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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Delaware
(State or Other Jurisdiction of Incorporation)
001-31970 81-0597059
(Commission File Number) (IRS Employer Identification No.)
(734) 855-2600
(Registrant’s Telephone Number, Including Area Code)
Not applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any
of the following provisions (see General Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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TABLE OF CONTENTS
ITEM 5.02. DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS;
COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS.
SIGNATURE
Form of Amendment to Employment Agreement, dated as of February 26, 2009, between TRW Automotive Inc. and TRW Limited, as
applicable, and each of its named executive officers
Form of TRW Automotive Inc. Executive Officer Cash Incentive Award Agreement, dated as of February 26, 2009
Form of TRW Automotive Inc. Executive Officer Retention Award Agreement, dated as of February 26, 2009
Form of TRW Automotive Inc. Director Cash Incentive Award Agreement, dated as of February 26, 2009
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ITEM 5.02. DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN
OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS.
At a meeting held on February 18, 2009, the Compensation Committee (the “Committee”) of the Board of Directors of TRW Automotive
Holdings Corp. and TRW Automotive Inc. (collectively, the “Company”) approved and authorized the Company to amend the Annual Non-
Equity Incentive (Bonus) Plan (the “Bonus Plan”) for 2009 and the employment agreements of each of the named executive officers (each, an
“Executive”) to reflect those Bonus Plan changes, and to enter into Executive Officer Cash Incentive Award Agreements and Executive Officer
Retention Award Agreements with each Executive. The terms Disability, Cause, Good Reason and Change in Control as used below are
defined in the Executives’ employment agreements.
As a result of unstable economic conditions and the increased difficulty in accurately forecasting global automobile production and other
factors, the Committee elected to increase the proportion of the 2009 Bonus Plan award calculation that will be subject to the Committee’s
discretion. The three factors that comprise the Bonus Plan will remain the same as in previous years, however the weighting of each of these
factors will be modified. The EBITDAP factor will be reduced to a 25% weighting (40% in previous years), the cash flow factor will be reduced
to a 25% weighting (40% in previous years) and the discretionary additional factors will be increased to a 50% weighting (20% in previous
years). The plan maximum payout of 125% of target awards will remain unchanged.
The Committee approved and authorized the Company to enter into amendments to the employment agreements of each of the Executives as
of February 26, 2009 (the “Effective Date”) to reflect the changes to the Bonus Plan described above.
This description of the amendments is qualified in its entirety by reference to the full text of the form of amendment which is attached hereto as
Exhibit 10.1.
With falling equity values the Committee elected to add a cash incentive award for the Executives (and for certain other senior leaders) to
complement the existing Long-Term Incentive Plan which offers stock options and restricted stock unit awards. The target value of each
Executive’s cash incentive award was set so that the sum of his cash incentive, restricted stock unit and stock option awards for 2009 would
be substantially equal to or less than the value of his restricted stock unit and option awards in 2008 (calculated at the time of the award).
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Under the Executive Officer Cash Incentive Award Agreements, as of the Effective Date, the Company will set a target value for the award to
each Executive. Subject to certain early vesting provisions, one-third of the target value will be adjusted on each of the first, second and third
anniversaries of the Effective Date, based upon the average price of the Company’s common stock during the portion of the month of
February preceding such anniversary as compared to the stock price on the Effective Date. If the stock price increases, then the applicable
portion of the award will be increased from target, subject to a cap of 250% of target. If the stock price decreases, then the applicable portion of
the award will be decreased from target, potentially to zero. The adjusted values will accumulate without interest until the third anniversary of
the Effective Date, when they will vest and become payable, provided that the Executive remains employed by the Company. A pro rata
portion of the award is subject to earlier vesting in the event of the Executive’s death, Disability, involuntary termination of employment
without Cause, voluntary termination of employment for Good Reason or retirement. Further, in the event of a Change in Control, the award
will immediately become payable.
The target value of the cash incentive award to be granted to each of the Executives is as follows:
This description is qualified in its entirety by reference to the full text of the form of Executive Officer Cash Incentive Award Agreement which
is attached hereto as Exhibit 10.2.
Under the Executive Officer Retention Award Agreements, as of the Effective Date, the Company will grant to each Executive (and to certain
other senior leaders) a cash award in return for the Executive remaining employed with the Company for the next 36 months. Subject to certain
early vesting provisions, half of each award will vest and become payable on the 18 month anniversary of the Effective Date, provided that the
Executive remains employed by the Company. The other half of each award will vest and become payable on the 36 month anniversary of the
Effective Date, provided that the Executive remains employed by the Company and the price of the Company’s common stock is greater than
$10 on any day during the last six months of the vesting period. A pro rata portion of the award is subject to earlier vesting in the event of the
Executive’s death, Disability, involuntary termination of employment without Cause or voluntary termination for Good Reason. Further, in the
event of Executive’s involuntary termination of employment without Cause or voluntary termination for Good Reason following or in
connection with a Change in Control, the award will immediately become fully vested and payable.
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In the event of an Executive’s voluntary termination (other than for Good Reason) or involuntary termination for Cause after receiving the first
half of the retention award but prior to reaching the 36 month anniversary of the Effective Date, the Executive must repay such portion of the
award.
The retention award to be granted to each of the Executives is as follows:
This description is qualified in its entirety by reference to the full text of the form of Executive Officer Retention Award Agreement which is
attached hereto as Exhibit 10.3.
