Document:

Exhibit 10.2

 

AMENDMENT TO LOAN AND SECURITY
AGREEMENT

 

THIS AMENDMENT TO LOAN AND
SECURITY AGREEMENT (this “Agreement”) is made and entered into as of the 23rd
day of September, 2005 among FCC, LLC, d/b/a First
Capital, a Florida limited liability company (“Lender”), PAWNMART, INC., a Nevada corporation (“PawnMart”), and XPONENTIAL, INC., a Delaware corporation (“Parent”).

 

W I  T  N  E
S  S  E  T  H:

 

WHEREAS, PawnMart, Parent and Lender are parties to
that certain Loan and Security Agreement dated as of June 17, 2004 (as
amended, restated, modified or supplemented from time to time, the “Loan
Agreement”); and

 

WHEREAS, PawnMart and Parent have requested that
Lender agree to amend the Loan Agreement in certain respects; and

 

WHEREAS, Lender has agreed to do so on the terms and
conditions set forth herein.

 

NOW, THEREFORE, in consideration of the foregoing
premises, and other good and valuable consideration, the receipt and legal
sufficiency of which are hereby acknowledged, the parties hereto hereby agree
as follows:

 

1.             Definitions.  All capitalized terms used herein and not
otherwise expressly defined herein shall have the respective meanings given to
such terms in the Loan Agreement.

 

2.             Inventory Turnover Ratio Covenant.  The Loan Agreement is hereby amended, effective
as of June 30, 2005, by deleting paragraph (c) of Item 20 of the Schedule to the
Loan Agreement and substituting the following in lieu thereof:

 

(c)           Borrower (without giving effect to the results of Parent)
shall maintain an Inventory Turnover Ratio of at least 2.0 to 1 as of the end
of each month for the twelve-month period then ended.  As used herein, “Inventory Turnover Ratio”
means the ratio of (i) Borrower’s cost of goods sold, to (ii) (A) the
sum of (1) the dollar amount of Borrower’s Inventory as of the first day
of such twelve-month period, plus (2) the dollar amount of Borrower’s
Inventory as of the last day of such twelve-month period, divided by (B) two.

 

3.             Loans from Parent to PawnMart.  PawnMart and Parent have informed Lender of
their desire that Parent, from time to time, make intercompany advances to
PawnMart (each, an “Intercompany Loan”) and that PawnMart repay such
Intercompany Loans from time to time. 
Lender hereby consents to the incurrence of the Intercompany Loans by
PawnMart from time to time on the following terms and conditions:

 

(a)           PawnMart and Parent agree that the Intercompany Loans
shall be subordinate to the Obligations and shall be unsecured obligations of
PawnMart.  Any security interest of
Parent in any asset of PawnMart is hereby released.

 

(b)           PawnMart shall not make, and Parent shall not take or
receive (by setoff or in any other manner) any payment with respect to the
Intercompany Loans unless (i) Lender has consented to such payment in
writing, (ii) no Default exists, and (iii) PawnMart would have at

 

 

least $500,000 of borrowing availability under the
Loan Agreement after giving effect to such payment.

 

4.             Representations and Warranties.  PawnMart and Parent each hereby restate,
ratify, and reaffirm each and every term, condition representation and warranty
heretofore made by it under or in connection with the execution and delivery of
the Loan Agreement, as amended hereby, and the other Loan Documents, as fully
as though such representations and warranties had been made on the date hereof
and with specific reference to this Agreement and the Loan Documents.

 

5.             No Other Amendment.  Except as set forth herein, the Loan
Agreement shall be and remain in full force and effect as originally written,
and shall constitute the legal, valid, binding and enforceable obligation of
PawnMart and Parent to Lender.

 

6.             Lender’s Costs.  In consideration of the accommodations made
by Lender hereunder, PawnMart agrees to pay to Lender on demand all costs and
expenses of Lender in connection with the preparation, execution, delivery and
enforcement of this Agreement and the other Loan Documents and any other
transactions contemplated hereby and thereby, including, without limitation,
the reasonable fees and out-of-pocket expenses of legal counsel to Lender.

 

7.             No Default.  To induce Lender to enter into this
Agreement, each of Parent and PawnMart hereby represents and warrants that, as
of the date hereof, and after giving effect to the terms hereof, there exists
no Default under the Loan Agreement or any of the other Loan Documents.

 

8.             Counterparts.  This Agreement may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which, when so executed and delivered, shall be deemed to be an original and
all of which counterparts, taken together, shall constitute but one and the
same instrument.

 

9.             Successors and Assigns.  This Agreement shall be binding upon and
inure to the benefit of the successors and permitted assigns of the parties
hereto.

 

10.           Governing Law.  This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Georgia, other than its
laws respecting choice of law.

