On January 29, 2020, Mr. Garcia resigned. On January 31, 2020, the Company and Mr. Garcia26, 2023, we entered into a ResignationSeparation Agreement and General Release (the “Garcia Agreement”). Underwith Mr. Matthies to set out the terms of his separation from the Garcia Agreement, and inCompany, effective as of January 26, 2023. In consideration of Mr. Garcia’s future cooperation,Matthies’ release of claims, future cooperation and compliance with certain obligations, including confidentiality, non-competition, non-solicitation and mutual non-disparagement covenants, Mr. Garcia receivedMatthies will receive separation payments comprised of the following separation payments:•
following: (i) a sum of $615,000,$595,000, which is equal to one year of Mr. Garcia’sMatthies’ annual base salary applicable onand $20,000 to assist with the date of his resignation;
•
costs associated with COBRA; (ii) a payment of $104,765.55, which is equal to Mr. Garcia’sMatthies’ expected ACI award for 2019,2022 pursuant to the STIP, based on an assumed scoreactual performance; and (iii) a payment of 1.0;
•
a lump sum of $20,000 for COBRA coverage over a 12-month period;
•
full vesting$483,805 with respect to 10,861 shares underlying the Initial Sign-On RS, 5,880 shares of the time-based restricted stockcertain awards granted underto Mr. Matthies pursuant to the LTIP in November 2019, and 5,344 shares of the 2019 RS;
that were forfeited upon his separation.•
a sum of $500,000 in lieu of the Subsequent Sign-On Award;
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•
a sum of $409,590 in lieu of receiving any portion of the annual 2020 long-term incentives;
•
reimbursement of reasonable and documented career transition services through July 31, 2020; and
•
continued vesting (upon the contractual vesting date) with respect to 1,321 shares (based on target performance) of the 2019 PB-TSR and 1,810 shares (based on target performance) of the 2019 PB-FCF, subject to the Company’s certification of the satisfaction of applicable performance criteria.
Mr. Pilla’s Retirement Agreement and General Release
On July 29, 2020, we entered into a retirement agreement and general release with Mr. Pilla (the “Pilla Agreement”). Under the terms of the Pilla Agreement, effective August 1, 2020, Mr. Pilla stepped down from his position as Senior Vice President and Chief Technology Officer and become a Senior Advisor to the Company. Such position will continue until July 1, 2021, the Retirement Date. For a period of 13 months following the Retirement Date (the “Consulting Term”), Mr. Pilla will provide consulting and transition services to the Company and Spirit.
In consideration of Mr. Pilla’s contributions to the Company (more than 39 years of service, including with Boeing prior to the Company’s divestiture), relationships with customers and key stakeholders in the industry, provision of advisory and consulting services, release of claims, and compliance with certain obligations, including confidentiality, non-competition, non-solicitation, and non-disparagement covenants, Mr. Pilla will receive the following:
•
From August 1, 2020, through the Retirement Date, Mr. Pilla will (i) receive an annual base salary of $475,000, and (ii) be eligible to receive an ACI award with a target value as follows: (a) for 2020, Mr. Pilla was entitled to an award of 100% of his base salary if target performance metrics are met, or 200% of his base salary if maximum performance metrics are met, and (b) for 2021, Mr. Pilla will be entitled to an award of 75% of his base salary if target performance metrics are met, or 150% of his base salary if maximum performance metrics are met, pro-rated based on the portion of the year in which he serves as Senior Advisor. Mr. Pilla will not be entitled to any new LTIP grants after August 1, 2020.
•
For the services to be provided during the Consulting Term, Mr. Pilla will receive $514,600 payable in equal installments over a 13-month period.
•
Mr. Pilla’s outstanding equity awards under the LTIP will be subject to continued vesting in accordance with their terms, including, in the case of performance-based grants, the satisfaction of applicable performance criteria.