At a meeting held on February 19, 2009, the Board of Directors of the Company approved and authorized the Company to enter into Director
Cash Incentive Award Agreements with each of its independent directors as of the Effective Date to offset the reduction in the current value
of the restricted stock units awarded to the independent directors. The terms of these agreements generally mirror the terms of the cash
incentive award agreements with the named executive officers as described above, with the following exceptions:
• The director agreements have a one-year vesting schedule;
• The only early vesting circumstances in the director agreement will be a director’s death (which results in pro rata vesting) or a
Change in Control of the Company (which results in full vesting); and
• Each independent director will receive the same target award, which will be calculated as $75,000 less the value of 3,500 shares of the
Company’s common stock on the Effective Date.
The foregoing description is qualified in its entirety by reference to the full text of the form of Director Cash Incentive Award Agreement which
is attached hereto as Exhibit 10.4.
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10.1* Form of Amendment to Employment Agreement, dated as of February 26, 2009, between TRW Automotive Inc. and TRW
Limited, as applicable, and each of its named executive officers
10.2* Form of TRW Automotive Inc. Executive Officer Cash Incentive Award Agreement, dated as of February 26, 2009
10.3* Form of TRW Automotive Inc. Executive Officer Retention Award Agreement, dated as of February 26, 2009
10.4* Form of TRW Automotive Inc. Director Cash Incentive Award Agreement, dated as of February 26, 2009
* Filed herewith
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
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Index to Exhibits
10.1 Form of Amendment to Employment Agreement, dated as of February 26, 2009, between TRW Automotive Inc. and TRW
Limited, as applicable, and each of its named executive officers
10.2 Form of TRW Automotive Inc. Executive Officer Cash Incentive Award Agreement, dated as of February 26, 2009
10.3 Form of TRW Automotive Inc. Executive Officer Retention Award Agreement, dated as of February 26, 2009
10.4 Form of TRW Automotive Inc. Director Cash Incentive Award Agreement, dated as of February 26, 2009
Exhibit 10.1
By: [Executive]
Title:
Exhibit 10.2
EXECUTIVE OFFICER
(b) “Affiliate” shall mean, with respect to any Person, any other Person directly or indirectly controlling, controlled by or under common
control with such Person or any other Person designated by the Committee in which any Person has an interest.
(c) “Award” shall mean the cash incentive award granted pursuant to this Agreement and calculated pursuant to Section 2(b).
(d) “Cause” shall have the meaning given to such term in the Closing Date Employment Agreement or, if not defined therein or if there is
no such agreement, “Cause” means (i) such Executive’s continued failure substantially to perform such Executive’s duties (other than as a
result of total or partial incapacity due to physical or mental illness) for a period of 10 days following written notice by the Company or any of
its Subsidiaries or Affiliates to the Executive of such failure, (ii) dishonesty in the performance of the Executive’s duties, (iii) such Executive’s
conviction of, or plea of nolo contendere to, a crime constituting (A) a felony under the laws of the United States or any state thereof or (B) a
misdemeanor involving moral turpitude, (iv) such Executive’s willful malfeasance or willful misconduct in connection with such Executive’s
duties or any act or omission which is injurious to the financial condition or business reputation of the Company or any of its Subsidiaries or
Affiliates or (v) such Executive’s breach of any non-competition, non-solicitation or confidentiality provisions to which the Executive is
subject.
(e) “Change in Control” shall mean (A) the sale or disposition, in one or a series of related transactions, of all or substantially all of the
assets of Holdings or the Company to any “person” or “group” (as such terms are defined in Sections 13(d)(3) and 14(d)(2) of the Act) other
than Automotive Investors L.L.C. (“AI”) or any of its Affiliates, (B) any person or group, other than AI or any of its Affiliates, is or becomes
the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Act), directly or indirectly, of more than 50% of the total voting power of
the voting stock of Holdings or the Company, including by way of merger, consolidation or otherwise and AI or any of its Affiliates cease to
control the Board of Directors
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of Holdings (the “Holdings Board”) or the Board of Directors of the Company, (C) any “person” or “group” (as defined above) other than AI
or its Affiliates acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition of such person or
group) ownership of stock of Holdings or the Company possessing 30 percent or more of the total voting power of the stock of Holdings or
the Company, as applicable, or (D) a majority of the members of the Holdings Board is replaced during any 12-month period by directors
whose appointment or election is not endorsed by a majority of the members of the Holdings Board, as it was constituted at the beginning of
such 12-month period.
(f) “Closing Date” shall mean February 28, 2003.
(g) “Closing Date Employment Agreement” shall mean a written employment agreement between the Company or any of its Subsidiaries
and the Executive which is or was entered into as of or after the Closing Date (as the same may be amended, modified or supplemented in
accordance with the terms thereof).
(h) “Code” shall mean the Internal Revenue Code of 1986, as amended, or any successor thereto.
(i) “Disability” shall have the meaning given such term in the Closing Date Employment Agreement or, if not defined therein or if there
shall be no such agreement, “disability” of the Executive shall have the meaning ascribed to such term in the long-term disability plan or policy
maintained by the Company or one or more members of the Company’s controlled group of corporations (as defined in Section 1563 of the
Code), as in effect from time to time.
(j) “Fair Market Value” of a Share on a given date shall mean the closing price of a Share as reported on the NYSE composite tape on
such date, or, if there is no such reported sale price of a Share on the NYSE composite tape on such date, then the closing price of a Share as
reported on the NYSE composite tape on the last previous day on which sale price was reported on the NYSE composite tape. If at any time
the Shares are no longer listed or traded on the NYSE, the Fair Market Value of a Share shall be determined by the Committee in its sole but
reasonable discretion from time to time.
