shall pay the Executive’s Base Salary according to payroll
practices in effect for all officers of the Company.


 


(b)           Incentive
Compensation.  The Executive shall be
eligible to participate in any annual performance bonus plans, long-term
incentive plans, and/or equity-based compensation plans established or
maintained by the Company for its officers, including, but not limited to, the
2005 Executive Bonus Plan (“Bonus Plan”) and the SPX Corporation Stock
Compensation Plan, all as the Board (or appropriate Board committee) may
determine from time to time in its discretion. 
For the 2006 bonus plan year, the Executive shall be eligible for a
target bonus under the Company’s Bonus Plan equal to 80% of his Base Salary
provided that all performance goals set by the Company are met.  The Board (or appropriate Board committee)
will determine and communicate to the Executive his annual bonus plan
participation for subsequent bonus plan years, no later than March 31 of
such bonus plan year.


 


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(c)           Executive
Benefit Plans.  The Executive will be
eligible to participate in any executive benefit plans offered by the Company
including, without limitation, medical, dental, short-term and long-term
disability, life, pension, profit sharing and nonqualified deferred
compensation arrangements, as the Board may determine in its discretion.  The Company reserves the right to modify,
suspend or discontinue any and all of the plans, practices, policies and
programs at any time without recourse by the Executive, so long as the Company
takes such action generally with respect to other similarly situated officers.


 


(d)           Business
Expenses.  The Company shall
reimburse the Executive for all reasonable and necessary business expenses
incurred in the performance of services with the Company, according to the
Company’s policies and upon Executive’s presentation of an itemized written
statement and such verification as the Company may require.


 


(e)           Perquisites.  The Company will provide the Executive with
all perquisites it provides to other similarly situated officers.  Such perquisites shall not be less than those
provided to the Executive on the Effective Date.  The Company will also reimburse the Executive
for annual income tax return preparation and financial planning up to $20,000
per year.


 


(f)            Vacation.
The Executive will be entitled to vacation in accordance with the Company’s
vacation policy for officers, but in no event less than 5 weeks per calendar
year.  The maximum vacation accrual
allowed from year to year and at any given time will equal Executive’s annual
entitlement.  Once the maximum accrual is
reached, Executive will no longer accrue vacation until the unused amount
accrued is below the maximum level allowed.


 


(g)           Retiree
Medical.  The Executive shall be
entitled to receive retiree medical benefits in accordance with the eligibility
requirements and plan offerings for access to retiree medical benefits provided
generally to full-time employees of the Company.  The Executive may cover his spouse or
dependents eligible at the time of retirement. 
The cost of such benefits for the Executive, his spouse and eligible
dependents, will be 100% of the premiums and shall be reimbursed by the Company
on an annual basis up to the date the Executive reaches Medicare eligibility
due to age, at which point such reimbursement shall cease.  Depending on the plan, all or a portion of
the reimbursement may be taxable.  Such
benefits shall include prescription drug coverage, but not dental or vision
benefits unless included in the medical plan. 
Upon reaching Medicare eligibility due to age, Medicare shall become the
primary payor of medical/prescription benefits for the Executive, his spouse or
eligible dependents as applicable, and the reimbursement of premiums for such
coverage by the Company shall cease.  In
the event that the Company terminates retiree access to medical and/or
prescription benefits generally for retirees, the Executive shall be entitled
to an annual reimbursement from the Company upon proof of continued coverage
for comparable medical and/or prescription coverage under an individual policy
or other group policy, subject to a maximum total reimbursement of one and
one-half times the applicable premium of the plan in effect at the time retiree
access is terminated at the appropriate coverage level, and subject to maximum
annual inflation adjustment thereafter of five (5) percent.  Upon the death of the Executive, a surviving


 


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spouse
will continue eligibility and reimbursement as described above.  Surviving dependent children will not receive
premium reimbursement beyond the COBRA continuation period.  For all other COBRA qualifying events other
than the death of the Executive, reimbursement will cease upon commencement of
the COBRA continuation period.


