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 (2½) 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 Te