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Grants of Plan-Based Awards in 2020
The following table presents information regarding grants of plan-based awards to the NEOs during the fiscal year ended December 31, 2020. Note that, for all equity awards below other than for Mr. Garcia, the date the award was approved by the Compensation Committee was January 21, 2020; however, the awards were not priced until the grant date of March 4, 2020. For more information on the status of Mr. Pilla’s awards, see “Summary Compensation Table - Employment and Separation Agreements – Mr. Pilla’s Retirement Agreement and General Release.”
| | Estimated Future Payouts
Under Non-Equity Incentive Plan Awards | | Estimated Future Payouts Under Equity Incentive Plan Awards | | All Other Stock Awards | Grant Date Fair Value of Stock Awards
($) |
Name | Grant Date | Threshold ($) | Target
($) | Maximum ($) | | Threshold (#) | Target (#) | Maximum (#) | | Number of Shares of Stock (#) |
Thomas C. Gentile III |
ACI(1) | | 401,850 | 1,607,400 | 3,214,801 | | | | | | | |
RS(2) | 3/4/2020 | | | | | | | | | 84,267 | 4,290,033 |
PB-TSR(3) | 3/4/2020 | | | | | 12,123 | 48,492 | 96,984 | | | 1,430,029 |
PB-FCF(4) | 3/4/2020 | | | | | 7,038 | 28,150 | 56,300 | | | 1,430,020 |
Jose I. Garcia | | | | | | | | | | |
RS(5) | 1/31/2020 | | | | | | | | | 5,344 | 348,215 |
PB-TSR(6) | 1/31/2020 | | | | | 331 | 1,321 | 2,642 | | | 39,220 |
PB-FCF(7) | 1/31/2020 | | | | | 453 | 1,810 | 3,620 | | | 217,275 |
RS(8) | 1/31/2020 | | | | | | | | | 10,861 | 707,703 |
RS(9) | 1/31/2020 | | | | | | | | | 5,880 | 383,141 |
Mark J. Suchinski | | | | | | | | | | |
ACI(1) | | 102,234 | 408,934 | 817,869 | | | | | | | |
RS(2) | 3/4/2020 | | | | | | | | | 10,313 | 525,035 |
PB-TSR(3) | 3/4/2020 | | | | | 1,484 | 5,935 | 11,870 | | | 175,023 |
PB-FCF(4) | 3/4/2020 | | | | | 862 | 3,445 | 6,890 | | | 175,006 |
Samantha J. Marnick | | | | | | | | | | |
ACI(1) | | 123,256 | 493,025 | 986,049 | | | | | | | |
RS(2) | 3/4/2020 | | | | | | | | | 13,937 | 709,533 |
PB-TSR(3) | 3/4/2020 | | | | | 2,005 | 8,020 | 16,040 | | | 236,510 |
PB-FCF(4) | 3/4/2020 | | | | | 1,164 | 4,656 | 9,312 | | | 236,525 |
Duane F. Hawkins | | | | | | | | | | |
ACI(1) | | 114,053 | 456,212 | 912,423 | | | | | | | |
RS(2) | 3/4/2020 | | | | | | | | | 14,503 | 738,348 |
PB-TSR(3) | 3/4/2020 | | | | | 2,087 | 8,346 | 16,692 | | | 246,124 |
PB-FCF(4) | 3/4/2020 | | | | | 1,212 | 4,845 | 9,690 | | | 246,126 |
William E. Brown | | | | | | | | | | |
ACI(1) | 85,358 | 341,431 | 682,861 | | | | | | | |
RS(2) | 3/4/2020 | | | | | | | | | 9,417 | 479,419 |
PB-TSR(3) | 3/4/2020 | | | | | 1,355 | 5,419 | 10,838 | | | 159,806 |
PB-FCF(4) | 3/4/2020 | | | | | 787 | 3,146 | 6,292 | | | 159,817 |
John A. Pilla | | | | | | | | | | |
ACI(1) | | 101,262 | 405,048 | 810,096 | | | | | | | |
RS(2) | 3/4/2020 | | | | | | | | | 10,637 | 541,530 |
PB-TSR(3) | 3/4/2020 | | | | | 1,531 | 6,121 | 12,242 | | | 180,508 |
PB-FCF(4)
| 3/4/2020
| | | | | 889
| 3,554
| 7,108
| | | 180,543
|
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(1)
Represents ACIs that were paid in February 2021 but granted and earned in 2020. The actual ACI amounts are reported in the “Non-Equity Incentive Plan Compensation” column of the “Summary Compensation Table.” For all participants, the threshold, target, and maximum figures were calculated on a weighted-average basis, giving effect to the changes made to base salaries during 2020 (including the salary reductions that applied in 2020).
