Current Report Filing (8-k)

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

 

FORM 8-K

 

Current Report

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported):  September 22, 2015

 

SPX FLOW, INC.

(Exact name of registrant as specified in its charter)

 

DELAWARE
(State or other jurisdiction of
incorporation)

 

1-37393
(Commission File Number)

 

47-3110748
(IRS Employer
Identification No.)

 

13320 Ballantyne Corporate Place

Charlotte, North Carolina 28277

(Address of principal executive offices) (Zip Code)

 

Registrant’s telephone number, including area code  (704) 752-4400

 

NOT APPLICABLE

(Former name or former address if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the obligation of the registrant under any of the following provisions:

 

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 



 

Item 1.01 Entry into a Material Definitive Agreement.

 

Agreements with SPX Corporation

 

At 11:59 p.m., New York City time, on September 26, 2015 (the “Distribution Date”), SPX Corporation (“SPX”) completed the previously announced tax-free spin-off (also referred to herein as the “Spin-Off”) of its Flow business, comprising is Flow Technology reportable segment, its Hydraulic Technology business and certain of its subsidiaries, into a new standalone, publicly traded company, SPX FLOW, Inc. (“SPX FLOW”), and distributed, on a pro rata basis, all of the shares of SPX FLOW common stock to SPX’s stockholders of record as of 5:00 p.m., New York City time, on September 16, 2015 (the “Record Date”). To effect the Spin-Off, SPX distributed to its stockholders one share of SPX FLOW common stock, par value $0.01 per share, for every one share of SPX common stock (the “Distribution”) outstanding as of the Record Date.

 

In connection with the Distribution, SPX FLOW entered into definitive agreements with SPX that, among other things, set forth the terms and conditions of the Distribution and provide a framework for SPX FLOW’s relationship with SPX after the Distribution, including the following agreements:

 

·                  Separation and Distribution Agreement;

 

·                  Transition Services Agreement;

 

·                  Tax Matters Agreement;

 

·                  Employee Matters Agreement; and

 

·                  Trademark License Agreement.

 

A summary of the material terms of these agreements can be found in the Information Statement of SPX FLOW, dated September 8, 2015 (the “Information Statement”), filed as Exhibit 99.1 SPX FLOW’s Amendment No. 3 to the Registration Statement on Form 10 dated September 8, 2015, filed with the Securities and Exchange Commission on September 8, 2015 (File No. 001-37393), under “Certain Relationships and Related Party Transactions—Agreements with SPX Related to the Spin-Off,” which summary is incorporated herein by reference.  The summary is qualified in its entirety by reference to the Separation and Distribution Agreement, Transition Services Agreement, Tax Matters Agreement, Employee Matters Agreement and Trademark License Agreement, filed as Exhibits 2.1 and 10.1, 10.2, 10.3 and 10.4, respectively, hereto, each of which is incorporated herein by reference.

 

Substitution as Obligor under the Indenture and the 2017 Notes

 

On September 22, 2015, in connection with the completion of the transfer of the SPX’s Flow Technology reportable segment, along with its hydraulics technologies business to SPX FLOW (the “Flowco Asset Transfer”), as part of the Spin-Off, SPX FLOW entered into a Third Supplemental Indenture (the “Third Supplemental Indenture”) to the Indenture (as defined below) and issued substitute global notes in connection with SPX FLOW’s substitution for SPX as the obligor of $600.0 aggregate principal amount of 6.875% Senior Notes due 2017 (the “2017 Notes”). A copy of the Third Supplemental Indenture is attached hereto as Exhibit 4.1 and is incorporated herein by reference. The 2017 Notes were issued pursuant to the terms of the Indenture, dated as of August 10, 2010 (as amended and supplemented, the “Indenture”).

 

The 2017 Notes mature in August 2017. The interest payment dates for the 2017 Notes are March 1 and September 1 of each year. The 2017 Notes are redeemable, in whole or in part, at any time prior to maturity at a price equal to 100% of the principal amount thereof plus an applicable premium, plus accrued and unpaid interest. If SPX FLOW experiences certain types of change of control transactions, SPX FLOW must offer to repurchase the 2017 Notes at 101% of the aggregate principal amount of the notes repurchased, plus accrued and unpaid interest. The 2017 Notes are unsecured and rank equally with all of SPX FLOW’s existing and future unsubordinated unsecured senior indebtedness, but are effectively junior to SPX FLOW’s senior credit facilities. The Indenture contains covenants that, among other things, limit SPX FLOW’s ability to incur liens, enter into sale and leaseback transactions and consummate some mergers. Payment of the principal, premium, if any, and interest on the 2017 Notes will be guaranteed on a senior unsecured basis by SPX FLOW’s domestic subsidiaries.

 

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On September 24, 2015, SPX FLOW, and SPX Flow Holdings, Inc., SPX Flow Technology Systems, Inc., SPX Flow US, LLC, Corporate Place LLC,  and Delaney Holdings Co. (collectively, the “Guarantors) and U.S. Bank National Association, as trustee, executed the Fourth Supplemental Indenture (the “Fourth Supplemental Indenture”) to the Indenture, pursuant to which the Guarantors were added as subsidiary guarantors under the Indenture.  A copy of the Fourth Supplemental Indenture is attached hereto as Exhibit 4.2 and is incorporated herein by reference.

 

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

 

The information provided under Item 1.01 above is incorporated by reference into this Item 2.03.

 

Item 3.03 Material Modification to Rights of Security Holders.

 

The information provided under Item 5.03 below is incorporated herein by reference into this Item 3.03.

 

Item 5.01 Changes in Control of Registrant.

 

The information provided under Item 1.01 above is incorporated herein by reference into this Item 5.01.

 

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

Appointment and Resignation of Directors

 

On September 11, 2015, when the SPX FLOW Registration Statement on Form 10 was declared effective by the Securities and Exchange Commission, the members of the Board of Directors of SPX FLOW (the “Board”) consisted of Jeremy W. Smeltser, Stephen A. Tsoris and Stephen R. Winslow.

 

Effective upon completion of the Spin-Off at 11:59 p.m., New York City time, on September 26, 2015, the size of the Board was expanded from three to seven and Jeremy W. Smeltser, Stephen A. Tsoris and Stephen R. Winslow resigned from the Board (the “Resignations”). Effective upon completion of the Spin-Off and immediately after the expansion in the size of the Board and the Resignations, and to fill the vacancies created thereby, Christopher J. Kearney, Anne K. Altman, Patrick D. Campbell, Emerson U. Fullwood, Robert F. Hull, Jr., Terry S. Lisenby and David V. Singer were appointed to the Board. Effective as of his appointment to the Board, Mr. Kearney was appointed to serve as Chairman of the Board. Effective as of his appointment to the Board, Mr. Fullwood was appointed to serve as Lead Independent Director of the Board.

 

Biographical information for each member of the Board can be found in the Information Statement under the section entitled “Management — Our Board of Directors” which section is incorporated by reference into this Item 5.02.

 

The Board of SPX FLOW is currently constituted into three classes, as follows:

 

·                  Class I: Anne K. Altman and Patrick D. Campbell serve in the first class of directors of the Board, whose terms expire at the first annual meeting of SPX FLOW stockholders following the Spin-Off;

 

·                  Class II: Robert F. Hull, Jr. and David V. Singer serve in the second class of directors of the Board, whose terms expire at the second annual meeting of the SPX FLOW stockholders following the Spin-Off; and

 

·                  Class III: Christopher J. Kearney, Emerson U. Fullwood and Terry S. Lisenby serve in the third class of directors of the Board, whose terms expire at the third annual meeting of SPX FLOW stockholders following the Spin-Off.

 

Also, in connection with the Spin-Off, effective September, 2015:

 

·                  Ms. Altman, Mr. Campbell, Mr. Fullwood, Mr. Hull, Jr., Mr. Lisenby and Mr. Singer were appointed as members of the Audit Committee of the Board. Mr. Lisenby was appointed the Chair of the Audit Committee. The Board has determined that each of the members of the Audit Committee are independent under SEC rules and New York Stock Exchange (“NYSE”) listing standards, are financially literate under

 

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NYSE listing standards applicable to audit committee members and that each qualifies as an “audit committee financial expert” for purposes of the rules of the SEC.

 

·                  Mr. Campbell, Mr. Fullwood and Mr. Hull, Jr., each of whom has been determined by the Board to be independent under NYSE listing standards, were appointed as members of the Nominating and Corporate Governance Committee of the Board. Mr. Campbell was appointed the Chair of the Nominating and Corporate Governance Committee.

 

·                  Mr. Fullwood, Mr. Lisenby and Mr. Singer, each of whom has been determined by the Board to be independent under SEC rules and NYSE listing standards applicable to compensation committee members, were appointed as members of the Compensation Committee of the Board. Mr. Fullwood was appointed the Chair of the Compensation Committee.

 

Each of the non-employee directors of SPX FLOW will receive compensation for their service as a director or committee member in accordance with plans and programs more fully described in the Information Statement under the heading “Management — Director Compensation,” which is incorporated by reference into this Item 5.02.

 

There are no arrangements or understandings between any of the individuals listed above and any other person pursuant to which such individuals were selected as directors. There are no transactions involving any of the individuals listed above that would be required to be reported under Item 404(a) of Regulation S-K.

 

Appointment of Executive Officers

 

In connection with the Spin-Off, on September 26, 2015, the following individuals became executive officers of SPX FLOW as set forth in the table below:

 

Name

 

Position

Christopher J. Kearney

 

Chairman, President and Chief Executive Officer

Jeremy W. Smeltser

 

Vice President and Chief Financial Officer

Stephen A. Tsoris

 

Vice President, Secretary, and General Counsel

Robert B. Foreman

 

Executive Vice President

David A. Kowalski

 

President, Global Manufacturing Operations

J. Michael Whitted

 

Vice President, Corporate Development

Marc G. Michael

 

President, Food and Beverage

Anthony A. Renzi

 

President, Power and Energy

David J. Wilson

 

President, Industrial

Belinda G. Hyde

 

Vice President and Chief Human Resources Officer

Kevin J. Eamigh

 

Chief Information Officer and Vice President, Global Business Services

 

Stephen A. Tsoris was previously appointed as Vice President, Secretary, and General Counsel of SPX FLOW on September 21, 2015.

 

Biographical information on each of the executive officers can be found in the Information Statement under the section entitled “Management—Our Executive Officers,” which is incorporated by reference into this Item 5.02.

 

Compensation Plans

 

Adoption of the SPX FLOW Stock Compensation Plan

 

On September 23, 2015, the Board adopted the SPX FLOW Stock Compensation Plan (the “Stock Plan”), which was been approved by SPX as SPX FLOW’s sole shareholder, and the Stock Plan became effective as of September 23, 2015. The persons who are eligible to receive grants of awards under the Stock Plan are employees (including officers who are employees) or directors of, or individual consultants or independent contractors who provide services to, SPX FLOW or its subsidiaries.  The Stock Plan will be administered by the Compensation Committee, or a delegate of the Compensation Committee, or the Board itself, although it is expected that the Compensation Committee will generally serve as the administrator.  Among other things, the Compensation Committee, in its discretion, selects the participants to whom awards may be granted, the time or times at which such awards are granted, and the terms of such awards, including the type of award to be granted and the number of shares subject to each award. The Stock Plan provides that the Compensation Committee may award to such eligible recipients as it may determine from time to time the following awards: stock options, stock appreciation rights, restricted stock, restricted stock units and performance units. The Stock Plan also provides that certain awards may be granted under the Stock Plan in connection with the adjustment and replacement of certain awards previously granted by SPX pursuant to its equity plan (the “Replacement Awards”) in accordance with the terms of the Employee Matters Agreement.  Subject to the adjustment clauses in the Stock Plan, the maximum aggregate number of shares of SPX FLOW common stock that may be subject to awards granted under the Stock Plan is 3,000,000 plus the number of shares of SPX FLOW common stock awarded in connection with Replacement Awards.

 

The foregoing description of the Stock Plan is not complete and is qualified in its entirety by reference to the full text of the Stock Plan and the forms of award agreements related to the Stock Plan, which are filed as Exhibit 10.5, 10.6, 10.7 and 10.8, respectively, to this Current Report on Form 8-K and incorporated herein by reference.

 

Adoption of SPX FLOW Executive Annual Bonus Plan

 

On September 23, 2015, the Board adopted the SPX FLOW Executive Annual Bonus Plan (the “Executive Bonus Plan”), which was approved by SPX as SPX FLOW’s sole shareholder, and the Executive Bonus Plan became effective as of September 23, 2015.  SPX FLOW’s Chief Executive Officer, each of its other executive officers and each other SPX FLOW employee that the Compensation Committee determines may be a “covered employee” within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended, are eligible to participate in the Executive Bonus Plan. The Executive Bonus Plan is administered by the Compensation Committee, or such other committee that may be appointed by the Board.  Generally, the Executive Bonus Plan provides that participants will be eligible for a cash award for each performance year of participation, with the amount of the award, if any, determined based on the achievement of performance goals established for the applicable performance period, with no individual bonus to exceed $4,000,000. The Compensation Committee, in its discretion, may reduce the amount of an award granted under the Executive Bonus Plan.

 

The foregoing description of the Executive Bonus Plan is not complete and is qualified in its entirety by reference to the full text of the Executive Bonus Plan, which is filed as Exhibit 10.9 to this Current Report on Form 8-K and incorporated herein by reference.

 

Adoption of the SPX FLOW Supplemental Retirement Plan for Top Management

 

On September 23, 2015, the Board adopted the SPX FLOW Supplemental Retirement Plan for Top Management (the “TMP”), which became effective on September 26, 2015. The TMP is a nonqualified defined benefit plan that provides individuals designated by the Compensation Committee, including each of our named executive officers, with retirement benefits determined by using a benefits formula based on a percentage of the participant’s final pensionable earnings (highest three of last ten calendar years of employment, subject to certain adjustments) and the number of years the participant has participated in the SPX Corporation Supplemental Retirement Plan for Top Management or the TMP, as applicable.  The accrual rate for the benefit under the TMP varies based on when the participant commenced participation in the SPX Corporation Supplemental Retirement Plan for Top Management or the TMP, as applicable.

 

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The foregoing description of the TMP is not complete and is qualified in its entirety by reference to the full text of the TMP, which is filed as Exhibit 10.10 to this Current Report on Form 8-K and incorporated herein by reference.

 

Adoption of the SPX Flow Life Insurance Plan for Key Managers

 

On September 23, 2015, the Board adopted the SPX FLOW Life Insurance Plan for Key Managers (the “Life Insurance Plan”), which became effective on September 26, 2015. The Life Insurance Plan provides enhanced life insurance benefits for certain key managers of SPX FLOW designated by the Compensation Committee.  Participants are eligible for life insurance benefits in the event of their death (i) following retirement from SPX FLOW or (ii) during employment with SPX FLOW.  If a participant becomes disabled prior to retirement, the Compensation Committee, in its discretion, may allow a participant to continue to participate in the Life Insurance Plan.  If a participant’s employment with SPX FLOW terminates for any other reason, no payments will be due under the Life Insurance Plan.  Benefits under the Life Insurance Plan are reduced by death benefits paid to the applicable participant under any group life insurance policy paid for by SPX FLOW.

 

The foregoing description of the Life Insurance Plan is qualified in its entirety by reference to the text of the Life Insurance Plan, which is attached as Exhibit 10.11 hereto and incorporated herein by reference.

 

Adoption of SPX FLOW Supplemental Retirement Savings Plan

 

On September 23, 2015, the Board adopted the SPX FLOW Supplemental Retirement Savings Plan (the “SRSP”), which became effective on September 25, 2015. The SRSP is a nonqualified defined contribution plan that allows our named executive officers and other senior level management to make pre-tax deferrals in excess of those permitted by the SPX FLOW Retirement Savings Plan (the “401(k) Plan”).  The SRSP allows eligible participants to defer up to 50% of their base compensation (excluding bonuses) and up to 100% of their annual bonus into the SRSP.  A company match will be made to the SRSP after the maximum company match is made under the 401(k) Plan and is allocated to the fund(s) selected by the participant.  Each participant is fully vested in all contributions, including matching contributions, at all times.

 

The foregoing description of the SRSP is qualified in its entirety by reference to the text of the SRSP, which is attached as Exhibit 10.12 hereto and incorporated herein by reference.

 

Adoption of SPX FLOW Executive Long-Term Disability Plan

 

On September 23, 2015, the Board adopted the SPX FLOW Executive Long-Term Disability Plan (the “Executive LTD Plan”) which became effective on September 27, 2015.  The benefit under the Executive LTD Plan, when combined with the benefit under the group long-term disability plan offered to most of our employee population, equals approximately 60% of the participant’s base salary on an after-tax basis in the event the participant becomes disabled while employed by SPX FLOW.  The monthly benefits under the Executive LTD Plan continue until the earlier of (i) the end of the participant’s disability (as defined in the Executive LTD Plan) or (ii) age 65.  The Executive LTD Plan benefit is offset by other income benefits including company-paid retirement benefits.

 

The foregoing description of the Executive LTD Plan is qualified in its entirety by reference to the text of the Executive LTD Plan, which is attached as Exhibit 10.13 hereto and incorporated herein by reference.

 

Adoption of the Assignment and Assumption of and Amendment to Employment Agreement

 

On September 23, 2015, the Board adopted a form of Assignment and Assumption of and Amendment to Employment Agreement (the “EA Assumption Agreement”) to be entered into with each of our named executive officers.  The EA Assumption Agreement provides that, effective as of the Distribution Date, SPX FLOW will assume all of SPX’s right, title and interest in, and agrees to pay, perform and discharge all of the covenants, conditions, obligations and liabilities of SPX, in all cases under the employment agreements entered into between each of our named executive officers and SPX.  The EA Assumption Agreement also provides for certain amendments to the original employment agreement, primarily to reflect SPX FLOW benefit and compensation plans.  The terms of the employment agreements with our named executive officers that are being assigned and assumed pursuant to the EA Assumption Agreement are more fully described in the Information Statement under the heading “Executive Compensation— Historical Compensation of Executive Officers Prior to the Spin-Off,” which is incorporated by reference into this Item 5.02.

 

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The foregoing description of the EA Assumption Agreement is qualified in its entirety by reference to the text of the form of EA Assumption Agreement, which is attached as Exhibit 10.14 hereto and incorporated herein by reference.

 

Adoption of the Assignment and Assumption of and Amendment to Change of Control Agreement

 

On September 23, 2015, the Board adopted a form of Assignment and Assumption of and Amendment to Change of Control Agreement (the “COC Assumption Agreement”) to be entered into with each of our named executive officers, as well as certain of our other key executives.  The COC Assumption Agreement provides, effective as of the Distribution Date, that SPX FLOW will assume all of SPX’s right, title and interest in, and agrees to pay, perform and discharge all of the covenants, conditions, obligations and liabilities of SPX, in all cases under the change of control agreements entered into between each of our named executive officers and certain other key executives and SPX.  The COC Assumption Agreement also provides for certain amendments to the original change of control agreement, primarily to reflect SPX FLOW benefit and compensation plans.  The terms of the change of control agreements with our named executive officers that are being assigned and assumed pursuant to the COC Assumption Agreement are more fully described in the Information Statement under the heading “Executive Compensation— Historical Compensation of Executive Officers Prior to the Spin-Off,” which is incorporated by reference into this Item 5.02.

 

The foregoing description of the COC Assumption Agreement is qualified in its entirety by reference to the text of the form of COC Assumption Agreement, which is attached as Exhibit 10.15 hereto and incorporated herein by reference.

 

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal year.

 

In connection with the Spin-Off, on September 21, 2014, SPX FLOW adopted its Amended and Restated Certificate of Incorporation (the “Amended and Restated Certificate of Incorporation”) and Amended and Restated Bylaws (the “Amended and Restated Bylaws”).  The Amended and Restated Certificate of Incorporation increased the number of authorized shares of SPX FLOW common stock to 300,000,000, in order to facilitate the distribution of the shares of SPX FLOW common stock to holders of SPX common stock. A summary of the material provisions of each of the

 

6



 

Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws is included under the section “Description of Capital Stock” in the Information Statement, which section is incorporated herein by reference. This description is qualified in its entirety by reference to the Amended and Restated Certificate of Incorporation filed as Exhibit 3.1 and the Amended and Restated Bylaws filed as Exhibit 3.2, respectively, to this Current Report on Form 8-K, which are incorporated herein by reference.

 

Item 5.07 Submission of Matters to a Vote of Security Holders.

 

On September 21, 2015, SPX, the sole stockholder of SPX FLOW, executed a written consent of stockholders in lieu of an annual meeting.  SPX, as the sole stockholder of SPX FLOW, voted all 100 shares held by it in favor of (a) the adoption of the Amended and Restated Certificate of Incorporation, (b) electing the individuals listed under Item 5.02 above, which is incorporated herein by reference, to be members of the Board, and (c) the adoption of the SPX FLOW Stock Compensation Plan and the SPX FLOW Executive Annual Bonus Plan.

 

Item 8.01 Other Events

 

SPX FLOW issued a press release on September 28, 2015 announcing that it completed the Spin-Off, a copy of which is attached as Exhibit 99.1 hereto and is incorporated herein by reference.

 

In connection with the Spin-Off, the Board adopted Corporate Governance Guidelines, a copy of which is available under the Investor Relations section of the SPX FLOW website at www.spxflow.com.

 

Item 9.01    Financial Statements and Exhibits

 

(d) Exhibits

 

Exhibit Number

 

Description

2.1

 

Separation and Distribution Agreement, dated as of September 22, 2015, by and between SPX FLOW, Inc. and SPX Corporation

3.1

 

Amended and Restated Certificate of Incorporation of SPX FLOW, Inc.

3.2

 

Amended and Restated Bylaws of SPX FLOW, Inc.

4.1

 

Third Supplemental Indenture, dated as of September 22, 2015, by and between SPX FLOW, Inc. and U.S. Bank National Association, as Trustee, to the Indenture dated as of August 10, 2010

4.2

 

Fourth Supplemental Indenture, dated as of September 24, 2015, by and among SPX FLOW, Inc., the Guarantors (as defined herein) and U.S. Bank National Association, as Trustee, to the Indenture dated as of August 10, 2010

10.1

 

Transition Services Agreement, dated as of September 26, 2015, by and between SPX FLOW, Inc. and SPX Corporation

10.2

 

Tax Matters Agreement, dated as of September 26, 2015, by and between SPX FLOW, Inc. and SPX Corporation

10.3

 

Employee Matters Agreement, dated as of September 26, 2015, by and between SPX FLOW, Inc. and SPX Corporation

10.4

 

Trademark License Agreement, dated as of September 26, 2015, by and between SPX FLOW, Inc. and SPX Corporation

10.5

 

SPX FLOW Stock Compensation Plan

10.6

 

Form of SPX FLOW Stock Option Award Agreement

10.7

 

Form of SPX FLOW Restricted Stock Unit Award Agreement

10.8

 

Form of SPX FLOW Restricted Stock Award Agreement

10.9

 

SPX FLOW Executive Annual Bonus Plan

10.10

 

SPX FLOW Supplemental Retirement Plan for Top Management

10.11

 

SPX FLOW Life Insurance Plan for Key Managers

10.12

 

SPX FLOW Supplemental Retirement Savings Plan

10.13

 

SPX FLOW Executive Long-Term Disability Plan

10.14

 

Form of Assignment and Assumption of and Amendment to Employment Agreement

10.15

 

Form of Assignment and Assumption of and Amendment to Change of Control Agreement

 

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99.1

 

Press Release of SPX FLOW, Inc., dated September 28, 2015

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

SPX FLOW, INC.

 

 

 

 

 

Date: September 28, 2015

By:

/s/ Stephen A. Tsoris

 

 

Stephen A. Tsoris

 

 

Vice President, Secretary
and General Counsel

 

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EXHIBIT INDEX

 

Exhibit
Number

 

Description

2.1

 

Separation and Distribution Agreement, dated as of September 22, 2015, by and between SPX FLOW, Inc. and SPX Corporation

3.1

 

Amended and Restated Certificate of Incorporation of SPX FLOW, Inc.

3.2

 

Amended and Restated Bylaws of SPX FLOW, Inc.

4.1

 

Third Supplemental Indenture, dated as of September 22, 2015, by and between SPX FLOW, Inc. and U.S. Bank National Association, as Trustee, to the Indenture dated as of August 10, 2010

4.2

 

Fourth Supplemental Indenture, dated as of September 24, 2015, by and among SPX FLOW, Inc., the Guarantors (as defined herein) and U.S. Bank National Association, as Trustee, to the Indenture dated as of August 10, 2010

10.1

 

Transition Services Agreement, dated as of September 26, 2015, by and between SPX FLOW, Inc. and SPX Corporation

10.2

 

Tax Matters Agreement, dated as of September 26, 2015, by and between SPX FLOW, Inc. and SPX Corporation

10.3

 

Employee Matters Agreement, dated as of September 26, 2015, by and between SPX FLOW, Inc. and SPX Corporation

10.4

 

Trademark License Agreement, dated as of September 26, 2015, by and between SPX FLOW, Inc. and SPX Corporation

10.5

 

SPX FLOW Stock Compensation Plan

10.6

 

SPX FLOW Stock Option Award Agreement

10.7

 

SPX FLOW Restricted Stock Unit Award Agreement

10.8

 

SPX FLOW Restricted Stock Award Agreement

10.9

 

SPX FLOW Executive Annual Bonus Plan

10.10

 

SPX FLOW Supplemental Retirement Plan for Top Management

10.11

 

SPX FLOW Life Insurance Plan for Key Managers

10.12

 

SPX FLOW Supplemental Retirement Savings Plan

10.13

 

SPX FLOW Executive Long-Term Disability Plan

10.14

 

Assignment and Assumption of and Amendment to Employment Agreement

10.15

 

Assignment and Assumption of and Amendment to Change of Control Agreement

99.1

 

Press Release of SPX FLOW, Inc., dated September 28, 2015

 

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Exhibit 2.1

 

SEPARATION AND DISTRIBUTION AGREEMENT

 

by and between

 

SPX CORPORATION

 

and

 

SPX FLOW, INC.

 

Dated as of September 22, 2015

 



 

TABLE OF CONTENTS

 

ARTICLE I

DEFINITIONS AND INTERPRETATION

2

 

 

 

Section 1.1.

General

2

Section 1.2.

References; Interpretation

15

Section 1.3.

Effective Date of Agreement

16

Section 1.4.

Other Matters

16

 

 

 

ARTICLE II

THE SEPARATION

16

 

 

 

Section 2.1.

General

16

Section 2.2.

Transfer of Assets

16

Section 2.3.

Assumption and Satisfaction of Liabilities

17

Section 2.4.

Intercompany Accounts

17

Section 2.5.

Bank Accounts; Cash Management

18

Section 2.6.

Limitation of Liability; Termination of Inter-Group Agreements

18

Section 2.7.

Transfers Not Effected at or Prior to the Effective Time; Transfers Deemed Effective as of the Effective Time

19

Section 2.8.

Transfer Documents

21

Section 2.9.

Shared Contracts

21

Section 2.10.

Further Assurances

22

Section 2.11.

Novation of Liabilities; Consents

23

Section 2.12.

Performance Guarantees

24

Section 2.13.

Disclaimer of Representations and Warranties

25

Section 2.14.

Financing Arrangements; Credit Agreement

26

Section 2.15.

Cash Contribution

27

 

 

 

ARTICLE III

CERTAIN ACTIONS PRIOR TO THE DISTRIBUTION

27

 

 

 

Section 3.1.

Reorganization

27

Section 3.2.

Certificate of Incorporation; Bylaws

27

Section 3.3.

Directors and Executive Officers

27

Section 3.4.

Resignations

28

Section 3.5.

Ancillary Agreements

28

 

 

 

ARTICLE IV

THE DISTRIBUTION

28

 

 

 

Section 4.1.

Exchange of Flowco Assets for Flowco Stock and Debt Securities; Debt Exchange

28

Section 4.2.

Distribution

29

Section 4.3.

Reserved

29

Section 4.4.

Actions in Connection with the Distribution

29

Section 4.5.

Sole and Absolute Discretion of SPX

30

Section 4.6.

Conditions to Distribution

30

 

 

 

ARTICLE V

CERTAIN COVENANTS

31

 

 

 

Section 5.1.

Legal Name

31

 

i



 

Section 5.2.

Auditors and Audits; Financial Statements and Accounting

31

Section 5.3.

No Restrictions on Corporate Opportunities

34

 

 

 

ARTICLE VI

RELEASES AND INDEMNIFICATION

35

 

 

 

Section 6.1.

Release of Pre-Distribution Claims

35

Section 6.2.

Indemnification by Infrastructurco

37

Section 6.3.

Indemnification by Flowco

37

Section 6.4.

Procedures for Indemnification

38

Section 6.5.

Indemnification Payments

40

Section 6.6.

Additional Matters; Survival of Indemnities

40

Section 6.7.

Indemnification Obligations Net of Insurance Proceeds; Contribution

40

Section 6.8.

Characterization of Indemnification and Reimbursement Payments

41

 

 

 

ARTICLE VII

CONFIDENTIALITY; ACCESS TO INFORMATION

42

 

 

 

Section 7.1.

Provision of Corporate Records

42

Section 7.2.

Access to Information

42

Section 7.3.

Witness Services

43

Section 7.4.

Confidentiality

43

Section 7.5.

Privileged Matters

44

Section 7.6.

Ownership of Information

46

Section 7.7.

Retention of Records

46

Section 7.8.

Other Agreements

46

Section 7.9.

Compensation for Providing Information

46

 

 

 

ARTICLE VIII

DISPUTE RESOLUTION

47

 

 

 

Section 8.1.

Negotiation

47

Section 8.2.

Statute of Limitations

47

Section 8.3.

Arbitration

47

Section 8.4.

Continuity of Service and Performance

50

 

 

 

ARTICLE IX

INSURANCE

50

 

 

 

Section 9.1.

Assignment of Rights

50

Section 9.2.

Third Party SPX Policies

51

Section 9.3.

Director and Officer Liability Insurance

52

Section 9.4.

Cooperation

52

Section 9.5.

Miscellaneous

52

 

 

 

ARTICLE X

MISCELLANEOUS

52

 

 

 

Section 10.1.

Complete Agreement; Construction

52

Section 10.2.

Ancillary Agreements

53

Section 10.3.

Counterparts

53

Section 10.4.

Survival of Agreements

53

Section 10.5.

Expenses

53

Section 10.6.

Notices

54

Section 10.7.

Waivers

55

Section 10.8.

Amendments

55

Section 10.9.

Assignment

55

 

ii



 

Section 10.10.

Termination, Etc.

55

Section 10.11.

Payment Terms

55

Section 10.12.

No Circumvention

56

Section 10.13.

Subsidiaries

56

Section 10.14.

Third Party Beneficiaries

56

Section 10.15.

Exhibits and Schedules; Title and Headings

56

Section 10.16.

Public Announcements

56

Section 10.17.

Governing Law

57

Section 10.18.

Consent to Jurisdiction

57

Section 10.19.

Specific Performance

57

Section 10.20.

Waiver of Jury Trial

57

Section 10.21.

Severability

58

Section 10.22.

Construction

58

Section 10.23.

Authorization

58

 

EXHIBITS

Exhibit A            Form of Employee Matters Agreement

Exhibit B            Form of Tax Matters Agreement

Exhibit C            Form of Trademark License Agreement

Exhibit D            Form of Transition Services Agreement

 

iii



 

SEPARATION AND DISTRIBUTION AGREEMENT

 

THIS SEPARATION AND DISTRIBUTION AGREEMENT (this “Agreement”), is entered into as of September 22, 2015 by and between SPX Corporation, a Delaware corporation (“SPX” or “Infrastructurco”), and SPX FLOW, Inc., a Delaware corporation (“Flowco”) (each a “Party” and together, the “Parties”).  Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in Section 1.1.

 

R E C I T A L S:

 

WHEREAS, SPX, acting through its direct and indirect Subsidiaries, currently conducts the Flowco Business and the Infrastructurco Business;

 

WHEREAS, the Board of Directors of SPX has determined that it is in the best interests of SPX and its stockholders to separate SPX into two separate, publicly traded companies: (i) Infrastructurco, which will continue to conduct, directly and through its Subsidiaries, the Infrastructurco Business, and (ii) Flowco, which will continue to conduct, directly and through its Subsidiaries, the Flowco Business;

 

WHEREAS, in order to effect such separation, the Board of Directors of SPX has determined that it is in the best interests of SPX and its stockholders: (i) for SPX and its Subsidiaries to enter into a series of transactions whereby SPX and its Subsidiaries will be reorganized such that (A) Infrastructurco and/or one or more other members of the Infrastructurco Group will own all of the Infrastructurco Assets and assume (or retain) all of the Infrastructurco Liabilities, and (B) Flowco and/or one or more other members of the Flowco Group will own all of the Flowco Assets and assume (or retain) all of the Flowco Liabilities (the transactions referred to in clauses (A) and (B) being referred to herein as the “Reorganization”); and thereafter (ii) for SPX to distribute to the holders of SPX Common Stock as of the Record Date on a pro rata basis all of the issued and outstanding shares of common stock, par value $0.01 per share, of Flowco (the “Flowco Common Stock”) (such transactions described in clauses (i) and (ii), as may be amended or modified from time to time in accordance with the terms and subject to the conditions of this Agreement, the “Separation”);

 

WHEREAS, the Parties intend (i) that the Separation, together with certain related transactions, generally will qualify as tax-free for U.S. federal income tax purposes under Sections 368(a)(1)(D), 355 and 361 of the Internal Revenue Code of 1986, as amended (the “Code”), (ii) that other transactions connected with the Separation will also qualify as tax-free for U.S. federal income tax purposes under applicable provisions of the Code, and (iii) that this Agreement be, and is hereby adopted as, a plan of reorganization under Section 368 of the Code to the extent relevant for these transactions; and

 

WHEREAS, the Parties intend (i) to set forth in this Agreement the principal arrangements between them with respect to the Separation, and (ii) that certain other agreements will govern certain other matters following the Effective Time.

 

NOW, THEREFORE, in consideration of the foregoing and the mutual agreements, provisions and covenants contained in this Agreement, the Parties, intending to be legally bound, hereby agree as follows:

 



 

ARTICLE I

 

DEFINITIONS AND INTERPRETATION

 

Section 1.1.                       General.  As used in this Agreement, the following capitalized terms shall have the following meanings:

 

AAA” shall have the meaning set forth in Section 8.3.

 

Action” shall mean any demand, action, claim, charge, suit, countersuit, arbitration, inquiry, subpoena, proceeding or investigation of any kind by or before any Governmental Entity or any arbitration or mediation tribunal.

 

Affiliate” shall mean, when used with respect to any Person, a Person that directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with such specified Person.  For the purposes of this definition and the definition of “Subsidiary,” “control” (including the correlative meanings “controlled by” and “under common control with”), when used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or other interests, by Contract or otherwise.  From and after the Effective Time, and for purposes of this Agreement and the Ancillary Agreements, Infrastructurco and Flowco shall not be deemed to be under common control for purposes hereof due solely to the fact that Infrastructurco and Flowco have common stockholders or have one or more directors in common or due to the existence of this Agreement or any of the Ancillary Agreements.

 

Agent” shall mean the distribution agent to be appointed by SPX to distribute to the stockholders of SPX all of the issued and outstanding shares of Flowco Common Stock pursuant to the Distribution.

 

Agreed Consent Efforts” shall have the meaning set forth in Section 2.7(a).

 

Agreed Consents” shall have the meaning set forth in Section 2.7(a).

 

Agreement” shall have the meaning set forth in the preamble hereof.

 

Agreement Disputes” shall have the meaning set forth in Section 8.1(a).

 

Amended Financial Reports” shall have the meaning set forth in Section 5.2(b).

 

Ancillary Agreements” shall mean all written Contracts or other arrangements (other than this Agreement) entered into between the Parties and/or their Subsidiaries in connection with the Separation, the Distribution or the other transactions contemplated hereby, including the Transfer Documents, the Reorganization Documents, the Tax Matters Agreement, the Transition Services Agreement, the Employee Matters Agreement, Trademark License Agreement and the other agreements set forth on Schedule 1.1-1.

 

Archived Data” shall have the meaning set forth in Section 7.2(c).

 

2



 

Assets” shall mean assets, properties, claims and rights (including goodwill), wherever located (including in the possession of vendors or other third parties or elsewhere), of every kind, character and description, whether real, personal or mixed, tangible, intangible or contingent, in each case whether or not recorded or reflected or required to be recorded or reflected on the Records or financial statements of any Person.

 

Audited Party” shall have the meaning set forth in Section 5.2(a)(iii).

 

Business” shall mean the Flowco Business or the Infrastructurco Business, as applicable.

 

Business Day” shall mean any day that is not a Saturday, a Sunday or any other day on which banks are required or authorized by Law to be closed in Charlotte, North Carolina.

 

Business Entity” shall mean any corporation, partnership, trust, limited liability company, joint venture, or other incorporated or unincorporated organization or other entity of any kind or nature (including those formed, organized or otherwise existing under the Laws of jurisdictions outside the United States).

 

Code” shall have the meaning set forth in the recitals hereto.

 

Commission” shall mean the United States Securities and Exchange Commission or any successor agency thereto.

 

Confidential Information” shall mean business, operations or other information, data or material concerning a Party and/or its Affiliates which, prior to or following the Effective Time, has been disclosed by such Party or its Affiliates or any of their respective representatives or advisors to the other Party or its Affiliates or any of their respective representatives or advisors, in written, oral (including by recording), electronic, or visual form to, or otherwise has come into the possession of, the other, including pursuant to the access provisions of Section 7.1 or Section 7.2 or any other provision of this Agreement or any Ancillary Agreement (except to the extent that such information can be shown to have been (i) in the public domain through no action of such Party or its Affiliates or any of their respective representatives or advisors, (ii) lawfully acquired from other sources by such Party or its Affiliates or any of their respective representatives or advisors to which it was furnished or (iii) independently developed by such Party or its Affiliates without use or reference to Confidential Information of the disclosing Party’s or its Affiliates; provided, however, in the case of clause (ii) that, to the furnished Party’s knowledge, such sources did not provide such information in breach of any confidentiality or fiduciary obligations).

 

Consents” shall mean any consents, waivers or approvals from, or notification requirements to, any Person other than a Governmental Entity.

 

Contract” shall mean any contract, obligation, indenture, instrument, agreement, lease, purchase order, commitment, permit, license, note, bond, mortgage, arrangement or undertaking (whether written or oral and whether express or implied) that is legally binding on any Person or any part of its property under applicable Law, but excluding this Agreement and any Ancillary Agreement except as otherwise expressly provided in this Agreement or any Ancillary Agreement.

 

3



 

Credit Agreement” shall mean the Amended and Restated Credit Agreement, dated as of December 23, 2013, among SPX, the Foreign Subsidiary Borrowers party thereto, Bank of America, N.A., as Administrative Agent, Deutsche Bank AG Deutschlandgeschäft Branch, as Foreign Trade Facility Agent, and the lenders party thereto, as amended, supplemented or otherwise modified from time to time.

 

Dispute Notice” shall have the meaning set forth in Section 8.1(a).

 

Distribution” shall mean the distribution by SPX of all of the issued and outstanding shares of Flowco Common Stock to holders of record of shares of SPX Common Stock as of the Record Date on the basis of one (1) share of Flowco Common Stock for every issued and outstanding share of SPX Common Stock.

 

Distribution Date” shall mean the date of the consummation of the Distribution, which shall be determined by the Board of Directors of SPX in its sole and absolute discretion.

 

Distribution Disclosure Documents” shall mean the Form 10 and all exhibits thereto (including the Information Statement), any current reports on Form 8-K and the registration statement on Form S-8 related to securities to be offered under Flowco’s employee benefit plans, in each case as filed with or furnished to the Commission by Flowco in connection with the Distribution.

 

Effective Time” shall mean the time at which the Distribution is effective on the Distribution Date.

 

Employee Matters Agreement” shall mean the Employee Matters Agreement by and between Infrastructurco and Flowco, to be dated on or about the Distribution Date, and substantially in the form attached as Exhibit A hereto.

 

Environment” shall mean ambient air, indoor air, surface water, groundwater, stream sediments, wetlands, soil and subsurface strata.

 

Environmental Law” shall mean any Law relating to (a) human or occupational health and safety with respect to exposure to Hazardous Materials; (b) protection of the Environment and natural resources; or (c) the generation, manufacture, processing, treatment, recycling, storage, disposal, emission, discharge, transport, distribution, labeling, handling, Release or threatened Release of any Hazardous Material.

 

Environmental Liabilities” shall mean all Liabilities (including all removal, remediation, cleanup or monitoring costs, investigatory costs, response costs, natural resources damages, property damages, personal injury damages, costs of any settlement, judgment or other determination of Liability and indemnity, contribution or similar obligations and all costs and expenses, interest, fines, penalties or other monetary sanctions in connection therewith) relating to, arising out of or resulting from any (a) actual or alleged by a Third Party (i) noncompliance with any Environmental Law, or (ii) presence, Release or threatened Release of, or exposure to, any Hazardous Material, or (b) contract, agreement, or other consensual arrangement pursuant to which Liability is assumed, imposed or retained with respect to any of the foregoing.

 

4



 

Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time that reference is made thereto.

 

Financing Arrangements” shall mean the financing arrangements for Flowco and Infrastructurco (the “Flowco Financing Arrangements” and the “Infrastructurco Financing Arrangements,” respectively) (described on Schedule 1.1-2).

 

Flowco” shall have the meaning set forth in the preamble hereof.

 

Flowco Accounts” shall have the meaning set forth in Section 2.5(a).

 

Flowco Assets” shall mean (without duplication):

 

(i)                                     the ownership interests (to the extent held by SPX, Flowco or any of their respective Affiliates immediately prior to the Effective Time) in each member of the Flowco Group;

 

(ii)                                  all Flowco Contracts and any and all rights or claims (whether accrued or contingent), including accounts or notes receivables, of SPX, Flowco, or any of their respective Affiliates, to the extent relating to, arising under or resulting therefrom;

 

(iii)                               all Assets owned, leased or held by SPX, Flowco or any of their respective Affiliates immediately prior to the Effective Time that are used primarily or held for use primarily in the Flowco Business;

 

(iv)                              subject to Article IX, any and all rights of any member of the Flowco Group under any Third Party SPX Policies;

 

(v)                                 the Assets listed or described on Schedule 1.1-3 and any and all Assets that are expressly contemplated by this Agreement or any Ancillary Agreement as Assets to be retained by, or assigned or transferred to, any member of the Flowco Group; and

 

(vi)                              all Flowco Accounts, and, subject to the provisions of Section 2.5, all cash, cash equivalents, and securities credited to or on deposit in such accounts immediately prior to the Effective Time, after giving effect to any contribution of cash to Flowco contemplated by Section 2.15.

 

Notwithstanding the foregoing, the Flowco Assets shall in no event include:

 

(A)                               the Assets listed or described on Schedule 1.1-4; or

 

(B)                               any Assets that are expressly contemplated by this Agreement or any Ancillary Agreement (or the schedules hereto or thereto) as Assets to be retained by, or transferred or assigned to, any member of the Infrastructurco Group.

 

5



 

Flowco Business” shall mean:

 

(i)                                     the businesses and operations of the Flow Technology reportable segment of SPX and its Subsidiaries and the businesses and operations of the Hydraulic Technologies Business, as described in the Information Statement, but excluding all of the Former SPX Businesses; and

 

(ii)                                  the businesses and operations of Business Entities acquired or established by or for any member of the Flowco Group after the Effective Time.

 

Flowco Common Stock” shall have the meaning set forth in the recitals hereto.

 

Flowco Contracts” shall mean the following Contracts to which any of SPX, Flowco, or any of their respective Affiliates is a party immediately prior to the Effective Time:

 

(i)                                     any Contract that relates primarily to the Flowco Business;

 

(ii)                                  any Contract or part thereof that is otherwise expressly contemplated pursuant to this Agreement or any of the Ancillary Agreements to be retained by, transferred or assigned to, any member of the Flowco Group; and

 

(iii)                               the Contracts listed or described on Schedule 1.1-5.

 

Notwithstanding the foregoing, the Flowco Contracts shall in no event include the Contracts listed or described on Schedule 1.1-6.

 

Flowco Disclosure” shall mean any form, statement, schedule or other material (other than the Distribution Disclosure Documents) filed with or furnished to the Commission, any other Governmental Entity, or holders of any securities of any member of the Flowco Group, in each case, on or after the Distribution Date by or on behalf of any member of the Flowco Group in connection with the registration, sale, or distribution of securities or disclosure related thereto (including periodic disclosure obligations).

 

Flowco Employee” shall have the meaning set forth in the Employee Matters Agreement.

 

Flowco Financing Arrangements” shall have the meaning set forth in the definition of “Financing Arrangements.”

 

Flowco Global Note” shall mean physical evidence of Flowco’s indebtedness under the Indenture in substantially the form set forth in Exhibit A to the Indenture.

 

Flowco Group” shall mean Flowco and each Person identified on Schedule 1.1-7 and each Person who is or becomes an Affiliate of Flowco at or after the Effective Time.

 

Flowco Group Performance Guarantee” shall have the meaning set forth in Section 2.12(a).

 

Flowco Indemnitees” shall mean each member of the Flowco Group and each of their respective Affiliates, and each of their respective directors, officers, employees and agents (in

 

6



 

each case, in their respective capacities as such) and each of the heirs, executors, successors and assigns of any of the foregoing.

 

Flowco Liabilities” shall mean only the following Liabilities of any of SPX, Flowco or any of their respective Affiliates:

 

(i)                                     the Liabilities listed or described on Schedule 1.1-8 and any and all Liabilities that are expressly contemplated by this Agreement or any Ancillary Agreement as Liabilities to be retained, assumed, performed, satisfied or retired by any member of the Flowco Group;

 

(ii)                                  any and all Liabilities, including Environmental Liabilities, to the extent relating to, arising out of or resulting from:

 

(A)                               the operation or conduct of any Flowco Business, as conducted at any time prior to, on or after the Effective Time;

 

(B)                               any Flowco Assets, whether arising before, on or after the Effective Time;

 

(iii)                               any and all Liabilities (including under applicable federal and state securities Laws) relating to, arising out of or resulting from:

 

(A)                               the Distribution Disclosure Document except to the extent specifically enumerated as a Infrastructurco Liability on Schedule 1.1-11; and

 

(B)                               any Flowco Disclosure;

 

(iv)                              any and all Liabilities relating to, arising out of or resulting from any Indebtedness of any member of the Flowco Group incurred pursuant to the Flowco Financing Arrangements or after the Effective Time;

 

(v)                                 any and all Liabilities relating to, resulting from, or arising out of any Action (x) listed or described on Schedule 1.1-9 or (y) to the extent such Action relates to, results from, or arises out of the Flowco Business, the Flowco Assets or the other Flowco Liabilities; and

 

(vi)                              the Flowco Specified Liabilities.

 

Notwithstanding the foregoing, the Flowco Liabilities shall in no event include (A) any Retained Specified Liabilities, (B) any Liabilities that are expressly contemplated by this Agreement or any Ancillary Agreement (or the schedules hereto or thereto) as Liabilities to be retained, assumed, performed, satisfied or retired by any member of the Infrastructurco Group, or for which any member of the Infrastructurco Group is liable pursuant to this Agreement or such Ancillary Agreement, (C) the Notes or (D) the Liabilities listed or described on Schedule 1.1-10.

 

Flowco Specified Liabilities” shall mean any actual or alleged Liabilities arising out of or attributable to actual or alleged personal injuries asserted by a Person (whether prior to or after the Distribution Date) resulting from the actual or alleged manufacture, sale or distribution of products containing asbestos in connection with the Clyde Union business, or from actual or

 

7



 

alleged exposure to or injury from asbestos or products containing asbestos at a premises that was or is owned or operated by the Clyde Union business, including all such liabilities of Clyde Union, Inc., a Michigan corporation.

 

Form 10” shall mean the registration statement on Form 10 filed by Flowco with the Commission in connection with the Distribution and all amendments thereto.

 

Former SPX Business” shall mean any Business Entity, division, real estate, facility, material Asset, business unit or business, including any business within the definition of Rule 11-01(d) of Regulation S-X promulgated under the Exchange Act (in each case, including any Assets and Liabilities comprising the same) that has been sold, conveyed, assigned, transferred or otherwise disposed of or divested (in whole or in part), or the operations, activities or production of which has been discontinued, abandoned, completed or otherwise terminated (in whole or in part), in each case by SPX or any of its current or former Affiliates prior to the Effective Time.

 

Governmental Approvals” shall mean any notices or reports to be submitted to, or other filings to be made with, or any consents, registrations, approvals, permits or authorizations to be obtained from, any Governmental Entity.

 

Governmental Entity” shall mean any nation or government, any state, municipality or other political subdivision thereof and any entity, body, agency, commission, department, board, bureau or court, whether domestic, foreign or multinational, exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any official thereof, including the NYSE and any similar self-regulatory body under applicable securities Laws.

 

Group” shall mean either the Flowco Group or the Infrastructurco Group, as the context requires.

 

Hazardous Materials” shall mean (a) any petroleum or petroleum products, radiation or radioactive materials, asbestos or asbestos-containing materials or polychlorinated biphenyls (PCBs), and (b) any chemicals, materials, substances or wastes that are defined or characterized as or included in the definition of “hazardous substances,” “hazardous wastes,” “hazardous materials,” “extremely hazardous wastes,” “restricted hazardous wastes,” “special waste,” “toxic substances,” “pollutants,” “contaminants” or words of similar import, under any Environmental Law.

 

Hydraulic Technologies Business” shall mean the hydraulic technologies division within SPX headquartered in Rockford, Illinois with additional facilities in: Newcastle, UK; Dagenham, UK; Eygelshoven, Netherlands; Perth, Australia; Singapore; Suzhou, China; and Houston, Texas and which utilizes the Power Team, Bolting Systems, Stone, Globe, Rail Systems and Hytec brands.

 

Indebtedness” shall mean with respect to any Person (i) any indebtedness of such Person for borrowed money or the deferred purchase price of property (other than trade accounts payable incurred in the ordinary course of business) as evidenced by a note, bonds or other instruments, (ii) obligations of such Person as lessee under capital leases, (iii) obligations (excluding prepaid interest thereon) secured by any mortgage, pledge, security interest,

 

8



 

encumbrance, lien or charge of any kind existing on any asset owned or held by such Person (excluding indebtedness arising under conditional sales or other title retention agreements incurred in the ordinary course of business), whether or not such Person has assumed or become liable for the obligations secured thereby, (iv) any net obligation under any interest rate swap agreement or other hedging arrangement, (v) reimbursement obligations of such Person with respect to surety and performance bonds, bank guarantees, bankers’ acceptances, letters of credit or similar instruments, and (vi) obligations of such Person under direct or indirect guarantees of (including obligations, contingent or otherwise, to assure a creditor against loss in respect of) indebtedness or obligations of the kinds referred to in clauses (i), (ii), (iii), (iv) and (v) above.

 

Indemnifiable Loss” and “Indemnifiable Losses” shall mean any and all damages, losses, deficiencies, Liabilities, obligations, penalties, judgments, settlements, claims, payments, fines, interest, costs and expenses (including costs and expenses provided for in Section 10.5(c) and the costs and expenses of any and all Actions and demands, assessments, judgments, settlements and compromises relating thereto and the reasonable costs and expenses of attorneys’, accountants’, consultants’ and other professionals’ fees and expenses incurred in the investigation or defense thereof or the enforcement of rights hereunder).

 

Indemnifying Party” shall have the meaning set forth in Section 6.4(b).

 

Indemnitee” shall have the meaning set forth in Section 6.4(b).

 

Indemnity Payment” shall have the meaning set forth in Section 6.7(a).

 

Indenture” shall mean the indenture, dated as of August 16, 2010 (as supplemented) by and among SPX, each of the guarantors party thereto and U.S. Bank National Association, as trustee.

 

Information” shall mean information, whether or not patentable or copyrightable, in written, oral, electronic or other tangible or intangible forms, stored in any medium, including studies, reports, records, books, contracts, instruments, surveys, discoveries, ideas, concepts, know-how, techniques, designs, specifications, drawings, blueprints, diagrams, models, prototypes, samples, flow charts, data, computer data, disks, diskettes, tapes, computer programs or other software, marketing plans, customer names, communications by or to attorneys (including attorney-client privileged communications), memos and other materials prepared by attorneys or under their direction (including attorney work product), and other technical, financial, employee or business information or data.

 

Information Statement” shall mean the Information Statement attached as an exhibit to the Form 10 sent to the holders of shares of SPX Common Stock in connection with the Distribution, including any amendment or supplement thereto.

 

Infrastructurco” shall have the meaning set forth in the preamble hereof.

 

Infrastructurco Accounts” shall have the meaning set forth in Section 2.5(a).

 

Infrastructurco Assets” any and all Assets of SPX, Flowco or their respective Subsidiaries as of immediately prior to the Effective Time that are not Flowco Assets, including

 

9



 

any and all Assets that are expressly contemplated by this agreement or any Ancillary Agreement as Assets to be retained by, or assigned or transferred to, any member of Infrastructure Group.

 

Infrastructurco Business” shall mean:

 

(i)                                     all businesses and operations of SPX and its Affiliates (other than the Flowco Business) and all Former SPX Businesses; and

 

(ii)                                  the businesses and operations of Business Entities acquired or established by or for any member of the Infrastructurco Group after the Effective Time.

 

Infrastructurco Disclosure” shall mean any form, statement, schedule or other material (other than the Distribution Disclosure Documents) filed with or furnished to the Commission, any other Governmental Entity, or holders of any securities of any member of the Infrastructurco Group, in each case, on or after the Effective Time by or on behalf of any member of the Infrastructurco Group in connection with the registration, sale or distribution of securities or disclosure related thereto (including periodic disclosure obligations).

 

Infrastructurco Employee” shall have the meaning set forth in the Employee Matters Agreement.

 

Infrastructurco Financing Arrangements” shall have the meaning set forth in the definition of “Financing Arrangements.”

 

Infrastructurco Group” shall mean (i) Infrastructurco and each of its Subsidiaries immediately following the Effective Time and (ii) each other Person who is or becomes an Affiliate of Infrastructurco at or after the Effective Time, in each case, other than the members of the Flowco Group.

 

Infrastructurco Group Performance Guarantee” shall have the meaning set forth in Section 2.12(b).

 

Infrastructurco Indemnitees” shall mean each member of the Infrastructurco Group and each of their respective Affiliates, and each of their respective directors, officers, employees and agents (in each case, in their respective capacities as such) and each of the heirs, executors, successors and assigns of any of the foregoing.

 

Infrastructurco Liabilities” shall mean any and all Liabilities of any of SPX, Flowco or any of their respective Affiliates, including:

 

(i)                                     any and all Liabilities that are expressly contemplated by this Agreement or any Ancillary Agreement as Liabilities to be retained, assumed, performed, satisfied or retired by any member of the Infrastructurco Group;

 

(ii)                                  any and all Liabilities, including Environmental Liabilities, to the extent relating to, arising out of or resulting from:

 

(A)                               the operation or conduct of any Infrastructurco Business, as conducted at any time prior to, on or after the Effective Time:

 

10



 

(B)                               any of the Former SPX Businesses; or

 

(C)                               any Infrastructurco Assets, whether arising before, on or after the Effective Time;

 

(iii)                               any and all Liabilities (including under applicable federal and state securities Laws) relating to, arising out of or resulting from:

 

(A)                               the Pre-Separation Disclosure; or

 

(B)                               a material misstatement or omission contained in the sections of the Distribution Disclosure Documents described in Schedule 1.1-11; or

 

(C)                               any Infrastructurco Disclosure;

 

(iv)                              any and all Liabilities relating to, arising out of or resulting any Indebtedness of any member of the Infrastructurco Group incurred pursuant to the Infrastructurco Financing Arrangements or after the Effective Time;

 

(v)                                 any and all Liabilities relating to, resulting from, or arising out of any Action (x) listed or described on Schedule 1.1-12; or (y) to the extent such Action relates to, results from, or arises out of the Infrastructurco Business, the Infrastructurco Assets or the other Infrastructurco Liabilities;

 

(vi)                              any and all Retained Specified Liabilities; and

 

(vii)                           any and all Liabilities as of immediately prior to the Effective Time that are not Flowco Liabilities.

 

Notwithstanding the foregoing, the Infrastructurco Liabilities shall in no event include (A) any Liabilities that are expressly contemplated by this Agreement or any Ancillary Agreement (or the schedules hereto or thereto) as Liabilities to be retained, assumed, performed, satisfied or retired by any member of the Flowco Group, or for which any member of the Flowco Group is liable pursuant to this Agreement or such Ancillary Agreement, or (B) the Notes.

 

Infrastructurco Third Party Performance Support” shall have the meaning set forth in Section 2.12(c).

 

Insurance Proceeds” shall mean those monies (i) received by an insured from an unaffiliated Third-Party insurer under any Third Party SPX Policy, or (ii) paid by such Third-Party insurer on behalf of an insured under any Third Party SPX Policy.

 

Insured Claims” shall mean those Liabilities that, individually or in the aggregate, are covered within the terms and conditions of any of the Third Party SPX Policies, whether or not subject to deductibles, co-insurance, uncollectibility, exhaustion of limits, or retrospectively-rated premium adjustments.

 

Intercompany Accounts” shall mean any receivable, payable or loan between any member of the Infrastructurco Group, on the one hand, and any member of the Flowco Group, on the other hand, that is reflected in the Records of the relevant members of the Infrastructurco

 

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Group and the Flowco Group, except for any such receivable, payable or loan that arises pursuant to this Agreement or any Ancillary Agreement.

 

Internal Control Audit and Management Assessments” shall have the meaning set forth in Section 5.2(a)(i).

 

Law” shall mean any U.S. or non-U.S. federal, national, supranational, state, provincial, local or similar statute, law, ordinance, regulation, rule, code, income tax treaty, order requirement or rule of law (including common law) or other binding directives of any Governmental Entity.

 

Liabilities” shall mean all debts, liabilities, obligations, responsibilities, response actions, losses, damages (whether compensatory, punitive, consequential, incidental, treble or other), fines, penalties and sanctions, absolute or contingent, matured or unmatured, liquidated or unliquidated, foreseen or unforeseen, joint, several or individual, asserted or unasserted, accrued or unaccrued, known or unknown, whenever arising, including those arising under or in connection with any Law or other pronouncements of Governmental Entities having the effect of Law, Actions, threatened Actions, order or consent decree of any Governmental Entity or any award of any arbitration tribunal, and those arising under any Contract, whether based in contract, tort, implied or express warranty, strict liability, criminal or civil statute, or otherwise, and including any costs, expenses, interest, attorneys’ fees, disbursements and expenses of counsel, expert and consulting fees and costs related thereto or to the investigation or defense thereof.

 

Liable Party” shall have the meaning set forth in Section 2.11(b).

 

Negotiation Period” shall have the meaning set forth in Section 8.1(a).

 

Notes” shall mean SPX’s 6.875 % Senior Notes due 2017 subject to the Indenture.

 

Novated Third Party SPX Liability Policies” shall mean the Third Party SPX Policies other than those listed on Schedule 1.1-13.

 

NYSE” shall mean the New York Stock Exchange.

 

Other Parties’ Auditors” shall have the meaning set forth in Section 5.2(a)(iii).

 

Party” shall have the meaning set forth in the preamble hereof.

 

Performance Guarantee Obligation” shall have the meaning set forth in Section 2.12(d).

 

Person” shall mean any (i) individual, (ii) Business Entity or (iii) Governmental Entity.

 

Policies” shall mean insurance policies and insurance Contracts of any kind (other than life and benefits policies or Contracts), including primary, excess and umbrella policies, comprehensive general liability policies, director and officer liability, fiduciary liability, automobile, aircraft, property and casualty, business interruption, workers’ compensation and employee dishonesty insurance policies, together with the rights, benefits and privileges thereunder.

 

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Pre-Separation Disclosure” shall mean any form, statement, schedule or other material (other than the Distribution Disclosure Documents) that SPX, Flowco, or any of their respective Affiliates filed with or furnished to the Commission, any other Governmental Entity, or holders of any securities of SPX or any of its Affiliates, in each case, prior to the Effective Time and in connection with the registration, sale, or distribution of securities or disclosure related thereto (including periodic disclosure obligations).

 

Prime Rate” shall mean the rate per annum publicly announced by JPMorgan Chase Bank (or any successor thereto or other major money center commercial bank agreed to by the Parties) from time to time as its prime lending rate, as in effect from time to time.

 

Record Date” shall mean the date to be determined by the Board of Directors of SPX in its sole and absolute discretion as the record date for the Distribution.

 

Records” shall mean any Contracts, documents, books, records or files.

 

Release” shall mean any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping or disposing of a Hazardous Material into the Environment (including the abandonment or discarding of barrels, containers and other closed receptacles containing any Hazardous Materials).

 

Reorganization” shall have the meaning set forth in the recitals hereto.

 

Reorganization Documents” shall have the meaning set forth in Section 3.1.

 

Reorganization Step Plan” shall have the meaning set forth in Section 3.1.

 

Retained Specified Liabilities” shall mean any actual or alleged Liabilities, other than Flowco Specified Liabilities, arising out of or attributable to the actual or alleged manufacture, sale or distribution of products containing asbestos in connection with any of the businesses or operations of SPX or any of its Affiliates or by Former SPX Businesses prior to the Effective Time, or from actual or alleged exposure to or injury from asbestos or products containing asbestos at a premises that was or is owned or operated by any of the businesses or operations of SPX or any of its current or former Affiliates or any of their respective Former Businesses prior to the Effective Time, including Liabilities arising out of or attributable to actual or alleged personal injuries asserted by a Person (whether prior to or after the Effective Time) resulting from exposure to any products containing asbestos manufactured, marketed, sold or distributed in connection with any of the businesses or operations of SPX or any of its Affiliates or any of their respective Former Businesses prior to the Effective Time (other than Flowco Specified Liabilities).

 

Rules” shall have the meaning set forth in Section 8.3.

 

Security Interest” shall mean any mortgage, security interest, pledge, lien, charge, claim, option, right to acquire, voting or other restriction, right-of-way, condition, easement, encroachment, restriction on transfer, or other encumbrance of any nature whatsoever, excluding restrictions on transfer under securities Laws.

 

Separation” shall have the meaning set forth in the recitals hereto.

 

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Shared Access Period” shall have the meaning set forth in Section 7.2(b).

 

Shared Contracts” shall mean the Contracts entered into prior to the Effective Time to which either Party or any of its respective Subsidiaries and one or more Third Parties are a party that inures to the benefit or burden of both the Flowco Business and the Infrastructurco Business.

 

Shared Contractual Liabilities” shall mean Liabilities in respect of Shared Contracts.

 

Software” shall mean all computer programs (whether in source code, object code, or other form), algorithms, databases, compilations and data, and technology supporting the foregoing, and all documentation, including flowcharts and other logic and design diagrams, technical, functional and other specifications, and user manuals and training materials related to any of the foregoing.

 

SPX” shall have the meaning set forth in the preamble hereof.

 

SPX Common Stock” shall mean the issued and outstanding shares of common stock, par value $0.01 per share, of SPX.

 

SPX Global Note” shall mean physical evidence of SPX’s indebtedness under the Indenture in substantially the form set forth in Exhibit A to the Indenture.

 

Subsidiary” shall mean with respect to any Person (i) a corporation, fifty percent (50%) or more of the voting capital stock of which is, as of the time in question, directly or indirectly owned by such Person and (ii) any other Business Entity in which such Person, directly or indirectly, owns fifty percent (50%) or more of the equity economic interest thereof or has the power to elect or direct the election of fifty percent (50%) or more of the members of the governing body of such entity or otherwise has control over such entity (e.g., as the managing partner of a partnership).

 

Tax” shall have the meaning set forth in the Tax Matters Agreement.

 

Tax Matters Agreement” shall mean the Tax Matters Agreement by and between SPX and Flowco, dated as of the date hereof, and substantially in the form attached as Exhibit B hereto.

 

Third Party” shall mean any Person other than the Parties or any of their respective Subsidiaries.

 

Third Party Claim” shall have the meaning set forth in Section 6.4(b).

 

Third Party SPX Policies” shall mean all Policies with policy periods or coverage rights in effect as of the Effective Time issued by unaffiliated Third-Party insurers to SPX or any of its current or former Affiliates which cover risks that relate to the Flowco Liabilities, Flowco Assets or Flowco Business, including the Policies listed on Schedule 1.1-14.

 

Trademark License Agreement” shall mean the Trademark License Agreement by and between Infrastructurco and Flowco, to be dated on or about the date hereof, and substantially in the form attached as Exhibit C hereto.

 

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Transfer” shall have the meaning set forth in Section 2.2(a)(i).

 

Transfer Documents” shall mean, collectively, the various Contracts and other documents entered into and to be entered into to effect the transfer of Assets and the assumption of Liabilities in the manner contemplated by this Agreement (including as contemplated by the Reorganization Step Plan) or otherwise relating to, arising out of or resulting from the transactions contemplated by this Agreement (other than the Ancillary Agreements), each of which shall be in such form and dated as of such date as SPX shall determine in its sole and absolute discretion.

 

Transferred Entities” shall have the meaning set forth in Section 2.2(a)(i).

 

Transition Services Agreement” shall mean the Transition Services Agreement by and between Infrastructurco and Flowco, dated as of the date hereof, and substantially in the form attached as Exhibit D hereto.

 

Wholly Owned Subsidiary” shall mean, with respect to any Person, any Subsidiary of such Person if all of the common stock or other similar equity ownership interests (but not including non-voting preferred stock) in such Subsidiary (other than any director’s qualifying shares or investments by foreign nationals mandated by applicable Law) is owned directly or indirectly by such Person.

 

Section 1.2.                       References; Interpretation.  References in this Agreement to any gender include references to all genders, and references to the singular include references to the plural and vice versa.  Any action to be taken by the Board of Directors of a Party may be taken by a committee of the Board of Directors of such Party if properly delegated by the Board of Directors of a Party to such committee.  Unless the context otherwise requires:

 

(i)                                     the words “include,” “includes” and “including” when used in this Agreement shall be deemed to be followed by the phrase “without limitation;”

 

(ii)                                  references in this Agreement to Articles, Sections, Exhibits and Schedules shall be deemed references to Articles and Sections of, and Exhibits and Schedules to, this Agreement;

 

(iii)                               the words “hereof,” “hereby” and “herein” and words of similar meaning when used in this Agreement refer to this Agreement in its entirety and not to any particular Article, Section or provision of this Agreement;

 

(iv)                              references in this Agreement to any time shall be to Eastern time unless otherwise expressly provided herein;

 

(v)                                 the Disclosure Schedules and Exhibits referred to herein shall be construed with, and as an integral part of, this Agreement to the same extent as if they were set forth verbatim herein; and

 

(vi)                              any agreement by a Party to take, or refrain from taking, any action hereunder shall be deemed to constitute an agreement by such Party to cause each member of such Party’s Group to take, or refrain from taking, such action.

 

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Section 1.3.                       Effective Date of Agreement.  This Agreement shall be effective as of the date first written above.

 

Section 1.4.                       Other Matters.  As described in more detail in, but subject to the terms and conditions of, Section 10.1 and Section 10.2, each Ancillary Agreement will govern Infrastructurco’s and Flowco’s respective rights, responsibilities and obligations after the Distribution with respect to the matters set forth in such Ancillary Agreement, except as expressly set forth in this Agreement or any other Ancillary Agreement.

 

ARTICLE II

 

THE SEPARATION

 

Section 2.1.                       General.  Subject to the terms and conditions of this Agreement, the Parties shall use their respective commercially reasonable efforts to ensure the transactions contemplated hereby are consummated in a timely manner.  It is the intent of the Parties that prior to the Distribution, Infrastructurco, Flowco and their respective Subsidiaries shall be reorganized, to the extent necessary, such that immediately following the consummation of such reorganization, subject to Section 2.7 and the provisions of any Ancillary Agreement, (i) all of SPX’s and its Subsidiaries’ right, title and interest in and to the Flowco Assets will be owned or held by a member or members of the Flowco Group, the Flowco Business will be conducted by the members of the Flowco Group, and the Flowco Liabilities will be assumed by (or retained by) a member of the Flowco Group; and (ii) all of SPX’s and its Subsidiaries’ right, title and interest in and to the Infrastructurco Assets will be owned or held by a member or members of the Infrastructurco Group, the Infrastructurco Business will be conducted by the members of the Infrastructurco Group and the Infrastructurco Liabilities will be assumed by (or retained by) a member of the Infrastructurco Group.

 

Section 2.2.                       Transfer of Assets.

 

(a)                                 At or prior to the Effective Time:

 

(i)                                     Infrastructurco shall, and hereby does, transfer, contribute, assign, distribute, and convey (“Transfer”) to Flowco or another member of the Flowco Group, and Flowco shall, and hereby does, accept from Infrastructurco and the applicable members of the Infrastructurco Group, all of the members of the Infrastructurco Group’s respective direct or indirect rights, title and interest in and to the Flowco Assets, including all issued and outstanding shares of capital stock or other ownership interests in the entities listed on Schedule 2.2(a)(i) (the “Transferred Entities”) (it being understood that if any Flowco Asset shall be held by a Transferred Entity or a Subsidiary of a Transferred Entity, such Flowco Asset shall be deemed to be Transferred for all purposes hereunder as a result of the Transfer of the equity interests in such Transferred Entity to Flowco or another member of the Flowco Group); and

 

(ii)                                  Flowco shall, and hereby does, Transfer to Infrastructurco or another member of the Infrastructurco Group, and Infrastructurco shall, and hereby does accept from Flowco and the applicable members of the Flowco Group, all of members of the Flowco Group’s respective direct or indirect right,

 

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title and interest in and to the Infrastructurco Assets held by Flowco or another member of the Flowco Group, including all issued and outstanding shares of capital stock or other ownership interests in the entities listed on Schedule 2.2(a)(ii) (the “Retained Entities”) (it being understood that if any Infrastructurco Asset shall be held by a Retained Entity or a Subsidiary of a Retained Entity, such Infrastructurco Asset shall be deemed to be Transferred for all purposes hereunder as a result of the Transfer of the equity interests in such Retained Entity to Infrastructurco or another member of the Infrastructurco Group).

 

(b)                                 Unless otherwise agreed to by the Parties, each of Infrastructurco and Flowco, as applicable, shall be entitled to designate the Business Entity within such Party’s respective Group to which any Assets are to be transferred pursuant to this Agreement.

 

Section 2.3.                       Assumption and Satisfaction of Liabilities.  Except as otherwise specifically set forth in this Agreement or any Ancillary Agreement, from and after the Effective Time, (a) Infrastructurco shall, and hereby does, accept, assume (or, as applicable, retain) and perform, discharge and fulfill, in accordance with their respective terms, all of the Infrastructurco Liabilities and (b) Flowco shall, and hereby does, accept, assume (or, as applicable, retain) and perform, discharge and fulfill, in accordance with their respective terms, all the Flowco Liabilities, in each case regardless of (i) when or where such Liabilities arose or arise, (ii) where or against whom such Liabilities are asserted or determined, (iii) whether arising from or alleged to arise from negligence, gross negligence, recklessness, violation of law, willful misconduct, bad faith, fraud or misrepresentation by any member of the Infrastructurco Group or the Flowco Group, as the case may be, or any of their past or present respective directors, officers, employees, or agents, (iv) which entity is named in any action associated with any Liability, and (v) whether the facts on which they are based occurred prior to, on or after the date hereof.

 

Section 2.4.                       Intercompany Accounts.

 

(a)                                 Each Intercompany Account (other than those set forth on Schedule 2.4(a)) shall be satisfied and/or settled by Infrastructurco and Flowco no later than the Effective Time by (i) forgiveness by the relevant obligee, (ii) one or a related series of distributions of and/or contributions to capital, (iii) payment by the relevant obligor to the relevant obligee, or (iv) dividends or a combination of the foregoing, in each case as determined by SPX in its sole and absolute discretion.

 

(b)                                 With respect to any Intercompany Account that is set forth on Schedule 2.4(a) and any other Intercompany Account that is not satisfied or settled as described in Section 2.4(a) for any reason, such Intercompany Account shall continue to be outstanding after the Effective Time and thereafter (i) shall be an obligation of the relevant Party (or the relevant member of such Party’s Group), each responsible for fulfilling its (or a member of such Party’s Group’s) obligations in accordance with the terms and conditions applicable to such obligation or if such terms and conditions are not set forth in writing, such obligation shall be satisfied within 30 days of a written request by the beneficiary of such obligation given to the corresponding obligor thereunder, and (ii) shall be for each relevant Party (or the relevant member of such Party’s Group) an obligation to a Third Party and shall no longer be an Intercompany Account.

 

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Section 2.5.                       Bank Accounts; Cash Management.

 

(a)                                 The Parties agree to take, at the Effective Time (or such earlier time as SPX may determine in its sole and absolute discretion), all actions necessary to amend, terminate and/or replace, as applicable, all Contracts governing each bank and brokerage account owned by Flowco or any other member of the Flowco Group (the “Flowco Accounts”) so that such Flowco Accounts, if currently linked (whether by automatic withdrawal, automatic deposit, or any other authorization to transfer funds from or to, hereinafter “linked”) to any bank or brokerage account owned by Infrastructurco or any other member of the Infrastructurco Group (the “Infrastructurco Accounts”) are de-linked from the Infrastructurco Accounts.  From and after the Effective Time, no Infrastructurco Employee shall have any authority to access or control any Flowco Account, except as provided for through the Transition Services Agreement.

 

(b)                                 The Parties agree to take, at the Effective Time (or such earlier time as SPX may determine in its sole and absolute discretion), all actions necessary to amend, terminate and/or replace, as applicable, all Contracts governing the Infrastructurco Accounts so that such Infrastructurco Accounts, if currently linked to a Flowco Account, are de-linked from the Flowco Accounts.  From and after the Effective Time, no Flowco Employee shall have any authority to access or control any Infrastructurco Account, except as provided for through the Transition Services Agreement.

 

(c)                                  It is intended that, following consummation of the actions contemplated by sections (a) and (b) above, there will be put in place a centralized cash management system pursuant to which the Flowco Accounts will be managed centrally and funds collected will be transferred into one or more centralized accounts maintained by members of the Flowco Group.

 

(d)                                 It is intended that, following consummation of the actions contemplated by sections (a) and (b) above, there will continue to be in place a centralized cash management system pursuant to which the Infrastructurco Accounts will be managed centrally and funds collected will be transferred into one or more centralized accounts maintained by members of the Infrastructurco Group.

 

(e)                                  With respect to any outstanding checks issued by Infrastructurco, Flowco, or any of the members of their respective Groups prior to the Effective Time, such outstanding checks shall be honored following the Effective Time by the member of the applicable Group owning the account on which the check is drawn.

 

(f)                                   As between the Parties (and the members of their respective Groups) all payments and reimbursements received after the Effective Time by either Party (or member of its Group) that relate to a Business, Asset or Liability of the other Party (or member of its Group), shall be held by such Party in trust for the use and benefit of the Party entitled thereto and, promptly upon receipt by such Party of any such payment or reimbursement, such Party shall pay over to the other Party the amount of such payment or reimbursement without right of set-off.

 

Section 2.6.                       Limitation of Liability; Termination of Inter-Group Agreements.

 

(a)                                 Except as otherwise expressly provided in this Agreement, no Party shall have any Liability to any other Party or any member of each other Party’s Group in the event that

 

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any Information exchanged or provided pursuant to this Agreement (but excluding any such information included in the Distribution Disclosure Documents, Pre-Separation Disclosure, the Infrastructurco Disclosure and the Flowco Disclosure, Liability for any and all of which will be governed by Section 2.3) which is an estimate or forecast, or which is based on an estimate or forecast, is found to be inaccurate.

 

(b)                                 Except as provided in Section 2.4, Section 2.9, Section 2.12 or as set forth in subsection (c) below, no Party shall have any Liability to any other Party or any member of such other Party’s Group based upon, arising out of or resulting from any Contract, arrangement, course of dealing or understanding between it or any members in its Group, on the one hand, and the other Party, or any members of its Group, on the other hand, whether or not in writing, entered into or existing at or prior to the Effective Time, and each Party hereby terminates any and all Contracts, arrangements, course of dealings or understandings between it or any members in its Group, on the one hand, and the other Party, or any members of its Group, on the other hand, effective as of immediately prior to the Effective Time, and any such Liability, whether or not in writing, is hereby irrevocably cancelled, released and waived effective as of the Effective Time.  No such terminated Contract, arrangement, course of dealing or understanding (including any provision thereof which purports to survive termination) shall be of any further force or effect after the Effective Time.  Each Party shall, at the reasonable request of the other Party, take, or cause to be taken, any reasonably requested actions necessary to effect the foregoing.

 

(c)                                  The provisions of Section 2.6(b) shall not apply to any of the following Contracts, arrangements, course of dealings or understandings (or to any of the provisions thereof):

 

(i)                                     this Agreement, the Ancillary Agreements, the Reorganization Documents and any Contract entered into in connection herewith or in order to consummate the transactions contemplated hereby or thereby;

 

(ii)                                  any Contracts, arrangements, course of dealings or understandings to which any Third Party is a party (it being understood that to the extent that the rights and obligations of the Parties and the members of their respective Groups under any such Contracts, arrangements, course of dealings or understandings constitute Infrastructurco Assets, Flowco Assets, Infrastructurco Liabilities or Flowco Liabilities, such Contracts, arrangements, course of dealings or understandings shall be assigned or retained pursuant to Article II); and

 

(iii)                               any Contracts, arrangements, commitments or understandings to which any non-Wholly Owned Subsidiary of Infrastructurco or Flowco is a party.

 

Section 2.7.                       Transfers Not Effected at or Prior to the Effective Time; Transfers Deemed Effective as of the Effective Time.

 

(a)                                 To the extent that any Transfers or assumptions contemplated by this Article II shall not have been consummated at or prior to the Effective Time, the Parties shall cooperate to effect such Transfers or assumptions as promptly following the Effective Time as shall be practicable.  Nothing herein shall be deemed to require or constitute the Transfer of any Assets or the assumption of any Liabilities which by their terms or operation of Law cannot be

 

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Transferred or assumed; provided, however, that the Parties shall cooperate in good faith to agree on Consents or Governmental Approvals for the Transfer of all Assets and assumption of all Liabilities contemplated to be Transferred or assumed pursuant to this Article II that should be obtained (the “Agreed Consents”) and the efforts to be expended by the Parties to seek to obtain the Agreed Consents (the “Agreed Consent Efforts”).  In the event that any such Transfer of Assets or assumption of Liabilities has not been consummated as of the Effective Time, then from and after the Effective Time (i) the Party (or relevant member in its Group) retaining such Asset shall thereafter hold such Asset for the use and benefit of the Party (or relevant member in its Group) entitled thereto (at the expense of the Person entitled thereto) (for the avoidance of doubt, each Party may grant Security Interests on any such Assets to secure its own financings notwithstanding that any such Asset is being held for the use and benefit of the other Party or relevant member in its Group), (ii) the Party intended to assume such Liability shall pay or reimburse the Party (or the relevant member of its Group) retaining such Liability for all amounts reasonably paid or incurred in connection with the retention of such Liability and (iii) the Parties shall, for U.S. federal income tax purposes, reflect the Transfers of the use and benefit of such Assets and the assumption of reimbursement obligations for such Liabilities contemplated in this Section 2.7(a) as having occurred as of the Effective Time, in each case subject to applicable Law.  In addition, the Party retaining such Asset or Liability shall treat, insofar as reasonably possible and to the extent permitted by applicable Law, such Asset or Liability in the ordinary course of business in accordance with past practice and take such other actions as may be reasonably requested by the Party to which such Asset or Liability is to be transferred or assumed in order to place such Party, insofar as reasonably possible, in the same position as if such Asset or Liability had been transferred or assumed as contemplated hereby and so that all the benefits and burdens relating to such Asset or Liability, including possession, use, risk of loss, potential for income and gain, and dominion, control and command over such Asset or Liability, are to inure from and after the Effective Time to the relevant member of the Infrastructurco Group or the Flowco Group, as the case may be, entitled to the receipt of such Asset or Liability.

 

(b)                                 If and when the Consents, Governmental Approvals and/or conditions, the absence or non-satisfaction of which caused the deferral of transfer or assignment of any Asset or assumption of any Liability pursuant to Section 2.7(a), are obtained or satisfied, the transfer, assignment or novation of the applicable Asset or Liability shall be effected without further consideration in accordance with and subject to the terms of this Agreement (including Sections 2.2 and 2.3) and/or the applicable Ancillary Agreement as promptly as practicable after the receipt of such Consents, Governmental Approvals and/or absence or satisfaction of conditions.

 

(c)                                  The Party (or relevant member of its Group) retaining any Asset or Liability due to the deferral of the transfer or assignment of such Asset or the deferral of the assumption of such Liability pursuant to Section 2.7(a) shall (i) not be obligated, in connection with the foregoing, to expend any money unless the necessary funds are advanced, or agreed in advance to be reimbursed by the Party (or relevant member of its Group) entitled to such Asset, other than reasonable outside attorneys’ fees and recording or similar fees paid or incurred in connection with the transfer or assignment of such Asset, all of which shall be promptly reimbursed by the Party (or relevant member of its Group) entitled to such Asset and (ii) be indemnified for all Indemnifiable Losses or other Liabilities arising out of any actions (or omissions to act) of such retaining Party taken at the direction of the other Party (or relevant member of its Group) in connection with and relating to such retained Asset or Liability, as the case may be.

 

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(d)                                 If at any time prior to April 30, 2018 either Party determines that it (or any member of its Group) owns any Asset that was allocated by the terms of this Agreement to be Transferred to the other Party or any member of such other Party’s Group at the Effective Time or that is agreed by such Party and the other Party in their good faith judgment to be an Asset that more properly belongs to the other Party or any member of such other Party’s Group or an Asset that such other Party or any member of such other Party’s Group was intended to have the right to continue to use, then the Party owning such Asset shall as applicable (i) Transfer any such Asset to the Party (or relevant member of its Group) identified as the appropriate transferee and following such Transfer, such Asset shall be a Flowco Asset or Infrastructurco Asset, as the case may be, or (ii) grant such mutually agreeable rights with respect to such Asset to permit such continued use, subject to, and consistent with this Agreement, including with respect to assumption of associated Liabilities.  In connection with such transfer, contribution, assignment, distribution or conveyance, the receiving party shall assume all Liabilities related to such Asset.

 

(e)                                  After the Effective Time, each Party (or any member of its Group) may receive mail, correspondence, e-mail, packages and other communications properly belonging to the other Party (or any member of its Group).  Accordingly, at all times after the Effective Time, each Party authorizes the other Party (or any member of its Group) to receive and open all mail, correspondence, e-mail, packages and other communications received by such Party (or any member of its Group) and not unambiguously intended for such first Party, any member of such first Party’s Group or any of their respective officers, directors, employees or other agents, and to the extent that they do not relate to the business of the receiving Party, the receiving Party shall promptly deliver such mail, correspondence, e-mail, packages or other communications (or, in case the same relate to both businesses, copies thereof) to the other Party as provided for in Section 10.6.  The provisions of this Section 2.7(e) are not intended to, and shall not, be deemed to constitute an authorization by any Party (or any member of its Group) to permit the other to accept service of process on its (or its members’) behalf and no Party (or any member of its Group) is or shall be deemed to be the agent of the other Party (or any member of its Group) for service of process purposes.

 

Section 2.8.                       Transfer Documents.  In connection with, and in furtherance of, the Transfers of Assets and the acceptance and assumptions of Liabilities contemplated by this Agreement, the Parties shall execute, at or prior to the Effective Time, or after the Effective Time with respect to Section 2.7, by the appropriate entities, the Transfer Documents necessary to evidence the valid and effective assumption by the applicable Party (or any member of its Group) of its assumed Liabilities, and the valid Transfer to the applicable Party (or any member of its Group) of all rights, titles and interests in and to its accepted Assets, including the transfer of real property with quit claim deeds, as may be appropriate.

 

Section 2.9.                       Shared Contracts.

 

(a)                                 With respect to Shared Contractual Liabilities pursuant to, under or relating to a given Shared Contract, such Shared Contractual Liabilities shall be allocated, unless otherwise allocated pursuant to this Agreement or an Ancillary Agreement, between the Parties as follows:

 

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(i)                                     first, if a Liability is incurred exclusively in respect of a benefit received by one Party or its Group, the Party or Group receiving such benefit shall be responsible for such Liability;

 

(ii)                                  second, if a Liability cannot be exclusively allocated to one Party or its Group under clause (i) above, such Liability shall be allocated among both Parties and their respective Groups based on the relative proportions of total benefit received (over the term of the Shared Contract, measured as of the date of allocation) under the relevant Shared Contract.  Notwithstanding the foregoing, each Party shall be responsible for any or all Liabilities arising out of or resulting from such Party’s or Group’s breach of the relevant Shared Contract.

 

(b)                                 Except as otherwise expressly contemplated in this Agreement or an Ancillary Agreement, if Infrastructurco or any member of the Infrastructurco Group, on the one hand, or Flowco or any member of the Flowco Group, on the other hand, receives any benefit or payment under any Shared Contract which was intended for the other Party or its Group, Infrastructurco, on the one hand, or Flowco, on the other hand, will use its respective commercially reasonable efforts, to deliver, transfer or otherwise afford such benefit or payment to the other Party in as efficient a manner as can be effected with commercially reasonable efforts.

 

(c)                                  Notwithstanding anything to the contrary herein, the Parties have determined that it is advisable that certain Shared Contracts, or portions thereof, will be separated or assigned to a member of the Infrastructurco Group or Flowco Group, as applicable.  The Parties shall use their commercially reasonable efforts to separate the Shared Contracts which are identified on Schedule 2.9(c) into separate Contracts between the appropriate Third Party and either Flowco or a member of the Flowco Group or Infrastructurco or a member of the Infrastructurco Group.

 

(d)                                 The Parties agree to cooperate and provide reasonable assistance prior to the Effective Time and for a period of twelve (12) months following the Effective Time (with no obligation on the part of either Party to pay any costs or fees with respect to such assistance) in effecting the separation of such Shared Contracts as described above.

 

Section 2.10.                Further Assurances.

 

(a)                                 In addition to and without limiting the actions specifically provided for elsewhere in this Agreement, including Section 2.7, each of the Parties shall cooperate with each other and use commercially reasonable efforts, prior to, on and after the Effective Time, to take, or to cause to be taken, all actions, and to do, or to cause to be done, all things reasonably necessary on its part under applicable Law or contractual obligations to consummate and make effective the transactions contemplated by this Agreement and the Ancillary Agreements.

 

(b)                                 Without limiting the foregoing, each Party shall cooperate with the other Party, from and after the Effective Time, to execute and deliver, or use commercially reasonable efforts to cause to be executed and delivered, all instruments, including instruments of conveyance, assignment and transfer and/or assumption, and to take all such other actions as such Party may reasonably be requested to take by any other Party from time to time, consistent

 

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with the terms of this Agreement and the Ancillary Agreements, in order to effectuate the provisions and purposes of this Agreement and the Ancillary Agreements and the Transfers of the applicable Assets and the assumption of the applicable Liabilities and the other transactions contemplated hereby and thereby.

 

(c)                                  On or prior to the Distribution Date, Infrastructurco and Flowco in their respective capacities as direct or indirect stockholders of their respective Subsidiaries, shall each ratify any actions that are reasonably necessary or desirable to be taken by any Subsidiary of Infrastructurco or Subsidiary of Flowco, as the case may be, to effectuate the transactions contemplated by this Agreement and the Ancillary Agreements.

 

(d)                                 Notwithstanding anything herein to the contrary, neither Party is under any obligation to seek to obtain any Consent or Governmental Approval, except for any obligation to make the Agreed Consent Efforts to obtain the Agreed Consents, as determined in accordance with the proviso contained in Section 2.7(a).

 

Section 2.11.                Novation of Liabilities; Consents.

 

(a)                                 Other than with respect to any Flowco Group Performance Guarantee (which shall be subject to the terms of Section 2.12(a)) or any Infrastructurco Group Performance Guarantee (which shall be subject to the terms of Section 2.12(b)), as applicable, each Party, at the request of the other Party, shall use commercially reasonable efforts to obtain, or to cause to be obtained, any material Consent, release, substitution or amendment required to novate or assign all obligations under Contracts or other Liabilities for which a member of such Party’s Group and a member of the other Party’s Group are jointly or severally liable, or for which a member of the other Party is otherwise liable, and that do not constitute Liabilities of such other Party as provided in this Agreement, or to obtain in writing the unconditional release of all parties to such arrangements (other than any member of the Group who assumed or retained such Liability as set forth in this Agreement), so that, in any such case, the members of the applicable Group will be solely responsible for such Liabilities; provided, however, that no Party shall be obligated to pay any consideration therefor to any Third Party from whom any such Consent, substitution or amendment is requested (unless the other Party agrees to fully reimburse the requesting Party).

 

(b)                                 If the Parties are unable to obtain, or to cause to be obtained, any material Consent, release, substitution or amendment, the other Party or a member of such other Party’s Group shall continue to be bound by such Contract, license or other obligation that does not constitute a Liability of such other Party and, unless not permitted by Law or the terms thereof, as agent or subcontractor for such Party, the Party or member of such Party’s Group who assumed or retained such Liability as set forth in this Agreement (the “Liable Party”) shall pay, perform and discharge fully all the obligations or other Liabilities of such other Party or member of such other Party’s Group thereunder from and after the Effective Time.  The Liable Party shall indemnify each other Party and the members of such other Party’s Group and hold each of them harmless against any and all Liabilities arising in connection therewith; provided, that the Liable Party shall have no obligation to indemnify the other Party or any member of such other Party’s Group with respect to any matter to the extent that such other Party has engaged in any knowing violation of Law or fraud in connection therewith as determined by a court of competent jurisdiction in a final judgment that is not subject to appeal.  The other Party shall, without

 

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further consideration, promptly pay and remit, or cause to be promptly paid or remitted, to the Liable Party or to another member of the Liable Party’s Group, all money, rights and other consideration received by it or any member of its Group in respect of such performance by the Liable Party (unless any such consideration is an Asset of such other Party pursuant to this Agreement).  If and when any such Consent, release, substitution or amendment shall be obtained or such agreement, lease, license or other rights or obligations shall otherwise become assignable or able to be novated, the other Party shall promptly assign, or cause to be assigned, all rights, obligations and other Liabilities thereunder of any member of such other Party’s Group to the Liable Party or to another member of the Liable Party’s Group without payment of any further consideration and the Liable Party, without the payment of any further consideration, shall assume such rights and obligations and other Liabilities.

 

Section 2.12.                Performance Guarantees.

 

(a)                                 With respect to any guarantee or other obligation for which any member of the Flowco Group is a guarantor of, or obligor for, any Infrastructurco Liability (“Flowco Group Performance Guarantee”), Infrastructurco shall indemnify and hold harmless the guarantor or obligor for any Indemnifiable Loss arising therefrom or relating thereto (in accordance with the provisions of Article VI) and shall, as agent or subcontractor for such guarantor or obligor, pay, perform and discharge fully all the obligations or other Liabilities of such guarantor or obligor thereunder.

 

(b)                                 With respect to any guarantee or other obligation for which any member of the Infrastructurco Group is a guarantor of, or obligor for, any Flowco Liability (“Infrastructurco Group Performance Guarantee”), Flowco shall indemnify and hold harmless the guarantor or obligor for any Indemnifiable Loss arising therefrom or relating thereto (in accordance with the provisions of Article VI) and shall, as agent or subcontractor for such guarantor or obligor, pay, perform and discharge fully all the obligations or other Liabilities of such guarantor or obligor thereunder.

 

(c)                                  Infrastructurco and Flowco shall cooperate, and Flowco shall use commercially reasonable efforts, to replace all letters of credit, foreign credit instruments, bank guarantees, surety bonds, performance bonds or analogous instruments issued by Third Parties that were obtained by or on the credit of the members of the Infrastructurco Group on behalf of or in favor of any member of the Flowco Group or the Flowco Business (or the beneficiaries relating thereto such as, without limitation, customers, suppliers or taxing authorities of the Flowco Business) (the “Infrastructurco Third Party Performance Support”) prior to or as promptly as practicable after the Effective Time with letters of credit, foreign credit instruments, bank guarantees, surety bonds, performance bonds or analogous instruments issued by Third Parties that are obtained by and on the credit of Flowco or a member of the Flowco Group as of the Effective Time.  With respect to any Infrastructurco Third Party Performance Support that remains outstanding after the Effective Time, Flowco shall indemnify and hold harmless the Infrastructurco Indemnitees for any Liabilities arising from or relating to such Infrastructurco Third Party Performance Support, including any fees in connection with the issuance and maintenance thereof and any funds drawn by (or for the benefit of), or disbursements made to, the Third Party issuers or the beneficiaries of such Infrastructurco Third Parties Performance Support in accordance with the terms thereof.

 

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(d)                                 If requested by a Party, any indemnification or reimbursement of any Liability with respect to any Flowco Group Performance Guarantee, Infrastructurco Group Performance Guarantee or Infrastructurco Third Party Performance Support (in each case, a “Performance Guarantee Obligation”) shall be made by the indemnifying or reimbursing Party in the currency in which payment was made (or is expected to be made) by the requesting Party (or member of its Group).  If any Party (or any member of its Group) receives a request to pay any Performance Guarantee Obligation from a Third Party, such Party shall use commercially reasonable efforts to promptly inform the other Party accordingly.  Each Party’s obligation to pay any Performance Guarantee Obligation and other indemnification obligations under this Section 2.12 shall be absolute, irrevocable and unconditional, and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any Performance Guarantee Obligation, or any term or provision therein, or (if any) underlying agreement, (ii) any draft or other document presented under a Performance Guarantee Obligation proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect, (iii) payment by the applicable issuer of the Performance Guarantee Obligation against presentation of a draft or other document that does not comply with the terms of such Performance Guarantee Obligation, (iv) failure by a Party to provide the other Party with the information contemplated by this Section 2.12, (v) any dispute as to whether or the amount of any Performance Guarantee Obligation was proper, or (vi) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section 2.12(d), constitute a legal or equitable discharge of, or provide a right of setoff against, a Party’s obligations hereunder.

 

Section 2.13.                Disclaimer of Representations and Warranties.

 

(a)                                 EACH OF INFRASTRUCTURCO AND FLOWCO UNDERSTANDS AND AGREES THAT, EXCEPT AS EXPRESSLY SET FORTH HEREIN OR IN ANY ANCILLARY AGREEMENT, NO PARTY TO THIS AGREEMENT, ANY ANCILLARY AGREEMENT OR ANY OTHER AGREEMENT OR DOCUMENT CONTEMPLATED HEREBY OR THEREBY, IS REPRESENTING OR WARRANTING IN ANY WAY AS TO THE ASSETS, BUSINESSES OR LIABILITIES CONTRIBUTED, TRANSFERRED, DISTRIBUTED, OR ASSUMED AS CONTEMPLATED HEREBY OR THEREBY, AS TO ANY CONSENTS OR GOVERNMENTAL APPROVALS REQUIRED IN CONNECTION HEREWITH OR THEREWITH, AS TO THE VALUE OR FREEDOM FROM ANY SECURITY INTERESTS OF, OR ANY OTHER MATTER CONCERNING, ANY ASSETS OF SUCH PARTY, OR AS TO THE ABSENCE OF ANY DEFENSES OR RIGHT OF SETOFF OR FREEDOM FROM COUNTERCLAIM WITH RESPECT TO ANY ACTION OR OTHER ASSET, INCLUDING ACCOUNTS RECEIVABLE, OF ANY PARTY, OR AS TO THE LEGAL SUFFICIENCY OF ANY CONTRIBUTION, DISTRIBUTION, ASSIGNMENT, ASSUMPTION, DOCUMENT, CERTIFICATE OR INSTRUMENT DELIVERED HEREUNDER TO CONVEY TITLE TO ANY ASSET OR THING OF VALUE OR ASSUME ANY LIABILITY UPON THE EXECUTION, DELIVERY AND FILING HEREOF OR THEREOF.  EXCEPT AS MAY EXPRESSLY BE SET FORTH HEREIN OR IN ANY ANCILLARY AGREEMENT, ALL ASSETS ARE BEING TRANSFERRED ON AN “AS IS,” “WHERE IS” BASIS (AND, IN THE CASE OF ANY REAL PROPERTY, BY MEANS OF A QUITCLAIM OR SIMILAR FORM OF DEED OR CONVEYANCE WITHOUT

 

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WARRANTY) AND THE RESPECTIVE TRANSFEREES SHALL BEAR ALL ECONOMIC AND LEGAL RISKS THAT (I) ANY CONVEYANCE SHALL PROVE TO BE INSUFFICIENT TO VEST IN THE TRANSFEREE GOOD TITLE, FREE AND CLEAR OF ANY SECURITY INTEREST, AND (II) ANY NECESSARY CONSENTS OR GOVERNMENTAL APPROVALS ARE NOT OBTAINED OR THAT ANY REQUIREMENTS OF LAWS, CONTRACTS, OR JUDGMENTS ARE NOT COMPLIED WITH.  ALL WARRANTIES OF HABITABILITY, MERCHANTABILITY AND FITNESS FOR ANY PARTICULAR PURPOSE, AND ALL OTHER WARRANTIES ARISING UNDER THE UNIFORM COMMERCIAL CODE (OR SIMILAR FOREIGN LAWS), ARE HEREBY DISCLAIMED.

 

(b)                                 Each of Infrastructurco and Flowco further understands and agrees that if the disclaimer of express or implied representations and warranties contained in Section 2.13(a) is held unenforceable or is unavailable for any reason under the Laws of any jurisdiction outside the United States or if, under the Laws of a jurisdiction outside the United States, both Infrastructurco or any member of the Infrastructurco Group, on the one hand, and Flowco or any member of the Flowco Group, on the other hand, are jointly or severally liable for any Infrastructurco Liability or any Flowco Liability, respectively, then, the Parties intend that, notwithstanding any provision to the contrary under the Laws of such foreign jurisdictions, the provisions of this Agreement and the Ancillary Agreements (including the disclaimer of all representations and warranties, allocation of Liabilities among the Parties and the members of their respective Groups, releases, indemnification and contribution of Liabilities) shall prevail for any and all purposes among the Parties and the members of their respective Groups.

 

(c)                                  Infrastructurco hereby waives compliance by itself and each and every member of the Infrastructurco Group with the requirements and provisions of any “bulk-sale” or “bulk transfer” Laws of any jurisdiction that may otherwise be applicable with respect to the transfer or sale of any or all of the Infrastructurco Assets to Infrastructurco or any member of the Infrastructurco Group.

 

(d)                                 Flowco hereby waives compliance by itself and each and every member of the Flowco Group with the requirements and provisions of any “bulk-sale” or “bulk transfer” Laws of any jurisdiction that may otherwise be applicable with respect to the transfer or sale of any or all of the Flowco Assets to Flowco or any member of the Flowco Group.

 

Section 2.14.                Financing Arrangements; Credit Agreement.  Prior to the Distribution Date, Flowco and Infrastructurco shall enter into the Financing Arrangements, on such terms and conditions as agreed by SPX (including the amounts that shall be borrowed by Flowco and Infrastructurco, respectively, pursuant to the Financing Arrangements and the interest rates and terms for such borrowings).  The Parties shall participate in the preparation of all materials and presentations as may be reasonably necessary to obtain funding pursuant to the Financing Arrangements, including rating agency presentations necessary to obtain the requisite ratings needed to obtain the financings under the Financing Arrangements.  The Parties agree that SPX shall be ultimately responsible for all out-of-pocket costs and expenses incurred by, and for reimbursement of such costs and expenses to, any member of the Infrastructurco Group or Flowco Group associated with negotiating, documenting and entering into the Financing Arrangements (but, for the avoidance of doubt, Flowco shall be responsible for all fees payable to its financing sources in connection with the Flowco Financing Arrangements).  Prior to the

 

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Distribution Date, SPX will use reasonable best efforts to take or cause to be taken all actions, and enter into such agreements and arrangements, as will be necessary to cause, as of the Distribution Date, (i) to terminate the Credit Agreement and cause SPX and its Subsidiaries to be fully and unconditionally released from all Liabilities in respect of the Credit Agreement (other than pursuant to those provisions thereof that by their express terms survive termination) and to cause all Security Interests thereunder or under agreements ancillary thereto to be fully and unconditionally released, (ii) to cause Flowco to be substituted for SPX as issuer under the Indenture, and (iii) otherwise to implement the Financing Arrangements.

 

Section 2.15.                Cash Contribution.  Immediately prior to the Effective Time, SPX will contribute to Flowco or such other member or members of the Flowco Group such amount of cash and cash equivalents as necessary (if any) so that, as of the Effective Time, the Flowco Group will have, in the aggregate, an amount of cash and cash equivalents of no less than the equivalent of $200,000,000 (as converted) in accordance with the regional allocation provisions set forth in Schedule 2.15.  All cash and cash equivalents held by any member of the Flowco Group as of the Effective Time will be a Flowco Asset and all cash and cash equivalents held by any member of the Infrastructurco Group as of the Effective Time will be an Infrastructurco Asset.

 

ARTICLE III

 

CERTAIN ACTIONS PRIOR TO THE DISTRIBUTION

 

Section 3.1.                       Reorganization.  The Parties agree to take, prior to the Distribution, all actions necessary, subject to the terms of this Agreement, to effectuate the Reorganization (such documentation necessary to effect the Reorganization, the “Reorganization Documents”) as set forth on Schedule 3.1 (the steps of the Reorganization being referred to herein as the “Reorganization Step Plan”), as the same may be updated by SPX from time to time.

 

Section 3.2.                       Certificate of Incorporation; Bylaws.  At or prior to the Effective Time, SPX shall, and shall cause Flowco to, take all necessary actions to adopt the amended and restated certificate of incorporation and amended and restated by-laws in the form filed by Flowco with the Commission as exhibits to the Form 10.

 

Section 3.3.                       Directors and Executive Officers.

 

(a)                                 At or prior to the Effective Time, SPX shall take all necessary action to (x) cause the Board of Directors of Flowco to consist of the individuals who are identified in the Form 10 (including the Information Statement) at the Effective Time as being directors of Flowco and (y) cause the executive officers of Flowco to consist of the individuals who are identified in the Form 10 (including the Information Statement) at the Effective Time as being the executive officers of Flowco.

 

(b)                                 At or prior to the Effective Time, SPX shall take all necessary action, including by obtaining resignations and appointing new officers or directors, as necessary, to (x) cause the Board of Directors of Infrastructurco to consist of the individuals who are identified by the Board of Directors of SPX as being the Board of Directors of Infrastructurco at the Effective Time and (y) cause the executive officers of Infrastructurco to consist of the individuals who are

 

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identified by the Board of Directors of SPX as being the executive officers of Infrastructurco at the Effective Time.

 

Section 3.4.                       Resignations.

 

(a)                                 Subject to Section 3.4(b), at or prior to the Effective Time, (i) SPX shall cause all its employees and any employees of its Affiliates who will not be a Flowco Employee immediately following the Effective Time to resign, or deliver to Flowco all instruments and other documents reasonably necessary to resign, effective as of the Effective Time, from all positions as officers or directors of any member of the Flowco Group in which they serve, (ii) Flowco shall cause all Flowco Employees to resign, or deliver to Infrastructurco all instruments and other documents reasonably necessary to resign, effective as of the Effective Time, from all positions as officers or directors of any member of the Infrastructurco Group in which they serve, (iii) SPX shall cause all its employees and any employees of its Affiliates who will not be an Infrastructurco Employee immediately following the Effective Time to resign, effective as of the Effective Time, from all positions as officers or directors of any member of the Infrastructurco Group in which they serve, and (iv) Infrastructurco shall cause all Infrastructurco Employees to resign, effective as of the Effective Time, from all positions as officers or directors of any member of the Flowco Group in which they serve.

 

(b)                                 No Person shall be required by any Party to resign from any position or office with another Party if such Person is disclosed in the Information Statement as the Person who is to hold such position or office following the Distribution.

 

Section 3.5.                       Ancillary Agreements.  At or prior to the Effective Time, Infrastructurco and Flowco shall enter into, and/or (where applicable) shall cause a member or members of their respective Groups to enter into, the Ancillary Agreements.

 

ARTICLE IV

 

THE DISTRIBUTION

 

Section 4.1.                       Exchange of Flowco Assets for Flowco Stock and Debt Securities; Debt Exchange.  On or prior to the Distribution Date and in connection with the Separation:

 

(a)                                 as consideration for the transfer of the Flowco Assets to Flowco, Flowco shall issue to SPX:

 

(i)                                     such number of shares of Flowco Common Stock (or SPX and Flowco shall take or cause to be taken such other appropriate actions to ensure that SPX has the requisite number of shares of Flowco Common Stock) as may be requested by SPX in order to effect the Distribution, which shares as of the date of issuance shall represent (together with such shares previously held by SPX) all of the issued and outstanding shares of Flowco Common Stock; and

 

(ii)                                  the Flowco Global Note; and

 

(b)                                 SPX shall deliver the Flowco Global Note to the Trustee (as defined in the Indenture), as custodian for the Depositary (as defined in the Indenture), whereupon the Trustee, as custodian for the Depositary, shall deliver the SPX Global Note to SPX.

 

(c)                                  For ease of administration, the issuance and delivery of the Flowco Global Note required by Sections 4.1(a)(ii) and 4.1(b) may be effectuated by Flowco’s delivery, at SPX’s discretion and on SPX’s behalf, of the Flowco Global Note directly to the Trustee, as custodian for the Depositary. In addition, Flowco may, at SPX’s direction and on SPX’s behalf, take any other actions reasonably necessary to effectuate such delivery.

 

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(d)                                 Approximately $440,000,000, or such other amount as may be agreed to by Flowco and SPX prior to the Distribution, of the proceeds of the Flowco Financing Arrangements shall be used, at SPX’s direction, to retire an equal amount of SPX’s outstanding indebtedness under the Credit Agreement; provided, that any Intercompany Account arising from any such payment by Flowco of the indebtedness of SPX shall be assumed by Flowco, effective at the Effective Time, as a Flowco Liability pursuant to the provisions of Section 2.3(b).

 

Section 4.2.                       Distribution.  Subject to the conditions and other terms contained in this Article IV, SPX will cause the Agent on the Distribution Date to make the Distribution, including by crediting the appropriate number of shares of Flowco Common Stock to book entry accounts for each holder of SPX Common Stock or designated transferee or transferees of such holder of SPX Common Stock.  For stockholders of SPX who own SPX Common Stock through a broker or other nominee, their shares of Flowco Common Stock will be credited to their respective accounts by such broker or nominee.  No action by any holder of SPX Common Stock on the Record Date shall be necessary for such stockholder (or such stockholder’s designated transferee or transferees) to receive the applicable number of shares of Flowco Common Stock such stockholder is entitled to in the Distribution.

 

Section 4.3.                       Reserved.

 

Section 4.4.                       Actions in Connection with the Distribution.

 

(a)                                 Flowco shall file such amendments and supplements to the Form 10 as SPX may reasonably request, and such amendments as may be necessary in order to cause the same to become and remain effective as required by Law, including filing such amendments and supplements to the Form 10 and Information Statement as may be required by the Commission or federal, state or foreign securities Laws.  SPX shall mail to the holders of SPX Common Stock, at such time on or prior to the Distribution Date as SPX shall determine, the Information Statement included in the Form 10, as well as any other information concerning Flowco, Flowco’s business, operations and management, the Separation and such other matters as SPX shall reasonably determine are necessary and as may be required by Law.

 

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(b)                                 Flowco shall also prepare, file with the Commission and cause to become effective any registration statements or amendments thereof required to effect the establishment of, or amendments to, any employee benefit and other plans or as otherwise necessary or appropriate in connection with the transactions contemplated by this Agreement, or any of the Ancillary Agreements, including any transactions related to financings or other credit facilities.  Promptly after receiving a request from SPX, Flowco shall prepare and, in accordance with applicable Law, file with the Commission any such documentation that SPX determines is necessary or desirable to effectuate the Distribution, and SPX and Flowco shall each use commercially reasonable efforts to obtain all necessary approvals from the Commission with respect thereto as soon as practicable.

 

(c)                                  Promptly after receiving a request from SPX, Flowco shall prepare and file, and shall use commercially reasonable efforts to have approved and made effective, an application for the original listing on the NYSE of the Flowco Common Stock to be distributed in the Distribution, subject to official notice of distribution.

 

Section 4.5.                       Sole and Absolute Discretion of SPX.  Notwithstanding anything to the contrary in this Agreement or any Ancillary Agreement, SPX shall, in its sole and absolute discretion, determine the Distribution Date and all terms of the Distribution, including the form, structure and terms of any transactions to effect the Distribution and the timing of and conditions to the consummation thereof.  In addition, SPX may, in accordance with Section 10.10, at any time prior to the Distribution Date and from time to time until the completion of the Distribution decide to abandon the Distribution or modify or change the terms of the Distribution, including by accelerating or delaying the timing of the consummation of all or part of the Distribution.  None of Flowco, any other member of the Flowco Group, any Flowco Employee or any Third-Party shall have any right or claim to require the consummation of the Separation or the Distribution, each of which shall be effected at the sole and absolute discretion of the Board of Directors of SPX.

