Document:

EXHIBIT 10.38

 

Amended and Restated Employment Agreement of Lee S. Powell

 

This Employment Agreement (the “Agreement”) is effective as of November 20,
2008 (the “Effective Date”), by and between SPX Corporation (the “Company”) and
Leslie (“Lee”) S. Powell (the “Executive”).

 

WHEREAS, the Company and the Executive
previously entered into an employment agreement, effective as of January 31,
2008, as amended (the “Previous Employment Agreement”);

 

WHEREAS, the Company desires to employ the Executive as its Segment
President, Industrial Products and Services;

 

WHEREAS, the Company and the Executive desire to amend and restate the
Previous Employment Agreement as set forth below; 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 Segment President,
Industrial Products and Services.  During
the Term (as hereinafter defined), the Executive will have the title, status
and duties of the Segment President, Industrial Products and Services  and will report directly to the Company’s
Chief Executive Officer or other senior executive officer.  The Executive’s principal business office
shall be 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 Term.

 

2.                                       Term. 
The term of employment under this Agreement (“Term”) will commence on
the Effective Date, and will continue thereafter until December 31, 2010;
provided, however, that this Agreement shall remain in effect and the Term
shall be extended from year to year thereafter unless, not less than one
hundred eighty (180) days prior to December 31, 2010, or any subsequent December 31,
either the Executive or the Company delivers to the other written notice of his
or its intention not to continue this Agreement in effect, in which case this
Agreement shall terminate as of December 31 of the year in which such
notice is given; and provided further that, if a Change in Control (as defined
below) shall have occurred during the Term, this Agreement shall continue in
effect and the Term shall be extended until at least the second anniversary of
such Change in Control.

 

3.                                       Duties. 
During the 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
Segment President, Industrial Products and Services.

 

(b)                                 The
Executive will devote his full time and best efforts, talents, knowledge and
experience to serving as the Company’s Segment President, Industrial Products
and Services.  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 Term strictly adhere to and
obey all of the rules, regulations and policies 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.  The Executive shall not
engage in consulting work or any trade or business on behalf of any other
person, firm or company that competes, conflicts or interferes with the
performance of his duties hereunder in any way.

 

4.                                       Compensation and Benefits.  During the Term, 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 four hundred thousand
dollars ($400,000).  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.  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 written
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
SPX Corporation Stock Compensation Plan, all as the Board (or appropriate Board
committee) may determine from time to time in its discretion.  For the 

 

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2008 bonus plan year, the Executive shall be
eligible for a target bonus under the Company’s bonus plan equal to eighty
percent (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 and the applicable performance goals for
subsequent bonus plan years, no later than March 31 of such bonus plan
year.  The Company will pay the Executive’s
annual performance bonus at the same time as annual performance bonus payments
for such year (if any) are made to other participants with respect to such
fiscal year, 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.  Annual performance bonuses are intended to
qualify for the short-term deferral exception to Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”).

 

(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, provided that such
expenses shall be reimbursed no later than December 31 of the year
following the year in which the expenses were incurred.

 

(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.  The Company will make such
reimbursements in accordance with the Company’s reimbursement practices, and in
all events no later than December 31 of the year following the year in
which the expense was incurred.

 

(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 during his lifetime in accordance with the eligibility
requirements and plan 

 

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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.  Such reimbursement shall be made in
accordance with the Company’s reimbursement practices, and in all events no
later than December 31 of the year following the year in which the
premiums were incurred, and in accordance with the other requirements of Code Section 409A
and Treasury Regulation §1.409A-3(i)(1)(iv) (or any similar or successor
provisions).  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.  The Company reserves the right to
modify, suspend or discontinue any and all retiree medical 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; provided that, if 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 applicable coverage
level, and subject to maximum annual inflation adjustment thereafter of five
percent (5%).  Upon the death of the
Executive, a surviving 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)                                  Definition
of Termination of Employment.  For
purposes of this Agreement, the Executive’s employment with the Company shall
be deemed to be terminated when the Executive has a “Separation from Service”
within the meaning of Code Section 409A, and references to termination of
employment shall be deemed to refer to a Separation from Service.

 

(b)                                 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;

 

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(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.

