| | Number of Shares of Common Stock Beneficially Owned(1) | | | Right to Acquire Beneficial Ownership Under Options Exercisable/ | | | | | | | | | | | | | Number of Shares of Common Stock Beneficially Owned(1) | | | Right to Acquire Beneficial Ownership Under Options Exercisable/ Stock Units Distributable Within 60 Days(2)(3) | | | Percent of Class | | DIRECTORS AND DIRECTOR NOMINEES WHO ARE NOT NAMED EXECUTIVE OFFICERS | | Patrick J. O’Leary | | | 20,19224,079
| | | | 4,8103,887
| | | | * | | Ricky D. Puckett | | | 20,19224,079
| | | | 4,8103,887
| | | | * | | David A. Roberts | | | 20,19224,079
| | | | 4,8103,887
| | | | * | | Ruth G. Shaw | | | 20,19224,079
| | | | 4,8103,887
| | | | * | | Robert B. Toth | | | 4,4918,378
| | | | 4,4913,887
| | | | * | | Tana L. Utley | | | 20,19224,079
| | | | 4,8103,887
| | | | * | | NAMED EXECUTIVE OFFICERS | | | | | | | | | | | | | Eugene J. Lowe, III(3) | | | 267,170838,992
| | | | 197,856644,403
| | | 1.89% | Scott W. Sproule | | | 235,252 | | | | *148,987
| | | * | Scott W. Sproule(3)J. Randall Data
| | | 86,642169,410
| | | | 37,782121,674
| | | * | John W. Nurkin | | | 158,225 | | | | *99,176
| | | * | J. Randall Data(3)John W. Swann, III
| | | 48,750149,994
| | | | 31,097111,240
| | | | * | | John W. Nurkin(3)
| | | 59,118
| | | | 25,184
| | | | *
| | John W. Swann, III(3)
| | | 54,822
| | | | 25,588
| | | | *
| | All directors and executive officers as a group (13 persons)(3) | | | 691,8481,901,125
| | | | 384,3991,306,126
| | | | 1.60
| % 4.21%
|
(1) | Beneficial ownership is a technical term broadly defined by the SEC to mean more than ownership in the usual sense. In general, beneficial ownership includes any shares a director or officer can vote or transfer, stock options that are exercisable or would become exercisable within 60 days, and other shares a director or officer would have the right to acquire within 60 days. The number of our shares beneficially owned by each of the named executive officers and by all directors and officers as a group also includes shares represented as held under the individual’s account under the SPX Corporation Retirement Savings and Stock Ownership Plan.Plan (“401(k) Plan”). The stockholders named in this table have sole voting and investment power for all shares shown as beneficially owned by them. |
(2) | Represents shares of our common stock issuable under options that are exercisable or become exercisable within 60 days of March 20, 201814, 2019 and RSUs that vest within 60 days of March 20, 2018.14, 2019. Such shares are included in the number of shares of common stock beneficially owned as presented in the preceding column on this table. |
(3) | Includes shares beneficially owned through the SPX Corporation Retirement Savings and Stock Ownership401(k) Plan (“401(k) Plan”) for each of the following: Mr. Lowe, 3,2693,734 shares; Mr. Sproule, 2,7243,166 shares; Mr. Data, 1,8612,310 shares; Mr. Nurkin, 3,51721,643 shares; Mr. Swann, 2,2752,717 shares; and all directors and executive officers as a group, 17,54038,603 shares. Directors do not participate in our 401(k) Plan. |
| | | | | 16 | | 20182019 PROXY STATEMENT | | |
OWNERSHIP OF COMMON STOCK PRINCIPAL STOCKHOLDERS The following table includes certain information about each person or entity known to us to be the beneficial owner of more than five percent of the issued and outstanding shares of our common stock. | | | | | Name and Address | | Shares of Common Stock Beneficially Owned | | Percent of Class(1) | BlackRock, Inc. 55 East 52nd Street New York, NY 10055 | | 5,334,4446,177,732(2) | | 12.42%14.08% | The Vanguard Group 100 Vanguard Boulevard Malvern, PA 19355 | | 4,528,0394,580,768(3) | | 10.54% | ACR Alpine Capital Research, LLC
8000 Maryland Avenue, Suite 700
St. Louis, MO 63105
| | 2,529,964(4) | | 5.89%10.44% |
(1) | Ownership percentages set forth in this column are based on the assumption that each of the principal shareowners continued to own, as of March 20, 2018,14, 2019, the number of shares reflected in the table. |
(2) | Based on information provided in a Schedule 13G/A filed with the SEC on January 19, 2018,31, 2019, by BlackRock, Inc., and certain affiliated entities (“BlackRock”). BlackRock reports having sole voting power with respect to 5,252,9746,090,478, of the shares and sole dispositive power with respect to all the shares. The Schedule 13G/A indicates that Blackrock Fund Advisors beneficially owns five percent or greater of our outstanding stock. |
(3) | Based on information provided in a Schedule 13G/A filed with the SEC on February 12, 2018,11, 2019, by The Vanguard Group and certain affiliated entities (“Vanguard”). Vanguard reports having sole voting power with respect to 82,04780,530 of the shares; shared voting power with respect to 17,232 of the shares; sole dispositive power with respect to 4,431,7604,487,506 of the shares; and shared dispositive power with respect to 96,27993,262 of the shares. |
(4) | Based on information provided in a Schedule 13G/A filed with the SEC on February 13, 2018, by ACR Alpine Capital Research, LLC (“ACR”); Alpine Investment Management, LLC (“AIM”); Alpine Private Capital, LLC (“APC”); Alpine Partners Management, LLC (“APM”); MQR, L.P. (“MQRLP”); ACR Multi-Strategy Quality Return Fund (“MQRFUND”); and Nicholas V. Tompras (collectively, the “Alpine Entities”). The Alpine Entities report having sole voting and sole dispositive power with respect to none of the shares and shared voting and shared dispositive power as follows: |
| (a) | MQRLP, ACR, AIM, APM, and Mr. Tompras with respect to the 27,500 shares owned directly by MQRLP; |
| (b) | MQRFUND, ACR, AIM, and Mr. Tompras with respect to the 77,498 shares owned directly by MQRFUND; |
| (c) | ACR, AIM, APC, and Mr. Tompras with respect to the 402,857 shares owned directly by accounts separately managed by APC; and |
| (d) | ACR, AIM, and Mr. Tompras with respect to the 2,022,109 shares owned directly by accounts separately managed by ACR. |
Section 16(a) Beneficial Ownership Reporting Compliance Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our directors, officers, and beneficial owners of more than 10% of our outstanding common stock to file with the SEC reports of ownership and changes in ownership. SEC regulations require that directors, officers, and beneficial owners of more than 10% of our outstanding common stock furnish us with copies of all Section 16(a) reports they file. Based solely upon a review of Forms 3 and 4 (including amendments to such forms) furnished to us during 20172018 and Forms 5 furnished with respect to 2017,2018, no director, officer, or beneficial owner of more than 10% of our outstanding common stock failed to file on a timely basis during 20172018 any reports required by Section 16(a), except a Form 4 reporting sales of common stock on March 10, 2017 by Michael A. Reilly, Corporate Controller and Chief Accounting Officer, was filed after the reporting deadline.. | | | | | | | 20182019 PROXY STATEMENT | | 17 |
EXECUTIVE COMPENSATION Compensation Discussion and Analysis INTRODUCTION This Compensation Discussion and Analysis (“CD&A”) provides information about our executive compensation program and the factors considered in making compensation decisions for ourthe named executive officers named in our Summary Compensation Table set forth below (“NEOs”). Our NEOs for 20172018 are listed in the table below: | | | Named Executive Officer | | Title | Eugene J. Lowe, III | | President and Chief Executive Officer | Scott W. Sproule | | Vice President, Chief Financial Officer and Treasurer | J. Randall Data | | President, South Africa and Global Operations | John W. Nurkin | | Vice President, General Counsel and Secretary | John W. Swann, III | | President, Weil-McLain, Marley Engineered ProductsHeating and RadiodetectionLocation & Inspection |
EXECUTIVE SUMMARY The past two and a half years have been transformative for SPX. In 2015,2018, we completedproudly celebrated our third anniversary since thespin-off of the Flow business (the“Spin-Off”) into an independent, publicly-owned company called SPX FLOW, Inc. (“FLOW”). TheSpin-Off became effective on September 26, 2015, at which timeOver this period, our executive officers and directors assumed their new roles. Ashave led the organization first through a result, we believe thatperiod of stabilization and then through a focuspivot to execute on operations as the “new” SPX, is particularly relevant for evaluating our growth strategy. We have demonstrated continued improvement in business performance, delivered strong stockholder returns, and completed two acquisitions.
Our executive compensation. When assessing ourcompensation program is designed to align short- and long-term rewards directly to business performance. Having achieved three years of performance since thepay-for-performanceSpin-Off, outcomes, it is necessary to separate thepre-Spin-Off results frompost-Spin-Off results. The Company’s business model, strategy, managed assets, executive officer team,we and membership of the Compensation Committee of the Board (the “Committee”) are now able to benchmark our compensation strategy independent of our Board were materially different compared with periods prior to theSpin-Off.pre-Spin-Off history, more clearly accounting for the performance of the current leadership team against market and peer group companies.
Summary of Key Business Accomplishments Over the past year, our overallOverall solid execution has placed usduring 2018 resulted in our strongest financial condition since theSpin-Off. We achieved several key milestones on our value creation roadmap, positioning our Company for further successimprovements in operating income and investments in organic and inorganic growth, which included the following accomplishments:cash flow. Select accomplishments during 2018 include:
• | | Our full-year results wereWe achieved or exceeded the overall SPX guidance we introduced to investors at the upper endbeginning of our 2017 guidance range,the year, including Coreadjusted operating income* growth of approximately 24%22%;† |
We exceeded target for cumulative adjusted segment income* over a three-year period, achieving $545.8M compared to target of $504.7M; • | | Our CoreWe exceeded prior year results and targets for adjusted free cash flow* exceeded our expectations and targets,, achieving 118%greater than 120%† conversion of adjusted net income from continuing operations;* |
• | | We increasedgrew segment income in our HVAC and Detection and Measurement and Engineered Solutions (Core)* segments, byachieving growth in total adjusted segment income* of approximately 40%12%;† each; |
We delivered significantcompleted two acquisitions, and signed a third, which contributed to growth in our Detection and Measurement segment; We continued to progress on our strategy to repositionmove away from power-generation focused businesses, selling the major brands and technology of our Process CoolingHeat Transfer business, withinand we expect to complete the Engineered Solutions segment, towards higher margin componentswind down of this business in the first half of 2019; and aftermarket sales; and while this strategy came with an expected lower revenue profile, margin results exceeded expectations driving a 230 basis point increase in 2017 over 2016; We continued to manage our obligations on the projects in South Africa, our anticipated timeline for substantial completion is the end of next year (2019), and we reduced our estimate of future cash usage associated with the South African projects; and We appreciably increased earnings per share (“EPS”) on an adjusted basis by more than 25%:
| | | | | | | | | | | | | 2017 | | | | 2018 | | | 2016 | | | | 2017 | | | GAAP EPS | | $0.30 | | | | $1.91 | | $1.91 | | | | $1.75 | | | | | Adjusted EPS* | | $1.47 | | | | $1.78 | | $1.74 | | | | $2.20 |
| | | | | 18 | | 20182019 PROXY STATEMENT | | |
EXECUTIVE COMPENSATION Three-Year Total Stockholder Return Due to the significant difference betweenpre-Spin-Off SPX and SPX after the Spin-Off of FLOW, we do not believe aThe following graph shows our three-year total stockholder return (“TSR”) is relevant. Therefore, we are presentingas compared to our peer group, as defined on page 24, the total stockholder return fromS&P 600 Capital Goods Index, and the point ofS&P 500 Index for theSpin-Off in September 2015.
TSR fromSpin-Off through period December 31, 20172015 to December 31, 2018.
Three-Year TSR from December 31, 2015 to December 31, 2018
FromSpin-Off, on September 26, 2015, through the end of 2017, the SPX total stockholder return of 163.8% was 1.8 times greater than that of our peer group (as defined in page 24) and 3.9 times greater than the S&P 500.
20172018 Compensation Highlights
Our executive compensation program has three primary elements: base salary, annual incentives,incentive, and long-term incentives. Each of these compensation elements serves a specific purpose in our compensation strategy. Base salary is an essential component to any market-competitive compensation program. Annual incentives reward the achievement of short-term goals, while long-term incentives drive our NEOs to focus on stockholder value creation. Based on our performance, and consistent with the design of our program, the Committee made the following executive compensation decisions for 2017:2018: • | | Base Salary. Annual salary increases ranged from 3% to 7%4%. These adjustments were a continuation of the effort to bring our NEOs’ base salaries to the market median, commensurate with performance, over a three-year period. These adjustments were also reflective ofreflect the exceptional contributions made by our NEOs in connection with executing on key initiatives and the Company’s strategic priorities.priorities over the course of 2018. For details, please see page 24 of this CD&A. |
• | | Annual Incentive. Based on our performance results, awards under our Executive Bonus Program were paid at 187.5%94.8% of target. This payout applied to all our NEOs, with the exception of Mr. Swann, whose payout was 93.0%131.5% based on both business unit and corporate results. Mr. Swann is responsible for two of our businesses that delivered exceptional results. In addition, he was a key driver behind two successful acquisitions that we completed during the year. For details, please see page 25 of this CD&A. |
• | | Long-Term Incentives. All of our NEOs received equity and equity-based awards in 2017.2018. Target award amounts and the mix of vehicles used are described beginning on page 26 of this CD&A. Performance for the measurement period of January 1, 2016 through December 31, 2018 exceeded maximum metric for both relative TSR and adjusted segment income* resulting in the maximum allowable payout capped at 150% for both performance based incentives. For details, please see page 26 of this CD&A. |
* Non-GAAP financial measure. Reconciliations of amounts presented asnon-GAAP financial measures with the amounts of the most comparable measures calculated and presented in accordance with GAAP, and other important information regardingnon-GAAP financial measures, are presented in the appendix of this Proxy Statement. † Exclusive of annual incentive adjustments. | | | | | | | 20182019 PROXY STATEMENT | | 19 |
EXECUTIVE COMPENSATION EXECUTIVE COMPENSATION PROGRAM
Reflecting the Voice of Our Stockholders We carefully consider the results of our stockholderSay-on-Pay vote from the previous year. At our 20172018 Annual Meeting, approximately 96%97% of votes cast approved our executive compensation. WeOur results have improved year-over-year, and exceeded 90% approval each year since 2016, which we interpret interpreted this result, which exceeded the approximately 90% favorable vote we received in 2016, as a strong endorsement of our compensation program’s design and direction. We continue to actively seek and highly value the perspectives of our investors. During the year, we reached out to stockholders owning approximately 75%80% of our common stock. We have taken and will continue to take stockholder feedback into consideration as we evolve our compensation program. Most importantly, we are committed to ensuring that our ongoing program is designed in the best interests of both our stockholders and executives. Summary of Compensation Program | • | | Sets base salaries that are commensurate with peers, targeting market median for established performers; | |
| • | | Emphasizes variable compensation programs, with greater than 80% of CEO and greater than 65% of other NEOs pay at risk and 65% at risk for other NEOs;risk; | |
| • | | Provides that a majority of long-term incentives to NEOs are performance based; | |
| • | | Correlates between annual incentive payouts and stockholder returns, with 20172018 targets that were aligned toexceeded external commitments on profitability,operating income, cash flow, and revenue; | |
| • | | Grants equity awards with double-trigger termination payments upon a change in control; | |
| • | | Includes a relative “total stockholder return”TSR component of long-term incentives to align with stockholder value; | |
| • | | Freezes historic defined benefit pension plans, with no NEO participants; | |
| • | | Eliminates historic perquisites, such as retiree medical benefits; and | |
| • | | Prohibits NEO hedging or pledging of our common stock. | |
Our Compensation Principles Our executive compensation program is centered around the following principles: | | | Alignment with Stockholders’ Interests | | Executive officers’ interests should be more directly aligned with those of stockholders whenthrough a compensation program that emphasizes an appropriate balance of both short- and long-term financial performance and is directly affected by our stock price. Requiring executive officers to hold a meaningful amount of equity supports alignment to stockholder interests. | Link to Business Priorities and Performance
Performance
| | A significant portion of total compensation should be variable and subject to the attainment of certain specific and measurable performance goals and objectives. | Competitiveness | | Target total compensation should be competitive with that being offered to individuals holding comparable positions at other public companies with which we compete for leadership and market talent. | Governance | | Maintaining best-practice executive compensation governance standards is critical to the decision-making process and the ability to manage risk. Doing so is in the best interests of our stockholders and executives. |
| | | | | 20 | | 20182019 PROXY STATEMENT | | |
EXECUTIVE COMPENSATION Components of Total Direct Compensation For 2017,2018, we continued to focus on ensuring alignment of pay practices with stockholder interests and driving apay-for-performance culture. Design and philosophical characteristics of the SPX compensation program include: • | | Base Salary. Annual salary for our NEOs is targeted at the market median of peer companies and is commensurate with performance, contributions, and overall experience. |
• | | Annual Incentive. Performance metrics focus on operating profitability, cash generation, and revenue expectations,delivering key annual objectives with financial targets directly tied to the achievement of goals related to operating income, cash flow, and revenue. |
• | | Long-Term Incentives. Long-term incentive (“LTI”) awards align compensation and long-term performance. Mix of vehicles include: |
Stock Options (“Options”) that vest ratably over a three-year period; Performance Stock Units (“PSUs”) tied to relative Total Stockholder ReturnTSR(“r-TSR”) and a peer group within the S&P 600 Capital Goods Index over a three-year performance measurement period, with a potential payout range of 0% to 150% of target, and cannot exceed target if our TSR is negative; Cash Performance Units (“CPUs”) tied to cumulative adjusted segment incomeincome* over a three-year performance measurement period, that is aligned with external commitments, and with a potential payout range of 0% to 150% of target; and Restricted Stock Units (“RSUs”) that vest ratably over a three-year period. Mix of Compensation Elements The following charts show that for 20172018 the mix of compensation elements targeted for our NEOs was heavily weighted toward variable compensation. The mix of LTI is based on the allocation value used in determining the number of units or options, as applicable, for each award.
| | | | | | | 20182019 PROXY STATEMENT | | 21 |
EXECUTIVE COMPENSATION Our CEO’sPay-for-Performance Alignment Because 2016 and 2017 were our first two full years,post-Spin-Off, as a materially different company, a three-year TSR does not provide a meaningful comparison to our peer group. The following chart shows our CEO’s compensation relative to our TSR and compared with our peers,peer group of companies listed on page 24, demonstrating how our executive compensation program aligns with performance. This chart is based on ourtwo-year three-year TSR; the average of our CEO’s total compensation for 2016, 2017, and 20172018 by percentile; and the average total compensation for CEOs at our peer companies, from their most recent twothree proxy statement filings.
| * | Peer company compensation based on 2015, 2016, and 20162017 target compensation data from each company’s twothree most recent proxy statement filings. |
While our CEO’s relative pay rank falls below the median of our peer companies for 2017,2018, our philosophy is to align executive compensation with that of our peers and provide variable incentive compensation that rewards executives at higher levels when superior performance is achieved. | | | | | 22 | | 20182019 PROXY STATEMENT | | |
EXECUTIVE COMPENSATION HOW DECISIONS FOR OUR NAMED EXECUTIVE OFFICERS WERE MADE Executive Compensation Practices | | | | What We Do | ✓ | | Heavy emphasis on variable compensation | | | ✓ | | Majority of long-term incentive awards are performance based | | | ✓ | | Stock ownership guidelines | | | ✓ | | Clawback provisions | ✓ | | Use of independent compensation consultant | ✓ | | Regular risk assessments | ✓ | | “Double-trigger” termination payments upon a change in control | | | ✓ | | Use of independent compensation consultant | | | ✓ | | Regular risk assessments | | | ✓ | | Annual reviews of share utilization | | | ✓ | | Stockholder outreach | | | ✓ | | Regular market assessments against our peer group |
| | | | | | | | | What We Do Not Do | | | û | | No multi-year guarantees of salary increases | | | | | | û | | No taxgross-ups on termination payments following a change in control | | | | | | û | | No hedging of Company stock | | | | | | û | | No pledging of Company stock | | | | | | û | | No significant perquisites or defined benefit pension plans | | | | | | û | | No “single-trigger” termination payments upon a change in control | | | | | | û | | No repricing or backdating stock options without stockholder approval | | | | | | û | | No cash buyout of underwater stock options without stockholder approval |
The Role of the Compensation Committee The Committee is responsible for overseeing the design and administration of the executive compensation program so that the program is consistent with our compensation philosophy. The Committee reviews compensation levels for all of our executive officers, including our NEOs. The Committee also makes all final compensation decisions regarding our NEOs and officers, except for the CEO, whose compensation is reviewed and approved by the full Board, excluding Mr. Lowe, based upon recommendations of the Committee. The Committee also works very closely with its independent compensation consultant and with management to examine the effectiveness of the Company’s executive compensation program. Details of the Committee’s authority and responsibilities are specified in the Committee’s charter, which is available on our website (www.spx.com) under the heading “Investor Relations—Corporate Governance—Board Committees.” The Role of Management Certain members of our senior management team help prepare for and attend meetings where executive compensation, Company and individual performance, and competitive compensation levels and practices are discussed and evaluated. However, only the Committee members are allowed to vote on decisions regarding executive compensation. The Committee also receives recommendations from the CEO regarding the compensation of our other officers, including the other NEOs. The CEO does not participate in the deliberations of the Committee and Board regarding his own compensation. The Role of the Independent Compensation Consultant The Committee engages an independent compensation consultant to provide expertise on competitive pay practices and compensation program design and an objective assessment of any inherent risks of any compensation programs. Pursuant to the authority granted to it under its charter, the Committee has retained Pearl Meyer as its independent consultant. Pearl Meyer reports directly to the Committee and does not provide additional services to management. The Committee has conducted an independence assessment of Pearl Meyer in accordance with SEC rules, NYSE listing standards, and the requirements of the Compensation Committee charter,Charter, and has determined that work performed by Pearl Meyer does not create a conflict of interest. | | | | | | | 20182019 PROXY STATEMENT | | 23 |
EXECUTIVE COMPENSATION The Role of the Peer Group Our executive compensation program takes into account the compensation practices of companies with which we compete or could compete for executive talent. In its 2017 review, the Committee added four companies (Barnes Group Inc., Harsco Corporation, Nordson Corporation, and TriMas Corporation)No changes were made to and removed two companies (Joy Global, Inc. and Powell Industries, Inc.) from our peer group. The Committee removed Joy Global, Inc. due to its acquisition by Komatsu America Corp., noting data will no longer be available, and Powell Industries, Inc. due to its revenues falling below the peer selection size criteria. The Committee believes these changes provide a more relevant comparison based on the similarity of these companies to SPX in size and operational complexity.group for 2018. For purposes of setting 20172018 executive compensation, the Committee used the following peer companies (“peer group”): | | | SPX Peer Companies | Actuant Corporation (ATU) | | EnPro Industries, Inc. (NPO) | Altra Industrial Motion Corp. (AIMC) | | Graco Inc. (GGG) | Babcock & Wilcox Enterprise, Inc. (BW) | | Harsco Corporation (HSC) | Barnes Group Inc. (B) | | IDEX Corp. (IEX) | Chart Industries, Inc. (GLTS) | | Nordson Corporation (NDSN) | CIRCOR International, Inc. (CIR) | | Regal Beloit Corporation (RBC) | Crane Co.Colfax Corp. (CFX)
| | Rexnord Corporation (RXN) | Colfax Corp.Crane Co. (CR)
| | SPX FLOW, Inc. (FLOW) | Curtiss-Wright Corporation (CW) | | TriMas Corporation (TRS) |
Our peer companies were drawn from a pool of potential companies identified by our management either as key competitors for senior talent or as having businesses or serving end markets similar to our Company. These companies were further reviewed for appropriateness as peers by Pearl Meyer prior to Committee approval. The primary factors used to generate the group were as follows: ASimilar business mix similar to that of SPX; Similar end markets;markets to SPX; Competitors for executive talent; Market capitalization; and Revenue of approximately 0.4 to 2.5 times SPX’s revenue. SPX’sSPX annual revenues for 2017 rank slightly below2018 are approximately at the median peer company.
The Committee reviews the peer group regularly to assure alignment and adds or removes companies as peers as it deems appropriate and necessary to maintain competitive and balanced alignment. The Committee uses the peer group data to assist in compensation decisions around base salary, short-term incentives, and long-term incentives, as well as in benchmarking other executive compensation matters. Base Salary Base salary represents annual fixed compensation and is a standard element of compensation necessary to attract and retain talent. Base salary levels are reviewed annually. When making adjustments, the Committee considers the Company’s overall performance; the NEO’s individual performance, experience, career potential, and tenure with the Company; and competitive market practices. The Committee approved increases in annual base salary, effective March 20, 2017,19, 2018, as reflected in the table below, to continue to improve the competitive market position of our NEO’s base salaries relative to our peer group. | | | | | | | | | | | Named Executive Officer | | Base Salary (From 3/21/2016) | | | Base Salary (From 3/20/2017) | | | % Adjustment | | | Base Salary (From 3/20/2017) | | | Base Salary (From 3/19/2018) | | | % Adjustment | | Eugene J. Lowe, III | | $ | 786,625 | | | $ | 825,956 | | | | 5.0 | % | | $ | 825,956 | | | $ | 850,735 | | | | 3.0 | % | Scott W. Sproule | | $ | 416,150 | | | $ | 445,281 | | | | 7.0 | % | | $ | 445,281 | | | $ | 458,639 | | | | 3.0 | % | J. Randall Data | | $ | 408,000 | | | $ | 430,440 | | | | 5.5 | % | | $ | 430,440 | | | $ | 445,506 | | | | 3.5 | % | John W. Nurkin | | $ | 334,950 | | | $ | 355,047 | | | | 6.0 | % | | $ | 355,047 | | | $ | 369,249 | | | | 4.0 | % | John W. Swann, III | | $ | 406,000 | | | $ | 418,180 | | | | 3.0 | % | | $ | 418,180 | | | $ | 430,726 | | | | 3.0 | % |
| | | | | 24 | | 20182019 PROXY STATEMENT | | |
EXECUTIVE COMPENSATION Annual Incentive Executive Bonus Program Our Executive Bonus Program pays annual bonuses ranging from 0% to 200% of target by reference to three key metrics: Coreadjusted operating income,* Coreadjusted free cash flow,* and Coreadjusted revenue.* The Committee selected these metrics to be transparent and to provide clarity and consistency in calculating bonuses. In setting short-term incentive goals, SPX management and the Committee utilized a number of data points to focus targets on driving the Company’s strategic priorities, including setting goals that align executive pay with stockholder return.incentivize delivery of annual objectives. Further, the use of Core* resultsadjusted* metrics is intended to incentivize the executivesdrive management to focus on the performance of our go forward businesses, which exclude the South African projects.and Heat Transfer businesses. 20172018 targets were set to drive double-digitcontinued growth in profitabilityoperating income and to deliver Coreadjusted free cash flow* atin excess of 100% conversion of adjusted net income from continuing operations.* CoreAdjusted revenue* targets were establishedin-line with our externally communicated strategy.
In our Process Cooling business, within the Engineered Solutions segment, we are successfully executingcontinued to execute on our strategya multi-year strategic transformation to improveshift the revenue mix of thethis business onaway from large, less profitable projects to more profitable services and components. The implementationAs expected, this strategic shift has resulted in declines in the business’s revenues in 2017 and 2018, but increases in the business’s profitability. In consideration of the continued impact of this strategy has reduced Engineered Solutions (Core) segment revenues* by 8%,† but significantly increased profitability. In 2017, Engineered Solutions (Core)* operating profits* increased 42%† compared to the prior year. When setting these targets for 2017,strategic transformation, SPX management and the Committee considered this lowerexcluded the anticipated net reduction in revenue higher margin profile in ourfor Process Cooling business, withinfrom the Engineered Solutions segment.2018 adjusted revenue* target. The 2018 adjusted operating income* and adjusted free cash flow* targets include the respective increases that were projected to result from the Process Cooling strategic transformation.
In addition, the Committee adjusted the 2018 targets to account for increased operating income, cash, and revenues resulting from acquisitions completed during the year. The table below shows the 20172018 threshold, target, and maximum goals for each of the relevant metrics under our Executive Bonus Program, as well as the actual performance results. | | | | | | | | | | | | | | | | | | | | | | | Level of Performance ($ Millions) | | | Payout % | | Performance Metric and Weighting | | Threshold ($) | | | Target ($) | | | Maximum ($) | | | Actual ($) | | | Core Operating Income* (50%) | | $ | 102.7 | | | $ | 115.5 | | | $ | 135.0 | | | $ | 130.4 | | | | 176.3 | % | Core Free Cash Flow* (30%) | | $ | 62.0 | | | $ | 69.2 | | | $ | 76.4 | | | $ | 78.9 | | | | 200.0 | % | Core Revenue* (20%) | | $ | 1,250.0 | | | $ | 1,300.0 | | | $ | 1,400.0 | | | $ | 1,396.7 | | | | 196.7 | % | Total Corporate Results | | | | | | | | | | | | | | | | | | | 187.5 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | Level of Performance ($ Millions) | | | Payout % | | Performance Metric and Weighting | | Threshold ($) | | | Target ($) | | | Maximum ($) | | | Actual ($) | | Adjusted Operating Income* (50%) | | $ | 133.5 | | | $ | 151.6 | | | $ | 169.0 | | | $ | 147.9 | | | | 89.7 | % | Adjusted Free Cash Flow* (25%) | | $ | 95.4 | | | $ | 112.8 | | | $ | 133.2 | | | $ | 128.6 | | | | 100.0 | % | Adjusted Revenue* (25%) | | $ | 1,201.2 | | | $ | 1,232.2 | | | $ | 1,273.2 | | | $ | 1,263.2 | | | | 100.0 | % | Total Corporate Results | | | | | | | | | | �� | | | | | | | | | 94.8 | % |
For 2017, Core2018, adjusted operating income* of $130.4M$147.9M resulted in a 176.3%an 89.7% payout, with a weighting of 50%. CoreAdjusted free cash flow* of $78.9M$128.6M resulted in a 200%100% payout, with a weighting of 30%25%. CoreAdjusted revenue* of $1,396.7M$1,263.2M resulted in a 196.7%100% payout, with a weighting of 20%25%. While we exceeded target for adjusted free cash flow* and adjusted revenue,* payout on these measures was capped at 100% because we did not hit target for adjusted operating income.* The cumulative payout for 20172018 results was 187.5%94.8% of target for those NEOs with 100% of their bonus tied to corporate metrics. Mr. Lowe, Mr. Sproule, Mr. Data, and Mr. Nurkin had bonus payouts based on corporate results, generating an overall payout of 187.5%94.8%. Mr. Swann, hadhowever, has a target incentive that includes both business unit and corporate results: 75% of his incentive is based on his role as President, Heating and Location & Inspection, including our Weil-McLain, Marley Engineered Products, Radiodetection and Radiodetection,Cues businesses, and 25% is based on corporate metrics. For 2017,2018, business unit performance achievement metric, prorated for acquisitions, was 61.5%143.7%, generating an overall payout of 93.0%131.5% for Mr. Swann. *Non-GAAP financial measure. Reconciliations of amounts presented asnon-GAAP financial measures with the amounts of the most comparable measures calculated and presented in accordance with GAAP, and other important information regardingnon-GAAP financial measures, are presented in the appendix of this Proxy Statement. † Exclusive of annual incentive adjustments.