 

IN WITNESS WHEREOF, PawnMart, Parent and Lender have
caused this Agreement to be duly executed as of the date first above written.

 

	
   

  	
  PAWNMART, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert W. Schleizer

  	
   

  
	
   

  	
  Name:

  	
  Robert W. Schleizer

  	
   

  
	
   

  	
  Title:

  	
  CFO

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  XPONENTIAL, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Dwayne A. Moyers

  	
   

  
	
   

  	
  Name:

  	
  Dwayne A. Moyers

  	
   

  
	
   

  	
  Title:

  	
  Chairman & CEO

  	
   

  
							

 

2

 

	
   

  	
  FCC, LLC, d/b/a First Capital

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Evan G. Jones

  	
   

  
	
   

  	
  Name:

  	
  Evan G. Jones

  	
   

  
	
   

  	
  Title:

  	
  Senior Vice President

  	
   

  
						

 

Each
of the undersigned acknowledges the foregoing and agrees that his respective
Validity and Support Agreement in favor of Lender dated as of June 17,
2004 remains in full force and effect, subject to no right of offset, claim or
counterclaim.

 

	
   /s/ Robert W. Schleizer

  	
   

  
	
  ROBERT W. SCHLEIZER

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   /s/ Dwayne A. Moyers

  	
   

  
	
  DWAYNE A. MOYERS

  	
   

  
				

 

3Exhibit 10.1

 

 

Ross B. Bricker

General Counsel and Senior Vice President

13515 Ballantyne Corporate Place

Charlotte, North Carolina 28277

 

September 23, 2005

 

Mr. Jay Caraviello

13515 Ballantyne
Corporate Place

Charlotte, North Carolina
28277

 

Dear Jay:

 

As discussed with you,
the effective termination date of your employment with SPX Corporation (the “Company”)
is September 23, 2005.  This letter,
otherwise known as the Separation Agreement and General Release, sets forth the
terms upon which you and the Company have agreed your employment will be
terminated (hereinafter the Separation Agreement and General Release will be
referenced as the “Agreement”).

 

1.                                      Salary
Continuation

 

Subject to the provisions of this Agreement, your
salary, as of your termination date, will be continued through September 23,
2006, and will be paid in the same increments at the same pay intervals as you
are currently being paid (the “Salary Continuation”).  The period between your termination date and September 23,
2006 will be known as the “Separation Allowance Period”.  The Salary Continuation shall be subject to
any and all applicable withholding and other employment taxes.  This Salary Continuation is in lieu of any
and all rights or entitlements to severance pay under any other Company plan,
policy, benefit or procedure, or any agreement between you and the Company.

 

2.                                      Bonus and Equity Incentive Compensation

 

Subject to the provisions of this Agreement, you will
be eligible to receive a bonus under the 2005 Executive Bonus Plan, based on
full year business performance and prorated according to the number of days you
worked for SPX in the 2005 plan year, and payable at the time such bonuses are
paid to participants generally.  Also,
subject to the provisions of this Agreement, any unvested stock options,
restricted stock and restricted stock units granted to you by the Company that
would have vested on or before January 31, 2006 will vest as of your
employment termination date, and you will have one (1) year in which to
exercise your vested options.  Any other
unvested stock options, restricted stock and restricted stock units granted to
you by the Company will be forfeited.

 

1

 

3.                                      Employee
Benefits

 

The Attached Exhibit A summarizes the status of
your employee benefits following your separation from SPX.  Most of your employee benefits terminate as
of your last day of active work, although your medical, dental, and vision
coverage (if applicable) continue through the end of the month during which
your last day of active work occurred. 
Please be aware that you will be entitled to receive certain benefits as
noted in Exhibit A, provided you take the steps described in the
Exhibit.  It is important that you read
this information.

 

You will be vested in the benefits accrued through and
including your employment termination date under the SPX Corporation Individual
Account Retirement Plan, the Supplemental Individual Account Retirement Plan,
and the Supplemental Retirement Plan for Top Management.  Except as expressly provided in this
Agreement, payments or reimbursements in respect of country club dues, fees or
other costs shall cease effective as of September 23, 2005.  The Company will reimburse you for up to
$20,000 for annual income tax return preparation and financial planning fees
and costs incurred in calendar year 2005 (less the amount of any such fees and
costs previously reimbursed by the Company in 2005, regardless of when such
fees and costs were incurred) upon receipt of documentation satisfactory to the
Company.  No unused amounts from 2004 or
prior years, if any, will be carried forward or otherwise available for income
tax return preparation and financial planning services.

 

You acknowledge that the
payments and benefits specified in this Agreement exceed in value any payments
and benefits to which you may already be entitled.