 

(c)                                  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 (x) 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 (y) the date that a reputable
physician selected by the Company’s Chief Executive Officer, 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 request therefore by the Chief
Executive Officer, the Executive shall submit to medical examination for the
purpose of determining the existence, nature and extent of any such
disability.  In accordance with Section 11,
the Chief Executive Officer shall promptly give the Executive written notice of
any such determination of the Executive’s disability and of any decision of the
Chief Executive Officer to terminate the Executive’s employment by reason
thereof.  In the event of disability,
until the date of termination, the amount of Base Salary payable to the
Executive under Section 4 hereof shall be reduced dollar-for-dollar by the
amount of disability benefits paid to the Executive in accordance with any
disability policy or program of the Corporation.

 

(d)                                 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 death or
disability, or the Executive voluntarily terminates his employment for Good
Reason, in addition to the benefits payable under (b), the Company will pay the
following amounts and provide the following severance benefits:

 

(i)                                     The
Executive’s Base Salary through the one-year anniversary of the employment
termination and annual incentive bonus, which will be determined as the highest
of (A) the actual incentive bonus paid for the bonus plan year immediately
preceding such termination, or (B) the average annual bonus paid to the
Executive for the three bonus plan years preceding the year in which such
termination occurs (excluding any years of partial, or no, bonus plan 

 

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participation), plus (C) the amount, if
any, to which the bonus that would have been paid to the Executive for the
bonus plan year in which such termination occurs, based on the performance
level actually attained, exceeds the amount payable under the highest of (A) or
(B).

 

(ii)                                  Continued
coverage under the Company’s medical, dental, vision, key manager life
insurance and pension through the one-year anniversary of the employment
termination, at the same cost to the Executive as in effect on the date of the
Executive’s termination, provided that to the extent such continued coverage
extends beyond the COBRA continuation period, 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).  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. 
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 will provide such benefits under (A) an alternate arrangement,
such as through the purchase of an individual insurance policy that provides
similar benefits, 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) or (B) if
applicable, through a nonqualified pension or profit sharing plan, provided
that such payments shall be made no later than December 31 of the calendar
year following the calendar year in which the Executive’s termination of
employment occurs.  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
incentive bonus) through the one-year anniversary of the employment termination
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 one year anniversary of the employment termination;
and (B) reimbursement of expenses relating to financial planning services,
tax return preparation and annual physicals incurred on or before December 31
of the calendar year that includes the first anniversary of the Executive’s
employment termination; provided that reimbursement of such perquisites shall
be made to the Executive in accordance with the Company’s reimbursement
practices, and in all events no later than December 31 of the calendar
year that includes the third anniversary of the termination of the Executive’s
employment.  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 Section shall
be reduced to the extent comparable perquisites are actually received by or
made available to the Executive without cost during the period following 

 

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the Executive’s employment
termination covered by this Section.  The
Executive shall report to the Company any such perquisites actually received by
or made available to the Executive.

 

Upon a “Change
of Control” (as defined in the Executive’s Change of Control Agreement dated November 20,
2008), any outstanding stock options, restricted stock or other equity-based
compensation awards that would have vested during the period through the one
year anniversary of the Executive’s employment termination shall immediately
vest upon such termination date, and any Company stock options shall be
immediately exercisable at any time prior to the earlier of (A) one (1) year,
or (B) the stock option expiration or other termination date, subject to
applicable insider trading policies and regulations.  Prior to a Change of Control, 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) two (2) years,
or (B) the stock option expiration or other termination date.  Notwithstanding the foregoing, any restricted
stock or other equity-based compensation awards that were intended to satisfy
the requirements for performance-based compensation under Code Section 162(m),
and would become vested only upon the attainment of specified performance
goals, shall vest only if (and at the time that) such performance goals are
achieved.

 

(v)                                 Outplacement
services, as elected by the Executive (and with a firm selected by the
Executive), not to exceed $35,000 in total. 
Such outplacement services must be incurred by the Executive no later
than the end of the calendar year that includes the second anniversary of the
termination of the Executive’s employment. 
If applicable, reimbursement of such expenses shall be made to the
Executive no later than the end of the calendar year that includes the third
anniversary of the termination of the Executive’s employment.

