EXHIBIT 10.1
[GRAPHIC OMITTED] [SPX LOGO]
December 8, 2004
Xx. Xxxx X. Xxxxxxxx
0000 Xxxxx Xxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Dear Xxxx:
This Agreement is to confirm the terms of your retirement and resignation,
and termination of the Employment Agreement between SPX Corporation (the
"Company") and you dated as of January 1, 1997, as amended (the "Employment
Agreement"). It is understood and agreed that you will resign from your
positions of Chairman, President and Chief Executive Officer and as a
Director of the Company, effective as of December 8, 2004 (the "Effective
Date"), and that, except as expressly stated herein, the Employment
Agreement shall be deemed to be terminated as of such date. At the
Company's request, you shall execute any and all documents reasonably
necessary to confirm your resignation as an officer and director of the
Company and its subsidiaries. The following provisions have been agreed
between the Company and you in connection with your retirement and
resignation and the termination of the Employment Agreement:
1. Cancellation and Termination of Employment Agreement.
(a) Within 10 days following the Effective Date the Company shall pay to
you in U.S. dollars an amount equal to the aggregate of the following:
i. $2,800,000 representing payment for two (2) years salary;
ii. $387,000 representing a lump sum payment of life insurance
premiums; and
iii. $136,600 representing a lump sum payment of your unused vacation
pay.
(b) The Company shall pay you an amount equal to your bonus bank balance
under the EVA Incentive Compensation Plan ("EVA Plan") remaining after
calculations for the 2004 plan year are completed, payable at such
time as the other plan participants are paid their bonuses, (but in
any event no later than March 31, 2005) minus the amount of your
outstanding home relocation loan balance;
These payments shall be in consideration for your agreement to cancel
your Employment Agreement, and all payments under this Agreement shall
be subject to applicable withholdings. The Company shall not pay any
Gross-up Payment to you under Section 9 of the Employment Agreement.
2. Return of Company Property. All Company property, including without
limitation, credit cards and restricted stock certificates in respect
of forfeited grants, shall be returned to the Company within five (5)
business days after the date hereof, except for your laptop computer
and cellular phone.
3. Pending Salary and Other Items. The Company shall pay any accrued and
unpaid salary to which you are entitled as of the Effective Date in
accordance with normal payroll practices, subject to applicable
withholdings. The Company shall reimburse you for all unpaid business
expenses incurred by you if submitted to the Chief Financial Officer
of the Company within 30 days following the Effective Date in
accordance with Company policy.
4. Continuation of Benefits. For a period of three (3) years following
the Effective Date (the "Benefit Continuation Period"), the Company
shall continue in force Company-provided insurance coverage for you
and your spouse (on the same basis as an actual employee), including
medical, dental, and vision coverage, based on your elections as of
the Effective Date, with your ability to continue medical, dental and
vision coverage thereafter at your own expense pursuant to COBRA. If
the continuation of any of such coverage is impractical or legally
prohibited, the Company shall purchase comparable coverage from third
party providers reasonably acceptable to you. If during the Benefit
Continuation Period you obtain comparable insurance coverage through
your employer (and payable by your employer) then the Company's
obligation under this Section 3 shall terminate. In addition, at age
55 you shall be entitled to the same medical coverage benefits in
effect at that time for officers of the Company who retire. Except as
otherwise expressly provided in this Agreement, all compensation,
benefits and perquisites shall cease as of the Effective Date.
5. Age 55 Annuity. On or prior to your 55th birthday the Company shall
purchase an annuity for your benefit from an issuer, reasonably
acceptable to you, providing you payments over a term specified by you
equal to an aggregate amount of $8,000,000 or at your option providing
you with a lump sum payment at any time equal to $8,000,000.
6. Stock Options. All options to acquire common stock of the Company
granted to you under the stock option plans of the Company and its
predecessor, will vest no later than the Effective Date. You will be
permitted to exercise such options at any time prior to the earlier of
(i) the expiration or other termination date of such options or (ii)
the second anniversary of the Effective Date.
7. Restricted Stock.
You have the following restricted stock grant which have been issued
to you:
Identification of Number of Shares Vested Shares as Unvested Shares as
Grant in Grant of Effective Date of Effective Date
------------------- ---------------- ------------------ -------------------
2004 Restricted 100,000 0 100,000
Stock Grant ("2004"
Grant")
Special Retention 1,000,000 0 1,000,000
Restricted Stock
Grant ("Special
Grant")
Miscellaneous 4,052 4,052 0
Restricted Stock
Grant
("Miscellaneous
Grant")
With respect to the 2004 Grant the Company shall vest 33,333 shares as
of your Effective Date and the remaining 66,667 shares shall be
forfeited. All shares under the Special Grant shall be forfeited as of
your Effective Date. All shares under the Miscellaneous Grant are
vested and are not subject to forfeiture.
