Equity-Based Compensation

We have equity-based compensation plans that authorize the issuance of equity-based awards for shares of Class A and Class B common stock to directors, officers and key employees. Equity-based compensation grants are designed to reward long-term contributions to Moog and provide incentives for recipients to remain with Moog.

Equity-based compensation expense is based on share-based payment awards that are ultimately expected to vest. Vesting requirements vary for directors, officers and key employees. In general, options and stock appreciation rights (SARs) granted to outside directors vest one year from the date of grant, options granted to officers vest on various schedules, options granted to key employees vest in equal annual increments over a period of five years from the date of grant and SARs granted to officers and key employees vest in equal annual installments over a period of three years from the date of grant.

The fair value of equity-based awards granted was estimated on the date of grant using the Black-Scholes option-pricing model. The following table provides the range of assumptions used to value equity-based awards and the weighted-average fair value of the awards granted.



	2015			2014			2013
Expected volatility	24% - 38%			29% - 39%			34% - 40%
Risk-free rate	.9% - 1.9%			.7% - 2.0%			.4% - 1.1%
Expected dividends	—		%	—		%	—		%
Expected term	3-7 years			3-7 years			3-7 years
Weighted-average fair value of awards granted	$	28.71		$	23.74		$	14.10

To determine expected volatility, we generally use historical volatility based on weekly closing prices of our Class A common stock over periods that correlate with the expected terms of the awards granted. The risk-free rate is based on the United States Treasury yield curve at the time of grant for the appropriate term of the awards granted. Expected dividends are based on our history and expectation of dividend payouts. The expected term of equity-based awards is based on vesting schedules, expected exercise patterns and contractual terms.

On January 7, 2015, shareholders approved the 2014 Long Term Incentive Plan. The 2014 Long Term Incentive Plan authorizes the issuance of a total of 2,000,000 shares of either Class A or Class B common stock. The 2014 Long Term Incentive Plan is intended to provide a flexible framework that permits the development and implementation of a variety of stock-based programs that base awards on key performance metrics as well as align our long term incentive compensation with our peers and shareholder interests.

The 2008 Stock Appreciation Rights Plan (2008 Plan) authorizes the issuance of 4,000,000 SARs, which represent the right to receive shares of Class A common stock. The exercise price of the SARs, determined by a committee of the Board of Directors, may not be less than the fair market value of the Class A common stock on the grant date. The number of shares received upon exercise of a SAR is equal in value to the difference between the fair market value of the Class A common stock on the exercise date and the exercise price of the SAR. The term of a SAR may not exceed ten years from the grant date.

The 2003 Stock Option Plan (2003 Plan) authorizes the issuance of options for 1,350,000 shares of Class A common stock. The 1998 Stock Option Plan (1998 Plan) authorizes the issuance of options for 2,025,000 shares of Class A common stock. Under the terms of the plans, options may be either incentive or non-qualified. Options outstanding as of October 3, 2015 consisted of both incentive options and non-qualified options. The exercise price, determined by a committee of the Board of Directors, may not be less than the fair market value of the Class A common stock on the grant date. Options become exercisable over periods not exceeding ten years.

Options and SARs are as follows:



1998 Stock Option Plan	Stock Options/SARs		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life	Aggregate Intrinsic Value
Outstanding at September 29, 2012	157,861		15.45
Exercised in 2013	(107,237	)	13.42
Outstanding at September 28, 2013	50,624		19.74
Exercised in 2014	(50,624	)	19.74
Outstanding at September 27, 2014	—		$	—	0 years	$	—



2003 Stock Option Plan
Outstanding at September 29, 2012	1,104,334		$	33.05
Exercised in 2013	(341,822	)	30.20
Expired in 2013	(20,250	)	42.45
Outstanding at September 28, 2013	742,262		34.11
Exercised in 2014	(139,974	)	32.22
Outstanding at September 27, 2014	602,288		34.55
Exercised in 2015	(346,405	)	32.89
Outstanding at October 3, 2015	255,883		$	36.81	1.3 years	$	4,530
Exercisable at October 3, 2015	189,305		$	38.68	1.6 years	$	2,997

Total Stock Option Plans
Outstanding at October 3, 2015	255,883		$	36.81
Exercisable at October 3, 2015	189,305		$	38.68



2008 Stock Appreciation Rights Plan
Outstanding at September 29, 2012	1,468,165		$	36.43
Granted in 2013	460,791		36.41
Exercised in 2013	(235,715	)	33.71
Outstanding at September 28, 2013	1,693,241		36.80
Granted in 2014	233,000		61.69
Exercised in 2014	(298,213	)	35.66
Forfeited in 2014	(4,000	)	39.12
Outstanding at September 27, 2014	1,624,028		40.57
Granted in 2015	192,000		74.38
Exercised in 2015	(403,653	)	37.57
Expired in 2015	(668	)	61.69
Forfeited in 2015	(38,163	)	50.30
Outstanding at October 3, 2015	1,373,544		$	45.90	6.3 years	$	17,017
Exercisable at October 3, 2015	956,523		$	39.63	5.5 years	$	14,916

The aggregate intrinsic value in the preceding tables represents the total pre-tax intrinsic value, based on our closing price of Class A common stock of $54.51 as of October 3, 2015. That value would have been effectively received by the option and SAR holders had all option and SAR holders exercised their options and SARs as of that date.

The intrinsic value of awards exercised and fair value of awards vested are as follows:



	2015		2014		2013
1998 Stock Option Plan
Intrinsic value of options exercised	$	—	$	2,134	$	2,585
Total fair value of options vested	$	—	$	28	$	27
2003 Stock Option Plan
Intrinsic value of options exercised	$	14,205	$	4,843	$	6,199
Total fair value of options vested	$	981	$	981	$	399
2008 Stock Appreciation Rights Plan
Intrinsic value of SARs exercised	$	14,566	$	9,534	$	3,368
Total fair value of SARs vested	$	5,424	$	7,633	$	5,199

As of October 3, 2015, total unvested compensation expense associated with stock options amounted to $40 and will be recognized over a weighted-average period of one year, and total unvested compensation expense associated with SARs amounted to $2,080 and will be recognized over a weighted-average period of two years.