(2)
Represents RSs that vest annually over three years, beginning March 4, 2021, if such NEO remains employed by the Company on each annual vesting date or as otherwise provided under the Pilla Agreement. However, Mr. Hawkins became retirement eligible in 2020 and, accordingly, will continue to vest in the RS even if he departs the Company (except under certain circumstances described under “Potential Payments Upon Termination or Change in Control”). The grant date fair value of each award, which is reported in the “Stock Awards” column of the “Summary Compensation Table,” is equal to the number of shares multiplied by $50.91, the average of the opening and closing prices of the Common Stock on the grant date.
(3)
Represents PB-TSRs that vest at the end of the three-year performance period based on the ranking of the Company’s TSR relative to the TSR of each of the companies in the Company’s peer group. The grant date fair value of each award, which is reported in the “Stock Awards” column of the “Summary Compensation Table,” is equal to the number of shares granted at target multiplied by $29.49, which was determined using a Monte Carlo simulation based on the probable ranking of the Company’s TSR relative to a group of the Company’s peers, using the closing price of the Common Stock on the grant date. Actual payout may be zero or range from 25% to 200% of the target shares granted.
|
(4)
Represents PB-FCFs that vest at the end of the three-year performance period based upon the achievement of FCF Percentage on a cumulative basis over the period. The grant date fair value of each award, which is reported in the “Stock Awards” column of the “Summary Compensation Table,” is equal to the number of shares granted at target multiplied by $50.80, the average of the open and closing prices of the Common Stock on the grant date, adjusted for dividends. Actual payout may be zero or range from 25% to 200% of the target shares granted.
(5)
Represents RS granted on February 6, 2019 (approved by the Compensation Committee on January 23, 2019), that would have been forfeited by its terms upon Mr. Garcia’s resignation. As a result of the Garcia Agreement, the incremental fair value of the modified award, which is reported in the “Stock Awards” column of the “Summary Compensation Table,” is equal to the number of shares multiplied by $65.16, the average of the opening and closing prices of the Common Stock on January 31, 2020.
(6)
Represents PB-TSR granted on February 6, 2019 (approved by the Compensation Committee on January 23, 2019), that would have been forfeited by its terms upon Mr. Garcia’s resignation. As a result of the Garcia Agreement, the incremental fair value of the modified award, which is reported in the “Stock Awards” column of the “Summary Compensation Table,” is equal to the number of shares at target multiplied by $29.69, which was determined using a Monte Carlo simulation model based on the probable ranking of the Company’s TSR relative to the TSR of a group of the Company’s peers, using the closing price of Common Stock on January 31, 2020.
(7)
Represents PB-FCF granted on February 6, 2019 (approved by the Compensation Committee on January 23, 2019), that would have been forfeited by its terms upon Mr. Garcia’s resignation. As a result of the Garcia Agreement, the incremental fair value of the modified award, which is reported in the “Stock Awards” column of the “Summary Compensation Table,” is equal to the number of shares at target multiplied by $65.24, the average of the opening and closing prices of the Common Stock on January 31, 2020, adjusted for dividends, multiplied by 184%, the expected payout of the award as of January 31, 2020.
(8)
Represents Initial Sign-On RS granted on February 6, 2019 (approved by the Compensation Committee on November 20, 2018), that would have been forfeited by its terms upon Mr. Garcia’s resignation. As a result of the Garcia Agreement, the incremental fair value of the modified award, which is reported in the “Stock Awards” column of the “Summary Compensation Table,” is equal to the number of shares multiplied by $65.16, the average of the opening and closing prices of the Common Stock on January 31, 2020.
(9)
Represents special RS granted on November 5, 2020 (approved by the Compensation Committee on October 22, 2020), that would have been forfeited by its terms upon Mr. Garcia’s resignation. As a result of the Garcia Agreement, the incremental fair value of the modified award, which is reported in the “Stock Awards” column of the “Summary Compensation Table,” is equal to the number of shares multiplied by $65.16, the average of the opening and closing prices of the Common Stock on January 31, 2020.
|
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Outstanding Equity Awards at 2020 Fiscal Year End
The following table presents the outstanding equity awards held by the NEOs as of December 31, 2020. The Company has not granted any options or option-like awards. The market value of the awards is determined by multiplying the number of shares shown in the applicable columns below by $39.09, the closing price of the Common Stock on December 31, 2020. For information on the effect of Mr. Garcia’s resignation on such awards, see “Employment and Separation Agreements.”