8. Restrictive Covenants.
(a) Definitions. For purposes of this Agreement, the following
terms will be defined as follows:
(i) "Confidential Information" shall mean the Company's
trade secrets and all other information unique to the Company and
not readily available to the public, including developments,
designs, improvements, inventions, formulas, compilations,
methods, strategies, forecasts, software programs, processes,
know-how, data, research, operating methods and techniques, and
all business plans, strategies, costs, profits, customers,
vendors, markets, sales, products, key personnel, pricing
policies, marketing, sales or other financial or business
information, and any modifications or enhancements of any of the
foregoing.
(ii) The term "Business Conducted by the Company or any of
its Affiliates" shall mean all businesses conducted by the
Company or any of its Affiliates as of the Effective Date, of
whatever kind, within or outside of the United States.
(iii) The term "Affiliates" shall mean (i) any entity that
directly or indirectly, is controlled by the Company, and (ii)
any entity in which the Company has a significant equity
interest.
(b) Non-Disclosure of Confidential Information. You acknowledge
that you have had access to Confidential Information of the Company
and/or its Affiliates and agree that you shall not, at any time,
directly or indirectly use, divulge, furnish or make accessible to any
person any Confidential Information, but instead shall keep all such
matters strictly and absolutely confidential.
(c) Non-Competition. You agree that for a period of two (2) years
after the Effective Date (the "Period"), you shall not, without the
prior written consent of the Company, participate or engage in,
directly or indirectly (as an owner, partner, employee, officer,
director, independent contractor, consultant, advisor or in any other
capacity calling for the rendition of services, advice, or acts of
management, operation or control), any business that, during the
Period, is competitive with the Business Conducted by the Company or
any of its Affiliates within the United States (hereinafter, the
"Geographic Area") as of the Effective Date.
(d) Non-Solicitation of Employees. You agree that, during the
Period, you shall not, without the prior written consent of the
Company, directly or indirectly solicit any current employee of the
Company or any of its Affiliates, or any individual who becomes an
employee during the Period, to leave such employment and join or
become affiliated with any business that is, during the Period,
competitive with the Business Conducted by the Company or any of its
Affiliates within the Geographic Area as of the Effective Date.
(e) Non-Solicitation of Suppliers or Customers. You agree that,
during the Period, you shall not, without the prior written consent of
the Company, directly or indirectly solicit, seek to divert or
dissuade from continuing to do business with or entering into business
with the Company or any of its Affiliates, any supplier, customer, or
other person or entity that had a business relationship with or with
which the Company was actively planning or pursuing a business
relationship at or before the Effective Date.
(f) Irreparable Harm. You acknowledge that: (i) your compliance
with this Section is necessary to preserve and protect the
Confidential Information and the goodwill of the Company and its
Affiliates as going concerns; (ii) any failure by you to comply with
the provisions of this Section will result in irreparable and
continuing injury for which there will be no adequate remedy at law;
and (iii) in the event that you should fail to comply with the terms
and conditions of this Section, the Company shall be entitled, in
addition to such other relief as may be proper, to all types of
equitable relief (including, but not limited to, the issuance of an
injunction and/or temporary restraining order) as may be necessary to
cause you to comply with this Section, to restore to the Company its
property, and to make the Company whole.
(g) Unenforceability. If any provision(s) of this Section shall
be found invalid or unenforceable, in whole or in part, then such
provision(s) shall be deemed to be modified or restricted to the
extent and in the manner necessary to render the same valid and
enforceable, or shall be deemed excised from this Agreement, as the
case may require, 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.
9. Publicity and Nondisparagement. Both the Company and you shall
publicly indicate that you have resigned your employment to allow you
to retire and pursue other interests and spend more time with your
family. Both you and the Company agree not to, directly or indirectly,
make any public disclosure or take any action to cause public
disclosure that would be inconsistent with such a resignation. You
hereby consent to the public disclosure of the contents of this
Agreement by the Company in accordance with applicable laws and
regulations governing disclosure of executive compensation.
