EXHIBIT 10.3
Employment Agreement of J.
Michael Whitted
This Employment Agreement (the
“Agreement”) is effective as of April 22, 2009
(the “Effective Date”), by and between SPX Corporation
(the “Company”) and J. Michael Whitted (the
“Executive”).
WHEREAS, the Company desires to
employ the Executive as its Vice President, Business
Development;
WHEREAS, the Company and the
Executive have reached agreement concerning the terms and
conditions of the Executive’s 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 Vice President, Business
Development. During the Term (as hereinafter defined), the
Executive will have the title, status and duties of the Vice
President, Business Development 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 the
Executive’s principal family residence shall be located
within fifty (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 the
Executive’s 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 of 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 of Control.
3.
Duties. During the Term:
(a)
The Executive will perform duties
assigned by the Company’s Chief Executive Officer, other
senior executive officer, or the Company’s Board of Directors
(the “Board”), from time to time; provided that the
Executive shall not be assigned duties or responsibilities that are
materially lower in status than those traditionally assigned to the
Vice President, Business Development.
(b)
The Executive will devote the
Executive’s full time and best efforts, talents, knowledge
and experience to serving as the Company’s Vice President,
Business
Development. However, the
Executive may devote reasonable time to activities such as
supervision of personal investments and activities involving
professional, charitable, educational, religious, civic, and
similar types of activities, speaking engagements and membership on
other boards of directors, subject to Section 3(c) below,
and provided such activities do not interfere in any material way
with the business of the Company; and provided further that, the
Executive cannot serve on any board of directors without the
Company’s Chief Executive Officer’s written consent, or
on the board of directors of more than one 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 the
Executive in connection with such activities ( e.g. ,
director fees and honoraria).
(c)
The Executive will perform the
Executive’s 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 the Executive’s 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 the Executive’s 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 an annual base salary (“Base Salary”) of four
hundred and thirty-five thousand dollars ($435,000). 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 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 2009 bonus plan year, the Executive shall be eligible for a
target bonus under the Company’s bonus plan equal to eighty
percent (80%) of the Executive’s Base Salary, provided that
all performance goals set by the Company are met. The Board
(or appropriate Board committee) will determine and communicate the
Executive’s 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
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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 . As the
Board may determine in its discretion, the Executive will be
eligible to participate in any benefit plans offered by the Company
to similarly situated officers including, without limitation,
medical, dental, short-term and long-term disability, life
insurance, pension, profit sharing and nonqualified deferred
compensation arrangements. 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 will 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 the 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, as the Board may determine in its
discretion. The Company also will reimburse the Executive for
annual income tax return preparation and financial planning up to
$20,000 per year, provided that the amount of such expenses
available for reimbursement in one year shall not affect the amount
of expenses available for reimbursement in any other 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 five (5) weeks per
calendar year. The maximum vacation accrual allowed from year
to year and at any given time will equal the Executive’s
annual entitlement. Once the maximum accrual is reached, the
Executive will no longer accrue vacation until the unused amount
accrued is below the maximum level allowed.
(g)
Retiree Medical
.
(i)
The Executive shall be entitled to
receive retiree medical benefits during the Executive’s
lifetime in accordance with the eligibility requirements, terms and
conditions, and plan offerings for access to retiree medical
benefits provided generally to full-time employees of the
Company. The Executive may cover the individual who is the
Executive’s spouse as of the date of the Executive’s
termination of employment (the “Spouse”) and/or the
individuals who
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are the Executive’s dependent
children as of the date of the Executive’s termination of
employment (the “Dependents”), to the extent eligible
at the time of the Executive’s retirement, according to the
terms and conditions of the Company’s retiree medical benefit
plan. The cost of such benefits for the Executive, the
Executive’s Spouse and eligible Dependents, will be 100% of
the premiums and will 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 will 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.
(ii)
Upon reaching Medicare eligibility
due to age, Medicare shall become the primary payor of
medical/prescription benefits for the Executive, the
Executive’s Spouse or eligible Dependents as applicable, and
the reimbursement of premiums for such coverage by the Company
shall cease.
(iii)
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 (1½)
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%).
(iv)
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.
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(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;
(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 (as defined
below), the Executive (or the Executive’s 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. For
purposes of this Agreement, “Disability” shall mean, in
the written opinion of a qualified physician selected by the
Company, the Executive is by reason of any medically determinable
physical or mental impairment that can be expected to result in
death or can be expected to last for a continuous period of not
less than twelve (12) months, (x) unable to engage in any
substantial gainful activity, or (y) receiving income
replacement benefits for a period of not less than three
(3) months under a Company disability plan.
(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, death or Disability, or the Executive voluntarily terminates
employment for Good Reason, in addition to the benefits payable
under Section 5(b), the Company will pay the following amounts
and provide the following severance benefits:
(i)
The Executive’s Base Salary
through the one (1)-year anniversary of the Executive’s
termination of employment, and the Executive’s annual
incentive bonus, which will be determined as the higher of
(A) the actual incentive bonus paid for the bonus plan year
immediately preceding such termination of employment, or
(B) the average annual bonus paid to the Executive for the
three bonus plan years preceding the year in which such termination
of employment occurs (excluding any years of partial, or no, bonus
plan 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 of
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employment 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 (1)-year anniversary of the
Executive’s termination of employment, at the same cost to
the Executive as in effect on the date of the Executive’s
termination of employment, 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, as it may have been extended, 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
the Executive is not actively performin