 

Section 4.6.                       Conditions to Distribution.  Subject to Section 4.5, the following are conditions to the consummation of the Distribution (which, to the extent permitted by applicable Law, may be waived, in whole or in part, by SPX in its sole and absolute discretion).  The conditions are for the sole benefit of SPX and shall not give rise to or create any duty on the part of SPX or the Board of Directors of SPX to waive or not waive any such condition.  Any determination made by SPX prior to the Distribution concerning the satisfaction or waiver of any or all of the conditions set forth in this Section 4.6 shall be conclusive and binding on the Parties hereto.

 

(a)                                 The Form 10 shall have been declared effective by the Commission, with no stop order in effect with respect thereto, and the Information Statement shall have been mailed to SPX’s stockholders as of the Record Date;

 

(b)                                 The Flowco Common Stock to be delivered to the SPX stockholders in the Distribution shall have been approved for listing on the NYSE, subject to official notice of distribution;

 

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(c)                                  SPX shall have obtained from Fried, Frank, Harris, Shriver & Jacobson LLP (or other outside tax counsel of national standing) an opinion that is consistent with SPX’s intent that the separation be tax-free to SPX and SPX shareholders for U.S. federal income tax purposes;

 

(d)                                 All permits, registrations and consents required under the securities or blue sky Laws of states or other political subdivisions of the United States or of other foreign jurisdictions in connection with the Distribution shall have been obtained and be in full force and effect;

 

(e)                                  No order, injunction or decree issued by any Governmental Entity of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the Distribution or any of the transactions related thereto, including the Transfer of Assets and assumption of Liabilities pursuant to Article II, shall be in effect, and no other event outside the control of SPX shall have occurred or failed to occur that prevents the consummation of the Distribution or any of the related transactions;

 

(f)                                   The Reorganization shall have been effectuated in accordance with the Reorganization Step Plan;

 

(g)                                  Each of the Ancillary Agreements shall have been duly executed and delivered by the parties thereto;

 

(h)                                 All Governmental Approvals necessary to consummate the Distribution shall have been obtained and be in full force and effect;

 

(i)                                     The Flowco Financing Arrangements and the Infrastructurco Financing Arrangements shall have been executed and delivered and the proceeds thereof shall have been (or substantially concurrently will be) received by Flowco and Infrastructurco, as applicable;

 

(j)                                    The Board of Directors of SPX shall have received an opinion of a solvency opinion provider of national standing, in form and substance satisfactory to the Board of Directors of SPX (in its sole and absolute discretion) with respect to the solvency, capital adequacy and sufficiency of surplus of each of Infrastructurco and Flowco after giving effect to the Separation; and

 

(k)                                 No events or developments shall have occurred or exist that, in the judgment of the Board of Directors of SPX, in its sole and absolute discretion, make it inadvisable to effect the Distribution or the other transactions contemplated hereby, or would result in the Distribution or the other transactions contemplated hereby not being in the best interest of SPX or its stockholders.

 

ARTICLE V

 

CERTAIN COVENANTS

 

Section 5.1.                       Legal Name.  From and after the Effective Time until the date that is twenty (20) years after the Distribution Date, SPX shall not change its corporate name without the prior written consent of Flowco.

 

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Section 5.2.                       Auditors and Audits; Financial Statements and Accounting.

 

(a)                                 Each Party agrees that, until March 31, 2017, and in any event solely for the purpose of the preparation and audit of each of the Party’s financial statements for any of the years ended December 31, 2013, 2014 and 2015, the preparation of each of the Party’s financial statements for any of the quarterly periods during the years ended December 31, 2013, 2014 and 2015, the printing, filing and public dissemination of such financial statements, the audit of each Party’s internal control over financial reporting related to each of the Party’s financial statements for any of the years ended December 31, 2013, 2014 and 2015 and such Party’s management’s assessment thereof, and each Party’s management’s assessment of such Party’s disclosure controls and procedures related to the financial statements for any of the years ended, and the quarterly periods ended during, the years ended December 31, 2013, 2014 and 2015:

 

(i)                                     Annual Financial Statements.  Each Party shall provide to the other Party on a timely basis all information reasonably required to meet such other Party’s schedule for the preparation, printing, filing, and public dissemination of its annual financial statements, for management’s assessment of and conclusion with respect to, the effectiveness of its disclosure controls and procedures and its internal control over financial reporting in accordance with Items 307 and 308, respectively, of Regulation S-K and for statutory account filings for any of its foreign Subsidiaries and, to the extent applicable to such other Party, (A) its auditor’s audit report of its internal control over financial reporting and (B) management’s assessment thereof in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 and the Commission’s and Public Company Accounting Oversight Board’s rules and auditing standards thereunder (such assessments and audit being referred to as the “Internal Control Audit and Management Assessments”).  Without limiting the generality of the foregoing, each Party will provide all required financial and other Information with respect to itself and the members of its Group to its auditors in a sufficient and reasonable time and in sufficient detail to permit its auditors to take all steps and perform all reviews necessary to provide sufficient assistance to the other Party’s auditors with respect to information to be included or contained in such other Party’s annual financial statements or statutory account filings for its foreign Subsidiaries and to permit such other Party’s auditors and management to complete their respective auditor’s report on Internal Control Audit and Management Assessments, to the extent applicable to such Party.

 

(ii)                                  Quarterly Financial Statements.  Each Party shall provide to the other Party on a timely basis all information reasonably required to meet such other Party’s schedule for the preparation, printing, filing, and public dissemination of its quarterly financial statements, for management’s conclusions with respect to the effectiveness of its disclosure controls and procedures and changes to its internal control over financial reporting in accordance with Items 307 and 308(c), respectively, of Regulation S-K and for statutory account filings for any of its foreign Subsidiaries.

 

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(iii)                               Access to Personnel and Records.  Each audited Party shall authorize, and use its reasonable best efforts to cause, its respective auditors to make available to the other Party’s auditors (each such other Party’s auditors, collectively, the “Other Parties’ Auditors”) both the personnel who performed or are performing the annual audits of such audited party (each such Party with respect to its own audit, the “Audited Party”) and work papers related to the annual audits of such Audited Party, in all cases within a reasonable time prior to such Audited Party’s expected auditors’ opinion date, so that the Other Parties’ Auditors are able to perform the procedures they consider necessary to take responsibility for the work of the Audited Party’s auditors as it relates to their auditors’ report on such other Party’s financial statements, all within sufficient time to enable such other Party to meet its timetable for the printing, filing and public dissemination of its annual financial statements.  Each Party shall make available to the Other Parties’ Auditors and management its personnel and Records in a reasonable time prior to the Other Parties’ Auditors’ opinion date and other Parties’ management’s assessment date so that the Other Parties’ Auditors and other Parties’ management are able to perform the procedures they consider necessary to conduct their respective Internal Control Audit and Management Assessments.

 

(b)                                 Amended Financial Reports.  In the event a Party restates any of its financial statements that includes such Party’s audited or unaudited financial statements or statutory account filings for such Party’s foreign Subsidiaries with respect to any balance sheet date or period of operation between January 1, 2010 and December 31, 2015, such Party will deliver to the other Party a substantially final draft, as soon as the same is prepared, of any report to be filed by such first Party with the Commission or the appropriate Governmental Entity that includes such restated audited or unaudited financial statements or statutory account filing (the “Amended Financial Reports”); provided, however, that such first Party may continue to revise its Amended Financial Report prior to its filing thereof with the Commission or appropriate Governmental Entity, which changes will be delivered to the other Party as soon as reasonably practicable; provided, further, however, that such first Party’s financial personnel will actively consult with the other Party’s financial personnel regarding any changes which such first Party may consider making to its Amended Financial Report and related disclosures prior to the anticipated filing of such report with the Commission or other Governmental Entity, with particular focus on any changes which would have an effect upon the other Party’s financial statements or related disclosures.  Each Party will reasonably cooperate with, and permit and make any necessary employees available to, the other Party and the Other Parties’ Auditors, in connection with the other Party’s preparation of any Amended Financial Reports.

 

(c)                                  Financials; Outside Auditors.  If any Party or member of its respective Group is required, pursuant to Rule 3-09 of Regulation S-X or otherwise, to include in its Exchange Act filings audited financial statements or other information of the other Party or member of the other Party’s Group, the other Party shall use its commercially reasonable efforts (i) to provide such audited financial statements or other information, and (ii) to cause its outside auditors to consent to the inclusion of such audited financial statements or other information in the Party’s Exchange Act filings.

 

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(d)                                 Third Party Agreements.  Nothing in this Section 5.2 shall require any Party to violate any Contract or arrangement with any Third Party regarding the confidentiality of confidential and proprietary information relating to that Third Party or its business; provided, however, that in the event that a Party is required under this Section 5.2 to disclose any such information, such Party shall use commercially reasonable efforts to seek to obtain such Third Party’s consent to the disclosure of such information.  The Parties also acknowledge that the Other Parties’ Auditors are subject to contractual, legal, professional and regulatory requirements which such auditors are responsible for complying therewith.

 

Section 5.3.                       No Restrictions on Corporate Opportunities.

 

(a)                                 In the event that Flowco or any other member of the Flowco Group, or any director or officer of Flowco or any other member of the Flowco Group, acquires knowledge of a potential transaction or matter that may be a corporate opportunity for both Flowco or any other member of the Flowco Group and Infrastructurco or any other member of the Infrastructurco Group, subsequent to the Effective Date, neither Flowco nor any other member of the Flowco Group, nor any director or officer of Flowco or any other member of the Flowco Group, shall have any duty to communicate or present such corporate opportunity to Infrastructurco or any other member of the Infrastructurco Group and shall not be liable to Infrastructurco or any other member of the Infrastructurco Group or to Infrastructurco’s stockholders for breach of any fiduciary duty as a stockholder of Infrastructurco or an officer or director thereof by reason of the fact that Flowco any other member of the Flowco Group pursues or acquires such corporate opportunity for itself, directs such corporate opportunity to another Person, or does not present such corporate opportunity to Infrastructurco or any other member of the Infrastructurco Group.

 

(b)                                 In the event that Infrastructurco or any other member of the Infrastructurco Group, or any director or officer of Infrastructurco or any other member of the Infrastructurco Group, acquires knowledge of a potential transaction or matter that may be a corporate opportunity for both Infrastructurco or any other member of the Infrastructurco Group and Flowco or any other member of the Flowco Group, subsequent to the Effective Date, neither Infrastructurco nor any other member of the Infrastructurco Group, nor any director or officer of Infrastructurco or any other member of the Infrastructurco Group, shall have any duty to communicate or present such corporate opportunity to Flowco or any other member of the Flowco Group and shall not be liable to Flowco or any other member of the Flowco Group or to Flowco’s stockholders for breach of any fiduciary duty as a stockholder of Flowco or an officer or director thereof by reason of the fact that Infrastructurco or any other member of the Infrastructurco Group pursues or acquires such corporate opportunity for itself, directs such corporate opportunity to another Person, or does not present such corporate opportunity to Flowco or any other member of the Flowco Group.

 

(c)                                  For the avoidance of doubt, to the extent that any person who is a director or officer of Flowco or any other member of the Flowco Group is also a director or officer of Infrastructurco or any other member of the Infrastructurco Group, such person shall have no duty to communicate or present any corporate opportunity of which he or she acquires knowledge to Infrastructurco or any other member of the Infrastructurco Group and shall not be liable to Infrastructurco or any other member of the Infrastructurco Group or to Infrastructurco’s stockholders for breach of any fiduciary duty as an officer or director of Infrastructurco by

 

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reason of the fact that Flowco or any other member of the Flowco Group pursues or acquires such corporate opportunity, directs such corporate opportunity to another Person, or does not present such corporate opportunity to Infrastructurco or any other member of the Infrastructurco Group, unless such corporate opportunity is expressly offered to such person in writing solely in his or her capacity as a director or officer of Infrastructurco or any other member of the Infrastructurco Group.

 

(d)                                 For the purposes of this Section 5.3, “corporate opportunities” of Flowco or any other member of the Flowco Group shall include, but not be limited to, business opportunities that are, by their nature, in a line of business of Flowco or any other member of the Flowco Group, including the Flowco Business, are of practical advantage to them and are ones in which Flowco or any other member of the Flowco Group have an interest or a reasonable expectancy, and in which, by embracing the opportunities, the self-interest of Infrastructurco or any other member of the Infrastructurco Group or any of their officers or directors will be brought into conflict with that of Flowco or any other member of the Flowco Group, and “corporate opportunities” of Infrastructurco or any other member of the Infrastructurco Group shall include, but not be limited to, business opportunities that are, by their nature, in a line of business of Infrastructurco or any other member of the Infrastructurco Group, including the Infrastructurco Business, are of practical advantage to them and are ones in which Infrastructurco or any other member of the Infrastructurco Group have an interest or a reasonable expectancy, and in which, by embracing the opportunities, the self-interest of Flowco or any other member of the Flowco Group or any of their officers or directors will be brought into conflict with that of Infrastructurco or any other member of the Infrastructurco Group.

 

ARTICLE VI

 

RELEASES AND INDEMNIFICATION

 

Section 6.1.                       Release of Pre-Distribution Claims.

 

(a)                                 Except (i) as provided in Section 6.1(b), (ii) as may be otherwise provided in any Ancillary Agreement and (iii) for any matter for which any Party is entitled to indemnification or contribution pursuant to this Article VI, each Party, on behalf of itself and each member of its respective Group, their respective Affiliates and all Persons who at any time prior to the Effective Time were directors, officers, agents or employees of any member of their respective Group (in each case, in their respective capacities as such), in each case, together with their respective heirs, executors, administrators, successors and assigns, and solely for the benefit of the other Party, do hereby remise, release and forever discharge the other Party and the other members of such other Parties’ Group, their respective Affiliates and all Persons who at any time prior to the Effective Time were stockholders, directors, officers, agents or employees of any member of such other Parties’ Group (in each case, in their respective capacities as such), in each case, together with their respective heirs, executors, administrators, successors and assigns, from any and all Liabilities whatsoever, whether at Law or in equity (including any right of contribution), whether arising under any Contract, by operation of Law or otherwise, including for fraud, existing or arising from any acts or events occurring or failing to occur or alleged to have occurred or to have failed to occur or any conditions existing or alleged to have existed at or before the Effective Time, including in connection with all activities to implement the

 

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Distribution, the Separation and any of the other transactions contemplated hereunder and under any of the Ancillary Agreements.

 

(b)                                 Nothing contained in Section 6.1(a) shall impair or otherwise affect any right of any Party, and as applicable, a member of the Party’s Group, to enforce this Agreement, any Ancillary Agreement or any agreements, arrangements, commitments or understandings unrelated to the Separation and Distribution and explicitly contemplated in this Agreement or any Ancillary Agreement to continue in effect after the Effective Time.  In addition, nothing contained in Section 6.1(a) shall release any Person from:

 

(i)                                     any Liability assumed, transferred by, or assigned or allocated to, a Party or a member of such Party’s Group pursuant to or contemplated by this Agreement or any Ancillary Agreement including (A) with respect to Infrastructurco, any Infrastructurco Liability, and (B) with respect to Flowco, any Flowco Liability;

 

(ii)                                  any Liability provided in or resulting from any other Contract or understanding that is entered into after the Effective Time between one Party (and/or a member of such Party’s Group), on the one hand, and the other Party (and/or a member of such Party’s Group), on the other hand;

 

(iii)                               any Liability that the Parties may have with respect to indemnification or contribution pursuant to this Agreement or any Ancillary Agreement, including in respect of claims brought against the Parties (or members of their respective Groups) by any Third Party, which Liability shall be governed by the provisions of this Article VI and, if applicable, the appropriate provisions of the Ancillary Agreements;

 

(iv)                              any Liability with respect to any Intercompany Accounts that survive the Effective Time pursuant to Section 2.4(b); and

 

(v)                                 any Liability the release of which would result in a release of any Person other than the Persons released in Section 6.1(a); provided that the Parties agree not to bring any Action or permit any other member of their respective Group to bring any Action against a Person released in Section 6.1(a) with respect to such Liability.

 

In addition, nothing contained in Section 6.1(a) shall release any member of the Infrastructurco Group or Flowco Group from honoring its existing obligations to indemnify any director, officer or employee of the Infrastructurco Group or Flowco Group who was a director, officer or employee of SPX or any of its Affiliates at or prior to the Effective Time, to the extent such director, officer or employee is or becomes a named defendant in any Action with respect to which he or she was entitled to such indemnification pursuant to obligations existing prior to the Effective Time; it being understood that if the underlying circumstances or obligation giving rise to such Action relates to the Flowco Business or is a Flowco Liability, as between Infrastructurco and Flowco, Flowco shall be responsible for such Liability in accordance with the provisions set forth in this Article VI and if the underlying circumstances or obligation giving rise to such Action relates to the Infrastructurco Business or is a Infrastructurco Liability, as between

 

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Infrastructurco and Flowco, Infrastructurco shall be responsible for such Liability in accordance with the provisions set forth in this Article VI.

 

(c)                                  Each Party shall not make any claim or demand, or commence any Action asserting any claim or demand, including any claim of contribution or indemnification, against the other Party or any member of any other Party’s Group, or any other Person released pursuant to Section 6.1(a), with respect to any and all Liabilities released pursuant to Section 6.1(a).

 

(d)                                 It is the intent of each Party, by virtue of the provisions of this Section 6.1, to provide for a full and complete release and discharge of all Liabilities existing or arising from all acts and events occurring or failing to occur or alleged to have occurred or to have failed to occur and all conditions existing or alleged to have existed on or before the Effective Time, whether known or unknown, between or among one Party and/or a member of such Party’s Group, on the one hand, and the other Party and/or a member of such other Party’s Group, on the other hand (including any contractual agreements or arrangements existing or alleged to exist between or among any such members on or before the Effective Time), except as specifically set forth in Section 6.1(a) and 6.1(b).

 

(e)                                  If any Person associated with a Party (including any director, officer or employee of a Party) initiates an Action with respect to claims released by this Section 6.1, the Party with which such Person is associated shall be responsible for the fees and expenses of counsel of the other Party and such other Party shall be indemnified for all Liabilities incurred in connection with such Action in accordance with the provisions set forth in this Article VI.

 

(f)                                   At any time, at the request of any Party, each Party shall cause each member of its respective Group and to the extent practicable each other Person on whose behalf it released Liabilities pursuant to this Section 6.1 to execute and deliver releases reflecting the provisions hereof.

 

Section 6.2.                       Indemnification by Infrastructurco.  Except as otherwise specifically set forth in any provision of this Agreement or any Ancillary Agreement, following the Effective Time, Infrastructurco shall indemnify, defend and hold harmless the Flowco Indemnitees from and against any and all Indemnifiable Losses arising out of, by reason of or otherwise in connection with (i) the Infrastructurco Liabilities, including the failure of any member of the Infrastructurco Group or any other Person to pay, perform or otherwise discharge any Infrastructurco Liability in accordance with its respective terms, whether prior to, on or after the Effective Time, or (ii) any breach by any member of the Infrastructurco Group of any provision of this Agreement or any Ancillary Agreement, unless such Ancillary Agreement expressly provides for separate indemnification therein, in which case any such indemnification claims shall be made thereunder.  Following the Effective Time, without limiting the generality of the foregoing, Infrastructurco shall indemnify, defend and hold harmless the Flowco Indemnitees from and against any and all Indemnifiable Losses to the extent set forth on Schedule 6.2.

 

Section 6.3.                       Indemnification by Flowco.  Except as otherwise specifically set forth in any provision of this Agreement or of any Ancillary Agreement, Flowco shall indemnify, defend

 

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and hold harmless the Infrastructurco Indemnitees from and against any and all Indemnifiable Losses arising out of, by reason of or otherwise in connection with (i) the Flowco Liabilities or the Notes, including the failure of any member of the Flowco Group or any other Person to pay, perform or otherwise discharge any Flowco Liability or the Notes in accordance with its respective terms, whether prior to, on or after the Effective Time or (ii) any breach by Flowco or any member of the Flowco Group of any provision of this Agreement or any Ancillary Agreement, unless such Ancillary Agreement expressly provides for separate indemnification therein, in which case any such indemnification claims shall be made thereunder.  Following the Effective Time, without limiting the generality of the foregoing, Flowco shall indemnify, defend and hold harmless the Infrastructurco Indemnitees from and against any and all Indemnifiable Losses to the extent set forth on Schedule 6.3.

 

Section 6.4.                       Procedures for Indemnification.

 

(a)                                 An Indemnitee shall give the Indemnifying Party notice of any matter that an Indemnitee has determined has given or could give rise to a right of indemnification under this Agreement or any Ancillary Agreement (other than a Third Party Claim which shall be governed by Section 6.4(b)), as promptly as practicable, stating the amount of the Indemnifiable Loss claimed, if known, and method of computation thereof, and containing a reference to the provisions of this Agreement in respect of which such right of indemnification is claimed by such Indemnitee or arises; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure.

 

(b)                                 If a claim or demand (including the commencement of an Action) is made against a Infrastructurco Indemnitee or a Flowco Indemnitee (each, an “Indemnitee”) by any Third Party as to which such Indemnitee is or may be entitled to indemnification pursuant to this Agreement or any Ancillary Agreement (a “Third Party Claim”), such Indemnitee shall notify the Party which is or may be required pursuant to this Article VI or pursuant to any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) in writing, and in reasonable detail (which may be satisfied by providing copies of all notices and documents received by the Indemnitee relating to the Third Party Claim), of the Third Party Claim promptly (and in any event within ten (10) Business Days) after receipt by such Indemnitee of written notice of the Third Party Claim; provided, however, that the failure to provide notice of any such Third Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure.

 

(c)                                  Other than in the case of a Liability being managed by a Party in accordance with any Ancillary Agreement, an Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and seek to settle or compromise any Third Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, that is reasonably acceptable to the applicable Indemnitees, if it gives notice of its intention to do so to the applicable Indemnitees within thirty (30) days of the receipt of such notice from such Indemnitees.  After notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third Party Claim, such Indemnitee shall have the right to employ separate counsel and to participate in (but not control) the defense, compromise, or

 

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settlement thereof, at its own expense and, in any event, shall cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses, pertinent Information, materials and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party.  In the event of a conflict of interest between the Indemnifying Party and the applicable Indemnitee(s), or in the event that any Third Party Claim seeks equitable relief which would restrict or limit the future conduct of the Indemnitee’s business or operations, such Indemnitee(s) shall be entitled to retain, at the Indemnifying Party’s expense, separate counsel and to participate in (but not control) the defense, compromise, or settlement of that portion of the Third Party Claim that involves such conflict of interest or seeks equitable relief with respect to the Indemnitee(s).

 

(d)                                 If an Indemnifying Party elects not to assume responsibility for defending a Third Party Claim, or fails to notify an Indemnitee of its election as provided in Section 6.4(c), such Indemnitee may defend such Third Party Claim at the cost and expense of the Indemnifying Party.  If the Indemnitee is conducting the defense against any such Third Party Claim, the Indemnifying Party shall cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses, pertinent Information, material and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee.

 

(e)                                  Unless the Indemnifying Party has failed to assume the defense of the Third Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third Party Claim without the consent of the Indemnifying Party, which consent shall not be unreasonably withheld or delayed.  If an Indemnifying Party has failed to assume the defense of the Third Party Claim within the time period specified in clause (c) above, it shall not be a defense to any obligation to pay any amount in respect of such Third Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability.

 

(f)                                   In the case of a Third Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third Party Claim without the consent of the Indemnitee, which consent may not be unreasonably withheld, unless such settlement or compromise is solely for monetary damages, does not involve any finding or determination of wrongdoing or violation of Law by the Indemnitee and provides for a full, unconditional and irrevocable release of the Indemnitee from all Liability in connection with the Third Party Claim.

 

(g)                                  Except as otherwise provided in Section 10.19, absent actual and intentional fraud by an Indemnifying Party, the indemnification provisions of this Article VI shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or losses resulting from any breach of this Agreement (including with respect to monetary or compensatory damages or losses arising out of or relating to, as the case may be, any Flowco Liability or Infrastructurco Liability), and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article VI against any Indemnifying Party.  The remedies

 

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provided in this Article VI shall be cumulative and shall not preclude assertion by any Indemnitee of any other rights or the seeking of any and all other remedies against any Indemnifying Party.

 

(h)                                 Notwithstanding the foregoing, to the extent any Ancillary Agreement provides procedures for indemnification that differ from the provisions set forth in this Section 6.4, the terms of the Ancillary Agreement will govern.

 

(i)                                     Any Indemnitee that has made a claim for indemnification pursuant to this Section 6.4 shall use commercially reasonable efforts to mitigate any Indemnifiable Losses in respect thereof.

 

(j)                                    The provisions of this Article VI shall apply to Third Party Claims that are already pending or asserted as well as Third Party Claim brought or asserted after the date of this Agreement.  There shall be no requirement under this Section 6.4 to give a notice with respect to any Third Party Claim that exists as of the Effective Time.  The Parties acknowledge that Liabilities for Actions (regardless of the parties to the Actions) may be partly Infrastructurco Liabilities and partly Flowco Liabilities.  If the Parties cannot agree on the allocation of any such Liabilities for Actions, they shall resolve the matter pursuant to the procedures set forth in Article VIII.  Neither Party shall file Third Party claims or cross-claims against the other Party or the members of its Group in an Action in which a Third Party Claim is being resolved.

 

Section 6.5.                       Indemnification Payments.  Indemnification required by this Agreement, including this Article VI, shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or an Indemnifiable Loss or Liability incurred.

 

Section 6.6.                       Additional Matters; Survival of Indemnities.

 

(a)                                 The indemnity and contribution agreements contained in this Agreement, including this Article VI¸ shall remain operative and in full force and effect, regardless of (i) any investigation made by or on behalf of any Indemnitee; and (ii) the knowledge by the Indemnitee of Liabilities for which it might be entitled to indemnification or contribution hereunder.

 

(b)                                 The rights and obligations of each Party and their respective Indemnitees relating to indemnity and contribution under this Agreement, including this Article VI, shall survive (i) the sale or other transfer by any Party or its Affiliates of any Assets or businesses or the assignment by it of any and all Liabilities and (ii) any merger, consolidation, business combination, sale of all or substantially all of the Assets, restructuring, recapitalization, reorganization or similar transaction involving either Party or any member of its Group.

 

Section 6.7.                       Indemnification Obligations Net of Insurance Proceeds; Contribution.

 

(a)                                 Insurance Proceeds.  The Parties intend that any Liability subject to indemnification or contribution pursuant to this Agreement or any Ancillary Agreement shall be reduced by any Insurance Proceeds or other amounts actually recovered (net of any out-of-pocket costs or expenses incurred in the collection thereof) from any Person by or on behalf of the Indemnitee in respect of any indemnifiable Liability.  Accordingly, the amount which an Indemnifying Party is required to pay to any Indemnitee shall be reduced by any Insurance

 

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Proceeds or any other amounts theretofore actually recovered (net of any out-of-pocket costs or expenses incurred in the collection thereof) by or on behalf of the Indemnitee in respect of the related Liability.  If an Indemnitee receives a payment required by this Agreement from an Indemnifying Party in respect of any Liability (an “Indemnity Payment”) and subsequently receives Insurance Proceeds or any other amounts in respect of the related Liability, then the Indemnitee shall pay to the Indemnifying Party an amount equal to the excess of the Indemnity Payment received over the amount of the Indemnity Payment that would have been due if the Insurance Proceeds or such other amounts (net of any out-of-pocket costs or expenses incurred in the collection thereof) had been received, realized or recovered before the Indemnity Payment was made.

 

(b)                                 Insurers and Other Third Parties Not Relieved.  The Parties hereby agree that an insurer or other Third Party that would otherwise be obligated to pay any amount shall not be relieved of the responsibility with respect thereto or have any subrogation rights with respect thereto by virtue of any provision contained in this Agreement or any Ancillary Agreement, and that no insurer or any other Third Party shall be entitled to a “windfall” (e.g., a benefit they would not be entitled to receive in the absence of the indemnification or release provisions) by virtue of any provision contained in this Agreement or any Ancillary Agreement.  Each Party shall use commercially reasonable efforts to collect or recover, or allow the Indemnifying Party to collect or recover, any Insurance Proceeds that may be collectible or recoverable respecting the Liabilities for which indemnification may be available under this Agreement, including this Article VI.  Notwithstanding the foregoing, an Indemnifying Party may not delay making any indemnification payment required under the terms of this Agreement, or otherwise satisfying any indemnification obligation, pending the outcome of any proceeding to collect or recover Insurance Proceeds, and an Indemnitee need not attempt to collect any Insurance Proceeds prior to making a claim for indemnification or receiving any Indemnity Payment otherwise owed to it under this Agreement or any Ancillary Agreement.

 

(c)                                  Contribution.  If the indemnification provided for in this Article VI is unavailable for any reason to an Indemnitee in respect of any Indemnifiable Loss, then the Indemnifying Party shall, in accordance with this Section 6.7(c), contribute to the Losses incurred, paid or payable by such Indemnitee as a result of such Indemnifiable Loss in such proportion as is appropriate to reflect the relative fault of Flowco and each other member of the Flowco Group, on the one hand, and Infrastructurco and each other member of the Infrastructurco Group, on the other hand, in connection with the circumstances which resulted in such Indemnifiable Loss.  With respect to any Losses arising out of or related to information contained in the Distribution Disclosure Documents or other securities law filing, the relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact relates to information supplied by the Flowco Business or a member of the Flowco Group, on the one hand, or the Infrastructurco Business or a member of the Infrastructurco Group, on the other hand.  All other information in the Distribution Disclosure Documents shall be deemed supplied by the members of the Flowco Group.  With respect to Pre-Separation Disclosure, all disclosure shall be deemed supplied by the Infrastructurco Business or the members of the Infrastructurco Group.

 

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Section 6.8.        Characterization of Indemnification and Reimbursement Payments.  For all Tax purposes, Infrastructurco and Flowco agree to treat any indemnification or reimbursement or other similar payment made hereunder (other than any payment of interest accruing after the Distribution Date) as an adjustment to the amount of Flowco Assets transferred by the Infrastructurco Group to the Flowco Group in connection with the Separation.

 

ARTICLE VII

 

CONFIDENTIALITY; ACCESS TO INFORMATION

 

Section 7.1.        Provision of Corporate Records.  Other than in circumstances in which indemnification is sought pursuant to Article VI (in which event the provisions of such Article will govern) and without limiting the applicable provisions of Article VI, and subject to appropriate restrictions for classified, privileged or Confidential Information and subject further to any restrictions or limitations contained in Section 5.2 or elsewhere in this Article VII:

 

(a)           After the Effective Time, upon the prior written request by Flowco for Information which relates to (x) any member of the Flowco Group or the conduct of the Flowco Business (including Flowco Assets and Flowco Liabilities), as the case may be, up to the Effective Time, or (y) any Ancillary Agreement, Infrastructurco shall provide, as soon as reasonably practicable following the receipt of such request, appropriate copies of such Information (or the originals thereof if Flowco has a reasonable need for such originals) in the possession or control of Infrastructurco or any of its Affiliates.

 

(b)           After the Effective Time, upon the prior written request by Infrastructurco for Information which relates to (x) any member of the Infrastructurco Group or the conduct of the Infrastructurco Business (including Infrastructurco Assets and Infrastructurco Liabilities), as the case may be, up to the Effective Time, or (y) any Ancillary Agreement, Flowco shall provide, as soon as reasonably practicable following the receipt of such request, appropriate copies of such Information (or the originals thereof if Infrastructurco has a reasonable need for such originals) in the possession or control of Flowco or any of its Affiliates.

 

Section 7.2.        Access to Information.

 

(a)           Other than in circumstances in which indemnification is sought pursuant to Article VI (in which event the provisions of such Article will govern) and without limiting the applicable provisions of Article VI, and subject to any restrictions or limitations contained in Section 5.2 or elsewhere in this Article VII, from and after the Effective Time, each of Infrastructurco and Flowco shall afford to the other and its authorized accountants, counsel and other designated representatives reasonable access during normal business hours, subject to appropriate restrictions for classified, privileged or confidential information and to the requirements of any applicable Law, to the personnel, properties, and Information of such Party and its Subsidiaries insofar as such access is reasonably required by the other Party, and reasonably relates to (x) such other Party or the conduct of its business prior to the Effective Time or (y) any Ancillary Agreement; provided, however, in the event that a Party determines that any such access or the provision of any such information (including information requested under Section 5.2 or Section 7.1) would be commercially detrimental in any material respect, violate any Law or Contract with a Third Party or waive any attorney-client privilege, the work

 

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product doctrine or other applicable privilege, the Parties shall take all reasonable measures (and, to the extent applicable, shall use commercially reasonable efforts to obtain the Consent from any Third Party required to make such disclosure without violating a Contract with a Third Party) to permit compliance with such information request in a manner that avoids any such harm, violation or consequence.  Each of Infrastructurco and Flowco shall inform their respective officers, employees, agents, consultants, advisors, authorized accountants, counsel and other designated representatives who have or have access to the other Party’s Confidential Information or other information provided pursuant to Section 5.2 or this Article VII of their obligation to hold such information confidential in accordance with the provisions of this Agreement.

 

(b)           Notwithstanding anything herein to the contrary, from and after the Effective Time until the end date specified in a written notice delivered by one Party to the other Party (the “Shared Access Period”), Infrastructurco agrees to cooperate with Flowco and the members of the Flowco Group to enable Flowco and the members of the Flowco Group and their respective authorized accountants, counsel and other designated representatives to obtain access to Information relating to the Flowco Business that is in the custody of any third party records management repository to which Infrastructurco has transferred information, including but not limited to Iron Mountain.

 

(c)           Infrastructurco and Flowco each acknowledge and agree that each Party possesses certain Information reflecting the operations of the other Party for periods prior to the Effective Time in such archived electronic format as described in Schedule 7.2(c) (the “Archived Data”).  Subject to the provisions of Section 7.7 below, each Party agrees to maintain the Archived Data in a manner materially consistent with the treatment of such Archived Data as of the Effective Date; provided, however, that neither Party is required to maintain any specific storage format, license, system, reporting functionality for such Archived Data or specific personnel to provide access to the Archived Data.  Access to the Archived Data will remain under the sole discretion and control of the custodian Party and, except as specifically set forth on Schedule 7.2(c), no personnel of either Party will be granted direct access to the other Party’s network or systems and any requests for delivery of Archived Data shall be governed by the provisions of Section 7.2(a).

 

Section 7.3.        Witness Services.  At all times from and after the Effective Time, each of Infrastructurco and Flowco shall use its commercially reasonable efforts to make available to the other, upon reasonable written request, its and its Group’s officers, directors, employees and agents (taking into account the business demands of such individuals) as witnesses to the extent that (i) such Persons may reasonably be required to testify in connection with the prosecution or defense of any Action in which the requesting Party may from time to time be involved (except for claims, demands or Actions in which one or more members of one Group is adverse to one or more members of the other Group) and (ii) there is no conflict in the Action between the requesting Party and the other Party.

 

Section 7.4.        Confidentiality.

 

(a)           Notwithstanding any termination of this Agreement, from and after the Effective Time until the date that is ten (10) years after the Distribution Date, the Parties shall hold, and shall each cause their respective officers, employees, agents, consultants and advisors

 

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to hold, in strict confidence, and not to disclose or release or use, for any ongoing or future commercial purpose, without the prior written consent of the other Party, any and all Confidential Information concerning the other Party (and the members of its respective Group and Business); provided, that the Parties may disclose, or may permit disclosure of, Confidential Information (i) to their respective auditors, attorneys, financial advisors, bankers and other appropriate consultants and advisors who have a need to know such information for auditing and other appropriate purposes and are informed of their obligation to hold such information confidential to the same extent as is applicable to the Parties and in respect of whose failure to comply with such obligations, the applicable Party will be responsible, (ii) if the Parties or any of the members of their respective Groups are required or compelled to disclose any such Confidential Information by judicial or administrative process or by other requirements of Law or stock exchange rule, or (iii) as necessary in order to permit a Party to prepare and disclose its financial statements, or other required disclosures; provided, further, that each Party (and members of its Group as necessary) may use, or may permit use of, Confidential Information of the other Party in connection with such first Party performing its obligations, or exercising its rights, under this Agreement or any Ancillary Agreement.  Notwithstanding the foregoing, in the event that any demand or request for disclosure of Confidential Information is made pursuant to clause (ii) above, each Party, as applicable, shall promptly notify the other of the existence of such request or demand and shall provide the other a reasonable opportunity to seek an appropriate protective order or other remedy, which such Parties will cooperate in obtaining.  In the event that such appropriate protective order or other remedy is not obtained, the Party whose Confidential Information is required to be disclosed shall or shall cause the other applicable Party or Parties to furnish, or cause to be furnished, only that portion of the Confidential Information that is legally required to be disclosed and shall take commercially reasonable steps to ensure that confidential treatment is accorded such information.

 

(b)           Notwithstanding anything to the contrary set forth herein, (i) the Parties shall be deemed to have satisfied their obligations hereunder with respect to Confidential Information if they exercise at least the same degree of care that applies to SPX’s confidential and proprietary information pursuant to policies in effect as of the Effective Time and (ii) confidentiality obligations provided for in any Contract between each Party or the members of its Group and their respective employees shall remain in full force and effect.  Notwithstanding anything to the contrary set forth herein, Confidential Information of any Party in the possession of and used by any other Party as of the Effective Time may continue to be used by such Party in possession of the Confidential Information in and only in the operation of the Flowco Business (in the case of the Flowco Group) or the Infrastructurco Business (in the case of the Infrastructurco Group).

 

(c)           Each Party acknowledges that it and the other members of its Group may have in their possession confidential or proprietary information of Third Parties that was received under confidentiality or non-disclosure agreements with such Third Party prior to the Effective Time.  Such Party will hold in strict confidence the confidential and proprietary information of Third Parties to which they or any other member of their respective Groups has access, in accordance with the terms of any Contracts entered into prior to the Effective Time between one or more members of the such Party’s Group (whether acting through, on behalf of, or in connection with, the separated Businesses) and such Third Parties.

 

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Section 7.5.        Privileged Matters.

 

(a)           Pre-Separation Services.  The Parties recognize that legal and other professional services that have been and will be provided prior to the Effective Time have been and will be rendered for the collective benefit of each of the members of the Infrastructurco Group and the Flowco Group, and that each of the members of the Infrastructurco Group and the Flowco Group should be deemed to be the client with respect to such pre-separation services for the purposes of asserting all privileges which may be asserted under applicable Law.  No Party may waive any privilege which could be asserted under any applicable Law, and in which any other Party has a shared privilege, without the consent of the other Party.

 

(b)           Post-Separation Services.  The Parties recognize that legal and other professional services will be provided following the Effective Time which will be rendered solely for the benefit of Infrastructurco or Flowco or their successors or assigns, as the case may be.  With respect to such post-separation services, the Parties agree as follows:

 

(i)            Infrastructurco shall be entitled, in perpetuity, to control the assertion or waiver of all privileges in connection with privileged information which relates solely to the Infrastructurco Business, whether or not the privileged information is in the possession of or under the control of Infrastructurco or Flowco or any member of its Group or their respective successors or assigns.  Infrastructurco shall also be entitled, in perpetuity, to control the assertion or waiver of all privileges in connection with privileged information that relates solely to the subject matter of any claims constituting Infrastructurco Liabilities, now pending or which may be asserted in the future, in any Action, lawsuits or other proceedings initiated against or by Infrastructurco or any member of its Group, whether or not the privileged information is in the possession of or under the control of Infrastructurco or Flowco or any member of its Group or their respective successors or assigns; and

 

(ii)           Flowco shall be entitled, in perpetuity, to control the assertion or waiver of all privileges in connection with privileged information which relates solely to the Flowco Business, whether or not the privileged information is in the possession of or under the control of Infrastructurco or Flowco or their successors or assigns.  Flowco shall also be entitled, in perpetuity, to control the assertion or waiver of all privileges in connection with privileged information that relates solely to the subject matter of any claims constituting Flowco Liabilities, now pending or which may be asserted in the future, in any lawsuits or other proceedings initiated against or by Flowco or any member of its Group, whether or not the privileged information is in the possession of or under the control of Infrastructurco or Flowco or any member of its Group or their respective successors or assigns.

 

(iii)          The Parties agree that they shall have a shared privilege, with equal right to assert or waive, subject to the restrictions in this Section 7.5, with respect to all privileges not allocated pursuant to the terms of Section 7.5(b)(i) and 7.5(b)(ii).  All privileges relating to any claims, proceedings, litigation, disputes, or other matters which involve both Infrastructurco and Flowco in respect of

 

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which both Parties retain any responsibility or Liability under this Agreement, shall be subject to a shared privilege among them.

 

(c)           No Party may waive any privilege which could be asserted under any applicable Law, and in which any other Party has a shared privilege, without the consent of the other Party.  If a dispute arises between or among the Parties or their respective Group members regarding whether a privilege should be waived to protect or advance the interest of any Party, each Party agrees that it will not withhold consent to waiver for any purpose except to protect its own legitimate interests.

 

(d)           Upon receipt by any Party or by any member of its Group thereof of any subpoena, discovery or other request which arguably calls for the production or disclosure of information subject to a shared privilege or as to which another Party has the sole right hereunder to assert a privilege, or if any Party obtains knowledge that any of its or any of its Group members’ current or former directors, officers, agents or employees have received any subpoena, discovery or other requests which arguably calls for the production or disclosure of such privileged information, such Party shall promptly notify the other Party or Parties of the existence of the request and shall provide the other Party or Parties a reasonable opportunity to review the information and to assert any rights it or they may have under this Section 7.5 or otherwise to prevent the production or disclosure of such privileged information.

 

(e)           The transfer of all Information pursuant to this Agreement is made in reliance on the agreement of Infrastructurco and Flowco as set forth in Section 7.4 and this Section 7.5 to maintain the confidentiality of privileged information and to assert and maintain all applicable privileges.  The access to Information being granted pursuant to Section 7.1 and Section 7.2, the agreement to provide witnesses and individuals pursuant to Section 7.3, the furnishing of notices and documents and other cooperative efforts contemplated by this Section 7.5, and the transfer of privileged information between and among the Parties and the members of their respective Groups pursuant to this Agreement shall not be deemed a waiver of any privilege that has been or may be asserted under this Agreement or otherwise.

 

Section 7.6.        Ownership of Information.  Any Information owned by one Party or any of the members of its Group that is provided to a requesting Party pursuant to this Article VII or Section 5.2 shall be deemed to remain the property of the providing Party.  Unless specifically set forth herein, nothing contained in this Agreement shall be construed as granting or conferring rights of license or otherwise in any such Information.

 

Section 7.7.        Retention of Records.  Except as otherwise required by Law or agreed in writing, or as otherwise provided in any Ancillary Agreement, each Party shall use commercially reasonable efforts to comply with its records retention policy, as amended or revised from time to time, in the retention and destruction of all Information in the possession of such Party or any other member of its Group substantially relating to the other Party, any other member of its Group or its Business, its Assets or Liabilities, this Agreement or the Ancillary Agreements.

 

Section 7.8.        Other Agreements.  The rights and obligations granted under this Article VII are subject to any specific limitations, qualifications or additional provisions on the sharing, exchange or confidential treatment of information, or privileged matter with respect thereto, set forth in any Ancillary Agreement.

 

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Section 7.9.        Compensation for Providing Information.  A Party requesting Information pursuant to this Article VII agrees to reimburse the providing Party for the reasonable, out-of-pocket expenses, if any, of copying and otherwise complying with the respect with respect to such Information (including any reasonable costs and expenses incurred in any review of Information for purposes of protecting any privilege thereunder or any other restrictions on the disclosure of such Information).

 

ARTICLE VIII

 

DISPUTE RESOLUTION

 

Section 8.1.        Negotiation.

 

(a)           In the event of a controversy, dispute or claim arising out of, in connection with, or in relation to the interpretation, performance, nonperformance, validity, termination or breach of, this Agreement or any Ancillary Agreement (unless such Ancillary Agreement expressly provides that disputes thereunder will not be subject to the resolution procedures set forth in this Article VIII) or otherwise related to the transactions contemplated hereby or thereby (but excluding any controversy, dispute or claim arising out of any Contract with a Third Party if such Third Party is a necessary party to such controversy, dispute or claim) (collectively, “Agreement Disputes”), the general counsel or chief legal officer (as appropriate) of the relevant Parties (or such other person designated by the relevant Party) shall negotiate for a minimum of sixty (60) days to attempt to settle such Agreement Dispute (“Negotiation Period”).  The Negotiation Period shall commence on the date of receipt by a Party of written notice of such Agreement Dispute (“Dispute Notice”).  Within thirty (30) days of receipt of the Dispute Notice, the receiving Party shall submit to the other Party a written response.

 

(b)           Notwithstanding anything to the contrary contained in this Agreement or any Ancillary Agreement, in the event of any Agreement Dispute with respect to which a Dispute Notice has been delivered in accordance with this Section 8.1 (i) the relevant Parties shall not assert the defenses of statute of limitations and laches with respect to the period beginning after the date of receipt of the Dispute Notice, and (ii) any contractual time period or deadline under this Agreement or any Ancillary Agreement to which such Agreement Dispute relates occurring after the Dispute Notice is received shall be tolled by the service of a Dispute Notice.  Such tolling-period shall terminate at the conclusion of the arbitration proceeding or one hundred eighty (180) days after the date of issuance of the Dispute Notice if no arbitration proceeding has commenced by that date.

 

(c)           Nothing said or disclosed, nor any document produced, in the course of any negotiations, conferences and discussions in connection with efforts to settle an Agreement Dispute that is not otherwise independently discoverable shall be offered or received as evidence or used for impeachment or for any other purpose in any arbitration or other proceeding, but shall be considered as to have been disclosed for settlement purposes.

 

Section 8.2.        Statute of Limitations.  No arbitration proceeding may be commenced or prosecuted if the claim asserted therein would be barred by the statute of limitations applicable if the claim were being asserted in a state court for the State of Delaware for all state law claims and in a federal court in the State of Delaware for all federal law claims.

 

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Section 8.3.        Arbitration.  If the Agreement Dispute has not been resolved for any reason after sixty (60) days have elapsed from the receipt by a Party of a Dispute Notice, such Agreement Dispute shall be exclusively and finally determined, at the request of any relevant Party, by arbitration conducted where the Parties agree it would be most convenient, and in the absence of agreement in Charlotte, North Carolina, before and in accordance with the American Arbitration Association (“AAA”) Commercial Arbitration Rules then currently in effect, except as modified herein (the “Rules”).

 

(a)           Selection of Arbitrators.

 

(i)            The Agreement Dispute shall be heard and determined by either one (1) or three (3) arbitrators, as may be agreed upon by the Parties.  If the Parties are unable to agree upon the number of arbitrators and a claim or counterclaim involves at least $1,000,000, then three arbitrators shall hear and determine the case.  If the Parties are unable to agree upon the number of arbitrators and each claim and counterclaim is less than $1,000,000, then one arbitrator shall hear and determine the case.

 

(ii)           For Agreement Disputes heard and determined by one (1) arbitrator, the arbitrator shall be agreed to by the Parties within twenty (20) days of receipt by the respondent of a copy of the demand for arbitration or in default thereof appointed by the AAA in accordance with the Rules.

 

(iii)          For Agreement Disputes heard and determined by three (3) arbitrators, each Party shall appoint an arbitrator within twenty (20) days of receipt by respondent of a copy of the demand for arbitration.  The two (2) Party-appointed arbitrators shall have twenty (20) days from the appointment of the second arbitrator to agree on a third arbitrator who shall chair the arbitral tribunal.  Any arbitrator not timely appointed by the Parties shall be appointed by the AAA in accordance with the Rules.

 

(iv)          All arbitrators shall be neutral and disinterested, and there shall be no ex parte contact with any arbitrator during the pendency of the arbitration proceeding.

 

(b)           Disputes Concerning Arbitration.  Any controversy concerning the jurisdiction of the arbitrators, whether an Agreement Dispute is arbitrable, whether arbitration has been waived, whether an assignee of this Agreement is bound to arbitrate, or as to the interpretation of enforceability of this Article VIII shall be determined by the arbitrators.

 

(c)           Arbitration Procedures.

 

(i)            Any hearing to be conducted shall be held no later than one hundred eighty (180) days following appointment of the arbitrators or as soon thereafter as practicable as determined in the sole discretion of the arbitrators.

 

(ii)           The arbitrators, consistent with the expedited nature of arbitration, shall permit limited discovery only of documents directly related to the issues in

 

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dispute.  There shall be no more than three (3) depositions per Party and no deposition shall be more than eight (8) hours.

 

(iii)          In resolving any Agreement Dispute, the Parties intend that the arbitrators shall apply the substantive Laws of the State of Delaware, without regard to any choice of law principles thereof that would mandate the application of the Laws of another jurisdiction.

 

(d)           Pre-Hearing Procedure and Disposition.  Nothing contained herein is intended to or shall be construed to prevent any Party from applying to any court of competent jurisdiction for interim measures or other provisional relief in connection with the subject matter of any Agreement Disputes, including to compel a Party to arbitrate any Agreement Dispute, to prevent irreparable harm prior to the appointment of the arbitral tribunal or to require witnesses to obey subpoenas issued by the arbitrators.  Without prejudice to such provisional remedies as may be available under the jurisdiction of a court, the arbitral tribunal shall have full authority to grant provisional remedies and to direct the Parties to request that any court modify or vacate any temporary or preliminary relief issued by such court, and to award damages for the failure of any Party to respect the arbitral tribunal’s orders to that effect.  The Parties agree to accept and honor any orders relating to interim or provisional remedies that are issued by the arbitrators and agree that any such interim order or remedy may be enforced, as necessary, in any court of competent jurisdiction.

 

(e)           Awards.  The arbitrators shall make an award and issue a reasoned opinion in writing setting forth the basis for such award within sixty (60) days following the close of the hearing on the merits.  The arbitrators shall be entitled, if appropriate, to award any remedy in such proceedings that is permitted under this Agreement and applicable Law, including monetary damages, specific performance and other forms of legal and equitable relief.  The Parties hereby waive any claim to exemplary, punitive, multiple or similar damages in excess of compensatory damages, attorneys’ fees, costs and expenses of arbitration, except as may be expressly required by statute or as necessary to indemnify a Party for a Third Party Claim and the arbitrators are not empowered to and shall not award such damages.  Any final award must provide that the Party against whom an award is issued shall comply with the order within a specified period of time, not to exceed thirty (30) days.

 

(f)            Finality of Awards.  The Parties intend that the provisions to arbitrate set forth herein be valid, enforceable and irrevocable, and any award rendered by the arbitrators shall be final and binding on the Parties.  The Parties agree to comply and cause the members of their applicable Group to comply with any award made in any such arbitration proceedings and agree to enforcement of or entry of judgment upon such award in any court of competent jurisdiction.

 

(g)           Costs and Fees.  Except as otherwise provided in any Ancillary Agreement, the arbitrator shall award the prevailing party, if any, as determined by the arbitrator all of its costs and fees of arbitration.  If any Party attempts, unsuccessfully, to prevent an Agreement Dispute from being arbitrated such Party shall reimburse the prevailing party for all costs and fees incurred in compelling arbitration.  As used in this Section, costs and fees of arbitration shall mean reasonable attorneys’ fees and expenses, litigation support expenses, the arbitrators’ fees, AAA administrative fees and expert fees.

 

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(h)           Adherence to Time Limits.  In accepting appointment, each of the arbitrators shall commit that his or her schedule permits him or her to devote the reasonably necessary time and attention to the arbitration proceedings and to resolving the Agreement Dispute within the time periods set by this Agreement and by the Rules.  Any time limits set out in this Article VIII or in the Rules may be modified upon written agreement of the Parties and the arbitrators or by order of the arbitrators for good cause shown.  Any failure of the arbitrators to comply with such time limits or to render a final award within the time specified shall not impair the validity of the award or cause the award to be void or voidable, nor shall it be a basis for challenge of the validity or enforceability of the award or of the arbitration proceedings.

 

(i)            Confidentiality of Proceedings.  Without limiting the provisions of the Rules, unless otherwise agreed in writing by or among the relevant Parties or permitted by this Agreement or as may be required by law or any regulatory authority, the relevant Parties shall keep, and shall cause the members of their applicable Group to keep, confidential all matters relating to the arbitration or the award.  The arbitral award shall be confidential; provided that such award may be disclosed (i) to the extent reasonably necessary in any proceeding brought to enforce this agreement to arbitrate or any arbitral award or for entry of a judgment upon the award and (ii) to the extent otherwise required by Law or regulatory authority.

 

Section 8.4.        Continuity of Service and Performance.  During the course of dispute resolution pursuant to the provisions of this Article VIII, the Parties will continue to provide all other services and honor all other commitments under this Agreement and each Ancillary Agreement with respect to all matters not subject to such dispute resolution.

 

ARTICLE IX

 

INSURANCE

 

Section 9.1.        Assignment of Rights.  Effective as of the Effective Time, and subject to Section 2.7, SPX, on its behalf and on behalf of its Affiliates, hereby assigns, transfers, conveys and delivers to Flowco, and Flowco hereby accepts, all rights to, proceeds from, and all claims of SPX and its Affiliates (or any of them) for coverage, defense, indemnification, payment, reimbursement, recoupment, or any other benefits provided under any Third Party SPX Policies in connection with Flowco Liabilities.  This assignment includes, but is not limited to, any and all chose in action rights arising from or related to Flowco Liabilities.  In accordance with the assignment of insurance rights and claims in this Section 9.1, Flowco shall have the right to make claims for coverage for Flowco Liabilities under the Third Party SPX Policies, including providing notice and tender of claims to insurers.  The Parties shall reasonably cooperate as necessary to effectuate further the assignment of rights and claims in this Section 9.1 and in Flowco’s pursuit of insurance coverage under the Third Party SPX Policies for Flowco Liabilities, including by making available to Flowco copies of the Policies, and cooperating in actions that are necessary or helpful to perfect or secure the right of Flowco to obtain coverage for Flowco Liabilities under the Third Party SPX Policies.  Flowco may take whatever action it deems reasonable to effectuate the assignment of insurance rights and claims in this Section 9.1 and to secure coverage under the Third Party SPX Policies for Flowco Liabilities, at its sole cost and expense.  Such actions may include filing any legal proceeding for declaratory judgment or damages, in its own name or the name of one or more of the Parties, against an insurer issuing or

 

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subscribing to one or more of the Third Party SPX Policies, and/or bringing an action or asserting a claim against any such insurer for compensatory or punitive damages for breach of contract, breach of the covenant of good faith and fair dealing, violation of applicable insurance laws, or violation of other legal obligations arising out of the acts or omissions of such insurers in connection with Flowco Liabilities.

 

Section 9.2.        Third Party SPX Policies.

 

(a)           SPX shall use commercially reasonable efforts to obtain, or to cause to be obtained, any material Consent, release, substitution or amendment required to novate, assign by endorsement, or amend (with assumption, as applicable) to add Flowco as a named insured party to, each of the Novated Third Party SPX Liability Policies, so that (i) such Third Party SPX Policies will continue to provide Flowco and any other member of the Flowco Group with access to and coverage under the applicable Third Party SPX Policies, and (ii) Flowco and any other member of the Flowco Group may submit, administer, manage, litigate and settle claims under the applicable Novated Third Party SPX Liability Policies.  To the extent that any novations, endorsements or amendments contemplated by this Section 9.2(a) shall not have been consummated at or prior to the Effective Time, the Parties shall cooperate to effect such novations, endorsements or amendments as promptly following the Effective Time as shall be practicable.

 

(b)           With respect to any Third Party SPX Policy (other than Novated Third Party SPX Liability Policies that are novated as contemplated by Section 9.2(a) at or prior to the Effective Time) that may cover a loss or casualty with respect to the Flowco Business, Infrastructurco will, and will cause the applicable insurance companies or members of the Infrastructurco Group that are insured thereunder (i) to continue to provide Flowco and any other member of the Flowco Group with access to and coverage under the applicable Third Party SPX Policies, and (ii) to the extent requested by (and, in accordance with the reasonable instructions of) Flowco, submit, administer, manage, litigate and settle claims on behalf of Flowco or any other member of the Flowco Group under the applicable Third Party SPX Policies; provided, that Flowco shall be responsible for any and all applicable deductibles, self-insured retentions, retrospective premiums, claims-handling charges, co-payments or any other charge or fee legally due and owing to Third Parties relating to such claims.  Flowco shall reimburse Infrastructurco for its reasonable, documented costs and expenses incurred by Infrastructurco in connection with its submission, administration, management, litigation and settlement of claims on behalf of Flowco or any other member of the Flowco Group in accordance with the foregoing to the extent such costs and expenses are not covered under Third Party SPX Policies.  Flowco shall reimburse Infrastructurco within sixty (60) days following the receipt of an applicable monthly invoice from Infrastructurco, for any payments of claims made by or on behalf of Flowco, including any and all applicable deductibles, self-insured retentions, retrospective premiums, and reasonable third party costs ,co-payments or any other charge or fee legally due and owing to Third Parties relating to such Flowco claims. Reasonable documented costs and expenses incurred by Infrastructurco, litigation and settlement of claims on behalf of Flowco or any other member of the Flowco Group in accordance with the foregoing to the extent such costs and expenses are not covered under Third Party SPX Policies will be reimbursed to Infrastructurco by Flowco. None of Infrastructurco or any member of the Infrastructurco Group shall settle any Insured Claim of Flowco or any member of Flowco Group under the Third Party SPX Policies without first obtaining the approval of Flowco or such member of Flowco Group.

 

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(c)           Infrastructurco shall not, without the consent of Flowco, provide any insurance company with a release or amend, modify or waive any rights under any Third Party SPX Policy if such release, amendment, modification or waiver thereunder would materially adversely affect any rights of any member of the Flowco Group with respect to insurance coverage otherwise afforded to the Flowco Group; provided, however, that the foregoing shall not (i) preclude any member of Infrastructurco Group from presenting any claim or from exhausting any policy limit, (ii) require any member of the Infrastructurco Group to pay any premium, or (iii) require any member of the Infrastructurco Group to renew or extend or continue any Third Party SPX Policy in force beyond its current term.

 

Section 9.3.        Director and Officer Liability Insurance.  For the six (6)-year period commencing at the Effective Time, Infrastructurco shall maintain in effect United States directors’ and officers’ liability insurance coverage with reputable insurance carriers in an amount not less than $100,000,000 for the first three (3) years and $80,000,000 for the next three (3) years, respectively, on terms and conditions no less advantageous to the directors and officers than the coverage currently provided under SPX’s current policies.  Such insurance coverage shall cover the directors and officers of SPX and its Subsidiaries prior to the Effective Time with respect to acts or omissions that occurred prior to the Effective Time.  If Infrastructurco or any of its successors or assigns (i) consolidates or merges into any other Person and shall not be the continuing or surviving corporation or entity in such consolidation or merger or (ii) transfers all or substantially all of its properties and assets to any Person, then, and in each such case, proper provision shall be made so that the successors and assigns of Infrastructurco shall assume all of the obligations set forth in this Section 9.3.

 

Section 9.4.        Cooperation.  The Parties agree to use their commercially reasonable efforts to cooperate with respect to the various insurance matters contemplated by this Article IX.

 

Section 9.5.        Miscellaneous.  Nothing in this Agreement shall be deemed to restrict Flowco or Infrastructurco, or any members of their respective Groups, from acquiring at its own expense any Policy in respect of any Liabilities or covering any period.  Except as otherwise provided in this Agreement or any Ancillary Agreement, from and after the Effective Time, Flowco and Infrastructurco shall be responsible for obtaining and maintaining their respective insurance programs for their risk of loss and such insurance arrangements shall be separate programs apart from each other and each will be responsible for its own premiums, retentions, deductibles, or other charges or fees for such insurance programs.

 

ARTICLE X

 

MISCELLANEOUS

 

Section 10.1.     Complete Agreement; Construction.  This Agreement and the Ancillary Agreements (and the exhibits and schedules thereto) shall constitute the entire agreement between the Parties with respect to the subject matter hereof and thereof and shall supersede all previous negotiations, commitments and writings with respect to such subject matter.  Notwithstanding anything to the contrary in this Agreement or any Ancillary Agreement, in the event of any conflict between the terms and conditions of the body of this Agreement or any Ancillary Agreement and the terms and conditions of any Schedule, the terms and conditions of

 

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such Schedule shall control (it being understood that the Parties intend to include in the Schedules any exceptions to the general rules described in the body of this Agreement and to give full effect to such exceptions, with respect to the matters expressly set forth therein).  Notwithstanding anything to the contrary in this Agreement or any Ancillary Agreement, in the case of any conflict between the provisions of this Agreement and the provisions of any Ancillary Agreement, the provisions of this Agreement shall control; provided, however, that in relation to (i) any matters concerning Taxes, the Tax Matters Agreement shall prevail over this Agreement and any other Ancillary Agreement; (ii) any matters governed by the Employee Matters Agreement, the Employee Matters Agreement shall prevail over this Agreement or any other Ancillary Agreement, and (iii) the provision of support and other services after the Effective Time by the Flowco Group to the Infrastructurco Group, and vice versa, the Transition Services Agreement shall prevail over this Agreement or any other Ancillary Agreement.  It is the intention of the Parties that the Transfer Documents shall be consistent with the terms of this Agreement and the other Ancillary Agreements.  The Parties agree that the Transfer Documents are not intended and shall not be considered in any way to enhance, modify or decrease any of the rights or obligations of Infrastructurco, Flowco or any member of their respective Groups from those contained in this Agreement and the other Ancillary Agreements.

 

Section 10.2.     Ancillary Agreements.  Notwithstanding anything to the contrary contained in this Agreement, this Agreement is not intended to address, and should not be interpreted to address, the matters specifically and expressly covered by the Ancillary Agreements (excluding the Transfer Documents and the Reorganization Documents).

 

Section 10.3.     Counterparts.  This Agreement may be executed in more than one counterparts, all of which shall be considered one and the same agreement, and, except as otherwise expressly provided in Section 1.3, shall become effective when one or more such counterparts have been signed by each of the Parties and delivered to the other Parties.  Execution of this Agreement or any other documents pursuant to this Agreement by facsimile or other electronic copy of a signature shall be deemed to be, and shall have the same effect as, executed by an original signature.

 

Section 10.4.     Survival of Agreements.  Except as otherwise contemplated by this Agreement or any Ancillary Agreement, all covenants and agreements of the Parties contained in this Agreement and each Ancillary Agreement shall survive the Effective Time and remain in full force and effect in accordance with their applicable terms.

 

Section 10.5.     Expenses.

 

(a)           Except as otherwise expressly provided in this Agreement (including paragraphs (b) and (c) of this Section 10.5 and Schedule 10.5(a)) or any Ancillary Agreement, or as otherwise agreed to in writing by the Parties, all out-of-pocket fees and expenses incurred on or prior to the Effective Time in connection with the preparation, execution, delivery and implementation of this Agreement and any Ancillary Agreement, the Separation, the Information Statement, the plan of Separation and the Distribution and the consummation of the transactions contemplated hereby and thereby shall be borne and paid by the Person incurring such cost or Liability.

 

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(b)           Except as otherwise expressly provided in this Agreement (including paragraphs (b) and (c) of this Section 10.5) or any Ancillary Agreement, or as otherwise agreed to in writing by the Parties, each Party shall bear its own costs and expenses incurred or accrued after the Effective Time; provided, however, that any costs and expenses incurred in obtaining any Consents or novation from a Third Party in connection with the assignment to or assumption by a Party or a member of its Group of any Contracts in connection with the Separation shall be borne by the Party or the member of its Group to which such Contract is being assigned.

 

(c)           With respect to any expenses incurred pursuant to a request for further assurances granted under Section 2.10, the Parties agree that any and all fees and expenses incurred by either Party shall be borne and paid by the requesting Party; it being understood that no Party shall be obliged to incur any Third-Party accounting, consulting, advisor, banking or legal fees, costs or expenses, and the requesting Party shall not be obligated to pay such fees, costs or expenses, unless such fee, cost or expense shall have had the prior written approval of the requesting Party.  Notwithstanding the foregoing, each Party shall be responsible for paying its own internal fees, costs and expenses (e.g., salaries of personnel).  With respect to any fees, costs and expenses incurred by either Party in satisfying its obligations under Section 5.2, the requesting Party shall be responsible for the other Party’s fees, costs and expenses.

 

Section 10.6.     Notices.  All notices, requests, claims, demands and other communications under this Agreement and, to the extent applicable and unless otherwise provided therein, under each of the Ancillary Agreements, as between the Parties, shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt unless the day of receipt is not a Business Day, in which case it shall be deemed to have been duly given or made on the next Business Day) by delivery in person, by overnight courier service, by facsimile with receipt confirmed (followed by delivery of an original via overnight courier service) or by registered or certified mail (postage prepaid, return receipt requested) to the respective Parties at the following addresses (or at such other address for a Party as shall be specified in a notice given in accordance with this Section 10.6):

 

If to Infrastructurco:

 

SPX Corporation

13320-A Ballantyne Corporate Place

Charlotte, NC  28277

Attention:  General Counsel

Telecopy number: _________

 

If to Flowco:

 

SPX FLOW, Inc.

13320 Ballantyne Corporate Place

Charlotte, NC  28277

Attention:  General Counsel

Telecopy number:  704.752.7448

 

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Section 10.7.     Waivers.  The failure of any Party to require strict performance by any other Party of any provision in this Agreement will not waive or diminish that Party’s right to demand strict performance thereafter of that or any other provision hereof.

 

Section 10.8.     Amendments.  Subject to the terms of Section 10.10, this Agreement may not be modified or amended except by an agreement in writing signed by each of the Parties.

 

Section 10.9.     Assignment.  The provisions of this Agreement and the obligations and rights hereunder shall be binding upon, inure to the benefit of and be enforceable by (and against) the Parties and their respective successors (by merger, acquisition of assets or otherwise) and permitted transferees and assigns to the same extent as if such successor or permitted transferees and assigns had been an original party to the Agreement.  Notwithstanding the foregoing, this Agreement shall not be assignable, in whole or in part, by any Party without the prior written consent of the other Party, and any attempt to assign any rights or obligations arising under this Agreement without such consent shall be null and void; provided, that (i) a Party may assign any or all of its rights and obligations under this Agreement to any of its Affiliates, but no such assignment shall release the assigning Party from any liability or obligation under this Agreement, (ii) a Party may assign this Agreement in whole in connection with a bone fide third party merger transaction in which such Party is not the surviving entity or the sale by such Party of all or substantially all of its Assets, and upon the effectiveness of such assignment under this clause (ii) the assigning Party shall be released from all of its obligations under this Agreement if the surviving entity of such merger or the transferee of such Assets shall agree in writing, in form and substance reasonably satisfactory to the other Party, to be bound by the terms of this Agreement as if named as a “Party” hereto, and (iii) a Party may pledge or collaterally assign its rights under this Agreement to any financing source for it or any member of its Group, but no such pledge or collateral assignment shall release the pledging or assigning Party from any liability or obligation under this Agreement.

 

Section 10.10.   Termination, Etc.  Notwithstanding anything to the contrary herein, this Agreement (including Article VI (Indemnification)) may be terminated and the Distribution may be amended, modified or abandoned at any time prior to the Effective Time by and in the sole and absolute discretion of SPX without the approval of Flowco or the stockholders of SPX.  In the event of such termination, this Agreement shall become null and void and no Party, nor any of its officers, directors or employees, shall have any Liability to any other Party or any other Person.  After the Effective Time, this Agreement may not be terminated except by an agreement in writing signed by each of the Parties.

 

Section 10.11.   Payment Terms.

 

(a)           Except as expressly provided to the contrary in this Agreement or in any Ancillary Agreement, any amount to be paid or reimbursed by any Party (and/or a member of such Party’s Group), on the one hand, to any other Party (and/or a member of such Party’s Group), on the other hand, under this Agreement shall be paid or reimbursed hereunder within five (5) Business Days after presentation of an undisputed invoice or a written demand therefor and setting forth, or accompanied by, reasonable documentation or other reasonable explanation supporting such amount.

 

55



 

(b)           Except as expressly provided to the contrary in this Agreement or in any Ancillary Agreement, any amount not paid when due pursuant to this Agreement shall bear interest at a rate per annum equal to the then effective Prime Rate plus 2% (or the maximum legal rate, whichever is lower), calculated for the actual number of days elapsed, accrued from the date on which such payment was due up to the date of the actual receipt of payment.

 

Section 10.12.   No Circumvention.  The Parties agree not to directly or indirectly take any actions, act in concert with any Person who takes an action, or cause or allow any member of any such Party’s Group to take any actions (including the failure to take a reasonable action) such that the resulting effect is to materially undermine the effectiveness of any of the provisions of this Agreement or any Ancillary Agreement (including adversely affecting the rights or ability of any Party to successfully pursue indemnification, contribution or payment pursuant to Article VI).

 

Section 10.13.   Subsidiaries.  Each of the Parties shall cause (or with respect to an Affiliate that is not a Subsidiary, shall use commercially reasonable efforts to cause) to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth herein to be performed by any Subsidiary or Affiliate of such Party or by any Business Entity that becomes a Subsidiary or Affiliate of such Party on and after the Effective Time.  This Agreement is being entered into by Infrastructurco and Flowco on behalf of themselves and the members of their respective Groups (the Infrastructurco Group and the Flowco Group).  This Agreement shall constitute a direct obligation of each such entity and shall be deemed to have been readopted and affirmed on behalf of any Business Entity that becomes a Subsidiary or Affiliate of such Party on and after the Effective Time.  Either Party shall have the right, by giving notice to the other Party, to require that any Subsidiary of the other Party execute a counterpart to this Agreement to become bound by the provisions of this Agreement applicable to such Subsidiary.

 

Section 10.14.   Third Party Beneficiaries.  Except as explicitly provided in Article VI relating to Indemnitees and except as specifically provided in any Ancillary Agreement, this Agreement is solely for the benefit of the Parties and should not be deemed to confer upon third parties any remedy, claim, liability, reimbursement, cause of action or other right in excess of those existing without reference to this Agreement.

 

Section 10.15.   Exhibits and Schedules; Title and Headings.  The Exhibits and Schedules attached hereto are incorporated herein by reference and shall be construed with and as an integral part of this Agreement to the same extent as if the same had been set forth verbatim herein. Titles and headings to Sections and Articles are inserted for the convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.

 

Section 10.16.   Public Announcements.  From and after the Effective Time, Infrastructurco and Flowco shall consult with each other before issuing, and give each other the opportunity to review and comment upon, that portion of any press release or other public statements that relates to the transactions contemplated by this Agreement or the Ancillary Agreements, and shall not issue any such press release or make any such public statement prior to such consultation, except (a) as may be required by applicable Law, court process or by

 

56



 

obligations pursuant to any listing agreement with any national securities exchange or national securities quotation system; or (b) for disclosures made that are substantially consistent with disclosure contained in any Distribution Disclosure Document or Pre-Separation Disclosure.

 

Section 10.17.   Governing Law.  This Agreement shall be governed by and construed in accordance with the internal Laws, and not the Laws governing conflicts of Laws, of the State of Delaware.

 

Section 10.18.   Consent to Jurisdiction.  Subject to the provisions of Article VIII, each of the Parties irrevocably submits to exclusive jurisdiction of (i) the Court of Chancery of the State of Delaware (unless the Court of Chancery of the State of Delaware declines to accept jurisdiction over a particular matter, in which case, any state or federal court within the State of Delaware) and (ii) so long as both Parties are headquartered in North Carolina, any state or federal court within the State of North Carolina, for the purposes of any suit, action or other proceeding to compel arbitration, for provisional relief in aid of arbitration in accordance with Article VIII, for provisional relief to prevent irreparable harm, or for the enforcement of any award issued thereunder.  Each of the Parties further agrees that service of any process, summons, notice or document by United States registered mail to such Party’s respective address set forth in Section 10.6 shall be effective service of process for any action, suit or proceeding in the Delaware or North Carolina courts with respect to any matters to which it has submitted to jurisdiction in this Section 10.18.  Each of the Parties irrevocably and unconditionally waives any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement or the transactions contemplated hereby in the Delaware courts or, so long as both Parties are headquartered in North Carolina, the North Carolina courts, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim that any such action, suit or proceeding brought in any Delaware court or, so long as both Parties are headquartered in North Carolina, any North Carolina court has been brought in an inconvenient forum.

 

Section 10.19.   Specific Performance.  The Parties agree that irreparable damage would occur in the event that the provisions of this Agreement were not performed in accordance with their specific terms.  Accordingly, it is hereby agreed that the Parties shall be entitled to (i) an injunction or injunctions to enforce specifically the terms and provisions hereof in any arbitration in accordance with Article VIII, (ii) provisional or temporary injunctive relief in accordance therewith in any Delaware Court, and (iii) enforcement of any such award of an arbitral tribunal or a Delaware Court in any court of the United States, or any other any court or tribunal sitting in any state of the United States or in any foreign country that has jurisdiction, this being in addition to any other remedy or relief to which they may be entitled.

 

Section 10.20.   Waiver of Jury Trial.  SUBJECT TO ARTICLE VIII AND SECTIONS 10.18 AND 10.19, EACH OF THE PARTIES HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY COURT PROCEEDING PERMITTED HEREUNDER.  EACH OF THE PARTIES HEREBY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS

 

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AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.20.

 

Section 10.21.   Severability.  In the event any one or more of the provisions contained in this Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby, and the Parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions, the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

 

Section 10.22.   Construction.  The Parties have participated jointly in the negotiation and drafting of this Agreement.  This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting or causing any instrument to be drafted.

 

Section 10.23.   Authorization.  Each of the Parties hereby represents and warrants that it has the power and authority to execute, deliver and perform this Agreement, that this Agreement has been duly authorized by all necessary corporate action on the part of such Party, that this Agreement constitutes a legal, valid and binding obligation of each such Party enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar Laws affecting creditors’ rights generally and general equity principles.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the Parties have caused this Separation and Distribution Agreement to be duly executed as of the date first above written.

 

 

 

SPX CORPORATION

 

 

 

 

 

By:

/s/ Stephen A. Tsoris

 

Name: Stephen A. Tsoris

 

Title: Vice President, Secretary and General Counsel

 

 

 

 

 

SPX FLOW, INC.

 

 

 

 

 

By:

/s/ Stephen A. Tsoris

 

Name: Stephen A. Tsoris

 

Title: Vice President and Secretary

 

[Signature Page to Separation and Distribution Agreement]

 




Exhibit 3.1

 

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

OF

SPX FLOW, INC.

 

SPX FLOW, Inc., a corporation organized and existing under the laws of the State of Delaware (the “Corporation”), hereby certifies as follows:

 

(a)                   The Corporation filed its original Certification of Incorporation with the Secretary of State of the State of Delaware on February 11, 2015.

 

(b)                   This Amended and Restated Certificate of Incorporation, which restates and integrates and also further amends the provisions of the original Certificate of Incorporation, has been duly adopted in accordance with Sections 242 and 245 of the General Corporation Law of the State of Delaware, and reads in its entirety as follows:

 

FIRST. The name of the corporation is SPX FLOW, Inc..

 

SECOND. The address of its registered office in the State of Delaware is 1209 Orange Street, in the City of Wilmington, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company.

 

THIRD. The nature of the business, or objects or purposes to be conducted or promoted by the Corporation are:

 

(a)           To manufacture, purchase or otherwise acquire invest in, or mortgage, pledge, sell, assign and transfer or otherwise dispose of, trade, deal in and with goods, wares and merchandise and property of every class and description, including but not limited to the manufacture and sale of automotive engine parts and related products.

 

(b)           To have one or more offices, to carry on all or any of its operations and business and without restriction or limit as to amount to purchase or otherwise acquire, hold, own, mortgage, sell, convey or otherwise dispose of, real and personal property of every class and description in any of the states, districts, territories or possessions of the United States, and in any and all foreign countries, subject to the laws of such state, district, territory, possession or country.

 

(c)           To purchase, hold, sell and transfer the shares of its own capital stock; provided it shall not use its funds or property for the purchase of its own shares of capital stock when such use would cause any impairment of its capital except as otherwise permitted by law, and provided further that shares of its own capital stock belonging to it shall not be voted upon directly or indirectly.

 

(d)           To engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware.

 



 

FOURTH.

 

1.   Authorized Shares. The total number of authorized shares of stock of all classes which the Corporation shall have authority to issue is three hundred three million (303,000,000), of which three million (3,000,000) shall be shares of Preferred Stock, without par value, and three hundred million (300,000,000) shall be shares of Common Stock, par value $0.01 per share.

 

2.   Preferred Stock.

 

(a)           The Preferred Stock shall be issuable in series, and in connection with the issuance of any series of Preferred Stock and to the extent now or hereafter permitted by the laws of the State of Delaware, the Board of Directors is authorized to fix by resolution the designation of each series, the stated value of the shares of each series, the dividend rate of each series and the date or dates and other provisions respecting the payment of dividends, the provisions, if any, for a sinking fund for the shares of each series, the preferences of the shares of each series in the event of the liquidation or dissolution of the Corporation, the provisions, if any, respecting the redemption of the shares of each series and, subject to requirements of the laws of the State of Delaware, the voting rights, the terms, if any, upon which the shares of each series shall be convertible into or exchangeable for any other shares of stock of the Corporation and any other relative, participating, optional or other special rights, and qualifications, limitations or restrictions thereof, of the shares of each series.

 

(b)           Preferred Stock of any series redeemed, converted, exchanged, purchased, or otherwise acquired by the Corporation shall constitute authorized but unissued Preferred Stock.

 

(c)           All shares of any series of Preferred Stock, as between themselves, shall rank equally and be identical; and all series of Preferred Stock, as between themselves, shall rank equally and be identical except as set forth in resolutions of the Board of Directors authorizing the issuance of such series.

 

3.   Common Stock.

 

(a)           After dividends to which the holders of Preferred Stock may then be entitled under the resolutions creating any series thereof have been declared and after the Corporation shall have set apart the amounts required pursuant to such resolutions for the purchase or redemption of any series of Preferred Stock, the holders of Common Stock shall be entitled to have dividends declared in cash, property, or other securities of the Corporation out of any net profits or net assets of the Corporation legally available therefor.

 

(b)           In the event of the liquidation or dissolution of the Corporation’s business and after the holders of Preferred Stock shall have received amounts to which they are entitled under the resolutions creating such series, the holders of Common Stock shall be

 

2



 

entitled to receive ratably the balance of the Corporation’s net assets available for distribution.

 

(c)           Each share of Common Stock shall be entitled to one vote, but shall not be entitled to vote for the election of any directors who may be elected by vote of the Preferred Stock voting as a class.

 

4.   Preemptive Rights. No holder of any shares of the Corporation shall have any preemptive right to subscribe for or to acquire any additional shares of the Corporation of the same or of any other class, whether now or hereafter authorized or any options or warrants giving the right to purchase any such shares, or any bonds, notes, debentures or other obligations convertible into any such shares.

 

FIFTH.  The Corporation is to have perpetual existence.

 

SIXTH.  The private property of the stockholders shall not be subject to the payment of corporate debts to any extent whatever.

 

SEVENTH.  Except as otherwise fixed by resolution of the Board of Directors pursuant to the provisions of Article FOURTH hereof relating to the rights of the holders of Preferred Stock to elect directors as a class, the number of the directors of the Corporation shall be fixed from time to time by resolution of the Board of Directors. The directors, other than those who may be elected by the holders of Preferred Stock, shall be classified, with respect to the time for which they severally hold office, into three classes, as nearly equal in number as possible, designated Class I, Class II and Class III. The directors in Class I shall serve for an initial term expiring at the Corporation’s 2016 annual meeting of stockholders, the directors in Class II shall serve for an intial term expiring at the Corporation’s 2017 annual meeting of stockholders, and the directors in Class III shall serve for an intial term expiring at the Corporation’s 2018 annual meeting of stockholders, with each director in a class to hold office until his successor is elected and qualified. At the 2016 annual meeting of the stockholders of the Corporation and at each subsequent annual meeting of the stockholders of the Corporation, the successors of the class of directors whose term expires at that meeting shall be elected to hold office for a term expiring at the annual meeting of stockholders held in the third year following the year of their election. Advance notice of stockholder nominations for the election of directors shall be given in the manner provided in the By-Laws of the Corporation.

 

Except as otherwise fixed by resolution of the Board of Directors pursuant to the provisions of Article FOURTH hereof relating to the rights of the holders of Preferred Stock to elect directors as a class, newly created directorships resulting from any increase in the number of directors and any vacancies on the Board of Directors resulting from death, resignation, disqualification, removal or other cause shall be filled solely by the affirmative vote of a majority of the remaining directors then in office, even though less than a quorum of the Board of Directors. Any director elected in accordance with the preceding sentence shall be a member of the class of directors in which the new directorship was created (subject to the requirements of this Article SEVENTH that all classes be as nearly equal in number as possible) or in which the vacancy occurred and shall be submitted to a stockholder vote at the next annual meeting of stockholders.

 

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No decrease in the number of directors constituting the Board of Directors shall shorten the term of an incumbent director.

 

Subject to the rights of the holders of Preferred Stock to elect directors as a class, a director may be removed only for cause and only by the affirmative vote of the holders of 80% of the combined voting power of the then outstanding shares of stock entitled to vote generally in the election of directors, voting together as a single class.

 

In furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized:

 

1.   To adopt, amend and repeal the By-Laws of the Corporation. Any by-laws adopted by the directors under the powers conferred hereby may be amended or repealed by the directors or by the stockholders. Notwithstanding any provision in this Amended and Restated Certificate of Incorporation or the By-Laws of the Corporation to the contrary, Article II, Sections 3 and 7 and Article III, Sections 1, 2 and 3 of the By-Laws of the Corporation shall not be amended or repealed by the stockholders and no provision inconsistent therewith shall be adopted by the stockholders, in each case without the affirmative vote of the holders of at least 80% of the voting power of all the shares of the Corporation entitled to vote generally in the election of directors, voting together as a single class.

 

2.   To fix and determine, and to vary the amount of, the working capital of the Corporation, and to determine the use or investment of any assets of the Corporation, to set apart out of any of the funds of the Corporation available for dividends a reserve or reserves for any proper purpose and to abolish any such reserve or reserves.

 

3.   To authorize the purchase or other acquisition of shares of stock of the Corporation or any of its bonds, debentures, notes, scrip, warrants or other securities or evidences of indebtedness.

 

4.   Except as otherwise provided by law, to determine the places, within or without the State of Delaware, where any or all of the books of the Corporation shall be kept.

 

5.   To authorize the sale, lease or other disposition of any part or parts of the properties of the Corporation and to cease to conduct the business connected therewith or again to resume the same, as it may deem best.

 

6.   To authorize the borrowing of money, the issuance of bonds, debentures and other obligations or evidences of indebtedness of the Corporation, secured or unsecured, and the inclusion of provisions as to redeemability and convertibility into shares of stock of the Corporation or otherwise; and the mortgaging or pledging, as security for money borrowed or bonds, notes, debentures or other obligations issued by the Corporation, of any property of the Corporation, real or personal, then owned or thereafter acquired by the Corporation.

 

In addition to the powers and authorities herein or by statute expressly conferred upon it, the Board of Directors may exercise all such powers and do all such acts and things as may be exercised or done by the Corporation, subject, nevertheless, to the provisions of the laws of the

 

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State of Delaware, of this Amended and Restated Certificate of Incorporation and of the By-Laws of the Corporation.

 

Subject to any limitation in the By-Laws of the Corporation, the members of the Board of Directors shall be entitled to reasonable fees, salaries or other compensation for their services, as determined from time to time by the Board of Directors, and to reimbursement for their expenses as such members. Nothing herein contained shall preclude any director from serving the Corporation or its subsidiaries or affiliates in any other capacity and receiving compensation therefor.

 

Notwithstanding anything contained in this Amended and Restated Certificate of Incorporation to the contrary, the affirmative vote of the holders of at least 80% of the voting power of all shares of the Corporation entitled to vote generally in the election of directors, voting together as a single class, shall be required to alter, amend, adopt any provision inconsistent with or repeal this Article SEVENTH.

 

EIGHTH.  Both stockholders and directors shall have power, if the By-Laws of the Corporation so provide, to hold their meetings and to have one or more offices within or without the State of Delaware.

 

Except as otherwise fixed by resolution of the Board of Directors pursuant to the provisions of Article FOURTH hereof relating to the rights of the holders of Preferred Stock, any action required or permitted to be taken by the stockholders of the Corporation must be effected at a duly called annual or special meeting of such holders and may not be effected by any consent in writing by such holders. Except as otherwise required by law and subject to the rights of the holders of Preferred Stock, special meetings of stockholders may be called only by the Chairman on his own initiative, the President on his own initiative or by the Board of Directors pursuant to a resolution approved by a majority of the entire Board of Directors. Notwithstanding anything contained in this Amended and Restated Certificate of Incorporation to the contrary, the affirmative vote of the holders of at least 80% of the voting power of all shares of the Corporation entitled to vote generally in the election of directors, voting together as a single class, shall be required to alter, amend, adopt any provision inconsistent with or repeal this Article EIGHTH.

 

NINTH.  Whenever a compromise or arrangement is proposed between the Corporation and its creditors or any class of them and/or between the Corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of the Corporation or of any creditor or stockholder thereof, or on the application of any receiver or receivers appointed for the Corporation under the provisions of Section 291 of the General Corporation Law of the State of Delaware or on the application of trustees in dissolution or of any receiver or receivers appointed for the Corporation under the provisions of Section 279 of the General Corporation Law of the State of Delaware order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockholders of the Corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing three-fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of the Corporation, as the case may be, agree

 

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to any compromise or arrangement and to any reorganization of the Corporation as consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the said application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders or class of stockholders, of the Corporation, as the case may be, and also on the Corporation.

 

TENTH.  Except as otherwise provided in this Amended and Restated Certificate of Incorporation, the Corporation reserves the right to amend, alter, change or repeal any provision contained in this Amended and Restated Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation.

 

ELEVENTH.  No contract or other transaction between the Corporation and any person, firm, association or Corporation and no other act of the Corporation shall, in the absence of fraud, be invalidated or in any way affected by the fact that any of the directors of the Corporation are, directly or indirectly, pecuniarily or otherwise interested in such contract, transaction or other act or related to or interested in such person, firm, association or corporation as director, stockholder, officer, employee, member or otherwise. Any director of the Corporation individually, or any firm or association of which any director may be a member, may be a party to, or may be pecuniarily or otherwise interested in, any contract or transaction of the Corporation, provided that the fact that he individually or such firm or association is so interested shall be disclosed or known to the Board of Directors or a majority of such members thereof as shall be present at any meeting of the Board of Directors, or of any committee of directors having the powers of the full Board, at which action upon any such contract, transaction or other act is taken, and if such fact shall be so disclosed or known any director of the Corporation so related or otherwise interested may be counted in determining the presence of a quorum at any meeting of the Board of Directors or of such committee at which action upon any such contract, transaction or act shall be taken and may vote thereat with respect to such action with like force and effect as if he were not so related or interested. Any director of the Corporation may vote upon any contract or other transaction between the Corporation and any subsidiary or affiliated corporation without regard to the fact that he is also a director of such subsidiary or affiliated corporation.

 

TWELFTH.

 

(a)           A director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director’s duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the General Corporation Law of the State of Delaware, or (iv) for any transaction from which the director derived an improper personal benefit. If the General Corporation Law of the State of Delaware, or any other applicable law, is amended to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the General Corporation Law of the State of Delaware, or any other

 

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applicable law, as so amended. Any repeal, or modification of this Section (a) by the stockholders of the Corporation shall not adversely affect any right or protection of a director of the Corporation existing at the time of such repeal or modification.

 

(b)

 

(1)  Each person who was or is made a party or is threatened to be made a party to or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a “proceeding”), by reason of the fact that he or she or a person of whom he or she is the legal representative is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a director, officer or employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent or in any other capacity while serving as a director, officer, employee or agent, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the General Corporation Law of the State of Delaware, or any other applicable law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than said law permitted the Corporation to provide prior to such amendment), against all expense, liability and loss (including attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by such person in connection therewith and such indemnification shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of his or her heirs, executors and administrators; provided, however, that except as provided in paragraph (2) of this Section (b) with respect to proceedings seeking to enforce rights to indemnification, the Corporation shall indemnify any such person seeking indemnification in connection with a proceeding (or part thereof) initiated by such person only if such proceeding (or part thereof) was authorized by the Board of Directors. The right to indemnification conferred in this Section (b) shall be a contract right and shall include the right to be paid by the Corporation the expenses incurred in defending any such proceeding in advance of its final disposition; provided, however, that if the General Corporation Law of the State of Delaware, or any other applicable law, requires, the payment of such expenses incurred by a director or officer in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such person while a director or officer, including, without limitation, service to an employee benefit plan) in advance of the final disposition of a proceeding, shall be made only upon delivery to the Corporation of an undertaking by or on behalf of such director or officer, to repay all amounts so advanced if it shall ultimately be determined that such director or officer is not entitled to be indemnified under this Section (b) or otherwise.

 

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(2)  If a claim under paragraph (1) of this Section (b) is not paid in full by the Corporation within thirty days after a written claim has been received by the Corporation, the claimant may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant shall be entitled to be paid also the expense of prosecuting such claim. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking, if any is required, has been tendered to the Corporation) that the claimant has not met the standards of conduct which make it permissible under the General Corporation Law of the State of Delaware, or any other applicable law, for the Corporation to indemnify the claimant for the amount claimed, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors, stockholders or independent legal counsel) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the General Corporation Law of the State of Delaware, or any other applicable law, nor an actual determination by the Corporation (including its Board of Directors, stockholders or independent legal counsel) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct.

 

(3)  The right to indemnification and the payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this Section (b) shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, provision of this Amended and Restated Certificate of Incorporation, By-Law, agreement, vote of stockholders or disinterested directors or otherwise.

 

(4)  The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the General Corporation Law of the State of Delaware, or any other applicable law.

 

(5)  The Corporation may, to the extent authorized from time to time by the Board of Directors, grant rights to indemnification, and rights to be paid by the Corporation the expenses incurred in defending any proceeding in advance of its final disposition, to any employee or agent of the Corporation to the fullest extent of the provisions of this Section (b) with respect to the indemnification and advancement of expenses of directors and officers of the Corporation.

 

(6)  Any repeal or modification of this Section (b) by the stockholders of the Corporation shall not adversely affect any right or protection of a director,

 

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officer, employee or agent of the Corporation existing at the time of such repeal or modification.

 

THIRTEENTH.  Unless the Corporation consents in writing to the selection of an alternative forum, to the fullest extent permitted by law, the sole and exclusive forum for (a) any derivative action or proceeding brought on behalf of the Corporation, (b) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Corporation to the Corporation or the Corporation’s stockholders, (c) any action asserting a claim against the Corporation or any director or officer or other employee of the Corporation arising pursuant to the General Corporation Law of the State of Delaware or the Corporation’s certificate of incorporation or by-laws (as either may be amended from time to time), or (d) any action asserting a claim governed by the internal affairs doctrine of the State of Delaware shall be a state court located within the State of Delaware (or, if no state court located within the State of Delaware has jurisdiction, the federal district court for the District of Delaware).  Any person or entity purchasing or otherwise acquiring any interest in shares of capital stock of the Corporation shall be deemed to have notice of and consented to the provisions of this Article THIRTEENTH.

 

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IN WITNESS WHEREOF, this Amended and Restated Certificate of Incorporation, which restates and integrates and further amends the provisions of the Certificate of Incorporation of the Corporation, and which has been duly adopted in accordance with Sections 242 and 245 of the General Corporation Law of the State of Delaware, has been executed by its duly authorized officer as of September 22, 2015.

 

 

SPX FLOW, INC.

 

 

 

 

 

By:

/s/ Stephen A. Tsoris

 

Name: Stephen A. Tsoris

 

Title: Vice President, Secretary and General Counsel

 

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Exhibit 3.2

 

BY-LAWS

 

OF

 

SPX FLOW, INC.

 

(A Delaware Corporation)

 

Amended and Restated

 

Effective as of September 22, 2015

 



 

BY-LAWS

 

OF

 

SPX FLOW, INC.

(A Delaware Corporation)

 

ARTICLE I

 

Offices

 

Section 1.  The registered office of the corporation shall be in Wilmington, New Castle County, Delaware.

 

Section 2.  The corporation shall have its principal office at 13320 Ballantyne Corporate Place, Charlotte, North Carolina, and it may also have offices at such other places as the board of directors may from time to time determine.

 

ARTICLE II

 

Stockholders

 

Section 1.  Annual Meeting.  The annual meeting of stockholders for the election of directors and for the transaction of such other business as may be properly brought before the meeting shall be held on such date as the board of directors shall fix each year.  No business shall be conducted at an annual meeting except in accordance with the procedures set forth in these by-laws.  The presiding officer of an annual meeting shall, if the facts warrant, determine that business was not properly brought before the meeting in accordance with the provisions of these by-laws, and, if it is so determined, shall so declare to the meeting and any such business not properly brought before the meeting shall not be transacted.

 

To be properly brought before an annual meeting, (a) business must be specified in the notice of meeting, or any supplement thereto, given by or at the direction of the board of directors, (b) business must be otherwise properly brought before the meeting by or at the direction of the board of directors, (c) director nominations by a stockholder must be submitted pursuant to Section 1 of Article III, or (d) business other than director nominations must be otherwise properly brought before the meeting by a stockholder who (i) is a stockholder of record at the time of giving notice provided for in this Section and at the time of the annual meeting of stockholders, (ii) is entitled to vote at the meeting, and (iii) complies with the notice procedures as to such business set forth in this Section.  Clauses (c) and (d) of this paragraph shall be the exclusive means for a stockholder to submit business before an annual meeting of stockholders other than matters properly brought under Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and included in the corporation’s notice of meeting.

 

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For business to be properly brought before an annual meeting by a stockholder pursuant to Clause (d) of the preceding paragraph, such business must be a proper subject for stockholder action under the General Corporation Law of the State of Delaware and the secretary of the corporation must have received notice of such business in writing from the stockholder not later than the close of business on the one hundred and twentieth day, nor earlier than the one hundred and fiftieth day, prior to the anniversary date of the immediately preceding annual meeting; provided, however, that, subject to the last sentence of this paragraph, if an annual meeting is convened more than sixty days prior to, or delayed by more than forty-five days after, the anniversary date of the immediately preceding annual meeting, if no annual meeting was held in the preceding year, notice to be timely must be received by the secretary of the corporation from the stockholder not later than the close of business on the later of (i) the one hundred and twentieth day before such annual meeting, or (ii) if the first public announcement of the date of such annual meeting is less than one hundred days prior to the date of such annual meeting, the tenth day following the day on which public announcement of the date of such meeting is first made; and with respect to the 2016 annual meeting of stockholders, notice to be timely must be received by the secretary of the corporation from the stockholder not earlier than December 10, 2015 nor later than January 9, 2016.  A stockholder’s notice to the secretary of the corporation shall set forth as to each matter the stockholder proposes to bring before the annual meeting (a) a brief description of the business desired to be brought before the meeting, and (b) the reasons for conducting such business at the meeting.  In no event shall an adjournment, or postponement of an annual meeting for which the public announcement of the date thereof shall have been made, commence a new time period for the giving of notice by a stockholder.

 

Nothing in this Section shall be deemed to affect any rights of (a) stockholders to request inclusion of proposals in the corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act or (b) the holders of any series of preferred stock if and to the extent provided for under law, the certificate of incorporation or these by-laws.

 

Section 2.  Special Meetings.  Special meetings of the stockholders may be called only by the chairman, the president or the board of directors pursuant to a resolution approved by a majority of the entire board.  Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting of stockholders pursuant to the corporation’s notice of meeting.

 

Section 3.  Stockholder Action; How Taken.  Any action required or permitted to be taken by the stockholders of the corporation must be effected at a duly called annual or special meeting of such holders and may not be effected by any consent in writing by such holders.

 

Section 4.  Place of Meeting.  The board of directors may designate any place, either within or without Delaware, as the place of meeting for any annual or special meeting.

 

Section 5.  Notice of Meetings.  Written or printed notice stating the place, day and hour of the meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be delivered not less than ten nor more than sixty days before the date of the meeting, or in the case of a merger or consolidation, not less than twenty nor more than fifty days before the date of the meeting, either personally or by mail, by or at the direction of the

 

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chairman, or the president, or the secretary, or the officer or persons calling the meeting, to each stockholder of record entitled to vote at such meeting.  If mailed, such notice shall be deemed to be delivered when deposited in the United States mails in a sealed envelope addressed to the stockholder at his address as it appears on the records of the corporation with postage thereon prepaid.

 

Section 6.  Record Date.  For the purpose of determining (a) stockholders entitled to notice of or to vote at any meeting of stockholders, (b) stockholders entitled to receive payment of any dividend, or (c) stockholders for any other purpose, the board of directors may fix in advance a date as the record date for any such determination of stockholders, such date in any case to be not more than sixty days and not less than ten days, or in the case of a merger or consolidation not less than twenty days prior to the date on which the particular action, requiring such determination of stockholders is to be taken.

 

Section 7.  Quorum.  The holders of not less than one-third of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall be requisite and shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute, by the certificate of incorporation or by these by-laws.  If, however, such quorum shall not be present or represented at any meeting of the stockholders, the chairman of the meeting shall have the power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented.  At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified.

 

When a quorum is present at any meeting, the vote of the holders of a majority of the stock having voting power present in person or represented by proxy and entitled to vote on the subject matter shall decide any question brought before such meeting, unless the question is one upon which by express provision of the statutes or of the certificate of incorporation or of these by-laws, a different vote is required in which case such express provision shall govern and control the decision of such question.

 

Section 8.  Notices; Required Stockholder Information.  A stockholder’s notice of director nominations to be brought before an annual or special meeting as permitted by Section 1 of Article III and a stockholder’s notice of other business to be brought before an annual meeting as permitted by Clause (d) of Section 1 of this Article, shall, in addition to the information required by such Sections, set forth the following as to the stockholder giving the notice and the beneficial owner or owners, if any, on whose behalf the nomination or business proposal is made and their respective affiliates and associates:

 

(a)           the name and address of such stockholder, as they appear on the corporation’s stockholder records, and of the beneficial owner or owners, if any, and of each of their respective affiliates and associates in respect of which information is required to be provided pursuant to Clauses (b) or (c) below;

 

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(b)           the class and number of shares of capital stock or other securities of the corporation or any of its subsidiaries that are owned, whether of record or beneficially, by such stockholder, such beneficial owner or owners, if any, and each of their respective affiliates and associates, as of the date of such notice (which information shall be supplemented by such stockholder, such beneficial owner or owners, if any, and their respective affiliates and associates, not later than ten days after the record date for the meeting to disclose such ownership as of the record date);

 

(c)           a representation that such stockholder is a holder of record of stock of the corporation entitled to vote at such meeting and the beneficial owner or owners, if any, is the beneficial owner of stock of the corporation; and such stockholder (or its duly authorized representative) intends to appear in person or by proxy at the meeting to nominate the person or persons or present the business proposal, as specified in the notice;

 

(d)           a description of any agreement, arrangement or understanding (including any derivative or short positions, profit interests, options, hedging transactions, and borrowed or loaned shares) that has been entered into as of the date of such notice by, or on behalf of, the stockholder, the beneficial owner or owners, if any, or any of their respective affiliates or associates, the effect or intent of which is to mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of the stockholder or the beneficial owner, if any, or any of their respective affiliates or associates, with respect to shares of stock or other securities of the corporation or any of its subsidiaries, and a representation that the stockholder or the beneficial owner or owners, if any, will notify the corporation in writing of any such agreement, arrangement or understanding in effect as of the record date for the meeting promptly following the later of the record date or the date notice of the record date is first publicly disclosed;

 

(e)           any material interest of the stockholder or the beneficial owner or owners, if any, or any of their respective affiliates or associates in such director nomination or business proposal;

 

(f)            a description of all agreements, arrangements and understandings between such stockholder or the beneficial owner or owners, if any, or any of their respective affiliates or associates and any other person or persons (including their names) in connection with such director nomination or business proposal, including a description of all agreements, arrangements or understandings between such stockholder or the beneficial owner or owners, if any, or any of their respective affiliates or associates and each nominee and any other person or persons, naming such person or persons, pursuant to which the director nomination or nominations are to be made by the stockholder; and

 

(g)           any other information relating to such stockholder, beneficial owner or owners, if any, or any of their respective affiliates and associates that would be required by Section 14 of the Exchange Act and the rules and regulations promulgated thereunder to be included in a proxy statement or other filings of such stockholder, beneficial owner

 

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or owners, if any, or any of their respective affiliates and associates required to be made in connection with solicitations of proxies for the proposal or the election of directors in a contested election, as applicable, if Section 14 of the Exchange Act were applicable.

 

Section 9.  Procedure.  The order of business and all other matters of procedure at every meeting of stockholders shall be determined by the chairman of the meeting.  The board of directors shall appoint two or more inspectors of election to serve at every meeting of stockholders at which directors are to be elected.  The chairman of the meeting may adjourn or postpone a meeting of stockholders with or without the approval of the stockholders present and voting.  In no event shall the adjournment of an annual or special meeting commence a new time period for the giving of a stockholder’s notice as described in Section 1 of this Article or Section 1 of Article III.

 

ARTICLE III

 

Directors

 

Section 1.  Number, Election and Terms.  Except as otherwise fixed pursuant to the provisions of Article Fourth of the certificate of incorporation relating to the rights of the holders of any class or series of stock having a preference over the common stock as to dividends or upon liquidation to elect additional directors under specified circumstances, the number of directors shall be fixed from time to time by the board of directors but shall not be less than three.  The directors, other than those who may be elected by the holders of any class or series of stock having a preference over the common stock as to dividends or upon liquidation, shall be classified, with respect to the time for which they severally hold office, into three classes, as near equal in number as possible, designated Class I, Class II and Class III.  The directors in Class I shall serve for an initial term expiring at the 2016 annual meeting of stockholders, the directors in Class II shall serve for an initial term expiring at the 2017 annual meeting of stockholders, and the directors in Class III shall serve for an initial term expiring at the 2018 annual meeting of stockholders, with each director in a class to hold office until his or her successor is elected and qualified.  At the 2016 annual meeting of the stockholders and at each subsequent annual meeting of the stockholders, the successors of the class of directors whose term expires at that meeting shall be elected to hold office for a term expiring at the annual meeting of stockholders held in the third year following the year of their election.

 

The term the “entire board” as used in these by-laws means the total number of directors which the corporation would have if there were no vacancies.

 

Except as provided in Section 2 of this Article, each director shall be elected by the vote of the majority of the votes cast with respect to the director at any meeting for the election of directors at which a quorum is present, provided, however, that directors shall be elected by a plurality of the votes cast at any meeting of stockholders for which (i) the secretary of the corporation receives a notice that a stockholder has nominated a person for election to the board of directors in compliance with the advance notice requirements for stockholder nominees for director set forth in this Section and (ii) such nomination has not been withdrawn by such stockholder as of a date that is ten days in advance of the date the corporation files its definitive

 

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proxy statement with the Securities and Exchange Commission (regardless of whether or not thereafter revised or supplemented).  For purposes of this Section, a majority of the votes cast means that the number of shares voted “for” a director must exceed the number of shares voted “against” that director.  The Nominating & Governance Committee shall maintain procedures regarding the tender to the board of directors by directors of advance resignations to address majority voting.  The Nominating & Governance Committee shall make a recommendation to the board of directors on whether to accept or reject a resignation, or whether other action should be taken.  The board of directors shall act on the Committee’s recommendation and publicly disclose its decision and the rationale behind it in a Form 8-K filed with the Securities and Exchange Commission within ninety days from the date of the certification of the election results.

 

Subject to the rights of holders of any class or series of stock having a preference over the common stock as to dividends or upon liquidation, nominations for the election of directors may be made by the board of directors or a committee appointed by the board of directors or by any stockholder who (i) is a stockholder of record at the time of giving notice provided for in this Section and at the time of the meeting of stockholders at which the election of directors occurs, (ii) is entitled to vote at the meeting on the election of directors, and (iii) complies with the notice procedures as to such nominations as set forth in this Section.  For a stockholder to nominate candidates for the election of directors at an annual meeting of stockholders, the secretary of the corporation shall have received notice of such nomination in writing from the stockholder not later than the close of business on the one hundred and twentieth day, nor earlier than the one hundred and fiftieth day, prior to the anniversary date of the immediately preceding annual meeting; provided, however, that, subject to the last sentence of this paragraph, if an annual meeting is convened more than sixty days prior to, or delayed by more than forty five days after, the anniversary date of the immediately preceding annual meeting, or if no annual meeting was held in the preceding year, notice to be timely must be received by the secretary of the corporation from the stockholder not later than the close of business on the later of (i) the one hundred and twentieth day before such annual meeting or (ii) if the first public announcement of the date of such annual meeting is less than one hundred days prior to the date of such annual meeting, the tenth day following the day on which public announcement of the date of such meeting is first made; and with respect to the 2016 annual meeting of stockholders, notice to be timely must be received by the secretary of the corporation from the stockholder not earlier than December 10, 2015 nor later than January 9, 2016.  For a stockholder to nominate candidates for the election of directors at a special meeting of stockholders at which directors are to be elected, the secretary of the corporation shall have received notice of such nomination in writing from the stockholder not later than the close of business on the tenth day following the date on which public announcement of the date of such special meeting (and that directors will be elected at such special meeting) is first made.  A stockholder’s notice to the secretary of the corporation shall set forth: (a) the name and address of the person or persons to be nominated; (b) such other information regarding each nominee proposed by such stockholder that would be required by Section 14 of the Exchange Act and the rules and regulations promulgated thereunder to be included in a proxy statement or other filings of such stockholder, beneficial owner or owners, if any, or any of their respective affiliates and associates required to be made in connection with solicitations of proxies for the election of directors in a contested election, as applicable, if Section 14 of the Exchange Act were applicable; (c) the consent of each nominee to serve as a

 

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director of the corporation if so elected; and (d) a statement as to whether each nominee, if elected, intends to tender, promptly following such nominee’s election or re-election, an irrevocable resignation effective upon such nominee’s failure to receive the required vote for re-election at the next meeting at which such nominee would face re-election and the acceptance of such resignation by the board of directors, in accordance with the corporation’s Corporate Governance Guidelines.  In no event shall an adjournment, or postponement of an annual or special meeting for which the public announcement of the date thereof shall have been made, commence a new time period for the giving of notice by a stockholder.

 

The chairman of the meeting may refuse to acknowledge the nomination of any person not made in compliance with the foregoing procedure.

 

Section 2.  Newly Created Directorships and Vacancies. Except as otherwise fixed pursuant to the provisions of Article Fourth of the certificate of incorporation relating to the rights of the holders of any class or series of stock having a preference over the common stock as to dividends or upon liquidation to elect directors under specified circumstances, newly created directorships resulting from any increase in the number of directors and any vacancies on the board of directors resulting from death, resignation, disqualification, removal or other cause shall be filled solely by the affirmative vote of a majority of the remaining directors then in office, even though less than a quorum of the board of directors.  Any director elected in accordance with the preceding sentence shall be a member of the class of directors in which the new directorship was created (subject to the requirements of Section 1 of this Article III that all classes be as nearly equal in number as possible) or in which the vacancy occurred and shall be submitted to a stockholder vote at the next annual meeting of stockholders.  No decrease in the number of directors constituting the board of directors shall shorten the term of any incumbent director.

 

Section 3.  Removal.  Subject to the rights of any class or series of stock having a preference over the common stock as to dividends or upon liquidation to elect directors under specified circumstances, any director may be removed from office, for cause, only by the affirmative vote of the holders of 80% of the combined voting power of the then outstanding shares of stock entitled to vote generally in the election of directors, voting together as a single class.

 

Section 4.  Regular Meetings.  Regular meetings of the board of directors shall be held at such times and at such places as the board of directors may from time to time determine.

 

Section 5.  Special Meetings.  Special meetings of the board of directors may be called by or at the request of the chairman or the president or by any officer of the corporation upon the request of a majority of the entire board.  The person or persons authorized to call special meetings of the board of directors may fix any place, either within or without Delaware, as the place for holding any special meeting of the board of directors called by them.

 

Section 6.  Notice.  Notice of regular meetings of the board of directors need not be given.  Notice of every special meeting of the board of directors shall be given to each director at his usual place of business, or at such other address as shall have been furnished by him for the

 

8



 

purpose.  Such notice shall be given at least twenty-four hours before the meeting by telephone or by being personally delivered, mailed or telegraphed.  Such notice need not include a statement of the business to be transacted at, or the purpose of, any such meeting.