Without limiting the provisions of the restrictive covenants set forth
in Section 8 above both you and the Company further agree not to,
directly or indirectly, individually or in concert with others, engage
in any conduct or make any statement calculated or likely to have the
effect of undermining, disparaging or otherwise reflecting poorly upon
you, or in the case of the Company, or its good will, products or
business opportunities, or in any manner detrimental to the Company
and any parent, subsidiary, affiliate or other entity related to the
Company, as well as its or their predecessors, successors and assigns,
shareholders, directors, officers, agents, representatives, attorneys,
servants, and employees, past, present and future (the "Company
Parties") at any time following the Effective Date. If either party
breaches this provision, the breaching party agrees to indemnify the
other against all liability, costs and expenses, including reasonable
attorneys' fees, related to such breach.
With respect to the Company's obligations in the preceding two
paragraphs, the Company shall mean the Company's senior management and
Board of Directors.
The provisions of this Section shall not apply to testimony as a
witness, compliance with other legal obligations, assertion of or
defense against any claim of breach of this Agreement, and shall not
require the Company Parties or you to make false statements or
disclosures.
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 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).
10. Release. In consideration of the benefits and payment to be paid
hereunder, you hereby release, forever discharge and hold harmless the
Company Parties, individually and collectively, from any and all
claims, demands, causes of action or liabilities, that you ever had,
or now have, or that your heirs, executors or administrators hereafter
can, shall or may have upon or by reason of any matter, cause or thing
whatsoever, whether known or unknown, suspected or unsuspected,
arising out of or in any way connected with your employment and/or
separation from the Company, except for those claims that cannot be
waived by law. Without limiting the generality of the foregoing, this
release applies to any right that you have or may have to commence or
maintain a charge or action alleging discrimination under any federal,
state or local statute (whether before a court or an administrative
agency), and any right that you have or may have to commence or
maintain a claim or action alleging wrongful termination, breach of
contract, commission of tort, or any combination thereof, whether
based in law or in equity. You agree not to make, assert or maintain
any charge, claim, demand or action that would be covered by this
release. If you breach this provision, you agree to indemnify the
Company against all liability, costs and expenses, including
reasonable attorneys' fees, related to such breach.
11. 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 to the same extent it indemnifies
and provides liability insurance coverage to officers and directors
and former officers and directors of the Company.
12. Legal Fees. The Company will pay the reasonable attorneys' fees and
actual out of pocket expenses of your legal advisors incurred in
connection with negotiating this Agreement, not to exceed $25,000.00,
which amount will be in addition to any payments described elsewhere
in this Agreement, upon submission of invoices for such fees and
expenses.
13. Tax Matters. You and the Company agree to cooperate to structure the
payments made under this Agreement in a manner most tax effective to
each party, provided that neither you nor the Company is economically
disadvantaged or legally at risk by such structure.
14. Entire Agreement and Interpretation. This Agreement constitutes the
entire agreement of the parties with respect to the subject matter
hereof, and may not be modified except by a writing signed by you and
the Chairman of the Board or Chief Executive Officer of the Company.
Except as provided in this Agreement, all other agreements between you
and the Company providing for compensation or benefits to you shall be
terminated simultaneously with the execution of this Agreement,
including but not limited to the Executive Change of Control Agreement
dated February 15, 1999 between you and the Company. 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. The parties both agree to submit
to jurisdiction and venue in the Courts of Delaware. All dollar
amounts referred to in this Agreement are in United States currency.
15. Acknowledgements. By signing this Agreement, you expressly acknowledge
and agree that:
(a) you have read and fully understand the terms of this Agreement;
(b) you have been advised to consult with and have consulted with the
law firm of Xxxxxx Price prior to signing this Agreement;
(c) each party has cooperated in the preparation of this Agreement
and, as a result, this Agreement shall not be construed against
any party on the basis that the party was the draftsperson; and
(d) you have knowingly and voluntarily entered this Agreement,
without any duress, coercion or undue influence by anyone.
16. Counterparts. This Agreement may be signed in single or separate
counterparts, each of which shall constitute an original.
All questions and dealings with the Company regarding this Agreement shall
be through Xxxxxxx Xxxxx.
If the foregoing accurately sets forth our understanding, please execute
the enclosed copy of this letter and return it to the Secretary of the
Company.
Sincerely yours,
SPX CORPORATION
By: /s/Xxxxxxxxxxx X. Xxxxxxx
-----------------------------
ACCEPTED AND AGREED AS
OF DECEMBER 8, 2004
/s/Xxxx X. Xxxxxxxx
------------------------
Xxxx X. Xxxxxxxx
