Joy Global Inc.
JOY GLOBAL INC (Form: DEF 14A, Received: 02/03/2016 14:17:05)
 
 
 
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________________________ 
SCHEDULE 14A INFORMATION
____________________________________________ 
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant   ý                             Filed by a Party other than the Registrant   ¨
Check the appropriate box:
o
 
Preliminary Proxy Statement
o
 
Confidential, for use of the Commission Only (as permitted by Rule 14a-6(e)(2))
ý
 
Definitive Proxy Statement
o
 
Definitive Additional Materials
o
 
Soliciting Materials Pursuant to sec. 240.14a-12
____________________________________________  
JOY GLOBAL INC.
(Exact Name of Registrant as Specified in Its Charter)
 ____________________________________________
Payment of Filing Fee (Check the appropriate box):
ý
 
No fee required.
 
 
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.1
 
 
(1
)
 
Title of each class of securities to which transaction applies: ________________________________
 
 
(2
)
 
Aggregate number of securities to which transaction applies: ________________________________
 
 
(3
)
 
Per unit or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): ___________
 
 
(4
)
 
Proposed maximum aggregate value of transaction: _______________________________________
 
 
(5
)
 
Total fee paid: ____________________________________________________________________
 
 
Fee paid previously with preliminary materials.
 
 
Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
 
 
(1
)
 
Amount Previously Paid: __________________________________________________________
 
 
(2
)
 
Form, Schedule or Registration Statement No.: _________________________________________
 
 
(3
)
 
Filing Party: _____________________________________________________________________
 
 
(4
)
 
Date Filed: ______________________________________________________________________




















 
Notice of 2016
 
Annual Meeting of
 
Shareholders and
 
Proxy Statement




TABLE OF CONTENTS
 
 
 
 
 
PROXY STATEMENT
 
 
 
INFORMATION ABOUT THIS PROXY SOLICITATION
3
 
 
COMPANY PROPOSALS
 
7
 
 
PROPOSAL #2: APPROVAL OF THE JOY GLOBAL INC. 2016 OMNIBUS INCENTIVE COMPENSATION PLAN
13
 
 
PROPOSAL #3: RATIFICATION OF THE APPOINTMENT OF OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
24
 
 
PROPOSAL #4: ADVISORY VOTE ON OUR NAMED EXECUTIVE OFFICERS’ COMPENSATION
25
 
 
SHAREHOLDER PROPOSAL
 
PROPOSAL #5: SHAREHOLDER PROPOSAL REGARDING BOARD DIVERSITY
26
 
 
CORPORATE GOVERNANCE
28
 
 
EXECUTIVE COMPENSATION
 
34
55
59
60
62
63
65
Potential Payments Upon Termination or Change-in-Control at Fiscal 2015 Year-End
66
71
Human Resources and Nominating Committee Report
73
74
 
 
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
75
 
 
RELATED PARTY TRANSACTIONS
78
 
 
AUDIT COMMITTEE REPORT
79
 
 
AUDITORS, AUDIT FEES, AND AUDITOR INDEPENDENCE
81
 
 
OTHER INFORMATION
82
 
 
APPENDIX A
A-1




JOY GLOBAL INC.
100 E. Wisconsin Avenue, Suite 2780
Milwaukee, Wisconsin 53202
NOTICE OF ANNUAL MEETING
The 2016 annual meeting of shareholders of Joy Global Inc. will be held at 100 E. Wisconsin Avenue, 2 nd Floor Conference Room, Milwaukee, Wisconsin, on Tuesday , March 8, 2016 at 7:30 a.m. for the following purposes:
1.
to elect nine persons to the Board of Directors;
2.
to approve the Joy Global Inc. 2016 Omnibus Incentive Compensation Plan;
3.
to ratify the appointment of our independent registered public accounting firm for Fiscal 2016 ;
4.
to conduct an advisory vote on our named executive officers’ compensation;
5.
to consider a shareholder proposal, if properly presented at the annual meeting; and
6.
to transact such other business as may properly come before the meeting or any adjournment or postponement of the meeting.
Shareholders of record at the close of business on January 8, 2016 are entitled to receive notice of and to vote at the annual meeting and any adjournment or postponement of the meeting. A list of shareholders entitled to vote will be available at our headquarters at least 10 days prior to the meeting and may be inspected there during business hours by any shareholder for any purpose germane to the meeting.
Whether or not you plan to attend the meeting, it is important that your shares be represented and voted at the annual meeting. We urge you to vote your shares at your earliest convenience by submitting your proxy by Internet, telephone, or by marking, signing, and dating the enclosed proxy card and returning it in the enclosed envelope. If you decide to attend the annual meeting, you will be able to vote in person, even if you have previously submitted your proxy.
 
By order of the Board of Directors,
 
 
 
Sean D. Major
 
Executive Vice President,
 
General Counsel and Secretary

February 3, 2016

Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to be held on March 8, 2016 . Our proxy statement and 2015 annual report to shareholders are available at
http://investors.joyglobal.com/annuals-proxies.cfm




INFORMATION ABOUT THIS PROXY SOLICITATION
This proxy statement is furnished in connection with the solicitation of proxies by the Board of Directors of Joy Global Inc., a Delaware corporation (the “corporation” or the “company”), for use at the 2016 annual meeting of shareholders to be held at 100 E. Wisconsin Avenue, 2 nd Floor Conference Room, Milwaukee, Wisconsin, on Tuesday , March 8, 2016 at 7:30 a.m. and at any adjournment or postponement of the annual meeting. The proxy statement, proxy card, and annual report are being mailed to shareholders on or about February 3, 2016 .
Proxies
Properly signed and dated proxies received by the Secretary prior to or at the annual meeting will be voted as instructed on the proxies or, in the absence of such instruction, in accordance with the Board’s recommendations stated below. At the 2016 annual meeting, shareholders will be asked to take the following actions:
Shareholder Actions
 
 
 
Company Proposals
Board Recommendation
Page Reference
Election of Directors
For each nominee
7
Approval of the Joy Global Inc. 2016 Omnibus Incentive Compensation Plan
For
13
Ratification of appointment of our independent registered public accounting firm
For
24
Advisory vote on our named executive officers’ compensation
For
25
 
 
 
Shareholder Proposal
 
 
Vote upon a shareholder proposal relating to Board diversity
Against
26
Election of Directors (Proposal 1)
This proxy statement contains important information about the qualifications and experience of each of the director nominees who you are asked to elect. The Human Resources and Nominating Committee performs an annual assessment to see that our directors have the skills and experience to effectively oversee our management and operations. The Board of Directors has determined that each of its nominees possesses the required qualifications, experience, commitment, and integrity necessary for continued service on the Board of Directors.
Approval of the Joy Global Inc. 2016 Omnibus Incentive Compensation Plan (Proposal 2)
The Board of Directors has approved and recommends that our shareholders approve the Joy Global Inc. 2016 Omnibus Incentive Compensation Plan (the “2016 Plan”) in order to replace the Joy Global Inc. 2007 Stock Incentive Plan (the “2007 Stock Incentive Plan”) to reflect current compensation and governance


3



trends and pay practices and conform to recent changes in law. The 2016 Plan will continue to provide a means to compensate the company’s directors, officers and employees in a way that is performance-driven, because the value of many of the awards will depend on corporate performance. Shareholder approval of the 2016 Plan will allow us to carry out our objectives of providing meaningful equity compensation to align the interests of our employees and shareholders and provide strong incentives for our employees to execute our corporate strategy and positively influence our overall performance. The 2016 Plan is attached as Appendix A to this proxy statement.
Ratification of Appointment of Independent Registered Public Accounting Firm (Proposal 3)
As a matter of good corporate governance, we ask that our shareholders ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for Fiscal 2016 . Set forth below is a summary of fees paid to Ernst & Young for services provided in Fiscal 2015 and Fiscal 2014 .
 
(in millions)
 
 
 
 
 
2015
2014
Audit Fees
 
$3.48
$3.29
Audit-Related Fees
 
Tax Fees
 
0.33
0.32
Total
 
$3.81
$3.61
Advisory Vote on Our Named Executive Officers’ Compensation (Proposal 4)
Our shareholders are being asked to cast a non-binding advisory vote on our named executive officers’ compensation. We are gratified that shareholders have overwhelmingly supported our executive compensation program over the last three years, with this proposal receiving the affirmative vote of 97%, 98% and 95% of votes cast by shareholders at our 2015 , 2014 and 2013 annual meetings, respectively. In evaluating this proposal, we recommend that you review our Compensation Discussion and Analysis, which explains how and why the Human Resources and Nominating Committee arrived at its executive compensation actions and decisions for Fiscal 2015 .
Vote Upon a Shareholder Proposal Relating to Board Diversity (Proposal 5)
If properly presented, the shareholder proposal requests that the Board of Directors adopt a policy relating to director diversity. The text of the proponent’s resolution and supporting statement and our statement recommending a vote against the proposal appear below.
Revocation of Proxies
Any proxy may be revoked by the person executing it at any time before the polls close at the annual meeting by filing with the Secretary a written revocation or a duly executed form of proxy bearing a later date, or by voting in person at the annual meeting. The Board of Directors has appointed a representative of Broadridge Financial Solutions to act as an independent inspector at the annual meeting.


4



Record Date, Shares Outstanding and Quorum
Shareholders of record of our common stock, par value $1.00 per share, at the close of business on January 8, 2016 may vote on all matters presented at the annual meeting. As of the record date, 97,931,858 shares of common stock were outstanding and entitled to vote at the annual meeting. Each share of common stock is entitled to one vote.
A quorum is required to transact business at our annual meeting. Holders of at least a majority of the shares of our common stock must be present at the annual meeting in person or by proxy to constitute a quorum. Abstentions, shares for which authority is withheld to vote for director nominees, and broker non-votes (i.e., proxies from brokers or nominees regarding proposals for which such broker or nominee lacks discretionary voting authority and the beneficial owners or other persons entitled to vote have not provided voting instructions) will be considered present for the purpose of establishing a quorum. In addition, abstentions will also count as votes against a proposal in cases where approval of the proposal requires the affirmative vote of a majority of the shares present in person or represented by proxy and entitled to vote at the meeting. However, broker non-votes, while being counted for purposes of calculating whether a quorum is present at the annual meeting, will not be counted for purposes of determining the number of votes cast. Therefore, a broker non-vote will make a quorum more readily available but will not otherwise affect the outcome of the vote on any proposal. Once a share is represented at the annual meeting, it is deemed present for quorum purposes throughout the meeting, including any adjourned meeting, unless a new record date is set for the adjourned meeting.
If less than a majority of the outstanding shares of common stock are present or represented by proxy at the meeting, a majority of the shares that are present or represented by proxy at the meeting may adjourn the meeting from time to time without further notice.
Required Vote
Proposal 1: Election of Directors . We have a majority voting standard for the election of directors in uncontested elections. Under this standard, directors are elected by the affirmative vote of a majority of votes cast. A “majority” of votes cast means that the number of votes “for” the election of a director nominee exceed the number of votes “withheld” with respect to such nominee. If an incumbent director in an uncontested election is not elected, he or she would be required to promptly tender his or her resignation to the Board of Directors. In the event of a contested election, which is one in which the number of candidates exceed the number of directors to be elected, the individuals receiving the largest number of votes will be elected up to the maximum number of directors to be chosen in the election.
Any shares not voted due to abstention or broker non-vote will not affect the election of directors. If you hold your shares in “street name,” your broker or other nominee will not have discretionary authority to vote your shares if you do not provide instructions as to how your shares should be voted on this proposal.
Proposal 2: Approval of the Joy Global Inc. 2016 Omnibus Incentive Compensation Plan. Approval of the 2016 Plan will require the affirmative vote of a majority of the shares of common stock present in person or represented by proxy and entitled to vote at the meeting. Any shares present and not voted, whether by abstention or otherwise, will have the effect of a vote against this proposal. If you hold your shares in “street name,” your broker or other nominee will not have discretionary authority to vote your shares if you do not provide instructions as to how your shares should be voted on this proposal.
Proposal 3: Ratification of the appointment of our independent registered public accounting firm. The affirmative vote of a majority of the shares of common stock that are present in person or represented by


5



proxy and entitled to vote at the meeting is required to ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending October 28, 2016 . Any shares present and not voted, whether by abstention or otherwise, will have the effect of a vote against this proposal. If you hold your shares in “street name,” your broker or other nominee will have discretionary authority to vote your shares if you do not provide instructions as to how your shares should be voted on this proposal.
Proposal 4: Advisory vote on our named executive officers’ compensation . At the 2011 annual meeting, shareholders expressed their preference for conducting annual advisory votes on our named executive officers’ compensation. Consistent with this preference, the Board of Directors determined that such votes will occur annually. This vote permits shareholders to express their approval or disapproval of our executive compensation practices for our named executive officers, as disclosed in this proxy statement. Although the outcome of this vote is not binding on us, we will consider the outcome of this vote when developing our compensation policies and practices, and when making compensation decisions in the future. Any shares present and not voted, whether by broker non-vote, abstention or otherwise, will have no effect on this advisory vote regarding our named executive officers' compensation. If you hold your shares in “street name,” your broker or other nominee will not have discretionary authority to vote your shares if you do not provide instructions as to how your shares should be voted on this proposal.
Proposal 5: Vote upon a shareholder proposal relating to Board diversity
Approval of the shareholder proposal, if properly presented, will require the affirmative vote of a majority of the shares of common stock present in person or represented by proxy and entitled to vote at the meeting. Any shares present and not voted, whether by abstention or otherwise, will have the effect of a vote against this proposal. If you hold your shares in “street name,” your broker or other nominee will not have discretionary authority to vote your shares if you do not provide instructions as to how your shares should be voted on this proposal.



6



COMPANY PROPOSALS

PROPOSAL #1: ELECTION OF DIRECTORS
The Board of Directors consists of nine members. All members of the Board of Directors are elected by the holders of common stock at each annual meeting. The following table shows certain information, including the principal occupation and recent business experience for each of the nine individuals nominated by the Board of Directors for election at the 2016 annual meeting. All of the nominees are presently directors whose terms expire in 2016 and who are nominated to serve terms ending at the 2017 annual meeting following the election and qualification of their successors.
If an incumbent director nominee receives a greater number of votes “withheld” than “for” in an uncontested election, the director must promptly tender his resignation for consideration by the Human Resources and Nominating Committee and the Board (with the affected director recusing himself from the deliberations). The Board will be free to accept or reject the resignation and will disclose its decision within 90 days of certification of the vote results. If a director’s resignation is accepted by the Board, or if a new nominee for director is not elected, then the Board may fill the resulting vacancy. If a director’s resignation is not accepted by the Board, the director will continue to serve until the 2017 annual meeting and until the election and qualification of his successor.
The Board of Directors believes that each of its nominees possesses the required qualifications, including the experience, knowledge, education, skills, and character necessary for continued service on the Board of Directors. Through their prior experience on our Board of Directors and in our industry, each nominee is well-versed in our operations, markets and strategy, as well as with the duties and responsibilities of serving as a director of a public company in our industry. In addition, the nominees are familiar with the governance requirements applicable to public companies through experience serving in management or as directors of other publicly traded companies. The Board of Directors believes that each nominee’s experience and personal qualities will permit each nominee to make a substantial and active contribution to Board deliberations. If, for any unforeseen reason, any of these nominees should not be available for election, the proxies will be voted for such person or persons as may be nominated by the Board of Directors.
Board Nominees
 
 
 
 
Director Since
 
 
 
Experience/
Qualifications
 
 
 
 
Name
 
Age
 
 
Principal Occupation
 
 
Independent
 
Committees
Edward L. Doheny II
 
53
 
2013
 
President and 
Chief Executive Officer
 
•Leadership
 
No
 
Executive
 
 
 
 
 
 
Joy Global Inc.
 
•Industry
 
 
 
 
 
 
 
 
 
 
 
 
•Global
 
 
 
 
 
 
 
 
 
 
 
 
•Governance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Steven L. Gerard
 
70
 
2001
 
Chairman and 
Chief Executive Officer
 
•Leadership
 
Yes
 
Audit
 
 
 
 
 
 
CBIZ, Inc.
 
•Accounting
 
 
 
Executive
 
 
 
 
 
 
 
 
•Governance
 
 
 
 
 
 
 
 
 
 
 
 
•Industry
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mark J. Gliebe
 
55
 
2014
 
Chairman and 
Chief Executive Officer
 
•Leadership
 
Yes
 
HRN (1)
 
 
 
 
 
 
Regal Beloit Corporation
 
•Industry
 
 
 
 
 
 
 
 
 
 
 
 
•Global
 
 
 
 


7



Board Nominees
 
 
 
 
Director Since
 
 
 
Experience/
Qualifications
 
 
 
 
Name
 
Age
 
 
Principal Occupation
 
 
Independent
 
Committees
 
 
 
 
 
 
 
 
•Governance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
John T. Gremp
 
64
 
2011
 
Chairman and 
Chief Executive Officer
 
•Leadership
 
Yes
 
HRN (1)
 
 
 
 
 
 
FMC Technologies, Inc.
 