 


5.             Payments on Termination of Employment.


 


(a)           Termination
of Employment for any Reason.  The
following payments will be made upon the Executive’s termination of employment
for any reason:


 


(i)            Earned
but unpaid Base Salary through the date of termination;


 


(ii)           Any annual
incentive plan bonus, for which the performance measurement period has ended,
but which is unpaid at the time of termination;


 


(iii)          Any
accrued but unpaid vacation;


 


(iv)          Any amounts
payable under any of the Company’s benefit plans in accordance with the terms
of those plans, except as may be required under Code Section 401(a)(13);
and


 


(v)           Unreimbursed
business expenses incurred by the Executive on the Company’s behalf.


 


(b)           Termination
of Employment for Death or Disability. 
In addition to the amounts determined under (a) above, if the
Executive’s termination of employment occurs by reason of death or disability,
the Executive (or his estate) will receive a pro rata portion of any bonus
payable under the Company’s annual incentive plan for the year in which such
termination occurs determined based on the highest of (i) the actual
annual bonus paid for the bonus plan year immediately preceding such
termination, or (ii) the target bonus for the bonus plan year in which
such termination occurs.  The Executive
will be deemed to be disabled upon the earlier of (i) the end of a six (6) consecutive
month period during which, by reason of physical or mental injury or disease,
the Executive has been unable to perform substantially all of his usual and
customary duties under this Agreement or (ii) the date that a reputable
physician selected by the Board, and as to whom the Executive has no reasonable
objection, determines in writing that the Executive will, by reason of physical
or mental injury or disease, be unable to perform substantially all of the
Executive’s usual and customary duties under this Agreement for a period of at
least six (6) consecutive months. 
If any question arises as to whether the Executive is disabled, upon
reasonable request therefore by the Board, the Executive shall submit to
reasonable medical examination for the purpose of determining the existence,
nature and extent of any such disability. 
In accordance with Paragraph 10, the Board shall promptly give the
Executive written notice of any such determination of the Executive’s
disability and of any decision of the Board to terminate the Executive’s
employment by reason thereof.  In the
event of disability, until the date of termination, the base salary payable to
the Executive under Paragraph 4 hereof shall be reduced


 


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dollar-for-dollar
by the amount of disability benefits paid to the Executive in accordance with
any disability policy or program of the Corporation.


 


(c)           Termination
by the Company Without Cause, or Voluntary Termination by the Executive for
Good Reason.  If the Company
terminates the Executive’s employment other than for Cause, or the Executive
voluntarily terminates his employment for Good Reason, in addition to the
benefits payable under (a), the Company will pay the following amounts and
provide the following benefits:


 


(i)            The Base
Salary and annual bonus that the Company would have paid under the Agreement
had the Executive’s employment continued to the end of the Employment
Term.  For this purpose, annual bonus
will be determined as the highest of (A) the actual bonus paid for the
bonus plan year immediately preceding such termination, or (B) the target
bonus for the bonus plan year in which such termination occurs.


 


(ii)           Continued
coverage under the Company’s medical, dental, life, disability, pension, profit
sharing and other executive benefit plans through the end of the Employment
Term, at the same cost to the Executive as in effect on the date of the
Executive’s termination.  If the Company
determines that the Executive cannot participate in any benefit plan because he
is not actively performing services for the Company, the Company may provide
such benefits under an alternate arrangement, such as through the purchase of
an individual insurance policy that provides similar benefits or, if
applicable, through a nonqualified pension or profit sharing plan.  To the extent that the Executive’s
compensation is necessary for determining the amount of any such continued
coverage or benefits, such compensation (Base Salary and annual bonus) through
the end of the Employment Term shall be at the highest rate in effect during
the 12-month period immediately preceding the Executive’s termination of
employment.


 


(iii)          Executive
perquisites on the same basis on which the Executive was receiving such
perquisites prior to his employment termination, including: (A) reimbursement
for club dues through the end of the Employment Term; and (B) reimbursement
of expenses relating to financial planning services, tax return preparation and
annual physicals through December 31 of the calendar year that includes
the first anniversary of the Executive’s employment termination.  The Company will bear the cost of such
perquisites, at the same level in effect immediately prior to the Executive’s
employment termination.  Perquisites
otherwise receivable by the Executive pursuant to this Paragraph shall be
reduced to the extent comparable perquisites are actually received by or made
available to the Executive without cost during the period following the
Executive’s employment termination covered by this Paragraph.  The Executive shall report to the Company any
such perquisites actually received by or made available to the Executive.