(k) “Good Reason” shall have the meaning given to such term in the Closing Date Employment Agreement.
(l) “Holdings” shall mean TRW Automotive Holdings Corp., a Delaware corporation.
(m) “NYSE” shall mean the New York Stock Exchange.
(n) “Person” shall mean any individual, firm, corporation, partnership, limited liability company, trust, incorporated or unincorporated
association, joint venture, joint stock company, governmental body or other entity of any kind.
(o) “Retirement” shall mean the Executive’s voluntary Termination of Employment on or after the date that such Executive becomes
Retirement Eligible.
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(p) “Retirement Eligible” shall mean satisfaction of the requirements for early or normal retirement under a defined benefit pension plan
maintained by the Company or one or more members of the Company’s controlled group of corporations (as defined by Section 1563 of the
Code) and receipt of pension benefits in accordance with such requirements as soon as administratively practicable following the last date of
active employment with the Company or its controlled group of corporations.
(q) “Share Price” shall mean the average Fair Market Value of a Share during the portion of the month of February immediately preceding
the first, second, or third year anniversary of the Effective Date, as applicable.
(r) “Shares” shall mean shares of the common stock, par value $0.01 per share, of Holdings.
(s) “Subsidiary” shall mean a subsidiary corporation, as defined in Section 424(f) of the Code.
(t) “Target Value” shall mean the initial value of the Award, as set forth in Section 2(a).
(u) “Target Value Adjustment” shall mean the percentage by which the Target Value is increased or decreased under Section 2(b), based
on the applicable Share Price pursuant to the formula attached hereto as Exhibit A, provided that the percentage to be used for such
adjustment shall be the nearest tenth of a percentage determined pursuant to Exhibit A.
(v) “Termination of Employment” shall mean a separation from service from the Company and all of its controlled group members (as
defined by Section 1563 of the Code).
Section 2. Grant of Cash Incentive Award. The Company hereby grants to the Executive an Award subject to the terms and conditions
stated in this Agreement. The amount of the Award shall be equal to the Target Value specified under Section 2(a) as adjusted pursuant to
Section 2(b).
(a) Target Value. The Target Value of the Award is $ , which is subject to the terms and conditions stated in this Agreement.
(b) Adjustment to the Target Value. The Target Value of the Award shall be increased or decreased, as applicable, on the first, second,
and third anniversary of the Effective Date by multiplying one-third of the Target Value (referred to respectively as Tranche A, Tranche B, and
Tranche C) by the Target Value Adjustment percentage on each such anniversary date, as determined under Exhibit A with reference to the
calculated Share Price as of that date, to establish the adjusted value of each such tranche (referred to respectively as Tranche A Adjusted
Value, Tranche B Adjusted Value, and Tranche C Adjusted Value), as follows:
(i) Tranche A. On the first anniversary of the Effective Date, $ (“Tranche A”), shall be multiplied by the Target Value
Adjustment percentage under Exhibit A, determined with reference to the calculated Share Price on such anniversary date to establish the
adjusted value of Tranche A (“Tranche A Adjusted Value”); plus
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(ii) Tranche B. On the second anniversary of the Effective Date, $ (“Tranche B”) shall be multiplied by the Target Value
Adjustment percentage under Exhibit A, determined with reference to the calculated Share Price on such anniversary date to establish the
adjusted value of Tranche B (“Tranche B Adjusted Value”); plus
(iii) Tranche C. On the third anniversary of the Effective Date, $ (“Tranche C”) shall be multiplied by the Target Value
Adjustment percentage under Exhibit A, determined with reference to the calculated Share Price on such anniversary date to establish the
adjusted value of Tranche C (“Tranche C Adjusted Value”).
The adjusted values so determined shall accumulate (without interest) over the period ending on the third anniversary of the Effective Date
and shall be payable to the Executive in one cash payment in accordance with Section 3, provided the vesting requirements under Section 4
have been satisfied at that time.
Section 3. Payment of the Awards. Subject to the vesting requirements of Section 4 and Section 5, the Award determined in accordance
with Section 2(b) shall be payable to the Executive in one cash payment as soon as administratively practicable on or after the third
anniversary of the Effective Date, but in no event later than 90 days thereafter.
Section 4. Service-Vesting Requirement. Except as otherwise provided in Section 5, the Award amount determined under Section 2(b) shall
become vested on the third anniversary of the Effective Date, provided the Executive remains continuously employed with the Company or
one of its Subsidiaries or Affiliates through that date. Once this requirement has been satisfied the Award shall thereafter be payable in
accordance with Section 3.
Section 5. Vesting Upon Certain Events.
(a) Death. In the event of the Executive’s death prior to satisfying the vesting requirements under Section 4, a pro rata portion of the
Award, determined as set forth below, is immediately vested and shall be paid as soon as administratively practicable following the date of
death, but in no event later than 90 days thereafter. All other amounts hereunder are immediately forfeited and shall not be payable. The pro
rata portion of the Award shall be determined as follows:
(i) In the event of the Executive’s death prior to the first anniversary of the Effective Date, the pro rata portion of the Award shall be
equal to Tranche A, without regard to any adjustment under Section 2(b)(i), multiplied by a fraction, the numerator of which is the number of
completed calendar months from the Effective Date to the date of death and the denominator of which is 12.