Name | Stock Awards |
Grant Date | Number of Shares or Units of Stock That Have Not Vested
(#) | Market Value of Shares or Units of Stock That Have Not Vested
($) | | Equity Incentive Plan Awards: Number of Unearned Shares, Units, or Other Rights That Have Not Vested
(#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units, or Other Rights That Have Not Vested
($) |
Thomas C. Gentile III | | | | | | |
RS(1) | 3/4/2020 | 84,267 | 3,293,997 | | | |
PB-TSR(2) | 3/4/2020 | | | | 12,123 | 473,888 |
PB-FCF(3) | 3/4/2020 | | | | 7,038 | 275,115 |
RS(4) | 2/6/2019 | 31,060 | 1,214,135 | | | |
PB-TSR(5) | 2/6/2019 | | | | 2,878 | 112,501 |
PB-FCF(6) | 2/6/2019 | | | | 3,946 | 154,249 |
RS(7) | 2/7/2018 | 13,994 | 547,025 | | | |
Jose I. Garcia | | | | | | |
PB-TSR(5) | 2/6/2019 | | | | 331 | 12,939 |
PB-FCF(6) | 2/6/2019 | | | | 453 | 17,708 |
Mark J. Suchinski | | | | | | |
RS(1) | 3/4/2020 | 10,313 | 403,135 | | | |
PB-TSR(2) | 3/4/2020 | | | | 1,484 | 58,010 |
PB-FCF(3) | 3/4/2020 | | | | 862 | 33,696 |
RS(4) | 2/6/2019 | 1,882 | 73,567 | | | |
PB-TSR(5) | 2/6/2019 | | | | 140 | 5,473 |
PB-FCF(6) | 2/6/2019 | | | | 192 | 7,505 |
Special RS(8) | 11/26/2018 | 1,674 | 65,437 | | | |
RS(7) | 2/7/2018 | 776 | 30,334 | | | |
Samantha J. Marnick | | | | | | |
RS(1) | 3/4/2020 | 13,937 | 544,797 | | | |
PB-TSR(2) | 3/4/2020 | | | | 2,005 | 78,375 |
PB-FCF(3) | 3/4/2020 | | | | 1,164 | 45,501 |
RS(4) | 2/6/2019 | 5,137 | 200,805 | | | |
PB-TSR(5) | 2/6/2019 | | | | 476 | 18,607 |
PB-FCF(6) | 2/6/2019 | | | | 653 | 25,526 |
RS(7) | 2/7/2018 | 2,329 | 91,040 | | | |
Duane F. Hawkins | | | | | | |
RS(1) | 3/4/2020 | 8,069 | 315,417 | | | |
PB-TSR(2) | 3/4/2020 | | | | 2,087 | 81,581 |
PB-FCF(3) | 3/4/2020 | | | | 1,212 | 47,377 |
RS(4) | 2/6/2019 | 2,974 | 116,254 | | | |
PB-TSR(5) | 2/6/2019 | | | | 496 | 19,389 |
PB-FCF(6) | 2/6/2019 | | | | 680 | 26,581 |
RS(7) | 2/7/2018 | 1,532 | 59,886 | | | |
William E. Brown | | | | | | |
RS(1) | 3/4/2020 | 9,417 | 368,111 | | | |
PB-TSR(2) | 3/4/2020 | | | | 1,355 | 52,967 |
PB-FCF(3) | 3/4/2020 | | | | 787 | 30,764 |
RS(4) | 2/6/2019 | 3,471 | 135,681 | | | |
PB-TSR(5) | 2/6/2019 | | | | 322 | 12,587 |
PB-FCF(6) | 2/6/2019 | | | | 441 | 17,239 |
Special RS(8) | 10/23/2018 | 613 | 23,962 | | | |
RS(7) | 2/7/2018 | 1,128 | 44,094 | | | |
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Name | Stock Awards |
Grant Date | Number of Shares or Units of Stock That Have Not Vested
(#) | Market Value of Shares or Units of Stock That Have Not Vested
($) | | Equity Incentive Plan Awards: Number of Unearned Shares, Units, or Other Rights That Have Not Vested
(#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units, or Other Rights That Have Not Vested
($) |
John A. Pilla | | | | | | |
RS(1) | 3/4/2020 | 10,637 | 415,800 | | | |
PB-TSR(2) | 3/4/2020 | | | | 1,531 | 59,848 |
PB-FCF(3) | 3/4/2020 | | | | 889 | 34,751 |
RS(4) | 2/6/2019 | 3,920 | 153,233 | | | |
PB-TSR(5) | 2/6/2019 | | | | 364 | 14,229 |
PB-FCF(6) | 2/6/2019 | | | | 499 | 19,506 |
Special RS(8) | 10/23/2018 | 2,045 | 79,939 | | | |
RS(7) | 2/7/2018 | 1,936 | 75,678 | | | |
(1) Represents 2020 annual RSs. The first tranche of the award vested on March 4, 2021, and the second and third tranches will vest on March 4, 2022, and March 4, 2023, respectively, if the NEO continues to be employed by the Company on each vesting date or as otherwise provided in the Pilla Agreement. However, Mr. Hawkins became retirement eligible in 2020 and, accordingly, will continue to vest in the RS even if he departs the Company (except under certain circumstances described under “Potential Payments Upon Termination or Change in Control”). For this reason, Mr. Hawkins’ amounts for the RS are shown as net shares, because shares were disposed of for tax purposes on the date he became retirement eligible in 2020 in accordance with IRC