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EXECUTIVE COMPENSATION Executive Bonus Results for 20172018 The table below shows the total annual bonuses earned by our NEOs for 2017.2018. | Named Executive Officer | | Base Salary as of 12/31/2017 | | | Target Payout (as a % of Base Salary) | | | Bonus Achieved (% of Target Payout) | | | Total Bonus | | | Base Salary as of 12/31/2018 | | | Target Payout (as a % of Base Salary) | | | Bonus Achieved (% of Target Payout) | | | Total Bonus | | Eugene J. Lowe, III | | $ | 825,956 | | | | 100 | % | | | 187.5 | % | | $ | 1,548,723 | | | $ | 850,735 | | | | 100 | % | | | 94.8 | % | | $ | 806,497 | | Scott W. Sproule | | $ | 445,281 | | | | 70 | % | | | 187.5 | % | | $ | 584,452 | | | $ | 458,639 | | | | 70 | % | | | 94.8 | % | | $ | 304,353 | | J. Randall Data | | $ | 430,440 | | | | 65 | % | | | 187.5 | % | | $ | 524,618 | | | $ | 445,506 | | | | 65 | % | | | 94.8 | % | | $ | 274,521 | | John W. Nurkin | | $ | 355,047 | | | | 60 | % | | | 187.5 | % | | $ | 399,442 | | | $ | 369,249 | | | | 60 | % | | | 94.8 | % | | $ | 210,028 | | John W. Swann, III | | $ | 418,180 | | | | 60 | % | | | 93.0 | % | | $ | 233,344 | | | $ | 430,726 | | | | 60 | % | | | 131.5 | % | | $ | 339,828 | |
SPX Corporation Executive Annual Bonus Plan
Annual bonuses to NEOs are paid under the 162(m) Plan (as defined in “Tax Matters” on page 29). Under the 162(m) Plan, the threshold for at least one metric must be met in order for any bonus to be paid. For 2017, at least one performance metric applicable to the NEOs under the 162(m) Plan was met, and therefore the maximum payment amount permitted under the 162(m) Plan was achieved. However, after reviewing overall Company results for 2017, the Committee exercised its negative discretion and reduced the payout under the 162(m) Plan from 200% to to 187.5%. This payout applied to all our NEOs, with the exception of Mr. Swann, whose payout was 93.0% based on both business unit and corporate results. The preceding percentages were determined by reference to metrics under the Executive Bonus Program—for a more detailed description of annual bonus payment determinations, see “Executive Bonus Program” on page 25.
Long TermLong-Term Incentives
Long-term incentives are an integral part of our executive compensation program. They are designed to align the financial interests of our NEOs with those of our stockholders through performance-based compensation that correlates with the creation of long-term stockholder value. Our long-term incentive awards also support our executive retention strategy. For 2017,2018, the Committee approved the following mix of long-term incentiveLTI awards, which awards were granted in March 2017February 2018 under our stockholder approved plans: • | | Stock Options (“Options”) that vest ratably over a three-year period; |
Options that vest ratably over a three-year period; • | | Performance Stock Units (“PSUs”) tied to relative Total Stockholder Return(“r-TSR”) and a peer group within the S&P 600 Capital Goods Index over a three-year performance measurement period, with potential payout range of 0% to 150% of target, and cannot exceed target if our TSR is negative; |
PSUs tied tor-TSR and a peer group within the S&P 600 Capital Goods Index over a three-year performance measurement period, with potential payout range of 0% to 150% of target, and cannot exceed target if our TSR is negative; • | | Cash Performance Units (“CPUs”) tied to cumulative segment income over a three-year performance measurement period that is aligned with external commitments, and with potential payout range of 0% to 150% of target; and |
CPUs tied to cumulative adjusted segment income* over a three-year performance measurement period, with potential payout range of 0% to 150% of target; and • | | Restricted Stock Units (“RSUs”) that vest ratably over a three-year period. |
RSUs that vest ratably over a three-year period. Our NEOs received the following long-term incentive award opportunities in 2017:2018: | | | Target LTI Value | | | Units | | | Target LTI Value | | | Units | | Named Executive Officer | | Options | | | PSUs | | | CPUs | | | RSUs | | | Options | | | PSUs | | | CPUs | | | RSUs | | Eugene J. Lowe, III | | $ | 2,900,000 | | | | 82,405 | | | | 28,611 | | | | 725,000 | | | | 28,611 | | | $ | 3,100,000 | | | | 72,298 | | | | 25,261 | | | | 775,000 | | | | 25,261 | | Scott W. Sproule | | $ | 700,000 | | | | 19,891 | | | | 6,907 | | | | 175,000 | | | | 6,907 | | | $ | 750,000 | | | | 17,492 | | | | 6,112 | | | | 187,500 | | | | 6,112 | | J. Randall Data | | $ | 650,000 | | | | 18,471 | | | | 6,413 | | | | 162,500 | | | | 6,413 | | | $ | 700,000 | | | | 16,326 | | | | 5,705 | | | | 175,000 | | | | 5,705 | | John W. Nurkin | | $ | 475,000 | | | | 13,498 | | | | 4,687 | | | | 118,750 | | | | 4,687 | | | $ | 505,000 | | | | 11,778 | | | | 4,116 | | | | 126,250 | | | | 4,116 | | John W. Swann, III | | $ | 465,000 | | | | 13,214 | | | | 4,588 | | | | 116,250 | | | | 4,588 | | | $ | 530,000 | | | | 12,361 | | | | 4,319 | | | | 132,500 | | | | 4,319 | |
The allocation of Options were based on the SPX Black-Scholes valuation; RSUs and PSUs were based on the average closing fair market value of SPX stock for the 15 trading days immediately preceding the date of grant; and CPUs were valued at $1.00 per unit, with assumed payment at the 100% target amount. | | | | | 26 | | 2018 PROXY STATEMENT | | |
EXECUTIVE COMPENSATION
Stock Options In 2017,2018, awards of Options were granted to eligible participants, including each of the NEOs. The Committee approved the 20172018 Option grants to the NEOs in March 2017.February 2018. The 20172018 Options grant agreement provides for time-based ratable vesting (of 331⁄3 percent per year) over a three-year period (generally subject to continued employment during the period) with a maximum term of ten years. The Committee approves all grants of Options to be issued by the Company pursuant to approved equity grant guidelines. | | | | | 26 | | 2019 PROXY STATEMENT | | |
EXECUTIVE COMPENSATION Performance Stock Units The 20172018 awards of PSUs provideprovided eligible participants, including each of the NEOs, the opportunity to receive shares of common stock based onpre-established financial performance targets over a specified three-year period (and generally subject to continued employment during the performance period). The performance criteria for the PSUs are based on ther-TSR of SPX as compared to the results of a peer group within the S&P 600 Capital Goods Index. At grant date, this peer group was comprised of 5661 companies that compete in similar markets. Payouts under the program are made in shares of our common stock and range from 0% to 150% based on our TSR achievement versus the peer group. Payout cannot exceed target if our TSR return is negative. Cash Performance Units As part of the 20172018 long-term incentive program, participants, including each of the NEOs, have the opportunity to receive cash incentive payments based on SPX’s performance over a specified three-year period in the form of CPUs (and generally subject to continued employment during the performance period). CPU payments are based on SPX’s actual performance over the three-year performance cycle beginning with the fiscal year in which the CPU is granted. In March 2017,February 2018, the Committee granted three-year CPUs with a performance period ending December 31, 2019.2020. Payouts under the program range from 0% to 150% based on achievement of three-year cumulative adjusted segment incomeincome* targets, and each unit has a par value of $1.00. Beginning with compensation awards made in 2019, the Committee has decided to no longer grant CPU awards and to proportionately increase PSU awards. As a result, all of the 2019 LTI compensation grants are comprised of equity-based awards. The Committee evaluates the Company’s compensation programs annually and considers a number of factors when evaluating the components of LTI compensation, including equity use and dilution, compensation trends to attract and retain talent, and alignment of incentives with Company performance. Restricted Stock Units As part of the 20172018 long-term incentive program, participants, including each of the NEOs, received RSUs. The Committee approved the 20172018 RSU grants to the NEOs in March 2017.February 2018. The 20172018 RSU grant agreement provides for time-based ratable vesting (of 33 1⁄/3 percent per year) over a three-year period (generally subject to continued employment during the period). The Committee approves all grants of RSUs to be issued by the Company pursuant to approved equity grant guidelines. Outstanding equity awards are more fully described in the “Outstanding Equity Awards at FiscalYear-End” table in “Executive Compensation,” beginning on page 35.34. Equity ConversionPerformance Based Incentive Results for PreSpin-Off Grants2016-2018
Equity granted prior
• | | Performance Stock Units. The performance metric for PSUs measuresr-TSR compared to a peer group within the S&P 600 Capital Goods Index. The grant of PSUs made in February 2016 covered the measurement period of January 1, 2016 through December 31, 2018. Total stockholder return delivered in the measurement period was 216%, which ranked in the 95th percentile, compared to threshold of 30th percentile, target of 50th percentile, and maximum of 75th percentile. The resulting performance achievement of the February 2016 grant exceeded the maximum allowable and, therefore, is capped at 150% payout of the PSUs. The final amount of the payout accounts for both the appreciation of the value of stock since the time of the grant and the 150% performance award. |
• | | Cash Performance Units. The performance metric for CPUs measures three-year cumulative adjusted segment income.* The grant of CPUs made in February 2016 covered the measurement period of January 1, 2016 through December 31, 2018. Adjusted segment income* achieved in the measurement period was $545.8M, compared to threshold of $469.5M, target of $504.7M, and maximum of $537.5M. The resulting performance achievement of the February 2016 grant exceeded the maximum allowable and, therefore, is capped at 150% payout of the CPUs. |
*Non-GAAP financial measure. Reconciliations of amounts presented asnon-GAAP financial measures with theSpin-Off was converted topost-Spin-Off SPX equity based on a conversion factor. Prior to theSpin-Off, thethree-day simple average was used in comparison to thepost-Spin-Offsix-day simple average to determine the share ratio of 4.0589 and the price ratio of 0.25. Individuals holdingpre-Spin-Off unvested shares who continued their employment with SPX after theSpin-Off received 4.0589 unvested shares for each share ofpre-Spin-Off SPX unvested equity. However, the value of thepost-Spin-Off shares was 25% amounts of the value ofmost comparable measures calculated and presented in accordance with GAAP, and other important information regardingnon-GAAP financial measures, are presented in thepre-Spin-Off shares. With regard to vested shares of Company stock, employees were treated the same as other stockholders and each received one share of FLOW and one share ofpost-Spin-Off SPX stock (SPXC) for each share ofpre-Spin-Off SPX stock (SPW) owned as of theSpin-Off transaction record date.
For example,pre-Spin-Off, Mr. Lowe was granted 3,554 RSUs in January 2015. AtSpin-Off, using the averagethree-day share price of $49.60, the fair market value appendix of this award was $176,278 (3,554 RSUs x $49.60). Application of the share conversion factor of 4.0589 resulted in the number of shares converted topost-Spin-Off shares of SPX totaling 14,425 (3,554 RSUs x 4.0589). Based on the averagesix-day share price ofpost-Spin-Off SPX stock of $12.22, the converted fair market value of this grant was virtually the samepost-Spin-Off as it waspre-Spin-Off at $176,274 (14,425 RSUs x $12.22).
The increase in the number of shares to participants is offset by the reduction in the underlying value of the equity.Proxy Statement.
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EXECUTIVE COMPENSATION OTHER PRACTICES, POLICIES, AND GUIDELINES Policy on Hedging No SPX director or employee may trade in derivative securities relating to SPX securities, such as put and call options or forward transactions. Policy on Pledging No SPX director or officer may pledge SPX securities. Stock Ownership Guidelines Our Stock Ownership Guidelines are designed to help ensure our officers’ interests are closely aligned with those of our long-term stockholders. Additional detail can be found in “Ownership of Common Stock” on page 15. Impact on Compensation from Misconduct–Clawbacks If the Board were to determine that a NEO had engaged in fraudulent or intentional misconduct, it would take action to remedy the misconduct and impose appropriate discipline. Discipline would vary based on the facts and circumstances, but may include termination of employment and/or other appropriate actions. We retroactively adjust compensation in the event of a restatement of financial or other performance results to the extent required by the Sarbanes-Oxley Act of 2002. The 162(m) Plan (defined in “Tax Matters” on page 29)Our executive bonus program provides for repayment or forfeiture of awards under specified circumstances if the Company, as a result of misconduct, is required to prepare an accounting restatement due to material noncompliance with any financial reporting requirement under the securities laws. Any awards earned or accrued during the12-month period following the first public issuance or filing with the SEC (whichever first occurred) of the financial document that failed to materially comply with a financial reporting requirement must be paid back to the Company. To the extent that the affected award was deferred under a nonqualified deferred compensation plan maintained by the Company rather than paid to the executive officer, the deferred amount (and any earnings from it) must be forfeited. Beginning in 2013, our equity award agreements have provided that awards are subject to any compensation recovery policy adopted by the Company, as amended from time to time. Other Benefits and Perquisites We provide perquisites to attract and retain executives in a competitive marketplace, and we believe these benefits are generally consistent with market practices of our peer group and other comparable public industrial manufacturing companies. For a full listing of benefits and perquisites, see the “Summary Compensation Table” and accompanying footnotes beginning on page 32.31. We do not provide taxgross-up payments for perquisites. Our CEO may utilize our aircraft for personal travel for himself and his family. Other executive officers may be permitted personal use of our aircraft for themselves and their families if approved by our CEO. We report the value of any personal use of our corporate aircraft by NEOs as ordinary taxable income and as compensation in the “SummarySummary Compensation Table”Table on page 32.31. Retirement and Deferred Compensation Plans None of our NEOs participate in an SPX defined benefit pension plan. Our executives, along with the majority of our U.S.-based employee population, are eligible to receive matching contributions into the SPX Corporation Retirement Savings and Stock Ownership Plan (the “401(k) Plan”), atax-qualified retirement savings plan. Matching contributions are immediately vested and are invested initially in the SPX Common Stock Fund in the form of units. This fund under the 401(k) Plan is primarily invested in SPX common stock, with a small portion of the fund in cash, for purposes of administrative convenience. Executive officers and other senior-level management employees are also eligible to participate in the SPX Corporation Supplemental Retirement Savings Plan (the “SRSP”), anon-qualified deferred compensation plan that permits voluntary deferrals of base salary and annual bonuses. For more information regarding these plans, see the “Nonqualified Deferred Compensation” table and accompanying narrative and footnotes, beginning on page 37.
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EXECUTIVE COMPENSATION For more information regarding these plans, see the Nonqualified Deferred Compensation table and accompanying narrative and footnotes, beginning on page 36. Termination andChange-in-Control Provisions As described below, all our NEOs, except our CEO, have entered into the current form of ourchange-in-control agreement as filed with the SEC. On September 28, 2015, the Committee recommended, and the Board approved, an employment agreement and achange-in-control agreement for Mr. Lowe, President and Chief Executive Officer, and severance benefit agreements andchange-in-control agreements for all other executive officers. The Committee reviews these agreements annually considering stakeholder interests and market competitiveness and will address adjustments as it deems appropriate. Our severance arrangements are designed to protect stockholder interests by stabilizing management during periods of uncertainty. Executives often assign significant value to severance agreements because these agreements provide compensation for lost professional opportunities in the event of a negative qualifying event following achange-in-control. Severance agreements can also be a powerful tool to discourage entrenchment of management, in that these agreements can offset the risk of financial and professional loss that management may face when recommending a sale to or merger with another company. Our severance arrangements are structured to serve the above functions, which differ, and are perceived by recipients to differ, from pay for performance. Accordingly, decisions relating to other elements of compensation have minimal effect on decisions relating to existing severance agreements. As described above, all our NEOs, except our CEO, have entered into the most current form of our severance benefit agreement as filed with the SEC. We utilize a double-trigger in the event of achange-in-control. If the executive officer experiences a qualifying negative employment action following achange-in-control, then the executive officer becomes immediately vested in all previously-granted unvested SPX equity, including shares subject to performance vesting, at the target level.level of vesting. This feature is designed to be equitable in the event of dismissal without cause or resignation for good reason, and we believe it is appropriate in the event of termination following achange-in-control. Severance andchange-in-control terms are further discussed and quantified in “Potential Payments Upon Termination orChange-in-Control,” beginning on page 38. Tax Matters
We seek to structure executive compensation in atax-efficient manner and review compensation plans in light of applicable tax provisions, including the performance-based exception under Section 162(m) of the Internal Revenue Code. To maintain flexibility in structuring executive compensation to achieve its goals consistent with its compensation philosophy, the Committee has not adopted a policy requiring all compensation to be tax deductible. We generally structure our executive officer annual bonuses to be tax deductible, and therefore for 2017 a separate plan, the SPX Corporation Executive Annual Bonus Plan (the “162(m) Plan”), approved by our stockholders at our 2016 Annual Meeting, determined whether each executive officer qualified for the payment of bonuses described above and set a cap on the amount of bonus that may be awarded and treated as tax deductible.
The Committee set the amounts payable under the 162(m) Plan (subject to the maximum amount permitted under the 162(m) Plan and applicable performance metrics being met). While the Committee was authorized to exercise its discretion to reduce any bonus payable under the 162(m) Plan, the Committee did not have discretion to increase the bonus payable under the 162(m) Plan.
The performance-based exception under Section 162(m) was repealed in the tax reform legislation signed into law on December 22, 2017. As a result, it is uncertain whether compensation that the Committee intended to structure as performance-based compensation under Section 162(m), including long-term incentive performance awards, will be deductible to the extent that compensation to a covered employee in any year exceeds the limit on deductibility under Section 162(m). While the Committee considers the deductibility of awards as a factor in determining executive compensation, the Committee also looks at other factors in making its decisions and retains the flexibility to award compensation that it determines to be consistent with the goals of our executive compensation program even if the awards are not deductible for income tax purposes.
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EXECUTIVE COMPENSATION
37. Notes The discussion of performance targets in this CD&A is exclusively in the context of executive compensation and should not be used for any other purpose or regarded as an indication of management’s expectations of future results. References to “bonus” or “bonuses” in this CD&A and the compensation tables are to our annual performance-based payments reflected as“Non-Equity Incentive Plan Compensation” in the “Summary Compensation Table” on page 3231 and “Estimated Future Payouts underNon-Equity Incentive Plan Awards” in the “Grants of Plan BasedPlan-Based Awards” table on page 34.33. Risk Analysis Management regularly monitors and reviews our compensation program and the related risks and reports its findings to the Committee. We do not believe our compensation policies and practices give rise to risks that are reasonably likely to have a material adverse effect on our Company. In reaching this conclusion, we considered the following factors: Our compensation program is designed to provide a mix of both fixed and variable incentive compensation. The variable portions of compensation (cash incentive and equity awards) are designed to reward both annual performance and longer-term performance. We believe this design mitigates any incentive for short-term risk-taking that could be detrimental to our Company’s long-term best interests. For business unit level executives, a significant percentage of their compensation is based on the performance of our Company as a whole. This is designed to mitigate any incentive to pursue strategies that might maximize the performance of a single operating business unit to the detriment of our Company as a whole. | | | | | | | 2019 PROXY STATEMENT | | 29 |
EXECUTIVE COMPENSATION Our executive officers are subject to stock ownership guidelines that we believe incentivize our executives to consider the long-term interests of our Company and our stockholders and discourage excessive risk-taking that could negatively impact our stock price. The Committee exercises risk oversight of our executive compensation program. A qualitative risk assessment concluded that our plans do not have an unreasonable ratio between fixed and variable compensation. The annual bonus plans are capped at specified maximum percentages, which limits incentives to undertake excessive risk. The executive and management annual bonus plans also have clawback provisions relating to any fraud, manipulation, or negligence in connection with computation of performance measures or payments under the plans. Incentive plans are primarily determined by a formula tied directly to Company performance. Sales incentive plans are regularly reviewed. In addition to the structure of our plans, we mitigate any risk that may be generated by compensation plans through management oversight, compliance training and enforcement, and periodic reviews. No single SPX business unit carries a significant portion of the Company’s risk profile, or has compensation structured in a significantly different manner than other business units within the Company, regardless of relative business unit profitability or compensation expense as a percentage of revenues. Management does not believe that any of the design features pose a significant concern. Based upon this analysis, we determined that the compensation programs do not present a material risk. | | | | | 30 | | 2018 PROXY STATEMENT | | |
EXECUTIVE COMPENSATION
Compensation Committee Report The Compensation Committee of the SPX Board of Directors consists of four directors. Each of the Committee members is independent, as defined under SEC rules and the listing standards of the NYSE. Additionally, each member of the Committee is an “outside director” within the meaning of grandfathered provisions of Section 162(m) of the Internal Revenue Code. The Committee reviews SPX’s “Compensation Discussion and Analysis” on behalf of the Board. The Committee has reviewed and discussed the “Compensation Discussion and Analysis” with management, and based on the review and discussions, the Committee recommended to the Board that the “Compensation Discussion and Analysis” be included in this Proxy Statement and SPX’s Annual Report on Form10-K for the year ended December 31, 2017.2018. Compensation Committee, David A. Roberts, Chairman Ricky D. Puckett Ruth G. Shaw Robert B. Toth | | | | | | | 2018 PROXY STATEMENT30 | | 31 2019 PROXY STATEMENT | | |
EXECUTIVE COMPENSATION Compensation Tables SUMMARY COMPENSATION TABLE The following table summarizes the compensation for our named executive officers during 2017.2018. The “named executive officers” or “NEOs” are our Chief Executive Officer, our Chief Financial Officer, and our next three most highly compensated officers. | Name and Principal Position | | Year | | | Salary ($)(1) | | | Bonus ($) | | | Stock Awards ($)(2) | | | Option Awards ($)(3) | | | Non-Equity Incentive Plan Compensation ($)(4) | | | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) | | | All Other Compensation ($)(5) | | | Total ($) | | | Year | | Salary ($)(1) | | Bonus ($) | | Stock Awards ($)(2) | | Option Awards ($)(3) | | Non-Equity Incentive Plan Compensation ($)(4a) (4b) | | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) | | All Other Compensation ($)(5) | | Total ($) | Eugene J. Lowe, III President and Chief Executive Officer | | | 2017 | | | $ | 817,551 | | | $ | — | | | $ | 1,654,860 | | | $ | 791,088 | | | $ | 1,548,723 | | | $ | — | | | $ | 79,241 | | | $ | 4,891,463 | | | | | 2018 | | | | $ | 845,508 | | | | $ | — | | | | $ | 1,725,579 | | | | $ | 842,995 | | | | $ | 1,750,186 | | | | $ | — | | | | $ | 130,254 | | | | $ | 5,294,522 | | | | 2016 | | | $ | 784,084 | | | $ | — | | | $ | 1,844,703 | | | $ | 768,237 | | | $ | 654,472 | | | $ | — | | | $ | 53,494 | | | $ | 4,104,990 | | | | | 2017 | | | | $ | 817,551 | | | | $ | — | | | | $ | 1,654,860 | | | | $ | 791,088 | | | | $ | 1,548,723 | | | | $ | — | | | | $ | 79,241 | | | | $ | 4,891,463 | | | | 2015 | | | $ | 511,692 | | | $ | — | | | $ | 1,742,982 | | | $ | 1,555,156 | | | $ | 513,246 | | | $ | — | | | $ | 48,047 | | | $ | 4,371,123 | | | | | 2016 | | | | $ | 784,084 | | | | $ | — | | | | $ | 1,844,703 | | | | $ | 768,237 | | | | $ | 654,472 | | | | $ | — | | | | $ | 53,494 | | | | $ | 4,104,990 | | Scott W. Sproule Vice President, Chief Financial Officer and Treasurer | | | 2017 | | | $ | 439,055 | | | $ | — | | | $ | 399,501 | | | $ | 190,954 | | | $ | 584,452 | | | $ | — | | | $ | 46,892 | | | $ | 1,660,854 | | | | | 2018 | | | | $ | 455,821 | | | | $ | — | | | | $ | 417,510 | | | | $ | 203,957 | | | | $ | 540,275 | | | | $ | — | | | | $ | 24,882 | | | | $ | 1,642,445 | | | | 2016 | | | $ | 414,806 | | | $ | — | | | $ | 461,176 | | | $ | 192,056 | | | $ | 242,366 | | | $ | — | | | $ | 49,623 | | | $ | 1,360,027 | | | | | 2017 | | | | $ | 439,055 | | | | $ | — | | | | $ | 399,501 | | | | $ | 190,954 | | | | $ | 584,452 | | | | $ | — | | | | $ | 46,892 | | | | $ | 1,660,854 | | | | 2015 | | | $ | 358,861 | | | $ | — | | | $ | 1,007,677 | | | $ | 312,495 | | | $ | 192,633 | | | $ | — | | | $ | 29,281 | | | $ | 1,900,947 | | | | | 2016 | | | | $ | 414,806 | | | | $ | — | | | | $ | 461,176 | | | | $ | 192,056 | | | | $ | 242,366 | | | | $ | — | | | | $ | 49,623 | | | | $ | 1,360,027 | | J. Randall Data President, South Africa and Global Operations | | | 2017 | | | $ | 425,645 | | | $ | — | | | $ | 370,928 | | | $ | 177,322 | | | $ | 524,618 | | | $ | — | | | $ | 33,566 | | | $ | 1,532,079 | | | | | 2018 | | | | $ | 442,327 | | | | $ | — | | | | $ | 389,708 | | | | $ | 190,361 | | | | $ | 463,259 | | | | $ | — | | | | $ | 44,326 | | | | $ | 1,529,981 | | | | 2016 | | | $ | 406,251 | | | $ | — | | | $ | 368,941 | | | $ | 153,644 | | | $ | 203,674 | | | $ | — | | | $ | 32,532 | | | $ | 1,165,042 | | | | | 2017 | | | | $ | 425,645 | | | | $ | — | | | | $ | 370,928 | | | | $ | 177,322 | | | | $ | 524,618 | | | | $ | — | | | | $ | 33,566 | | | | $ | 1,532,079 | | | | | | | | | | | | | | | | | | | | | | | | 2016 | | | | $ | 406,251 | | | | $ | — | | | | $ | 368,941 | | | | $ | 153,644 | | | | $ | 203,674 | | | | $ | — | | | | $ | 32,532 | | | | $ | 1,165,042 | | John W. Nurkin Vice President, General Counsel and Secretary | | | 2017 | | | $ | 350,752 | | | $ | — | | | $ | 271,096 | | | $ | 129,581 | | | $ | 399,442 | | | $ | — | | | $ | 32,558 | | | $ | 1,183,429 | | | | | 2018 | | | | $ | 366,253 | | | | $ | — | | | | $ | 281,164 | | | | $ | 137,331 | | | | $ | 366,681 | | | | $ | — | | | | $ | 43,735 | | | | $ | 1,195,164 | | | | 2016 | | | $ | 333,868 | | | $ | — | | | $ | 306,197 | | | $ | 127,525 | | | $ | 167,207 | | | $ | — | | | $ | 18,862 | | | $ | 953,659 | | | | | 2017 | | | | $ | 350,752 | | | | $ | — | | | | $ | 271,096 | | | | $ | 129,581 | | | | $ | 399,442 | | | | $ | — | | | | $ | 32,558 | | | | $ | 1,183,429 | | | | 2015 | | | $ | 296,827 | | | $ | — | | | $ | 731,711 | | | $ | 207,499 | | | $ | 137,322 | | | $ | — | | | $ | 22,896 | | | $ | 1,396,255 | | | | | 2016 | | | | $ | 333,868 | | | | $ | — | | | | $ | 306,197 | | | | $ | 127,525 | | | | $ | 167,207 | | | | $ | — | | | | $ | 18,862 | | | | $ | 953,659 | | John W. Swann, III President, Weil-McLain, Marley Engineered Products and Radiodetection | | | 2017 | | | $ | 415,577 | | | $ | — | | | $ | 265,370 | | | $ | 126,854 | | | $ | 233,344 | | | $ | — | | | $ | 36,919 | | | $ | 1,078,064 | | | | | 2016 | | | $ | 404,689 | | | $ | — | | | $ | 313,600 | | | $ | 130,599 | | | $ | 50,669 | | | $ | — | | | $ | 35,110 | | | $ | 934,667 | | | | | 2015 | | | $ | 357,768 | | | $ | — | | | $ | 694,548 | | | $ | 249,999 | | | $ | 140,953 | | | $ | — | | | $ | 28,753 | | | $ | 1,472,021 | | | John W. Swann, III President, Heating and Location & Inspection | | | | | 2018 | | | | $ | 428,079 | | | | $ | — | | | | $ | 295,031 | | | | $ | 144,129 | | | | $ | 500,255 | | | | $ | — | | | | $ | 37,957 | | | | $ | 1,405,451 | | | | | | 2017 | | | | $ | 415,577 | | | | $ | — | | | | $ | 265,370 | | | | $ | 126,854 | | | | $ | 233,344 | | | | $ | — | | | | $ | 36,919 | | | | $ | 1,078,064 | | | | | | 2016 | | | | $ | 404,689 | | | | $ | — | | | | $ | 313,600 | | | | $ | 130,599 | | | | $ | 50,669 | | | | $ | — | | | | $ | 35,110 | | | | $ | 934,667 | |
