EX-10.16 4 wwd-20130930ex1016d9320.htm EX-10.16 Exhibit Exec Comp

WOODWARD, INC.
SUMMARY OF EXECUTIVE OFFICER COMPENSATION 

 

     The compensation program for executive officers of Woodward, Inc. (the “Company”) primarily consists of three variable components: base salary, a potential cash bonus under the Company’s annual Management Incentive Plan (“MIP”), and cash and equity long-term incentive compensation under the Woodward 2006 Omnibus Incentive Plan (the “2006 Plan”).  We also provide other benefits incident to employment to our employees.

 

BASE SALARIES 

 

     The base salaries for each of the executive officers of the Company (the “Executive Officers”) for fiscal year 2014, are as follows:

 

 

 

Name and Principal Positions

 

Base Salary

Thomas A. Gendron, President and Chief Executive Officer

 

$
790,010 

Robert F. Weber, Jr., Vice Chairman, Chief Financial Officer and Treasurer

 

$
450,164 

Martin V. Glass, President, Airframe Systems

 

$
400,140 

Sagar Patel, President, Aircraft Turbine Systems

 

$
400,140 

Chad R. Preiss, President, Engine Systems

 

$
345,072 

James D. Rudolph, President, Industrial Turbomachinery

 

$
300,040 

A. Christopher Fawzy, Corporate Vice President, General Counsel and Corporate Secretary

 

$
347,308 

 

MANAGEMENT INCENTIVE PLAN 

 

     The target amounts to be awarded under the MIP for fiscal year 2014 for each of our Executive Officers, subject to achievement of financial objectives of the Company, are as follows:

 

 

 

 

Name of Executive Officer

 

Target Amounts as a Percentage of Base Salary

Mr. Gendron

 

100% 

Mr. Weber

 

75% 

Mr. Glass

 

60% 

Mr. Patel

 

60% 

Mr. Preiss

 

60% 

Mr. Rudolph

 

60% 

Mr. Fawzy

 

60% 

 

    Under the MIP, an Executive Officers bonus, if any, would range from anywhere between a threshold payout amount as defined by the Compensation Committee of the Board of the Directors (typically 40% of the target payout) up to a stretch/outstanding amount of 200% of the target payout based upon the level of performance results achieved.  The payout would be 0% if the performance results are below pre-determined threshold performance levels.

 

LONG TERM INCENTIVE PLAN AWARDS UNDER THE 2006 PLAN 

 

     Stock Option Awards 

 

     The annual awards of options to purchase shares of Common Stock of the Company relating to fiscal year 2014 were granted to each of the Executive Officers under the 2006 Plan on October 1, 2013 with an exercise price based on the closing price of Woodward’s common stock on The Nasdaq Global Select Market on October 1, 2013.

 

 

 

 

Name of Executive Officer

 

Number of Shares

Mr. Gendron

 

157,700 

Mr. Weber

 

30,300 

Mr. Glass

 

20,600 

Mr. Patel

 

22,500 

Mr. Preiss

 

20,900 

Mr. Rudolph

 

16,900 

Mr. Fawzy

 

21,100 


 

 

   The form of Stock Option Award Agreement under the 2006 Plan, including vesting provisions, pursuant to which such awards were made, is filed with the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2013, as Exhibit 10.13.

 

    Restricted Stock Awards

 

    The Compensation Committee of the Company also granted an award of 24,361 shares of restricted stock to Mr. Gendron under the 2006 Plan on October 1, 2013.  Subject to Mr. Gendron’s continued employment by the Company, these shares of restricted stock will vest 100% following the end of the Company’s fiscal year 2017 if a cumulative earnings per share (“EPS”) target is met or exceeded for fiscal years 2014 through 2017.  If this EPS target is not met, all shares of restricted stock will be forfeited by Mr. Gendron.  The form of Restricted Stock Agreement under the 2006 Plan pursuant to which this award was made is filed with the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2013, as Exhibit 10.14.

 

CASH COMPONENT OF LONG-TERM INCENTIVE PLAN 

 

     The Company established a reward target for the cash component of the three-year long-term incentive plan (“LTIP”) for fiscal 2014-2016 for each Executive Officer, articulated as a percentage of base pay.  Payout targets for the cash component of the long-term incentive plan are detailed in the following table:

 

 

 

Name of Executive Officer

 

Cash Target LTIP Award as a % of Base

Mr. Gendron

 

50% 

Mr. Weber

 

40% 

Mr. Glass

 

35% 

Mr. Patel

 

35% 

Mr. Preiss

 

35% 

Mr. Rudolph

 

35% 

Mr. Fawzy

 

25% 

 

    For purposes of the LTIP, we assess our performance as measured by Return on Capital and Growth on Net Earnings per Share against the same performance metrics of the other companies in the S&P Mid Cap 400 over the three-year period 2014-2016.  Each performance measurement is worth 50% of the award and each is measured separately.  Payout triggers in relation to our ranking within the S&P Mid Cap 400 are as follows:

 

 

 

 

Performance

 

Payout

At or above 50th percentile

 

50% of target

At or above 60th percentile

 

100% of target

At or above 75th percentile

 

200% of target

 

OTHER BENEFITS 

 

     Our Executive Officers participate in the same health, welfare and retirement benefits as does all of our employee membership.  This includes a group health insurance program; life insurance, inclusive of employee life, additional buy-up employee life, optional spouse life, and optional child life; Accidental Death & Dismemberment insurance; Long-Term Disability; Woodward Retirement Savings Plan, inclusive of employee contributions and Company contributions (100% match on the first 3% of employee contributions, 50% on the next 3% of employee contributions, capped at a total Company match of 4.5% of base salary); Woodward Stock Plan after two years’


 

employment (Company contribution of 5% of base wages); Retirement Income Plan (Company contribution of 1.5% of eligible wages, and 0.1% for each year of additional service).  The Retirement Income Plan was frozen as of September 30, 2003, with prior participants grandfathered and closed to new participants.

 

     All plans are subject to applicable IRS limitations.  Supplemental matches and contributions are made for the Retirement Savings Plan, the Woodward Stock Plan, and the grandfathered Retirement Income Plan.

 

     Our Executive Officers are also eligible to participate in a deferred compensation plan, the Executive Benefit Plan (“EBP”).  This plan is also available to other key leaders and to members of our Board of Directors.  Employee participants are able to defer up to 50% of base pay, and up to 100% of any incentive payments.

 

WHERE MORE INFORMATION CAN BE FOUND 

 

     Each of the plans and agreements mentioned herein are discussed further annually in our Notice of Annual Meeting of Shareholders and Proxy Statement as filed with the Securities and Exchange Commission (“SEC”).  Our Proxy Statement can be found on our website at www.woodward.com and at the SEC’s website at www.sec.gov.