 

Section 7.  Quorum.  A majority of the entire board shall constitute a quorum for the transaction of business at any meeting of the board of directors, provided, that if less than a majority of the entire board is present at said meeting, a majority of the directors present may adjourn the meeting from time to time without further notice.  The act of the majority of the directors present at a meeting at which a quorum is present shall be the act of the board of directors unless the act of a greater number is required by the certificate of incorporation or these by-laws.

 

Section 8.  Compensation.  Directors who are also full time employees of the corporation shall not receive any compensation for their services as directors but they may be reimbursed for reasonable expenses of attendance.  By resolution of the board of directors, all other directors may receive either an annual fee or a fee for each meeting attended, or both, and expenses of attendance, if any, at each regular or special meeting of the board of directors; provided, that nothing herein contained shall be construed to preclude any director from serving the corporation in any other capacity and receiving compensation therefor.

 

Section 9.  Committees.  The board of directors may, by resolution passed by a majority of the entire board, designate one or more committees, each committee to consist of two or more of the directors of the corporation, which, to the extent provided in the resolution, shall have and may exercise the powers of the board of directors in the management of the business and affairs of the corporation and may authorize the seal of the corporation to be affixed to all papers which may require it.  Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the board of directors.  Each committee shall keep regular minutes of its meetings and report the same to the board of directors when required.

 

Section 10.  Director Emeritus.  The board of directors may by resolution appoint any former director who has retired from the board of directors as a Director Emeritus.  Directors Emeritus may, but are not required to, attend all meetings (regular and special) of the board of directors and will receive notice of such meetings; however, they shall not have the right to vote and they shall be excluded from the number of directors for quorum and other purposes.  Directors Emeritus shall be appointed for one year terms and may be reappointed for up to two additional one year terms.

 

Section 11.  Independence.  No nominee shall be eligible for election to the board of directors unless such nominee has provided such information as the corporation has reasonably requested to determine the eligibility of such nominee to serve as an independent director of the corporation.

 

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ARTICLE IV

 

Officers

 

Section 1.  Number.  The officers of the corporation shall be a chairman, a vice-chairman (if elected by the board of directors), a president, an executive vice president (if elected by the board of directors), one or more vice-presidents (the number thereof to be determined by the board of directors), a treasurer, a secretary and such other officers as may be elected in accordance with the provisions of this Article.

 

Section 2.  Election and Term of Office.  The officers of the corporation shall be elected annually by the board of directors at the first meeting of the board of directors held after each annual meeting of stockholders.  If the election of officers shall not be held at such meeting, such election shall be held as soon thereafter as convenient.  Vacancies may be filled or new offices created and filled at any meeting of the board of directors.  Each officer shall hold office until his successor shall have been duly elected and shall have qualified or until his death or until he shall resign or shall have been removed in the manner hereinafter provided.

 

Section 3.  Removal.  Any officer or agent elected or appointed by the board of directors may be removed by the board of directors whenever in its judgment the best interests of the corporation would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed.

 

Section 4.  Vacancies.  A vacancy in any office because of death, resignation, removal, disqualification or otherwise, may be filled by the board of directors for the unexpired portion of the term.

 

Section 5.  Chairman.  The chairman shall preside at all meetings of the stockholders and the board of directors.  If so appointed by the board of directors he shall be the chief executive officer of the corporation and shall have those duties and responsibilities described in Section 8 of this Article.  He shall perform such other duties as may be prescribed by the board of directors.

 

Section 6.  Vice-Chairman.  The vice-chairman (if elected by the board of directors) shall, in the absence of the chairman, preside at all meetings of the stockholders and the board of directors.  If so appointed by the board of directors, he shall be either the chief executive officer or the chief operating officer, or both, and he shall have those duties and responsibilities described in Sections 8 or 9 of this Article, as the case may be.  He shall perform such other duties as may be prescribed by the board of directors and by the chief executive officer if he does not have that position.

 

Section 7.  President.  The president shall be either the chief executive officer or the chief operating officer, or both, as determined by the board of directors, and shall have the duties and responsibilities described in Sections 8 and 9 of this Article, as the case may be.  In the absence of the chairman and vice-chairman, he shall preside at all meetings of the stockholders and board of directors.  He shall perform such other duties as may be prescribed by the board of directors and chief executive officer if he does not have that position.

 

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Section 8.  Chief Executive Officer.  The chief executive officer of the corporation shall be either the chairman, the vice-chairman or the president as determined by the board of directors.  The chief executive officer shall provide overall direction and administration of the business of the corporation, he shall interpret and apply the policies of the board of directors, establish basic policies within which the various corporate activities are carried out, guide and develop long range planning and evaluate activities in terms of objectives.  He may sign, with the secretary or any other proper officer of the corporation thereunto authorized by the board of directors, stock certificates of the corporation, any deeds, mortgages, bonds, contracts, or other instruments except in cases where the signing and execution thereof shall be required by law to be otherwise signed or executed, and he may execute proxies on behalf of the corporation with respect to the voting of any shares of stock owned by the corporation.  He shall have the power to (1) designate management committees of employees deemed essential in the operations of the corporation, its divisions or subsidiaries, and appoint members thereof, subject to the approval of the board of directors; (2) appoint certain employees of the corporation as vice presidents of one or several divisions or operations of the corporation, subject to the approval of the board of directors, provided however, that any vice president so appointed shall not be an officer of the corporation for any other purpose; and (3) appoint such other agents and employees as in his judgment may be necessary or proper for the transaction of the business of the corporation and in general shall perform all duties incident to the office of the chief executive.

 

Section 9.  Chief Operating Officer.  The chief operating officer (if elected by the board of directors) shall be either the vice-chairman or the president as determined by the board of directors.  The chief operating officer shall in general be in charge of all operations of the corporation and shall direct and administer the activities of the corporation in accordance with the policies, goals and objectives established by the chief executive officer and the board of directors.  In the absence of the chief executive officer, the chief operating officer shall assume the duties and responsibilities of the office of the chief executive.

 

Section 10.  Executive Vice President.  The executive vice president (if elected by the board of directors) shall report to either the chief executive officer or the chief operating officer as determined in the corporate organization plan established by the board of directors.  He shall direct and coordinate such major activities as shall be delegated to him by his superior officer in accordance with policies established and instructions issued by his superior officer, the chief executive officer, or the board of directors.

 

Section 11.  Vice Presidents.  The board of directors may elect one or several vice presidents.  Each vice president shall report to either the chief executive officer, the chief operating officer or the executive vice president as determined in the corporate organization plan established by the board of directors.  Each vice president shall perform such duties as may be delegated to him by his superior officers and in accordance with the policies established and instructions issued by his superior officer, the chief executive officer or the board of directors.  The board of directors may designate any vice president as a senior vice president and a senior vice president shall be senior to all other vice presidents and junior to the executive vice president.  In the event there be more than one senior vice president, then seniority shall be determined by and be the same as the annual order in which their names are presented to and acted on by the board of directors.

 

11



 

Section 12.  The Treasurer.  The treasurer shall (a) have charge and custody of and be responsible for all funds and securities of the corporation; receive and give receipts for moneys due and payable to the corporation from any source whatsoever, and deposit all such moneys in the name of the corporation in such banks, trust companies or other; (b) in general perform all the duties incident to the office of treasurer and such other duties as from time to time may be assigned to him by the chief executive officer, chief operating officer or by the board of directors.

 

Section 13.  The Secretary.  The secretary shall:  (a) keep the minutes of the meetings of the stockholders and the board of directors in one or more books provided for that purpose; (b) see that all notices are duly given in accordance with the provisions of these by-laws or as required by law; (c) be custodian of the corporate records and of the seal of the corporation and see that the seal of the corporation is affixed to all documents, the execution of which on behalf of the corporation under its seal is duly authorized in accordance with the provisions of these by-laws or as required by law; (d) keep a register of the post office address of each stockholder which shall be furnished to the secretary by such stockholder; (e) sign with the chairman, president, or a vice president, stock certificates of the corporation, the issue of which shall have been authorized by resolution of the board of directors; (f) have general charge of the stock transfer books of the corporation; (g) in general perform all duties incident to the office of secretary and such other duties as from time to time may be assigned to him by the chief executive officer, chief operating officer or by the board of directors.

 

ARTICLE V

 

Fiscal Year

 

The fiscal year of the corporation shall begin on the first day of January in each year and end on the thirty-first day of December in each year.

 

ARTICLE VI

 

Seal

 

The corporate seal shall be in the form determined by the board of directors.

 

ARTICLE VII

 

Waiver of Notice

 

Whenever any notice is required to be given under the provisions of these by-laws or under the provisions of the certificate of incorporation or under the provisions of the laws of the State of Delaware, a waiver thereof in writing, signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice.

 

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ARTICLE VIII

 

Amendments

 

Subject to the provisions of the certificate of incorporation, these by-laws may be altered, amended or repealed at any regular meeting of the stockholders, or at any special meeting of stockholders duly called for that purpose, by a majority vote of the shares represented and entitled to vote at such meeting; provided that in the notice of such special meeting notice of such purpose shall be given.  Subject to the laws of the State of Delaware, the certificate of incorporation and these by-laws, the board of directors may by a majority vote of those present at any meeting at which a quorum is present amend these by-laws, or enact such other by-laws as in their judgment may be advisable for the regulation of the conduct of the affairs of the corporation.

 

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EXHIBIT 4.1

 

THIRD SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”), dated as of September 22, 2015, is entered into by and between SPX FLOW, Inc., a corporation organized under the laws of the State of Delaware (the “Company”), as successor entity under the Indenture referred to below (in such capacity, the “Successor Entity”) and U.S. Bank National Association (or its permitted successor) as trustee (the “Trustee”) under the Indenture referred to below.

 

W I T N E S S E T H

 

WHEREAS, SPX Corporation, a corporation organized under the laws of the State of Delaware (“SPX”), the Subsidiary Guarantors party thereto and the Trustee have heretofore executed and delivered an indenture, dated as of August 16, 2010 (as amended and supplemented by the First Supplemental Indenture, dated as of January 23, 2014, and the Second Supplemental Indenture, dated as of November 7, 2014, the “Indenture”);

 

WHEREAS, the 6.875% Senior Notes due 2017 (the “Notes”) have been issued pursuant to the Indenture and are outstanding as of the date of this Supplemental Indenture;

 

WHEREAS, the Notes are the only series of securities outstanding under the Indenture;

 

WHEREAS, SPX’s obligations under the Notes are guaranteed by the Subsidiary Guarantors;

 

WHEREAS, Section 5.01 of the Indenture provides that SPX may not, among other things, sell, convey, transfer, lease or otherwise dispose of all or substantially all of its property and assets (as an entirety or substantially an entirety in one transaction or a series of related transactions), to any Person unless, among other things, the Person that acquires such property and assets expressly assumes, by a supplemental indenture, SPX’s obligations under the Indenture and the Notes;

 

WHEREAS, Section 5.01 of the Indenture further provides that the transfer of the Flowco Assets as a result of the Flowco Asset Transfer shall be deemed to be the transfer of substantially all of SPX’s property and assets (as an entirety or substantially an entirety in one transaction or a series of related transactions) to the Company so long as the Flowco Assets accounted for a majority of the consolidated revenues of SPX for the most recent four fiscal quarter period ending prior to the Spin-off;

 

WHEREAS, SPX has transferred the Flowco Assets to the Company pursuant to that certain Separation and Distribution Agreement, dated as of September 22, 2015, by and between SPX and the Company (the “Separation Agreement”) and the Flowco Assets account for a majority of the consolidated revenues of SPX for the most recent four fiscal quarter period ending prior to the Spin-off;

 

WHEREAS, Section 4.1(c) of the Separation Agreement permits Flowco to issue and deliver, at SPX’s direction and on SPX’s behalf, the Flowco Global Note directly to the Trustee, as custodian for the Depositary, in satisfaction of Flowco’s obligation to issue the Flowco Global Note to SPX and SPX’s obligation to deliver the Flowco Global Note to the Trustee, as custodian for the Depositary;

 

WHEREAS, Section 9.01 of the Indenture provides that, without consent of any Holders, the Indenture may be amended to provide for the assumption of SPX’s obligations to the Holders of the Notes in the case of a transfer of substantially all of the SPX’s property and assets;

 

WHEREAS, the Company desires and has requested the Trustee to join in entering into this Supplemental Indenture for the purpose of evidencing the assumption by the Company of SPX’s obligations to the Holders of the Notes under the Indenture;

 

WHEREAS, (i) SPX has delivered to the Trustee an Officers’ Certificate and stating that the Flowco Asset Transfer complies with Section 5.01 of the Indenture and that all conditions precedent provided for in the Indenture relating to such transaction have been complied with, and (ii) the Company has delivered to the Trustee

 

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an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent provided in the Indenture relating to the execution and delivery of this Supplemental Indenture have been complied with;

 

WHEREAS, the Company has been authorized by Board Resolutions to enter into this Supplemental Indenture;

 

WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture; and

 

WHEREAS, all conditions necessary to authorize the execution and delivery of this Supplemental Indenture by the Company to make this Supplemental Indenture valid and binding on the Company have been complied with or have been done or performed.

 

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:

 

1.             CAPITALIZED TERMS.  Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.

 

2.             ASSUMPTION OF OBLIGATIONS. The Company hereby expressly assumes all of the obligations of SPX under the Indenture and the Notes.

 

3.             EFFECT AND OPERATION OF SUPPLEMENTAL INDENTURE.  This Supplemental Indenture shall be effective and binding immediately upon its execution by the Company and the Trustee, and thereupon this Supplemental Indenture shall form a part of the Indenture for all purposes, and every Note and Note Guarantee heretofore or hereafter authenticated and delivered under the Indenture shall be bound hereby.

 

4.             INDENTURE AND SUPPLEMENTAL INDENTURE CONSTRUED TOGETHER.  This Supplemental Indenture is an indenture supplemental to, and in implementation of, the Indenture, and the Indenture and this Supplemental Indenture shall henceforth be read and construed together.

 

5.             TRUST INDENTURE ACT CONTROLS.  If any provision of the Indenture, as amended by this Supplemental Indenture, limits, qualifies or conflicts with another provision which is required or deemed to be included in the Indenture, as amended by this Supplemental Indenture, by the Trust Indenture Act, such required or deemed provision of the Trust Indenture Act shall control.

 

6.             NO RECOURSE AGAINST OTHERS.  No recourse for the payment of the principal of, premium, if any, or interest on any of the Notes, or for any claim based thereon or otherwise in respect thereof, and no recourse under or upon any obligation, covenant or agreement of the Company contained in the Indenture or in any of the Notes, as amended by this Supplemental Indenture, or because of the creation of any Indebtedness represented thereby, shall be had against any incorporator or against any past, present or future partner, stockholder, other equityholder, officer, director, employee or controlling person, as such, of the Company or of any successor Person, either directly or through the Company or any successor Person, whether by virtue of any constitution, statute, rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood that all such liability is expressly waived and released as a condition of, and as a consideration for, the execution of the Indenture and the issue of the Notes, in each case as amended by this Supplemental Indenture.

 

7.             NEW YORK LAW TO GOVERN.  THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

 

8.             SEPARABILITY.  In case any provision in this Supplemental Indenture, the Indenture as supplemented by this Supplemental Indenture, or in the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

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9.             DUPLICATE ORIGINALS.  The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.

 

10.          EFFECT OF HEADINGS.  The Section headings herein have been inserted for convenience of reference only, are not to be considered a part hereof and shall in no way modify or restrict any of the terms and provisions hereof.

 

11.          THE TRUSTEE.  The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Company.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed, all as of the date first above written.

 

 

 

SPX FLOW, INC.

 

 

 

 

 

 

 

By:

/s/ Stephen A. Tsoris

 

 

Name:

Stephen A. Tsoris

 

 

Title:

Vice President and Secretary

 

[Signature Page to Third Supplemental Indenture]

 



 

 

U.S. BANK NATIONAL ASSOCIATION,

 

as Trustee

 

 

 

 

 

 

 

By:

/s/ Paul Vaden

 

 

Name:

Paul Vaden

 

 

Title:

Vice President

 

[Signature Page to Third Supplemental Indenture]

 




EXHIBIT 4.2

 

THIS FOURTH SUPPLEMENTAL INDENTURE, dated as of September 24, 2015 (the “Supplemental Indenture”), is by and among SPX FLOW, Inc., a Delaware corporation, as the successor entity under the Indenture referenced below (the “Company”), SPX Flow Holdings, Inc., a Delaware corporation, SPX Flow Technology Systems, Inc., a Delaware corporation, SPX Flow US, LLC, a Delaware limited liability company, Corporate Place LLC, a Delaware limited liability company, and Delaney Holdings Co., a Delaware corporation (collectively, the “New Guarantors”), and U.S. Bank National Association, as trustee (the “Trustee”).

 

WHEREAS, the Company and the Trustee are parties as of the date hereof to that certain Indenture dated as of August 16, 2010 (as supplemented by the First Supplemental Indenture, dated January 23, 2014, the Second Supplemental Indenture, dated November 7, 2014, the Third Supplemental Indenture, dated September 22, 2015 and as further supplemented from time to time, the “Indenture”), providing for the issuance of 6.875% Senior Notes due 2017 (the “Notes”);

 

WHEREAS, the Company originally issued $600,000,000 aggregate principal amount of the Notes;

 

WHEREAS, Section 4.13 of the Indenture provides that under certain circumstances the New Guarantors shall execute and deliver to the Trustee a supplemental indenture pursuant to which the New Guarantors shall unconditionally guarantee all of the Company’s obligations under the Notes and the Indenture on the terms and conditions set forth herein (the “Note Guarantee”);

 

WHEREAS, the Company desires and has requested the Trustee to join with it in entering into this Supplemental Indenture for the purpose of amending the Indenture in certain respects required by Section 4.13 of the Indenture; and

 

WHEREAS, (1) the Company has satisfied all conditions precedent, if any, provided under the Indenture to enable the Company and the Trustee to enter into this Supplemental Indenture, all as certified by an Officers’ Certificate, delivered to the Trustee simultaneously with the execution and delivery of this Supplemental Indenture as contemplated by Sections 11.03 and 11.04 of the Indenture, and (2) the Company has delivered to the Trustee simultaneously with the execution and delivery of this Supplemental Indenture an Opinion of Counsel relating to this Supplemental Indenture as contemplated by Sections 11.03 and 11.04 of the Indenture.

 

NOW, THEREFORE, in consideration of the above premises, each party hereby agrees, for the benefit of the others and for the equal and ratable benefit of the Holders of the Notes, as follows:

 

ARTICLE I

 

GUARANTEE OF NOTES

 

Section 1.1.                                 Agreement to Guarantee. Each New Guarantor hereby agrees to provide an unconditional Guarantee on the terms set forth in the Indenture including but not limited to Article 10 thereof.

 

ARTICLE II

 

MISCELLANEOUS PROVISIONS

 

Section 2.1.                                 Defined Terms. For all purposes of this Supplemental Indenture, except as otherwise defined or unless the context otherwise requires, terms used in capitalized form in this Supplemental Indenture and defined in the Indenture have the meanings specified in the Indenture.

 

Section 2.2.                                 Indenture. Except as amended hereby, the Indenture is in all respects ratified and confirmed and all the terms thereof shall remain in full force and effect. This Supplemental Indenture shall form a part of the Indenture for all purposes, and every Holder of Notes heretofore or hereafter authenticated and delivered

 



 

under the Indenture shall be bound by the Indenture as amended hereby. In the case of conflict between the Indenture and this Supplemental Indenture, the provisions of this Supplemental Indenture shall control.

 

Section 2.3.                                 Governing Law. This Supplemental Indenture will be governed by, and construed in accordance with, the laws of the state of New York.

 

Section 2.4.                                 Successors. All agreements of the Company, the New Guarantors and the Trustee in this Supplemental Indenture, the Notes, and the Guarantee shall bind their respective successors.

 

Section 2.5.                                 Duplicate Originals. All parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together shall represent the same agreement.

 

Section 2.6.                                 Severability. In case any one or more of the provisions in this Supplemental Indenture or in the Notes or Guarantees shall be held invalid, illegal or unenforceable, in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions shall not in any way be affected or impaired thereby, it being intended that all of the provisions hereof shall be enforceable to the full extent permitted by law.

 

Section 2.7.                                 Trustee Disclaimer. The Trustee accepts the amendment of the Indenture effected by this Supplemental Indenture and agrees to execute the trust created by the Indenture as hereby amended, but on the terms and conditions set forth in the Indenture, including the terms and provisions defining and limiting the liabilities and responsibilities of the Trustee, which terms and provisions shall in like manner define and limit its liabilities and responsibilities in the performance of the trust created by the Indenture as hereby amended, and without limiting the generality of the foregoing, the Trustee shall not be responsible in any manner whatsoever for or with respect to any of the recitals or statements contained herein, all of which recitals or statements are made solely by the Company and the New Guarantors, and the Trustee makes no representation with respect to any such matters. Additionally, the Trustee makes no representations as to the validity or sufficiency of this Supplemental Indenture.

 

Section 2.8.                                 Effectiveness. The provisions of this Supplemental Indenture shall be effective only upon execution and delivery of this instrument by the parties hereto.

 

Section 2.9.                                 Effect of Headings. The headings of the Articles and Sections of this Supplemental Indenture have been inserted for convenience of reference only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or provision hereof.

 

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

 



 

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed as of the day and year written above.

 

 

SPX FLOW, INC.

 

 

 

 

 

By:

/s/ Stephen A. Tsoris

 

Name:

Stephen A. Tsoris

 

Title:

Vice President and Secretary

 

 

 

 

 

SPX FLOW HOLDINGS, INC.

 

 

 

 

 

By:

/s/ Stephen A. Tsoris

 

Name:

Stephen A. Tsoris

 

Title:

Vice President and Secretary

 

 

 

 

 

SPX FLOW TECHNOLOGY SYSTEMS, INC.

 

 

 

 

 

By:

/s/ Stephen A. Tsoris

 

Name:

Stephen A. Tsoris

 

Title:

Vice President and Secretary

 

 

 

 

 

SPX FLOW US, LLC

 

 

 

 

 

By:

/s/ Stephen A. Tsoris

 

Name:

Stephen A. Tsoris

 

Title:

Vice President and Secretary

 

[Signature Page to the Fourth Supplemental Indenture]

 



 

 

CORPORATE PLACE LLC

 

 

 

 

 

By:

/s/ Jeremy Smeltser

 

Name:

Jeremy Smeltser

 

Title:

President

 

 

 

 

 

DELANEY HOLDINGS CO.

 

 

 

 

 

By:

/s/ Jeremy Smeltser

 

Name:

Jeremy Smeltser

 

Title:

President

 

[Signature Page to the Fourth Supplemental Indenture]

 



 

 

U.S. BANK NATIONAL ASSOCIATION, as Trustee

 

 

 

 

 

By:

/s/ Paul Vaden

 

Name:

Paul Vaden

 

Title:

Vice President

 

[Signature Page to the Fourth Supplemental Indenture]

 




Exhibit 10.1

 

TRANSITION SERVICES AGREEMENT

 

This TRANSITION SERVICES AGREEMENT (this “Agreement”) is made this 26th day of September, 2015, by and between SPX Corporation, a Delaware corporation (“SPX”) and SPX FLOW, Inc., a Delaware corporation (“Flowco”).  Capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed to them in the Separation Agreement (as defined below).

 

W I T N E S S E T H:

 

WHEREAS, SPX and Flowco are parties to that certain Separation and Distribution Agreement dated as of September 22, 2015 (the “Separation Agreement”);

 

WHEREAS, in furtherance of the transactions contemplated in the Separation Agreement, SPX has agreed to provide to Flowco certain services for the periods and on the terms and conditions set forth herein; and

 

WHEREAS, in furtherance of the transactions contemplated in the Separation Agreement, Flowco has agreed to provide to SPX certain services for the periods and on the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the mutual agreements and covenants set forth herein and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and intending to be legally bound hereby, the parties agree:

 

1.             SERVICES

 

1.1          Services.  During the term of this Agreement and subject to the terms and conditions set forth herein,

 

(a)           SPX shall provide to Flowco, or cause an Affiliate or Affiliates of SPX designated by SPX for this purpose to provide to Flowco (with SPX, each, a “SPX Service Provider”), and Flowco agrees to purchase from the SPX Service Providers, the services set forth in Schedule A attached hereto (each, an “SPX Service”, and collectively, the “SPX Services”); and

 

(b)           Flowco shall provide to SPX, or cause an Affiliate or Affiliates of Flowco designated by Flowco for this purpose to provide to SPX (with Flowco, each, a “Flowco Service Provider” and together with the SPX Service Providers, the “Service Provider”), and SPX agrees to purchase from the Flowco Service Providers, the services set forth in Schedule B attached hereto (each, a  “Flowco Service”, collectively, the “Flowco Services” and together with the SPX Services, the “Services”).

 

1.2          Level of Services.  Except as set forth specifically in Schedule A, Schedule B or otherwise specifically agreed to in writing by SPX and Flowco, (a) each party shall provide, or cause its Affiliate to provide, each Service with a degree of care consistent with the care it exercises in the conduct of similar activities for itself, (b) each of the SPX Services that are similar to those provided to, or in connection with the operation of, the Flowco Business prior to the Effective Time shall be, in all material respects, consistent in scope, quality and nature with

 

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those provided to, or provided on behalf of, the Flowco Business prior to the date hereof, (c) each of the Flowco Services that are similar to those provided to, or in connection with the operation of, the Infrastructurco Business prior to the Effective Time shall be, in all material respects, consistent in scope, quality and nature with those provided to, or provided on behalf of, the Infrastructurco Business prior to the date hereof and (d) in no event shall any Service be provided at a level of service (including, without limitation, accuracy, quality, completeness, timeliness, priority and responsiveness) lower than the levels at which such Services were provided prior to the date hereof, if applicable.  The Services to be provided hereunder that are not similar to those provided to the Flowco Business or to the Infrastructurco Business prior to the Effective Time shall be performed by personnel selected by the Service Provider providing such Services, which personnel shall have the capacity, skill and expertise necessary to perform such Services.  In providing the Services, neither the Service Provider nor any of its Affiliates shall be obligated to: (i) hire any additional employees; (ii) maintain the employment of any specific employee; or (iii) purchase, lease or license any additional facilities, equipment or materials; provided that, at all times, the Service Provider shall maintain the standard of care and performance as set forth in the preceding sentences of this Section 1.2.

 

1.3          Cooperation.  Each party shall cause its employees to reasonably cooperate with employees of the Service Provider in providing a Service to such party, to the extent required for effective delivery of the Services and to minimize the disruption to, or additional recordkeeping required by, the Service Provider.  In addition, each party shall name a point of contact who shall be responsible for the day-to-day implementation of this Agreement, including attempted resolution of any issues that may arise during the performance of any of such party’s obligations hereunder.

 

1.4          Third-Party Services.  At its option, each party may cause any Service it is required to provide hereunder to be provided by any third party (a “Third-Party Service”), in which event such Service Provider shall provide prior written notice to the other party of its election to cause such Service to be provided by a third party.  Such Service Provider shall not be responsible for the performance of any Third-Party Services so long as such Service Provider reasonably selects the provider of such Third-Party Services and imposes on such third-party provider the confidentiality obligations specified in this Agreement.  The Service Provider shall assign its rights to enforce any confidentiality claims against such third-party provider to the other party.

 

1.5          Impracticability.  Notwithstanding any other provision of this Agreement, no Service Provider shall be required to provide any Service to the extent the performance of such Service becomes impracticable as a result of a cause or causes outside the control of such Service Provider or to the extent the provision of such Service would require such Service Provider to violate any applicable laws. Each party, as Service Provider, shall promptly notify the other party in writing upon learning of such a cause or causes and shall use commercially reasonable efforts to resume its performance of any Service so suspended with the least possible delay as soon as practicable.

 

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1.6          Performance and Receipt of Services.

 

(a)           SPX and Flowco shall each exercise reasonable care in providing and receiving any Service to (i) prevent access to the Services or the computing, telecommunications or other digital operating or processing systems or environments (including computer programs, data, databases, computers, computer libraries, communications equipment, networks and systems) accessed and/or used in connection with the Services (collectively, the “Information Systems”) by unauthorized Persons and (ii) not damage, disrupt or interrupt the Services or Information Systems.

 

(b)           Neither SPX nor Flowco shall access, nor shall either permit unauthorized Persons to access, the other party’s Information Systems and/or networks without express written authorization of such party, and any such actual or attempted access shall be consistent with any such authorization and the means of access directed by the party granting access to the given Information System.  Each party shall comply with those reasonable policies and procedures relating to access to the other party’s Information Systems as have been provided to it by the other party.

 

1.7          Representatives; Status Meetings.  SPX hereby designates Suzanne Harrington as the SPX representative (the “SPX Representative”) and Flowco hereby designates Nick Persavich as the Flowco representative (the “Flowco Representative”) to coordinate the Services provided under this Agreement.  The SPX Representative and the Flowco Representative shall meet on a monthly basis, or more frequently if reasonably requested by either party, to discuss the Services being provided, the charges and Invoices (as defined below) therefor, any problems with the Services, charges or Invoices, any proposed modifications and any terminations of Services pursuant to Section 6.2(b) below (“Status Meetings”).  Status Meetings shall be held at a time and place mutually agreeable to the Flowco Representative and the SPX Representative and shall be for a reasonable duration; provided that Status Meetings may be held in person or via conference telephone, videophone or similar means.  Each of SPX and Flowco may change its respective representative at any time by written notice to the other party.

 

1.8          Personnel. Each Service Provider shall remain responsible for compensating the employees and the independent contractors it engages to perform the Services on its behalf.  The parties acknowledge and agree that those employees and independent contractors used by the Service Providers in the performance of the Services will have no employer/employee relationship with the recipient of the Services, and that each Service Provider alone is responsible for providing workers’ compensation insurance for its applicable employees, for paying the salaries and wages of its applicable employees, for providing any employee benefits to its applicable employees, and for ensuring that all required tax withholdings are made.

 

2.             PAYMENTS

 

2.1          Services Pricing.  Flowco shall pay SPX or its applicable Affiliate fees for the SPX Services on the basis and in the manner described in Schedule A.  SPX shall pay Flowco or its applicable Affiliate fees for the Flowco Services on the basis and in the manner described in Schedule B.  Each party or its agents shall keep and maintain such books and records as may be reasonably necessary to make any applicable allocations.  During the term of this Agreement and

 

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at any time thereafter upon the reasonable request of another party, each party shall make copies of the relevant portion of such books and records available to the other party for inspection upon request and with reasonable notice.

 

2.2          Invoicing. Except for those charges with alternate invoicing and payment terms specifically set forth in the Schedules hereto, within twenty (20) days following the end of each calendar month during the term hereof, (a) SPX shall provide to Flowco a single invoice in form, format and media reasonably acceptable to Flowco totaling all charges during such month for SPX Services incurred by Flowco hereunder (each, a “SPX Invoice”) and (b) Flowco shall provide to SPX a single invoice in form, format and media reasonably acceptable to SPX totaling all charges during such month for Flowco Services incurred by SPX hereunder (each, a “Flowco Invoice” and with any SPX Invoice, each an “Invoice”).  Any failure by a party to provide an Invoice within such time period or to provide the Invoice in such form, format or media as is reasonably acceptable to the recipient of the Invoice shall not relieve the recipient of the Invoice of its obligation to pay any Invoice received after such date.  Each party agrees to provide such information as reasonably requested by the other party for use in preparation of an Invoice.  Each Invoice shall contain a brief description of each Service giving rise to such charge.

 

2.3          Payment.  Each party shall pay all amounts due under each Invoice no later than forty-five (45) days following receipt of such Invoice, without right to set-off or counterclaim (the “Payment Date”).  Each party reserves the right to require payment in advance for any out-of-pocket expenses that may be incurred in the course of performing this Agreement, including, without limitation, payroll expenses.  In addition, the recipient shall be responsible for any fees or charges payable to any government, regulatory organization or other body in connection with the Services, and any sales, use, value added, property, duties, or other taxes arising under this Agreement including in connection with payments due under any Invoice (but excluding any taxes on the net income of the Service Provider) and shall remit the amount due under this Agreement without offset for any withholdings, fees or charges in respect of any payments under this Agreement.  Each party shall pay all amounts due with respect to those charges with alternate invoicing and payment terms specifically set forth in the Schedules hereto in accordance with the relevant payment terms set forth in the Schedules.

 

2.4          Late Payments. Interest on late payments will accrue at the Prime Rate plus 2% (or the maximum legal rate, whichever is lower) calculated for the actual number of days elapsed, accrued from the applicable Payment Date up to the date of the actual receipt of payment.

 

3.             REPRESENTATIONS AND WARRANTIES

 

In addition to any representations set forth elsewhere in this Agreement (including the Schedules hereto) each party represents and warrants that:

 

3.1          Such party (including, as applicable, its Affiliates) has all necessary rights and authority to provide the Services such party will perform as a Service Provider as contemplated herein.  Each party (including, as applicable, its Affiliates) has obtained all necessary third party and governmental consents and authorizations to provide the Services such party will perform as a Service Provider as contemplated herein.

 

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3.2          Such party is not in breach of any arrangement or agreement with any third party in respect of a Service to be provided by such party that may be provided by a third party pursuant to Section 1.4.

 

4.                                      CONFIDENTIALITY

 

4.1          Information Exchanges.  Subject to applicable Law and good faith claims of privilege, each party hereto shall provide the other party with all information regarding itself and the transactions under this Agreement that the other party reasonably believes that it requires (a) in order to comply with all applicable laws, ordinances, regulations and codes in connection with the provision of Services pursuant to this Agreement or (b) to perform its obligations under this Agreement.   In addition to the foregoing information, each party shall, and shall cause its Affiliates to, afford the other party, upon reasonable advance notice, reasonable access during normal business hours to the facilities, Information, systems, infrastructure and personnel of such party and its Affiliates as reasonably necessary for the applicable recipient of Services to verify the adequacy of internal controls over information technology, reporting of financial data and related processes employed in connection with the Services being provided by any Service Provider, including in connection with verifying compliance with Section 404 of the Sarbanes-Oxley Act of 2002; provided that (i) such access shall not unreasonably interfere with any of the business or operations of the Service Provider or any of their respective Affiliates and (ii) in the event that the Service Provider determines that providing such access could be commercially detrimental, violate any Law or agreement, or waive any attorney-client privilege, then the parties shall use commercially reasonable efforts to permit such access in a manner that avoids any such harm or consequence.

 

4.2          Confidential Information.  SPX and Flowco shall, and each shall cause its Affiliates, officers, directors, employees, agents, representatives and advisors to, (a) hold in trust and maintain confidential all Confidential Information relating to the other party and (b) limit the use and disclosure of the Confidential Information solely to the purposes of such party’s obligations, benefits or rights under this Agreement; provided, however, that a party may disclose such Confidential Information that such party reasonably believes it is required to disclose by applicable Law, provided that (unless prohibited by applicable Law) it first notifies the other party hereto of such requirement and allows such party a reasonable opportunity to seek a protective order or other appropriate remedy to prevent or minimize such disclosure.  For the purposes of this Agreement, “Confidential Information” shall mean all information regarding SPX or Flowco, as applicable, of a confidential or proprietary nature, whether oral, visual, in writing or in any other tangible form, and includes, without limitation, economic, scientific, technical, product and business data, business plans, and the like, except to the extent that such information can be shown to have been (i) in the public domain through no action of the applicable receiving party or its Affiliates or any of their respective representatives or advisors, (ii) lawfully acquired from other sources by such receiving party or its Affiliates or any of their respective representatives or advisors to which it was furnished or (iii) independently developed by such receiving party or its Affiliates without use or reference to Confidential Information of the disclosing party’s or its Affiliates; provided, however, in the case of clause (ii) that, to the receiving party’s knowledge, such sources did not provide such information in breach of any confidentiality or fiduciary obligations.  Without prejudice to the rights and remedies of either party to this Agreement, a party disclosing any Confidential Information to the other party in accordance with the

 

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provisions of this Agreement shall be entitled to seek equitable relief by way of an injunction if the other party hereto breaches or threatens to breach any provision of this Section 4.2.  Upon the earlier of a request by a disclosing party or the termination of this Agreement in accordance with Section 6, each party shall promptly return or destroy all Confidential Information of the other party and copies thereof.  Upon request by the disclosing party, an authorized representative of the other party shall confirm in writing compliance with its obligation set forth in the immediately preceding sentence.

 

5.             REMEDIES; INDEMNIFICATION; LIMITATION OF LIABILITY

 

5.1          Remedies; No Warranties.  SPX and Flowco expressly agree that neither party, nor any of their respective Affiliates (nor any of the officers, directors, stockholders, employees or agents thereof) shall be liable to the other party or any of the Affiliates thereof for any claims, damages, liabilities, losses, costs or expenses (collectively, “Damages”) whatsoever relating to the Services provided by such party pursuant to this Agreement (whether as a result of any action or any failure to act), except for those Damages arising directly from such providing party’s willful misconduct or gross negligence, and, in the case of such willful misconduct or gross negligence, the remedy of the aggrieved party shall be any one or more of the following, at the aggrieved party’s election: to (a) have such Service re-performed as soon as practical without additional charge, and/or (b) terminate this Agreement as to the applicable Service as provided in Section 6.2(b), and in each case, subject to the provisions of Section 5.3.  The parties expressly agree that (i) no warranty of any kind (including any warranties of utility or fitness for any particular purpose or of merchantability or of any other type) shall be implied under this Agreement and that no warranties of any kind are made herein, (ii) except for Services specifically designated as advisory services in the Schedules hereto, it is not the intent of either party to render (in its capacity as Service Provider) nor to receive (in its capacity as recipient of Services) any professional advice or opinions, whether with regard to tax, legal, treasury, finance, employment or other business and financial matters, or technical advice, whether with regard to information technology or other matters, and neither party shall rely on, or construe, any Service rendered by or on behalf of the applicable Service Provider as such professional advice or opinions or technical advice; and (iii) each party shall seek all third-party professional advice and opinions or technical advice as it may desire or need.

 

5.2          Indemnification.

 

(a)           Flowco shall indemnify SPX and its Affiliates and the officers, directors, employees and agents of each (collectively, the “SPX Parties”), and hold each SPX Party harmless against any Damages incurred or suffered by any SPX Party in any way arising out of, relating to, or in connection with any third-party claims based on the performance of SPX Services hereunder (whether by a SPX Service Provider or by a third party as a Third-Party Service), except in the case of third party claims arising directly from SPX’s fraud, willful misconduct or gross negligence.  This Section 5.2(a) shall survive any termination of this Agreement.

 

(b)           SPX shall indemnify Flowco and its Affiliates and the officers, directors, employees and agents of each (collectively, the “Flowco Parties”), and hold each Flowco Party harmless against any Damages incurred or suffered by any Flowco Party in any way arising out of, relating to, or in connection with any third-party claims based on the performance of Flowco Services hereunder (whether by a Flowco Service Provider or by a third party as a Third-Party

 

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Service), except in the case of third-party claims arising directly from Flowco’s willful misconduct or gross negligence.  This Section 5.2(b) shall survive any termination of this Agreement.

 

(c)           The procedures contained in the indemnification and related litigation cooperation provisions of the Separation Agreement shall apply with respect to each Party’s indemnification obligations under this Section 5.2.  The right to indemnification and the remedies set forth in this Section 5 shall constitute the parties’ sole and exclusive remedies with respect to any and all claims arising under or relating to this Agreement or the Services provided hereunder.

 

5.3          Limitation of Liability.  Notwithstanding any other provision in this Agreement to the contrary, (a) other than as may be included in actual payments of Damages to third parties arising from claims subject to indemnification under Section 5.2, no party shall have any liability to the other party relating to this Agreement for damage to reputation, lost business opportunities, lost profits, mental or emotional distress, incidental, special, exemplary, punitive or indirect damages, interference with business operations or diminution in value and (b) other than claims for breaches of Section 4 and actual payments of Damages to third parties arising from claims subject to indemnification under Section 5.2, in no event shall the aggregate liability of a party to the aggrieved party for (i) Damages and (ii) costs of re-performance of a Service, relating to this Agreement (under any theory, whether in contract, tort, statutory or otherwise) exceed the aggregate amounts actually paid by the aggrieved party for Services received under this Agreement (exclusive of any amounts such aggrieved party has paid as reimbursement for pass-through expenses).

 

6.             TERM AND TERMINATION

 

6.1          Term.  Unless earlier terminated in accordance with Section 6.2 below, this Agreement shall be in effect from the Effective Time until the twelve (12) month anniversary of such date.  Except as specifically set forth on Schedule A or Schedule B, upon termination of any Service pursuant to Section 6.2 below, or upon any termination of this Agreement in accordance with its terms, the applicable Service Provider shall have no further obligation to provide the terminated Service (or any Service, in the case of termination of this Agreement) and the recipient of such terminated Service shall have no obligation to pay any fees relating to such terminated Service or Services (or to make any other payments hereunder, in the case of termination of this Agreement); provided that, notwithstanding such termination, the recipient shall remain liable to the Service Provider for fees owed and payable in respect of Services provided prior to the effective date of the termination.

 

6.2                               Termination.

 

(a)           If a party (the “Defaulting Party”) has materially breached its obligations under this Agreement and has not cured such default within thirty (30) days following the date on which the other party (the “Notifying Party”) has given written notice to the Defaulting Party specifying the facts constituting the default, the Notifying Party may, in its sole discretion, (i) suspend or terminate (or any combination thereof) providing or receiving any or all of the Services, in whole or in part, or (ii) terminate this Agreement.  Notwithstanding the foregoing sentence, neither this Agreement nor any Service shall be terminated due to a default by the

 

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Defaulting Party if such default is directly attributable to a breach of this Agreement by the Notifying Party.

 

(b)           Except as otherwise set forth in Schedule A or as provided in this Section, Flowco shall be permitted to terminate this Agreement with respect to any particular or all SPX Services to be provided by a SPX Service Provider upon thirty (30) days prior written notice to SPX (with a copy to SPX Representative) notifying SPX of the specific SPX Services that are no longer required.  Except as otherwise set forth in Schedule B or as provided in this Section, SPX shall be permitted to terminate this Agreement with respect to any particular or all Flowco Services to be provided by a Flowco Service Provider upon thirty (30) days prior written notice to Flowco notifying Flowco (with a copy to Flowco Representative) of the specific Flowco Services that are no longer required.  Notwithstanding the foregoing, for any Service that is provided in whole or in part by a third party and the Service Provider’s agreement or arrangement with such third party relating to such Service cannot be terminated upon fifteen (15) days’ prior written notice, this Agreement with respect to such Service shall not be deemed to have been terminated with respect to such Service until the earliest date by which such Service Provider’s agreement or arrangement with such third party may be terminated without payment or penalty.  SPX or Flowco, as applicable, will incrementally decrease the subsequent Invoices by the applicable amount or amounts of the relevant fees for any Services terminated by the other party hereunder.

 

(c)           SPX may suspend or terminate any or all the SPX Services hereunder effective upon not less than ten (10) days’ prior written notice from SPX to Flowco if Flowco has failed to pay any SPX Invoice or other amounts owing to SPX for SPX Services when due (as provided in Section 2.2) more than ten (10) days after SPX has given Flowco written notice of such past due amount.  Flowco may suspend or terminate any or all the Flowco Services hereunder effective upon not less than ten (10) days’ prior written notice from Flowco to SPX if SPX has failed to pay any Flowco Invoice or other amounts owing to Flowco for Flowco Services when due (as provided in Section 2.2) more than ten (10) days after Flowco has given SPX written notice of such past due amount.

 

(d)           Upon termination of this Agreement for any reason, all rights and obligations of the parties under this Agreement shall cease and be of no further force or effect, except that the provisions of Sections 2.3, 4, 5 and 7 of this Agreement shall survive any such termination or expiration.

 

(e)           Upon the end of the term or the earlier termination of this Agreement, each Service Provider shall, as promptly as practicable thereafter, deliver to the other party all books and records, or copies thereof, that pertain solely to such other party’s businesses that are used or generated in the course of the provision of Services hereunder.

 

7.             GENERAL

 

7.1          Successors and Assigns.  The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties hereto.  Neither party may assign this Agreement or any of such party’s rights hereunder without the prior written consent of the other party; provided, however, that each party may assign, in its sole discretion, any or all of its rights, interests and obligations under this Agreement to one or more of its direct or indirect wholly owned Subsidiaries so long as such assignment does not have any

 

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adverse consequences to the other party or its Affiliates.  No assignment shall relieve the assigning party from any of its obligations under this Agreement and in the event of an assignment, the assigning party shall nonetheless continue to be primarily liable for all of its obligations hereunder.  Each assignee shall execute a counterpart of this Agreement agreeing to be bound by the provisions hereof.

 

7.2          Force Majeure.  No party shall bear any responsibility or liability for any damages arising out of any delay, inability to perform or interruption of its performance of its obligations under this Agreement due to any acts or omissions of the other party hereto or for events beyond its reasonable control including, without limitation, acts of God, acts of governmental authorities, acts of the public enemy or due to war, riot, flood, civil commotion, insurrection, labor difficulty, severe or adverse weather conditions, lack of or shortage of electrical power, malfunctions of equipment or software programs, or any other cause beyond the reasonable control of such party. Each party shall, as promptly as practicable, notify the other upon learning of the occurrence of such event of force majeure affecting its ability to perform its obligations hereunder.  Upon the cessation of a force majeure event, the party whose performance was suspended shall use commercially reasonable best efforts to resume its performance.

 

7.3          Relationship of the Parties.  The parties shall for all purposes be considered independent contractors with respect to each other, and neither shall be considered an employee, employer, agent, principal, partner or joint venturer of the other.

 

7.4          Intellectual Property.  Nothing in this Agreement shall be interpreted to, or shall, assign, transfer or license any intellectual property rights between the parties hereto, and each party shall retain all right, title and interest in and to their respective intellectual property rights and any and all improvements, modifications and derivative works thereof or thereto.

 

7.5          Compliance with Laws.  Each party acknowledges and agrees that the Services shall be provided only with respect to the Flowco Business or to the Infrastructurco Business, as applicable, as such business was operated immediately prior to the Closing Date or as mutually agreed by the parties hereto.  Each party covenants and agrees that it shall use the Services only in accordance with all applicable laws, and in accordance with past practices.  Each party, as a Service Provider, reserves the right to take all actions, including suspension or termination of any particular Service, that such Service Provider reasonably believes to be necessary to assure compliance with applicable laws and such actions will not constitute a breach of this Agreement.  Such Service Provider shall notify the other party promptly of any decision to suspend or terminate any Services and the reasons for any such suspension or termination of such Services.

 

7.6          Entire Agreement; Amendment.  This Agreement, including the Schedules hereto, constitutes the entire agreement between SPX and Flowco with respect to the subject matter hereof.  This Agreement shall not be amended, altered or changed except by a written agreement signed by the parties hereto.

 

7.7          No Waiver.  No delay or omission on the part of either party to this Agreement in requiring performance by the other party or in exercising any right hereunder shall operate as a waiver of any provision hereof or of any right or rights hereunder; and the waiver, omission or delay in requiring performance or exercising any right hereunder on any one occasion shall not be

 

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construed as a bar to or waiver of such performance or right, or of any right or remedy under this Agreement, on any future occasion.

 

7.8          Notices.  Any notice, request, instruction or other document to be given hereunder by any party hereto to any other party shall be in writing and shall be given (and shall be deemed to have been duly given or made upon receipt unless the day of receipt is not a Business Day, in which case it shall be deemed to have been duly given or made on the next Business Day) by delivery in person, by overnight courier service, by facsimile with receipt confirmed (followed by delivery of an original via overnight courier service) or by registered or certified mail (postage prepaid, return receipt requested) to the respective parties at the following addresses:

 

If to SPX:

 

SPX Corporation

13320-A Ballantyne Corporate Place

Charlotte, NC  28277

Attention:  General Counsel

Telecopy number: _________

 

If to SPX Representative:

 

SPX Corporation

13320-A Ballantyne Corporate Place

Charlotte, NC  28277

Attention:  Suzanne Harrington

Telecopy number: _________

Email: suzanne.harrington@spx.com

 

 

 

If to Flowco:

 

SPX FLOW, Inc.

13320 Ballantyne Corporate Place

Charlotte, NC  28277

Attention:  General Counsel

Telecopy number: 704.752.7448

 

If to Flowco Representative:

 

SPX FLOW, Inc.

13320 Ballantyne Corporate Place

Charlotte, NC  28277

Attention:  Nick Persavich

Telecopy number: 980.321.7073

Email: nick.persavich@spx.com

 

 

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or at such other address for a party as shall be specified by like notice.

 

7.9          Severability.  If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of Law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any adverse manner to any party.  Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner so that the transactions contemplated hereby are fulfilled to the greatest extent possible.

 

7.10        Counterparts; Signatures.  This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which together shall constitute but one and the same agreement.  This Agreement may be executed by facsimile signature.

 

7.11        Governing Law, Etc.  This Agreement shall be construed in accordance with and governed by the laws of the State of Delaware applicable to agreements made and to be performed wholly within such jurisdiction.  Each of the parties hereto hereby irrevocably and unconditionally consents to submit to the exclusive jurisdiction of (a) the Court of Chancery of the State of Delaware (unless the Court of Chancery of the State of Delaware declines to accept jurisdiction over a particular matter, in which case, any state or federal court within the State of Delaware) and (b) so long as both parties are headquartered in North Carolina, any state or federal court within the State of North Carolina, for the purposes of any suit, action or other proceeding arising out of or relating to this Agreement (and agrees not to commence any such suit, action or other proceeding relating thereto except in such courts), and further agrees that service of any process, summons, notice or document by U.S. registered mail to its address set forth in Section 7.8 shall be effective service of process for any action, suit or proceeding in the Delaware or North Carolina courts with respect to any matters to which it has submitted to jurisdiction in this Section 7.11.

 

7.12        Conflict.  This Agreement is being executed and delivered pursuant to the terms and conditions of the Separation Agreement.  In the event of any inconsistency between the terms of this Agreement and the Separation Agreement, the terms of the Separation Agreement shall control.

 

7.13        Definitions; Interpretation.  When a reference is made in this Agreement to Sections or Schedules, such reference is to a Section of, or a Schedule to, this Agreement, unless otherwise indicated.  The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words “herein,” “hereof,” “hereto” or “hereunder” are used in this Agreement, they shall be deemed to refer to this Agreement as a whole and not to any specific Section of this Agreement. 

 

11



 

7.14        Effect if Distribution does not Occur. If the Distribution does not occur, then all actions and events that are, under this Agreement, to be taken or occur effective as of or following the Effective Date, or otherwise in connection with the Distribution, shall not be taken or occur except to the extent specifically agreed by the parties and neither party shall have any liability or further obligation to the other party under this Agreement.

 

Signature Page Follows

 

12



 

IN WITNESS WHEREOF, Flowco and SPX have duly executed this Agreement as of the day, month and year first above written.

 

 

 

SPX CORPORATION

 

 

 

 

 

By:

/s/ Stephen A. Tsoris

 

 

Name: Stephen A. Tsoris

 

 

Title: Vice President, Secretary and General Counsel

 

 

 

 

 

SPX FLOW, INC.

 

 

 

 

 

By:

/s/ Stephen A. Tsoris

 

 

Name: Stephen A. Tsoris

 

 

Title: Vice President and Secretary

 

Signature Page to Transition Services Agreement

 



 

SCHEDULE A

 

SPX Services

 

Upon reasonable notice, throughout the term of the Transition Services Agreement, the SPX Service Providers shall have reasonable access to the facilities and premises of the applicable members of the Flowco Group to the extent necessary to provide the SPX Services, in each case subject to the reasonable safety, security, confidentiality and other policies and procedures of Flowco in place from time to time.  Flowco shall provide SPX with such information, management direction and documentation as is reasonably necessary for the SPX Service Providers to perform the SPX Services and the members of the Flowco Group shall perform such other duties and tasks as may be reasonably required to permit the SPX Service Providers to perform the SPX Services.

 

I.  INFORMATION TECHNOLOGY

 

A.  The following list of IT services will be provided by SPX:

 

Service Description

 

Unit
Charge

 

Cost Driver

 

Comments

 

 

 

 

 

 

 

Access to and use of Licensed Products under Microsoft Enterprise Enrollment Agreement #83632359

 

None

 

NA

 

Service available through June 29, 2016 and not extendable.

 

 

 

 

 

 

 

Purchases of Licenses and services from Microsoft under Microsoft Select Plus Agreement #X20-02487

 

As Incurred

 

Direct Charge

 

Any licenses purchased under Select Plus for the account of Flowco will be paid directly to Dell (as Microsoft reseller) by Flowco. Service available through June 29, 2016 and not extendable.

 

 

 

 

 

 

 

Access to and use of Microsoft Support Account Management and Problem Resolution Support (Premium Support services) under the Enterprise Services Work Order issued under Microsoft Business and Services Agreement #U4701657

 

None

 

NA

 

Service available through June 29, 2016 and not extendable. Service only provided until the aggregate Microsoft support hours utilized by SPX and by Flowco exhaust the number of pre-purchased hours under the Enterprise Services Work Order.

 

 

 

 

 

 

 

Access to and use of Oracle Database Programs under the Oracle Database Enterprise Edition — Processor Perpetual Software Update License & Support Order (ULA), dated as of September 22, 2015

 

None

 

NA

 

Service available through June 26, 2016 and not extendable.

 



 

Service Description

 

Unit
Charge

 

Cost Driver

 

Comments

 

 

 

 

 

 

 

Access to and use of the Oracle Hyperion software licenses and Oracle Exalytics software licenses under the Oracle License and Services Agreement between Oracle USA, Inc. and SPX dated December 7, 2007 (as amended)

 

None

 

NA

 

Service available through June 26, 2016 and not extendable

 

 

 

 

 

 

 

Access to and use of the Oracle Big Machines services under the Oracle BigMachines CPQ Cloud Services Agreement, dated November 25, 2014, between Oracle America, Inc. and SPX Corporation and the Oracle BigMachines CPQ Cloud Services Renewal Agreement, with an effective date of August 11, 2014, between Oracle America, Inc. and SPX Corporation (d/b/a SPX Process Equipment)

 

As Incurred

 

Direct Charge

 

Flowco is responsible for any applicable charges related to its access or use (including any annual renewals due during service period).

 

Service available through March 26, 2016 and not extendable.

 

Services limited to Flowco locations in Rochester, NY location and Delavan, WI.

 

 

 

 

 

 

 

Access to and use of SAP Software under the Software End-User License Agreement, effective September 21, 2004, by and between SAP America, Inc. and SPX Corporation (as amended)

 

None

 

NA

 

Service available through December 31, 2015 and not extendable.

 

 

 

 

 

 

 

SAP ERP License Maintenance

 

None

 

NA

 

Service available through December 31, 2015 and not extendable.

 

 

 

 

 

 

 

Voice and Data Services & Circuits (AT&T ILEC, AT&T Mobility, Sprint, Windstream and Level 3 Communications)

 

As Incurred

 

Direct Charge

 

Flowco is responsible for any applicable charges related to its data circuits, including early termination fees.

 

 

 

 

 

 

 

Access to and use of Payroll, Payroll Tax and Garnishment BPO Services provided by AT&T under the Payroll BPO Services Agreement between SPX and AT&T Corp.

 

$24,000

 

Per Month

 

Payroll BPO services available until December 31, 2015.

 

 

 

 

 

 

 

2015 W2 and other year-end payroll tax BPO Services provided by AT&T under the Payroll BPO Services Agreement between SPX and AT&T Corp.

 

$10,000

 

One Time

 

Services available January 1, 2016 through March 31, 2016. Payment of unit charge is due on or before January 1, 2016.

 

A-2



 

Service Description

 

Unit
Charge

 

Cost Driver

 

Comments

 

 

 

 

 

 

 

Project Management Services

 

$130.00

 

Per Hour

 

Any management effort to migrate off an SPX technology, service and/or contract.

 

 

 

 

 

 

 

Technical Project Services

 

$150.00

 

Per Hour

 

Any technical effort to migrate off an SPX technology or service.

 

B.            Email Forwarding: At no charge, SPX will immediately forward each email message delivered to any “@spx.com” email address which was associated with an employee of any member of the Flowco Group (each, a “Covered Address”) to an individual destination email address selected by Flowco for each such applicable Covered Address.  Once the initial forwarding for a given Covered Address is established, changes may be made to the destination forwarding location for $50 per change.

 

C.            PeopleSoft Data Migration:  At no charge, SPX will (i) extract the relevant records regarding any Flowco Employee, Former Flowco Employee or Disabled Flowco Employee (each as defined in the Employee Matters Agreement) as included in the PeopleSoft database maintained by SPX as of the Effective Date, (ii) compile a read-only database solely comprised of such Flowco records in a format selected in the reasonable discretion of SPX (provided that such database format includes, at a minimum, query, reporting and standard report development functions) and (iii) deliver such database of Flowco records to Flowco.  In its reasonable discretion, SPX may elect to make such extraction and delivery in one or more phases, provided that the final database includes all such relevant records.  Until the full and final delivery of such database to Flowco in accordance with these provisions, the relevant portion of the applicable PeopleSoft database shall be considered “Archived Data” under Section 7.2(c) of the Separation Agreement.

 

D.            Website Traffic Redirection:  At no charge, SPX will forward the traffic destined for each web URL (each, an “SPX Domain”) in the list attached hereto as Exhibit A.I.D. (as such Exhibit may be amended from time to time in accordance with the provisions of the Transition Services Agreement) to one destination URL selected by Flowco (each, a “Flow Domain”) per SPX Domain.  Once the initial forwarding for an SPX Domain is established, changes may be made to the destination forwarding location for $50 per change.

 

Flowco agrees that no Flowco Domain shall (i) contain any obscene, defamatory, harassing, offensive, or malicious material, (ii) any material that otherwise contains any negative or disparaging references about SPX or its Affiliates, customers, suppliers, employees, officers, directors or the products or services of any such person or entity; or (iii) otherwise operate in any manner likely to cause confusion, mistake, or deception.  Flowco agrees that the determination of the foregoing shall be made in the reasonable discretion of SPX and that SPX may suspend or discontinue forwarding traffic upon notice to Flowco of SPX’s determination of a violation of any of the foregoing.

 

A-3



 

E.             Content on www.SPX.com:

 

·                  Splash Page/Screen: For a period starting on the Distribution Date and ending on the date which is thirty (30) days thereafter, SPX will maintain a ‘splash page’ attached to the www.spx.com web site that the user sees first before being given the option to continue to the main content of the site (the “Splash Page”).  The Splash Page will be presented to user with graphics in substantially the form attached as Exhibit A.I.E. (including the check-box included therein to be unchecked by default) but will only be shown on such user’s first visit to www.spx.com on or after the Distribution Date unless the user clicks the applicable check-box requesting to be shown the Splash Page on user’s next visit.  The Splash Page will provide the user with an option to click a hyperlink providing redirection to www.spxflow.com and Flowco may not change the destination web site without consent of SPX.

 

·                  Footer Bar Hyperlink: For a period starting on the Distribution Date and ending on the date which is six (6) months thereafter, SPX will maintain a hyperlink on the footer bar of the www.spx.com web site linking to directly the www.spxflow.com web site (the “FLOW Link”).  The FLOW Link will be displayed as prominently (including color, size and font) as other hyperlinks included in the footer of such web site.

 

A-4



 

II.  HUMAN RESOURCES

 

US Severance Payments:  Without limiting the responsibility of Flowco and members of the Flowco Group for certain severance Liabilities pursuant to Section 5.06 of the Employee Matters Agreement, SPX will continue to provide coordination, processing and delivery of any applicable severance payments due to any Former Flowco Employees (as defined in the Employee Matters Agreement) who were terminated between August 1, 2015 and the Effective Date and were based in the US at the time of such termination (the “Severed US Flowco Employees”).  SPX and Flowco acknowledge and agree that (i) Flowco shall manage and direct the negotiation with the Severed US Flowco Employees and the determination of the payments to be made to each of the Severed US Flowco Employees and (ii) Flowco shall remain responsible for any Actions arising out of such negotiations and determinations. SPX shall maintain and provide such applicable employment and payment records and other information regarding such Severed US Flowco Employees as reasonably requested by Flowco.

 

Other than as contemplated by Section 5.06 of the Employee Matters Agreement, Flowco shall reimburse SPX for the actual payroll, severance and benefits costs incurred associated with the Severed US Flowco Employees, as well as any third-party costs or expenses (including, but not limited to, taxes) arising from such severance payments, payroll, benefits and human resources participation (if any).

 

A-5



 

III.  FINANCE, ACCOUNTING AND TAX

 

A.            September 26, 2015 Month-End Close and Financial Reporting: Without limiting SPX’s agreement to provide the financial statement preparation and audit information, access and support as set forth in Section 5.2 of the Separation Agreement, SPX agrees to provide Flowco, until October 28, 2015 and at no additional charge, with the following financial reporting services solely with respect to the September 26, 2015 fiscal month-end:

 

·                  Maintain the current Certification (formerly AssureNET) application (“AssureNET”) and, with respect to the period ending September 26, 2015, the reconciliation, certification and variance analysis processes therein, to the extent related to Flowco or other members of the Flowco Group.

 

·                  Provide Flowco and other members of the Flowco Group with reasonable access to and rights under AssureNET in order to enter, review and adjust financial information in a manner consistent with the access and rights of Flowco and such members for fiscal periods ended prior to September 26, 2015.

 

·                  Participate in, and provide reasonable cooperation with respect to, transitioning those certain AssureNET financial reconciliation, certification and variance analysis processes related to Flowco or other members of the Flowco Group.

 

·                  Maintain the current DoubleCheck GRC application (“DoubleCheck”) and, with respect to the fiscal quarter ending September 26, 2015, the issue management, workflow and 302 certification processes therein, to the extent related to Flowco or other members of the Flowco Group.

 

·                  Provide Flowco and other members of the Flowco Group with reasonable access to and rights under DoubleCheck in order to enter, review and approve and close Sarbanes-Oxley issues in a manner consistent with the access and rights of Flowco and such members for fiscal periods ended prior to September 26, 2015.

 

·                  Participate in, and provide reasonable cooperation with respect to, transitioning those certain DoubleCheck the issue management, workflow and 302 certification processes related to Flowco or other members of the Flowco Group.

 

·                  Promptly after completion of the closing process for the fiscal period ending September 26, 2015, participate in the preparation of the Flowco opening balance sheet.

 

·                  For the avoidance of doubt, during the term of these fiscal month-end close services, neither SPX nor Flowco shall enter any transactions or other information in AssureNET or DoublCheck for any periods reflecting activity occurring on or after September 27, 2015.

 

B.            EMEA SAP General Ledger Services:  Until January 31, 2016, SPX Cooling Technologies GmbH shall maintain the current SAP General Ledger module application (the “SAP GL”) and the financial information contained therein for each of SPX International GmbH, SPX U.L.M. GmbH, SPX International Holding GmbH, SPX Clyde UK Limited, UD-RD Holding Company Limited and Medinah Holding GmbH (collectively, the “EMEA Holding Companies”) for an aggregate service fee of EUR 1,000 per month.  During such service period, SPX Cooling Technologies GmbH shall provide the EMEA Holding Companies with reasonable access to and rights under the SAP GL in

 

A-6



 

order to enter, review and adjust financial information in a manner consistent with the access and rights of such EMEA Holding Company for periods prior to the Effective Date.  Upon request from Flowco, SPX shall provide reasonable assistance in the migration of the EMEA Holding Companies from the SAP GL, subject to the Technical Project Services fees set forth in Section I.A above, as applicable.

 

C.            Treasury Services:  For a period of up to three (3) months, SPX shall permit Flowco-designated persons to use the SPX “company profile” in the applicable online banking systems to the extent necessary for access to the bank accounts of the members of the Flowco Group or any related processing/payment services.  SPX may limit or discontinue access to selected Flowco-designated persons at any time in its reasonable discretion.  Flowco will reimburse SPX for costs incurred for any such Treasury-related services provided by a third party.

 

D.            Deregistration of Marley Engineered Products (Shanghai) Co. Ltd.:  Without limiting SPX’s agreement to maintain and provide Flowco with access to (i) certain Archived Data pursuant to Section 7.2(c) of the Separation Agreement and (ii) certain transactional records pursuant to Article VI of the Tax Matters Agreement, SPX agrees to provide Flowco, at no additional charge, with such information and support (including access to selected personnel of Marley Engineered Products LLC) as reasonably requested by Flowco to support the deregistration and liquidation of Marley Engineered Products (Shanghai) Co. Ltd.

 

E.             US Payroll Tax Accounting: Upon request by Flowco and agreement covering project scope and required resources, SPX will provide US payroll tax accounting services to Flowco at the rate of $150/hr.

 

A-7



 

IV.  SPX CONTRACTS

 

SPX shall take commercially-reasonable efforts to allow the applicable members of the Flowco Group to continue to contract services under the same terms as the following SPX contracts, provided that the continuation of these services does not cause breach of any existing vendor agreement and does not result in additional costs to SPX:

 

·                                          Microsoft Enterprise Enrollment Agreement #83632359

·                                          Microsoft Select Plus Agreement #X20-02487

·                                          Enterprise Services Work Order, dated as of June 26, 2015, issued under Microsoft Business and Services Agreement #U4701657

·                                          Oracle Database Enterprise Edition — Processor Perpetual Software Update License & Support Order (ULA), dated as of September 22, 2015

·                                          Oracle License and Services Agreement between Oracle USA, Inc. and SPX dated December 7, 2007 (as amended)

·                                          Oracle BigMachines CPQ Cloud Services Agreement, dated November 25, 2014, between Oracle America, Inc. and SPX Corporation

·                                          Oracle BigMachines CPQ Cloud Services Renewal Agreement, with an effective date of August 11, 2014, between Oracle America, Inc. and SPX Corporation (d/b/a SPX Process Equipment)

·                                          Software End-User License Agreement, effective September 21, 2004, by and between SAP America, Inc. and SPX Corporation (as amended)

·                                          Travel Services Support Agreement with KesselRun

·                                          Travel Risk Management Agreement (Duty of Care) with International SOS, provided that Flowco shall be responsible for any incremental fees or charges arising from services provided thereunder to employees or representatives of the members of the Flowco Group (other than general monitoring services)

·                                          Hotel booking discount programs

·                                          All other Contracts listed on Schedule 2.9 to the Separation Agreement.

 

Subject to the provisions of Section 2.9 of the Separation Agreement, for each of the SPX Contracts listed above and upon request by Flowco, SPX shall provide Flowco with such information regarding pricing and other contract terms and the Flowco usage thereunder as reasonably required by Flowco in connection with negotiation of a replacement contract with the applicable vendor, subject to appropriate restrictions for classified, privileged or confidential information and to the requirements of applicable law or contractual provisions.

 

A-8



 

V. OTHER

 

To be provided on an as-needed basis, subject to reasonable negotiation on project scope, for the term of the Transition Services Agreement:

 

Task

 

Rate

 

 

 

Risk Management Consulting: Allocations, Contract Review, Renewal Process, International Renewals & Ongoing Concepts (including Tax Issues), Risk Management Activities and Policies Best Practices, Balance Sheet Accrual & Actuarial Process, Philosophic Approach to Settlements/ Claims/ Claimants, Insurance Policy Review, Due Diligence, Divestitures and Certificates of Insurance

 

$250 per hour

 

 

 

Consulting on operation of Concur Business Travel and Expense Management Software

 

$130 per hour

 

 

 

Knowledge Transfer Services. Upon request by Flowco, SPX agrees to make its corporate-level employees available to provide limited general consulting services to corporate-level employees of Flowco regarding general processes, enterprise knowledge, routines, best practices and organizational matters, to the extent related to the services formerly performed by such Infrastructurco employee.

 

SPX shall have the sole discretion in identifying the specific employees to perform such services and no obligation to retain any specific Infrastructurco employee for performance of these services. Flowco acknowledges and agrees that the scope of these services shall be limited to general consulting and guidance on prior practices and that any requests for process outsourcing, functional training/onboarding, preparation of process summaries or other documentation, information collection, research, third-party services, implementation, developments, enhancements, project management or ticket-item resolutions are not included and any such projects must be separately negotiated on a fee-for-project basis.

 

No Charge

 

A-9



 

SCHEDULE B

 

Flowco Services

 

Upon reasonable notice, throughout the term of the Transition Services Agreement, the Flowco Service Providers shall have reasonable access to the facilities and premises of the applicable members of the Infrastructurco Group to the extent necessary to provide the Flowco Services, in each case subject to the reasonable safety, security, confidentiality and other policies and procedures of SPX in place from time to time.  SPX shall provide Flowco with such information, management direction and documentation as is reasonably necessary for the Flowco Service Providers to perform the Flowco Services and the members of the Infrastructurco Group shall perform such other duties and tasks as may be reasonably required to permit the Flowco Service Providers to perform the Flowco Services.

 

I.  INFORMATION TECHNOLOGY

 

A.  The following list of IT services will be provided by Flowco:

 

Service Description

 

Unit
Charge

 

Cost Driver

 

Comments

 

 

 

 

 

 

 

Concur Expense Reporting

 

$10.00

 

Per Report (with minimum)

 

Charges subject to minimum base transactions usage of 7,800 reports per calendar quarter. Service terminates March 28, 2016.

 

 

 

 

 

 

 

Data Circuits for Infrastructurco sites (Verizon MPLS)

 

As Incurred

 

Direct Charge

 

SPX is responsible for any applicable charges related to its data circuits, including early termination fees.

 

 

 

 

 

 

 

Communications Center Services for Infrastructurco equipment located in Verizon’s Amsterdam and Hong Kong Regional Communication Hubs

 

As Incurred

 

Direct Charge

 

 

 

 

 

 

 

 

 

Call Forwarding of Office Phones for Infrastructurco Employees in Charlotte, NC and Shanghai, China

 

$100.00

 

Per month, per location

 

Charlotte Service terminates March 26, 2016

 

Shanghai Service terminates January 1, 2016

 

 

 

 

 

 

 

Project Management Services

 

$130.00

 

Per Hour

 

Any management effort to migrate a Flowco technology, service and/or contract.

 

 

 

 

 

 

 

Technical Project Services

 

$150.00

 

Per Hour

 

Any technical effort to migrate off a Flowco technology or service.

 

B-1



 

B.            United Arab Emirates:  Subject to reasonable negotiation on project scope and in exchange for fees in accordance with the Project Management Services and Technical Project Services fee structure set forth above, one or more members of the Flowco IT support team in the United Arab Emirates will provide consulting and guidance on information technology needs and set-up at the new Infrastructurco office location in the United Arab Emirates for the four (4) employees of the Infrastructurco Group referenced in Section II.B.1. of this Schedule B.  Infrastructurco will be solely responsible for the purchase of any related equipment, hardware and software (including reimbursement of Flowco for any such items purchased as part of the services).  Infrastructurco acknowledges and agrees that Flowco’s support is solely for the one-time relocation to a new facility in the United Arab Emirates and not for ongoing technical support or maintenance.

 

C.            Chennai, India:  Subject to reasonable negotiation on project scope and in exchange for fees in accordance with the Project Management Services and Technical Project Services fee structure set forth above, one or more members of the Flowco IT support team in India will complete the current project in process regarding set-up at the new Infrastructurco office location in Chennai, India for the two (2) of the employees of the Infrastructurco Group referenced in Section II.B.2. of this Schedule B.  Infrastructurco will be solely responsible for the purchase of any related equipment, hardware and software (including reimbursement of Flowco for any such items purchased as part of the services).  Infrastructurco acknowledges and agrees that Flowco’s support is solely for the one-time relocation of two people to a new facility in Chennai, India and not for ongoing technical support or maintenance.

 

D.            Footer Bar Hyperlink: For a period starting on the Distribution Date and ending on the date which is six (6) months thereafter, Flowco will maintain a hyperlink on the footer bar of the www.spxflow.com web site linking to the www.spx.com web site (the “SPXC Link”).  The SPXC Link will be displayed as prominently (including color, size and font) as other hyperlinks included in the footer of such web site.

 

B-2



 

II.  HUMAN RESOURCES AND PAYROLL SUPPORT

 

A.                  UK HR and Payroll Services and Flexible Benefits:

 

Flowco’s shared service centre in EMEA will continue to provide those certain HR Direct (administration) and Payroll services as denoted in the “Service Scope” as set forth in detail in Exhibit B.II.A-1 hereto and with access for certain eligible employees of Radiodetection Limited and SPX Cooling Technologies UK Limited (collectively, the “Covered Entities”) to participate in those certain flexible benefits schemes set forth in Exhibit B.II.A-2 hereto (the “Flexible Benefits”) (collectively, the “HR Services”).  The HR Service fees set forth below are contingent upon Flowco providing the full scope of HR Services.  If there are certain HR Services that are terminated by SPX pursuant to the terms of the Transition Services Agreement, the fees for any remaining HR Services may increase at Flowco’s discretion due to changes required to establish processes, transitions and interfaces.  All fee amounts are subject to VAT at prevailing rates as required by local laws.

 

The quarterly fees for the HR Services are set forth below:

 

Radiodetection Limited

 

GBP

23,430

 

SPX Cooling Technologies UK Limited

 

GBP

7,140

 

 

SPX shall cause each of the Covered Entities to continue with the full provision of HR Services, including coverage of eligible employees of the Covered Entities under the Flexible Benefits, from Flowco until June 30, 2016 (the “Term”).  No changes to the fee structure or the time period that fees are applicable may be made by SPX.  Should the net number of the employees of the Covered Entities being supported by Flowco increase by ten (10) or more employees (approx. 5%) from a covered base of two hundred fifteen (215) supported employees, Flowco reserves the right increase the HR Service fee in accordance with the percentage increase in employees.  No deductions for a reduction in the number of applicable employees will be made.

 

SPX will ensure that the existing UK Bank Account(s) of each of the Covered Entities remain available during the Term for use by Flowco in connection with completion of the HR Services.  SPX will provide appropriate access and funding to allow Flowco’s designated third-party payroll provider to execute payroll and payroll related payments (including taxes) on behalf of the Covered Entities pursuant to the HR Services.  Flowco will not utilize its own funds to execute any such payroll or payroll-related payments in the event that such funds are not made available from SPX.

 

Any incremental third party costs incurred by Flowco required in order to support the HR Services will be billed quarterly to the Covered Entities on a cost-only basis. These include, but are not limited to: pension and other benefits administration costs, the employer portion of benefits premium costs and background check costs.

 

Access to HRMS SuccessFactors: Without limiting SPX’s agreement to provide the general cooperation as set forth in the Transition Services Agreement, SPX shall provide Flowco’s designated employees with reasonable access to the HRMS system of SPX, SuccessFactors, in connection with the execution of the HR Services. In addition, SPX agrees that, during the Term,

 

B-3



 

no technical or process changes will be made to the applicable SuccessFactors systems, including implementation of new modules or functionality, without the written consent of Flowco.  Flowco will not be liable for any costs or fines incurred as a result of system service interruption or system changes made without Flowco’s consent.

 

Excluded Services:  For the avoidance of doubt, the HR Services specifically exclude any requirement for Flowco to provide a solution for, or to participate in development of, any HR and Payroll services for SPX or the Covered Entities applicable to any period after the Term or to provide any of the tasks set forth in Exhibit B.II.A-3 hereto.

 

Additional HR project support services:  Upon separate agreement between SPX and Flowco covering support for any projects or activities requested outside of the scope of the Services, and subject to availability of required resources and reasonable lead-times, Flowco’s shared service centre in EMEA will provide the Covered Entities with general HR and payroll support at the following rates:

 

Process Expertise Services

 

GBP 50/hr

 

Project Management Services

 

GBP 85/hr

 

 

Any incremental third party costs incurred by Flowco required to support any agreed projects or activities requested outside the scope of the HR Services will be billed to SPX on a cost only basis.

 

B.                  Other Employees:  For each of the following, SPX shall reimburse Flowco for the actual payroll, perquisite allowances and benefits costs (including severance) incurred associated with the applicable employees, as well as any third-party costs or expenses (including, but not limited to, taxes) arising from such payroll, benefits and human resources participation (if any).

 

1.              United Arab Emirates: Flowco and SPX acknowledge and agree that four (4) employees of a member of the Infrastructurco Group are currently working in the United Arab Emirates under work permits/visas sponsored by a member of the Flowco Group.  To the extent permissible under applicable law, Flowco will continue to sponsor the work visas for the applicable employees and continue to direct such employees to provide services exclusively to the Infrastructurco Group in a manner consistent to the services provided as of the Effective Date.  SPX agrees and acknowledges that SPX shall be solely responsible for all acts and omissions of the relevant employees and shall have no cause of action against Flowco or any of its Affiliates arising out of the relevant employees’ services.  If SPX fails to transition the work permits/visas with respect to the relevant employees on or before March 31, 2016, Flowco may unilaterally terminate such work permit/visa arrangements and SPX shall reimburse Flowco for all external and reasonable internal costs associated with terminating such work permits/visas and severing or relocating such employees (including any costs arising under such employee’s activities after such termination).

 

For a period ending no later than March 31, 2016, Flowco will continue to permit participation in the worker’s compensation insurance coverages sponsored by Flowco in the United Arab Emirates, by those four (4) employees of members of the Infrastructurco

 

B-4



 

Group who are currently participants in such coverages, solely to the extent permissible under applicable law.

 

2.              India:  Flowco and SPX acknowledge and agree that two (2) employees of SPX Flow Technology (India) Private Limited are, as of the Effective Date, performing services solely for, and on behalf of, members of the Infrastructurco Group (the “Managed India Employees”).  Flowco will continue to direct the Managed India Employees to provide services exclusively to the Infrastructurco Group in a manner consistent to the services provided as of the Effective Date.  SPX agrees and acknowledges that SPX shall be solely responsible for all acts and omissions of each of the Managed India Employees and shall have no cause of action against Flowco or any of its Affiliates arising out of the relevant employees’ services.  If SPX fails to transition the employment agreements with respect to the Managed India Employees on or before March 31, 2016, Flowco may unilaterally terminate such employees and SPX shall reimburse Flowco for all external and reasonable internal costs associated with terminating such employees (including any costs arising under such employee’s activities after such termination).

 

For a period ending no later than March 31, 2016, Flowco will continue to provide payroll and human resources support for the Managed India Employees as well as four (4) other employees of a member of the Infrastructurco Group who are located in India and paid through SPX Flow Technology (India) Private Limited as of the Effective Date.  During such period, Flowco will continue to permit participation in the medical and life insurance coverages sponsored by SPX Flow Technology (India) Private Limited, by such individuals who are currently participants in such coverages, solely to the extent permissible under applicable law.

 

C.                  US Stock Comp Transition Services: Prior to the Distribution, a ‘Corporate Action Team’ between Fidelity Stock Plan Services, LLC and SPX was established to create a system to manage stock awards for the applicable Infrastructurco Employees in accordance with the provisions of Section 4.03 of the Employee Matters Agreement (the “Award Transition Plan”).  SPX and Flowco acknowledge and agree that the final items of the Award Transition Plan, related to transferring the unvested stock into the new participant accounts, cannot take effect until the Flowco Share Ratio and the Infrastructurco Share Ratio (each as defined in the Employee Matters Agreement) are established after the Distribution.  Without limiting Flowco’s obligations under Section 4.08 of the Employee Matters Agreement, Flowco will continue to provide such Services as reasonably required to complete the Infrastructurco participant account transfer under the Award Transition Plan, including, but not limited to: providing direction to Fidelity Stock Plan Services, LLC, conversion of Infrastructurco participant data, mapping of plan features, loading grants as appropriate, and reconciliation of the applicable plans post spin.

 

SPX acknowledges and agrees that Flowco’s support is solely for the one-time completion of the Award Transition Plan and does not include reporting, recurring management or any future grant administration.  The Services provided under this Section II.C of Schedule B shall be provided for a service fee of $250 per hour and shall terminate no later than October 12, 2015.

 

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III.  FINANCE, ACCOUNTING AND TAX

 

A.            APAC Income Tax Accounting and Tax Advisory Services: Flowco agrees to provide SPX or its applicable Affiliates with the following tax advisory services, in each case to the extent reasonably requested by SPX:

 

·                  Provide general review of the High Technology Status application for SPX Cooling Technologies (ZJK) Co. Ltd.  Such application will be prepared by SPX but Flowco will assist by reviewing and supporting discussions with the tax authorities.

 

·                  Provide general review of the quarterly tax provision calculations, as prepared by SPX, and advise of corrections as necessary and support the documentation process for each of the following entities: SPX Cooling Technologies (Beijing) Co. Ltd., SPX Cooling Technologies (ZJK) Co. Ltd, Wuxi Balcke Durr Technologies Company Ltd., SPX (GZ) Cooling Technologies Co. Ltd. and SPX Cooling Technologies (Foho) Company (collectively, the “SPX APAC Entities”).

 

·                  Provide pre-filing general review of the 2015 APAC tax returns and related filings for each of the SPX APAC Entities, as prepared by SPX’s local tax advisors/auditors.  Due date for such returns is May 31, 2016.

 

·                  Assist SPX APAC Entities in the preparation of the tax provision-to-return reconciliation of the 2015 tax returns by August 31, 2016.

 

The APAC Income Tax Accounting and Tax Advisory Services shall be provided subject to the following fees, as well as reimbursement of any reasonable third-party costs:

 

·

Manager (initially David Dai):

RMB 1,300/hr.

 

·

Staff (initially Isaac Zhu):

RMB 350/hr.

 

 

B.            Form 1099 Filings: Upon request by SPX, Flowco will provide SPX and applicable members of the Infrastucturco Group with the reports and data reflecting activity of the members of the Flowco Group prior to the Effective Date to the extent requested by SPX and as reasonably necessary to support the processing and delivery of applicable Form 1099 reports to vendors of SPX.

 

C.            September 26, 2015 Month-End Close and Financial Reporting: Without limiting Flowco’s agreement to provide the financial statement preparation and audit information, access and support as set forth in Section 5.2 of the Separation Agreement, Flowco will provide SPX, until October 28, 2015 and at no additional charge, with the following financial reporting services solely with respect to the September 26, 2015 fiscal month-end:

 

·                  Maintain the current Oracle Hyperion Financial Management application (the “Consolidated HFM”) and the corporate, business unit and consolidating financial information for SPX and Flowco for periods ending on or before September 26, 2015.

 

·                  Provide SPX and other members of the Infrastructurco Group with reasonable access to and rights under the Consolidated HFM in order to enter, review and adjust financial information in a manner consistent with the access and rights of SPX and such members for periods ended prior to September 26, 2015.

 

B-6



 

·                  Participate in, and provide reasonable cooperation with respect to, the financial reporting and month-end closing process reflecting transactions in the Consolidated HFM for members of the Flowco Group for fiscal month-end periods ending on or before September 26, 2015.

 

·                  Promptly after completion of the closing process for the fiscal period ending September 26, 2015, permit and participate in a full replication of the data in the Consolidated HFM for all periods ending on or before September 26, 2015 and reconciliation and delivery of such data to the SPX instance of the Oracle Hyperion Financial Management application.

 

·                  For the avoidance of doubt, during the term of these fiscal month-end close services, neither SPX nor Flowco shall enter any transactions or other information in the Consolidated HFM for any periods reflecting activity occurring on or after September 27, 2015.

 

D.            Treasury Services: SPX will reimburse Flowco for costs incurred for any Treasury-related services provided by a third party.

 

·                  Travel Cards; Purchasing Cards:  The employees of members of the Infrastructurco Group shall have continued use of the travel cards being used by any such employees as of the Effective Date for 30 days thereafter.  SPX shall reimburse Flowco for any charges made against such credit cards and for any administrative charges or fees (including any late fees arising from failure the failure of SPX to pay any Invoice) charged by the third-party provider.  All purchasing cards (P-cards) held by any employee of a member of the Infrastructurco will be terminated as of the Effective Date.

 

·                  APAC Credit Cards: As of the Effective Date, certain members of the Infrastructurco Group participate in a credit card program under an agreement between SPX Corporation (China) Co., Ltd. (a member of the Flowco Group) and China Merchants Bank.  Such members of the Infrastructurco Group shall have continued access to such credit card program and use of the credit cards issued thereunder until June 29, 2016.  Each applicable member of the Infrastructurco Group shall directly pay China Merchants Bank for any charges made against such credit cards and for any related administrative charges or fees.  SPX shall reimburse SPX Corporation (China) Co., Ltd. for any liability incurred arising from the failure by any member of the Infrastructurco Group to make any such payments.

 

·                  Australia Credit Cards: As of the Effective Date, Radiodetection Australia Pty Ltd. (a member of the Infrastructurco Group) participates in a credit card program under an agreement between SPX Flow Technology Australia Pty Ltd. (a member of the Flowco Group) and Bank of America, N.A.  Radiodetection Australia Pty Ltd. shall have continued access to such credit card program and use of the credit cards issued thereunder until December 31, 2015.  Radiodetection Australia Pty Ltd. shall directly pay Bank of America, N.A. for any charges made against such credit cards and for any related administrative charges or fees.  SPX shall reimburse SPX Flow Technology Australia Pty Ltd. for any liability incurred arising from the failure by Radiodetection Australia Pty Ltd. to make any such payments.

 

·                  Online Banking:  For a period of up to three (3) months, Flowco shall permit SPX-designated persons to use the Flowco “company profile” in the applicable online banking systems to the extent necessary for access to the bank accounts of the members of the

 

B-7



 

Infrastructurco Group or any related processing/payment services.  Flowco may limit or discontinue access to selected SPX-designated persons at any time in its reasonable discretion.

 

B-8



 

IV.  FACILITY ACCESS AND MANAGEMENT

 

Flowco agrees to provide SPX or its applicable Affiliates with access, use of limited common areas, telephone and internet access and general administrative services (all in accordance with standards of the Level of Services set forth in Section 1.2 of the Transition Services Agreement) in the following facilities in exchange for the fees set forth below.  Flowco’s agreement to provide access to, or use of, a given facility shall automatically terminate upon termination of Flowco’s right to occupy such facility or relevant portion thereof (for any reason) and Flowco shall not be obligated to provide replacement facilities for SPX.

 

Facility

 

 

 

Monthly Fee*

1.

 

SPX Middle East FZE
The Galleries, 3rd Floor
Downtown Jebel Ali
Dubai, United Arab Emirates

 

AED

17.090,03

 


* Monthly fee is applicable for no more than the space utilized and scope of services provided as of the Effective Date and use by the number of employees of members of the Infrastructurco Group that utilized such facility as of the Effective Date.  Additional space of users must be separately negotiated.

 

B-9



 

V.  FLOWCO CONTRACTS

 

Flowco shall take commercially-reasonable efforts to allow the applicable members of the Infrastructurco Group to continue to contract services under the same terms as the following Flowco contracts, provided that the continuation of these services does not cause breach of any existing vendor agreement and does not result in additional costs to Flowco:

 

·                                          Travel Booking Services Support Agreement with BCD, excluding VIP Agent and Meeting Services offerings; provided that, for any period during which any member of the Infrastructurco Group utilizes such contract, SPX shall reimburse Flowco quarterly in an amount equal to 40% of the those certain non-POS fees billed by BCD.

 

·                                          Amendment 11 to the Services Agreement identified by Verizon/MCI Contract Identification Number 566509, between Verizon Business Network Services Inc. and SPX (as predecessor in interest to Flowco), together with all exhibits, attachments, and schedules thereto, all orders issued thereunder, and all prior modifications to any of the foregoing on or before the date hereof.

 

Subject to the provisions of Section 2.9 of the Separation Agreement, for each of the Flowco Contracts listed above and upon request by SPX, Flowco shall provide SPX with such information regarding pricing and other contract terms and the SPX usage thereunder as reasonably required by SPX in connection with negotiation of a replacement contract with the applicable vendor, subject to appropriate restrictions for classified, privileged or confidential information and to the requirements of applicable law or contractual provisions.

 

B-10



 

VI. OTHER

 

To be provided on an as-needed basis, subject to reasonable negotiation on project scope, for the term of the Transition Services Agreement:

 

Task

 

Rate

 

 

 

M&A Advisory Services. Such services shall continue until (i) consummation of the applicable identified transaction or (ii) notice of termination by SPX, whichever is earlier.

 

$20,000 per month; subject to equitable adjustment to reflect the time commitment and scope of services provided, upon mutual agreement by SPX and Flowco in good faith

 

 

 

Conflict Minerals Assistance:  Overall coordination of Infrastructurco’s Conflict Minerals Compliance Program data preparation in support for CMRT report development & submission.  Tasks include but are not limited to: coordination of supplier identification and segregation; coordination of CM supplier survey solicitation, expediting, compilation and reporting; coordination of smelter RCOI for 3TG materials;  and coordination of Infrastructurco representatives & consultants involved in CMRT data preparation. Such services terminate May 31, 2016 if not earlier terminated.

 

$200 per hour

 

 

 

Security Assistance Management

 

$130 per hour

 

 

 

Knowledge Transfer Services. Upon request by SPX, Flowco agrees to make its corporate-level employees available to provide limited general consulting services to corporate-level employees of Infrastructurco regarding general processes, enterprise knowledge, routines, best practices and organizational matters, to the extent related to the services formerly performed by such Flowco employee.

 

Flowco shall have the sole discretion in identifying the specific employees to perform such services and no obligation to retain any specific Flowco employee for performance of these services. SPX acknowledges and agrees that the scope of these services shall be limited to general consulting and guidance on prior practices and that any requests for process outsourcing, functional training/onboarding, preparation of process summaries or other documentation, information collection, research, third-party services, implementation, developments, enhancements, project management or ticket-item resolutions are not included and any such projects must be separately negotiated on a fee-for-project basis.

 

No Charge

 

B-11




Exhibit 10.2

 

TAX MATTERS AGREEMENT

 

by and between

 

SPX CORPORATION

 

and

 

SPX FLOW, Inc.

 

Dated as of September 26, 2015

 



 

Table of Contents

 

ARTICLE I                                DEFINITIONS

2

 

 

ARTICLE II                           ALLOCATION OF TAXES AND REFUNDS

6

 

 

 

Section 2.1

Responsibility for Taxes

6

Section 2.2

Entitlement to Refunds

7

Section 2.3

Straddle Periods

7

Section 2.4

Temporary Differences

7

 

 

 

ARTICLE III                      TAX RETURNS

8

 

 

 

Section 3.1

Responsibility for Preparation, Filing and Payment

8

Section 3.2

Consistent with Past Practice

8

Section 3.3

Closing of Flowco Taxable Year

8

Section 3.4

Carrybacks

8

Section 3.5

Tax Attributes

9

Section 3.6

Treatment of Deductions Associated with Equity-Related Compensation

9

Section 3.7

Review Rights—Material Adverse Effect

10

Section 3.8

Review Rights and Reimbursement—Taxes for Which Non-Preparing Party is Responsible

10

Section 3.9

Refund Payments

10

Section 3.10

Expenses

11

Section 3.11

German Tax Payment

11

 

 

 

ARTICLE IV                       TAX-FREE STATUS OF THE TRANSACTIONS

11

 

 

 

Section 4.1

Representations and Warranties

11

Section 4.2

Prohibited Events

11

Section 4.3

Procedures Regarding Opinions and Rulings

13

Section 4.4

Protective Section 336(e) Elections

13

Section 4.5

Consistent Reporting

14

 

 

 

ARTICLE V                            TAX PROCEEDINGS

14

 

 

 

Section 5.1

Notice

14

Section 5.2

Conduct

14

 

 

 

ARTICLE VI                       COOPERATION

15

 

 

 

Section 6.1

General Cooperation

15

Section 6.2

Retention of Records

15

 

 

 

ARTICLE VII                  INDEMNIFICATION

15

 

 

 

Section 7.1

Survival

15

Section 7.2

Indemnification by Infrastructurco

15

 

i



 

Table of Contents

 

Section 7.3

Indemnification by Flowco

16

Section 7.4

Flowco Gross-Up Obligation

16

Section 7.5

Characterization of Indemnification and Reimbursement Payments

16

 

 

 

ARTICLE VIII             MISCELLANEOUS

16

 

 

 

Section 8.1

Dispute Resolution

16

Section 8.2

Tax Sharing Agreements

16

Section 8.3

Specific Performance

17

Section 8.4

Interest

17

Section 8.5

Coordination with the Separation Agreement and Other Ancillary Agreements

17

Section 8.6

Effective Date

17

 

ii



 

TAX MATTERS AGREEMENT

 

THIS TAX MATTERS AGREEMENT (this “Agreement”) is entered into as of September 26, 2015, by and between SPX Corporation, a Delaware corporation (“SPX” or “Infrastructurco”), and SPX FLOW, Inc., a Delaware corporation and wholly-owned subsidiary of SPX (“Flowco”) (each a “Party” and together, the “Parties”).

 

R E C I T A L S:

 

WHEREAS, SPX currently conducts the Infrastructurco Business and the Flowco Business directly and through its Subsidiaries, and is the common parent of an affiliated group (within the meaning of Section 1504 of the Code) of corporations filing a consolidated return for U.S. federal income tax purposes (the “SPX Consolidated Group”);

 

WHEREAS, the Board of Directors of SPX has determined that it is in the best interests of SPX and its stockholders to separate SPX into two separate, publicly traded companies: (i) Infrastructurco, which will continue to conduct, directly and through its Subsidiaries, the Infrastructurco Business, and (ii) Flowco, which will continue to conduct, directly and through its Subsidiaries, the Flowco Business;

 

WHEREAS, in order to effect such separation, (i) SPX and certain of its Subsidiaries have effectuated the transactions described in the Reorganization Step Plan that precede the completion of the Flowco Asset Transfer and the Distribution (such transactions, the “Restructuring”); (ii) pursuant to the Reorganization Step Plan and that certain Separation and Distribution Agreement entered into as of September 22, 2015, by and between SPX and Flowco (the “Separation Agreement”), SPX has transferred and has caused certain of its Subsidiaries to, transfer (directly or indirectly) the Flowco Assets to Flowco in exchange for (a) the actual or constructive the issuance by Flowco to SPX of shares of the common stock of Flowco, (b) the substitution of Flowco for SPX as the obligor under the Notes, and corresponding issuance and delivery by Flowco of the Flowco Global Note, and (c) the assumption by Flowco (directly or indirectly) of the Flowco Liabilities (the transactions described in this clause (ii), the “Flowco Asset Transfer”); (iii) a portion of the proceeds of the Flowco Financing Arrangements was used, at SPX’s direction, to retire an equal amount of SPX’s outstanding indebtedness under the Credit Agreement; and (iv) SPX will distribute all of the common stock of Flowco to the holders of SPX Common Stock as of the Record Date on a pro rata basis (the “Distribution”);

 

WHEREAS, the Distribution is motivated in whole or substantial part by the corporate business purposes of (i) allowing investors to separately value each company based on its distinct investment identity, (ii) allowing each company to more effectively pursue its distinct operating priorities and strategies and opportunities for long-term growth and profitability in its respective markets, (iii) allowing each company to more directly tie incentive compensation arrangements for its employees to the performance of its business and the achievement of its strategic objectives, enhancing employee hiring and retention, (iv) permitting each company to implement a capital structure appropriate to its strategy and business needs and to concentrate its financial resources solely on its own operations without having to compete with the other company’s businesses for investment capital, and (v) providing each company increased strategic flexibility to make acquisitions and form partnerships and alliances in its target markets, unencumbered by consideration of the potential impact on or of the businesses of the other company, including by allowing each company to effect future acquisitions using its own stock for all or part of the consideration, the value of which will be more closely aligned with the performance of its businesses, and unaffected by the businesses of the other company;

 

WHEREAS, the Parties intend, for U.S. federal income tax purposes, for (i) certain steps of the Restructuring to qualify as tax-free transactions; (ii) the Flowco Asset Transfer to qualify as a reorganization described in Section 368(a)(1)(D) of the Code; (iii) the substitution of Flowco for SPX as the obligor under the Notes to be treated, consistent with the IRS Ruling, as an issuance by Flowco to SPX of

 



 

“securities” (within the meaning of Section 361(a) of the Code) in partial consideration for the Flowco Asset Transfer (in an exchange governed by Section 361(a) of the Code), followed by a distribution by SPX of such securities to holders of the Notes in exchange for the Notes (in an exchange governed by Section 355(a)(1)(A)(ii) of the Code); and (iv) the Distribution to qualify as a transaction described in Section 355(a) of the Code;

 

WHEREAS, as a result of the Distribution, the Flowco Entities that were members of the SPX Consolidated Group will cease to be members of the SPX Consolidated Group (the “Deconsolidation”); and

 

WHEREAS, the Parties intend in this Agreement to allocate economic responsibility for Taxes arising prior to, as a result of, and subsequent to the Distribution, and to provide for and agree upon certain other matters relating to Taxes.

 

NOW, THEREFORE, in consideration of the foregoing and the terms, conditions, covenants and provisions of this Agreement, the Parties hereby agree as follows:

 

ARTICLE I
DEFINITIONS

 

Any capitalized term used in this Agreement but not defined herein shall have the meaning ascribed to it in the Separation Agreement.  For purposes of this Agreement, the following terms shall have the following meanings:

 

Agreement” has the meaning set forth in the preamble.

 

Carryback” has the meaning set forth in Section 3.4.

 

Code” means the Internal Revenue Code of 1986, as amended.

 

Counsel” means (i) Fried, Frank, Harris, Shriver & Jacobson LLP, with respect to the Flowco Asset Transfer and the Distribution, and (ii) Baker & McKenzie LLP, with respect to the Restructuring.

 

Deconsolidation” has the meaning set forth in the recitals.

 

Distribution” has the meaning set forth in the recitals.

 

Distribution Date” means the date of the consummation of the Distribution, which shall be determined by the Board of Directors of SPX in its sole and absolute discretion.

 

Due Date” means (a) with respect to a Tax Return, the date (taking into account all valid extensions) on which such Tax Return is required to be filed under applicable Law and (b) with respect to a payment of Taxes, the date on which such payment is required to be made to avoid the incurrence of interest, penalties and/or additions to tax.

 

Effective Time” means the time at which the Distribution is effective on the Distribution

 

2



 

Date.

 

Final Determination” means any final resolution of liability for any Tax for any taxable period, by or as a result of (a) a final decision, judgment, decree or other order by any court of competent jurisdiction that can no longer be appealed, (b) a final settlement with the IRS, a closing agreement or accepted offer in compromise under Sections 7121 or 7122 of the Code, or a comparable agreement under the Laws of any other jurisdiction, which resolves the entire Tax liability for any taxable period, (c) any allowance of a refund or credit in respect of an overpayment of Tax, but only after the expiration of all periods during which such refund or credit may be recovered by the jurisdiction imposing the Tax, or (d) any other final resolution, including by reason of the expiration of the applicable statute of limitations or the execution of a pre-filing agreement with the IRS or other Taxing Authority.

 

Flowco” has the meaning set forth in the preamble.

 

Flowco Asset Transfer” has the meaning set forth in the recitals.

 

Flowco Entity” means any of Flowco and any entity (including any predecessor thereof) that will be a Subsidiary of Flowco immediately after the Effective Time.

 

Flowco Prohibited Event” means any Prohibited Event that Flowco causes or permits to occur.

 

Flowco PTI Taxes” means any U.S. federal income taxes resulting from a Final Determination and attributable to amounts included in the gross income of a Flowco Entity or an Infrastructurco Entity under Section 951(a) of the Code on account of a Flowco Entity that is a “controlled foreign corporation” (within the meaning of Section 957(a) of the Code), to the extent that no Infrastructurco Entity received, prior to the Effective Time, a distribution of the earnings and profits corresponding to such income inclusion.

 

Income Tax” means any income, franchise or similar tax based upon, measured by or calculated by reference to net income or net profits (including any liability under Treasury Regulations Section 1.1502-6), together with any interest, penalty or addition attributable thereto.

 

Infrastructurco” has the meaning set forth in the preamble.

 

Infrastructurco Entity” means any of Infrastructurco and any entity (including any predecessor thereof) that will be a Subsidiary of Infrastructurco immediately after the Effective Time.

 

Infrastructurco Prohibited Event” means any Prohibited Event that Infrastructurco causes or permits to occur.

 

IRS” means the U.S. Internal Revenue Service.

 

IRS Ruling” means private letter ruling PLR-103674-15, dated May 28, 2015, issued by the IRS to SPX.

 

Notes” means Flowco’s 6.875 % Senior Notes due 2017 subject to the Indenture.

 

Opinions” means the opinions of Counsel with respect to certain Tax aspects of the Transactions.

 

3



 

Party” and “Parties” have the meanings set forth in the preamble.

 

Past Practice” means past custom, practices, accounting methods, elections and conventions.

 

Permitted Carryback” has the meaning set forth in Section 3.4.

 

Post-Distribution Period” means any taxable period (or portion thereof) beginning after the Distribution Date, including for the avoidance of doubt, the portion of any Straddle Period beginning after the Distribution Date.

 

Pre-Distribution Period” means any taxable period (or portion thereof) ending on or before the Distribution Date, including for the avoidance of doubt, the portion of any Straddle Period ending at the end of the day on the Distribution Date.

 

Pre-Distribution Flowco State Income Taxes” means any U.S. state Income Taxes incurred by any Flowco Entity in any Pre-Distribution Period (excluding, for the avoidance of doubt, any such Taxes that are attributable to any action taken by a Flowco Entity on the Distribution Date after the Effective Time).

 

Prohibited Event” has the meaning set forth in Section 4.2(a).

 

Refund” means any refund of Taxes or any credit for Taxes in lieu thereof, including any interest payable thereon or with respect thereto.

 

Restructuring” has the meaning set forth in the recitals.

 

Ruling Request” means the request for rulings submitted to the IRS by Counsel on January 21, 2015, regarding the U.S. federal income tax treatment of the substitution of Flowco for SPX as the obligor under the Notes (including the exhibits thereto and any supplemental submissions).

 

Separation Agreement” has the meaning set forth in the recitals.

 

Spin-Off Taxes” means any Taxes that are not attributable to a Prohibited Event and that are attributable to (i) the Restructuring, the Flowco Asset Transfer, the Distribution or the Deconsolidation or (ii) the settlement of any intercompany receivable, payable, loan or other account between any Flowco Entity and any Infrastructurco Entity pursuant to Section 2.4 of the Separation Agreement.

 

SPX” has the meaning set forth in the preamble.

 

SPX Consolidated Group” has the meaning set forth in the recitals.

 

SPX Consolidated Taxes” means any U.S. federal, state or local Income Taxes reported or reportable on any Tax Return filed or required to be filed by an Infrastructurco Entity in its

 

4



 

capacity as the common parent of an affiliated (or similar) group of corporations that reports its U.S. federal, state or local Income Taxes, respectively, on a consolidated (or similar) basis.

 

Straddle Period” means any taxable period that begins on or before and ends after the Distribution Date.

 

Tax” means any tax, charge, fee, duty, levy, impost, or other similar assessment, in each case imposed by any governmental authority, including, but not limited to, any net income (including any liability under Treasury Regulations Section 1.1502-6(a)), gross income, gross receipts, excise, real property, personal property, sales, use, service, service use, license, lease, capital stock, transfer, recording, franchise, business organization, occupation, premium, environmental, windfall profits, profits, customs, payroll, unclaimed property, wage, withholding, social security, employment, unemployment, insurance, severance, workers compensation, excise, stamp, alternative minimum, estimated, value added, ad valorem or other tax, in each case, together with any interest, penalty or addition attributable thereto.

 

Tax Attribute” means any net operating loss, capital loss, investment tax credit carryover, earnings and profits, foreign tax credit carryover, overall foreign loss, previously taxed income, separate limitation loss or any other loss, deduction, credit or other comparable item.

 

Tax Benefit” means any Refund, deduction, credit, or other item that reduces the amount of Taxes otherwise required to be paid.

 

Tax-Free Status of the Transactions” means the tax-free treatment for which certain of the Transactions are intended to qualify, as described in the Opinions.

 

Tax Materials” means (i) the Opinions, (ii) the representation letters from SPX and Flowco upon which Counsel will rely in rendering the Opinions, (iii) the Ruling Request, and (iv) any other materials delivered or deliverable by SPX or Flowco in connection with the rendering by Counsel of the Opinions or the consideration by the IRS of the Ruling Request.

 

Tax Proceeding” means any audit, assessment, review, examination or other proceeding (including any appeal thereof) administered by any Taxing Authority for the purpose of determining or redetermining any Tax or Refund, including any proceeding relating to a competent authority determination.

 

Tax Return” means any return, report, declaration, certificate, form or similar statement or document (including any related or supporting information or schedule attached thereto and any amendment thereof) supplied to, filed with, or required to be supplied to or filed with, a Taxing Authority in connection with the payment, determination, assessment or collection of any Tax or Refund or the administration of any Law relating to any Tax or Refund.

 

Taxing Authority” means any governmental authority (including any subdivision, agency, commission or entity thereof) or any quasi-governmental or private body having jurisdiction over the assessment, determination, administration, collection or imposition of any Tax.

 

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Transactions” means the transactions described in the Reorganization Step Plan.

 

Treasury Regulations” means the regulations promulgated under the Code by the U.S. Treasury Department.

 

Unqualified Tax Opinion” means a “will” opinion, without substantive qualifications, of a nationally recognized law or accounting firm, which firm is reasonably acceptable to the Party not receiving such Unqualified Tax Opinion.

 

U.S.” means the United States of America.

 

ARTICLE II
ALLOCATION OF TAXES AND REFUNDS

 

Section 2.1                           Responsibility for Taxes.  Economic responsibility for Taxes shall be allocated between the Parties as follows:

 

(a)                                 Infrastructurco shall be responsible for:

 

(i)                                     any Taxes attributable to any of the activities of the Infrastructurco Business or any of the Infrastructurco Assets or Infrastructurco Liabilities;

 

(ii)                                  any SPX Consolidated Taxes;

 

(iii)                               any Pre-Distribution Flowco State Income Taxes;

 

(iv)                              any sales, use, unclaimed property or escheat taxes incurred in any Pre-Distribution Period with respect to SPX’s corporate headquarters;

 

(v)                                 any Taxes attributable to an Infrastructurco Prohibited Event; and

 

(vi)                              any Spin-Off Taxes;

 

provided, however, that Infrastructurco shall not be responsible for any Taxes for which Flowco is responsible under clause (ii) or clause (iii) of Section 2.1(b).

 

(b)                                 Flowco shall be responsible for:

 

(i)                                     any Taxes that are (A) attributable to any of the activities of the Flowco Business or any of the Flowco Assets or Flowco Liabilities and (B) not described in Section 2.1(a);

 

(ii)                                  all Flowco PTI Taxes for any taxable year, but only if all Flowco PTI Taxes in such taxable year exceed, in the aggregate, $100,000 (in which case, for the avoidance of doubt, Flowco shall be responsible for all such Flowco PTI Taxes); and

 

(iii)                               any Taxes attributable to a Flowco Prohibited Event, but only if such Taxes exceed, in the aggregate, $100,000 (in which case, for the avoidance of doubt, Flowco shall be responsible for all such Taxes).

 

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Section 2.2                           Entitlement to Refunds.  Refunds shall be allocated between the Parties as follows:

 

(a)                                 Infrastructurco shall be entitled to any Refund in respect of Taxes for which Infrastructurco is responsible pursuant to Section 2.1(a), except to the extent such Refund is attributable to a Permitted Carryback.

 

(b)                                 Flowco shall be entitled to (i) any Refund in respect of Taxes for which Flowco is responsible pursuant to Section 2.1(b) and (ii) any other Refund, to the extent such Refund is attributable to a Permitted Carryback.

 

Section 2.3                           Straddle Periods.  To the extent necessary for purposes of this Agreement, any Tax incurred with respect to any Straddle Period shall be apportioned between the Pre-Distribution portion and the Post-Distribution portion of such Straddle Period as follows:

 

(a)                                 any such Tax based on or measured by income, receipts, services or transactions (including Income Taxes and sales, use, withholding, payroll and other employment taxes, but not including real and personal property taxes) shall be apportioned between the Pre-Distribution portion and the Post-Distribution portion of such Straddle Period based on an interim closing of the books as of the Effective Time; provided, however, that any exemption, allowance or deduction that is calculated on an annual or periodic basis shall be apportioned on a per diem basis; and

 

(b)                                 any such Tax not described in Section 2.3(a) shall be apportioned between the Pre-Distribution portion and the Post-Distribution portion of such Straddle Period on a per diem basis.

 

Section 2.4                           Temporary Differences.  If, as a result of a Final Determination relating to Taxes for which Infrastructurco or Flowco is responsible under Section 2.1(a) or Section 2.1(b), respectively, any Flowco Entity or any Infrastructurco Entity, respectively, reports, with respect to any taxable year, any Tax Benefit that (a) results in Tax savings for such taxable year of at least $50,000 and (b) it would not have reported but for such Final Determination (including, for the avoidance of doubt, any Tax Benefit resulting from the elections under Section 336(e) of the Code described in Section 4.4), then such Flowco Entity or Infrastructuro Entity, as the case may be, shall make a payment to Infrastructurco or Flowco, respectively, equal to the actual reduction of Taxes attributable to such Tax Benefit (determined on a with and without basis), such payment to be made promptly after filing the annual U.S. federal corporate income tax return on which such Tax Benefit is reported (i.e., if such a Final Determination results in Tax Benefits over multiple taxable years, payments shall be made only as and when any reduction in annual Taxes attributable to such Tax Benefits occurs).

