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EXHIBIT 10(ii)
[SPX CORPORATION LOGO]
XXXX X. XXXXXXXX
STOCK OPTION AWARD
THIS AGREEMENT is made on and as of June 23, 1999, by and
between SPX CORPORATION, a Delaware Corporation ("SPX" or the
"Company") and XXXX X. XXXXXXXX ("Executive").
1. Grant of Options. In recognition of his performance as Chairman,
President and Chief Executive Officer of the Corporation, and as an
inducement to his continuing in the employ of the Company, SPX hereby
grants to Executive Options to purchase 1,000,000 Shares of the
Company's Common Stock, par value $10.00 ("Common Stock") at Option
Prices set forth below and in the manner and subject to the terms and
conditions hereinafter provided:
Number of Shares Option Price Per Share
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250,000 $120.00
250,000 $145.00
250,000 $170.00
250,000 $195.00
These Options are granted to Executive by the Board of Directors of the
Company and are in addition to the stock options granted to Executive
under the Company's 1992 Stock Compensation Plan. The Options granted
under this Agreement are outside of and not granted pursuant to said
Plan. To the extent that shares of Common Stock are held by the Company
as treasury shares at the time that the Options (or any portion
thereof) are exercised, the Company will use treasury shares as the
source of the Common Stock issued to the Executive in connection with
such exercise. The Board of Directors has delegated to its Compensation
Committee (the "Committee") the authority to make such determinations
and interpretations of this Agreement as it deems necessary and
appropriate to carry out its intent and terms.
2. Nonqualified Replacement Options. This Option is granted with the right
to receive "Nonqualified Replacement Options" in accordance with the
terms of this Agreement. A Nonqualified Replacement Option shall be
granted upon the exercise of the Option (including any Options granted
under this paragraph 2) if either (i) previously-owned shares of Mature
Common Stock (defined below) are surrendered (whether by delivery or
attestation) in payment of the Option Price or tax withholding, or (ii)
shares of Common Stock otherwise issuable upon such exercise are
withheld to satisfy minimum tax withholding, subject to the following:
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a. The number of shares of Common Stock subject to the
Nonqualified Replacement Option shall be the number of shares
of Common Stock surrendered or withheld.
b. The Option Price of the Nonqualified Replacement Option shall
be the fair market value of a share of Common Stock on the
date the Nonqualified Replacement Option is granted.
c. The Nonqualified Replacement Option shall be fully vested and
shall expire on the Expiration Date set forth in paragraph 3.
Upon exercise, a Nonqualified Replacement Option shall also be eligible
to receive a Nonqualified Replacement Option. A Nonqualified
Replacement Option will not be granted upon the exercise of an Option,
including a Nonqualified Replacement Option, unless the fair market
value of a share of Common Stock on the date of exercise is at least
25% higher than the Option Price of such Option or Nonqualified
Replacement Option, as applicable. "Mature Shares" means, for purposes
of this Agreement, Common Stock that has been acquired by the Executive
on the open market or that has been acquired pursuant to an employee
benefit arrangement of the Company and held for at least six months.
For purposes of this paragraph 2, fair market value shall be determined
in accordance with paragraph 4d. For purposes of the following
provisions of this Agreement, the term Option shall also refer to
Nonqualified Replacement Options.
3. Time of Exercise of Options/Vesting. The Options granted hereunder may
be exercised in whole or in part at any time and from time to time on
or after the Vesting Date and prior to or on the Expiration Date. The
Vesting Date is the earliest of: (i) June 23, 2004, (ii) the date on
which a "Change-of-Control" of the Company occurs as defined in the
Executive's "Change-of-Control Severance Agreement" dated February 15,
1999, or (iii) the Date of Termination as defined in the Executive's
Employment Agreement made and entered into as of January 1, 1997, and
executed on February 25, 1997 (the "Employment Agreement"), in the
event the Executive's employment with the Company is terminated by
reason of his death or disability or by the Company other than for
"Cause" or by the resignation of the Executive for "Good Reason" as
those terms are defined in the Employment Agreement. The Expiration
Date is the earlier of: (i) June 22, 2009, or (ii) the date which is
two years after the Date of Termination as defined in the Employment
Agreement. Consistent with the terms of the Employment Agreement and
the definitions provided therein, the Options granted hereunder are
forfeited in the event the Executive's employment is terminated by
reason of his Discharge For Cause or resignation without Good Reason
prior to the Vesting Date.