•Industry
 
 
 
 
 
 
 
 
 
 
 
 
•Global
 
 
 
 
 
 
 
 
 
 
 
 
•Governance
 
 
 
 
John Nils Hanson
 
74
 
1996
 
Chairman
 
•Leadership
 
Yes
 
Executive
 
 
 
 
 
 
Joy Global Inc.
 
•Industry
 
 
 
 
 
 
 
 
 
 
 
 
•Global
 
 
 
 
 
 
 
 
 
 
 
 
•Governance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gale E. Klappa
 
65
 
2006
 
Chairman and
Chief Executive Officer
 
•Leadership
 
Yes
 
Audit
 
 
 
 
 
 
WEC Energy Group
 
•Accounting
 
 
 
 
 
 
 
 
 
 
 
 
•Finance
 
 
 
 
 
 
 
 
 
 
 
 
•Industry
 
 
 
 
 
 
 
 
 
 
 
 
•Governance
 
 
 
 
Richard B. Loynd
 
88
 
2001
 
President
 
•Governance
 
Yes
 
HRN (1)
 
 
 
 
 
 
Loynd Capital Management
 
•Leadership
 
 
 
 
 
 
 
 
 
 
 
 
•Global
 
 
 
 
 
 
 
 
 
 
 
 
•Industry
 
 
 
 
P. Eric Siegert
 
50
 
2001
 
Senior Managing Director
 
•Accounting
 
Yes
 
Audit
 
 
 
 
 
 
Houlihan, Lokey,
Howard & Zukin
 
•Finance
 
 
 
 
 
 
 
 
 
 
 
•Industry
 
 
 
 
James H. Tate
 
68
 
2001
 
Independent Consultant
 
•Accounting
 
Yes
 
Audit
 
 
 
 
 
 
 
 
•Finance
 
 
 
 
 
 
 
 
 
 
 
 
•Industry
 
 
 
 
(1) Human Resources and Nominating Committee
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR EACH OF EDWARD L. DOHENY II, STEVEN L. GERARD, MARK J. GLIEBE, JOHN T. GREMP, JOHN NILS HANSON, GALE E. KLAPPA, RICHARD B. LOYND, P. ERIC SIEGERT, AND JAMES H. TATE TO SERVE AS A DIRECTOR AND TO HOLD OFFICE UNTIL OUR 2017 ANNUAL MEETING OF SHAREHOLDERS AND UNTIL THEIR SUCCESSORS ARE ELECTED AND QUALIFIED, OR UNTIL THEIR EARLIER DEATH, RESIGNATION, OR REMOVAL.


8



 
 
 
 
 
 
 
Director
Since
 
 
 
Edward L. Doheny II
President, Chief Executive Officer and a director since December 2013. Previously Mr. Doheny served as the Executive Vice President of the corporation and President and Chief Operating Officer of its Underground Mining Machinery business from 2006 to 2013. Prior to joining Joy Global, Mr. Doheny spent 21 years with Ingersoll-Rand Co. in a series of senior executive positions of increasing responsibility, including President of Industrial Technologies from 2003 to 2005 and previously as President of the Air Solutions Group. Mr. Doheny also serves as a director of John Bean Technologies Corporation. He is 53.

Mr. Doheny’s experience with the company and in our industry, including his current leadership of the corporation, led the Board to conclude that he should continue to serve as a director.
 
2013
 
 
 
Steven L. Gerard
Chairman and Chief Executive Officer of CBIZ, Inc., a leading provider of integrated business services and products headquartered in Cleveland, Ohio. Mr. Gerard has served as Chief Executive Officer and a director since 2000 and as Chairman since 2002. On October 29, 2014, CBIZ and Mr. Gerard announced that he will retire as CBIZ’s Chief Executive Officer in March 2016, following the filing of CBIZ, Inc.’s Form 10-K for the year ending December 31, 2015.

Mr. Gerard is also a director of Lennar Corporation and the Las Vegas Sands Corporation. He is 70.

The Board concluded that Mr. Gerard should continue to serve as a director due to his experience as a director since 2001, his service as our Lead Independent Director, a member of the Audit Committee, his prior service as a member of the Human Resources and Nominating Committee and his 25 years of significant experience in senior management, including as a chief executive officer and director of other public companies. The Board also considered Mr. Gerard’s commitments as Chief Executive Officer of CBIZ and as an outside director to two other public companies and determined that in light of his planned retirement from CBIZ in March 2016 and his strong contributions to the Board during the prior year, he should continue to serve as a director.
 
2001
 
 
 
 


9



 
 
 
 
 
 
 
Director
Since
 
 
 
Mark J. Gliebe
Chairman and Chief Executive Officer of Regal Beloit Corporation which is a global manufacturer of electric motors and controls, electric generators and controls and mechanical motion control products. Mr. Gliebe has served as Chief Executive Officer of Regal Beloit since May 2011 and as Chairman since January 2012. Prior to assuming these roles, Mr. Gliebe served as President and Chief Operating Officer of Regal Beloit from December 2006 to May 2011 and Vice President and President-Electric Motors Group from January 2005 to December 2005. Prior to joining Regal Beloit, Mr. Gliebe was employed by General Electric Company from 2000 to 2004 as the General Manager of GE Motors & Controls in the GE Consumer & Industrial business unit. He is 55.

The Board believes Mr. Gliebe should continue to serve on the Board of Directors based on his experience and perspectives as an incumbent chief executive officer of a leading global manufacturing business, his significant experience in operations and manufacturing, and his significant knowledge and understanding of our business and industry.
 
2014
 
 
 
 
John T. Gremp
Chairman and Chief Executive Officer of FMC Technologies, Inc. Mr. Gremp has served as Chief Executive Officer of FMC Technologies, Inc., a major manufacturer of oilfield equipment since March 2011 and as Chairman since November 2011. Mr. Gremp previously served as President and Chief Operating Officer from April 2010 to February 2011 and as Executive Vice President of FMC Technologies’ Energy Systems business from January 2007 to March 2010. He served as Vice President of FMC Technologies’ Energy Production Systems business from 2004 to December 2006. Mr. Gremp previously served in a series of management positions of increasing responsibility after joining the company in 1975. He has served as a director of FMC Technologies, Inc. since 2011. He is 64.

Mr. Gremp is the chair of our Human Resources and Nominating Committee and the Board believes Mr. Gremp should continue to serve on the Board of Directors based on his service to date and his experience as the chief executive officer of a large, publicly traded company that designs and manufactures equipment used in the energy industry. In making this determination, the Board also considered Mr. Gremp’s operations management experience, which includes prior leadership of each of FMC Technologies’ business segments, and his knowledge and understanding of the financial, regulatory, legal and accounting issues affecting public companies of our size, and his management experience of international companies.
 
2011
 
 
 


10



 
 
 
 
 
 
 
Director
Since
 
 
 
John Nils Hanson
Chairman. Mr. Hanson has served as our Chairman since 2000. He previously served as our President and Chief Executive Officer from 1999 to 2006. Mr. Hanson ran a series of industrial product and capital goods businesses before joining Joy Technologies Inc. in 1990, where he served as President of the Underground Mining Machinery Division until its acquisition by us in 1995. He has a Ph.D. in nuclear engineering/reactor physics. Mr. Hanson has also served as a director of Arrow Electronics, Inc. since 1998. He is 74.

The Board believes that Mr. Hanson should continue to serve on the Board of Directors based on his leadership of the Board through 13 years of significant growth, his seven years of experience as our Chief Executive Officer, and his significant knowledge and deep understanding of our business and industry.
 
1996
 
 
 
 
Gale E. Klappa
Chairman and Chief Executive Officer of WEC Energy Group, formerly Wisconsin Energy Corporation, a Milwaukee-based holding company with subsidiaries in utility and non-utility businesses since 2004. Mr. Klappa has more than 20 years of experience working at a senior executive level in the public utility industry, including service as the Executive Vice President, Chief Financial Officer and Treasurer of The Southern Company. On January 28, 2016, WEC and Mr. Klappa announced that he will retire as WEC's Chief Executive Officer on May 1, 2016.

Since 2010, Mr. Klappa has also served as a director of Badger Meter, Inc., a publicly traded leader in the development and manufacture of flow management solutions. He is 65.

Mr. Klappa’s experience as chief executive officer of a publicly traded company and service as chair of our Audit Committee, coupled with his industry knowledge and understanding of public company financial statement requirements led the Board to conclude that he should continue serving as a director.
 
2006
 
 
 
 
Richard B. Loynd
President of Loynd Capital Management. Mr. Loynd has previously served as chairman and/or chief executive officer, or as a director, of a number of public companies doing business in the industrial and consumer product areas. He is 88.

Mr. Loynd’s service as chair of our Human Resources and Nominating Committee from 2001 to 2015, as a member of our Executive Committee from 2001 to 2014 and chair of the Executive Committee from 2001 to 2012, as our Lead Independent Director from 2007 to 2013, in addition to his deep understanding of our operations, industry, markets and management, and his 50 years of experience as a senior executive, led the Board to conclude that he should continue to serve as a director.
 
2001
 
 
 


11



 
 
 
 
 
 
 
Director
Since
 
 
 
P. Eric Siegert
Senior Managing Director of Houlihan Lokey Howard & Zukin, an international investment banking firm. He is 50.

Mr. Siegert’s service as a director since 2001, his service on the Audit Committee, and his significant understanding of financial matters and public company financial statement requirements led the Board to conclude that he should continue serving as a director.
 
2001
 
 
 
 
James H. Tate
Independent consultant. From 2005 to 2006, Mr. Tate was Executive Vice President, Chief Administrative Officer, and Chief Financial Officer of TIMCO Aviation Services, Inc. Mr. Tate also served as our acting Chief Financial Officer from March 4, 2008 to December 9, 2008. Mr. Tate’s career includes 18 years as an accountant with Ernst & Young, LLP, including six years as an audit partner. He is 68.

Mr. Tate’s service as a director since 2001, his many years of experience as a member of the Audit Committee, and as acting Chief Financial Officer during 2008, coupled with his industry knowledge and understanding of financial matters, led the Board to conclude that he should continue serving as a director.
 
2001


12



PROPOSAL #2: APPROVAL OF JOY GLOBAL INC. 2016 OMNIBUS INCENTIVE COMPENSATION PLAN

Overview

Our Board of Directors is requesting shareholder approval of the Joy Global Inc. 2016 Omnibus Incentive Compensation Plan (the “2016 Plan”) at the 2016 annual meeting. The 2016 Plan will become effective when and if approved by our shareholders. The 2016 Plan is attached as Appendix A to this Proxy Statement and this summary is qualified in its entirety by the full text of the 2016 Plan.

We currently maintain the Joy Global Inc. 2007 Stock Incentive Plan (the “2007 Incentive Plan”). The 2007 Incentive Plan is scheduled to be terminated, replaced and superseded by the 2016 Plan on the date on which the 2016 Plan is approved by our shareholders. As of January 8, 2016, a total of 6,570,245 shares of common stock were subject to outstanding awards under the 2007 Incentive Plan, and an additional 123,706 shares of our common stock were available for new awards under the 2007 Incentive Plan. If the 2016 Plan is approved by our shareholders, we will not grant any new awards under the 2007 Incentive Plan after the annual meeting.

If shareholders do not approve the 2016 Plan, we will continue to have the authority to, and expect that we will, grant awards under the 2007 Incentive Plan. If shareholders approve the 2016 Plan, the termination of our grant authority under the 2007 Incentive Plan will not affect awards then outstanding under the 2007 Incentive Plan.

Why We are Asking our Shareholders to Approve the 2016 Plan

We believe that equity-based compensation is fundamental to our ability to attract, motivate and retain highly-qualified dedicated employees who have the skills and experience required to achieve our business goals. We further believe that a combination of stock options, restricted stock and performance share awards provides a strong link to our long-term performance, creates an ownership culture and generally aligns the interests of our executives and other employees with our shareholders. We have worked closely with our compensation consultants to design the 2016 Plan to meet our internal compensation objectives, as well as the interests of our shareholders, as more fully described below.

The Board of Directors has adopted, subject to shareholder approval, the 2016 Plan in order to replace the 2007 Incentive Plan to reflect current compensation and governance trends and pay practices and to conform to recent changes in law. The 2016 Plan will continue to provide a means to compensate the company’s directors, officers and employees in a way that is performance-driven, because the value of many of the awards will depend on corporate performance. Adoption of the 2016 Plan is subject to shareholder approval in order to comply with New York Stock Exchange listing requirements and in order to permit awards granted under the 2016 Plan to certain executive officers to qualify as performance-based compensation under Section 162(m) of the U.S. Internal Revenue Code of 1986, as amended (the “Code”).

The 2016 Plan has been designed to include a number of provisions for the protection of shareholders that are not present in the 2007 Incentive Plan, as described below.



13


Important Aspects of our 2016 Plan Are Designed to Protect our Shareholders’ Interests

The 2016 Plan includes a number of features designed to protect our shareholders’ interests and reflect corporate governance best practices, including the following:

Shareholder approval required for additional shares . The 2016 Plan authorizes a pool of 6,325,000 shares of our common stock, plus any shares of common stock that are available under the company’s 2007 Incentive Plan immediately prior to effectiveness of the 2016 Plan. Shareholder approval will be required to issue any additional shares and our shareholders will have direct input on any increase in the numbers of shares of common stock issuable under the 2016 Plan.

Fungible plan design . The 2016 Plan uses a so-called “fungible share pool” design. Accordingly, for purposes of determining the number of shares available under the 2016 Plan, so-called “full-value” awards (stock-based awards other than stock options and stock appreciation rights) will be counted against the authorized share pool at an accelerated rate differently than stock options and stock appreciation rights. We have adopted this plan design after consultation with advisors to determine what structure would best align the interests of the company and its shareholders. This plan structure offers the company flexibility in determining what types of equity awards are best suited for its needs within the overall authorized share pool. At the same time, this structure recognizes that certain types of awards may be more valuable than others. Under the fungible share pool, each share of our common stock issued pursuant to a stock option or stock appreciation right will reduce the number of shares available out of the authorized share pool by one share and each share issued pursuant to a full value award will reduce the number of shares available out of the authorized share pool by 2.4 shares. For example, this means that, for every 100 shares of restricted stock issued by us under the 2016 Plan, the number of shares available under the 2016 Plan will be reduced by 240 shares.

Limitations on share recycling of option and stock appreciation rights . Shares that are withheld as payment for the exercise price or for tax withholding upon the exercise of stock options or stock-settled stock appreciation rights granted under the 2016 Plan will not be available for future issuance under the 2016 Plan. In addition, upon the exercise of a stock option or stock-settled stock appreciation right, the total number of shares exercised will be deducted from the 2016 Plan’s share pool.

Prohibition against repricing of stock options and stock appreciation rights without shareholder approval. Except in connection with an equitable adjustment or a Change in Control (as defined in the 2016 Plan), the 2016 Plan prohibits the repricing of outstanding stock options and stock appreciation rights, whether by amending an existing award or by substituting a new award at a lower price. The 2016 Plan also prohibits the payment of cash or other securities in exchange for out-of-the-money awards.

Vesting restrictions . The 2016 Plan generally requires that participants who are granted stock options or stock appreciation rights continue to provide services to the company (or an affiliate) for at least one year following the date of grant (other than in case of death, disability or Change in Control (as defined in the 2016 Plan)) in order for such awards to vest in whole or in part. The 2016 Plan contains an exception to this requirement that is limited to five percent of available shares of common stock authorized for issuance under the 2016 Plan.

Double-trigger vesting upon a Change in Control; No “liberal” Change in Control definition . Awards granted under the 2016 Plan are subject to double-trigger vesting provisions upon a Change


14


in Control. This means that rather than vesting automatically upon a Change in Control, such awards will be subject to accelerated vesting only in the event of a qualifying termination following a Change in Control or in the event the acquiring company does not assume the award. The Change in Control definition in the 2016 Plan is not “liberal” and, for example, would not occur merely upon shareholder approval of a transaction or upon a change in the composition of the Board of Directors. A change in control must actually occur in order for the Change in Control provisions in the 2016 Plan to be triggered.

Clawback policy . Any award granted to an executive officer under the 2016 Plan is subject to our clawback policy and will become subject to any regulations or stock exchange listing rules promulgated under the requirements of Section 954 of the Dodd-Frank Act that are applicable to the company. Pursuant to our clawback policy, we may require forfeiture or repayment of all or a portion of cash-based or equity-based awards to an executive officer under certain circumstances involving misconduct.

Summary of the 2016 Plan

The following is a description of the principal terms of the 2016 Plan. The summary is qualified in its entirety by the full text of the 2016 Plan, which is attached as Appendix A to this Proxy Statement.

Plan Administration

The 2016 Plan will be administered by the Human Resources and Nominating Committee, or such other committee of the Board of Directors as the Board of Directors may from time to time designate and which is comprised solely of at least two outside directors (in either case, the “Committee”). The Committee has full power to select, from among the individuals eligible for awards, the individuals to whom awards will be granted, to make any combination of awards to participants, and to determine the specific terms and conditions of each award, subject to the provisions of the 2016 Plan. The Committee may delegate the administrative responsibilities of the 2016 Plan and also delegate to the Chief Executive Officer all or a portion of its responsibilities to grant awards, subject to a specified set of limitations.