(ii) In the event of the Executive’s death after the first anniversary of the Effective Date, but prior to the second anniversary of the
Effective Date, the pro rata portion of the Award shall be the sum of (1) and (2):
(1) Tranche A Adjusted Value, as determined by Section 2(b)(i); plus
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(2) Tranche B, without regard to any adjustment under Section 2(b)(ii), multiplied by a fraction, the numerator of which is the
number of completed calendar months from the first anniversary of the Effective Date to the date of death and the denominator
of which is 12.
(iii) In the event of the Executive’s death after the second anniversary of the Effective Date, but prior to the third anniversary of the
Effective Date, the pro rata portion of the Award shall be the sum of (1), (2), and (3):
(1) Tranche A Adjusted Value, as determined by Section 2(b)(i); plus
(2) Tranche B Adjusted Value, as determined by Section 2(b)(ii); plus
(3) Tranche C, without regard to any adjustment under Section 2(b)(iii), multiplied by a fraction, the numerator of which is the
number of completed calendar months from the second anniversary of the Effective Date to the date of death and the
denominator of which is 12.
(b) Disability. In the event of the Executive’s Termination of Employment due to Disability prior to satisfying the vesting requirements
under Section 4, a pro rata portion of the Award, determined as set forth below, is immediately vested and shall be paid as soon as
administratively practicable following the date of Termination of Employment due to Disability, but in no event later than 90 days thereafter.
All other amounts hereunder are immediately forfeited and shall not be payable. The pro rata portion of the Award shall be determined as
follows:
(i) In the event of the Executive’s Termination of Employment due to Disability prior to the first anniversary of the Effective Date, the
pro rata portion of the Award shall be equal to Tranche A, without regard to any adjustment under Section 2(b)(i), multiplied by a fraction, the
numerator of which is the number of completed calendar months from the Effective Date to the date of Termination of Employment due to
Disability and the denominator of which is 12.
(ii) In the event of the Executive’s Termination of Employment due to Disability after the first anniversary of the Effective Date, but
prior to the second anniversary of the Effective Date, the pro rata portion of the Award shall be the sum of (1) and (2):
(1) Tranche A Adjusted Value, as determined by Section 2(b)(i); plus
(2) Tranche B, without regard to any adjustment under Section 2(b)(ii), multiplied by a fraction, the numerator of which is the
number of completed calendar months from the first anniversary of the Effective Date to the date of Termination of Employment
due to Disability and the denominator of which is 12.
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(iii) In the event of the Executive’s Termination of Employment due to Disability after the second anniversary of the Effective Date,
but prior to the third anniversary of the Effective Date, the pro rata portion of the Award shall be the sum of (1), (2), and (3):
(1) Tranche A Adjusted Value, as determined by Section 2(b)(i); plus
(2) Tranche B Adjusted Value, as determined by Section 2(b)(ii); plus
(3) Tranche C, without regard to any adjustment under Section 2(b)(iii), multiplied by a fraction, the numerator of which is the
number of completed calendar months from the second anniversary of the Effective Date to the date of Termination of
Employment due to Disability and the denominator of which is 12.
(c) Involuntary Termination of Employment without Cause or Voluntary Termination of Employment for Good Reason. In the event of the
Executive’s involuntary Termination of Employment without Cause or voluntary Termination of Employment for Good Reason, prior to
satisfying the vesting requirements under Section 4, a pro rata portion of the Award, determined as set forth below, is immediately vested and
shall be paid as soon as administratively practicable following the date of such Termination of Employment, but in no event later than 90 days
thereafter. All other amounts hereunder are immediately forfeited and shall not be payable. The pro rata portion of the Award shall be
determined as follows:
(i) In the event such Termination of Employment occurs prior to the first anniversary of the Effective Date, the pro rata portion of the
Award shall be equal to Tranche A, without regard to any adjustment under Section 2(b)(i).
(ii) In the event such Termination of Employment occurs after the first anniversary of the Effective Date, but prior to the second
anniversary of the Effective Date, the pro rata portion of the Award shall be the sum of (1) and (2):
(1) Tranche A Adjusted Value, as determined by Section 2(b)(i); plus
(2) Tranche B, without regard to any adjustment under Section 2(b)(ii).
(iii) In the event such Termination of Employment occurs after the second anniversary of the Effective Date, but prior to the third
anniversary of the Effective Date, the pro rata portion of the Award shall be the sum of (1), (2), and (3):
(1) Tranche A Adjusted Value, as determined by Section 2(b)(i); plus
(2) Tranche B Adjusted Value, as determined by Section 2(b)(ii); plus
(3) Tranche C, without regard to any adjustment under Section 2(b)(iii).
(d) Retirement. In the event of the Executive’s Retirement, prior to satisfying the vesting requirements under Section 4, a pro rata
portion of the Award, determined as set forth
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below, is immediately vested and shall be paid as soon as administratively practicable following the date of Retirement, but in no event later
than 90 days thereafter. All other amounts hereunder are immediately forfeited and shall not be payable. The pro rata portion of the Award
shall be determined as follows:
(i) In the event of the Executive’s Retirement prior to the first anniversary of the Effective Date, the pro rata portion of the Award shall
be equal to Tranche A, without regard to any adjustment under Section 2(b)(i), multiplied by a fraction, the numerator of which is the number
of completed calendar months from the Effective Date to the date of Retirement and the denominator of which is 12.