(1) | NEOs are eligible to defer up to 50% of their salaries into the SPX Corporation Retirement Savings and Stock Ownership Plan, atax-qualified retirement savings plan (the “401(k) Plan”);401(k) Plan; and the SPX Corporation Supplemental Retirement Savings Plan, a nonqualified deferred compensation plan (the “SRSP”).SRSP. In 2017,2018, the following NEOs deferred the following portions of their salaries into the 401(k) Plan and the SRSP: |
| | | | | | | | | | | | | | | | | | | | | Name | | Deferred into 401(k) Plan | | | Deferred into SRSP | | | | | | | | Eugene J. Lowe, III | | $ | 12,102 | | | $ | 39,936 | | | | | | | | Scott W. Sproule | | $ | 9,603 | | | $ | 43,024 | | | | | | | | J. Randall Data | | $ | 5,492 | | | $ | 20,808 | | | | | | | | John W. Nurkin | | $ | 5,153 | | | $ | 19,809 | | | | | | | | John W. Swann, III | | $ | 11,712 | | | $ | 29,405 | |
| | | | | | | | | | | | | | | | | | | | | Name | | Deferred into 401(k) Plan | | | Deferred into SRSP | | | | | | | | Eugene J. Lowe, III | | $ | 12,707 | | | $ | 41,171 | | | | | | | | Scott W. Sproule | | $ | 10,276 | | | $ | — | | | | | | | | J. Randall Data | | $ | 5,794 | | | $ | 21,555 | | | | | | | | John W. Nurkin | | $ | 5,462 | | | $ | 23,815 | | | | | | | | John W. Swann, III | | $ | 12,063 | | | $ | 52,112 | |
(2) | Stock Award grants are generally subject to performance or time-vesting conditions. The amounts reported in the above table were calculated in accordance with FASB Accounting Standard Codification Topic 718 (“Topic 718”) to reflect their grant date fair valuefair-value given vesting requirements. See note 1415 to the consolidated financial statements contained in our Annual Report on Form10-K for the year ended December 31, 2017,2018, for additional information regarding the calculation of these numbers. See the “Grants of Plan-Based Awards” table, on page 34,33, for more information on these grants. Amount presented for 2018 assumes achievement at the target performance level. At the maximum performance level, Mr. Lowe would receive $1,349,695, Mr. Sproule would receive $326,564, Mr. Data would receive $304,818; Mr. Nurkin would receive $219,918, and Mr. Swann would receive $230,764. |
(3) | Option Awards reflect the fair-value at time of grant in accordance with Topic 718 to reflect their grant date fair value given vesting requirements. See note 1415 to the consolidated financial statements contained in our Annual Report on Form10-K for the year ended December 31, 2017,2018, for additional information regarding the calculation of these numbers. See the “Grants of Plan-Based Awards” table, on page 34,33, for more information on these grants. |
(4)(4a) | In 2018,2019, the year in which they received the 20172018 bonus payout, the following NEOs deferred the following portions of their bonuses into the 401(k) Plan and the SRSP: |
| | | | | | | | | | | | | | | | | | | | | Name | | Deferred into 401(k) Plan | | | Deferred into SRSP | | | | | | | | Eugene J. Lowe, III | | $ | 5,793 | | | $ | 85,954 | | | | | | | | Scott W. Sproule | | $ | 8,224 | | | $ | — | | | | | | | | J. Randall Data | | $ | 12,706 | | | $ | — | | | | | | | | John W. Nurkin | | $ | 13,038 | | | $ | 15,418 | | | | | | | | John W. Swann, III | | $ | 6,437 | | | $ | 5,815 | |
| | | | | | | | | | | | | | | | | | | | | Name | | Deferred into 401(k) Plan | | | Deferred into SRSP | | | | | | | | Eugene J. Lowe, III | | $ | 5,912 | | | $ | 41,406 | | | | | | | | Scott W. Sproule | | $ | 8,416 | | | $ | — | | | | | | | | J. Randall Data | | $ | 16,433 | | | $ | — | | | | | | | | John W. Nurkin | | $ | 13,319 | | | $ | 83 | | | | | | | | John W. Swann, III | | $ | 6,575 | | | $ | 21,399 | |
| | | | | 32 | | 20182019 PROXY STATEMENT | | 31 |
EXECUTIVE COMPENSATION (4b) | Includes the following CPU payouts for the 2016-2018 performance period, based on 150% maximum performance achieved: |
| | | | | | | | | Name | | Cash Performance Unit | | | | Eugene J. Lowe, III | | $ | 943,689 | | | | Scott W. Sproule | | $ | 235,922 | | | | J. Randall Data | | $ | 188,738 | | | | John W. Nurkin | | $ | 156,653 | | | | John W. Swann, III | | $ | 160,427 | |
(5) | All Other Compensation for 20172018 for NEOs is outlined in the table below: |
| | | | | | | | | | | | | | | | | | | | | All Other Compensation | | Eugene J. Lowe, III | | | Scott W. Sproule | | | J. Randall Data | | | John W. Nurkin | | | John W. Swann, III | | Financial Planning | | $ | 750 | | | $ | 4,430 | | | $ | — | | | $ | 475 | | | $ | 8,629 | | Executive Physical | | $ | 713 | | | $ | — | | | $ | 1,172 | | | $ | — | | | $ | — | | Matching Gift(a) | | $ | 2,500 | | | $ | 10,000 | | | $ | — | | | $ | 4,180 | | | $ | — | | Business Use of Aircraft/Guest Travel(b) | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 2,517 | | Group Term Life (>$50,000) | | $ | 1,710 | | | $ | 1,035 | | | $ | 1,554 | | | $ | 2,022 | | | $ | 2,471 | | 401(k) Plan Match | | $ | 13,500 | | | $ | 13,500 | | | $ | 13,500 | | | $ | 13,500 | | | $ | 13,500 | | SRSP Match | | $ | 60,068 | | | $ | 17,927 | | | $ | 17,340 | | | $ | 12,381 | | | $ | 9,802 | | Total | | $ | 79,241 | | | $ | 46,892 | | | $ | 33,566 | | | $ | 32,558 | | | $ | 36,919 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | All Other Compensation | | Eugene J. Lowe, III | | | Scott W. Sproule | | | J. Randall Data | | | John W. Nurkin | | | John W. Swann, III | | Financial Planning | | $ | 925 | | | $ | — | | | $ | 10,948 | | | $ | 475 | | | $ | 1,780 | | Executive Physical | | $ | — | | | $ | — | | | $ | — | | | $ | 120 | | | $ | 268 | | SPX Foundation Matching Gift(a) | | $ | 7,000 | | | $ | 10,000 | | | $ | — | | | $ | 2,700 | | | $ | — | | Company Aircraft Personal Use(b) | | $ | 20 | | | $ | 20 | | | $ | 20 | | | $ | 20 | | | $ | 10 | | Group Term Life (>50k) | | $ | 2,622 | | | $ | 1,112 | | | $ | 1,645 | | | $ | 2,149 | | | $ | 2,840 | | Retirement Savings Plan Match | | $ | 13,750 | | | $ | 13,750 | | | $ | 13,750 | | | $ | 13,750 | | | $ | 13,750 | | Supplemental Retirement Savings Plan Match | | $ | 105,937 | | | $ | — | | | $ | 17,963 | | | $ | 24,521 | | | $ | 19,309 | | Total | | $ | 130,254 | | | $ | 24,882 | | | $ | 44,326 | | | $ | 43,735 | | | $ | 37,957 | |
| (a) | We will make matching donations for charitable contributions made by employees up to a total of $5,000 per annum. We will make matching donations for executive officers up to a total of $10,000. Amounts represented are the matching contributions for 2017.2018. |
| (b) | Represents guest travel accompanying executive officer on business travel. The value shown reflects SIFL rates, tax, and terminal charges grossed up for taxes plusthe incremental costs (e.g., food and beverage). |
CEO Employment Agreement The above benefits for Mr. Lowe are provided pursuant to the terms of his employment agreement. His employment agreement provides for annual base salary levels, annual incentive compensation opportunity, severance entitlements, and allowance amounts for annual income tax return preparation and financial planning. The initial term of Mr. Lowe’s employment agreement expired on December 31, 2017, and the agreement automatically renews in additional subsequent one year-long terms unless at least 180 days prior to the expiration of any subsequent extended term one of the parties provides the other party with a written notice ofnon-renewal. See “Compensation Discussion and Analysis,” beginning on page 18, for further discussion and explanation of each element of compensation. CEO Pay Ratio For 2017,2018, our last completed fiscal year, the median of the annual total compensation of all employees of the Company (other than our CEO) was $56,123$63,232 and the annual total compensation of our CEO was $4,891,463.$5,294,522. Based on this information, for 20172018 the ratio of the annual total compensation of our CEO to the median of the annual total compensation of all employees was 8784 to 1. To identify the median employee, we conducted a full analysis of our total employee population as of December 31, 2017,2018, without the use of statistical sampling. We determined our median employee using “total compensation” paid during the full year 2017.2018. Total compensation consisted of gross wages to include base wages, overtime, shift differential, incentives, paid time off, and perquisites, as applicable. We did not annualize gross wages for employees who were not employed for the full year in 2017.2018. For those employees located outside of the US, currencies were converted to US Dollars using the posted Bloomberg market rates as of December 27, 2017.2018. We have an even number of employees when not including the CEO, therefore there are two employees for whom the number of employees with greater “total compensation” equals the number of employees with less “total compensation.” From those two employees, we selected as the median employee the one with lower “total compensation.” We then calculated the annual total compensation of the median employee using the same methodology used in calculating the annual total compensation of our CEO, as reported in the “Summary Compensation Table” on page 32.31. The selection of the higher compensated of the two employees as the median employee instead of the one selected would not have affected the ratio presented above, as the difference in total annual compensation of the two employees was less than $20.$70. This pay ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of RegulationS-K of the SEC using the data and methodology summarized above. The SEC rules for identifying the median compensated employee allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices. As such, the median employee compensation amount and CEO pay ratio reported by other companies may not be comparable to the amount and ratio reported above. | | | | | | | 2018 PROXY STATEMENT32 | | 33 2019 PROXY STATEMENT | | |
EXECUTIVE COMPENSATION GRANTS OF PLAN-BASED AWARDS The following table provides information regarding equity andnon-equity awards granted to the NEOs in 2017.2018. | | | | | | Estimated Future Payouts UnderNon-Equity Incentive Plan Awards | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | | | | | | | | | | | | | | | | Estimated Future Payouts UnderNon-Equity Incentive Plan Awards | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | | | | | | | | | | | | Name | | Grant Date(1) | | | Threshold (#)(2) | | | Target (#)(2) | | | Maximum (#)(2) | | | Threshold (#)(3) | | | Target (#)(3) | | | Maximum (#)(3) | | | All Other Stock Awards: Number of Shares or Stock Units (#)(4) | | | Stock Option Awards (#)(5) | | | Exercise Price of Stock Option Awards ($) | | | Grant Date Fair Value of Stock and Option Awards ($)(6) | | | Grant Date(1) | | | Threshold (#)(2) | | | Target (#)(2) | | | Maximum (#)(2) | | | Threshold (#)(3) | | | Target (#)(3) | | | Maximum (#)(3) | | | All Other Stock Awards: Number of Shares or Stock Units (#)(4) | | | Stock Option Awards (#)(5) | | | Exercise Price of Stock Option Awards ($) | | | Grant Date Fair Value of Stock and Option Awards ($)(6) | | Eugene J. Lowe, III | | | 2/20/2017 | | | | 412,978 | | | | 825,956 | | | | 1,651,912 | | | | | | | | | | | | | | | | | | | 2/12/2018 | | | | 425,368 | | | | 850,735 | | | | 1,701,470 | | | | | | | | | | | | | | | | | | | 3/1/2017 | | | | | | | | | | 14,306 | | | | 28,611 | | | | 42,917 | | | | | | | | | $ | 870,919 | | | | 2/22/2018 | | | | | | | | | | 12,631 | | | | 25,261 | | | | 37,892 | | | | | | | | | $ | 899,797 | | | | 3/1/2017 | | | | 362,500 | | | | 725,000 | | | | 1,087,500 | | | | | | | | | | | | | | | | | | | 2/22/2018 | | | | 387,500 | | | | 775,000 | | | | 1,162,500 | | | | | | | | | | | | | | | | | | | 3/1/2017 | | | | | | | | | | | | | | | | 28,611 | | | | | | | $ | 783,941 | | | | 2/22/2018 | | | | | | | | | | | | | | | | 25,261 | | | | | | | $ | 825,782 | | | | 3/1/2017 | | | | | | | | | | | | | | | | | | 82,405 | | | $ | 27.40 | | | $ | 791,088 | | | | 2/22/2018 | | | | | | | | | | | | | | | | | | 72,298 | | | $ | 32.69 | | | $ | 842,995 | | Scott W. Sproule | | | 2/20/2017 | | | | 155,849 | | | | 311,697 | | | | 623,394 | | | | | | | | | | | | | | | | | | | 2/12/2018 | | | | 160,524 | | | | 321,047 | | | | 642,095 | | | | | | | | | | | | | | | | | | | 3/1/2017 | | | | | | | | | | 3,454 | | | | 6,907 | | | | 10,361 | | | | | | | | | $ | 210,249 | | | | 2/22/2018 | | | | | | | | | | 3,056 | | | | 6,112 | | | | 9,168 | | | | | | | | | $ | 217,709 | | | | 3/1/2017 | | | | 87,500 | | | | 175,000 | | | | 262,500 | | | | | | | | | | | | | | | | | | | 2/22/2018 | | | | 93,750 | | | | 187,500 | | | | 281,250 | | | | | | | | | | | | | | | | | | | 3/1/2017 | | | | | | | | | | | | | | | | 6,907 | | | | | | | $ | 189,252 | | | | 2/22/2018 | | | | | | | | | | | | | | | | 6,112 | | | | | | | $ | 199,801 | | | | 3/1/2017 | | | | | | | | | | | | | | | | | | 19,891 | | | $ | 27.40 | | | $ | 190,954 | | | | 2/22/2018 | | | | | | | | | | | | | | | | | | 17,492 | | | $ | 32.69 | | | $ | 203,957 | | J. Randall Data | | | 2/20/2017 | | | | 139,893 | | | | 279,786 | | | | 559,572 | | | | | | | | | | | | | | | | | | | 2/12/2018 | | | | 144,789 | | | | 289,579 | | | | 579,157 | | | | | | | | | | | | | | | | | | | 3/1/2017 | | | | | | | | | | 3,207 | | | | 6,413 | | | | 9,620 | | | | | | | | | $ | 195,212 | | | | 2/22/2018 | | | | | | | | | | 2,853 | | | | 5,705 | | | | 8,558 | | | | | | | | | $ | 203,212 | | | | 3/1/2017 | | | | 81,250 | | | | 162,500 | | | | 243,750 | | | | | | | | | | | | | | | | | | | 2/22/2018 | | | | 87,500 | | | | 175,000 | | | | 262,500 | | | | | | | | | | | | | | | | | | | 3/1/2017 | | | | | | | | | | | | | | | | 6,413 | | | | | | | $ | 175,716 | | | | 2/22/2018 | | | | | | | | | | | | | | | | 5,705 | | | | | | | $ | 186,496 | | | | 3/1/2017 | | | | | | | | | | | | | | | | | | 18,471 | | | $ | 27.40 | | | $ | 177,322 | | | | 2/22/2018 | | | | | | | | | | | | | | | | | | 16,326 | | | $ | 32.69 | | | $ | 190,361 | | John W. Nurkin | | | 2/20/2017 | | | | 106,514 | | | | 213,028 | | | | 426,056 | | | | | | | | | | | | | | | | | | | 2/12/2018 | | | | 110,775 | | | | 221,549 | | | | 443,099 | | | | | | | | | | | | | | | | | | | 3/1/2017 | | | | | | | | | | 2,344 | | | | 4,687 | | | | 7,031 | | | | | | | | | $ | 142,672 | | | | 2/22/2018 | | | | | | | | | | 2,058 | | | | 4,116 | | | | 6,174 | | | | | | | | | $ | 146,612 | | | | 3/1/2017 | | | | 59,375 | | | | 118,750 | | | | 178,125 | | | | | | | | | | | | | | | | | | | 2/22/2018 | | | | 63,125 | | | | 126,250 | | | | 189,375 | | | | | | | | | | | | | | | | | | | 3/1/2017 | | | | | | | | | | | | | | | | 4,687 | | | | | | | $ | 128,424 | | | | 2/22/2018 | | | | | | | | | | | | | | | | 4,116 | | | | | | | $ | 134,552 | | | | 3/1/2017 | | | | | | | | | | | | | | | | | | 13,498 | | | $ | 27.40 | | | $ | 129,581 | | | | 2/22/2018 | | | | | | | | | | | | | | | | | | 11,778 | | | $ | 32.69 | | | $ | 137,331 | | John W. Swann, III | | | 2/20/2017 | | | | 125,454 | | | | 250,908 | | | | 501,816 | | | | | | | | | | | | | | | | | | | 2/12/2018 | | | | 129,218 | | | | 258,435 | | | | 516,871 | | | | | | | | | | | | | | | | | | | 3/1/2017 | | | | | | | | | | 2,294 | | | | 4,588 | | | | 6,882 | | | | | | | | | $ | 139,659 | | | | 2/22/2018 | | | | | | | | | | 2,160 | | | | 4,319 | | | | 6,479 | | | | | | | | | $ | 153,843 | | | | 3/1/2017 | | | | 58,125 | | | | 116,250 | | | | 174,375 | | | | | | | | | | | | | | | | | | | 2/22/2018 | | | | 66,250 | | | | 132,500 | | | | 198,750 | | | | | | | | | | | | | | | | | | | 3/1/2017 | | | | | | | | | | | | | | | | 4,588 | | | | | | | $ | 125,711 | | | | 2/22/2018 | | | | | | | | | | | | | | | | 4,319 | | | | | | | $ | 141,188 | | | | 3/1/2017 | | | | | | | | | | | | | | | | | | 13,214 | | | $ | 27.40 | | | $ | 126,854 | | | | 2/22/2018 | | | | | | | | | | | | | | | | | | 12,361 | | | $ | 32.69 | | | $ | 144,129 | |
(1) | The Committee approved the 20172018 bonuses to each of the NEOs on February 20, 201712, 2018 and the 20172018 LTI awards to each of the NEOs on March 1, 2017. As described on page 26, payment of bonuses to NEOs are made under, and are subject to, the 162(m) Plan.February 22, 2018. The 20172018 LTI awards are generally subject to continued employment through the applicable performance or vesting period. |
(2) | Represents the potential payout for 20172018 bonuses and three-year CPUs. As described on page 26, payment of bonuses to NEOs are made under, and are subject to, the 162(m) Plan. For bonuses, threshold payout is 50% of target and maximum payout is 200% of target. For CPUs, threshold payout is 50% of target and maximum payout is 150% of target, and is based on three-year cumulative segment income goals for 2017-2019.2018-2020. CPU par value is $1.00 per unit. |
(3) | Represents the potential payout for the PSUs granted on March 1, 2017.February 22, 2018. For the PSUs, threshold payout is 50% of target and maximum payout is 150% of target, and is based on the three-yearr-TSR versus a peer group within the S&P 600 Capital Goods Index for 2017-2019.2018-2020. Payout is capped at target if our TSR is negative. |
(4) | Represents the RSU awards for 2017.2018. RSUs are time-based and do not have a performance requirement for vesting. The time-based awards vest 331⁄3 percent per year over three years on March 1, 2018, March 1,February 22, 2019, February 22, 2020, and March 1, 2020.February 22, 2021. |
(5) | Represents the number of Options awarded on the grant date, and vest 331⁄3 percent per year over three years on March 1, 2018, March 1,February 22, 2019, February 22, 2020, and March 1, 2020.February 22, 2021. |
(6) | Represents the grant date fair value, based on the closing price of our stock on the date of grant for RSUs. PSU grant date fair value is based on the Monte-Carlo simulation and Option valuation is based on the SPX Black-Scholes valuation on the date of grant. Fair value is based on Topic 718. See the consolidated financial statements contained in our Annual Report on Form10-K for the year ended December 31, 2017,2018, for the assumptions made in the valuation of these awards. |
| | | | | 34 | | 20182019 PROXY STATEMENT | | 33 |
EXECUTIVE COMPENSATION OUTSTANDING EQUITY AWARDS AT FISCALYEAR-END The following table details the outstanding equity awards held by each of our NEOs at December 31, 2017.2018. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Option Awards | | | Stock Awards | | | | | | | Option Awards | | | Stock Awards | | | | Name | | Award Date | | | Number of Securities Underlying Unexercised Option Unexercisable (#)(1) | | | Number of Securities Underlying Unexercised Option Exercisable (#)(1) | | | Option Exercise Price ($)(2) | | | Option Expiration Date | | | Number of Shares or Units of Stock That Have Not Vested (#) | | | Market or Payout Value of Unearned Shares, Units, or Other Rights That Have Not Vested ($)(3) | | | Equity Incentive Plan Awards: Number of Unearned Shares, Units, or Other Rights That Have Not Vested (#) | | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units, or Other Rights That Have Not Vested ($)(3) | | | Award Date | | | Number of Securities Underlying Unexercised Option Unexercisable (#)(1) | | | Number of Securities Underlying Unexercised Option Exercisable (#)(1) | | | Option Exercise Price ($)(2) | | | Option Expiration Date | | | Number of Shares or Units of Stock That Have Not Vested (#) | | | Market or Payout Value of Unearned Shares, Units, or Other Rights That Have Not Vested ($)(3) | | | Equity Incentive Plan Awards: Number of Unearned Shares, Units, or Other Rights That Have Not Vested (#) | | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units, or Other Rights That Have Not Vested ($)(3) | | Eugene J. Lowe, III | | | | 1/2/2015 | | | | | | 45,776 | | | $ | 21.16 | | | | 1/2/2025 | | | | | | | | | | | | | 1/2/2015 | | | | | | | | | | | | 4,811 | (4a) | | $ | 151,017 | | | | | | | | | 10/13/2015 | | | | | | 332,673 | | | $ | 12.36 | | | | 10/13/2025 | | | | | | | | | | | | | 1/2/2015 | | | | 15,262 | | | | 30,514 | | | $ | 21.16 | | | | 1/2/2025 | | | | | | | | | | | | | 3/2/2016 | | | | | | | | | | | | 20,767 | (4a) | | $ | 581,684 | | | | | | | | | 10/13/2015 | | | | | | | | | | | | 101,133 | (4d) | | $ | 3,174,565 | | | | | | | | | 3/2/2016 | | | | | | | | | | | | | | | | 93,450 | (4b) | | $ | 2,617,535 | | | | 10/13/2015 | | | | 332,673 | | | | | $ | 12.36 | | | | 10/13/2025 | | | | | | | | | | | | | 3/2/2016 | | | | 62,307 | | | | 124,612 | | | $ | 12.85 | | | | 3/2/2026 | | | | | | | | | | | | | 3/2/2016 | | | | | | | | | | | | 41,534 | (5a) | | $ | 1,303,752 | | | | | | | | | 3/1/2017 | | | | | | | | | | | | 19,074 | (5a) | | $ | 534,263 | | | | | | | | | 3/2/2016 | | | | | | | | | | | | | | | | 93,450 | (5b) | | $ | 2,933,396 | | | | 3/1/2017 | | | | | | | | | | | | | | | | 42,917 | (5b) | | $ | 1,202,091 | | | | 3/2/2016 | | | | 124,613 | | | | 62,306 | | | $ | 12.85 | | | | 3/2/2026 | | | | | | | | | | | | | 3/1/2017 | | | | 54,937 | | | | 27,468 | | | $ | 27.40 | | | | 3/1/2027 | | | | | | | | | | | | | 3/1/2017 | | | | | | | | | | | | 28,611 | (6a) | | $ | 898,099 | | | | | | | | | 2/22/2018 | | | | | | | | | | | | 25,261 | (6a) | | $ | 707,561 | | | | | | | | | 3/1/2017 | | | | | | | | | | | | | | | | 42,917 | (6b) | | $ | 1,347,165 | | | | 2/22/2018 | | | | | | | | | | | | | | | | 25,261 | (6b) | | $ | 707,561 | | | | 3/1/2017 | | | | 82,405 | | | | | $ | 27.40 | | | | 3/1/2027 | | | | | | | | | | | | | 2/22/2018 | | | | 72,298 | | | | | $ | 32.69 | | | | 2/22/2028 | | | | | | | | | | | Scott W. Sproule | | | 1/2/2015 | | | | | | | | | | | | 5,773 | (4b) | | $ | 181,214 | | | | | | | | | 10/13/2015 | | | | | | 83,168 | | | $ | 12.36 | | | | 10/13/2025 | | | | | | | | | | | | | 8/20/2015 | | | | | | | | | | | | 3,385 | (4c) | | $ | 106,255 | | | | | | | | | 3/2/2016 | | | | | | | | | | | | 5,192 | (4a) | | $ | 145,428 | | | | | | | | | 10/13/2015 | | | | | | | | | | | | 25,283 | (4d) | | $ | 793,633 | | | | | | | | | 3/2/2016 | | | | | | | | | | | | | | | | 23,363 | (4b) | | $ | 654,384 | | | | 10/13/2015 | | | | 83,168 | | | | | $ | 12.36 | | | | 10/13/2025 | | | | | | | | | | | | | 3/2/2016 | | | | 15,577 | | | | 31,152 | | | $ | 12.85 | | | | 3/2/2026 | | | | | | | | | | | | | 3/2/2016 | | | | | | | | | | | | 10,384 | (5a) | | $ | 325,954 | | | | | | | | | 3/1/2017 | | | | | | | | | | | | 4,605 | (5a) | | $ | 128,986 | | | | | | | | | 3/2/2016 | | | | | | | | | | | | | | | | 23,363 | (5b) | | $ | 733,365 | | | | 3/1/2017 | | | | | | | | | | | | | | | | 10,361 | (5b) | | $ | 290,198 | | | | 3/2/2016 | | | | 31,153 | | | | 15,576 | | | $ | 12.85 | | | | 3/2/2026 | | | | | | | | | | | | | 3/1/2017 | | | | 13,261 | | | | 6,630 | | | $ | 27.40 | | | | 3/1/2027 | | | | | | | | | | | | | 3/1/2017 | | | | | | | | | | | | 6,907 | (6a) | | $ | 216,811 | | | | | | | | | 2/22/2018 | | | | | | | | | | | | 6,112 | (6a) | | $ | 171,197 | | | | | | | | | 3/1/2017 | | | | | | | | | | | | | | | | 10,361 | (6b) | | $ | 325,232 | | | | 2/22/2018 | | | | | | | | | | | | | | | | 6,112 | (6b) | | $ | 171,197 | | | | 3/1/2017 | | | | 19,891 | | | | | $ | 27.40 | | | | 3/1/2027 | | | | | | | | | | | | | 2/22/2018 | | | | 17,492 | | | | | $ | 32.69 | | | | 2/22/2028 | | | | | | | | | | | J. Randall Data | | | 10/13/2015 | | | | | | | | | | | | 20,227 | (4d) | | $ | 634,926 | | | | | | | | | 10/13/2015 | | | | | | 66,535 | | | $ | 12.36 | | | | 10/13/2025 | | | | | | | | | | | | | 10/13/2015 | | | | | | | | | | | | 6,743 | (4e) | | $ | 211,663 | | | | | | | | | 3/2/2016 | | | | | | | | | | | | 4,154 | (4a) | | $ | 116,354 | | | | | | | | | 10/13/2015 | | | | 66,535 | | | | | $ | 12.36 | | | | 10/13/2025 | | | | | | | | | | | | | 3/2/2016 | | | | | | | | | | | | | | | | 18,690 | (4b) | | $ | 523,507 | | | | 3/2/2016 | | | | | | | | | | | | 8,307 | (5a) | | $ | 260,757 | | | | | | | | | 3/2/2016 | | | | 12,461 | | | | 24,922 | | | $ | 12.85 | | | | 3/2/2026 | | | | | | | | | | | | | 3/2/2016 | | | | | | | | | | | | | | | | 18,690 | (5b) | | $ | 586,679 | | | | 3/1/2017 | | | | | | | | | | | | 4,276 | (5a) | | $ | 119,771 | | | | | | | | | 3/2/2016 | | | | 24,922 | | | | 12,461 | | | $ | 12.85 | | | | 3/2/2026 | | | | | | | | | | | | | 3/1/2017 | | | | | | | | | | | | | | | | 9,620 | (5b) | | $ | 269,442 | | | | 3/1/2017 | | | | | | | | | | | | 6,413 | (6a) | | $ | 201,304 | | | | | | | | | 3/1/2017 | | | | 12,314 | | | | 6,157 | | | $ | 27.40 | | | | 3/1/2027 | | | | | | | | | | | | | 3/1/2017 | | | | | | | | | | | | | | | | 9,620 | (6b) | | $ | 301,972 | | | | 2/22/2018 | | | | | | | | | | | | 5,705 | (6a) | | $ | 159,797 | | | | | | | | | 3/1/2017 | | | | 18,471 | | | | | $ | 27.40 | | | | 3/1/2027 | | | | | | | | | | | | | 2/22/2018 | | | | | | | | | | | | | | | | 5,705 | (6b) | | $ | 159,797 | | J. Randall Data | | | | 2/22/2018 | | | | 16,326 | | | | | $ | 32.69 | | | | 2/22/2028 | | | | | | | | | | | | | 1/2/2015 | | | | | | | | | | | | 4,006 | (4b) | | $ | 125,748 | | | | | | | | | 10/13/2015 | | | | | | 55,224 | | | $ | 12.36 | | | | 10/13/2025 | | | | | | | | | | | | | 8/20/2015 | | | | | | | | | | | | 3,385 | (4c) | | $ | 106,255 | | | | | | | | | 3/2/2016 | | | | | | | | | | | | 3,447 | (4a) | | $ | 96,550 | | | | | | | | | 10/13/2015 | | | | | | | | | | | | 16,788 | (4d) | | $ | 526,975 | | | | | | | | | 3/2/2016 | | | | | | | | | | | | | | | | 15,512 | (4b) | | $ | 434,477 | | | | 10/13/2015 | | | | 55,224 | | | | | $ | 12.36 | | | | 10/13/2025 | | | | | | | | | | | | | 3/2/2016 | | | | 10,343 | | | | 20,685 | | | $ | 12.85 | | | | 3/2/2026 | | | | | | | | | | | | | 3/2/2016 | | | | | | | | | | | | 6,894 | (5a) | | $ | 216,403 | | | | | | | | | 3/1/2017 | | | | | | | | | | | | 3,125 | (5a) | | $ | 87,531 | | | | | | | | | 3/2/2016 | | | | | | | | | | | | | | | | 15,512 | (5b) | | $ | 486,922 | | | | 3/1/2017 | | | | | | | | | | | | | | | | 7,031 | (5b) | | $ | 196,924 | | | | 3/1/2017 | | | | 20,686 | | | | 10,342 | | | $ | 12.85 | | | | 3/2/2026 | | | | | | | | | | | | | 3/1/2017 | | | | 8,999 | | | | 4,499 | | | $ | 27.40 | | | | 3/1/2027 | | | | | | | | | | | | | 3/1/2017 | | | | | | | | | | | | 4,687 | (6a) | | $ | 147,125 | | | | | | | | | 2/22/2018 | | | | | | | | | | | | 4,116 | (6a) | | $ | 115,289 | | | | | | | | | 3/1/2017 | | | | | | | | | | | | | | | | 7,031 | (6b) | | $ | 220,703 | | | | 2/22/2018 | | | | | | | | | | | | | | | | 4,116 | (6b) | | $ | 115,289 | | John W. Nurkin | | | 3/1/2017 | | | | 13,498 | | | | | $ | 27.40 | | | | 3/1/2027 | | | | | | | | | | | | | 2/22/2018 | | | | 11,778 | | | | | $ | 32.69 | | | | 2/22/2028 | | | | | | | | | | | | | 1/2/2015 | | | | | | | | | | | | 5,212 | (4b) | | $ | 163,605 | | | | | | | | | 10/13/2015 | | | | | | 66,535 | | | $ | 12.36 | | | | 10/13/2025 | | | | | | | | | | | | | 10/13/2015 | | | | | | | | | | | | 20,227 | (4d) | | $ | 634,926 | | | | | | | | | 3/2/2016 | | | | | | | | | | | | 3,531 | (4a) | | $ | 98,903 | | | | | | | | | 10/13/2015 | | | | 66,535 | | | | | $ | 12.36 | | | | 10/13/2025 | | | | | | | | | | | | | 3/2/2016 | | | | | | | | | | | | | | | | 15,887 | (4b) | | $ | 444,981 | | | | 3/2/2016 | | | | | | | | | | | | 7,061 | (5a) | | $ | 221,645 | | | | | | | | | 3/2/2016 | | | | 10,592 | | | | 21,184 | | | $ | 12.85 | | | | 3/2/2026 | | | | | | | | | | | | | 3/2/2016 | | | | | | | | | | | | | | | | 15,887 | (5b) | | $ | 498,693 | | | | 3/1/2017 | | | | | | | | | | | | 3,059 | (5a) | | $ | 85,683 | | | | | | | | | 3/2/2016 | | | | 21,184 | | | | 10,592 | | | $ | 12.85 | | | | 3/2/2026 | | | | | | | | | | | | | 3/1/2017 | | | | | | | | | | | | | | | | 6,882 | (5b) | | $ | 192,765 | | | | 3/1/2017 | | | | | | | | | | | | 4,588 | (6a) | | $ | 144,017 | | | | | | | | | 3/1/2017 | | | | 8,810 | | | | 4,404 | | | $ | 27.40 | | | | 3/1/2027 | | | | | | | | | | | | | 3/1/2017 | | | | | | | | | | | | | | | | 6,882 | (6b) | | $ | 216,026 | | | | 2/22/2018 | | | | | | | | | | | | 4,319 | (6a) | | $ | 120,975 | | | | | | | | | 3/1/2017 | | | | 13,214 | | | | | $ | 27.40 | | | | 3/1/2027 | | | | | | | | | | | | | 2/22/2018 | | | | | | | | | | | | | | | | 4,319 | (6b) | | $ | 120,975 | | John W. Swann, III | | | | 2/22/2018 | | | | 12,361 | | | | | $ | 32.69 | | | | 2/22/2028 | | | | | | | | | | |
| | | | | | | 2018 PROXY STATEMENT34 | | 35 2019 PROXY STATEMENT | | |