Eligibility and Limitations on Grants

Persons eligible to participate in the 2016 Plan will be non-employee directors, officers and employees of the company and its subsidiaries, as selected from time to time by the Committee. As of January 8, 2016, approximately 200 directors and employees would be eligible to participate in the 2016 Plan.

The maximum aggregate numbers of shares of common stock that may be granted under the 2016 Plan is 6,325,000, plus any shares of common stock that are available under the company’s 2007 Incentive Plan immediately prior to effectiveness of the 2016 Plan (of which 123,706 shares were available for new awards on January 8, 2016). In addition, (a) awards that are forfeited, cancelled or settled in cash, and (b) shares of common stock that are tendered or held back (other than for the exercise price or tax withholding of a stock option or stock-settled stock appreciation right) will be added to the share pool and will be available for issuance under the 2016 Plan. These provisions also apply with respect to awards outstanding under the 2007 Incentive Plan and the Joy Global Inc. 2003 Stock Incentive Plan immediately prior to effectiveness of the 2016 Plan, of which on January 8, 2016 there were 6,570,245 and 101,972 shares subject to such awards, respectively. No shares that are tendered or held back to cover the exercise price or tax withholding of a stock option or stock appreciation right will be available for future issuance under the 2016 Plan.



15


For purposes of calculating the maximum number of shares that may be issued pursuant to all awards under the 2016 Plan, including any shares that become available for issuance following the forfeiture, cancellation or settlement of awards, or tender or withholding of common stock, as set forth in the preceding paragraph: (a) every one share issuable pursuant to the exercise of a stock option or stock appreciation right shall count as one share, and (b) every one share underlying restricted stock, restricted stock units, or other stock-based awards shall count as 2.4 shares.

The maximum aggregate number of shares of common stock that may be delivered pursuant to incentive stock options, or “ISOs,” granted under the 2016 Plan is 6,325,000.

The 2016 Plan also provides certain limits on the number of shares subject to awards that an individual may receive in any one year. The maximum aggregate number of shares of common stock subject to stock options granted to any participant in any fiscal year is 2,000,000. The maximum aggregate number of shares of common stock subject to stock appreciation rights granted to any participant in any fiscal year is 2,000,000. For awards other than stock options and stock appreciation rights that are settled in shares of common stock, the maximum aggregate number of shares of common stock that may be granted for qualified performance-based compensation within the meaning of Section 162(m) to any participant in any fiscal year is 1,000,000.

For qualified performance-based awards that are settled in cash based on the fair market value of a share of common stock, the maximum aggregate amount of cash that may be paid to any participant in any fiscal year will be the fair market value as of the applicable vesting or payment date multiplied by 1,000,000. For all other awards that are settled in cash or property, the maximum amount payable to any participant other than a director in any fiscal year is $10,000,000. The maximum aggregate dollar amount of cash, common stock or other property, or common stock underlying an award that may be paid or delivered to a director during any fiscal year is $750,000.

Participants who are granted stock options and stock appreciation rights will be required to continue to provide services to the company (or an affiliate) for not less than one year following the date of grant (other than in case of death, disability or a Change in Control) in order for any such stock options and stock appreciation rights to fully or partially vest or be exercisable.

Stock Options

Stock options shall be granted under the 2016 Plan pursuant to option agreements. The 2016 Plan permits the grant of stock options that are intended to qualify as incentive stock options, or “ISOs,” and options that are not intended to qualify as ISOs, which are commonly referred to as “nonqualified” stock options. Generally, ISOs may be granted only to employees of the company and its subsidiaries. The differing tax treatment of ISOs and nonqualified stock options is discussed below under Material U.S. Federal Income Tax Consequences of Participation in the 2016 Plan .

The exercise price of a stock option may not be less than 100% (or 110% in the case of certain ISOs) of the fair market value of the common stock subject to the stock option on the date of grant. The 2016 Plan generally prohibits the repricing of outstanding stock options and the exchange of cash or other securities for out-of-the money awards, without prior shareholder approval. The term of stock options granted under the 2016 Plan may not exceed ten years and, in some cases, may not exceed five years.

Acceptable forms of consideration for the purchase of our common stock pursuant to the exercise of a stock option under the 2016 Plan will be determined by the Committee and may include payment by certified or bank check. The Committee may also accept payment in the form of unrestricted common stock


16


already owned by the optionee of the same class of common stock subject to the stock option; provided, however, that in the case of an incentive stock option, the right to make payment in the form of already owned shares of common stock of the same class as the common stock subject to the incentive stock option may be authorized only at the time the incentive stock option is granted.

The Committee may impose limitations on the transferability of stock options granted under the 2016 Plan in its discretion. Generally, a participant may not transfer a stock option granted under the 2016 Plan other than by will or the laws of descent and distribution or, subject to approval by the Committee and only in the case of nonqualified options, to the optionee’s children or family member.

Stock Appreciation Rights

Stock appreciation rights shall be granted under the 2016 Plan pursuant to stock appreciation right agreements. Each stock appreciation right is denominated in common stock equivalents. The strike price of each stock appreciation right will in no event be less than 100% of the fair market value of the common stock subject to the stock appreciation right on the date of grant. The 2016 Plan generally prohibits the repricing of stock appreciation rights or the exchange of cash or other securities for out-of-the-money awards, without prior shareholder approval. The appreciation distribution payable upon exercise of a stock appreciation right may be paid in shares of our common stock, in cash, or in a combination of cash and stock at the election of the Committee. Stock appreciation rights are subject to the same transferability restrictions as stock options.

Performance Awards

Performance awards shall be granted under the 2016 Plan pursuant to performance award agreements. A performance award is an award the vesting of which is contingent upon the achievement of certain performance goals over a specified period of time. The Committee may condition the performance award upon the continued service of the participant and the provisions of performance awards need not be the same with respect to each participant. The Committee shall determine the number of performance shares or units that have been earned at the end of a performance cycle. Performance awards are payable in shares of our common stock or cash, at the election of the Committee.

Other Awards

The Committee may award restricted stock, restricted stock units and deferred stock units to eligible individuals pursuant to an award agreement. The Committee shall determine the duration of the restrictions, and any other terms and conditions of an award of restricted stock, restricted stock units, deferred stock units, and dividend equivalents. The Committee is also permitted to grant other awards of our common stock or awards that are valued in whole or in part by reference to, or are otherwise based upon, common stock, including, without limitation, dividend equivalents. The company does not grant dividend equivalents on stock options or stock appreciation rights. In addition, the Committee is permitted to grant cash incentive awards under the 2016 Plan.

Change in Control Provisions

Awards granted under the 2016 Plan are subject to double-trigger vesting provisions upon a Change in Control. This means that rather than vesting automatically upon a Change in Control, such awards will be subject to accelerated vesting only in the event of a qualifying termination following a Change in Control or in the event the acquiring company does not assume the awards.


17


Under the 2016 Plan, in the case of a Change in Control, unless provided otherwise by the Committee:

Any outstanding stock options and stock appreciation rights will be assumed or cancelled in exchange for substitute stock options issued by the successor (or its parent) and will vest and become exercisable if, during the term of the award of such shorter term as specified in the award agreement, the participant’s employment is terminated without cause. To the extent any stock options or stock appreciation rights are not assumed or substituted, the award shall (a) immediately become fully exercisable and vested or (b) be cancelled in exchange for cash and/or other substitute consideration.

Any outstanding performance awards will be converted into time-based restricted stock or restricted stock units of the successor (or its parent) and will vest if, during the term of the award or such shorter term as specified in the award agreement, the participant’s employment is terminated without cause. With respect to any outstanding performance awards that are not so converted, any restriction will lapse and the award will be settled in cash as promptly as practicable (subject to delays required for tax compliance). In either case, the value of the award will be determined assuming target performance has been achieved, except that the value will be determined based on actual performance if (a) more than half of the performance period has elapsed and (b) actual performance is determinable as of such date.

Any other stock-based or cash awards will be assumed by the successor (or its parent) or cancelled in exchange for comparable awards issued by the successor (or its parent) and will vest if, during the term of the award or such shorter term as specified in the award agreement, the participant’s employment is terminated without cause. With respect to such awards that are not assumed or substituted, any restriction shall lapse and such awards will be settled in cash as promptly as practicable (subject to delays required for tax compliance).

For an award to be validly assumed or substituted by a successor, it must (a) provide the participant 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; (b) have substantially equivalent value to such award (determined at the time of the Change in Control); and (c) be based on stock that is traded on an established U.S. securities market or an established securities market outside the United States upon which the participants could readily trade the stock without administrative burdens or complexities.

Clawback of Awards

Any award made under the 2016 Plan is subject to our clawback policy, as well as the requirements of Section 954 of the Dodd-Frank Act and any regulations or stock exchange listing rules promulgated thereunder that are applicable to the company. Pursuant to this policy, among other things, the Committee may require an executive officer to forfeit cash-based or equity-based awards, repay all or a portion of cash-based or equity-based awards or otherwise make payments under certain circumstances involving misconduct by such executive officer.

Tax Withholding

Participants in the 2016 Plan are responsible for the payment of any federal, state, local, or foreign taxes that we are required by law to withhold upon any option exercise or vesting of other awards. Unless otherwise determined, withholding obligations may be settled with common stock, including common stock that is part of the award that gives rise to the withholding requirement.


18


Amendments and Termination

The Board of Directors may amend, alter, or discontinue the 2016 Plan, but no amendment, alteration, or discontinuation shall be made which would impair the rights of a recipient under an award without such recipient’s consent, except as required to comply with applicable law, stock exchange listing requirements or accounting rules. We will obtain shareholder approval of any amendment to the 2016 Plan as required by applicable law, stock exchange listing requirements or in connection with any repricing of a stock option or stock appreciation right.

Material U.S. Federal Income Tax Consequences of Participation in the 2016 Plan

The following is a brief summary of the material U.S. federal income tax consequences associated with awards under the 2016 Plan, based on current U.S. federal income tax laws and Treasury regulations promulgated thereunder, all as in effect or existence as of the date of this Proxy Statement. We have not sought, nor do we intend to seek, any ruling from the U.S. Internal Revenue Service with respect to the statements made in this section. This summary is not intended to be exhaustive, does not constitute tax advice and, among other things, does not describe state, local or foreign tax consequences. Moreover, the tax effects of participation in the 2016 Plan may vary depending on the facts and circumstances pertaining to each participant. Each participant who receives an award under the 2016 Plan should consult his or her own tax advisor with respect to his or her individual tax position and the effect of any legislative revisions on such position.

Unrestricted Stock. Generally, a participant receiving an award of unrestricted stock will recognize taxable income at the time unrestricted stock is granted. The taxable income will equal the excess of the fair market value of the unrestricted stock on the grant date over any amount the participant pays for the unrestricted stock. The company generally will be entitled to an income tax deduction equal to the amount of ordinary income a participant recognizes in connection with an award of unrestricted stock.

Restricted Stock. A participant will not recognize taxable income upon the grant of restricted stock unless the participant makes an election under Section 83(b) of the Code within 30 days of the date of grant. If a timely Section 83(b) election is made, then a participant will have compensation income at the time of grant equal to the value of the stock less the purchase price. When the stock is sold, the participant will have capital gain or loss equal to the difference between the sales proceeds and the value of the stock on the date of grant. If the participant does not make a Section 83(b) election, then when the stock vests the participant will have compensation income equal to the value of the stock on the vesting date less the purchase price. When the stock is sold, the participant will have capital gain or loss equal to the difference between the sales proceeds and the value of the stock on the vesting date. Any capital gain or loss will be long-term if the participant held the stock for more than one year since the date of vesting (or, with a Section 83(b) election, date of grant) and otherwise will be short-term.

Incentive Stock Options. ISOs are intended to meet the requirements of Section 422 of the Code. Generally, the grant of an ISO does not result in taxable income to the participant or a tax deduction for the company. The exercise of an ISO will not result in ordinary taxable income to the participant (although the difference between the exercise price and the fair market value of the common stock subject to the ISO may result in alternative minimum tax liability to the participant), if the following conditions are met:

at all times during the period beginning with the date of the grant and ending on the day three months before the date of exercise, the participant is an employee of the company or an affiliate; and



19


the participant makes no disposition of stock within two years from the date of grant or within one year after the stock is transferred to the participant.

The three-month period is extended to one year in the event of disability and is waived in the event of death of the participant. If the stock is sold by the participant after meeting these conditions, any gain realized over the exercise price ordinarily will be treated as long-term capital gain, and any loss will be treated as long-term capital loss, in the year of the sale.

If the participant fails to comply with the employment or holding period requirements discussed above, the participant will recognize ordinary taxable income in an amount equal to the lesser of:

the excess of the fair market value of the common stock subject to the ISO on the date of exercise over the exercise price; or

if the employment period (but not the holding period) described above is satisfied and if the disposition occurs in an arm’s length sale or exchange with an unrelated party, the excess of the amount realized upon such disposition over the exercise price.

If a participant pays the exercise price for an ISO with common stock already owned and the participant receives back a larger number of shares, a number of shares of common stock equal to the number of shares used to pay the exercise price will have a tax basis equal to that of the stock originally used to pay the exercise price. The additional newly acquired shares of common stock will have a tax basis of zero. The ISO holding period for the newly acquired common stock will begin on the exercise date. The tax on disposition will be as described above. If the participant uses shares obtained on exercise of an ISO before the end of the incentive stock option holding period for those shares, the participant will be taxed on those shares as though he or she had sold those shares at that time.

Nonqualified Stock Options. A participant will not recognize taxable income upon the grant of a nonqualified stock option. A participant will realize compensation taxable as ordinary income upon the exercise of a nonqualified stock option equal to the value of the stock on the day the participant exercised the option less the purchase price. Upon sale of the stock, the participant will have capital gain or loss equal to the difference between the sales proceeds and the value of the stock on the day the option was exercised. This capital gain or loss will be long-term if the participant has held the stock for more than one year and otherwise will be short-term.

Stock Appreciation Rights. A participant will not recognize taxable income upon the grant of a stock appreciation right. A participant generally will recognize compensation income upon the exercise of a stock appreciation right equal to the amount of the cash and the fair market value of any stock received. Upon the sale of the stock, the participant will have capital gain or loss equal to the difference between the sales proceeds and the value of the stock on the day the stock appreciation right was exercised. This capital gain or loss will be long-term if the participant held the stock for more than one year and otherwise will be short-term.

Performance Shares and Performance Units. The grant of a performance share or performance unit does not result in taxable income to the participant or a tax deduction for the company. Upon the expiration of the applicable performance period and receipt of the common stock distributed in payment of the award or an equivalent amount of cash, the participant will realize ordinary taxable income equal to the full fair market value of the common stock delivered or the amount of cash paid. At that time, the company generally


20


will be allowed a corresponding tax deduction for the same year equal to the compensation taxable to the participant.

Dividend Equivalents. Dividend equivalents generally are taxed as compensation when they are paid to the participant, and the company receives a corresponding deduction for the same year. If a participant elects to be taxed on the value of a restricted stock award when the award is granted, dividends paid with respect to the award will be taxed as dividends and will not be deductible by us.

Restricted Stock Units. A recipient of a restricted stock unit award realizes ordinary income when the award is settled in shares or cash. The ordinary income realized on the payment date equals the full fair market value of the common stock or other property delivered or the amount of cash paid. At that time, the company generally will be allowed a corresponding tax deduction for the same year equal to the compensation taxable to the participant.

Other Cash Incentive Awards. A recipient of a cash incentive award realizes ordinary income when the award is paid in cash. The ordinary income realized on the amount of cash paid. At that time, the company generally will be allowed a corresponding tax deduction for the same year equal to the compensation taxable to the participant.

Section 409A.   Section 409A of the Code applies to amounts that are considered “non-qualified deferred compensation.” If a deferred compensation arrangement, including certain awards that may be issued under the 2016 Plan, does not meet the requirements of Section 409A of the Code, the timing of taxation for these amounts could be accelerated (meaning these amounts could become immediately taxable). Also, an additional 20% income tax, as well as penalties and interest, could be imposed upon the applicable participants in the 2016 Plan. Although the Committee intends to administer the 2016 Plan so that awards will be exempt from, or will comply with, the requirements of Section 409A of the Code, the company does not warrant that any award under the 2016 Plan will qualify for favorable tax treatment under Section 409A of the Code or any other provision of federal, state, local or foreign law.

Parachute Payments.   In the event any payments or rights accruing to a participant upon a change in control (as described under “Change in Control Provisions” above), including any payments or vesting under the 2016 Plan triggered by a change in control, constitute “parachute payments” under Section 280G of the Code, depending upon the amount of such payments and the other income of the participant, the participant may be subject to a 20% excise tax (in addition to ordinary income tax), and the company may be disallowed a deduction for the amount of the actual payment.