 


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(iv)          The period
through the end of the Employment Term shall continue to count for purposes of
determining the Executive’s age and service with the Company with respect to
eligibility, vesting and the amount of benefits under the Company’s benefit
plans to the maximum extent permitted by applicable law.


 


(v)           Any
outstanding stock options, restricted stock or other equity-based compensation
awards shall immediately vest upon such termination date, and any such stock
options shall be immediately exercisable at any time prior to the earlier
of:  (A) one year; or (B) the
stock option expiration or other termination date.


 


(vi)          Outplacement
services, as elected by the Executive (and with a firm elected by the
Executive), not to exceed $35,000 in total.


 


(d)           Good
Reason.  For purposes of this
Agreement, “Good Reason” shall mean the occurrence of any of the following
without the Executive’s consent (i) assigning duties to the Executive that
are inconsistent with those of the position of Vice President, Secretary and
General Counsel for similar companies in similar industries (except to the
extent the Company promotes the Executive to a higher executive position); (ii) requiring
the Executive to report to other than the Company’s Chief Executive Officer or the
Company’s Board; (iii) the failure of the Company to pay any portion of
the Executive’s compensation within 10 days of the date such compensation is
due; or (iv)  the Company’s failure to continue in effect any applicable
cash or stock-based incentive or bonus plan, pension plan, welfare benefit plan
or other benefit plan, program or arrangement, unless the aggregate value of
all such arrangements provided to the Executive after such discontinuance is
not materially less than the aggregate value as of the Effective Date (using,
for purposes of bonus plan comparisons, the target bonus potential before and
after any such discontinuance).


 


(e)           Cause.  For purposes
of this Agreement, “Cause” shall mean:  (i) the
Executive’s willful and continued failure to substantially perform his duties
as an executive of the Company (other than any such failure resulting from
incapacity due to physical or mental illness) after a written demand for
substantial performance is delivered to the Executive by the Board, which demand
specifically identifies the manner in which the Board believes that the
Executive has not substantially performed his duties, and which gives the
Executive at least 30 days to cure such alleged deficiencies, (ii) the
Executive’s willful misconduct, which is demonstrably and materially injurious
to the Company, monetarily or otherwise, or (iii) the Executive’s engaging
in egregious misconduct involving serious moral turpitude to the extent that
his credibility and reputation no longer conforms to the standard of officers
of the Company.


 


(f)            Timing
of Payments.  All payments described
above shall be made in a lump sum cash payment as soon as practicable (but in
no event more than 10 days unless prohibited by applicable law or plan
documents) following the Executive’s termination of employment.  If the total amount of annual bonus is not
determinable on that date, the


 


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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.


 


6.             Assignment; Successors.  This Agreement
shall inure to the benefit of and be binding upon the Company and its
successors.  The Company may not assign
this Agreement without the Executive’s written consent, except that the Company’s
obligations under this Agreement shall be the binding legal obligations of any
successor to the Company by sale, and in the event of any transaction that
results in the transfer of substantially all of the assets or business of the
Company, the Company will use its best efforts to cause the transferee to
assume the obligations of the Company under this Agreement.  The Executive may not assign this Agreement
during his life.  Upon the Executive’s
death this Agreement will inure to the benefit of the Executive’s heirs,
legatees and legal representatives of the Executive’s estate.


 


7.             Interpretation.  The laws of
the State of Delaware shall govern the validity, interpretation, construction
and performance of this Agreement, without regard to the conflict of laws
principles thereof.


 


8.             Withholding.  The Company
may withhold from any payment that it is required to make under this Agreement
amounts sufficient to satisfy applicable withholding requirements under any
federal, state or local law.


 


9.             Amendment or Termination.  This Agreement
may be amended at any time by written agreement between the Company and the
Executive.


