TRIUMPH GROUP,INC. (NYSE:TGI) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Severance Plans
As previously reported on a Form 8-K dated May 29, 2018, on such date the Board of Directors (the “Board”) of Triumph Group, Inc. (the “Company”), on the recommendation of the Compensation and Management Development Committee of the Board (the “Committee”), adopted the Triumph Group, Inc. Executive Change in Control and General Severance Plan for Executive and Management Employees (the “Prior Severance Plan”), in which the executive officers, including the named executive officers, of the Company participate.
On February 19, 2019, the Committee approved the bifurcation of the Prior Severance Plan into (i) the Triumph Group, Inc. Executive Change in Control Severance Plan (the “CIC Severance Plan”), applicable in the event of a termination of employment without Cause or for Good Reason that occurs within the period beginning six (6) months prior to and ending twenty-four (24) months after a Change in Control (each term as defined in the CIC Severance Plan), and (ii) the Triumph Group, Inc. General Severance Plan, applicable in the event of a termination of employment without Cause or for Good Reason (each term as defined in the General Severance Plan) unrelated to a Change in Control (the “General Severance Plan”) (collectively, the “Current Severance Plans”).
The Committee approved the Current Severance Plans in order to simplify plan administration and enhance clarity. The Current Severance Plans maintain the material terms of the Prior Severance Plan, including the severance multiplies applicable under the Prior Severance Plan. In addition, the Current Severance Plans provide for the following:
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The annual bonus component of each named executive officer’s cash severance payment under the CIC Severance Plan is based on the higher of the executive’s (i) highest annual bonus earned in each of the last three completed annual performance periods and (ii) current target bonus opportunity in the fiscal year in which the executive’s termination occurs. The annual bonus component of each named executive officer’s cash severance payment under the General Severance Plan is based on the executive’s target bonus opportunity in the fiscal year in which the executive’s termination occurs. |
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Under the Current Severance Plans, severance payments will include a lump sum payment equal to the executive’s pro-rated annual target bonus opportunity in the fiscal year in which the executive’s termination occurs. |
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Under the Current Severance Plans, performance-based awards vest based on an assumed achievement of all relevant performance goals at target as of the effective date of termination (pro-rated under the General Severance Plan). |
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Under the CIC Severance Plan, severance payments include a lump sum payment equal to the total amount that the executive would have received under the Company’s 401(k) plan as a company match, assuming the executive participated in such plan at statutory maximum levels through the applicable severance period. |
The above is a non-comprehensive summary of changes only and does not purport to be a complete description of the Current Severance Plans. This summary is qualified in all respects by the applicable plan documents, which will be included as exhibits to our Form 10-K for the fiscal year ending March 31, 2019.
CFO Compensation
Also on February 19, 2019, the Committee approved certain amendments to the Company’s compensation arrangements with James F. McCabe, the Company’s Senior Vice President and Chief Executive Officer. Specifically, Mr. McCabe’s annual base salary was increased to $550,000, and his target bonus was increased to $550,000. In addition, Mr. McCabe’s target long-term incentive (LTI) payment was increased to 150% of base salary.
About TRIUMPH GROUP,INC. (NYSE:TGI)
Triumph Group, Inc. designs, engineers, manufactures, repairs, overhauls and distributes a portfolio of aircraft components, accessories, subassemblies and systems. The Company offers a range of products and services to the aerospace industry through three segments: Triumph Aerostructures Group, whose companies are engaged in the design, manufacture, assembly and integration of metallic and composite aerostructures and structural components for the aerospace original equipment manufacturer (OEM) market; Triumph Aerospace Systems Group, whose companies design, engineer and manufacture a range of build-to-print components, assemblies and systems also for the OEM market, and Triumph Aftermarket Services Group, whose companies serve aircraft fleets, such as commercial airlines, the United States military and cargo carriers, through the maintenance, repair and overhaul (MRO) of aircraft components and accessories manufactured by third parties.