 

4.                                      Outplacement
Services

 

The Company agrees to
make executive outplacement service available to assist you in obtaining new
employment at the Company’s cost. 
Subject to final approval by the Company, you may select the provider
you wish to use and the level of services you wish to receive provided the
total cost does not exceed $25,000.  The
Company’s obligation to provide these outplacement services will be terminated
on September 23, 2006, or on the date that you commence your new
employment, whichever occurs first, and in any event, when the Company’s cost
has reached $25,000.

 

5.                                      Release

 

By signing this
Agreement, you release the Company from any known or unknown, asserted
or unasserted claims that you may have against the Company.

 

You are giving this
release on behalf of yourself and your heirs, personal representatives, assigns
or any other person who could make a claim based upon your employment
relationship with the Company.

 

2

 

The release applies to
the Company and its subsidiaries, business units, divisions and affiliates, as
well as their current and former directors, board of directors, managers,
officers, shareholders, agents, representatives, attorneys, employees,
successors, predecessors and assigns. 
These parties are together called the “Released Parties” in this
Agreement.  Except to the extent provided
herein, the release also includes any employee benefit plans or funds sponsored
or administered by the Company (except that it does not apply to claims for
vested benefits, if any, arising from Company-sponsored retirement plans).

 

This is a general and
complete release that applies to any claim, known or unknown, asserted or
unasserted, and waives any claim to further compensation or benefits.  It includes claims relating to your
employment with and termination of employment with the Company.

 

This release specifically
applies to claims under Title VII of the Civil Rights Act of 1964, the Civil
Rights Act of 1991, the Americans with Disabilities Act, the Worker Adjustment
and Retraining Notification Act, the Employee Retirement Income Security Act of
1974, 42 U.S.C. § 1981 through 1988, as amended, the Age Discrimination in
Employment Act, as amended, the Older Workers Benefits Protection Act, the
Immigration Reform and Control Act, as amended, the Occupational Safety and
Health Act, as amended, the Equal Pay Act, any collective bargaining agreement,
any other federal, state, local civil or human rights law or any other local,
state or federal law, regulation or ordinance, any federal or state common law,
including claims in contract and tort or based upon public policy, and any
allegation for costs, fees, or other expenses including attorneys’ fees
incurred in these matters.  It does not
apply to any claim that arises after you sign this Agreement, and it does not
include claims that cannot be released as a matter of law.

 

You agree to permanently
withdraw with prejudice all claims, if any, you have filed against any Released
Party, including a request to the EEOC or any other employment discrimination
investigation agencies to withdraw any previously filed charges of
discrimination.  You further agree that
you shall not be entitled to receive any relief, recovery, or monies in
connection with any complaint or charge brought against the Company, without
regard as to who brought said complaint or charge.

 

6.                                      Employee
Affirmations

 

You affirm that you have
not assigned or transferred, or purported to assign or transfer, to any person
or entity, any claim against any of the Released Parties, or any portion
thereof or interest therein.  You also
affirm that you have not filed, caused to be filed, or presently are a party to
any claim, complaint, or action against any of the Released Parties in any
forum or form. You further affirm that you have been paid and/or have received
all leave (paid or unpaid), compensation, wages, bonuses, commissions, and/or
benefits to which you may be entitled and that no other leave (paid or unpaid),
compensation, wages, bonuses, commissions, and/or benefits are due to you,
except as provided in this Agreement. You further affirm that you have no known
workplace

 

3

 

injuries or occupational
diseases and have been provided and/or have not been denied any leave requested
under the Family and Medical Leave Act.

 

7.                                      Employee
Covenants

 

You agree to resign from any appointments,
directorships or other offices you may hold on behalf of SPX Corporation or any
of its divisions or affiliates.  You
acknowledge that any employment or contractual relationship between you and the
Company will terminate by virtue of this Agreement, and that you have no future
employment or contractual relationship with the Company other than the
contractual relationship created by this Agreement.  In consideration of this Agreement, you
hereby waive any and all employment rights that you now have with the Company,
except as otherwise expressly provided in this Agreement.  You agree not to seek reinstatement,
reemployment, or future employment as a new employee, and the Company has no
obligation, contractual or otherwise, to employ or reemploy, hire or rehire, or
recall or reinstate you in the future.

 

You acknowledge that you will remain bound by any
confidentiality, nondisclosure or noncompetition agreements you have with the
Company.

 

You further acknowledge
that you may possess secret, confidential or proprietary information or trade
secrets concerning the operations, future plans or business methods of the
Company.  You agree never to use or
disclose any such information.

 

You further
acknowledge that for a one-year period immediately after termination of your
employment, you will not directly or indirectly accept employment with or
render services on behalf of a competitor of any SPX business unit at which you
have been employed, or any other third party, in any capacity where the
confidential information of an SPX business unit acquired by you during your
employment with an SPX business unit would reasonably be considered to be
useful to the competitor or to such other third party to become a competitor
based in whole or in part on such information.