Application of Section 162(m) of the Code

Approval of the 2016 Plan by shareholders will permit us to grant awards under the 2016 Plan that qualify as “performance-based compensation” within the meaning of Section 162(m) of the Code. Section 162(m) places a limit of $1,000,000 on the amount we may deduct in any one year for compensation paid to our “covered employees.” Covered employees under Section 162(m) generally consist of our Chief Executive Officer and each of our three most highly-compensated executive officers other than our Chief Executive Officer and Chief Financial Officer. If, however, an award qualifies as “performance-based compensation” it is excluded for purposes of calculating the amount of compensation subject to the $1,000,000 limit. Stock options and stock appreciation rights granted under the 2016 Plan will qualify as “performance-based compensation.”



21


A performance award (other than a stock option or stock appreciation right) will qualify as “performance-based compensation” if, among other requirements, the payment of the award is contingent upon the achievement, as determined by the Committee, of the one or more performance goals established by the Committee at the inception of the performance period and based on the performance criteria specified in the 2016 Plan.

Approval by shareholders of the 2016 Plan will constitute approval of the following performance criteria listed in the 2016 Plan: revenue growth; earnings before interest, taxes, depreciation, and amortization; earnings before interest and taxes; operating income; pre- or after-tax income; earnings per share; cash flow; cash flow per share; return on equity; return on invested capital; return on assets; economic value added (or an equivalent metric); share price performance; total shareholder return; market capitalization; improvement in or attainment of expense levels; improvement in or attainment of working capital levels; profitability; market share; reduction in costs; gross profits; net profits; completion of corporate transactions (including mergers or acquisitions); successful litigation outcomes; and/or development and/or acquisition of intellectual property.

Performance goals established using the foregoing criteria may be determined in accordance with accounting principles generally accepted in the United States (“GAAP”) or may be adjusted when established to include or exclude any items otherwise includable or excludable under GAAP. Performance goals may be established on an individual or a corporate-wide basis or with respect to one or more business units, divisions, or subsidiaries, and may be applied on an absolute or relative basis against a group of peer companies, a financial market index or other objective and quantifiable indices. Measurement of performance against goals may include or exclude impact of charges for restructurings, discontinued operations, extraordinary items, and other unusual or non-recurring items; the cumulative effects of tax or accounting changes; asset write-downs; litigation or claim judgments or settlements; acquisitions or divestitures; reorganization or change in the corporate structure or capital structure of the company; foreign exchange gains and losses; a change in the fiscal year of the company; the refinancing or repurchase of bank loans or debt securities; unbudgeted capital expenditures; any business interruption event; the effect of changes in other laws or regulatory rules affecting reported results; and/or an event either not directly related to the operations of the company, subsidiary, division, business segment or business unit or not within the reasonable control of management each as identified in the financial statements, notes to the financial statements or management’s discussion and analysis within the company’s Annual Report on Form 10-K, or the company’s earnings release reporting annual financial performance that is furnished to the SEC pursuant to Item 2.02 of Form 8-K.

While approval of the 2016 Plan by shareholders will enable us to grant awards that qualify as “performance-based compensation” under Section 162(m), we believe that it is in our best interests and the interests of our shareholder to maintain the flexibility also to grant awards that do not qualify as “performance-based compensation” as determined in the discretion of the Committee.

New Plan Benefits

The Committee will determine in its discretion the timing and amount of awards under the 2016 Plan and the recipients or class of recipients of such awards. It is therefore not possible to state the amount of awards that will be made in the future if the 2016 Plan is approved by our shareholders.



22


Securities Authorized for Issuance Under Equity Compensation Plans

Information concerning securities authorized for issuance under equity compensation plans is set forth in the “Equity Compensation Plan Information” section of this Proxy Statement.

Required Vote

Approval of the 2016 Plan will require the affirmative vote of a majority of the shares of common stock present in person or represented by proxy and voting at the 2016 annual meeting.

Recommendation of the Board of Directors

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR ADOPTION OF PROPOSAL #2 TO APPROVE THE 2016 OMNIBUS INCENTIVE COMPENSATION PLAN.


23



PROPOSAL #3: RATIFICATION OF THE APPOINTMENT OF OUR
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee of the Board of Directors has appointed Ernst & Young LLP as our independent registered public accounting firm (“Independent Auditor”) for the fiscal year ending October 28, 2016 . Ernst & Young has been our Independent Auditor since Fiscal 2002. For additional information regarding our relationship with Ernst & Young, please refer to the Audit Committee Report on page 79 and the Audit Fees disclosure on page 81.
Although ratification is not required under our Certificate of Incorporation, bylaws, Audit Committee Charter, or otherwise, the Board of Directors is submitting the selection of the Independent Auditor to shareholders for ratification as a matter of corporate governance practice. A representative of the Independent Auditor is expected to be present at the 2016 annual meeting. The representative will have the opportunity to make a statement if he or she desires to do so and is expected to be available to respond to appropriate shareholder questions at the meeting.
If the shareholders do not approve the appointment of the Independent Auditor for Fiscal 2016 , the adverse vote will be considered a direction to the Audit Committee to consider other auditing firms for Fiscal 2017 . However, the Audit Committee will still have discretion to determine which audit firm to appoint for Fiscal 2017 and, due to the difficulty in making a substitution of auditing firms so long after the beginning of the current fiscal year, the appointment for Fiscal 2016 will stand unless the Audit Committee finds other good reason for making a change. If the shareholders ratify the appointment of the Independent Auditor, the Audit Committee may, in its discretion, select a different auditing firm at any time during the year if it determines that such a change would be in the best interests of our shareholders.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR ADOPTION OF PROPOSAL #3 TO RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL 2016 .


24



PROPOSAL #4: ADVISORY VOTE ON OUR NAMED EXECUTIVE OFFICERS’
COMPENSATION
At the 2011 annual meeting, our shareholders expressed their preference that we conduct annual non-binding advisory votes on executive compensation. Consistent with this preference, we are providing shareholders with the opportunity to cast a non-binding advisory vote on our named executive officers’ compensation, as disclosed in this proxy statement.
We believe our executive compensation and compensation policies and practices are focused on pay-for-performance principles, reflect a strong alignment with the interests of our long-term shareholders, assist us in retaining, incentivizing, and recruiting our executive officers, and are reasonable in comparison to the compensation practices of our competitors and other manufacturing companies of similar size and complexity. We also believe that our compensation policies and programs and Fiscal 2015 compensation decisions, as each is described in this proxy statement, appropriately reward our named executive officers for our performance and for their individual performance. You are strongly encouraged to read the full details of our compensation policies and programs under “Executive Compensation” below.
Because this vote is advisory, it will not be binding on the Board of Directors or the Human Resources and Nominating Committee, nor will it overrule any prior decision or require the Board or Committee to take any action. However, the Board and the Human Resources and Nominating Committee will review the voting results and may consider the outcome of the vote when making future decisions about executive compensation programs.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR OUR NAMED EXECUTIVE OFFICERS’ COMPENSATION.


25



SHAREHOLDER PROPOSAL

PROPOSAL #5: SHAREHOLDER PROPOSAL REGARDING BOARD DIVERSITY
The Amalgamated Bank’s LongView Broad Market 3000 Index Fund submitted the following resolution, which we expect to be presented to stockholders for approval at the 2016 annual meeting. The company will provide the proponent’s address and share holdings to any stockholder promptly upon request. The text of the proponent’s resolution and supporting statement appear below, printed verbatim from its submission, and we have not endeavored to correct any erroneous statements or typographical errors contained therein. We disclaim all responsibility for the content of the proposal and the supporting statement, including sources referenced therein. Our Board of Directors has recommended a vote against the proposal for the reasons set forth in our statement recommending a vote against the proposal, which follows the proposal.
Resolution on Board Diversity
RESOLVED: Shareholders request that the board of directors adopt a policy that the board will seek to enhance board diversity beyond current levels by taking all reasonable steps, consistent with the board’s fiduciary obligations, to ensure that a wider range of female and minority candidates are included in the pool of candidates from which board nominees are chosen and reporting to shareholders by the 2017 annual meeting about how that policy is being implemented, including efforts taken to expand the pool of potential candidates and any changes made to the nominating committee’s charter. The report may be prepared at reasonable expense and omit proprietary information.
Supporting Statement
We believe that diversity, inclusive of gender and race, is a critical attribute of a well-functioning board and a measure of sound corporate governance. We are concerned that Joy Global has no women on its board of directors and apparently has had none for over a decade. Indeed, the board appears to be somewhat entrenched, with only two independent directors added since 2006 and the average director tenure exceeding ten years.
Research confirms a strong business case for diversity on corporate boards. Credit Suisse linked board diversity to better stock market and financial performance, including 26% higher share performance over a six-year period, higher return-on-equity, lower leverage, higher price/book ratios and improved growth prospects ( Gender Diversity and Corporate Performance, August 2012). Their research suggests several explanations for this better performance including, among other factors, a stronger mix of leadership skills, improved understanding of consumer performance, a larger pool from which to pick top-10 talent, and more attention to risk.
Additional research demonstrates that companies with more women on their boards outperform companies with fewer familiar female directors by 53% on return-on-equity, 42% on return-on-sales, and 66% on return-on-invested capital over a four-year timeframe (Catalyst, Inc., The Bottom Line: Corporate Performance and Women’s Representation on Boards, 2007). Thomson Reuters researched 4,100 global companies and found that companies with no female directors tended to underperform companies with mixed boards over a five-year period ( Mining the Metrics of Board Diversity , June 2013).
Various studies cite a critical mass of at least three women directors as strengthening corporate governance (research from Hebrew University, Wellesley Centers for Women, University of Western Ontario and V. Kramer Associates).


26



A 2014 PriceWaterhouseCoopers survey of institutional investors representing more than $11 trillion in assets stated: “Nine out of 10 investors believe boards should be revisiting their director diversity policies, and 85% believe doing so will require addressing underlying impediments…”
Joy Global lags on board diversity; 92% of S&P companies have at least one female director, and the average is two female directors (2014 ISS Board Practices Study.) Approximately 80% S&P MidCap companies and 63% of S&P SmallCap companies have at least one female director.
We believe that the Company would benefit from expanding its recruitment pool for directors and promoting a more diverse board.

Board of Directors’ Statement in Opposition
The Board of Directors recommends a vote against this shareholder proposal. The Board of Directors and the Human Resources and Nominating Committee believe that the company’s current director nomination process allows for identification of qualified director candidates and the consideration of director diversity. In this respect, in late 2013 the Board of Directors adopted a policy with respect to director diversity that is substantially the same as the policy that the shareholder proposal asks the Board to adopt. The 2013 policy, which is contained in the company’s Corporate Governance Principles, provides:

Consistent with applicable law and the exercise of its fiduciary duties, the Human Resources and Nominating Committee will seek to include diverse candidates, including women and minority candidates, in the pool of candidates from which it recommends director nominees. If the Human Resources and Nominating Committee engages a director search firm or other professional to assist it in identifying director nominees, it will refer such firm or other professional to these director qualifications and advise that diverse candidates meeting these qualifications should be identified in the candidate pool.
The 2013 revisions to the company’s Corporate Governance Principles also provide that when the Human Resources and Nominating Committee reviews director candidates, it will consider, among other factors, diversity, which is “viewed comprehensively, including with respect to background, experience, skill, education, age, gender, race, ethnicity and national origin.” At the same time, the Board of Directors also revised the Human Resources and Nominating Committee charter to provide the Committee with authority to “conduct appropriate inquiries into the backgrounds and independence from the company of director candidates, as well as the candidates’ satisfaction of the director qualifications set forth in the Corporate Governance Principles.”
The Board of Directors and the Human and Resources and Nominating Committee seek to obtain qualified director candidates, as evaluated under the criteria set forth in the company’s Corporate Governance Principles. These criteria provide for the same consideration of diversity, including with respect to gender, race, ethnicity and national origin, as the shareholder proposal. Accordingly, the Board of Directors believes that adoption of the shareholder proposal is unnecessary as it would be redundant of the policy it implemented in 2013.
FOR THE FOREGOING REASONS, THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE AGAINST THE SHAREHOLDER PROPOSAL.




27



CORPORATE GOVERNANCE

Board of Directors Structure and Operations

The Board of Directors is responsible for the oversight of the management and direction of the corporation and for establishing broad corporate policies. The Board’s approach to corporate governance is reflected in our Corporate Governance Principles and the structure of Board committees that operate under written charters. The Corporate Governance Principles and charters for the Board’s three standing committees – Audit, Human Resources and Nominating, and Executive – may be viewed on our website: www.joyglobal.com, under the Governance tab in the Leadership section of the Investor Center page.

The Board of Directors is comprised of nine directors. The Board determined that all directors other than Mr. Doheny are independent under New York Stock Exchange listing standards. The Board completed a self-assessment of Board performance for Fiscal 2015 .

Board Leadership Structure

The Board of Directors determines the most suitable leadership structure from time to time. Our bylaws provide that the offices of Chief Executive Officer and Chairman of the Board are separate positions, but may be held by the same person. Currently, Edward Doheny serves as our Chief Executive Officer. John Nils Hanson, our former Chief Executive Officer who retired in 2007, serves as Chairman of the Board, and Steven Gerard serves as our Lead Independent Director. In 2007, the Board appointed a Lead Independent Director at a time when Mr. Hanson was not considered to be an independent director due to his prior employment as our Chief Executive Officer. Notwithstanding that Mr. Hanson is independent under New York Stock Exchange listing standards, the Board has elected to retain our existing leadership structure and division of responsibilities between the positions of Chairman and Lead Independent Director, and the separation of these positions from the position of Chief Executive Officer. The Board of Directors concluded that this leadership structure and division of responsibilities between the positions of Chairman, Lead Independent Director, and Chief Executive Officer has served us well in the past and we anticipate maintaining this structure for the current year.

The Lead Independent Director’s responsibilities include:

leading meetings of the independent directors, including executive sessions of the independent directors held in conjunction with meetings of the full board of directors;
calling meetings of the independent directors and setting the agenda for such meetings;
briefing the Chief Executive Officer and any other director not participating in a meeting of independent directors regarding matters discussed in the executive sessions or meetings of the independent directors, and reporting back to the independent directors as appropriate;
soliciting suggestions from management on matters that they would like the independent directors to review or act upon in their meetings or executive sessions;
chairing meetings of the Board when the Chairman is not in attendance;
acting as representative or spokesman for the independent directors where advisable in communications with shareholders, other stakeholders or the media; and
generally acting as liaison among the directors and with management.



28



Risk Management

As stated in our Corporate Governance Principles, the Board of Directors is responsible for assessing the major risks facing us and for reviewing options to mitigate such risks as part of its general oversight duties. In executing this responsibility, the Board has delegated authority to the Audit Committee to assist the Board of Directors in monitoring the company’s overall risk management profile by reviewing and discussing with management the company’s guidelines and policies governing risk assessment and risk management, major financial risk exposures and the steps management has taken to monitor and control such exposures, and recommending to the Board of Directors any appropriate actions or policies to manage the company’s risks. These actions or policies may relate to risk assessment, internal control, management of financial risks, and risk management policies generally. It is the role of management to present these and other material risks in a clear and understandable manner as part of its broader responsibility to keep the Board of Directors well-informed on all matters of significance to the corporation. We believe that our current leadership structure facilitates this clear delineation of responsibility with respect to our risk management process.

Meetings

The Board of Directors held seven meetings during Fiscal 2015 . Each incumbent director who served on the Board during Fiscal 2015 attended at least 92% of the Board meetings and committee meetings of which he was a member that were held during the fiscal year. The Board of Directors met without the Chief Executive Officer four times in Fiscal 2015 . Each person serving as a director at the time of the 2015 annual meeting attended the 2015 annual meeting. We expect all directors to attend the 2016 annual meeting.

Communications

Shareholders, employees, and other interested parties may communicate with the Board of Directors, a committee of the Board, or particular directors by sending communications in care of the Secretary at Joy Global Inc., 100 E. Wisconsin Avenue, Suite 2780, Milwaukee, Wisconsin 53202. Shareholders, employees, and other interested parties also may submit communications electronically at http://investors.joyglobal.com/interestedparties.cfm. The Secretary will forward all such communications to the Board of Directors, the applicable committee, or to particular directors as appropriate. Communications intended as or relating to shareholder proposals pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) must be addressed to the Secretary as specified under the heading “Submission of Shareholder Proposals” on page 82.

Governance, Ethics, and Communications Policies

Corporate Governance Principles

The Board of Directors has adopted Corporate Governance Principles to set forth its guiding principles concerning our governance practices relating to the size and function of the Board of Directors. The Corporate Governance Principles address, among other items, the Board’s principles regarding director independence, the functions of the Chairman and Lead Independent Director, executive sessions of independent directors, committee structure and responsibilities, evaluations of the board and the Chief Executive Officer, succession planning, and management responsibilities. You will find our Corporate Governance Principles on our website, www.joyglobal.com, under the Governance tab in the Leadership section of the Investor Center page.


29



Code of Ethics

The Board of Directors has adopted a Code of Ethics applicable to the Chief Executive Officer and senior financial officers, including the Chief Financial Officer and Chief Accounting Officer. The most recent version of the Code of Ethics, which is consistent with regulations of the Securities and Exchange Commission (“SEC”) and New York Stock Exchange listing standards, is available on our website at www.joyglobal.com, under the Governance tab in the Leadership section of the Investor Center page.