 

ARTICLE III
TAX RETURNS

 

Section 3.1                           Responsibility for Preparation, Filing and Payment.  With respect to any Tax Return for a Pre-Distribution Period or Straddle Period required to be filed by an Infrastructurco Entity or a Flowco Entity:

 

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(a)                                 Infrastructurco shall prepare and file, or cause to be prepared and filed, any such Tax Return required by Law to be filed by an Infrastructurco Entity, and shall pay or cause to be paid any Taxes shown to be due and owing thereon; and

 

(b)                                 Flowco shall prepare and file, or cause to be prepared and filed, any such Tax Return required by Law to be filed by a Flowco Entity, and shall pay or cause to be paid any Taxes shown to be due and owing thereon;

 

provided, however, that, in the case of any such consolidated or combined tax return, each non-filing entity included in such tax return shall, at the request of the filing entity, prepare and deliver to the filing entity any supporting tax returns or other documents that relate to such non-filing entity and are necessary to the preparation of such consolidated or combined tax return; and

 

provided, further, that (x) Flowco shall prepare and file, or cause to be prepared and filed, any such Tax Return relating to sales or use taxes, and (y) Infrastructurco shall prepare and file, or cause to be prepared and filed, any such Tax Return relating to unclaimed property or escheat taxes.

 

Section 3.2                           Consistent with Past Practice.  Unless otherwise agreed by the Parties, and except to the extent otherwise required by applicable Law, each Tax Return described in Section 3.1 shall be prepared in a manner consistent with Past Practice.

 

Section 3.3                           Closing of Flowco Taxable Year.  Infrastructurco and Flowco shall use reasonable best efforts to close the taxable year of each Flowco Entity for all U.S. federal and state income tax purposes as of the end of the Distribution Date, to the extent permitted by applicable Law.

 

Section 3.4                           Carrybacks.  Except to the extent otherwise consented to by Infrastructurco or prohibited by applicable Law, Flowco shall cause each Flowco Entity to elect to relinquish, waive or otherwise forego the carryback of any loss, credit or other Tax Attribute from any Post-Distribution Period to any Pre-Distribution Period or Straddle Period (a “Carryback”).  In the event that a Flowco Entity is permitted under the preceding sentence to effect a Carryback (such Carryback, a “Permitted Carryback”), Infrastructurco shall cooperate with Flowco in seeking any corresponding Refund; provided, however, that Flowco shall indemnify and hold the Infrastructurco Entities harmless from and against any and all collateral Tax consequences resulting from or caused by such Permitted Carryback, including, without limitation, the loss or postponement of any benefit from the use of Tax Attributes generated by an Infrastructurco Entity if (a) such Tax Attributes expire unutilized, but would have been utilized but for such Carryback, or (b) the use of such Tax Attributes is postponed to a later taxable period than the taxable period in which such Tax Attributes would have been utilized but for such Carryback.

 

Section 3.5                           Tax Attributes.

 

(a)                                 Infrastructurco and Flowco shall, prior to any relevant Due Date, jointly determine in good faith the allocation of Tax Attributes arising in Pre-Distribution Periods and in existence immediately after the Effective Time between Infrastructurco Entities and Flowco Entities in accordance with applicable Law, including Treasury Regulations Sections 1.1502-

 

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9T(c), 1.1502-21, 1.1502-21T, 1.1502-22, 1.1502-79 and, if applicable, 1.1502-79A (and any applicable state, local and foreign Laws); provided, however, that:

 

(i)                                     earnings and profits shall be allocated in accordance with Code Section 312(h) and Treasury Regulations Section 1.312-10(a);

 

(ii)                                  any earnings and profits allocated to any Flowco Entity shall include both non-previously taxed income within the meaning of Code Section 959(c)(3) and previously taxed income (as defined in Code Section 959(a));

 

(iii)                               Infrastructurco shall be entitled to make any determination as to (A) basis, and (B) valuation, and shall make such determination consistent with Past Practice, where applicable.

 

For the avoidance of doubt, any previously taxed income (as defined in Code Section 959(a)) in existence immediately after the Effective Time shall be allocated to the corporation to which such previously taxed income is attributable for U.S. federal income tax purposes (including any successor to such corporation). Infrastructurco and Flowco hereby agree to compute all Taxes for Post-Distribution Periods consistently with the determination of the allocation of Tax Attributes pursuant to this Section 3.5(a) unless otherwise required by a Final Determination.

 

(b)                                 To the extent that the amount of any Tax Attribute is later reduced or increased by a Taxing Authority or Tax Proceeding, such reduction or increase shall be allocated to the Party to which such Tax Attribute was allocated pursuant to Section 3.5(a), except to the extent otherwise required by applicable Law.

 

Section 3.6                           Treatment of Deductions Associated with Equity-Related Compensation.

 

(a)                                 From and after the Distribution Date, only the current or most recent employer of the relevant employee may claim any Tax deduction in respect of any equity award or other incentive compensation of such employee described in Section 4.03 (“Treatment of Outstanding Equity Incentive Awards”) of the Employee Matters Agreement, except to the extent otherwise required by applicable Law.

 

(b)                                 If, as a result of a Final Determination, an Infrastructurco Entity or Flowco Entity realizes a Tax Benefit from a deduction to which a Flowco Entity or Infrastructurco Entity, respectively, is entitled pursuant to Section 3.6(a), then Infrastructurco or Flowco, as the case may be, shall pay or cause to be paid to Flowco or Infrastructurco, respectively, an amount equal to the value of such Tax Benefit (determined on a with and without basis), such payment to be made promptly after filing the Tax Return on which such Tax Benefit is reflected.

 

Section 3.7                           Review Rights—Material Adverse Effect.  If a Tax Return prepared by an Infrastructurco Entity or a Flowco Entity pursuant to Section 3.1 takes a position that would reasonably be expected to materially adversely affect any Flowco Entity or any Infrastructurco Entity, respectively, the Party responsible for preparing such Tax Return under Section 3.1 shall deliver a draft of such Tax Return (or of the relevant portions of such Tax Return) to the non-preparing Party for its review and comment, such delivery to be made a reasonable amount of time prior to the Due Date (it being understood and agreed that in the case of any such Tax Return for U.S. federal Income Taxes or other material Taxes, “a reasonable amount of time” means at least thirty (30) days prior to the Due Date).  The Parties shall attempt to resolve any

 

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dispute regarding the preparation of such Tax Return through good faith negotiation before resorting to the dispute resolution procedures contained in Section 8.1In the event that any such dispute is not resolved prior to the Due Date, the Tax Return shall be timely filed and subsequently amended as necessary to reflect the resolution of such dispute.

 

Section 3.8                           Review Rights and Reimbursement—Taxes for Which Non-Preparing Party is Responsible.  If a Tax Return prepared by an Infrastructurco Entity or a Flowco Entity pursuant to Section 3.1 reflects Taxes for which Flowco or Infrastructurco, respectively, is responsible under Section 2.1, the Party responsible for preparing such Tax Return under Section 3.1 shall deliver a draft of such Tax Return (or of the relevant portions of such Tax Return), together with a written calculation of the amount of Taxes reflected thereon for which the non-preparing Party is responsible under Section 2.1, to the non-preparing Party for its review and comment, such delivery to be made a reasonable amount of time prior to the Due Date (it being understood and agreed that in the case of any such Tax Return for U.S. federal Income Taxes or other material Taxes, “a reasonable amount of time” means at least thirty (30) days prior to the Due Date).  The non-preparing Party shall pay the preparing Party the amount of Taxes for which the non-preparing Party is responsible under Section 2.1 at least two (2) business days before the Due Date for the payment of such Taxes (whether or not the non-preparing Party disputes such amount).  The Parties shall attempt to resolve any dispute regarding the preparation of such Tax Return or the amount of Taxes reflected thereon for which the non-preparing Party is responsible under Section 2.1 through good faith negotiation before resorting to the dispute resolution procedures contained in Section 8.1.  In the event that any such dispute is not resolved prior to the Due Date, the Tax Return shall be timely filed and subsequently amended as necessary to reflect the resolution of such dispute, and/or the preparing Party shall return to the non-preparing Party any amounts paid by the non-preparing Party but which are determined to be the responsibility of the preparing Party under Section 2.1, as applicable.

 

Section 3.9                           Refund Payments.  A Party that receives a Refund to which the other Party is entitled in whole or in part under Section 2.2 shall pay to the other Party the portion to which the other Party is entitled, net of any Taxes or other costs (other than Tax Return preparation expenses) incurred by the preparing Party in connection with the receipt or accrual of such Refund and attributable to such portion, within ten (10) days after (a) receipt of the Refund in cash or (b) the filing of the relevant Tax Return (in the case of a Refund that is a credit against payment of future Taxes).

 

Section 3.10                    Expenses.  Notwithstanding anything to the contrary herein, each Party shall bear its own expenses in preparing any Tax Return governed by Section 3.1.

 

Section 3.11                    German Tax Payment.  To the extent required by German law, SPX U.L.M. GmbH shall contribute cash to SPX Cooling Technologies Leipzig GmbH equal to the amount of the combined tax loss sustained by Infrastructurco Entities organized under German law.  In the event SPX U.L.M. GmbH contributes cash to SPX Cooling Technologies Leipzig GmbH pursuant to the previous sentence, Infrastructurco shall, at the same time, make a payment of equivalent amount to Flowco.

 

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ARTICLE IV
TAX-FREE STATUS OF THE TRANSACTIONS

 

Section 4.1                           Representations and Warranties.

 

(a)                                 By Flowco.  Flowco hereby represents and warrants that the facts presented and the statements and representations made in the Tax Materials are true, correct and complete in all respects to the extent they relate to any Flowco Entity with respect to any period of time following the Effective Time.

 

(b)                                 By SPX.  SPX hereby represents and warrants that the facts presented and the statements and representations made in the Tax Materials are true, correct and complete in all respects to the extent they relate to either (i) any Infrastructurco Entity, whether preceding or following the Effective Time or (ii) any Flowco Entity with respect to any period of time preceding the Effective Time.

 

(c)                                  No Contrary Knowledge.  Each of SPX and Flowco represents and warrants that it knows of no fact (after due inquiry) that may adversely affect the Tax-Free Status of the Transactions.

 

(d)                                 No Contrary Plan.  Each of SPX and Flowco represents and warrants that neither it nor any of its Affiliates has any plan or intention to take any action, or to fail to take any action, in a manner that would be inconsistent with any fact presented or statement or representation made in the Tax Materials.

 

Section 4.2                           Prohibited Events.

 

(a)                                 From the Effective Time to the first day following the second anniversary of the Distribution, neither Flowco nor Infrastructurco may (each of the following actions and events, a “Prohibited Event”):

 

(i)                                     (A) with respect to Flowco, fail to cause to be continued the active conduct of the Flowco Business as conducted immediately prior to the Distribution, or (B) with respect to Infrastructurco, fail to cause to be continued the active conduct of the Infrastructurco Business as conducted immediately prior to the Distribution;

 

(ii)                                  voluntarily dissolve or liquidate (or take any other action that would be treated as a liquidation for U.S. federal income tax purposes);

 

(iii)                               (A) with respect to Flowco, cause or permit to occur any event (or series of events) involving the capital stock of Flowco, any assets of Flowco or any assets of any Flowco Entity, or (B) with respect to Infrastructurco, permit to occur any event (or series of events) involving the capital stock of Infrastructurco, any assets of Infrastructurco or any assets of any Infrastructurco Entity, in each case, that adversely affects, or could reasonably be expected to adversely affect, the Tax-Free Status of the Transactions;

 

(iv)                              (A) with respect to Flowco, cause or permit to occur any transaction or series of transactions (or any agreement, understanding or arrangement, within the meaning of Section 355(e) of the Code and the Treasury Regulations promulgated thereunder, to enter into a transaction or series of

 

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transactions), whether such transaction is supported by management or shareholders, is a hostile acquisition, or otherwise, that would, when combined with any other direct or indirect changes in stock ownership, result in a direct or indirect acquisition (within the meaning of Section 355(e) of the Code) of 40% or more of (1) the value of all outstanding shares of stock or (2) the total combined voting power of all outstanding shares of voting stock, in either case, of Flowco, as of the date of such transaction, or in the case of a series of transactions, the date of the last transaction in such series, or (B) with respect to Infrastructurco, permit to occur any transaction or series of transactions (or any agreement, understanding or arrangement, within the meaning of Section 355(e) of the Code and the Treasury Regulations promulgated thereunder, to enter into a transaction or series of transactions), whether such transaction is supported by management or shareholders, is a hostile acquisition, or otherwise, that would, when combined with any other direct or indirect changes in stock ownership, result in a direct or indirect acquisition (within the meaning of Section 355(e) of the Code) of 40% or more of (1) the value of all outstanding shares of stock or (2) the total combined voting power of all outstanding shares of voting stock, in either case, of Infrastructurco, as of the date of such transaction, or in the case of a series of transactions, the date of the last transaction in such series; or

 

(v)                                 (A) with respect to Flowco, take or permit to be taken by any Flowco Entity any other action that (1) would be inconsistent with any fact presented or statement or representation made in the Tax Materials or any representation, warranty or covenant contained herein or (2) adversely affects, or could reasonably be expected to adversely affect, the Tax-Free Status of the Transactions, or (B) with respect to Infrastructurco, take or permit to be taken by any Infrastructurco Entity any other action that (1) would be inconsistent with any fact presented or statement or representation made in the Tax Materials or any representation, warranty or covenant contained herein or (2) adversely affects, or could reasonably be expected to adversely affect, the Tax-Free Status of the Transactions;

 

provided, however, that the following actions shall not be taken into account for purposes of this Section 4.2(a) (and shall be excluded from the definition of “Prohibited Event”):

 

(vi)                              any repurchase by Flowco or by Infrastructurco of stock of Flowco or Infrastructurco, respectively, that (A) satisfies the requirements set forth in Section 4.05(1)(b) of Revenue Procedure 96-30, 1996-1 C.B. 696 (as in effect prior to the amendment of such Revenue Procedure by Revenue Procedure 2003-48, 2003-2 C.B. 86), (B) could not reasonably be expected to adversely affect the Tax-Free Status of the Transactions, and (C) is not an acquisition that would be taken into account in applying Section 355(e)(2)(A)(ii) of the Code;

 

(vii)                           any adoption of, or issuance of stock pursuant to, a shareholder rights plan that is described in or is similar to the shareholder rights plan described in Revenue Ruling 90-11, 1990-1 C.B. 10; and

 

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(viii)                        any issuance of stock that satisfies Safe Harbor VIII (relating to acquisitions in connection with a person’s performance of services) or Safe Harbor IX (relating to acquisitions by a retirement plan of an employer) of Treasury Regulations Section 1.355-7(d).

 

(b)                                 Notwithstanding the general prohibition imposed by Section 4.2(a), either Party may cause or permit to occur a Prohibited Event if (i) such Party has provided to the other Party an Unqualified Tax Opinion, in form and substance reasonably satisfactory to the other Party, that such Prohibited Event will not adversely affect the Tax-Free Status of the Transactions, (ii) such Party has received a private letter ruling from the IRS that such Prohibited Event will not adversely affect the Tax-Free Status of the Transactions, or (iii) the other Party has consented in writing to such Prohibited Event; provided, however, that, for the avoidance of doubt, a Party’s satisfaction of the conditions described in this Section 4.2(b) shall not affect such Party’s responsibility under Section 2.1 for any Taxes attributable to such Prohibited Event.  In determining whether an Unqualified Tax Opinion is satisfactory, the other Party may consider, among other factors, the appropriateness of any assumptions or representations supporting such Unqualified Tax Opinion and the strength of any reasoning contained therein.

 

Section 4.3                           Procedures Regarding Opinions and Rulings.

 

(a)                                 Neither Infrastructurco nor Flowco may seek any guidance from the IRS or any other Taxing Authority (whether written, verbal or otherwise) at any time concerning the Restructuring, the Flowco Asset Transfer, the Distribution or the Deconsolidation without the other Party’s prior written consent (which may not be unreasonably conditioned, delayed or withheld).  The Parties shall cooperate in good faith regarding any such request for guidance undertaken with such consent.

 

(b)                                 Each Party shall use its reasonable best efforts to comply with any reasonable request made by the other Party in connection with any attempt by such other Party to secure an Unqualified Tax Opinion regarding a Prohibited Event.

 

Section 4.4                           Protective Section 336(e) Elections.  Infrastructurco and Flowco shall make a protective election under Section 336(e) of the Code (and any similar election under state or local law) in accordance with Treasury Regulations Section 1.336-2(h) and (j) (and any applicable provisions under state and local law), and shall cooperate in the timely completion and/or filings of such elections and any related filings or procedures (including filing or amending any Tax Returns to implement a protective election that becomes effective) and the execution of any necessary agreements, with respect to (i) the Distribution and (ii) such qualified stock dispositions of Subsidiaries of Flowco as Flowco shall designate resulting from the asset sales deemed to occur pursuant to the protective elections under Section 336(e) of the Code contemplated by this Section 4.4.  This Section 4.4 is intended to constitute a binding, written agreement to make an election under Section 336(e) of the Code with respect to the Distribution.  To the extent the protective elections contemplated by this Section 4.4 result in Tax Benefits, Section 2.4 contains a payment obligation with respect to such Tax Benefits in certain cases.

 

Section 4.5                           Consistent Reporting.  Each of Infrastructurco and Flowco covenants and agrees that it will not take, and will cause its respective Affiliates to refrain from taking, any position on any Tax Return, in connection with any Tax Proceeding or otherwise that is

 

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inconsistent with the Tax-Free Status of the Transactions or the IRS Ruling, notwithstanding any other provision herein, except to the extent otherwise required pursuant to a Final Determination.

 

ARTICLE V
TAX PROCEEDINGS

 

Section 5.1                           Notice.  Within ten (10) days after a Party or any of its Affiliates becomes aware of the commencement of a Tax Proceeding that (a) reasonably could be expected to have a material adverse effect on the other Party, (b) relates to Taxes or a Refund for which the other Party is responsible or to which the other Party is entitled under ARTICLE II, or (c) relates to Spin-Off Taxes or a Prohibited Event, such Party shall notify the other in writing of such Tax Proceeding, and shall promptly forward or make available copies of any written communications with a Taxing Authority in connection with such Tax Proceeding.  Any failure of a Party to comply with the preceding sentence shall not relieve the other Party of any indemnification obligation hereunder except to the extent that such Party is actually prejudiced by such failure.

 

Section 5.2                           Conduct.

 

(a)                                 General Rule.  To the extent feasible and requested by either Party, control of the conduct of any Tax Proceeding described in Section 5.1 shall be divided between the Parties in accordance with each Party’s economic interest in such Tax Proceeding, taking into account any indemnification obligations and the other provisions of this Agreement (e.g., each Party shall be entitled to control the conduct of any aspects of such Tax Proceeding that relate primarily to Taxes for which such Party is responsible under Section 2.1).  The Parties shall cooperate in good faith regarding any procedural or other aspects of such Tax Proceeding that do not implicate the economic interests of one Party disproportionately, and any disputes regarding the application of this Section 5.2(a) shall be resolved in accordance with Section 8.1.

 

(b)                                 Alternative Procedure.  If division of control of a Tax Proceeding as contemplated by Section 5.2(a) is not feasible, the Party whose economic interest in such Tax Proceeding is greater, taking into account any indemnification obligations and the other provisions of this Agreement, shall be entitled (but not obligated) to control the conduct of such Tax Proceeding.

 

(c)                                  Notice and Participation Rights.  The Party that controls the conduct of any Tax Proceeding (or portion thereof) pursuant to Section 5.2(a) or Section 5.2(b) shall, to the extent requested by the other Party:

 

(i)                                     keep the other Party reasonably and timely informed regarding such Tax Proceeding (or portion thereof);

 

(ii)                                  permit the other Party to attend any formally scheduled meetings with a Taxing Authority in relating to such Tax Proceeding (or portion thereof); and

 

(iii)                               not settle such Tax Proceeding (or portion thereof) without the prior written consent of the other Party, which consent shall not be unreasonably withheld, delayed or conditioned.

 

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(d)                                 Power of Attorney.  Infrastructurco shall execute and deliver to Flowco (or Flowco’s designee) any power of attorney or other similar document reasonably requested by Flowco in connection with any Tax Proceeding regarding a Flowco Prohibited Event.

 

ARTICLE VI
COOPERATION

 

Section 6.1                           General Cooperation.  Each Party shall, and shall cause its Affiliates to, provide such cooperation or information relating to any Tax, Refund, Tax Return or Tax Proceeding as the other Party (or any of its Affiliates) reasonably requests in writing, including by making its employees, advisors, and facilities available, without charge, on a reasonable and mutually convenient basis.

 

Section 6.2                           Retention of Records.  Each Infrastructurco Entity and Flowco Entity shall retain or cause to be retained all Tax Returns, schedules and work papers, and all material records or other documents relating thereto in their possession, until sixty (60) days after the expiration of the applicable statute of limitations (including any waivers or extensions thereof) of the taxable periods to which such Tax Returns and other documents relate or until the expiration of any additional period that either Party reasonably requests, in writing, with respect to specific material records and documents. A Party (or Affiliate thereof) intending to destroy any material records or documents shall provide the other Party with reasonable advance notice and the opportunity to copy or take possession of such records and documents.  Either Party shall notify the other in writing of any waivers or extensions of the applicable statute of limitations that may affect the period for which the foregoing records or other documents must be retained.

 

ARTICLE VII
INDEMNIFICATION

 

Section 7.1                           Survival.  Except as otherwise contemplated by this Agreement, all covenants, agreements, indemnities, representations and warranties contained herein shall survive the Effective Time and shall remain in full force and effect thereafter.

 

Section 7.2                           Indemnification by Infrastructurco.  Infrastructurco shall indemnify and hold the Flowco Entities harmless from and against, without duplication, all Taxes for which Infrastructurco is responsible pursuant to Section 2.1(a), and any reasonable out-of-pocket costs or expenses related thereto (excluding any expenses governed by Section 3.10).

 

Section 7.3                           Indemnification by Flowco.  Flowco shall indemnify and hold the Infrastructurco Entities harmless from and against, without duplication, all Taxes for which Flowco is responsible pursuant to Section 2.1(b), and any reasonable out-of-pocket costs or expenses related thereto (excluding any expenses governed by Section 3.10).

 

Section 7.4                           Flowco Gross-Up Obligation.  If Flowco makes an indemnity or reimbursement payment to any Infrastructurco Entity attributable to any Flowco Prohibited Event, such indemnity or reimbursement payment shall be increased to take into account any Taxes of such Infrastructurco Entity resulting from the receipt of such indemnity or reimbursement payment.  For this purpose, the amount of such Taxes shall be determined

 

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assuming that such Infrastructurco Entity is taxed at the highest applicable marginal rate then in effect and has no Tax Attributes.

 

Section 7.5                           Characterization of Indemnification and Reimbursement Payments.  For all Tax purposes, Infrastructurco and Flowco agree to treat any indemnification or reimbursement or other similar payment made hereunder (other than any payment of interest accruing after the Distribution Date) as an adjustment to the amount of cash transferred between Infrastructurco and Flowco in the Flowco Asset Transfer.

 

ARTICLE VIII
MISCELLANEOUS

 

Section 8.1                           Dispute Resolution.  In the event of any dispute between the Parties as to any matter covered by this Agreement that cannot be timely resolved through good faith negotiation:

 

(a)                                 if the amount in dispute is less than $10,000,000, the Parties shall appoint a nationally-recognized independent public accounting firm or law firm to resolve such dispute; and

 

(b)                                 if the amount in dispute equals or exceeds $10,000,000, the Parties shall appoint a panel of three nationally-recognized independent public accounting firms and/or law firms to resolve such dispute by majority decision, unless the Parties mutually agree instead to resolve such dispute (i) under Section 8.1(a), (ii) by using the dispute resolution procedures set forth in the Separation Agreement, or (iii) in some other way.

 

The Parties agree that the resolution of such dispute pursuant to this Section 8.1 shall be final and conclusive and binding on the Parties and that any fees and expenses related to the resolution of such dispute shall be borne by the non-prevailing Party.

 

Section 8.2                           Tax Sharing Agreements.  Any Tax sharing, indemnification or similar agreement between an Infrastructurco Entity and a Flowco Entity (other than any such agreement entered into in connection with the Transactions) shall be terminated as of no later than the Effective Time and, after the Effective Time, no Infrastructurco Entity or Flowco Entity shall have any further rights or obligations under any such Tax sharing, indemnification or similar agreement.

 

Section 8.3                           Specific Performance.  The Parties agree that irreparable damage would occur in the event that the provisions of this Agreement were not performed in accordance with their specific terms.  Accordingly, it is hereby agreed that the Parties shall be entitled to (i) an injunction or injunctions to enforce specifically the terms and provisions hereof, (ii) provisional or temporary injunctive relief in accordance therewith in any Delaware Court, and (iii) enforcement of any such award of an arbitral tribunal or a Delaware Court in any court of the United States, or any other any court or tribunal sitting in any state of the United States or in any foreign country that has jurisdiction, this being in addition to any other remedy or relief to which they may be entitled.

 

16



 

Section 8.4                           Interest.  Any amount not paid when due pursuant to this Agreement shall bear interest at a rate per annum equal to the then effective Prime Rate plus 2% (or the maximum legal rate, whichever is lower), calculated for the actual number of days elapsed, accrued from the date on which such payment was due up to the date of the actual receipt of payment.

 

Section 8.5                           Coordination with the Separation Agreement and Other Ancillary Agreements.  This Agreement constitutes part of a more comprehensive agreement between the Parties, the other provisions of which are contained in the Separation Agreement and the other Ancillary Agreements.  Any general provision contained in the Separation Agreement (e.g., the provisions of Section 1.2 and ARTICLE X thereof) shall apply to this Agreement, mutatis mutandis, as though included herein, except to the extent the subject matter of such provision is expressly provided for herein.  In the event of any conflict between this Agreement and the Employee Matters Agreement regarding employee compensation or benefits matters, the Employee Matters Agreement shall control.

 

Section 8.6                           Effective Date.  This Agreement shall become effective only upon the occurrence of the Distribution.

 

[The remainder of this page is intentionally left blank.]

 

17



 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the day and year first above written.

 

 

SPX CORPORATION

 

By

/s/ Stephen A. Tsoris

 

Name: Stephen A. Tsoris

 

Title: Vice President, Secretary and General Counsel

 

 

 

 

 

 

 

SPX FLOW, INC.

 

By

/s/ Stephen A. Tsoris

 

Name: Stephen A. Tsoris

 

Title: Vice President and Secretary

 

 

18




Exhibit 10.3

 

EMPLOYEE MATTERS AGREEMENT

 

by and between

 

SPX CORPORATION

 

and

 

SPX FLOW, INC.

 

Dated as of September 26, 2015

 



 

Table of Contents

 

 

 

Page

Article I

 

 

 

DEFINITIONS AND INTERPRETATION

1

Section 1.01

Certain Defined Terms

1

Section 1.02

Interpretation and Rules of Construction

6

 

 

Article II

 

 

 

GENERAL PRINCIPLES FOR ALLOCATION OF LIABILITIES

7

Section 2.01

General Principles

7

Section 2.02

Service Credit

9

Section 2.03

Benefit Plans

9

Section 2.04

Individual Agreements; Expatriate Obligations

10

 

 

Article III

 

 

 

EMPLOYEES

11

Section 3.01

Active Employees

11

Section 3.02

Former Employees

12

Section 3.03

Employment Law Obligations

13

Section 3.04

Employee Records

13

Section 3.05

No-Hire and Non-Solicitation

14

 

 

Article IV

 

 

 

EQUITY AWARDS

15

Section 4.01

General Principles

15

Section 4.02

Establishment of Equity Incentive Plans

15

Section 4.03

Treatment of Outstanding Equity Incentive Awards

16

Section 4.04

Section 16(b) of the Exchange Act

20

Section 4.05

Liabilities for Settlement of Awards

20

Section 4.06

Form S-8

20

Section 4.07

Tax Reporting and Withholding for Equity-Based Awards

20

Section 4.08

Cooperation

20

Section 4.09

SPX Equity Awards in Certain Non-U.S. Jurisdictions

21

 

 

Article V

 

 

 

CERTAIN U.S. WELFARE BENEFIT MATTERS

21

Section 5.01

Establishment of Welfare Plans

21

Section 5.02

Accrued Paid Time Off

25

Section 5.03

Flexible Spending Accounts

25

 

i



 

Section 5.04

COBRA and HIPAA

26

Section 5.05

Third Party Vendors

26

Section 5.06

Severance

26

 

 

Article VI

 

 

 

DEFINED CONTRIBUTION, DEFINED BENEFIT, NON-QUALIFIED DEFERRED COMPENSATION PLANS, AND OTHER PLANS IN THE UNITED STATES

27

Section 6.01

Qualified Defined Contribution Plans

27

Section 6.02

Qualified Defined Benefit Plan

30

Section 6.03

Supplemental Retirement Savings Plan

30

Section 6.04

Supplemental Individual Account Retirement Plan

31

Section 6.05

Supplemental Retirement Plan for Top Management

32

Section 6.06

No Distributions on Separation

32

Section 6.07

IAM Fund

33

 

 

Article VII

 

 

 

NON-U.S. EMPLOYEES

33

Section 7.01

General Principles

33

Section 7.02

UK Pension Plans

33

Section 7.03

Canadian Pension Plans

34

Section 7.04

Certain Canadian Employees

34

 

 

Article VIII

 

 

 

ANNUAL INCENTIVE PLANS

34

Section 8.01

Annual Incentive Plans

34

 

 

Article IX

 

 

 

COMPENSATION MATTERS AND GENERAL BENEFIT AND EMPLOYEE MATTERS

35

Section 9.01

Restrictive Covenants in Employment and Other Agreements

35

Section 9.02

Termination of Participation

36

Section 9.03

Leaves of Absence

36

Section 9.04

Workers’ Compensation for Flowco Employees

36

Section 9.05

Unemployment Compensation

36

Section 9.06

Preservation of Rights to Amend

36

Section 9.07

Confidentiality

37

Section 9.08

Administrative Complaints/Litigation

37

Section 9.09

Reimbursement and Indemnification

37

Section 9.10

Fiduciary Matters

37

Section 9.11

Subsequent Transfers of Employment

37

Section 9.12

Section 409A

38

 

ii



 

Article X

 

 

 

MISCELLANEOUS

38

Section 10.01

Limitation of Liability

38

Section 10.02

Notices

38

Section 10.03

Public Announcements

39

Section 10.04

Severability

39

Section 10.05

Entire Agreement

39

Section 10.06

Amendments; No Waivers

39

Section 10.07

Assignment

40

Section 10.08

Parties in Interest

40

Section 10.09

Currency

40

Section 10.10

Tax Matters

40

Section 10.11

Governing Law

40

Section 10.12

Consent to Jurisdiction

40

Section 10.13

Dispute Resolution

41

Section 10.14

Specific Performance

41

Section 10.15

No Circumvention

41

Section 10.16

Settlor Prerogatives Regarding Plan Dispositions

41

Section 10.17

Effect if Distribution Does Not Occur

42

Section 10.18

No Third Party Beneficiaries

42

Section 10.19

Waiver of Jury Trial

42

Section 10.20

Survival of Covenants

42

Section 10.21

Counterparts

42

Section 10.22

Authorization

42

 

SCHEDULES

 

 

 

 

Schedule 1.01

Individual Agreements

 

Schedule 5.01(f)

SPX Retiree Medical for Certain Flowco Employees

 

Schedule 7.04

Certain Canadian Employees

 

Schedule 9.12

Section 409A

 

 

iii



 

EMPLOYEE MATTERS AGREEMENT

 

THIS EMPLOYEE MATTERS AGREEMENT (this “Agreement”), is entered into as of September 26, 2015 by and between SPX Corporation, a Delaware corporation (“SPX” or “Infrastructurco”), and SPX FLOW, Inc., a Delaware corporation (“Flowco”) (each a “Party” and together, the “Parties”).

 

WHEREAS, SPX and Flowco have entered into a Separation and Distribution Agreement as of September 22, 2015, as may be amended from time to time (the “Separation Agreement”), pursuant to which SPX shall separate into two separate publicly traded companies: (i) Flowco, which will continue to conduct, directly and through its Subsidiaries, the Flowco Business, and (ii) Infrastructurco, which will continue to conduct, directly and through its Subsidiaries, the Infrastructurco Business; and distribute to the holders of issued and outstanding SPX Shares on a pro rata basis (in each case without consideration being paid by such shareholders), through a spin off, all of the outstanding Flowco Shares; and

 

WHEREAS, the Separation Agreement contemplates the execution and delivery of certain other agreements, including this Agreement, in order to facilitate and provide for the separation of Flowco and Infrastructurco.

 

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements contained herein and in the Separation Agreement, and intending to be legally bound hereby, SPX and Flowco hereby agree as follows:

 

Article I

 

DEFINITIONS AND INTERPRETATION

 

Section 1.01                             Certain Defined Terms.

 

Unless otherwise defined herein, each capitalized term shall have the meaning specified for such term in the Separation Agreement.  As used in this Agreement:

 

Benefit Plan” means any plan, program, policy, agreement, arrangement or understanding that is an employment, consulting, deferred compensation, executive compensation, incentive bonus or other bonus, employee pension, profit sharing, savings, retirement, supplemental retirement, stock option, stock purchase, stock appreciation right, restricted stock, restricted stock unit, deferred stock unit, other equity based compensation, severance pay, retention, change in control, salary continuation, life, death benefit, health, hospitalization, workers’ compensation, sick leave, vacation pay, disability or accident insurance or other employee benefit plan, program, agreement or arrangement, including any “employee benefit plan” (as defined in Section 3(3) of ERISA) (whether or not subject to ERISA) sponsored or maintained by such entity or to which such entity is a party.

 

COBRA” means the U.S. Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, and the regulations promulgated thereunder.

 



 

Employee Records” means all records pertaining to employment, including benefits, eligibility, training history, performance reviews, disciplinary actions, job experience and history and compensation history.

 

ERISA” means the U.S. Employee Retirement Income Security Act of 1974, as amended, and the regulations promulgated thereunder.

 

Flowco Awards” means Flowco Options, Flowco RSAs and Flowco RSUs and any other awards to be granted under the Flowco Equity Plan pursuant to Article IV.

 

Flowco Benefit Plan” means any Benefit Plan sponsored or maintained by one or more members of the Flowco Group following the Effective Time.

 

Flowco Board” means the board of directors of Flowco.

 

Flowco Business Employee” means an individual employed by SPX or any of its Subsidiaries, and whose employment duties primarily related to the Flowco Business, immediately prior to the Effective Time.

 

Flowco Common Stock Fund” means the unitized stock fund investment option offered or to be offered under the SPX Savings Plan or Flowco Savings Plan, as applicable, with a value based on the value of Flowco Shares and the cash liquidity component held thereunder.

 

Flowco Employee” means each (i) Flowco Business Employee and (ii) individual employed by SPX, who (in either case) shall be employed by Flowco or a member of the Flowco Group immediately prior to the Effective Time.

 

Flowco Non-Employee Director” means any individual who shall be a non-employee member of the Flowco Board immediately after the Distribution Date.

 

Flowco Options” means any stock options granted pursuant to the Flowco Equity Plan in accordance with Section 4.03(c)(ii).

 

Flowco Price Ratio” means the quotient obtained by dividing the Flowco Stock Value by the SPX Stock Value.

 

Flowco RSA” means restricted stock awards granted pursuant to the Flowco Equity Plan in accordance with Section 4.03(b)(ii).

 

Flowco RSU” means any RSUs granted pursuant to the Flowco Equity Plan in accordance with Section 4.03(a)(ii).

 

Flowco Share” or “Flowco Common Stock” means, prior to and including the Distribution Date, the common stock of Flowco, traded on a when-issued basis and, following the Distribution Date, the common stock of Flowco.

 

Flowco Share Ratio” means the quotient obtained by dividing the SPX Stock Value by the Flowco Stock Value.

 

2



 

Flowco Stock Value” means the simple average of the volume weighted average per share price of Flowco Common Stock on the New York Stock Exchange during regular trading hours for, (1) if the Distribution Date is on a Trading Day, the three Trading Days ending on the Distribution Date or, if the Distribution Date is not on a Trading Day, the three Trading Days ending on the last Trading Day prior to the Distribution Date, plus (2) the three Trading Days following the Distribution Date.

 

HIPAA” means the Health Insurance Portability and Accountability Act of 1996, as amended, and the regulations promulgated thereunder.

 

Individual Agreement” means each individual agreement set forth on Schedule 1.01.

 

Infrastructurco Awards” means Adjusted Infrastructurco Options, Adjusted Infrastructurco RSAs and Adjusted Infrastructurco RSUs, collectively provided through the SPX Equity Plan in accordance with Article IV.

 

Infrastructurco Board” means the board of directors of Infrastructurco.

 

Infrastructurco Business Employee” means an individual employed by SPX or any of its Subsidiaries whose employment duties primarily related to the Infrastructurco Business immediately prior to the Effective Time.

 

Infrastructurco Employee” means each (i) Infrastructurco Business Employee and (ii) individual employed by SPX, who (in either case) shall be employed by Infrastructurco or a member of the Infrastructurco Group immediately prior to the Effective Time.

 

Infrastructurco Non-Employee Director” means any individual who shall be a non-employee member of the Infrastructurco Board immediately after the Distribution Date.

 

Infrastructurco Price Ratio” means the quotient obtained by dividing the Infrastructurco Stock Value by the SPX Stock Value.

 

Infrastructurco Share Ratio” means the quotient obtained by dividing the SPX Stock Value by the Infrastructurco Stock Value.

 

Infrastructurco Stock Value” means the simple average of the volume weighted average per share price of, in each case on the New York Stock Exchange during regular trading hours, of (1) the common stock of SPX trading “ex-distribution” for, if the Distribution Date is on a Trading Day, the three Trading Days ending on the Distribution Date or, if the Distribution Date is not on a Trading Day, the three Trading Days ending on the last Trading Day prior to the Distribution Date, plus (2) SPX Common Stock for the three Trading Days following the Distribution Date.

 

Nonqualified Retirement Plans” means the SPX Supplemental Retirement Savings Plan, the Flowco Supplemental Retirement Savings Plan, the SPX SIARP, the SPX TMP and the Flowco TMP.

 

3



 

RSU” means a right to receive a share of SPX Common Stock or Flowco Common Stock, as applicable, in the future (subject to applicable restrictions and risk of forfeiture).

 

SPX Annual Incentive Plan” means any annual incentive bonus or commission program maintained by SPX, including, without limitation, the SPX Corporation Executive Annual Bonus Plan.

 

SPX Benefit Plan” means any Benefit Plan sponsored or maintained by SPX or any of its Subsidiaries as of immediately prior to the Effective Time.

 

SPX Common Stock Fund” means the unitized stock fund investment option offered or to be offered under the SPX Savings Plan or Flowco Savings Plan, as applicable, with a value based on the value of SPX Shares and the cash liquidity component held thereunder.

 

SPX Equity Awards” means any equity awards granted pursuant to the SPX Equity Plan.

 

SPX Equity Plan” means the SPX Corporation 2002 Stock Compensation Plan, as amended.

 

SPX Internal Performance-Based RSA” means an SPX RSA that vests solely or partially based on the achievement of specified performance goals, which performance goals are based on internal performance metrics such as meeting certain performance returns on operating margin or bonus free cash flow.

 

SPX Non-Employee Director” means any non-employee director of SPX immediately prior to the Effective Time.

 

SPX Options” means any stock options granted pursuant to the SPX Equity Plan.

 

SPX RSA” means restricted stock awards granted pursuant to the SPX Equity Plan.

 

SPX RSU” means any RSUs granted pursuant to the SPX Equity Plan.

 

SPX Savings Plan” means the SPX Corporation Retirement Savings and Stock Ownership Plan, as amended.

 

SPX Share” means a share of SPX Common Stock.

 

SPX SIARP” means the SPX Corporation Supplemental Individual Account Retirement Plan, as amended.

 

SPX Stock Value” means the simple average of the volume weighted average per share price of SPX Common Stock, trading regular way with due bills on the New York Stock Exchange during regular trading hours for, if the Distribution Date is on a Trading Day, the three Trading Days ending on the Distribution Date or, if the Distribution Date is not on a

 

4



 

Trading Day, the three Trading Days ending on the last Trading Day prior to the Distribution Date.

 

SPX Supplemental Retirement Savings Plan” means the SPX Corporation Supplemental Retirement Savings Plan, as amended.

 

SPX Time-Based RSU” means an SPX RSU that vests solely based on the passage of time (subject to continued employment or service by holder).

 

SPX TMP” means the SPX Corporation Supplemental Retirement Plan for Top Management, as amended.

 

SPX Welfare Plan” means any Welfare Plan sponsored or maintained by one or more members of the Infrastructurco Group as of immediately prior to the Distribution Date.

 

Trading Day” means any day on which the New York Stock Exchange is open for the buying and selling of securities.

 

Welfare Plan” means, where applicable, a “welfare plan” (as defined in Section 3(1) of ERISA) or a “cafeteria plan” under Section 125 of the Code, and any benefits offered thereunder, and any other plan offering health benefits (including medical, prescription drug, dental, vision, and mental health and substance abuse), disability benefits, or life, accidental death and disability, and business travel insurance, pre tax premium conversion benefits, dependent care assistance programs, employee assistance programs, paid time off programs, contribution funding toward a health savings account, flexible spending accounts, tuition reimbursement or educational assistance programs, adoption assistance programs, or cashable credits.

 

WARN” means the U.S. Worker Adjustment and Retraining Notification Act, as amended, and the regulations promulgated thereunder, and any applicable foreign, state, provincial or local Law equivalent.

 

The following terms have the meanings set forth in the Sections set forth below:

 

Definition

 

Location

Adjusted Infrastructurco Option

 

4.03(c)(i)

Adjusted Infrastructurco RSA

 

4.03(b)(i)

Adjusted Infrastructurco RSU

 

4.03(a)(i)

Agreement

 

Preamble

Canadian Pension Plans

 

7.03

Canadian Transferees

 

7.04

Clyde

 

6.07

FICA

 

3.01(e)

Flowco

 

Preamble

Flowco Annual Bonus Plan

 

8.01(a)

Flowco Compensation Committee

 

4.03(d)(i)

Flowco Disabled Employees

 

5.01(d)(i)

 

5



 

Flowco Equity Plan

 

4.02

Flowco FSA

 

5.03(a)

Flowco Key Life Participant

 

5.01(g)

Flowco Key Life Plan

 

5.01(g)

Flowco Savings Plan Beneficiaries

 

6.01(b)

Flowco Savings Plan

 

6.01(a)

Flowco Spin Option

 

4.03(c)(ii)

Flowco Spin RSA

 

4.03(b)(ii)

Flowco Spin RSU

 

4.03(a)(ii)

Flowco SRSP Participant

 

6.03(a)

Flowco SRSP Rabbi Trust

 

6.03(c)

Flowco Supplemental Retirement Savings Plan

 

6.03(a)

Flowco TMP

 

6.05(a)

Flowco TMP Participant

 

6.05(a)

Flowco TMP Rabbi Trust

 

6.05(c)

Flowco Welfare Plans

 

5.01(a)

Former Employees

 

3.02(d)

Former Flowco Employees

 

3.02(c)

“Former Infrastructurco Employees

 

3.02(b)

FSA Participation Period

 

5.03(b)

FUTA

 

3.01(e)

IAM Fund

 

6.07

Infrastructurco

 

Preamble

“IRS”

 

6.01(g)

Party” and “Parties

 

Preamble

Providing Party

 

2.02(b)

Requesting Party

 

2.02(b)

Separation Agreement

 

Recitals

SPX Compensation Committee

 

4.01(c)

SPX Savings Plan Beneficiaries

 

6.01(f)(i)

SPX DB Plans

 

6.02(c)

SPX Key Life Plan

 

5.01(g)

SPX LTD Plan

 

5.01(d)(i)

SPX STD Plan

 

5.01(d)(i)

SPX Savings Plan Flowco Assets

 

6.01(c)

SPX

 

Preamble

 

Section 1.02                             Interpretation and Rules of Construction.

 

References in this Agreement to any gender include references to all genders, and references to the singular include references to the plural and vice versa.  Any action to be taken by the Board of Directors of a Party may be taken by a committee of the Board of Directors of such Party if properly delegated by the Board of Directors of a Party to such committee.  Unless the context otherwise requires:

 

(i)                                     the words “include,” “includes” and “including” when used in this Agreement shall be deemed to be followed by the phrase “without limitation;”

 

6



 

(ii)                                  references in this Agreement to Articles, Sections and Schedules shall be deemed references to Articles and Sections of, and Schedules to, this Agreement;

 

(iii)                               the words “hereof,” “hereby” and “herein” and words of similar meaning when used in this Agreement refer to this Agreement in its entirety and not to any particular Article, Section or provision of this Agreement;

 

(iv)                              references in this Agreement to any time shall be to Eastern time unless otherwise expressly provided herein;

 

(v)                                 the Exhibits referred to herein shall be construed with, and as an integral part of, this Agreement to the same extent as if they were set forth verbatim herein;

 

(vi)                              any agreement by a Party to take, or refrain from taking, any action hereunder shall be deemed to constitute an agreement by such Party to cause each member of such Party’s Group to take, or refrain from taking, such action (and if legally required or necessary, each Party will agree on similar agreements with members of its Party Group to ensure that all members are obliged in the same way to effectuate the foregoing); and

 

(vii)                           if there is any conflict between the provisions of the Separation Agreement and this Agreement, the provisions of this Agreement shall control with respect to the subject matter hereof; if there is any conflict between the provisions of the body of this Agreement and the Schedules hereto, the provisions of the body of this Agreement shall control unless explicitly stated otherwise in such Schedule.

 

Article II

 

GENERAL PRINCIPLES FOR ALLOCATION OF LIABILITIES

 

Section 2.01                             General Principles.

 

(a)                                 Acceptance and Assumption of Flowco Liabilities.  From and after the Effective Time, Flowco shall accept, assume (or, as applicable, retain) and faithfully perform, discharge and fulfill all of the following Liabilities of SPX, Flowco or any of their respective Affiliates in accordance with their respective terms (each of which shall be considered a Flowco Liability), regardless of (i) when or where such Liabilities arose or arise, (ii) where or against whom such Liabilities are asserted or determined, (iii) whether arising from or alleged to arise from negligence, gross negligence, recklessness, violation of law, willful misconduct, bad faith, fraud or misrepresentation by any member of the Infrastructurco Group or the Flowco Group, as the case may be, or any of their past or present respective directors, officers, employees, or agents, (iv) which entity is named in any action associated with any Liability, and (v) whether the facts on which they are based occurred prior to, on or after the date hereof:

 

(i)                                     any and all wages, salaries, incentive compensation, equity compensation, commissions, bonuses and any other employee compensation or benefits (including,

 

7



 

without limitation, any benefits under education assistance, tuition reimbursement, relocation, or adoption assistance programs), each as may be modified by this Agreement, payable to or on behalf of any Flowco Employees without regard to when such wages, salaries, incentive compensation, equity compensation, commissions, bonuses or other employee compensation or benefits are or may have been awarded or earned;

 

(ii)                                  any and all Liabilities whatsoever with respect to claims made by or with respect to any Flowco Employees in connection with any Benefit Plan not retained or assumed by any member of the Infrastructurco Group pursuant to this Agreement, the Separation Agreement or any Ancillary Agreement; and

 

(iii)                               any and all Liabilities expressly assumed or retained by any member of the Flowco Group pursuant to this Agreement.

 

(b)                                 Acceptance and Assumption of Infrastructurco Liabilities.  From and after the Effective Time, Infrastructurco shall accept, assume (or, as applicable, retain) and faithfully perform, discharge and fulfill all of the following Liabilities of SPX, Flowco or any of their respective Affiliates in accordance with their respective terms (each of which shall be considered an Infrastructurco Liability), regardless of (i) when or where such Liabilities arose or arise, (ii) where or against whom such Liabilities are asserted or determined, (iii) whether arising from or alleged to arise from negligence, gross negligence, recklessness, violation of law, willful misconduct, bad faith, fraud or misrepresentation by any member of the Infrastructurco Group or the Flowco Group, as the case may be, or any of their past or present respective directors, officers, employees, or agents, (iv) which entity is named in any action associated with any Liability, and (v) whether the facts on which they are based occurred prior to, on or after the date hereof:

 

(i)                                     any and all wages, salaries, incentive compensation, equity compensation, commissions, bonuses and any other employee compensation or benefits (including, without limitation, any benefits under education assistance, tuition reimbursement, relocation, or adoption assistance programs), each as may be modified by this Agreement, payable to or on behalf of any Infrastructurco Employees and Former Employees, without regard to when such wages, salaries, incentive compensation, equity compensation, commissions, bonuses or other employee compensation or benefits are or may have been awarded or earned;

 

(ii)                                  any and all Liabilities whatsoever with respect to claims made by or with respect to any Infrastructurco Employees or Former Employees in connection with any Benefit Plan not retained or assumed by any member of the Flowco Group pursuant to this Agreement, the Separation Agreement or any Ancillary Agreement; and

 

(iii)                               any and all Liabilities expressly assumed or retained by any member of the Infrastructurco Group pursuant to this Agreement.

 

(c)                                  Unaddressed Liabilities.  To the extent that the Parties agree this Agreement does not address particular Liabilities under any Benefit Plan and the Parties later determine that they

 

8



 

should be allocated in connection with the Distribution, the Parties shall agree in good faith on the allocation, taking into account the handling of comparable Liabilities under this Agreement.

 

Section 2.02                             Service Credit.

 

(a)                                 Service for Eligibility, Vesting and Benefit Purposes.  Except as otherwise determined by Flowco in its discretion, Flowco shall cause each member of the Flowco Group to, and shall cause the Flowco Benefit Plans to, recognize each Flowco Employee’s full service with SPX or any of its Subsidiaries or their respective predecessor entities at or before the Effective Time, to the same extent that such service was credited by SPX and its Subsidiaries for similar purposes prior to the Effective Time as if such full service had been performed for a member of the Flowco Group, for purposes of eligibility, vesting and determination of level of benefits under any such Flowco Benefit Plan (except for purposes of benefit accrual under a defined benefit pension plan).

 

(b)                                 Evidence of Prior Service.  Notwithstanding anything in this Agreement to the contrary, but subject to applicable Law, upon reasonable request by either Party (the “Requesting Party”), the other Party (the “Providing Party”) will provide to the Requesting Party copies of any records available to the Providing Party to document the service, plan participation and membership of former employees of the Providing Party who are then employees of the Requesting Party, and will cooperate with the Requesting Party to resolve any discrepancies or obtain any missing data for purposes of determining benefit eligibility, participation, vesting and calculation of benefits with respect to any such employee.

 

Section 2.03                             Benefit Plans.

 

(a)                                 Establishment of Plans.  As of or after the Effective Time, and subject to the other provisions of this Agreement, Flowco, except as otherwise determined by Flowco in its sole discretion, shall, or shall cause the other applicable members of the Flowco Group to, adopt or maintain Benefit Plans (and related trusts, if applicable), with terms that are substantially comparable (or such other standard as is determined by Flowco in its sole discretion) to those of the corresponding SPX Benefit Plans; provided, however, that Flowco may limit participation in any such Flowco Benefit Plan to Flowco Employees who participated in the corresponding SPX Benefit Plan immediately prior to the Effective Time.

 

(b)                                 Information and Operation.  Infrastructurco shall, and shall cause the applicable members of the Infrastructurco Group to, provide Flowco with information describing each SPX Benefit Plan election made by a Flowco Employee that may have application to a Flowco Benefit Plan from and after the Effective Time, and Flowco shall use its commercially reasonable efforts to administer the Flowco Benefit Plans using those elections (except as otherwise determined by Flowco in its sole discretion).  Each Party shall, subject to applicable Law, upon reasonable request, provide the other Party and the other Party’s respective Affiliates, agents, and vendors all information (including, without limitation, the elections described in the preceding sentence) reasonably necessary to the other Party’s operation or administration of its Benefit Plans.

 

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(c)                                  No Duplication or Acceleration of Benefits.  Notwithstanding anything to the contrary in this Agreement, the Separation Agreement or any Ancillary Agreement, no participant in any Flowco Benefit Plan shall receive service credit or benefits to the extent that receipt of such service credit or benefits would result in duplication of benefits provided to such participant by the corresponding SPX Benefit Plan or any other plan, program or arrangement sponsored or maintained by Infrastructurco or any other member of the Infrastructurco Group. Furthermore, unless expressly provided for in this Agreement, the Separation Agreement or in any Ancillary Agreement or required by applicable Law, no provision in this Agreement shall be construed to create any right to accelerate vesting or entitlements under any Benefit Plans sponsored or maintained by SPX, a member of the Infrastructurco Group, Flowco or member of the Flowco Group on the part of any Flowco Employee, Infrastructurco Employee or Former Employee.

 

(d)                                 No Expansion of Participation.  Unless otherwise expressly provided in this Agreement, as otherwise determined or agreed to by Infrastructurco and Flowco, as required by applicable Law, or as explicitly set forth in a Flowco Benefit Plan, a Flowco Employee shall be entitled to participate in the Flowco Benefit Plans at the Effective Time only to the extent that such Flowco Employee was entitled to participate in the corresponding SPX Benefit Plan as in effect immediately prior to the Effective Time (to the extent that such Flowco Employee does not participate in the respective Flowco Benefit Plan immediately prior to the Effective Time), it being understood that this Agreement does not expand (i) the number of Flowco Employees entitled to participate in any Flowco Benefit Plan or (ii) the participation rights of Flowco Employees in any Flowco Benefit Plans beyond the rights of such Flowco Employees under the corresponding SPX Benefit Plans, in each case, after the Effective Time.

 

(e)                                  Transition Services.  The Parties acknowledge that the Infrastructurco Group or the Flowco Group may provide administrative services for certain of the other Party’s Benefit Plans for a transitional period under the terms of the Transition Services Agreement.  The Parties agree to enter into a business associate agreement in connection with such Transition Services Agreement (if required by HIPAA or other applicable health information privacy Laws).

 

(f)                                   Beneficiaries.  References to Infrastructurco Employees, Flowco Employees, Former Employees, SPX Non-Employee Director, Flowco Non-Employee Directors and Infrastructurco Non-Employee Directors shall be deemed to refer to their beneficiaries, dependents, survivors and alternate payees, as applicable.

 

Section 2.04                             Individual Agreements; Expatriate Obligations.

 

(a)                                 Assignment to Flowco.  SPX hereby assigns, and shall cause each other applicable member of the Infrastructurco Group to assign, to Flowco or another member of the Flowco Group, as designated by Flowco, all Individual Agreements, with such assignment to be effective as of the Effective Time; provided, however, that to the extent that assignment of any such Individual Agreement is not permitted by the terms of such agreement or by applicable Law, effective as of the Effective Time, each member of the Flowco Group shall be considered to be a successor to SPX and/or the applicable member(s) of the Infrastructurco Group for purposes of, and a third-party beneficiary with respect to, such Individual Agreement, such that the applicable members of the Flowco Group shall enjoy all of the rights and benefits under such agreement

 

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(including rights and benefits as a third-party beneficiary), with respect to the business operations of the Flowco Group.  For avoidance of doubt, to the extent that an Individual Agreement is assigned to Flowco or another member of the Flowco Group, and such Individual Agreement contains provisions addressing equity awards, the assignment shall provide that such provisions shall apply to equity awards of Flowco and Infrastructurco.

 

(b)                                 Assumption by Flowco.  From and after the Effective Time, Flowco shall accept, assume and faithfully perform, discharge and fulfill the agreements referenced in Section 2.04(a) hereof.

 

(c)                                  Expatriate Obligations.  From and after the Effective Time, Flowco shall accept, assume and faithfully perform, discharge and fulfill the agreements to which any Flowco Employee is a party (to the extent that a member of the Flowco Group is not already contractually obligated) that provides for expatriate (including any international assignee) contract or arrangement (including agreements and obligations regarding repatriation, relocation, equalization of taxes (including tax filings and obligations for years prior to the Effective Time) and living standards in the host country).

 

(d)                                 Relocation Loan — Flowco Employee Officers.  Infrastructurco shall keep the Liabilities relating to a relocation loan provided by SPX to a Flowco Employee who is an officer of SPX (or will be an officer of Flowco immediately after the Effective Time), and the relocation loan for such Flowco Employee shall not be assigned or transferred to Flowco (or any member of the Flowco Group).

 

Article III

 

EMPLOYEES

 

Section 3.01                             Active Employees.

 

(a)                                 Generally.  Except as otherwise set forth in this Agreement, effective not later than immediately prior to the Effective Time, the employment of each Flowco Business Employee shall be assigned and transferred to Flowco or a member of the Flowco Group, and the employment of each Infrastructurco Business Employee shall be assigned and transferred to Infrastructurco or a member of the Infrastructurco Group.

 

(b)                                 At Will Employment.  Notwithstanding the above or any other provision of this Agreement, nothing in this Agreement shall create any obligation on the part of any member of the Infrastructurco Group or the Flowco Group to continue the employment of any employee for any period of time following the Effective Time or to change the employment status of any employee from “at will,” to the extent such employee is an “at will” employee under applicable Law.

 

(c)                                  No Severance.  The Distribution and the assignment, transfer or continuation of the employment of employees in connection therewith shall not be deemed a severance or termination of employment of any employee for purposes of any plan, policy, practice or arrangement of any member of the Infrastructurco Group or Flowco Group.

 

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(d)                                 Not a Change of Control/Change in Control.  Neither the consummation of the Distribution nor any transaction in connection with the Distribution shall be deemed a “change of control,” “change in control,” or term of similar import for purposes of any SPX Benefit Plan or Flowco Benefit Plan.

 

(e)                                  Payroll and Related Taxes.  With respect to any Flowco Employee or group of Flowco Employees, the Parties shall, or shall cause their respective Subsidiaries to, (i) treat Flowco (or the applicable member of the Flowco Group) as a “successor employer” and Infrastructurco (or the applicable member of the Infrastructurco Group) as a “predecessor,” within the meaning of Sections 3121(a)(1) and 3306(b)(1) of the Code, for purposes of taxes imposed under the United States Federal Insurance Contributions Act, as amended (“FICA”), or the United States Federal Unemployment Tax Act, as amended (“FUTA”), (ii) cooperate with each other to avoid, to the extent possible, the restart of FICA and FUTA before, upon, or following the Effective Time with respect to each such Flowco Employee for the tax year during which the Effective Time occurs, and (iii) use commercially reasonable efforts to implement the alternate procedure described in Section 5 of Revenue Procedure 2004-53; provided, however, that, if Flowco (or the applicable member of the Flowco Group) cannot be treated as a “successor employer” to SPX (or the applicable member of the Infrastructurco Group) within the meaning of Sections 3121(a)(1) and 3306(b)(1) of the Code with respect to any Flowco Employee or group of Flowco Employees, (x) with respect to the portion of the tax year commencing on January 1, 2015 and ending on the Distribution Date, SPX will (A) be responsible for all payroll obligations, tax withholding and reporting obligations for such Flowco Employees and (B) furnish a Form W-2 or similar earnings statement to all such Flowco Employees for such period, and (y) with respect to the remaining portion of such tax year, Flowco will (A) be responsible for all payroll obligations, tax withholding and reporting obligations regarding such Flowco Employees and (B) furnish a Form W-2 or similar earnings statement to all such Flowco Employees.

 

Section 3.02                             Former Employees.

 

(a)                                 General Principle.  Except as otherwise provided in this Agreement, each former employee of the Infrastructurco Group or the Flowco Group as of the Distribution Date will be considered a former employee of the business as to which his or her duties were primarily related immediately prior to his or her termination of employment with all of Infrastructurco, Flowco and their respective Affiliates.

 

(b)                                 Former Infrastructurco Employees.  Former employees of the Infrastructurco Group as of the Effective Time shall be deemed to include all employees who, as of their last day of employment with all of Infrastructurco, Flowco and their respective Affiliates, had employment duties primarily related to the Infrastructurco Business (collectively, the “Former Infrastructurco Employees”).

 

(c)                                  Former Flowco Employees.  Former employees of the Flowco Group as of the Effective Time shall be deemed to include all employees who, as of their last day of employment with all of Infrastructurco, Flowco and their respective Affiliates, had employment duties primarily related to the Flowco Business (collectively, the “Former Flowco Employees”).

 

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(d)                                 Former Employees.  Former Infrastructurco Employees and Former Flowco Employees are collectively referred to as “Former Employees”.

 

Section 3.03                             Employment Law Obligations.  From and after the Effective Time, (a) the members of the Infrastructurco Group shall be responsible for adopting and maintaining any policies or practices, and for all other actions and inactions, necessary to comply with employment related laws and requirements relating to the employment of the Infrastructurco Employees and the treatment of the Former Employees in respect of their former employment with SPX and its Affiliates, and (b) the members of the Flowco Group shall be responsible for adopting and maintaining any policies or practices, and for all other actions and inactions, necessary to comply with employment related laws and requirements relating to the employment of the Flowco Employees.  Without limiting the scope of the foregoing, after the Effective Time, (i) the members of the Infrastructurco Group shall be responsible for providing any necessary WARN notice and satisfying WARN obligations with respect to any termination of employment of any Infrastructurco Employee that occurs after the Effective Time and (ii) the members of the Flowco Group shall be responsible for providing any necessary WARN notice and satisfying WARN obligations with respect to any termination of employment of any Flowco Employee that occurs after the Effective Time.

 

Section 3.04                             Employee Records.

 

(a)                                 Sharing of Records.  The Parties shall use their respective best efforts to provide each other such Employee Records and information only as necessary or appropriate to carry out their obligations under applicable Law (including, without limitation, any relevant privacy protection laws or regulations in any applicable jurisdictions), this Agreement or the Separation Agreement or the Transition Services Agreement, or for the purposes of administering their respective Benefit Plans and policies.  Subject to applicable Law, all information and Employee Records regarding employment and personnel matters of (i) Infrastructurco Employees and Former Employees shall be accessed, retained, held, used, copied and transmitted after the Distribution Date by Infrastructurco in accordance with all laws and policies relating to the collection, storage, retention, use, transmittal, disclosure and destruction of such records and (ii) Flowco Employees and Former Flowco Employees shall be accessed, retained, held, used, copied and transmitted after the Distribution Date by Flowco in accordance with all laws and policies relating to the collection, storage, retention, use, transmittal, disclosure and destruction of such records.  Subject to the Transition Services Agreement, the Parties shall reimburse each other for any reasonable costs incurred in copying or transmitting any records requested pursuant to this Section 3.04.

 

(b)                                 Access to Records.  To the extent consistent with applicable privacy protection laws or regulations, access to such Employee Records after the Distribution Date will be provided to Infrastructurco and Flowco in accordance with the Separation Agreement and Transition Services Agreement.  In addition, notwithstanding anything to the contrary, Flowco shall be entitled to reasonable access to those Employee Records retained by Infrastructurco necessary for Flowco’s continued administration of any plans or programs (or as otherwise required by applicable Law) on behalf of employees after the Distribution Date, and SPX shall be entitled to reasonable access to those Employee Records retained by Flowco necessary for Infrastructurco’s continued administration of any plans or programs (or as otherwise required by

 

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applicable Law) on behalf of employees after the Distribution Date, provided that, in each case, such access shall be limited to individuals who have a job related need to access such Employee Records.  Flowco shall be entitled to retain copies of all restrictive covenant agreements with any Infrastructurco Employee or Former Employee in which Flowco has a valid business interest.  Infrastructurco shall be entitled to retain copies of all restrictive covenant agreements with any Flowco Employee or Former Employee in which Infrastructurco has a valid business interest.

 

(c)                                  Maintenance of Employee Records.  With respect to retaining, destroying, transferring, sharing, copying and permitting access to all such information, Flowco and Infrastructurco shall each comply with all applicable Laws, regulations and internal policies, and each Party shall indemnify and hold harmless the other Party from and against any and all liability, claims, actions, and damages that arise from a failure (by the indemnifying party or its agents) to so comply with all applicable Laws, regulations and internal policies applicable to such information.

 

(d)                                 No Access to Computer Systems.  Except as set forth in the Separation Agreement or the Transition Services Agreement, no provision of this Agreement shall give either Party direct access to the computer systems of the other Party, unless specifically permitted by the owner of such systems.

 

(e)                                  Relation to Separation Agreement.  The provisions of this Section 3.04 shall be in addition to, and not in derogation of, the provisions of the Separation Agreement governing Confidential Information and access to and use of employees, information and records.

 

(f)                                   Confidentiality.  Except as otherwise set forth in this Agreement, all Employee Records and data relating to employees shall, in each case, be subject to the confidentiality provisions of the Separation Agreement.

 

(g)                                  Cooperation.  Each member of the Infrastructurco Group and Flowco Group shall use commercially reasonable efforts to share, retain and maintain data and Employee Records that are necessary or appropriate to further the purposes of this Section 3.04 and for each other to administer their respective Benefit Plans to the extent consistent with this Agreement and applicable Law.  Except as provided under the Transition Services Agreement, neither Infrastructurco nor Flowco shall charge the other any fee for such cooperation.  The Parties agree to cooperate as long as is reasonably necessary to further the purposes of this Section 3.04.

 

Section 3.05                             No-Hire and Non-Solicitation.  Each Party agrees that, for a period of twelve (12) months from the Distribution Date, such Party shall not hire or solicit for employment any individual who is an Infrastructurco Employee, in the case of Flowco, or a Flowco Employee, in the case of Infrastructurco; provided, however, that, without limiting the generality of the foregoing prohibition on solicitation and hiring employees of the other Party, this Section 3.05 shall not prohibit (a) the solicitation but not the hiring of a Person through generalized solicitations that are not directed to specific Persons or employees of the other Party, (b) the solicitation and hiring of a Person whose employment was involuntarily terminated by the other Party, or (c) the solicitation and hiring of a Person after receipt by the soliciting Party (in advance of any solicitation or, in the case of a response to a general solicitation as permitted under clause (a) above, in advance of any subsequent solicitation in connection with the

 

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recruiting process) of the express written consent of the senior human resources executive of the Party that employs the Person who is to be solicited and/or hired (or if such Person is the senior human resources executive, the express written consent of the general counsel of the Party). Except as provided in clause (b) above with respect to involuntary terminations, without regard to the use of the term “employee” or “employs,” the restrictions under this Section 3.05 shall be applicable to (i) Infrastructurco Employees whose employment terminates after the Effective Time, and (ii) Flowco Employees whose employment terminates after the Effective Time, in each case, until the earlier of the date that is (x) three months after such employee’s last date of employment with Infrastructurco or Flowco, as applicable, or (y) the date that is the first anniversary of the Distribution Date. For the avoidance of doubt, the restrictions under this Section 3.05 shall not apply to Former Employees whose most recent employment with SPX and its Subsidiaries was terminated prior to the Effective Time.

 

Article IV

 

EQUITY AWARDS

 

Section 4.01                             General Principles.

 

(a)                                 Infrastructurco and Flowco shall take any and all reasonable actions as shall be necessary and appropriate to further the provisions of this ARTICLE IV, including, to the extent practicable, providing written notice or similar communication to each employee who holds one or more awards granted under the SPX Equity Plan informing such employee of (i) the actions contemplated by this ARTICLE IV with respect to such awards and (ii) whether (and during what time period) any “blackout” period shall be imposed upon holders of awards granted under the SPX Equity Plan during which time awards may not be exercised or settled, as the case may be.

 

(b)                                 No award described in this ARTICLE IV, whether outstanding or to be issued, adjusted, substituted, assumed, converted or cancelled by reason of or in connection with the Distribution, shall be issued, adjusted, substituted, assumed, converted or cancelled until in the judgment of the administrator of the applicable plan or program such action is consistent with all applicable Laws, including federal securities Laws.  Any period of exercisability will not be extended on account of a period during which such an award is not exercisable pursuant to the preceding sentence.

 

(c)                                  Notwithstanding anything to the contrary in this Section 4.01, effective immediately prior to the Effective Time, the compensation committee of the board of directors of SPX (the “SPX Compensation Committee”) may provide for different adjustments with respect to some or all SPX Equity Awards to the extent that the SPX Compensation Committee deems such adjustments necessary and appropriate.  Any adjustments made by the SPX Compensation Committee pursuant to the foregoing sentence shall be deemed incorporated by reference herein as if fully set forth below and shall be binding on the Parties and their respective Affiliates.

 

Section 4.02                             Establishment of Equity Incentive Plans.  Prior to the Effective Time, (a) Flowco shall establish an equity incentive plan for the benefit of eligible Flowco Employees and Flowco Non-Employee Directors that is substantially similar to the SPX Equity Plan (the

 

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Flowco Equity Plan”) and (b) thereafter and prior to the Effective Time, SPX, as the sole stockholder of Flowco, shall approve the Flowco Equity Plan.

 

Section 4.03                             Treatment of Outstanding Equity Incentive Awards.

 

(a)                                 SPX RSUs.

 

(i)                                     Infrastructurco Employees and Former Employees.  Each SPX RSU that is outstanding as of immediately prior to the Effective Time and held by an Infrastructurco Employee or a Former Employee shall be adjusted by multiplying the number of RSUs subject to such SPX RSU by the Infrastructurco Share Ratio (each such adjusted SPX RSU, an “Adjusted Infrastructurco RSU”).  If the resulting product includes a fractional RSU, the number of RSUs subject to such Adjusted Infrastructurco RSU shall be rounded down to the nearest whole RSU.  Each Adjusted Infrastructurco RSU shall be subject to substantially the same terms and conditions (including, as applicable, with respect to service vesting and performance vesting) immediately after the Effective Time as were applicable to the corresponding SPX RSU immediately prior to the Effective Time (except as otherwise provided herein, including in Section 4.03(d)).

 

(ii)                                  Flowco Employees.  Each SPX RSU that is outstanding as of immediately prior to the Effective Time and held by a Flowco Employee shall be converted as of the Effective Time into a Flowco RSU (each such award, a “Flowco Spin RSU”), with the number of RSUs subject to each such Flowco Spin RSU to be set at a number equal to the product of (A) the number of RSUs subject to the corresponding SPX RSU immediately prior to the Effective Time multiplied by (B) the Flowco Share Ratio, with any fractional RSU rounded down to the nearest whole RSU.  Each Flowco Spin RSU shall otherwise be subject to substantially the same terms and conditions (including, as applicable, with respect to service vesting and performance vesting) immediately after the Effective Time as were applicable to the corresponding SPX RSU immediately prior to the Effective Time (except as otherwise provided herein, including in Section 4.03(d)).

 

(iii)                               Notwithstanding Sections 4.03(a)(i)-(ii), the vesting of any SPX Time-Based RSU that would otherwise vest in full (assuming continued employment by the holder) on or prior to December 31, 2015, shall be accelerated to the date that is four Trading Days prior to the Record Date (assuming that such award has not otherwise been forfeited prior to such date) and shall be settled in accordance with terms of the applicable award agreement (but no later than the Record Date).

 

(b)                                 SPX RSAs.

 

(i)                                     Infrastructurco Employees and Former Employees.  Each SPX RSA that is outstanding as of immediately prior to the Effective Time and held by an Infrastructurco Employee or a Former Employee shall be adjusted by multiplying the number of SPX Shares subject to such SPX RSA by the Infrastructurco Share Ratio (each such adjusted SPX RSA, an “Adjusted Infrastructurco RSA”).  If the resulting product includes a fractional share, the number of SPX Shares subject to such Adjusted Infrastructurco RSA shall be rounded down to the nearest whole share.  Each Adjusted

 

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Infrastructurco RSA shall be subject to substantially the same terms and conditions (including, as applicable, with respect to service vesting, performance vesting and periods of holding) immediately after the Effective Time as were applicable to the corresponding SPX RSA immediately prior to the Effective Time (except as otherwise provided herein, including in Section 4.03(d)).

 

(ii)                                  Flowco Employees.  Each SPX RSA that is outstanding as of immediately prior to the Effective Time and held by a Flowco Employee shall be converted as of the Effective Time into a Flowco RSA (each such award, a “Flowco Spin RSA”), with the number of Flowco Shares subject to each such Flowco Spin RSA to be set at a number equal to the sum of (x) plus (y) below, with any fractional share rounded down to the nearest whole share:

 

(x) product of (A) the number of SPX Shares subject to the corresponding SPX RSA immediately prior to the Effective Time multiplied by (B) the Flowco Share Ratio; plus

 

(y) the quotient of (A) the value of the cash dividends held in escrow under the corresponding SPX RSA immediately prior to the Effective Time divided by (B) the Flowco Stock Value.

 

Each Flowco Spin RSA shall otherwise be subject to substantially the same terms and conditions (including, as applicable, with respect to service vesting, performance vesting and periods of holding) immediately after the Effective Time as were applicable to the corresponding SPX RSA immediately prior to the Effective Time (except as otherwise provided herein, including in Section 4.03(d)).

 

(iii)                               Notwithstanding Sections 4.03(b)(i)-(ii), immediately prior to the Effective Time, the vesting of (i) each outstanding SPX Internal Performance-Based RSA granted in 2014 and 2013 held by a Former Employee and (ii) each outstanding SPX RSA held by an SPX Non-Employee Director, shall be accelerated (without regard to whether any applicable service or performance criteria has been met) and shall cease to be subject to any restrictions.

 

(c)                                  SPX Stock Options.

 

(i)                                     Infrastructurco Employees and Former Employees.  Each SPX Option that is outstanding as of immediately prior to the Effective Time and held by an Infrastructurco Employee or a Former Employee shall remain an option to purchase SPX Shares (each such option, an “Adjusted Infrastructurco Option”), with exercise price and the number of SPX Shares subject to the Adjusted Infrastructurco Option adjusted as follows:

 

(x)  the per-share exercise price of each such Adjusted Infrastructurco Option shall be equal to the product of (A) the per-share exercise price of the corresponding SPX Option immediately prior to the Effective Time multiplied by (B) the Infrastructurco Price Ratio, rounded up to the nearest whole hundredth of a cent; and

 

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(y) the number of SPX Shares subject to each such Adjusted Infrastructurco Option shall be equal to the product of (A) the number of SPX Shares subject to the corresponding SPX Option immediately prior to the Effective Time multiplied by (B) the Infrastructurco Share Ratio, with any fractional share rounded down to the nearest whole share.

 

Each Adjusted Infrastructurco Option shall otherwise be subject to substantially the same terms and conditions (including, as applicable, with respect to service vesting and option expiration) immediately after the Effective Time as were applicable to the corresponding SPX Option immediately prior to the Effective Time (except as otherwise provided herein, including in Section 4.03(d)).

 

(ii)                                  Flowco Employees.  Each SPX Option that is outstanding as of immediately prior to the Effective Time and held by a Flowco Employee shall be converted as of the Effective Time into a Flowco Option to purchase Flowco Shares (each such option, a “Flowco Spin Option”), with exercise price and the number of Flowco Shares subject to the Flowco Spin Option adjusted as follows:

 

(x) the per-share exercise price of each such Flowco Spin Option shall be equal to the product of (A) the per-share exercise price of the corresponding SPX Option immediately prior to the Effective Time multiplied by (ii) the Flowco Price Ratio, rounded up to the nearest whole hundredth of a cent; and

 

(y) the number of Flowco Shares subject to each such Flowco Spin Option shall be equal to the product of (A) the number of SPX Shares subject to the corresponding SPX Option immediately prior to the Effective Time multiplied by (B) the Flowco Share Ratio, with any fractional share rounded down to the nearest whole share.

 

Each Flowco Spin Option shall otherwise be subject to substantially the same terms and conditions (including, as applicable, with respect to service vesting and option expiration) immediately after the Effective Time as were applicable to the corresponding SPX Option immediately prior to the Effective Time (except as otherwise provided herein, including in Section 4.03(d)).

 

(iii)                               Notwithstanding anything to the contrary in this Section 4.03(c), the exercise price, the number of SPX Shares and Flowco Shares subject to each Adjusted Infrastructurco Option and Flowco Spin Option, and the terms and conditions of exercise of such options shall be determined in a manner consistent with the requirements of Section 409A of the Code.

 

(d)                                 Miscellaneous Award Terms.

 

(i)                                     With respect to determining eligibility for “Retirement” (or such other similar term) under Flowco Awards, if applicable, employment with or service to the Infrastructurco Group prior to the Distribution Date for the corresponding SPX Award

 

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shall be treated as employment with and service to Flowco with respect to such determination under Flowco Awards held by Flowco Employees.  To the extent that any determination with respect to the achievement of certain performance goals or retirement must be made with respect to Flowco Awards, such determination shall be made by the compensation committee of the board of directors of Flowco (the “Flowco Compensation Committee”).

 

(ii)                                  For the avoidance of doubt, neither the Separation nor the Distribution shall constitute a termination of employment for any employee for purposes of any Infrastructurco Award or any Flowco Award.

 

(iii)                               For any Flowco Award granted under this Section 4.03, and without limiting Sections 9.11 and 9.12, any reference to a “change in control,” “change of control” or similar definition in an award agreement shall refer to a “Change of Control” as set forth in the Flowco Equity Plan (as may be adjusted by the applicable award agreement).

 

(iv)                              With respect to the Adjusted Infrastructurco RSU issued in accordance with Section 4.03(a)(i), or a Flowco Spin RSU issued in accordance with Section 4.03(a)(ii), which in either case vests solely or partially based on the achievement of specified performance goals, and subject to the applicable award agreement, the number of RSUs that vest under such awards shall be the greater of (i) the number as certified by the SPX Compensation Committee or Flowco Compensation Committee, as applicable, in accordance with the applicable performance vesting terms of the award, or (ii) 50% of the number that would have vested assuming performance under such award was at target level; provided, however, this paragraph (iv) shall not apply to any Adjusted Infrastructurco RSU held by a Former Employee whose termination of employment from SPX (and its Affiliates) occurred before August 20, 2015.

 

(v)                                 With respect to any Flowco Spin RSA issued in accordance with Section 4.03(b)(ii), where the corresponding SPX RSA was an SPX Internal Performance-Based RSA granted in 2014, the performance periods with respect to such Flowco Spin RSAs shall be (i) the fourth quarter of the 2015 fiscal year, and (ii) January 1, 2016 to December 31, 2016, and new performance goals that are attributable to Flowco with respect to such periods shall be set by the SPX Compensation Committee or Flowco Compensation Committee, as applicable.  With respect to any Flowco Spin RSA issued in accordance with Section 4.03(b)(ii), where the corresponding SPX RSA was an SPX Internal Performance-Based RSA granted in 2013, the performance period with respect to such Flowco Spin RSAs shall be the fourth quarter of the 2015 fiscal year, and new performance goals that are attributable to Flowco with respect to such period shall be set by the SPX Compensation Committee or Flowco Compensation Committee, as applicable.

 

(vi)                              Nothing in this Agreement shall be construed to limit the SPX Compensation Committee from equitably adjusting SPX Equity Awards pursuant to its powers under the SPX Equity Plan and applicable award agreements.

 

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Section 4.04                             Section 16(b) of the Exchange Act.  By approving the adoption of this Agreement, the respective Boards of Directors of each of SPX and Flowco intend to exempt from the short-swing profit recovery provisions of Section 16(b) of the Exchange Act, by reason of the application of Rule 16b-3 thereunder, all acquisitions and dispositions of equity incentive awards by directors and officers of each of SPX and Flowco, and the respective Boards of Directors of SPX and Flowco also intend expressly to approve, in respect of any equity-based award, the use of any method for the payment of an exercise price and the satisfaction of any applicable Tax withholding (specifically including the actual or constructive tendering of shares in payment of an exercise price and the withholding of option shares from delivery in satisfaction of applicable Tax withholding requirements) to the extent such method is permitted under the SPX Equity Plan, Flow Equity Plan and award agreement, as applicable.

 

Section 4.05                             Liabilities for Settlement of Awards.  Except as provided for pursuant to Section 4.07, from and after the Effective Time (a) Infrastructurco (or one or more members of the Infrastructurco Group so designated) shall be responsible for all Liabilities associated with Infrastructurco Awards, including share delivery, dividends, dividend equivalents, registration or other obligations related to the exercise, vesting or settlement of the Infrastructurco Awards and (b) Flowco shall be responsible for all Liabilities associated with Flowco Awards, including any option exercise, share delivery, dividends, dividend equivalents, registration or other obligations related to the exercise, vesting or settlement of the Flowco Awards.

 

Section 4.06                             Form S-8.  Prior to, upon or as soon as reasonably practicable after the Effective Time and subject to applicable Law, Flowco shall prepare and file with the U.S. Securities and Exchange Commission one or several registration statements on Form S-8 (or another appropriate form) registering under the Securities Act of 1933, as amended, the offering of a number of shares of Flowco Common Stock at a minimum equal to the number of shares that are or may be subject to Flowco Awards.  Flowco shall use commercially reasonable efforts to cause any such registration statement to be kept effective (and the current status of the prospectus or prospectuses required thereby to be maintained) as long as any Flowco Awards remain outstanding.

 

Section 4.07                             Tax Reporting and Withholding for Equity-Based Awards.  The Infrastructurco Group will be responsible for all income, payroll, or other tax reporting related to income of Infrastructurco Employees or Former Employees from equity-based awards, and Flowco (or one of its Subsidiaries) will be responsible for all income, payroll, or other tax reporting related to income of Flowco Employees from equity-based awards.  Similarly, the Infrastructurco Group will be responsible for all income, payroll, or other tax reporting related to income of its non-employee directors from equity-based awards, and Flowco will be responsible for all income, payroll, or other tax reporting related to income of its non-employee directors from equity-based awards.  Further, the Infrastructurco Group shall be responsible for remitting applicable tax withholdings for Infrastructurco Employees to each applicable taxing authority, and Flowco (or one of its Subsidiaries) shall be responsible for remitting applicable tax withholdings for Flowco Employees to each applicable taxing authority.

 

Section 4.08                             Cooperation.  Each of the Parties shall establish an appropriate administration system in order to administer, in an orderly manner, (i) exercises of vested Adjusted Infrastructurco Options and Flowco Spin Options, (ii) the vesting and forfeiture of

 

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other unvested Infrastructurco Awards and Flowco Awards, and (iii) the withholding and reporting requirements with respect to all awards.  Each of the Parties shall work together to unify and consolidate all indicative data and payroll and employment information on regular timetables and make certain that each applicable Person’s data and records in respect of such awards are correct and updated on a timely basis.  The foregoing shall include employment status and information required for vesting and forfeiture of awards and tax withholding/remittance, compliance with trading windows and compliance with the requirements of the Exchange Act and other applicable Laws.

 

Section 4.09                             SPX Equity Awards in Certain Non-U.S. Jurisdictions.  Notwithstanding the provisions of Section 4.03, the Parties may mutually agree, in their sole discretion, not to adjust certain outstanding SPX Equity Awards held by non-U.S. award holders pursuant to the provisions of Section 4.03, where those actions would create or trigger adverse legal, accounting or tax consequences for SPX, Flowco, and/or the affected non-U.S. award holders.  In such circumstances, SPX and/or Flowco may take any action necessary or advisable to prevent any such adverse legal, accounting or tax consequences, including, but not limited to, agreeing that the outstanding SPX Equity Awards of the affected non-U.S. award holders shall terminate in accordance with the terms of the SPX Equity Plan and the underlying award agreements, in which case Flowco or SPX, as applicable, shall equitably compensate the affected non-U.S. award holders in an alternate manner determined by Flowco or SPX, as applicable, in its sole discretion, or apply an alternate adjustment method.  Where and to the extent required by applicable Law or tax considerations outside the United States, the adjustments described in this Section 4.09 shall be deemed to have been effectuated immediately prior to the Distribution Date.

 

Article V

 

CERTAIN U.S. WELFARE BENEFIT MATTERS

 

Section 5.01                             Establishment of Welfare Plans.

 

(a)                                 Except as expressly set forth herein, on or prior to the Distribution Date, and subject to Section 5.05, Flowco shall establish and adopt Welfare Plans that will provide welfare benefits to each eligible Flowco Employee who is, as of the Distribution Date, a participant in any of the SPX Welfare Plans (and their eligible spouses and dependents, as the case may be) under terms and conditions that are comparable to the SPX Welfare Plans (the “Flowco Welfare Plans”).  Coverage and benefits that were provided under the SPX Welfare Plans shall then be provided to the Flowco Employees on an uninterrupted basis under the newly established Flowco Welfare Plans which shall contain substantially the same terms and conditions as in effect under the corresponding SPX Welfare Plans on and immediately prior to the Distribution Date.  Flowco Employees shall cease to be eligible for coverage under the SPX Welfare Plans after the Distribution Date.  For the avoidance of doubt, Flowco Employees shall not participate in any SPX Welfare Plans after the Distribution Date, and Infrastructurco Employees and Former Employees shall not participate in any Flowco Welfare Plans at any time.

 

(b)                                 Flowco shall use commercially reasonable efforts to cause all Flowco Welfare Plans (to the extent not already waived or taken into account, as applicable, prior to the date

 

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hereof) to (i) waive all limitations as to preexisting conditions, exclusions, and service conditions with respect to participation and coverage requirements applicable to Flowco Employees, other than limitations that were in effect with respect to such Flowco Employees as of the Distribution Date under the SPX Welfare Plans, (ii) waive any waiting period limitation or evidence of insurability requirement that would otherwise be applicable to a Flowco Employee to the extent such Flowco Employee had satisfied any similar limitation under the analogous SPX Welfare Plan as of the Distribution Date and (iii) reflect under the Flowco Welfare Plan (including giving credit to Flowco Employees for the plan year in which the Distribution Date occurs) for any amount paid, number of services obtained or provider visits by such Flowco Employees toward deductibles, out of pocket maximums, limits on number of services or visits, or other similar limitations to the extent such amounts are taken into account under the analogous SPX Welfare Plan.

 

(c)                                  Except as otherwise specifically set forth in this Agreement, Infrastructurco (or one or more members of the Infrastructurco Group so designated) shall retain Liability and responsibility in accordance with the applicable SPX Welfare Plan for all reimbursement claims (such as medical and dental claims) for expenses incurred and for all non-reimbursement claims (such as life insurance claims) incurred by Flowco Employees (and their dependents and beneficiaries) under such plans through the Distribution Date.  Flowco shall retain Liability and responsibility in accordance with the Flowco Welfare Plans for all reimbursement claims (such as medical and dental claims) for expenses incurred and for all non-reimbursement claims (such as life insurance claims) incurred by Flowco Employees (and their dependents and beneficiaries) after the Distribution Date.  For purposes of this Section 5.01, a benefit claim shall be deemed to be incurred when the event giving rise to the benefit under the applicable plan has occurred as set forth in the governing plan documents, if it is clear based on the governing documents of both the SPX Welfare Plan and the Flowco Welfare Plans which plan should be responsible for the claim or, if not, as follows: (i) health, dental, vision, employee assistance program, and prescription drug benefits (including in respect of any hospital confinement), upon provision of such services, materials or supplies; (ii) life, accidental death and dismemberment and business travel accident insurance benefits, upon the death, or other event giving rise to such benefits and (iii) with respect to short- and long-term disability benefits, upon the date of an individual’s onset of disability (subject to Section 5.01(d) below), as determined by the disability benefit insurance carrier or claim administrator, giving rise to such claim or expense.  The members of the Infrastructurco Group shall retain Liability and responsibility in accordance with the applicable SPX Welfare Plan for all reimbursement claims (such as medical and dental claims) for expenses incurred, for all non-reimbursement claims (such as life insurance claims) and for all short- and long-term disability claims, in each case for individuals who, immediately prior to the Distribution Date, are Former Employees (and their dependents and beneficiaries), including any such Former Employee on long-term disability on the Distribution Date.

 

(d)                                 Flowco Business Employees on Disability.

 

(i)                                     Flowco Disabled Employees” refers to any Flowco Business Employee (A) who is receiving disability benefit payments under the SPX Corporation Long-Term Disability Plan (the “SPX LTD Plan”) or under the SPX Corporation Short-Term Disability Plan (the “SPX STD Plan”) immediately prior to the Effective Time, (B) who is a participant in the SPX LTD Plan immediately prior to July 1, 2015, and (C) whose

 

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disability regarding such benefits was incurred prior to July 1, 2015.  A Flowco Disabled Employee shall continue as such if the Flowco Disabled Employee transfers from the SPX STD Plan to the SPX LTD Plan.

 

(ii)                                  Flowco Disabled Employees shall not become a Flowco Employee as of the Distribution Date, and instead, shall be an Infrastructurco Employee and be assigned and transferred to Infrastructurco or a member of the Infrastructurco Group prior to the Effective Time.

 

(iii)                               Commencing with the first month after the Distribution Date, Flowco shall reimburse Infrastructurco, within thirty (30) days following the receipt of an applicable invoice from Infrastructurco, for (A) any payments of SPX STD Plan benefits to Flowco Disabled Employees, and (B) a period not to exceed July 1, 2017, Infrastructurco’s costs of providing (1) medical, dental, vision, life and accidental death and dismemberment insurance to those Flowco Disabled Employees who have elected such benefits and (2) with respect to the employment of the Flowco Disabled Employees, any contributions pursuant to FICA, FUTA or similar state law, any workers’ compensation premiums and unemployment insurance premiums, any employer 401(k) matching contributions, and payment of any applicable bonus earned prior to the Distribution Date.

 

(iv)                              Within ten (10) days following the receipt of notice from SPX that any Flowco Disabled Employee has been determined to not qualify, or to no longer qualify, as disabled under either the SPX STD Plan or SPX LTD Plan, as applicable (other than those Flowco Disabled Employees transferring from the SPX STD Plan to the SPX LTD Plan in accordance with the terms hereof), Flowco (or any member of Flowco Group) shall offer employment to each such Flowco Disabled Employee but only if Flowco is notified of such release within twenty-four (24) months from the date that such Flowco Disabled Employee’s leave commenced.

 

(v)                                 For avoidance of doubt, with respect to any Flowco Business Employee who is not a Flowco Disabled Employee and is receiving disability benefit payments under the SPX LTD Plan or SPX STD Plan immediately prior to the Effective Time, such Flowco Business Employee shall become a Flowco Employee as of the Distribution Date (subject to the other terms of this Agreement), and shall receive any long-term or short-term disability benefits to which such Flowco Employee is entitled under the applicable Flowco Welfare Plan after the Distribution Date in accordance with the terms of such plans.

 

(e)                                  No Flowco Retiree Welfare Benefit Plans.  Notwithstanding anything herein to the contrary, and except as specifically provided in Sections 5.01(f) and (g), with respect of any SPX Welfare Plan that provides retiree medical or other post-retirement benefits to eligible employees: (i) no Flowco Employee shall be eligible to receive such retiree benefits under any such SPX Welfare Plan at or at any time after the Effective Time, (ii) Infrastructurco (or one or more members of the Infrastructurco Group so designated) shall retain sole responsibility for the Liabilities associated with any SPX Welfare Plan providing retiree medical or other post-retirement benefits to eligible Infrastructurco Employees or Former Employees, and no member of the Flowco Group shall have any Liability therefor, and (iii) neither Flowco nor any members

 

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of the Flowco Group shall be obligated to provide retiree medical or other post-retirement benefits to any Flowco Employee (except such retiree life as otherwise provided pursuant to a collective bargaining agreement).  The preceding shall not be construed as limiting Flowco from providing reimbursement of post-retirement medical coverage premiums to any Flowco Employee pursuant to any Individual Agreement.

 

(f)                                   SPX Retiree Medical for Certain Flowco Employees.  Notwithstanding Section 5.01(e) and subject to Section 5.01(h), any Flowco Employee who (i) would have been eligible, ignoring solely for purposes of this clause (i) any age or service requirements, for subsidized retiree medical benefits from an SPX Welfare Plan had they retired immediately prior to the Effective Time (such Flowco Employees identified on Schedule 5.01(f)), and (ii) at the date of termination of employment from Flowco and the Flowco Group, would have otherwise been eligible to receive subsidized retiree medical benefits from an SPX Welfare Plan at such date had that Flowco Employee continued employment with Infrastructurco until such date, shall remain eligible to receive such retiree medical benefits under any such applicable SPX Welfare Plan upon termination from Flowco or its Affiliates.  Flowco shall notify Infrastructurco within thirty (30) days of when any such Flowco Employee identified on Schedule 5.01(f) terminates employment with Flowco and the Flowco Group.  Within thirty (30) days following the receipt of an applicable invoice from Infrastructurco, Flowco shall reimburse Infrastructurco for the portion of such retiree medical benefit coverage premium subsidized by Infrastructurco provided to such Flowco Employees under such SPX Welfare Plans.  Nothing in this paragraph shall be construed as requiring the Infrastructurco Group to maintain an SPX Welfare Plan which provides, as described above, subsidized retiree medical benefits to the Flowco Employees identified on Schedule 5.01(f), and the Flowco Group retains all Liabilities (if any) associated with providing any required subsidized retiree medical benefits to such Flowco Employees (whether provided through the mechanics above or otherwise).  The provisions of this Agreement shall not be construed as requiring that subsidized retiree medical benefits be provided to the Flowco Employees identified on Schedule 5.01(f) for any set period after the Distribution Date.

 

(g)                                  SPX Retiree Life for Certain Flowco Employees.  Prior to the Distribution Date, Flowco shall establish a key manager life plan (the “Flowco Key Life Plan”) that is comparable to the SPX Corporation Life Insurance Plan for Key Managers (the “SPX Key Life Plan”) for the benefit of each Flowco Employee (and his or her respective beneficiaries) who is, immediately prior to the Distribution Date, a participant in the SPX Key Life Plan (“Flowco Key Life Participant”).  As of the Effective Time, Flowco shall, and shall cause the Flowco Key Life Plan to, assume all Liabilities under the SPX Key Life Plan for the benefits of Flowco Key Life Participants and their respective beneficiaries, and the SPX Group and the SPX Key Life Plan shall be relieved of all Liabilities for those benefits.  Flowco shall be responsible for any and all Liabilities and other obligations with respect to the Flowco Key Life Plan.  SPX shall retain all Liabilities under the SPX Key Life Plan for the benefits for applicable Infrastructurco Employees and Former Employees and their respective beneficiaries.  From and after the Effective Time, Flowco Key Life Participants shall cease to be participants in the SPX Key Life Plan.

 

(h)                                 No Restrictions on Amendment or Termination.  Notwithstanding anything to the contrary in this Agreement, including Sections 5.01(e)-(g), nothing shall prohibit any member of the Infrastructurco Group or the Flowco Group from amending, modifying or terminating any

 

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SPX Welfare Plan or Flowco Welfare Plan, as applicable, in accordance with the terms of such plan.

 

(i)                                     Benefit Elections and Designations.  As of the Distribution Date, Flowco shall cause the Flowco Welfare Plans to recognize and give effect to all elections and designations (including all coverage and contribution elections and beneficiary designations) made by each Flowco Employee under, or with respect to, the corresponding SPX Welfare Plan for the plan year in which the Distribution Date occurs (and for the next plan year to the extent the Distribution Date occurs after the open enrollment period such plan year).  As of the Distribution Date, Flowco shall cause any Flowco Welfare Plan that constitutes a cafeteria plan under Section 125 of the Code to recognize and give effect to all non-elective employer contributions payable and paid toward coverage of a Flowco Employee under the corresponding SPX Welfare Plan that constitutes a cafeteria plan under Section 125 of the Code for the applicable cafeteria plan year.  Notwithstanding the foregoing, nothing in this Section 5.01 will prohibit Flowco from soliciting or causing the solicitation of new election forms or beneficiary designations from Flowco Employees to be effective under any applicable Flowco Welfare Plan as of the Distribution Date.

 

Section 5.02                             Accrued Paid Time Off.  Flowco shall credit each Flowco Employee with the amount of accrued but unused vacation time, sick time and other time off benefits as such Flowco Employee had with SPX as of the Distribution Date.

 

Section 5.03                             Flexible Spending Accounts.

 

(a)                                 On or prior to the Distribution Date, Flowco shall establish and adopt Flowco Welfare Plans that will provide health care flexible spending account and dependent care flexible spending account benefits to Flowco Employees (each a “Flowco FSA”).

 

(b)                                 It is the intention of the Parties that all activity under a Flowco Employee’s flexible spending account with SPX for the plan year in which the Distribution Date occurs be treated instead as activity under the corresponding Flowco FSA.  Accordingly, (i) any period of participation by a Flowco Employee in an SPX flexible spending account during the plan year in which the Distribution Date occurs (the “FSA Participation Period”) will be deemed a period when the Flowco Employee participated in the corresponding Flowco FSA; (ii) all expenses incurred during the FSA Participation Period will be deemed incurred while the Flowco Employee’s coverage was in effect under the corresponding Flowco FSA; and (iii) all elections and reimbursements made with respect to an FSA Participation Period under an SPX flexible spending account will be deemed to have been made with respect to the corresponding Flowco FSA.

 

(c)                                  If the aggregate reimbursement payouts made to Flowco Employees prior to the Distribution Date from the applicable SPX flexible spending accounts during the plan year in which the Distribution Date occurs are less than the aggregate accumulated contributions to such accounts made by such Flowco Employees prior to the Distribution Date for such plan year, Infrastructurco shall cause an amount equal to the amount by which such contributions are in excess of such reimbursement payouts to be transferred to Flowco by wire transfer of immediately available funds as soon as practicable, but in no event later than thirty (30) days, following the Distribution Date.

 

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(d)                                 If the aggregate reimbursement payouts made to Flowco Employees prior to the Distribution Date from the applicable SPX flexible spending accounts during the plan year in which the Distribution Date occurs exceed the aggregate accumulated contributions to such accounts made by the Flowco Employees prior to the Distribution Date for such plan year, Flowco shall cause an amount equal to the amount by which such reimbursement payouts are in excess of such contributions to be transferred to Infrastructurco by wire transfer of immediately available funds as soon as practicable, but in no event later than thirty (30) days, following the Distribution Date.

 

(e)                                  Notwithstanding anything in this Section 5.03 on and after the Distribution Date, Flowco shall assume, and cause the Flowco FSA to be solely responsible for, all claims by Flowco Employees under the applicable SPX flexible spending accounts that were incurred in the plan year in which the Distribution Date occurs, whether incurred prior to, on, or after the Distribution Date, that have not been paid in full as of the Distribution Date.

 

Section 5.04                             COBRA and HIPAA.  Infrastructurco (or one or more members of the Infrastructurco Group so designated) shall retain responsibility for compliance with the health care continuation coverage requirements of COBRA with respect to Former Employees who, on or prior to the Distribution Date, were covered under an SPX Welfare Plan pursuant to COBRA.  The Parties agree that neither the Distribution nor any transfers of employment that occur in connection with and on or prior to the Distribution shall constitute a COBRA qualifying event (as defined in Section 4980B of the Code) for purposes of COBRA; provided, that, in all events, Flowco shall assume, or shall have caused the Flowco Welfare Plans to assume, responsibility for compliance with the health care continuation coverage requirements of COBRA with respect to Flowco Employees who, after the Distribution Date, incur a qualifying event for purposes of COBRA.

 

Section 5.05                             Third Party Vendors.  To the extent any SPX Welfare Plan is administered by a third party vendor, SPX and Flowco will cooperate and use their commercially reasonable efforts to “clone” any contract with such third party vendor for Flowco and to maintain any pricing discounts or other preferential terms for SPX and Flowco, as applicable.  Neither party shall be liable for failure to obtain such cloned contract, pricing discounts or other preferential terms for Flowco.  Each Party shall be responsible for any additional premiums, charges or administrative fees that such Party may incur pursuant to this Section 5.05.

 

Section 5.06                             Severance.  Flowco (or one or more members of the Flowco Group so designated) shall retain responsibility and all Liabilities for providing (or continuing to provide) any severance payments to Former Flowco Employees on and after the Distribution Date, and neither Infrastructurco nor any member of the Infrastructurco Group shall have any Liability with respect to such severance payments with respect to Former Flowco Employees.  Notwithstanding the foregoing, any subsidized COBRA premiums in connection with severance for Former Flowco Employees with respect to SPX Welfare Plans will remain Liabilities of the Infrastructurco Group.

 

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Article VI

DEFINED CONTRIBUTION, DEFINED BENEFIT, NON-QUALIFIED DEFERRED COMPENSATION PLANS, AND OTHER PLANS IN THE UNITED STATES

 

Section 6.01                             Qualified Defined Contribution Plans.

 

(a)                                 Establishment of the Flowco Savings Plan.  Flowco shall, or shall cause another member of the Flowco Group to, use best efforts to establish a defined contribution plan and trust no later than the Distribution Date for the benefit of Flowco Employees (the “Flowco Savings Plan”).  Flowco shall be responsible for taking all necessary steps to establish, maintain, and administer the Flowco Savings Plan with the intention that it be qualified under Section 401(a) of the Code and that the related trust thereunder be exempt under Section 501(a) of the Code.  Flowco (acting directly or through its Affiliates) shall be responsible for any and all Liabilities and other obligations with respect to the Flowco Savings Plan.

 

(b)                                 Participation in Savings Plans.  Each Flowco Employee who was an active participant (or eligible to participate) in the SPX Savings Plan on the Distribution Date shall be eligible to participate in the Flowco Saving Plan effective from and after the Distribution Date (or such earlier date as designated under the Flowco Savings Plan).  Flowco Employees shall not make or receive additional contributions under the SPX Savings Plan on and after the Distribution Date (or such earlier date as designated under the SPX Savings Plan) (the “Flowco Savings Plan Beneficiaries”).

 

(c)                                  Transfer of SPX Savings Plan Assets.  No later than ninety (90) days following the Distribution Date (or such later time as mutually agreed by the Parties), SPX shall cause the accounts (including any outstanding loan balances) in the SPX Savings Plan attributable to the Flowco Savings Plan Beneficiaries and all of the assets in the SPX Savings Plan trust related thereto (the “SPX Savings Plan Flowco Assets”) to be transferred in kind (subject to the consent of the plan administrator of the Flowco Savings Plan) or (at the election of the plan administrator of the SPX Savings Plan) in cash to the Flowco Savings Plan, and Flowco shall cause the Flowco Savings Plan to accept such transfer of accounts and underlying SPX Savings Plan Flowco Assets (including any applicable promissory notes) and, effective as of the date of such transfer, to assume all Liabilities of, and to fully perform, pay, and discharge, all obligations of, the SPX Savings Plan relating to the accounts of the Flowco Savings Plan Beneficiaries (to the extent the SPX Savings Plan Flowco Assets related to those accounts are actually transferred from the SPX Savings Plan to the Flowco Savings Plan).  Notwithstanding any provision to the contrary, the transfer of SPX Savings Plan Flowco Assets shall be conducted in accordance with Section 414(l) of the Code, Treasury Regulation Section 1.414(1)-1, and Section 208 of ERISA.  SPX shall be responsible for taking all necessary, reasonable and appropriate action so that, as of the date of transfer of the SPX Savings Plan Flowco Assets and as of any other date relevant for purposes of this Agreement, the SPX Savings Plan is qualified under Section 401(a) of the Code and the related trust thereunder is exempt under Section 501(a) of the Code.  While it is the intent of the Parties that the preceding transfer be effectuated in a single transfer, the Parties may agree that such transfer be effectuated in multiple transfers to the extent administratively necessary, and in such case, the provisions of this paragraph shall be construed accordingly.

 

(d)                                 Continuation of Elections.  As of the Distribution Date (or such earlier date as designated under the Flowco Savings Plan), Flowco (acting directly or through its Affiliates)

 

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shall take commercially reasonable steps to cause the Flowco Savings Plan to recognize and maintain all SPX Savings Plan elections, including but not limited to, deferral, investment and payment form elections, beneficiary designations, and the rights of alternate payees under qualified domestic relations orders with respect to Flowco Savings Plan Beneficiaries, to the extent such election or designation is available under the Flowco Savings Plan and may be continued under applicable Law; provided, that Flowco Savings Plan Beneficiary investment elections directed to the SPX Common Stock Fund thereunder shall be directed to the investment option or options designated by the applicable fiduciary of the Flowco Savings Plan thereunder until such time (if any) as the Flowco Savings Plan Beneficiary changes his or her election.  Prior to the Distribution Date, SPX shall provide written notice to all individuals anticipated to be Flowco Savings Plan Beneficiaries of the intended continuation of such elections.  Any deferrals under the Flowco Savings Plan with respect to Flowco Savings Plan Beneficiaries will begin on the first payroll period following the Distribution Date (or such earlier time as designated by the Flowco Savings Plan).

 

(e)                                  Other Savings Plans.  As of the Distribution Date, Flowco (or any member of the Flowco Group) shall retain (or assume to the extent necessary) plan sponsorship of the Clyde Union Savings Plan for Bargained Employees and the Gerstenberg Schroder North America 401(k) Profit Sharing Plan, and from and after the Distribution Date, Flowco (acting directly or through its Affiliates) shall be responsible for any and all Liabilities and other obligations with respect to such plans; provided, however, that such plans may be merged into the Flowco Savings Plan before, on or after the Distribution Date, and the foregoing plan sponsorship requirement shall not be applicable in such case for the merged plan thereafter.  As of the Distribution Date, Infrastructurco (or any member of the Infrastructurco Group) shall retain (or assume to the extent necessary) plan sponsorship of the David Brown Pumps, Inc. 401(k) Plan, and from and after the Distribution Date, Infrastructurco (acting directly or through its Affiliates) shall be responsible for any and all Liabilities and other obligations with respect to such plan; provided, however, that such plan may be merged into the SPX Savings Plan before, on or after the Distribution Date, and the foregoing plan sponsorship requirement shall not be applicable in such case for the merged plan thereafter.

 

(f)                                   Treatment of Flowco Common Stock and SPX Common Stock.

 

(i)                                     Flowco Common Stock Fund in the SPX Savings Plan.  The SPX Savings Plan will provide, effective as of or by the Effective Time: (A) for the establishment of a Flowco Common Stock Fund; (B) that such Flowco Common Stock Fund shall receive a transfer of and hold all shares of Flowco Common Stock distributed in connection with the Distribution in respect of SPX Common Stock held in the SPX Common Stock Fund under the SPX Savings Plan; and (C) that, following the Distribution, participants in the SPX Savings Plan (the “SPX Savings Plan Beneficiaries”) will be prohibited from increasing their holdings in such Flowco Common Stock Fund and no new amounts may be contributed to the Flowco Common Stock Fund, whether through employee contributions, employer contributions or exchanges.  SPX Savings Plan Beneficiaries may elect to liquidate their holdings in such Flowco Common Stock Fund under the SPX Savings Plan and invest those monies in any other investment fund offered under the SPX Savings Plan.

 

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(ii)                                  Common Stock Funds in the Flowco Savings Plan.  The Flowco Savings Plan will provide, effective as of or by the Effective Time, for the establishment of a Flowco Common Stock Fund and SPX Common Stock Fund.  Without limiting the generality of the provisions of Section 6.01(c), to the extent the transfer in Section 6.01(c) occurs after the Flowco Common Stock Fund under the SPX Savings Plan receives the shares of Flowco Common Stock distributed in connection with the Distribution, (A) shares of Flowco Common Stock held in the Flowco Common Stock Fund under the SPX Savings Plan on behalf of Flowco Savings Plan Beneficiaries shall be transferred in kind to the Flowco Common Stock Fund under the Flowco Saving Plan and (B) shares of SPX Common Stock held in the SPX Common Stock Fund under the SPX Savings Plan on behalf of Flowco Savings Plan Beneficiaries shall be transferred in kind to the SPX Common Stock Fund under the Flowco Saving Plan, in each case pursuant to Section 6.01(c).  To the extent the transfer in Section 6.01(c) occurs before the Flowco Common Stock Fund under the SPX Savings Plan receives the shares of Flowco Common Stock distributed in connection with the Distribution, the Flowco Common Stock Fund shall receive a transfer of and hold all shares of Flowco Common Stock distributed in connection with the Distribution in respect of SPX Common Stock held in the SPX Common Stock Fund under the Flowco Savings Plan.  Except as otherwise provided above, the Flowco Savings Plan will provide that Flowco Savings Plan Beneficiaries will be prohibited from increasing their holdings in the SPX Common Stock Fund under the Flowco Savings Plan and no new amounts may be contributed to such SPX Common Stock Fund, whether through employee contributions, employer contributions or exchanges.  Flowco Savings Plan Beneficiaries may elect to liquidate their holdings in such SPX Common Stock Fund under the Flowco Savings Plan and invest those monies in any other investment fund offered under the Flowco Savings Plan.

 

(iii)                               Maintaining Common Stock Funds.  Nothing herein shall require either the Flowco Savings Plan or the SPX Savings Plan to maintain an SPX Common Stock Fund or a Flowco Common Stock Fund for any period of time following the Effective Time.