(ii) In the event of the Executive’s Retirement after the first anniversary of the Effective Date, but prior to the second anniversary of
the Effective Date, the pro rata portion of the Award shall be the sum of (1) and (2):
(1) Tranche A Adjusted Value, as determined by Section 2(b)(i); plus
(2) Tranche B, without regard to any adjustment under Section 2(b)(ii), multiplied by a fraction, the numerator of which is the
number of completed calendar months from the first anniversary of the Effective Date to the date of Retirement and the
denominator of which is 12.
(iii) In the event of the Executive’s Retirement after the second anniversary of the Effective Date, but prior to the third anniversary of
the Effective Date, the pro rata portion of the Award shall be the sum of (1), (2), and (3):
(1) Tranche A Adjusted Value, as determined by Section 2(b)(i); plus
(2) Tranche B Adjusted Value, as determined by Section 2(b)(ii); plus
(3) Tranche C, without regard to any adjustment under Section 2(b)(iii), multiplied by a fraction, the numerator of which is the
number of completed calendar months from the second anniversary of the Effective Date to the date of Retirement and the
denominator of which is 12.
(e) Change in Control. In the event of a Change in Control , prior to the satisfaction of the vesting requirements of Section 4, the Award
shall be immediately 100 percent vested and shall be paid as soon as administratively practicable following the date of the completion of the
Change in Control, but in no event later than 90 days thereafter. The amount of the Award shall be determined as follows:
(i) In the event the Change in Control is completed prior to the first anniversary of the Effective Date, the Award shall be the sum of
(1), (2), and (3):
(1) Tranche A, without regard to any adjustment under Section 2(b)(i), plus
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(2) Tranche B, without regard to any adjustment under Section 2(b)(ii), plus
(3) Tranche C, without regard to any adjustment under Section 2(b)(iii).
(ii) In the event the Change in Control is completed after the first anniversary of the Effective Date, but prior to the second
anniversary of the Effective Date, the Award shall be the sum of (1), (2), and (3):
(1) Tranche A Adjusted Value, as determined by Section 2(b)(i); plus
(2) Tranche B, without regard to any adjustment under Section 2(b)(ii); plus
(3) Tranche C, without regard to any adjustment under Section 2(b)(iii).
(iii) In the event the Change in Control is completed after the second anniversary of the Effective Date, but prior to the third
anniversary of the Effective Date, the Award shall be the sum of (1), (2), and (3):
(1) Tranche A Adjusted Value, as determined by Section 2(b)(i); plus
(2) Tranche B Adjusted Value, as determined by Section 2(b)(ii); plus
(3) Tranche C, without regard to any adjustment under Section 2(b)(iii).
(f) Other Termination of Employment. In the event of the Executive’s Termination of Employment for any reason other than an event
specified above, prior to satisfying the vesting requirements of Section 4 or 5, the Award is immediately forfeited in its entirety and shall not be
payable.
(g) Rules of Construction. In the event that more than one event occurs under this Section 5, the first event to occur shall be controlling
and shall determine the timing and amount of the Award payable. Under no circumstances shall any provision of this Agreement be construed
so as to require payment to the Executive in excess of the Award amount calculated under Section 2(b).
Section 6. Miscellaneous.
(a) Binding Agreement. This Agreement is binding on and enforceable by and against the parties, their successors, legal representatives
and assigns.
(b) Entire Agreement. This Agreement constitutes the whole agreement between the parties relating to the subject matter hereof and
supersedes any prior agreements or understandings related to such subject matter.
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(c) Amendment of this Agreement. This Agreement may not be amended, modified, or supplemented except by a written instrument
executed by each of the parties hereto.
(d) Restrictions on Transfer. The Award may not be sold, assigned, transferred, encumbered, hypothecated or pledged in any manner
(whether by operation of law or otherwise) other than by will or applicable laws of decent and distribution.
(e) No Right to Continued Employment. The Executive’s right, if any, to continue to serve the Company or its Subsidiaries or Affiliates as
an employee or otherwise will not be enlarged or otherwise affected by this Agreement. This Agreement does not restrict the right of the
Company or its Subsidiaries or Affiliates to terminate the Executive’s employment at any time.
(f) Changes in Capitalization. In the event of any change in the outstanding Shares by reason of any stock split, stock dividend, split-up,
split-off, spin-off, recapitalization, merger, consolidation, rights offering, reorganization, combination, subdivision or exchange of shares, or
any distribution to stockholders other than a normal cash dividend, the Committee shall make an appropriate adjustment to the Share Price as
may be determined in the sole but reasonable discretion of the Committee, and such adjustments shall be final, conclusive and binding for all
purposes.
(g) Severability. If any provision of this Agreement shall be held unlawful or otherwise invalid or unenforceable in whole or in part by a
court of competent jurisdiction, such provision shall (i) be deemed limited to the extent that such court of competent jurisdiction deems it
lawful, valid and/or enforceable and as so limited shall remain in full force and effect, and (ii) not affect any other provision of this Agreement
or part thereof, each of which shall remain in full force and effect. If the making of any payment or the provision of any other benefit required
under this Agreement shall be held unlawful or otherwise invalid or unenforceable by a court of competent jurisdiction, such unlawfulness,
invalidity or unenforceability shall not prevent any other payment or benefit from being made or provided under this Agreement, and if the
making of any payment in full or the provision of any other benefit required under this Agreement in full would be unlawful or otherwise
invalid or unenforceable, then such unlawfulness, invalidity or unenforceability shall not prevent such payment or benefit from being made or
provided in part, to the extent that it would not be unlawful, invalid or unenforceable, and the maximum payment or benefit that would not be
unlawful, invalid or unenforceable shall be made or provided under this Agreement.
