Exhibit 10.16
Woodward Governor Company
Summary of Executive Officer Compensation
     The compensation program for executive officers of Woodward Governor
Company (the “Company”) primarily consists of three variable components: base
salary, a potential cash bonus under the Company’s annual Management Incentive
Plan, and cash and equity long-term incentive compensation under the Woodward
Governor Company 2006 Omnibus Incentive Plan (the “2006 Plan”). We also provide
other benefits incident to employment to our employees.
Base Salaries
     The base salaries for Mr. Thomas A. Gendron, the President and Chief
Executive Officer of the Company, Mr. Robert F. Weber, Jr., Chief Financial
Officer and Treasurer of the Company, and each of the other three most highly
compensated executive officers of the Company other than the Chief Executive
Officer and the Chief Financial Officer named below (collectively, the “Named
Executive Officers”), for fiscal year 2008, are as follows:

          Name and Principal Positions   Base Salary
Thomas A. Gendron, President and Chief Executive Officer
  $ 650,000  
Robert F. Weber, Jr., Chief Financial Officer and Treasurer
  $ 328,000  
Gerhard Lauffer, Group Vice President, Electrical Power Systems
  $ 320,000  
Dennis Benning, Group Vice President, Engine Systems
  $ 296,000  
Martin V. Glass, Group Vice President, Turbine Systems
  $ 300,000  

Management Incentive Plan
     The threshold, target and stretch/outstanding amounts to be awarded under
the annual Management Incentive Plan (“MIP”) of the Company for fiscal year 2008
for each of our Named Executive Officers, subject to achievement of financial
objectives of the Company, are as follows:

              Threshold, Target and     Stretch/Outstanding     Amounts as a
Percentage of Name of Executive Officer   Base Salary
Mr. Gendron
    30, 75 & 150 %
Mr. Weber
    22, 55 & 110 %
Mr. Lauffer
    20, 50 & 100 %
Mr. Benning
    20, 50 & 100 %
Mr. Glass
    20, 50 & 100 %

 

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     For fiscal 2008, the performance objectives were determined to be:
(1) earnings per share (EPS) (GAAP); and (2) total Company returns on invested
assets (ROIA, meaning EPS divided by our invested assets).
     Threshold customarily is established at the EPS results achieved by us in
the preceding fiscal year, which for fiscal year 2007 was $2.87. The ROIA
metrics are set based on profit planning goals.
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 2008, granted on November 16, 2007 with an
exercise price of $65.46 per share, under the 2006 Plan to each of the Other
Executive Officers are as follows:

              Number of Name of Executive Officer   Shares
Mr. Gendron
    45,000  
Mr. Weber
    13,000  
Mr. Lauffer
    13,000  
Mr. Benning
    13,000  
Mr. Glass
    13,000  

     The form of Stock Option Award Agreement under the 2006 Plan, including
vesting provisions, pursuant to which such awards were made is incorporated
herein by reference to Exhibit 99.2 to the Company’s Current Report on Form 8-K
dated November 16, 2007.
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 2008-1010 for each Name
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:

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              Cash Target     LTIP Award as Executive Officer   a % of Base
Gendron
    50 %
Weber
    40 %
Lauffer
    25 %
Benning
    25 %
Glass
    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 Small Cap 600 over the three-year
period 2008 through 2010. 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 Small Cap 600 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 Named 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, maxing at 4.5%); Woodward Stock Plan (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 Named 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. Participants are able to defer up to 50% of base pay, and
up to 100% of any incentive payments.

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     Messrs Gendron and Weber have been provided company cars and Messrs Weber,
Benning and Glass have been provided with country club memberships.
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/corp/IR/secFilings.cfm and at
the SEC’s website at www.sec.gov.

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