Item
5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensation Arrangements
of Certain Officers.
Chief
Operating Officer
On
July 28, 2020, the boards of directors of Spirit AeroSystems Holdings, Inc. (the “Company”) and Spirit AeroSystems,
Inc. (“Spirit”) appointed Samantha Marnick, age 49, as Executive Vice President and Chief Operating Officer, effective
July 28, 2020. Previously, Ms. Marnick served as the Company’s and Spirit’s Executive Vice President, Chief Administration
Officer and Strategy. With the July 28 promotion, Ms. Marnick has responsibility for supply chain, fabrication, strategy, administration,
aftermarket, and business and regional jets, among other things.
Ms.
Marnick’s biographical information appears in the Company’s Form 10-K for the 2019 fiscal year filed with the Securities
and Exchange Commission on February 28, 2020. There were no arrangements or understandings between
Ms. Marnick and any other persons pursuant to which Ms. Marnick received her appointment. Ms. Marnick does not have any family
relationships subject to disclosure under Item 401(d) of Regulation S-K or any direct or indirect material interest in any transaction
required to be disclosed pursuant to Item 404(a) of Regulation S-K.
In
connection with Ms. Marnick’s July 28 promotion, the boards of directors of the Company and Spirit modified Ms.
Marnick’s compensation arrangements. Effective July 28, 2020, Ms. Marnick’s annual base salary will increase from
$550,000 to $620,000 (referenced salary amounts are currently subject to a 20% reduction applicable to all Company
executives). Beginning in 2021, Ms. Marnick will be entitled to receive an annual award under the Long-Term Incentive Plan
(“LTIP”) under the Company’s 2014 Omnibus Incentive Plan, as amended (the “Omnibus Plan”) with
a value equal to 230% of her annual base salary (increased from 215%). Beginning in 2021, Ms. Marnick will also receive an
annual contribution to the Company’s Deferred Compensation Plan of $200,000 (increased from $100,000).
Also
in connection with Ms. Marnick’s July 28 promotion, Duane Hawkins’ title was revised to Senior Vice President, Defense,
at the Company, and President, Defense Division, at Spirit, which allows for greater focus on defense growth and execution.
Senior
Vice President and Chief Technology Officer
On
July 28, 2020, John Pilla announced his retirement as Senior Vice President and Chief Technology Officer of the Company and Spirit,
effective August 1, 2020. On July 29, 2020, the Company and Mr. Pilla entered into a Retirement Agreement and General Release (the
“Agreement”). Under the terms of the Agreement, effective August 1, 2020, Mr.
Pilla will step down from his current position and become a Senior Advisor to the Company and Spirit; such position will continue
until June 30, 2021, when he will formally retire from the Company (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 The Boeing
Company 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:
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From August 1, 2020 through the Retirement Date, Mr. Pilla
will (i) receive a base salary of $475,000, and (ii) be entitled to participate in the Company’s Short-Term Incentive Program
(“STIP”) under the Omnibus Plan as follows: (a) for 2020, Mr. Pilla will be 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 (referenced salary amounts are currently subject to a 20% reduction applicable to all Company executives).
Mr. Pilla will not be entitled to any new LTIP grants after August 1, 2020.
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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 annualized compensation
during the Consulting Term represents approximately 26% of Mr. Pilla’s total direct compensation as Senior Vice President
and Chief Technology Officer.
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Mr. Pilla’s outstanding 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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