requirements. (2) Represents PB-TSRs granted in 2020 with a performance period running from January 1, 2020, to December 31, 2022. The number of shares and market value shown reflects the achievement of a threshold performance goal based on TSR performance for the fiscal year ended December 31, 2020. The award vesting date is December 31, 2022, subject to performance certification by the Compensation Committee. (3) Represents PB-FCFs granted in 2020 with a performance period running from January 1, 2020, to December 31, 2022. The number of shares and market value shown reflects the achievement of a threshold performance goal based on FCF Percentage performance for the fiscal year ended December 31, 2020. The award vesting date is December 31, 2022, subject to performance certification by the Compensation Committee. (4) Represents 2019 annual RSs. The first tranche of the award vested on February 6, 2020, the second tranche vested on February 6, 2021, and the third tranche will vest on February 6, 2022, if the NEO continues to be employed by the Company on each such vesting date or as otherwise provided in the Pilla Agreement. However, Mr. Hawkins became retirement eligible in 2020 and, accordingly, will continue to vest in the RS even if he departs the Company (except under certain circumstances described under “Potential Payments Upon Termination or Change in Control”). For this reason, Mr. Hawkins’ amounts for the RS are shown as net shares, because shares were disposed of for tax purposes on the date he became retirement eligible in 2020 in accordance with IRC requirements. (5) Represents PB-TSRs granted in 2019 with a performance period running from January 1, 2019, to December 31, 2021. The number of shares and market value shown reflects the achievement of a threshold performance goal based on TSR performance during the fiscal year ended December 31, 2020. The award vesting date is December 31, 2021, subject to performance certification by the Compensation Committee. For information on the effect of Mr. Garcia’s resignation on such award, see “Employment and Separation Agreements.” (6) Represents PB-FCFs granted in 2019 with a performance period running from January 1, 2019, to December 31, 2021. The number of shares and market value shown reflects the achievement of a threshold performance goal based on FCF Percentage performance for the fiscal year ended December 31, 2020. The award vesting date is December 31, 2021, subject to performance certification by the Compensation Committee. For information on the effect of Mr. Garcia’s resignation on such award, see “Employment and Separation Agreements.” (7) Represents 2018 annual RSs. The first tranche of the award vested on February 7, 2019, the second tranche vested on February 7, 2020, and the third tranche vested on February 7, 2021. As Mr. Hawkins became retirement eligible in 2020, Mr. Hawkins’ amounts for the RS are shown as net shares, because shares were disposed of for tax purposes on the date he became retirement eligible in 2020 in accordance with IRC requirements. (8) Represents a special RS (each, a “Special RS”) that vests annually on the anniversary of the applicable grant date over three years, subject to the NEO remaining employed by the Company through each applicable vesting date or as otherwise provided in the Pilla Agreement. |
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Option Exercises and Stock Vested for Fiscal Year 2020
The following table presents information regarding NEO stock awards that vested in 2020. Values reflected below are gross amounts that do not include any reductions for tax withholding. The value realized on vesting represents the number of shares multiplied by the average of the high and low prices of the Common Stock on the vesting date. The Company has not granted any options or option-like awards.