EXECUTIVE COMPENSATION (1) | Outstanding vested and unvestedUnvested Options awarded on the award date are subject to satisfaction of vesting criteria for the applicable year. Options awarded to Mr. Lowe on January 2, 2015, vest at the rate of 331⁄3 percent per year with vesting dates of January 2, 2016, January 2, 2017, and January 2, 2018. Options awarded to NEOs on October 13, 2015, cliff vest after three yearsvested in their entirety on October 13, 2018. Options awarded to NEOs on March 2, 2016, vest at the rate of 331⁄3 percent per year with vesting dates of March 2, 2017, March 2, 2018, and March 2, 2019. Options awarded to NEOs on March 1, 2017, vest at the rate of 331⁄3 percent per year with vesting dates of March 1, 2018, March 1, 2019, and March 1, 2020. Options awarded to NEOs on February 22, 2018, vest at the rate of 331⁄3 percent per year with vesting dates of February 22, 2019, February 22, 2020, and February 22, 2021. LTI awards are generally subject to continued employment through the applicable vesting period. |
(2) | Based on the closing price of our common stock on the award date adjusted when applicable for theSpin-Off. |
(3) | Based on the closing price of our common stock of $31.39$28.01 on December 29, 2017, the last trading day of 2017.31, 2018. |
(4a) | Restricted shares awarded on January 2, 2015, vest at the rate of 33 1⁄3 percent per year, subject to satisfaction of vesting criteria for the applicable year, with vesting dates of January 2, 2016, January 2, 2017, and January 2, 2018. The number of restricted shares is based on the adjustment as a result of theSpin-Off on September 26, 2015. LTI awards are generally subject to continued employment through the applicable vesting period. |
(4b) | RSUs awarded on January 2, 2015, vest at the rate of 33 1⁄3 percent per year, subject to satisfaction of vesting criteria for the applicable year, with vesting dates of January 2, 2016, January 2, 2017, and January 2, 2018. The number of RSUs is based on the adjustment as a result of theSpin-Off on September 26, 2015. LTI awards are generally subject to continued employment through the applicable vesting period. |
(4c) | RSUs awarded on August 20, 2015, vest at 33 1⁄3 percent per year, subject to satisfaction of vesting criteria for the applicable year, with vesting dates of August 20, 2016, August 20, 2017, and August 20, 2018. The number of RSUs is based on the adjustment as a result of theSpin-Off on September 26, 2015. LTI awards are generally subject to continued employment through the applicable vesting period. |
(4d) | RSUs awarded on October 13, 2015, cliff vest after three years on October 13, 2018. LTI awards are generally subject to continued employment through the applicable vesting period. |
(4e) | RSUs awarded on October 13, 2015, vest at 33 1⁄3 percent per year, subject to satisfaction of vesting criteria for the applicable year, with vesting dates of October 13, 2016, October 13, 2017, and October 13, 2018. LTI awards are generally subject to continued employment through the applicable vesting period. |
(5a) | RSUs awarded on March 2, 2016, vest at the rate of 33 1⁄/3 percent per year, subject to satisfaction of vesting criteria for the applicable year, with vesting dates of March 2, 2017, March 2, 2018, and March 2, 2019. LTI awards are generally subject to continued employment through the applicable vesting period. |
(5b)(4b) | PSUs awarded on March 2, 2016, become eligible to vest March 2,vested on February 11, 2019, subject to satisfactionupon Committee certification of achievement of external performance criteria for the three-year performance period. The Committee certified 150% achievement and these awards were distributed on February 22, 2019 at maximum performance. LTI awards are generally subject to continued employment through the applicable vesting period. PSUs are capped at target if our TSR is negative. Amount presented assumesbased on achievement ofat the maximum performance level. |
(6a)(5a) | RSUs awarded on March 1, 2017, vest at the rate of 33 1⁄/3 percent per year, subject to satisfaction of vesting criteria for the applicable year, with vesting dates of March 1, 2018, March 1, 2019, and March 1, 2020. LTI awards are generally subject to continued employment through the applicable vesting period. |
(6b)(5b) | PSUs awarded on March 1, 2017, become eligible to vest March 1, 2020,upon Committee certification of achievement, subject to satisfaction of external performance criteria for the three-year performance period. LTI awards are generally subject to continued employment through the applicable vesting period. PSUs are capped at target if our TSR is negative. Amount presented assumes achievement ofat the maximum performance level. |
(6a) | RSUs awarded on February 22, 2018, vest at the rate of 33 1/3 percent per year, subject to satisfaction of vesting criteria for the applicable year, with vesting dates of February 22, 2019, February 22, 2020, and February 22, 2021. LTI awards are generally subject to continued employment through the applicable vesting period. |
(6b) | PSUs awarded on February 22, 2018, become eligible to vest upon Committee certification of achievement, subject to satisfaction of external performance criteria for the three-year performance period. LTI awards are generally subject to continued employment through the applicable vesting period. PSUs are capped at target if our TSR is negative. Amount presented assumes achievement at the target performance level. |
OPTION EXERCISES AND STOCK VESTED IN 20172018 The following table sets forth stock vested for each of our NEOs in 2017.2018. Our NEOs did not exercise any Options in 2017.2018. | | | | | | | | | | | | | | | | | | | Option Awards | | | Stock Awards | | | | Option Awards | | | Stock Awards | | | | Name | | Number of Shares Acquired on Exercise (#) | | | Value Realized on Exercise ($) | | | Number of Shares Acquired on Vesting (#) | | | Value Realized on Vesting ($)(1) | | | Number of Shares Acquired on Exercise (#) | | | Value Realized on Exercise ($) | | | Number of Shares Acquired on Vesting (#) | | | Value Realized on Vesting ($)(1) | | Eugene J. Lowe, III | | | — | | | $ | — | | | | 34,609 | | | $ | 897,344 | | | | — | | | $ | — | | | | 136,248 | | | $ | 4,097,396 | | Scott W. Sproule | | | — | | | $ | — | | | | 21,992 | | | $ | 542,173 | | | | — | | | $ | — | | | | 41,935 | | | $ | 1,282,463 | | J. Randall Data | | | — | | | $ | — | | | | 10,895 | | | $ | 310,861 | | | | — | | | $ | — | | | | 33,260 | | | $ | 997,050 | | John W. Nurkin | | | — | | | $ | — | | | | 15,935 | | | $ | 392,083 | | | | — | | | $ | — | | | | 29,188 | | | $ | 897,397 | | John W. Swann, III | | | — | | | $ | — | | | | 14,582 | | | $ | 358,875 | | | | — | | | $ | — | | | | 30,498 | | | $ | 921,868 | |
(1) | The value realized on vesting of stock awards includes RSUs that vested on January 3, 2017,2, 2018, based on a market value of $23.72,$31.39, for each of Mr. Lowe, Mr. Sproule, Mr. Data, Mr. Nurkin, and PSUsMr. Swann. The value realized on vesting of stock awards also includes RSUs that vested on January 3, 2017,March 1, 2018, based on a market value of $23.72,$31.23 for each of Mr. Lowe, Mr. Sproule, Mr. Data, Mr. Nurkin, and Mr. Swann. The value realized on vesting of stock awards also includes RSUs that vested on March 2, 2017,2018, based on a market value of $27.40$30.81 for each of Mr. Lowe, Mr. Sproule, Mr. Data, Mr. Nurkin, and Mr. Swann. For Mr. Sproule and Mr. Nurkin, the value also includes RSUs that vested August 21, 2017,20, 2018, based on a market value of $24.14.$34.63. The value realized on vesting of stock awards includes RSUs that vested on October 15, 2018, based on a market value of $29.75 for each of Mr. Lowe, Mr. Sproule, Mr. Data, Mr. Nurkin, and Mr. Swann. For Mr. Data, the value also includes RSUs that vested October 13, 2017,15, 2018, based on a market value of $29.23.$29.75. |
PENSION BENEFITS No SPX executive officer participates in an SPX defined benefit pension plan. | | | | | 36 | | 20182019 PROXY STATEMENT | | 35 |
EXECUTIVE COMPENSATION NONQUALIFIED DEFERRED COMPENSATION The following table sets forth information relating to the SPX Corporation Supplemental Retirement Savings Plan (“SRSP”) for NEOs in 2017.2018. Other members of senior-level management are also eligible to participate in the SRSP, a nonqualified deferred compensation plan that allows them to makepre-tax deferrals in excess of those permitted by the 401(k) Plan. Eligible executives may defer up to 50% of their base compensation (excluding annual bonuses) and up to 100% of their annual bonuses into the SRSP. Both base compensation and annual bonus deferral elections are made prior to the beginning of the year to which they relate. A company match is made to the SRSP after the maximum company match has been made under the 401(k) Plan, and the deferrals and match are allocated to the fund(s) under the SRSP as selected by the participant. In general, “eligible compensation” for purposes of the SRSP is the amount reported as wages on a participant’sForm W-2, (1) increased by (a) amounts contributed by the participant to the 401(k) Plan and the SPX Corporation Flexible Spending Account Plans, and (b) vacation and holiday pay paid after termination of employment; and (2) decreased by (a) reimbursements or other expense allowances, (b) fringe benefits (cash andnon-cash), (c) moving expenses, (d) welfare benefits (provided that short-term disability payments are included and long-term disability payments are excluded), (e) employer-provided automobiles, mileage reimbursements, and car allowances for which no documentation is required, taxable andnon-taxable tuition reimbursements, the taxable value of physical examinations, and group term life insurance coverage in excess of $50,000, (f) pay in lieu of notice, (g) deferred compensation, (h) the value of restricted shares and other equity awards, and (i) severance pay paid after termination of employment. All matching contributions into the SRSP are made in cash and invested according to the participant’s elections. All participant and matching contributions vest immediately. There is no minimum holding period. The SRSP is unfunded and earnings are credited on account balances based on participant direction within the same investment choices available in the 401(k) Plan, except that the SPX Company Stock Fund and a stable value fund are not available under the SRSP. All returns in the SRSP and the 401(k) Plan are at market rates.In-service distributions are not allowed under the SRSP. All amounts deferred under the SRSP after 2009 will be paid in alump-sum payment six months following termination of employment. Participants may elect to receive theirpre-2009 accounts in a lump sum, annual installments (two to ten years), or monthly installments (up to 120 months) upon separation from service, on a date that is a specified number of months after retirement or separation from service, or on a specified date following separation from service (no later than attainment of age 701⁄2). | | | | | | | | | | | | | | | Name | | Executive Contributions in Last FY ($)(1) | | | Registrant Contributions in Last FY ($)(2) | | | Aggregate Earnings in Last FY ($)(3) | | | Aggregate Withdrawals/ Distributions ($) | | | Aggregate Balance at Last FYE ($) | | | Executive Contributions in Last FY ($)(1) | | | Registrant Contributions in Last FY ($)(2) | | | Aggregate Earnings in Last FY ($)(3) | | | Aggregate Withdrawals/ Distributions ($) | | | Aggregate Balance at Last FYE ($) | | Eugene J. Lowe, III | | $ | 72,081 | | | $ | 60,068 | | | $ | 61,314 | | | $ | — | | | $ | 414,810 | | | $ | 127,125 | | | $ | 105,937 | | | $ | 33,814 | | | $ | — | | | $ | 681,686 | | Scott W. Sproule | | $ | 43,024 | | | $ | 17,927 | | | $ | 71,934 | | | $ | — | | | $ | 520,864 | | | $ | — | | | $ | — | | | $ | 34,329 | | | $ | — | | | $ | 555,193 | | J. Randall Data | | $ | 20,808 | | | $ | 17,340 | | | $ | 8,518 | | | $ | — | | | $ | 71,387 | | | $ | 21,555 | | | $ | 17,963 | | | $ | 6,145 | | | $ | — | | | $ | 117,050 | | John W. Nurkin | | $ | 19,809 | | | $ | 12,381 | | | $ | 20,407 | | | $ | — | | | $ | 156,466 | | | $ | 38,141 | | | $ | 23,838 | | | $ | 15,064 | | | $ | — | | | $ | 235,284 | | John W. Swann, III | | $ | 29,405 | | | $ | 9,802 | | | $ | 63,726 | | | $ | — | | | $ | 412,815 | | | $ | 57,927 | | | $ | 19,309 | | | $ | 41,613 | | | $ | — | | | $ | 531,664 | |
(1) | Contributions to the SRSP consisted of the following amounts reported in the Summary Compensation Table. |
| | | | | | | | | | | | | | | | | | | | | Name | | 2017 Salary | | | 2016Non-Equity Incentive Plan Compensation | | | | | | | | Eugene J. Lowe, III | | $ | 39,936 | | | $ | 32,145 | | | | | | | | Scott W. Sproule | | $ | 43,024 | | | $ | — | | | | | | | | J. Randall Data | | $ | 20,808 | | | $ | — | | | | | | | | John W. Nurkin | | $ | 19,809 | | | $ | — | | | | | | | | John W. Swann, III | | $ | 29,405 | | | $ | — | |
| | | | | | | | | | | | | | | | | Name | | 2018 Salary | | | 2017Non-Equity Incentive Plan Compensation | | | | Eugene J. Lowe, III | | $ | 41,171 | | | $ | 85,954 | | | | Scott W. Sproule | | $ | — | | | $ | — | | | | J. Randall Data | | $ | 21,555 | | | $ | — | | | | John W. Nurkin | | $ | 23,815 | | | $ | 15,418 | | | | John W. Swann, III | | $ | 52,112 | | | $ | 5,815 | |
(2) | Represents matching amounts contributed by SPX to the SRSP. These amounts have been included in the All Other Compensation column of the Summary Compensation Table. |
(3) | Aggregate earnings under the SRSP are not above market and, accordingly, are not included in the Summary Compensation Table. |
| | | | | | | 2018 PROXY STATEMENT36 | | 37 2019 PROXY STATEMENT | | |
EXECUTIVE COMPENSATION POTENTIAL PAYMENTS UPON TERMINATION ORCHANGE-IN-CONTROL Our NEOs are covered bychange-in-control agreements, severance agreements, and stock plan award agreements governing compensation in the event of a termination of employment or a change in control of our Company. In addition, we have entered into an employment agreement with Mr. Lowe in lieu of a severance agreement. The following tables set forth the expected benefits to be received by each NEO in the event of histheir termination resulting from various scenarios, assuming a termination date of December 31, 20172018 and a stock price of $31.39,$28.01, our closing stock price on December 29, 2017,31, 2018 the last tradetrading day of fiscal 2017.2018. Assumptions and explanations of the numbers set forth in the tables below are set forth in the footnotes to, and in additional text following, the tables. | | | | | | | | | | | | | | | | | | Eugene J. Lowe, III | | (a) Voluntary Resignation or (b) Involuntary Termination For Cause | | | Disability | | | Death Pre-retirement | | | Involuntary Without Cause/ Voluntary Resignation for Good Reason | | | Termination Following Change in Control | | | (a) Voluntary Resignation or (b) Involuntary Termination For Cause | | | Disability | | | Death Pre-retirement | | | Involuntary Without Cause/ Voluntary Resignation for Good Reason | | | Termination Following Change in Control | | Salary | | $ | — | | | $ | — | | | $ | — | | | $ | 1,651,912 | (1) | | $ | 2,477,868 | (3) | | $ | — | | | $ | — | | | $ | — | | | $ | 1,701,470 | (1) | | $ | 2,552,205 | (2) | Bonus | | $ | — | | | $ | 825,956 | (4) | | $ | 825,956 | (4) | | $ | 3,097,446 | (5) | | $ | 4,646,169 | (7) | | $ | — | | | $ | 850,735 | (3) | | $ | 850,735 | (3) | | $ | 3,097,446 | (4) | | $ | 4,646,169 | (5) | Value of Accelerated Equity | | $ | — | | | $ | 17,507,148 | (9) | | $ | 17,507,148 | (9) | | $ | 16,200,084 | (10) | | $ | 17,507,148 | (9) | | $ | — | | | $ | 6,072,306 | (6) | | $ | 6,072,306 | (6) | | $ | 5,112,137 | (7) | | $ | 6,072,306 | (6) | Value of Accelerated CPUs | | $ | — | | | $ | 1,354,126 | (11) | | $ | 1,354,126 | (11) | | $ | 1,354,126 | (11) | | $ | 1,354,126 | (11) | | $ | — | | | $ | 2,129,126 | (8) | | $ | 2,129,126 | (8) | | $ | 2,129,126 | (8) | | $ | 2,129,126 | (8) | All Other Compensation | | $ | 79,241 | (12) | | $ | 79,241 | (12) | | $ | 79,241 | (12) | | $ | 174,486 | (13) | | $ | 234,085 | (14) | | $ | 81,801 | (9) | | $ | 81,801 | (9) | | $ | 81,801 | (9) | | $ | 182,103 | (10) | | $ | 248,542 | (11) | TOTAL | | $ | 79,241 | | | $ | 19,766,471 | | | $ | 19,766,471 | | | $ | 22,478,054 | | | $ | 26,219,396 | | | $ | 81,801 | | | $ | 9,133,968 | | | $ | 9,133,968 | | | $ | 12,222,282 | | | $ | 15,648,348 | |
| | | | | | | | | | | | | | | Scott W. Sproule | | (a) Voluntary Resignation or (b) Involuntary Termination For Cause | | | Disability | | | Death Pre-retirement | | | Involuntary Without Cause/ Voluntary Resignation for Good Reason | | | Termination Following Change in Control | | | (a) Voluntary Resignation or (b) Involuntary Termination For Cause | | | Disability | | | Death Pre-retirement | | | Involuntary Without Cause/ Voluntary Resignation for Good Reason | | | Termination Following Change in Control | | Salary | | $ | — | | | $ | — | | | $ | — | | | $ | 445,281 | (2) | | $ | 890,562 | (1) | | $ | — | | | $ | — | | | $ | — | | | $ | 458,639 | (12) | | $ | 917,278 | (1) | Bonus | | $ | — | | | $ | 311,697 | (4) | | $ | 311,697 | (4) | | $ | 584,452 | (6) | | $ | 1,168,904 | (8) | | $ | — | | | $ | 321,047 | (3) | | $ | 321,047 | (3) | | $ | 584,452 | (13) | | $ | 1,168,904 | (4) | Value of Accelerated Equity | | $ | — | | | $ | 4,569,206 | (9) | | $ | 4,569,206 | (9) | | $ | 3,214,280 | (10) | | $ | 4,569,206 | (9) | | $ | — | | | $ | 1,494,781 | (6) | | $ | 1,494,781 | (6) | | $ | 943,410 | (7) | | $ | 1,494,781 | (6) | Value of Accelerated CPUs | | $ | — | | | $ | 332,281 | (11) | | $ | 332,281 | (11) | | $ | 332,281 | (11) | | $ | 332,281 | (11) | | $ | — | | | $ | 519,781 | (8) | | $ | 519,781 | (8) | | $ | 519,781 | (8) | | $ | 519,781 | (8) | All Other Compensation | | $ | 42,815 | (15) | | $ | 42,815 | (15) | | $ | 42,815 | (15) | | $ | 95,285 | (16) | | $ | 124,771 | (17) | | $ | 44,100 | (9) | | $ | 44,100 | (9) | | $ | 44,100 | (9) | | $ | 107,300 | (14) | | $ | 148,639 | (15) | TOTAL | | $ | 42,815 | | | $ | 5,255,999 | | | $ | 5,255,999 | | | $ | 4,671,579 | | | $ | 7,085,724 | | | $ | 44,100 | | | $ | 2,379,709 | | | $ | 2,379,709 | | | $ | 2,613,582 | | | $ | 4,249,383 | |
| J. Randall Data | | (a) Voluntary Resignation or (b) Involuntary Termination For Cause | | | Disability | | | Death Pre-retirement | | | Involuntary Without Cause/ Voluntary Resignation for Good Reason | | | Termination Following Change in Control | | | | | | | J Randall Data | | | (a) Voluntary Resignation or (b) Involuntary Termination For Cause | | | Disability | | | Death Pre-retirement | | | Involuntary Without Cause/ Voluntary Resignation for Good Reason | | | Termination Following Change in Control | | Salary | | $ | — | | | $ | — | | | $ | — | | | $ | 430,440 | (2) | | $ | 860,880 | (1) | | $ | — | | | $ | — | | | $ | — | | | $ | 445,506 | (12) | | $ | 891,011 | (1) | Bonus | | $ | — | | | $ | 279,786 | (4) | | $ | 279,786 | (4) | | $ | 524,618 | (6) | | $ | 1,049,236 | (8) | | $ | — | | | $ | 289,579 | (3) | | $ | 289,579 | (3) | | $ | 524,618 | (13) | | $ | 1,049,236 | (4) | Value of Accelerated Equity | | $ | — | | | $ | 3,702,987 | (9) | | $ | 3,702,987 | (9) | | $ | 2,565,822 | (10) | | $ | 3,702,987 | (9) | | $ | — | | | $ | 1,284,490 | (6) | | $ | 1,284,490 | (6) | | $ | 771,146 | (7) | | $ | 1,284,490 | (6) | Value of Accelerated CPUs | | $ | — | | | $ | 288,325 | (11) | | $ | 288,325 | (11) | | $ | 288,325 | (11) | | $ | 288,325 | (11) | | $ | — | | | $ | 463,325 | (8) | | $ | 463,325 | (8) | | $ | 463,325 | (8) | | $ | 463,325 | (8) | All Other Compensation | | $ | 41,388 | (15) | | $ | 41,388 | (15) | | $ | 41,388 | (15) | | $ | 91,119 | (16) | | $ | 117,866 | (17) | | $ | 42,837 | (9) | | $ | 42,837 | (9) | | $ | 42,837 | (9) | | $ | 103,571 | (14) | | $ | 142,444 | (15) | TOTAL | | $ | 41,388 | | | $ | 4,312,486 | | | $ | 4,312,486 | | | $ | 3,900,324 | | | $ | 6,019,294 | | | $ | 42,837 | | | $ | 2,080,231 | | | $ | 2,080,231 | | | $ | 2,308,166 | | | $ | 3,830,506 | |
| | | | | 38 | | �� 20182019 PROXY STATEMENT | | 37 |
EXECUTIVE COMPENSATION | | | | | | | | | | | | | | | John W. Nurkin | | (a) Voluntary Resignation or (b) Involuntary Termination For Cause | | | Disability | | | Death Pre-retirement | | | Involuntary Without Cause/ Voluntary Resignation for Good Reason | | | Termination Following Change in Control | | | (a) Voluntary Resignation or (b) Involuntary Termination For Cause | | | Disability | | | Death Pre-retirement | | | Involuntary Without Cause/ Voluntary Resignation for Good Reason | | | Termination Following Change in Control | | Salary | | $ | — | | | $ | — | | | $ | — | | | $ | 355,047 | (2) | | $ | 710,094 | (1) | | $ | — | | | $ | — | | | $ | — | | | $ | 369,249 | (12) | | $ | 738,498 | (1) | Bonus | | $ | — | | | $ | 213,028 | (4) | | $ | 213,028 | (4) | | $ | 399,442 | (6) | | $ | 798,884 | (8) | | $ | — | | | $ | 221,549 | (3) | | $ | 221,549 | (3) | | $ | 399,442 | (13) | | $ | 798,884 | (4) | Value of Accelerated Equity | | $ | — | | | $ | 3,082,524 | (9) | | $ | 3,082,524 | (9) | | $ | 2,176,846 | (10) | | $ | 3,082,524 | (9) | | $ | — | | | $ | 1,000,614 | (6) | | $ | 1,000,614 | (6) | | $ | 627,932 | (7) | | $ | 1,000,614 | (6) | Value of Accelerated CPUs | | $ | — | | | $ | 223,185 | (11) | | $ | 223,185 | (11) | | $ | 223,185 | (11) | | $ | 223,185 | (11) | | $ | — | | | $ | 349,435 | (8) | | $ | 349,435 | (8) | | $ | 349,435 | (8) | | $ | 349,435 | (8) | All Other Compensation | | $ | 28,617 | (15) | | $ | 28,617 | (15) | | $ | 28,617 | (15) | | $ | 78,119 | (16) | | $ | 105,356 | (17) | | $ | 35,505 | (9) | | $ | 35,505 | (9) | | $ | 35,505 | (9) | | $ | 86,389 | (14) | | $ | 116,177 | (15) | TOTAL | | $ | 28,617 | | | $ | 3,547,354 | | | $ | 3,547,354 | | | $ | 3,232,639 | | | $ | 4,920,043 | | | $ | 35,505 | | | $ | 1,607,103 | | | $ | 1,607,103 | | | $ | 1,832,447 | | | $ | 3,003,608 | |
| | | | | | | | | | | | | | | John W. Swann, III | | (a) Voluntary Resignation or (b) Involuntary Termination For Cause | | | Disability | | | Death Pre-retirement | | | Involuntary Without Cause/ Voluntary Resignation for Good Reason | | | Termination Following Change in Control | | | (a) Voluntary Resignation or (b) Involuntary Termination For Cause | | | Disability | | | Death Pre-retirement | | | Involuntary Without Cause/ Voluntary Resignation for Good Reason | | | Termination Following Change in Control | | Salary | | $ | — | | | $ | — | | | $ | — | | | $ | 418,180 | (2) | | $ | 836,360 | (1) | | $ | — | | | $ | — | | | $ | — | | | $ | 430,726 | (12) | | $ | 861,451 | (1) | Bonus | | $ | — | | | $ | 250,908 | (4) | | $ | 250,908 | (4) | | $ | 250,908 | (6) | | $ | 501,816 | (8) | | $ | — | | | $ | 258,435 | (3) | | $ | 258,435 | (3) | | $ | 339,828 | (13) | | $ | 679,656 | (4) | Value of Accelerated Equity | | $ | — | | | $ | 3,352,297 | (9) | | $ | 3,352,297 | (9) | | $ | 2,437,470 | (10) | | $ | 3,352,297 | (9) | | $ | — | | | $ | 1,020,307 | (6) | | $ | 1,020,307 | (6) | | $ | 641,962 | (7) | | $ | 1,020,307 | (6) | Value of Accelerated CPUs | | $ | — | | | $ | 223,201 | (11) | | $ | 223,201 | (11) | | $ | 223,201 | (11) | | $ | 223,201 | (11) | | $ | — | | | $ | 355,701 | (8) | | $ | 355,701 | (8) | | $ | 355,701 | (8) | | $ | 355,701 | (8) | All Other Compensation | | $ | 33,655 | (15) | | $ | 33,655 | (15) | | $ | 33,655 | (15) | | $ | 92,605 | (16) | | $ | 132,946 | (17) | | $ | 41,416 | (9) | | $ | 41,416 | (9) | | $ | 41,416 | (9) | | $ | 90,997 | (14) | | $ | 115,132 | (15) | TOTAL | | $ | 33,655 | | | $ | 3,860,061 | | | $ | 3,860,061 | | | $ | 3,422,364 | | | $ | 5,046,620 | | | $ | 41,416 | | | $ | 1,675,859 | | | $ | 1,675,859 | | | $ | 1,859,214 | | | $ | 3,032,247 | |
(1) | Two times current base salary. |
(2) | OneThree times current base salary. |
(3) | Three times current base salary. |
(4) | Reflects annual bonus, which is equal to apro-rated portion of the highest of actual bonus for year preceding termination or current-year target bonus. |
(5)(4) | Two times annual bonus, which is equal to the highest of actual bonus for year preceding termination or current-year target bonus plus the amount, if any, that the bonus that would have been paid to the executive for the bonus plan year in which such termination of employment occurs, based on the performance level actually attained, exceeds the amount payable under the highest of prior actual or current target bonus. |
(5) | Three times annual bonus, which is equal to the highest of actual bonus for year preceding termination or current year target bonus plus the amount, if any, that the bonus that would have been paid to the executive for the bonus plan year in which such termination of employment occurs, based on the performance level actually attained, exceeds the amount payable under the highest of prior actual or current target bonus. |
(6) | Represents the accelerated vesting of all unvested PSUs (at assumed target performance level), RSUs, and Options. |
(7) | Represents the accelerated vesting of all unvested PSUs (at assumed target performance level), RSUs, and Options, which would have otherwise vested within two years of termination for Mr. Lowe and within one year for Mr. Sproule, Mr. Data, Mr. Nurkin, and Mr. Swann. |
(8) | Represents the accelerated vesting of all unvested CPUs at assumed target performance level. |
(9) | Other compensation includes payout of accrued vacation (up to five weeks of base salary). |
(10) | Sum of other compensation for Mr. Lowe includes: |
Payout of accrued vacation (up to five weeks of base salary). Maximum outplacement benefit for involuntary termination of $50,000. The Company will reimburse premiums paid over benefit continuation period. Value shown represents group term life imputed income in year preceding termination. The Company cost of health and welfare benefit continuation for 2 years. The value of perquisites (annual physical, financial planning, and tax preparation) on the same basis as the executive was receiving in the year preceding termination for 2 years. (11) | Sum of other compensation for Mr. Lowe includes: |
Payout of accrued vacation (up to five weeks of base salary). Maximum outplacement benefit for involuntary termination of $50,000. The Company will reimburse premiums paid over benefit continuation period. Value shown represents group term life imputed income in year preceding termination. | | | | | 38 | | 2019 PROXY STATEMENT | | |
EXECUTIVE COMPENSATION The full cost of health and welfare and vision benefit continuation for 3 years. The value of perquisites (annual physical, financial planning, and tax preparation) on the same basis as the executive was receiving in the year preceding termination for 3 years. (12) | One times current base salary. |
(13) | One times annual bonus, which is equal to the highest of actual bonus for year preceding termination or current year target bonus plus the amount, if any, that the bonus that would have been paid to the executive for the bonus plan year in which such termination of employment occurs, based on the performance level actually attained, exceeds the amount payable under the highest of prior actual or current target bonus. |
(7)(14) | Three times annual bonus, which is equal to the highestSum of actual bonus for year preceding termination or current year target bonus plus the amount, if any, that the bonus that would have been paid to the executive for the bonus plan year in which such termination of employment occurs, based on the performance level actually attained, exceeds the amount payable under the highest of prior actual or current target bonus. |
(8) | Two times annual bonus, which is equal to the highest of actual bonus for year preceding termination or current year target bonus plus the amount, if any, that the bonus that would have been paid to the executive for the bonus plan year in which such termination of employment occurs, based on the performance level actually attained, exceeds the amount payable under the highest of prior actual or current target bonus. |
(9) | Represents the accelerated vesting of all unvested PSUs (at assumed target performance level), RSUs, and Options. |
(10) | Represents the accelerated vesting of all unvested PSUs (at assumed target performance level), RSUs, and Options, which would have otherwise vested within two years of termination for Mr. Lowe and within one yearother compensation for Mr. Sproule, Mr. Data, Mr. Nurkin, and Mr. Swann. |
Swann includes: (11) | Represents the accelerated vesting of all unvested CPUs at assumed target performance level. |
(12) | Other compensation for Mr. Lowe includes payout of accrued vacation (up to five weeks of base salary). |
(13) | Sum of other compensation for Mr. Lowe includes: |
Payout of accrued vacation (up to five weeks of base salary). Maximum outplacement benefit for involuntary termination of $50,000.$35,000. The Company will reimburse premiums paid over benefit continuation period. Value shown represents group term life imputed income in year preceding termination. | | | | | | | 2018 PROXY STATEMENT | | 39 |
EXECUTIVE COMPENSATION
The Company cost of health and welfare benefit continuation for 2 years.1 year. The value of perquisites (annual physical, financial planning, and tax preparation) on the same basis as the executive was receiving in the year preceding termination for 1 year. (15) | Sum of other compensation for Mr. Sproule, Mr. Data, Mr. Nurkin, and Mr. Swann includes: |
Payout of accrued vacation (up to five weeks of base salary). Maximum outplacement benefit for involuntary termination of $35,000. The Company will reimburse premiums paid over benefit continuation period. Value shown represents group term life imputed income in year preceding termination. The full cost of health and welfare and vision benefit continuation for 2 years. The value of perquisites (annual physical, financial planning, and tax preparation) on the same basis as the executive was receiving in the year preceding termination for 2 years. (14) | Sum of other compensation for Mr. Lowe includes: |
Payout of accrued vacation (up to five weeks of base salary).