In the event of any amendment to, or waiver from, a provision of the Code of Ethics, we will promptly post the date and nature of such amendment or waiver, as well as related information, on our website.

Worldwide Business Conduct Policy and Employee Training and Certification

The Board of Directors has adopted the Joy Global Inc. Worldwide Business Conduct Policy, which governs the actions of all officers, employees, and directors of Joy Global and our subsidiaries. The Worldwide Business Conduct Policy is designed to foster compliance with all applicable legal requirements and to reflect our commitment to the highest principles of business ethics and integrity. The Worldwide Business Conduct Policy is published in the primary language of the countries in which we operate and is made available to all employees. The Worldwide Business Conduct Policy is available on our website, www.joyglobal.com, under the Governance tab in the Leadership section of the Investor Center page.

We require U.S. full-time salaried employees who are not members of a collective bargaining group, equivalent employees outside of the United States, and certain third parties worldwide to complete the Joy Global Inc. Worldwide Business Conduct Policy Training and Certification Program on an annual basis. This program includes completion of online ethics training and certification that the employee or third party has reviewed the Worldwide Business Conduct Policy and has disclosed all known violations of this policy to management. The online ethics training provides guidance on how to properly identify potential Worldwide Business Conduct Policy violations and appropriately respond to possible violations. In Fiscal 2015 , approximately 5,800 employees and third parties completed the mandatory program, which was conducted in the primary language of the countries where those employees and such third parties were required to participate.

In addition, all members of our Board of Directors annually certify that they have complied with the Worldwide Business Conduct Policy.

Employee Hotline

Communications from employees regarding accounting, internal accounting controls, auditing matters, or any violation of the Joy Global Inc. Worldwide Business Conduct Policy may be directed to the Secretary, or may be made anonymously through the Joy Global Inc. Employee Hotline. Employees may access the Employee Hotline 24 hours a day, seven days a week through a toll-free number or by making an online report with our third-party Employee Hotline service provider. We prohibit retaliation against any employee who raises a good faith concern regarding compliance with the Worldwide Business Conduct Policy or any other corporate governance policy.



30



Committees

The Board’s standing committees are the Audit Committee, the Human Resources and Nominating Committee, and the Executive Committee. In addition, the Board may from time to time authorize additional ad hoc committees, as it deems appropriate.

Audit Committee and Audit Committee Financial Expert

The Audit Committee is a separately designated committee of the Board, established in accordance with Section 3(a)(58)(A) of the Exchange Act. Current members of the Audit Committee are Gale E. Klappa (Chair), Steven L. Gerard, P. Eric Siegert, and James H. Tate. The Board of Directors has determined that Messrs. Klappa, Gerard and Tate are each audit committee financial experts within the meaning of SEC rules. The Board of Directors has also determined that all members of the Audit Committee are independent and financially literate under New York Stock Exchange Listed Company Manual Sections 303A.02 and 303A.07, respectively.

The Audit Committee has the sole authority to appoint and replace the Independent Auditor and is directly responsible for the compensation and oversight of the Independent Auditor. The Audit Committee met 10 times during Fiscal 2015 . The primary function of the Audit Committee is to assist the Board in monitoring:

(1)
the integrity of our financial statements, including our internal control over financial reporting;
(2)
the Independent Auditor’s qualifications and independence;
(3)
the performance of our internal audit function and the Independent Auditor;
(4)
our overall risk management profile, including risk assessment, management of financial risks, and risk management policies; and
(5)
compliance with legal and regulatory requirements.

Human Resources and Nominating Committee

Current members of the Human Resources and Nominating Committee are John T. Gremp (Chair), Mark J. Gliebe, and Richard B. Loynd. The Human Resources and Nominating Committee met five times during Fiscal 2015 . The Board of Directors has determined that all members of the Human Resources and Nominating Committee are independent under New York Stock Exchange Listed Company Manual Section 303A.02.

The primary functions of the Human Resources and Nominating Committee are to:

(1)
develop and recommend to the Board corporate governance principles;
(2)
review management staffing and make recommendations to the Board;
(3)
review and approve management compensation programs;
(4)
administer our equity and incentive compensation plans;
(5)
evaluate the Board and management;
(6)
evaluate Board practices and make recommendations to the Board;
(7)
develop and recommend qualifications for directors to the Board;
(8)
manage a process for identifying and evaluating director nominees;


31



(9)
evaluate and recommend to the Board director nominees; and
(10)
develop and recommend to the Board director compensation programs.
The Human Resources and Nominating Committee will consider director candidates recommended by shareholders. Shareholder nominations of directors for election at an annual meeting of shareholders must be directed to our principal executive offices, 100 E. Wisconsin Avenue, Suite 2780, Milwaukee, Wisconsin 53202, to the attention of the Secretary, not less than 90 days before nor more than 120 days before the first anniversary of the preceding date of the previous year’s annual meeting. A shareholder nomination of a director candidate must comply with, and contain all of the information specified in, our bylaws.

When reviewing director candidates, the Human Resources and Nominating Committee is directed by our Corporate Governance Principles to consider the following qualifications for service as a director:

(1)
the background, experience, skills and education of the candidate, which shall include, but not be limited to, consideration of public company experience, industry background, international experience, leadership, diversity (viewed comprehensively, including with respect to background, experience, skill, education, age, gender, race, ethnicity and national origin), capital markets, accounting, legal or regulatory expertise and other qualities it deems important to enhance the ability of the Board of Directors to manage and direct our affairs;
(2)
ability to comprehend and advise with respect to our goals and strategy and ability to effectively oversee management’s actions to implement a strategic plan to accomplish our goals;
(3)
a history of conducting his or her professional and personal affairs with the utmost integrity and observing the highest standards of values, character, and ethics; and
(4)
a willingness to invest the time necessary to prepare for Board and committee meetings, to attend Board and committee meetings, to be present at annual shareholder meetings, and to be available for consultation with other directors and executive management.
The Human Resources and Nominating Committee also believes that it is generally desirable for all non-employee directors to be able to satisfy the criteria for independence established by the SEC and New York Stock Exchange listing standards. The Board of Directors has determined that each director, other than Mr. Doheny, is a non-employee director and is independent under New York Stock Exchange listing standards.

The Human Resources and Nominating Committee and the Board of Directors have also developed procedures for identifying and evaluating persons recommended to be nominated for election as directors, including nominees recommended by shareholders. Under these procedures, the Committee will, among other things:

(1)
review the qualifications and performance of incumbent directors to determine whether the Committee recommends that they be nominated for a further term;
(2)
investigate and review the backgrounds and qualifications of candidates recommended by shareholders, management, or other directors to determine their eligibility to be nominated to become directors;
(3)
consider the appropriateness of adding additional directors to the Board; and
(4)
interview candidates for nomination.
In evaluating candidates for the Board of Directors, the Human Resources and Nominating Committee considers the qualifications discussed above. The Human Resources and Nominating Committee will seek


32



to include diverse candidates meeting these qualifications, including women and minority candidates, in the pool of candidates from which it recommends director nominees, consistent with applicable law and the exercise of its fiduciary duties. In addition, if the Committee engages a director search firm or other professional to assist in the identification of director nominees, it will provide instructions that diverse candidates meeting our director qualification standards be identified in the candidate pool. The Committee intends to monitor this issue over time.

Executive Committee

Current members of the Executive Committee are John Nils Hanson (Chair), Edward L. Doheny, and Steven L. Gerard. The Executive Committee may act upon a matter when it determines that prompt action is in the best interests of the corporation and it is not feasible to call a meeting of the full Board. In connection with the performance of its responsibilities, the Executive Committee has all powers of the Board of Directors, except as prohibited by law or otherwise limited by our Certificate of Incorporation or bylaws or by Board resolution.

In addition, the Executive Committee possesses authority to consider specific proposals to:

(1)
modify the corporation’s capital structure;
(2)
acquire or divest businesses;
(3)
acquire a company;
(4)
make significant investments in the corporation; or
(5)
entertain strategic alliances with the corporation.
The Executive Committee does not have regularly scheduled meetings and did not meet in Fiscal 2015 .


33



EXECUTIVE COMPENSATION
COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis discusses our executive compensation policies and decisions that affect the compensation that we pay to our named executive officers. These policies and decisions are established by the Human Resources and Nominating Committee of our Board of Directors, which we refer to in this Compensation Discussion and Analysis as the Committee.

The purpose of this discussion and analysis is to provide an overview of our compensation philosophy and practices in order to provide our investors with an understanding of how and why our executive compensation decisions are made. This includes our emphasis on performance-based compensation, the role of the Committee, the process through which the Committee makes compensation determinations, and the components of our compensation program for our named executive officers. When we refer to our named executive officers, we are referring to the five individuals listed below, who were our executive officers serving at the end of Fiscal 2015 and our former Executive Vice President and Chief Operating Officer, who departed on September 4, 2015. These individuals were the only persons who served as our executive officers in Fiscal 2015. The Fiscal 2015 compensation for the following individuals is set forth below in the Summary Compensation Table and subsequent compensation tables:

Edward L. Doheny II, our President and Chief Executive Officer;
James M. Sullivan, our Executive Vice President and Chief Financial Officer;
Sean D. Major, our Executive Vice President, General Counsel and Secretary;
Johannes S. Maritz, our Executive Vice President, Human Resources; and
Randal W. Baker, our former Executive Vice President and Chief Operating Officer.

Overview of Executive Compensation Policies and Fiscal 2015 Compensation

Our Compensation Philosophy, Policies and Practices

Executive Compensation Philosophy

Our goal is to retain and attract experienced and talented executive officers and to develop them to achieve our short-term and long-term operational and strategic objectives that produce and promote shareholder value. To achieve this goal, we seek to provide opportunity for our executive officers and other senior managers to earn compensation that is competitive with other manufacturing companies of comparable size, global reach and complexity. In addition, we strongly emphasize a culture of pay for performance in order to provide incentives and accountability for our executive officers and other senior managers in working toward the achievement of our strategic and operational objectives. Accordingly, we have designed our incentive programs with the goal of ensuring that actual realized pay varies above or below targeted compensation opportunity based on achievement of challenging performance goals and demonstration of outstanding commitment and contribution to our performance.

Pay for Performance

Because our executive officers have primary responsibility for developing and executing our short- and long-range business strategy, they have the greatest impact on our performance and should be held most accountable for results. Our executive compensation program is therefore designed to increase the proportion of an


34



executive’s pay that is considered to be “at-risk” as his or her responsibilities increase. We consider at-risk pay to include annual cash incentive awards and long-term equity awards and believe that such compensation should have the potential to significantly exceed our named executive officers’ base salary. Targets are set for both the annual cash incentive and performance awards at levels that will reward our executive officers for the achievement of outstanding and sustained company performance over time. We believe this emphasis on performance-based compensation as the most significant aspect of our executive officers’ compensation package aligns the interests of our executives and shareholders and provides strong incentives for these individuals to execute our corporate strategy and positively influence our overall performance.

Compensation Governance Practices

Our executive compensation programs include the following governance best practices:

Executive Employment Agreements . We do not maintain employment agreements with our named executive officers, other than change in control and indemnification agreements. Accordingly, our named executive officers are not provided with minimum base salaries or pre-determined bonuses, equity awards or other incentives.

Equity Grant Practices . We conduct an annual compensation review at the Committee's first meeting of our fiscal year, which is normally held in early December, at which the Committee grants equity awards and determines the payout of performance awards granted in prior years. With the exception of new hire grants and grants made in Fiscal 2013 in connection with our executive leadership succession process, our practice is to grant equity awards only as part of this annual compensation process. Stock option grants are never backdated and are issued with an exercise price equal to the fair market value of our common stock on the date of the grant. Stock options may not be repriced without shareholder approval, other than pursuant to an adjustment that affects all shares of our common stock.

Executive Stock Ownership Levels . Since Fiscal 2010, all of our equity award agreements have contained provisions limiting the ability of our executive officers to sell our common stock unless they have satisfied minimum stock ownership requirements. Under these requirements, our Chief Executive Officer is expected to own shares having a market value equal to at least five times his base salary and our other executive officers are expected to own shares having a market value equal to at least two and one-half times their base salaries. Unless these ownership levels are satisfied, at the time a trade is executed our Chief Executive Officer and other executive officers are required to retain shares of our common stock having a market value equal to at least 50% and 25%, respectively, of pre-tax compensation realized upon payment of any stock-settled performance awards, exercise of any stock options or settlement of any restricted stock units.

Ability to “Claw Back” Incentive Awards . Our Board of Directors adopted a Compensation Recovery Policy, effective December 1, 2015, under which we will seek to recover cash or equity-based incentive-based compensation from current or former executive officers and employees if we are required to restate any of our previously issued financial statements due to material non-compliance with any financial reporting requirement under the federal securities laws. This policy will require the company, in most circumstances, to obtain reimbursement of compensation that is granted, earned or vested based on achievement of a financial reporting measure in the three years preceding the date a restatement becomes required. In addition, our equity award agreements issued since Fiscal 2011 have contained “clawback” provisions pursuant to which we may seek to recover equity-based compensation from any current or former named executive officer if we are required to restate any


35



previously issued financial statements due to material non-compliance with any financial reporting requirement under the federal securities laws.

Performance Awards - No Dividend Accrual . Performance award payouts are based solely on achievement of stated performance criteria. We do not pay dividends or dividend equivalents on performance awards.

Stock Options - No Dividend Accrual . We do not pay dividends or dividend equivalents on stock options.

Tax Treatment of Perquisites . In January 2015 we eliminated tax gross-ups for club initiation fees and personal use of corporate aircraft. We only provide gross ups for personal income taxes incurred in connection with our broad-based relocation program and in connection with post-separation welfare benefits.

No Gross-ups on Severance Payments . Our change of control agreements with our named executive officers do not provide for “golden parachute” or other excise tax reimbursements on severance payments, other than in connection with post-separation welfare benefits. These agreements also permit the executive to elect to receive a lower payment from us if it would result in the executive receiving a higher benefit after application of federal excise taxes.

Compensation Program Risk Assessment . We annually evaluate our compensation practices for potential risks. We do not believe that our compensation policies or practices present risks that may have a material adverse effect on our business, results of operations, or liquidity.

Independent Compensation Consultant . The Committee has retained an independent compensation consulting firm that does not provide any other services to the company.

Adoption of Double-Trigger Vesting for Equity Award Grants . In December 2015, we amended our change of control employment agreements with our named executive officers to provide that beginning in Fiscal 2016, equity award grants will be subject to “double-trigger” vesting provisions in the event of a change of control. As a result of these revisions, future equity awards, including any awards granted under the 2016 Plan, if it is adopted by shareholders, will vest upon a qualifying termination following a change of control, rather than vesting automatically upon the occurrence of the change of control.

Consideration of Prior Shareholder Advisory Votes on Executive Compensation

Management and the Committee have considered the view of our shareholders, as expressed through their annual advisory vote on our executive compensation, in the development of our executive compensation program. In this regard, shareholders supported our named executive officers’ compensation at the 2014 annual meeting, which was the most recent vote at the time Fiscal 2015 compensation decisions were made, with 98% of the vote. At our 2015 annual meeting, our shareholders again expressed support for our named executive officers’ 2014 compensation with 97% of votes cast. We view these levels of shareholder support for our executive compensation program as indicative of broad shareholder agreement with the philosophy and policies on which our executive compensation program is premised. In particular, we believe that shareholders support our belief that performance-based compensation should be the largest component of executive officer compensation packages. As a result, we and the Committee considered the results of the shareholder advisory vote at the 2015 annual meeting and determined to continue our practice of emphasizing


36



performance-based compensation. We believe that the matters discussed herein, including “Key Fiscal 2015 Compensation Decisions,” demonstrate our ongoing commitment to refine and improve our executive compensation in accordance with our executive compensation philosophy.

Our 2015 Performance and Compensation

We are a leading manufacturer and servicer of high productivity mining equipment for the extraction of metals and minerals. We manufacture and market original equipment and parts and perform services for both underground and surface mining, as well as certain industrial applications. Our equipment is used in major mining regions throughout the world to mine coal, copper, iron ore, oil sands, gold and other minerals and ores. We also offer comprehensive direct service, which includes our smart service offerings, near major mining regions worldwide and provide extensive operational support for many types of equipment used in mining.

Fiscal 2015 was one of the most challenging years for the commodities markets in decades. Our financial results continued to be pressured by the follow on effects of weaker commodity pricing, with customers delaying capital expenditures and maintenance decisions, idling equipment and further rationalizing required parts and service. Most commodity markets remained in surplus in Fiscal 2015, which contributed to a depressed pricing environment and a third consecutive annual decline in mining industry capital expenditures. Despite these market conditions, we remained focused on solving our customers’ toughest challenges, accelerating our footprint optimization plans, implementing further cost reductions and driving cash from operations to strengthen our balance sheet.