 

You agree that, for a
period of one (1) year after the date of execution of this Agreement, you
will not interfere with the Company’s relationship with, or endeavor to entice
away from the Company, or hire any person who at the time of the execution of
this Agreement is an employee of the Company. 
You agree that, for a period of one (1) year after the date of
execution of this Agreement, you will not interfere with the Company’s
relationship with, or endeavor to entice away from the Company, any customer of
the Company who, during your employment at the Company, you serviced, solicited
on behalf of the Company or gained knowledge about through your employment at
the Company.

 

You also agree not to
criticize the Company or any of its officers, directors, employees,
shareholders, affiliates or agents.

 

4

 

You agree that the
Company would be irreparably harmed by any actual or threatened violation of
the Employee Covenants described in this section, and that the Company will be
entitled to an injunction prohibiting you from committing such violation.

 

8.                                      Tender
Back

 

You agree that in the event of any breach of this
Agreement, including but not limited to, your bringing any claim against any
Released Party, you will immediately repay all or any portion of the payments
made to you and the Company will have no obligation to make any further
payments to you under this Agreement, provided, however, that these provisions
do not apply to any claims brought pursuant to the Age Discrimination in
Employment Act or the Older Workers Benefit Protection Act.

 

9.                                      Expenses

 

The Company will reimburse you for all reasonable
business expenses incurred through September 23, 2005, upon proper
presentation of supporting documentation, provided that appropriate expense
reports have been submitted by September 29, 2005.  Effective September 23, 2005, the
Company will no longer pay for or reimburse you for any charges or fees
incurred in connection with your cellular phone.  Should you decide to retain the cellular
phone, you agree that all expenses incurred in connection with the phone will
be paid by you.

 

10.                               Company
Property

 

You agree that all Company property, including but not
limited to, automobiles, credit cards, keys, documents, software, computer
data, records, or any other materials, will be returned by September 23,
2005.

 

11.                               Non-Admission

 

You agree that this
Agreement is not an admission of guilt or wrongdoing by the Released
Parties, and acknowledge that the Released Parties do not believe or admit that
any of them has done anything wrong.

 

12.                               Cooperation

 

You shall cooperate fully and voluntarily with the
Company and with the Company’s counsel in connection with any past, present or
future, actual or threatened, litigation, claims, investigations, hearings,
actions, or administrative proceeding involving the Company that relate to
events, occurrences or conduct occurring (or claimed to have occurred) during
the period of your employment by the Company. 
This cooperation by you shall include, but not be limited to, (i) being
reasonably available for interviews and discussions with the Company’s counsel
as well as for depositions and trial testimony; 
(ii) if depositions or trial testimony are to occur, being
reasonably available and cooperating in the preparation therefore as and to the
extent that the Company or its counsel request; (iii) refraining from
impeding in any way the Company’s prosecution or

 

5

 

defense of any such litigation, claims,
investigations, hearings, actions, or administrative proceeding; (iv) cooperating
fully in the development and presentation of prosecution or defense of any such
litigation, claims, investigations, hearings, actions, or administrative proceeding;  (v) providing, on a timely basis, advice
and consultations as reasonably requested by the Company; (vi) attending
depositions (whether or not you are deposed), hearings, investigations, trials
or arbitrations, assisting in response to discovery requests, meeting with
counsel for the Company, and providing written statements and/or affidavits,
all as requested by the Company’s General Counsel, or his designee; and (vii) promptly
notifying the Company’s General Counsel or his designee, if you are contacted
by any party, third party or by counsel or a representative representing
parties with respect to claims or litigation adverse to the Company, and
avoiding discussions with or otherwise providing information to such party,
third party, counsel or representative prior to discussions with General
Counsel, or his designee, or his representatives, and then only in the presence
of the Company’s representatives (unless otherwise required by court order).

 

You agree to provide, on a timely basis, advice and
consultation upon the reasonable request of the Company’s senior management
team with respect to business, operational, financial, personnel and other
matters relating to the period of your employment by the Company.

 

You shall be reimbursed
by the Company for reasonable travel, lodging, telephone and similar expenses
incurred in connection with such cooperation except to the extent that such
reimbursement may be prohibited, or may jeopardize the Company’s legal
interests, as determined by the Company.