 

(g)                                  Regulatory Filings.  Flowco (acting directly or through its Affiliates) shall submit an application to the Internal Revenue Service (“IRS”) as soon as practicable after the Effective Time (but no later than the last day of the applicable remedial amendment period as defined in applicable Code provisions) requesting a determination letter regarding the qualified status of the Flowco Savings Plan under Section 401(a) of the Code and the tax-exempt status of its related trust under Section 501(a) of the Code as of the Distribution Date and shall make any amendments reasonably requested by the IRS to receive such a favorable determination letter.  In connection with the transfer of SPX Savings Plan Flowco Assets and Liabilities from the SPX Savings Plan to the Flowco Savings Plan contemplated in this Article VI, Flowco and SPX (each acting directly or through its Affiliates) shall cooperate in making any and all appropriate filings required by the IRS, or required under the Code, ERISA or any applicable regulations, and shall take all such action as may be necessary and appropriate to cause such plan-to-plan transfer to take place as soon as practicable after the Distribution Date; provided, however, that Flowco (acting directly or through its Affiliates) shall be solely responsible for complying with any requirements and applying for any IRS determination letter with respect to the Flowco Savings Plan.

 

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(h)                                 Plan Fiduciaries.  For all periods, including on and after the Distribution Date, the Parties agree that the applicable fiduciaries of each of the SPX Savings Plan and the Flowco Savings Plan, respectively, shall have the authority with respect to the SPX Savings Plan and the Flowco Savings Plan, respectively, to determine the investment alternatives, the terms and conditions with respect to those investment alternatives and such other matters as are within the scope of their duties under ERISA and the terms of the applicable plan documents.

 

Section 6.02                             Qualified Defined Benefit Plan.

 

(a)                                 Infrastructurco (or one or more members of the Infrastructurco Group so designated) shall retain and be solely responsible for all Liabilities and obligations with respect to Flowco Employees (and Infrastructurco Employees and Former Employees) who participate in the SPX US Pension Plan, and accordingly, there shall be no transfer of Assets or Liabilities among Infrastructurco, Flowco, any of their respective Affiliates or their respective plans in respect of the SPX US Pension Plan following the Distribution Date.

 

(b)                                 As of the Distribution Date, Infrastructurco (or any member of the Infrastructurco Group) shall retain (or assume to the extent necessary) plan sponsorship of the Clyde Union Company Retirement Plan, and from and after the Distribution Date, Infrastructurco (acting directly or through its Affiliates) shall be responsible for any and all Liabilities and other obligations with respect to such plans; provided, however, that such plan may be merged into the SPX US Pension Plan before, on or after the Distribution Date, and the foregoing plan sponsorship requirement shall not be applicable in such case for the merged plan thereafter.

 

(c)                                  Effective as of the Effective Time, each Flowco Employee who participates in the SPX US Pension Plan or the Clyde Union Company Retirement Plan (referred collectively as the “SPX DB Plans”) shall become 100% vested in all benefits provided under such SPX DB Plan.  As of the Distribution Date, each Flowco Employee participating in an SPX DB Plan shall be treated as a terminated vested participant under such SPX DB Plan.  In no event shall any Flowco Employee accrue any additional benefits under the SPX DB Plans following the Distribution Date.

 

(d)                                 Except as provided in Section 6.07. none of Flowco or any member of the Flowco Group shall have any obligation to adopt, sponsor, maintain, participate in, contribute to or otherwise become liable with respect to any Benefit Plan that is subject to Title IV of ERISA, as a result of the Distribution or otherwise.

 

Section 6.03                             Supplemental Retirement Savings Plan.

 

(a)                                 Prior to the Distribution Date, and subject to Section 6.03(c), Flowco shall establish a nonqualified deferred compensation plan that is substantially comparable to the SPX Supplemental Retirement Savings Plan (the “Flowco Supplemental Retirement Savings Plan”) for the benefit of each Flowco Employee who is, immediately prior to the Distribution Date, a participant in the SPX Supplemental Retirement Savings Plan (“Flowco SRSP Participant”).  Flowco shall be responsible for any and all Liabilities and other obligations with respect to the Flowco Supplemental Retirement Savings Plan.

 

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(b)                                 As of the Effective Time (or such earlier time as designated by the Flowco Supplemental Retirement Savings Plan), Flowco shall, and shall cause the Flowco Supplemental Retirement Savings Plan to, assume all Liabilities under the SPX Supplemental Retirement Savings Plan for the benefits of Flowco SRSP Participants and their respective beneficiaries, and the SPX Group and the SPX Supplemental Retirement Savings Plan shall be relieved of all Liabilities for those benefits.  SPX shall retain all Liabilities under the SPX Supplemental Retirement Savings Plan for the benefits for applicable Infrastructurco Employees and Former Employees and their respective beneficiaries.  From and after the Effective Time, Flowco SRSP Participants shall cease to be participants in the SPX Supplemental Retirement Savings Plan.

 

(c)                                  The Flowco Supplemental Retirement Savings Plan shall contain a provision which requires that a grantor trust (the “Flowco SRSP Rabbi Trust”) is to be funded in the event of a “change of control” (as such term or similar term is defined under such plan) in an amount equal to the vested account balances of participants thereunder, with such funding to occur on or prior to such change of control.  Flowco shall establish the Flowco SRSP Rabbi Trust on or prior to the Distribution Date or as soon as reasonably possible after the Distribution Date.  Nothing herein shall be construed as altering the “unfunded” status of the Flowco Supplemental Retirement Savings Plan, and the assets of the Flowco SRSP Rabbi Trust shall be subject to the claims of Flowco creditors.  For avoidance of doubt, neither the consummation of the Distribution nor any transaction in connection with the Distribution shall be deemed a change of control for purposes of the Flowco Supplemental Retirement Savings Plan, and the Parties shall not be required to fund the Flowco SRSP Rabbi Trust on or prior to the Distribution Date (but may choose to do so in its discretion).

 

(d)                                 As of the Distribution Date (or such earlier time as designated by the Flowco Supplemental Retirement Savings Plan), Flowco (acting directly or through its Affiliates) shall take commercially reasonable steps to cause the Flowco Supplemental Retirement Savings Plan to recognize and maintain all SPX Supplemental Retirement Savings Plan elections with respect to Flowco SRSP Participants, including but not limited to, deferral, investment and payment form elections, and beneficiary designations, to the extent such election or designation is available under the Flowco Supplemental Retirement Savings Plan and may be continued under applicable Law.  Prior to the Distribution Date, SPX shall provide written notice to all Flowco SRSP Participants of the intended continuation of such elections.  Any deferrals under the Flowco Supplemental Retirement Savings Plan with respect to Flowco SRSP Participants will begin on the first payroll period following the Distribution Date (or such earlier time as designated by the Flowco Supplemental Retirement Savings Plan).

 

Section 6.04                             Supplemental Individual Account Retirement Plan.  No Flowco Employee who participates in the SPX SIARP as of the Distribution Date shall accrue any additional benefits under the SPX SIARP attributable to services performed on or after the Distribution Date.  Infrastructurco (or one or more members of the Infrastructurco Group so designated) shall retain and be solely responsible for all Liabilities and obligations with respect to Flowco Employees (and Infrastructurco Employees and Former Employees) who participate in the SPX SIARP, and accordingly, there shall be no transfer of Assets or Liabilities with respect to the SPX SIARP among SPX, Flowco, any of their respective Affiliates or their respective plans.  The treatment of benefits under the SPX SIARP shall comply with Section 409A of the Code, to the extent subject thereto.

 

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Section 6.05                             Supplemental Retirement Plan for Top Management.

 

(a)                                 Prior to the Distribution Date, and subject to Section 6.05(c), Flowco shall establish a nonqualified deferred compensation plan that is substantially comparable to the SPX TMP (the “Flowco TMP”) for the benefit of each Flowco Employee who is, immediately prior to the Distribution Date, a participant in the SPX TMP (“Flowco TMP Participant”).  Flowco shall be responsible for any and all Liabilities and other obligations with respect to the Flowco TMP.

 

(b)                                 As of the Effective Time, Flowco shall, and shall cause the Flowco TMP to, assume all Liabilities under the SPX TMP for the benefits of Flowco TMP Participants and their respective beneficiaries, and the SPX Group and the SPX TMP shall be relieved of all Liabilities for those benefits.  SPX shall retain all Liabilities under the SPX TMP for the benefits for applicable Infrastructurco Employees and Former Employees and their respective beneficiaries. From and after the Effective Time, Flowco TMP Participants shall cease to be participants in the SPX TMP.

 

(c)                                  The Flowco TMP shall contain a provision which requires that a grantor trust (the “Flowco TMP Rabbi Trust”) is to be funded in the event of a “change of control” (as such term or similar term is defined under such plan) in an amount equal to the vested accrued benefits of participants thereunder, with such funding to occur on or prior to such change of control.  Flowco shall establish the Flowco TMP Rabbi Trust on or prior to the Distribution Date.  Nothing herein shall be construed as altering the “unfunded” status of the Flowco TMP, and the assets of the Flowco TMP Rabbi Trust shall be subject to the claims of Flowco creditors.  For avoidance of doubt, neither the consummation of the Distribution nor any transaction in connection with the Distribution shall be deemed a change of control for purposes of the Flowco TMP, and the Parties shall not be required to fund such Flowco TMP Rabbi Trust on or prior to the Distribution Date (but may choose to do so in its discretion).

 

(d)                                 As of the Distribution Date, Flowco (acting directly or through its Affiliates) shall take commercially reasonable steps to cause the Flowco TMP to recognize and maintain all SPX TMP elections with respect to Flowco TMP Participants, including but not limited to, payment form elections, and beneficiary designations, to the extent such election or designation is available under the Flowco TMP and may be continued under applicable Law.  Prior to the Distribution Date, SPX shall provide written notice to all Flowco TMP Participants of the intended continuation of such elections.

 

Section 6.06                             No Distributions on Separation.  SPX and Flowco acknowledge that neither the Distribution nor any of the other transactions contemplated by this Agreement, the Separation Agreement or the other Ancillary Agreements will trigger a payment or distribution of benefits under any Nonqualified Retirement Plan for any Infrastructurco Employee, Flowco Employee, or Former Employee and, consequently, that the payment or distribution of any benefit to which any Infrastructurco Employee, Flowco Employee, or Former Employee is entitled under any such Nonqualified Retirement Plan will occur upon such individual’s “separation from service” (to the extent it has not previously occurred) from the Infrastructurco Group or the Flowco Group, as applicable, or at such other time as specified in the applicable Nonqualified Retirement Plan.

 

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Section 6.07                             IAM Fund.  Clyde Union Inc. (“Clyde”) is a contributing employer to the IAM National Pension Fund (“IAM Fund”), a multiemployer plan within the meaning of section 4001(a)(3) of ERISA.  On and after the Effective Time, Clyde shall be a member of the Flowco Group.  On and after the Effective Time, Clyde shall continue to retain the collective bargaining agreement which provides for Clyde to be a contributing employer to the IAM Fund, and neither Infrastructurco nor any member of the Infrastructurco Group shall have further Liability thereunder.  Clyde shall continue after the Effective Time to be responsible for any obligations under such collective bargaining agreement requiring contributions to the IAM Fund, and shall be solely responsible for any withdrawal liability (including, without limitation, with respect to any Former Employee) arising in connection with Clyde withdrawing from the IAM Fund, and Infrastructurco (or any member of the Infrastructurco Group) shall have no Liability with respect thereto.

 

Article VII

 

NON-U.S. EMPLOYEES

 

Section 7.01                             General Principles.  Except as explicitly set forth in this ARTICLE VII, Infrastructurco Employees and Flowco Employees who are resident outside of the United States or otherwise are subject to non-U.S. Law and their related benefits and obligations shall be treated in the same manner as the Infrastructurco Employees and Flowco Employees who are resident of the United States are treated.  Except as otherwise agreed to by the Parties, (i) any non-U.S. Benefit Plan sponsored by Flowco (or any member of the Flowco Group) immediately prior to the Effective Time shall continue to be sponsored by such entity on and after the Distribution Date, and such entity shall retain and be solely responsible for all Liabilities and obligations with respect to such non-U.S. Benefit Plan, and (ii) any non-U.S. Benefit Plan sponsored by Infrastructurco (or any member of the Infrastructurco Group) immediately prior to the Effective Time shall continue to be sponsored by such entity on and after the Distribution Date, and such entity shall retain and be solely responsible for all Liabilities and obligations with respect to such non-U.S. Benefit Plan.  All actions taken with respect to non-U.S. employees in connection with the Distribution, including with respect to SPX Equity Awards as set forth in Section 4.09, will be accomplished in accordance with applicable Law and custom in each of the applicable jurisdictions.

 

Section 7.02                             UK Pension Plans.

 

(a)                                 Infrastructurco (or one or more members of the Infrastructurco Group so designated) shall retain and be solely responsible for all Liabilities and obligations with respect to Flowco Employees (and Infrastructurco Employees and Former Employees) who have participated in the SPX UK Pension Plan insofar as such Liabilities and obligations arise as a result of their participation in that plan, and accordingly, there shall be no transfer of Assets or Liabilities with respect to the SPX UK Pension Plan between SPX, Flowco, any of their respective Affiliates or their respective plans.

 

(b)                                 As of the Distribution Date, Infrastructurco (or any member of the Infrastructurco Group) shall, subject to the consent of the trustee of the Dezurik International fund of Stanplan F (which consent Infrastructurco (and/or the relevant member of the Infrastructurco Group) shall

 

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use all reasonable endeavours to obtain), retain (or assume to the extent necessary) plan sponsorship of that plan, and from and after the Distribution Date, Infrastructurco (acting directly or through its Affiliates) shall be responsible for any and all Liabilities and other obligations (including, for the avoidance of doubt, any Liabilities and obligations arising as a result of a period prior to the Distribution Date) with respect to such plan.  To the extent that Infrastructurco (or any member of the Infrastructurco Group) is unable to assume plan sponsorship of such plan by the Distribution Date, the Parties agree that (i) they shall reasonably cooperate with each other to transfer the plan sponsorship of the plan to Infrastructurco (or any member of the Infrastructurco Group) as soon as reasonably possible after the Distribution Date, (ii) Infrastructurco shall indemnify Flowco for all Liabilities that Flowco is required to incur after the Distribution Date in relation to the plan, and (iii) Infrastructurco shall reimburse Flowco for all reasonable costs incurred by Flowco after the Distribution Date as a result of its sponsorship of the plan (including, for the avoidance of doubt, all reasonable costs incurred in relation to the transfer of the plan sponsorship).

 

Section 7.03                             Canadian Pension Plans.  Effective as of a date on or before the Distribution Date, SPX shall cause SPX Canada Co., as sponsor and administrator of the (i) Hourly Employee Pension Plan of the Serco Corporation, SPX Canada, (ii) the Retirement Plan for Salaried Employees of SPX Canada, and (iii) Pension Plan for Hourly Employees of SPX Valves & Controls, A Division of SPX Canada Inc. (collectively the “Canadian Pension Plans”), to assign all of its rights, duties, obligations and Liabilities under and in relation to the Canadian Pension Plans to an entity that is a member of the Infrastructurco Group and to amend the Canadian Pension Plans as necessary to give effect to this Section 7.03.

 

Section 7.04                             Certain Canadian Employees.  For the Infrastructurco Employees and Former Employees identified on Schedule 7.04 (the “Canadian Transferees”), Infrastructurco (or a member of the Infrastructurco Group) shall establish and adopt Benefit Plans that will provide benefits to each eligible Canadian Transferee (and their eligible spouses and dependents, as the case may be) who is, as of the Distribution Date, a participant in any of the Benefit Plans identified on Schedule 7.04 under terms and conditions that are comparable to such Benefit Plans.  For any such Benefit Plan that is a defined contribution pension plan, the Parties agree to use reasonable efforts to transfer the accounts (whether by asset transfer, plan spinoff, or such other mechanic agreed to by the Parties) of each Canadian Transferee from such Benefit Plan to the analogous Benefit Plan established by Infrastructurco (or a member of the Infrastructurco Group).

 

Article VIII

 

ANNUAL INCENTIVE PLANS

 

Section 8.01                             Annual Incentive Plans.

 

(a)                                 Not later than the Distribution Date, Flowco shall, or shall cause another member of the Flowco Group to, take commercially reasonable steps to adopt a plan (or plans) that will provide annual bonus or short-term cash incentive opportunities for Flowco Employees that are substantially similar to the opportunities provided to such Flowco Employees immediately prior to the Distribution Date (the “Flowco Annual Bonus Plan”), subject to Flowco’s right to amend

 

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or terminate such plan after the Distribution Date in accordance with the terms thereof.  The Flowco Annual Bonus Plan shall be approved prior to the Distribution Date by SPX to the extent determined necessary by SPX under Code Section 162(m).  Flowco Employees shall participate in such Flowco Annual Bonus Plan (provided the eligibility requirements therein are met) immediately following the Distribution Date; provided, however, that for the 2015 performance period, in determining whether the performance goals under the Flowco Annual Bonus Plan have been achieved, Flowco may take into account the financial and operational performance of the Flowco Business (or applicable portion thereof) prior to the Distribution Date, and service with SPX shall be credited for the purposes of determining whether such Flowco Employee had been a participant in the Flowco Annual Bonus Plan during such performance period.  For avoidance of doubt, with respect to the 2015 performance period, Flowco Employees shall not be eligible for any payment from any SPX annual bonus plan or short-term incentive compensation plan, including the SPX 2015 Bonus Plan, on or after the Distribution Date.

 

(b)                                 For the avoidance of doubt, (i) the Infrastructurco Group shall be solely responsible for funding, paying, and discharging all obligations relating to any annual cash incentive awards that any Infrastructurco Employee or Former Employee is eligible to receive under any Infrastructurco Group annual bonus plans and other short-term incentive compensation plans, including the SPX 2015 Bonus Plan, with respect to payments made beginning at or after the Distribution Date, and no member of the Flowco Group shall have any obligations with respect thereto, and (ii) the Flowco Group shall be solely responsible for funding, paying, and discharging all obligations relating to any annual cash incentive awards that any Flowco Employee is eligible to receive under any Flowco Group annual bonus and other short-term incentive compensation plans, including the Flowco Annual Bonus Plan, with respect to payments made beginning at or after the Distribution Date, and no member of the Infrastructurco Group shall have any obligations with respect thereto.

 

Article IX

 

COMPENSATION MATTERS AND GENERAL BENEFIT AND
EMPLOYEE MATTERS

 

Section 9.01                             Restrictive Covenants in Employment and Other Agreements.  To the fullest extent permitted by the agreements described in this Section 9.01 and applicable Law, SPX shall assign, or cause an applicable member of the Infrastructurco Group to assign (including through notification to employees, as applicable) to Flowco or a member of the Flowco Group designated by Flowco all agreements containing restrictive covenants (including confidentiality, non-competition and non-solicitation provisions) between a member of the Infrastructurco Group and a Flowco Employee, with such assignment to be effective as of the Effective Time.  To the extent that assignment of such agreements is not permitted, effective as of the Effective Time, each member of the Flowco Group shall be considered to be a successor to each member of the Infrastructurco Group for purposes of such agreements, with all rights, obligations and benefits under such agreements as if each were a signatory.  To the extent necessary, Infrastructurco shall, at Flowco’s request and expense, enforce or seek to enforce such restrictive covenants on behalf of members of the Flowco Group; provided, however, that in no

 

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event shall Infrastructurco be permitted to enforce such restrictive covenant agreements against Flowco Employees for action taken in their capacity as employees of a member of the Flowco Group.  To the extent necessary, Flowco shall, at Infrastructurco’s request and expense, enforce or seek to enforce such restrictive covenants on behalf of members of the Infrastructurco Group; provided, however, that in no event shall Flowco be permitted to enforce such restrictive covenant agreements against Infrastructurco Employees for action taken in their capacity as employees of a member of the Infrastructurco Group.

 

Section 9.02                             Termination of Participation.  Except as otherwise provided under this Agreement, effective as of the Effective Time (or at such earlier date as provided under an SPX Benefit Plan), Flowco Employees shall cease participation in each SPX Benefit Plan and shall no longer be eligible to participate in any SPX Benefit Plan.

 

Section 9.03                             Leaves of Absence.  Flowco will continue to apply the appropriate leave of absence policies applicable to inactive Flowco Employees who are on an approved leave of absence as of the Distribution Date.  Leaves of absence taken by Flowco Employees prior to the Distribution Date shall be deemed to have been taken as employees of a member of the Flowco Group.  Nothing in this Section 9.03 shall be construed as limiting the applicability of Section 5.01(d).

 

Section 9.04                             Workers’ Compensation for Flowco Employees.  All workers’ compensation Liabilities relating to, arising out of, or resulting from any claim by a Flowco Employee that results from an accident, incident or event occurring, or from an occupational disease which becomes manifest, prior to the Distribution Date shall be retained by Flowco (or a member of the Flowco Group).  Effective as of the Effective Time, Flowco, acting through the member of the Flowco Group employing each Flowco Employee, will be responsible for obtaining workers’ compensation insurance, including providing all collateral required by the insurance carriers and providing all notices to Flowco Employees required by applicable workers’ compensation Laws.

 

Section 9.05                             Unemployment Compensation.  Effective as of the Effective Time, the member of the Flowco Group employing each Flowco Employee shall have (and, to the extent it has not previously had such obligations, such member of the Flowco Group shall assume) the obligations for all claims and Liabilities relating to unemployment compensation benefits for all Flowco Employees.  Effective as of the Effective Time, the member of the Infrastructurco Group employing each Infrastructurco Employee shall have (and, to the extent it has not previously had such obligations, such member of the Infrastructurco Group shall assume) the obligations for all claims and Liabilities relating to unemployment compensation benefits for all Infrastructurco Employees.  Infrastructurco shall have (and, to the extent it has not previously had such obligations, such member of the Infrastructurco Group shall assume) the obligations for all claims and Liabilities relating to unemployment compensation benefits for all Former Employees.

 

Section 9.06                             Preservation of Rights to Amend.  The rights of SPX or Flowco to amend or terminate any plan, program, or policy referred to herein shall not be limited in any way by this Agreement.

 

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Section 9.07                             Confidentiality.  Each Party agrees that any information conveyed or otherwise received by or on behalf of a Party in conjunction herewith is confidential and is subject to the terms of the confidentiality provisions set forth in the Separation Agreement.

 

Section 9.08                             Administrative Complaints/Litigation.  To the extent that any legal action relates to a putative or certified class of plaintiffs, which includes both Infrastructurco Employees (or Former Employees) and Flowco Employees and such action involves employment or Benefit Plan related claims, reasonable costs and expenses incurred by the Parties in responding to such legal action shall be allocated among the Parties equitably in proportion to a reasonable assessment of the relative proportion of Infrastructurco Employees (or Former Employees) and Flowco Employees included in or represented by the putative or certified plaintiff class.  The procedures contained in the indemnification and related litigation cooperation provisions of the Separation Agreement shall apply with respect to each Party’s indemnification obligations under this Section 9.08.

 

Section 9.09                             Reimbursement and Indemnification.  To the extent provided for under this Agreement, each Party agrees to reimburse the other Party, within thirty (30) days of receipt from the other Party of reasonable verification, for all costs and expenses which the other Party may incur on its behalf as a result of any of the respective Welfare Plans and other Benefit Plans.  All Liabilities retained, assumed, or indemnified against by Flowco pursuant to this Agreement, and all Liabilities retained, assumed, or indemnified against by Infrastructurco pursuant to this Agreement, shall in each case be subject to the indemnification provisions of the Separation Agreement.  Notwithstanding anything to the contrary, (i) no provision of this Agreement shall require any member of the Flowco Group to pay or reimburse to any member of the Infrastructurco Group any benefit related cost item that a member of the Flowco Group has paid or reimbursed to any member of the Infrastructurco Group prior to the Effective Time; and (ii) no provision of this Agreement shall require any member of the Infrastructurco Group to pay or reimburse to any member of the Flowco Group any benefit related cost item that a member of the Infrastructurco Group has paid or reimbursed to any member of the Flowco Group prior to the Effective Time.

 

Section 9.10                             Fiduciary Matters.  Each Party acknowledges that actions required to be taken pursuant to this Agreement may be subject to fiduciary duties or standards of conduct under ERISA or other applicable Law, and no Party shall be deemed to be in violation of this Agreement if it fails to comply with any provisions hereof based upon its good faith determination (as supported by advice from counsel experienced in such matters) that to do so would violate any such fiduciary duty or standard.  Each Party shall be responsible for taking such actions as are deemed necessary and appropriate to comply with its own fiduciary responsibilities and shall fully release and indemnify the other Party for any Liabilities caused by the failure to satisfy any such responsibility.

 

Section 9.11                             Subsequent Transfers of Employment.  To the extent that the employment of any individuals transfers between any member of the Infrastructurco Group and any member of the Flowco Group during the six (6) month period following the Distribution Date, the Parties shall use their reasonable efforts to effect the provisions of this Agreement with respect to the compensation and benefits of such individuals following such transfer, it being understood that (a) it may not be possible to replicate the effect of such provisions under such circumstance, and

 

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(b) neither Infrastructurco nor Flowco shall be bound by the provisions of this Section 9.11 to assume any Liabilities or transfer any Assets or to vest any current equity awards of such individual or to issue any replacement or new equity awards to such individual.  Notwithstanding the foregoing, for compensation that is subject to the provisions of Section 409A of the Code, or for SPX Equity Awards or Flowco Equity Awards, any such subsequent transfer shall be a “separation from service” from the applicable employer for purposes of such compensation and awards, and the consequences of such separation from service shall be determined in accordance with the terms of the applicable plan or agreement.

 

Section 9.12                             Section 409A.  SPX and Flowco shall cooperate in good faith so that the transactions contemplated by this Agreement and the Separation Agreement will not result in adverse tax consequences under Section 409A of the Code to any Flowco Employee, Flowco Non-Employee Director, SPX Non-Employee Director, Former Employee, Infrastructurco Employee, or Infrastructurco Non-Employee Director, in respect of their respective benefits under any Benefit Plan.  Without limiting the generality of the foregoing, Flowco (acting directly or through its Affiliates) shall use reasonable efforts to provide timely notice to Infrastructurco of any “separation from service” from Flowco of a Flowco Employee who is a participant in the SPX SIARP.  The list of Flowco Employees who participate in the SIARP is identified in Schedule 9.12.

 

Article X

 

MISCELLANEOUS

 

Section 10.01                      Limitation of Liability.  IN NO EVENT SHALL ANY MEMBER OF THE INFRASTRUCTURCO GROUP OR THE FLOWCO GROUP BE LIABLE TO ANY MEMBER OF THE FLOWCO GROUP OR THE INFRASTRUCTURCO GROUP, RESPECTIVELY, FOR ANY SPECIAL, CONSEQUENTIAL, INDIRECT, INCIDENTAL OR PUNITIVE DAMAGES OR LOST PROFITS, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY (INCLUDING NEGLIGENCE) ARISING IN ANY WAY OUT OF THIS AGREEMENT OR ANY ANCILLARY AGREEMENT, WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES; PROVIDED, HOWEVER, THAT THE FOREGOING LIMITATIONS SHALL NOT LIMIT EACH PARTY’S INDEMNIFICATION OBLIGATIONS FOR LIABILITIES TO THIRD PARTIES AS SET FORTH IN ARTICLE VI OF THE SEPARATION AGREEMENT.

 

Section 10.02                      Notices.  All notices, requests, claims, demands and other communications under this Agreement shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt unless the day of receipt is not a Business Day, in which case it shall be deemed to have been duly given or made on the next Business Day) by delivery in person, by overnight courier service, by facsimile with receipt confirmed (followed by delivery of an original via overnight courier service) or by registered or certified mail (postage prepaid, return receipt requested) to the respective Parties at the following addresses (or at such other address for a Party as shall be specified in a notice given in accordance with this Section 10.02):

 

(a)                                 if to SPX or Infrastructurco:

 

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13320-A Ballantyne Corporate Place

Charlotte, NC  28277

USA

Attention:  General Counsel

 

(b)                                 if to Flowco:

13320 Ballantyne Corporate Place

Charlotte, NC  28277

USA

Attention:  General Counsel

 

Section 10.03                      Public Announcements.  Following the Effective Time, neither Party to this Agreement shall make, or cause to be made, any press release or public announcement in respect of this Agreement or the Separation Agreement or the transactions contemplated by this Agreement or the Separation Agreement without the prior written consent of the other Party unless otherwise required by Law or applicable stock exchange regulation, and the Parties to this Agreement shall cooperate as to the timing and contents of any such press release or public announcement.

 

Section 10.04                      Severability.  In the event any one or more of the provisions contained in this Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby, and the Parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions, the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

 

Section 10.05                      Entire Agreement.  This Agreement and the Ancillary Agreements constitute the entire understanding of the Parties with respect to the subject matter hereof and thereof and supersede all prior agreements, understandings and negotiations, both written and oral, between the Parties with respect to the subject matter hereof and thereof.  Irrespective of anything else contained herein, the Parties do not intend for this Agreement to constitute the establishment or adoption of, or amendment to, any Benefit Plan, and no person participating in any such Benefit Plan shall have any claim or cause of action, under ERISA or otherwise, in respect of any provision of this Agreement as it relates to any such Benefit Plan or otherwise.

 

Section 10.06                      Amendments; No Waivers.

 

(a)                                 From and after the Distribution, any provision of this Agreement may be amended or waived if, and only if, such amendment or waiver is in writing and signed, in the case of an amendment, by the Parties, or in the case of a waiver, by the Party against whom the waiver is to be effective.

 

(b)                                 No failure or delay by any Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or

 

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privilege.  The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by Law.

 

Section 10.07                      Assignment.  Neither this Agreement nor any of the rights, interests or obligations under this Agreement shall be assigned, in whole or in part, by operation of law or otherwise by either Party without the prior written consent of the other Party.  Any purported assignment without such consent shall be void.  Subject to the preceding sentences, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the Parties and their respective successors and assigns.  Notwithstanding the foregoing, either Party may assign this Agreement without consent in connection with (a) a merger transaction in which such Party is not the surviving entity and the surviving entity acquires or assumes all or substantially all of such Party’s Assets, or (b) the sale of all or substantially all of such Party’s Assets; provided, however, that the assignee expressly assumes in writing all of the obligations of the assigning Party under this Agreement, and the assigning Party provides written notice and evidence of such assignment and assumption to the non-assigning Party.  No assignment permitted by this Section 10.07 shall release the assigning Party from liability for the full performance of its obligations under this Agreement.

 

Section 10.08                      Parties in Interest.  This Agreement shall be binding upon and inure solely to the benefit of the Parties hereto and their respective successors and permitted assigns, and nothing herein, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.

 

Section 10.09                      Currency.  Unless otherwise specified in this Agreement, all references to currency, monetary values and dollars set forth herein means United States dollars, and all payments hereunder shall be made in United States dollars unless otherwise mutually agreed upon by the Parties.

 

Section 10.10                      Tax Matters.  Notwithstanding anything in this Agreement to the contrary, except for those tax matters specifically addressed herein, the Tax Matters Agreement will be the exclusive agreement among the Parties with respect to all Tax matters, including indemnification in respect of Tax matters.

 

Section 10.11                      Governing Law.  This Agreement shall be governed by and construed in accordance with the internal Laws, and not the Laws governing conflicts of Laws, of the State of Delaware.

 

Section 10.12                      Consent to Jurisdiction.  Subject to the provisions of ARTICLE VIII of the Separation Agreement, each of the Parties irrevocably submits to exclusive jurisdiction of (i) the Court of Chancery of the State of Delaware (unless the Court of Chancery of the State of Delaware declines to accept jurisdiction over a particular matter, in which case, any state or federal court within the State of Delaware) and (ii) so long as both Parties are headquartered in North Carolina, any state or federal court within the State of North Carolina, for the purposes of any suit, action or other proceeding to compel arbitration, for provisional relief in aid of arbitration in accordance with ARTICLE VIII of the Separation Agreement, for provisional relief to prevent irreparable harm, or for the enforcement of any award issued thereunder.  Each of the Parties further agrees

 

40



 

that service of any process, summons, notice or document by United States registered mail to such Party’s respective address set forth in Section 10.02 shall be effective service of process for any action, suit or proceeding in the Delaware or North Carolina courts with respect to any matters to which it has submitted to jurisdiction in this Section 10.12.  Each of the Parties irrevocably and unconditionally waives any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement or the transactions contemplated hereby in the Delaware courts or, so long as both Parties are headquartered in North Carolina, the North Carolina courts, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim that any such action, suit or proceeding brought in any Delaware court or, so long as both Parties are headquartered in North Carolina, any North Carolina court has been brought in an inconvenient forum.

 

Section 10.13                      Dispute Resolution.  The procedures for negotiating and binding arbitration set forth in ARTICLE VIII of the Separation Agreement shall apply to any controversy, dispute or claim arising out of, in connection with, or in relation to the interpretation, performance, nonperformance, validity, termination or breach of, this Agreement or otherwise related to the transactions contemplated hereby (including all actions taken in furtherance of the transactions contemplated hereby on or prior to the date hereof), or the construction, interpretation, enforceability, or validity hereof.

 

Section 10.14                      Specific Performance.  The Parties agree that irreparable damage would occur in the event that the provisions of this Agreement were not performed in accordance with their specific terms.  Accordingly, it is hereby agreed that the Parties shall be entitled to (i) an injunction or injunctions to enforce specifically the terms and provisions hereof in any arbitration in accordance with ARTICLE VIII of the Separation Agreement, (ii) provisional or temporary injunctive relief in accordance therewith in any Delaware Court, and (iii) enforcement of any such award of an arbitral tribunal or a Delaware Court in any court of the United States, or any other any court or tribunal sitting in any state of the United States or in any foreign country that has jurisdiction, this being in addition to any other remedy or relief to which they may be entitled.

 

Section 10.15                      No Circumvention.  The Parties agree not to directly or indirectly take any actions, act in concert with any Person who takes an action, or cause or allow any member of any such Party’s Group to take any actions (including the failure to take a reasonable action) such that the resulting effect is to materially undermine the effectiveness of any of the provisions of this Agreement.

 

Section 10.16                      Settlor Prerogatives Regarding Plan Dispositions.  Notwithstanding anything in this Agreement to the contrary, nothing in this Agreement shall be construed to require Flowco to maintain a Flowco Benefit Plan for a specific period of time, or into perpetuity, and further, nothing herein shall be construed to inhibit or otherwise interfere with Flowco’s ability to terminate a Flowco Benefit Plan, so long as the termination of a Flowco Benefit Plan intended to be qualified under Section 401(a) of the Code does not jeopardize the tax qualified status of the Flowco Benefit Plan.

 

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Section 10.17                      Effect if Distribution Does Not Occur.  Notwithstanding anything in this Agreement to the contrary, if the Separation Agreement or Transition Services Agreement is terminated prior to the Distribution Date, this Agreement shall be of no further force and effect.

 

Section 10.18                      No Third Party Beneficiaries.  Except as specifically provided in any Ancillary Agreement, this Agreement is solely for the benefit of the Parties and should not be deemed to confer upon third parties any remedy, claim, liability, reimbursement, cause of action or other right in excess of those existing without reference to this Agreement.

 

Section 10.19                      Waiver of Jury Trial.  EACH OF THE PARTIES HERETO HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.  EACH OF THE PARTIES HERETO HEREBY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.19.

 

Section 10.20                      Survival of Covenants.  Except as expressly set forth in this Agreement or any Ancillary Agreement, the covenants and agreements contained in this Agreement and each Ancillary Agreement, and Liability for the breach of any obligations contained herein or therein, shall survive the Separation and shall remain in full force and effect.

 

Section 10.21                      Counterparts.  This Agreement may be executed and delivered (including by facsimile transmission or portable document format (.pdf)) in counterparts, and by the different Parties hereto in separate counterparts, each of which when executed shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement.

 

Section 10.22                      Authorization.  Each of the Parties hereby represents and warrants that it has the power and authority to execute, deliver and perform this Agreement, that this Agreement has been duly authorized by all necessary corporate action on the part of such Party, that this Agreement constitutes a legal, valid and binding obligation of each such Party enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar Laws affecting creditors’ rights generally and general equity principles.

 

[Remainder of page intentionally left blank]

 

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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.

 

 

 

SPX CORPORATION

 

 

 

 

 

 

 

By

/s/ Stephen A. Tsoris

 

 

Name: Stephen A. Tsoris

 

 

Title: V. P., Secretary & General Counsel

 

 

 

 

 

SPX FLOW, INC.

 

 

 

 

 

 

 

By

/s/ Stephen A. Tsoris

 

 

Name: Stephen A. Tsoris

 

 

Title: Vice President and Secretary

 

43




Exhibit 10.4

 

TRADEMARK LICENSE AGREEMENT

 

This TRADEMARK LICENSE AGREEMENT (this “Agreement”), is made and entered into as of this 26th day of September, 2015, (“Effective Date”) by and between SPX FLOW, Inc., a corporation organized and existing under the laws of Delaware, U.S.A. (along with its Affiliates, collectively referred to herein as “Licensor”), and SPX Corporation, a corporation organized and existing under the laws of Delaware, U.S.A. (along with its Affiliates, collectively referred to herein as “Licensee”).  Capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed to them in the Separation Agreement (as defined below).

 

W I T N E S S E T H:

 

WHEREAS, Licensor and Licensee are parties to that certain Separation and Distribution Agreement dated as of September 22, 2015 (the “Separation Agreement”);

 

WHEREAS, Licensor is the owner of certain trademarks along with certain trademark registrations and pending applications around the world for the marks “SPX”, “SPX (with discrete modification)”, the “chevron design,” the “green X design” and “WHERE IDEAS MEET INDUSTRY” as set forth on Schedule A (collectively, the “Licensed Marks”) that it desires to license to Licensee in furtherance of the transactions contemplated in the Separation Agreement;

 

WHEREAS, Licensor is willing to license the Licensed Marks to Licensee under the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the above premises and mutual covenants contained herein, and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

1.                                      License Grant.

 

(a)                                 In consideration of the faithful performance by Licensee with respect to the Licensed Marks of the covenants and conditions contained herein and subject to the termination provisions contained in Paragraph 2 hereof, Licensor hereby grants to Licensee a non-exclusive, royalty-free license for the License Term to use the Licensed Marks, with right to sublicense, so long as Licensee continues to meet the quality control standards set forth in Paragraph 3 herein.  Licensor expressly reserves its ownership rights in the Licensed Marks and shall continue to hold all rights in the Licensed Marks.  Licensee’s use of the Licensed Marks shall inure to the benefit of Licensor.  Any sublicense intended to be granted by Licensee shall be in writing and shall first be approved by Licensor in writing.  Any sublicense shall provide that Licensor is a third party beneficiary of such sublicense, and that Licensor is entitled to enforce directly upon the sublicensee the terms of this Agreement relating to the Licensed Marks, including the quality control obligations set forth herein.  Any sublicense shall not allow for further sublicensing without Licensor’s prior written approval.  Licensee shall remain liable to Licensor hereunder for any and all damages suffered by Licensor due to acts or omissions of any sublicensee under any sublicense as if such acts or omissions were made by Licensee directly.

 

(b)                                 Included within the Licensed Marks are “Discrete SPX Marks” defined as the mark SPX with discrete modification as depicted on Schedule B, along with any other

 



 

discrete modification(s) of the mark SPX as deemed necessary by Licensee from time to time, provided however, that prior to adoption and use of any such discrete modification(s) of the SPX mark, Licensee has obtained the express written consent of Licensor, which Licensor shall not unreasonably withhold.  For the purpose of clarity, the modifications depicted on Schedule B are deemed expressly consented to by Licensor.

 

(c)                                  Except with respect to Discrete SPX Marks, neither Licensee nor any of its successors in interest shall use a Licensed Mark in connection with any product or service that directly competes with the “Flowco Business” (as defined in Section 1.1 of the Separation Agreement) or with any packaging, advertising, promotional, marketing or other written, audio or electronic materials, including but not limited to, use on websites or the internet that are illegal or that would reflect negatively on the goodwill associated with the Licensed Mark or otherwise dilute the value of the Licensed Mark.

 

(d)                                 Licensor agrees that it shall not use the Discrete SPX Marks, except in a manner that would constitute “fair use” under applicable law if any unaffiliated third party made such use.  Licensee agrees that it shall not use the mark “SPX FLOW” except in a manner that would constitute “fair use” under applicable law if any unaffiliated third party made such use.

 

(e)                                  Licensee agrees that it will do nothing inconsistent with the Licensor’s ownership of any of the Licensed Marks and shall not claim adversely to Licensor, or assist any third party in attempting to claim adversely to Licensor, with regards to such ownership.  Licensee agrees that it will not challenge the title of the Licensor to any of the Licensed Marks, oppose any registration thereof, or challenge the validity of this Agreement or the license granted hereunder.

 

2.                                      Term and Termination

 

(a)                                 Subject to the termination provisions of this paragraph, this Agreement and the license granted hereunder shall exist for an initial term of twenty years and automatically continue thereafter for like periods unless otherwise terminated under this Agreement in accordance with the following schedule:

 

(i)   for the “chevron design” and the “green X design” along with marks incorporating the “chevron design” and the “green X design” as depicted in Schedule C - 18 months from the Effective Date;

 

(ii)  for mark ‘WHERE IDEAS MEET INDUSTRY” and the mark “SPX”  as currently used by the parties in the forms as depicted in Schedule C and except to the extent that the SPX mark includes the “green X design” or the “chevron design” as provided for in Paragraph 2(a)(i) above - three years from the Effective Date; and

 

(iii)  for “Discrete SPX Marks”  — twenty years and automatically continue thereafter for like periods unless otherwise terminated under this Agreement.

 

(b)                                 Licensor may otherwise terminate this Agreement if the Licensee breaches any provision of Paragraph 3 and fails to cure that breach within ninety (90) days after notice thereof.  Upon termination of this Agreement, Licensee agrees to (i) promptly discontinue any and all uses of the Licensed Marks, including uses related to any of Licensee’s products or services and (ii) promptly take all necessary steps to discontinue use of, and refrain from further

 

2



 

using, the Licensed Marks in advertising, commercial registers, directories, internet and web-sites, telephone listings, and all other similar listings.

 

3.                                      Quality Control.

 

Licensee shall use Licensed Marks solely in connection with goods and services that have been manufactured, sold, distributed and offered in accordance with the reasonable standards of quality in materials, design, workmanship, use, advertising and promotion as maintained by Licensor.  For purposes of clarity, the quality of Licensee’s goods and services manufactured, offered, distributed and sold under the Licensed Marks as of the Effective Date are approved by Licensor as they currently meet Licensor’s standards of quality.  Such approval shall continue so long as Licensee’s goods and services continue to be of substantially the same quality as those currently manufactured, sold, distributed and offered by Licensee.  Any future approval shall not be unreasonably withheld or delayed by Licensor.

 

4.                                      Registration and Enforcement.

 

(a)                                 Maintenance of trademark registrations and prosecution of trademark applications included with the Licensed Marks existing and pending at the time of the Effective Date shall be Licensor’s sole responsibility including but not limited to payment of associated fees and expenses.  Licensee shall not directly or indirectly apply for or attempt to register for itself or others any of the Licensed Marks.  Should Licensee determine that new applications for registration of Discrete SPX Marks become necessary from time to time, Licensee shall notify Licensor in writing of the need for said new application.  Upon notification by Licensee, Licensor shall apply for registration at Licensee’s expense.  Any such new Discrete SPX Marks and the applications and registrations thereof shall immediately become subject to this Agreement.

 

(b)                                 Licensee shall promptly notify Licensor in the event that Licensee obtains knowledge of any potential infringement of a Licensed Mark.   Licensor shall have the right of first opportunity (but not the obligation) to enforce its rights in the Licensed Mark in whatever enforcement manner it chooses. Upon request by Licensor, Licensee shall cooperate with Licensor in any enforcement action undertaken by Licensor provided that Licensor shall reimburse Licensee for any out-of-pocket expenses incurred in providing such assistance.  Should Licensor chose not to enforce its rights after receiving notification of a potential infringement, Licensor shall promptly notify Licensee of its intention not to enforce its rights and Licensee thereafter will have the right to take action against the infringement and retain any damages recovered therefrom.  The party bringing the action shall be responsible for all of the costs of the action unless otherwise agreed to in writing by the parties.

 

(c)                                  To the extent either party is required to record or file this license with a governmental agency, the parties agree to assist each other in preparing and executing a short version of the license for recordation and filing purposes.

 

5.                                      Severability.  The provisions of this Agreement shall be severable, and if any provision of this Agreement shall be held or declared to be illegal, invalid or unenforceable, such provision shall, if possible and without waiving rights of appeal, be limited or construed so as to make it valid and enforceable or, if such limitation or construction is not possible or would be contrary to the parties’ manifest intentions, such provision shall be stricken from the Agreement.  In any event, the remainder of the Agreement shall continue in full force and effect.

 

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6.                                      Assignment.  This Agreement shall inure to the benefit of and be binding upon the successors and assigns of the parties.  Licensee shall not, assign or transfer (including any change of control which effectively assigns or transfers) any or all of their right, title, and interest in or to this Agreement or obligations and duties under this Agreement to any party without the express prior written consent of the Licensor which shall not be unreasonably withheld, delayed or conditioned.

 

7.                                      Governing Law. This Agreement shall be governed by and interpreted in accordance with the laws of Delaware, U.S.A. without regard to conflict or choice of law principles.  Each of the parties hereto hereby irrevocably and unconditionally consents to submit to the exclusive jurisdiction of (a) the Court of Chancery of the State of Delaware (unless the Court of Chancery of the State of Delaware declines to accept jurisdiction over a particular matter, in which case, any state or federal court within the State of Delaware) and (b) so long as both parties are headquartered in North Carolina, any state or federal court within the State of North Carolina, for the purposes of any suit, action or other proceeding arising out of or relating to this Agreement (and agrees not to commence any such suit, action or other proceeding relating thereto except in such courts).

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

 

 

SPX FLOW, Inc.

 

 

 

 

 

 

 

By:

/s/ Stephen A. Tsoris

 

 

 

 

Name:

Stephen A. Tsoris

 

 

 

 

Title:

Vice President and Secretary

 

 

 

 

Date:

September 26, 2015

 

 

 

 

 

 

SPX Corporation

 

 

 

 

 

 

 

By:

/s/ Stephen A. Tsoris

 

 

 

 

Name:

Stephen A. Tsoris

 

 

 

 

Title:

Vice President, Secretary and General Counsel

 

 

 

 

Date:

September 26, 2015

 

4




Exhibit 10.5

 

SPX FLOW

STOCK COMPENSATION PLAN

 

SECTION 1.   ESTABLISHMENT, PURPOSES AND EFFECTIVE DATE OF PLAN

 

1.1.         Establishment.  SPX FLOW, Inc. (the “Company”), a Delaware corporation, hereby establishes the SPX FLOW Stock Compensation Plan (the “Plan”) to provide for the award of Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, and Performance Units (“Awards”) to eligible individuals.

 

1.2.         Effective Date.  The Plan was approved by SPX Corporation (“SPX”), as the sole shareholder of the Company, and by the Board, on September 23, 2015.  The Plan shall be effective as of such approval date (the “Effective Date”).

 

1.3.         Distribution.  The Company has entered into a Separation and Distribution Agreement with SPX Corporation (the “Separation Agreement”), which provides for a “Distribution” (as defined in the Separation Agreement), by which SPX will separate into two separate, publicly traded companies, SPX and the Company. Until the Distribution, the Company is a wholly owned subsidiary of SPX.

 

1.4.         Purpose.

 

(a)           Generally.  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 shareholders, and (b) enabling the Company to compete with other organizations in attracting, retaining, promoting and rewarding the services of Participants.

 

(b)           Replacement Awards.  In addition to the general purposes described in Section 1.4(a), this Plan is established to issue Awards in partial or full substitution for awards relating to common shares of SPX prior to the Distribution, in accordance with the terms of an Employee Matters Agreement (as defined hereafter).

 

SECTION 2.   DEFINITIONS

 

2.1.         Definitions.  Whenever used herein, the following terms shall have their respective meanings set forth below:

 

(a)           “Award” means, individually or collectively, a grant under this Plan of  Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, and Performance Units, made to eligible individuals.

 

(b)           “Award Agreement” means an agreement entered into between the Company and a Participant (which may be in electronic format) setting forth the terms and conditions applicable to the Award granted to the Participant.

 

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(c)           “Board” means the Board of Directors of the Company.

 

(d)           “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(d), “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.

 

(e)           “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 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(e), 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.

 

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(B)          “Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in Rule 12b-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 Rule 13d-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(e)(i)(C)(II)(2) above) or disposing of any securities of the Company.

 

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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 Distribution, 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(e)(i), above, or Subsection 2(e)(iii), below) whose election by the Board or nomination for election by the Company’s shareholders was approved by a vote of at least two-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(e)(iii) being referred to as a “Business Combination”), in each case unless after such a Business Combination the shareholders of the 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(e)(i) or (e)(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, the Distribution will not constitute a Change of Control for the purposes of this Plan.

 

(f)            “Code” means the Internal Revenue Code of 1986, as amended and the regulations and guidance promulgated thereunder.

 

(g)           “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; provided, however, that prior to the initial formation of the Compensation

 

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Committee of the Board, references in this Plan to the Committee will be deemed to be references to the Board.

 

(h)           “Common Stock” means the common stock, par value $0.01 (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.

 

(i)            “Company” means SPX FLOW, Inc., a Delaware corporation, and any successor thereto.

 

(j)            “Covered Employee” shall mean a Participant who the Committee determines is or may be one of the group of “covered employees” as defined in the regulations promulgated under Code Section 162(m), or any successor statute.

 

(k)           “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.

 

(l)            “Employee Matters Agreement” means the Employee Matters Agreement entered into by and between SPX and the Company setting forth certain rights and obligations of the parties in connection with the Distribution.

 

(m)          “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.  If there is no regular public trading market for the Common Stock, Fair Market Value shall be the fair market value of the Common Stock as determined in good faith by the Committee.

 

(n)           “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.

 

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(o)           “Mature Common Stock” means Common Stock that has been 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.

 

(p)           “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.

 

(q)           “Options” or “ Stock 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.

 

(r)            “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.

 

(s)            “Participant” means each Non-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.  The term “Participant” shall also include an SPX Participant; provided that, pursuant to Section 18.17, an SPX Participant who is not otherwise eligible to be a Participant pursuant to Section 3 may receive only Replacement Awards.

 

(t)            “Performance-Based Exception” shall mean the performance-based exception from the deductibility limitations as set forth in Code Section 162(m).

 

(u)           “Performance Unit” means an award granted to a Participant pursuant to Section 10.

 

(v)           “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.

 

(w)          “Replacement Award” means an Award that is issued under this Plan in accordance with the Employee Matters Agreement, in substitution of, or in accordance with, an outstanding award granted under the SPX Plan which is held by a Participant immediately before the Distribution.

 

(x)           “Restricted Stock” means the Common Stock granted to a Participant pursuant to Section 9.

 

(y)           “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.

 

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(z)           “Retirement” means, except as otherwise defined in any applicable Award Agreement, at the time of the Participant’s termination of Service, the Participant is age 55 or older, has completed five years of Service with the Company or a Subsidiary (provided that the Subsidiary has been directly or indirectly owned by the Company for at least three years) and voluntarily elects to retire by providing appropriate notice to the Company.

 

(aa)         “Service” means, except as otherwise defined in any applicable Award Agreement,  the provision of personal services to the Company or its Subsidiaries in the capacity of (i) an employee, (ii) a Non-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.

 

(bb)         “SPX” means SPX Corporation, a Delaware corporation.

 

(cc)         “SPX Participant” means a current or former employee, officer or member of the board of directors of SPX or any of its subsidiaries, or any other person, who holds a stock option, restricted stock, restricted stock unit or other award under the SPX Plan as of immediately prior to the Distribution.

 

(dd)         “SPX Plan” means the SPX Corporation 2002 Stock Compensation Plan, as amended, or any similar or predecessor plan sponsored by SPX under which any awards remain outstanding as of the date immediately prior to the Distribution.

 

(ee)         “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.

 

(ff)          “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.

 

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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

 

3.1.         Subject to Section 18.17, 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 to Non-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.

 

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 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 independent directors who qualify as “non-employee directors,” as defined in Rule 16b-3 under the Exchange Act.  For purposes of any Award granted under the Plan by the Committee that is intended to qualify for the Performance-Based Exception, the Committee shall consist only of directors who qualify as “outside directors,” as defined in Code Section 162(m) and the related regulations.

 

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, all Participants, 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 other non-paper Award Agreements, and the use of electronic, internet or

 

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other non-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 or who is a “Covered Employee” under Code Section 162(m).  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.

 

(a)           Generally.  The total number of shares of Common Stock available for issuance under the Plan shall not exceed three million (3,000,000) plus the number of shares awarded in connection with Replacement Awards made pursuant to Section 18.17; provided, however, that total number of shares of Common Stock available for issuance under the Plan shall be subject to adjustment upon occurrence of any of the events indicated in Subsection 5.3, and shall be reduced by one (1) share of Common Stock for every one (1) share that is subject to an 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.

 

(b)           Participant Limits (Excluding Non-Employee Directors).  The maximum aggregate number of shares of Common Stock (including Options, Restricted Stock, RSUs, Stock Appreciation Rights and Performance Units to be paid out in shares of Common Stock) that may be granted or that may vest with respect to awards granted in any one fiscal year to a Participant (excluding a Non-Employee Director) shall be 2,000,000, subject to adjustment upon the occurrence of any of the events indicated in Subsection 5.3; provided, however, in the case of awards granted in the form of Performance Units, the Committee may instead provide for a cash payment, in which case the maximum aggregate cash payment for any fiscal year shall not exceed the fair market value (determined as of the date of vesting or payout, as applicable) of 2,000,000 shares of Common Stock, subject to adjustment under Subsection 5.3.

 

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(c)                                  Non-Employee Director Limits. The maximum aggregate number of shares of Common Stock (including, Restricted Stock, RSUs, Stock Appreciation Rights and Performance Units to be paid out in shares of Common Stock, but excluding Options) that may be granted or that may vest with respect to awards granted in any one fiscal year to a Non-Employee Director shall be 10,000, subject to adjustment upon the occurrence of any of the events indicated in Subsection 5.3; provided, however, in the case of awards granted in the form of Options, the maximum aggregate number of shares of Common Stock that may be granted or that may vest with respect to Option awards granted in any one fiscal year to a Non-Employee Director shall be 30,000, subject to adjustment upon the occurence of any of the events indicated in subsection 5.3; provided, further, in the case of awards granted in the form of Performance Units, the Committee may instead provide for a cash payment, in which case the maximum aggregate cash payment for any fiscal year shall not exceed, $500,000 subject to adjustment under Subsection 5.3.

 

(d)                                 Replacement Awards.  Replacement Awards made pursuant to Section 18.17 shall not count against the individual limits above.

 

5.2.                            Unused Stock.  In the event that 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 any shares of Common Stock subject to a Restricted Stock or RSU award made under the Plan are reacquired by the Company pursuant to the Plan, or any Stock Appreciation Right expires unexercised, such shares and rights again shall become available for grant under the Plan.  The shares of Common Stock that become available for new Awards under this Subsection 5.2 shall include shares of Common Stock with respect to Awards that were issued prior to the Effective Date, to the extent that such Awards expire, terminate, are cancelled or are otherwise settled without the issuance of shares of Common Stock on or after the Effective Date.  Any shares of Common Stock that again become available for grant pursuant to this Subsection 5.2 shall be added back as one (1) share of Common Stock.

 

For purposes of determining the number of shares of Common Stock subject to grant under this Subsection or 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.

 

5.3.                            Adjustment in Capitalization.  In the event of any change in the Common Stock of the Company through stock dividends or stock splits, a corporate spin-off, reverse spin-off, split-off or split-up, or recapitalization, merger, consolidation, exchange of shares, or a 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, (d) the performance goals which may be applicable to any outstanding Awards, and (e) such other

 

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equitable substitutions or adjustments may be made, as may be determined to be appropriate and equitable by the Committee, in its sole discretion, to prevent dilution or enlargement of rights.  Without limiting the preceding sentence, in the case of any such transaction described above, the adjustments may consist of either (i) making appropriate provision for the protection of outstanding Awards by the substitution on an equitable basis of appropriate equity interests or awards similar to the Awards (or, in the event no such similar equity interests may be identified, a nonqualified deferred compensation account allocation of equivalent value), provided that the substitution neither enlarges nor diminishes the value and rights under the Awards; or (ii) upon written notice to the Participants, providing that Awards will be exercised, distributed, cashed out or exchanged for value pursuant to such terms and conditions (including the waiver of any existing terms or conditions including but not limited to vesting restrictions or exercise waiting periods) as shall be specified in the notice.  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, 409A and 162(m) to the extent the Awards subject to adjustment are subject to such Code Sections.

 

5.4.                            Awards Subject to Minimum Vesting Period.  Except as otherwise provided under the Plan or any applicable Award Agreement, any Award granted under this Plan after the Effective Date shall not vest sooner than one year after the date of grant, provided that up to 5% of the shares available for issuance under the Plan under this Section 5 as of the Effective Date may be granted under Awards without any minimum vesting requirements. Replacement Awards granted pursuant to Section 18.17 shall not be subject to a minimum vesting period nor taken into account when determining the total shares available for insurance under this Section 5.4.

 

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 15 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 September 23, 2025, which is the tenth anniversary of the Plan’s current 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) a Non-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

 

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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.

 

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.

 

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

 

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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 Due to Death, Disability or Retirement.  In the event the Service of a Participant is terminated by reason of death, any outstanding Options shall become immediately fully vested and exercisable within such period following the Participant’s death as shall be determined by the Committee in the applicable Award Agreement, but in no event beyond the expiration of the term of the Option, by such person or person as shall have acquired the Participant’s rights under the Option by will or by the laws of descent and distribution.  In the event the Service of a Participant is terminated by reason of Retirement or Disability, the Award Agreement with a Participant may provide that any outstanding Options shall become immediately fully vested and exercisable within such period after such date of termination of Service as shall be determined by the Committee, and set forth in the Award Agreement but in no event beyond the expiration of the term of the Option.

 

7.9.                            Termination of Service Other Than for Death, Disability or Retirement.  If the Service of the Participant terminates for any reason other than death, Disability or Retirement, the Participant shall have the right to exercise the Option within such period after the date of his termination as shall be determined by the Committee in the applicable Award Agreement, but in no event beyond the expiration of the term of the Option and only to the extent that the Participant was entitled to exercise the Option at the date of his termination of Service.  Regardless of the reasons for termination of Service, incentive stock options must be exercised within the Code Section 422 prescribed time period in order to receive the favorable tax treatment applicable thereto.

 

7.10.                     Nontransferability of Options.  Except as provided in this Subsection 7.10, 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

 

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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), 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.

 

8.8.                            Termination of Service.  In the event that the Service of a Participant is terminated by reason of death, Disability or Retirement, or for any other reason, the exercisability of any outstanding Stock Appreciation Rights granted in conjunction with an Option shall terminate in the same manner as specified for their related Options under Subsections 7.8 and 7.9.  The exercisability of any outstanding Stock Appreciation Rights granted independent of Options also shall terminate in the manner provided under Subsections 7.8 and 7.9 or as otherwise provided in the Award Agreement.

 

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8.9.                            Nontransferability 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 RESTRICTED STOCK UNITS

 

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 Section 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, the Participant (or beneficiary, in the case of death) shall be issued one share of Common Stock for each RSU no longer subject to a Period of Restriction on such date.

 

9.4.                            Transferability.  Except as provided in this Section 9, 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 period of time as shall be established by the Committee and as shall be specified in the Award Agreement, or upon earlier satisfaction of other conditions as specified by the Committee in its sole discretion and set forth 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:

 

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“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 SPX FLOW Stock Compensation Plan, 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 FLOW, Inc.”

 

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.

 

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, and except as otherwise 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 additional RSUs.  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.  RSUs received under this Section 9.9 shall be settled in cash or shares of Common Stock, in the discretion of the Committee, on the same date as the underlying RSUs to which they relate.

 

9.10.                     Termination of Service Due to Retirement.  In the event the Service of a Participant is terminated by reason of Retirement, the Award Agreement with a Participant may provide that the remaining Period of Restriction may lapse with respect to any outstanding shares of Restricted Stock or RSUs as of the date of the Participant’s Retirement and, except as otherwise provided in Subsection 9.5 or under the applicable Award Agreement, the shares of Restricted Stock shall thereby be free of restrictions and fully transferable and the shares attributable to RSUs shall be issued.

 

9.11.                     Termination of Service Due to Death or Disability.  In the event a Participant’s Service is terminated because of death or Disability, the Award Agreement with a Participant may provide that any remaining Period of Restriction may lapse and, except as otherwise provided in Subsection 9.5 or under the applicable Award Agreement, the shares of Restricted Stock shall

 

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thereby be free of restrictions and fully transferable and the shares attributable to RSUs shall be issued.

 

9.12.                     Termination of Service for Reasons Other Than Death, Disability or Retirement.  In the event that a Participant terminates his or her Service with the Company for any reason other than those set forth in Subsections 9.10 and 9.11 during the Period of Restriction, and except as otherwise provided under the applicable Award Agreement, then any shares of Restricted Stock or RSUs still subject to a Period of Restriction as of the date of such termination shall automatically be forfeited and returned to the Company; provided, however, that, in the event of an involuntary termination of the Service of a Participant by the Company, the Committee, in its sole discretion, may waive the automatic forfeiture of any or all such shares and may add such new restrictions to such shares of Restricted Stock or RSUs as it deems appropriate.

 

SECTION 10.   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.

 

SECTION 11.   CODE SECTION 162(m) PROVISIONS

 

11.1.                     Performance Goals.  The Committee, in its discretion, may determine that an award of Restricted Stock, RSUs, or Performance Units to a Covered Employee will be designed to comply with the Performance-Based Exception under Code Section 162(m).  In such case, the level of vesting of the award will depend on the attainment of any of the following performance criteria, either alone or in any combination, which may be expressed with respect to the Company or one or more operating units or groups, as the Committee may determine: (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

 

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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.

 

11.2.                     Performance Period; Adjustments.  The Committee shall determine the performance period over which the designated performance goals shall be attained and shall, in the case of an Award designed to comply with the Performance-Based Exception under Code Section 162(m), establish the performance goals no later than 90 days after the beginning of such performance period (or such other date as may be required or permitted under Code Section 162(m)).  Following the end of the performance period, the Committee shall certify in writing the level of attainment of the performance goal(s).  The Committee may reduce (including a reduction to zero), but may not increase the amount of an available award.  The Committee may provide in any Performance-Based Award, at the time the performance goals are established, that any evaluation of performance shall exclude or otherwise objectively adjust for any specified circumstance or event that occurs during a performance period, including by way of example, but without limitation, the following: (a) asset write-downs or impairment charges; (b) litigation or claim judgments or settlements; (c) the effect of changes in tax laws, accounting principles or other laws or provisions affecting reported results; (d) accruals for reorganization and restructuring programs; (e) extraordinary nonrecurring items as described in then-current accounting principles; (f) extraordinary nonrecurring items as described in management’s discussion and analysis of financial condition and results of operations appearing in the Company’s annual report for the applicable year; (g) acquisitions or divestitures; and (h) foreign exchange gains and losses.  To the extent such inclusions or exclusions affect Awards to Covered Employees, they shall be prescribed in a form that meets the requirements of Code Section 162(m) for deductibility.

 

SECTION 12.   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.  In its discretion, the Committee may permit beneficiary designations by a Participant under the SPX Plan to be effective for such purposes under this Plan.

 

SECTION 13.   RIGHTS OF PARTICIPANTS

 

13.1.                     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.

 

13.2.                     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.

 

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SECTION 14.   CHANGE OF CONTROL

 

14.1.                     General.  Notwithstanding any other provision of this Plan to the contrary, the provisions of this Section 14 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.

 

14.2.                     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 Section 14.3) 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).

 

14.3.                     Alternative Awards.  Upon a Change of Control, and subject to Section 14.4, each outstanding Award shall be replaced with another Award meeting the requirements of Subsection 14.5 (an “Alternative Award”); provided that (a) if an Alternative Award meeting the requirements of Subsection 14.5 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.

 

14.4.                     Cash Substitution.  Notwithstanding Subsection 14.3, 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 14.4, “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

 

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the Committee as constituted before the Change of Control, if any part of the offered price is payable other than in cash.

 

14.5.                     Qualification of Alternative Awards.  In order for an Award to meet the conditions of this Subsection 14.5 and qualify as an Alternative Award, the Committee (as constituted immediately prior to the Change of Control) must reasonably 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 14.5 are satisfied shall be made by the Committee, as constituted immediately before the Change of Control, in its sole discretion.

 

14.6.                     Replacement Awards.  Notwithstanding the preceding, if a Change of Control occurs, the Replacement Awards shall be handled as described in the Employee Matters Agreement or any transaction agreement related to the Distribution and the applicable Award Agreement.

 

SECTION 15.   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 shareholders, 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;

 

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(b)                                 change the provisions of the Plan regarding the Option Price, including a reduction of the Option Price of any outstanding Option, cancellation of an Option in exchange for cash (including but not limited to a cash buyout of underwater options) or any other awards under the Plan, exchange or replace an outstanding Option with a new Option with a lower Option Price, or take any other action that would be a “repricing” of Options, except as permitted by Subsection 5.3 or Section 14; 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 16.   TAX WITHHOLDING

 

16.1.                     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.

 

16.2.                     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 minimum withholding liability required by law, and only Mature Common Stock may be tendered (including by attestation) for withholding in excess of the amount the Company is legally required to withhold by applicable law.  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.

 

SECTION 17.   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

 

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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 18.   REQUIREMENTS OF LAW AND OTHER PROVISIONS

 

18.1.                     Requirements of Law.  The granting of Awards, and the issuance of shares of Common Stock with respect to an Option or Stock Appreciation Right exercise or Performance Unit award, 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.

 

18.2.                     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 or make any sub-plan that (i) increases the limitations contained in Section 5.1, (ii) increases the number of shares available under the Plan, as set forth in Section 5.1, (iii) causes the Plan to cease to satisfy any conditions under Rule 16b-3 under the Exchange Act or (iv) causes the grant of any performance Award to fail to qualify for an income tax deduction pursuant to Code Section 162(m).  Subject to the foregoing, the Committee may amend, modify, administer or terminate such sub-plans, and prescribe, amend and rescind rules and regulations relating to such sub-plans.

 

18.3.                     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).

 

18.4.                     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 18.4.

 

18.5.                     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.

 

18.6.                     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

 

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any Award other than an incentive stock option or to the extent required or permitted by applicable law.

 

18.7.                     409A Compliance.  To the extent any Award is subject to Code Section 409A, such Award and the Plan are intended to be administered in a manner consistent with the requirements 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.

 

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 the six-month anniversary of the Participant’s separation from service, such payment shall be delayed until the earlier to occur of (a) the six-month anniversary of such separation from service or (b) the date of the Participant’s death.

 

18.8.                     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.

 

18.9.                     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.

 

18.10.              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.

 

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18.11.              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.

 

18.12.              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.

 

18.13.              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.

 

18.14.              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.

 

18.15.              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.

 

18.16.              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.

 

18.17.              Replacement Awards.  The Company is authorized to issue Replacement Awards to Participants, including SPX Participants, in connection with the adjustment and replacement of certain awards previously granted by SPX under the SPX Plan to such Participants (pursuant to the anti-dilution adjustment provisions of the SPX Plan).  The Common Stock subject to a Replacement Award and the other terms and conditions of each Replacement Award, including, without limitation, option exercise price and service crediting rules, as applicable shall be determined by the Committee, all in accordance with the terms of the Employee Matters Agreement.  Subject to the foregoing, all Replacement Awards shall generally be subject to substantially similar terms and conditions as provided in the grantee’s corresponding awards under the SPX Plan.  To the extent the terms of the Plan are inconsistent with the terms of a

 

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Replacement Award Agreement, the terms of the Replacement Award shall be governed by the Employee Matters Agreement and the applicable Award Agreement.

 

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Exhibit 10.6

 

SPX FLOW

 

SPX FLOW STOCK COMPENSATION PLAN

FORM OF

STOCK OPTION AGREEMENT
AWARD

 

THIS STOCK OPTION AGREEMENT (the “Agreement”) is made between SPX FLOW, Inc., a Delaware corporation (the “Company”), and the Recipient pursuant to the SPX FLOW Stock Compensation Plan, as amended from time to time, and related plan documents (the “Plan”) in combination with an SPX Stock Option Summary (the “Award Summary”) to be displayed at the Fidelity website.  The Award Summary, which identifies the person to whom the Options are granted (the “Recipient”) and specifies the date (the “Award Date”) and other details of this grant of Options, and the electronic acceptance of this Agreement (which also is to be displayed at the Fidelity website), are incorporated herein by reference.  Capitalized terms used but not otherwise defined herein shall have the meanings assigned to such terms in the Plan.  The parties hereto agree as follows:

 

1.                                      Grant of Options.  The Company hereby grants to the Recipient, a non-qualified stock option to purchase the number of shares of Common Stock of the Company specified in the Award Summary (the “Award”) at a price per share equal to the Fair Market Value of a share of Common Stock on the date of grant, subject to the terms and conditions of the Plan and this Agreement.  The Recipient must accept the Award within [ninety (90) days] after notification that the Award is available for acceptance and in accordance with the instructions provided by the Company.  The Award automatically will be rescinded upon the action of the Company, in its discretion, if the award is not accepted within [ninety (90) days] after notification is sent to the Recipient indicating availability for acceptance.  The Company shall maintain an account (the “Option Account” or “Account”) on its books in the name of the Recipient, which shall reflect the number of Options awarded to the Recipient.

 

2.                                      Restrictions.  The Options may not be sold, transferred, pledged, assigned or otherwise alienated or hypothecated, whether voluntarily or involuntarily or by operation of law.  The Recipient shall have no rights in the Common Stock underlying the Options until the vesting and subsequent exercise and delivery of the Common Stock or as otherwise provided in the Plan or this Agreement.  The Recipient shall not have any voting rights with respect to the Options, nor shall the Recipient receive or be entitled to receive any dividends or dividend equivalents with respect to the Options.

 

3.                                      Expiration Date.  Subject to earlier expiration, forfeiture or termination as provided in the following Sections, the Options will expire and be forfeited at the close of business on the business day immediately preceding the tenth anniversary of the Award Date (the “Stated Expiration Date”).

 

4.                                      Vesting Period.  Subject to the provisions of the Plan and this Agreement, unless they are vested or forfeited earlier as described in Section 5, 6, or 7 of this Agreement, as applicable, the Options shall become vested in/on [

 



 

(“Vesting Date”),] subject to the Recipient’s continuous employment through the [applicable Vesting Date], provided that the Committee, in its sole discretion, may accelerate the vesting of all or a portion of the Options, at any time and from time to time.

 

5.                                      Vesting upon Certain Terminations.

 

(a)                                 Disability or Death.  If the Recipient terminates employment with the Company (or a Subsidiary of the Company if the Recipient is then in the employ of such Subsidiary) by reason of Disability (as defined below) or death, then (i) any unvested Options shall become fully vested as of the date of employment termination without regard to the vesting restrictions set forth in Section 4 of this Agreement and (ii) vested options shall remain exercisable for       following such termination or until the Stated Expiration Date, whichever period is shorter, and any Options not exercised by the end of such period shall be forfeited at the end of the period.  “Disability” means, in the written opinion of a qualified physician selected by the Company, the Recipient 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.

 

(b)                                 [RetirementIf the Recipient terminates employment with the Company by reason of Retirement (as defined below), then (i) any unvested Options shall become fully vested as of the date of employment termination without regard to the vesting restrictions set forth in Section 4 of this Agreement and (ii) vested options shall remain exercisable for       following such termination or until the Stated Expiration Date, whichever period is shorter, and any Options not exercised by the end of such period shall be forfeited at the end of the period.  A Recipient will be eligible for “Retirement” treatment for purposes of this Agreement if, at the time of the Recipient’s termination of Service, the Recipient is age 55 or older, has completed five years of Service with the Company or a Subsidiary (provided that the Subsidiary has been directly or indirectly owned by the Company for at least three years), has been an employee of the Company for at least ninety (90) days following the Award Date and voluntarily elects to retire by providing appropriate notice to the Company’s Human Resources department.]

 

6.                                      Forfeiture upon Termination due to Reason other than [Retirement, ]Disability or Death.  If the Recipient experiences a termination of Service for any reason other than the Recipient’s [Retirement, ]Disability or death, then the Recipient shall forfeit any unvested Options on the date of such termination of Service.  [Vested options shall remain exercisable for       following such termination or until the Stated Expiration Date, whichever period is shorter, and any vested Options not exercised by the end of such period shall be forfeited at the end of the period.]

 

7.                                      Termination Without Cause Following Change of Control.  In the event the Recipient is terminated without Cause within two years following a “Change of Control” of the Company as defined in this Section, then (i) any unvested Options shall become fully vested and exercisable as of the termination without Cause and shall cease to be subject to the restrictions set forth in Section 4 of the Agreement and (ii) vested options shall remain exercisable for [two

 

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years] following such termination or until the Stated Expiration Date, whichever period is shorter, and any Options not exercised by the end of such period shall be forfeited at the end of the period.  A “Change of Control” shall be deemed to have occurred if:

 

(a)                                 Any “Person” (as defined below), excluding for this purpose (i) the Company or any Subsidiary of the Company, (ii) any employee benefit plan of the Company or any Subsidiary of the Company, and (iii) 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 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 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 paragraph (a), the following terms shall have the meanings set forth below:

 

(i)                                    “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.

 

(ii)                                “Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

 

(iii)                            A Person shall be deemed the “Beneficial Owner” of and shall be deemed to “beneficially own” any securities:

 

(A)                               which such Person or any of such Person’s Affiliates or Associates beneficially owns, directly or indirectly (determined as provided in Rule 13d-3 under the Exchange Act);

 

(B)                               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,

 

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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

 

(C)                               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 subparagraph (a)(iii)(B)(2), above) or disposing of any securities of the Company.

 

Notwithstanding anything in this “Beneficial Ownership” definition 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.

 

(b)                                 During any period of two (2) consecutive years (not including any period prior to the acceptance of this Agreement), individuals who at the beginning of such two-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 paragraph (a), above, or paragraph (c), below) whose election by the Board or nomination for election by the Company’s shareholders was approved by a vote of at least two-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

 

(c)                                  The consummation of: (i) a plan of complete liquidation of the Company, (ii) an agreement for the sale or disposition of the Company or all or substantially all of the Company’s assets, (iii) a plan of merger or consolidation of the Company with any other corporation, or (iv) a similar transaction or series of transactions involving the Company (any transaction described in parts (i) through (iv) of this paragraph (c) being referred to as a “Business Combination”), in each case unless after such a Business Combination the shareholders of the Company immediately prior to the Business

 

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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 of this Agreement to the contrary, a “Change of Control” shall not include any transaction described in paragraph (a) or (c), above, where, in connection with such transaction, the Recipient and/or any party acting in concert with the Recipient substantially increases 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).

 

8.                                      Effect of Change of Control.  In the event of a Change of Control as defined in Section 7 of this Agreement:

 

(a)                                 No cancellation, termination, acceleration of exercisability or vesting, or settlement or other payment shall occur with respect to the Options if the Committee (as constituted immediately prior to the Change in Control) reasonably determines, in good faith, prior to the Change in Control that the Options shall be honored or assumed or new rights substituted therefor by an Alternative Award, in accordance with the terms of Section 14.5 of the Plan.

 

(b)                                 Notwithstanding Section 8(a), if an Alternative Award meeting the requirements of Section 14.5 of the Plan cannot be issued, or the Committee so determines at any time prior to the Change of Control, any unvested options shall become fully vested and exercisable immediately prior to the Change of Control.

 

(c)                                  Notwithstanding Sections 8(a) and 8(b), the Committee (as constituted immediately prior to the Change in Control) may determine that all then-outstanding Options (whether vested or unvested) shall be canceled in exchange for a payment having a value equal to the excess, if any, of (a) the product of the Change in Control Price multiplied by the aggregate number of shares covered by all such Options immediately prior to the Change in Control over (b) the aggregate Option Price for all such shares, to be paid as soon as reasonably practicable, but in no event later than 30 days following the Change in Control.

 

(d)                                 Notwithstanding Sections 8(a) through 8(c), the Committee may, in its discretion, terminate any outstanding Options if either (i) the Company provides holders of such Options with reasonable advance notice to exercise their outstanding and unexercised Options, or (ii) the Board reasonably determines that the Change in Control Price is equal to or less than the Option Price for such Options.

 

9.                                      Manner of Exercise.  Vested Options shall be exercised pursuant to this Section 9.

 

(a)                                 Subject to such reasonable administrative regulations as the Committee may adopt from time to time, the exercise of vested Options by the Recipient shall be pursuant to procedures established by the Company from time to time and shall include

 

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the Recipient specifying the proposed date on which the Recipient desires to exercise a vested Option (the “Exercise Date”), the number of whole shares with respect to which the vested Options are being exercised (the “Exercise Shares”) and the aggregate Option Price for such Exercise Shares (the “Exercise Price”), or such other or different requirements as may be specified by the Company.  Unless otherwise determined by the Committee, (i) on or before the Exercise Date the Recipient shall deliver to the Company full payment for the Exercise Shares in United States dollars in cash or cash equivalents satisfactory to the Company, in an amount equal to the Exercise Price, or tendering shares of previously acquired Mature Common Stock having a fair market value at the time of exercise equal to the Exercise Price plus (if applicable) any required withholding taxes or other similar taxes, charges or fees, or, pursuant to a broker-assisted exercise program established by the Company, the Recipient may exercise vested Options by an exercise and sell procedure (cashless exercise) in which the Exercise Price (together with any required withholding taxes or other similar taxes, charges or fees) is deducted from the proceeds of the exercise of an Option, or in such other method permitted under the Plan, and (ii) the Company shall register the issuance of the Exercise Shares on its records (or direct such issuance to be registered by the Company’s transfer agent).  The Company may require the Recipient to furnish or execute such other documents as the Company shall reasonably deem necessary (i) to evidence such exercise or (ii) to comply with or satisfy the requirements of the Securities Act of 1933, as amended, applicable state or non-U.S. securities laws or any other law.

 

(b)                                 Notwithstanding any other provision of this Agreement, the Options may not be exercised in whole or in part, (i) (A) unless all requisite approvals and consents of any governmental authority of any kind shall have been secured, (B) unless the purchase of the Exercise Shares shall be exempt from registration under applicable U.S. federal and state securities laws, and applicable non-U.S. securities laws, or the Exercise Shares shall have been registered under such laws, and (C) unless all applicable U.S. federal, state and local and non-U.S. tax withholding requirements shall have been satisfied or (ii) if such exercise would result in a violation of the terms or provisions of or a default or an event of default under, any of the financing or credit agreements of the Company or any Subsidiary.  The Company shall use its commercially reasonable efforts to obtain any consents or approvals referred to in clause (i) (A) of the preceding sentence, but shall otherwise have no obligations to take any steps to prevent or remove any impediment to exercise described in such sentence.

 

(c)                                  The shares of Common Stock issued upon exercise of the Options shall be registered in the Recipient’s name, or, if applicable, in the names of the Recipient’s heirs or estate.  In the Company’s discretion, such shares may be issued either in certificated form or in uncertificated, book entry form.  The certificate or book entry account shall bear such restrictive legends or restrictions as the Company, in its sole discretion, shall require.  If delivered in certificate form, the Company may deliver a share certificate to the Recipient, or deliver shares electronically or in certificate form to the Recipient’s designated broker on the Recipient’s behalf.  If the Recipient is deceased (or subject to Disability and if necessary) at the time that a delivery of share certificates is to be made, the certificates will be delivered to the Recipient’s estate, executor, administrator, legally authorized guardian or personal representative (as applicable).

 

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(d)                                 The Company may postpone the issuance and delivery of any shares of Common Stock provided for under this Agreement for so long as the Company determines to be necessary or advisable to satisfy the following: (1) the completion or amendment of any registration of such shares or satisfaction of any exemption from registration under any securities law, rule, or regulation; (2) compliance with any requests for representations; and (3) receipt of proof satisfactory to the Company that a person seeking such shares on the behalf of the Recipient upon the Recipient’s Disability (if necessary), or upon the Recipient’s estate’s behalf after the death of the Recipient, is appropriately authorized.

 

(e)                                  Except as otherwise provided, the unvested Options will expire and be forfeited upon the Recipient’s termination of Service.

 

10.                               Adjustment in Capitalization.  In the event of any change in the Common Stock of the Company through stock dividends or stock splits, a corporate spin-off, reverse spin-off, split-off or split-up, or recapitalization, merger, consolidation, exchange of shares, or a similar event, the number of Options subject to this Agreement shall be equitably adjusted by the Committee to preserve the intrinsic value of any Awards granted under the Plan.  Such mandatory adjustment may include a change in any or all of the number and kind of shares of Common Stock or other equity interests underlying the Options, and/or if reasonably determined in good faith by the Committee prior to such adjustment event, that the Options (in whole or in part) shall be replaced by Alternative Awards meeting the requirements set forth in Section 14.5 of the Plan.  In addition, the Committee may make provisions for a cash payment to a Recipient in such event.  The number of shares of Common Stock or other equity interests underlying the Options shall be rounded to the nearest whole number.  Any such adjustment shall be consistent with Code

 

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Section 162(m) to the extent the Award is subject to such section of the Code and shall not result in adverse tax consequences to the Recipient under Code Section 409A.

 

11.                               Tax Withholding.  Regardless of any action the Company, any Subsidiary of the Company, or the Recipient’s employer takes with respect to any or all income tax, social insurance, payroll tax, payment on account or other tax-related withholding (“Tax”) that the Recipient is required to bear pursuant to all applicable laws upon the vesting or exercise of the Options, the Recipient hereby acknowledges and agrees that the ultimate liability for all Tax is and remains the responsibility of the Recipient.

 

Prior to receipt of any shares of Common Stock that correspond to exercised Options, the Recipient shall pay or make adequate arrangements satisfactory to the Company and/or any Subsidiary of the Company to satisfy all withholding and payment obligations of the Company and/or any Subsidiary of the Company.  In this regard, the Recipient authorizes the Company and/or any Subsidiary of the Company to withhold all applicable Tax legally payable by the Recipient from the Recipient’s wages or other cash compensation paid to the Recipient by the Company and/or any Subsidiary of the Company or from the proceeds of the sale of shares of Common Stock.  Alternatively, or in addition, the Company may sell or arrange for the sale of Common Stock that the Recipient is due to acquire to satisfy the minimum withholding obligation for Tax and/or withhold any Common Stock necessary to satisfy the withholding amount.  Finally, the Recipient agrees to pay the Company or any Subsidiary of the Company any amount of any Tax that the Company or any Subsidiary of the Company may be required to withhold as a result of the Recipient’s participation in the Plan that cannot be satisfied by the means previously described.  The Company may refuse to deliver Common Stock if the Recipient fails to comply with its obligations in connection with the tax as described in this section.

 

The Company advises the Recipient to consult a lawyer or accountant with respect to the tax consequences for the Recipient under the Plan.

 

The Company and/or any Subsidiary of the Company: (a) make no representations or undertakings regarding the tax treatment in connection with the Plan; and (b) do not commit to structure the Plan to reduce or eliminate the Recipient’s liability for Tax.

 

12.                               Securities Laws.  This Award is a private offer that may be accepted only by a Recipient who is an employee of the Company or a Subsidiary of the Company and who satisfies the eligibility requirements outlined in the Plan and the Committee’s administrative procedures.  This Award may not be registered with the body responsible for regulating offers of securities in the Recipient’s country.  The future value of Common Stock acquired under the Plan is unknown and could increase or decrease.

 

Neither the Plan nor any offering materials related to the Plan may be distributed to the public.  The Common Stock should be resold only on the New York Stock Exchange and should not be resold to the public except in full compliance with all applicable securities laws.

 

13.                               No Employment or Compensation Rights.  This Section applies whether or not the Company has full discretion in the operation of the Plan, and whether or not the Company

 

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could be regarded as being subject to any legal obligations in the operation of the Plan.  It also applies both during and after the period that the Recipient is providing Services, whether the termination of a Recipient’s Service is lawful or unlawful.

 

Nothing in the rules, the operation of the Plan or this Agreement forms part of the contract of employment or employment relationship between a Recipient and the Company or any Subsidiary of the Company.  The rights and obligations arising from the employment relationship between the Recipient and the Company or one of its Subsidiaries are separate from, and are not affected by, the Plan.  This Agreement shall not confer upon the Recipient any right to continue to provide Services, nor shall this Agreement interfere in any way with the Company’s or its Subsidiaries’ right to terminate Recipient’s Service at any time.

 

The grant of rights on a particular basis in any year does not create any right to or expectation of the grant of rights on the same basis, or at all, in any future year.

 

No employee is entitled to participate in the Plan, or to be considered for participation in the Plan, at a particular level or at all.  Participation in any operation of the Plan does not imply any right to participate, or to be considered for participation, in any later operation of the Plan.

 

Without prejudice to a Recipient’s rights under the Plan, subject to and in accordance with the express terms of the applicable rules, no Recipient has any rights in respect of the Company’s exercise or omission to exercise any discretion, or making or omission to make any decision, relating to the right.  Any and all discretion, decisions or omissions relating to the right may operate to the disadvantage of the Recipient, even if this could be regarded as capricious or unreasonable or could be regarded as a breach of any implied term between the Recipient and the Recipient’s employer, including any implied duty of trust and confidence.  Any such implied term is hereby excluded and overridden.

 

No employee has any right to compensation for any loss in relation to the Plan, including:

 

·                  any loss or reduction of any rights or expectations under the Plan in any circumstances or for any reason (including lawful or unlawful termination of Service);

 

·                  any exercise of discretion or a decision taken in relation to the Plan, or any failure to exercise discretion or make a decision; or

 

·                  the operation, suspension, termination or amendment of the Plan.

 

The Options granted pursuant to this Agreement do not constitute part of the Recipient’s wages or remuneration or count as pay or remuneration for pension or other purposes.  If the Recipient experiences a termination of Service, in no circumstances will the Recipient be entitled to any compensation for any loss of any right or benefit or any prospective right or benefit under the Plan or this Agreement that the Recipient might otherwise have enjoyed had such Service continued, whether such compensation is claimed by way of damages for wrongful dismissal, breach of contract or otherwise.

 

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Participation in the Plan is permitted only on the basis that the Recipient accepts all of the terms and conditions of the Plan and this Agreement, as well as the administrative rules established by the Committee.  By participating in the Plan, a Recipient waives all rights under the Plan to the fullest extent permitted by applicable laws, other than the rights subject to and in accordance with the express terms of the applicable rules, in consideration for, and as a condition of, the grant of rights under the Plan.  Neither this Agreement nor the Plan confers on the Recipient any legal or equitable rights (other than those related to the Award) against the Company or any Subsidiary or directly or indirectly gives rise to any cause of action in law or in equity against the Company or any Subsidiary.

 

Nothing in this Plan confers any benefit, right or expectation on a person who is not a Recipient.

 

14.                               Data Privacy.  The Recipient agrees that the Company, with its headquarters located at 13320 Ballantyne Corporate Place, Charlotte, North Carolina, USA 28277, is the data controller in the context of the Plan.

 

The Recipient hereby explicitly and unambiguously consents to the collection, storage, use, processing and transfer, in electronic or other form, of the Recipient’s personal data as described below by and among, as applicable, the Recipient’s employer and any of its affiliates for the exclusive purpose of implementing, administering and managing the Recipient’s participation in the Plan, and the transfer of such data by them to government and other regulatory authorities for the purpose of complying with their legal obligations in connection with the Plan.

 

The Recipient understands that the Recipient’s employer and any of its affiliates may hold certain personal information about the Recipient, including the Recipient’s name, date of birth, date of hire, home and business addresses and telephone numbers, e-mail address, business group/segment, employment status, account identification, and details of all rights and other entitlement to shares or options awarded, cancelled, purchased, vested, unvested or outstanding in the Recipient’s favor pursuant to this Agreement, for the purpose of managing and administering the Plan (“Data”).

 

The Recipient further agrees that Data may be transferred to any third parties assisting in the implementation, administration and management of the Plan, that these recipients may be located in the Recipient’s country or elsewhere, including outside the European Economic Area, and that the Recipient’s country may have less adequate data privacy laws and protections than the Recipient’s country.  The Company has entered into contractual arrangements to ensure the same safeguards for data as required under European Union Law.  A third party to whom the information may be passed is Fidelity Investments and its affiliates.  The Recipient understands that the Recipient may request a list with the names and addresses of any potential recipients of the Data by contacting the Recipient’s local human resources representative.  The Recipient authorizes recipients of the Data to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing the Recipient’s participation in the Plan, including any requisite transfer of such Data as may be required to a broker or other third party with whom shares acquired pursuant to the Plan may be deposited.

 

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The Recipient understands that Data will be held only as long as necessary to implement, administer and manage the Recipient’s participation in the Plan.  The Recipient understands that the Recipient may, at any time, view the Recipient’s Data, request additional information about the storage and processing of Data, require any necessary amendments to the Recipient’s Data or refuse or withdraw the consents herein, in any case without cost, by contacting the Company’s local data privacy administrator.

 

The Recipient understands, however, that refusing or withdrawing the Recipient’s consent, or that refusing to disclose the Data, although it will not have any negative effect on the Recipient’s employment, may affect the Recipient’s ability to participate in the Plan.  For more information on the consequences of the Recipient’s refusal to consent or withdrawal of consent, or refusal to disclose the Data, the Recipient understands that the Recipient may contact the Company’s local data privacy administrator.

 

15.                               Exemption from Code Section 409A.  Notwithstanding any provision of the Plan or this Agreement to the contrary, the Award is intended to be exempt from Code Section 409A.  The Plan and the Agreement will be construed and interpreted in accordance with such intent.  References in the Plan and this Agreement to “termination of Service” and similar terms shall mean a “separation from service” within the meaning of that term under Code Section 409A.

 

16.                               No Fractional Shares.  No fractional shares of Common Stock shall be issued or delivered under this Agreement.  The Committee shall determine whether cash or other property shall be issued or paid in lieu of such fractional shares of Common Stock or whether such fractional shares of Common Stock or any rights thereto shall be forfeited or otherwise eliminated.

 

17.                               Amendment.  The Board may at any time amend, modify or terminate the Plan and this Agreement; provided, however, that no such action of the Board shall adversely affect the Recipient’s rights under this Agreement without the consent of the Recipient.  The Board or the Committee, to the extent it deems necessary or advisable in its sole discretion, reserves the right, but shall not be required, to unilaterally amend or modify this Agreement so that the Award qualifies for exemption from or complies with Code Section 409A; provided, however, that the Board, the Committee and the Company make no representations that the Award shall be exempt from or comply with Code Section 409A and make no undertaking to preclude Code Section 409A from applying to the Award.

 

18.                               Plan Terms and Committee Authority.  This Agreement and the rights of the Recipient hereunder are subject to all of the terms and conditions of the Plan, as it may be amended from time to time, as well as to such rules and regulations as the Committee may adopt for administration of the Plan.  It is expressly understood that the Committee is authorized to administer, construe and make all determinations necessary or appropriate for the administration of the Plan and this Agreement, all of which shall be binding upon the Recipient.  Any inconsistency between this Agreement and the Plan shall be resolved in favor of the Plan.  The Recipient hereby acknowledges receipt of a copy of the Plan and this Agreement.

 

19.                               Severability.  If any provision of this Agreement is determined to be invalid, illegal or unenforceable in any jurisdiction, or as to any person, or would disqualify the Plan or

 

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the Agreement under any law deemed applicable by the Board, such provision shall be construed or deemed amended to conform to applicable laws, or, if it cannot be so construed or deemed amended without, in the Board’s determination, materially altering the intent of the Plan or the Agreement, such provision shall be stricken as to such jurisdiction or person, and the remainder of the Agreement shall remain in full force and effect.

 

20.                               Governing Law and Jurisdiction.  The Plan and this Agreement shall be construed in accordance with and governed by the laws of the State of Delaware, United States of America.  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, United States of America, including the Federal Courts located therein (should Federal jurisdiction exist).  As consideration for and by accepting the Award, the Recipient agrees that the Governing Law and Jurisdiction provisions of this Section 20 shall supersede any Governing Law or similar provisions contained or referenced in any prior equity awards made by the Company to the Recipient, and, accordingly, such prior equity awards shall become subject to the terms and conditions of the Governing Law and Jurisdiction provisions of this Section 20.

 

21.                               Successors.  All obligations of the Company under this Agreement will be binding on any successor to the Company, whether the existence of the successor results from a direct or indirect purchase of all or substantially all of the business or assets of the Company or both, or a merger, spin-off, consolidation or otherwise.

 

22.                               Compensation Recovery.  This Award shall be subject to any compensation recovery 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 the Award, the Recipient agrees that all prior equity awards made by the Company to the Recipient shall become subject to the terms and conditions of the provisions of this Section 22.

 

23.                               Language.  If the Recipient has received this Agreement or any other document related to the Plan translated into a language other than English and the translated version is different than the English version, the English version will control.

 

24.                               Further Assurances.  The Recipient agrees to use his or her reasonable efforts to proceed promptly with the transactions contemplated herein, to fulfill the conditions precedent for the Recipient’s benefit or to cause the same to be fulfilled and to execute such further documents and other papers and perform such further acts as may be reasonably required or desirable to carry out the provisions hereof and the transactions contemplated herein.

 

25.                               Addendums.  The Company may adopt addendums to this Agreement, which shall constitute part of this Agreement.

 

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Exhibit 10.7

 

SPX FLOW

 

SPX FLOW STOCK COMPENSATION PLAN

FORM OF

RESTRICTED STOCK UNIT AGREEMENT
AWARD

 

THIS AGREEMENT (the “Agreement”) is made between SPX FLOW, Inc., a Delaware corporation (the “Company”), and the Recipient pursuant to the SPX FLOW Stock Compensation Plan, as amended from time to time, and related plan documents (the “Plan”) in combination with an SPX FLOW Restricted Stock Unit Summary (the “Award Summary”) to be displayed at the Fidelity website.  The Award Summary, which identifies the person to whom the Restricted Stock Units are granted (the “Recipient”) and specifies the date (the “Award Date”) and other details of this grant of Restricted Stock Units, and the electronic acceptance of this Agreement (which also is to be displayed at the Fidelity website), are incorporated herein by reference.  Capitalized terms used but not otherwise defined herein shall have the meanings assigned to such terms in the Plan.  The parties hereto agree as follows:

 

1.                                      Grant of Restricted Stock Units.  The Company hereby grants to the Recipient the [target] number of Restricted Stock Units specified in the Award Summary (the “Award”), subject to the terms and conditions of the Plan and this Agreement.  [The Restricted Stock Units shall vest based on the Recipient’s performance during any applicable Period of Restriction, as specified in Section 4 and pursuant to the terms of the Award Summary.]  Each Restricted Stock Unit will entitle the Recipient to a share of Common Stock when the Restricted Stock Unit ceases to be subject to any applicable Period of Restriction (as specified in Section 4 below).  The Recipient must accept the Restricted Stock Unit Award within [ninety (90)] days after notification that the Award is available for acceptance and in accordance with the instructions provided by the Company.  The Award automatically will be rescinded upon the action of the Company, in its discretion, if the Award is not accepted within [ninety (90) days] after notification is sent to the Recipient indicating availability for acceptance.  No payment of cash is required for the award of the Restricted Stock Units pursuant to this Agreement.

 

2.                                      Restrictions.  The Restricted Stock Units evidenced by this Award may not be sold, transferred, pledged, assigned, used to exercise options or otherwise alienated or hypothecated, whether voluntarily or involuntarily or by operation of law.  The Recipient shall have no rights in the Common Stock underlying the Restricted Stock Units until the Restricted Stock Units cease to be subject to any applicable Period of Restriction and the delivery of the underlying shares of Common Stock is made, or as otherwise provided in the Plan or this Agreement.  The Recipient shall not have any voting rights with respect to the Restricted Stock Units, nor shall the Recipient receive or be entitled to receive any dividends or dividend equivalents with respect to the Restricted Stock Units.

 

3.                                      Restricted Stock Unit Account.  The Company shall maintain an account (the “Restricted Stock Unit Account” or “Account”) on its books in the name of the Recipient, which shall reflect the number of Restricted Stock Units awarded to the Recipient.

 



 

4.                                      Period of Restriction.

 

[Subject to the provisions of the Plan and this Agreement, unless they are vested or forfeited earlier as described in Section 5, 6, or 7 of this Agreement, as applicable, the Restricted Stock Unit Award shall become vested in/on                                        (“Vesting Date”) subject to the Recipient’s continuous employment through the applicable Vesting Date, provided that the Committee, in its sole discretion, and subject to Section 15, may accelerate the vesting of all or a portion of the Restricted Stock Units, at any time and from time to time.]

 

[Subject to the provisions of the Plan and this Agreement, unless they are vested or forfeited earlier as described in Section 5, 6, or 7 of this Agreement, as applicable, the number of Restricted Stock Units that shall become vested shall be determined                                      .  Such vesting shall occur upon certification by the Board (or appropriate Board committee) that the applicable performance criteria have been met.]

 

Upon vesting, all vested Restricted Stock Units shall cease to be considered Restricted Stock Units, subject to the terms and conditions of the Plan and this Agreement, and except as otherwise provided in the Agreement (including Section 15), the Recipient shall be entitled to receive one share of Common Stock for each vested Restricted Stock Unit in the Recipient’s Account.

 

5.                                      Vesting upon Certain Terminations.

 

(a)                                 Disability or DeathIf, while the Restricted Stock Units are subject to any applicable Period of Restriction, the Recipient experiences a termination of Service by reason of Disability (as defined below) or death, then the portion of the Restricted Stock Units subject to the Period of Restriction shall become fully vested [at the target level of performance (as specified in the Award Summary)] as of the date of such termination of Service without regard to the Period of Restriction set forth in Section 4 of this Agreement.  “Disability” means, in the written opinion of a qualified physician selected by the Company, the Recipient 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.

 

(b)                                 [Retirement.  If, while the Restricted Stock Units are subject to any applicable Period of Restriction, the Recipient experiences a termination of Service by reason of Retirement (as defined below), then                                              . A Recipient will be eligible for “Retirement” treatment for purposes of this Agreement if, at the time of the Recipient’s termination of Service, the Recipient is age 55 or older, has completed five years of Service with the Company or a Subsidiary (provided that the Subsidiary has been directly or indirectly owned by the Company for at least three years), has been an employee of the Company for at least ninety (90) days following the Award Date and

 

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voluntarily elects to retire by providing appropriate notice to the Company’s Human Resources department.]

 

6.                                      Forfeiture upon Termination due to Reason other than [Retirement, ]Disability or Death.  If, while the Restricted Stock Units are subject to any applicable Period of Restriction, the Recipient experiences a termination of Service for any reason other than the Recipient’s [Retirement, ]Disability or death, then the Recipient shall forfeit any Restricted Stock Units that are subject to the Period of Restriction on the date of such termination of Service.

 

7.                                      Termination Without Cause Following Change of Control.  In the event the Recipient is terminated without Cause within two years following a “Change of Control” of the Company as defined in this Section, the Restricted Stock Units subject to any applicable Period of Restriction shall become fully vested [at the Target level of performance (as specified in the Award Summary)] as of the termination without Cause and shall cease to be subject to the Period of Restriction set forth in Section 4 of this Agreement.  A “Change of Control” shall be deemed to have occurred if:

 

(a)                                 Any “Person” (as defined below), excluding for this purpose (i) the Company or any Subsidiary of the Company, (ii) any employee benefit plan of the Company or any Subsidiary of the Company, and (iii) 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 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 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 paragraph (a), the following terms shall have the meanings set forth below:

 

(i)                                    (“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.

 

(ii)                                “Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

 

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(iii)                            A Person shall be deemed the “Beneficial Owner” of and shall be deemed to “beneficially own” any securities:

 

(A)                               which such Person or any of such Person’s Affiliates or Associates beneficially owns, directly or indirectly (determined as provided in Rule 13d-3 under the Exchange Act);

 

(B)                               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

 

(C)                               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 subparagraph (a)(iii)(B)(2), above) or disposing of any securities of the Company.

 

Notwithstanding anything in this “Beneficial Ownership” definition 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.

 

(b)                                 During any period of two (2) consecutive years (not including any period prior to the acceptance of this Agreement), individuals who at the beginning of such two-year period constitute the Board and any new director or directors (except for any director

 

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designated by a person who has entered into an agreement with the Company to effect a transaction described in paragraph (a), above, or paragraph (c), below) whose election by the Board or nomination for election by the Company’s shareholders was approved by a vote of at least two-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

 

(c)                                  The consummation of: (i) a plan of complete liquidation of the Company, (ii) an agreement for the sale or disposition of the Company or all or substantially all of the Company’s assets, (iii) a plan of merger or consolidation of the Company with any other corporation, or (iv) a similar transaction or series of transactions involving the Company (any transaction described in parts (i) through (iv) of this paragraph (c) being referred to as a “Business Combination”), in each case unless after such a Business Combination the shareholders of the 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 of this Agreement to the contrary, a “Change of Control” shall not include any transaction described in paragraph (a) or (c), above, where, in connection with such transaction, the Recipient and/or any party acting in concert with the Recipient substantially increases 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).

 

8.                                      Effect of Change of Control.  In the event of a Change of Control as defined in Section 7 of this Agreement:

 

(a)                                 No cancellation, termination, lapse of Period of Restriction, settlement or other payment shall occur with respect to any Restricted Stock Units if the Committee (as constituted immediately prior to the Change in Control) reasonably determines, in good faith, prior to the Change in Control that the Restricted Stock Units shall be honored or assumed or new rights substituted therefor by an Alternative Award, in accordance with the terms of Section 14.5 of the Plan.

 

(b)                                 Notwithstanding Section 8(a), if an Alternative Award meeting the requirements of Section 14.5 of the Plan cannot be issued, or the Committee so determines at any time prior to the Change of Control, any Restricted Stock Units subject to an applicable Period of Restriction shall become fully vested [at the Target level of performance (as specified in the Award Summary)] and free of any Period of Restriction immediately prior to the Change of Control.

 

(c)                                  Notwithstanding Sections 8(a) and 8(b), and subject to Section 14.4 of the Plan, the Committee (as constituted immediately prior to the Change in Control) may, in its discretion, cancel any Restricted Stock Units in exchange for an amount equal to the

 

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Change of Control Price multiplied by the aggregate number of shares of Common Stock covered by such Award.

 

9.                                      Adjustment in Capitalization.  In the event of any change in the Common Stock of the Company through stock dividends or stock splits, a corporate spin-off, reverse spin-off, split-off or split-up, or recapitalization, merger, consolidation, exchange of shares, or a similar event, the number of Restricted Stock Units subject to this Agreement shall be equitably adjusted by the Committee to preserve the intrinsic value of any Awards granted under the Plan.  Such mandatory adjustment may include a change in any or all of the number and kind of shares of Common Stock or other equity interests underlying the Restricted Stock Units, and/or if reasonably determined in good faith by the Committee prior to such adjustment event, that the Restricted Stock Units (in whole or in part) shall be replaced by Alternative Awards meeting the requirements set forth in Section 14.5 of the Plan.  In addition, the Committee may make provisions for a cash payment to a Recipient in such event.  The number of shares of Common Stock or other equity interests underlying the Restricted Stock Units shall be rounded to the nearest whole number.  Any such adjustment shall be consistent with Code Section 162(m) to the extent the Award is subject to such section of the Code and shall not result in adverse tax consequences to the Recipient under Code Section 409A.

 

10.                               Delivery of Stock Certificates or Cash.  Subject to the requirements of Sections 11 and 12 below, as promptly as practicable after the [Committee certifies that the Period of Restriction has ceased and the] Restricted Stock Units should be settled and paid as otherwise provided in accordance with this Agreement, but in no event later than 60 days after such date, the Company may, if applicable, cause to be issued and delivered to the Recipient, the Recipient’s legal representative, or a brokerage account for the benefit of the Recipient, as the case may be, certificates for the shares of Common Stock that correspond to the vested Restricted Stock Units, or, pursuant to Section 8, a check will be delivered to the last known address of the Recipient.

 

11.                               Tax Withholding.  Regardless of any action the Company, any Subsidiary of the Company, or the Recipient’s employer takes with respect to any or all income tax, social insurance, payroll tax, payment on account or other tax-related withholding (“Tax”) that the Recipient is required to bear pursuant to all applicable laws, the Recipient hereby acknowledges and agrees that the ultimate liability for all Tax is and remains the responsibility of the Recipient.

 

Prior to receipt of any shares of Common Stock that correspond to settlement of vested Restricted Stock Units, the Recipient shall pay or make adequate arrangements satisfactory to the Company and/or any Subsidiary of the Company to satisfy all withholding and payment obligations of the Company and/or any Subsidiary of the Company.  In this regard, the Recipient authorizes the Company and/or any Subsidiary of the Company to withhold all applicable Tax legally payable by the Recipient from the Recipient’s wages or other cash compensation paid to the Recipient by the Company and/or any Subsidiary of the Company or from the proceeds of the sale of shares of Common Stock.  Alternatively, or in addition, the Company may sell or arrange for the sale of Common Stock that the Recipient is due to acquire to satisfy the minimum withholding obligation for Tax and/or withhold any Common Stock.  Finally, the Recipient agrees to pay the Company or any Subsidiary of the Company any amount of any Tax that the Company or any Subsidiary of the Company may be required to withhold as a result of the

 

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Recipient’s participation in the Plan that cannot be satisfied by the means previously described.  The Company may refuse to deliver Common Stock if the Recipient fails to comply with its obligations in connection with the tax as described in this section.

 

The Company advises the Recipient to consult a lawyer or accountant with respect to the tax consequences for the Recipient under the Plan.

 

The Company and/or any Subsidiary of the Company: (a) make no representations or undertakings regarding the tax treatment in connection with the Plan; and (b) do not commit to structure the Plan to reduce or eliminate the Recipient’s liability for Tax.

 

12.                               Securities Laws.  This Award is a private offer that may be accepted only by a Recipient who is an employee of the Company or a Subsidiary of the Company and who satisfies the eligibility requirements outlined in the Plan and the Committee’s administrative procedures.  This Award may not be registered with the body responsible for regulating offers of securities in the Recipient’s country.  The future value of Common Stock acquired under the Plan is unknown and could increase or decrease.

 

Neither the Plan nor any offering materials related to the Plan may be distributed to the public.  The Common Stock should be resold only on the New York Stock Exchange and should not be resold to the public except in full compliance with all applicable securities laws.

 

The Addendum to this Agreement contains country-specific provisions regarding the securities laws in Denmark, France, Singapore and the United States.

 

13.                               No Employment or Compensation Rights.  This Section applies whether or not the Company has full discretion in the operation of the Plan, and whether or not the Company could be regarded as being subject to any legal obligations in the operation of the Plan.  It also applies both during and after the period that the Recipient is providing Services, whether the termination of a Recipient’s Service is lawful or unlawful.

 

Nothing in the rules, the operation of the Plan or this Agreement forms part of the contract of employment or employment relationship between the Recipient and the Company or any Subsidiary of the Company.  The rights and obligations arising from the employment relationship between the Recipient and the Company or one of its Subsidiaries are separate from, and are not affected by, the Plan.  This Agreement shall not confer upon the Recipient any right to continue to provide Services, nor shall this Agreement interfere in any way with the Company’s or its Subsidiaries’ right to terminate Recipient’s Service at any time.

 

The grant of rights on a particular basis in any year does not create any right to or expectation of the grant of rights on the same basis, or at all, in any future year.

 

No employee is entitled to participate in the Plan, or to be considered for participation in the Plan, at a particular level or at all.  Participation in any operation of the Plan does not imply any right to participate, or to be considered for participation, in any later operation of the Plan.

 

Without prejudice to a Recipient’s rights under the Plan, subject to and in accordance with the express terms of the applicable rules, no Recipient has any rights in respect of the

 

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Company’s exercise or omission to exercise any discretion, or making or omission to make any decision, relating to the right.  Any and all discretion, decisions or omissions relating to the right may operate to the disadvantage of the Recipient, even if this could be regarded as capricious or unreasonable or could be regarded as a breach of any implied term between the Recipient and the Recipient’s employer, including any implied duty of trust and confidence.  Any such implied term is hereby excluded and overridden.

 

No employee has any right to compensation for any loss in relation to the Plan, including:

 

·                  any loss or reduction of any rights or expectations under the Plan in any circumstances or for any reason (including lawful or unlawful termination of Service);

 

·                  any exercise of discretion or a decision taken in relation to the Plan, or any failure to exercise discretion or make a decision; or

 

·                  the operation, suspension, termination or amendment of the Plan.