Name | Grant Date | Vesting Date | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting
($) |
Thomas C. Gentile III | | | | |
PB-TSR(1) | 2/7/2017 | 2/7/2020 | 22,358 | 1,556,229 |
PB-FCF(2) | 2/7/2017 | 2/7/2020 | 37,672 | 2,662,160 |
RS(3) | 2/7/2017 | 2/7/2020 | 18,457 | 1,284,699 |
RS(4) | 2/7/2018 | 2/7/2020 | 13,995 | 974,122 |
RS(5) | 2/6/2019 | 2/6/2020 | 15,530 | 1,064,504 |
TOTAL | | | 108,012 | 7,501,713 |
Jose I. Garcia | | | | |
RS(7) | 2/6/2019 | 1/31/2020 | 5,344 | 345,917 |
RS(8) | 2/6/2019 | 1/31/2020 | 10,861 | 703,033 |
Special RS(9) | 11/5/2019 | 1/31/2020 | 5,880 | 380,612 |
TOTAL | | | 22,085 | 1,429,562 |
Mark J. Suchinski | | | | |
PB-TSR(1) | 2/7/2017 | 2/7/2020 | 1,427 | 99,326 |
PB-FCF(2) | 2/7/2017 | 2/7/2020 | 2,404 | 167,330 |
RS(3) | 2/7/2017 | 2/7/2020 | 1,177 | 81,925 |
Special RS(6) | 2/28/2017 | 2/7/2020 | 866 | 60,278 |
RS(4) | 2/7/2018 | 2/7/2020 | 776 | 54,013 |
Special RS(6) | 11/26/2018 | 11/26/2020 | 1,674 | 59,226 |
RS(5) | 2/6/2019 | 2/6/2020 | 941 | 64,501 |
TOTAL | | | 9,265 | 586,600 |
Samantha J. Marnick | | | | |
PB-TSR(1) | 2/7/2017 | 2/7/2020 | 4,022 | 279,951 |
PB-FCF(2) | 2/7/2017 | 2/7/2020 | 6,778 | 471,783 |
RS(3) | 2/7/2017 | 2/7/2020 | 3,320 | 231,089 |
RS(4) | 2/7/2018 | 2/7/2020 | 2,329 | 162,110 |
RS(5) | 2/6/2019 | 2/6/2020 | 2,569 | 176,092 |
TOTAL | | | 19,018 | 1,321,025 |
Duane F. Hawkins | | | | |
PB-TSR(1) | 2/7/2017 | 2/7/2020 | 4,943 | 344,058 |
PB-FCF(2) | 2/7/2017 | 2/7/2020 | 8,328 | 579,670 |
RS(3) | 2/7/2017 | 2/7/2020 | 4,079 | 283,919 |
RS(4) | 2/7/2018 | 2/7/2020 | 2,756 | 191,831 |
RS(5) | 2/6/2019 | 2/6/2020 | 2,673 | 183,221 |
RS(10) | 2/7/2018 | 3/15/2020 | 1,222 | 42,874 |
RS(10) | 2/6/2019 | 3/15/2020 | 2,372 | 83,222 |
RS(10) | 3/4/2020 | 3/15/2020 | 6,434 | 225,737 |
TOTAL | | | 32,807 | 1,934,531 |
William E. Brown | | | | |
PB-TSR(1) | 2/7/2017 | 2/7/2020 | 2,100 | 146,171 |
PB-FCF(2) | 2/7/2017 | 2/7/2020 | 3,538 | 246,262 |
RS(3) | 2/7/2017 | 2/7/2020 | 1,733 | 120,625 |
RS(4) | 2/7/2018 | 2/7/2020 | 1,129 | 78,584 |
Special RS(6) | 10/23/2018 | 10/23/2020 | 614 | 12,441 |
RS(5) | 2/6/2019 | 2/6/2020 | 1,736 | 118,994 |
TOTAL | | | 10,850 | 723,078 |
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Name | Grant Date | Vesting Date | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting
($) |
John A. Pilla | | | | |
PB-TSR(1) | 2/7/2017 | 2/7/2020 | 3,325 | 231,437 |
PB-FCF(2) | 2/7/2017 | 2/7/2020 | 5,602 | 389,927 |
RS(3) | 2/7/2017 | 2/7/2020 | 2,744 | 190,996 |
RS(4) | 2/7/2018 | 2/7/2020 | 1,936 | 134,755 |
Special RS(6) | 10/23/2018 | 10/23/2020 | 2,045 | 41,437 |
RS(5) | 2/6/2019 | 2/6/2020 | 1,961 | 134,417 |
TOTAL | | | 17,613 | 1,122,969 |
(1) Represents shares under the 2017 PB-TSR with a performance period from January 1, 2017, to December 31, 2019. (2) Represents shares under the 2017 PB-FCF with a performance period from January 1, 2017, to December 31, 2019. (3) Represents shares vesting under the 2017 annual RS. (4) Represents shares vesting under the 2018 annual RS. (5) Represents shares vesting under the 2019 annual RS. (6) Represents shares vesting under a Special RS granted to the recipients in consideration of their performance or responsibilities, or for retention purposes. (7) Represents shares granted under the 2019 annual RS that were accelerated pursuant to the Garcia Agreement on January 31, 2020. (8) Represents shares vesting under Mr. Garcia’s Initial Sign-On RS that were accelerated pursuant to the Garcia Agreement on January 31, 2020. (9) Represents shares vesting under a Special RS that were accelerated pursuant to the Garcia Agreement on January 31, 2020. (10) Represents shares required to be withheld to satisfy tax obligations upon the date Mr. Hawkins became retirement eligible. |
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Pension Benefits
The following table presents information concerning benefits payable under the Company’s PVP for Mr. Pilla, computed as of December 31, 2020. No other NEOs are entitled to receive any benefits under the PVP.