Maximum outplacement benefit for involuntary termination of $50,000.
The Company will reimburse premiums paid over benefit continuation period. Value shown represents group term life imputed income in year preceding termination.
The full cost of health and welfare and vision benefit continuation for 3 years.
The value of perquisites (annual physical, financial planning, and tax preparation) on the same basis as the executive was receiving in the year preceding termination for 3 years.
(15) | Sum of other compensation for Mr. Sproule, Mr. Data, Mr. Nurkin, and Mr. Swann includes payout of accrued vacation (up to five weeks of base salary). |
(16) | Sum of other compensation for Mr. Sproule, Mr. Data, Mr. Nurkin, and Mr. Swann includes: |
Payout of accrued vacation (up to five weeks of base salary).
Maximum outplacement benefit for involuntary termination of $35,000.
The Company will reimburse premiums paid over benefit continuation period. Value shown represents group term life imputed income in year preceding termination.
The Company cost of health and welfare benefit continuation for 1 year.
The value of perquisites (annual physical, financial planning, and tax preparation) on the same basis as the executive was receiving in the year preceding termination for 1 year.
(17) | Sum of other compensation for Mr. Sproule, Mr. Data, Mr. Nurkin, and Mr. Swann includes: |
Payout of accrued vacation (up to five weeks of base salary).
Maximum outplacement benefit for involuntary termination of $35,000.
The Company will reimburse premiums paid over benefit continuation period. Value shown represents group term life imputed income in year preceding termination.
The full cost of health and welfare and vision benefit continuation for 2 years.
The value of perquisites (annual physical, financial planning, and tax preparation) on the same basis as the executive was receiving in the year preceding termination for 2 years.
| | | | | 40 | | 20182019 PROXY STATEMENT | | 39 |
EXECUTIVE COMPENSATION Equity Compensation Plan Information The following table provides information as of December 31, 2017,2018, about SPX common stock that may be issued upon the exercise of options and rights under all our existing equity compensation plans, each of which was approved by our stockholders. These plans include 2002 Stock Compensation Plan (and its predecessor plan, the 1992 Stock Compensation Plan) and the 2006Non-Employee Directors’ Stock Incentive Plan. | | | | | | | | | | | | | | | | Plan Category | | Number of Securities to Be Issued Upon Exercise of Outstanding Options, Warrants, and Rights (a)(1) | | Weighted-Average Exercise Price of Outstanding Options, Warrants, and Rights (b)(2) | | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))(3) | | Number of Securities to Be Issued Upon Exercise of Outstanding Options, Warrants, and Rights (a)(1) | | Weighted-Average Exercise Price of Outstanding Options, Warrants, and Rights (b)(2) | | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))(3) | | | | | | Equity Compensation Plans Approved By Stockholders | | 2,836,664 | | 14.67 | | 1,682,429 | | 2,369,365 | | 16.58 | | 1,709,744 | | | | | | Total | | 2,836,664 | | 14.67 | | 1,682,429 | | 2,369,365 | | 16.58 | | 1,709,744 |
(1) | Comprised of 1,606,9491,717,253 shares issuable upon the exercise of outstanding Options and 1,229,715652,112 shares issuable pursuant to RSUs and PSUs. |
(2) | Excludes RSUs and PSUs. |
(3) | All these shares were available for issuance under the 2002 Stock Compensation Plan and 2006Non-Employee Directors’ Stock Incentive Plan. |
| | | | | | | 2018 PROXY STATEMENT40 | | 41 2019 PROXY STATEMENT | | |
PROPOSAL 2: APPROVAL OF NAMED EXECUTIVE OFFICERS’ COMPENSATION, ON ANON-BINDING ADVISORY BASIS(“SAY-ON-PAY”) We are asking our stockholders to cast an advisory vote at our Annual Meeting to approve the compensation of our NEOs, as disclosed in this Proxy Statement. Although the vote isnon-binding, the Committee and the Board value your opinion and will consider the outcome of the vote in revising our compensation philosophy and making future compensation decisions. We intend to seek approval of our executive compensation on an annual basis. WHY YOU SHOULD APPROVE OUR NEO COMPENSATION During our second full year as the “new” SPX,2018, we continued to focus on our commitment to having an executive compensation program that is aligned with stockholder interests and our goal of creating asustaining our meaningfulpay-for-performance culture. At our 20172018 Annual Meeting, approximately 96%97% of votes cast approved our executive compensation. We interpreted this result,The approval vote has improved each year since 2016, which exceeded the approximately 90% favorable vote we received in 2016,interpret as a strong endorsement of our executive compensation program design and direction — further validating that our program is currently structured in the best interests of both our stockholders and executives. Our executive compensation and executive compensation program are more fully described in the “Compensation Discussion and Analysis,” beginning on page 18, and in the “Summary Compensation Table” and subsequent tables, beginning on page 32.31. OVERVIEW Key Components of Our Compensation Program Base Salary We target base salary for NEOs at the market median of peer companies for established performers. Annual Incentive We focus annual bonus pay based on operating income, cash flow, and revenue goals. Long-term Incentives We target long-term pay based 50% on performance units, 25% on stock options, and 25% on restricted stock units. Change in Control Provisions We have double-triggerdouble trigger provisions in the event of a change ofin control. Updated Peer GroupNo Pledging or Hedging
We refineddo not permit officer or director hedging or pledging of our peer group to better reflect our industry, size, and competition.common stock. Benefits and Perquisites We have no NEO participation in defined benefit pension plans or retiree medical benefits. | | | | | | | | | YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE“FOR” THE APPROVAL OF NAMED EXECUTIVE OFFICERS’ COMPENSATION, ON A NON-BINDING ADVISORY BASIS (“SAY-ON-PAY”). |
| | | | | 42 | | 20182019 PROXY STATEMENT | | 41 |
SPX CORPORATION 2019 STOCK COMPENSATION PLAN SUMMARY THE 2019 PLAN GENERALLY The Board adopted, and we are asking our stockholders to approve, the SPX Corporation 2019 Stock Compensation Plan (the “2019 Plan”). If approved, the 2019 Plan will replace what we refer to as the 2002 Stock Compensation Plan (the “2002 Plan”), which was last approved by our stockholders at the 2015 annual meeting, and no further awards will be made under the 2002 Plan. We are asking our stockholders to approve the 2019 Plan in order to compensate and retain our employees and to align the interests of our employees with those of our stockholders. Stockholder approval of the 2019 Plan is required under the rules of the NYSE. The Board recommends that you approve the 2019 Plan. If the 2019 Plan is approved, awards may be granted under the 2019 Plan until May 9, 2029, 10 years from the date you approve the 2019 Plan. The following summary of the 2019 Plan, as proposed, describes the material features of the 2019 Plan; however, it is not complete and, therefore, you should not rely solely on it for a detailed description of every aspect of the 2019 Plan. A copy of the 2019 Plan is included as Appendix A to this Proxy Statement. HIGHLIGHTS OF THE 2019 PLAN The following features of the 2019 Plan will protect the interests of our stockholders: • | | No single-trigger acceleration, “liberal”change-in-control definition, or excise taxgross-ups. Under the 2019 Plan, we do not automatically accelerate vesting of awards in connection with achange-in-control of our company. The 2019 Plan does not include a “liberal”change-in-control definition. We do not providechange-in-control excise taxgross-ups. |
• | | Minimum vesting requirements: The 2019 Plan includes minimum vesting requirements. Equity-based awards generally cannot vest earlier than one year after grant. Certain limited exceptions are permitted. |
• | | No repricing of options or SARs: The 2019 Plan prohibits the repricing of options or stock appreciation rights (“SARs”) without stockholder approval. |
• | | No discounted options or SARs: The 2019 Plan requires options and SARs to have an exercise price at least equal to the fair market value of our common stock on the date of grant. |
• | | No dividends on unvested awards: We do not pay dividends or dividend equivalents on options or SARs. We also do not pay dividends or dividend equivalents on unearned restricted stock, RSUs, or performance awards, except to the extent the award actually becomes vested. |
• | | Awards are subject to clawback:Awards granted under the 2019 Plan are subject to compensation clawback provisions. |
• | | Administered by an Independent Committee: The Committee, which is comprised entirely of independent directors, will administer the 2019 Plan. |
DETERMINATION OF NUMBER OF SHARES AVAILABLE FOR THE 2019 PLAN If the 2019 Plan is approved, the maximum number of shares available for grant will be 4,900,000 shares, plus any shares underlying awards granted under the 2002 Plan that expire or are terminated, surrendered, or forfeited for any reason after the effective date of the 2019 Plan. All 4,900,000 shares may be granted as incentive stock options. In setting the number of shares of common stock available under the 2019 Plan, the Board and the Committee, in consultation with our independent compensation consultant, Pearl Meyer, considered a number of factors. In particular, the Committee reviewed and discussed data regarding our historical equity grant practices, including our3-year trailing average share usage rate (referred to as the “burn rate” and set out on page 47), the total dilution with respect to the increase, and how long shares would be available given certain assumed equity granting models. Based on historical grant practices, the performance of our common stock, and our overall compensation strategy, the 2019 Plan is expected to cover awards for approximately three years. | | | | | 42 | | 2019 PROXY STATEMENT | | |
SPX CORPORATION 2019 STOCK COMPENSATION PLAN SUMMARY SHARE COUNTING, SHARE RECYCLING, AND ADJUSTMENTS FOR CHANGES IN CAPITAL Under the 2019 Plan, each option or SAR award counts against the available share pool as one share for each option or SAR awarded. Restricted stock and restricted stock units (“RSUs”) (sometimes referred to as “full value” awards), meanwhile count against the available share pool as two shares for each share of restricted stock or RSU awarded. Awards settled in cash and certain substitute awards arising from acquisitions do not count against the share pool. If an award expires, terminates, is canceled, or otherwise forfeits without issuance of shares, the shares are again available for grant under the plan. Shares tendered or surrendered to cover taxes in connection with a full value award under the 2019 Plan are added back to the share pool on a2-for-1 basis. There is no “liberal share counting” with respect to options or SARs. Shares used to cover the exercise price of options or to cover any tax withholding obligations in connection with options or SARs will not again be available for awards under the 2019 Plan. In addition, the total number of shares covering stock-settled SARs ornet-settled options will be counted against the pool of available shares, not just the net shares issued upon exercise. Any shares of common stock repurchased by us with cash proceeds from the exercise of options will not be added back to the pool of shares available for grant under the 2019 Plan. The number of shares that can be issued and the number of shares subject to outstanding awards under the 2019 Plan may be adjusted in the event of a stock split, stock dividend, corporatespin-off, reversespin-off,split-off orsplit-up, extraordinary cash dividend or other distribution of assets, recapitalization, merger, consolidation, exchange of shares, or other similar event affecting the number of shares of our outstanding common stock. In that event, the Committee also may make appropriate adjustments to any awards outstanding under the 2019 Plan. PLAN ADMINISTRATION The Committee will administer the 2019 Plan. The Committee is made up entirely of independent directors. Subject to the specific provisions of the 2019 Plan, the Committee determines award eligibility, timing and type, amount, and terms of the awards. The Committee also interprets the 2019 Plan, establishes rules and regulations under the 2019 Plan and makes all other determinations necessary or advisable for the 2019 Plan’s administration. The 2019 Plan permits the Committee to delegate to one or more of our officers, subject to the limitations of applicable law, the authority to grant and establish terms and conditions of awards other than awards made to directors or executive officers subject to the reporting requirements of Section 16(a) of the Securities Exchange Act of 1934, as amended. ELIGIBILITY Employees,non-employee directors, and individuals performing services for us are eligible to receive awards under the 2019 Plan, as determined by the Committee, and, as applicable, the Nominating and Governance Committee and Board. In 2018, approximately 85 individuals received awards under the 2002 Plan, including seven executive officers and sixnon-employee directors. TYPES OF AWARDS UNDER THE 2019 PLAN Restricted Stock and Restricted Stock Units Restricted stock refers to shares of SPX common stock that are subject to restrictions on ownership for a certain period of time. RSUs refer to units which represent the right to receive a share of SPX common stock in the future, which is subject to restrictions for a certain period of time, and payment for RSUs will be made in shares of SPX common stock (or in cash, or a combination of cash and stock). These restrictions for both restricted stock and RSUs may relate to continued employment and/or require that certain performance goals be met during a specified period, as determined by the Committee and set forth in the award agreement. In the case of restricted stock, the holder may vote the shares, and may be entitled to any dividends or other distributions, provided that such dividends or distributions are subject to the same restrictions or vesting and transferability as the underlying shares of restricted stock. In the case of RSUs, the holder may not vote the shares underlying the RSUs or receive dividend equivalents unless specified by the award agreement. The restricted stock or shares underlying RSUs become freely transferable upon the lapse of the applicable period of restriction (and delivery of the shares in the case of RSUs). The award agreement will set forth the treatment of the awards upon termination of service with the company. | | | | | | | 2019 PROXY STATEMENT | | 43 |
SPX CORPORATION 2019 STOCK COMPENSATION PLAN SUMMARY Performance Units We may grant performance units in performance stock units (PSUs) or cash performance units (CPUs). Stock units are equal in value to one share of SPX common stock. The Committee sets the terms and conditions of each award, including the performance goals that its holder must attain and the various percentages of performance unit value to be paid out upon full or partial attainment of those goals. The Committee also determines the payment that is due to the holder after the applicable performance period and whether the payment of the performance units will be made in cash, in shares of SPX common stock, or in a combination of cash and stock. The award agreement will set forth the treatment of the awards upon termination of service with the company. The Committee may select any performance goals for purposes of performance units, including, but not limited to, any of the following business criteria: cash flow cash flow from operations net asset turnover inventory turnover capital expenditures net earnings operating earnings gross or operating margin debt total earnings earnings per share from continuing operations, diluted or basic stock price total stockholder return working capital return on equity return on net assets return on total assets return on capital return on investment return on sales net or gross sales earnings from operations earnings per share, diluted or basic market share economic value added cost of capital change in assets expense reduction levels debt reduction productivity delivery performance safety record earnings before interest and taxes earnings before interest, taxes, depreciation, and amortization Stock Options Options granted under the 2019 Plan may be either “incentive stock options,” as defined under the tax laws, ornon-qualified stock options. The per share exercise price may not be less than the fair market value of SPX common stock on the date the option grant date, which, so long as SPX common stock is listed on the NYSE, is defined to be the closing price per share on that exchange. (The closing price per share of our common stock on the NYSE on March 14, 2019, was $35.03.) The Committee may specify any period of time following the date of grant during which options are exercisable, so long as the exercise period is not more than 10 years from the grant date. Incentive stock options are subject to additional limitations relating to such matters as employment status, minimum exercise price, length of exercise period, maximum value of the stock underlying the options, and a required holding period for stock received upon exercise of the option. Upon exercise, the option holder may pay the exercise price in several ways. He or she can pay: (1) in cash or its equivalent; (2) by tendering shares of previously owned SPX common stock with a fair market value equal to the exercise price; (3) by directing us to withhold shares of SPX common stock with a fair market value equal to the exercise price; (4) by delivering other approved property; or (5) by a combination of these methods. The award agreement will set forth the treatment of the award upon termination of service, including any post-termination period to exercise vested options (not to extend beyond the original expiration date). Stock Appreciation Rights A SAR allows its holder to receive payment from us equal to the amount by which the fair market value of a share of SPX common stock exceeds the exercise price of the right on the exercise date. At the time of grant, we may establish a maximum amount per share payable upon exercise of a right. The exercise price cannot be less than the fair market value of a share on the date of grant of SAR (or related stock option). | | | | | 44 | | 2019 PROXY STATEMENT | | |
SPX CORPORATION 2019 STOCK COMPENSATION PLAN SUMMARY Under the 2019 Plan, the Committee may grant SARs in conjunction with an award ofnon-qualified stock options or on a stand-alone basis. If the Committee grants a SAR with anon-qualified stock option award, then the holder can exercise the rights at any time during the life of the related option, but the exercise will proportionately reduce the number of his or her relatednon-qualified stock options. The holder can exercise stand-alone SARs during a period no longer than ten years, as determined by the Committee. Upon exercise of a SAR, we will pay the participant in cash (or in stock, or a combination of cash and stock). The award agreement will set forth the treatment of the award upon termination of service, including any post-termination period to exercise vested SARs (not to extend beyond the original expiration date). MINIMUM VESTING PERIOD Equity-based awards granted under the 2019 Plan will have aone-year minimum vesting requirement. This requirement does not apply to (1) substitute awards resulting from acquisitions, (2) shares delivered in lieu of fully vested cash awards, or (3) awards tonon-employee directors that vest on the earlier of the one year anniversary of the date of grant or the next annual meeting of stockholders (but not sooner than 50 weeks after the grant date). Also, the Committee may grant equity-based awards without regard to the minimum vesting requirement with respect to a maximum of five percent of the available share reserve authorized for issuance under the 2019 Plan. In addition, the minimum vesting requirement does not apply to the Committee’s discretion to provide for accelerated exercisability or vesting of any award, including in cases of retirement, death, disability, or a change in control, in the terms of the award or otherwise. TRANSFERABILITY The recipient of an award under the 2019 Plan generally may not pledge, assign, sell, or otherwise transfer his or her stock options, SARs, restricted stock, RSUs, or performance units other than by will or by the laws of descent and distribution. PLAN AMENDMENT AND TERMINATION; PROHIBITIONS ON REPRICING Generally, the Board may terminate, amend, or modify the 2019 Plan at any time without stockholder approval. Without stockholder approval, however, the Board may not: (1) materially increase the number of shares of SPX stock subject to the 2019 Plan; (2) change the provisions of the 2019 Plan relating to the exercise price of an option or SAR, including a reduction of the exercise price, cancellation of an option or SAR in exchange for cash or any other awards under the 2019 Plan, exchange or replace an outstanding option or SAR with a new option or SAR with a lower option price, or take any other action that would be a “repricing” of options or SARs; or (3) make a material revision (within the meaning of rules of the NYSE) to the terms of the 2019 Plan. In addition, if any action that the Board proposes to take will have a materially adverse effect on any awards outstanding under the 2019 Plan, then the affected participant must consent to the action. CLAWBACK POLICY The 2019 Plan provides that any awards are subject to any compensation recovery or clawback policy we adopt, including any policy required to comply with applicable law or listing standards, as such policy may be amended from time to time in our sole discretion. See “Impact on Compensation from Misconduct–Clawbacks” in the Compensation Discussion and Analysis on page 28. IMPACT OF CHANGE OF CONTROL The 2019 Plan does not automatically accelerate the vesting or exercisability of awards upon a “Change of Control” (as defined under the 2019 Plan). Rather, the 2019 Plan generally provides that awards will be adjusted for the transaction or replaced by “Alternative Awards” (described below), and these adjusted awards or Alternative Awards will be subject to “double trigger” provisions. Under the “double trigger” provisions, if a participant is terminated without “Cause” (as defined in the 2019 Plan) within two years after the Change of Control, any conditions on the participant’s rights under, or any restrictions on transfer, vesting, or exercisability applicable to, each such award or Alternative Award held by such participant shall lapse. These provisions may be modified by the terms of a specific award agreement approved by the Committee. The Committee, however, may determine for a particular transaction that awards should not be continued or that Alternative Awards may not be issued. In that case, awards will vest immediately before the Change of Control, or the Committee may provide for thecash-out of the awards based on the Change of Control stock price. | | | | | | | 2019 PROXY STATEMENT | | 45 |
SPX CORPORATION 2019 STOCK COMPENSATION PLAN SUMMARY To qualify as an Alternative Award, the Committee must determine that the existing awards are to be assumed, honored, or new rights substituted by the successor entity and further must: be based on shares of common stock that are traded on an established U.S. securities market or another public market; provide the participant (or each participant in a class of participants) with rights and entitlements substantially equivalent to or better than the rights, terms, and conditions applicable under such award, including, but not limited to, an identical or better exercise or vesting schedule and identical or better timing and methods of payment; have substantially equivalent economic value to such award; contain terms and conditions which provide that in the event that the participant is terminated without Cause within two years following the Change of Control, any conditions on the participant’s rights under, or any restrictions on transfer, vesting, or exercisability applicable to, each such award shall lapse; and be on terms and conditions that do not result in adverse tax consequences to the participant under Section 409A of the Internal Revenue Code. EQUITY COMPENSATION PLAN INFORMATION As of March 14, 2019, SPX had: Unvested RSUs outstanding of 169,005; Unvested PSUs outstanding of 132,940; Unvested CPUs outstanding of $6,848,387; Unvested options outstanding of 187,153; and vested options outstanding of 1,482,308 with a weighted average exercise price of $16.67 and a weighted average remaining term to expiration of 7.1 years; 1,048,287 shares remaining available for grant under the 2002 Plan. If the 2019 Plan is approved, no shares will be available for grant from the 2002 Plan, and the only shares available for grant will be the 4,900,000 shares authorized under the 2019 Plan; and 26,667 shares remaining available for grant under the 2006Non-employee Director Stock Incentive Plan. NEW PLAN BENEFITS We cannot determine the number of shares that will be awarded under the 2019 Plan to the eligible participants because all awards are granted at the discretion of the Committee. The table below shows the awards granted in 2018 under the 2002 Plan to our named executive officers, current executive officers as a group, plan participants other than current executive officers, and currentnon-employee directors. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name | | RSU ($) | | | RSU (#) | | | PSU ($)(1) | | | PSU (#)(1) | | | CPU ($)(1) | | | Options (#) | | Eugene J. Lowe, III | | $ | 825,782 | | | | 25,261 | | | $ | 899,797 | | | | 25,261 | | | $ | 775,000 | | | | 72,298 | | Scott W. Sproule | | $ | 199,801 | | | | 6,112 | | | $ | 217,709 | | | | 6,112 | | | $ | 187,500 | | | | 17,492 | | J. Randall Data | | $ | 186,496 | | | | 5,705 | | | $ | 203,212 | | | | 5,705 | | | $ | 175,000 | | | | 16,326 | | John W. Nurkin | | $ | 134,552 | | | | 4,116 | | | $ | 146,612 | | | | 4,116 | | | $ | 126,250 | | | | 11,778 | | John W. Swann, III | | $ | 141,188 | | | | 4,319 | | | $ | 153,843 | | | | 4,319 | | | $ | 132,500 | | | | 12,361 | | All current executive officers as a group | | $ | 1,706,255 | | | | 52,195 | | | $ | 1,859,186 | | | | 52,195 | | | $ | 1,601,250 | | | | 149,380 | | All employee plan participants (other than current executive officers) | | $ | 2,123,371 | | | | 64,764 | | | $ | 377,323 | | | | 10,593 | | | $ | 1,875,500 | | | | 30,318 | | All currentnon-employee directors as a group | | $ | 780,120 | | | | 23,322 | | | | — | | | | — | | | | — | | | | — | |
(1) | Performance units at target. |
| | | | | 46 | | 2019 PROXY STATEMENT | | |
SPX CORPORATION 2019 STOCK COMPENSATION PLAN SUMMARY BURN RATE The following is provided in order to assist those who may wish to run a burn rate calculation. The numbers in this table relate to the total number of performance shares vested andnon-performance shares granted in a year across our Company and are not limited to grants made to named executive officers or directors. | | | | | | | | | | | | | | | | | | | | | | | | | Year | | Options Granted | | | Performance Shares Vested | | | Time-Vested Restricted Stock and Restricted Stock Units Granted | | | Total | | | Weighted-Average Number of Common Shares Outstanding | 2018 | | | 183,662 | | | | 272,650 | | | | 147,004 | | | | 603,316 | | | 43,054,000 | 2017 | | | 207,725 | | | | 81,012 | | | | 180,221 | | | | 468,958 | | | 42,413,000 | 2016 | | | 505,048 | | | | 134,709 | | | | 423,293 | | | | 1,063,050 | | | 41,610,000 |
TAX CONSEQUENCES The holder of an award granted under the 2019 Plan may be affected by certain U.S. federal income tax consequences. The following discussion summarizes certain U.S. federal income tax consequences of awards under the 2019 Plan based on the law as in effect on the date of this Proxy Statement. The following discussion does not purport to cover federal employment taxes or other federal tax consequences that may be employed with awards, nor does it cover state, local, ornon-U.S. taxes. • | | Restricted Stock: The holder of restricted stock does not recognize any taxable income on the stock while it is restricted. When the restrictions lapse, the holder’s taxable income (treated as compensation) equals the fair market value of the shares. The holder may, however, avoid the delay in computing the amount of taxable gain by filing with the Internal Revenue Service, within 30 days after receiving the shares, an election to determine the amount of taxable income at the time of receipt of the restricted shares. |
• | | Restricted Stock Units: There are no tax consequences associated with the grant of RSUs. Generally, a participant who receives RSUs will not have taxable income under federal income tax laws at the time the RSUs or any dividend equivalents awarded thereon are credited to the participant. A participant will recognize ordinary income under federal income tax laws equal to (1) the amount of cash paid and/or (2) the fair market value of the shares or other property on the respective payment dates when such cash, shares, and/or other property are delivered or paid in accordance with the terms of the award. |
• | | Performance Units: There are no tax consequences associated with the grant of performance units, but the holder recognizes ordinary income (treated as compensation) upon payment of the performance units. |
• | | Stock Appreciation Rights: A participant generally will not recognize taxable income upon the grant or vesting of a SAR. Upon the exercise of a SAR, a participant generally will recognize compensation taxable as ordinary income in an amount equal to the difference between the fair market value of the shares underlying the SAR on the date of exercise and the grant price of the SAR. |
• | | Incentive Stock Options: A participant generally will not recognize taxable income upon the grant of an incentive stock option. If a participant exercises an incentive stock option during employment or within three months after employment ends (12 months in the case of permanent and total disability), the participant will not recognize taxable income at the time of exercise for regular U.S. federal income tax purposes (although the participant generally will have taxable income for alternative minimum tax purposes at that time as if the stock option were a nonqualified stock option). If a participant sells or otherwise disposes of the shares acquired upon exercise of an incentive stock option after the later of (1) one year from the date the participant exercised the option and (2) two years from the grant date of the stock option, the participant generally will recognize long-term capital gain or loss equal to the difference between the amount the participant received in the disposition and the exercise price of the stock option. If a participant sells or otherwise disposes of shares acquired upon exercise of an incentive stock option before these holding period requirements are satisfied, the disposition will constitute a “disqualifying disposition,” and the participant generally will recognize taxable ordinary income in the year of disposition equal to the excess of the fair market value of the shares on the date of exercise over the exercise price of the stock option (or, if less, the excess of the amount realized on the disposition of the shares over the exercise price of the stock option). The balance of the participant’s gain on a disqualifying disposition, if any, will be taxed as short-term or long-term capital gain, as the case may be. |
| | | | | | | 2019 PROXY STATEMENT | | 47 |
SPX CORPORATION 2019 STOCK COMPENSATION PLAN SUMMARY • | | Non-Qualified Stock Options:A participant generally will not recognize taxable income upon the grant or vesting of a nonqualified stock option. Upon the exercise of a nonqualified stock option, a participant generally will recognize compensation taxable as ordinary income in an amount equal to the difference between the fair market value of the shares underlying the stock option on the date of exercise and the exercise price of the stock option. When a participant sells the shares, the participant will have short-term or long-term capital gain or loss, as the case may be, equal to the difference between the amount the participant received from the sale and the tax basis of the shares sold. The tax basis of the shares generally will be equal to the fair market value of the shares on the exercise date. |
• | | Impact on SPX: In the foregoing cases, we generally will be entitled to a deduction at the same time, and in the same amount, as a participant recognizes ordinary income, subject to certain limitations imposed under the Internal Revenue Code. |
The preceding general tax discussion is intended for the information of stockholders considering how to vote with respect to this proposal and not as tax guidance to participants in the 2019 Plan. Participants in the 2019 Plan are strongly urged to consult their own tax advisors regarding the federal, state, local, foreign, and other tax consequences to them of participating in the 2019 Plan. | | | | | 48 | | 2019 PROXY STATEMENT | | |
PROPOSAL 3: APPROVAL OF SPX CORPORATION 2019 STOCK COMPENSATION PLAN We are asking our stockholders to approve the 2019 Plan, as described above in “SPX Corporation 2019 Stock Compensation Plan Summary,” beginning on page 42, and in the copy of the proposed 2019 Plan included as Appendix A to this Proxy Statement. WHY YOU SHOULD APPROVE OUR 2019 PLAN We are asking our stockholders to approve the 2019 Plan in order to compensate and retain our employees and to align the interests of our employees with those of our stockholders. We estimate that the share pool requested for the 2019 Plan will last approximately three years based on our recent run rate and other assumptions. Long-term incentives are an important part of our executive compensation program and are the tool by which we align the interests of our executives with the interests of our stockholders. Equity compensation is also a critical component of achieving our goal of sustaining our meaningfulpay-for-performance culture. Upon approval of the 2019 Plan we will cease making awards under our existing 2002 Plan. OVERVIEW Key Components of the 2019 Plan that Protect Stockholder Interests No Single-Trigger Acceleration or Excise TaxGross-Ups We do not automatically accelerate vesting of awards orgross-up excise tax in connection with a change in control. Minimum Vesting Requirements Equity-based awards generally cannot vest earlier than one year after grant. No Discounted Options or SARs The 2019 Plan requires options and SARs to have an exercise price at least equal to the fair market value of our common stock on the date of grant. Awards are Subject to Clawback Awards granted under the 2019 Plan are subject to compensation clawback provisions. No “Liberal” Change in Control Definition The 2019 Plan does not include a “liberal”change-in-control definition. No Repricing of Options or SARs The 2019 Plan prohibits the repricing of options or SARs without stockholder approval. No Dividends on Unvested Awards We do not pay dividends or dividend equivalents on options, SARs, or unvested restricted stock, RSUs, or performance awards. Administered by an Independent Committee The Committee, which is comprised of entirely of independent directors, will administer the 2019 Plan. | | | | | | | | | YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE“FOR” THE APPROVAL OF THE SPX CORPORATION 2019 STOCK COMPENSATION PLAN |
| | | | | | | 2019 PROXY STATEMENT | | 49 |