 

13.                               Full
Disclosure of Claims

 

You represent and affirm that (i) you have not
filed or caused to be filed on your behalf any claim for relief against the
Company or any Released Parties and, to the best of your knowledge and belief,
no outstanding claims for relief have been filed or asserted against the
Company or any Released Parties on your behalf; and (ii) you have not
reported any purported improper, unethical or illegal conduct or activities to
any supervisor, manager, department head, Human Resources representative, agent
or other representative of the Company, to any member of the Company’s legal
department, and have no knowledge of any such improper, unethical, or illegal
conduct or activities and have disclosed to the Company any information you
might have had concerning any conduct involving the Company that you had reason
to believe may be unlawful or involve any false claims to the United States or
any other government having jurisdiction over the Company; and (iii) you
will not file, commence, prosecute or participate in any judicial or arbitral
action or proceeding against the Company or its representatives based upon or
arising out of any act, omission, transaction, occurrence, contract, claim or
event existing or occurring on or before the date of this Agreement except as
otherwise provided for in this Agreement. You agree that you will not
voluntarily aid or assist, either directly or indirectly, any individual or
entity in either the assertion or pursuit of any private claim or prosecution
of any private lawsuit, action, arbitration or judicial or administrative
proceeding, now existing or hereafter arising, relating to any matters in which
you were either involved or

 

6

 

for which you rendered services to the Company.  Notwithstanding the above, nothing in this
Agreement shall prohibit or restrict you from: (i) making any disclosure
of information required by law; (ii) providing information to, or
testifying or otherwise assisting in any investigation or proceeding brought by
any federal, state or local government agency, law enforcement agency or
legislative body, any self-regulatory organization, or the Company’s legal
department; (iii) cooperating with any other U.S. government
investigation; or (iv) testifying, participating in or otherwise assisting
in a proceeding relating to an alleged violation of Sarbanes-Oxley Act or any
federal, state or municipal law relating to fraud or any rule or
regulation of the Securities and Exchange Commission or any self-regulatory
organization.

 

14.                               Testimony
and Production of Documents

 

Nothing in Paragraphs 11 and 12 herein shall give
the Company the right to control or dictate the content of any testimony given
by you, it being understood that you would be required to testify
truthfully.  Moreover, nothing in this section shall
give the Company the right to control or dictate any documents required to be
produced by you pursuant to court order and by doing so, you will not be deemed
to have violated any provision of this Agreement.

 

15.                               Action
on Behalf of Employer

 

You shall not take any action on behalf of the
Company except as expressly required by the Company’s General Counsel, or his
designee.

 

16.                               Joint
Representation

 

In the event you are named in a lawsuit arising out
of any alleged acts or omissions committed by the Company or by you within the
scope of your employment with the Company, the Company at the Company’s cost
will agree to provide you with representation either jointly, provided you
execute a separate agreement in a form to be provided by the Company, or
separately.  In either event, counsel for
you shall be selected by the Company in its sole discretion.  In the event the Company determines at any
point in the matter that there exists a conflict of interest or if
representation of you jeopardizes the Company’s interests, then the Company
may, in its sole discretion, decline to provide or continue any such
representation.

 

17.                               Indemnification
and Insurance

 

The Company shall
continue to indemnify you and provide applicable directors’ and officers’
liability insurance coverage (including, where required, legal defense) for
actions prior to the effective date of your employment termination to the same
extent it indemnifies and provides liability insurance coverage to officers and
directors and former officers and directors of the Company.

 

7

 

18.                               Review
Period

 

You acknowledge that, before signing this Agreement,
you were given a period of at least 21 calendar days to consider this
Agreement.  If the 21-day period has not
elapsed at the time you sign this Agreement, you acknowledge that you have
knowingly and voluntarily chosen to sign this Agreement before the expiration
of that period.  You acknowledge that (a) you
took advantage of this period to consider this Agreement before signing it; (b) you
carefully read this Agreement; (c) you fully understand it; and (d) you
are signing it voluntarily.  You further
acknowledge that the Company encouraged you to discuss this Agreement with your
attorney (at your own expense) before signing it and that you did so to the
extent you deemed necessary.

 

19.                               Revocation
of Agreement

 

You understand that you may revoke this Agreement in
writing within seven (7) calendar days after you sign it, and the
Agreement shall not become effective or enforceable until the end of the
seven-day period.  To be effective, your
written revocation must be submitted, in writing, and state “I hereby revoke
acceptance of our Separation Agreement and General Release.”  The revocation must be personally delivered
to Douglas Hardy, or mailed to him at 13515 Ballantyne Corporate Place,
Charlotte North Carolina 28277 and postmarked within seven (7) calendar
days of execution of this Agreement.  This
Agreement shall not become effective or enforceable until the revocation period
has expired.  If the last day of the
revocation period is a Saturday, Sunday, or legal holiday in the state where
you reside, then the revocation period shall not expire until the next
following day that is not a Saturday, Sunday, or legal holiday.  If you revoke this Agreement, the Company
shall have no obligations under this Agreement.