(h) Waiver. Any party’s failure to insist on compliance with or enforcement of any provision of this Agreement shall not affect its
validity or enforceability or constitute a waiver of future enforcement of that provision or of any other provision of this Agreement.
(i) General Rules of Construction. The headings given to the Sections of this Agreement are solely as a convenience to facilitate
reference, and are not intended to narrow, limit or affect the substance or interpretation of the provisions contained herein. The reference to
any statute, regulation or other provision of law shall be construed to include any amendment thereto or refer to any successor thereof.
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(j) Section 409A. To the extent required by law, this Agreement and the grant of the Award hereunder are intended to comply with the
requirements of Section 409A of the Code and the Treasury Regulations promulgated and other official guidance issued thereunder
(collectively, “Section 409A”), and this Agreement and the Award shall be administered and interpreted in a manner that is consistent with
such intention. Notwithstanding the terms of Sections 3 and 5, to the extent that payment to the Executive is required to be delayed by six
months pursuant to Section 409A, such payment shall be made as soon as administratively practicable following the first day of the seventh
month following the Executive’s Termination of Employment, but in no event later than 90 days thereafter.
(k) Rabbi Trust. In the event of a delay in payment upon a Change in Control beyond the date of completion of such Change in Control,
amounts payable under Section 5(e) shall be contributed by the Company to a grantor trust established by the Company with an independent
trustee immediately prior to the completion of the Change in Control giving rise to Executive’s entitlement to such amounts. The costs and
fees associated with establishing and maintaining such grantor trust shall be borne by the Company. The amounts held in trust shall be
invested in a stable value fund or other similar investment vehicle, which seeks to preserve principal while earning interest income. The
investment vehicle shall be selected by an independent investment manager appointed by the Company. The interest income realized shall be
included in and paid to Executive as and when Executive’s payment under this Section is made.
(l) Governing Law. This Agreement, to the extent not otherwise governed by the Code or the laws of the United States, shall be governed
by the laws of the State of New York, without reference to principles of conflict of laws, and construed accordingly.
(m) Counterpart Execution. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original
but all of which together shall be deemed one and the same instrument.
By:
Name:
Title:
EXECUTIVE
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EXHIBIT A
No payout if Share Price is less than $1.00.
[$5.00] 125.0%
* If the Share Price is between price levels set forth above, the Company shall use linear extrapolation to
determine the resultant Target Value Adjustment.
Exhibit 10.3
EXECUTIVE OFFICER
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of Holdings (the “Holdings Board”) or the Board of Directors of the Company, (C) any “person” or “group” (as defined above) other than AI
or its Affiliates acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition of such person or
group) ownership of stock of Holdings or the Company possessing 30 percent or more of the total voting power of the stock of Holdings or
the Company , as applicable, or (D) a majority of the members of the Holdings Board is replaced during any 12-month period by directors
whose appointment or election is not endorsed by a majority of the members of the Holdings Board, as it was constituted at the beginning of
such 12-month period.
(f) “Closing Date” shall mean February 28, 2003.
(g) “Closing Date Employment Agreement” shall mean a written employment agreement between the Company or any of its Subsidiaries
and the Executive which is or was entered into as of or after the Closing Date (as the same may be amended, modified or supplemented in
accordance with the terms thereof).
(h) “Code” shall mean the Internal Revenue Code of 1986, as amended, or any successor thereto.
(i) “Disability” shall have the meaning given such term in the Closing Date Employment Agreement or, if not defined therein or if there
shall be no such agreement, “disability” of the Executive shall have the meaning ascribed to such term in the long-term disability plan or policy
maintained by the Company or one or more members of the Company’s controlled group of corporations (as defined in Section 1563 of the
Code), as in effect from time to time.
(j) “Good Reason” shall have the meaning given to such term in the Closing Date Employment Agreement.
(k) “Holdings” shall mean TRW Automotive Holdings Corp., a Delaware corporation.
(l) “NYSE” shall mean the New York Stock Exchange.
(m) “Person” shall mean any individual, firm, corporation, partnership, limited liability company, trust, incorporated or unincorporated
association, joint venture, joint stock company, governmental body or other entity of any kind.
(n) “Shares” shall mean shares of the common stock, par value $0.01 per share, of Holdings.
(o) “Subsidiary” shall mean a subsidiary corporation, as defined in Section 424(f) of the Code.
(p) “Termination of Employment” shall mean a separation from service from the Company and all of its controlled group members (as
defined by Section 1563 of the Code).
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Section 2. Grant of Retention Award. The Company hereby grants to the Executive an Award of $ , which is subject to the terms
and conditions stated in this Agreement.
Section 3. Vesting Requirements. Except as otherwise provided in Section 4, the Award shall vest in two installments (“Tranche A” and
“Tranche B”, respectively), each of which shall be equal to 50% of the Award amount, as follows:
(a) Tranche A shall vest on the 18-month anniversary of the Effective Date, provided the Executive remains continuously employed by
the Company or one of its Subsidiaries or Affiliates through that date; and
(b) Tranche B shall vest on the 36-month anniversary of the Effective Date (the “36-month Vesting Date”), provided:
(i) the Executive remains continuously employed by the Company or one of its Subsidiaries or Affiliates through that date; and
(ii) the closing price of the Shares on the NYSE on any day during the six months immediately preceding the 36-month Vesting Date is
greater than $10.00 (If at any time the Shares are no longer listed or traded on the NYSE, the foregoing price shall be calculated in such manner
as may be determined by the Committee in its sole but reasonable discretion from time to time).