AUDIT MATTERS Audit Committee Report The Audit Committee of the SPX Board of Directors consists of four directors. Each Audit Committee member is independent, as defined under SEC rules and the listing standards of the NYSE. The Audit Committee reviews SPX’s financial reporting process on behalf of the Board and is responsible for ensuring the integrity of the financial information reported by SPX. Management is responsible for SPX’s financial reporting process, including its systems of internal and disclosure controls, and for the preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States (“US GAAP”). SPX’s independent registered public accounting firm, which is appointed by the Audit Committee, is responsible for auditing those financial statements. The Audit Committee’s responsibility is to monitor and review these processes. The Audit Committee has relied, without independent verification, on management’s representation that the financial statements have been prepared with integrity and objectivity and in conformity with US GAAP and on the representations of the independent registered public accounting firm included in the firm’s report on SPX’s financial statements. In this context, the Audit Committee has met and held discussions with management and Deloitte & Touche LLP (“Deloitte”), SPX’s independent registered public accounting firm since 2002. Management represented to the Audit Committee that SPX’s consolidated financial statements were prepared in accordance with US GAAP, and the Audit Committee has reviewed and discussed the consolidated financial statements with management and the independent registered public accounting firm. The Audit Committee discussed with the independent registered public accounting firm matters required to be discussed by the Standards of the Public Company Accounting Oversight Board (“PCAOB”) for communication with audit committees, under which Deloitte must provide us with additional information regarding the scope and results of its audit of SPX’s consolidated financial statements. In addition, we have discussed with Deloitte its independence from SPX and SPX management, including matters in the written disclosures required by PCAOB Rule 3526,Communication with Audit Committees Concerning Independence. The Audit Committee discussed with SPX’s internal auditors and independent registered public accounting firm the overall scope and plans for its respective audits. The Audit Committee met with the independent registered public accounting firm, with and without management present, to discuss the results of its examinations, the evaluations of SPX’s internal controls, and the overall quality of SPX’s financial reporting. In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board, and the Board has approved, that the audited consolidated financial statements be included in SPX’s Annual Report onForm 10-K for the year ended December 31, 2017,2018, filed with the SEC. The Audit Committee has reviewed and discussed with management its assertion and opinion regarding internal controls included in the 20172018 Annual Report on Form10-K to Stockholders as required by Section 404 of the Sarbanes-Oxley Act of 2002. Management has confirmed to the Audit Committee that at December 31, 20172018 internal controls over financial reporting were appropriately designed and operating effectively to provide reasonable assurance regarding the reliability of financial reporting and the preparation of SPX’s consolidated financial statements for external purposes in accordance with US GAAP. The Audit Committee has also reviewed and discussed with Deloitte its audit and opinion regarding SPX’s internal control over financial reporting as required by Section 404, which opinion is included in the 20172018 Annual Report onForm 10-K. Audit Committee, Ricky D. Puckett, Chairman David A. Roberts Ruth G. Shaw Tana L. Utley | | | | | | | 2018 PROXY STATEMENT50 | | 43 2019 PROXY STATEMENT | | |
AUDIT MATTERS Other Audit Information AUDIT ANDNON-AUDIT FEE TABLE During fiscal years 20162017 and 2017,2018, we retained our principal auditor,independent registered public accounting firm, Deloitte, to perform services in the following categories and amounts: | | | | | | | | | | | | 2016 | | | 2017 | | | 2017 | | | 2018 | | Audit Fees(1) | | $ | 4,733,000 | | | $ | 4,087,000 | | | $ | 4,087,000 | | | | 3,960,000 | | Audit-Related Fees(2) | | $ | 29,000 | | | $ | 65,000 | | | $ | 65,000 | | | | 34,000 | | Tax Fees(3) | | $ | 404,000 | | | $ | 221,000 | | | $ | 221,000 | | | | 210,000 | | All Other Fees | | | N/A | | | | N/A | | | | N/A | | | | N/A | |
(1) | Fees for audit services billed or expected to be billed relate to (a) audit of our annual financial statements and effectiveness of internal controls over financial reporting; (b) reviews of our quarterly financial statements; (c) statutory and regulatory audits; and (d) comfort letters, consents, and other services related to SEC matters. |
(2) | Fees for audit-related services include due diligence services in connection with acquisitions, other technical accounting assistance, and attest or audit services that are not required. |
(3) | Fees for tax services relate to tax compliance and preparation, including the preparation of original and amended tax returns, claims for refunds, and tax payment planning. |
PRE-APPROVAL BY AUDIT COMMITTEE Our Audit Committee has adopted a policy that requires all audit andnon-audit services performed by Deloitte to bepre-approved. The Audit Committee annually approves the fees and expenses for audit services performed by Deloitte, as well as for any regularly recurringnon-audit services of the type covered by our annual engagement of Deloitte. In addition, ourpre-approval policy requirespre-approval by the Chair of the Audit Committee of fees and expenses for othernon-audit services that may arise during the year. The policy requires the Chair to report anynon-audit services that he haspre-approved to the Audit Committee at each regularly scheduled meeting of the Audit Committee. In no event may Deloitte perform any of the following services for us: (1) bookkeeping or other services related to our accounting records or financial statements; (2) financial information systems design and implementation; (3) appraisal or valuation services, fairness opinions, orcontribution-in-kind reports; (4) actuarial services; (5) internal audit outsourcing services; (6) management functions or human resources services; (7) broker-dealer, investment advisor, or investment banking services; (8) legal services; or (9) expert services. The Audit Committee regularly considers whether specific projects or expenditures could potentially affect Deloitte’s independence. | | | | | 44 | | 20182019 PROXY STATEMENT | | 51 |
PROPOSAL 3:4: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Deloitte has been our independent registered public accounting firm since 2002. The Audit Committee has engaged Deloitte to perform reviews, in accordance with the Standards of the Public Company Accounting Oversight Board, of our financial statements to be filed on Form10-Q in 2018.2019. Consistent with past practice, on February 12, 2018,11, 2019, the Audit Committee approved the engagement of Deloitte to perform the audit of the financial statements and internal controls over financial reporting included in SPX’s Annual Report on Form10-K for the fiscal year ending December 31, 2018.2019. Representatives of Deloitte will be present at the Annual Meeting and will have the opportunity to make a statement if they so desire and to respond to appropriate questions. Although we are not required to do so, we believe that it is appropriate for us to request stockholder ratification of the appointment of Deloitte as our independent registered public accounting firm. If stockholders do not ratify the appointment, the Audit Committee will investigate the reasons for the stockholders’ rejection and reconsider the appointment. | | | | | | | | | YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2018.2019. |
| | | | | | | 2018 PROXY STATEMENT52 | | 45 2019 PROXY STATEMENT | | |
QUESTIONS AND ANSWERS Proxy Materials Why am I receiving these materials? We are mailing or making these materials available to you because we are soliciting your proxy to vote your shares in connection with our Annual Meeting, scheduled to take place on May 15, 2018,9, 2019, or at any adjournments or postponements of this meeting. We are first mailing or making available to stockholders this Proxy Statement, our Annual Report to Stockholders for the year ended December 31, 2017,2018, and related materials on or about April 3, 2018.March 28, 2019. Why did I receive aone-page notice of internet availability of proxy materials rather than a full set of proxy materials? SEC rules allow companies to provide stockholders access to Proxy Materials over the internet rather than mailing the materials to stockholders. Accordingly, to conserve natural resources and reduce costs, we are sending many of our stockholders a Notice of Internet Availability of Proxy Materials. The Notice provides instructions for accessing the Proxy Materials on the website referred to in the Notice or for requesting printed copies of the Proxy Materials. The Notice also provides instructions for requesting the delivery of the Proxy Materials for future Annual Meetings in printed form. Are the proxy materials available electronically? Our Proxy Statement and our 20172018 Annual Report to Stockholders are available on our website (www.spx.com) under the heading “Investor Relations—Financial Information—Proxy and 10K.Annual Reports.” Additionally, and in accordance with SEC rules, you may access our Proxy Statement at www.envisionreports.com/SPXC (for stockholders of record) or www.edocumentview.com/SPXC (for all other stockholders), which do not have “cookies” that identify visitors to the sites. Annual Meeting What is the purpose of this meeting? This is the Annual Meeting of the Company’s stockholders. At the meeting, we will be voting on: The election of directors; The approval of our named executive officers’ compensation, on anon-binding advisory basis; The approval of the SPX Corporation 2019 Stock Compensation Plan; The ratification of our Audit Committee’s appointment of our independent registered public accounting firm for 2018;2019; and Any other business properly brought before the meeting. How does the Board recommend that I vote? | | | Proposal 1: | | FOR the election of each of Mr. PuckettLowe, Mr. O’Leary, and Ms. Utley.Mr. Roberts. | | | Proposal 2: | | FOR the approval of our named executive officers’ compensation. | | | Proposal 3: | | FOR the approval of the SPX Corporation 2019 Stock Compensation Plan. | | | Proposal 4: | | FOR the ratification of our Audit Committee’s appointment of our independent registered public accounting firm for 2018.2019. |
How can I attend the Annual Meeting? You may attend the Annual Meeting if you were an SPX stockholder of record as of the close of business on March 20, 2018,14, 2019, or you hold a valid proxy for the Annual Meeting. You should be prepared to present photo identification for admittance. If you are a stockholder of record or hold your shares through the SPX 401(k) Plan, then your name will be verified against the list of stockholders of record or plan participants on the record date prior to your being admitted to the Annual Meeting. If you are not a stockholder of record, but hold shares through a broker, bank, trustee, or other holder of record, you should provide proof of beneficial ownership on the record date, such as a recent account statement showing your ownership; a copy of the voting instruction card provided by your broker, bank, trustee, or other holder of record; or other similar evidence of ownership. | | | | | 46 | | 20182019 PROXY STATEMENT | | 53 |
QUESTIONS AND ANSWERS Voting and Quorum What is a proxy? Our Board of Directors is asking for your proxy, which is a legal designation of another person to vote the shares you own. We have designated two officers of the Company, Eugene J. Lowe, III, and Scott W. Sproule, to vote your shares at the meeting in the way you instruct and, with regard to any other business that may properly come before the meeting, as they think best. Who is entitled to vote? Stockholders at the close of business on March 20, 201814, 2019 (the record date), are entitled to vote. On that date there were 42,954,37443,869,354 shares of SPX common stock outstanding. How many votes do I have? Each share of SPX common stock that you own entitles you to one vote. How do I vote if I do not attend the Annual Meeting? If your shares are held in your name as a stockholder of record, then you may vote your shares before the meeting over the internet by following the instructions on the Notice of Internet Availability of Proxy Materials or proxy card you received for that account. If your shares are held through a broker, bank, trustee, or other holder of record, then you may vote your shares before the meeting over the internet by following the instructions on the Notice of Internet Availability of Proxy Materials or proxy card you received or, if you received a voting instruction form from your brokerage firm, bank, trustee, or other similar entity by mail, then by completing, signing, and returning the form you received. You should check your voting instruction form to see if telephone or internet voting is available to you. If your shares are held in your name, then you may vote your shares before the meeting over the internet by following the instructions on the Notice of Internet Availability of Proxy Materials or proxy card you received for that account.
If you received more than one Notice of Internet Availability of Proxy Materials or proxy card, then this means you hold shares of our common stock in more than one account. You should complete, sign, date, and return each proxy card or vote all shares over the internet or by telephone for each of your accounts. If you vote over the internet or by telephone, then you should not mail back the related proxy card. Can I vote at the Annual Meeting? Yes. If you were a stockholder on the record date, then you can vote your shares of common stock in person at the Annual Meeting. If your shares are held through a broker, bank, trustee, or other holder of record, then you may vote your shares in person only if you have a legal proxy from the entity that holds your shares giving you the right to vote the shares. A legal proxy is a written document from your brokerage firm, bank, trustee, or other holder of record authorizing you to vote the shares it holds for you in its name. If you attend the meeting and vote your shares by ballot, then your vote at the meeting will revoke any vote you submitted previously. Even if you currently plan to attend the meeting, we recommend that you also vote by proxy as described above so that your vote will be counted if you later decide not to attend the meeting. May I revoke my proxy? You may revoke your proxy in one of four ways at any time before it is exercised: Notify our Corporate Secretary in writing before the Annual Meeting that you are revoking your proxy; Submit another proxy with a later date; Vote by telephone or internet after you have given your proxy; or Vote in person at the Annual Meeting. | | | | | 54 | | 2019 PROXY STATEMENT | | |
QUESTIONS AND ANSWERS What constitutes a quorum? The presence, in person or by proxy, of the holders ofone-third of the total number of shares of SPX stock issued and outstanding and entitled to vote at the Annual Meeting constitutes a quorum. You will be considered part of the quorum if you return a signed and dated proxy card, if you vote by telephone or internet, or if you attend the Annual Meeting. | | | | | | | 2018 PROXY STATEMENT | | 47 |
QUESTIONS AND ANSWERS
Abstentions are counted as “shares present” at the Annual Meeting for purposes of determining whether a quorum exists. Proxies submitted by brokers, banks, trustees, or other holders of record holding shares for you as a beneficial owner that do not indicate a vote for some of or all of the proposals because that holder does not have voting authority and has not received voting instructions from you(so-called “brokernon-votes”) are also considered “shares present” for purposes of determining whether a quorum exists. If you are a beneficial owner, then these holdersBrokers are permitted to vote your shares on the ratification of the appointment of our independent public accountants, even if they do not receive voting instructions from you. What vote is required to approve each proposal? | | | | | | | | | | | Proposal | | Vote Required | | Broker Discretionary Voting Allowed | Election of Directors | | Majority of Votes Cast | | No | Approval of Named Executive Officers’ Compensation,on aNon-binding Advisory Basis | | Majority of Votes Cast | | No | Approval of the SPX Corporation 2019 Stock Compensation Plan | | Majority of Votes Cast (Counting Abstentions as Votes) | | No | Ratification of Appointment of Independent Registered Public Accounting Firm | | Majority of Shares Present or Represented by Proxy and Entitled to Vote | | Yes | Other Proposals | | Majority of Shares Present or Represented by Proxy and Entitled to Vote | | No |
A majority of votes cast means that the number of shares voted for a director or proposal must exceed the number of shares voted against that director or proposal, except that for the approval of the SPX Corporation 2019 Stock Compensation Plan it means that the number of shares voted for the proposal must exceed the aggregate of the number of shares voted against the proposal or that abstain from voting on the proposal. What is the impact of abstentions or brokernon-votes? An abstention is not considered as a share voted and will not impact the election of directors or the approval ofnon-binding advisory vote to approve our named executive officers’ compensation. However, an abstention will have the same effect as a vote against approval of the SPX Corporation 2019 Stock Compensation Plan. In addition, since an abstention is considered a share present or represented by proxy and entitled to vote, as one less vote for approval it will have the effect of a vote against the ratification of our independent public accountants and other proposals that may be brought before the Annual Meeting. A “brokernon-vote” occurs when a broker, trustee, bank, or other nominee that holds shares on your behalf does not receive instructions from you on how to vote such shares and does not otherwise have discretion to vote because the matter is not considered routine. A brokernon-vote is not considered as a share voted or entitled to vote and will not impact the vote on any of the proposals. The New York Stock ExchangeNYSE does not consider the election of directors or matters relating to compensation, including the approval of the SPX Corporation 2019 Stock Compensation Plan, to be routine. Unless the broker has received instructions from you, any broker holding shares for you will not have the ability to cast votes with respect to the election of directors, or the approval of our named executive officers’ compensation.compensation, or the approval of the SPX Corporation 2019 Stock Compensation Plan. It is important, therefore, that you provide instructions to your broker if your shares are held by a broker so that your vote with respect to these matters is counted. | | | | | | | 2019 PROXY STATEMENT | | 55 |
QUESTIONS AND ANSWERS How does discretionary voting authority apply? If you sign, date, and return your proxy card, then your vote will be cast as you direct. If your proxy card does not indicate how you want to vote, then you give authority to Eugene J. Lowe, III, and Scott W. Sproule to vote on the items discussed in these proxy materials and any other matter properly brought at the Annual Meeting. In such a case, your vote will be cast: FOR the election of the director nominees; FOR the approval of our named executive officers’ compensation; FOR the approval of the SPX Corporation 2019 Stock Compensation Plan; FOR the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for 2018;2019; and FOR or AGAINST any other properly raised matters at the discretion of Eugene J. Lowe, III, and Scott W. Sproule. | | | | | 48 | | 2018 PROXY STATEMENT | | |
QUESTIONS AND ANSWERS
Who pays to prepare, mail, and solicit the proxies? We will pay all the costs of preparing, mailing, and soliciting the proxies. We will ask brokers, banks, trustees, and other nominees and fiduciaries to forward the Proxy Materials to the beneficial owners of SPX common stock and to obtain the authority to execute proxies. We will reimburse them for their reasonable expenses upon request. In addition to mailing Proxy Materials, our directors, officers, and employees may solicit proxies in person, by telephone, or otherwise. These individuals will not be specially compensated. We have retained Georgeson LLC, a Computershare company, to assist us with inquiries of brokerage houses and other custodians and nominees whether other persons are beneficial owners of SPX common stock. We will supply them with additional copies of the Proxy Materials for distribution to the beneficial owners. We will pay Georgeson LLC an estimated fee of $1,800 plus reasonableout-of-pocket expenses. We have not retained a proxy solicitor for this Annual Meeting to assist us in soliciting your proxy; however, as proxy returns are counted we may determine it is necessary to retain a proxy solicitor, in which case we will pay an estimated fee of $12,500 plus reasonableout-of-pocket expenses. We will also reimburse brokers, banks, trustees, and other nominees, fiduciaries, and other custodians for their costs of sending the Proxy Materials to the beneficial owners of SPX common stock. Communications and Stockholder Proposals How do I submit a stockholder proposal? To bring a proposal other than the nomination of a director before an annual meeting, your notice of proposal must comply with the requirements of ourBy-laws and include any other information regarding you or any beneficial owner that would be required under the SEC’s proxy rules and regulations. For a proposal to be included in our Proxy Statement for the 20192020 Annual Meeting, you must submit it no later than December 4, 2018.November 29, 2019. Your proposal must be in writing and comply with the proxy rules of the SEC. You should send your proposal to our Corporate Secretary at our address on the cover of this Proxy Statement. You also may submit a proposal that you do not want included in the Proxy Statement, but that you want to raise at the 20192020 Annual Meeting. We must receive this type of proposal in writing on or after December 16, 2018,11, 2019, but no later than January 15, 2019.10, 2020. How do I submit a director nominee? If you wish to submit a nominee for director for the 20192020 Annual Meeting, our Corporate Secretary must receive written notice of your intended nomination on or before January 15, 2019.10, 2020. You should send your nomination to our Corporate Secretary at our address on the cover of this Proxy Statement. For a nomination to be properly brought before an annual meeting, your notice of nomination must comply with the requirements of ourBy-laws. In addition, any director nominee must provide information we may reasonably request in order for us to determine the eligibility of such nominee to serve as an independent director. You may also make recommendations for director nominees to the Nominating and Governance Committee. Director nominations made to the Nominating and Governance Committee is more fully described in the “Director Nominees, Qualifications, and Diversity” section, beginning on page 2. | | | | | 56 | | 2019 PROXY STATEMENT | | |
APPENDIX A - SPX CORPORATION 2019 STOCK COMPENSATION PLAN SPX CORPORATION 2019 STOCK COMPENSATION PLAN (As Adopted Effective May 9, 2019) SECTION 1. ESTABLISHMENT, PURPOSES AND EFFECTIVE DATE OF PLAN 1.1 Establishment.SPX Corporation, a Delaware corporation, established on the Effective Date described below the SPX Corporation 2019 Stock Compensation Plan (the “Plan”), to provide for the award of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, and Performance Units (“Awards”) to eligible individuals. Upon becoming effective, the Plan replaced, and no further awards shall be made under, the SPX Corporation 2002 Stock Compensation Plan (the “Prior Plan”). 1.2 Purpose.The purpose of the Plan is to advance the interests of the Company and its Subsidiaries and divisions by (a) encouraging and providing for the acquisition of equity interests in the Company by Participants, thereby increasing the stake in the future growth and prosperity of the Company, and furthering the Participants’ identity of interest with those of the Company’s stockholders, and (b) enabling the Company to compete with other organizations in attracting, retaining, promoting and rewarding the services of Participants. 1.3 Effective Date.The Plan shall be effective as of May 9, 2019 (the “Effective Date”). The Plan provided herein is subject to stockholder approval at the 2019 annual meeting of stockholders. SECTION 2. DEFINITIONS 2.1 Definitions.Whenever used herein, the following terms shall have their respective meanings set forth below: (a) “Board” means the Board of Directors of the Company. (b) “Cause” means, except as otherwise defined in any applicable Award Agreement, (i) a Participant’s willful and continued failure to substantially perform his duties with the Company (other than any such failure resulting from Disability), after a demand for substantial performance is delivered to such Participant that specifically identifies the manner in which the Company believes that the Participant has not substantially performed his duties, and after such Participant has failed to resume substantial performance of his duties on a continuous basis within fourteen (14) calendar days after receiving such demand, (ii) a Participant willfully engaging in conduct that is demonstrably and materially injurious to the Company, monetarily or otherwise, or (iii) the Participant having been convicted of (or pleaded nolo contendere to) a felony that impairs his ability to substantially perform his duties with the Company. For the purposes of this Subsection 2.1(b), “Cause” shall include those situations if, within 12 months after a Participant’s employment or association with the Company has ended, facts and circumstances are discovered that would have justified a termination for Cause. (c) “Change of Control” means, except as otherwise defined in any applicable Award Agreement, the first occurrence of any of the following events after the Effective Date: (i) Any “Person” (as defined below), excluding for this purpose the Company or any Subsidiary, any employee benefit plan of the Company or of any Subsidiary, and any entity organized, appointed or established for or pursuant to the terms of any such plan that acquires beneficial ownership of Common Stock, is or becomes the “Beneficial Owner” (as defined below) of twenty-five percent (25%) or more of the Common Stock then outstanding; provided, however, that no Change of Control shall be deemed to have occurred as the result of an acquisition of Common Stock by the Company which, by reducing the number of shares outstanding, increases the proportionate beneficial ownership interest of any Person to twenty-five percent (25%) or more of the Common Stock then outstanding, but any subsequent increase in the beneficial ownership interest of such a Person in Common Stock shall be deemed a Change of Control; and provided further that if the Board determines in good faith that a Person who has become the Beneficial Owner of Common Stock representing twenty-five percent (25%) or more of the Common Stock 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 | | | | | | | 20182019 PROXY STATEMENT | | 49A-1 |
APPENDIX A Company so that the Person no longer has a beneficial ownership interest in twenty-five percent (25%) or more of the Common Stock then outstanding, then no Change of Control shall be deemed to have occurred. For purposes of this Subsection 2(c), the following terms shall have the meanings set forth below: (A) “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. (B) “Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in Rule12b-2 of the Securities Exchange Act of 1934, as amended and the regulations and guidance promulgated thereunder (the “Exchange Act”). (C) A Person shall be deemed the “Beneficial Owner” of and shall be deemed to “beneficially own” any securities: (I) which such Person or any of such Person’s Affiliates or Associates beneficially owns, directly or indirectly (determined as provided in Rule13d-3 under the Exchange Act); (II) 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 (III) 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 Subsection 2(c)(i)(C)(II)(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 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. (ii) During any period of two (2) consecutive years after the Effective Date, individuals who at the beginning of such two (2)-year period constitute the Board 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 Subsection 2(c)(i), above, or Subsection 2(c)(iii), below) whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at leasttwo-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 (iii) The consummation of: (A) a plan of complete liquidation of the Company, (B) an agreement for the sale or disposition of the Company or all or substantially all of the Company’s assets, (C) a plan of merger or consolidation of the Company with any other corporation, or (D) a similar transaction or series of transactions involving the Company (any transaction described in parts (A) through (D) of this Subsection 2(c)(iii) being referred to as a “Business Combination”), in each case unless after such a Business Combination the stockholders of the | | | | | A-2 | | 2019 PROXY STATEMENT | | |
APPENDIX A Company immediately prior to the Business Combination continue to own at least seventy-five percent (75%) 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. Notwithstanding any provision in this Agreement to the contrary, a “Change of Control” shall not include any transaction described in Subsection 2(c)(i) or (c)(iii), above, where, in connection with such transaction, a Participant and/or any party acting in concert with the Participant substantially increase the Participant’s, 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). Notwithstanding the foregoing, if it is determined that an Award hereunder is subject to the requirements of Code Section 409A and payable upon a Change of Control, the Company will not be deemed to have undergone a Change of Control unless the Company is deemed to have undergone a “change in control event” pursuant to the definition of such term in Code Section 409A. (d) “Code” means the Internal Revenue Code of 1986, as amended and the regulations and guidance promulgated thereunder. (e) “Committee” means the Compensation Committee of the Board, or, if applicable, the delegate of the Compensation Committee of the Board as permitted or required herein. (f) “Common Stock” means the common stock, par value $10.00 (or any amended par value), of the Company or such other class of shares or other securities as may be applicable pursuant to the provisions of Subsection 5.3. (g) “Company” means SPX Corporation, a Delaware corporation, and any successor thereto. (h) “Disability” means, except as otherwise defined in any applicable Award Agreement, in the written opinion of a qualified physician selected by the Company, the Participant 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 12 months, (i) unable to engage in any substantial gainful activity, or (ii) receiving income replacement benefits for a period of not less than three months under the Company’s disability plan; provided, that with respect to any Award that constitutes deferred compensation subject to Code Section 409A, “Disability” shall have the meaning set forth in Code Section 409A(a)(2)(c). (i) “Fair Market Value” means, except as otherwise defined in any applicable Award Agreement, as of any date, the closing price of one share of Common Stock on the New York Stock Exchange (or on such other recognized market or quotation system on which the trading prices of Common Stock are traded or quoted at the relevant time) on the date as of which such Fair Market Value is determined. If there are no Common Stock transactions reported on the New York Stock Exchange (or on such other exchange or system as described above) on such date, Fair Market Value shall mean the closing price for a share of Common Stock on the immediately preceding day on which Common Stock transactions were so reported. (j) “Key Employee” means an employee of the Company or of a Subsidiary, including an officer or director, who, in the opinion of the Committee, can contribute significantly to the growth and profitability of the Company or a Subsidiary. Key Employees also may include those employees identified by the Committee to be in situations of extraordinary performance, promotion, retention or recruitment. The awarding of a grant under this Plan to an employee by the Committee shall be deemed a determination by the Committee that such employee is a Key Employee. (k) “Mature Common Stock” means Common Stock that has been (i) acquired by the holder thereof on the open market or that has been acquired pursuant to this Plan or another employee benefit arrangement of the Company and (ii) held for any minimum period as may be determined by the Company to avoid adverse treatment under applicable accounting principles. (l) “Non-Employee Director” means any person who is a member of the Board and who is not, as of the date of an Award, an employee of the Company or any of its Subsidiaries. (m) “Options” means the right granted to a Participant to purchase Common Stock at a stated price for a specified period of time. For purposes of the Plan, an Option may be either (i) an “incentive stock option” within the meaning of Code Section 422, or (ii) a “nonqualified stock option” which is intended not to fall under the provisions of Code Section 422. | | | | | | | 2019 PROXY STATEMENT | | A-3 |
APPENDIX A (n) “Option Price” means the price at which each share of Common Stock subject to an Option may be purchased, determined in accordance with Subsection 7.3. (o) “Participant” means eachNon-Employee Director, any Key Employee or any individual consultant or independent contractor, providing services to the Company or any Subsidiary designated by the Committee to participate in this Plan pursuant to Section 3. (p) “Performance Unit” means an award granted to a Participant pursuant to Section 10. (q) “Period of Restriction” means the period during which the transfer of shares of Restricted Stock or Restricted Stock Units are restricted pursuant to Section 9. (r) “Restricted Stock” means the Common Stock granted to a Participant pursuant to Section 9. (s) “Restricted Stock Unit” or “RSU” means a notional account established pursuant to an Award granted to a Participant, as described in Section 9, that is (i) valued solely by reference to shares of Common Stock, and (ii) subject to restrictions specified in the Award Agreement. The restrictions on, and risk of forfeiture of, RSUs generally will expire on a specified date, upon the occurrence of an event or achievement of performance goals, or on an accelerated basis under certain circumstances specified in the Plan or the Award Agreement. (t) “Service” means the provision of personal services to the Company or its Subsidiaries in the capacity of (i) an employee, (ii) aNon- Employee Director, or (iii) a consultant or independent contractor. A Participant’s Service shall not be deemed to have terminated merely because of a change in the capacity in which the Participant renders Service to the Company or its Subsidiaries, a transfer of the Participant among the Company and its Subsidiaries, or a change in the Company or Subsidiary for which the Participant renders such Service, provided in each case that there is no interruption or termination of the Participant’s Service. A Participant’s Service shall be deemed to have terminated either upon an actual termination of Service or upon the time that the entity for which the Participant performs Service ceases to be a Subsidiary or otherwise part of the Company. Subject to the foregoing and the requirements of Code Section 409A, the Company, in its discretion, shall determine whether the Participant’s Service has terminated and the effective date of and reason for such termination. (u) “Stock Appreciation Right” means the right to receive a cash payment or the Fair Market Value in shares of Common Stock (or any combination thereof) from the Company equal to the excess of the Fair Market Value of a share of Common Stock at the date of exercise of the Right over a specified price fixed by the Committee at grant (exercise price), which shall not be less than 100% of the Fair Market Value of a share of Common Stock on the date of grant. In the case of a Stock Appreciation Right which is granted in conjunction with an Option, the specified price shall be the Option Price. (v) “Subsidiary” means any corporation in which the Company owns, directly or indirectly, stock representing 50% or more of the combined voting power of all classes of stock entitled to vote, and any other business organization, regardless of form, in which the Company possesses, directly or indirectly, 50% or more of the total combined equity interests in such organization. (w) “Substitute Award” means any Award granted in assumption of or in substitution for an award of a company or business acquired by the Company or a Subsidiary or with which the Company or a Subsidiary combines. 2.2 Gender and Number.Except when otherwise indicated by the context, words in the masculine gender when used in the Plan shall include the feminine gender, the singular shall include the plural, and the plural shall include the singular. SECTION 3. ELIGIBILITY AND PARTICIPATION Participants in the Plan to whom Awards shall be granted shall be selected by the Committee from among the Key Employees or any individual consultant or independent contractor providing Services to the Company or any Subsidiary.Non-Employee Directors may also be Participants in the Plan; provided that, Awards made toNon-Employee Directors under Sections 7, 8, 9, or 10 of the Plan shall be in the amounts and subject to the terms and conditions approved by the Board or the Board’s Nominating and Governance Committee. | | | | | A-4 | | 2019 PROXY STATEMENT | | |