 

The Restricted Stock Units granted pursuant to this Agreement do not constitute part of the Recipient’s wages or remuneration or count as pay or remuneration for pension or other purposes.  If the Recipient experiences a termination of Service, in no circumstances will the Recipient be entitled to any compensation for any loss of any right or benefit or any prospective right or benefit under the Plan or this Agreement that the Recipient might otherwise have enjoyed had such Service continued, whether such compensation is claimed by way of damages for wrongful dismissal, breach of contract or otherwise.

 

Participation in the Plan is permitted only on the basis that the Recipient accepts all of the terms and conditions of the Plan and this Agreement, as well as the administrative rules established by the Committee.  By participating in the Plan, a Recipient waives all rights under the Plan to the fullest extent permitted by applicable laws, other than the rights subject to and in accordance with the express terms of the applicable rules, in consideration for, and as a condition of, the grant of rights under the Plan.  Neither this Agreement nor the Plan confers on the Recipient any legal or equitable rights (other than those related to the Restricted Stock Unit Award) against the Company or any Subsidiary or directly or indirectly gives rise to any cause of action in law or in equity against the Company or any Subsidiary.

 

Nothing in this Plan confers any benefit, right or expectation on a person who is not a Recipient.

 

14.                               Data Privacy.  The Recipient agrees that the Company, with its headquarters located at 13320 Ballantyne Corporate Place, Charlotte, North Carolina, USA 28277, is the data controller in the context of the Plan.

 

The Recipient hereby explicitly and unambiguously consents to the collection, storage, use, processing and transfer, in electronic or other form, of the Recipient’s personal data as described below by and among, as applicable, the Recipient’s employer and any of its affiliates for the exclusive purpose of implementing, administering and managing the Recipient’s

 

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participation in the Plan, and the transfer of such data by them to government and other regulatory authorities for the purpose of complying with their legal obligations in connection with the Plan.

 

The Recipient understands that the Recipient’s employer and any of its affiliates may hold certain personal information about him or her, including the Recipient’s name, date of birth, date of hire, home and business addresses and telephone numbers, e-mail address, business group/segment, employment status, account identification, and details of all rights and other entitlement to shares or units awarded, cancelled, purchased, vested, unvested or outstanding in the Recipient’s favor pursuant to this Agreement, for the purpose of managing and administering the Plan (“Data”).

 

The Recipient further agrees that Data may be transferred to any third parties assisting in the implementation, administration and management of the Plan, that these recipients may be located in the Recipient’s country or elsewhere, including outside the European Economic Area, and that the Recipient’s country may have less adequate data privacy laws and protections than the Recipient’s country.  The Company has entered into contractual arrangements to ensure the same safeguards for data as required under European Union Law.  A third party to whom the information may be passed is Fidelity Investments and its affiliates.  The Recipient understands that the Recipient may request a list with the names and addresses of any potential recipients of the Data by contacting the Recipient’s local human resources representative.  The Recipient authorizes recipients of the Data to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing the Recipient’s participation in the Plan, including any requisite transfer of such Data as may be required to a broker or other third party with whom shares acquired pursuant to the Plan may be deposited.

 

The Recipient understands that Data will be held only as long as necessary to implement, administer and manage the Recipient’s participation in the Plan.  The Recipient understands that the Recipient may, at any time, view the Recipient’s Data, request additional information about the storage and processing of Data, require any necessary amendments to the Recipient’s Data or refuse or withdraw the consents herein, in any case without cost, by contacting the Company’s local data privacy administrator.

 

The Recipient understands, however, that refusing or withdrawing the Recipient’s consent, or that refusing to disclose the Data, although it will not have any negative effect on the Recipient’s employment, may affect the Recipient’s ability to participate in the Plan.  For more information on the consequences of the Recipient’s refusal to consent or withdrawal of consent, or refusal to disclose the Data, the Recipient understands that the Recipient may contact the Company’s local data privacy administrator.

 

The Addendum to this Agreement contains additional provisions regarding the data privacy laws in specific countries.

 

15.                               Compliance with Code Section 409A.  Notwithstanding any provision of the Plan or this Agreement to the contrary, the Award is intended to be exempt from or, in the alternative, comply with Code Section 409A and the interpretive guidance thereunder, including the

 

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exceptions for stock rights and short-term deferrals.  The Plan and the Agreement will be construed and interpreted in accordance with such intent.  References in the Plan and this Agreement to “termination of Service” and similar terms shall mean a “separation from service” within the meaning of that term under Code Section 409A.  Any payment or distribution that is to be made to a Recipient who is a “specified employee” of the Company within the meaning of that term under Code Section 409A and as determined by the Committee, on account of a “separation from service” under Code Section 409A, may not be made before the date which is six months after the date of such “separation from service,” unless the payment or distribution is exempt from the application of Code Section 409A by reason of the short-term deferral exemption or otherwise.

 

16.                               No Fractional Shares.  No fractional shares of Common Stock shall be issued or delivered under this Agreement.  The Committee shall determine whether cash or other property shall be issued or paid in lieu of such fractional shares of Common Stock or whether such fractional shares of Common Stock or any rights thereto shall be forfeited or otherwise eliminated.

 

17.                               Amendment.  The Board may at any time amend, modify or terminate the Plan and this Agreement; provided, however, that no such action of the Board shall adversely affect the Recipient’s rights under this Agreement without the consent of the Recipient.  The Board or the Committee, to the extent it deems necessary or advisable in its sole discretion, reserves the right, but shall not be required, to unilaterally amend or modify this Agreement so that the Award qualifies for exemption from or complies with Code Section 409A; provided, however, that the Board, the Committee and the Company make no representations that the Award shall be exempt from or comply with Code Section 409A and make no undertaking to preclude Code Section 409A from applying to the Award.

 

18.                               Plan Terms and Committee Authority.  This Agreement and the rights of the Recipient hereunder are subject to all of the terms and conditions of the Plan, as it may be amended from time to time, as well as to such rules and regulations as the Committee may adopt for administration of the Plan.  It is expressly understood that the Committee is authorized to administer, construe and make all determinations necessary or appropriate for the administration of the Plan and this Agreement, all of which shall be binding upon the Recipient.  Any inconsistency between this Agreement and the Plan shall be resolved in favor of the Plan.  The Recipient hereby acknowledges receipt of a copy of the Plan and this Agreement.

 

19.                               Severability.  If any provision of this Agreement is determined to be invalid, illegal or unenforceable in any jurisdiction, or as to any person, or would disqualify the Plan or the Agreement under any law deemed applicable by the Board, such provision shall be construed or deemed amended to conform to applicable laws, or, if it cannot be so construed or deemed amended without, in the Board’s determination, materially altering the intent of the Plan or the Agreement, such provision shall be stricken as to such jurisdiction or person, and the remainder of the Agreement shall remain in full force and effect.

 

20.                               Governing Law and Jurisdiction.  The Plan and this Agreement shall be construed in accordance with and governed by the laws of the State of Delaware, United States of America.  The jurisdiction and venue for any disputes arising under, or any action brought to enforce (or

 

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otherwise relating to), the Plan will be exclusively in the courts in the State of North Carolina, County of Mecklenburg, United States of America, including the Federal Courts located therein (should Federal jurisdiction exist).  As consideration for and by accepting the Award, the Recipient agrees that the Governing Law and Jurisdiction provisions of this Section 20 shall supersede any Governing Law or similar provisions contained or referenced in any prior equity awards made by the Company to the Recipient, and, accordingly, such prior equity awards shall become subject to the terms and conditions of the Governing Law and Jurisdiction provisions of this Section 20.

 

21.                               Successors.  All obligations of the Company under this Agreement will be binding on any successor to the Company, whether the existence of the successor results from a direct or indirect purchase of all or substantially all of the business or assets of the Company or both, or a merger, spin-off, consolidation or otherwise.

 

22.                               Compensation Recovery.  This Award shall be subject to any compensation recovery 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 the Award, the Recipient agrees that all prior equity awards made by the Company to the Recipient shall become subject to the terms and conditions of the provisions of this Section 22.

 

23.                               Language.  If the Recipient has received this Agreement or any other document related to the Plan translated into a language other than English and the translated version is different than the English version, the English version will control.

 

24.                               Further Assurances.  The Recipient agrees to use his or her reasonable efforts to proceed promptly with the transactions contemplated herein, to fulfill the conditions precedent for the Recipient’s benefit or to cause the same to be fulfilled and to execute such further documents and other papers and perform such further acts as may be reasonably required or desirable to carry out the provisions hereof and the transactions contemplated herein.

 

25.                               Addendums.  The Company may adopt addendums to this Agreement, which shall constitute part of this Agreement.  Notwithstanding any provisions in this Agreement, the Restricted Stock Units will be subject to any country-specific terms set forth in an Addendum for the Recipient’s country of residence or employment.  Moreover, if the Recipient relocates to one of the countries included in the Addendum, the terms for such country will apply to the Recipient, to the extent the Company determines that the application of such terms is necessary or advisable.

 

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Exhibit 10.8

 

SPX FLOW

 

SPX FLOW STOCK COMPENSATION PLAN

FORM OF

RESTRICTED STOCK AGREEMENT
AWARD

 

THIS AGREEMENT (the “Agreement”) is made between SPX FLOW, Inc., a Delaware corporation (the “Company”), and the Recipient pursuant to the SPX FLOW Stock Compensation Plan, as amended from time to time, and related plan documents (the “Plan”) in combination with an SPX FLOW Restricted Stock Summary (the “Award Summary”) to be displayed at the Fidelity website.  The Award Summary, which identifies the person to whom the shares of Restricted Stock are granted (the “Recipient”) and specifies the date (the “Award Date”) and other details of this grant of Restricted Stock, and the electronic acceptance of this Agreement (which also is to be displayed at the Fidelity website), are incorporated herein by reference.  Capitalized terms used but not otherwise defined herein shall have the meanings assigned to such terms in the Plan.  The parties hereto agree as follows:

 

1.                                      Grant of Restricted Stock.  The Company hereby grants to the Recipient the [target] number of shares of Restricted Stock specified in the Award Summary (the “Award”), subject to the terms and conditions of the Plan and this Agreement.  [The Restricted Stock shall vest based on the Recipient’s performance during the Period of Restriction, as specified in Section 4 and pursuant to the terms of the Award Summary.]  [The Restricted Stock is divided into        separate tranches, for purposes of determining when the Period of Restriction ends with respect to the Restricted Stock.]  Each share of Restricted Stock will entitle the Recipient to a share of Common Stock when the share of Restricted Stock ceases to be subject to a Period of Restriction (as specified in Section 4(a) below).  The Recipient must accept the Restricted Stock Award within [ninety (90) days] after notification that the Award is available for acceptance and in accordance with the instructions provided by the Company.  The Award automatically will be rescinded upon the action of the Company, in its discretion, if the Award is not accepted within [ninety (90) days] after notification is sent to the Recipient indicating availability for acceptance.  No payment of cash is required for the award of the Restricted Stock pursuant to this Agreement.

 

2.                                      Restrictions.  The Restricted Stock evidenced by this Award may not be sold, transferred, pledged, assigned, used to exercise options or otherwise alienated or hypothecated, whether voluntarily or involuntarily or by operation of law, until the Restricted Stock ceases to be subject to any applicable Period of Restriction specified in Section 4 below or as otherwise provided in the Plan or this Agreement.  Except for such restrictions, and the provisions relating to dividends paid during the Period of Restriction as described in Section 9, the Recipient will be treated as the owner of the shares of Restricted Stock and shall have all of the rights of a shareholder, including, but not limited to, the right to vote such shares.

 

3.                                      Restricted Stock Certificates.  The Award may be evidenced in such manner as the Committee shall determine.  The stock certificate(s) representing the Restricted Stock may be issued or held in book entry form promptly following the acceptance of this Agreement.  If a stock certificate is issued, it shall be delivered to the Secretary of the Company or such other

 



 

custodian as may be designated by the Company, to be held until the applicable Period of Restriction ends or until the Restricted Stock is forfeited.  The certificates representing shares of Restricted Stock granted pursuant to this Agreement, if issued, shall bear a legend in substantially the form set forth below:

 

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 SPX FLOW Stock Compensation Plan, as adopted effective [·], and as further amended from time to time, rules and administration adopted pursuant to such Plan, and a Restricted Stock award agreement with an Award Date as specified in the Recipient’s Award Summary.  A copy of the Plan, such rules and such Restricted Stock award agreement may be obtained from the Secretary of SPX FLOW, Inc.

 

4.                                      Period of Restriction.  Subject to the provisions of the Plan and this Agreement, unless vested or forfeited earlier as described in Section 5, 6, or 7 of this Agreement, as applicable, [the number of shares] [each tranche] of Restricted Stock that shall become vested and freely transferable shall be determined                                                       . Such vesting shall occur upon certification by the Board (or appropriate Board committee) that the applicable performance criteria or targets have been met.

 

Upon vesting, all vested shares cease to be considered Restricted Stock, subject to the terms and conditions of the Plan and this Agreement, and the Recipient shall be entitled to have the legend removed from his or her Common Stock certificate(s), if applicable.

 

5.                                      Vesting upon Certain Terminations.

 

(a)                                 Disability or Death.  If, while any shares of Restricted Stock are subject to any applicable Period of Restriction, the Recipient experiences a termination of Service by reason of Disability (as defined below) or death, such shares of Restricted Stock shall become fully vested [at the Target level of performance (as specified in the Award Summary)] and shall cease to be subject to any Period of Restriction as of the date of such termination of Service, regardless of whether such termination of Service occurs prior to the Board (or Board committee) certification described in Section 4 above.  “Disability” means, in the written opinion of a qualified physician selected by the Company, the Recipient 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.

 

(b)                                 [Retirement.  If, while any shares of Restricted Stock are subject to any applicable Period of Restriction, the Recipient experiences a termination of Service by reason of Retirement (as defined below) and the termination of Service occurs prior to Board (or Board committee) certification described in Section 4 above, then such Restricted Stock shall vest only if and to the extent (and at the time that) the specified

 

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performance goals are achieved and vesting occurs for Recipients who remain actively employed.  The Recipient will be eligible for “Retirement” treatment for purposes of this Agreement if, at the time of the Recipient’s termination of Service, the Recipient is age 55 or older, has completed five years of Service with the Company or a Subsidiary (provided that the Subsidiary has been directly or indirectly owned by the Company for at least three years), has been an employee of the Company for at least ninety (90) days following the Award Date and voluntarily elects to retire by providing appropriate notice to the Company’s Human Resources department.]

 

6.                                      Forfeiture upon Termination due to Reason other than [Retirement, ]Disability or Death.  If, while any shares of Restricted Stock are subject to any applicable Period of Restriction, the Recipient experiences a termination of Service for any reason other than the Recipient’s [Retirement, ]Disability or death, then the Recipient shall forfeit any such shares of Restricted Stock on the date of such termination of Service.

 

7.                                      Termination Without Cause Following Change of Control.  In the event the Recipient is terminated without Cause within two years following a “Change of Control” of the Company as defined in this Section, then any shares of outstanding Restricted Stock shall become fully vested [at the Target level of performance (as specified in the Award Summary)] as of the termination without Cause and shall cease to be subject to any applicable Period of Restriction, regardless of whether such Change in Control occurs prior to the Board (or Board committee) certification described in Section 4 above.  A “Change of Control” shall be deemed to have occurred if:

 

(a)                                 Any “Person” (as defined below), excluding for this purpose (i) the Company or any Subsidiary of the Company, (ii) any employee benefit plan of the Company or any Subsidiary of the Company, and (iii) 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 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 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 paragraph (a), the following terms shall have the meanings set forth below:

 

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(i)                                    “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.

 

(ii)                                “Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

 

(iii)                            A Person shall be deemed the “Beneficial Owner” of and shall be deemed to “beneficially own” any securities:

 

(A)                               which such Person or any of such Person’s Affiliates or Associates beneficially owns, directly or indirectly (determined as provided in Rule 13d-3 under the Exchange Act);

 

(B)                               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

 

(C)                               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 subparagraph (a)(iii)(B)(2), above) or disposing of any securities of the Company.

 

Notwithstanding anything in this “Beneficial Ownership” definition to the contrary, the phrase “then outstanding,” when used with reference to a Person’s

 

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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.

 

(b)                                 During any period of two (2) consecutive years (not including any period prior to the acceptance of this Agreement), individuals who at the beginning of such two-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 paragraph (a), above, or paragraph (c), below) whose election by the Board or nomination for election by the Company’s shareholders was approved by a vote of at least two-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

 

(c)                                  The consummation of: (i) a plan of complete liquidation of the Company, (ii) an agreement for the sale or disposition of the Company or all or substantially all of the Company’s assets, (iii) a plan of merger or consolidation of the Company with any other corporation, or (iv) a similar transaction or series of transactions involving the Company (any transaction described in parts (i) through (iv) of this paragraph (c) being referred to as a “Business Combination”), in each case unless after such a Business Combination the shareholders of the 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 of this Agreement to the contrary, a “Change of Control” shall not include any transaction described in paragraph (a) or (c), above, where, in connection with such transaction, the Recipient and/or any party acting in concert with the Recipient substantially increases 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).

 

8.                                      Effect of Change of Control.  In the event of a Change of Control as defined in Section 7 of this Agreement:

 

(a)                                 No cancellation, termination, lapse of Period of Restriction, settlement or other payment shall occur with respect to any Restricted Stock if the Committee (as constituted immediately prior to the Change in Control) reasonably determines, in good faith, prior to the Change in Control that the Restricted Stock shall be honored or assumed or new rights substituted therefor by an Alternative Award, in accordance with the terms of Section 14.5 of the Plan.

 

(b)                                 Notwithstanding Section 8(a), if an Alternative Award meeting the requirements of Section 14.5 of the Plan cannot be issued, or the Committee so

 

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determines at any time prior to the Change of Control, any Restricted Stock subject to an applicable Period of Restriction shall become fully vested [at the Target level of performance (as specified in the Award Summary)] and free of any Period of Restriction immediately prior to the Change of Control.

 

9.                                      Dividends Paid During Period of Restriction.  If cash dividends are paid with respect to any shares of Restricted Stock, such dividends shall be deposited in the Recipient’s name in an escrow or similar account maintained by the Company for this purpose.  Such dividends shall, except as noted below, be subject to the same Period of Restriction as the shares of Restricted Stock to which they relate.  The dividends shall be paid to the Recipient in cash (subject to all applicable tax withholding), without adjustment for interest, as soon as administratively practicable after the date the related shares of Restricted Stock cease to be subject to any Period of Restriction (or, if earlier, the date the related shares of Restricted Stock cease to be subject to a substantial risk of forfeiture).  If the related shares of Restricted Stock are forfeited, then any dividends related to such shares shall also be forfeited on the same date.  If any dividends on Restricted Stock are paid in shares of Common Stock, and subject to other applicable provisions of the Plan and this Agreement, the dividend shares shall be subject to the same restrictions as the shares of Restricted Stock with respect to which they were paid, and shall vest or be forfeited in the same manner as the underlying Restricted Stock.

 

10.                               Adjustment in Capitalization.  In the event of any change in the Common Stock of the Company through stock dividends or stock splits, a corporate spin-off, reverse spin-off, split-off or split-up, or recapitalization, merger, consolidation, exchange of shares, or a similar event, the number of shares of Restricted Stock subject to this Agreement shall be equitably adjusted by the Committee to preserve the intrinsic value of any Awards granted under the Plan.  Such mandatory adjustment may include a change in any or all of the number and kind of shares of Common Stock or other equity interests underlying the Restricted Stock, and/or if reasonably determined in good faith by the Committee prior to such adjustment event, that the Restricted Stock (in whole or in part) shall be replaced by Alternative Awards meeting the requirements set forth in Section 14.5 of the Plan.  In addition, the Committee may make provisions for a cash payment to the Recipient in such event.  The number of shares of Common Stock or other equity interests underlying the Restricted Stock shall be rounded to the nearest whole number.  Any such adjustment shall be consistent with Code Section 162(m) to the extent the Award is subject to such section of the Code and shall not result in adverse tax consequences to the Recipient under Code Section 409A.

 

11.                               Delivery of Stock Certificates.  Subject to the requirements of Sections 12 and 13 below, as promptly as practicable after the shares of Restricted Stock cease to be subject to the applicable Period of Restriction in accordance with this Agreement, the Company may, if applicable, cause to be issued and delivered to the Recipient, the Recipient’s legal representative, or a brokerage account for the benefit of the Recipient, as the case may be, certificates for the shares of Common Stock that correspond to the vested shares of Restricted Stock, or, pursuant to Section 8, a check will be delivered to the last known address of the Recipient.

 

12.                               Tax Withholding.  Regardless of any action the Company, any Subsidiary of the Company, or the Recipient’s employer takes with respect to any or all income tax, social security, payroll tax, payment on account or other tax-related withholding (“Tax”) that the Recipient is

 

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required to bear pursuant to all applicable laws, the Recipient hereby acknowledges and agrees that the ultimate liability for all Tax is and remains the responsibility of the Recipient.

 

Prior to receipt of any shares of Common Stock that correspond to Restricted Stock that vests in accordance with this Agreement, the Recipient shall pay or make adequate arrangements satisfactory to the Company and/or any Subsidiary of the Company to satisfy all withholding and payment obligations of the Company and/or any Subsidiary of the Company.  In this regard, the Recipient authorizes the Company and/or any Subsidiary of the Company to withhold all applicable Tax legally payable by the Recipient from the Recipient’s wages or other cash compensation paid to the Recipient by the Company and/or any Subsidiary of the Company or from the proceeds of the sale of shares of Common Stock.  Alternatively, or in addition, the Company may sell or arrange for the sale of Common Stock that the Recipient is due to acquire to satisfy the minimum withholding obligation for Tax and/or withhold any Common Stock.  Finally, the Recipient agrees to pay the Company or any Subsidiary of the Company any amount of any Tax that the Company or any Subsidiary of the Company may be required to withhold as a result of the Recipient’s participation in the Plan that cannot be satisfied by the means previously described.  The Company may refuse to deliver Common Stock if the Recipient fails to comply with its obligations in connection with the tax as described in this section.

 

The Company advises the Recipient to consult a lawyer or accountant with respect to the tax consequences for the Recipient under the Plan.

 

The Company and/or any Subsidiary of the Company: (a) make no representations or undertakings regarding the tax treatment in connection with the Plan; and (b) do not commit to structure the Plan to reduce or eliminate the Recipient’s liability for Tax.

 

13.                               Securities Laws.  This Award is a private offer that may be accepted only by the Recipient who is an employee of the Company or a Subsidiary of the Company and who satisfies the eligibility requirements outlined in the Plan and the Committee’s administrative procedures.  If a registration statement under the Securities Act of 1933, as amended, is not in effect with respect to the shares of Common Stock to be issued pursuant to this Agreement, the Recipient hereby represents that the Recipient is acquiring the shares of Common Stock for investment and with no present intention of selling or transferring them and that the Recipient will not sell or otherwise transfer the shares except in compliance with all applicable securities laws and requirements of any stock exchange on which the shares of Common Stock may then be listed.

 

14.                               Exemption from Code Section 409A.  Notwithstanding any provision of the Plan or this Agreement to the contrary, the Award is intended to be exempt from Code Section 409A and the interpretive guidance thereunder.  The Plan and the Agreement will be construed and interpreted in accordance with such intent.  References in the Plan and this Agreement to “termination of Service” and similar terms shall mean a “separation from service” within the meaning of that term under Code Section 409A.

 

15.                               No Employment or Compensation Rights.  Participation in the Plan is permitted only on the basis that the Recipient accepts all of the terms and conditions of the Plan and this Agreement, as well as the administrative rules established by the Committee.  This Agreement shall not confer upon the Recipient any right to continue to provide Services, nor shall this

 

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Agreement interfere in any way with the Company’s or its Subsidiaries’ right to terminate the Recipient’s Service at any time.  Neither the Plan nor this Agreement forms any part of any contract of employment between the Company or any Subsidiary and the Recipient, and neither the Plan nor this Agreement confers on the Recipient any legal or equitable rights (other than those related to the Restricted Stock Award) against the Company or any Subsidiary or directly or indirectly gives rise to any cause of action in law or in equity against the Company or any Subsidiary.

 

The Restricted Stock granted pursuant to this Agreement does not constitute part of the Recipient’s wages or remuneration or count as pay or remuneration for pension or other purposes.  If the Recipient experiences a termination of Service, in no circumstances will the Recipient be entitled to any compensation for any loss of any right or benefit or any prospective right or benefit under the Plan or this Agreement that the Recipient might otherwise have enjoyed had such Service continued, whether such compensation is claimed by way of damages for wrongful dismissal, breach of contract or otherwise.

 

16.                               No Fractional Shares.  No fractional shares of Common Stock shall be issued or delivered under this Agreement.  The Committee shall determine whether cash or other property shall be issued or paid in lieu of such fractional shares of Common Stock or whether such fractional shares of Common Stock or any rights thereto shall be forfeited or otherwise eliminated.

 

17.                               Plan Terms and Committee Authority.  This Agreement and the rights of the Recipient hereunder are subject to all of the terms and conditions of the Plan, as it may be amended from time to time, as well as to such rules and regulations as the Committee may adopt for administration of the Plan.  It is expressly understood that the Committee is authorized to administer, construe and make all determinations necessary or appropriate for the administration of the Plan and this Agreement, all of which shall be binding upon the Recipient.  Any inconsistency between this Agreement and the Plan shall be resolved in favor of the Plan.  The Recipient hereby acknowledges receipt of a copy of the Plan and this Agreement.

 

18.                               Amendment.  The Board may at any time amend, modify or terminate the Plan and this Agreement; provided, however, that no such action of the Board shall adversely affect the Recipient’s rights under this Agreement without the consent of the Recipient.  The Board or the Committee, to the extent it deems necessary or advisable in its sole discretion, reserves the right, but shall not be required, to unilaterally amend or modify this Agreement so that the Award qualifies for exemption from or complies with Code Section 409A; provided, however, that the Board, the Committee and the Company make no representations that the Award shall be exempt from or comply with Code Section 409A and make no undertaking to preclude Code Section 409A from applying to the Award.

 

19.                               Severability.  If any provision of this Agreement is determined to be invalid, illegal or unenforceable in any jurisdiction, or as to any person, or would disqualify the Plan or the Agreement under any law deemed applicable by the Board, such provision shall be construed or deemed amended to conform to applicable laws, or, if it cannot be so construed or deemed amended without, in the Board’s determination, materially altering the intent of the Plan or the

 

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Agreement, such provision shall be stricken as to such jurisdiction or person, and the remainder of the Agreement shall remain in full force and effect.

 

20.                               Governing Law and Jurisdiction.  The Plan and this Agreement shall be construed in accordance with and governed by the laws of the State of Delaware, United States of America.  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, United States of America, including the Federal Courts located therein (should Federal jurisdiction exist).  As consideration for and by accepting the Award, the Recipient agrees that the Governing Law and Jurisdiction provisions of this Section 20 shall supersede any Governing Law or similar provisions contained or referenced in any prior equity awards made by the Company to the Recipient, and, accordingly, such prior equity awards shall become subject to the terms and conditions of the Governing Law and Jurisdiction provisions of this Section 20.

 

21.                               Successors.  All obligations of the Company under this Agreement will be binding on any successor to the Company, whether the existence of the successor results from a direct or indirect purchase of all or substantially all of the business or assets of the Company or both, or a merger, spin-off, consolidation or otherwise.

 

22.                               Compensation Recovery.  This Award shall be subject to any compensation recovery 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 the Award, the Recipient agrees that all prior equity awards made by the Company to the Recipient shall become subject to the terms and conditions of the provisions of this Section 22.

 

23.                               Data Privacy.  The Recipient agrees that the Company, with its headquarters located at 13320 Ballantyne Corporate Place, Charlotte, North Carolina, USA 28277, is the data controller in the context of the Plan.  To the extent applicable, the Recipient agrees that this Section 23 shall apply to data as described below.

 

The Recipient hereby explicitly and unambiguously consents to the collection, storage, use, processing and transfer, in electronic or other form, of the Recipient’s personal data as described below by and among, as applicable, the Recipient’s employer and any of its affiliates for the exclusive purpose of implementing, administering and managing the Recipient’s participation in the Plan, and the transfer of such data by them to government and other regulatory authorities for the purpose of complying with their legal obligations in connection with the Plan.

 

The Recipient understands that the Recipient’s employer and any of its affiliates may hold certain personal information about him or her, including the Recipient’s name, date of birth, date of hire, home and business addresses and telephone numbers, e-mail address, business group/segment, employment status, account identification, and details of all rights and other entitlement to shares awarded, cancelled, purchased, vested, unvested or outstanding in the Recipient’s favor pursuant to this Agreement, for the purpose of managing and administering the Plan (“Data”).

 

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The Recipient further agrees that Data may be transferred to any third parties assisting in the implementation, administration and management of the Plan, that these recipients may be located in the Recipient’s country or elsewhere, including outside the European Economic Area, and that the Recipient’s country may have less adequate data privacy laws and protections than the Recipient’s country.  The Company has entered into contractual arrangements to ensure the same safeguards for data as required under European Union Law.  A third party to whom the information may be passed is Fidelity Investments and its affiliates.  The Recipient understands that the Recipient may request a list with the names and addresses of any potential recipients of the Data by contacting the Recipient’s local human resources representative.  The Recipient authorizes recipients of the Data to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing the Recipient’s participation in the Plan, including any requisite transfer of such Data as may be required to a broker or other third party with whom shares acquired pursuant to the Plan may be deposited.

 

The Recipient understands that Data will be held only as long as necessary to implement, administer and manage the Recipient’s participation in the Plan.  The Recipient understands that the Recipient may, at any time, view the Recipient’s Data, request additional information about the storage and processing of Data, require any necessary amendments to the Recipient’s Data or refuse or withdraw the consents herein, in any case without cost, by contacting the Company’s local data privacy administrator.

 

The Recipient understands, however, that refusing or withdrawing the Recipient’s consent, or that refusing to disclose the Data, although it will not have any negative effect on the Recipient’s employment, may affect the Recipient’s ability to participate in the Plan.  For more information on the consequences of the Recipient’s refusal to consent or withdrawal of consent, or refusal to disclose the Data, the Recipient understands that the Recipient may contact the Company’s local data privacy administrator.

 

24.                               Further Assurances.  The Recipient agrees to use his or her reasonable efforts to proceed promptly with the transactions contemplated herein, to fulfill the conditions precedent for the Recipient’s benefit or to cause the same to be fulfilled and to execute such further documents and other papers and perform such further acts as may be reasonably required or desirable to carry out the provisions hereof and the transactions contemplated herein.

 

25.                               Addendums.  The Company may adopt addendums to this Agreement, which shall constitute part of this Agreement.

 

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Exhibit 10.9

 

SPX FLOW
EXECUTIVE ANNUAL BONUS PLAN

 

SPX FLOW, Inc., a Delaware corporation (the “Company”), adopts the SPX FLOW Executive Annual Bonus Plan (the “Plan”) for the purpose of enhancing the Company’s ability to attract and retain highly qualified executives and to provide additional financial incentives to such executives to promote the success of the Company and its subsidiaries.  Remuneration payable under the Plan is intended to constitute “qualified performance-based compensation” for purposes of Section 162(m) of the Internal Revenue Code of 1986, as amended, and Section 1.162-27 of the Treasury Regulations promulgated thereunder, and the Plan shall be construed consistently with such intention.

 

1.                                      Definitions.  As used herein, the following terms shall have the respective meanings indicated:

 

(a)                                 “Board” shall mean the Board of Directors of the Company.

 

(b)                                 “Code” shall mean the Internal Revenue Code of 1986, as amended, or the corresponding provisions of any subsequent federal internal revenue law.

 

(c)                                  “Committee” shall mean the Compensation Committee of the Board or such other committee appointed by the Board to administer the Plan that is comprised of not less than two directors of the Company, each of whom shall qualify in all respects as an “outside director” within the meaning of Section 162(m) of the Code and Section 1.162-27(e)(3) of the Regulations.

 

(d)                                 “Company” shall mean SPX FLOW, Inc., a Delaware corporation.

 

(e)                                  “Eligible Executive” shall mean the Company’s Chief Executive Officer, each other executive officer of the Company, and each other employee that the Committee determines, in its discretion, is or may be a “covered employee” of the Company within the meaning of Section 162(m) of the Code and Section 1.162-27(c)(2) of the Regulations.

 

(f)                                   “Incentive Bonus” shall mean, for each Participant, an annual bonus to be paid in the amount determined by the Committee pursuant to Section 6 below.

 

(g)                                  “Maximum Potential Incentive Bonus” shall mean, with respect to any Participant for any Performance Period, $4,000,000.

 

(h)                                 “Participant” means, with respect to any Performance Period, an Eligible Executive who is eligible to participate in the Plan for such Performance Period in accordance with Section 3.

 

(i)                                     “Performance Goal(s)” means the level or levels of Performance Measures established by the Committee for a Performance Period.

 

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(j)                                    “Performance Measures” means, with respect to any Performance Period, one or more of the following, which may be expressed with respect to the Company or one or more operating units or groups, as the Committee may determine: cash flow; cash flow from operations; total earnings; earnings per share, diluted or basic; earnings per share from continuing operations, diluted or basic; earnings before interest and taxes; earnings before interest, taxes, depreciation, and amortization; earnings from operations; net asset turnover; inventory turnover; capital expenditures; net earnings; operating earnings; gross or operating margin; debt; 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; market share; economic value added; cost of capital; change in assets; expense reduction levels; debt reduction; productivity; delivery performance; safety record; stock price; and 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.  The Committee shall provide how any Performance Measure shall be adjusted to the extent necessary to prevent dilution or enlargement of any award as a result of extraordinary events or circumstances, as determined by the Committee, or to exclude the effects of extraordinary, unusual, or non-recurring items; changes in applicable laws, regulations, or accounting principles; currency fluctuations; discontinued operations; non-cash items, such as amortization, depreciation, or reserves; asset impairment; or any recapitalization, restructuring, reorganization, merger, acquisition, divestiture, consolidation, spin-off, split-up, combination, liquidation, dissolution, sale of assets, or other similar corporation transaction; provided, however, that no such adjustment will be made if the effect of such adjustment would cause an award to fail to qualify as performance-based compensation within the meaning of Code Section 162(m).

 

(k)                                 “Performance Period” shall mean the fiscal year of the Company, except that the initial Performance Period shall be from the Distribution Date (as defined in Section 12), or such other date set by the Committee, to the last day of the calendar year containing the Distribution Date.

 

(l)                                     “Regulations” shall mean the Treasury Regulations promulgated under the Code, as amended from time to time.

 

2.                                      Administration of the Plan.  The Plan shall be administered by the Committee, which shall have full power and authority to construe, interpret and administer the Plan and shall have the exclusive right to establish, adjust, pay or decline to pay an Incentive Bonus for each Participant.  Such power and authority shall include the right to exercise discretion to reduce by any amount the Incentive Bonus payable to any Participant; provided, however, that the exercise of such discretion with respect to any Participant shall not have the effect of increasing the Incentive Bonus that is payable to any other Participant.  Decisions of the Committee shall be final, conclusive and binding on all persons or entities, including the Company, its subsidiaries, any Participant and any person claiming any benefit or right under the Plan.

 

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3.                                      Eligibility.  All Eligible Executives shall be Participants in the Plan unless the Committee, in its sole and absolute discretion, designates that an Eligible Executive shall not be eligible for participation in the Plan for a Performance Period.

 

4.                                      Awards.  Not later than the 90th day of each Performance Period (or such earlier date as required by Code Section 162(m)), the Committee shall designate, in writing, the Performance Goal(s) to be attained for each Participant for such Performance Period based on one or more Performance Measures, and the payout schedule detailing the total amount which may be available for payout to each Participant based upon the relative level of attainment of the Performance Goal(s).

 

5.                                      Committee Certification.  As soon as reasonably practicable after the end of each Performance Period, but in no event later than March 15 following the end of such Performance Period, the Committee shall certify, in writing, (i) whether and to what extent the Performance Goal(s) for the Performance Period were satisfied, and (ii) the amount available for each Participant’s Incentive Bonus for such Performance Period based upon the payout schedule established under Section 4 for such Participant for the Performance Period.

 

6.                                      Payment of Incentive Bonuses.  The amount of the Incentive Bonus actually paid to a Participant for a Performance Period shall be such amount as determined by the Committee in its sole discretion, including zero, provided that the actual Incentive Bonus paid shall not exceed the amount determined as payable by the Committee under Section 5 for the Performance Period or the Maximum Potential Incentive Bonus.  Incentive Bonuses shall be paid in cash at such times and on such terms as are determined by the Committee in its sole and absolute discretion, but in no event later than March 15 following the end of the Performance Period to which such Incentive Bonus relates.  To the extent provided by the Committee, in its sole discretion, the annual Incentive Bonus may be paid in the form of shares of Company common stock under a shareholder-approved stock plan of the Company, or may be deferred under a nonqualified deferred compensation program maintained by the Company, subject to the terms and conditions of such plan or program.

 

7.                                      No Right to Bonus or Continued Employment.  Neither the establishment of the Plan, the provision for or payment of any amounts hereunder, nor any action of the Company, the Board or the Committee with respect to the Plan shall be held or construed to confer upon any person (a) any legal right to receive, or any interest in, an Incentive Bonus or any other benefit under the Plan or (b) any legal right to continue to serve as an officer or employee of the Company or any subsidiary or affiliate of the Company.  The Company expressly reserves any and all rights to discharge any Participant without incurring liability to any person under the Plan or otherwise.  Notwithstanding any other provision hereof and notwithstanding the fact that the stated Performance Goal has been achieved or the individual Incentive Bonus amounts have been determined, the Company shall have no obligation to pay any Incentive Bonus hereunder unless the Committee otherwise expressly provides by written contract or other written commitment.

 

8.                                      Withholding.  The Company shall have the right to withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy any applicable federal, state, local or foreign withholding tax requirements imposed with respect to the payment of any Incentive Bonus.

 

3



 

9.                                      Nontransferability.  Except as expressly provided by the Committee, the rights and benefits under the Plan are personal to the Participant and shall not be subject to any voluntary or involuntary alienation, assignment, pledge, transfer or other disposition.

 

10.                               Unfunded Plan.  The Company shall have no obligation to reserve or otherwise fund in advance any amounts that are or may in the future become payable under the Plan.  Any funds that the Company, acting in its sole and absolute discretion, determines to reserve for future payments under the Plan may be commingled with other funds of the Company and need not in any way be segregated from other assets or funds held by the Company.  A Participant’s rights to payment under the Plan shall be limited to those of a general creditor of the Company.

 

11.                               Repayment/Forfeiture of Incentive Bonus.  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, then (a) any Participant whose Incentive Bonus is subject to automatic forfeiture due to such misconduct and restatement under Section 304 of the Sarbanes-Oxley Act of 2002, and (b) any Participant who the Committee determines either knowingly engaged in or failed to prevent the misconduct, or whose actions or inactions with respect to the misconduct and restatement constituted gross negligence, shall be required to reimburse the Company the amount of any payment of any Incentive Bonus earned or accrued during the twelve month period following the first public issuance or filing with the SEC (whichever first occurred) of the financial document embodying such financial reporting requirement.  To the extent such Incentive Bonus was deferred under a nonqualified deferred compensation plan maintained by the Company rather than paid to the Participant, the amount of bonus deferred (and any earnings thereon) shall be forfeited.

 

12.                               Adoption, Amendment, Suspension and Termination of the Plan.

 

(a)                                 The Company has entered into a Separation and Distribution Agreement with SPX Corporation (“SPX”) (the “Separation Agreement”), which provides for a “Distribution” (as defined in the Separation Agreement), by which SPX will separate into two separate, publicly traded companies, SPX and the Company.  Until the Distribution, the Company is a wholly owned subsidiary of SPX.  The Plan was approved by SPX, as the sole shareholder of the Company, and by the Board, on September 23, 2015.  The Plan shall be effective as of such approval date.

 

(b)                                 Subject to the limitations set forth in paragraph (c) below, the Board may at any time suspend or terminate the Plan and may amend it from time to time in such respects as the Board may deem advisable, subject to any requirement for stockholder approval imposed by applicable law, including Section 162(m) of the Code.

 

(c)                                  No amendment, suspension or termination of the Plan shall, without the consent of the person affected thereby, materially, adversely alter or impair any rights or obligations under any Incentive Bonus previously awarded under the Plan.

 

13.                               Governing Law.  The Plan 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

 

4



 

in the State of North Carolina, County of Mecklenburg, including the Federal Courts located therein (should Federal jurisdiction exist).

 

14.                               Compensation Recovery Policy.  The Incentive Bonuses awarded 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 Incentive Bonus under the Plan, the Participant agrees that all prior Incentive Bonuses made by the Company to the Participant shall become subject to the terms and conditions of this Section 14.

 

5




Exhibit 10.10

 

SPX FLOW

 

SUPPLEMENTAL RETIREMENT PLAN

 

FOR TOP MANAGEMENT

 

(As Adopted Effective September 26, 2015)

 



 

TABLE OF CONTENTS

 

 

 

Page

 

 

ARTICLE I DEFINITIONS

2

 

 

1.1

Actuarial Equivalent

2

1.2

Affiliated Company” or “Affiliate

2

1.3

Beneficiary

2

1.4

Board

3

1.5

Code

3

1.6

Committee” or “Compensation Committee

3

1.7

Company

3

1.8

Continuous Service

3

1.9

Early Retirement Date

3

1.10

Employee

4

1.11

Final Average Pay

4

1.12

Normal Retirement Age

4

1.13

Normal Retirement Date

4

1.14

Participant

4

1.15

Plan

4

1.16

SPX Qualified Plan

4

1.17

SPX Qualified Plan Benefit

4

1.18

Other Nonqualified Pension Plans

4

1.19

Surviving Spouse

5

1.20

Top Management Retirement Benefit

5

1.21

Non-409A Top Management Retirement Benefit

5

1.22

409A Top Management Retirement Benefit

5

1.23

Vested

5

 

 

 

ARTICLE II ELIGIBILITY

6

 

 

2.1

Participation

6

2.2

Top Hat Requirements and Reduction in Status

6

2.3

Removal From Participation

6

 

 

 

ARTICLE III TOP MANAGEMENT RETIREMENT BENEFITS

7

 

 

3.1

Normal Retirement

7

3.2

Early Retirement

7

3.3

Participation in Other Nonqualified Pension Plans

8

3.4

Form and Timing of Benefit

9

3.5

Actuarial Equivalent

11

3.6

Source of Benefit Payments

11

 

 

 

ARTICLE IV TOP MANAGEMENT PRE-RETIREMENT DEATH BENEFIT

12

 

 

4.1

Survivor Benefits for the Non-409A Top Management Retirement Benefit

12

4.2

Survivor Benefits for the 409A Top Management Retirement Benefit

12

 

 

 

ARTICLE V ADMINISTRATION OF THE PLAN

14

 

 

5.1

Administration by the Company

14

5.2

General Powers of Administration

14

5.3

409A Compliance

14

 

i



 

ARTICLE VI AMENDMENT OR TERMINATION

15

 

 

6.1

Amendment or Termination

15

6.2

Effect of Amendment or Termination

15

 

 

 

ARTICLE VII GENERAL PROVISIONS

16

 

 

7.1

Funding

16

7.2

General Conditions

16

7.3

No Guaranty of Benefits

16

7.4

No Enlargement of Employee Rights

16

7.5

Spendthrift Provision

16

7.6

Applicable Law

16

7.7

Automatic Cashout

16

7.8

Incapacity of Recipient

17

7.9

Corporate Successor

17

7.10

Unclaimed Benefit

17

7.11

Limitations on Liability

17

7.12

Duties of Participants, Beneficiaries, and Surviving Spouses

17

7.13

Taxes and Withholding

17

7.14

Treatment for Other Compensation Purposes

17

 

 

 

ARTICLE VIII CHANGE-OF-CONTROL

18

 

 

8.1

Benefit Rights Upon Change-of-Control

18

8.2

Definition of Change-of-Control

19

8.3

Definition of 409A Change-of-Control

19

 

 

 

ARTICLE IX SPECIAL PROVISIONS

21

 

 

9.1

Transfer of Liabilities from Prior Plan

21

9.2

Generally

21

 

 

 

TABLE A

22

 

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SPX FLOW
SUPPLEMENTAL RETIREMENT PLAN
FOR TOP MANAGEMENT

 

The SPX FLOW Supplemental Retirement Plan for Top Management (the “Plan”) is adopted effective September 26, 2015 (the “Effective Date”).  The Plan is established and maintained by SPX FLOW, Inc. for the purpose of providing supplemental retirement income benefits to a limited number of top management employees largely responsible for enhancing the earnings and growth of SPX FLOW, Inc.

 

The provisions of this Plan are only applicable to Participants who were in the employ of SPX FLOW, Inc. on or after the Effective Date (except as otherwise provided in the Plan).

 

As part of the Separation and Distribution Agreement by and between SPX Corporation and SPX FLOW, Inc. dated as of September 22, 2015 (as may be amended from time to time), SPX Corporation and SPX FLOW, Inc. entered into the Employee Matters Agreement dated as of September 26, 2015 (the “EMA”).  In accordance with the EMA, all liabilities for Flowco Employees (as defined in the EMA) under the SPX Corporation Supplemental Retirement Plan for Top Management (the “Prior Plan”) are to be transferred to the Plan and the Plan became liable to pay all such benefits to such participants.  Section 9.1 of the Plan sets forth the additional rules applicable to such transferred benefits and transferred participants.

 

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ARTICLE I

DEFINITIONS

 

Wherever used herein the following terms shall have the meanings hereinafter set forth (except as may otherwise be modified in other provisions or appendices of the Plan).  Words in the masculine gender shall include the feminine and the singular shall include the plural, and vice versa, unless qualified by the context.  Any headings used herein are included for ease of reference only, and are not to be construed so as to alter the terms hereof.

 

1.1          “Actuarial Equivalent means a benefit having the same value as the benefit it replaces.  Actuarial equivalency shall be determined on the basis of the following assumptions:

 

(a)                                 For purposes of converting a 100% joint and survivor annuity or a 50% joint and survivor annuity (as the case may be) at Normal Retirement Age to a lump sum at Normal Retirement Age or at any other time, or a lump sum at any age to a 100% joint and survivor annuity or a 50% joint and survivor annuity (as the case may be) at Normal Retirement Age or at any other time, (i) mortality shall be based upon the table prescribed in Code Section 417(e)(3)(A)(ii)(I), (ii) the ages of the Participant and the Participant’s spouse shall be their actual ages and (iii) the assumed interest rate shall be the annual interest on 30-year Treasury securities, as published by the Board of Governors of the Federal Reserve System, for the November prior to the Plan Year during which the distribution is made.

 

(b)                                 For purposes of converting a 100% joint and survivor annuity or a 50% joint and survivor annuity (as the case may be) into a single life annuity, the factors set forth in Table A (attached hereto) shall be applied.  If a Participant is not married, such application shall be based on the assumption that the Participant is married and that he and his spouse are the same age.  If a Participant is married, such application shall be based on the actual ages of the Participant and his spouse.  For purposes of converting into any other optional annuity form of benefit available under the Plan or for adjusting for a non-spousal Beneficiary, the 100% joint and survivor annuity or the 50% joint and survivor annuity (as the case may be) shall first be converted into a single life annuity, as described above, after which the actuarial factors set forth in Appendix A of the SPX Qualified Plan (as amended, and including any successor or replacement appendix) shall be applied.

 

1.2          “Affiliated Company” or “Affiliate means any corporation, trade or business entity which is a member of a controlled group of corporations, trades or businesses, or an affiliated service group, of which the Company is also a member, as provided in Code Sections 414(b), (c), (m) or (o).

 

1.3          “Beneficiary means, subject to Section 9.1., a Participant’s beneficiary under the SPX Qualified Plan, or any person or persons designated by a Participant to receive benefits payable in the event of the Participant’s death before benefits under the Plan begin, or to receive the survivor benefits under any joint and survivor benefit option or period certain benefit option after benefits under the Plan begin.  Any separate designation of a Beneficiary under this Plan shall not be effective for any purpose unless and until it has been filed by the Participant with the Committee on a form approved by the Committee.  In the event that a Participant shall not have a Beneficiary, or if for any reason a Beneficiary designation shall be legally ineffective, or if such Beneficiary predeceases the Participant, then, for purposes of the Plan, payments shall be made to the first surviving class, and in equal shares if there are more than one in each class, of the following classes of beneficiaries in order of preference: (i) Participant’s widow or widower, (ii) surviving children, (iii) surviving parents, (iv) surviving brothers or sisters, and (v) legal representative, provided that if no legal representative is duly appointed and qualified within six months of the date of death of a deceased Participant, then payment shall be made to such persons as, at the date of the Participant’s death, would be entitled to share in the distribution of such deceased Participant’s estate under the provisions of the statute governing the descent of intestate property, then in force and effect in the state of Participant’s residence.  A Participant may, from time to time, on a form approved by and filed with the Committee, change the Beneficiary, provided that once benefit payments have commenced to be paid to a Participant, his designation of a Beneficiary may only be changed for the period certain and life benefit.  If payments under a period certain and life benefit have

 

2



 

commenced to a Participant’s designated Beneficiary and the Beneficiary dies before all payments under such form of payment have been made, any remaining payments shall be made to the Beneficiary’s estate.

 

A married Participant may elect at any time to designate a non-spouse Beneficiary or to revoke any such election at any time.  An election by a Participant to designate a non-spouse Beneficiary shall not take effect unless the Participant’s spouse consents in writing to such election, such consent acknowledges the effect of such an election and the consent is witnessed by a representative of the Plan or a notary public, unless the Participant establishes to the satisfaction of the Committee that such consent may not be obtained because there is no spouse, the spouse cannot be located or due to other circumstances.  The consent by a spouse shall be irrevocable and shall be effective only with respect to that spouse.

 

There shall be separate Beneficiary designations for a Participant’s Non-409A Top Management Retirement Benefit and 409A Top Management Retirement Benefit (although a Participant may select the same person(s) as Beneficiary for both the Participant’s Non-409A Top Management Retirement Benefit and 409A Top Management Retirement Benefit).

 

A Participant’s spouse shall no longer be eligible for the Top Management Retirement Benefit provided in Sections 4.1(a) and 4.2(a) on the date of entry of a judgment of divorce from that spouse, provided that a Participant may designate a former spouse as his Beneficiary on a form approved by the Committee and filed with the Committee after the date of entry of the judgment of divorce and before his death.

 

1.4          “Board means the Board of Directors of the Company.

 

1.5          “Code means the Internal Revenue Code of 1986, as amended from time to time, and any regulations relating thereto.

 

1.6          “Committee” or “Compensation Committee means the Compensation Committee of the Board.

 

1.7          “Company means (a) SPX FLOW, Inc., a Delaware corporation, (b) any Affiliated Company or Affiliate provided that such Affiliated Company or Affiliate shall have been included in the definition of Company only to the extent determined by action of the officer of SPX FLOW, Inc. empowered to make such employee benefit determinations, or (c) to the extent provided in Section 7.9 below, any successor corporation or other entity resulting from a reorganization, merger or consolidation into or with the Company, or a transfer or sale of substantially all of the assets of the Company.

 

1.8          “Continuous Service for purposes of this Plan shall be equal to (i) a Participant’s Continuous Service as shown on the records of the Prior Plan as of the Effective Date, if applicable, plus (ii) a Participant’s Continuous Service as determined under the SPX Qualified Plan after the Participant’s Continuous Service Commencement Date, which solely for the purposes of this Plan, is determined as if such Participant were a participant in the SPX Qualified Plan and the Participant’s employment with the Company were with SPX Corporation.

 

For purposes of this Plan only, and subject to Section 9.1, a Participant’s Continuous Service Commencement Date shall be the date such Participant was named an officer with SPX FLOW, Inc.; provided, in the event a Participant was employed by a business entity acquired by the Company, his Continuous Service Commencement Date shall be the closing date of such acquisition; provided, further, that the Committee may set an alternative Continuous Service Commencement Date for any Participant.

 

1.9          “Early Retirement Date means the first day of the month coinciding with or next following the date on which a Participant or former Participant meets all of the following requirements:

 

·                                          terminated employment with the Company, prior to attaining Normal Retirement Age;

 

·                                          after such Participant is Vested under this Plan; and

 

3



 

·                                          when the Participant has attained at least age 55, regardless of whether he attained such age prior to his termination of employment.

 

1.10        “Employee means an employee of the Company or of an Affiliated Company.

 

1.11        “Final Average Pay shall mean the average monthly pay in the Participant’s highest paid three calendar years out of his last ten calendar years of Company employment, but with the following modifications and subject to Section 9.1:

 

(a)                                 In a Participant’s last calendar year of Company employment, Final Average Pay will be based on the full year, by annualizing the Participant’s last rate of pay for that year, and including the bonus paid to the Participant during that year.

 

(b)                                 Those items excluded from the definition of Compensation under the SPX Qualified Plan (where reference to compensation and benefit items, programs and plans of SPX Corporation therein shall be deemed to reference the analogous compensation and benefit items, programs and plans at the Company) shall also be excluded from Final Average Pay; provided that any deferrals of compensation made pursuant to the SPX FLOW Supplemental Retirement Savings Plan shall be includable in the determination of Final Average Pay.

 

(c)                                  For purposes of this Plan, Final Average Pay shall be determined, regardless of the limit (if any) provided by Code Section 401(a)(17) or any other statutorily imposed limit.

 

1.12        “Normal Retirement Age shall mean age sixty-five (65).

 

1.13        “Normal Retirement Date means the first day of the month coinciding with or next following the later of (i) the date of the Participant’s Normal Retirement Age or (ii) the date on which a Participant terminates employment with the Company on or after attainment of his Normal Retirement Age.

 

1.14        “Participant means an Employee who is eligible to participate in this Plan pursuant to Article II hereof.

 

1.15        “Plan means this SPX FLOW Supplemental Retirement Plan For Top Management.

 

1.16        “SPX Qualified Plan means the SPX Corporation US Pension Plan and each predecessor, successor or replacement to the said SPX Qualified Plan.

 

1.17        “SPX Qualified Plan Benefit means the aggregate benefit (including any portion to be paid to an alternate payee pursuant to a qualified domestic relations order) payable to and in respect of a Participant pursuant to the SPX Qualified Plan and any tax-qualified (within the meaning of Code Section 401(a)) defined benefit pension plans (within the meaning of Code Section 414(j)) maintained by the Company and its Affiliates by reason of his termination of employment with the Company and all Affiliates.  If benefits are paid under this Plan in a different form than the SPX Qualified Plan Benefit, the SPX Qualified Plan Benefit shall be determined as an Actuarial Equivalent benefit in the same form.  SPX Qualified Plan Benefits paid prior to payment under this Plan shall (i) in the event of lump sum payments, be increased by the actual interest credits provided to SPX Qualified Plan participants between the date of payment under the SPX Qualified Plan and the date of payment under this Plan, and (ii) in the event of monthly annuity payments, such payments shall be redetermined as if paid by the SPX Qualified Plan on the Normal Retirement Date or Early Retirement Date under this Plan.  This redetermination shall include actual interest credits provided to SPX Qualified Plan participants between the date of payment under the SPX Qualified Plan and the date of payment under this Plan.

 

1.18        “Other Nonqualified Pension Plans shall mean the SPX Corporation Supplemental Individual Account Retirement Plan (and any predecessor, successor or replacement plans) or any non-qualified defined benefit plan sponsored by the Company.

 

4



 

1.19        “Surviving Spouse means the person who is married to a Participant at the date of his death.

 

1.20        “Top Management Retirement Benefit means the benefit payable to a Participant, a Surviving Spouse or a Beneficiary pursuant to the terms of this Plan.

 

1.21        “Non-409A Top Management Retirement Benefit refers to the Top Management Retirement Benefit that is determined under Code Section 409A to be (i) attributable to amounts deferred in taxable years beginning before January 1, 2005, and (ii) not subject to Code Section 409A.

 

1.22        “409A Top Management Retirement Benefit refers to the Top Management Retirement Benefit that is determined under Code Section 409A to be (i) attributable to amounts deferred in taxable years beginning on or after January 1, 2005, or (ii) attributable to amounts deferred in taxable years beginning before January 1, 2005 that are subject to Code Section 409A.

 

1.23        “Vested  A Participant shall be Vested in his benefits under this Plan if he has 5 years of Continuous Service.

 

5



 

ARTICLE II

ELIGIBILITY

 

2.1          Participation.  An Employee shall become a Participant hereunder upon designation as such by the Compensation Committee.  Such designation shall be made in writing and filed with the records of the Plan.  The Compensation Committee shall promptly notify those Employees selected as Participants hereunder of their participation.  Notwithstanding the foregoing, an Employee shall not be eligible to become a Participant at any point during a year if Code Section 409A would prevent such Employee from making a payment election under Section 3.4(b)(1)(i) of the Plan at such time.  In such circumstances, such Employee would be permitted to participate in the Plan only as of the January 1st of the following year, and the Employee shall be permitted to make a payment election in accordance with Section 3.4(b)(1)(ii) of the Plan.

 

2.2          Top Hat Requirements and Reduction in Status.  No Employee shall be designated as a Participant hereunder unless the Employee qualifies for inclusion in a “select group of management or highly compensated employees” as defined in Sections 201(2), 301(a)(3), 401(a)(1) and 4021(b)(6) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).  In the event a Participant’s compensation or level of responsibility is reduced so that such Participant no longer qualifies for inclusion in a “select group of management or highly compensated employees,” the individual shall cease to be a Participant.  A Vested Participant shall not forfeit benefits accrued to the date he ceases to be a Participant, while a non-Vested Participant shall forfeit all rights to benefits under the Plan.

 

2.3          Removal From Participation.  Except in the event of a Change-of-Control (as defined in Article VIII), the Compensation Committee may reexamine a non-Vested Participant’s eligibility and make a new determination as to whether he shall be entitled to continue as a Participant hereunder.  If an Employee is removed from participation pursuant to this Section 2.3, he and his Surviving Spouse or Beneficiary shall forfeit all rights to benefits under this Plan.  The Compensation Committee shall not be entitled to remove any Vested Participant from participation, except as described in Section 2.2 above or in the event of the termination of the Plan as to all Participants, in which case the Participant’s Vested accrued benefits shall not be forfeitable.

 

6



 

ARTICLE III
TOP MANAGEMENT RETIREMENT BENEFITS

 

3.1          Normal Retirement.

 

(a)                                 Normal Retirement for Employees Who Became Participants Before August 24, 2005.  For Employees who became Participants in the Plan (or the Prior Plan) before August 24, 2005, the Top Management Retirement Benefit payable to an eligible Participant on his Normal Retirement Date shall be a monthly amount in the form of a 100% joint and survivor annuity equal to the remainder of (1) minus (2), as described below:

 

(1)                                 60% of Final Average Pay multiplied by a ratio, the numerator of which is the Participant’s Continuous Service (not to exceed 15) and the denominator of which is 15; minus

 

(2)                                 the Participant’s SPX Qualified Plan Benefit (if any) determined as of the Participant’s Normal Retirement Date without regard to when such benefit is actually paid.

 

(b)                                 Normal Retirement for Employees Who Became Participants On and After August 24, 2005 and Before April 22, 2009.  For Employees who become Participants in the Plan (or the Prior Plan) on and after August 24, 2005 and before April 22, 2009, the Top Management Retirement Benefit payable to an eligible Participant on his Normal Retirement Date shall be a monthly amount in the form of a 50% joint and survivor annuity equal to the remainder of (1) minus (2), as described below:

 

(1)                                 50% of Final Average Pay multiplied by a ratio, the numerator of which is the Participant’s Continuous Service (not to exceed 20) and the denominator of which is 20; minus

 

(2)                                 the Participant’s SPX Qualified Plan Benefit (if any) determined as of the Participant’s Normal Retirement Date without regard to when such benefit is actually paid.

 

(c)                                  Normal Retirement for Employees Who Become Participants On and After April 22, 2009.  For Employees who become Participants in the Plan (or the Prior Plan) on and after April 22, 2009, the Top Management Retirement Benefit payable to an eligible Participant on his Normal Retirement Date shall be a monthly amount in the form of a 50% joint and survivor annuity equal to the remainder of (1) minus (2), as described below:

 

(1)                                 50% of Final Average Pay multiplied by a ratio, the numerator of which is the Participant’s Continuous Service (not to exceed 25) and the denominator of which is 25; minus

 

(2)                                 the Participant’s SPX Qualified Plan Benefit (if any) determined as of the Participant’s Normal Retirement Date without regard to when such benefit is actually paid.

 

3.2          Early Retirement.

 

(a)                                 Early Retirement for Employees Who Became Participants Before August 24, 2005.  For Employees who became Participants in the Plan (or the Prior Plan) before August 24, 2005, the Top Management Retirement Benefit payable to an eligible Participant on his Early Retirement Date shall be a monthly amount equal to the Top Management

 

7



 

Retirement Benefit to which he would be entitled at his Normal Retirement Date pursuant to Section 3.1(a) above, with the following adjustments:

 

(1)                                 Amount If Early Retirement Is Within Five Years of Normal Retirement Age.  The monthly amount payable hereunder to a Participant whose Early Retirement Date is within five (5) years of his Normal Retirement Age shall be an amount computed in the same manner as a benefit under Section 3.1(a) (without regard to Section 3.1(a)(2) above), based on his Final Average Pay and Continuous Service as of his Early Retirement Date.

 

(2)                                 Amount If Early Retirement Is More Than Five Years From Normal Retirement Age.  The monthly amount payable hereunder to a Participant whose Early Retirement Date is more than five years prior to his Normal Retirement Age shall be computed in the same manner as a benefit under Section 3.1(a) above (without regard to Section 3.1(a)(2)), based on his Final Average Pay and Continuous Service as of his Early Retirement Date, but such amount shall be reduced by one-twelfth (1/12) of three percent (3%) for each complete calendar month by which his first payment precedes his age 60.

 

(3)                                 Reductions for Qualified Plan Benefits.  The benefit so determined shall be reduced by the SPX Qualified Plan Benefit (if any), or the Actuarial Equivalent thereof, if such benefit could not have been paid at such date.

 

(b)                                 Early Retirement for Employees Who Become Participants On and After August 24, 2005.  For Employees who become Participants in the Plan (or the Prior Plan) on and after August 24, 2005, the Top Management Retirement Benefit payable to an eligible Participant on his Early Retirement Date shall be a monthly amount equal to the Top Management Retirement Benefit to which he would be entitled at his Normal Retirement Date pursuant to Section 3.1(b) or 3.1(c), as applicable, above, with the following adjustments:

 

(1)                                 Amount If Early Retirement Is Within Three Years of Normal Retirement Age.  The monthly amount payable hereunder to a Participant whose Early Retirement Date is within three (3) years of his Normal Retirement Age shall be an amount computed in the same manner as a benefit under Section 3.1(b) (without regard to Section 3.1(b)(2) above) or Section 3.1(c) (without regard to Section 3.1(c)(2) above), as applicable, based on his Final Average Pay and Continuous Service as of his Early Retirement Date.

 

(2)                                 Amount If Early Retirement Is More Than Three Years From Normal Retirement Age.  The monthly amount payable hereunder to a Participant whose Early Retirement Date is more than three (3) years prior to his Normal Retirement Age shall be computed in the same manner as a benefit under Section 3.1(b) above (without regard to Section 3.1(b)(2)) or Section 3.1(c) above (without regard to Section 3.1(c)(2)), as applicable, based on his Final Average Pay and Continuous Service as of his Early Retirement Date, but such amount shall be reduced by one-twelfth (1/12) of four percent (4%) for each complete calendar month by which his first payment precedes his age 62.

 

(3)                                 Reductions for Qualified Plan Benefits.  The benefit so determined shall be reduced by the SPX Qualified Plan Benefit (if any), or the Actuarial Equivalent thereof, if such benefit could not have been paid at such date.

 

3.3          Participation in Other Nonqualified Pension Plans.  In addition to reducing a Participant’s benefit under the Plan by his SPX Qualified Plan Benefit (if any) as provided above, such Plan benefit shall also be reduced by his benefit (as actuarially adjusted to the applicable optional form of payment and benefit commencement date

 

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hereunder) under the Other Nonqualified Pension Plans, if any.  In the event a Participant’s aggregate benefit under the Other Nonqualified Pension Plans is higher than his benefit under the Plan, he shall receive no benefits from this Plan.

 

3.4          Form and Timing of Benefit.

 

(a)                                 Non-409A Top Management Retirement Benefits.

 

(1)                                 A Participant may elect to have his Non-409A Top Management Retirement Benefit payable in any optional form in which the benefit from the SPX Qualified Plan is payable (including a lump sum payment).  A Participant must make a separate election for the Non-409A Top Management Retirement Benefit under this Plan, which need not be the same as the Participant’s election under the SPX Qualified Plan (if any).  However, any option other than the automatic form of benefit under the SPX Qualified Plan must have been elected for the Non-409A Top Management Retirement Benefit at least one year prior to a Participant’s Normal or Early Retirement Date.  Failure to elect a different option in a timely manner will result in payment in the automatic form of benefit under the SPX Qualified Plan for the Non-409A Top Management Retirement Benefit.

 

(2)                                 Payment of the Non-409A Top Management Retirement Benefit to a Participant will commence no sooner than a date chosen by such Participant, which commencement date must be no sooner than the date when the Participant has both terminated employment and attained age 55.  Such commencement date may be after the date the Participant has chosen to begin his SPX Qualified Plan Benefit (if any).

 

(b)                                 409A Top Management Retirement Benefits.

 

(1)                                 Initial Eligibility and Payment Elections.  For any person who shall newly become a Participant pursuant to Section 2.1, such person may elect to have his 409A Top Management Retirement Benefit payable in any optional form in which the benefit from the SPX Qualified Plan is payable (including a lump sum payment).  Such person must make a separate optional form election for the 409A Top Management Retirement Benefit under this Plan, which need not be the same as the Participant’s election under the SPX Qualified Plan (if any).  Such person may also elect when the 409A Top Management Retirement Benefit will commence, which commencement date must be no sooner than the date when the Participant has both terminated employment and attained age 55.

 

(i)                                   To the extent permitted under Code Section 409A, such payment election must be made no later than thirty (30) days (or such earlier time as the Committee may designate) after the person becomes newly eligible to participate in the Plan.

 

(ii)                                If the election timing provided in clause (i) above is not permitted under Code Section 409A, such payment election must be made no later than the December 31st of the year preceding the year in which such person is initially eligible to participate in this Plan.

 

(iii)                             The payment form and timing election shall be irrevocable for the duration of a Participant’s participation in the Plan except as set forth in the remainder of this Section 3.4(b).

 

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(2)                                 Timely Election Failure.  Failure to make a timely payment election as provided above will result in such person deeming to elect the following with respect to the 409A Top Management Retirement Benefit: (i) benefit commencement date that is the later of (x) six months following termination of employment or (y) age 55 and (ii) benefit payment form that is a lump sum payment.  Such deemed election shall be irrevocable for the duration of a Participant’s participation in the Plan except as set forth in paragraph (3) below.

 

(3)                                 Subsequent Change in Election.  A Participant may change his payment election with respect to the 409A Top Management Retirement Benefit so long as: (i) the new payment election is made at least twelve (12) months before the original payment commencement date, (ii) the new payment election does not take effect until at least twelve (12) months after the date on which such election is made, and (iii) the original payment commencement date is deferred for a period of not less than five (5) years.  Notwithstanding the foregoing, to the extent that a Participant’s payment form election with respect to the 409A Top Management Retirement Benefit is a “life annuity” (as defined under Code Section 409A), the Participant may change such election to another optional form in which the benefit from the SPX Qualified Plan is payable to the Participant provided that:

 

(i)                                   such optional form is also a “life annuity” (as defined under Code Section 409A) which is actuarially equivalent (as determined under Code Section 409A);

 

(ii)                                such election to change is timely made before the first scheduled annuity payment date of the original election; and

 

(iii)                             such first scheduled annuity payment date does not change as a result of the new election.

 

(c)                                  Form.  The elections (including the change in payment election provisions under paragraph (b)(3) above) provided above shall be made on a form approved by the Committee and filed with the Committee in the time and manner prescribed by the Committee.

 

(d)                                 Six Month Delay Rule.  If, at the time the Participant becomes entitled to 409A Top Management Retirement Benefit payments under the Plan, the Participant is a Specified Employee (as defined and determined under Code Section 409A), then, notwithstanding any other provision in the Plan to the contrary, the following provision shall apply.  No 409A Top Management Retirement Benefit payments considered deferred compensation under Code Section 409A which is determined to be payable upon a Participant’s termination as determined under Code Section 409A and not subject to an exception or exemption thereunder, shall be paid to the Participant until the date that is six (6) months after the Participant’s termination.  Any such 409A Top Management Retirement Benefit payments that would otherwise have been paid to the Participant during this six-month period shall instead be aggregated with interest (at the Interest Credit Rate as defined under the SPX Qualified Plan) during such period, and be paid to the Participant on the date that is six (6) months after the Participant’s termination.  Any 409A Top Management Retirement Benefit payments to which the Participant is entitled to be paid after the date that is six (6) months after the Participant’s termination shall be paid to the Participant in accordance with the applicable terms of this Plan.

 

(e)                                  Payments.  Notwithstanding anything in the foregoing, a 409A Top Management Retirement Benefit payment shall be paid (or commence to be paid) on or as soon as practicable after the date determined pursuant to the above but not later than 30 days after such date.

 

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3.5          Actuarial Equivalent.  A Top Management Retirement Benefit which is payable in any other form than that prescribed under Sections 3.1 and 3.2 above, or which is payable in such form prescribed under Sections 3.1 and 3.2 above but with a Beneficiary other than such Participant’s spouse, shall be the Actuarial Equivalent of the Top Management Retirement Benefit set forth in Sections 3.1 and 3.2 above.

 

3.6          Source of Benefit Payments.  Any Top Management Retirement Benefit payable to a Participant, a Surviving Spouse or a Beneficiary shall be paid from the general assets of the Company.

 

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ARTICLE IV

TOP MANAGEMENT PRE-RETIREMENT DEATH BENEFIT

 

4.1          Survivor Benefits for the Non-409A Top Management Retirement Benefit.  If a Vested Participant dies before his Non-409A Top Management Retirement Benefit has commenced to be paid to him, the Surviving Spouse or Beneficiary, as shall be applicable, shall receive the Non-409A Top Management Retirement Benefit as described below:

 

(a)                                 Surviving Spouse.  If the Participant was married at the time of death, the Surviving Spouse may elect (i) a single life annuity for the Surviving Spouse’s life which is 100% of the Actuarial Equivalent of the Participant’s Non-409A Top Management Retirement Benefit, payable as of the first day of the month following the date the Participant would have attained age 55, or (ii) a lump sum which is the Actuarial Equivalent of the Participant’s Non-409A Top Management Retirement Benefit payable to the Surviving Spouse as of the first day of the month following the date of the Participant’s death.  If the Surviving Spouse dies after the Participant but before the Non-409A Top Management Retirement Benefit is paid or commenced to be paid to the Surviving Spouse, the Actuarial Equivalent shall be paid in a lump sum to the legal representative of such deceased Surviving Spouse; or if there shall be no such legal representative duly appointed and qualified within six months of the date of death of such deceased Surviving Spouse, then to such person as, at the date of the Surviving Spouse’s death, would be entitled to share in the distribution of such deceased Surviving Spouse’s personal estate under the provisions of the statute governing the descent of intestate property then in force and effect in the state of the deceased Surviving Spouse’s residence.

 

(b)                                 Other Beneficiary.  If the Participant dies before his Non-409A Top Management Retirement Benefit becomes payable and (1) the Participant was not married at the date of death or (2) the Participant is married but his spouse has consented to the Beneficiary designation as provided under Section 1.3, a lump sum amount equal to the Actuarial Equivalent of the Participant’s Non-409A Top Management Retirement Benefit shall be paid to the Participant’s designated Beneficiary as of the first day of the month following the date of the Participant’s death.

 

4.2          Survivor Benefits for the 409A Top Management Retirement Benefit.  If a Vested Participant dies before his 409A Top Management Retirement Benefit has commenced to be paid to him, the Surviving Spouse or Beneficiary, as shall be applicable, shall receive the 409A Top Management Retirement Benefit as described below:

 

(a)                                 Surviving Spouse.  If the Participant was married at the time of death, the Surviving Spouse shall receive a lump sum which is the Actuarial Equivalent of the Participant’s 409A Top Management Retirement Benefit payable to the Surviving Spouse on or as soon as administratively feasible following the first day of the month following the date of the Participant’s death, but no later than 60 days after such date.  If the Surviving Spouse dies after the Participant but before the lump sum is paid to the Surviving Spouse, the lump sum shall be paid to the legal representative of such deceased Surviving Spouse on or as soon as administratively feasible following the first day of the month following the date of the Participant’s death, but no later than 60 days after such date; or if there shall be no such legal representative duly appointed and qualified at such time, then to such person as, at the date of the Surviving Spouse’s death, would be entitled to share in the distribution of such deceased Surviving Spouse’s personal estate under the provisions of the statute governing the descent of intestate property then in force and effect in the state of the deceased Surviving Spouse’s residence.

 

(b)                                 Other Beneficiary.  If the Participant dies before his 409A Top Management Retirement Benefit becomes payable and (1) the Participant was not married at the date of death or (2) the Participant is married but his spouse has consented to the Beneficiary designation

 

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as provided under Section 1.3, a lump sum amount equal to the Actuarial Equivalent of the Participant’s 409A Top Management Retirement Benefit shall be paid to the Participant’s designated Beneficiary on or as soon as administratively feasible following the first day of the month following the date of the Participant’s death, but no later than 60 days after such date.

 

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ARTICLE V

ADMINISTRATION OF THE PLAN

 

5.1          Administration by the Company.  The Company, acting under the supervision of the Compensation Committee, shall be responsible for the general operation and administration of the Plan and for carrying out the provisions thereof.

 

5.2          General Powers of Administration.  All provisions set forth in the SPX FLOW Retirement Savings Plan with respect to the administrative powers and duties of the Company, expenses of administration, and procedures for filing claims shall also be applicable with respect to the Plan.  The Company shall be entitled to rely conclusively upon all tables, valuations, certificates, opinions and reports furnished by any actuary, accountant, controller, counsel or other person employed or engaged by the Company with respect to the Plan.

 

5.3          409A Compliance.  To the extent any provision of the Plan or action by the Committee or Company would subject any Participant to liability for interest or additional taxes under Code Section 409A, or make Non-409A Top Management Retirement Benefits subject to Code Section 409A, it will be deemed null and void, to the extent permitted by law and deemed advisable by the Committee.  It is intended that the Plan will comply with Code Section 409A, and that the Non-409A Top Management Retirement Benefits be exempt from Code Section 409A coverage, and the Plan shall be interpreted and construed on a basis consistent with such intent.  The Plan may be amended in any respect deemed necessary (including retroactively) by the Committee in order to preserve compliance with Code Section 409A and to maintain Code Section 409A exemption for the Non-409A Top Management Retirement Benefits.  For purposes of this Plan with respect to 409A Top Management Retirement Benefits, a “termination of employment”, “termination”, “retirement” or “separation from service” (or other similar term having a similar import) under this Plan shall have the same meaning as a “separation from service” as defined in Code Section 409A.  The preceding shall not be construed as a guarantee of any particular tax effect for Plan benefits.

 

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ARTICLE VI

AMENDMENT OR TERMINATION

 

6.1          Amendment or Termination.  The Company reserves the right, subject to Article VIII, to amend or terminate the Plan at any time.  Any such amendment or termination shall be made pursuant to a resolution of the Compensation Committee and shall be effective as of the date of such resolution or as specified therein.

 

6.2          Effect of Amendment or Termination.  No amendment or termination of the Plan shall directly or indirectly deprive any current or former Participant, Surviving Spouse, or Beneficiary of all or any portion of any Top Management Retirement Benefit or amount due to such persons, the payment of which has commenced prior to the effective date of such amendment or termination, or which is Vested at the time of such amendment or termination of the Plan.  The Compensation Committee may remove an Employee from participation as provided in Section 2.2 and Section 2.3.

 

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ARTICLE VII
GENERAL PROVISIONS

 

7.1                               Funding.  The Plan is intended to constitute and at all times shall be interpreted and administered so as to qualify as an unfunded deferred compensation plan for a select group of management and highly compensated employees under ERISA.  The Plan at all times shall be entirely unfunded within the meaning of ERISA and the Code and the Company shall not be required at any time to segregate any assets of the Company for payment of any benefits hereunder.  No Participant, Surviving Spouse, Beneficiary, or any other person shall have any interest in any particular assets of the Company by reason of the right to receive a benefit under the Plan and any such Participant, Surviving Spouse, Beneficiary, or other person shall have only the rights of a general unsecured creditor of the Company with respect to any rights under the Plan.

 

Notwithstanding the foregoing, the Company may, in its sole discretion at any time or from time to time, establish segregated funds, escrow accounts or trust funds (including through a grantor trust) whose primary purpose would be for the provision of benefits under this Plan.  If such funds or accounts are established, however, individuals entitled to benefits hereunder shall not have any identifiable interest in any such funds or accounts nor shall such individuals be entitled to any preference or priority with respect to the assets of such funds or accounts.  These funds and accounts would still be available to judgment creditors of the Company and to all creditors in the event of the Company’s insolvency or bankruptcy.

 

7.2                               General Conditions.  Any SPX Qualified Plan Benefit shall be paid solely in accordance with the terms and conditions of the SPX Qualified Plan and nothing in this Plan shall operate or be construed in any way to modify, amend or affect the terms and provisions of the SPX Qualified Plan.  Any Other Nonqualified Pension Plan shall be paid solely in accordance with the terms and conditions of such Other Nonqualified Pension Plan and nothing in this Plan shall operate or be construed in any way to modify, amend or affect the terms and provisions of any Other Nonqualified Pension Plan.

 

7.3                               No Guaranty of Benefits.  Nothing contained in the Plan (or any Plan communication) shall constitute a guaranty by the Company or any other entity or person that the assets of the Company will be sufficient to pay any benefit hereunder.

 

7.4                               No Enlargement of Employee Rights.  No Participant, Surviving Spouse, or Beneficiary shall have any right to a benefit under the Plan except in accordance with the terms of the Plan.  Establishment of the Plan shall not be construed to give any Participant the right to be retained in the service of the Company, nor to create or confer on any Participant the right to receive future benefit accruals hereunder with respect to any future period of service with the Company.  Nothing in the Plan shall interfere in any way with the right of the Company to terminate a Participant’s service at any time with or without cause or notice and whether or not such termination results in any adverse effect on the individual’s interests under the Plan.

 

7.5                               Spendthrift Provision.  No interest of any person or entity in, or right to receive a benefit under, the Plan shall be subject in any manner to sale, transfer, assignment, pledge, attachment, garnishment, or other alienation or encumbrance of any kind; nor may such interest or right to receive a benefit be taken, either voluntarily or involuntarily, for the satisfaction of the debts of, or other obligations or claims against, such person or entity, including claims for alimony, support, separate maintenance and claims in bankruptcy proceedings.

 

7.6                               Applicable Law.  The Plan (including, without limitation, any rules, regulations, determinations or decisions made by the Compensation Committee or Company relating to the Plan) shall be construed and administered exclusively in accordance with applicable federal laws and the laws of the State of Delaware, without regard to its conflict of laws principles.

 

7.7                               Automatic Cashout.  Notwithstanding anything in the Plan to the contrary, if at the time of benefit commencement, the lump sum amount which is the Actuarial Equivalent of a Participant’s Top Management Retirement Benefit is less than $100,000, the Company shall pay such lump sum amount to the Participant, Surviving Spouse or Beneficiary in a single lump sum in lieu of any further benefit payments hereunder.  Subject to any six-month delay in payment (or portion of payment) required by Code Section 409A, such payment (or

 

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applicable portion) shall be made on or as soon as administratively practicable after the benefit commencement date (or the date required by Code Section 409A’s six-month delay rule), but not later than 60 days after such date.

 

7.8                               Incapacity of Recipient.  If any person entitled to a benefit payment under the Plan is deemed by the Company to be incapable of personally receiving and giving a valid receipt for such payment, then, unless and until claim therefor shall have been made by a duly appointed guardian or other legal representative of such person, the Company may provide for such payment or any part thereof to be made to any other person or institution then contributing toward or providing for the care and maintenance of such person.  Any such payment shall be deemed to be a payment for the account of such person and a complete discharge of any liability of the Company and the Plan therefor.

 

7.9                               Corporate Successor.  The Plan shall not be automatically terminated by a transfer or sale of assets of the Company or by the reorganization, merger or consolidation of the Company into or with any other corporation or other entity, but the Plan shall be continued after such transfer, sale, reorganization, merger or consolidation only if and to the extent that the transferee, purchaser or successor entity agrees to continue the Plan, except as set forth in Article VIII.  In the event that the Plan is not continued by the transferee, purchaser or successor entity, then the Plan shall terminate subject to the provisions of Section 6.2.

 

7.10                        Unclaimed Benefit.  Each Participant shall keep the Company informed of his current address and the current address of his spouse and/or Beneficiary.  The Company shall not be obligated to search for the whereabouts of any person.  If the location of a Participant is not made known to the Company within three (3) years after the date on which payment of the Participant’s Top Management Retirement Benefit may first be made, payment may be made as though the Participant had died at the end of the three-year period.  If, within one additional year after such three-year period has elapsed, or, within three years after the actual death of a Participant, the Company is unable to locate any Surviving Spouse or Beneficiary of the Participant, then the Company shall have no further obligation to pay any benefit hereunder to such Participant, Surviving Spouse, Beneficiary or any other person and such benefit shall be irrevocably forfeited.

 

7.11                        Limitations on Liability.  Notwithstanding any of the preceding provisions of the Plan, neither the Company nor any individual acting as an employee or agent of the Company shall be liable to any Participant, former Participant, Surviving Spouse, Beneficiary or any other person for any claim, loss, liability or expense incurred in connection with the Plan.

 

7.12                        Duties of Participants, Beneficiaries, and Surviving Spouses.  A Participant, Surviving Spouse or Beneficiary shall, as a condition of receiving benefits under this Plan, be obligated to provide the Compensation Committee with such information as the Compensation Committee shall require in order to calculate benefits under this Plan or otherwise administer the Plan.

 

7.13                        Taxes and Withholding.  As a condition to any payment or distribution pursuant to the Plan, the Company may require a Participant (or as applicable, the Surviving Spouse or Beneficiary) to pay such sum to the Company as may be necessary to discharge its obligations with respect to any taxes, assessments or other governmental charges imposed on property or income received by the Participant (or as applicable, the Surviving Spouse or Beneficiary) thereunder.  The Company may deduct or withhold such sum from any payment or distribution to the Participant (or as applicable, the Surviving Spouse or Beneficiary).

 

7.14                        Treatment for Other Compensation Purposes.  Payments received by a Participant (or as applicable, the Surviving Spouse or Beneficiary) under the Plan shall not be deemed part of a Participant’s regular, recurring compensation for purposes of any termination, indemnity or severance pay laws and shall not be included in, nor have any effect on, the determination of benefits under any other employee benefit plan, contract or similar arrangement provided by the Company, unless expressly so provided by such other plan, contract or arrangement.

 

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ARTICLE VIII

CHANGE-OF-CONTROL

 

8.1                               Benefit Rights Upon Change-of-Control.

 

(a)                                 Notwithstanding any other provision of the Plan to the contrary, in the event of a Change-of-Control, all Participants shall immediately become Vested in their accrued benefits under this Plan, and the Company or any successor shall be prohibited from amending or terminating the Plan in any manner so as to deprive, directly or indirectly, any current or former Participant, Surviving Spouse, or Beneficiary of all or any portion of any Top Management Retirement Benefit which has commenced prior to the effective date of such amendment or termination, or which would be payable if the Participant’s employment terminated for any reason, including death, on such effective date.  Following a Change-of-Control or 409A Change-of-Control, no action shall be taken under the Plan that will cause any Non-409A Top Management Retirement Benefit to be subject to Code Section 409A coverage, or cause any 409A Top Management Retirement Benefit to fail to comply in any respect with Code Section 409A, in either case without the written consent of the Participant, Surviving Spouse, or Beneficiary (as applicable).

 

(b)                                 (i) Each Participant whose employment terminates following a Change-of-Control, or (ii) in the event that the Plan is terminated following a Change-of-Control, each current or former Participant, Surviving Spouse, or Beneficiary, shall be paid immediately a lump sum amount with respect to the Non-409A Top Management Retirement Benefit (and with respect to the 409A Top Management Retirement Benefit if such employment terminates within two years following a 409A Change-of-Control or if such Plan (together with any other deferred compensation arrangements as required by Code Section 409A) terminates).  This amount shall be the Actuarial Equivalent of any Non-409A Top Management Retirement Benefit (and with respect to the 409A Top Management Retirement Benefit if applicable), the payment of which has commenced prior to the effective date of any such termination, or which would be payable upon any termination of employment or which would be payable if the Participant’s employment terminated on the effective date of any Plan termination.

 

(c)                                  Notwithstanding anything to the contrary, and to the extent consistent with Code Section 409A, on or prior to a Change-of-Control, the Company shall, (i) to the extent not previously established, establish a grantor trust, and (ii) fund such grantor trust with a single, irrevocable lump sum contribution which is, when combined with any other assets already held in the grantor trust, equal to the value of all Vested benefits under the Plan through the date of such Change-of-Control.  If a Participant shall continue to be employed by the Company or any successor after such Change-of-Control, each calendar year the Company (or any successor) shall, as soon as possible, but in no event later than 30 days following the end of such calendar year, make an irrevocable contribution to the grantor trust in an amount that is necessary in order to maintain assets under the grantor trust equal to the value of all Vested benefits under the Plan at the end of the applicable calendar year.  After a Change-of-Control, if the assets of the grantor trust are not sufficient to make payment of Plan benefits at any time, the Company (or any successor) shall, as soon as possible, but in no event later than 30 days following notice from the trustee, make an irrevocable contribution sufficient to enable the trustee to make such Plan benefit payments.  The Company (or any successor) shall provide such information as reasonably requested by the trustee in order for the trustee to fulfill its duties (including, without limitation, making Plan benefit determinations after a Change-of-Control) under the grantor trust agreement.  As provided under Section 7.1, the Company shall retain beneficial ownership of all assets transferred to the grantor trust and such assets will be subject to the claims of the Company’s creditors.

 

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8.2                               Definition of Change-of-Control.  For purposes of this Plan, a “Change-of-Control” shall have the same meaning as set forth in the SPX FLOW Stock Compensation Plan (as amended from time to time, and including any successor or replacement plan).

 

8.3                               Definition of 409A Change-of-Control.  For purposes of this Plan, a “409A Change-of-Control” means the occurrence of any of the following events:

 

(a)                                 any person or Group acquires ownership of Company’s stock that, together with stock held by such person or Group, constitutes more than 50% of the total fair market value or total voting power of Company’s stock, (including an increase in the percentage of stock owned by any person or Group as a result of a transaction in which Company acquires its stock in exchange for property, provided that the acquisition of additional stock by any person or Group deemed to own more than 50% of the total fair market value or total voting power of Company’s stock on the Effective Date, shall not constitute a 409A Change-of-Control); or

 

(b)                                 any person or Group acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or Group) ownership of Company stock possessing 30% or more of the total voting power of Company stock; or

 

(c)                                  a majority of the members of the Board is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election; or

 

(d)                                 any person or Group acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or Group) assets from Company that have a total Gross Fair Market Value equal to 40% or more of the total Gross Fair Market Value of all Company assets immediately prior to such acquisition or acquisitions, provided that there is no 409A Change-of-Control when Company’s assets are transferred to:

 

(1)                                 a shareholder of Company (immediately before the asset transfer) in exchange for or with respect to Company stock;

 

(2)                                 an entity, 50% or more of the total value or voting power of which is owned, directly or indirectly, by Company;

 

(3)                                 a person or Group that owns, directly or indirectly, 50% or more of the total value or voting power of all outstanding Company stock; or

 

(4)                                 an entity, at least 50% of the total value or voting power of which is owned, directly or indirectly, by a person described in paragraph (3).

 

For purposes of the above sub-paragraph (d), a person’s status is determined immediately after the transfer of the assets.  For example, a transfer to a corporation in which Company has no ownership interest before the transaction, but which is a majority-owned subsidiary of Company after the transaction is not a 409A Change-of-Control.

 

For purposes of this Section 8.3, “Gross Fair Market Value” means the value of assets determined without regard to any liabilities associated with such assets.

 

For purposes of this Section 8.3, “Group” means persons acting together for the purpose of acquiring Company stock and includes owners of a corporation that enters into a merger, consolidation, purchase or acquisition of stock, or similar business transaction with Company.  If a person owns stock in both the Company and another corporation that enter into a merger, consolidation purchase or acquisition of stock, or similar transaction,

 

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such person is considered to be part of a Group only with respect to ownership prior to the merger or other transaction giving rise to the change and not with respect to the ownership interest in the other corporation.  Persons will not be considered to be acting as a Group solely because they purchase assets of the same corporation at the same time, or as a result of the same public offering.

 

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ARTICLE IX

SPECIAL PROVISIONS

 

9.1                               Transfer of Liabilities from Prior Plan.  The purpose of this Section 9.1 is to provide for the transfer of liabilities from the Prior Plan to this Plan with respect to Flowco Employees as set forth in the EMA.

 

(a)                                 Flowco Employees shall be eligible to participate in this Plan on the Effective Date to the extent they were eligible to participate in the Prior Plan immediately prior to the Effective Date (the “Flowco Employee Participants”).  For such Flowco Employee Participants, the Continuous Service Commencement Date for purposes of Section 1.8 shall be the Effective Date.

 

(b)                                 The compensation paid by SPX Corporation and its subsidiaries to a Flowco Employee Participant that was recognized under the Prior Plan immediately prior to the Effective Date shall be credited and recognized for all applicable purposes (including, without limitation, benefit determinations) under this Plan as though it were compensation from the Company or its affiliates.

 

(c)                                  The Continuous Service of a Flowco Employee Participant that was recognized under the Prior Plan immediately prior to the Effective Date shall be credited and recognized for all applicable analogous purposes under this Plan as though it were Continuous Service from the Company or its affiliates.

 

(d)                                 On the Effective Date, and subject to such terms and conditions as the Administrator may establish, all liabilities attributable to Flowco Employee Participants shall be transferred from the Prior Plan to this Plan.

 

(e)                                  The Plan shall recognize, implement and honor all distribution and beneficiary elections made by each Flowco Employee Participant under the Prior Plan.

 

9.2                               Generally.  The Company may determine to provide special benefits for any Participant as set forth in separate documents which may be appended hereto.  To the extent that the Company has so determined, the Participant shall be entitled to the benefits provided in such documents, and to the extent that there is any inconsistency between this Plan and such document, and subject to Section 5.3, such other document will govern.

 

21



 

TABLE A

 

Table A

Factors to Convert a 100% Joint and Survivor Annuity to a Life Annuity

 

Supplemental Retirement Plan for Top Management

 

Equivalent Benefit Payable Under Single Life Annuity Option for Each $1.00 Otherwise Payable

 

EMPLOYEE’S

 

BENEFICIARY’S AGE

 

AGE

 

20

 

21

 

22

 

23

 

24

 

25

 

26

 

27

 

28

 

29

 

20

 

1.0486

 

1.0469

 

1.0451

 

1.0434

 

1.0417

 

1.0400

 

1.0383

 

1.0367

 

1.0351

 

1.0336

 

21

 

1.0524

 

1.0506

 

1.0487

 

1.0469

 

1.0451

 

1.0433

 

1.0415

 

1.0398

 

1.0381

 

1.0364

 

22

 

1.0565

 

1.0546

 

1.0526

 

1.0507

 

1.0487

 

1.0468

 

1.0450

 

1.0431

 

1.0413

 

1.0395

 

23

 

1.0609

 

1.0589

 

1.0568

 

1.0547

 

1.0527

 

1.0507

 

1.0487

 

1.0467

 

1.0448

 

1.0429

 

24

 

1.0656

 

1.0635

 

1.0613

 

1.0591

 

1.0570

 

1.0548

 

1.0527

 

1.0506

 

1.0486

 

1.0465

 

25

 

1.0707

 

1.0684

 

1.0661

 

1.0639

 

1.0616

 

1.0593

 

1.0571

 

1.0549

 

1.0527

 

1.0505

 

26

 

1.0761

 

1.0737

 

1.0713

 

1.0689

 

1.0665

 

1.0642

 

1.0618

 

1.0594

 

1.0571

 

1.0548

 

27

 

1.0819

 

1.0794

 

1.0769

 

1.0744

 

1.0719

 

1.0694

 

1.0668

 

1.0644

 

1.0619

 

1.0594

 

28

 

1.0880

 

1.0855

 

1.0828

 

1.0802

 

1.0776

 

1.0749

 

1.0723

 

1.0697

 

1.0670

 

1.0644

 

29

 

1.0946

 

1.0919

 

1.0892

 

1.0865

 

1.0837

 

1.0809

 

1.0782

 

1.0754

 

1.0726

 

1.0699

 

30

 

1.1017

 

1.0989

 

1.0960

 

1.0932

 

1.0903

 

1.0874

 

1.0845

 

1.0816

 

1.0786

 

1.0757

 

31

 

1.1092

 

1.1063

 

1.1033

 

1.1003

 

1.0973

 

1.0943

 

1.0912

 

1.0882

 

1.0851

 

1.0820

 

32

 

1.1172

 

1.1142

 

1.1111

 

1.1080

 

1.1049

 

1.1017

 

1.0985

 

1.0953

 

1.0921

 

1.0888

 

33

 

1.1257

 

1.1226

 

1.1194

 

1.1162

 

1.1129

 

1.1096

 

1.1063

 

1.1029

 

1.0995

 

1.0961

 

34

 

1.1347

 

1.1315

 

1.1283

 

1.1249

 

1.1215

 

1.1181

 

1.1146

 

1.1111

 

1.1076

 

1.1040

 

35

 

1.1444

 

1.1411

 

1.1377

 

1.1342

 

1.1307

 

1.1272

 

1.1235

 

1.1199

 

1.1162

 

1.1125

 

36

 

1.1547

 

1.1513

 

1.1478

 

1.1442

 

1.1406

 

1.1369

 

1.1331

 

1.1293

 

1.1254

 

1.1215

 

37

 

1.1656

 

1.1621

 

1.1585

 

1.1548

 

1.1510

 

1.1472

 

1.1433

 

1.1393

 

1.1353

 

1.1312

 

38

 

1.1773

 

1.1737

 

1.1699

 

1.1661

 

1.1622

 

1.1583

 

1.1542

 

1.1501

 

1.1459

 

1.1417

 

39

 

1.1897

 

1.1860

 

1.1821

 

1.1782

 

1.1742

 

1.1701

 

1.1659

 

1.1616

 

1.1572

 

1.1528

 

40

 

1.2029

 

1.1991

 

1.1951

 

1.1911

 

1.1869

 

1.1827

 

1.1783

 

1.1739

 

1.1694

 

1.1648

 

41

 

1.2170

 

1.2130

 

1.2090

 

1.2048

 

1.2005

 

1.1961

 

1.1916

 

1.1871

 

1.1824

 

1.1776

 

42

 

1.2320

 

1.2279

 

1.2237

 

1.2194

 

1.2150

 

1.2105

 

1.2059

 

1.2011

 

1.1963

 

1.1913

 

43

 

1.2478

 

1.2437

 

1.2394

 

1.2350

 

1.2304

 

1.2257

 

1.2210

 

1.2161

 

1.2110

 

1.2059

 

44

 

1.2647

 

1.2604

 

1.2560

 

1.2514

 

1.2467

 

1.2419

 

1.2370

 

1.2319

 

1.2267

 

1.2214

 

45

 

1.2825

 

1.2781

 

1.2735

 

1.2689

 

1.2640

 

1.2591

 

1.2540

 

1.2488

 

1.2434

 

1.2379

 

46

 

1.3012

 

1.2967

 

1.2921

 

1.2873

 

1.2823

 

1.2772

 

1.2720

 

1.2666

 

1.2611

 

1.2554

 

47

 

1.3211

 

1.3165

 

1.3117

 

1.3067

 

1.3016

 

1.2964

 

1.2910

 

1.2854

 

1.2797

 

1.2739

 

48

 

1.3420

 

1.3373

 

1.3324

 

1.3273

 

1.3221

 

1.3167

 

1.3111

 

1.3054

 

1.2995

 

1.2934

 

49

 

1.3641

 

1.3593

 

1.3542

 

1.3490

 

1.3436

 

1.3381

 

1.3324

 

1.3265

 

1.3204

 

1.3141

 

50

 

1.3875

 

1.3825

 

1.3773

 

1.3720

 

1.3664

 

1.3607

 

1.3548

 

1.3488

 

1.3425

 

1.3360

 

51

 

1.4122

 

1.4070

 

1.4017

 

1.3962

 

1.3905

 

1.3847

 

1.3786

 

1.3724

 

1.3659

 

1.3593

 

52

 

1.4383

 

1.4330

 

1.4276

 

1.4219

 

1.4161

 

1.4100

 

1.4038

 

1.3974

 

1.3907

 

1.3838

 

53

 

1.4659

 

1.4605

 

1.4549

 

1.4491

 

1.4431

 

1.4369

 

1.4305

 

1.4239

 

1.4170

 

1.4099

 

54

 

1.4953

 

1.4897

 

1.4840

 

1.4780

 

1.4718

 

1.4654

 

1.4588

 

1.4520

 

1.4450

 

1.4377

 

55

 

1.5264

 

1.5207

 

1.5148

 

1.5087

 

1.5023

 

1.4958

 

1.4890

 

1.4819

 

1.4747

 

1.4672

 

56

 

1.5596

 

1.5538

 

1.5477

 

1.5414

 

1.5349

 

1.5281

 

1.5211

 

1.5138

 

1.5063

 

1.4986

 

57

 

1.5950

 

1.5890

 

1.5828

 

1.5763

 

1.5695

 

1.5626

 

1.5554

 

1.5479

 

1.5402

 

1.5322

 

58

 

1.6329

 

1.6267

 

1.6203

 

1.6136

 

1.6067

 

1.5995

 

1.5920

 

1.5843

 

1.5764

 

1.5681

 

59

 

1.6735

 

1.6671

 

1.6605

 

1.6536

 

1.6464

 

1.6390

 

1.6314

 

1.6234

 

1.6152

 

1.6067

 

60

 

1.7171

 

1.7105

 

1.7036

 

1.6965

 

1.6892

 

1.6815

 

1.6736

 

1.6654

 

1.6569

 

1.6481

 

61

 

1.7639

 

1.7571

 

1.7501

 

1.7427

 

1.7351

 

1.7273

 

1.7191

 

1.7106

 

1.7018

 

1.6927

 

62

 

1.8144

 

1.8073

 

1.8001

 

1.7925

 

1.7846

 

1.7765

 

1.7680

 

1.7593

 

1.7502

 

1.7407

 

63

 

1.8687

 

1.8614

 

1.8539

 

1.8461

 

1.8379

 

1.8295

 

1.8208

 

1.8117

 

1.8023

 

1.7925

 

64

 

1.9271

 

1.9196

 

1.9118

 

1.9037

 

1.8953

 

1.8866

 

1.8775

 

1.8681

 

1.8584

 

1.8482

 

65

 

1.9900

 

1.9822

 

1.9741

 

1.9657

 

1.9570

 

1.9480

 

1.9386

 

1.9288

 

1.9187

 

1.9082

 

66

 

2.0574

 

2.0493

 

2.0409

 

2.0322

 

2.0232

 

2.0138

 

2.0040

 

1.9939

 

1.9834

 

1.9725

 

67

 

2.1294

 

2.1210

 

2.1123

 

2.1033

 

2.0939

 

2.0841

 

2.0740

 

2.0635

 

2.0525

 

2.0412

 

68

 

2.2066

 

2.1979

 

2.1888

 

2.1794

 

2.1697

 

2.1595

 

2.1490

 

2.1381

 

2.1267

 

2.1149

 

69

 

2.2900

 

2.2809

 

2.2715

 

2.2617

 

2.2516

 

2.2410

 

2.2301

 

2.2187

 

2.2068

 

2.1946

 

70

 

2.3806

 

2.3711

 

2.3613

 

2.3511

 

2.3406

 

2.3296

 

2.3181

 

2.3062

 

2.2939

 

2.2811

 

 

22



 

EMPLOYEE’S

 

BENEFICIARY’S AGE

 

AGE

 

30

 

31

 

32

 

33

 

34

 

35

 

36

 

37

 

38

 

39

 

20

 

1.0321

 

1.0306

 

1.0292

 

1.0278

 

1.0264

 

1.0251

 

1.0238

 

1.0226

 

1.0214

 

1.0203

 

21

 

1.0348

 

1.0332

 

1.0317

 

1.0302

 

1.0287

 

1.0273

 

1.0259

 

1.0246

 

1.0233

 

1.0221

 

22

 

1.0378

 

1.0361

 

1.0344

 

1.0328

 

1.0312

 

1.0297

 

1.0282

 

1.0267

 

1.0254

 

1.0240

 

23

 

1.0410

 

1.0392

 

1.0374

 

1.0356

 

1.0339

 

1.0323

 

1.0307

 

1.0291

 

1.0276

 

1.0262

 

24

 

1.0445

 

1.0426

 

1.0406

 

1.0388

 

1.0369

 

1.0351

 

1.0334

 

1.0317

 

1.0301

 

1.0285

 

25

 

1.0483

 

1.0462

 

1.0442

 

1.0422

 

1.0402

 

1.0383

 

1.0364

 

1.0346

 

1.0328

 

1.0311

 

26

 

1.0525

 

1.0502

 

1.0480

 

1.0459

 

1.0438

 

1.0417

 

1.0397

 

1.0377

 

1.0358

 

1.0340

 

27

 

1.0570

 

1.0546

 

1.0522

 

1.0499

 

1.0476

 

1.0454

 

1.0433

 

1.0411

 

1.0391

 

1.0371

 

28

 

1.0619

 

1.0593

 

1.0568

 

1.0543

 

1.0519

 

1.0495

 

1.0472

 

1.0449

 

1.0427

 

1.0405

 

29

 

1.0671

 

1.0644

 

1.0617

 

1.0591

 

1.0565

 

1.0539

 

1.0514

 

1.0490

 

1.0466

 

1.0443

 

30

 

1.0728

 

1.0700

 

1.0671

 

1.0643

 

1.0615

 

1.0588

 

1.0561

 

1.0534

 

1.0509

 

1.0484

 

31

 

1.0790

 

1.0759

 

1.0729

 

1.0699

 

1.0669

 

1.0640

 

1.0611

 

1.0583

 

1.0556

 

1.0528

 

32

 

1.0856

 

1.0824

 

1.0792

 

1.0760

 

1.0728

 

1.0697

 

1.0667

 

1.0636

 

1.0607

 

1.0578

 

33

 

1.0927

 

1.0893

 

1.0860

 

1.0826

 

1.0792

 

1.0759

 

1.0726

 

1.0694

 

1.0662

 

1.0631

 

34

 

1.1004

 

1.0969

 

1.0933

 

1.0897

 

1.0862

 

1.0826

 

1.0791

 

1.0757

 

1.0723

 

1.0689

 

35

 

1.1087

 

1.1049

 

1.1012

 

1.0974

 

1.0936

 

1.0899

 

1.0862

 

1.0825

 

1.0789

 

1.0753

 

36

 

1.1176

 

1.1136

 

1.1097

 

1.1057

 

1.1017

 

1.0978

 

1.0938

 

1.0899

 

1.0860

 

1.0822

 

37

 

1.1271

 

1.1230

 

1.1188

 

1.1146

 

1.1104

 

1.1063

 

1.1021

 

1.0979

 

1.0938

 

1.0897

 

38

 

1.1374

 

1.1330

 

1.1287

 

1.1243

 

1.1199

 

1.1154

 

1.1110

 

1.1066

 

1.1023

 

1.0979

 

39

 

1.1484

 

1.1438

 

1.1392

 

1.1346

 

1.1300

 

1.1253

 

1.1207

 

1.1160

 

1.1114

 

1.1068

 

40

 

1.1601

 

1.1554

 

1.1506

 

1.1458

 

1.1409

 

1.1360

 

1.1311

 

1.1262

 

1.1213

 

1.1164

 

41

 

1.1728

 

1.1678

 

1.1628

 

1.1578

 

1.1527

 

1.1475

 

1.1424

 

1.1372

 

1.1320

 

1.1268

 

42

 

1.1863

 

1.1811

 

1.1759

 

1.1707

 

1.1653

 

1.1599

 

1.1545

 

1.1490

 

1.1436

 

1.1381

 

43

 

1.2007

 

1.1953

 

1.1899

 

1.1844

 

1.1788

 

1.1732

 

1.1675

 

1.1618

 

1.1560

 

1.1502

 

44

 

1.2160

 

1.2105

 

1.2048

 

1.1991

 

1.1933

 

1.1874

 

1.1814

 

1.1754

 

1.1693

 

1.1632

 

45

 

1.2323

 

1.2265

 

1.2207

 

1.2147

 

1.2086

 

1.2025

 

1.1962

 

1.1899

 

1.1836

 

1.1772

 

46

 

1.2496

 

1.2436

 

1.2375

 

1.2313

 

1.2250

 

1.2186

 

1.2121

 

1.2054

 

1.1988

 

1.1920

 

47

 

1.2678

 

1.2617

 

1.2554

 

1.2489

 

1.2424

 

1.2357

 

1.2289

 

1.2220

 

1.2150

 

1.2079

 

48

 

1.2872

 

1.2808

 

1.2743

 

1.2676

 

1.2608

 

1.2538

 

1.2467

 

1.2395

 

1.2322

 

1.2248

 

49

 

1.3077

 

1.3011

 

1.2944

 

1.2874

 

1.2803

 

1.2731

 

1.2657

 

1.2582

 

1.2506

 

1.2428

 

50

 

1.3294

 

1.3226

 

1.3156

 

1.3084

 

1.3011

 

1.2936

 

1.2859

 

1.2781

 

1.2701

 

1.2620

 

51

 

1.3524

 

1.3454

 

1.3381

 

1.3307

 

1.3231

 

1.3153

 

1.3073

 

1.2992

 

1.2909

 

1.2824

 

52

 

1.3768

 

1.3695

 

1.3620

 

1.3543

 

1.3465

 

1.3384

 

1.3301

 

1.3216

 

1.3130

 

1.3042

 

53

 

1.4027

 

1.3951

 

1.3874

 

1.3795

 

1.3713

 

1.3629

 

1.3543

 

1.3455

 

1.3365

 

1.3274

 

54

 

1.4301

 

1.4224

 

1.4144

 

1.4062

 

1.3977

 

1.3890

 

1.3801

 

1.3710

 

1.3617

 

1.3521

 

55

 

1.4594

 

1.4514

 

1.4431

 

1.4346

 

1.4259

 

1.4169

 

1.4077

 

1.3982

 

1.3885

 

1.3785

 

56

 

1.4906

 

1.4823

 

1.4738

 

1.4650

 

1.4560

 

1.4466

 

1.4371

 

1.4272

 

1.4172

 

1.4068

 

57

 

1.5239

 

1.5154

 

1.5066

 

1.4975

 

1.4881

 

1.4785

 

1.4685

 

1.4583

 

1.4479

 

1.4371

 

58

 

1.5596

 

1.5508

 

1.5417

 

1.5323

 

1.5226

 

1.5126

 

1.5023

 

1.4917

 

1.4808

 

1.4697

 

59

 

1.5979

 

1.5887

 

1.5793

 

1.5696

 

1.5596

 

1.5492

 

1.5385

 

1.5276

 

1.5163

 

1.5047

 

60

 

1.6390

 

1.6296

 

1.6198

 

1.6098

 

1.5994

 

1.5886

 

1.5776

 

1.5662

 

1.5544

 

1.5424

 

61

 

1.6833

 

1.6735

 

1.6634

 

1.6530

 

1.6422

 

1.6311

 

1.6196

 

1.6078

 

1.5956

 

1.5830

 

62

 

1.7310

 

1.7209

 

1.7104

 

1.6996

 

1.6884

 

1.6769

 

1.6650

 

1.6527

 

1.6400

 

1.6270

 

63

 

1.7824

 

1.7719

 

1.7611

 

1.7499

 

1.7383

 

1.7263

 

1.7139

 

1.7011

 

1.6879

 

1.6743

 

64

 

1.8378

 

1.8269

 

1.8156

 

1.8040

 

1.7919

 

1.7795

 

1.7666

 

1.7533

 

1.7396

 

1.7255

 

65

 

1.8973

 

1.8860

 

1.8743

 

1.8622

 

1.8497

 

1.8368

 

1.8234

 

1.8095

 

1.7952

 

1.7805

 

66

 

1.9612

 

1.9495

 

1.9373

 

1.9247

 

1.9117

 

1.8982

 

1.8843

 

1.8699

 

1.8550

 

1.8396

 

67

 

2.0295

 

2.0173

 