 


10.           Notices.  Notices given
pursuant to this Agreement shall be in writing and shall be deemed received
when personally delivered, or on the date of written confirmation of receipt by
(i) overnight carrier, (ii) telecopy, (iii) registered or
certified mail, return receipt requested, addressee only, postage prepaid, or (iv) such
other method of delivery that provides a written confirmation of delivery.  Notice to the Company shall be directed to:


 


SPX
Corporation


13515
Ballantyne Corporate Place


Charlotte,
NC 28277


Attention:
General Counsel


 


The Company may change
the person and/or address to whom the Executive must give notice under this Section by
giving the Executive written notice of such change, in accordance with the
procedures described above.  Notices to
or with respect to the Executive will be directed to the Executive, or to the
Executive’s executors, personal representatives or distributees, if the
Executive is deceased, or the assignees of the Executive, at the Executive’s
home address on the records of the Company.


 


11.           Severability.  If any
provisions(s) of this Agreement shall be found invalid or unenforceable by a
court of competent jurisdiction, in whole or in part, then it is the parties’
mutual desire that such court modify such provision(s) to the extent and in the
manner necessary to render the same valid and enforceable, and this Agreement
shall be construed and enforced to the maximum extent permitted by law, as if
such provision(s) had been originally incorporated


 


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herein as so modified or restricted, or as if such
provision(s) had not been originally incorporated herein, as the case may be.


 


12.           Entire Agreement.  This Agreement
sets forth the entire agreement and understanding between the Company and the
Executive and supersedes all prior agreements and understandings, written or
oral, relating to the subject matter hereof; provided, however, that: (i) the
Executive’s Change in Control Agreement dated December 5, 2006 shall
remain in full force and effect, and payments and benefits provided thereunder
shall replace those provided in this Agreement to the extent that such payments
or benefits would otherwise clearly be duplicative; and (ii) the Executive’s
non-compete, non-solicitation, confidentiality or similar restrictive covenants
shall remain in full force and effect.


 


13.           Consultation With Counsel.  The Executive
acknowledges that he has had a full and complete opportunity to consult with
counsel of the Executive’s own choosing concerning the terms, enforceability
and implications of this Agreement, and the Company has made no representations
or warranties to the Executive concerning the terms, enforceability or
implications of this Agreement other than as are reflected in this Agreement.


 


14.           No Waiver.  No failure or
delay by the Company or the Executive in enforcing or exercising any right or
remedy hereunder shall operate as a waiver thereof.  No modification, amendment or waiver of this
Agreement nor consent to any departure by the Executive from any of the terms
or conditions thereof, shall be effective unless in writing and signed by the
Chairman of the Company’s Board.  Any
such waiver or consent shall be effective only in the specific instance and for
the purpose for which given.


 


15.           Effect on Other
Obligations.  Payments and benefits herein provided to be
paid to the Executive by the Company shall be made without regard to and in
addition to any other payments or benefits required to be paid the Executive at
any time hereafter under the terms of any other agreement between the Executive
and the Company or under any other policy of the Company relating to
compensation, or retirement or other benefits. 
Except as otherwise expressly provided herein, payments or benefits
provided the Executive hereunder shall be reduced by any amount the Executive
may earn or receive from employment with another employer or from any other
source.


 


16.           Survival.  All Sections
of this Agreement survive beyond the Employment Term except as otherwise
specifically stated.


 


17.           Headings.  The headings
in this Agreement are for convenience of reference only and shall not limit or
otherwise affect the meaning thereof.


 


18.           Counterparts.  The parties
may execute this Agreement in one or more counterparts, all of which together
shall constitute but one Agreement.


 


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IN WITNESS WHEREOF, the parties have executed this Agreement
effective as of the date shown below.


 


 


	
  EXECUTIVE ACCEPTANCE

  	
  SPX CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Kevin L.
  Lilly

  	
   

  	
  By:

  	
  /s/ Christopher
  J. Kearney

  	
   

  
	
  Kevin Lilly

  	
   

  	
   

  	
  Christopher J.
  Kearney

  
	
   

  	
   

  
	
   

  	
  Its: President and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
  Date:
  January 6, 2006

  



 


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