APPENDIX A SECTION 4. ADMINISTRATION 4.1 Administration.The Plan shall be administered by the Compensation Committee of the Board. The administration of the Plan shall include the ability to administer any written agreement, contract, or other instrument or document evidencing any Award granted by the Committee pursuant to the Plan (“Award Agreement”). For purposes of any Award by the Committee that is intended to be exempt from the restrictions of Section 16(b) of the Exchange Act, the Committee shall consist only of directors who qualify as“non-employee directors,” as defined in Rule16b-3 under the Exchange Act. 4.2 Authority.The Committee shall have the authority, subject to the terms of the Plan, to determine the Participants to whom Awards shall be granted, the type or types of Awards to be granted and the terms and conditions of any and all Awards including, but not limited to, the number of shares of Common Stock subject to an Award, the time or times at which Awards shall be granted, and the terms and conditions of applicable Award Agreements. The Committee may establish different terms and conditions for different types of Awards, for different Participants receiving the same type of Award, and for the same Participant for each type of Award such Participant may receive, whether or not granted at the same or different times. The Committee may establish such rules and regulations, not inconsistent with the provisions of the Plan, as it deems necessary to determine eligibility to participate in the Plan and for the proper administration of the Plan, and may amend or revoke any rule or regulation so established. The Committee may make such determinations and interpretations under or in connection with the Plan as it deems necessary or advisable. The Committee’s determinations under the Plan need not be uniform and may be made by the Committee selectively among Participants who receive, or are eligible to receive, Awards under the Plan, whether or not such Participants are similarly situated. All such rules, regulations, determinations and interpretations shall be binding and conclusive upon the Company, its Subsidiaries and divisions, its stockholders and all employees, and upon their respective legal representatives, beneficiaries, successors and assigns, and upon all other persons claiming under or through any of them. The terms of any plan or guideline adopted by the Committee and applicable to an Award shall be deemed incorporated in and part of the related Award Agreement. The Committee may provide for the use of electronic, internet or othernon-paper Award Agreements, and the use of electronic, internet or othernon-paper means for the Participant’s acceptance of, or actions under, an Award Agreement unless otherwise expressly specified herein. The Committee may appoint accountants, actuaries, counsel, advisors and other persons that it deems necessary or desirable in connection with the administration of the Plan. In the event of any inconsistency or conflict between the terms of the Plan and an Award Agreement, the terms of the Plan shall govern. 4.3 Delegation.The Committee shall have the right, from time to time, to delegate to one or more officers of the Company the authority of the Committee to grant and determine the terms and conditions of Awards granted under the Plan, subject to the requirements of Section 157(c) of the Delaware General Corporation Law (or any successor provision) and such other limitations as the Committee shall determine. In no event shall any such delegation of authority be permitted with respect to Awards to be granted to any member of the Board or to any Key Employee who is subject to the reporting requirements of Section 16(a) of the Exchange Act. The Committee shall also be permitted to delegate, to any appropriate officer or employee of the Company, responsibility for performing certain ministerial functions under the Plan. In the event that the Committee’s authority is delegated to officers or employees in accordance with the foregoing, all provisions of the Plan relating to the Committee shall be interpreted in a manner consistent with the foregoing by treating any such reference as a reference to such officer or employee for such purpose. Any action undertaken in accordance with the Committee’s delegation of authority hereunder shall have the same force and effect as if such action was undertaken directly by the Committee and shall be deemed for all purposes of the Plan to have been taken by the Committee. SECTION 5. STOCK SUBJECT TO PLAN 5.1 Number.The total number of shares of Common Stock available for issuance under the Plan shall not exceed 4,900,000, subject to adjustment upon occurrence of any of the events indicated in Subsection 5.3. The number of shares shall be reduced by one (1) share of Common Stock for every one (1) share that is subject to an Option or Stock Appreciation Right granted under the Plan, and two (2) shares of Common Stock for every one (1) share that was subject to an award other than an Option or Stock Appreciation Right. In addition, shares of Common Stock underlying any outstanding award granted under the Prior Plan that, following the Effective Date, expires, or is terminated, surrendered or forfeited for any reason without issuance of such shares shall be available for the grant of new Awards under this Plan, provided that (i) for each such award under the Prior Plan that is a stock option or stock appreciation right, one (1) share of Common Stock shall be added to the Plan’s share pool for each share of Common Stock that is subject to such award, and (ii) for each such award under the Prior Plan that is other than a stock option or stock appreciation right, two (2) shares of Common Stock shall be | | | | | | | 2019 PROXY STATEMENT | | A-5 |
APPENDIX A added to the Plan’s share pool for each share of Common Stock that is subject to such award. The shares of Common Stock to be delivered under the Plan may consist, in whole or in part, of authorized but unissued shares of Common Stock or Common Stock held in or acquired for the treasury of the Company and not reserved for any other purpose. 5.2 Share Recycling. (a) Any Award settled in cash and any Substitute Award shall not be counted as shares of Common Stock for any purpose under this Plan. (b) In the event that (i) any shares of Common Stock that are subject to an Option which, for any reason, expires, terminates or is canceled as to such shares, or (ii) any shares of Common Stock subject to a Restricted Stock, RSU or Performance Unit Award made under the Plan are reacquired by the Company, or otherwise canceled or forfeited pursuant to the Plan (including as the result of a failure to achieve any applicable performance goals), or (iii) any Stock Appreciation Right expires unexercised, such shares and rights again shall become available for grant under the Plan. Any shares of Common Stock that again become available for grant pursuant to this Subsection 5.2(b) shall be added back as one (1) share of Common Stock if such shares were subject to Options or Stock Appreciation Rights granted under the Plan, and two (2) shares of Common Stock if such shares were subject to Awards other than Options or Stock Appreciation Rights granted under the Plan. (c) For purposes of determining the number of shares of Common Stock subject to grant under Subsection 5.1 above, with respect to Options and Stock Appreciation Rights, the following shares of Common Stock shall not be added back to the Plan as shares available for grant under the Plan: (a) shares of Common Stock purchased on the open market with the proceeds of Option exercises, (b) shares of Common Stock tendered to pay the exercise price of Options or withheld for taxes, or (c) shares subject to Stock Appreciation Rights that are not issued on the stock settlement of the Stock Appreciation Rights. (d) For purposes of determining the number of shares of Common Stock subject to grant under Subsection 5.1 above, with respect to Awards other than Options and Stock Appreciation Rights, any shares tendered or withheld for taxes pursuant to Section 15.2 below shall be added back to the Plan as shares available for grant under the Plan, with two (2) shares of Common Stock added to the Plan’s share pool for each share of Common Stock that is so tendered or withheld. 5.3 Adjustment in Capitalization.In the event of any (i) change in the Common Stock of the Company through stock dividends or stock splits, (ii) corporatespin-off, reversespin-off,split-off orsplit-up, (iii) extraordinary cash dividend or other distribution of assets by the Company, (iv) recapitalization, merger, consolidation, exchange of shares, or (v) similar event, the aggregate number of shares of Common Stock subject to each outstanding Option and any other Award granted under the Plan shall be appropriately adjusted by the Committee. Such mandatory adjustment may include a change in any or all of (a) the number and kind of shares of Common Stock which thereafter may be awarded or optioned and sold under the Plan (including, but not limited to, adjusting any limits on the number and types of Awards that may be made under the Plan), (b) the number and kind of shares of Common Stock subject to outstanding Awards, (c) the Option Price, grant, exercise or conversion price with respect to any Award, and (d) any applicable performance goals. In addition, the Committee may make provisions for a cash payment to a Participant who has an outstanding Award. The number of shares of Common Stock subject to any Award shall be rounded to the nearest whole number. Any such adjustment shall be consistent with Code Sections 424 and 409A to the extent the Awards subject to adjustment are subject to such Code Sections. 5.4 Award Limits.Subject to adjustment under Subsection 5.3, 4,900,000 shares of Common Stock available for issuance under the Plan shall be available for issuance under “incentive stock options” within the meaning of Code Section 422. 5.5 Awards Subject to Minimum Vesting Period.Notwithstanding any other provision of the Plan to the contrary, equity-based Awards granted under the Plan shall vest no earlier than the first anniversary of the date the Award is granted, excluding, for this purpose, any (i) Substitute Awards, (ii) shares delivered in lieu of fully vested cash Awards, and (iii) Awards toNon-Employee Directors that vest on the earlier of the one year anniversary of the date of grant or the next annual meeting of stockholders (provided that such vesting period under this clause (iii) may not be less than 50 weeks after grant; provided, that, the Board may grant equity-based Awards without regard to the foregoing minimum vesting requirement with respect to a maximum of five percent (5%) of the available share reserve authorized for issuance under the Plan pursuant to Subsection | | | | | A-6 | | 2019 PROXY STATEMENT | | |
APPENDIX A 5.1 (subject to adjustment under Subsection 5.3); and, provided further, for the avoidance of doubt, that the foregoing restriction does not apply to the Committee’s discretion to provide for accelerated exercisability or vesting of any Award, including in cases of retirement, death, disability or a Change of Control, in the terms of the Award or otherwise. SECTION 6. DURATION OF PLAN The Plan shall remain in effect, subject to the Board’s right to earlier terminate the Plan pursuant to Section 14 hereof, until all Common Stock subject to it shall have been purchased or granted pursuant to the provisions hereof. However, no Award may be granted under the Plan on or after May 9, 2029, which is the tenth anniversary of the Plan’s Effective Date. Upon termination of the Plan, no Awards may be granted but Awards previously granted shall remain outstanding in accordance with the terms of the Plan and the applicable Award Agreement. SECTION 7. STOCK OPTIONS 7.1 Grant of Options.Subject to the provisions of Sections 5 and 6, Options may be granted to Participants at any time and from time to time as shall be determined by the Committee. Subject to Subsection 5.1 and this Subsection 7.1, the Committee shall have complete discretion in determining the number of Options granted to each Participant. The Committee also shall determine whether an Option is an incentive stock option within the meaning of Code Section 422, or a nonqualified stock option. However, in no event shall the Fair Market Value (determined at the date of grant) of Common Stock for which incentive stock options become exercisable for the first time in any calendar year exceed $100,000, computed in accordance with Code Section 422(b)(7). In addition, no incentive stock option shall be granted to (a) aNon-Employee Director, or (b) any person who owns, directly or indirectly, stock possessing more than 10% of the total combined voting power of all classes of stock of the Company. Nothing in this Section 7 shall be deemed to prevent the grant of nonqualified stock options in excess of the maximum established by Code Section 422. 7.2 Option Agreement.Each Option shall be evidenced by an Award Agreement that shall specify the type of Option granted, the Option Price, the duration of the Option, the number of shares of Common Stock to which the Option pertains, and such other provisions as the Committee shall determine. The Award Agreement shall specify whether the Option is intended to be an incentive stock option within the meaning of Code Section 422, or a nonqualified stock option which is intended not to fall under the provisions of Code Section 422. To the extent that an Option designated as an incentive stock option does not meet the requirements of Code Section 422, it will be treated as a nonqualified stock option under the Plan. 7.3 Option Price.The Option Price shall be determined by the Committee. However, no Option granted pursuant to the Plan shall have an Option Price that is less than 100% of the Fair Market Value of one share of Common Stock on the Option grant date (other than in connection with a Substitute Award). 7.4 Duration of Options.Each Option shall expire at such time as the Committee shall determine at the date of grant, provided, however, that no Option shall be exercisable later than the tenth anniversary of its grant date. 7.5 Exercise of Options.Options granted under the Plan shall be exercisable at such times and be subject to such restrictions and conditions as the Committee shall in each instance approve, which need not be the same for all Participants. 7.6 Method of Exercise and Payment of Option Price.Options shall be exercised pursuant to the methods and procedures as shall be established from time to time by the Committee, which may include a broker-assisted cashless exercise arrangement. The Committee shall determine the acceptable form or forms and timing of payment of the Option Price. Acceptable forms of paying the Option Price upon exercise of any Option shall include, but not be limited to, (a) cash or its equivalent, (b) tendering shares of previously acquired Mature Common Stock having a fair market value at the time of exercise equal to the total Option Price, (c) directing the Company to withhold shares of Common Stock, which may include attesting to the ownership of the equivalent number of shares of previously-acquired Mature Common Stock having a fair market value at the time of exercise equal to the total Option Price or the election by the Participant to reduce the number of shares of Common Stock that are subject to the portion of the Option being exercised having a Fair Market Value equal to the Option Price, (d) other approved property or (e) by a combination of (a), (b), (c) and/or (d). The proceeds from such a payment shall be added to the general funds of the Company and shall be used for general corporate purposes. As soon as practicable, after Option exercise and payment, the Company shall deliver to the Participant Common Stock certificates or other evidence of Common Stock ownership in an appropriate amount based upon the number of Options exercised, issued in the Participant’s name. | | | | | | | 2019 PROXY STATEMENT | | A-7 |
APPENDIX A 7.7 Restrictions on Common Stock Transferability.The Committee shall impose such restrictions on any shares of Common Stock acquired pursuant to the exercise of an Option under the Plan as it may deem advisable, including, without limitation, restrictions under applicable Federal securities law, under the requirements of any stock exchange upon which such shares of Common Stock are then listed and under any blue sky or state securities laws applicable to such shares of Common Stock. 7.8 Termination of Service.The Award Agreement shall set forth the treatment of the Award upon termination of Service, with such terms and conditions as determined by the Committee not inconsistent with the terms of the Plan. 7.9 Non-transferability of Options.Except as provided in this Subsection 7.9, no Option granted under the Plan may be sold, transferred, pledged, assigned or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution, and all Options granted to a Participant under the Plan shall be exercisable during his lifetime only by such Participant. Under such rules and procedures as the Committee may establish, the holder of an Option may transfer such Option to members of the holder’s immediate family (i.e., children, grandchildren and spouse) or to one or more trusts for the benefit of such family members or to partnerships in which such family members are the only partners, provided that (i) the agreement, if any, with respect to such Option, expressly so permits or is amended to so permit, (ii) the holder does not receive any consideration for such transfer, and (iii) the holder provides such documentation or information concerning any such transfer or transferee as the Committee may reasonably request. Any Options held by any transferees shall be subject to the same terms and conditions that applied immediately prior to their transfer. The Committee may also amend the agreements applicable to any outstanding Options to permit such transfers. Any Option not granted pursuant to any agreement expressly permitting its transfer or amended expressly to permit its transfer shall not be transferable. Such transfer rights shall in no event apply to any incentive stock option. SECTION 8. STOCK APPRECIATION RIGHTS 8.1 Grant of Stock Appreciation Rights.Subject to the terms and provisions of this Plan, Stock Appreciation Rights may be granted to Participants either independent of Options or in conjunction with nonqualified stock options at any time and from time to time as shall be determined by the Committee. 8.2 Exercise of Stock Appreciation Rights Granted in Conjunction with a Nonqualified Option.Stock Appreciation Rights granted in conjunction with a nonqualified stock option may be exercised at such time as provided under the applicable Award Agreement during the term of the related stock option, with a corresponding reduction in the number of shares available under the Option. Option shares with respect to which the Stock Appreciation Right shall have been exercised may not again be subject to an Option under this Plan. 8.3 Exercise of Stock Appreciation Rights Granted Independent of Options.Stock Appreciation Rights granted independent of Options may be exercised upon whatever terms and conditions the Committee, in its sole discretion, may provide for the Stock Appreciation Right in the applicable Award Agreement including, but not limited to, a corresponding proportional reduction in previously granted Options. 8.4 Payment of Stock Appreciation Right Amount.Upon exercise of a Stock Appreciation Right, the Participant shall be entitled to receive payment of an amount (subject to Subsection 8.6 below) determined by multiplying: (a) The difference between the Fair Market Value of a share of Common Stock at the date of exercise over the price fixed by the Committee at the date of grant (which price may not be less than the Fair Market Value of a share of Common Stock on the grant date of such Stock Appreciation Right, other than in connection with a Substitute Award), by (b) The number of shares with respect to which the Stock Appreciation Right is exercised. 8.5 Form of Payment.Payment to the Participant, upon the exercise of a Stock Appreciation Right, will be made in cash or paid in the Fair Market Value in shares of Common Stock (or any combination thereof). 8.6 Limit on Appreciation.The Committee, in its sole discretion, may establish (at the time of grant) a maximum amount per share which will be payable upon exercise of a Stock Appreciation Right. 8.7 Term of Stock Appreciation Right.The term of a Stock Appreciation Right granted under the Plan shall not exceed ten years from the date of grant. | | | | | A-8 | | 2019 PROXY STATEMENT | | |
APPENDIX A 8.8 Termination of Service.The Award Agreement shall set forth the treatment of the Award upon termination of Service, with such terms and conditions as determined by the Committee not inconsistent with the terms of the Plan. 8.9 Non-transferability of Stock Appreciation Rights.No Stock Appreciation Right granted under the Plan may be sold, transferred, pledged, assigned or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution. Further, all Stock Appreciation Rights granted to a Participant under the Plan shall be exercisable during his lifetime only by such Participant. SECTION 9. RESTRICTED STOCK AND RSUs 9.1 Grant of Restricted Stock.Subject to the terms and provisions of this Plan, the Committee, at any time and from time to time, may grant shares of Restricted Stock to such Participants and in such amounts as it shall determine. 9.2 Restricted Stock Agreement.Each Restricted Stock grant shall be evidenced by an Award Agreement that shall specify the restriction period or periods, the number of Restricted Stock shares granted, and such other provisions as the Committee shall determine. 9.3 Grant of RSUs.Subject to the terms and provisions of this Plan, the Committee, at any time and from time to time, may grant RSUs to such Participants and in such amounts as it shall determine. Each RSU grant shall be evidenced by an Award Agreement that shall specify the restriction period or periods, the number of RSUs granted, and such other provisions as the Committee shall determine. Subject to Subsection 9.9, RSUs shall be settled in shares of Common Stock (or, if provided by the Committee, cash equal to the Fair Market Value of such shares of Common Stock or any combination of shares of Common Stock and cash having an aggregate Fair Market Value equal to such stated number of shares of Common Stock). As soon as practicable following the lapse of a Period of Restriction for an award of RSUs (or, as applicable, as soon as practicable after the applicable settlement payment date set forth in a deferral election), the Participant (or beneficiary, in the case of death) shall be issued one share of Common Stock for each RSU (or, as applicable, cash otherwise deliverable upon settlement of an award of RSUs) no longer subject to a Period of Restriction on such date. To the extent permitted by applicable law (including Code Section 409A), upon such terms and conditions as the Committee or Board may establish from time to time, a Participant may be permitted to defer the receipt of the shares of Common Stock or cash otherwise deliverable upon settlement of an award of RSUs. 9.4 Non-Transferability of Restricted Stock and RSUs.Neither the shares of Restricted Stock nor the RSUs granted hereunder may be sold, transferred, pledged, assigned or otherwise alienated or hypothecated until the termination of the applicable Period of Restriction or for such longer period of time as shall be established by the Committee and as shall be specified in the Award Agreement. All rights with respect to the Restricted Stock or RSUs granted to a Participant under the Plan shall be exercisable during the Participant’s lifetime only by such Participant. 9.5 Other Restrictions.The Committee shall impose such other restrictions on any shares of Restricted Stock or RSUs granted pursuant to the Plan as it may deem advisable including, without limitation, restrictions under applicable Federal or state securities laws, and may legend the certificates representing Restricted Stock to give appropriate notice of such restrictions. 9.6 Certificate Legend.In addition to any legends placed on certificates pursuant to Subsection 9.5, each certificate representing shares of Restricted Stock granted pursuant to the Plan shall bear the following (or similar) legend: “The sale or other transfer of the shares of stock represented by this certificate, whether voluntary, involuntary or by operation of law, is subject to certain restrictions on transfer set forth in the 2019 Stock Compensation Plan of SPX Corporation, rules and administration adopted pursuant to such Plan, and a Restricted Stock grant dated . A copy of the Plan, such rules and such Restricted Stock grant may be obtained from the Secretary of SPX Corporation.” 9.7 Removal of Restrictions.Except as otherwise provided in this Section or under the applicable Award Agreement, shares of Restricted Stock covered by each Restricted Stock grant made under the Plan shall become freely transferable by the Participant following the lapse of the Period of Restriction, and shares of Common Stock covered by each RSU grant made under the Plan shall be distributed to the Participant as soon as administratively feasible following the lapse of the Period of Restriction. Once the Period of Restriction lapses on the shares of Restricted Stock, the Participant shall be entitled to have the legend required by Subsection 9.6 removed from his Common Stock certificate. | | | | | | | 2019 PROXY STATEMENT | | A-9 |
APPENDIX A 9.8 Voting Rights.During the Period of Restriction, Participants holding shares of Restricted Stock granted hereunder may exercise full voting rights with respect to those shares. 9.9 Dividends and Other Distributions.During the Period of Restriction, if provided under the applicable Award Agreement, Participants holding shares of Restricted Stock granted hereunder may be entitled to receive dividends and other distributions paid with respect to those shares while they are so held. Any such dividends or distributions shall be subject to the same restrictions on vesting and transferability as the shares of Restricted Stock with respect to which they were paid. The Committee, in its discretion, may award dividend equivalent rights with respect to RSUs. To the extent so awarded, on each dividend record date for Common Stock, the Participant shall be credited with dividend equivalents in the form of cash or additional RSUs, as set forth in the Award Agreement. The amount of additional RSUs to be credited shall be equal to the amount of cash or the number of shares of stock dividends that would have been payable to the Participant if each outstanding RSU on such dividend record date had been a share of issued and outstanding Common Stock. If such dividends are payable in cash, the cash amount will be converted to RSUs based on the Fair Market Value of the Common Stock on the date such dividends are paid. Dividend equivalents credited under this Subsection 9.9 shall be subject to the same vesting conditions as the underlying RSUs to which they relate. Any such dividend equivalents credited as additional RSUs shall be settled in cash or shares of Common Stock, in the discretion of the Committee, on the applicable vesting date. 9.10 Termination of Service.The Award Agreement shall set forth the treatment of the Award upon termination of Service, with such terms and conditions as determined by the Committee not inconsistent with the terms of the Plan. SECTION 10. PERFORMANCE UNITS 10.1 Grant of Performance Units.Performance Units may be granted subject to such terms and conditions as the Committee in its discretion shall determine. Performance Units may be granted either in the form of cash units or in share units, including RSUs, which are equal in value to one share of Common Stock, or a combination thereof. The Committee shall establish the performance goals to be attained in respect of the Performance Units, the various percentages of Performance Unit value to be distributed upon the attainment, in whole or in part, of the performance goals and such other Performance Unit terms, conditions and restrictions as the Committee shall deem appropriate as set forth in an Award Agreement. As soon as practicable after the termination of the performance period, the Committee shall determine the payment, if any, which is due on the Performance Unit in accordance with the terms thereof. The Committee shall determine, among other things, whether the payment shall be made in the form of cash or shares of Common Stock, or a combination thereof. 10.2 Performance Goals.For purposes of Performance Units, the Committee may select any business criteria for the Company, on a consolidated basis, and/or specified subsidiaries or business units of the Company, including, among others, any of the following business criteria: (a) cash flow; (b) cash flow from operations; (c) total earnings; (d) earnings per share, diluted or basic; (e) earnings per share from continuing operations, diluted or basic; (f) earnings before interest and taxes; (g) earnings before interest, taxes, depreciation, and amortization; (h) earnings from operations; (i) net asset turnover; (j) inventory turnover; (k) capital expenditures; (l) net earnings; (m) operating earnings; (n) gross or operating margin; (o) debt; (p) working capital; (q) return on equity; (r) return on net assets; (s) return on total assets; (t) return on capital; (u) return on investment; (v) return on sales; (w) net or gross sales; (x) market share; (y) economic value added; (z) cost of capital; (aa) change in assets; (bb) expense reduction levels; (cc) debt reduction; (dd) productivity; (ee) delivery performance; (ff) safety record; (gg) stock price; and (hh) total stockholder return. Performance goals may be determined on an absolute basis or relative to internal goals or relative to levels attained in prior years or related to other companies or indices or as ratios expressing relationships between two or more performance goals. Performance goals may but need not be determinable in conformance with generally accepted accounting principles. The Committee may determine the extent to which measurement of performance goals may include or exclude certain unusual or nonrecurring events, including, without limitation, the following: the impact of charges for restructuring, discontinued operations, extraordinary items, debt redemption or retirement, asset write downs, litigation or claim judgments or settlements, acquisitions or divestitures, foreign exchange gains and losses, and other unusualnon-recurring items, and the cumulative effects of tax or accounting changes. 10.3 Non-transferability of Performance Units.No Performance Units granted under the Plan may be sold, transferred, pledged, assigned or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution. Further, all rights with respect to Performance Units granted to a Participant under the Plan shall be exercisable during the Participant’s lifetime only by such Participant. | | | | | A-10 | | 2019 PROXY STATEMENT | | |
APPENDIX A SECTION 11. BENEFICIARY DESIGNATION Each Participant under the Plan may, from time to time, name any beneficiary or beneficiaries (who may be named contingently or successively) to whom any benefit under the Plan is to be paid in case of his death. Each designation will revoke all prior designations by the same Participant, shall be in a form prescribed by the Committee, and will be effective only when filed by the Participant in writing with the Committee during his lifetime. In the absence of any such designation, benefits remaining unpaid at the Participant’s death shall be paid to his estate. SECTION 12. RIGHTS OF PARTICIPANTS 12.1 Service.Nothing in the Plan shall interfere with or limit in any way the right of the Company to terminate any Participant’s Service at any time, nor confer upon any Participant any right to continue in the employ or Service of the Company. 12.2 Participation.No employee shall have a right to be selected as a Participant, or, having been so selected, to be selected again as a Participant. SECTION 13. CHANGE OF CONTROL 13.1 General.Notwithstanding any other provision of this Plan to the contrary, the provisions of this Section 13 shall apply in the event of a Change of Control, unless otherwise provided in the applicable Award Agreement. Following a Change of Control, no action shall be taken under the Plan that will cause any Award that has previously been determined to be (or is determined to be) subject to Code Section 409A to fail to comply in any respect with Code Section 409A without the written consent of the Participant. 13.2 Double-Trigger Provisions.Unless otherwise provided in the Award Agreement, if the Participant is terminated without Cause within two years following the Change of Control, any conditions on the Participant’s rights under, or any restrictions on transfer, vesting or exercisability applicable to, each such Award or Alternative Award (as defined in Subsection 13.3) held by such Participant shall be waived or shall lapse, as the case may be. All Options and Stock Appreciation Rights held by the Participant immediately before the termination that the Participant held as of the date of the Change of Control or that constitute Alternative Awards shall remain exercisable for not less than two years following such termination or until the expiration of the stated term of such Option, whichever period is shorter (provided, that if the applicable Award Agreement provides for a longer period of exercisability, that provision shall control). 13.3 Alternative Awards.Upon a Change of Control, and subject to Subsection 13.4, each outstanding Award shall be replaced with another Award meeting the requirements of Subsection 13.5 (an “Alternative Award”); provided that (a) if an Alternative Award meeting the requirements of Subsection 13.5 cannot be issued, or (b) the Committee so determines at any time prior to the Change of Control, each outstanding Award shall instead become fully vested, exercisable and free of any Period of Restriction immediately prior to the Change of Control. 13.4 Cash Substitution.Notwithstanding Subsection 13.3, at the discretion of the Committee (as constituted immediately prior to the Change of Control), each such Option, Stock Appreciation Right, or RSU may be canceled in exchange for an amount equal to the product of (a) in the case of Options and Stock Appreciation Rights, the excess, if any, of the product of the Change of Control Price over the exercise price for such Award, and (b) in the case of other such Awards, the Change of Control Price multiplied by the aggregate number of shares of Common Stock covered by such Award; provided, further, that where the Change of Control does not constitute a “change in control event” as defined under Code Section 409A, the shares to be issued, or the amount to be paid, for each Award that constitutes deferred compensation subject to Code Section 409A shall be paid at the time or schedule applicable to such Awards (assuming for these payment purposes (but not the lapsing of the Period of Restriction) that no such Change of Control had occurred). Notwithstanding the foregoing, the Committee may, in its discretion, instead terminate any outstanding Options or Stock Appreciation Rights if either (i) the Company provides holders of such Options and Stock Appreciation Rights with reasonable advance notice to exercise their outstanding and unexercised Options and Stock Appreciation Rights or (ii) the Committee reasonably determines that the Change of Control Price is equal to or less than the exercise price for such Options or Stock Appreciation Rights. For the purpose of this Subsection 13.4, “Change of Control Price” means the price per share on a fully diluted basis offered in conjunction with any transaction resulting in a Change of Control, as determined in good faith by the Committee as constituted before the Change of Control, if any part of the offered price is payable other than in cash. 13.5 Qualification of Alternative Awards.In order for an Award to meet the conditions of this Subsection 13.5 and qualify as an Alternative Award, the Committee (as constituted immediately prior to the Change of Control) must reasonably | | | | | | | 2019 PROXY STATEMENT | | A-11 |