2.0046

 

1.9915

 

1.9780

 

1.9640

 

1.9494

 

1.9344

 

1.9189

 

1.9029

 

68

 

2.1027

 

2.0900

 

2.0768

 

2.0632

 

2.0491

 

2.0345

 

2.0193

 

2.0037

 

1.9875

 

1.9708

 

69

 

2.1818

 

2.1686

 

2.1549

 

2.1407

 

2.1260

 

2.1107

 

2.0949

 

2.0786

 

2.0617

 

2.0442

 

70

 

2.2678

 

2.2540

 

2.2397

 

2.2249

 

2.2095

 

2.1936

 

2.1771

 

2.1600

 

2.1423

 

2.1241

 

 

23



 

EMPLOYEE’S

 

BENEFICIARY’S AGE

 

AGE

 

40

 

41

 

42

 

43

 

44

 

45

 

46

 

47

 

48

 

49

 

20

 

1.0192

 

1.0182

 

1.0172

 

1.0162

 

1.0153

 

1.0144

 

1.0136

 

1.0128

 

1.0120

 

1.0113

 

21

 

1.0209

 

1.0198

 

1.0187

 

1.0176

 

1.0166

 

1.0156

 

1.0147

 

1.0139

 

1.0130

 

1.0122

 

22

 

1.0227

 

1.0215

 

1.0203

 

1.0192

 

1.0181

 

1.0170

 

1.0160

 

1.0151

 

1.0141

 

1.0133

 

23

 

1.0248

 

1.0234

 

1.0221

 

1.0209

 

1.0197

 

1.0185

 

1.0174

 

1.0164

 

1.0154

 

1.0144

 

24

 

1.0270

 

1.0255

 

1.0241

 

1.0228

 

1.0215

 

1.0202

 

1.0190

 

1.0179

 

1.0168

 

1.0157

 

25

 

1.0295

 

1.0279

 

1.0263

 

1.0249

 

1.0234

 

1.0221

 

1.0208

 

1.0195

 

1.0183

 

1.0172

 

26

 

1.0322

 

1.0304

 

1.0288

 

1.0272

 

1.0256

 

1.0241

 

1.0227

 

1.0213

 

1.0200

 

1.0188

 

27

 

1.0351

 

1.0333

 

1.0315

 

1.0297

 

1.0280

 

1.0264

 

1.0248

 

1.0233

 

1.0219

 

1.0206

 

28

 

1.0384

 

1.0364

 

1.0344

 

1.0325

 

1.0307

 

1.0289

 

1.0272

 

1.0256

 

1.0240

 

1.0225

 

29

 

1.0420

 

1.0398

 

1.0377

 

1.0356

 

1.0336

 

1.0317

 

1.0298

 

1.0280

 

1.0263

 

1.0247

 

30

 

1.0459

 

1.0435

 

1.0412

 

1.0390

 

1.0368

 

1.0347

 

1.0327

 

1.0308

 

1.0289

 

1.0271

 

31

 

1.0502

 

1.0476

 

1.0451

 

1.0427

 

1.0404

 

1.0381

 

1.0359

 

1.0338

 

1.0318

 

1.0298

 

32

 

1.0549

 

1.0521

 

1.0494

 

1.0468

 

1.0443

 

1.0418

 

1.0394

 

1.0371

 

1.0349

 

1.0328

 

33

 

1.0600

 

1.0571

 

1.0541

 

1.0513

 

1.0486

 

1.0459

 

1.0433

 

1.0408

 

1.0384

 

1.0361

 

34

 

1.0657

 

1.0624

 

1.0593

 

1.0562

 

1.0533

 

1.0504

 

1.0476

 

1.0448

 

1.0422

 

1.0397

 

35

 

1.0718

 

1.0683

 

1.0649

 

1.0616

 

1.0584

 

1.0553

 

1.0523

 

1.0493

 

1.0465

 

1.0437

 

36

 

1.0785

 

1.0748

 

1.0711

 

1.0676

 

1.0641

 

1.0607

 

1.0574

 

1.0542

 

1.0511

 

1.0481

 

37

 

1.0857

 

1.0818

 

1.0779

 

1.0740

 

1.0703

 

1.0666

 

1.0631

 

1.0596

 

1.0563

 

1.0530

 

38

 

1.0936

 

1.0894

 

1.0852

 

1.0811

 

1.0771

 

1.0731

 

1.0693

 

1.0655

 

1.0619

 

1.0584

 

39

 

1.1022

 

1.0977

 

1.0932

 

1.0888

 

1.0845

 

1.0803

 

1.0761

 

1.0721

 

1.0681

 

1.0643

 

40

 

1.1115

 

1.1067

 

1.1019

 

1.0972

 

1.0926

 

1.0880

 

1.0836

 

1.0792

 

1.0750

 

1.0708

 

41

 

1.1217

 

1.1165

 

1.1114

 

1.1064

 

1.1014

 

1.0966

 

1.0918

 

1.0871

 

1.0825

 

1.0780

 

42

 

1.1326

 

1.1272

 

1.1218

 

1.1164

 

1.1111

 

1.1058

 

1.1007

 

1.0956

 

1.0907

 

1.0858

 

43

 

1.1444

 

1.1386

 

1.1329

 

1.1272

 

1.1215

 

1.1159

 

1.1104

 

1.1050

 

1.0996

 

1.0944

 

44

 

1.1571

 

1.1510

 

1.1449

 

1.1388

 

1.1328

 

1.1268

 

1.1209

 

1.1151

 

1.1093

 

1.1037

 

45

 

1.1707

 

1.1642

 

1.1578

 

1.1513

 

1.1449

 

1.1385

 

1.1322

 

1.1260

 

1.1198

 

1.1138

 

46

 

1.1852

 

1.1784

 

1.1716

 

1.1648

 

1.1580

 

1.1512

 

1.1444

 

1.1378

 

1.1312

 

1.1247

 

47

 

1.2008

 

1.1936

 

1.1864

 

1.1792

 

1.1719

 

1.1647

 

1.1576

 

1.1505

 

1.1434

 

1.1365

 

48

 

1.2173

 

1.2098

 

1.2022

 

1.1946

 

1.1869

 

1.1793

 

1.1717

 

1.1641

 

1.1566

 

1.1492

 

49

 

1.2350

 

1.2271

 

1.2191

 

1.2110

 

1.2030

 

1.1949

 

1.1868

 

1.1788

 

1.1708

 

1.1628

 

50

 

1.2538

 

1.2455

 

1.2371

 

1.2286

 

1.2201

 

1.2116

 

1.2030

 

1.1945

 

1.1860

 

1.1775

 

51

 

1.2739

 

1.2651

 

1.2563

 

1.2474

 

1.2385

 

1.2295

 

1.2204

 

1.2114

 

1.2023

 

1.1933

 

52

 

1.2952

 

1.2861

 

1.2769

 

1.2676

 

1.2581

 

1.2486

 

1.2391

 

1.2295

 

1.2199

 

1.2104

 

53

 

1.3180

 

1.3085

 

1.2989

 

1.2891

 

1.2792

 

1.2692

 

1.2591

 

1.2490

 

1.2389

 

1.2287

 

54

 

1.3424

 

1.3324

 

1.3223

 

1.3121

 

1.3017

 

1.2912

 

1.2806

 

1.2699

 

1.2592

 

1.2485

 

55

 

1.3684

 

1.3580

 

1.3475

 

1.3368

 

1.3259

 

1.3148

 

1.3037

 

1.2925

 

1.2811

 

1.2698

 

56

 

1.3963

 

1.3855

 

1.3744

 

1.3632

 

1.3518

 

1.3403

 

1.3285

 

1.3167

 

1.3048

 

1.2928

 

57

 

1.4261

 

1.4149

 

1.4034

 

1.3917

 

1.3797

 

1.3676

 

1.3553

 

1.3429

 

1.3303

 

1.3176

 

58

 

1.4582

 

1.4465

 

1.4345

 

1.4223

 

1.4098

 

1.3971

 

1.3842

 

1.3711

 

1.3579

 

1.3445

 

59

 

1.4928

 

1.4805

 

1.4680

 

1.4553

 

1.4422

 

1.4289

 

1.4154

 

1.4017

 

1.3878

 

1.3737

 

60

 

1.5300

 

1.5173

 

1.5042

 

1.4909

 

1.4773

 

1.4634

 

1.4492

 

1.4348

 

1.4202

 

1.4053

 

61

 

1.5701

 

1.5569

 

1.5433

 

1.5294

 

1.5151

 

1.5006

 

1.4857

 

1.4706

 

1.4553

 

1.4397

 

62

 

1.6135

 

1.5997

 

1.5855

 

1.5710

 

1.5561

 

1.5409

 

1.5254

 

1.5095

 

1.4934

 

1.4770

 

63

 

1.6604

 

1.6460

 

1.6312

 

1.6160

 

1.6004

 

1.5845

 

1.5682

 

1.5516

 

1.5347

 

1.5174

 

64

 

1.7109

 

1.6959

 

1.6804

 

1.6646

 

1.6483

 

1.6317

 

1.6146

 

1.5972

 

1.5794

 

1.5613

 

65

 

1.7653

 

1.7496

 

1.7335

 

1.7170

 

1.7000

 

1.6825

 

1.6647

 

1.6464

 

1.6277

 

1.6087

 

66

 

1.8238

 

1.8074

 

1.7906

 

1.7733

 

1.7555

 

1.7373

 

1.7185

 

1.6994

 

1.6798

 

1.6598

 

67

 

1.8863

 

1.8693

 

1.8517

 

1.8336

 

1.8150

 

1.7959

 

1.7763

 

1.7562

 

1.7356

 

1.7146

 

68

 

1.9535

 

1.9357

 

1.9173

 

1.8984

 

1.8790

 

1.8589

 

1.8384

 

1.8173

 

1.7957

 

1.7736

 

69

 

2.0262

 

2.0076

 

1.9883

 

1.9685

 

1.9482

 

1.9272

 

1.9057

 

1.8836

 

1.8609

 

1.8377

 

70

 

2.1052

 

2.0857

 

2.0656

 

2.0449

 

2.0235

 

2.0015

 

1.9789

 

1.9557

 

1.9319

 

1.9074

 

 

24



 

EMPLOYEE’S

 

BENEFICIARY’S AGE

 

AGE

 

50

 

51

 

52

 

53

 

54

 

55

 

56

 

57

 

58

 

59

 

20

 

1.0106

 

1.0099

 

1.0093

 

1.0087

 

1.0081

 

1.0076

 

1.0071

 

1.0066

 

1.0062

 

1.0057

 

21

 

1.0115

 

1.0107

 

1.0100

 

1.0094

 

1.0088

 

1.0082

 

1.0076

 

1.0071

 

1.0066

 

1.0061

 

22

 

1.0124

 

1.0116

 

1.0109

 

1.0102

 

1.0095

 

1.0089

 

1.0083

 

1.0077

 

1.0071

 

1.0066

 

23

 

1.0135

 

1.0127

 

1.0118

 

1.0111

 

1.0103

 

1.0096

 

1.0089

 

1.0083

 

1.0077

 

1.0072

 

24

 

1.0147

 

1.0138

 

1.0129

 

1.0120

 

1.0112

 

1.0104

 

1.0097

 

1.0090

 

1.0084

 

1.0078

 

25

 

1.0161

 

1.0150

 

1.0141

 

1.0131

 

1.0122

 

1.0114

 

1.0106

 

1.0098

 

1.0091

 

1.0084

 

26

 

1.0176

 

1.0164

 

1.0154

 

1.0143

 

1.0133

 

1.0124

 

1.0115

 

1.0107

 

1.0099

 

1.0092

 

27

 

1.0192

 

1.0180

 

1.0168

 

1.0157

 

1.0146

 

1.0136

 

1.0126

 

1.0117

 

1.0108

 

1.0100

 

28

 

1.0211

 

1.0197

 

1.0184

 

1.0172

 

1.0160

 

1.0149

 

1.0138

 

1.0128

 

1.0119

 

1.0110

 

29

 

1.0231

 

1.0217

 

1.0202

 

1.0189

 

1.0176

 

1.0163

 

1.0152

 

1.0141

 

1.0130

 

1.0120

 

30

 

1.0254

 

1.0238

 

1.0222

 

1.0207

 

1.0193

 

1.0180

 

1.0167

 

1.0155

 

1.0143

 

1.0132

 

31

 

1.0279

 

1.0262

 

1.0244

 

1.0228

 

1.0213

 

1.0198

 

1.0184

 

1.0170

 

1.0158

 

1.0146

 

32

 

1.0307

 

1.0288

 

1.0269

 

1.0251

 

1.0234

 

1.0218

 

1.0202

 

1.0188

 

1.0174

 

1.0160

 

33

 

1.0338

 

1.0317

 

1.0296

 

1.0277

 

1.0258

 

1.0240

 

1.0223

 

1.0207

 

1.0192

 

1.0177

 

34

 

1.0373

 

1.0349

 

1.0327

 

1.0305

 

1.0285

 

1.0265

 

1.0247

 

1.0229

 

1.0212

 

1.0196

 

35

 

1.0411

 

1.0385

 

1.0361

 

1.0337

 

1.0315

 

1.0293

 

1.0273

 

1.0253

 

1.0234

 

1.0217

 

36

 

1.0452

 

1.0425

 

1.0398

 

1.0372

 

1.0347

 

1.0324

 

1.0301

 

1.0280

 

1.0260

 

1.0240

 

37

 

1.0499

 

1.0468

 

1.0439

 

1.0411

 

1.0384

 

1.0358

 

1.0334

 

1.0310

 

1.0288

 

1.0266

 

38

 

1.0550

 

1.0517

 

1.0485

 

1.0454

 

1.0425

 

1.0396

 

1.0369

 

1.0344

 

1.0319

 

1.0295

 

39

 

1.0606

 

1.0570

 

1.0535

 

1.0502

 

1.0470

 

1.0439

 

1.0409

 

1.0381

 

1.0354

 

1.0328

 

40

 

1.0668

 

1.0629

 

1.0591

 

1.0555

 

1.0520

 

1.0486

 

1.0453

 

1.0422

 

1.0393

 

1.0364

 

41

 

1.0736

 

1.0694

 

1.0653

 

1.0613

 

1.0575

 

1.0538

 

1.0502

 

1.0468

 

1.0436

 

1.0405

 

42

 

1.0811

 

1.0765

 

1.0721

 

1.0677

 

1.0636

 

1.0595

 

1.0557

 

1.0519

 

1.0484

 

1.0450

 

43

 

1.0893

 

1.0843

 

1.0795

 

1.0748

 

1.0703

 

1.0659

 

1.0616

 

1.0576

 

1.0536

 

1.0499

 

44

 

1.0982

 

1.0928

 

1.0876

 

1.0825

 

1.0776

 

1.0728

 

1.0682

 

1.0637

 

1.0594

 

1.0553

 

45

 

1.1079

 

1.1021

 

1.0964

 

1.0909

 

1.0855

 

1.0803

 

1.0753

 

1.0704

 

1.0658

 

1.0613

 

46

 

1.1183

 

1.1121

 

1.1060

 

1.1000

 

1.0942

 

1.0885

 

1.0831

 

1.0778

 

1.0727

 

1.0678

 

47

 

1.1296

 

1.1229

 

1.1163

 

1.1099

 

1.1036

 

1.0975

 

1.0915

 

1.0858

 

1.0802

 

1.0749

 

48

 

1.1418

 

1.1346

 

1.1275

 

1.1206

 

1.1138

 

1.1071

 

1.1007

 

1.0944

 

1.0884

 

1.0826

 

49

 

1.1550

 

1.1472

 

1.1396

 

1.1321

 

1.1248

 

1.1176

 

1.1107

 

1.1039

 

1.0973

 

1.0910

 

50

 

1.1691

 

1.1609

 

1.1527

 

1.1446

 

1.1367

 

1.1290

 

1.1215

 

1.1141

 

1.1070

 

1.1001

 

51

 

1.1844

 

1.1756

 

1.1668

 

1.1582

 

1.1497

 

1.1413

 

1.1332

 

1.1252

 

1.1175

 

1.1100

 

52

 

1.2009

 

1.1914

 

1.1821

 

1.1728

 

1.1637

 

1.1547

 

1.1459

 

1.1374

 

1.1290

 

1.1209

 

53

 

1.2186

 

1.2085

 

1.1985

 

1.1886

 

1.1789

 

1.1692

 

1.1598

 

1.1505

 

1.1415

 

1.1327

 

54

 

1.2377

 

1.2270

 

1.2164

 

1.2058

 

1.1953

 

1.1850

 

1.1748

 

1.1649

 

1.1551

 

1.1456

 

55

 

1.2584

 

1.2470

 

1.2357

 

1.2244

 

1.2132

 

1.2021

 

1.1912

 

1.1805

 

1.1700

 

1.1597

 

56

 

1.2807

 

1.2687

 

1.2566

 

1.2446

 

1.2326

 

1.2208

 

1.2091

 

1.1976

 

1.1862

 

1.1751

 

57

 

1.3049

 

1.2921

 

1.2793

 

1.2665

 

1.2538

 

1.2411

 

1.2286

 

1.2162

 

1.2040

 

1.1921

 

58

 

1.3311

 

1.3175

 

1.3040

 

1.2904

 

1.2768

 

1.2633

 

1.2499

 

1.2366

 

1.2235

 

1.2107

 

59

 

1.3595

 

1.3452

 

1.3308

 

1.3164

 

1.3019

 

1.2875

 

1.2732

 

1.2590

 

1.2449

 

1.2311

 

60

 

1.3903

 

1.3752

 

1.3600

 

1.3447

 

1.3294

 

1.3140

 

1.2987

 

1.2835

 

1.2684

 

1.2536

 

61

 

1.4239

 

1.4079

 

1.3918

 

1.3756

 

1.3593

 

1.3430

 

1.3267

 

1.3104

 

1.2943

 

1.2783

 

62

 

1.4603

 

1.4435

 

1.4264

 

1.4093

 

1.3920

 

1.3746

 

1.3572

 

1.3399

 

1.3226

 

1.3055

 

63

 

1.4999

 

1.4821

 

1.4641

 

1.4460

 

1.4276

 

1.4092

 

1.3907

 

1.3722

 

1.3537

 

1.3354

 

64

 

1.5428

 

1.5241

 

1.5051

 

1.4859

 

1.4664

 

1.4468

 

1.4272

 

1.4074

 

1.3877

 

1.3681

 

65

 

1.5892

 

1.5695

 

1.5495

 

1.5291

 

1.5086

 

1.4878

 

1.4669

 

1.4459

 

1.4249

 

1.4039

 

66

 

1.6393

 

1.6185

 

1.5974

 

1.5759

 

1.5541

 

1.5321

 

1.5099

 

1.4876

 

1.4652

 

1.4428

 

67

 

1.6931

 

1.6712

 

1.6489

 

1.6262

 

1.6032

 

1.5799

 

1.5564

 

1.5326

 

1.5088

 

1.4849

 

68

 

1.7510

 

1.7280

 

1.7045

 

1.6806

 

1.6562

 

1.6316

 

1.6066

 

1.5814

 

1.5560

 

1.5305

 

69

 

1.8139

 

1.7896

 

1.7649

 

1.7396

 

1.7139

 

1.6878

 

1.6613

 

1.6345

 

1.6075

 

1.5804

 

70

 

1.8824

 

1.8569

 

1.8307

 

1.8041

 

1.7769

 

1.7493

 

1.7212

 

1.6928

 

1.6641

 

1.6352

 

 

25



 

EMPLOYEE’S

 

BENEFICIARY’S AGE

 

AGE

 

60

 

61

 

62

 

63

 

64

 

65

 

66

 

67

 

68

 

69

 

20

 

1.0053

 

1.0049

 

1.0046

 

1.0042

 

1.0039

 

1.0036

 

1.0033

 

1.0031

 

1.0028

 

1.0026

 

21

 

1.0057

 

1.0053

 

1.0049

 

1.0045

 

1.0042

 

1.0039

 

1.0036

 

1.0033

 

1.0030

 

1.0027

 

22

 

1.0061

 

1.0057

 

1.0053

 

1.0049

 

1.0045

 

1.0041

 

1.0038

 

1.0035

 

1.0032

 

1.0029

 

23

 

1.0066

 

1.0061

 

1.0057

 

1.0052

 

1.0048

 

1.0044

 

1.0041

 

1.0037

 

1.0034

 

1.0031

 

24

 

1.0072

 

1.0066

 

1.0061

 

1.0056

 

1.0052

 

1.0048

 

1.0044

 

1.0040

 

1.0037

 

1.0033

 

25

 

1.0078

 

1.0072

 

1.0066

 

1.0061

 

1.0056

 

1.0052

 

1.0047

 

1.0043

 

1.0040

 

1.0036

 

26

 

1.0085

 

1.0078

 

1.0072

 

1.0066

 

1.0061

 

1.0056

 

1.0051

 

1.0047

 

1.0043

 

1.0039

 

27

 

1.0093

 

1.0085

 

1.0079

 

1.0072

 

1.0066

 

1.0061

 

1.0056

 

1.0051

 

1.0046

 

1.0042

 

28

 

1.0101

 

1.0093

 

1.0086

 

1.0079

 

1.0072

 

1.0066

 

1.0061

 

1.0055

 

1.0050

 

1.0046

 

29

 

1.0111

 

1.0102

 

1.0094

 

1.0086

 

1.0079

 

1.0072

 

1.0066

 

1.0060

 

1.0055

 

1.0050

 

30

 

1.0122

 

1.0112

 

1.0103

 

1.0095

 

1.0087

 

1.0079

 

1.0072

 

1.0066

 

1.0060

 

1.0054

 

31

 

1.0134

 

1.0124

 

1.0114

 

1.0104

 

1.0095

 

1.0087

 

1.0080

 

1.0073

 

1.0066

 

1.0060

 

32

 

1.0148

 

1.0136

 

1.0125

 

1.0115

 

1.0105

 

1.0096

 

1.0088

 

1.0080

 

1.0073

 

1.0066

 

33

 

1.0163

 

1.0151

 

1.0138

 

1.0127

 

1.0116

 

1.0106

 

1.0097

 

1.0088

 

1.0080

 

1.0072

 

34

 

1.0181

 

1.0166

 

1.0153

 

1.0140

 

1.0129

 

1.0118

 

1.0107

 

1.0097

 

1.0088

 

1.0080

 

35

 

1.0200

 

1.0184

 

1.0170

 

1.0156

 

1.0143

 

1.0130

 

1.0119

 

1.0108

 

1.0098

 

1.0089

 

36

 

1.0222

 

1.0204

 

1.0188

 

1.0173

 

1.0158

 

1.0145

 

1.0132

 

1.0120

 

1.0109

 

1.0099

 

37

 

1.0246

 

1.0227

 

1.0209

 

1.0192

 

1.0176

 

1.0161

 

1.0147

 

1.0134

 

1.0121

 

1.0110

 

38

 

1.0273

 

1.0252

 

1.0232

 

1.0213

 

1.0196

 

1.0179

 

1.0164

 

1.0149

 

1.0135

 

1.0123

 

39

 

1.0303

 

1.0280

 

1.0258

 

1.0238

 

1.0218

 

1.0200

 

1.0182

 

1.0166

 

1.0151

 

1.0137

 

40

 

1.0337

 

1.0312

 

1.0288

 

1.0265

 

1.0243

 

1.0223

 

1.0204

 

1.0186

 

1.0169

 

1.0153

 

41

 

1.0375

 

1.0347

 

1.0320

 

1.0295

 

1.0271

 

1.0249

 

1.0228

 

1.0208

 

1.0189

 

1.0172

 

42

 

1.0417

 

1.0386

 

1.0357

 

1.0329

 

1.0303

 

1.0278

 

1.0254

 

1.0232

 

1.0212

 

1.0193

 

43

 

1.0463

 

1.0429

 

1.0397

 

1.0366

 

1.0337

 

1.0310

 

1.0284

 

1.0260

 

1.0237

 

1.0216

 

44

 

1.0514

 

1.0477

 

1.0441

 

1.0408

 

1.0376

 

1.0346

 

1.0317

 

1.0290

 

1.0265

 

1.0241

 

45

 

1.0570

 

1.0529

 

1.0490

 

1.0453

 

1.0418

 

1.0385

 

1.0353

 

1.0324

 

1.0296

 

1.0269

 

46

 

1.0631

 

1.0586

 

1.0543

 

1.0503

 

1.0464

 

1.0427

 

1.0393

 

1.0360

 

1.0329

 

1.0300

 

47

 

1.0697

 

1.0648

 

1.0602

 

1.0557

 

1.0514

 

1.0474

 

1.0436

 

1.0400

 

1.0366

 

1.0334

 

48

 

1.0770

 

1.0716

 

1.0665

 

1.0616

 

1.0569

 

1.0525

 

1.0483

 

1.0444

 

1.0406

 

1.0371

 

49

 

1.0849

 

1.0790

 

1.0734

 

1.0680

 

1.0629

 

1.0581

 

1.0535

 

1.0491

 

1.0450

 

1.0411

 

50

 

1.0935

 

1.0871

 

1.0809

 

1.0751

 

1.0695

 

1.0642

 

1.0591

 

1.0543

 

1.0498

 

1.0455

 

51

 

1.1028

 

1.0959

 

1.0892

 

1.0828

 

1.0766

 

1.0708

 

1.0653

 

1.0600

 

1.0550

 

1.0503

 

52

 

1.1130

 

1.1054

 

1.0982

 

1.0912

 

1.0845

 

1.0781

 

1.0720

 

1.0663

 

1.0608

 

1.0556

 

53

 

1.1242

 

1.1159

 

1.1080

 

1.1004

 

1.0931

 

1.0861

 

1.0794

 

1.0731

 

1.0671

 

1.0614

 

54

 

1.1364

 

1.1274

 

1.1188

 

1.1105

 

1.1025

 

1.0949

 

1.0876

 

1.0807

 

1.0741

 

1.0678

 

55

 

1.1497

 

1.1400

 

1.1306

 

1.1216

 

1.1129

 

1.1046

 

1.0966

 

1.0890

 

1.0818

 

1.0749

 

56

 

1.1643

 

1.1538

 

1.1436

 

1.1338

 

1.1243

 

1.1152

 

1.1065

 

1.0982

 

1.0903

 

1.0828

 

57

 

1.1804

 

1.1690

 

1.1580

 

1.1473

 

1.1370

 

1.1271

 

1.1175

 

1.1084

 

1.0997

 

1.0915

 

58

 

1.1981

 

1.1858

 

1.1738

 

1.1622

 

1.1510

 

1.1402

 

1.1298

 

1.1198

 

1.1103

 

1.1012

 

59

 

1.2175

 

1.2042

 

1.1913

 

1.1787

 

1.1665

 

1.1547

 

1.1434

 

1.1325

 

1.1221

 

1.1121

 

60

 

1.2390

 

1.2246

 

1.2106

 

1.1970

 

1.1837

 

1.1709

 

1.1585

 

1.1466

 

1.1352

 

1.1243

 

61

 

1.2626

 

1.2471

 

1.2320

 

1.2172

 

1.2028

 

1.1889

 

1.1754

 

1.1624

 

1.1499

 

1.1380

 

62

 

1.2886

 

1.2720

 

1.2556

 

1.2396

 

1.2241

 

1.2089

 

1.1942

 

1.1800

 

1.1664

 

1.1533

 

63

 

1.3172

 

1.2993

 

1.2817

 

1.2644

 

1.2475

 

1.2311

 

1.2151

 

1.1997

 

1.1847

 

1.1704

 

64

 

1.3487

 

1.3294

 

1.3104

 

1.2918

 

1.2735

 

1.2557

 

1.2383

 

1.2215

 

1.2051

 

1.1894

 

65

 

1.3830

 

1.3623

 

1.3419

 

1.3218

 

1.3021

 

1.2827

 

1.2639

 

1.2456

 

1.2278

 

1.2106

 

66

 

1.4204

 

1.3983

 

1.3763

 

1.3547

 

1.3334

 

1.3125

 

1.2920

 

1.2721

 

1.2527

 

1.2340

 

67

 

1.4610

 

1.4373

 

1.4137

 

1.3904

 

1.3674

 

1.3449

 

1.3227

 

1.3011

 

1.2801

 

1.2596

 

68

 

1.5050

 

1.4796

 

1.4544

 

1.4294

 

1.4046

 

1.3803

 

1.3564

 

1.3329

 

1.3101

 

1.2878

 

69

 

1.5532

 

1.5261

 

1.4990

 

1.4722

 

1.4456

 

1.4193

 

1.3935

 

1.3681

 

1.3433

 

1.3191

 

70

 

1.6062

 

1.5772

 

1.5482

 

1.5194

 

1.4908

 

1.4625

 

1.4346

 

1.4072

 

1.3803

 

1.3540

 

 

26



 

EMPLOYEE’S

 

BENEFICIARY’S AGE

 

AGE

 

70

 

71

 

72

 

73

 

74

 

75

 

76

 

77

 

78

 

79

 

20

 

1.0024

 

1.0022

 

1.0020

 

1.0018

 

1.0016

 

1.0015

 

1.0013

 

1.0012

 

1.0011

 

1.0010

 

21

 

1.0025

 

1.0023

 

1.0021

 

1.0019

 

1.0017

 

1.0016

 

1.0014

 

1.0013

 

1.0012

 

1.0011

 

22

 

1.0027

 

1.0024

 

1.0022

 

1.0020

 

1.0018

 

1.0017

 

1.0015

 

1.0014

 

1.0012

 

1.0011

 

23

 

1.0028

 

1.0026

 

1.0024

 

1.0021

 

1.0019

 

1.0018

 

1.0016

 

1.0014

 

1.0013

 

1.0012

 

24

 

1.0030

 

1.0028

 

1.0025

 

1.0023

 

1.0021

 

1.0019

 

1.0017

 

1.0015

 

1.0014

 

1.0013

 

25

 

1.0033

 

1.0030

 

1.0027

 

1.0024

 

1.0022

 

1.0020

 

1.0018

 

1.0016

 

1.0015

 

1.0013

 

26

 

1.0035

 

1.0032

 

1.0029

 

1.0026

 

1.0024

 

1.0022

 

1.0019

 

1.0018

 

1.0016

 

1.0014

 

27

 

1.0038

 

1.0035

 

1.0031

 

1.0028

 

1.0026

 

1.0023

 

1.0021

 

1.0019

 

1.0017

 

1.0015

 

28

 

1.0041

 

1.0038

 

1.0034

 

1.0031

 

1.0028

 

1.0025

 

1.0023

 

1.0020

 

1.0018

 

1.0016

 

29

 

1.0045

 

1.0041

 

1.0037

 

1.0033

 

1.0030

 

1.0027

 

1.0024

 

1.0022

 

1.0020

 

1.0018

 

30

 

1.0049

 

1.0045

 

1.0040

 

1.0036

 

1.0033

 

1.0029

 

1.0027

 

1.0024

 

1.0021

 

1.0019

 

31

 

1.0054

 

1.0049

 

1.0044

 

1.0040

 

1.0036

 

1.0032

 

1.0029

 

1.0026

 

1.0023

 

1.0021

 

32

 

1.0059

 

1.0054

 

1.0048

 

1.0044

 

1.0039

 

1.0035

 

1.0032

 

1.0028

 

1.0025

 

1.0023

 

33

 

1.0065

 

1.0059

 

1.0053

 

1.0048

 

1.0043

 

1.0039

 

1.0035

 

1.0031

 

1.0028

 

1.0025

 

34

 

1.0072

 

1.0065

 

1.0059

 

1.0053

 

1.0047

 

1.0043

 

1.0038

 

1.0034

 

1.0031

 

1.0027

 

35

 

1.0080

 

1.0072

 

1.0065

 

1.0059

 

1.0053

 

1.0047

 

1.0042

 

1.0038

 

1.0034

 

1.0030

 

36

 

1.0089

 

1.0080

 

1.0072

 

1.0065

 

1.0058

 

1.0052

 

1.0047

 

1.0042

 

1.0037

 

1.0033

 

37

 

1.0099

 

1.0090

 

1.0081

 

1.0072

 

1.0065

 

1.0058

 

1.0052

 

1.0047

 

1.0042

 

1.0037

 

38

 

1.0111

 

1.0100

 

1.0090

 

1.0081

 

1.0073

 

1.0065

 

1.0058

 

1.0052

 

1.0047

 

1.0041

 

39

 

1.0124

 

1.0112

 

1.0101

 

1.0091

 

1.0081

 

1.0073

 

1.0065

 

1.0058

 

1.0052

 

1.0046

 

40

 

1.0139

 

1.0125

 

1.0113

 

1.0102

 

1.0091

 

1.0082

 

1.0073

 

1.0066

 

1.0059

 

1.0052

 

41

 

1.0156

 

1.0141

 

1.0127

 

1.0114

 

1.0103

 

1.0092

 

1.0083

 

1.0074

 

1.0066

 

1.0059

 

42

 

1.0175

 

1.0158

 

1.0143

 

1.0128

 

1.0116

 

1.0104

 

1.0093

 

1.0084

 

1.0075

 

1.0067

 

43

 

1.0196

 

1.0177

 

1.0160

 

1.0144

 

1.0130

 

1.0117

 

1.0105

 

1.0094

 

1.0085

 

1.0076

 

44

 

1.0219

 

1.0199

 

1.0180

 

1.0162

 

1.0146

 

1.0132

 

1.0118

 

1.0106

 

1.0095

 

1.0085

 

45

 

1.0245

 

1.0222

 

1.0201

 

1.0182

 

1.0164

 

1.0148

 

1.0133

 

1.0120

 

1.0107

 

1.0096

 

46

 

1.0273

 

1.0248

 

1.0225

 

1.0203

 

1.0184

 

1.0166

 

1.0149

 

1.0134

 

1.0121

 

1.0108

 

47

 

1.0304

 

1.0276

 

1.0250

 

1.0227

 

1.0205

 

1.0185

 

1.0167

 

1.0150

 

1.0135

 

1.0121

 

48

 

1.0338

 

1.0307

 

1.0279

 

1.0252

 

1.0228

 

1.0206

 

1.0186

 

1.0168

 

1.0151

 

1.0136

 

49

 

1.0375

 

1.0341

 

1.0309

 

1.0280

 

1.0254

 

1.0229

 

1.0207

 

1.0187

 

1.0168

 

1.0151

 

50

 

1.0415

 

1.0378

 

1.0343

 

1.0311

 

1.0282

 

1.0255

 

1.0230

 

1.0207

 

1.0187

 

1.0168

 

51

 

1.0459

 

1.0418

 

1.0380

 

1.0345

 

1.0312

 

1.0282

 

1.0255

 

1.0230

 

1.0207

 

1.0187

 

52

 

1.0508

 

1.0462

 

1.0420

 

1.0381

 

1.0346

 

1.0313

 

1.0283

 

1.0255

 

1.0230

 

1.0207

 

53

 

1.0561

 

1.0511

 

1.0465

 

1.0422

 

1.0382

 

1.0346

 

1.0313

 

1.0282

 

1.0254

 

1.0229

 

54

 

1.0620

 

1.0565

 

1.0514

 

1.0466

 

1.0423

 

1.0383

 

1.0346

 

1.0312

 

1.0282

 

1.0254

 

55

 

1.0685

 

1.0624

 

1.0568

 

1.0516

 

1.0468

 

1.0424

 

1.0383

 

1.0346

 

1.0312

 

1.0281

 

56

 

1.0757

 

1.0690

 

1.0628

 

1.0571

 

1.0518

 

1.0469

 

1.0424

 

1.0383

 

1.0345

 

1.0311

 

57

 

1.0837

 

1.0763

 

1.0695

 

1.0632

 

1.0574

 

1.0520

 

1.0470

 

1.0425

 

1.0383

 

1.0345

 

58

 

1.0926

 

1.0846

 

1.0771

 

1.0701

 

1.0636

 

1.0577

 

1.0522

 

1.0471

 

1.0425

 

1.0383

 

59

 

1.1027

 

1.0938

 

1.0855

 

1.0778

 

1.0707

 

1.0641

 

1.0580

 

1.0524

 

1.0473

 

1.0426

 

60

 

1.1139

 

1.1042

 

1.0950

 

1.0865

 

1.0786

 

1.0714

 

1.0646

 

1.0584

 

1.0528

 

1.0476

 

61

 

1.1266

 

1.1158

 

1.1058

 

1.0964

 

1.0877

 

1.0796

 

1.0721

 

1.0653

 

1.0589

 

1.0532

 

62

 

1.1408

 

1.1289

 

1.1178

 

1.1075

 

1.0978

 

1.0889

 

1.0806

 

1.0730

 

1.0660

 

1.0596

 

63

 

1.1567

 

1.1436

 

1.1314

 

1.1200

 

1.1093

 

1.0994

 

1.0903

 

1.0818

 

1.0740

 

1.0668

 

64

 

1.1744

 

1.1601

 

1.1466

 

1.1340

 

1.1223

 

1.1113

 

1.1011

 

1.0917

 

1.0831

 

1.0751

 

65

 

1.1941

 

1.1784

 

1.1636

 

1.1497

 

1.1367

 

1.1246

 

1.1134

 

1.1029

 

1.0933

 

1.0844

 

66

 

1.2160

 

1.1987

 

1.1825

 

1.1672

 

1.1529

 

1.1395

 

1.1270

 

1.1154

 

1.1047

 

1.0949

 

67

 

1.2399

 

1.2211

 

1.2032

 

1.1864

 

1.1707

 

1.1559

 

1.1421

 

1.1293

 

1.1174

 

1.1065

 

68

 

1.2663

 

1.2457

 

1.2262

 

1.2077

 

1.1904

 

1.1741

 

1.1589

 

1.1448

 

1.1316

 

1.1194

 

69

 

1.2957

 

1.2732

 

1.2518

 

1.2316

 

1.2125

 

1.1946

 

1.1778

 

1.1621

 

1.1476

 

1.1341

 

70

 

1.3285

 

1.3039

 

1.2805

 

1.2583

 

1.2374

 

1.2177

 

1.1992

 

1.1819

 

1.1657

 

1.1507

 

 

27



 

EMPLOYEE’S

 

BENEFICIARY’S AGE

 

AGE

 

80

 

81

 

82

 

83

 

84

 

85

 

86

 

87

 

88

 

89

 

20

 

1.0009

 

1.0008

 

1.0007

 

1.0007

 

1.0006

 

1.0005

 

1.0005

 

1.0004

 

1.0004

 

1.0003

 

21

 

1.0009

 

1.0009

 

1.0008

 

1.0007

 

1.0006

 

1.0006

 

1.0005

 

1.0004

 

1.0004

 

1.0004

 

22

 

1.0010

 

1.0009

 

1.0008

 

1.0007

 

1.0007

 

1.0006

 

1.0005

 

1.0005

 

1.0004

 

1.0004

 

23

 

1.0011

 

1.0010

 

1.0009

 

1.0008

 

1.0007

 

1.0006

 

1.0006

 

1.0005

 

1.0004

 

1.0004

 

24

 

1.0011

 

1.0010

 

1.0009

 

1.0008

 

1.0007

 

1.0007

 

1.0006

 

1.0005

 

1.0005

 

1.0004

 

25

 

1.0012

 

1.0011

 

1.0010

 

1.0009

 

1.0008

 

1.0007

 

1.0006

 

1.0006

 

1.0005

 

1.0004

 

26

 

1.0013

 

1.0012

 

1.0010

 

1.0009

 

1.0008

 

1.0007

 

1.0007

 

1.0006

 

1.0005

 

1.0005

 

27

 

1.0014

 

1.0012

 

1.0011

 

1.0010

 

1.0009

 

1.0008

 

1.0007

 

1.0006

 

1.0006

 

1.0005

 

28

 

1.0015

 

1.0013

 

1.0012

 

1.0011

 

1.0010

 

1.0009

 

1.0008

 

1.0007

 

1.0006

 

1.0005

 

29

 

1.0016

 

1.0014

 

1.0013

 

1.0011

 

1.0010

 

1.0009

 

1.0008

 

1.0007

 

1.0006

 

1.0006

 

30

 

1.0017

 

1.0015

 

1.0014

 

1.0012

 

1.0011

 

1.0010

 

1.0009

 

1.0008

 

1.0007

 

1.0006

 

31

 

1.0019

 

1.0017

 

1.0015

 

1.0013

 

1.0012

 

1.0011

 

1.0009

 

1.0008

 

1.0007

 

1.0007

 

32

 

1.0020

 

1.0018

 

1.0016

 

1.0015

 

1.0013

 

1.0012

 

1.0010

 

1.0009

 

1.0008

 

1.0007

 

33

 

1.0022

 

1.0020

 

1.0018

 

1.0016

 

1.0014

 

1.0013

 

1.0011

 

1.0010

 

1.0009

 

1.0008

 

34

 

1.0024

 

1.0022

 

1.0019

 

1.0017

 

1.0015

 

1.0014

 

1.0012

 

1.0011

 

1.0010

 

1.0008

 

35

 

1.0027

 

1.0024

 

1.0021

 

1.0019

 

1.0017

 

1.0015

 

1.0013

 

1.0012

 

1.0010

 

1.0009

 

36

 

1.0030

 

1.0027

 

1.0024

 

1.0021

 

1.0019

 

1.0017

 

1.0015

 

1.0013

 

1.0011

 

1.0010

 

37

 

1.0033

 

1.0029

 

1.0026

 

1.0023

 

1.0021

 

1.0018

 

1.0016

 

1.0014

 

1.0013

 

1.0011

 

38

 

1.0037

 

1.0033

 

1.0029

 

1.0026

 

1.0023

 

1.0020

 

1.0018

 

1.0016

 

1.0014

 

1.0012

 

39

 

1.0041

 

1.0037

 

1.0033

 

1.0029

 

1.0026

 

1.0023

 

1.0020

 

1.0018

 

1.0016

 

1.0014

 

40

 

1.0047

 

1.0041

 

1.0037

 

1.0033

 

1.0029

 

1.0026

 

1.0023

 

1.0020

 

1.0018

 

1.0015

 

41

 

1.0053

 

1.0047

 

1.0042

 

1.0037

 

1.0033

 

1.0029

 

1.0026

 

1.0023

 

1.0020

 

1.0017

 

42

 

1.0060

 

1.0053

 

1.0047

 

1.0042

 

1.0037

 

1.0033

 

1.0029

 

1.0026

 

1.0023

 

1.0020

 

43

 

1.0068

 

1.0060

 

1.0054

 

1.0048

 

1.0042

 

1.0038

 

1.0033

 

1.0029

 

1.0026

 

1.0023

 

44

 

1.0076

 

1.0068

 

1.0061

 

1.0054

 

1.0048

 

1.0043

 

1.0038

 

1.0033

 

1.0029

 

1.0026

 

45

 

1.0086

 

1.0077

 

1.0069

 

1.0061

 

1.0054

 

1.0048

 

1.0043

 

1.0038

 

1.0033

 

1.0029

 

46

 

1.0097

 

1.0087

 

1.0077

 

1.0069

 

1.0062

 

1.0055

 

1.0049

 

1.0043

 

1.0038

 

1.0033

 

47

 

1.0109

 

1.0097

 

1.0087

 

1.0078

 

1.0069

 

1.0062

 

1.0055

 

1.0048

 

1.0043

 

1.0038

 

48

 

1.0122

 

1.0109

 

1.0098

 

1.0087

 

1.0078

 

1.0069

 

1.0061

 

1.0054

 

1.0048

 

1.0043

 

49

 

1.0136

 

1.0122

 

1.0109

 

1.0097

 

1.0087

 

1.0077

 

1.0069

 

1.0061

 

1.0054

 

1.0048

 

50

 

1.0151

 

1.0135

 

1.0121

 

1.0109

 

1.0097

 

1.0086

 

1.0077

 

1.0068

 

1.0060

 

1.0053

 

51

 

1.0168

 

1.0151

 

1.0135

 

1.0121

 

1.0108

 

1.0096

 

1.0086

 

1.0076

 

1.0067

 

1.0060

 

52

 

1.0186

 

1.0167

 

1.0150

 

1.0134

 

1.0120

 

1.0107

 

1.0095

 

1.0085

 

1.0075

 

1.0066

 

53

 

1.0206

 

1.0185

 

1.0166

 

1.0149

 

1.0133

 

1.0119

 

1.0106

 

1.0094

 

1.0083

 

1.0074

 

54

 

1.0228

 

1.0205

 

1.0184

 

1.0165

 

1.0147

 

1.0131

 

1.0117

 

1.0104

 

1.0092

 

1.0082

 

55

 

1.0253

 

1.0227

 

1.0204

 

1.0182

 

1.0163

 

1.0146

 

1.0130

 

1.0115

 

1.0102

 

1.0090

 

56

 

1.0280

 

1.0251

 

1.0226

 

1.0202

 

1.0181

 

1.0161

 

1.0144

 

1.0128

 

1.0113

 

1.0100

 

57

 

1.0310

 

1.0279

 

1.0250

 

1.0224

 

1.0200

 

1.0179

 

1.0159

 

1.0142

 

1.0126

 

1.0111

 

58

 

1.0345

 

1.0310

 

1.0278

 

1.0249

 

1.0223

 

1.0199

 

1.0177

 

1.0157

 

1.0139

 

1.0123

 

59

 

1.0384

 

1.0345

 

1.0309

 

1.0277

 

1.0248

 

1.0221

 

1.0197

 

1.0175

 

1.0155

 

1.0137

 

60

 

1.0428

 

1.0385

 

1.0345

 

1.0310

 

1.0277

 

1.0247

 

1.0220

 

1.0196

 

1.0173

 

1.0153

 

61

 

1.0479

 

1.0431

 

1.0387

 

1.0347

 

1.0310

 

1.0277

 

1.0247

 

1.0219

 

1.0194

 

1.0172

 

62

 

1.0537

 

1.0483

 

1.0434

 

1.0389

 

1.0348

 

1.0311

 

1.0277

 

1.0246

 

1.0219

 

1.0193

 

63

 

1.0603

 

1.0543

 

1.0488

 

1.0438

 

1.0392

 

1.0350

 

1.0312

 

1.0278

 

1.0247

 

1.0218

 

64

 

1.0678

 

1.0611

 

1.0549

 

1.0493

 

1.0442

 

1.0395

 

1.0353

 

1.0314

 

1.0279

 

1.0247

 

65

 

1.0763

 

1.0688

 

1.0619

 

1.0556

 

1.0499

 

1.0447

 

1.0399

 

1.0355

 

1.0316

 

1.0280

 

66

 

1.0858

 

1.0774

 

1.0698

 

1.0628

 

1.0563

 

1.0504

 

1.0451

 

1.0402

 

1.0357

 

1.0317

 

67

 

1.0964

 

1.0871

 

1.0785

 

1.0707

 

1.0635

 

1.0569

 

1.0509

 

1.0454

 

1.0404

 

1.0358

 

68

 

1.1082

 

1.0978

 

1.0883

 

1.0796

 

1.0715

 

1.0641

 

1.0574

 

1.0512

 

1.0456

 

1.0405

 

69

 

1.1216

 

1.1101

 

1.0994

 

1.0897

 

1.0807

 

1.0724

 

1.0648

 

1.0579

 

1.0516

 

1.0458

 

70

 

1.1369

 

1.1240

 

1.1122

 

1.1013

 

1.0912

 

1.0819

 

1.0734

 

1.0657

 

1.0585

 

1.0521

 

 

28



 

Table A
Factors to Convert a 50% Joint and Survivor Annuity to a Life Annuity

 

Supplemental Retirement Plan for Top Management

 

Equivalent Benefit Payable Under Single Life Annuity Option for Each $1.00 of Life Annuity Otherwise Payable

 

EMPLOYEE’S

 

BENEFICIARY’S AGE

 

AGE

 

20

 

21

 

22

 

23

 

24

 

25

 

26

 

27

 

28

 

29

 

20

 

1.0243

 

1.0234

 

1.0226

 

1.0217

 

1.0208

 

1.0200

 

1.0192

 

1.0184

 

1.0176

 

1.0168

 

21

 

1.0262

 

1.0253

 

1.0244

 

1.0234

 

1.0225

 

1.0216

 

1.0208

 

1.0199

 

1.0190

 

1.0182

 

22

 

1.0283

 

1.0273

 

1.0263

 

1.0253

 

1.0244

 

1.0234

 

1.0225

 

1.0216

 

1.0206

 

1.0198

 

23

 

1.0305

 

1.0294

 

1.0284

 

1.0274

 

1.0264

 

1.0253

 

1.0243

 

1.0234

 

1.0224

 

1.0214

 

24

 

1.0328

 

1.0317

 

1.0306

 

1.0296

 

1.0285

 

1.0274

 

1.0264

 

1.0253

 

1.0243

 

1.0233

 

25

 

1.0353

 

1.0342

 

1.0331

 

1.0319

 

1.0308

 

1.0297

 

1.0285

 

1.0274

 

1.0263

 

1.0252

 

26

 

1.0380

 

1.0369

 

1.0357

 

1.0345

 

1.0333

 

1.0321

 

1.0309

 

1.0297

 

1.0285

 

1.0274

 

27

 

1.0409

 

1.0397

 

1.0384

 

1.0372

 

1.0359

 

1.0347

 

1.0334

 

1.0322

 

1.0309

 

1.0297

 

28

 

1.0440

 

1.0427

 

1.0414

 

1.0401

 

1.0388

 

1.0375

 

1.0362

 

1.0348

 

1.0335

 

1.0322

 

29

 

1.0473

 

1.0460

 

1.0446

 

1.0432

 

1.0419

 

1.0405

 

1.0391

 

1.0377

 

1.0363

 

1.0349

 

30

 

1.0508

 

1.0494

 

1.0480

 

1.0466

 

1.0451

 

1.0437

 

1.0422

 

1.0408

 

1.0393

 

1.0379

 

31

 

1.0546

 

1.0531

 

1.0517

 

1.0502

 

1.0487

 

1.0471

 

1.0456

 

1.0441

 

1.0426

 

1.0410

 

32

 

1.0586

 

1.0571

 

1.0555

 

1.0540

 

1.0524

 

1.0508

 

1.0493

 

1.0476

 

1.0460

 

1.0444

 

33

 

1.0628

 

1.0613

 

1.0597

 

1.0581

 

1.0565

 

1.0548

 

1.0531

 

1.0515

 

1.0498

 

1.0481

 

34

 

1.0674

 

1.0658

 

1.0641

 

1.0625

 

1.0608

 

1.0590

 

1.0573

 

1.0556

 

1.0538

 

1.0520

 

35

 

1.0722

 

1.0705

 

1.0689

 

1.0671

 

1.0654

 

1.0636

 

1.0618

 

1.0599

 

1.0581

 

1.0562

 

36

 

1.0773

 

1.0756

 

1.0739

 

1.0721

 

1.0703

 

1.0684

 

1.0665

 

1.0646

 

1.0627

 

1.0608

 

37

 

1.0828

 

1.0811

 

1.0793

 

1.0774

 

1.0755

 

1.0736

 

1.0716

 

1.0697

 

1.0677

 

1.0656

 

38

 

1.0886

 

1.0868

 

1.0850

 

1.0831

 

1.0811

 

1.0791

 

1.0771

 

1.0750

 

1.0730

 

1.0708

 

39

 

1.0949

 

1.0930

 

1.0911

 

1.0891

 

1.0871

 

1.0850

 

1.0829

 

1.0808

 

1.0786

 

1.0764

 

40

 

1.1015

 

1.0995

 

1.0976

 

1.0955

 

1.0935

 

1.0913

 

1.0892

 

1.0870

 

1.0847

 

1.0824

 

41

 

1.1085

 

1.1065

 

1.1045

 

1.1024

 

1.1003

 

1.0981

 

1.0958

 

1.0935

 

1.0912

 

1.0888

 

42

 

1.1160

 

1.1140

 

1.1119

 

1.1097

 

1.1075

 

1.1052

 

1.1029

 

1.1006

 

1.0981

 

1.0957

 

43

 

1.1239

 

1.1218

 

1.1197

 

1.1175

 

1.1152

 

1.1129

 

1.1105

 

1.1080

 

1.1055

 

1.1030

 

44

 

1.1323

 

1.1302

 

1.1280

 

1.1257

 

1.1234

 

1.1210

 

1.1185

 

1.1160

 

1.1134

 

1.1107

 

45

 

1.1412

 

1.1390

 

1.1368

 

1.1344

 

1.1320

 

1.1295

 

1.1270

 

1.1244

 

1.1217

 

1.1190

 

46

 

1.1506

 

1.1484

 

1.1460

 

1.1436

 

1.1412

 

1.1386

 

1.1360

 

1.1333

 

1.1305

 

1.1277

 

47

 

1.1605

 

1.1582

 

1.1558

 

1.1534

 

1.1508

 

1.1482

 

1.1455

 

1.1427

 

1.1399

 

1.1369

 

48

 

1.1710

 

1.1686

 

1.1662

 

1.1637

 

1.1610

 

1.1583

 

1.1556

 

1.1527

 

1.1497

 

1.1467

 

49

 

1.1821

 

1.1796

 

1.1771

 

1.1745

 

1.1718

 

1.1690

 

1.1662

 

1.1632

 

1.1602

 

1.1571

 

50

 

1.1937

 

1.1912

 

1.1887

 

1.1860

 

1.1832

 

1.1804

 

1.1774

 

1.1744

 

1.1712

 

1.1680

 

51

 

1.2061

 

1.2035

 

1.2009

 

1.1981

 

1.1953

 

1.1923

 

1.1893

 

1.1862

 

1.1830

 

1.1796

 

52

 

1.2191

 

1.2165

 

1.2138

 

1.2110

 

1.2080

 

1.2050

 

1.2019

 

1.1987

 

1.1954

 

1.1919

 

53

 

1.2330

 

1.2303

 

1.2275

 

1.2246

 

1.2216

 

1.2185

 

1.2152

 

1.2119

 

1.2085

 

1.2050

 

54

 

1.2476

 

1.2449

 

1.2420

 

1.2390

 

1.2359

 

1.2327

 

1.2294

 

1.2260

 

1.2225

 

1.2188

 

55

 

1.2632

 

1.2604

 

1.2574

 

1.2543

 

1.2512

 

1.2479

 

1.2445

 

1.2410

 

1.2373

 

1.2336

 

56

 

1.2798

 

1.2769

 

1.2738

 

1.2707

 

1.2674

 

1.2640

 

1.2605

 

1.2569

 

1.2532

 

1.2493

 

57

 

1.2975

 

1.2945

 

1.2914

 

1.2881

 

1.2848

 

1.2813

 

1.2777

 

1.2739

 

1.2701

 

1.2661

 

58

 

1.3164

 

1.3133

 

1.3101

 

1.3068

 

1.3033

 

1.2997

 

1.2960

 

1.2922

 

1.2882

 

1.2841

 

59

 

1.3367

 

1.3335

 

1.3302

 

1.3268

 

1.3232

 

1.3195

 

1.3157

 

1.3117

 

1.3076

 

1.3033

 

60

 

1.3585

 

1.3552

 

1.3518

 

1.3483

 

1.3446

 

1.3408

 

1.3368

 

1.3327

 

1.3285

 

1.3241

 

61

 

1.3820

 

1.3786

 

1.3750

 

1.3714

 

1.3676

 

1.3636

 

1.3595

 

1.3553

 

1.3509

 

1.3464

 

62

 

1.4072

 

1.4037

 

1.4000

 

1.3962

 

1.3923

 

1.3882

 

1.3840

 

1.3796

 

1.3751

 

1.3704

 

63

 

1.4343

 

1.4307

 

1.4269

 

1.4230

 

1.4190

 

1.4148

 

1.4104

 

1.4058

 

1.4011

 

1.3963

 

64

 

1.4636

 

1.4598

 

1.4559

 

1.4519

 

1.4477

 

1.4433

 

1.4388

 

1.4341

 

1.4292

 

1.4241

 

65

 

1.4950

 

1.4911

 

1.4871

 

1.4829

 

1.4785

 

1.4740

 

1.4693

 

1.4644

 

1.4593

 

1.4541

 

66

 

1.5287

 

1.5247

 

1.5205

 

1.5161

 

1.5116

 

1.5069

 

1.5020

 

1.4969

 

1.4917

 

1.4862

 

67

 

1.5647

 

1.5605

 

1.5562

 

1.5516

 

1.5469

 

1.5421

 

1.5370

 

1.5317

 

1.5263

 

1.5206

 

68

 

1.6033

 

1.5989

 

1.5944

 

1.5897

 

1.5848

 

1.5798

 

1.5745

 

1.5690

 

1.5634

 

1.5575

 

69

 

1.6450

 

1.6405

 

1.6358

 

1.6309

 

1.6258

 

1.6205

 

1.6150

 

1.6093

 

1.6034

 

1.5973

 

70

 

1.6903

 

1.6856

 

1.6807

 

1.6756

 

1.6703

 

1.6648

 

1.6591

 

1.6531

 

1.6470

 

1.6406

 

 

29



 

EMPLOYEE’S

 

BENEFICIARY’S AGE

 

AGE

 

30

 

31

 

32

 

33

 

34

 

35

 

36

 

37

 

38

 

39

 

20

 

1.0160

 

1.0153

 

1.0146

 

1.0139

 

1.0132

 

1.0126

 

1.0119

 

1.0113

 

1.0107

 

1.0102

 

21

 

1.0174

 

1.0166

 

1.0158

 

1.0151

 

1.0143

 

1.0136

 

1.0130

 

1.0123

 

1.0117

 

1.0110

 

22

 

1.0189

 

1.0180

 

1.0172

 

1.0164

 

1.0156

 

1.0148

 

1.0141

 

1.0134

 

1.0127

 

1.0120

 

23

 

1.0205

 

1.0196

 

1.0187

 

1.0178

 

1.0170

 

1.0161

 

1.0153

 

1.0146

 

1.0138

 

1.0131

 

24

 

1.0223

 

1.0213

 

1.0203

 

1.0194

 

1.0185

 

1.0176

 

1.0167

 

1.0159

 

1.0150

 

1.0143

 

25

 

1.0242

 

1.0231

 

1.0221

 

1.0211

 

1.0201

 

1.0191

 

1.0182

 

1.0173

 

1.0164

 

1.0156

 

26

 

1.0262

 

1.0251

 

1.0240

 

1.0229

 

1.0219

 

1.0208

 

1.0198

 

1.0189

 

1.0179

 

1.0170

 

27

 

1.0285

 

1.0273

 

1.0261

 

1.0250

 

1.0238

 

1.0227

 

1.0216

 

1.0206

 

1.0195

 

1.0185

 

28

 

1.0309

 

1.0297

 

1.0284

 

1.0272

 

1.0259

 

1.0247

 

1.0236

 

1.0224

 

1.0213

 

1.0203

 

29

 

1.0336

 

1.0322

 

1.0309

 

1.0295

 

1.0282

 

1.0270

 

1.0257

 

1.0245

 

1.0233

 

1.0221

 

30

 

1.0364

 

1.0350

 

1.0336

 

1.0321

 

1.0308

 

1.0294

 

1.0280

 

1.0267

 

1.0254

 

1.0242

 

31

 

1.0395

 

1.0380

 

1.0365

 

1.0350

 

1.0335

 

1.0320

 

1.0306

 

1.0292

 

1.0278

 

1.0264

 

32

 

1.0428

 

1.0412

 

1.0396

 

1.0380

 

1.0364

 

1.0349

 

1.0333

 

1.0318

 

1.0303

 

1.0289

 

33

 

1.0464

 

1.0447

 

1.0430

 

1.0413

 

1.0396

 

1.0380

 

1.0363

 

1.0347

 

1.0331

 

1.0316

 

34

 

1.0502

 

1.0484

 

1.0466

 

1.0449

 

1.0431

 

1.0413

 

1.0396

 

1.0378

 

1.0361

 

1.0345

 

35

 

1.0543

 

1.0525

 

1.0506

 

1.0487

 

1.0468

 

1.0449

 

1.0431

 

1.0413

 

1.0394

 

1.0377

 

36

 

1.0588

 

1.0568

 

1.0548

 

1.0528

 

1.0509

 

1.0489

 

1.0469

 

1.0450

 

1.0430

 

1.0411

 

37

 

1.0636

 

1.0615

 

1.0594

 

1.0573

 

1.0552

 

1.0531

 

1.0510

 

1.0490

 

1.0469

 

1.0449

 

38

 

1.0687

 

1.0665

 

1.0643

 

1.0621

 

1.0599

 

1.0577

 

1.0555

 

1.0533

 

1.0511

 

1.0490

 

39

 

1.0742

 

1.0719

 

1.0696

 

1.0673

 

1.0650

 

1.0627

 

1.0603

 

1.0580

 

1.0557

 

1.0534

 

40

 

1.0801

 

1.0777

 

1.0753

 

1.0729

 

1.0705

 

1.0680

 

1.0656

 

1.0631

 

1.0606

 

1.0582

 

41

 

1.0864

 

1.0839

 

1.0814

 

1.0789

 

1.0763

 

1.0738

 

1.0712

 

1.0686

 

1.0660

 

1.0634

 

42

 

1.0931

 

1.0906

 

1.0880

 

1.0853

 

1.0827

 

1.0800

 

1.0772

 

1.0745

 

1.0718

 

1.0690

 

43

 

1.1003

 

1.0977

 

1.0950

 

1.0922

 

1.0894

 

1.0866

 

1.0838

 

1.0809

 

1.0780

 

1.0751

 

44

 

1.1080

 

1.1052

 

1.1024

 

1.0995

 

1.0966

 

1.0937

 

1.0907

 

1.0877

 

1.0847

 

1.0816

 

45

 

1.1161

 

1.1133

 

1.1103

 

1.1074

 

1.1043

 

1.1012

 

1.0981

 

1.0950

 

1.0918

 

1.0886

 

46

 

1.1248

 

1.1218

 

1.1188

 

1.1157

 

1.1125

 

1.1093

 

1.1060

 

1.1027

 

1.0994

 

1.0960

 

47

 

1.1339

 

1.1308

 

1.1277

 

1.1245

 

1.1212

 

1.1178

 

1.1144

 

1.1110

 

1.1075

 

1.1040

 

48

 

1.1436

 

1.1404

 

1.1371

 

1.1338

 

1.1304

 

1.1269

 

1.1234

 

1.1198

 

1.1161

 

1.1124

 

49

 

1.1539

 

1.1506

 

1.1472

 

1.1437

 

1.1402

 

1.1366

 

1.1329

 

1.1291

 

1.1253

 

1.1214

 

50

 

1.1647

 

1.1613

 

1.1578

 

1.1542

 

1.1505

 

1.1468

 

1.1429

 

1.1390

 

1.1351

 

1.1310

 

51

 

1.1762

 

1.1727

 

1.1691

 

1.1654

 

1.1615

 

1.1576

 

1.1537

 

1.1496

 

1.1454

 

1.1412

 

52

 

1.1884

 

1.1848

 

1.1810

 

1.1772

 

1.1732

 

1.1692

 

1.1650

 

1.1608

 

1.1565

 

1.1521

 

53

 

1.2013

 

1.1976

 

1.1937

 

1.1897

 

1.1856

 

1.1815

 

1.1772

 

1.1728

 

1.1683

 

1.1637

 

54

 

1.2151

 

1.2112

 

1.2072

 

1.2031

 

1.1989

 

1.1945

 

1.1901

 

1.1855

 

1.1808

 

1.1761

 

55

 

1.2297

 

1.2257

 

1.2216

 

1.2173

 

1.2129

 

1.2085

 

1.2038

 

1.1991

 

1.1942

 

1.1893

 

56

 

1.2453

 

1.2412

 

1.2369

 

1.2325

 

1.2280

 

1.2233

 

1.2185

 

1.2136

 

1.2086

 

1.2034

 

57

 

1.2620

 

1.2577

 

1.2533

 

1.2487

 

1.2441

 

1.2392

 

1.2343

 

1.2292

 

1.2239

 

1.2186

 

58

 

1.2798

 

1.2754

 

1.2708

 

1.2661

 

1.2613

 

1.2563

 

1.2511

 

1.2459

 

1.2404

 

1.2348

 

59

 

1.2989

 

1.2944

 

1.2897

 

1.2848

 

1.2798

 

1.2746

 

1.2693

 

1.2638

 

1.2581

 

1.2523

 

60

 

1.3195

 

1.3148

 

1.3099

 

1.3049

 

1.2997

 

1.2943

 

1.2888

 

1.2831

 

1.2772

 

1.2712

 

61

 

1.3416

 

1.3368

 

1.3317

 

1.3265

 

1.3211

 

1.3156

 

1.3098

 

1.3039

 

1.2978

 

1.2915

 

62

 

1.3655

 

1.3604

 

1.3552

 

1.3498

 

1.3442

 

1.3384

 

1.3325

 

1.3263

 

1.3200

 

1.3135

 

63

 

1.3912

 

1.3860

 

1.3805

 

1.3749

 

1.3691

 

1.3631

 

1.3569

 

1.3506

 

1.3440

 

1.3372

 

64

 

1.4189

 

1.4134

 

1.4078

 

1.4020

 

1.3960

 

1.3897

 

1.3833

 

1.3767

 

1.3698

 

1.3627

 

65

 

1.4486

 

1.4430

 

1.4372

 

1.4311

 

1.4249

 

1.4184

 

1.4117

 

1.4048

 

1.3976

 

1.3902

 

66

 

1.4806

 

1.4747

 

1.4687

 

1.4624

 

1.4558

 

1.4491

 

1.4421

 

1.4349

 

1.4275

 

1.4198

 

67

 

1.5147

 

1.5086

 

1.5023

 

1.4958

 

1.4890

 

1.4820

 

1.4747

 

1.4672

 

1.4595

 

1.4514

 

68

 

1.5513

 

1.5450

 

1.5384

 

1.5316

 

1.5245

 

1.5172

 

1.5097

 

1.5018

 

1.4938

 

1.4854

 

69

 

1.5909

 

1.5843

 

1.5775

 

1.5703

 

1.5630

 

1.5554

 

1.5475

 

1.5393

 

1.5308

 

1.5221

 

70

 

1.6339

 

1.6270

 

1.6199

 

1.6124

 

1.6048

 

1.5968

 

1.5885

 

1.5800

 

1.5712

 

1.5620

 

 

30



 

Equivalent Benefit Payable Under Single Life Annuity Option for Each $1.00 Otherwise Payable

 

EMPLOYEE’S

 

BENEFICIARY’S AGE

 

AGE

 

40

 

41

 

42

 

43

 

44

 

45

 

46

 

47

 

48

 

49

 

20

 

1.0096

 

1.0091

 

1.0086

 

1.0081

 

1.0076

 

1.0072

 

1.0068

 

1.0064

 

1.0060

 

1.0056

 

21

 

1.0104

 

1.0099

 

1.0093

 

1.0088

 

1.0083

 

1.0078

 

1.0074

 

1.0069

 

1.0065

 

1.0061

 

22

 

1.0114

 

1.0107

 

1.0102

 

1.0096

 

1.0090

 

1.0085

 

1.0080

 

1.0075

 

1.0071

 

1.0066

 

23

 

1.0124

 

1.0117

 

1.0111

 

1.0104

 

1.0098

 

1.0093

 

1.0087

 

1.0082

 

1.0077

 

1.0072

 

24

 

1.0135

 

1.0128

 

1.0121

 

1.0114

 

1.0107

 

1.0101

 

1.0095

 

1.0089

 

1.0084

 

1.0079

 

25

 

1.0147

 

1.0139

 

1.0132

 

1.0124

 

1.0117

 

1.0110

 

1.0104

 

1.0098

 

1.0092

 

1.0086

 

26

 

1.0161

 

1.0152

 

1.0144

 

1.0136

 

1.0128

 

1.0121

 

1.0113

 

1.0107

 

1.0100

 

1.0094

 

27

 

1.0176

 

1.0166

 

1.0157

 

1.0149

 

1.0140

 

1.0132

 

1.0124

 

1.0117

 

1.0110

 

1.0103

 

28

 

1.0192

 

1.0182

 

1.0172

 

1.0163

 

1.0153

 

1.0145

 

1.0136

 

1.0128

 

1.0120

 

1.0113

 

29

 

1.0210

 

1.0199

 

1.0188

 

1.0178

 

1.0168

 

1.0158

 

1.0149

 

1.0140

 

1.0132

 

1.0124

 

30

 

1.0230

 

1.0218

 

1.0206

 

1.0195

 

1.0184

 

1.0174

 

1.0164

 

1.0154

 

1.0145

 

1.0136

 

31

 

1.0251

 

1.0238

 

1.0226

 

1.0214

 

1.0202

 

1.0190

 

1.0180

 

1.0169

 

1.0159

 

1.0149

 

32

 

1.0275

 

1.0261

 

1.0247

 

1.0234

 

1.0221

 

1.0209

 

1.0197

 

1.0186

 

1.0175

 

1.0164

 

33

 

1.0300

 

1.0285

 

1.0271

 

1.0257

 

1.0243

 

1.0229

 

1.0216

 

1.0204

 

1.0192

 

1.0180

 

34

 

1.0328

 

1.0312

 

1.0297

 

1.0281

 

1.0266

 

1.0252

 

1.0238

 

1.0224

 

1.0211

 

1.0198

 

35

 

1.0359

 

1.0342

 

1.0325

 

1.0308

 

1.0292

 

1.0276

 

1.0261

 

1.0247

 

1.0232

 

1.0219

 

36

 

1.0392

 

1.0374

 

1.0356

 

1.0338

 

1.0320

 

1.0304

 

1.0287

 

1.0271

 

1.0256

 

1.0241

 

37

 

1.0429

 

1.0409

 

1.0389

 

1.0370

 

1.0351

 

1.0333

 

1.0315

 

1.0298

 

1.0281

 

1.0265

 

38

 

1.0468

 

1.0447

 

1.0426

 

1.0405

 

1.0385

 

1.0366

 

1.0346

 

1.0328

 

1.0310

 

1.0292

 

39

 

1.0511

 

1.0488

 

1.0466

 

1.0444

 

1.0422

 

1.0401

 

1.0381

 

1.0360

 

1.0341

 

1.0321

 

40

 

1.0558

 

1.0534

 

1.0510

 

1.0486

 

1.0463

 

1.0440

 

1.0418

 

1.0396

 

1.0375

 

1.0354

 

41

 

1.0608

 

1.0583

 

1.0557

 

1.0532

 

1.0507

 

1.0483

 

1.0459

 

1.0435

 

1.0412

 

1.0390

 

42

 

1.0663

 

1.0636

 

1.0609

 

1.0582

 

1.0555

 

1.0529

 

1.0503

 

1.0478

 

1.0453

 

1.0429

 

43

 

1.0722

 

1.0693

 

1.0664

 

1.0636

 

1.0608

 

1.0580

 

1.0552

 

1.0525

 

1.0498

 

1.0472

 

44

 

1.0786

 

1.0755

 

1.0724

 

1.0694

 

1.0664

 

1.0634

 

1.0604

 

1.0575

 

1.0547

 

1.0519

 

45

 

1.0854

 

1.0821

 

1.0789

 

1.0757

 

1.0725

 

1.0693

 

1.0661

 

1.0630

 

1.0599

 

1.0569

 

46

 

1.0926

 

1.0892

 

1.0858

 

1.0824

 

1.0790

 

1.0756

 

1.0722

 

1.0689

 

1.0656

 

1.0624

 

47

 

1.1004

 

1.0968

 

1.0932

 

1.0896

 

1.0860

 

1.0824

 

1.0788

 

1.0752

 

1.0717

 

1.0682

 

48

 

1.1087

 

1.1049

 

1.1011

 

1.0973

 

1.0935

 

1.0896

 

1.0858

 

1.0821

 

1.0783

 

1.0746

 

49

 

1.1175

 

1.1135

 

1.1095

 

1.1055

 

1.1015

 

1.0974

 

1.0934

 

1.0894

 

1.0854

 

1.0814

 

50

 

1.1269

 

1.1227

 

1.1185

 

1.1143

 

1.1101

 

1.1058

 

1.1015

 

1.0972

 

1.0930

 

1.0888

 

51

 

1.1369

 

1.1326

 

1.1282

 

1.1237

 

1.1192

 

1.1147

 

1.1102

 

1.1057

 

1.1012

 

1.0967

 

52

 

1.1476

 

1.1431

 

1.1384

 

1.1338

 

1.1291

 

1.1243

 

1.1195

 

1.1148

 

1.1100

 

1.1052

 

53

 

1.1590

 

1.1543

 

1.1494

 

1.1445

 

1.1396

 

1.1346

 

1.1296

 

1.1245

 

1.1194

 

1.1144

 

54

 

1.1712

 

1.1662

 

1.1612

 

1.1560

 

1.1509

 

1.1456

 

1.1403

 

1.1350

 

1.1296

 

1.1242

 

55

 

1.1842

 

1.1790

 

1.1737

 

1.1684

 

1.1629

 

1.1574

 

1.1518

 

1.1462

 

1.1406

 

1.1349

 

56

 

1.1981

 

1.1927

 

1.1872

 

1.1816

 

1.1759

 

1.1701

 

1.1643

 

1.1584

 

1.1524

 

1.1464

 

57

 

1.2131

 

1.2074

 

1.2017

 

1.1958

 

1.1899

 

1.1838

 

1.1777

 

1.1714

 

1.1652

 

1.1588

 

58

 

1.2291

 

1.2232

 

1.2173

 

1.2111

 

1.2049

 

1.1985

 

1.1921

 

1.1856

 

1.1789

 

1.1723

 

59

 

1.2464

 

1.2403

 

1.2340

 

1.2276

 

1.2211

 

1.2145

 

1.2077

 

1.2008

 

1.1939

 

1.1868

 

60

 

1.2650

 

1.2586

 

1.2521

 

1.2454

 

1.2386

 

1.2317

 

1.2246

 

1.2174

 

1.2101

 

1.2027

 

61

 

1.2851

 

1.2785

 

1.2717

 

1.2647

 

1.2576

 

1.2503

 

1.2429

 

1.2353

 

1.2276

 

1.2198

 

62

 

1.3068

 

1.2999

 

1.2928

 

1.2855

 

1.2781

 

1.2704

 

1.2627

 

1.2547

 

1.2467

 

1.2385

 

63

 

1.3302

 

1.3230

 

1.3156

 

1.3080

 

1.3002

 

1.2923

 

1.2841

 

1.2758

 

1.2673

 

1.2587

 

64

 

1.3554

 

1.3479

 

1.3402

 

1.3323

 

1.3242

 

1.3158

 

1.3073

 

1.2986

 

1.2897

 

1.2806

 

65

 

1.3827

 

1.3748

 

1.3668

 

1.3585

 

1.3500

 

1.3413

 

1.3323

 

1.3232

 

1.3139

 

1.3043

 

66

 

1.4119

 

1.4037

 

1.3953

 

1.3867

 

1.3778

 

1.3686

 

1.3593

 

1.3497

 

1.3399

 

1.3299

 

67

 

1.4432

 

1.4346

 

1.4259

 

1.4168

 

1.4075

 

1.3980

 

1.3882

 

1.3781

 

1.3678

 

1.3573

 

68

 

1.4768

 

1.4678

 

1.4587

 

1.4492

 

1.4395

 

1.4295

 

1.4192

 

1.4087

 

1.3979

 

1.3868

 

69

 

1.5131

 

1.5038

 

1.4942

 

1.4843

 

1.4741

 

1.4636

 

1.4528

 

1.4418

 

1.4304

 

1.4188

 

70

 

1.5526

 

1.5429

 

1.5328

 

1.5224

 

1.5117

 

1.5008

 

1.4895

 

1.4778

 

1.4659

 

1.4537

 

 

31



 

EMPLOYEE’S

 

BENEFICIARY’S AGE

 

AGE

 

50

 

51

 

52

 

53

 

54

 

55

 

56

 

57

 

58

 

59

 

20

 

1.0053

 

1.0050

 

1.0046

 

1.0043

 

1.0041

 

1.0038

 

1.0035

 

1.0033

 

1.0031

 

1.0029

 

21

 

1.0057

 

1.0054

 

1.0050

 

1.0047

 

1.0044

 

1.0041

 

1.0038

 

1.0036

 

1.0033

 

1.0031

 

22

 

1.0062

 

1.0058

 

1.0054

 

1.0051

 

1.0048

 

1.0044

 

1.0041

 

1.0038

 

1.0036

 

1.0033

 

23

 

1.0068

 

1.0063

 

1.0059

 

1.0055

 

1.0052

 

1.0048

 

1.0045

 

1.0042

 

1.0039

 

1.0036

 

24

 

1.0074

 

1.0069

 

1.0064

 

1.0060

 

1.0056

 

1.0052

 

1.0049

 

1.0045

 

1.0042

 

1.0039

 

25

 

1.0080

 

1.0075

 

1.0070

 

1.0066

 

1.0061

 

1.0057

 

1.0053

 

1.0049

 

1.0045

 

1.0042

 

26

 

1.0088

 

1.0082

 

1.0077

 

1.0072

 

1.0067

 

1.0062

 

1.0058

 

1.0054

 

1.0050

 

1.0046

 

27

 

1.0096

 

1.0090

 

1.0084

 

1.0078

 

1.0073

 

1.0068

 

1.0063

 

1.0058

 

1.0054

 

1.0050

 

28

 

1.0105

 

1.0099

 

1.0092

 

1.0086

 

1.0080

 

1.0074

 

1.0069

 

1.0064

 

1.0059

 

1.0055

 

29

 

1.0116

 

1.0108

 

1.0101

 

1.0094

 

1.0088

 

1.0082

 

1.0076

 

1.0070

 

1.0065

 

1.0060

 

30

 

1.0127

 

1.0119

 

1.0111

 

1.0104

 

1.0097

 

1.0090

 

1.0083

 

1.0077

 

1.0072

 

1.0066

 

31

 

1.0140

 

1.0131

 

1.0122

 

1.0114

 

1.0106

 

1.0099

 

1.0092

 

1.0085

 

1.0079

 

1.0073

 

32

 

1.0154

 

1.0144

 

1.0135

 

1.0126

 

1.0117

 

1.0109

 

1.0101

 

1.0094

 

1.0087

 

1.0080

 

33

 

1.0169

 

1.0158

 

1.0148

 

1.0138

 

1.0129

 

1.0120

 

1.0112

 

1.0104

 

1.0096

 

1.0089

 

34

 

1.0186

 

1.0175

 

1.0163

 

1.0153

 

1.0142

 

1.0133

 

1.0123

 

1.0114

 

1.0106

 

1.0098

 

35

 

1.0205

 

1.0193

 

1.0180

 

1.0169

 

1.0157

 

1.0147

 

1.0136

 

1.0126

 

1.0117

 

1.0108

 

36

 

1.0226

 

1.0212

 

1.0199

 

1.0186

 

1.0174

 

1.0162

 

1.0151

 

1.0140

 

1.0130

 

1.0120

 

37

 

1.0249

 

1.0234

 

1.0220

 

1.0206

 

1.0192

 

1.0179

 

1.0167

 

1.0155

 

1.0144

 

1.0133

 

38

 

1.0275

 

1.0258

 

1.0242

 

1.0227

 

1.0212

 

1.0198

 

1.0185

 

1.0172

 

1.0159

 

1.0148

 

39

 

1.0303

 

1.0285

 

1.0268

 

1.0251

 

1.0235

 

1.0219

 

1.0205

 

1.0190

 

1.0177

 

1.0164

 

40

 

1.0334

 

1.0314

 

1.0296

 

1.0277

 

1.0260

 

1.0243

 

1.0227

 

1.0211

 

1.0196

 

1.0182

 

41

 

1.0368

 

1.0347

 

1.0326

 

1.0307

 

1.0287

 

1.0269

 

1.0251

 

1.0234

 

1.0218

 

1.0202

 

42

 

1.0406

 

1.0383

 

1.0360

 

1.0339

 

1.0318

 

1.0298

 

1.0278

 

1.0260

 

1.0242

 

1.0225

 

43

 

1.0446

 

1.0422

 

1.0397

 

1.0374

 

1.0351

 

1.0329

 

1.0308

 

1.0288

 

1.0268

 

1.0250

 

44

 

1.0491

 

1.0464

 

1.0438

 

1.0413

 

1.0388

 

1.0364

 

1.0341

 

1.0319

 

1.0297

 

1.0277

 

45

 

1.0539

 

1.0510

 

1.0482

 

1.0454

 

1.0428

 

1.0402

 

1.0376

 

1.0352

 

1.0329

 

1.0306

 

46

 

1.0592

 

1.0560

 

1.0530

 

1.0500

 

1.0471

 

1.0443

 

1.0415

 

1.0389

 

1.0363

 

1.0339

 

47

 

1.0648

 

1.0615

 

1.0582

 

1.0549

 

1.0518

 

1.0487

 

1.0458

 

1.0429

 

1.0401

 

1.0374

 

48

 

1.0709

 

1.0673

 

1.0638

 

1.0603

 

1.0569

 

1.0536

 

1.0503

 

1.0472

 

1.0442

 

1.0413

 

49

 

1.0775

 

1.0736

 

1.0698

 

1.0661

 

1.0624

 

1.0588

 

1.0553

 

1.0519

 

1.0487

 

1.0455

 

50

 

1.0846

 

1.0804

 

1.0763

 

1.0723

 

1.0684

 

1.0645

 

1.0607

 

1.0571

 

1.0535

 

1.0501

 

51

 

1.0922

 

1.0878

 

1.0834

 

1.0791

 

1.0748

 

1.0707

 

1.0666

 

1.0626

 

1.0588

 

1.0550

 

52

 

1.1004

 

1.0957

 

1.0910

 

1.0864

 

1.0818

 

1.0774

 

1.0730

 

1.0687

 

1.0645

 

1.0604

 

53

 

1.1093

 

1.1043

 

1.0993

 

1.0943

 

1.0894

 

1.0846

 

1.0799

 

1.0753

 

1.0707

 

1.0663

 

54

 

1.1189

 

1.1135

 

1.1082

 

1.1029

 

1.0977

 

1.0925

 

1.0874

 

1.0824

 

1.0776

 

1.0728

 

55

 

1.1292

 

1.1235

 

1.1178

 

1.1122

 

1.1066

 

1.1011

 

1.0956

 

1.0902

 

1.0850

 

1.0798

 

56

 

1.1404

 

1.1343

 

1.1283

 

1.1223

 

1.1163

 

1.1104

 

1.1045

 

1.0988

 

1.0931

 

1.0876

 

57

 

1.1524

 

1.1461

 

1.1397

 

1.1333

 

1.1269

 

1.1206

 

1.1143

 

1.1081

 

1.1020

 

1.0960

 

58

 

1.1655

 

1.1588

 

1.1520

 

1.1452

 

1.1384

 

1.1317

 

1.1249

 

1.1183

 

1.1118

 

1.1053

 

59

 

1.1797

 

1.1726

 

1.1654

 

1.1582

 

1.1510

 

1.1438

 

1.1366

 

1.1295

 

1.1225

 

1.1155

 

60

 

1.1952

 

1.1876

 

1.1800

 

1.1723

 

1.1647

 

1.1570

 

1.1494

 

1.1418

 

1.1342

 

1.1268

 

61

 

1.2119

 

1.2040

 

1.1959

 

1.1878

 

1.1796

 

1.1715

 

1.1633

 

1.1552

 

1.1471

 

1.1392

 

62

 

1.2302

 

1.2217

 

1.2132

 

1.2046

 

1.1960

 

1.1873

 

1.1786

 

1.1699

 

1.1613

 

1.1528

 

63

 

1.2499

 

1.2411

 

1.2321

 

1.2230

 

1.2138

 

1.2046

 

1.1953

 

1.1861

 

1.1769

 

1.1677

 

64

 

1.2714

 

1.2620

 

1.2525

 

1.2429

 

1.2332

 

1.2234

 

1.2136

 

1.2037

 

1.1939

 

1.1841

 

65

 

1.2946

 

1.2848

 

1.2747

 

1.2646

 

1.2543

 

1.2439

 

1.2334

 

1.2229

 

1.2124

 

1.2019

 

66

 

1.3197

 

1.3093

 

1.2987

 

1.2880

 

1.2771

 

1.2661

 

1.2550

 

1.2438

 

1.2326

 

1.2214

 

67

 

1.3466

 

1.3356

 

1.3245

 

1.3131

 

1.3016

 

1.2900

 

1.2782

 

1.2663

 

1.2544

 

1.2424

 

68

 

1.3755

 

1.3640

 

1.3522

 

1.3403

 

1.3281

 

1.3158

 

1.3033

 

1.2907

 

1.2780

 

1.2653

 

69

 

1.4069

 

1.3948

 

1.3824

 

1.3698

 

1.3569

 

1.3439

 

1.3306

 

1.3173

 

1.3038

 

1.2902

 

70

 

1.4412

 

1.4284

 

1.4154

 

1.4020

 

1.3884

 

1.3746

 

1.3606

 

1.3464

 

1.3320

 

1.3176

 

 

32



 

EMPLOYEE’S

 

BENEFICIARY’S AGE

 

AGE

 

60

 

61

 

62

 

63

 

64

 

65

 

66

 

67

 

68

 

69

 

20

 

1.0027

 

1.0025

 

1.0023

 

1.0021

 

1.0020

 

1.0018

 

1.0017

 

1.0015

 

1.0014

 

1.0013

 

21

 

1.0029

 

1.0026

 

1.0024

 

1.0023

 

1.0021

 

1.0019

 

1.0018

 

1.0016

 

1.0015

 

1.0014

 

22

 

1.0031

 

1.0028

 

1.0026

 

1.0024

 

1.0022

 

1.0021

 

1.0019

 

1.0017

 

1.0016

 

1.0015

 

23

 

1.0033

 

1.0031

 

1.0028

 

1.0026

 

1.0024

 

1.0022

 

1.0020

 

1.0019

 

1.0017

 

1.0016

 

24

 

1.0036

 

1.0033

 

1.0031

 

1.0028

 

1.0026

 

1.0024

 

1.0022

 

1.0020

 

1.0018

 

1.0017

 

25

 

1.0039

 

1.0036

 

1.0033

 

1.0031

 

1.0028

 

1.0026

 

1.0024

 

1.0022

 

1.0020

 

1.0018

 

26

 

1.0042

 

1.0039

 

1.0036

 

1.0033

 

1.0030

 

1.0028

 

1.0026

 

1.0023

 

1.0021

 

1.0019

 

27

 

1.0046

 

1.0043

 

1.0039

 

1.0036

 

1.0033

 

1.0030

 

1.0028

 

1.0025

 

1.0023

 

1.0021

 

28

 

1.0051

 

1.0047

 

1.0043

 

1.0039

 

1.0036

 

1.0033

 

1.0030

 

1.0028

 

1.0025

 

1.0023

 

29

 

1.0055

 

1.0051

 

1.0047

 

1.0043

 

1.0040

 

1.0036

 

1.0033

 

1.0030

 

1.0027

 

1.0025

 

30

 

1.0061

 

1.0056

 

1.0052

 

1.0047

 

1.0043

 

1.0040

 

1.0036

 

1.0033

 

1.0030

 

1.0027

 

31

 

1.0067

 

1.0062

 

1.0057

 

1.0052

 

1.0048

 

1.0044

 

1.0040

 

1.0036

 

1.0033

 

1.0030

 

32

 

1.0074

 

1.0068

 

1.0063

 

1.0057

 

1.0053

 

1.0048

 

1.0044

 

1.0040

 

1.0036

 

1.0033

 

33

 

1.0082

 

1.0075

 

1.0069

 

1.0063

 

1.0058

 

1.0053

 

1.0048

 

1.0044

 

1.0040

 

1.0036

 

34

 

1.0090

 

1.0083

 

1.0077

 

1.0070

 

1.0064

 

1.0059

 

1.0054

 

1.0049

 

1.0044

 

1.0040

 

35

 

1.0100

 

1.0092

 

1.0085

 

1.0078

 

1.0071

 

1.0065

 

1.0059

 

1.0054

 

1.0049

 

1.0044

 

36

 

1.0111

 

1.0102

 

1.0094

 

1.0086

 

1.0079

 

1.0072

 

1.0066

 

1.0060

 

1.0055

 

1.0049

 

37

 

1.0123

 

1.0113

 

1.0104

 

1.0096

 

1.0088

 

1.0080

 

1.0073

 

1.0067

 

1.0061

 

1.0055

 

38

 

1.0137

 

1.0126

 

1.0116

 

1.0107

 

1.0098

 

1.0090

 

1.0082

 

1.0074

 

1.0068

 

1.0061

 

39

 

1.0152

 

1.0140

 

1.0129

 

1.0119

 

1.0109

 

1.0100

 

1.0091

 

1.0083

 

1.0076

 

1.0068

 

40

 

1.0169

 

1.0156

 

1.0144

 

1.0132

 

1.0122

 

1.0111

 

1.0102

 

1.0093

 

1.0084

 

1.0077

 

41

 

1.0188

 

1.0173

 

1.0160

 

1.0148

 

1.0136

 

1.0124

 

1.0114

 

1.0104

 

1.0095

 

1.0086

 

42

 

1.0209

 

1.0193

 

1.0178

 

1.0164

 

1.0151

 

1.0139

 

1.0127

 

1.0116

 

1.0106

 

1.0096

 

43

 

1.0232

 

1.0215

 

1.0199

 

1.0183

 

1.0169

 

1.0155

 

1.0142

 

1.0130

 

1.0119

 

1.0108

 

44

 

1.0257

 

1.0239

 

1.0221

 

1.0204

 

1.0188

 

1.0173

 

1.0159

 

1.0145

 

1.0132

 

1.0121

 

45

 

1.0285

 

1.0265

 

1.0245

 

1.0227

 

1.0209

 

1.0192

 

1.0177

 

1.0162

 

1.0148

 

1.0135

 

46

 

1.0316

 

1.0293

 

1.0272

 

1.0251

 

1.0232

 

1.0214

 

1.0196

 

1.0180

 

1.0165

 

1.0150

 

47

 

1.0349

 

1.0324

 

1.0301

 

1.0278

 

1.0257

 

1.0237

 

1.0218

 

1.0200

 

1.0183

 

1.0167

 

48

 

1.0385

 

1.0358

 

1.0332

 

1.0308

 

1.0285

 

1.0263

 

1.0242

 

1.0222

 

1.0203

 

1.0185

 

49

 

1.0424

 

1.0395

 

1.0367

 

1.0340

 

1.0315

 

1.0290

 

1.0267

 

1.0246

 

1.0225

 

1.0206

 

50

 

1.0467

 

1.0435

 

1.0405

 

1.0375

 

1.0347

 

1.0321

 

1.0296

 

1.0272

 

1.0249

 

1.0228

 

51

 

1.0514

 

1.0479

 

1.0446

 

1.0414

 

1.0383

 

1.0354

 

1.0326

 

1.0300

 

1.0275

 

1.0252

 

52

 

1.0565

 

1.0527

 

1.0491

 

1.0456

 

1.0422

 

1.0391

 

1.0360

 

1.0331

 

1.0304

 

1.0278

 

53

 

1.0621

 

1.0580

 

1.0540

 

1.0502

 

1.0465

 

1.0430

 

1.0397

 

1.0366

 

1.0336

 

1.0307

 

54

 

1.0682

 

1.0637

 

1.0594

 

1.0552

 

1.0513

 

1.0474

 

1.0438

 

1.0403

 

1.0370

 

1.0339

 

55

 

1.0749

 

1.0700

 

1.0653

 

1.0608

 

1.0564

 

1.0523

 

1.0483

 

1.0445

 

1.0409

 

1.0375

 

56

 

1.0822

 

1.0769

 

1.0718

 

1.0669

 

1.0622

 

1.0576

 

1.0533

 

1.0491

 

1.0451

 

1.0414

 

57

 

1.0902

 

1.0845

 

1.0790

 

1.0736

 

1.0685

 

1.0635

 

1.0588

 

1.0542

 

1.0499

 

1.0457

 

58

 

1.0990

 

1.0929

 

1.0869

 

1.0811

 

1.0755

 

1.0701

 

1.0649

 

1.0599

 

1.0551

 

1.0506

 

59

 

1.1088

 

1.1021

 

1.0956

 

1.0893

 

1.0832

 

1.0774

 

1.0717

 

1.0662

 

1.0610

 

1.0561

 

60

 

1.1195

 

1.1123

 

1.1053

 

1.0985

 

1.0919

 

1.0854

 

1.0793

 

1.0733

 

1.0676

 

1.0622

 

61

 

1.1313

 

1.1236

 

1.1160

 

1.1086

 

1.1014

 

1.0944

 

1.0877

 

1.0812

 

1.0750

 

1.0690

 

62

 

1.1443

 

1.1360

 

1.1278

 

1.1198

 

1.1120

 

1.1045

 

1.0971

 

1.0900

 

1.0832

 

1.0766

 

63

 

1.1586

 

1.1497

 

1.1408

 

1.1322

 

1.1238

 

1.1156

 

1.1076

 

1.0998

 

1.0924

 

1.0852

 

64

 

1.1743

 

1.1647

 

1.1552

 

1.1459

 

1.1367

 

1.1278

 

1.1192

 

1.1107

 

1.1026

 

1.0947

 

65

 

1.1915

 

1.1812

 

1.1710

 

1.1609

 

1.1510

 

1.1414

 

1.1320

 

1.1228

 

1.1139

 

1.1053

 

66

 

1.2102

 

1.1991

 

1.1882

 

1.1773

 

1.1667

 

1.1562

 

1.1460

 

1.1361

 

1.1264

 

1.1170

 

67

 

1.2305

 

1.2186

 

1.2068

 

1.1952

 

1.1837

 

1.1724

 

1.1614

 

1.1506

 

1.1400

 

1.1298

 

68

 

1.2525

 

1.2398

 

1.2272

 

1.2147

 

1.2023

 

1.1901

 

1.1782

 

1.1665

 

1.1550

 

1.1439

 

69

 

1.2766

 

1.2630

 

1.2495

 

1.2361

 

1.2228

 

1.2097

 

1.1967

 

1.1841

 

1.1716

 

1.1595

 

70

 

1.3031

 

1.2886

 

1.2741

 

1.2597

 

1.2454

 

1.2313

 

1.2173

 

1.2036

 

1.1901

 

1.1770

 

 

33



 

EMPLOYEE’S

 

BENEFICIARY’S AGE

 

AGE

 

70

 

71

 

72

 

73

 

74

 

75

 

76

 

77

 

78

 

79

 

20

 

1.0012

 

1.0011

 

1.0010

 

1.0009

 

1.0008

 

1.0007

 

1.0007

 

1.0006

 

1.0006

 

1.0005

 

21

 

1.0013

 

1.0011

 

1.0010

 

1.0009

 

1.0009

 

1.0008

 

1.0007

 

1.0006

 

1.0006

 

1.0005

 

22

 

1.0013

 

1.0012

 

1.0011

 

1.0010

 

1.0009

 

1.0008

 

1.0008

 

1.0007

 

1.0006

 

1.0006

 

23

 

1.0014

 

1.0013

 

1.0012

 

1.0011

 

1.0010

 

1.0009

 

1.0008

 

1.0007

 

1.0007

 

1.0006

 

24

 

1.0015

 

1.0014

 

1.0013

 

1.0011

 

1.0010

 

1.0009

 

1.0008

 

1.0008

 

1.0007

 

1.0006

 

25

 

1.0016

 

1.0015

 

1.0014

 

1.0012

 

1.0011

 

1.0010

 

1.0009

 

1.0008

 

1.0007

 

1.0007

 

26

 

1.0018

 

1.0016

 

1.0015

 

1.0013

 

1.0012

 

1.0011

 

1.0010

 

1.0009

 

1.0008

 

1.0007

 

27

 

1.0019

 

1.0017

 

1.0016

 

1.0014

 

1.0013

 

1.0012

 

1.0010

 

1.0009

 

1.0008

 

1.0008

 

28

 

1.0021

 

1.0019

 

1.0017

 

1.0015

 

1.0014

 

1.0013

 

1.0011

 

1.0010

 

1.0009

 

1.0008

 

29

 

1.0023

 

1.0020

 

1.0018

 

1.0017

 

1.0015

 

1.0014

 

1.0012

 

1.0011

 

1.0010

 

1.0009

 

30

 

1.0025

 

1.0022

 

1.0020

 

1.0018

 

1.0016

 

1.0015

 

1.0013

 

1.0012

 

1.0011

 

1.0010

 

31

 

1.0027

 

1.0024

 

1.0022

 

1.0020

 

1.0018

 

1.0016

 

1.0014

 

1.0013

 

1.0012

 

1.0010

 

32

 

1.0030

 

1.0027

 

1.0024

 

1.0022

 

1.0020

 

1.0018

 

1.0016

 

1.0014

 

1.0013

 

1.0011

 

33

 

1.0033

 

1.0030

 

1.0027

 

1.0024

 

1.0022

 

1.0019

 

1.0017

 

1.0016

 

1.0014

 

1.0012

 

34

 

1.0036

 

1.0033

 

1.0029

 

1.0026

 

1.0024

 

1.0021

 

1.0019

 

1.0017

 

1.0015

 

1.0014

 

35

 

1.0040

 

1.0036

 

1.0033

 

1.0029

 

1.0026

 

1.0024

 

1.0021

 

1.0019

 

1.0017

 

1.0015

 

36

 

1.0045

 

1.0040

 

1.0036

 

1.0033

 

1.0029

 

1.0026

 

1.0023

 

1.0021

 

1.0019

 

1.0017

 

37

 

1.0050

 

1.0045

 

1.0040

 

1.0036

 

1.0032

 

1.0029

 

1.0026

 

1.0023

 

1.0021

 

1.0019

 

38

 

1.0055

 

1.0050

 

1.0045

 

1.0040

 

1.0036

 

1.0033

 

1.0029

 

1.0026

 

1.0023

 

1.0021

 

39

 

1.0062

 

1.0056

 

1.0050

 

1.0045

 

1.0041

 

1.0036

 

1.0033

 

1.0029

 

1.0026

 

1.0023

 

40

 

1.0069

 

1.0063

 

1.0056

 

1.0051

 

1.0046

 

1.0041

 

1.0037

 

1.0033

 

1.0029

 

1.0026

 

41

 

1.0078

 

1.0070

 

1.0063

 

1.0057

 

1.0051

 

1.0046

 

1.0041

 

1.0037

 

1.0033

 

1.0030

 

42

 

1.0087

 

1.0079

 

1.0071

 

1.0064

 

1.0058

 

1.0052

 

1.0047

 

1.0042

 

1.0037

 

1.0033

 

43

 

1.0098

 

1.0089

 

1.0080

 

1.0072

 

1.0065

 

1.0059

 

1.0053

 

1.0047

 

1.0042

 

1.0038

 

44

 

1.0110

 

1.0099

 

1.0090

 

1.0081

 

1.0073

 

1.0066

 

1.0059

 

1.0053

 

1.0048

 

1.0043

 

45

 

1.0122

 

1.0111

 

1.0101

 

1.0091

 

1.0082

 

1.0074

 

1.0067

 

1.0060

 

1.0054

 

1.0048

 

46

 

1.0137

 

1.0124

 

1.0112

 

1.0102

 

1.0092

 

1.0083

 

1.0075

 

1.0067

 

1.0060

 

1.0054

 

47

 

1.0152

 

1.0138

 

1.0125

 

1.0113

 

1.0103

 

1.0093

 

1.0083

 

1.0075

 

1.0068

 

1.0061

 

48

 

1.0169

 

1.0154

 

1.0139

 

1.0126

 

1.0114

 

1.0103

 

1.0093

 

1.0084

 

1.0075

 

1.0068

 

49

 

1.0187

 

1.0170

 

1.0155

 

1.0140

 

1.0127

 

1.0115

 

1.0104

 

1.0093

 

1.0084

 

1.0076

 

50

 

1.0208

 

1.0189

 

1.0172

 

1.0156

 

1.0141

 

1.0127

 

1.0115

 

1.0104

 

1.0093

 

1.0084

 

51

 

1.0230

 

1.0209

 

1.0190

 

1.0172

 

1.0156

 

1.0141

 

1.0128

 

1.0115

 

1.0104

 

1.0093

 

52

 

1.0254

 

1.0231

 

1.0210

 

1.0191

 

1.0173

 

1.0156

 

1.0141

 

1.0128

 

1.0115

 

1.0103

 

53

 

1.0280

 

1.0255

 

1.0232

 

1.0211

 

1.0191

 

1.0173

 

1.0156

 

1.0141

 

1.0127

 

1.0115

 

54

 

1.0310

 

1.0282

 

1.0257

 

1.0233

 

1.0211

 

1.0191

 

1.0173

 

1.0156

 

1.0141

 

1.0127

 

55

 

1.0342

 

1.0312

 

1.0284

 

1.0258

 

1.0234

 

1.0212

 

1.0192

 

1.0173

 

1.0156

 

1.0140

 

56

 

1.0378

 

1.0345

 

1.0314

 

1.0285

 

1.0259

 

1.0234

 

1.0212

 

1.0191

 

1.0173

 

1.0156

 

57

 

1.0418

 

1.0382

 

1.0348

 

1.0316

 

1.0287

 

1.0260

 

1.0235

 

1.0212

 

1.0191

 

1.0172

 

58

 

1.0463

 

1.0423

 

1.0385

 

1.0350

 

1.0318

 

1.0288

 

1.0261

 

1.0236

 

1.0213

 

1.0192

 

59

 

1.0513

 

1.0469

 

1.0428

 

1.0389

 

1.0353

 

1.0320

 

1.0290

 

1.0262

 

1.0237

 

1.0213

 

60

 

1.0570

 

1.0521

 

1.0475

 

1.0433

 

1.0393

 

1.0357

 

1.0323

 

1.0292

 

1.0264

 

1.0238

 

61

 

1.0633

 

1.0579

 

1.0529

 

1.0482

 

1.0438

 

1.0398

 

1.0361

 

1.0326

 

1.0295

 

1.0266

 

62

 

1.0704

 

1.0645

 

1.0589

 

1.0537

 

1.0489

 

1.0445

 

1.0403

 

1.0365

 

1.0330

 

1.0298

 

63

 

1.0783

 

1.0718

 

1.0657

 

1.0600

 

1.0547

 

1.0497

 

1.0451

 

1.0409

 

1.0370

 

1.0334

 

64

 

1.0872

 

1.0801

 

1.0733

 

1.0670

 

1.0611

 

1.0557

 

1.0506

 

1.0459

 

1.0415

 

1.0375

 

65

 

1.0971

 

1.0892

 

1.0818

 

1.0749

 

1.0684

 

1.0623

 

1.0567

 

1.0515

 

1.0466

 

1.0422

 

66

 

1.1080

 

1.0994

 

1.0912

 

1.0836

 

1.0764

 

1.0697

 

1.0635

 

1.0577

 

1.0524

 

1.0474

 

67

 

1.1200

 

1.1105

 

1.1016

 

1.0932

 

1.0853

 

1.0780

 

1.0711

 

1.0647

 

1.0587

 

1.0532

 

68

 

1.1332

 

1.1229

 

1.1131

 

1.1039

 

1.0952

 

1.0871

 

1.0795

 

1.0724

 

1.0658

 

1.0597

 

69

 

1.1478

 

1.1366

 

1.1259

 

1.1158

 

1.1062

 

1.0973

 

1.0889

 

1.0811

 

1.0738

 

1.0670

 

70

 

1.1642

 

1.1520

 

1.1402

 

1.1292

 

1.1187

 

1.1088

 

1.0996

 

1.0909

 

1.0829

 

1.0754

 

 

34



 

EMPLOYEE’S

 

BENEFICIARY’S AGE

 

AGE

 

80

 

81

 

82

 

83

 

84

 

85

 

86

 

87

 

88

 

89

 

20

 

1.0004

 

1.0004

 

1.0004

 

1.0003

 

1.0003

 

1.0003

 

1.0002

 

1.0002

 

1.0002

 

1.0002

 

21

 

1.0005

 

1.0004

 

1.0004

 

1.0003

 

1.0003

 

1.0003

 

1.0002

 

1.0002

 

1.0002

 

1.0002

 

22

 

1.0005

 

1.0005

 

1.0004

 

1.0004

 

1.0003

 

1.0003

 

1.0003

 

1.0002

 

1.0002

 

1.0002

 

23

 

1.0005

 

1.0005

 

1.0004

 

1.0004

 

1.0003

 

1.0003

 

1.0003

 

1.0002

 

1.0002

 

1.0002

 

24

 

1.0006

 

1.0005

 

1.0005

 

1.0004

 

1.0004

 

1.0003

 

1.0003

 

1.0003

 

1.0002

 

1.0002

 

25

 

1.0006

 

1.0005

 

1.0005

 

1.0004

 

1.0004

 

1.0003

 

1.0003

 

1.0003

 

1.0002

 

1.0002

 

26

 

1.0006

 

1.0006

 

1.0005

 

1.0005

 

1.0004

 

1.0004

 

1.0003

 

1.0003

 

1.0003

 

1.0002

 

27

 

1.0007

 

1.0006

 

1.0006

 

1.0005

 

1.0004

 

1.0004

 

1.0004

 

1.0003

 

1.0003

 

1.0002

 

28

 

1.0007

 

1.0007

 

1.0006

 

1.0005

 

1.0005

 

1.0004

 

1.0004

 

1.0003

 

1.0003

 

1.0003

 

29

 

1.0008

 

1.0007

 

1.0006

 

1.0006

 

1.0005

 

1.0005

 

1.0004

 

1.0004

 

1.0003

 

1.0003

 

30

 

1.0009

 

1.0008

 

1.0007

 

1.0006

 

1.0006

 

1.0005

 

1.0004

 

1.0004

 

1.0003

 

1.0003

 

31

 

1.0009

 

1.0008

 

1.0007

 

1.0007

 

1.0006

 

1.0005

 

1.0005

 

1.0004

 

1.0004

 

1.0003

 

32

 

1.0010

 

1.0009

 

1.0008

 

1.0007

 

1.0006

 

1.0006

 

1.0005

 

1.0005

 

1.0004

 

1.0004

 

33

 

1.0011

 

1.0010

 

1.0009

 

1.0008

 

1.0007

 

1.0006

 

1.0006

 

1.0005

 

1.0004

 

1.0004

 

34

 

1.0012

 

1.0011

 

1.0010

 

1.0009

 

1.0008

 

1.0007

 

1.0006

 

1.0005

 

1.0005

 

1.0004

 

35

 

1.0013

 

1.0012

 

1.0011

 

1.0010

 

1.0008

 

1.0008

 

1.0007

 

1.0006

 

1.0005

 

1.0005

 

36

 

1.0015

 

1.0013

 

1.0012

 

1.0011

 

1.0009

 

1.0008

 

1.0007

 

1.0006

 

1.0006

 

1.0005

 

37

 

1.0017

 

1.0015

 

1.0013

 

1.0012

 

1.0010

 

1.0009

 

1.0008

 

1.0007

 

1.0006

 

1.0006

 

38

 

1.0018

 

1.0016

 

1.0015

 

1.0013

 

1.0012

 

1.0010

 

1.0009

 

1.0008

 

1.0007

 

1.0006

 

39

 

1.0021

 

1.0018

 

1.0016

 

1.0015

 

1.0013

 

1.0011

 

1.0010

 

1.0009

 

1.0008

 

1.0007

 

40

 

1.0023

 

1.0021

 

1.0018

 

1.0016

 

1.0015

 

1.0013

 

1.0011

 

1.0010

 

1.0009

 

1.0008

 

41

 

1.0026

 

1.0023

 

1.0021

 

1.0019

 

1.0016

 

1.0015

 

1.0013

 

1.0011

 

1.0010

 

1.0009

 

42

 

1.0030

 

1.0027

 

1.0024

 

1.0021

 

1.0019

 

1.0017

 

1.0015

 

1.0013

 

1.0011

 

1.0010

 

43

 

1.0034

 

1.0030

 

1.0027

 

1.0024

 

1.0021

 

1.0019

 

1.0017

 

1.0015

 

1.0013

 

1.0011

 

44

 

1.0038

 

1.0034

 

1.0030

 

1.0027

 

1.0024

 

1.0021

 

1.0019

 

1.0017

 

1.0015

 

1.0013

 

45

 

1.0043

 

1.0039

 

1.0034

 

1.0031

 

1.0027

 

1.0024

 

1.0021

 

1.0019

 

1.0017

 

1.0015

 

46

 

1.0048

 

1.0043

 

1.0039

 

1.0035

 

1.0031

 

1.0027

 

1.0024

 

1.0021

 

1.0019

 

1.0017

 

47

 

1.0054

 

1.0049

 

1.0044

 

1.0039

 

1.0035

 

1.0031

 

1.0027

 

1.0024

 

1.0021

 

1.0019

 

48

 

1.0061

 

1.0055

 

1.0049

 

1.0044

 

1.0039

 

1.0035

 

1.0031

 

1.0027

 

1.0024

 

1.0021

 

49

 

1.0068

 

1.0061

 

1.0054

 

1.0049

 

1.0043

 

1.0039

 

1.0034

 

1.0031

 

1.0027

 

1.0024

 

50

 

1.0076

 

1.0068

 

1.0061

 

1.0054

 

1.0049

 

1.0043

 

1.0038

 

1.0034

 

1.0030

 

1.0027

 

51

 

1.0084

 

1.0075

 

1.0067

 

1.0060

 

1.0054

 

1.0048

 

1.0043

 

1.0038

 

1.0034

 

1.0030

 

52

 

1.0093

 

1.0084

 

1.0075

 

1.0067

 

1.0060

 

1.0053

 

1.0048

 

1.0042

 

1.0037

 

1.0033

 

53

 

1.0103

 

1.0093

 

1.0083

 

1.0074

 

1.0066

 

1.0059

 

1.0053

 

1.0047

 

1.0042

 

1.0037

 

54

 

1.0114

 

1.0102

 

1.0092

 

1.0082

 

1.0074

 

1.0066

 

1.0059

 

1.0052

 

1.0046

 

1.0041

 

55

 

1.0126

 

1.0113

 

1.0102

 

1.0091

 

1.0082

 

1.0073

 

1.0065

 

1.0058

 

1.0051

 

1.0045

 

56

 

1.0140

 

1.0126

 

1.0113

 

1.0101

 

1.0090

 

1.0081

 

1.0072

 

1.0064

 

1.0057

 

1.0050

 

57

 

1.0155

 

1.0139

 

1.0125

 

1.0112

 

1.0100

 

1.0089

 

1.0080

 

1.0071

 

1.0063

 

1.0056

 

58

 

1.0172

 

1.0155

 

1.0139

 

1.0124

 

1.0111

 

1.0099

 

1.0088

 

1.0079

 

1.0070

 

1.0062

 

59

 

1.0192

 

1.0172

 

1.0155

 

1.0139

 

1.0124

 

1.0111

 

1.0099

 

1.0088

 

1.0078

 

1.0069

 

60

 

1.0214

 

1.0192

 

1.0173

 

1.0155

 

1.0138

 

1.0124

 

1.0110

 

1.0098

 

1.0087

 

1.0077

 

61

 

1.0239

 

1.0215

 

1.0193

 

1.0173

 

1.0155

 

1.0138

 

1.0123

 

1.0110

 

1.0097

 

1.0086

 

62

 

1.0268

 

1.0241

 

1.0217

 

1.0195

 

1.0174

 

1.0155

 

1.0139

 

1.0123

 

1.0109

 

1.0097

 

63

 

1.0301

 

1.0271

 

1.0244

 

1.0219

 

1.0196

 

1.0175

 

1.0156

 

1.0139

 

1.0123

 

1.0109

 

64

 

1.0339

 

1.0305

 

1.0275

 

1.0247

 

1.0221

 

1.0198

 

1.0176

 

1.0157

 

1.0139

 

1.0123

 

65

 

1.0381

 

1.0344

 

1.0310

 

1.0278

 

1.0250

 

1.0223

 

1.0199

 

1.0178

 

1.0158

 

1.0140

 

66

 

1.0429

 

1.0387

 

1.0349

 

1.0314

 

1.0282

 

1.0252

 

1.0225

 

1.0201

 

1.0179

 

1.0158

 

67

 

1.0482

 

1.0435

 

1.0393

 

1.0353

 

1.0317

 

1.0284

 

1.0254

 

1.0227

 

1.0202

 

1.0179

 

68

 

1.0541

 

1.0489

 

1.0442

 

1.0398

 

1.0358

 

1.0321

 

1.0287

 

1.0256

 

1.0228

 

1.0202

 

69

 

1.0608

 

1.0550

 

1.0497

 

1.0448

 

1.0403

 

1.0362

 

1.0324

 

1.0289

 

1.0258

 

1.0229

 

70

 

1.0684

 

1.0620

 

1.0561

 

1.0506

 

1.0456

 

1.0410

 

1.0367

 

1.0328

 

1.0293

 

1.0260

 

 

35




Exhibit 10.11

 

SPX FLOW
LIFE INSURANCE PLAN
FOR KEY MANAGERS

 

1.                                      Establishment and Purpose.

 

SPX FLOW, Inc. (the “Corporation”) has established the SPX FLOW Life Insurance Plan for Key Managers (the “Plan”) effective as of September 26, 2015 (“Effective Date”) for the purpose of attracting and retaining competent key managers.

