exv10w16



 





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	%






 









 






     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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