4. Manner of Exercise. The Options may be exercised by written notice
which shall:
a. State the election to exercise the Options and the number of
shares and Option Price in respect of which they are being
exercised;
b. Be signed by Executive or such other person or persons
entitled to exercise the Options;
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c. Be in writing and delivered to SPX's Secretary;
d. Be accompanied by payment in full of the Option Price for the
shares to be purchased. Payment may be made by: (i) check,
bank draft, money order or other cash payment, or (ii)
delivery (or deemed delivery by attestation) of previously
acquired shares of Common Stock with a fair market value as of
the exercise date equal to the aggregate Option Price for the
shares to be purchased (or a combination of (i) and (ii)). The
fair market value of the Common Stock for this purpose shall
be the closing price of a share of Common Stock as reported in
the "NYSE-Composite Transactions" section of the Midwest
Edition of The Wall Street Journal for the exercise date or,
if no prices are quoted for such date, on the next preceding
date on which such prices of Common Stock are so quoted;
e. Be accompanied by payment of any Federal, state or local taxes
required by law to be withheld by the Company with respect to
the exercise of the Options unless other satisfactory
arrangements are made between the Company and the Executive to
satisfy such withholding obligations; and
f. Unless a Registration Statement under the Securities Act of
1933 is in effect with respect to the shares of Common Stock
to be issued, contain a representation by the Executive or
other person or persons entitled to exercise the Options that
the shares of Common Stock are being acquired for investment
and with no present intention of selling or transferring them
and that the person acquiring them will not sell or otherwise
transfer the shares except in compliance with all applicable
securities laws and requirements of any stock exchange upon
which the shares may then be listed.
If the Options shall have been exercised in full, this Agreement shall
be canceled and retained by the Company, otherwise it shall be
appropriately endorsed to reflect partial exercise and returned to the
Executive or other person entitled to exercise the Options.
5. Rights Prior to Exercise of Option. The Options may not be sold,
transferred, pledged, assigned or otherwise alienated or hypothecated,
other than by will or by the laws of descent and distribution. The
Options shall be exercisable during the Executive's lifetime only by
him. If without having fully exercised the Options granted hereunder,
the Executive dies, the Options granted hereunder shall be exercisable
by the person or persons who shall have acquired the Executive's rights
hereunder by will or the laws of descent and distribution and may be
exercised for a period ending on the Expiration Date as set forth in
Paragraph 3 above. Executive shall not have any rights as a stockholder
with respect to the shares of Common Stock optioned hereunder until
exercise of the Options and delivery of the shares as herein provided.
6. Adjustment in the Event of Changes Affecting Common Stock. In the event
of any change in the outstanding shares of Common Stock that occurs by
reason of a stock dividend or split, recapitalization, merger,
consolidation, combination, exchange of
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shares, or other similar corporate change, the aggregate number of
shares of Common Stock subject to the Options, and the Option Prices,
shall be appropriately adjusted by the Committee, whose reasonable
determination shall be conclusive, provided, however, that fractional
shares shall be rounded to the nearest whole share.
7. No Contract of Employment. Nothing contained in this Agreement shall be
construed as a contract of employment between SPX and Executive, or as
creating a right of Executive to be continued in the employment of SPX,
or as a limitation of SPX's right to discharge Executive with or
without cause, such rights being governed exclusively by the Employment
Agreement.
8. Binding Effect. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective executors,
administrators, legal representatives, successors and assigns. This
Agreement may be amended only by further written agreement of the
Company and Executive.
9. Governing Law. This Agreement shall be construed in accordance with and
governed by the laws of the State of Michigan.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
SPX CORPORATION EXECUTIVE
By: /s/ Xxxxxxxxxxx X. Xxxxxxx /s/ Xxxx X. Xxxxxxxx
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Xxxxxxxxxxx X. Xxxxxxx Xxxx X. Xxxxxxxx
Title: Vice President, Secretary and
General Counsel
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