 

2.                                      Eligibility to Participate.

 

The employees eligible to participate (“Participant”) in the Plan are those key managers who are designated by the Compensation Committee of the Board of Directors of the Corporation which administers the Plan (the “Compensation Committee”).

 

As part of the Separation and Distribution Agreement by and between SPX Corporation and SPX FLOW, Inc. dated as of September 22, 2015 (as may be amended from time to time), SPX Corporation and SPX FLOW, Inc. entered into the Employee Matters Agreement dated as of September 26, 2015 (the “EMA”).  In accordance with the EMA, all liabilities for Flowco Employees (as defined in the EMA) who participated under the SPX Corporation Life Insurance Plan for Key Managers (the “Prior Plan”) immediately prior to the Effective Time (as defined in the EMA) are to be transferred to the Plan as of the Effective Date and the Plan became liable to pay all such benefits (if any) to such Flowco Employees thereafter.  Such Flowco Employees shall become Participants in the Plan as of the Effective Date.

 

3.                                      Benefits After Retirement.

 

In the event of the post-retirement death of a Participant, the Participant’s Beneficiary shall receive an after-tax post-retirement death benefit equal to one times the Participant’s final base salary, less the amount of any death benefit paid with respect to the Participant under any group term life insurance policy paid for by the Corporation.

 

For purposes of the Plan, “retirement” (or such similar term) refers to a Participant whose employment with the Corporation terminates and at time of termination, the Participant (i) is at least age 55, (ii) has a minimum of five (5) years of continuous service with the Corporation, and (iii) has a sum of age and continuous service that totals 65 or greater.  For these purposes, any service of a Flowco Employee with SPX Corporation and its affiliates shall count toward the preceding service determination.  Any Participant’s employment which terminates in accordance with Section 5(B) shall not be considered a termination due to retirement.

 

For the purpose of calculating the payment from the Corporation, the Participant’s Beneficiary shall be deemed to be a surviving spouse, to be in the highest algebraically combined, joint return, Federal and state income tax bracket for earned income and to be a resident of the state in which the Participant resided at the time of his death.  Estate and inheritance taxes, if any, with respect to the payment from the Corporation shall not be taken into consideration in calculating the amount of benefit owed.

 



 

The amount of post-retirement death benefit paid directly by the Corporation shall be paid in a lump-sum.  Such payment shall first be made as soon as practicable following the Participant’s death and upon delivery to the Compensation Committee by the Participant’s Beneficiary of satisfactory proof of death.

 

4.                                      Benefits Paid Prior to Retirement.

 

In the event of the pre-retirement death of a Participant, the Participant’s Beneficiary shall receive an after-tax payment equal to two times the Participant’s base salary as of the time of his death, less the amount of any death benefit paid with respect to the participant under any group term life insurance policy paid for by the Corporation.

 

For purposes of calculating the payment from the Corporation, the Participant’s Beneficiary shall be deemed to be a surviving spouse, to be in the highest algebraically combined joint return, Federal and state income tax bracket for earned income and to be a resident of the state in which the Participant resided at the time of his death.  Estate and inheritance taxes, if any, with respect to the payment from the company shall not be taken into account in calculating the benefit.

 

The amount of pre-retirement death benefit paid directly by the Corporation shall be paid in a lump-sum.  Such payment shall first be made as soon as practicable following the Participant’s death and upon delivery to the Compensation Committee by the Participant’s Beneficiary of satisfactory proof of death.

 

5.                                      Eligibility for Benefits at Termination of Employment.

 

A.                                    Generally

 

If the Participant employment with the Corporation terminates for any reason other than death before retirement, and subject to Section 5(C), no payments shall be due under this Plan.

 

B.                                    For Cause

 

If the Participant’s employment terminates as a result of discharge by the Corporation for proven dishonesty, gross misconduct, misappropriation of the Corporation’s funds or property, willful destruction of the Corporation’s property or other dishonest or fraudulent conduct (or for such reason that constitutes “cause” (or such similar term) under the Participant’s employment or change in control or other similar agreement with the Corporation), no payment shall be due under the Plan.

 

C.                                    For Disability

 

(i)                                     If the Participant’s employment with the Corporation is terminated before his 65th birthday for reason of disability, he may continue to participate in this Plan, with the consent of the Compensation Committee.  The Participant whose employment is terminated due to a disability will be

 

2



 

considered to be a continuing employee of the Corporation until he reaches his 65th birthday (or ceases to be disabled), at which time he will be deemed to have retired.

 

(ii)                                  “Disability” or “disabled” as used herein means the Participant’s inability to engage in any occupation or employment for wage or profit for which he is reasonably qualified by education, training or experience, by reason of a medically-determined physical or mental impairment which can be expected to continue for the balance of his lifetime.  The determination of the Participant’s disability shall be made by the Compensation Committee.  The Participant agrees to submit to such physical examination and furnish such proof as may be required by the Compensation Committee in connection with the determination of the existence and continuation of the disability.

 

(iii)                               The Compensation Committee shall have sole discretion in the ultimate determination as to those who may remain in the Plan under this Section 5(C).

 

6.                                      Beneficiary Designation.

 

Each participant in the Plan shall designate a Beneficiary, class of Beneficiaries or any contingent Beneficiaries on a form to be provided by the Compensation Committee.  Such designation of a Beneficiary or Beneficiaries may be changed from time to time by the Participant by filing a new designation with the Compensation Committee.

 

If any Participant shall fail to designate a Beneficiary, or if all Beneficiaries predecease the Participant, payment (if any) shall be made within a reasonable time to the first surviving class, and in equal shares if there are more than one in each class, of the following classes of successive beneficiaries:

 

1.              Participant’s widow or widower or surviving domestic partner

 

2.              Surviving children

 

3.              Surviving parents

 

4.              Surviving brothers or sisters

 

5.              Executor or administrator

 

The Plan shall recognize and honor all Beneficiary designation elections made by each Flowco Employee under the Prior Plan (to the extent not changed or revoked subsequently as provided above).

 

7.                                      No Contract of Employment.

 

Nothing contained in the Plan shall be construed as a contract of employment between the Corporation and the Participant.  Nothing in the Plan shall interfere in any way with the right of the Corporation to terminate a Participant’s service at any time with or

 

3



 

without cause or notice and whether or not such termination results in any adverse effect on the individual’s interests under the Plan.

 

8.                                      Payments as Supplemental Compensation.

 

The benefits provided hereunder shall not affect the Participant’s annual salary while in full-time employment of the Corporation, nor shall such benefits affect the Participant’s right to participate in any existing or future retirement plan or any other supplemental arrangement.  Payments received by a Participant under the Plan shall not be deemed part of a Participant’s regular, recurring compensation for purposes of any termination, indemnity or severance pay laws and shall not be included in, nor have any effect on, the determination of benefits under any other employee benefit plan, contract or similar arrangement provided by the Corporation, unless expressly so provided by such other plan, contract or arrangement.

 

9.                                      Rights not Assignable.

 

This Plan and the rights, interests and benefits hereunder shall not be assigned, transferred, pledged, sold, conveyed or encumbered in any way by the Participant or the Participant’s Beneficiary and shall not be subject to execution, attachment or similar process.  Any attempted sale, conveyance, transfer, assignment, pledge or encumbrance of the rights, interest or benefits provided pursuant to the terms of this Plan contrary to the terms of the foregoing sentence, or the levy of any additional or similar process thereupon, shall be null and void and without effect.

 

10.                               Purchase of Insurance Contracts.

 

In the event the Corporation decides to buy life insurance policies, the Participant agrees to cooperate with the Corporation in providing information for, and submitting to, any physical examination necessary to obtain such insurance policy.  It is essential that all responses and answers to information requested by the insurance company be true and correct as to medical facts in order to prevent the insurance company from declaring the policy null and void.  If the insurance company declares the policy null and void because information provided by the Participant is not true and correct, no benefits shall be payable under this Plan to that Participant’s Beneficiary.  A life insurance policy on the life of the Participant, if purchased, shall name the Corporation as owner and beneficiary.  Such policy, when purchased, shall remain a general unsecured, unrestricted asset of the Corporation, and neither the Participant nor any Beneficiary shall have any rights with respect to, or claim against, such policy.  Such policy shall not be deemed to be held under any trust for the benefit of the Participant or the Participant’s Beneficiary, nor shall such policy be deemed to be held in any such trust as collateral security for fulfilling the obligations of the Corporation under the terms of this Plan.

 

The Plan at all times shall be entirely unfunded and the Corporation shall not be required at any time to segregate any assets of the Corporation for payment of any benefits hereunder.  No Participant, Beneficiary or any other person shall have any interest in any particular assets of the Corporation by reason of the right to receive a benefit under the

 

4



 

Plan and any such Participant, Beneficiary or other person shall have only the rights of a general unsecured creditor of the Corporation with respect to any rights under the Plan.  Nothing contained in the Plan shall constitute a guaranty by the Corporation or any other entity or person that the assets of the Corporation will be sufficient to pay any benefit hereunder.

 

11.                               Successors, Mergers and Consolidation.

 

This Plan shall be binding upon the Corporation, its successor and assigns, including without limitations any person, organization or corporation which may acquire substantially all of the assets and business of the Corporation or any company or corporation into which the Corporation may be merged or consolidated.

 

Nothing in this Plan shall be construed (a) to limit, impair or otherwise affect the Corporation’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 Corporation, or any affiliate, to take any action which such entity deems to be necessary or appropriate.

 

12.                               Amendment and Termination.

 

This Plan may be modified, amended or terminated by the Compensation Committee or the Board of Directors of the Corporation.

 

13.                               Applicable Law.

 

The Plan (including, without limitation, any rules, regulations, determinations or decisions made by the Compensation Committee or Corporation relating to the Plan) shall be construed and administered exclusively in accordance with applicable federal laws and the laws of the State of Delaware, without regard to its conflict of laws principles.  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).

 

14.                               Administration.

 

This Plan shall be administered by the Compensation Committee.  The Compensation 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 Compensation Committee may make such determinations and interpretations under or in connection with the Plan as it deems necessary or advisable.  The Compensation Committee’s determinations under the Plan need not be uniform and may be made by the Compensation Committee selectively among Participants, whether or not such Participants are similarly situated.  All such rules, regulations, determinations and interpretations shall be binding and conclusive upon the Corporation, its affiliates, its

 

5



 

stockholders, all Participants and Beneficiaries, and upon their respective legal representatives, beneficiaries, successors and assigns, and upon all other persons claiming under or through any of them.  The Compensation Committee may appoint accountants, actuaries, counsel, advisors and other persons that it deems necessary or desirable in connection with the administration of the Plan.

 

The Compensation Committee may delegate any of its duties under the Plan to one or more officers of the Corporation.  The Compensation Committee shall also be permitted to delegate, to any appropriate officer or employee of the Corporation, responsibility for performing certain ministerial functions under the Plan.  In the event that the Compensation Committee’s authority is delegated to officers or employees in accordance with the foregoing, all provisions of the Plan relating to the Compensation 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 Compensation Committee’s delegation of authority hereunder shall have the same force and effect as if such action was undertaken directly by the Compensation Committee and shall be deemed for all purposes of the Plan to have been taken by the Compensation Committee.

 

15.                               Validity.

 

In the event that any part of this Plan is invalid for any reason, such invalidity shall not affect the balance of this Plan, which shall remain valid and binding upon the parties and enforceable in accordance with its terms.

 

16.                               Indemnification.

 

Each person who is or shall have been a member of the Compensation Committee or of the Board of Directors of the Corporation shall be indemnified and held harmless by the Corporation 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 Corporation’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 Corporation 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 Corporation’s Certificate of Incorporation or Bylaws, as a matter of law or otherwise, or any power that the Corporation may have to indemnify them or hold them harmless.

 

17.                               Duty of Participants and Beneficiaries.

 

The Participant and any Beneficiaries shall, as a condition of receiving benefits under this Plan, be obligated to provide the Compensation Committee with such information as the Compensation Committee shall require in order to administer the Plan.  Each Participant

 

6



 

shall keep the Corporation informed of his current address.  The Corporation shall not be obligated to search for the whereabouts of any person.  If, within three years after the actual death of a Participant, the Corporation is unable to locate any Beneficiary for the Participant, then the Corporation shall have no further obligation to pay any benefit hereunder to such Beneficiary or any other person and such benefit shall be irrevocably forfeited.

 

18.                               Withholding and Right to Offset.

 

The Corporation may impute income to a Participant due to participating under the Plan, and deduct or withhold from any compensation or payment payable to a Participant or Beneficiary, to the extent it deems advisable to comply with applicable law.  Notwithstanding any provisions of the Plan to the contrary, and to the extent permitted by applicable law, the Corporation may offset any amounts to be paid to the Beneficiary of a Participant under the Plan against any amounts that such Participant (or Beneficiary) may owe to the Corporation or its affiliates.

 

19.                               Headings and Construction.

 

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.  Words in the masculine gender shall include the feminine and the singular shall include the plural, and vice versa, unless qualified by the context.

 

7




Exhibit 10.12

 

SPX FLOW
SUPPLEMENTAL RETIREMENT SAVINGS PLAN

 

As Adopted Effective September 25, 2015

 



 

SPX FLOW
SUPPLEMENTAL RETIREMENT SAVINGS PLAN

 

As Adopted Effective September 25, 2015

 

TABLE OF CONTENTS

 

 

 

Page

 

 

 

ARTICLE I DEFINITIONS

2

1.1

“Accounting Date”

2

1.2

“Administrator”

2

1.3

“Affiliated Company” or “Affiliate”

2

1.4

“Beneficiary”

2

1.5

“Board”

2

1.6

“Code”

2

1.7

“Company”

2

1.8

“Compensation”

2

1.9

“Compensation Committee” or “Committee”

2

1.10

“Deferred Account” or “Account”

2

1.11

“Deferred Mutual Fund”

2

1.12

“Deferred Mutual Fund Unit”

2

1.13

“Dividend Date”

2

1.14

“Employee”

2

1.15

“ERISA”

2

1.16

“Executive Annual Incentive Plan”

3

1.17

“Executive Bonus Plan”

3

1.18

“Participant”

3

1.19

“Plan”

3

1.20

“Plan Year”

3

1.21

“Qualified Savings Plan”

3

1.22

“Recordkeeper”

3

 

 

 

ARTICLE II ELIGIBILITY

4

2.1

Participation

4

2.2

Reduction in Status; Removal From Participation

4

 

 

 

ARTICLE III CONTRIBUTIONS AND DEFERRAL ACCOUNTS

5

3.1

Elections To Contribute

5

3.2

Duration of Election

5

3.3

Company Matching Contributions

5

3.4

Vesting of Participant Deferrals

5

 

 

 

ARTICLE IV PARTICIPANTS’ ACCOUNTS AND INVESTMENT CREDITS

6

4.1

Participants’ Accounts

6

4.2

Deferred Mutual Fund Credits

6

4.3

Selection of Deferred Mutual Funds

6

4.4

Changing Deferred Mutual Funds

6

4.5

Dividends

6

 

 

 

ARTICLE V PAYMENT OF ACCOUNT

7

5.1

Form of Benefit

7

5.2

Election of Payment Option

7

5.3

Commencement of Benefit

7

5.4

Change in Payment Selection for 2005-2008 Calendar Year Accounts

9

 

i



 

5.5

Source of Benefit Payments

9

5.6

Payment at Death of Participant

9

5.7

Beneficiary Designation

9

 

 

 

ARTICLE VI ADMINISTRATION OF THE PLAN

10

6.1

Administration by the Company

10

6.2

General Powers of Administration

10

6.3

409A Compliance

10

 

 

 

ARTICLE VII AMENDMENT OR TERMINATION

11

7.1

Amendment or Termination

11

7.2

Effect of Amendment or Termination

11

 

 

 

ARTICLE VIII GENERAL PROVISIONS

12

8.1

Funding

12

8.2

General Conditions

12

8.3

No Guaranty of Benefits

12

8.4

No Enlargement of Employee Rights

12

8.5

Spendthrift Provision

12

8.6

Applicable Law

12

8.7

Small Benefits

12

8.8

Incapacity of Recipient

12

8.9

Corporate Successor

13

8.10

Unclaimed Benefit

13

8.11

Limitations on Liability

13

8.12

Duties of Participants and Beneficiaries

13

8.13

Taxes and Withholding

13

8.14

Treatment for Other Compensation Purposes

13

 

 

 

ARTICLE IX CHANGE-OF-CONTROL

14

9.1

Benefit Rights Upon Change-of-Control

14

9.2

Definition of Change-of-Control

14

 

 

 

ARTICLE X SPECIAL PROVISIONS

17

10.1

Transfer of Liabilities from Prior Plan

17

 

ii



 

SPX FLOW
SUPPLEMENTAL RETIREMENT SAVINGS PLAN

 

The SPX FLOW Supplemental Retirement Savings Plan (the “Plan”) is adopted effective September 25, 2015 (the “Effective Date”).  The Plan is established and maintained by SPX FLOW, Inc. in order to allow an eligible Employee to (a) make pre-tax salary reduction contributions, and (b) receive Company matching contributions, in each case, in excess of those permitted by the Company’s tax-qualified 401(k) plan, known as the “SPX FLOW Retirement Savings Plan.”

 

The provisions of this Plan are only applicable to Participants who were in the employ of SPX FLOW, Inc. on or after the Effective Date (except as otherwise provided in the Plan).

 

As part of the Separation and Distribution Agreement by and between SPX Corporation and SPX FLOW, Inc. entered into in September 22, 2015 (and as may be amended from time to time), SPX Corporation and SPX FLOW, Inc. entered into the Employee Matters Agreement (the “EMA”).  In accordance with the EMA, all liabilities for Flowco Employees (as defined in the EMA) under the SPX Corporation Supplemental Retirement Savings Plan (the “Prior Plan”) are to be transferred to the Plan as of September 25, 2015 and the Plan became liable to pay all such benefits to such participants.  Section 10.1 of the Plan sets forth the additional rules applicable to such transferred benefits and transferred participants.

 

1



 

ARTICLE I

DEFINITIONS

 

Wherever used herein the following terms shall have the meanings hereinafter set forth:

 

1.1          “Accounting Date” means each business day.

 

1.2          “Administrator” means the Company, as set forth in Section 6.1.

 

1.3          “Affiliated Company” or “Affiliate” means any corporation, trade or business entity which is a member of a controlled group of corporations, trades or businesses, or an affiliated service group, of which the Company is also a member, as provided in Code Sections 414(b), (c), (m) or (o).

 

1.4          “Beneficiary” means the person, trust or estate designated (or deemed designated) to receive the balance of the Participant’s account under the Qualified Savings Plan.

 

1.5          “Board” means the Board of Directors of the Company.

 

1.6          “Code” means the Internal Revenue Code of 1986, as amended from time to time, and any regulations relating thereto.

 

1.7          “Company” means (a) SPX FLOW, Inc., (b) any Affiliated Company or Affiliate, provided that any such Affiliated Company or Affiliate shall be included in the definition of “Company” only to the extent determined by action of the officer of SPX FLOW, Inc. empowered to make such employee benefit determinations, and (c) any other entity resulting from a reorganization, merger or consolidation into or with the Company, or a transfer or sale of substantially all of the assets of the Company.

 

1.8          “Compensation” means the total amount paid to a Participant by the Company inclusive of bonuses, overtime pay, pre-tax contributions to the Qualified Savings Plan, and salary reduction contributions to this Plan, but excluding therefrom those items excluded from Compensation under the Qualified Savings Plan.  Notwithstanding the foregoing, Compensation shall not be reduced pursuant to the application of Code Section 401(a)(17), which applies to the Qualified Savings Plan but shall not be applied to this Plan.

 

1.9          “Compensation Committee” or “Committee” means the Compensation Committee of the Board.  When used herein, “Committee” shall also include any person or persons to whom the Committee’s authority has been lawfully delegated.

 

1.10        “Deferred Account” or “Account” means the Participant’s interest in the Plan and includes separate salary reduction and Company matching contributions accounts for each of the Deferred Mutual Funds for which Deferred Mutual Fund Units are credited to Participant Deferred Accounts, as described in Sections 4.1 and 4.2.  Participant Accounts may be further sub-divided for different time periods as provided in Section 4.1.

 

1.11        “Deferred Mutual Fund” means a mutual fund or other security designated by the Compensation Committee for purposes of measuring the value of a Deferred Account established pursuant to Article IV of the Plan.

 

1.12        “Deferred Mutual Fund Unit” means the equivalent of one share of a Deferred Mutual Fund.

 

1.13        “Dividend Date” means the payment date of any dividend declared on a Deferred Mutual Fund.

 

1.14        “Employee” means an employee of the Company who is eligible to participate under the Qualified Savings Plan (or any successor or replacement to the Qualified Savings Plan).

 

1.15        “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

 

2



 

1.16        “Executive Annual Incentive Plan” means the SPX FLOW Executive Annual Incentive Plan and each applicable successor or replacement plan to such plan.

 

1.17        “Executive Bonus Plan” means the Executive Bonus Program under the SPX FLOW Bonus Plan and each applicable successor or replacement plan to such plan.

 

1.18        “Participant” means an Employee who is eligible to participate in this Plan pursuant to Article II hereof who has filed a deferral election and shall also include a former Employee or current non-eligible Employee who continues to have an Account under this Plan.

 

1.19        “Plan” means this SPX FLOW Supplemental Retirement Savings Plan.

 

1.20        “Plan Year” means the calendar year.

 

1.21        “Qualified Savings Plan” means the SPX FLOW Retirement Savings Plan and each predecessor, successor or replacement to the said Qualified Savings Plan.  For avoidance of doubt, for purposes of determining when and how deferrals and matching contribution credits are made under the Plan (including, without limitation, when the Applicable Limitation has been reached), the SPX Corporation Retirement Savings and Stock Ownership Plan shall be viewed as a predecessor plan for Participants covered under Section 10.1.

 

1.22        “Recordkeeper” means the organization selected by the Company to keep information concerning the Account of each Participant in the Plan.

 

Words in the masculine gender shall include the feminine and the singular shall include the plural, and vice versa, unless qualified by the context.  Any headings used herein are included for ease of reference only, and are not to be construed so as to alter the terms hereof.

 

3



 

ARTICLE II

ELIGIBILITY

 

2.1          Participation.

 

(a)           An Employee shall be eligible to be a Participant hereunder if such Employee (i) is eligible to participate in the Executive Annual Incentive Plan (as determined under the terms of such plan) and has a pay grade level of H or above, (ii) is eligible to participate in the Executive Bonus Plan (as determined under the terms of such plan) and has a pay grade level of H or above, (iii) had a positive Account balance under the Prior Plan as of December 31, 2010, or (iv) participates as provided in Section 10.1.

 

For an Employee that meets criteria (i) or (ii) on or after the Effective Date, and subject to Section 2.2, such Employee shall be eligible to participate in the Plan depending on when such criteria was met within the Plan Year:

 

(i)                                     if the Employee meets such criteria in a Plan Year between January 1 and October 31 of such Plan Year, the Employee shall be eligible to participate in the Plan in the first Plan Year following such Plan Year; and

 

(ii)                                  if the Employee meets such criteria in a Plan Year between November 1 and December 31 of such Plan Year, the Employee shall be eligible to participate in the Plan in the second Plan Year following such Plan Year.

 

For a Participant who ceases to be eligible to participate in the Plan in accordance with Section 2.2, and then subsequently again meets the eligibility criteria described in the first sentence of Section 2.1(a), such Employee’s eligibility to participate in the Plan again shall be determined in the same manner as above (with the subsequent meeting of the eligibility criteria keying when eligibility commences again).

 

For an Employee that meets criteria (iii) and (iv) above, eligibility to participate in the Plan shall be as provided in Section 10.1.

 

(b)           Eligible Employees shall be notified of their ability to participate in the Plan and shall be offered the opportunity to make contributions hereunder, as set forth at Section 3.1 hereof.

 

2.2          Reduction in Status; Removal From ParticipationIf an Employee ceases to meet the eligibility criteria described in the first sentence of Section 2.1(a), such Employee shall cease to be eligible to participate in the Plan at the end of the applicable Plan Year and the Participant shall make no further contributions to this Plan, nor shall the Company make any further contributions on his behalf.  However, his Deferred Account shall continue to be held for his benefit pursuant to the terms of this Plan, and it shall continue to be credited with earnings, gains and losses as provided under Article IV.

 

4



 

ARTICLE III

CONTRIBUTIONS AND DEFERRAL ACCOUNTS

 

3.1          Elections To Contribute.

 

(a)           With respect to a Plan Year, a Participant may elect to have a percentage of Compensation deferred under this Plan with respect to any Compensation for services performed during the given Plan Year, even if such Compensation is paid during the following Plan Year.  Such deferrals shall occur on a per payroll basis, and shall be credited by the Company to this Plan.  Such an election with respect to any Plan Year must be made no later than December 31st of the preceding Plan Year, during the time period prescribed by the Administrator.  Such elections shall be irrevocable for the applicable Plan Year after the election deadline provided in the preceding sentence.

 

A Participant may separately elect (i) a basic deferral percentage (in 1% increments, up to 50% of Compensation, which includes, without limitation, bonuses except for the bonus (if any) paid under the Executive Bonus Plan and/or Executive Annual Incentive Plan), and (ii) a supplemental bonus deferral percentage (in 1% increments, up to 100%), applicable only to the bonus (if any) paid under the Executive Bonus Plan and/or Executive Annual Incentive Plan.

 

Notwithstanding the foregoing, no deferrals and crediting are made under this Plan with respect to a Participant until the Applicable Limitation in the Qualified Savings Plan has been reached for the applicable Plan Year in which such Compensation was paid.  For these purposes, “Applicable Limitation” means the limitation on benefits and compensation imposed on the Qualified Savings Plan by Code Section 401(a)(17).

 

A newly eligible Participant whose eligibility timing is determined pursuant to the second paragraph of Section 2.1(a) shall make elections to contribute with respect to the applicable Plan Year in the same manner as provided above.

 

(b)           Notwithstanding the foregoing, the applicable deferral percentages permitted under this Section 3.1 shall be reduced to the extent required by Code Section 409A with respect to a newly-eligible Participant (which shall include an Employee deemed to be “initially eligible” as provided under Code Section 409A).

 

(c)           The contribution election procedures described in this Section 3.1 shall apply with respect to Participant Compensation in Plan Years after 2015.  For the 2015 Plan Year, the contribution elections shall be determined according to the applicable provisions of Section 10.1.  For avoidance of doubt, no bonuses with respect to services performed in the 2015 Plan Year shall be eligible for deferral under the Plan, even if paid after the 2015 Plan Year.

 

3.2          Duration of ElectionA Participant’s election to defer Compensation under this Plan as described at Section 3.1 above shall remain in effect only for the Plan Year (or portion thereof) for which it applies.  Notwithstanding any other provision of the Plan to the contrary, a Participant’s deferral election for a Plan Year shall be cancelled upon the Participant having his deferrals under the Qualified Saving Plan suspended due to receiving a hardship distribution under the Qualified Savings Plan.

 

3.3          Company Matching ContributionsFor each Plan Year, a Participant’s Account under this Plan shall be credited with a matching contribution equal to a percentage (the same percentage of Compensation as matched by the Company under the Qualified Savings Plan) of his deferrals for such Plan Year, to the extent such deferrals have not received a match on that percentage of Compensation under the Qualified Savings Plan.  The matching contribution to be made under this Plan shall follow any increase or decrease in the match made for the Qualified Savings Plan, and shall be made only after the maximum match has been made under the Qualified Savings Plan.

 

3.4          Vesting of Participant DeferralsA Participant shall be fully vested in all allocations made to his Account pursuant to Section 3.1 and in the Company matching contribution credits made to his Account pursuant to Section 3.3.

 

5



 

ARTICLE IV

PARTICIPANTS’ ACCOUNTS AND INVESTMENT CREDITS

 

4.1          Participants’ AccountsA separate Deferred Account shall be established by the Recordkeeper for each Participant which shall accurately reflect his interest in this Plan.  Each Account shall consist of at least two sub-Accounts, one for the Participant’s deferrals made to this Plan pursuant to Section 3.1, and one for the Company matching contribution credits made pursuant to Section 3.3 (including, for each sub-Account, applicable credited earnings, gains and losses).

 

Each Participant’s Account shall further be sub-divided into six accounts: one account for deferral and matching contribution credit amounts (including applicable credited earnings, gains and losses) attributable to calendar years before 2005 (the “Pre-2005 Account”), four separate accounts for deferral and matching contribution credit amounts (including applicable credited earnings, gains and losses) attributable to each calendar year after 2004 and before 2009 (the “2005-2008 Calendar Year Accounts”), and one account for deferral and matching contribution credit amounts (including applicable credited earnings, gains and losses) attributable to calendar years after 2008 (the “Post-2008 Account”).

 

4.2          Deferred Mutual Fund CreditsThe Company shall establish a Deferred Account for each Participant who makes an election to defer Compensation, as provided in Section 3.1.  The balance of a Participant’s Deferred Account is dependent upon the value of the Deferred Mutual Fund Units in the Deferred Account, and is therefore subject to market fluctuations in value until distributed to a Participant.

 

4.3          Selection of Deferred Mutual FundsEach Participant (and Beneficiary, as provided at Section 5.6) shall be permitted to direct the manner in which credits to his Account shall be treated as invested from among such Deferred Mutual Funds determined by the Compensation Committee from time to time and communicated to Participants.  Each Participant shall choose the percentage of his Account treated as invested in each Deferred Mutual Fund provided that not less than 5% (or such other percentage as set by the Company) of the Participant’s contributions and Company contributions shall be designated for any one such Deferred Mutual Fund.  To the extent a Participant (or Beneficiary if applicable) does not provide any investment direction, the Company may select a Deferred Mutual Fund for which the Participant (or Beneficiary if applicable) will be deemed to have directed his Account be invested in.

 

4.4          Changing Deferred Mutual FundsA Participant may elect to change the mix of the Deferred Mutual Fund Units credited to the Participant’s Deferred Account in accordance with the administrative procedures and rules set by the Administrator from time to time.

 

4.5          DividendsAt any time a balance in Deferred Mutual Fund Units is maintained in an Account, there shall be credited to the Account additional Deferred Mutual Fund Units on each Dividend Date.  Such additional number of Deferred Mutual Fund Units shall be determined by reference to the number of mutual fund shares or other securities that would be issued by the mutual fund or the issuer of the other securities with respect to the reinvestment of such dividend.  In the absence of such reinvestment, the number of such additional Deferred Mutual Units shall be determined by (i) multiplying the total number of Deferred Mutual Fund Units (including fractional Deferred Mutual Fund Units) credited to the Account immediately prior to the Dividend Date by the amount of the dividend per share of the Deferred Mutual Fund and (ii) dividing the product by the fair market value per share as of such Dividend Date.  Additional Deferred Mutual Fund Units shall be similarly credited on each Dividend Date on which a balance in Deferred Mutual Fund Units is maintained in the Account.

 

6



 

ARTICLE V
PAYMENT OF ACCOUNT

 

5.1                               Form of Benefit.

 

(a)                                 At the Participant’s election as provided under Section 5.2, a Participant’s Pre-2005 Account and 2005-2008 Calendar Year Accounts (with separate elections for the Pre-2005 Account and each 2005-2008 Calendar Year Account) under this Plan shall be paid in one of the following forms:

 

(i)                                     In a single lump sum payment.

 

(ii)                                  In periodic annual installments payable for a period of up to ten (10) years.  So long as the Participant retains funds in his Account, earnings, gains and losses shall be credited to the Account.

 

(iii)                               In periodic monthly installments, payable for a period of up to ten (10) years.  So long as the Participant retains funds in his Account, earnings, gains, and losses shall be credited to the Account.

 

(b)                                 A Participant who made no election with respect to the Pre-2005 Account under the Prior Plan shall receive a lump sum payment of the Participant’s Pre-2005 Account, valued and paid on the date of his or her termination, death or retirement.  A Participant who made no election with respect to a 2005-2008 Calendar Year Account under the Prior Plan shall receive a lump sum payment of such 2005-2008 Calendar Year Account, valued and paid on or as soon as practicable after the date that is six months after the Participant’s separation from service but not later than 30 days after such date (subject to the last sentence of Section 5.2(b) and Section 5.4).

 

(c)                                  A Participant’s Post-2008 Account shall be paid in a single lump sum payment.

 

5.2                               Election of Payment Option.

 

(a)                                 Pre-2005 Account.  With respect to the Pre-2005 Account, a Participant selected a form of payment under the Prior Plan.  A Participant may change his election with respect to the Pre-2005 Account at any time that is at least one year prior to his retirement, death, disability or other termination of employment from the Company.  Notwithstanding a Participant’s payment election under Section 5.3, payments with respect to the Pre-2005 Account shall not be made until the year following the year of termination to the extent a payment would otherwise be subject to Code Section 162(m).

 

(b)                                 2005-2008 Calendar Year Accounts.  With respect to a 2005-2008 Calendar Year Account, the Participant selected a form of payment under the Prior Plan.  A Participant may change his form of payment election with respect to a 2005-2008 Calendar Year Account only as provided in Section 5.4 below.  Notwithstanding a Participant’s payment election under Section 5.3, payments with respect to a 2005-2008 Calendar Year Account shall not be made until the year following the year of termination to the extent a payment would otherwise be subject to Code Section 162(m).

 

(c)                                  Post-2008 Account.  With respect to the Post-2008 Account, no election as to form of payment is permitted under the Plan.  Notwithstanding Section 5.3, payments with respect to a Post-2008 Account shall not be made until the year following the year of termination to the extent a payment would otherwise be subject to Code Section 162(m).

 

5.3                               Commencement of Benefit.

 

(a)                                 Pre-2005 Account.  Except in the case of a distribution upon death pursuant to Section 5.6 hereof, payment of a Participant’s Pre-2005 Account under this Plan shall commence at (or as soon as

 

7



 

administratively feasible after) the time selected by the Participant (under the Prior Plan or this Plan) from the list below, which selection must be made at least one year prior to the commencement of payment:

 

(i)                                     upon separation from service,

 

(ii)                                  on the date which is a specified number of months after separation from service, or

 

(iii)                               on a specified date,

 

PROVIDED that the selection of a payment commencement date with respect to the Pre-2005 Account may be changed (subject to the following sentence) by a Participant prior to separation from service, so long as the new payment commencement date is at least one year after the date of change in election.  If the Administrator receives, within one year of the selected payment commencement date with respect to the Pre-2005 Account, a new election to change the payment commencement date, such election will be void, and the prior election will govern.

 

In no event shall the date for commencement of payments with respect to the Pre-2005 Account occur prior to separation from service, and notwithstanding any election to the contrary, benefits shall commence to be paid after a Participant has both attained age 701/2 and separated from service.

 

(b)                                 2005-2008 Calendar Year Accounts.  Except in the case of a distribution upon death pursuant to Section 5.6 hereof and subject to paragraph (d) below, payment with respect to a 2005-2008 Calendar Year Account under this Plan shall commence at the time selected by the Participant under the Prior Plan from the list below:

 

(i)                                     upon separation from service,

 

(ii)                                  on the date which is a specified number of months after separation from service, or

 

(iii)                               on a specified date,

 

PROVIDED that the selection of a payment commencement date with respect to a 2005-2008 Calendar Year Account may be changed in accordance with Section 5.4 below.

 

In no event shall the date for commencement of payments with respect to a 2005-2008 Calendar Year Account occur prior to separation from service, and notwithstanding any election to the contrary, benefits shall commence to be paid after a Participant has both attained age 70½ and separated from service.

 

Notwithstanding anything in the foregoing and subject to paragraph (d) below, payment with respect to a 2005-2008 Calendar Year Account shall be paid (or shall commence to be paid) on or as soon as practicable after the date determined pursuant to the above but not later than 30 days after such date.

 

(c)                                  Post-2008 Account.  Except in the case of a distribution upon death pursuant to Section 5.6 hereof, the single lump sum payment with respect to a Post-2008 Account under this Plan shall be made on or as soon as practicable after the date that is six months after the Participant’s separation from service but not later than 30 days after such date.

 

(d)                                 Six Month Delay for Specified Employees.  If, at the time the Participant becomes entitled to 2005-2008 Calendar Year Account payments under the Plan, the Participant is a Specified Employee (as defined and determined under Code Section 409A), then, notwithstanding any other provision in the Plan to the contrary, the following provision shall apply.  2005-2008 Calendar Year Account payments considered deferred compensation under Code Section 409A which are determined to be payable upon a Participant’s separation from service as determined under Code Section 409A and not subject to an exception or exemption thereunder, shall be paid to the Participant on or as soon as practicable after the date that is six months after the Participant’s separation

 

8



 

from service but not later than 30 days after such date.  Any such 2005-2008 Calendar Year Account payments that would otherwise have been paid to the Participant during this six-month period shall instead be aggregated (subject to the earnings, gains and losses credited to the 2005-2008 Calendar Year Account during such time) and paid to the Participant pursuant to the preceding sentence.  Any 2005-2008 Calendar Year Account payments to which the Participant is entitled to be paid after the date that is six (6) months after the Participant’s separation from service shall be paid to the Participant in accordance with the applicable terms of this Plan.

 

5.4                               Change in Payment Selection for 2005-2008 Calendar Year Accounts.  A Participant may change his payment form and payment commencement date election with respect to a 2005-2008 Calendar Year Account only upon written notice in a form acceptable to the Administrator, so long as: (i) the new election is made at least twelve (12) months before the original payment commencement date, (ii) the new election does not take effect until at least twelve (12) months after the date on which such election is made, and (iii) the original payment commencement date is deferred for a period of not less than five (5) years.

 

5.5                               Source of Benefit Payments.  Any Deferred Account payable to a Participant or a Participant’s Beneficiary shall be paid from the general assets of the Company.

 

5.6                               Payment at Death of Participant.  In the event a Participant dies before payment of his Account under this Plan commences, or in the event a Participant dies after such payment commences but before he has received the entire balance in his Account, payment of such Participant’s Account under this Plan shall commence to the Beneficiary (in the payment form selected by the Participant with respect to a Participant’s Pre-2005 Account and 2005-2008 Calendar Year Accounts, or in a single lump sum payment with respect to a Participant’s Post-2008 Account), but with benefit payments to commence on or as soon as practicable after the Participant’s death but not later than 60 days after such date, if payments had not previously commenced.  So long as an Account remains in this Plan with respect to a Beneficiary, that Account shall continue to be credited with earnings, gains and losses, and a Beneficiary may continue to change Deferred Mutual Funds as provided in Section 4.4.

 

5.7                               Beneficiary Designation.  The Beneficiary or Beneficiaries who shall receive the Participant’s interest in this Plan in the event of the Participant’s death shall be identical to the Beneficiary or Beneficiaries identified under the Qualified Savings Plan.  There shall be no separate beneficiary election with respect to this Plan.

 

9



 

ARTICLE VI

ADMINISTRATION OF THE PLAN

 

6.1                               Administration by the Company.  The Company, acting under the supervision of the Compensation Committee, shall be responsible for the general operation and administration of the Plan and for carrying out the provisions thereof.

 

6.2                               General Powers of Administration.  All provisions set forth in the Qualified Savings Plan with respect to the administrative powers and duties of the Company, expenses of administration, and procedures for filing claims shall also be applicable with respect to the Plan.  The Company shall be entitled to rely conclusively upon all tables, valuations, certificates, opinions and reports furnished by any actuary, accountant, controller, counsel or other person employed or engaged by the Company with respect to the Plan.

 

6.3                               409A Compliance.  To the extent any provision of the Plan or action by the Committee or Company would subject any Participant to liability for interest or additional taxes under Code Section 409A(a)(1)(B), or make Pre-2005 Account amounts subject to Code Section 409A, it will be deemed null and void, to the extent permitted by law and deemed advisable by the Committee.  It is intended that the Plan will comply with Code Section 409A, and that the Pre-2005 Account amounts be exempt from Code Section 409A coverage, and the Plan shall be interpreted and construed on a basis consistent with such intent.  The Plan may be amended in any respect deemed necessary (including retroactively) by the Committee in order to preserve compliance with Code Section 409A and to maintain Code Section 409A exemption for the Pre-2005 Account amounts.  For purposes of this Plan with respect to 2005-2008 Calendar Year Accounts and Post-2008 Accounts, a “termination of employment”, “termination”, “retirement” or “separation from service” (or other similar term having a similar import) under this Plan shall have the same meaning as a “separation from service” as defined in Code Section 409A.  Nothing in this Plan (including, without limitation, the preceding) shall be construed as a guarantee of any particular tax effect for Plan benefits.

 

10



 

ARTICLE VII

AMENDMENT OR TERMINATION

 

7.1                               Amendment or Termination.  The Company intends the Plan to be permanent but reserves the right, subject to Article IX, to amend or terminate the Plan when, in the sole opinion of the Company, such amendment or termination is advisable.  Any such amendment or termination shall be made pursuant to a resolution of the Compensation Committee and shall be effective as of the date of such resolution or as specified therein.

 

7.2                               Effect of Amendment or Termination.  No amendment or termination of the Plan shall directly or indirectly deprive any current or former Participant or Beneficiary of an Account balance which has accrued under this Plan prior to the effective date of such amendment or termination.

 

11



 

ARTICLE VIII

GENERAL PROVISIONS

 

8.1                               Funding.  The Plan is intended to constitute and at all times shall be interpreted and administered so as to qualify as an unfunded deferred compensation plan for a select group of management and highly compensated employees under ERISA.  The Plan at all times shall be entirely unfunded and the Company shall not be required at any time to segregate any assets of the Company for payment of any benefits hereunder.  No Participant, Beneficiary or any other person shall have any interest in any particular assets of the Company by reason of the right to receive a benefit under the Plan and any such Participant, Beneficiary or other person shall have only the rights of a general unsecured creditor of the Company with respect to any rights under the Plan.

 

Notwithstanding the foregoing, the Company may, in its sole discretion at any time or from time to time, establish segregated funds, escrow accounts or trust funds (including through a grantor trust) whose primary purpose would be for the provision of benefits under this Plan.  If such funds or accounts are established, however, individuals entitled to benefits hereunder shall not have any identifiable interest in any such funds or accounts nor shall such individuals be entitled to any preference or priority with respect to the assets of such funds or accounts.  These funds and accounts would still be available to judgment creditors of the Company and to all creditors in the event of the Company’s insolvency or bankruptcy.

 

8.2                               General Conditions.  Any accounts payable under the Qualified Savings Plan shall be paid solely in accordance with the terms and conditions of the Qualified Savings Plan and nothing in this Plan shall operate or be construed in any way to modify, amend or affect the terms and provisions of the Qualified Savings Plan.

 

8.3                               No Guaranty of Benefits.  Nothing contained in the Plan shall constitute a guaranty by the Company or any other entity or person that the assets of the Company will be sufficient to pay any benefit hereunder.

 

8.4                               No Enlargement of Employee Rights.  No Participant or Beneficiary shall have any right to a benefit under the Plan except in accordance with the terms of the Plan.  Establishment of the Plan shall not be construed to give any Participant the right to be retained in the service of the Company, nor to create or confer on any Participant the right to defer compensation or receive a matching contribution credit with respect to any future period of service with the Company.  Nothing in the Plan shall interfere in any way with the right of the Company to terminate a Participant’s service at any time with or without cause or notice and whether or not such termination results in any adverse effect on the individual’s interests under the Plan.

 

8.5                               Spendthrift Provision.  No interest of any person or entity in, or right to receive a benefit under, the Plan shall be subject in any manner to sale, transfer, assignment, pledge, attachment, garnishment, or other alienation or encumbrance of any kind; nor may such interest or right to receive a benefit be taken, either voluntarily or involuntarily, for the satisfaction of the debts of, or other obligations or claims against, such person or entity, including claims for alimony, support, separate maintenance and claims in bankruptcy proceedings.  No Deferred Mutual Fund Units shall be pledged, hypothecated, or transferred by a Participant other than by will or the laws of descent and distribution.

 

8.6                               Applicable Law.  The Plan (including, without limitation, any rules, regulations, determinations or decisions made by the Committee or Company relating to the Plan) shall be construed and administered exclusively in accordance with applicable federal laws and the laws of the State of Delaware, without regard to its conflict of laws principles.

 

8.7                               Small Benefits.  If at any time an Account payable under this Plan has a value of less than $25,000, the Company shall pay such Account to the Participant or Beneficiary in a single lump sum in lieu of any further benefit payments hereunder.

 

8.8                               Incapacity of Recipient.  If any person entitled to a benefit payment under the Plan is deemed by the Company to be incapable of personally receiving and giving a valid receipt for such payment, then, unless and until claim therefor shall have been made by a duly appointed guardian or other legal representative of such person,

 

12



 

the Company may provide for such payment or any part thereof to be made to any other person or institution then contributing toward or providing for the care and maintenance of such person.  Any such payment shall be a payment for the account of such person and a complete discharge of any liability of the Company and the Plan therefor.

 

8.9                               Corporate Successor.  The Plan shall not be automatically terminated by a transfer or sale of assets of the Company or by the reorganization, merger or consolidation of the Company into or with any other corporation or entity, but shall be continued after such transfer, sale, reorganization, merger or consolidation.

 

8.10                        Unclaimed Benefit.  Each Participant shall keep the Company informed of his current address.  The Company shall not be obligated to search for the whereabouts of any person.  If the location of a Participant is not made known to the Company within three (3) years after the date on which payment of the Participant’s Account may first be made, payment may be made as though the Participant had died at the end of the three-year period.  If, within one additional year after such three-year period has elapsed, or, within three years after the actual death of a Participant, the Company is unable to locate any Beneficiary for the Participant, then the Company shall have no further obligation to pay any benefit hereunder to such Participant or Beneficiary or any other person and such benefit shall be irrevocably forfeited.

 

8.11                        Limitations on Liability.  Notwithstanding any of the preceding provisions of the Plan, neither the Company nor any individual acting as an employee or agent of the Company shall be liable to any Participant, former Participant, Beneficiary or any other person for any claim, loss, liability or expense incurred in connection with the Plan.

 

8.12                        Duties of Participants and Beneficiaries.  The Participant and any Beneficiaries of a Participant shall, as a condition of receiving benefits under this Plan, be obligated to provide the Compensation Committee with such information as the Compensation Committee shall require in order to determine Account balances, calculate benefits under this Plan, or otherwise administer the Plan.

 

8.13                        Taxes and Withholding.  As a condition to any payment or distribution pursuant to the Plan, the Company may require a Participant to pay such sum to the Company as may be necessary to discharge its obligations with respect to any taxes, assessments or other governmental charges imposed on property or income received by the Participant thereunder.  The Company may deduct or withhold such sum from any payment or distribution to the Participant.  For each payroll period in which a Participant defers compensation or receives a matching contribution credit, or at such other time as the Company may determine necessary or desirable, the Company may withhold from that portion of the Participant’s compensation that is not being deferred, in a manner determined by the Company, the participant’s share of FICA and any other taxes due; provided, however, that the Company may reduce the applicable amount deferred if necessary to comply with applicable withholding requirements.

 

8.14                        Treatment for Other Compensation Purposes.  Payments received by a Participant under the Plan shall not be deemed part of a Participant’s regular, recurring compensation for purposes of any termination, indemnity or severance pay laws and shall not be included in, nor have any effect on, the determination of benefits under any other employee benefit plan, contract or similar arrangement provided by the Company, unless expressly so provided by such other plan, contract or arrangement.

 

13



 

ARTICLE IX

CHANGE-OF-CONTROL

 

9.1                               Benefit Rights Upon Change-of-Control.  Notwithstanding any other provision of the Plan to the contrary, in the event of a Change-of-Control, the Company or any successor shall be prohibited from amending or terminating the Plan in any manner so as to deprive, directly or indirectly, any current or former Participant or Beneficiary of all or any portion of any Account which has accrued under this Plan prior to the effective date of such amendment or termination.  Following a Change-of-Control, no action shall be taken under the Plan that will cause any Pre-2005 Account amounts to be subject to Code Section 409A coverage, or cause any 2005-2008 Calendar Year Accounts and Post-2008 Accounts to fail to comply in any respect with Code Section 409A, in either case without the written consent of the Participant or Beneficiary (as applicable).

 

Notwithstanding anything to the contrary, and to the extent consistent with Code Section 409A, on or prior to a Change-of-Control, the Company shall, (i) to the extent not previously established, establish a grantor trust, and (ii) fund such grantor trust with a single, irrevocable lump sum contribution which is, when combined with any other assets already held in the grantor trust, equal to the value of all vested Accounts under the Plan through the date of such Change-of-Control.  If a Participant shall continue to be employed by the Company or any successor after such Change-of-Control, each calendar year the Company (or any successor) shall, as soon as possible, but in no event later than 30 days following the end of such calendar year, make an irrevocable contribution to the grantor trust in an amount that is necessary in order to maintain an account for the Participant that is equal to his or her vested Account under the Plan at the end of the applicable calendar year.  After a Change-of-Control, if the assets of the grantor trust are not sufficient to make payment of Plan benefits at any time, the Company (or any successor) shall, as soon as possible, but in no event later than 30 days following notice from the trustee, make an irrevocable contribution sufficient to enable the trustee to make such Plan benefit payments.  The Company (or any successor) shall provide such information as reasonably requested by the trustee in order for the trustee to fulfill its duties (including, without limitation, making Plan benefit determinations after a Change-of-Control) under the grantor trust agreement.  As provided under Section 8.1, the Company shall retain beneficial ownership of all assets transferred to the grantor trust and such assets will be subject to the claims of the Company’s creditors.

 

9.2                               Definition of Change-of-Control.  For purposes of this Plan, a “Change of Control” shall be deemed to have occurred if:

 

(a)                                 Any “Person” (as defined below), excluding for this purpose the Company or any subsidiary of the Company, any employee benefit plan of the Company or any subsidiary of the Company, or any entity organized, appointed or established for or pursuant to the terms of any such plan which acquires beneficial ownership of common shares of the Company, is or becomes the “Beneficial Owner” (as defined below) of twenty-five percent (25%) or more of the common shares of the Company then outstanding; PROVIDED, however, that no Change of Control shall be deemed to have occurred as the result of an acquisition of common shares of the Company 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 shares of the Company then outstanding, but any subsequent increase in the beneficial ownership interest of such a Person in common shares of the Company 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 shares of the Company representing twenty-five percent (25%) or more of the common shares 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 Company so that the Person no longer has a beneficial ownership interest in twenty-five percent (25%) or more of the common shares of the Company then outstanding, then no Change of Control shall be deemed to have occurred.  For purposes of this paragraph (a), the following terms shall have the meanings set forth below:

 

14



 

(i)                                     “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.

 

(ii)                                  “Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

 

(iii)                               A Person shall be deemed the “Beneficial Owner” of and shall be deemed to “beneficially own” any securities:

 

(A)                               which such Person or any of such Person’s Affiliates or Associates beneficially owns, directly or indirectly (determined as provided in Rule 13d-3 under the Exchange Act);

 

(B)                               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

 

(C)                               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 subparagraph (a)(iii)(B)(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.

 

(b)                                 During any period of two (2) consecutive years, individuals who at the beginning of such two-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

 

15



 

effect a transaction described in paragraph (a), above, or paragraph (c), below) whose election by the Board or nomination for election by the Company’s shareholders was approved by a vote of at least two-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

 

(c)                                  The consummation of (i) a plan of complete liquidation of the Company, (ii) an agreement for the sale or disposition of the Company or all or substantially all of the Company’s assets, (iii) a plan of merger or consolidation of the Company with any other corporation, or (iv) a similar transaction or series of transactions involving the Company (any transaction described in parts (i) through (iv) of this paragraph (c) being referred to as a “Business Combination”), in each case unless after such a Business Combination the shareholders of the Company immediately prior to the Business Combination continue to own at least seventy-five (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.

 

A “Change of Control” shall not include any transaction described in paragraph (a) or (c), above, where, in connection with such transaction, a participant and/or any party acting in concert with that participant shall substantially increase their, 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).

 

16



 

ARTICLE X

SPECIAL PROVISIONS

 

10.1                        Transfer of Liabilities from Prior PlanThe purpose of this Section 10.1 is to provide for the transfer of liabilities from the Prior Plan to this Plan with respect to Flowco Employees as set forth in the EMA.

 

(a)                                 Flowco Employees shall be eligible to participate in this Plan for the 2015 Plan Year to the extent they were eligible to participate in the Prior Plan immediately prior to the Effective Date.

 

(b)                                 The compensation paid by SPX Corporation and its subsidiaries to a Flowco Employee  that was recognized under the Prior Plan immediately prior to the Effective Date shall be credited and recognized for all applicable purposes under this Plan as though it were compensation from the Company or its affiliates.

 

(c)                                  On the Effective Date, and subject to such terms and conditions as the Administrator may establish, all liabilities attributable to Flowco Employees shall be transferred from the Prior Plan to this Plan. The Plan shall credit each such Flowco Employee’s Account with an amount equal to his or her account balance under the Prior Plan as of the Effective Date.

 

(d)                                 The Plan shall recognize, implement and honor all deferral and distribution elections made by each Flowco Employee under the Prior Plan (including, but not limited to, any election to defer any compensation during the 2015 Plan Year, and how and when such deferral and matching contribution credits are made).

 

17




Exhibit 10.13

 

This Booklet constitutes the Plan Document.

 

SPX FLOW

 

Plan Document

 

SPX FLOW Executive Long-Term Disability Plan 

 

 

Effective September 27, 2015

 



 

Table of Contents

 

Schedule of Benefits

4

Eligibility

4

Effective Date of Coverage

5

Cost of Coverage

5

Payments

5

Benefit Amount

5

Coordination with Other Income Benefits

5

No Reduction in Benefits for Social Security Cost-of-Living Increases

6

When Your Eligibility Ends

6

Claim Filing Procedure

6

Filing a Claim

6

When You Can Expect to Learn if Benefits Have Been Approved

7

How You Will Learn of a Benefits Determination

7

How You Appeal Benefit Denials

7

How You Appeal a Second Time

8

General Provisions

9

Administration of the Plan

9

Applicable Law

10

Benefits Not Transferable

10

Cancellation of Coverage

10

Clerical Error

10

Conformity with Statutes

10

Effective Date of the Plan’s Adoption

10

Effect of Oral or Written Statements

10

Examinations Required by the Plan

11

Health Care Responsibilities

11

Incapacity

11

Limits on Liability

11

Lost Distributees

11

Misrepresentation

11

No Fault Coordination

12

No Guarantee of Tax Consequences

12

No Vested Rights to Benefits

12

Plan Is Not a Contract

12

Plan Modification and Amendment

12

Plan Termination

12

Recovery of Overpayment

12

Severability

13

Time Effective

13

Unfunded Plan

13

Waiver & Estoppel

13

Workers’ Compensation Not Affected

14

Administrative Information

15

Glossary of Terms

16

 

2



 

Using This Booklet

 

This benefits booklet provides information about the SPX FLOW Executive Long-Term Disability Plan (the Plan), effective for disabilities beginning on or after July 1, 2015.  The Plan does not provide benefits for disabilities beginning prior to July 1, 2015.

 

It is your responsibility to understand the terms and conditions in this Booklet.  This Booklet constitutes the Plan Document.

 

Italicized words are defined terms that are either defined in the text or can be found in the “Glossary of Terms” section at the end of this booklet.

 

Please keep this booklet for your future reference.

 

3



 

Schedule of Benefits

 

The following “Schedule of Benefits” is designed as a quick reference.  For further description of the provisions regarding schedule of benefits, including related definitions, elimination periods, limitations, maximum benefit period, exclusions and termination, please refer to the SPX FLOW, Inc. Long-Term Disability Plan and the remainder of this booklet.

 

 

 

Plan Benefit Amount

 

Duration

After 26 weeks of continuous disability.

 

60% of the following:

·                  pre-disability annual base pay, minus $200,000 plus

·                  target bonus*, minus $200,000

 

Until maximum benefit period has been reached, you are no longer disabled or you reach age 65, whichever is earlier.

 

 

 

 

 

Participation in an approved rehabilitation services program as defined in the SPX FLOW, Inc. Long-Term Disability Plan.

 

70% of the following:

·                  pre-disability annual base pay, minus $200,000 plus

·                  target bonus*, minus $200,000

 

Until your participation in an approved rehabilitation services program ends.

 

 

 

 

 

Pay from a modified job, an alternate job or from part-time work while you remain disabled.

 

1st 18 months of long-term disability benefits: No reduction in Plan benefits unless your Plan and other SPX FLOW disability benefits combined with income from employment exceed your pre-disability earnings.

After 18 months of Plan benefits, Plan benefits are reduced by 50% of income from other employment to a combined total of no more than 100% of your indexed pre-disability earnings.

 

Until you cease other employment while still covered by the Plan or until you are no longer determined to be disabled.

 


*For purposes of determining the Benefit Amount, any portion of the target bonus in excess of 100% shall not be considered.

 

Eligibility

 

An employee shall become a participant in the Plan upon designation as such by the Board of Directors of SPX FLOW (the “Board”) or the Compensation Committee of the Board (the “Committee”).

 

As part of the Separation and Distribution Agreement by and between SPX Corporation and SPX FLOW dated as of September 22, 2015 (as may be amended from time to time), SPX Corporation and SPX FLOW entered into the Employee Matters Agreement dated as of September 26, 2015 (the “EMA”).  In accordance with the EMA, all liabilities for Flowco Employees (as defined in the EMA) who participated under the SPX Corporation Executive Long-Term Disability Plan (the “Prior Plan”) immediately prior to the Effective Time (as defined in the EMA) are to be transferred to the Plan as of the Effective Time, and such Flowco Employees shall become Participants in the Plan as of the Adoption Date.

 

4



 

Effective Date of Coverage

 

If you are designated to participate in the Plan, you are a covered person under the Plan effective as of your date of hire, or appointment by the Board or the Committee to participate, whichever is later.

 

Cost of Coverage

 

The Employer pays the full cost of your Plan coverage.  Because the Employer pays for this benefit, benefits from the Plan are subject to certain taxes when received.  Please consult with your tax and/or financial advisor regarding your participation in this Plan.

 

Payments

 

You shall receive a benefit payment under this Plan: (a) if you are a participant in the SPX FLOW, Inc. Long-Term Disability Plan, for each month you actually receive and are entitled to a payment under such plan, or (b) if you are not a participant in the SPX FLOW, Inc. Long-Term Disability Plan, for each month you would be entitled to a payment under such plan if you were a participant in the plan.  Plan benefit payments are made monthly.

 

Benefit Amount

 

Your Plan benefits are based on your earnings prior to your disability.  The Plan provides a benefit equal to 60% of your pre-disability earnings.  Your benefit is based on your pre-disability earnings as of your last day worked.

 

If you are participating in an approved rehabilitation services program, your benefit will be increased to 70% of your pre-disability earnings.

 

This Plan does not provide any child care, survivor or family care expense benefits.

 

There is no minimum monthly benefit under this Plan.

 

Coordination with Other Income Benefits

 

The amount of your Plan benefits will be reduced by other income benefits, but only to the extent that any other SPX FLOW disability plan benefits are not already offset by such other income benefits.

 

Other income benefits include, but are not limited to the following:

 

·                  Any sick pay or other salary continuation paid to you by SPX FLOW;

·                  Workers’ Compensation benefits;

·                  Unemployment compensation benefits;

·                  Any state or federal disability benefits;

·                  Automobile no-fault wage replacement benefits;

·                  Wage replacement benefits recovered from a third party;

·                  Any benefit received from the SPX FLOW Supplemental Retirement Plan for Top Management;

·                  Any benefit from a defined benefit pension plan to which SPX FLOW or SPX Corporation has contributed or has liability for;

·                  Any benefit from the SPX Corporation Supplemental Individual Account Retirement Plan;

 

5



 

·                  Any Social Security benefits that you or your spouse or dependents are eligible for due to your disability or age; or

·                  Any estimated Social Security Disability Insurance (“SSDI”) benefits you would have received, should you fail to take the necessary steps in applying for your SSDI benefits or should your SSDI benefit determination not be received within 12 months of commencement of your Plan benefit.

 

In order to receive benefits under this Plan, you must apply for Social Security benefits, provide proof of application to the Claims Administrator, and pursue any appeals to the extent determined by the Claims Administrator.

 

To the extent that any of the above payments are made in a lump sum but are intended to provide coverage over an extended period of time, such as a lump-sum pension payment, the payment will be treated for purposes of this Plan as if it had been paid over the expected duration of the period.  For example, a lump-sum pension payment will be treated as if it were paid out in equal monthly installments over the remainder of your expected life span, as determined by SPX FLOW or the Claims Administrator.  Your Plan benefit payment would be reduced by the monthly installment amount.

 

All offsets are based on the gross (before-tax) amount of any income benefit that you or your spouse or dependent is eligible to receive from other sources, such as Social Security.

 

No Reduction in Benefits for Social Security Cost-of-Living Increases

 

Your Plan benefit will be reduced by the amount of the Social Security benefit provided to you, your spouse and your dependents when it is first awarded.  However, future cost-of-living increases to your Social Security benefit or to that of your dependents will not further reduce your Plan benefit.

 

When Your Eligibility Ends

 

Your eligibility for Plan coverage ends on the earliest of the following:

 

·                  You are no longer eligible for coverage;

·                  You transfer to a non-eligible employee group or your participation was discontinued by the Board or the Committee;

·                  Your approved leave of absence ends;

·                  You are laid off; or

·                  Your employment with SPX FLOW ends.

 

Claim Filing Procedure

 

Filing a Claim

 

A claim for benefits is a request for a Plan benefit or benefits, made by you or by your representative, that complies with the Plan’s procedure for making benefit claims.  The procedure for filing a claim is to contact the Claims Administrator when you have been receiving short-term disability benefits under the SPX FLOW, Inc. Short-Term Disability Plan for three months and apply for benefits under this Plan.

 

6



 

When You Can Expect to Learn if Benefits Have Been Approved

 

The Claims Administrator will notify you of the Plan’s benefit determination within a reasonable period of time after receipt of the application, but not later than 45 days after receipt of the application by the Plan.  This period may be extended by the Plan for up to 30 days provided that the extension is necessary due to matters beyond the control of the Plan and the Claims Administrator notifies you prior to the expiration of the initial 45-day period.  The notice will state the reason for the extension and the date by which the Plan expects to render a decision.  If, prior to the end of the first 30-day extension period, the Claims Administrator determines that, due to matters beyond the control of the Plan, a decision cannot be made within that extension period, the Plan may take another 30-day extension.  Again, the Plan must notify you of the reasons for the extension and the date on which the Plan expects to render a decision.  If the extension is necessary due to your failure to submit the information necessary to determine your qualification for Plan benefits, the notice of extension will describe the required information.  You will then have 45 days from receipt of the notice within which to provide the specified information.

 

How You Will Learn of a Benefits Determination

 

The Claims Administrator will provide you with written notification of the Plan’s benefit determination.  If benefits are denied, the benefit determination will include:

 

·                  the specific reasons for the denial;

·                  reference to the specific Plan provisions on which the determination is based;

·                  a description of any additional material or information necessary for you to complete the claim and an explanation of why such material or information is necessary;

·                  a description of the Plan’s review procedures and the time limits applicable to such procedures, including a statement of your right to bring a civil action following an adverse benefit determination on review;

·                  if an internal rule, guideline, protocol, or other criterion was relied upon in the decision-making, either (1) a copy of such rule, guideline, or protocol or (2) a statement that a copy of such rule, guideline, or protocol will be provided to you free of charge upon request; and

·                  if the denial was based on a medical necessity or experimental treatment or similar exclusion or limit, either (1) an explanation of the scientific or clinical judgment for the determination, applying the terms of the Plan to your medical circumstances, or (2) a statement that such explanation will be provided free of charge upon request.

 

How You Appeal Benefit Denials

 

If you wish to appeal an adverse benefit determination, you must do so within 180 days of receiving the benefit denial/adverse benefit determination.  Your appeal should be addressed to the Claims Administrator at the address shown in the back of this booklet.  Correspondence should include your Social Security number, your name, the claim information, and the service dates in question.  State the reason(s) for disagreement and attach any relevant information, such as additional medical evidence.  You will be provided, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to your claim for Plan benefits.  You will be notified within 45 days of the date the Claims Administrator receives your appeal of the outcome of your appeal.  If the Claims Administrator determines that an extension of time for processing the claim is necessary, written notice will be furnished prior to the termination of the initial 45-day period.  In no event will the extension exceed 45 days from the end of the initial 45-day period.  The extension notice will indicate the special circumstances requiring an extension of time and the date by which the Plan expects to return a determination.

 

7



 

In the case of an adverse decision, the notification will include:

 

·                  the specific reasons for the adverse determination;

·                  reference to the specific Plan provisions on which the benefit determination is based;

·                  a statement that you are entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents and records relevant to your claim for benefits, without regard to whether such records were considered or relied upon in making the adverse benefit determination on review, including any reports, and the identities, of any experts whose advice was obtained;

·                  a description of the Plan’s review procedures and the time limits applicable to such procedures, including a statement of your right to bring a civil action following an adverse benefit determination on review;

·                  if an internal rule, guideline, protocol, or other criterion was relied upon in the decision-making, either (1) a copy of such rule, guideline, or protocol or (2) a statement that a copy of such rule, guideline, or protocol will be provided free of charge to the claimant upon request;

·                  if the adverse benefit determination was based on a medical necessity or experimental treatment or similar exclusion or limit, either (1) an explanation of the scientific or clinical judgment for the determination, applying the terms of the Plan to the claimant’s medical circumstances, or (2) a statement that such explanation will be provided free of charge upon request.

 

How You Appeal a Second Time

 

If your first level appeal is denied, you may appeal a second and final time to the SPX FLOW Benefits Administrative Committee (SPX FLOW Administrative Committee).  You must do so within 180 days of receiving the adverse response to your appeal.  Your second level appeal should be addressed to the SPX FLOW Benefits Administrative Committee at 13320 Ballantyne Corporate Place, Charlotte, NC 28277.  Correspondence should include your Social Security number, your name, the claim information, and the service dates in question.  State the reason(s) for disagreement and attach any relevant information, such as additional medical evidence.  You will be provided, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to your claim for Plan benefits, including information about your first appeal, including the names and credentials of experts who advised the Plan on your benefits.  If your appeal requires a medical judgment, the SPX FLOW Administrative Committee will consult with independent (i.e., separate from any professionals consulted on the earlier adverse determinations) health care and/or vocational professionals about the circumstances surrounding your claim and will provide you with the names of medical or vocational experts whose advice was obtained on behalf of the Plan.

 

You will be notified within 45 days of the date the SPX FLOW Administrative Committee receives your second appeal of the outcome of such appeal.  If the SPX FLOW Administrative Committee determines that an extension of time for processing the claim is necessary, written notice will be furnished prior to the termination of the initial 45-day period.  In no event will the extension exceed 45 days from the end of the initial 45-day period.  The extension notice will indicate the special circumstances requiring an extension of time and the date by which the Plan expects to return a determination.

 

The SPX FLOW Administrative Committee will provide you with written notification of a Plan’s benefit determination on review.  In the case of an adverse decision, in addition to the information required to be included in the notification of denial of the first appeal, the notification of denial of the second appeal will also include:

 

·                  a statement describing any voluntary appeal procedures offered by the Plan and your right to obtain the information about such procedures;

 

8



 

·                  a statement of your right to bring a civil action following an adverse benefit determination on review;

·                  a statement advising you that you and the Plan may have other voluntary alternative dispute resolution options, such as mediation.

 

You may not bring a lawsuit regarding the Plan prior to the expiration of the claims and review procedures set out above.  After exhausting the Plan’s administrative claim and appeal provisions, if you wish to bring a lawsuit in either state or federal court challenging a claim denial, you must commence the lawsuit no later than one year after you receive a final denial letter indicating that you have exhausted your administrative appeals and have the right to file a lawsuit.  In addition to this one year deadline that applies to filing a lawsuit after the claims and appeals procedures are exhausted, a general time limitation shall apply to all lawsuits involving all types of Plan issues.  You must commence any such lawsuit involving Plan claims no later than two years after you first receive information that constitutes a clear repudiation of the rights you are seeking to assert (i.e., the underlying event or issue that should have triggered your awareness that your rights under the Plan may have been violated).  Although any period of time when your claim is in the claims procedure described above (i.e., the time between when you file a claim for benefits with the Claims Administrator and the time you receive a final determination letter from the SPX FLOW Administrative Committee) does not count against the two-year period, once the claims procedure process is completed, the two-year period will continue running from the point at which it was tolled.

 

General Provisions

 

Administration of the Plan

 

SPX FLOW is the Plan Administrator.  The Plan Administrator has full charge of the operation and management of the Plan.  SPX FLOW has retained the services of an independent Claims Administrator.

 

The Plan Administrator or its agent or delegate, has the absolute authority and discretion to:

 

·                  Interpret the terms of the Plan, including the Plan’s eligibility provisions and its provisions relating to determination of the amount, manner and time of payment of any benefits payable under the Plan;

·                  Resolve ambiguities, inconsistencies, or omissions in the Plan;

·                  Adopt, amend and rescind rules and regulations pertaining to its duties under the Plan;

·                  Make such determination as to the right of any person to a benefit;

·                  To employ such professional services and advisors as may be required in carrying out the provisions of the Plan;

·                  Keep all such books, records and other data as may be deemed necessary for the administration of the Plan; and

·                  Make all determinations necessary or advisable for the discharge of its duties under the Plan.

 

Benefits shall be paid under this Plan only if the Plan Administrator (or its agent or delegate), in its or their sole discretion, determines that you are entitled to them.  The Plan Administrator’s (or its agent’s or delegate’s) decision is final and binding on all parties.

 

SPX FLOW has delegated the responsibility for reviewing initial claims and initial appeals of adverse benefit determinations to the Claims Administrator.  The SPX FLOW Administrative Committee, or a subcommittee or delegate thereof, will review all second level appeals.  The SPX FLOW Administrative Committee, or subcommittee or delegate thereof, can interpret the Plan

 

9



 

terms and determine eligibility for and entitlement to Plan benefits in accordance with the Plan terms.

 

Any delegation or subsequent delegation shall include the same discretionary and final authority that SPX FLOW has listed herein, and any decisions, actions, or interpretations made by an delegate shall have the same final and binding effect as if made by SPX FLOW.

 

Applicable Law

 

Except to the extent superseded by federal law, the Plan and all rights and duties thereunder shall be governed, construed and administered in accordance with the laws of the State of North Carolina.

 

Benefits Not Transferable

 

No person other than a covered person is entitled to receive benefits under this Plan.  The right to receive benefits cannot be assigned, sold, transferred or pledged by you or reached by your creditors or anyone else.

 

Cancellation of Coverage

 

If you make a material misrepresentation on a claim for this Plan’s benefits, SPX FLOW may cancel your coverage, effective on or anytime after the date of the claim, without giving advance notice.

 

If you no longer meet the eligibility requirements, coverage is cancelled automatically.  (See the “Eligibility” section.)

 

If the Plan is terminated, coverage is cancelled automatically.  (See the “Plan Termination” section.)

 

Cancellation of coverage is effective on the date of cancellation and ends all rights under this Plan.

 

Clerical Error

 

No clerical error on the part of SPX FLOW or the Claims Administrator will operate to defeat any of the rights, privileges, services, or benefits of any employee, nor create or continue coverage that would not otherwise validly become effective or continue.  An equitable adjustment of benefits will be made when the error or delay is discovered.

 

Conformity with Statutes

 

Any Plan provision that conflicts with statutes applicable to this Plan is amended to conform to the minimum requirements of said statute(s).

 

Effective Date of the Plan’s Adoption

 

The effective date of the adoption of the Plan is September 27, 2015 (“Adoption Date”).

 

Effect of Oral or Written Statements

 

Any oral or written representation made by an employee or representative of SPX FLOW, the Claims Administrator, the Plan Administrator or any other individual or entity that alters, modifies, amends, or is inconsistent with the written terms of the Plan shall be invalid and unenforceable and may not be relied upon by you or any other person or entity, unless such representation meets the requirements of the Plan Modification and Amendment section or Plan

 

10



 

Termination section below.  Unless and until changes in the Plan are formally announced by SPX FLOW, no one is authorized to give you assurance that a change will or will not occur.

 

In the event of a discrepancy between any statements (oral or written) given to you and the Plan document, the Plan document as interpreted within the sole discretion of the Plan Administrator will control.

 

Examinations Required by the Plan

 

The Plan, at its own expense, will have the right to require a physical examination, a functional capacities assessment, a transferable skills analysis, or other examinations relevant to a claim of a person receiving benefits or for whom a claim for benefits is pending under this Plan when and as often as it may reasonably require during the pendency of a claim.

 

Health Care Responsibilities

 

All responsibility for health care decisions with respect to a covered person concerning any treatment, choice of health care provider, drug, service or supply shall rest exclusively with the covered person and/or the covered person’s treating health care provider.  SPX FLOW has no responsibility for any such medical decision(s) or for any act(s) or omission(s) of the covered person or any physician, hospital, pharmacist, nurse, or other provider of health care goods or services.

 

Incapacity

 

If, in SPX FLOW’s opinion, a covered person for whom a claim has been made is incapable of furnishing a valid receipt of payment and, in the absence of written evidence to the Plan of the qualification of a guardian or personal representative for his or her estate, SPX FLOW may on behalf of the Plan, at its discretion, make any and all such payments to the service provider or other person providing for the care and support of such person.  Any payment made will constitute a complete discharge of the Plan’s obligation for such payment.

 

Limits on Liability

 

Liability is limited to benefits specified in the Plan.  SPX FLOW will not be liable for the negligence, wrongful act or omission of any service provider or their employees or any other person.  The Plan liability will be limited to the benefits described herein.

 

Lost Distributees

 

Any payable benefit will be deemed forfeited if:

 

·                  The Plan Administrator cannot locate the covered person to whom payment is due, and

·                  Such benefits would be reinstated if the covered person submits a claim for the forfeited benefits within the time prescribed in the “Claim Filing Procedure” section.

 

Misrepresentation

 

If the covered person or anyone acting on behalf of or with respect to the covered person makes a false statement on the claim, or withholds information with intent to deceive or affect the acceptance of the claim or the risks assumed by the Plan, or otherwise misleads the Plan, the Plan will be entitled to recover its damages, including legal fees, from the covered person, or from any other person responsible for misleading the Plan, and from the person for whom the benefits were provided.  Any material misrepresentation on the part of the covered person or anyone acting on behalf of or with respect to the covered person in making application for claims will render the coverage under this Plan void.

 

11



 

No Fault Coordination

 

This Plan shall be secondary in coverage to any no fault automobile insurance policy, regardless of any election made to the contrary by you, your spouse or your dependents.

 

No Guarantee of Tax Consequences

 

Neither SPX FLOW, the Plan Administrator, the Claims Administrator nor any other person, as applicable, makes any commitment or guarantee of any particular tax treatment for any benefits provided or amounts paid to, or for the benefit of, a covered person.  In addition, should any federal, state or local income tax withholding requirements, Social Security withholding requirements, or any other employee tax requirements be applicable to the benefits provided under the Plan, a covered person shall make appropriate arrangements with SPX FLOW to satisfy any such requirements.  If no such arrangements are made, SPX FLOW may provide, at its discretion, for withholding and tax payments as required.

 

No Vested Rights to Benefits

 

Nothing in the Plan, or any other document describing, interpreting or relating to the Plan shall be construed to provide vested, nonforfeitable, nonterminable or nonchangeable benefits or rights thereto.  No one has a vested right to benefits under this Plan, and you may not rely on any statement or promise to the contrary.

 

Plan Is Not a Contract

 

The Plan will not be deemed to constitute a contract between SPX FLOW and any employee or to be a consideration for, or an inducement or condition, of, the employment of any employee.  Nothing in the Plan will be deemed to give any employee the right to be retained in the service of SPX FLOW.

 

Plan Modification and Amendment

 

SPX FLOW, through the Board or the Committee, reserves the right to amend or modify the Plan, from time to time, in its sole discretion.  Such amendment or modification may affect benefits on both a retroactive and prospective basis.

 

Plan Termination

 

SPX FLOW, through the Board or the Committee, reserves the right to terminate the Plan at any time.  Upon termination, the rights of the covered persons to benefits are limited to those benefits due and payable immediately prior to such termination.

 

Recovery of Overpayment

 

SPX FLOW has the right to recover the amount of any payments exceeding the maximum payment.  Also, such a recovery may be paid by offset against benefits that otherwise would be payable by this Plan.  If SPX FLOW makes any payment that, according to the Plan terms, should not have been made, SPX FLOW may recover that incorrect payment, whether or not it was SPX FLOW’s error, or the error of the person or entity to whom it was made or the error of any other party.

 

In some situations, another person, insurance policy or plan of benefits may be responsible to pay benefits to you for injury and/or illness.  SPX FLOW maintains the right to recover on its own behalf amounts for medical expenses paid when responsibility lies elsewhere, which is called the “right of subrogation.”  In this regard, SPX FLOW is subrogated to all of your rights of recovery

 

12



 

as against any person and under any insurance policy, or plan of benefits, which would be obligated to pay benefits to you for any injury and/or illness, to the full extent of any payment made under the Plan.

 

You are not permitted after injury and/or illness to prejudice SPX FLOW’s rights and you shall do everything necessary to secure such rights, including, but not limited to, providing SPX FLOW with notice of any and all claims you make for such injury and/or illness.  Any and all amounts recovered by you (whether by lawsuit, settlement or otherwise), regardless of designation of said recovery, shall be apportioned as follows: SPX FLOW shall be reimbursed first to the full extent of its payment under this Plan.  If any balance then remains from such recovery, it shall be applied to reimburse you and any other plan providing benefits to you as the interest may appear.

 

If SPX FLOW incurs attorneys’ fees in order to pursue its subrogation interest, you shall be obligated to reimburse SPX FLOW in full from any amount recovered.  Under no circumstances shall the Plan be obligated to pay a fee or costs to your attorney.  The Plan’s rights shall not be defeated by any “Make-Whole Doctrine” or similar doctrine which, if applicable would prevent the Plan from recovering unless a covered person has been “made whole” with respect to the illness or injury that is the responsibility of a third party.  The Plan’s rights will also not be subject to any “Common Fund” or similar doctrine requiring the Plan to pay your attorneys’ fees expended in obtaining a recovery.

 

Severability

 

In the event any provision of this Plan adopted hereunder shall be held illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining provisions of this Plan but shall be fully severable, and this Plan adopted hereunder shall be construed and enforced as if said illegal or invalid provisions had never been inserted therein.

 

Time Effective

 

The effective time with respect to any dates used in the Plan will be 12 a.m. (midnight) as may be legally in effect at the address of the Plan Administrator unless otherwise stated.

 

Unfunded Plan

 

The Plan is intended to be an unfunded welfare plan maintained by SPX FLOW for the purpose of providing benefits for a select group of management or highly compensated employees, pursuant to Section 104(a)(3) of the Employee Retirement Income Security Act of 1974 (ERISA) and Department of Labor regulation Section 2520.104-24 thereunder, or any statutory or regulatory provisions that may hereafter replace such sections.  No covered person shall be required or permitted to make contributions to the Plan.

 

All benefits under this Plan are an unfunded obligation of the Company.  Nothing herein contained shall require SPX FLOW to segregate any monies from its general funds, to create any trust, to make any special deposits, or to purchase any policies of insurance with respect to this obligation. Title to and beneficial ownership of any policies of insurance purchased or funds invested by SPX FLOW, including the proceeds, income and profits therefrom, which SPX FLOW may make to fulfill its obligations under this Plan shall at all times remain in the Company.

 

Waiver & Estoppel

 

No term, condition or provision of the Plan shall be waived, and there shall be no estoppel against the enforcement of any provision of the Plan, except by written direction of the Plan

 

13



 

Administrator.  No such waiver shall be deemed a continuing waiver unless specifically stated. Each waiver shall operate only as to the specific term or condition waived and shall not constitute a waiver of such term or condition for the future or as to any act other than that specifically waived.  No failure to enforce any provision of this Plan shall affect the right thereafter to enforce such provision, nor shall such failure affect its right to enforce any other provision of this Plan.

 

Workers’ Compensation Not Affected

 

This Plan is not in lieu of, and does not affect any requirement for, coverage by Workers’ Compensation insurance.

 

14



 

Administrative Information

 

Benefits Administration

 

This section contains information pertaining to your Plan.  You won’t use this information every day.  But, if you wish to communicate with the administrator or find out where you can get more information, this section will help you.

 

General Administrative Information

 

Name of Plan

 

SPX FLOW Executive Long-Term Disability Plan

 

Name, Address, and Phone Number of Employer/Plan Sponsor

 

SPX FLOW, Inc.

13320 Ballantyne Corporate Place

Charlotte, NC 28277

Phone: (704) 752-4400

 

Address for First Level Appeal

 

The designated Claims Administrator is:

 

Sun Life Financial

Appeals Unit

P.O. Box 81601

Wellesley Hills, MA 02481

 

Name, Address, and Phone Number of Plan Administrator, Fiduciary, and Agent for Service of Legal Process

 

SPX FLOW, Inc.

13320 Ballantyne Corporate Place

Charlotte, NC 28277

Phone: (704) 752-4400

 

Legal process may be served upon the Plan Administrator.

 

Ending Date of Plan Year

 

December 31

 

Procedures for Filing Claims

 

For detailed information on submitting claims for benefits, refer to the section entitled “Claim Filing Procedure.”

 

The designated Claims Administrator is:

 

Sun Life Financial
Long Term Disability Claims
PO Box 81830
Wellesley Hills, MA 02481

 

15



 

Glossary of Terms

 

Certain words and terms used will be defined as follows and are shown in italics throughout this Plan.

 

Base Pay

 

Your base pay is equal to your expected annual pay, exclusive of bonuses.

 

Claims Administrator

 

The company contracted by SPX FLOW that is responsible for processing benefits claims under the Plan terms and other administrative services deemed necessary for the Plan operation, as delegated by SPX FLOW from time to time.  Currently, this is Sun Life Financial; the Company may designate a new Claims Administrator at any time.

 

Covered Person

 

A person who is eligible for coverage under this Plan upon satisfying the eligibility requirements.

 

Disability/Disabled

 

You are considered disabled under this Plan if: (a) you are entitled to payment of benefits under the SPX FLOW, Inc. Long-Term Disability Plan; or (b) you would be entitled to payment of benefits under the SPX FLOW, Inc. Long-Term Disability Plan if you were a participant under such plan.

 

Earnings

 

Earnings are based on your annual base pay, less $200,000, plus target bonus under the annual executive bonus plan, less $200,000.  For purposes of determining the Benefit Amount, any portion of the target bonus in excess of 100% shall not be considered.

 

Effective Date

 

The Adoption Date or the date on which the covered person’s coverage commences, whichever occurs later.

 

Employer/Company

 

SPX FLOW, a Delaware corporation, and each of its majority owned domestic subsidiaries.

 

Indexed Pre-disability Earnings

 

Pre-disability earnings increased by the lesser of:

 

·                  any annual change in the Consumer Price Index, or

·                  7%

 

Plan

 

The SPX FLOW Executive Long-Term Disability Plan.

 

Plan Administrator

 

The Plan Administrator is SPX FLOW (or its agent or delegate) and is responsible for the day-to-day functions and management of the Plan.

 

16




Exhibit 10.14

 

FORM OF

ASSIGNMENT AND ASSUMPTION OF
AND AMENDMENT TO EMPLOYMENT AGREEMENT

 

Dated as of September 26, 2015, among SPX Corporation, SPX FLOW, Inc., and, each of:

 

Christopher J. Kearney

Jeremy W. Smeltser

Robert B. Foreman

David A Kowalski

J. Michael Whitted

 

This Assignment and Assumption of and Amendment to Employment Agreement (this “Assignment Agreement”) is made and entered into as of September 26, 2015, by and between SPX Corporation, a Delaware Corporation (“SPX”), SPX FLOW, Inc., a Delaware Corporation (“SPX FLOW”), and                           , an individual (the “Executive”).

 

WHEREAS, SPX and the Executive entered into that certain Employment Agreement dated as of            , and as amended by letter agreement dated December 2, 2013 (the “Original Employment Agreement”);

 

WHEREAS, SPX and SPX FLOW entered into that certain Separation and Distribution Agreement, dated as of September 22, 2015 (the “Separation Agreement”), which provides for a separation of SPX into two separate, publicly traded companies, SPX and SPX FLOW, as of that date defined in the Separation Agreement (the “Distribution Date”);

 

WHEREAS, as part of the Separation Agreement, SPX and SPX FLOW entered into that certain Employee Matters Agreement, dated as of September 26, 2015 (the “EMA”), which provides that SPX will assign, and SPX FLOW will assume, the Original Employment Agreement;

 

WHEREAS, SPX desires to assign to SPX FLOW all right, title and interest of SPX in and to the Original Employment Agreement, SPX FLOW desires to assume all of the obligations of SPX under the Original Employment Agreement, and the Executive desires to consent to such assignment and assumption of the Original Employment Agreement;

 

WHEREAS, SPX is simultaneously assigning, and SPX FLOW is simultaneously assuming, that certain Change of Control Agreement entered into between SPX and the Executive, dated as of December 2, 2013, and referenced in the Original Employment Agreement, as of the Distribution Date; and

 

WHEREAS, SPX FLOW and the Executive desire to amend the Original Employment Agreement.

 

NOW, THEREFORE, in consideration of the promises and mutual agreements of the respective parties and such other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

 

ASSIGNMENT AND ASSUMPTION

 

1.                                      Assignment of Original Employment Agreement.  As of the Distribution Date, SPX does hereby assign, transfer, grant, convey and deliver to SPX FLOW all of SPX’s right, title and interest of SPX in and to the Original Employment Agreement, subject to the terms, conditions, reservations and limitations set forth in this Assignment Agreement.

 

2.                                      Assumption of Original Employment Agreement.  From and after the Distribution Date, SPX FLOW hereby (i) expressly accepts and assumes all of SPX’s right, title and

 



 

interest in and to the Original Employment Agreement, subject to the terms, conditions, reservations and limitations set forth in this Assignment Agreement, and (ii) assumes, accepts and agrees to pay, perform and discharge all of the covenants, conditions, obligations and liabilities of SPX under the Original Employment Agreement.

 

3.                                      Consent of Executive to Assignment and Assumption of Original Employment Agreement.  Executive hereby acknowledges, recognizes and consents to the foregoing assignment and assumption of Original Employment Agreement.

 

AMENDMENT

 

SPX FLOW and the Executive hereby amend the Original Employment Agreement, effective as of the Distribution Date, as follows:

 

4.                                      References in Original Employment Agreement to SPX Corporation or Company.  References to “SPX Corporation” or the “Company” in the Original Employment Agreement shall be deemed to refer to “SPX FLOW, Inc.” as a result of this Assignment Agreement.

 

5.                                      References in Original Employment Agreement to SPX Plans or Programs.  References in the Original Employment Agreement to plans or programs sponsored by SPX shall be deemed to refer to the plan or program of the same type sponsored by SPX FLOW, including, but not limited to, references to the “SPX Corporation Stock Compensation Plan” in the Original Employment Agreement, which shall be deemed to refer to the “SPX FLOW Stock Compensation Plan” as a result of this Assignment Agreement.

 

6.                                      References in Original Employment Agreement to Individual Account Retirement Plan or Pension Plan.  Notwithstanding the foregoing, references to the “Individual Account Retirement Plan” or “pension plan” in the Original Employment Agreement shall not be deemed to refer to a plan or program of the same type sponsored by SPX FLOW, and such references shall be deleted in their entirety in view of the fact that SPX FLOW does not sponsor a similar qualified defined benefit pension plan; provided, however, that the parenthetical of Section 5 of the Original Employment Agreement providing “(together with interest at the interest credit rate provided in the SPX Corporation Individual Account Retirement Plan)” shall be unchanged.  For avoidance of doubt, SPX FLOW shall have no obligation to provide a qualified defined benefit pension plan such as the SPX US Pension Plan (or corresponding non-qualified plan such as the SPX Corporation Supplemental Individual Account Retirement Plan) to Executive and the failure to provide such plans shall not constitute “Good Reason” under the Original Employment Agreement.

 

7.                                      Retiree Medical.  SPX FLOW shall have no obligation to provide retiree medical benefits of any kind to Executive and the failure to offer retiree medical shall not constitute “Good Reason” under the Original Employment Agreement. Due to SPX FLOW not maintaining any retiree medical benefit plans for its employees, Section 4(g) of the Original Employment Agreement shall be replaced in its entirety as follows:

 



 

“(g)         Annual Reimbursements of Post-Retirement Medical Coverage

 

(i)                                     Upon retirement (or following the termination of any health care continuation coverage provided under the Change of Control Agreement, if later), if the Executive (i) is at least age 55, (ii) has a minimum of five (5) years of continuous service, and (iii) has a sum of age and continuous service that totals 65 or greater, then the Executive shall be entitled to an annual reimbursement from the Company upon proof of medical and/or prescription drug coverage and premium cost under an individual policy or other group policy for himself and his spouse or dependents eligible at the time of retirement.  Such premium reimbursement is subject to a maximum total annual reimbursement, based on his age during the year of reimbursement, of one and one-half times the applicable annual premium of the applicable retiree medical plan sponsored by SPX on or before the Distribution Date as indicated below. Thereafter, the maximum total annual reimbursement is subject to an annual inflation adjustment as determined by the Company, with a maximum annual inflation adjustment of five (5) percent, with such adjustment commencing as of the applicable calendar year indicated below.  For certainty purposes, the applicable annual premium for the pre-65 retiree medical plan coverage and post-65 retiree medical plan coverage described in the foregoing sentences for the calendar year indicated below is as set below.

 

2015 Pre-65 Coverage
Annual Premium Rate

 

2014 Post-65 Coverage
Annual Premium Rate

Individual:

[·]

 

[·]

Family:

[·]

 

[·]

 

(ii)                                  The annual reimbursement to the Executive provided under this Section 4(g) will last until                   .

 

(iii)                               Upon the death of the Executive, an eligible surviving spouse will continue to receive reimbursement as provided in this Section 4(g), which will continue until                   .  Surviving dependent children will not receive premium reimbursement beyond any applicable COBRA continuation period.

 

(iv)                              All or a portion of the annual reimbursement provided in this Section 4(g) may be taxable.  The reimbursement shall occur annually (or on such other periodic basis as agreed to by the Executive and the Company) in accordance with procedures reasonably set by the Company.  The reimbursement will comply with Code Section 409A.

 

(v)                                 For the avoidance of doubt, the Executive acknowledges and agrees that he is not eligible for any SPX sponsored retiree medical program.”

 



 

8.                                      Notice.  The contact information in the “Notice” section of the Original Employment Agreement shall be replaced as follows:

 

SPX FLOW, Inc.
13320 Ballantyne Corporate Place
Charlotte, NC  28277
Attention: General Counsel

 

MISCELLANEOUS

 

9.                                      Separation from Service.  For clarity, the parties agree that the transaction contemplated by the Separation Agreement will not result in a termination or separation from service under the Original Employment Agreement.

 

10.                               Counterparts.  The parties may execute this Assignment Agreement in one or more counterparts, all of which together shall constitute but one Assignment Agreement.

 

11.                               Separation Agreement and EMA.  In the event of any inconsistency among the terms of this Assignment Agreement and the terms of the Separation Agreement or EMA, the terms of the Separation Agreement or EMA, as applicable, shall control.  Nothing in this Assignment Agreement shall be construed to limit, discharge, mitigate or release any obligation or otherwise affect any right of any party to the Separation Agreement or EMA set forth or described therein.

 

12.                               Modification of Assignment Agreement.  This Assignment Agreement may be modified only by a writing signed by the parties hereto.

 

13.                               Effect if Distribution Does Not Occur.  Notwithstanding anything in this Assignment Agreement to the contrary, if the Separation Agreement is terminated prior to the Distribution Date, this Agreement shall be of no further force and effect.

 

14.                               Severability.  If any provision(s) of this Assignment Agreement shall be found invalid or unenforceable, in whole or in part, then it is the parties’ mutual desire that such provision(s) be modified to the extent and in the manner necessary to render the same valid and enforceable, and this Assignment Agreement shall be construed and enforced to the maximum extent permitted by law, as if such provision(s) had been originally incorporated herein as so modified or restricted, or as if such provision(s) had not been originally incorporated herein, as the case may be.

 

15.                               Consultation with Counsel.  This Assignment Agreement is the product of negotiations between the parties, each of which has had a full and complete opportunity to consult counsel.

 



 

IN WITNESS WHEREOF, the parties have executed this Assignment Agreement effective as of the date first written above.

 

 

EXECUTIVE

 

 

 

 

 

 

 

SPX CORPORATION

 

 

 

By:

 

 

 

 

 

Its:

 

 

 

 

 

Date:

 

 

 

 

 

 

SPX FLOW, INC.

 

 

 

 

 

By:

 

 

 

 

 

Its:

 

 

 

 

 

Date:

 

 




Exhibit 10.15

 

FORM OF

ASSIGNMENT AND ASSUMPTION OF
AND AMENDMENT TO CHANGE OF CONTROL AGREEMENT

 

Dated as of September 26, 2015, among SPX Corporation, SPX FLOW, Inc., and, each of:

 

Christopher J. Kearney

Jeremy W. Smeltser

Robert B. Foreman

David A Kowalski

J. Michael Whitted

Stephen A. Tsoris

Marc. G. Michael

Anthony A. Renzi

David J. Wilson

Belinda G. Hyde

Kevin J. Eamigh

 

This Assignment and Assumption of and Amendment to Change of Control Agreement (this “Assignment Agreement”) is made and entered into as of September 26, 2015, by and between SPX Corporation, a Delaware Corporation (“SPX”), SPX FLOW, Inc., a Delaware Corporation (“SPX FLOW”), and                           , an individual (the “Executive”).

 

WHEREAS, SPX and the Executive entered into that certain Change of Control Agreement dated as of December 2, 2013, and as amended by letter agreement dated December 2, 2013 (the “Original Change of Control Agreement”);

 

WHEREAS, SPX and SPX FLOW entered into that certain Separation and Distribution Agreement, dated as of September 22, 2015 (the “Separation Agreement”), which provides for a separation of SPX into two separate, publicly traded companies, SPX and SPX FLOW, as of that date defined in the Separation Agreement (the “Distribution Date”);

 

WHEREAS, as part of the Separation Agreement, SPX and SPX FLOW entered into that certain Employee Matters Agreement, dated as of September 26, 2015 (the “EMA”), which provides that SPX will assign, and SPX FLOW will assume, the Original Change of Control Agreement;

 

WHEREAS, SPX desires to assign to SPX FLOW all right, title and interest of SPX in and to the Original Change of Control Agreement, SPX FLOW desires to assume all of the obligations of SPX under the Original Change of Control Agreement, and the Executive desires to consent to such assignment and assumption of the Original Change of Control Agreement;

 

[WHEREAS, SPX is simultaneously assigning, and SPX FLOW is simultaneously assuming, that certain Employment Agreement entered into between SPX and the Executive, dated as of            , and referenced in the Original Change of Control Agreement, as of the Distribution Date;] and

 

WHEREAS, SPX FLOW and the Executive desire to amend the Original Change of Control Agreement.

 

NOW, THEREFORE, in consideration of the promises and mutual agreements of the respective parties and such other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

 

ASSIGNMENT AND ASSUMPTION

 

1.                                      Assignment of Original Change of Control Agreement.  As of the Distribution Date, SPX does hereby assign, transfer, grant, convey and deliver to SPX FLOW all of SPX’s right, title and interest of SPX in and to the Original Change of Control Agreement,

 



 

subject to the terms, conditions, reservations and limitations set forth in this Assignment Agreement.

 

2.                                      Assumption of Original Change of Control Agreement.  From and after the Distribution Date, SPX FLOW hereby (i) expressly accepts and assumes all of SPX’s right, title and interest in and to the Original Change of Control Agreement, subject to the terms, conditions, reservations and limitations set forth in this Assignment Agreement, and (ii) assumes, accepts and agrees to pay, perform and discharge all of the covenants, conditions, obligations and liabilities of SPX under the Original Change of Control Agreement.

 

3.                                      Consent of Executive to Assignment and Assumption of Original Change of Control Agreement.  Executive hereby acknowledges, recognizes and consents to the foregoing assignment and assumption of Original Change of Control Agreement.

 

AMENDMENT

 

SPX FLOW and the Executive hereby amend the Original Change of Control Agreement, effective as of the Distribution Date, as follows:

 

4.                                      References in Original Change of Control Agreement to SPX Corporation or Company.  References to “SPX Corporation” or the “Company” in the Original Change of Control Agreement shall be deemed to refer to “SPX FLOW, Inc.” as a result of this Assignment Agreement.

 

5.                                      References in Original Change of Control Agreement to SPX Plans or Programs.  References in the Original Change of Control Agreement to plans or programs sponsored by SPX shall be deemed to refer to the plan or program of the same type sponsored by SPX FLOW, including, but not limited to, the following, as a result of this Assignment Agreement:

 

References to the “2002 Stock Compensation Plan” or “Stock Compensation Plan” in the Original Change of Control Agreement shall be deemed to refer to the “SPX FLOW Stock Compensation Plan”;

 

References to the “2005 Executive Bonus Plan” or “Executive Bonus Plan” in the Original Change of Control Agreement shall be deemed to refer to the “SPX FLOW Executive Annual Bonus Plan or SPX FLOW 2015 Bonus Plan, as applicable,”;

 

References to the “SPX Corporation Supplemental Retirement Plan for Top Management” or “Supplemental Retirement Plan” in the Original Change of Control Agreement shall be deemed to refer to the “SPX FLOW Supplemental Retirement Plan for Top Management”;

 

References to the “Supplemental Retirement Savings Plan” or “SRSP” in the Original Change of Control Agreement shall be deemed to refer to the “SPX FLOW Supplemental Retirement Savings Plan”; and

 



 

References to the “Retirement Savings and Stock Ownership Plan” or “Retirement Savings Plan” in the Original Change of Control Agreement shall be deemed to refer to the “SPX FLOW Retirement Savings Plan”.

 

6.                                      References in Original Change of Control Agreement to Individual Account Retirement Plan or Pension Plan.  Notwithstanding the foregoing, references to the “Individual Account Retirement Plan” or “Pension Plan” in the Original Change of Control Agreement shall not be deemed to refer to a plan or program of the same type sponsored by SPX FLOW, and such references shall be deleted in their entirety in view of the fact that SPX FLOW does not sponsor a similar qualified defined benefit pension plan[; provided, however, that the parenthetical of Section 4(e)(i) of the Original Change of Control Agreement providing “(together with interest at the interest credit rate provided in the SPX Corporation Individual Account Retirement Plan)” shall be unchanged].  For avoidance of doubt, SPX FLOW shall have no obligation to provide a qualified defined benefit pension plan such as the SPX US Pension Plan (or corresponding non-qualified plan such as the SPX Corporation Supplemental Individual Account Retirement Plan) to Executive and the failure to provide such plans shall not constitute “Good Reason” under the Original Change of Control Agreement.

 

7.                                      Post-Retirement Medical Coverage.  SPX FLOW shall have no obligation to provide retiree medical benefits of any kind to Executive and the failure to offer retiree medical shall not constitute “Good Reason” under the Original Change of Control Agreement.

 

Notwithstanding anything to the contrary, (a) the years of continuation coverage provided under Section 4(b)(iii) of the Original Change of Control Agreement shall count for purposes of determining the Executive’s eligibility for post-retirement medical reimbursements under the Executive’s Employment Agreement, and (b) nothing herein shall be deemed to limit Executive’s right to reimbursement for post-retirement medical coverage pursuant to Section 4(g) of the Executive’s Employment Agreement, as amended.

 



 

MISCELLANEOUS

 

8.                                      Change of Control, Separation from Service.  For clarity, the parties agree that the transaction contemplated by the Separation Agreement will not result in a “Change of Control” or a separation from service, termination from employment or similar term, under the Original Change of Control Agreement.

 

9.                                      Good Reason.  For clarity, the parties agree that, unless the EMA provides that SPX FLOW must offer a certain benefit plan or program or type of benefit plan or program on and after the Distribution Date, the failure of SPX FLOW to offer such a benefit plan or program shall not constitute “Good Reason” under the Original Change of Control Agreement.

 

10.                               Counterparts.  The parties may execute this Assignment Agreement in one or more counterparts, all of which together shall constitute but one Assignment Agreement.

 

11.                               Separation Agreement and EMA.  In the event of any inconsistency among the terms of this Assignment Agreement and the terms of the Separation Agreement or EMA, the terms of the Separation Agreement or EMA, as applicable, shall control.  Nothing in this Assignment Agreement shall be construed to limit, discharge, mitigate or release any obligation or otherwise affect any right of any party to the Separation Agreement or EMA set forth or described therein.

 

12.                               Modification of Assignment Agreement.  This Assignment Agreement may be modified only by a writing signed by the parties hereto.

 

13.                               Effect if Distribution Does Not Occur.  Notwithstanding anything in this Assignment Agreement to the contrary, if the Separation Agreement is terminated prior to the Distribution Date, this Agreement shall be of no further force and effect.

 

14.                               Severability.  If any provision(s) of this Assignment Agreement shall be found invalid or unenforceable, in whole or in part, then it is the parties’ mutual desire that such provision(s) be modified to the extent and in the manner necessary to render the same valid and enforceable, and this Assignment Agreement shall be construed and enforced to the maximum extent permitted by law, as if such provision(s) had been originally incorporated herein as so modified or restricted, or as if such provision(s) had not been originally incorporated herein, as the case may be.

 

15.                               Consultation with Counsel.  This Assignment Agreement is the product of negotiations between the parties, each of which has had a full and complete opportunity to consult counsel.

 

[Signature Page Follows]

 



 

IN WITNESS WHEREOF, the parties have executed this Assignment Agreement effective as of the date first written above.

 

 

 

EXECUTIVE

 

 

 

 

 

 

 

SPX CORPORATION

 

 

 

By:

 

 

 

 

 

Its:

 

 

 

 

 

Date:

 

 

 

 

 

 

SPX FLOW, INC.

 

 

 

 

 

By:

 

 

 

 

 

Its:

 

 

 

 

 

Date:

 

 




Exhibit 99.1

 

SPX FLOW, Inc. Completes Spin-Off from SPX Corporation

 

To Begin “Regular Way” Trading on the New York Stock Exchange

 

CHARLOTTE, N.C., Sept. 28, 2015 /PRNewswire/ — SPX FLOW, Inc. (NYSE:FLOW) announced today that it has completed its spin-off from its former parent company and its stock will begin “regular way” trading today on the New York Stock Exchange under the symbol “FLOW”.

 

SPX FLOW is led by Chris Kearney, Chairman, President and Chief Executive Officer and Jeremy Smeltser, Vice President and Chief Financial Officer.

 

“I am very appreciative of the hard work and collective effort by our employees across the world. Together we have built a strong FLOW business recognized for world class engineering capabilities, quality manufacturing and commitment to customers.  Today marks a significant milestone as we begin operating independently as a standalone, pure FLOW Company,” said Mr. Kearney.

 

Kearney continued, “We are well-positioned as a leading supplier in food and beverage, power and energy and industrial markets, which we believe are solid, medium to long term growth markets.  As we move forward, we expect organic and inorganic investments to focus on increasing our customer relevance, expanding our service presence, innovation and new product development, optimizing our global footprint and reducing our overall cost structure.”

 

Mr. Smeltser added, “We have made great progress over the past few years improving our business processes and we believe there is more opportunity on that front as we continue to drive a customer-centric approach to doing business across our organization.  We are in a strong financial position and we intend to remain disciplined with respect to our capital allocation actions.”

 

Mr. Kearney and Mr. Smeltser are joined by an experienced executive team who bring extensive industry knowledge and strong functional and operational skills to SPX FLOW.  They include:

 

·                  Robert B. Foreman — Executive Vice President

·                  Stephen A. Tsoris — Vice President, Secretary and General Counsel

·                  David A. Kowalski — President, Global Manufacturing Operations

·                  J. Michael Whitted — Vice President, Corporate Development

·                  Marc G. Michael — President, Food and Beverage

·                  Anthony A. Renzi — President, Power and Energy

·                  David J. Wilson — President, Industrial

·                  Belinda G. Hyde — Vice President and Chief Human Resources Officer

·                  Kevin J. Eamigh — Chief Information Officer and Vice President, Global Business Services

 



 

About SPX FLOW, Inc.:  Based in Charlotte, North Carolina, SPX FLOW is a leading global supplier of highly engineered flow components, process equipment and turn-key systems, along with the related aftermarket parts and services, into the food and beverage, power and energy and industrial end markets.  SPX FLOW has approximately $2.5 billion in annual revenues and approximately 8,000 employees with operations in over 35 countries and sales in over 150 countries around the world.  To learn more about SPX FLOW, please visit our website at www.spxflow.com.

 

Investor and Media Contact:

 

Ryan Taylor, Vice President, Communications, Market Insights and Financial Planning

 

Phone:  704-752-4486