Fiscal 2015 strategic highlights include:

We advanced our underground hard rock growth strategy by complementing our 2014 purchase of Mining Technologies Inc. with the acquisition Montabert S.A.S which specializes in the design, production and distribution of high quality hydraulic rock breakers, drilling equipment and related parts and tools;

We delivered our new underground hard rock loader which utilizes our proprietary switched reluctance technology and is expected to be more efficient and last longer than competitive equipment;

We delivered our first hybrid excavator which also utilizes our switched reluctance technology with the hybrid diesel-electric system and expands our market coverage;

We exceeded our cost reduction targets;

We delivered strong cash flow which positioned us to strengthen our balance sheet through the early redemption of our $250 million aggregate principal amount of our 6% Senior Notes due November 2016; and

We proactively amended our Credit Agreement to provide increased financial flexibility for an extended downturn by increasing our near-term leverage limits.

We continue to focus on direct service, technology and operational execution in this challenging market, all while optimizing our global manufacturing footprint. Achieving this balance is critical for our business, as it will make us more efficient, responsive and competitive throughout the current part of the cycle and better positioned for profitable growth as markets improve.


37



The following table highlights key metrics of our financial performance for Fiscal 2015 and the two preceding fiscal years.

Financial Highlights
Fiscal 2015
Fiscal 2014
Fiscal 2013
(in thousands, except per-share information)
 
 
 
Net Sales

$3,172,147


$3,778,310


$5,012,697

Gross Profit

$838,922


$1,124,077


$1,613,129

Gross Profit Percentage
26.4
 %
29.8
%
32.2
%
Impairment Charges

$1,338,241



$155,200

Operating (Loss) Income

($1,109,389
)

$527,526


$835,430

Operating (Loss) Income Percentage
(35.0
)%
14.0
%
16.7
%
Net (Loss) Income

($1,178,004
)

$338,118


$536,534

Diluted (Loss) Earnings Per Share from Continuing Operations

($12.08
)

$3.35


$5.02

Cash Dividends Per Share

$0.80


$0.75


$0.70

Weighted Average Diluted Shares Outstanding
97,493

100,939

106,996


Key Fiscal 2015 Compensation Decisions

Base Salaries . In January 2015 , base salaries were increased by 3% for Messrs. Sullivan, Major, Maritz and Baker, which was consistent with the range of annual salary increase provided to our other salaried employees. Mr. Doheny received a 5% salary increase in January 2015 to bring his compensation in line with market data.

Annual Cash Incentive Payouts . No annual cash incentive awards were paid to named executive officers for Fiscal 2015 because our adjusted operating profit margin did not exceed 10%, which was the threshold established by the Committee for the payment of such awards.

Long-Term Incentive (“LTI”) Award Grants . In Fiscal 2015, we provided LTI award grants to our named executive officers that consisted of 60% performance awards, 25% stock options and 15% restricted stock units. This allocation reflects an increased weighting of performance shares compared to our Fiscal 2014 grant practice and provides a greater emphasis on LTI opportunity that is tied to specific operating goals.

No Payout for Fiscal 2013 Performance Awards . Our executives did not receive any payout for performance awards granted in Fiscal 2013 due to financial performance that fell below the minimum threshold level of average EPS performance over the three-year performance period that concluded in Fiscal 2015. The minimum threshold for payout for this performance period was $4.45, while our average annual adjusted EPS during this period was $3.72. This outcome was the result of the continuing deterioration of global mining industry conditions throughout the performance period.

Fiscal 2015 Total Direct Compensation

The Committee annually determines the mix and weightings of the elements of our compensation program. We believe the relative weighting of base salary to performance-based compensation, consisting of short-


38



term cash incentives and long-term equity awards, reflects our commitment to pay for performance principles. In this proxy statement, we refer to short-term incentives and LTI awards as “at-risk” compensation due to the fact that the value of such compensation is tied to our operating performance and the performance of our common stock. We refer to base salary and at-risk compensation together as total direct compensation.

The following table provides an overview of total direct compensation received by our named executive officers in Fiscal 2015 . This table does not include all of the information included in the Summary Compensation Table, which appears on page 55. In particular, this table excludes amounts reported in the “Change in pension value and nonqualified deferred compensation” and “All other compensation” columns of the Summary Compensation Table.

Fiscal 2015 Direct Compensation

Named Executive Officer

2015 Base Salary

Short-Term Incentives

Stock and Option Awards
2015 Total Direct Compensation

% Change from 2014
 
 
 
 
 
 
Mr. Doheny
$983,155
$0
$4,231,838
$5,214,993
19.4%
Mr. Sullivan
$570,045
$0
$1,271,402
$1,841,447
3.6%
Mr. Major
$489,654
$0
$855,861
$1,345,515
(6.3)%
Mr. Maritz
$387,338
$0
$676,342
$1,063,680
(7.5)%
Mr. Baker  (1)
$729,715
$2,333,272
$2,029,026
$5,092,013
(12.7)%

(1) Short-term incentives for Mr. Baker are comprised of severance payments in connection with his separation from the company on September 4, 2015.

The table below reflects the mix of total direct compensation for Fiscal 2015 for our Chief Executive Officer and the average mix for our other named executive officers. Highlights of our mix of total direct compensation for Fiscal 2015 include the following:

At-risk compensation exceeded 75% of total direct compensation for our Chief Executive Officer and two-thirds of total direct compensation for all of our other named executive officers;
Equity awards are the most significant component of our executive compensation program, with future realizable compensation dependent upon our operating performance and change in share price over a number of years; and
Named executive officers did not receive short-term incentive compensation because our adjusted operating profit margin did not exceed the threshold established by the Committee for the payment of such awards.



39




Our Compensation Decision Process

Role of the Committee, Independent Consultant and Management

The Committee serves as our compensation committee and is charged with overseeing and administering all compensation actions related to our named executive officers. The Committee’s charter is available on our website.

The Committee is specifically authorized in its charter to retain external legal, accounting, or other advisors and consultants. The Committee has retained Frederic W. Cook & Co., Inc. (“Cook & Co.”) as its independent executive compensation consultant. Cook & Co. was retained directly by the Committee, performed no other services for us in Fiscal 2015 , and worked with management only under the direction of the Committee chair. The Committee has assessed the independence of Cook & Co. pursuant to the New York Stock Exchange listing standards and SEC rules and is not aware of any conflict of interest that would prevent Cook & Co. from providing independent advice to the Committee.

Among other tasks assigned by the Committee, in Fiscal 2015 Cook & Co.:

provided assistance with a review of our long-term incentive programs and the competitiveness of our grant practices;
prepared annual analyses on the competitiveness of compensation to be paid to our Chief Executive Officer, other named executive officers and our non-employee directors;
provided advice to the Committee on executive compensation trends and regulatory developments, including the design and implementation of our clawback policy; and
provided advice and assistance developing the 2016 Plan.

Our Chief Executive Officer and Executive Vice President, Human Resources work with internal resources and Cook & Co. to design compensation and benefit programs applicable to executive officers, recommend amendments to existing compensation and benefit programs, prepare necessary briefing materials for the Committee’s review as part of its decision-making process and implement Committee decisions.



40



Use of Market Compensation Data

Before the Committee makes the foregoing determinations, the Chief Executive Officer provides his recommendations to the Committee on compensation actions for all executive officers, other than himself. The Chief Executive Officer also discusses with the Committee his assessment of the performance of our executive officers and any other factors that he believes the Committee should consider in making compensation decisions. The Committee reviews competitive market compensation data for our executive officers compared to similarly situated executives in a peer group, which for Fiscal 2015 consisted of the 14 manufacturing companies listed below:

     AGCO Corporation
     Ingersoll-Rand plc
     Cameron International Corporation
     The Manitowoc Company, Inc.
     Crane Co.
     Oshkosh Corporation
     Dover Corporation
     Pentair Ltd.
     Flowserve Corporation
     Terex Corporation
     Harsco Corporation
     The Timken Company
     Illinois Tool Works Inc.
     Trinity Industries, Inc.

In selecting the peer group, the Committee considered publicly traded manufacturing companies with reasonably comparable business operations, market capitalization and revenues. The peer group companies generally utilize similar business models and, like Joy Global, operate in highly competitive global markets. However, we are the only large, independent public company in the United States engaged solely in manufacturing and servicing equipment for the mining industry. Accordingly, cyclical fluctuations in the mining industry due to commodity price volatility, competitive pressures or economic factors affecting the industry may cause our results for any particular period to differ significantly from those of some or all of the other manufacturing companies included in the peer group. The Committee evaluates peer group composition annually and makes changes as it deems appropriate. The Committee determined in September 2014 that the peer group used for Fiscal 2015 would have the same composition as the peer group used in Fiscal 2014. In September 2015, the Committee determined that the peer group for Fiscal 2016 will add Colfax Corporation, Kennametal Inc., Oceaneering International, Inc. and Superior Energy Services, Inc. and remove Illinois Tool Works and Ingersoll-Rand to better reflect the company's current size.

In addition to reviewing peer group data, the Committee reviews third party survey data from Aon Hewitt and the Hay Group in order to obtain additional insight into market compensation practices. The identity of the companies comprising the survey data is not disclosed to, or considered by, the Committee in its decision-making process.

Establishing Executive Compensation

We have not entered into employment agreements with our named executive officers that determine their annual compensation. Instead, the Committee conducts an annual assessment to establish appropriate compensation levels based on its evaluation of executive performance and achievement of objectives and metrics selected to measure such performance. The Committee annually reviews our compensation structure and programs, including potential risks that may be associated with particular forms of compensation; retirement, benefit, severance programs; and management succession plans. The Committee annually reviews the role of the Chief Executive Officer in our performance and in advancing our strategic objectives and


41



other factors relating to his performance during the year, as well as establishing his performance objectives and targets for the upcoming fiscal year.

The Committee makes its annual compensation decisions at its first meeting of our fiscal year, which is normally held in early December. At this meeting, the Committee evaluates performance against targets for the just-concluded performance periods, and determines the associated corporate performance payout components, determines awards earned by executive officers under our annual incentive program for the previous fiscal year, and grants annual equity awards.

At the meeting, the Committee also establishes target levels of total compensation for our executive officers for the current fiscal year. The Committee’s general goal is to position target compensation, on average, at the median of the peer group for the named executive officers. Target compensation for each named executive officer may be set above or below median based on a variety of factors, including time in position, sustained performance over time, readiness for promotion to a higher level, and skill set and experience relative to external market counterparts. Actual compensation to each named executive officer varies above or below the target level based on the degree to which specific performance goals are attained in the variable incentive plans, changes in stock value over time, and the individual performance of each executive. Once an overall target compensation level is established, the Committee considers the weight of each principal component of compensation within the intended total target compensation. The principal components of compensation include base salary, annual cash incentives, performance awards, stock options and restricted stock units, each of which is described in the following section of this Compensation Discussion and Analysis.

In setting target levels of compensation, our executive compensation program takes into account marketplace compensation for executive talent, internal equity with our employees, past practices, business and individual results, and the talents, skills, and experience of our individual executive officers. With respect to our Chief Executive Officer, the Committee reviews salary adjustments and incentive plan payouts for the most recently concluded one- and three-year performance periods. The Committee then recommends targets for the upcoming one- and three-year performance periods based upon benchmarking studies for other chief executives within our peer group.

With respect to performance-based compensation, the Committee establishes, using information provided by management and in consideration of the annual budget and long-term strategic plan approved by the Board of Directors, performance criteria and target goals for the participants at the beginning of each performance period. At the conclusion of a performance period, performance is measured against the pre-established criteria for each program. Once threshold performance levels have been achieved, we utilize multiple measures of performance under our programs to ensure that no single aspect of performance is rewarded in isolation of the various performance criteria affecting shareholder value. We believe this approach results in a balanced evaluation of executive performance and prevents performance incentives from being distorted in a manner that may adversely affect our operations.

Principal Components of Fiscal 2015 Executive Compensation

Our executive compensation program has five principal components that are intended, collectively, to compensate and create incentives for our named executive officers with respect to annual and long-term performance. These five principal components are base salary, annual cash incentives, performance awards, stock options and restricted stock units.



42



Salary

Base salary is intended to provide our executive officers with a level of stable income that is competitive within our peer group. There are also motivational and reward aspects to base salary, as base salary can be adjusted from year to year to account for considerations such as individual performance and time in position. Base salary is also a factor in determining the amount of awards under, and eligibility to participate in, many of our compensation and benefits arrangements. The Committee establishes base salaries for our named executive officers annually at its first meeting of the fiscal year. To maintain peer competitiveness, in January 2015 each of our named executive officers received salary increases of 3%, except Mr. Doheny who received an increase of 5% in order to bring his compensation more closely in line with the market median.

 
 
 
 
Name
2014 Base
Salary ($)
2015 Base
Salary ($)
Percent
Increase
 
 
 
 
Mr. Doheny
927,000
973,350
5%
Mr. Sullivan
546,000
562,380
3%
Mr. Major
469,000
483,070
3%
Mr. Maritz
371,000
382,130
3%
Mr. Baker
824,000
848,720
3%

Annual Cash Incentives

As part of our pay-for-performance philosophy , we establish annual cash incentives for our executives and managers to achieve selected financial, strategic, and other business goals. This plan is intended to link employee pay to the performance of the business and reward employees for improvements in profitability and asset utilization.

Based on peer group and market survey data, the Fiscal 2015 target cash incentive opportunity for each named executive officer was as follows.

 
 
 
Name
Fiscal 2015 Target Cash Incentive as Percent of Base Salary
Fiscal 2015 Target Cash Incentive
($)
 
 
 
Mr. Doheny
100%
973,350
Mr. Sullivan
70%
393,666
Mr. Major
60%
289,842
Mr. Maritz
60%
229,278
Mr. Baker
80%
678,976



43



We award two-thirds of calculated annual cash incentive based on company-wide performance. The remaining one-third is allocated based on individual performance with respect to various performance objectives, as described in more detail below. While the final annual cash incentive to the named executive officers is ultimately in the judgment of the Committee, any such payout will occur only if the following company financial goals are achieved.
 
 
 
Annual Incentive Metric
 
Rationale
 
 
 
 
 
 
Gate:
 
 
Positive Adjusted Pre-tax Income
 
    Qualifies the annual cash incentive for deductibility under Section 162(m). Failure to attain this goal results in no annual cash incentive payout.
 
 
 
 
 
 
 
 
Primary:
 
 
Adjusted Operating Profit as Percentage of Net Sales (Adjusted Profit Margin)
 
    Key measure of our profitability
 
 
 
 
 
 
 
 
Multiplier:
 
 
Average Trade Working Capital as Percentage of Net Sales (Trade Working Capital Velocity)
 
    Key measure of our operating efficiency
 

The performance “gate” for annual cash incentive payout to executive officers is positive adjusted pre-tax income . Positive is defined as pre-tax income greater than zero, adjusted to eliminate the effects of tangible and intangible asset impairments, pension and other post-retirement benefit mark-to-market adjustments, excess purchase accounting and other acquisition related expenses. If we do not have positive adjusted pre-tax income for the fiscal year, the named executive officers will not receive a cash incentive payment. Assuming we have had positive adjusted pre-tax income, the Committee then exercises its discretion to reduce the maximum annual cash incentive payout to an amount calculated in the same manner as our annual cash incentive program for employees other than our executive officers. These annual incentive amounts are calculated based on our adjusted operating profit margin and application of a multiplier based on average trade working capital velocity. As indicated in the table below, the resulting payout factor may range from 0.0 to 2.0 of each participant’s target cash incentive set forth above, increasing as our profitability and operating efficiency improve.

Adjusted operating profit margin and average trade working capital velocity are non-GAAP measures. Adjusted operating profit margin is derived from our adjusted operating profit, which is our operating profit before unusual items, including restructuring charges, pension curtailment charge and acquisition-related expenses, partially offset by unusual period-end items. Average trade working capital velocity is a measure of operating efficiency that is calculated as an average of our trade working capital calculated over a 13-month period ended October 30, 2015, divided by net sales for Fiscal 2015. Average trade working capital is calculated as the sum of our average accounts receivable and inventories less accounts payable and advance payments and progress billings. Average trade working capital velocity measures management’s efficiency over the year of managing accounts receivable terms and collections, obtaining advance payments on customer orders, negotiating terms with our suppliers and aligning inventory levels with current production schedules, customer demand and our direct service model.


44



The method of determining cash incentive awards is intended to drive an appropriate balance under which trade working capital performance complements, but does not offset, profitability. The payout scale applicable to Fiscal 2015 is shown in the table below.
Performance Achievement
Adjusted Operating Profit Margin
Multiplier Applied to Adjusted Operating Profit Margin
(A)
Trade Working Capital Velocity
Multiplier Applied to Trade Working Capital Velocity(B)

Combined Payout Factor
(A*B)
 
 
 
 
 
 
Threshold
10.0%
0.00
39.0%
0.67
0.00
Minimum
13.0%
0.50
39.0%
0.67
0.34
Target
14.7%
1.07
37.8%
0.87
0.93
Maximum
16.0%
1.50
35.0%
1.33
2.00

The adjusted operating profit and trade working capital multipliers are established on a straight-line basis between the points shown in the table.

Our historical annual cash incentive payout factors over the three preceding fiscal years were as follows:
Historical Annual Cash Incentive
2014
2013
2012
Payout Factor
1.12
0.75
1.19

As noted above, two-thirds of the calculated annual incentive is allocated automatically and the remaining one-third is allocated based on individual performance measured against a variety of individual performance objectives that are established early in each fiscal year by the Committee and designed to align with our overall business plans. This portion of the annual cash incentive may be adjusted up or down, subject to the overall 200% cap on target cash incentive payments set forth above. The table below highlights each named executive officer’s individual performance objectives for Fiscal 2015 .