 

20.                               Miscellaneous

 

This is the entire agreement between you and the
Company.  This Agreement may not be
modified in any manner except in writing signed by both you and an authorized
Company official.  You acknowledge that
the Company has made no representations or promises to you other than those in
this Agreement.  Should any provision of
this Agreement be declared illegal or unenforceable by any court of competent
jurisdiction or by any arbitrator and cannot be modified to be enforceable,
such provision shall immediately become null and void, leaving the remainder of
the Agreement in full force and effect. 
Notwithstanding this provision, however, the parties agree that the
general release language of paragraph 5 cannot be modified by any court or by
any arbitrator and shall remain in full force and effect.

 

This Agreement binds your
heirs, administrators, personal representatives, executors, successors and
assigns, and will apply to the benefit of all Released Parties and their
respective heirs, administrators, personal representatives, executors,
successors and assigns.

 

This Agreement shall be
construed as a whole according to its fair meaning.  It shall not be construed strictly for or
against you or any Released Party.  This
Agreement shall be

 

8

 

governed by the statutes
and common law of the State of North Carolina, without regard to that state’s rules regarding
conflict of laws.

 

YOU HAVE BEEN
ADVISED THAT YOU HAVE UP TO TWENTY-ONE (21) CALENDAR DAYS TO REVIEW THIS
SEPARATION AGREEMENT AND GENERAL RELEASE AND HAVE BEEN ADVISED THAT YOU HAVE
THE RIGHT TO CONSULT WITH AN ATTORNEY PRIOR TO EXECUTION OF THIS SEPARATION
AGREEMENT AND GENERAL RELEASE. YOU AGREE THAT ANY MODIFICATIONS, MATERIAL OR
OTHERWISE, MADE TO THIS AGREEMENT AND GENERAL RELEASE DO NOT RESTART OR AFFECT
IN ANY MANNER THE ORIGINAL TWENTY-ONE (21) CALENDAR DAY CONSIDERATION PERIOD.

 

HAVING
ELECTED TO EXECUTE THIS AGREEMENT AND GENERAL RELEASE, TO FULFILL THE PROMISES
AND TO RECEIVE THE SUMS AND BENEFITS IN PARAGRAPH 1 ABOVE, YOU FREELY AND
KNOWINGLY, AND AFTER DUE CONSIDERATION, ENTER INTO THIS SEPARATION AGREEMENT
AND GENERAL RELEASE INTENDING TO WAIVE, SETTLE AND RELEASE ALL CLAIMS YOU HAVE
OR MIGHT HAVE AGAINST THE COMPANY.

 

 

	
  ACCEPTED
  AND AGREED TO:

  	
  SPX
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Jay
  Caraviello

  	
   

  	
  /s/ Ross B.
  Bricker

  	
   

  
	
  Jay
  Caraviello

  	
  Ross
  B. Bricker

  
	
   

  	
   

  
	
  Date: 9/23/05

  	
  Date: 9/23/05

  
				

 

9

 

EXHIBIT A

 

SPX CORPORATION

SEPARATION ALLOWANCE PLAN

Benefit Continuation Summary

 

This exhibit provides you with a summary of the
status of your SPX employee benefits upon your separation from employment.  Generally speaking, benefits fall into two
categories, those subject to COBRA continuation and those that are not subject
to COBRA.  Part I below lists those
benefits subject to COBRA.  Part II
lists those not subject to COBRA.

 

Part I. 
Benefits Subject to COBRA

 

The company provides COBRA at subsidized rates during the Separation
Allowance Period for certain plans. 
However, continuing such coverage requires timely action on your part –
see “How to Continue Your Coverage in These Plans” below.

 

	
  Benefit:

  	
   

  	
  Benefit Status
  After Termination:

  
	
  Medical,
  Dental, Vision

  	
   

  	
  Coverage under
  the Company’s medical, dental and vision plans will continue until the end of
  the month in which your employment terminated. At the end of that month, your
  coverage under the Company’s medical, dental and vision plans will be
  cancelled. However, if you were a participant in one or more of these plans
  at the time of your separation from employment, you may continue coverage
  under one or more of these plans under the Consolidated Omnibus Budget
  Reconciliation Act of 1985 (“COBRA”), for up to 18 months. Further, you may
  continue coverage for your eligible dependents, if those dependents were
  covered at the time of your separation from employment.

  
	
   

  	
   

  	
   

  
	
  Health
  Care Spending Account

  	
   

  	
  Health Care
  Spending Account participation and deductions will end with your last day of
  active work. However, you may continue to participate in the Health Care
  Spending Account under COBRA but only through the end of the calendar year of
  your separation from employment with the Company. If you elect to continue
  participation under COBRA, you should be aware that contributions to your
  Health Care Spending Account will be made on an after-tax basis after your separation
  from employment.