Subject to Section 4, once the requirements of Section 3 have been satisfied with respect to either Tranche A or Tranche B, that tranche
shall become vested and shall thereafter be payable in accordance with Section 5.
Section 4. Effects of Certain Events.
(a) Death. In the event of the Executive’s death prior to satisfying the vesting requirements of Section 3, a pro rata portion of the Award,
determined as set forth below, is immediately vested and shall be paid as soon as administratively practicable following the date of death, but
in no event later than 90 days thereafter. The pro rata portion of the Award shall be an amount equal to the following:
(i) The amount of the Award multiplied by a fraction, the numerator of which is the number of completed calendar months from the
Effective Date to the date of death and the denominator of which is 36; minus
(ii) Any payment received under Section 5(a).
Any remaining portion of the Award is immediately forfeited and shall not become payable.
(b) Disability. In the event of the Executive’s Termination of Employment due to Disability prior to satisfying the vesting requirements of
Section 3, a pro rata portion of the Award, determined as set forth below, is immediately vested and shall be paid as soon as
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administratively practicable following the date of Termination of Employment due to Disability, but in no event later than 90 days thereafter.
The pro rata portion of the Award shall be an amount equal to the following:
(i) The amount of the Award multiplied by a fraction, the numerator of which is the number of completed calendar months from the
Effective Date to the date of Termination of Employment due to Disability and the denominator of which is 36; minus
(ii) Any payment received under Section 5(a).
Any remaining portion of the Award is immediately forfeited and shall not become payable.
(c) Involuntary Termination of Employment without Cause. Subject to Section 4(e), in the event of the Executive’s involuntary
Termination of Employment without Cause prior to satisfying the vesting requirements of Section 3, a pro rata portion of the Award,
determined as set forth below, is immediately vested and shall be paid as soon as administratively practicable following the date of such
Termination of Employment, but in no event later than 90 days thereafter. The pro rata portion of the Award shall be an amount equal to the
following:
(i) The amount of the Award multiplied by a fraction, the numerator of which is the number of months from the Effective Date to the
date of Termination of Employment and the denominator of which is 36; minus
(ii) Any payment received under Section 5(a).
Any remaining portion of the Award is immediately forfeited and shall not become payable.
(d) Voluntary Termination for Good Reason. Subject to Section 4(e), in the event of the Executive’s voluntary Termination of
Employment for Good Reason, prior to satisfying the vesting requirements of Section 3, a pro rata portion of the Award, determined as set
forth below, is immediately vested and shall be paid as soon as administratively practicable following the date of such Termination of
Employment, but in no event later than 90 days thereafter. The pro rata portion of the Award shall be an amount equal to the following:
(i) The amount of the Award multiplied by a fraction, the numerator of which is the number of months from the Effective Date to the
date of Termination of Employment and the denominator of which is 36; minus
(ii) Any payment received under Section 5(a).
Any remaining portion of the Award is immediately forfeited and shall not become payable.
(e) Change in Control. In the event of the Executive’s involuntary Termination of Employment without Cause or voluntary Termination of
Employment for Good Reason in each case following or in connection with a Change in Control, prior to satisfying the vesting requirements of
Section 3, the Award shall be immediately 100
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percent vested and, to the extent not already paid under Section 5, shall be paid as soon as administratively practicable following the date of
such Termination of Employment, but in no event later than 90 days thereafter.
(f) Other Termination of Employment. In the event of the Executive’s Termination of Employment for any reason other than voluntary
Termination of Employment for Good Reason, involuntary Termination of Employment without Cause, or Termination of Employment due to
Disability or death prior to satisfying the vesting requirements of Section 3, the Award shall be immediately forfeited and shall not become
payable.
(g) Rules of Construction. In the event that more than one event occurs under this Section 4, the first event to occur shall be controlling
and shall determine the timing and amount of the Award payable. Under no circumstances shall any provision of this Agreement be construed
so as to require payment to the Executive in excess of the Award amount set forth in Section 2.
Section 5. Payment of Award. Upon vesting pursuant to Section 3, the Company shall pay the Award in cash as follows:
(a) Tranche A. Payment of Tranche A shall be made as soon as administratively practicable following the date upon which the vesting
requirements pursuant to Section 3(a) shall have been satisfied, but in no event later than 90 days thereafter.
(b) Tranche B. Payment of Tranche B shall be made as soon as administratively practicable following the date upon which the vesting
requirements pursuant to Section 3(b) shall have been satisfied, but in no event later than 90 days thereafter.
Section 6. Forfeiture Policy. In the event of Executive’s Termination of Employment (other than in connection with one of the events
enumerated in Section 4) after the 18-month anniversary of the Effective Date but before the 36-month anniversary of the Effective Date, the
Executive shall repay the amount of Tranche A to the Company as soon as administratively practicable following the date of the Executive’s
Termination of Employment, but in no event later than 90 days thereafter.
Section 7. Miscellaneous.
(a) Binding Agreement. This Agreement is binding on and enforceable by and against the parties, their successors, legal representatives
and assigns.