Mr. Doheny
    Creating long term growth from new products, services, markets, geographies and acquisitions beyond coal.
    Operating performance goals measured by safety, productivity, quality and customer satisfaction.
    Building a stronger global leadership team and a culture and values aligned with our business strategy.
    Driving shareholder value through financial metrics for sales, bookings, margins, cash flow, working capital management and operating leverage.
 
 
Mr. Sullivan
    Leading efforts to meet annual cost reduction and cash flow targets.
    Improved working capital performance.
    Capital structure and capital allocation priorities.
    Leadership of our information systems, audit and investor relations functions.
    Ensuring that acquisition outcomes met business case financials.
 
 


45



 
 
Mr. Major
    Leading a legal function with key outputs related to enabling new product development activities through contract development and intellectual property management.
    Alignment of acquired businesses with Joy Global contracting processes and procedures.
    Key goals related to acquisition activities.
    A broad range of preventative law programs focused on compliance and enabling business growth.
 
 
Mr. Maritz
    Organizational re-design and development of talent to enable longer term growth in products and service.
    Achievement of cost reduction targets related to employment costs.
    Successful execution of a number of key union contracts in Fiscal 2015.
    Implementation of globally consistent environment, health and safety programs and metrics and achieving world-class safety performance in Fiscal 2015.

The Committee considered the achievement of the corporate goals and each named executive officer’s personal performance for Fiscal 2015 and determined that no annual cash incentive payment should be made. The Committee concluded that no such payments were warranted because our adjusted profit margin did not exceed 10%, which was the threshold level established by the Committee, thus resulting in a payout factor of 0.0.
The Committee, in its discretion, may from time to time grant an individual bonus to a named executive officer or other senior manager for achievement of certain accomplishments in addition to an executive’s individual objectives under our annual cash incentive program. No discretionary bonuses were paid to named executive officers or senior managers in Fiscal 2015 .

Performance Awards

The Committee grants performance awards to provide executive officers and other senior management with long-term incentives to improve the quality of earnings and our share price performance. Each performance award represents the right to earn one share of our common stock. The Committee believes that the performance award program serves as a powerful retention tool and motivates senior management to attain performance levels linked to long-term returns for our shareholders. The Committee, taking into consideration the input of the Chief Executive Officer, annually determines performance objectives and sets the baseline number of performance awards to be paid out based on the attainment of these objectives. In establishing this baseline, the Committee considers the scope of the duties performed by each executive officer, as well as compensation relative to our other employees and for comparable positions within our peer group.

To determine the performance awards granted in Fiscal 2015 , the Committee used a two-step approach as more fully described below:



46



 
 
 
Performance Award Metric
Fiscal 2015-2017
Rationale
 
 
 
 
 

Gate:
 
 


Average Return on Equity
    Ensure achievement of a threshold level of return on shareholders’ equity before any performance awards can be earned

    Qualifies the award for deductibility under Section 162(m) of the Internal Revenue Code
 
 
 
 
 
Primary:
 
 
Average Adjusted EPS
    Reward achievement in earnings per share relative to net sales

The award cycle for performance shares granted during Fiscal 2015 is the three-year period concluding at the end of Fiscal 2017. The performance “gate” for the performance awards distributed to the named executive officers is average return on equity of 10% for the three-year performance period. If this performance level is not achieved, the named executive officers do not receive shares from the award following the conclusion of the performance period. If this performance metric is achieved, the number of performance shares distributable to executive officers will be (i) 180% of the target number of performance shares subject to the performance award or (ii) at the discretion of the Committee, any lower number that, expressed as a percentage of targeted performance shares, is not less than the percentage of the target number of performance shares generally awarded to employees other than executive officers who were granted performance awards in Fiscal 2015 .

Historically, the Committee has exercised its discretion and calculated performance award payouts for our executive officers in the same manner used with respect to awards to non-executive employees. In the past, these amounts have been based on our achievement of threshold, target or maximum levels of average adjusted EPS goals that were set at the commencement of the performance period. For the Fiscal 2015 performance awards, the target adjusted EPS goal is based on the actual change in net sales for each year of the performance period. For each such year, target income from continuing operations, the numerator of annual adjusted EPS, is derived based on profitability using a positive 25% operating leverage percentage when the annual change in net sales is positive, and a negative 34% operating leverage percentage when the annual change in net sales is zero, or negative. The operating leverage result is then reduced for interest expense and income taxes at the actual effective tax rates. Diluted weighted average shares used in the calculation are as reported in the corporation’s Annual Report on Form 10-K filed with the SEC. Each year’s targeted adjusted EPS and actual adjusted EPS are averaged for the total three-year period to determine the final payout factor at the end of the period.

The performance achievement and payout scale shown in the table below will be used to determine earned performance awards at the end of the Fiscal 2015-2017 performance period.

Performance Achievement
Target Average Adjusted EPS Achievement
Payout Factor
 
 
 
Minimum Payout
60%
0.25
Target Payout
100%
1.00
Maximum Payout
120%
1.50
The payout factor is established on a straight-line basis between the points shown in the table.


47



With respect to performance awards granted in Fiscal 2013 for the Fiscal 2013-2015 performance period, no shares were earned at the end of the performance period because our actual average adjusted EPS of $3.72 was below the minimum threshold performance achievement level $4.45.

Stock Options

The Committee believes that stock options are an important component of a sound executive compensation program that help to further align management’s interests with those of our shareholders because the options only have value if the price of our common stock increases after the stock options are granted. In Fiscal 2015 , stock options were granted to 42 employees, including executive officers and other senior managers. Stock options vest in three equal annual installments beginning on the first anniversary of the date of the grant and expire 10 years after the grant date. The exercise price of all stock options granted in Fiscal 2015 is the closing market price on the date of the grant.

The number of stock options granted to each named executive officer is shown in the Grants of Plan-Based Awards table.

Restricted Stock Units

The Committee believes that restricted stock unit grants play an important role in retaining our senior management and facilitating the accumulation of a significant ownership stake in the corporation in order to align management’s interests with those of our shareholders. In Fiscal 2015 , restricted stock units were granted to 206 employees, including executive officers and other senior managers. These restricted stock units will vest in three equal annual installments on the first, second and third anniversaries of the grant date. Prior to Fiscal 2014, restricted stock units were awarded with vesting installments on the third, fourth and fifth anniversaries of the grant dates. In revising the vesting period for these awards, the Committee concluded that a shorter vesting schedule would enhance retention by being more consistent with the practice of our peer companies.

The number of restricted stock units granted to each named executive officer is shown in the Grants of Plan-Based Awards table.

Determining Composition of Compensation Components

We target a total compensation mix for executive officers that is designed to retain, develop and attract experienced and talented executives who are capable of achieving our short-term and long-term strategic and financial objectives, thereby increasing shareholder value.

The overall mix of compensation reflects the Committee’s intention for named executive officers to have the substantial majority of their total compensation opportunity be at risk, and in particular, subject to our long-term performance and changes in shareholder value. The Committee also allocates incentives between short- and long-term performance as described above in order to align executive officers’ interests with those of our shareholders, emphasize achievement of the full spectrum of our business objectives, and retain develop and attract key talent.

We annually evaluate our compensation practices for all employees for potential risks; however, in light of the compensation mix described herein, the nature of our business, and our organizational structure, the Committee does not believe that our compensation policies or practices present risks that may have a material


48



adverse effect on our business, results of operations, or liquidity. As a result, the Committee has not made significant changes to our compensation policies or procedures in response to our risk profile.

Additional Fiscal 2015 Compensation Benefits and Programs

In addition to the principal components of our executive compensation program, we also provide our executives with retirement, health and other personal benefits.

Retirement Plans
Executive officers participate in the full range of retirement plans that are provided for our U.S. salaried employees. The plans are designed to provide replacement income upon retirement. We target our overall benefits to be competitive with median levels at leading manufacturing companies (a group that is somewhat broader than the compensation peer group used for pay comparisons). These benefits consist of:
fixed and matching contributions to the Joy Global Retirement Savings Plan (the “Retirement Savings Plan”), our tax-qualified defined contribution plan;
fixed and matching contributions to the Joy Global Nonqualified Deferred Compensation Plan (the “Nonqualified Deferred Compensation Plan”), our supplemental non-qualified defined contribution plan;
continued participation in our defined benefit pension plan (the “Joy Global Pension Plan”), for employees whose employment began before May 1, 2005, although the accrual of additional benefits under such plan was frozen on May 1, 2012;
if eligible, continued participation in the supplemental executive retirement plan available to participants in the Joy Global Pension Plan (the “Joy Global Supplemental Pension Plan”), although the accrual of additional benefits under such plan was frozen on May 1, 2012; and
prior to March 2015, individual replacement contributions to the Retirement Savings Plan and Nonqualified Deferred Compensation Plan to certain eligible employees that were designed to offset the estimated effect of our decision to freeze the accrual of benefits under the Joy Global Pension Plan for participants in such plan.

Executive officers participate in these plans on the same terms as provided to U.S. salaried employees, except that individual replacement contributions for executive officers who participate in the Joy Global Pension Plan were capped at 25%. The first such payment was made in February 2013 and was calculated as a fixed percentage of each eligible employee’s eligible compensation between May 1, 2012 and December 31, 2012. In March 2015, however, we announced the suspension of individual replacement contributions for at least one year. We are not obligated to make individual replacement contributions, and payment of these contributions may remain suspended or be eliminated in the future.

The Nonqualified Deferred Compensation Plan and the Joy Global Supplemental Pension Plan allow us to provide benefits to eligible employees, including executive officers, that are comparable to those that would be available under the Retirement Savings Plan and the Joy Global Pension Plan, respectively, if federal income tax rules applicable to retirement benefits did not include limits on covered compensation and benefits under tax-qualified plans. The supplemental plans use the same benefit formulas as our broad-based tax-qualified plans and use the same types of compensation to determine benefit amounts, including the exclusion from the calculation of retirement benefits of all amounts earned under long-term incentive programs. Neither of our supplemental plans provide for the payment of above-market or preferential interest or dividend rates.



49



Perquisites

We provide our executive officers with a limited number of perquisites to support our efforts to retain and attract executive talent. We believe these benefits allow our named executive officers to proactively manage their health, work more efficiently, provide appropriate settings for business networking and other business functions and meetings and, in the case of the financial and tax planning program, help them optimize the value received from our compensation and benefits programs:

Annual physical exam . We reimburse executive officers for the cost of an annual executive physical and health screening to the extent these charges are not covered by medical insurance.

Company car . We provide a car allowance of up to $1,300 per month ($1,400 in the case of the Chief Executive Officer). In addition, we reimburse the executive officers for the cost of gasoline, routine maintenance, and replacement of normal wear-and-tear items.

Club membership . We reimburse executive officers for the initiation fees and annual or monthly dues for belonging to either an appropriate country club or social club. We also reimburse the annual membership costs for one airline club.  

Financial planning and tax preparation . We reimburse executive officers for the cost of annual tax preparation and reasonable financial and estate planning.

Home office . We reimburse executive officers for reasonable costs associated with a home office.

In addition, we reimburse executive officers for the cost of relocation under the same policy and guidelines as all other full-time salaried employees who are hired or transferred at our request.

In January 2015 we eliminated the tax gross-up on club initiation fees and for personal use of company-owned aircraft, and in March 2015 we sold our aircraft. As a result, other than with respect to relocation expenses, and post-separation welfare benefits, we do not reimburse current or former employees for the payment of individual income taxes.

We regularly review the benefits provided to our employees, including our named executive officers, and make appropriate modifications based on the Committee’s evaluation of the retentive value of these benefits.
Severance Benefits

To enable us to offer competitive total compensation packages to key executives, as well as to ensure the ongoing retention of these individuals when considering potential takeovers that may create uncertainty as to their future employment with us, we have entered into change of control agreements with our named executive officers. In December 2015 we amended these agreements to provide that beginning in Fiscal 2016, equity award grants will be subject to “double-trigger” vesting provisions. As a result of these revisions, equity awards granted to our named executive officers will vest upon a qualifying termination following a change in control, rather than vesting automatically upon the occurrence of a change of control. The Committee believes that the benefits provided under these agreements are appropriate and are consistent with our objective of retaining and attracting highly-qualified executives. For a detailed description of the benefits provided under the change of control agreements, see the discussion on page 68.



50



Additional Considerations

Executive Stock Ownership
Since Fiscal 2010, all of our equity award agreements have contained provisions limiting the ability of our executive officers to sell our common stock unless they have satisfied stock ownership requirements. Under these requirements, our Chief Executive Officer is expected to own shares having a market value equal to at least five times his base salary and our other executive officers are expected to own shares having a market value equal to at least two and one-half times their base salaries. Unless these ownership levels are satisfied, at the time a trade is executed, our Chief Executive Officer and other executive officers are required to retain shares of our common stock having a market value at least equal to 50% and 25%, respectively, of pre-tax compensation realized upon payment of any stock-settled performance awards, exercise of any stock options or settlement of any restricted stock units.
Insider Trading Policy Restrictions on Hedging

Our insider trading policy provides that no officer, employee or director may trade in our securities or the securities of any of our business partners on the basis of material non-public information, or in any way facilitate such trading by others. This policy also restricts certain types activities that could be used to hedge or offset the value of a decline in the trading price of our securities. These restrictions include prohibiting our officers, employees and directors, as well as their family members, from buying, selling or writing call or put options on any of our securities at any time and prohibiting such persons from selling short any of our securities at any time.
Effect of Past Grants
Although the Committee annually monitors amounts realizable from prior compensation, such as prior option or stock awards, to date such prior compensation has not been given significant consideration in the Committee’s decisions setting other elements of compensation, such as retirement benefits.
Clawback Provision
Our Board of Directors believes that it is in the best interest of the company and its shareholders that the company’s executive compensation practices be designed to promote accountability and responsible risk-taking and to facilitate an ongoing focus on the quality of the company’s financial reporting. The Committee’s general position is that no executive officer should be allowed to retain any benefit attributable to an error in the determination of a performance measure. Accordingly, our Board of Directors adopted a Compensation Recovery Policy, effective December 1, 2015, under which we will seek to recover cash and equity-based incentive-based compensation from current or former executive officers and employees if we are required to restate any of our previously issued financial statements due to material non-compliance with any financial reporting requirement under the federal securities laws. This policy will require the company, in most circumstances, to obtain reimbursement of compensation that is granted, earned or vested based on achievement of a financial reporting measures in the three years preceding the date a restatement becomes required. Further, since Fiscal 2011, our equity award agreements have contained clawback provisions pursuant to which we may seek to recover equity-based compensation from any current or former named executive officer if we are required to restate any previously issued financial statements due to material non-compliance with any financial reporting requirement under the federal securities laws.
Accounting and Share Dilution Considerations
In designing our compensatory programs, we consider the various accounting and disclosure rules associated with various forms of compensation as well as the share dilution and cash flow considerations associated


51



with each program. The Committee seeks to implement plans and policies that maximize financial efficiency and avoid unnecessary or excessive share dilution. Each year, we engage Cook & Co. to conduct a study of the competitive share usage and dilution levels and the aggregate economic costs associated with our long-term incentive compensation, and the Committee considers this analysis when setting an annual budget for equity-based awards.
Tax Considerations
Under Section 162(m) of the Internal Revenue Code, we may not be able to deduct compensation in excess of $1 million that is paid in one year to “covered employees” which are our Chief Executive Officer and three other most highly compensated named executive officers (other than our Chief Financial Officer). Section 162(m) provides exemptions from the deduction limit for compensation that qualifies as “performance-based compensation” or is paid after the executive leaves our employment. The Committee considers the deductibility of executive compensation under Section 162(m) when evaluating particular compensation programs in the context of the Committee’s broader compensation objectives and overall compensation philosophy, but may determine to award non-deductible compensation based on its consideration of factors other than deductibility.

Supplemental Disclosure with Respect to Realized Compensation

The following supplemental table summarizes the compensation that our named executive officers actually realized in Fiscal 2013-2015. The amounts reflected in this table differ substantially from “Total Compensation” disclosed in the Summary Compensation Table by reporting the value realized each year from previously awarded equity compensation, rather than the grant date fair value of awards granted during each year, and excluding the amounts under “Change in Pension Value and Nonqualified Deferred Compensation Earnings” and “All Other Compensation.” The amounts reported in this table and in the charts below should not be considered a substitute for the Summary Compensation Table, which is calculated using accounting and actuarial assumptions required by SEC rules. In addition, the amounts reported in the table do not reflect potential compensation that our named executive officers may realize based on the future performance of our common stock. For information regarding potential future compensation of our named executive officers, refer to Outstanding Equity Awards at Fiscal Year-End 2015 on page 60, Pension Benefits as of Fiscal 2015 on page 63, Nonqualified Deferred Compensation During Fiscal 2015 on page 65, and Potential Payments Upon Termination or Change-in-Control at Fiscal 2015 Year-End on page 66.