  

  Eligible claims against your Health Care Spending Account may be filed
  through March 31st of the year after your separation date,
  provided the service was rendered during the calendar year of your separation
  from employment while you were a participant and before the end of your
  Health Care Spending Account coverage. In other words, you or one of your
  eligible dependents must have received the service before your Health Care
  Spending Account coverage terminates in order to be eligible for
  reimbursement. Claim forms are available by contacting the SPX Benefits
  Service Center, 1-866-779-7367.

  

 

How to Continue Your Coverage in These Plans

 

A COBRA enrollment package and notice of your COBRA rights will be
mailed to your home from the SPX Benefits Service Center, the COBRA
administrator, within ten days of the date your active employee benefits end.

 

Generally, you will have 60 days from receipt of your COBRA package to
elect continuation coverage under COBRA. 
If you elect to continue coverage under COBRA, you will then have 45
days from the date you make your COBRA continuation election to make all COBRA
premium payments due at that time to the SPX Benefits Service Center.

 

Please be aware that after your active benefits end, you will not be
covered by any of these benefit plans until you make a COBRA election within
the 60-day election period and make the required premium payments within the 45-day
payment period.  Once you make a timely
election and timely payments, your

 

As of:   September 15, 2005

 

1

 

coverage under the applicable benefit plans will be reinstated with no
lapse in coverage back to the date each employee benefit ended (the COBRA
qualifying event).

 

If you do not make a COBRA election during the 60-day election period
or if you do not make all required premium payments during the 45-day period,
you will not receive continuation coverage under COBRA.  Further, if you fail to make your monthly
premium payments to the SPX Benefits Service Center in a timely manner, your
coverage may be terminated.  A payment is
considered late if it is not received within 30 days of the due date.  Please refer to your COBRA notice for more
information regarding your rights under COBRA.

 

Your Contribution Amount for Continued Benefits

 

The contribution amount you will pay for COBRA benefits will change
when your Separation Allowance Period ends. 
During the Separation Allowance Period, you will pay the same
contribution for each plan that you paid as an active employee with the
Company.  Once the Separation Allowance
Period has ended, you will be responsible for paying 102% of the full cost of
coverage under each benefit plan.  The
SPX Benefits Service Center will inform you of the exact amounts owed; you are
responsible for making all payments to The SPX Benefits Service Center (both
during and after the Separation Allowance Period) for COBRA coverage.

 

Part II. 
Benefits Not Subject to COBRA

 

Participation in most of the plans listed below ends as of your last
day worked.

 

	
  Benefit:

  	
   

  	
  Benefit Status
  After Termination:

  
	
  Medical Opt Out Credits

  	
   

  	
  Opt
  out credits end after the pay period that includes your last day worked.

  
	
   

  	
   

  	
   

  
	
  Life
  Insurance

  •      Company
  Paid (Basic)

  •      Supplemental

  •      Spouse
  or Dependent Child Coverage

  	
   

  	
  Coverage ends
  with your last day worked. You may then elect to continue your supplemental,
  spouse, or dependent child coverage or you may convert your basic life
  coverage to an individual policy, provided you complete the required application
  and pay your first premium payment within 31 days of your last day of
  coverage. The SPX Benefits Service Center will mail a conversion/portability
  kit following the end of your life insurance coverage, which will provide the
  necessary forms and information. You should contact the SPX Benefits Service
  Center at 866-779-7367 if you do not receive this kit timely or if you have
  any questions.

  
	
   

  	
   

  	
   

  
	
  Accidental
  Death & Dismemberment (AD&D) Insurance

  	
   

  	
  Basic AD&D
  coverage ends with your last day worked. If you elected Supplemental AD&D
  coverage, it also ends with your last day worked. Neither plan may be
  converted.

  
	
   

  	
   

  	
   

  
	
  Disability
  Plans

  •      Short-Term
  Disability

  •      Long-Term
  Disability

  	
   

  	
  Participation
  ends with your last day worked. If you are receiving disability benefits at
  the time of your termination of employment, you will continue to receive
  these benefits while you remain disabled as defined within the plan. If you
  are receiving Short-Term Disability Plan benefits at the time your employment
  terminates, your termination will not affect your eligibility for Long-Term
  Disability Plan benefits should your disability continue more than 26 weeks,
  provided you elected to participate in the Long-Term Disability Plan. Your
  application for Long-Term Disability benefits will be considered, subject to
  applicable plan rules.

  
	
   

  	
   

  	
   

  
	
  Dependent
  Care Spending Account

  	
   

  	
  Participation
  ends with your last day worked. You may submit eligible dependent day care
  expenses incurred through your last day of work, provided they are submitted
  by March 31st of the following year. Claim forms are
  available by contacting the SPX Benefits Service Center at 866-779-7367.