 

(e)                                  Good
Reason.  For purposes of this
Agreement, “Good Reason” shall mean the occurrence of any of the following
without the Executive’s consent:  (i) a
material diminution in the Executive’s base compensation; (ii) a material
diminution in the Executive’s authority, duties, or responsibilities; (iii) a
material diminution in the budget over which the Executive retains authority; (iv) a
material change in the geographic location at which the Executive’s must
perform the services; or (v) any other action or inaction that constitutes
a material breach by the Company of this Agreement.  The Executive’s must provide notice to the
Company of the existence of the condition described in above within a period
not to exceed ninety (90) days of the initial existence of the condition, and
the Company will have a period of at least thirty (30) days following the
notice during which it may remedy the condition.  Any termination for Good Reason must occur
within two years following the initial existence of one or more of the
foregoing conditions.

 

(f)                                    Cause.  For purposes of this Agreement, “Cause” shall
mean:  (i) the Executive’s willful
and continued failure to satisfactorily perform his duties as an 

 

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executive of the Company (other than any such
failure resulting from incapacity due to physical or mental illness) after a
written demand for performance is delivered to the Executive, which demand
specifically identifies the manner in which the Executive has not
satisfactorily performed his duties, and which gives the Executive at least 30
days to cure such alleged deficiencies, (ii) the Executive’s willful
misconduct or dishonesty, which is demonstrably and materially injurious to the
Company, monetarily, reputationally, or otherwise, (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, (iv) the Executive’s refusal or failure to
substantially comply with the Company’s human resources rules, policies,
directions and/or restrictions relating to harassment and/or discrimination, or
to substantially comply with the Company’s compliance or risk management rules,
policies, directions and/or restrictions (including, without limitation, the
Company’s Code of Business Conduct); (v) the Executive’s loss of any
license or registration that is necessary for the Executive to perform his or
her duties, or commits any act that could result in the legal disqualification
of the Executive from being employed by the Company or a subsidiary; (vi) the
Executive’s failure to cooperate with the Company or a subsidiary in any
internal investigation or administrative, regulatory or judicial
proceeding.  The Executive’s employment
shall be deemed to have terminated for Cause if, after the Executive’s
employment has terminated, facts and circumstances are discovered that would
have justified a termination for Cause.

 

(g)                                 Non-Renewal.  If the Company gives written notice to the
Executive of its intention not to continue this Agreement in effect, in
accordance with Section 2, and the Executive remains employed until the December 31
termination of the Agreement (and a Change in Control has not occurred that
would extend the Agreement), the Executive may deliver his written resignation
to the Company effective December 31, and the Company will continue the
Executive’s Base Salary for six (6) months following the December 31
effective date of the Executive’s resignation.

 

(h)                                 Timing
of Payments.  Subject to Sections 5(i) and
5(j) and except as provided otherwise in this Agreement, all payments
described in Section 5 above shall be made in a lump sum cash payment as
soon as administratively practicable (but in no event more than thirty (30)
days) following the Executive’s 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 (subject to Section 5(i)).

 

(i)                                     Six
(6) Month Delay.  If, at the
time the Executive becomes entitled to a termination payment under this Section 5,
the Executive is a “specified employee” (as defined under Code Section 409A),
then, notwithstanding any other provision in this Agreement to the contrary,
the following provisions shall apply.

 

(i)                                     No
such termination payment considered deferred compensation under Code Section 409A
and not subject to an exception or exemption 

 

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thereunder shall be paid to the Executive
until the date that is six (6) months after the Executive’s termination
or, if earlier, the date of the Executive’s death (the “Six Month Delay Rule”).  Any such termination payment that would
otherwise have been paid to the Executive during this six-month period (the “Six
Month Delay”) shall instead be aggregated and paid to the Executive no later
than ten (10) days following the date that is six (6) months after
the Executive’s termination (together with interest at the interest credit rate
provided in the SPX Corporation Individual Account Retirement Plan).  Any termination payment to which the
Executive is entitled to be paid under this Section 5 after the date that
is six (6) months after the Executive’s termination shall be paid to the
Executive in accordance with the applicable terms of Section 5.

 

(ii)                                  During
the Six-Month Delay, the Company will pay to the Executive the applicable
payments set forth in this Section 5, to the extent any of the following
exceptions to the Six-Month Delay Rule apply:

 

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

 

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

 

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

 

provided that the amount paid under this
paragraph will count toward, and will not be in addition to, the total payment
amount required to be made to the Executive by the Company under this Section 5
on account of the separation from service and any applicable Company benefit
plan.