APPENDIX A determine, in good faith, prior to the Change of Control that such outstanding Awards are to be assumed, honored, or new rights substituted by the successor entity following the Change of Control, and that any such Alternative Award will: (a) be based on shares of Common Stock that are traded on an established U.S. securities market or another public market determined by the Committee prior to the Change of Control; (b) provide the Participant (or each Participant in a class of Participants) with rights and entitlements substantially equivalent to or better than the rights, terms and conditions applicable under such Award, including, but not limited to, an identical or better exercise or vesting schedule and identical or better timing and methods of payment; (c) have substantially equivalent economic value to such Award (determined at the time of the Change of Control); (d) contain terms and conditions which provide that in the event that the Participant is terminated without Cause within two years following the Change of Control, any conditions on the Participant’s rights under, or any restrictions on transfer, vesting or exercisability applicable to, each such Award held by such Participant shall be waived or shall lapse, as the case may be; and (e) be on terms and conditions that do not result in adverse tax consequences to the Participant under Code Section 409A. The determination of whether the conditions of this Subsection 13.5 are satisfied shall be made by the Committee, as constituted immediately before the Change of Control, in its sole discretion. SECTION 14. AMENDMENT, MODIFICATION AND TERMINATION OF PLAN The Board may at any time amend, modify or terminate the Plan; provided, however, that no such action of the Board, without approval of the stockholders, may: (a) increase the total amount of Common Stock which may be issued under the Plan, except as provided in Subsections 5.1 and 5.3; (b) change the provisions of the Plan regarding the Option Price or exercise price for a Stock Appreciation Right, including a reduction of the Option Price of any outstanding Option or exercise price of any outstanding Stock Appreciation Right, cancellation of an Option or Stock Appreciation Right in exchange for cash or any other awards under the Plan, exchange or replace an outstanding Option or Stock Appreciation Right with a new Option with a lower Option Price or Stock Appreciation Right with a lower exercise price, or take any other action that would be a “repricing” of Options or Stock Appreciation Rights, except as permitted by Subsection 5.3 or Section 13; or (c) make any “Material Revisions” (within the meaning of the listing rules of the New York Stock Exchange) to change the terms of the Plan. No amendment, modification or termination of the Plan shall materially adversely affect the terms of any Awards previously granted under the Plan, without the consent of the Participant. SECTION 15. TAX WITHHOLDING 15.1 Tax Withholding.The Company, as appropriate, shall have the right to deduct from all payments any Federal, state or local taxes required by law to be withheld with respect to such payments. 15.2 Stock Withholding.With respect to withholding required upon the exercise of nonqualified stock options, or upon the lapse of restrictions on Restricted Stock, RSUs, or Performance Units payable in shares of Common Stock, Participants may elect, subject to the terms of the applicable Award Agreement, to satisfy the withholding required, in whole or in part, by (a) having the Company withhold shares of Common Stock otherwise issuable, or (b) tendering shares of previously acquired Common Stock, including by attestation to the ownership of Common Stock, in either case having a value equal to the amount of tax to be withheld; provided, however, shares may only be withheld by the Company to the extent necessary to satisfy the withholding liability required by law (not to exceed maximum statutory rates). The value of the shares to be withheld, tendered or attested is to be determined by such methods or procedures as shall be established from time to time by the Committee. All elections shall be irrevocable and shall be made in writing, signed by the Participant, and shall satisfy such other requirements as the Committee shall deem appropriate. | | | | | A-12 | | 2019 PROXY STATEMENT | | |
APPENDIX A SECTION 16. INDEMNIFICATION Each person who is or shall have been a member of the Committee or of the Board shall be indemnified and held harmless by the Company against and from any loss, cost, liability or expense that may be imposed upon or reasonably incurred by him in connection with or resulting from any claim, action, suit or proceeding to which he may be a party or in which he may be involved by reason of any action taken or failure to act under the Plan and against and from any and all amounts paid by him in settlement thereof, with the Company’s approval, or paid by him in satisfaction of any judgment in any such action, suit or proceeding against him, provided he shall give the Company an opportunity, at its expense, to handle and defend the same before he undertakes to handle and defend it on his own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under the Company’s Certificate of Incorporation or Bylaws, as a matter of law or otherwise, or any power that the Company may have to indemnify them or hold them harmless. SECTION 17. REQUIREMENTS OF LAW AND OTHER PROVISIONS 17.1 Requirements of Law.The granting of Awards, and the issuance of shares of Common Stock with respect to the exercise of an Option or Stock Appreciation Right or settlement of an RSU or Performance Unit, shall be subject to all applicable laws, rules and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required. 17.2 Foreign Jurisdictions.In order to conform with provisions of local laws and regulations in foreign countries in which the Company or its Subsidiaries operate, the Committee may (a) modify the terms and conditions of Awards granted to Participants employed outside the United States, (b) establish subplans with modified exercise procedures and such other modifications as may be necessary or advisable under the circumstances presented by local laws and regulations, and (c) take any action which it deems advisable to obtain, comply with or otherwise reflect any necessary governmental regulatory procedures, exemptions or approvals with respect to the Plan or any subplan established hereunder; provided, however, that the Committee may not make anysub-plan that (i) increases the limitations contained in Subsection 5.1, (ii) increases the number of shares available under the Plan, as set forth in Subsection 5.1, or (iii) causes the Plan to cease to satisfy any conditions under Rule16b-3 under the Exchange Act. Subject to the foregoing, the Committee may amend, modify, administer or terminate suchsub-plans, and prescribe, amend and rescind rules and regulations relating to suchsub-plans. 17.3 Governing Law.The Plan and all agreements hereunder, shall be construed in accordance with and governed by the laws of the State of Delaware. The jurisdiction and venue for any disputes arising under, or any action brought to enforce (or otherwise relating to), the Plan will be exclusively in the courts in the State of North Carolina, County of Mecklenburg, including the Federal Courts located therein (should Federal jurisdiction exist). 17.4 Compensation Recovery Policy.The Awards granted under this Plan shall be subject to any compensation recovery or claw back policy adopted by the Company, including any policy required to comply with applicable law or listing standards, as such policy may be amended from time to time in the sole discretion of the Company. As consideration for and by accepting any Award under the Plan, the Participant agrees that all prior Awards made by the Company to the Participant shall become subject to the terms and conditions of the provisions of this Subsection 17.4 17.5 No Limitation on Compensation.Nothing in the Plan shall be construed to limit the right of the Company to establish other plans or to pay compensation to its employees, in cash or property, in a manner which is not expressly authorized under the Plan. 17.6 Deferrals.The Committee may postpone the exercising of Awards, the issuance or delivery of Common Stock under any Award or any action permitted under the Plan to prevent the Company or any Subsidiary from being denied a Federal income tax deduction with respect to any Award other than an incentive stock option or to the extent required or permitted by applicable law. 17.7 409A Compliance.The Plan is intended to be administered in a manner consistent with the requirements, where applicable, of Code Section 409A. Where reasonably possible and practicable, the Plan shall be administered in a manner to avoid the imposition on Participants of immediate tax recognition and additional taxes pursuant to Code Section 409A. Notwithstanding the foregoing, neither the Company nor the Committee shall have any liability to any person in the event Code Section 409A applies to any such Award in a manner that results in adverse tax consequences for the Participant or any of his beneficiaries or transferees. | | | | | | | 2019 PROXY STATEMENT | | A-13 |
APPENDIX A Solely for purposes of determining the time and form of payments due under any Award that is considered nonqualified deferred compensation under Code Section 409A and that is not otherwise exempt from Code Section 409A, a Participant shall not be deemed to have incurred a termination of employment unless and until he shall incur a “separation from service” within the meaning of Code Section 409A. Notwithstanding any other provision in this Plan, if as of a Participant’s separation from service, the Participant is a “specified employee” as determined by the Company, then to the extent any amount payable under any Award that is considered nonqualified deferred compensation under Code Section 409A and that is not otherwise exempt from Code Section 409A, for which payment is triggered by the Participant’s separation from service (other than on account of death), and that under the terms of the Award would be payable prior to thesix-month anniversary of the Participant’s separation from service, such payment shall be delayed until the earlier to occur of (a) thesix-month anniversary of such separation from service or (b) the date of the Participant’s death. 17.8 Severability; Blue Pencil.In the event that any one or more of the provisions of this Plan shall be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not be affected thereby. If, in the opinion of any court of competent jurisdiction such covenants are not reasonable in any respect, such court shall have the right, power and authority to excise or modify such provision or provisions of these covenants as to the court shall appear not reasonable and to enforce the remainder of these covenants as so amended. 17.9 No Impact On Benefits.Except as may otherwise be specifically stated under any employee benefit plan, policy or program, no amount payable in respect of any Award shall be treated as compensation for purposes of calculating a Participant’s right under any such plan, policy or program. No amount payable in respect of any Award pursuant to an Award shall be deemed part of a Participant’s regular, recurring compensation for purposes of any termination, indemnity or severance pay laws. 17.10 No Constraint on Corporate Action.Nothing in this Plan shall be construed (a) to limit, impair or otherwise affect the Company’s right or power to make adjustments, reclassifications, reorganizations or changes of its capital or business structure, or to merge or consolidate, or dissolve, liquidate, sell, or transfer all or any part of its business or assets or (b) to limit the right or power of the Company, or any Subsidiary to take any action which such entity deems to be necessary or appropriate. 17.11 Headings and Captions.The headings and captions herein are provided for reference and convenience only, shall not be considered part of this Plan, and shall not be employed in the construction of this Plan. 17.12 No Trust or Fund Created.Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company and a grantee or any other person. To the extent that any grantee or other person acquires a right to receive payments from the Company pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the Company. 17.13 Code Section 83(b) Elections.The Company, its Subsidiaries and the Committee have no responsibility for any Participant’s election, attempt to elect or failure to elect to include the value of a Restricted Stock Award or other Award subject to Code Section 83 in the participant’s gross income for the year of payment pursuant to Code Section 83(b). Any Participant who makes an election pursuant to Code Section 83(b) will promptly provide the Committee with a copy of the election form. 17.14 No Obligation to Exercise Awards; No Right to Notice of Expiration Date.The grant of an Award of an Option or Stock Appreciation Right will impose no obligation upon the Participant to exercise the Award. The Company, its Subsidiaries and the Committee have no obligation to inform a Participant of the date on which any Award lapses except in the Award Agreement. 17.15 Right to Offset.Notwithstanding any provisions of the Plan to the contrary, and to the extent permitted by applicable law (including Code Section 409A), the Company may offset any amounts to be paid to a Participant (or, in the event of the Participant’s death, to his beneficiary or estate) under the Plan against any amounts that such Participant may owe to the Company or its Subsidiaries. 17.16 Furnishing Information.A Participant will cooperate with the Committee by furnishing any and all information requested by the Committee and take such other actions as may be requested in order to facilitate the administration of the Plan and the payments of benefits hereunder, including but not limited to taking such physical examinations as the Committee may deem necessary when eligibility or entitlement to any compensation or benefit based on any matter relating to the Disability of the Participant is at issue. | | | | | A-14 | | 2019 PROXY STATEMENT | | |
APPENDIX AB - RECONCILIATION OF GAAP ANDNON-GAAP FINANCIAL MEASURES “Core”Adjusted results arenon-GAAP financial measures that exclude, among other items, the resultseffect of the South African projects. The South African projects do not impact our HVAC and Detection and Measurement segments, but do impact our Engineered SolutionsHeat Transfer operations, categorized as “All Other” in the company’s segment and we evaluate “Engineered Solutions (Core)” results for certain purposes.reporting structure. Additionally, we have made other adjustments for items that arenon-cash, bonus annual incentive related, and/or unusual in nature. We also present certain other non-GAAP financial measures, identified as “Adjusted.” This appendix to the Proxy Statement includes reconciliations of the amounts ofnon-GAAP financial measures with the most comparable measures determined in accordance with accounting principles generally accepted in the United States (“GAAP”) and other important information regardingnon-GAAP financial measures.
CORE OPERATING INCOME
Adjusted Operating Income | | | | | SPX CORPORATION AND SUBSIDIARIES NON-GAAP RECONCILIATION - COREADJUSTED OPERATING INCOME (Unaudited; in millions) | | | | Twelve months ended December 31, 20172018 | | Operating income | | $ | 54.8107.6
| | Adjustments: | | | | | Aggregate operating losses of the South African projectsAfrica and Heat Transfer businesses | | | 69.4(23.2)
| | Non-service pension and postretirement itemsOne time acquisition-related costs
| | | 6.8(11.5)
| | Contract settlement gainLoss on sale of Dry Cooling
| | | (0.6) | | Adjusted operating income, before annual incentive adjustment | | | 142.9 | | Corporate annual incentive expense | | | 4.6 | | Annual incentive adjustments | | | (10.2)0.4
| | Core operating income, before annual incentive adjustment
| | | 120.8
| | Corporate-annual incentive expense
| | | 9.6
| | CoreAdjusted operating income
| | $ | 130.4147.9
| |
ADJUSTED NET INCOME FROM CONTINUING OPERATIONSAdjusted Net Income from Continuing Operations
| | | | | SPX CORPORATION AND SUBSIDIARIES NON-GAAP RECONCILIATION - ADJUSTED NET INCOME FROM CONTINUING OPERATIONS (Unaudited; in millions) | | | | Twelve months ended December 31, 20172018 | | Net Income from continuing operations | | $ | 84.078.2
| | Adjustments: | | | | | Aggregate losses of the South African projectsAfrica and Heat Transfer businesses | | | 71.323.7
| | Gain on contract settlementOne time acquisition related costs
| | | (10.2)11.5
| | Pension and postretirement expense | | | 6.88.0
| | GainLoss on interest rate swapssale of Dry Cooling
| | | (2.7)0.6
| | Loss on amendment/refinancing of senior credit agreement | | | 0.90.4
| | Income tax benefit | | | (71.8)(24.0)
| | Adjusted Net Income from continuing operations | | $ | 78.398.4
| |
| | | | | | | 20182019 PROXY STATEMENT | | A-1B-1 |
APPENDIX AB ADJUSTED EARNINGS PER SHAREAdjusted Segment Income
| | | | | SPX CORPORATION AND SUBSIDIARIES NON-GAAP RECONCILIATION - ADJUSTED SERMENT INCOME (Unaudited; in millions) | | | | Twelve months ended December 31, 2018 | | Consolidated Segment Income | | $ | 178.5 | | Adjustments: | | | | | Aggregate losses of the South Africa and Heat Transfer businesses | | | 18.9 | | One time acquisition related costs | | | 5.9 | | Adjusted Segment Income | | $ | 203.3 | |
Adjusted Free Cash Flow | | | | | SPX CORPORATION AND SUBSIDIARIES NON-GAAP RECONCILIATION - ADJUSTED FREECASH FLOW (Unaudited; in millions) | | | | Twelve months ended December 31, 2018 | | Net operating cash from continuing operations | | $ | 112.9 | | Capital expenditures – continuing operations | | | (12.4) | | Adjustment for South Africa and Heat Transfer | | | 22.3 | | Adjusted free cash flow, before annual incentive adjustment | | | 122.8 | | Annual incentive adjustments | | | 5.8 | | Adjusted free cash flow | | $ | 128.6 | |
Adjusted free cash flow is defined as net operating cash from (used in) continuing operations less capital expenditures of continuing operations, excluding cash used in operations by our South Africa (which is net of a tax benefit) and Heat Transfer businesses. In addition, when calculating annual incentive awards, certain additional discrete adjustments were made as described in the program documents. The Company’s management believes that adjusted free cash flow is a useful financial measure for investors in evaluating the cash flow performance of multi-industrial companies, since it provides insight into the cash flow available to fund such things as mandatory and discretionary debt reduction, equity repurchases, and acquisitions or other strategic investments. In addition, due, in part, to certain wind-down activities, and the related decline in volumes, the South African operations and Heat Transfer business have a diminishing impact on the Company’s cash flows over the long term. Adjusted free cash flow is not a measure of financial performance under GAAP. The adjusted free cash flow measure does not provide investors with an accurate measure of the actual net cash flow from (used in) continuing operations reported by the Company and should not be considered as a substitute for cash flows from (used in) operating activities as determined in accordance with GAAP, and may not be comparable to similarly titled measures reported by other companies. | | | | | B-2 | | 2019 PROXY STATEMENT | | |
APPENDIX B Adjusted Earnings Per Share | | | | | SPX CORPORATION AND SUBSIDIARIES NON-GAAP RECONCILIATION - ADJUSTED EARNINGS PER SHARE (Unaudited; in millions) | | | | Twelve months ended December 31, 2018 | | GAAP EPS from continuing operations | | $ | 1.75 | | Adjustments: | | | | | South Africa and Heat Transfer | | | 0.26 | | Acquisition-related | | | 0.22 | | Non-service pension items & other* | | | (0.03) | | Adjusted EPS from continuing operations | | $ | 2.20 | |
| | | | | SPX CORPORATION AND SUBSIDIARIES NON-GAAP RECONCILIATION - ADJUSTED EARNINGS PER SHARE (Unaudited; in millions) | | | | Twelve months ended December 31, 2017 | | GAAP EPS from continuing operations | | $ | 1.91 | | Adjustments: | | | | | South African projectsAfrica and Heat Transfer | | | 0.06(0.11
| ) | Gain on contract settlement
| | | (0.17) | | Non-service pension items & other* | | | (0.02)(0.06
| ) | Adjusted EPS from continuing operations | | $ | 1.78
| |
| | | | | SPX CORPORATION AND SUBSIDIARIES
NON-GAAP RECONCILIATION - ADJUSTED EARNINGS PER SHARE
(Unaudited; in millions)
| | | | Twelve months ended
December 31, 2016
| | GAAP EPS from continuing operations
| | $
| 0.30
| | Adjustments:
| | | | | South African projects
| | | 0.34
| | Non-service pension items & other*
| | | 0.83
| | Adjusted EPS from continuing operations
| | $
| 1.471.74
| |
* | Other includes discrete tax items, loss on refinancing of senior credit agreement, net gain on sale of Dry Cooling business,non-cash intangible impairment, gain on interest rate swaps, adjustment to redeemablenon-controlling interest, loss on early extinguishment of debt,non-actuarial gain on post retirement plans, adjustment for foreign currency loss associated with South African projects, and tax effects associated with adjustments. |
“CoreAdjusted operating income” “adjusted (loss), adjusted net income (loss) from continuing operations,” and “adjustedadjusted earnings (loss) per share”share, are defined as operating income (loss), net income (loss) from continuing operations, and diluted net income (loss) per share from continuing operations excluding the following items: (a) results of the South African projects, “All Other” group of operating segments,(b) non-service pension and postretirement expense (income), (c) gain (loss)acquisition related to acquisitions/divestitures,charges, (d) non-cash intangible impairment charges, losses on the sale of the Company’s Dry Cooling business,(e) a non-recurring gain on a contract settlement, (f) non-cash charges associated with the amendment/refinancing of theour senior credit agreement, (g)(f) anon-recurring gain on interest rate swaps as these swapsthat no longer qualified for hedge accounting, in connection with the amendment of our senior credit agreement, (h) Core operating income (loss) also adds back annual incentive expense associated with employees at our corporate headquarters, and (i) the removal of a tax benefit associated with worthless stock deductions, tax charges associated with the impact of the new U.S. tax act, and(g) the removal of certain other discrete income tax benefits, each, as applicable, as well as (j)(h) the income tax impact of items (a) through (g)(f). In addition to the Company’s South African projects,“All Other” group of operating segments, as described above, the Company’s management views the impact related to each of the other items with the exception of (h), as not indicative of the Company’s ongoing performance. The Company believes that inclusion of only the service cost and prior service cost components of pension and postretirement expense better reflects the ongoing costs of providing pension and postretirement benefits to its employees. Other components of GAAP pension and postretirement expense (income) are mainly driven by market performance, and the Company manages these separately from the operational performance of its business. The Company believes Coreadjusted operating income (loss), adjusted net income (loss) from continuing operations, and adjusted earnings (loss) per share, when read in conjunction with operating income (loss), income (loss) from continuing operations, and diluted net income (loss) per share from continuing operations, gives investors a useful tool to assess and understand the Company’s overall financial performance, because they exclude items of income or expense that the Company believes are not reflective of its ongoing operating performance, allowing for a betterperiod-to-period comparison of operations of the Company. Additionally, the Company’s management uses Coreadjusted operating income (loss), adjusted net income (loss) from continuing operations, and adjusted earnings (loss) per share as measures of the Company’s performance. CoreThe adjusted operating income (loss), adjusted net income (loss) from continuing operations, and adjusted earnings per share are not measures of financial performance under GAAP. The Core operating income, adjusted net income from continuing operations, and adjusted earnings(loss) per share measures do not provide investors with an accurate measure of the actual operating income (loss), income (loss) from continuing operations, and diluted net income (loss) per share from continuing operations
| | | | | A-2 | | 2018 PROXY STATEMENT | | |
APPENDIX A
reported by the Company and should not be considered as substitutes for operating income (loss), net income (loss) from continuing operations, and diluted net income (loss) per share from continuing operations as determined in accordance with GAAP, and may not be comparable to similarly titled measures reported by other companies. CORE FREE CASH FLOW
| | | | | | | 2019 PROXY STATEMENT | | B-3 |
APPENDIX B Adjusted Revenue | | | | | SPX CORPORATION AND SUBSIDIARIES NON-GAAP RECONCILIATION - CORE FREECASH FLOWADJUSTED REVENUE (Unaudited; in millions) | | | | Twelve months ended December 31, 2017 | | Net operating cash from continuing operations
| | $
| 54.2
| | Capital expenditures – continuing operations
| | | (11.0)
| | Adjustment for South African projects
| | | 49.5
| | Core free cash flow, before annual incentive adjustment
| | | 92.7
| | Annual Incentive adjustments
| | | (13.8)
| | Core free cash flow
| | $
| 78.9
| |
“Core free cash flow” is defined as net cash from (used in) continuing operations less capital expenditures of continuing operations, excluding cash used in operations by our South African projects (which is net of a tax benefit). In addition, when calculating annual incentive awards, certain additional discrete adjustments were made as described in the program documents. The Company’s management believes that Core free cash flow is a useful financial measure for investors in evaluating the cash flow performance of multi-industrial companies, since it provides insight into the cash flow available to fund such things as mandatory and discretionary debt reduction, equity repurchases, and acquisitions or other strategic investments. The South African projects have a finite life and, thus, are expected to have a diminishing impact on the Company’s cash flows over the long-term. Core free cash flow is not a measure of financial performance under GAAP. The Core free cash flow measure does not provide investors with an accurate measure of the actual net cash flow from (used in) continuing operations reported by the Company and should not be considered as a substitute for cash flows from (used in) operating activities as determined in accordance with GAAP, and may not be comparable to similarly titled measures reported by other companies.
CORE REVENUE
| | | | | SPX CORPORATION AND SUBSIDIARIES
NON-GAAP RECONCILIATION - COREREVENUE
(Unaudited; in millions)
| | | | Twelve months ended
December 31, 20172018
| | Consolidated revenue | | $ | 1,425.81,538.6
| | Exclude: South African projectsAfrica and Heat Transfer | | | (29.1)(98.6)
| | CoreAcquisition accounting adjustment to acquired deferred revenue
| | | 0.5 | | Adjusted revenue, before annual incentive adjustment | | | 1,440.5 | | Annual incentive adjustments | | | (177.3) | | Adjusted revenue | | $ | 1,396.71,263.2
| |
“Core revenue”Adjusted revenue is defined as revenuerevenues for the Company excluding the “All Other” group of operating segments, with “All Other” comprised of the results of the South African projects. Theoperations and SPX Heat Transfer business. Due, in part, to certain wind-down activities, and the related decline in volumes, the South African projects have a finite lifeoperations and thus, are expected toHeat Transfer business have a diminishing impact on the Company’s operating results over the long-term. Thelong term. As such, the Company’s management believes it is useful to investors to disclose consolidated revenuerevenues without the results of its South African projectsthe “All Other” group of operating segments to provide investors with metrics that the Company’s management uses to measure the overall performance of its businesses. Core revenue is notAdditionally, the Company adjusted for deferred revenues acquired in the Cues’ acquisition and excluded (i) revenues from its Process Cooling business and (ii) revenues resulting from a measure of financial performance under GAAP The Core revenue measure doeschange in accounting principles during 2018. Adjusted revenues do not provide investors with an accurate measure of, the actual revenue reported by the Company and should not be consideredused as a substitutesubstitutes for, the Company’s revenuerevenues as determined in accordance with GAAP, and may not be comparable to similarly titled measures reported by other companies.
| | | | | | | 2018 PROXY STATEMENTB-4 | | A-3 2019 PROXY STATEMENT | | |
13320-A Ballantyne Corporate Place • Charlotte, NC 28277 • USA 980-474-3700 • www.spx.com
| | | Using ablack ink pen, mark your votes with anX as shown in this example. Please do not write outside the designated areas. | | ☒ |
Electronic Voting Instructions
Your vote matters – here’s how to vote! You canmay vote online or by Internet or telephone! Available 24 hours a day, 7 days a week!
Insteadphone instead of mailing your proxy, you may choose one of the two voting methods outlined below to vote your proxy.
VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR.
Proxiesthis card. Votes submitted by the Internet or telephoneelectronically must be received by 11:59 p.m. (Eastern Time), Eastern Time, on May 14, 2018.
| | | | | Vote by Internet
• Go towww.envisionreports.com/SPXC
• Or scan the QR code with your smartphone
• Follow the steps outlined on the secure website
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Vote by telephone
8, 2019 Online Go to www.envisionreports.com/SPXC or scan the QR code — login details are located in the shaded bar below. Phone Call toll free1-800-652-VOTE (8683) within the USA, US territories &and Canada onSave paper, time and money! Using a touch tone telephone Followblack ink pen, mark your votes with an X as shown in this example. Sign up for electronic delivery at Please do not write outside the instructions provided by the recorded message
q IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION,designated areas. www.envisionreports.com/SPXC 2019 Annual Meeting Proxy Card qIF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q A Proposals — The Board of Directors recommend a vote FOR all the nominees listed and FOR Proposals 2 – 4. 1. Election of Directors: + For Against Abstain For Against Abstain For Against Abstain 01—Eugene J. Lowe, III 02—Patrick J. O’Leary 03—David A. Roberts (Term will expire in 2022) (Term will expire in 2022) (Term will expire in 2022) For Against Abstain For Against Abstain 2. Approval of Named Executive Officers’ Compensation, on a 3. Approval of SPX Corporation 2019 Stock Compensation Plan.qNon-binding
| | | | | A | | Proposals — The Board of Directors recommends a voteFOR all the nominees listed andFOR Proposals 2 and 3.
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| | | | | | | | | | | | | | | | | 1. Election of Directors:
| | For | | Against | | Abstain | | | | For | | Against | | Abstain | | | 01 - Ruth G. Shaw
(Term will expire in 2021)
| | ☐ | | ☐ | | ☐ | | 02 - Robert B. Toth
(Term will expire in 2021)
| | ☐ | | ☐ | | ☐ | |
| | | | | | | | | | | | | | | | | | | | | For | | Against | | Abstain | | | | | | | | For | | Against | | Abstain | 2. Approval of Named Executive Officers’ Compensation, on a Non-binding Advisory Basis.
| | ☐ | | ☐ | | ☐ | | | | 3. Ratification of Appointment of Deloitte & Touche LLP as the Company’s Independent Registered Public Accounting Firm for the 2018 fiscal year.
| | ☐ | | ☐ | | ☐ | | | | | | | | | | 4. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting.
| | | | | | | | | | | | | | | | |
| | | | | | | Change of Address — Please print new address below. | | | | Meeting Attendance | | | | | | | Mark box to the right if you plan to attend the Annual Meeting. | | ☐ |
| | | | | C | | Authorized Signatures — This section must be completed for your vote to be counted. – Date and Sign Below |
Advisory Basis. 4. Ratification of Appointment of Deloitte & Touche LLP as the 5. In their discretion, the Proxies are authorized to vote upon Company’s Independent Registered Public Accounting Firm such other business as may properly come before the meeting. for 2019. B Authorized Signatures — This section must be completed for your vote to count. Please date and sign below. Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee,guardian, or custodian, please give full title. Date (mm/dd/yyyy) — Please print date below. Signature 1 — Please keep signature within the box. Signature 2 — Please keep signature within the box. 33BM + 030XJB Dear | | | | | | | | | Date (mm/dd/yyyy) — Please print date below. | | | | Signature 1 — Please keep signature within the box.
| | | | Signature 2 — Please keep signature within the box.
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| | | | | ∎ | | 1 UP X | | | 02SBXA | | | | |
Dear Stockholder:
Stockholder: The Annual Meeting of Stockholders of SPX Corporation will be held at 8:00 a.m. (Eastern Time) on Tuesday,Thursday, May 15, 20189, 2019 at the SPX Building, 13320 Ballantyne Corporate Place, Charlotte, North Carolina, 28277, for the following purposes: 1. Election of Directors: 01 - Ruth G. Shaw01—Eugene J. Lowe, III (Term will expire in 2021)2022), 02 - Robert B. Toth02—Patrick J. O’Leary (Term will expire in 2021)2022), 03—David A. Roberts (Term will expire in 2022). 2. Approval of Named Executive Officers’ Compensation, on a Non-binding Advisory Basis. 3. Approval of SPX Corporation 2019 Stock Compensation Plan. 4. Ratification of Appointment of Deloitte & Touche LLP as the Company’s Independent Registered Public Accounting Firm for the 2018 fiscal year. 4.2019. 5. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting.
Only holders of Common Stock of SPX Corporation of record at the close of business on March 20, 201814, 2019 will be entitled to vote at the meeting or any adjournment thereof. To be sure that your vote is counted, we urge you to vote by telephone or by Internet. By giving your proxy, you do not affect your right to vote in person ifof you attend the meeting. Your prompt vote will aid the company in reducing the expense of additional proxy solicitation. For stockholders with common shares held in the company’sCompany’s KSOP Trust: It is important to remember that your specific voting directions to the Trustee are strictly confidential and may not be divulged by the Trustee to anyone, including the company or any director, officer, employee, or agent of the company. The Trustee will vote the shares being held by the Trust and not yet allocated to participants’ accounts in the same manner and proportion as the shares for which the Trustee has received timely voting instructions. Shares in participants’ accounts for which no timely voting instructions are received by the Trustee will be voted in the same manner. | BY ORDER OF THE BOARD OF DIRECTORS | | John W. Nurkin | Vice President, Secretary
and General Counsel
|
q IF YOU HAVE NOT VOTED VIA THE INTERNETOR TELEPHONE, FOLD ALONG THE PERFORATION,BOARD OF DIRECTORS John W. Nurkin Vice President, General Counsel and Secretary Small steps make an impact. Help the environment by consenting to receive electronic delivery, sign up at www.envisionreports.com/SPXC qIF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q
Proxy — SPX Corporation
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 15, 2018
Charlotte, North Carolina
This + Notice of 2019 Annual Meeting of Stockholders Proxy is Solicited on Behalf of theby Board of Directors
The undersigned stockholder of SPX Corporation, a Delaware corporation, hereby appoints for Annual Meeting — May 9, 2019 Eugene J. Lowe, III and Scott W. Sproule, or either one of them, each with fullthe power of substitution, are hereby authorized to act as his or her agentsrepresent and proxiesvote the shares of the undersigned, with all the powers which the undersigned would possess if personally present, at the Annual Meeting of Stockholders of SPX Corporation to be held in Charlotte, North Carolina on May 15, 20189, 2019 or at 8:00 a.m. (Eastern Time) with authority to vote at said meeting, and adjournments thereof, as indicated below, all shares of stock of the company standing in the name of the undersigned on the books of the company.
This proxy when properly executed will be voted in the manner directedany postponement or adjournment thereof. Shares represented by the undersigned stockholder.If no direction is made, this proxy will be voted by the stockholder. If no such directions are indicated, the Proxies will have authority to vote FOR ALL NOMINEES in Proposal 1,the election of the Board of Directors and FOR Proposal 2, FOR Proposal 3, anditems2-4. In their discretion, the Proxies are authorized to vote upon such other business as the proxies deem advisable on all other matters that may properly come before the meeting.
PLEASE VOTE, DATE, AND SIGN THIS PROXY ON THE OTHER SIDE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. (Items to be voted appear on reverse side) CNon-Voting Items Change of Address — Please print new address below. Comments — Please print your comments below. +
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