  

 

2

 

	
  Benefit:

  	
   

  	
  Benefit Status
  After Termination:

  
	
  Retirement
  Savings and Stock Ownership Plan [401(k)]

  	
   

  	
  Participation
  ends with your last day worked. You may elect partial or total distribution
  at any time by contacting Fidelity at www.401k.com or 877-401-5779. If you
  make no election, payment is deferred unless your account is less than
  $1,000. (If your account is less than $1,000, it will be distributed, whether
  you elect a distribution or not, at the end of the calendar year during which
  your employment terminates.)

  

  Loan payments will not be deducted from Separation Allowance payments.
  Following your separation from employment, Fidelity will send you information
  on continuing your loan payments directly to Fidelity, provided your account
  balance exceeds $1,000. Should you have questions after you receive the
  information, you should contact Fidelity at 877-401-5779. If you do not
  arrange to continue making loan payments, the outstanding balance will be
  treated as a distribution subject to income tax and, possibly, additional
  taxes.

  
	
   

  	
   

  	
   

  
	
  SPX
  Individual Account Retirement Plan [Pension Plan]

  	
   

  	
  Participation
  ends with your last day worked. If you are vested, i.e., have five years of
  continuous service with SPX or predecessor companies and joined SPX on or
  before December 31, 2000, your cash balance account is payable at any
  time in any of the optional forms provided by this Plan. If you are not
  vested, you do not have a right to a benefit from this plan. You will receive
  a pension kit within 30 days of your termination date from the Pension
  Service Center. If you have questions prior to receipt of your pension kit,
  please contact the SPX Pension Service Center at 866-334-0354.

  
	
   

  	
   

  	
   

  
	
  Employee Assistance Plan (EAP)

  	
   

  	
  Coverage
  continues through the Separation Allowance Period.

  
	
   

  	
   

  	
   

  
	
  Legal
  Services Plan

  	
   

  	
  Participation
  ends with your last day worked; you may convert the plan to an individual
  policy by contacting ARAG Group at 800-247-4184.

  
	
   

  	
   

  	
   

  
	
  Auto
  and Home Insurance and Long Term Care

  	
   

  	
  You may continue
  your insurance through direct billing from Marsh@Work. It is important that
  you contact Marsh@Work at 877-295-3939 at your earliest convenience so there
  is no lapse in coverage.

  
	
   

  	
   

  	
   

  
	
  Educational
  Assistance Plan

  	
   

  	
  If you are
  taking an approved course as of your last day of work, you can still be
  reimbursed for that course, provided you meet plan requirements.

  
	
   

  	
   

  	
   

  
	
  Vacation

  	
   

  	
  You will be paid
  for unused vacation earned through the last full pay period worked.

  

 

3

 

Part III.  Additional Executive Benefits

 

	
  Benefit:

  	
   

  	
  Benefit Status
  After Termination:

  
	
  Key Man
  Life

  	
   

  	
  Coverage
  continues during the separation allowance period with the same post-tax
  premiums deducted from biweekly severance payments. There is no opportunity
  to convert, or otherwise continue, coverage beyond the Separation Allowance
  Period.

  
	
   

  	
   

  	
   

  
	
  Non-Qualified
  Supplemental Retirement Savings Plan [SRSP]

  	
   

  	
  If you are a
  participant in this plan, contributions stop as of your last day of work. You
  are eligible for a distribution according to your most recent election,
  provided the election was filed at least 12 months prior to the date you have
  elected to receive the distribution.

  
	
   

  	
   

  	
   

  
	
  SPX
  Supplemental Individual Account Retirement Plan [SIARP]

  	
   

  	
  Participation
  ends with your last day worked. If you are vested, i.e., have five years of
  continuous service with SPX or predecessor companies and joined SPX on or
  before December 31, 2000, your account is payable at any time in any of
  the optional forms provided by this plan. If you are not vested, you do not
  have a right to a benefit from this plan. You will receive a pension kit
  within about 30 days of your termination date from the Pension Service
  Center. If you have questions prior to receipt of your pension kit, please
  contact the SPX Pension Service Center at 866-334-0354.

  
	
   

  	
   

  	
   

  
	
  SPX Top
  Management Plan [TMP]

  	
   

  	
  Participation
  ends with your last day worked. If you are vested, i.e., have five years of
  continuous service with SPX or predecessor companies you are entitled to a
  benefit from this plan. If you are not vested, you do not have a right to a
  benefit from this plan. You will receive a pension package from the SPX
  Pension Service Center describing the benefits available to you. The package
  will include information for the coordination of entitlement from the IARP
  and Supplemental IARP, if applicable. If you have questions, please contact
  the SPX Pension Service Center at 866-334-0354 for assistance.

  

 

4

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