 

(j)                                     Release.  The Company shall deliver to the Executive a
release in favor of the Company that is acceptable to the Company (the “Release”)
as soon as administratively feasible following the Executive’s termination of
employment.  Notwithstanding anything in
this Agreement to the contrary, no payments pursuant to Section 5(c) or
Section 5(d) shall be made prior to the date that both (i) the
Executive has 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
the Executive 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 

 

9

 

following the Executive’s
termination of employment.  If the
Executive does 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) Executive’s rights shall be
limited to those made available to Executive under Section 5(b) above,
and (ii) the Company shall have no obligation to pay or provide to
Executive any amount or benefits described in Section 5(c) or Section 5(d),
or any other monies on account of the termination of Executive’s employment.

 

6.                                       Recapture of Certain Incentive Compensation.  If the Company is
required to prepare an accounting restatement due to the material noncompliance
of the Company, during the Term, as a result of misconduct, with any financial
reporting requirement under the securities laws, the Executive shall reimburse
the Company, promptly upon notice and demand, for (a) any bonus or other
incentive-based or equity-based compensation received from the Company during
the twelve (12-) month period following the first public issuance or filing
with the Securities and Exchange Commission, whichever occurs first, of the
financial document embodying such financial reporting requirement; and (b) any
profits realized from the sale of securities of the Company during that twelve
(12) month period.

 

7.                                       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.

 

8.                                       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.

 

9.                                       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.

 

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

 

11.                                 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:

 

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SPX Corporation

13515 Ballantyne Corporate Place

Charlotte, NC 28277

Attention: General Counsel

 

The Company
may change the person and/or address to which 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.

 

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

 

13.                                 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 of Control Agreement dated November 20, 2008 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.

 

14.                                 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.

 

15.                                 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 or 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.

 

16.                                 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 

 

11

 

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 another source.

 

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

 

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

 

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

 

20.                                 409A Compliance.  To the extent any provision of this Agreement
or action by the Company would subject the Executive to liability for interest
or additional taxes under Code Section 409A, it will be deemed null and
void, to the extent permitted by law and deemed advisable by the Company.  It is intended that this Agreement will
comply with Code Section 409A and the interpretive guidance thereunder,
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 5
of this Agreement or any Company benefit plan is intended to be treated as one
of a series of separate payments for purposes of Code Section 409A and
Treasury Regulation §1.409A-2(b)(2)(iii) (or any similar or successor provisions).  This Agreement may be amended to the extent
necessary (including retroactively) by the Company in order to preserve
compliance with Code Section 409A. 
The preceding shall not be construed as a guarantee of any particular
tax effect for the Executive’s compensation and benefits.

 

12

 

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

 

 

	
  EXECUTIVE ACCEPTANCE

  	
  SPX CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/Lee S. Powell

  	
   

  	
  By:/s/Christopher J. Kearney

  
	
  Lee S. Powell

  	
       Christopher J. Kearney

  
	
   

  	
   

  
	
   

  	
  Its: Chairman, President and

  
	
   

  	
       Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
  Date:  December 16, 2008

  
			

 

13EXHIBIT 10.39

 

 

 

November 20, 2008

 

Mr. Christopher J. Kearney

13515 Ballantyne Corporate
Place

Charlotte, NC 28277

 

Dear Chris:

 

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

Christopher J. Kearney

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

Christopher J. Kearney

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 

 

 

Executive Change of Control Agreement

Christopher J. Kearney

Page 4

 

the number of
such 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

Christopher J. Kearney

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

Christopher J. Kearney

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

Christopher J. Kearney

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

Christopher J. Kearney

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

Christopher J. Kearney

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

Christopher J. Kearney

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

Christopher J. Kearney

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

Christopher J. Kearney

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

Christopher J. Kearney

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

Christopher J. Kearney

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

Christopher J. Kearney

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

Christopher J. Kearney

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

Christopher J. Kearney

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/Christopher J. Kearney

  	
   

  	
  By:/s/Kevin L. Lilly

  
	
  Christopher J. Kearney

  	
       Kevin L.
  Lilly

  
	
   

  	
   

  
	
   

  	
  Its:

  	
  Senior Vice President,
  Secretary

  and General Counsel

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Date:December 8, 2008

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