Moog Proxy and Notice and Access Letter- FY2019 Filed 12 30 2019 - Flipbook - Page 38
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
EMPLOYMENT, SEVERANCE AND CHANGE IN CONTROL
The Company has entered into Employment Termination Benefits Agreements (“Termination Agreements”) with its executive
officers. These Termination Agreements cover termination as a result of death, disability, retirement, termination for cause, voluntary
and involuntary termination of employment, as well as involuntary termination after a change in control. The following is a summary
of the termination benefits provided under various circumstances. A discussion of the executive officers’ pension benefits under
these various circumstances, including a discussion of the company transaction contribution under the DC SERP, can be found
under “Pension Benefits” which begins on page 33.
PAYMENT UPON DEATH, DISABILITY OR RETIREMENT
In the event of the death of an officer, the estate or surviving spouse will receive a payment of six months’ salary, a STI payment
pro-rated to the last day of the month in which the officer’s death occurs, and any unused vested vacation. A payment of approximately
two times annual salary will be paid under the Company’s Group Life Insurance plan, subject to a cap of $4,000,000. The estate
or surviving spouse will receive payments under the Company’s pension and 401(k) plans, and all unexpired stock options and
SARs will fully vest, and the estate or surviving spouse will have one year to exercise unexpired ISOs and two years to exercise
unexpired NQSOs and SARs. Unvested PSUs will be paid out at target, pro-rated for the number of full quarters completed prior
to death within the performance period.
In the event an officer becomes disabled or retires, the officer is entitled to the same benefits, as described above, with the
exception of life insurance, salary continuation, STI payment and PSU settlement. If the officer becomes disabled, the officer also
will receive payments under the Company’s disability plan. STI will be paid on a pro-rated basis for full months of service prior to
the date of disability. Unvested PSUs will be forfeited.
If the officer retires, the officer will receive all benefits provided generally by the Company to its executives upon retirement,
including benefits under any retirement or supplemental retirement plans and insurance benefits provided upon retirement. STI will
be paid on a pro-rated basis for full months of service prior to the date of retirement. Unvested PSUs will remain available to be
earned at the end of the performance period, subject to the performance criteria and pro-rated for the number of full years completed
prior to retirement within the performance period.
PAYMENT UPON TERMINATION FOR CAUSE
Under the Termination Agreements, “cause” is considered a harmful act or omission constituting a willful and a continuing
failure to perform material and essential employment obligations, conviction of a felony, willful perpetration of common law fraud,
or any willful misconduct or bad faith omission constituting dishonesty, fraud or immoral conduct, which is materially injurious to the
financial condition or business reputation of the Company. If terminated for “cause,” the officer is entitled to all benefits vested under
retirement plans, and payment of unused vested vacation. The officer is not entitled to STI, no severance is provided and all stock
options, SARs and PSUs expire.
PAYMENT UPON VOLUNTARY TERMINATION
When an officer voluntarily terminates employment with the Company, the officer is entitled to receive all pension benefits
accrued under any retirement or supplemental retirement plans up to the date of termination (subject to the rules referenced above
in the PERI-SERP description), and payment for all unused vested vacation. All unexpired vested SARs are exercisable within
ninety days of termination and all unvested SARs and PSUs will expire at the close of business on the date of termination.
PAYMENT UPON INVOLUNTARY TERMINATION WITHOUT CAUSE AND AFTER A CHANGE IN CONTROL
The termination benefits provided to an officer under the Termination Agreements in the case of involuntary termination without
cause and in the event of involuntary termination after a change in control are the same, except each event references a different
credited years of service table to determine salary continuance. The officer will receive salary continuance for no less than 12
months and no more than 36 months, depending on length of service. STI will be paid on a pro-rated basis for service up to the
date of termination, and any unused vested vacation will be paid. The Company will pay, for one year after involuntary termination
without cause or involuntary termination after a change in control, medical, life and disability premiums on behalf of the officer, one
year of auto related expenses, outplacement services, as well as one year of club membership dues for which reimbursement was
provided by the Company. The officer is entitled to all vested benefits under any retirement or supplemental retirement plans. All
unexpired vested SARs are exercisable within ninety days of termination and all unvested SARs and PSUs will expire at the close
of business on the date of termination. Upon involuntary termination after a change in control, all unexpired stock options and SARs
will fully vest and the officer is entitled to exercise all ISOs within one year of termination and all NQSOs and SARs within two years
of termination. All unvested PSUs will fully vest and will be paid out at the maximum level of performance.