52



2015 Realized Compensation
 
 
Cash Compensation
Equity Compensation (2)
 
 
 
 
 
 
 
 
 
Named Executive
Officer

Year

Base Salary
Short-term Incentives (1)
Performance Award Payout
Stock Option Exercises

RSU Payout
Total Realized
Compensation
Mr. Doheny
2015
$983,155
$0
$0
$330,613
$1,313,768
 
2014
$939,635
$1,032,425
$199,897
$190,575
$2,362,532
 
2013
$853,788
$445,240
$337,878
$128,346
$1,765,252
Mr. Sullivan
2015
$570,045
$0
$0
$90,373
$660,418
 
2014
$553,423
$425,652
$979,075
 
2013
$524,231
$275,221
$799,452
Mr. Major
2015
$489,654
$0
$0
$168,110
$657,764
 
2014
$475,327
$313,359
$124,380
$104,436
$232,102
$1,249,604
 
2013
$446,346
$200,856
$234,638
$613,061
$241,628
$1,736,529
Mr. Maritz
2015
$387,338
$0
$0
$129,469
$516,807
 
2014
$355,942
$234,399
$66,632
$117,143
$774,116
Mr. Baker  (3)
2015
$729,715
$2,333,272
$0
$318,017
$3,381,004
 
2014
$835,231
$734,169
$199,897
$183,975
$1,953,272
 
2013
$776,923
$407,885
$469,275
$98,780
$1,752,863
(1)
Short-term incentives consist of non-equity incentive plan compensation and additional discretionary bonuses, if any, awarded by the Committee, each as reported in the Summary Compensation Table.

(2)
Reflects aggregate amounts realized from payout of performance awards, the exercise of stock options and payout of vested restricted stock units, including additional restricted stock units received in lieu of dividends since the date of grant. Performance awards for a given period are paid out in the fiscal year following the end of the award cycle. There was no performance award payout in Fiscal 2015 for the Fiscal 2012-2014 performance cycle. The performance award payout in Fiscal 2014 was for the Fiscal 2011-2013 performance cycle, and the performance award payout in Fiscal 2013 was for the Fiscal 2010-2012 performance cycle. All performance award payouts for the years provided were settled in shares of common stock. Restricted stock units that vested and were paid out in Fiscal 2015 were awarded in Fiscal 2010-2012 and also in Fiscal 2014. Restricted stock units that vested in Fiscal 2014 were awarded in Fiscal 2009-2011 and restricted stock units that vested and were paid out in Fiscal 2013 were awarded in Fiscal 2008-2010.

(3)
In the case of Mr. Baker, the short-term incentives includes severance payments of $2,333,272 in connection with his separation from the company on September 4, 2015.

The charts below reflect compensation realized in Fiscal 2015 by our Chief Executive Officer and the average of our other named executive officers, expressed as a percentage of Total Compensation reported in the Summary Compensation Table.



53





54



Summary Compensation Table
    
 
 
 
 
 
 
 
 
 
 
Name and principal position held at the end of Fiscal 2015
Year
Salary
Bonus 
(1)
Stock awards
(2)
Option awards 
(2)
Non-equity incentive plan compensation (3)
Change in pension value and nonqualified deferred compensation earnings
(4)
All other compensation (5)
Total
($)
Edward L. Doheny II
2015
$983,155
$3,063,718
$1,168,120
$0
$216,036
$5,431,029
President and
2014
$939,635
$1,631,655
$763,884
$1,032,425
$167,035
$4,534,634
Chief Executive Officer
2013
$853,788
$2,541,840
$1,007,600
$445,240
$317,480
$5,165,948
 
 
 
 
 
 
 
 
 
 
James M. Sullivan
2015
$570,045
$921,082
$350,320
$0
$117,531
$1,958,978
Executive Vice President and
2014
$553,423
$543,885
$254,628
$425,652
$87,372
$1,864,960
Chief Financial Officer 
2013
$524,231
$529,632
$182,880
$275,221
$94,605
$1,606,569
 
 
 
 
 
 
 
 
 
 
Sean D. Major
2015
$489,654
$620,381
$235,480
$0
$98,925
$1,444,440
Executive Vice President,
2014
$475,327
$441,636
$205,760
$313,359
$81,190
$1,517,272
General Counsel and Secretary
2013
$446,346
$397,224
$152,400
$200,856
$126,164
$1,322,990
 
 
 
 
 
 
 
 
 
 
Johannes S. Maritz
2015
$387,338
$489,582
$186,760
$0
$81,169
$118,631
$1,263,480
Executive Vice President,
2014
$355,942
$382,503
$177,468
$234,399
$74,302
$99,793
$1,324,407
Human Resources
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Randal W. Baker (6)
2015
$729,715
$1,468,746
$560,280
$0
$2,540,470
$5,299,211
Former Executive Vice President
2014
$835,231
$1,082,633
$509,256
$734,169
$132,809
$3,294,098
and Chief Operating Officer
2013
$776,923
$2,036,280
$831,900
$407,885
$161,993
$4,214,981

(1)
The amounts shown in this column represent bonuses paid at the discretion of the Human Resources and Nominating Committee of our Board of Directors, over and above amounts earned through satisfaction of the performance measures in our annual cash incentive plan. No such bonuses were paid to the named executive officers for the periods presented.

(2)
Stock awards consist of performance awards and restricted stock unit awards. The amounts reflected in the stock and option awards columns and corresponding disclosure in the total compensation column reflect the aggregate grant date fair value of stock and option awards we granted in Fiscal 2015 , computed in accordance with Financial Accounting Standards Board Accounting Standards Certification Topic 718, “Compensation-Stock Compensation” (“FASB ASC Topic 718”). Amounts reported for performance awards granted in Fiscal 2015 assume payout of performance shares at target levels. All assumptions made in the valuation of stock awards and option awards for financial statement reporting purposes in accordance with FASB ASC Topic 718 are discussed in Note 13, Share-Based Compensation, to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended October 30, 2015 .

(3)
All amounts shown represent earnings for services performed during the fiscal year under our annual cash incentive plan described beginning on page 43. No annual cash incentive awards were paid to named executive officers for Fiscal 2015 because our adjusted operating profit margin did not exceed 10%, which was the threshold established by the Committee for the payment of such awards. None of the named executive officers had any earnings on outstanding awards for any prior fiscal years.

(4)
All amounts reported relate to aggregate changes in pension value.

(5)
We provide our named executive officers with certain additional compensation, which is reflected in the All Other Compensation Table below.

(6)
Mr. Baker separated from the company on September 4, 2015.



55



All Other Compensation
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Executive Officer
 
 
Perquisites
 
Tax Reimbursement
 
 Company Contributions to Defined Contribution Plans
 
Severance Payments
 
Total “All Other Compensation”
 
 
 
(A)
 
(B)
 
(C)
 
(D)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mr. Doheny
2015
 
$60,679
 
 
$155,357
 
 
$216,036
 
2014
 
$61,226
 
$223
 
$105,586
 
 
$167,035
 
2013
 
$117,175
 
$84,877
 
$115,428
 
 
$317,480
Mr. Sullivan
2015
 
$39,448
 
 
$78,083
 
 
$117,531
 
2014
 
$22,647
 
 
$64,725
 
 
$87,372
 
2013
 
$47,174
 
$21,454
 
$25,977
 
 
$94,605
Mr. Major
2015
 
$35,575
 
 
$63,350
 
 
$98,925
 
2014
 
$29,581
 
 
$51,609
 
 
$81,190
 
2013
 
$47,800
 
 
$78,364
 
 
$126,164
Mr. Maritz
2015
 
$17,956
 
 
$100,675
 
 
$118,631
 
2014
 
$19,688
 
 
$80,105
 
 
$99,793
Mr. Baker
2015
 
$30,082
 
$52,798
 
$124,318
 
$2,333,272
 
$2,540,470
 
2014
 
$39,525
 
$36
 
$93,248
 
 
$132,809
 
2013
 
$24,118
 
 
$137,875
 
 
$161,993

(A)
See the Perquisites Table below for additional information regarding the identification and quantification of perquisites and personal benefits received by our named executive officers.

Perquisites
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Executive Officer
 
 
 
Car 
Expense
 
Personal Use of Airplane(i)
 
Club Dues
 
Relocation
Expense
 
Other (ii)
 
Total Perquisites
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mr. Doheny
 
2015
 
$23,145
 
 
$28,064
 
 
$9,470
 
$60,679
 
 
2014
 
$22,684
 
$9,735
 
$15,942
 
 
$12,865
 
$61,226
 
 
2013
 
$17,402
 
 
$97,260
 
$710
 
$1,803
 
$117,175
Mr. Sullivan
 
2015
 
$26,440
 
 
$11,808
 
 
$1,200
 
$39,448
 
 
2014
 
$9,850
 
 
$11,597
 
 
$1,200
 
$22,647
 
 
2013
 
$16,526
 
 
$28,848
 
$1,800
 
 
$47,174
Mr. Major
 
2015
 
$28,481
 
 
$7,094
 
 
 
$35,575
 
 
2014
 
$28,481
 
 
 
 
$1,100
 
$29,581
 
 
2013
 
$22,081
 
 
$16,669
 
 
$9,050
 
$47,800
Mr. Maritz
 
2015
 
$16,931
 
 
 
 
$1,025
 
$17,956
 
 
2014
 
$18,263
 
 
 
 
$1,425
 
$19,688
Mr. Baker
 
2015
 
$30,082
 
 
 
 
 
$30,082
 
 
2014
 
$30,082
 
$6,693
 
 
 
$2,750
 
$39,525
 
 
2013
 
$21,368
 
 
 
 
$2,750
 
$24,118



56



(i) Prior to March 2015 we owned a corporate aircraft which was used primarily for business purposes. The amount reported reflects our aggregate incremental cost for limited personal use of the aircraft before it was sold. The aggregate incremental cost to us of use of our corporate aircraft was determined on a per flight basis based on the amounts we were invoiced by our aircraft management services provider, and included the cost of fuel, landing fees, in-flight meals and crew expenses. Because our aircraft was used principally for business travel, the calculation did not include fixed costs that did not change based on usage. Prior to the sale of the aircraft, a spouse or other guest of a named executive officer from time to time flew on our aircraft when it was already scheduled for business purposes and had room to accommodate additional passengers. We incurred no incremental operating cost from the travel of those guests.

(ii) This column reports amounts reimbursed for payment of financial planning and tax preparation, and physical examinations.

(B)
Tax reimbursements in Fiscal 2015 were limited to payment of certain taxes incurred by Mr. Baker in connection with welfare benefits paid by the company in connection with his separation from the company.

(C)
Company contributions to defined contribution plans in 2015 consist of (i) fixed and matching contributions to the Retirement Savings Plan, our tax-qualified defined contribution retirement plan, (ii) fixed and matching contributions to the Nonqualified Deferred Compensation Plan on compensation in excess of limits imposed by the Internal Revenue Code, and (iii) if eligible, individual replacement contributions to the Retirement Savings Plan and Nonqualified Deferred Compensation Plan for participants in the Joy Global Pension Plan that are designed to offset the estimated effect of the May 2012 freeze in benefits under the Joy Global Pension Plan.

Mr. Maritz is the only named executive officer who participates in the Joy Global Pension Plan. Messrs. Doheny, Sullivan, Major and Baker were hired after the Joy Global Pension Plan was closed to new participants and, accordingly, did not receive individual replacement contributions designed to offset the May 2012 freeze of benefits under such plan.

The Joy Global Retirement Savings Plan is discussed under Pension Benefits as of Fiscal 2015 , beginning on page 63. The Nonqualified Deferred Compensation Plan is discussed under Nonqualified Deferred Compensation During Fiscal 2015 on page 65.

The amount reflected for Fiscal 2015 for Mr. Doheny consists of $11,761 in company contributions and $7,725 in matching contributions to his Retirement Savings Plan account and $135,871 in company contributions to his Nonqualified Deferred Compensation Plan account. The amount reflected for Fiscal 2014 for Mr. Doheny consists of $13,000 in company contributions and $7,674 in matching contributions to his Retirement Savings Plan account and $84,912 in company contributions to his Nonqualified Deferred Compensation Plan account. The amount reflected for Fiscal 2013 for Mr. Doheny consists of $12,750 in company contributions and $6,067 in matching contributions to his Retirement Savings Plan account and $96,611 in company contributions to his Nonqualified Deferred Compensation Plan account.

The amount reflected for Fiscal 2015 for Mr. Sullivan consists of $13,250 in company contributions and $7,950 in matching contributions to his Retirement Savings Plan account and $56,883 in company contributions to his Nonqualified Deferred Compensation Plan account. The amount reflected for Fiscal 2014 for Mr. Sullivan consists of $13,000 in company contributions and $7,800 in matching contributions to his Retirement Savings Plan account and $43,925 in company contributions to his Nonqualified Deferred Compensation Plan account. The amount reflected for Fiscal 2013 for Mr. Sullivan consists of $16,596 in company contributions and $9,381 in matching contributions to his Retirement Savings Plan account.

The amount reflected for Fiscal 2015 for Mr. Major consists of $13,250 in company contributions and $8,354 in matching contributions to his Retirement Savings Plan account and $41,746 in company contributions to his Nonqualified Deferred Compensation Plan account. The amount reflected for Fiscal 2014 for Mr. Major consists of $12,055 in company contributions and $7,624 in matching contributions to his Retirement Savings Plan account and $31,930 in company contributions to his Nonqualified Deferred Compensation Plan account. The amount reflected for Fiscal 2013 for Mr. Major consists of $12,098 in company contributions and $7,259 in matching contributions to his Retirement Savings Plan account and $59,007 in company contributions to his Nonqualified Deferred Compensation Plan account.

The amount reflected for Fiscal 2015 for Mr. Maritz consists of $13,250 in company contributions, $8,008 in matching contributions and $13,700 in individual replacement contributions to his Retirement Savings Plan account, and $26,361 in company contributions and $39,356 in individual replacement contributions to his Nonqualified Deferred Compensation Plan account. The amount reflected for Fiscal 2014 for Mr. Maritz consists of $13,000 in company contributions, $7,648 in matching contributions and $13,100 in individual replacement contributions to his Retirement Savings Plan account, and $17,180 in company contributions and $29,177 in individual replacement contributions to his Nonqualified Deferred Compensation Plan account.



57



The amount reflected for Fiscal 2015 for Mr. Baker consists of $12,664 in company contributions and $7,874 in matching contributions to his Retirement Savings Plan account and $103,780 in company contributions to his Nonqualified Deferred Compensation Plan account. The amount reflected for Fiscal 2014 for Mr. Baker consists of $11,179 in company contributions and $6,761 in matching contributions to his Retirement Savings Plan account and $75,308 in company contributions to his Nonqualified Deferred Compensation Plan account. The amount reflected for Fiscal 2013 for Mr. Baker consists of $12,750 in company contributions and $7,577 in matching contributions to his Retirement Savings Plan account and $117,548 in company contributions to his Nonqualified Deferred Compensation Plan account.

(D)
Mr. Baker separated from the company on September 4, 2015. The amount reported reflect the severance and the value of welfare benefits provided to Mr. Baker pursuant to the terms of his Senior Executive Retention Agreement, which is described on page 68.


58



Grants of Plan-Based Awards in Fiscal 2015
 
 
 
Estimated possible payouts under non-equity incentive plan awards
Estimated future payouts under equity incentive plan awards (1)
 
 
 
 
Name
 
Grant date
Threshold
Target
Maximum
Threshold
Minimum
Target
Maximum
All other stock awards; number of shares of stock or units (2)
All other options; number of securities underlying options
Exercise or base price of option awards
($/Sh)
Grant date fair value of stock and option awards
Mr. Doheny
Cash
 
$964,437
$1,928,874
 
 
 
 
 
 
 
 
 
Perf. Award
12/2/2014
 
 

12,650
25,300
50,600
75,900
 
 
 
$2,429,812
 
RSU
12/2/2014
 
 
 
 
 
 
 
12,600
 
 
$633,906
 
NQO
12/2/2014
 
 
 
 
 
 
 
 
100,700
$50.31
$1,168,120
Mr. Sullivan
Cash
 
$559,230
$782,922
 
 
 
 
 
 
 
 
 
Perf. Award
12/2/2014
 
 
 
3,800
7,600
15,200
22,800
 
 
 
$729,904
 
RSU
12/2/2014
 
 
 
 
 
 
 
3,800
 
 
$191,178
 
NQO
12/2/2014
 
 
 
 
 
 
 
 
30,200
$50.31
$350,320
Mr.
Major
Cash
 
$480,364
$576,437
 
 
 
 
 
 
 
 
 
Perf. Award
12/2/2014
 
 
 
2,575
5,150
10,300
15,450
 
 
 
$494,606
 
RSU
12/2/2014
 
 
 
 
 
 
 
2,500
 
 
$125,775
 
NQO
12/2/2014
 
 
 
 
 
 
 
 
20,300
$50.31
$235,480
Mr.
Maritz
Cash
 
$379,990
$455,988
 
 
 
 
 
 
 
 
 
Perf. Award
12/2/2014
 
 
 
2,025
4,050
8,100
12,150
 
 
 
$388,962
 
RSU