Name | Plan Name | Number of Years of
Credited Service | (1) | Present Value of
Accumulated Benefit ($) | (2) |
John A. Pilla | PVP | 24.0875 | | 879,374 | |
(1) Please note credited service was frozen in the PVP as of June 16, 2005. There is no policy that provides for granting extra years of credited service. (2) Present value was calculated based on the assumption that Mr. Pilla’s benefit commences at age 61.5. Key assumptions reflected in present value include a 2.31% discount rate, a cash balance interest crediting rate of 5.25%, and the life annuity form of payment. In order to determine changes in the present value reported in the “Summary Compensation Table,” the value was also calculated as of December 31, 2019. For values as of December 31, 2019, the discount rate was 3.19%. The present value was calculated assuming Mr. Pilla retires and commences receipt of benefits at age 61.5. The mortality assumption for the fiscal years ending December 31, 2019, and December 31, 2020, is Mercer’s MILES-2010 generational mortality table for the Auto, Industrial Goods, and Transportation group with the MMP-2019 improvement scale. |
A significant portion of Spirit’s operations related to Boeing aerostructures was owned and controlled by Boeing until 2005. Boeing’s pension assets and liabilities were spun-off from Boeing’s qualified plans (each, a “Prior Plan”) into Spirit qualified plans for certain eligible Boeing employees who joined the Company. Credited service and benefit amounts under the Prior Plans were frozen as of June 16, 2005. Effective December 31, 2005, all Prior Plans were merged together into the PVP. The PVP is a frozen plan, so no additional employees may become participants in the PVP, and no current participants are accruing any additional benefits (except for the interest credits described below). The PVP is fully paid for by the Company, and the Company’s employees are vested after reaching five years of service.
Mr. Pilla is the only NEO who participates in the PVP. Mr. Pilla is fully vested in his benefits. Benefits under the PVP for Mr. Pilla are based upon heritage benefits transferred into the Prior Plan and a cash balance benefit. Heritage benefits were indexed (increased) for base pay increases from the date the heritage benefit transferred to the Prior Plan until June 16, 2005. Under the cash balance benefit formula, employees received benefit credits based on their age at the end of each plan year through June 16, 2005. The annual benefit credit was a specified percentage of eligible pay, ranging from 3% at ages younger than 30, to 11% upon reaching age 50. Eligible pay included base pay and executive incentive pay, limited to IRC Section 401(a)(17) limits. The benefit credits ceased upon freezing the Prior Plan; however, employees continue to receive interest credits each year. Interest credits are calculated by applying simple interest to the Prior Plan balance at the beginning of the year and are accrued until the pension benefit begins. Interest credits are based on the 30-year Treasury Rate as of November of the prior year, with a minimum of 5.25% and a maximum of 10%.
The PVP benefits are payable as a life annuity (other annuity options are also available). To determine a participant’s pension benefit, the participant’s accumulated benefits are divided by 11 and further divided by a factor of 12 to produce a monthly benefit.
The normal retirement age under the PVP is age 65. Participants who have at least 10 years of service and are at least age 55, or at least one year of service and are at least age 62, are eligible for early retirement. Mr. Pilla is currently 61.5 years of age and is eligible for early retirement. Projected annual benefits payable upon retirement as of December 31, 2020, are $48,380 for Mr. Pilla. If he retires at age 65, the annual benefit amount is $51,633. Note that, while Mr. Pilla is no longer serving as Senior Vice President and Chief Technology Officer, he continues to serve in a Senior Advisor role for the Company and has not retired.
We also maintain the SERP, which provides supplemental, nonqualified retirement benefits to executives who (i) had their benefits transferred from a Boeing nonqualified plan to the SERP, and (ii) did not elect to convert their SERP benefit into phantom stock units as of June 17, 2005. Benefits under this plan were also frozen as of the date of the Boeing acquisition. There are no SERP annuity benefits payable to any of the NEOs. Mr. Pilla was a participant in the SERP, but elected to convert his SERP benefit as of June 17, 2005, into 16,023 phantom stock units. For additional information, see “Nonqualified Deferred Compensation.”
SPIRIT AEROSYSTEMS - 2021 Proxy Statement 67
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Nonqualified Deferred Compensation
The following table presents information concerning each of the Company’s defined contribution or other plans that provide for the deferral of compensation of the NEOs on a basis that is not tax-qualified. In addition, and as discussed above under “Pension Benefits,” Mr. Pilla was a participant in the SERP, but elected to convert his SERP benefit as of June 17, 2005, into 16,023 phantom stock units. Mr. Pilla’s vested and undelivered phantom stock units and accrued dividend equivalents are reflected below and may be settled in cash or shares on the earliest of his separation from service or a change in control (subject to the fulfillment of any applicable waiting period).
Name | Plan | Executive
Contributions
in Last FY
($)(1) | Registrant
Contributions
in Last FY
($) | (2) | Aggregate
Earnings
in Last FY
($) | (3) | Aggregate
Withdrawals/
Distributions
($) | Aggregate
Balance at
Last FYE
($) | |
Thomas C. Gentile III | DCP | | 600,000 | | 48,780 | | | 2,537,882 | (4) |
Jose I. Garcia | DCP | | | | 1,109 | | (101,109) | | |
Samantha J. Marnick | DCP | | 100,000 | | 10,612 | | | 536,754 | (5) |
John A. Pilla | DCP | 26,000 | | | 7,995 | | | 379,313 | (6) |
| SERP | | | | (541,417) | | | 650,053 | (7) |
(1) These amounts represent participant contributions to the DCP and are included in the “Salary” column of the “Summary Compensation Table.” (2) These amounts represent Company contributions to the DCP and are included in the “All Other Compensation” column of the “Summary Compensation Table.” (3) Under the DCP, these amounts represent earnings on DCP balances from January 1 to December 31, 2020, and are not included in the “Summary Compensation Table.” For Mr. Pilla’s balance under the SERP, represents a decrease in value equal to the change in market value of 16,023 phantom stock units and accrued dividend equivalents under the SERP from December 31, 2019, to December 31, 2020. The change in market value of the phantom stock units for Mr. Pilla was calculated using the closing prices of the Common Stock on December 31, 2019, and December 31, 2020, respectively. (4) This amount includes $1,800,000 consisting of aggregate Company contributions prior to 2020 (reported in the “Summary Compensation Table” of prior year’s proxy statements). (5) This amount includes $400,000 consisting of aggregate Company contributions prior to 2020 (reported in the “Summary Compensation Table” of prior year’s proxy statements). (6) This amount includes $339,349 consisting of aggregate individual contributions prior to 2020 (reported in the “Summary Compensation Table” of prior year’s proxy statements, when Mr. Pilla was a NEO). (7) Represents the sum of (i) $626,339 which represents the 16,023 phantom stock units under the SERP multiplied by $39.09, the closing price of the Common Stock on December 31, 2020, and (ii) $23,714 in accrued dividend equivalents on the phantom stock units through December 31, 2020. |
More information on the DCP and SERP can be found under “Other Compensation Elements and Information” and “Potential Payments Upon Termination or Change in Control.” There were no “above-market” earnings (defined by SEC rule as that portion of interest that exceeds 120% of the applicable federal long-term rate) under the DCP during fiscal year 2020, as the Company used 120% of the applicable federal long-term rate to determine the amounts to be contributed.
SPIRIT AEROSYSTEMS - 2021 Proxy Statement 68
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Potential Payments Upon Termination or Change in Control
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