(b) Entire Agreement. This Agreement constitutes the whole agreement between the parties relating to the subject matter hereof and
supersedes any prior agreements or understandings related to such subject matter.
(c) Amendment of this Agreement. This Agreement may not be amended, modified, or supplemented except by a written instrument
executed by each of the parties hereto.
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(d) Restrictions on Transfer. The Award may not be sold, assigned, transferred, encumbered, hypothecated or pledged in any manner
(whether by operation of law or otherwise) other than by will or applicable laws of decent and distribution.
(e) No Right to Continued Employment. The Executive’s right, if any, to continue to serve the Company or its Subsidiaries or Affiliates as
an employee or otherwise will not be enlarged or otherwise affected by this Agreement. This Agreement does not restrict the right of the
Company or its Subsidiaries or Affiliates to terminate the Executive’s employment at any time.
(f) Changes in Capitalization. In the event of any change in the outstanding Shares by reason of any stock split, stock dividend, split-up,
split-off, spin-off, recapitalization, merger, consolidation, rights offering, reorganization, combination, subdivision or exchange of shares, or
any distribution to stockholders other than a normal cash dividend, the Committee shall make an appropriate adjustment to the Share price
amount in Section 3(b)(ii) as may be determined in the sole but reasonable discretion of the Committee, and such adjustments shall be final,
conclusive and binding for all purposes.
(g) Severability. If any provision of this Agreement shall be held unlawful or otherwise invalid or unenforceable in whole or in part by a
court of competent jurisdiction, such provision shall (i) be deemed limited to the extent that such court of competent jurisdiction deems it
lawful, valid and/or enforceable and as so limited shall remain in full force and effect, and (ii) not affect any other provision of this Agreement
or part thereof, each of which shall remain in full force and effect. If the making of any payment or the provision of any other benefit required
under this Agreement shall be held unlawful or otherwise invalid or unenforceable by a court of competent jurisdiction, such unlawfulness,
invalidity or unenforceability shall not prevent any other payment or benefit from being made or provided under this Agreement, and if the
making of any payment in full or the provision of any other benefit required under this Agreement in full would be unlawful or otherwise
invalid or unenforceable, then such unlawfulness, invalidity or unenforceability shall not prevent such payment or benefit from being made or
provided in part, to the extent that it would not be unlawful, invalid or unenforceable, and the maximum payment or benefit that would not be
unlawful, invalid or unenforceable shall be made or provided under this Agreement.
(h) Waiver. Any party’s failure to insist on compliance with or enforcement of any provision of this Agreement shall not affect its
validity or enforceability or constitute a waiver of future enforcement of that provision or of any other provision of this Agreement.
(i) General Rules of Construction. The headings given to the Sections of this Agreement are solely as a convenience to facilitate
reference, and are not intended to narrow, limit or affect the substance or interpretation of the provisions contained herein. The reference to
any statute, regulation or other provision of law shall be construed to include any amendment thereto or refer to any successor thereof.
(j) Section 409A. To the extent required by law, this Agreement and the grant of the Award hereunder are intended to comply with the
requirements of Section 409A of the Code and the Treasury Regulations promulgated and other official guidance issued
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thereunder (collectively, “Section 409A”), and this Agreement and the Award shall be administered and interpreted in a manner that is
consistent with such intention. Notwithstanding the terms of Section 4 and Section 5, to the extent that payment to the Executive is required to
be delayed by six months pursuant to Section 409A, such payment shall be made no earlier than the first day of the seventh month following
the Executive’s Termination of Employment.
(k) Governing Law. This Agreement, to the extent not otherwise governed by the Code or the laws of the United States, shall be
governed by the laws of the State of New York without reference to principles of conflict of laws, and construed accordingly.
(l) Counterpart Execution. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original but
all of which together shall be deemed one and the same instrument.
By:
Name:
Title:
EXECUTIVE
Exhibit 10.4
DIRECTOR
was reported on the NYSE composite tape. If at any time the Shares are no longer listed or traded on the NYSE, the Fair Market Value of a
Share shall be calculated in such manner as may be determined by the Committee in its good faith judgment from time to time.
(g) “Holdings” shall mean TRW Automotive Holdings Corp., a Delaware corporation.
(h) “NYSE” shall mean the New York Stock Exchange.
(i) “Person” shall mean any individual, firm, corporation, partnership, limited liability company, trust, incorporated or unincorporated
association, joint venture, joint stock company, governmental body or other entity of any kind.
(j) “Share Price” shall mean the average Fair Market Value of a Share during the portion of the month of February immediately preceding
the first anniversary of the Effective Date.
(k) “Shares” shall mean shares of the common stock, par value $0.01 per share, of Holdings.
(l) “Subsidiary” shall mean a subsidiary corporation, as defined in Section 424(f) of the Code.
(m) “Target Value” shall mean the initial value of the Award, as set forth in Section 2(a).
(n) “Target Value Adjustment” shall mean the percentage by which the Target Value is increased or decreased under Section 2(b), based
on the applicable Share Price pursuant to the table attached hereto as Exhibit A, provided that the percentage to be used for such adjustment
shall be the nearest tenth of a percentage determined pursuant to Exhibit A.
Section 2. Grant of Cash Incentive Award. The Company hereby grants to the Director an Award subject to the terms and conditions stated
in this Agreement. The amount of the Award shall be equal to the Target Value determined under Section 2(a) as adjusted pursuant to
Section 2(b).
(a) Target Value. The Target Value of the Award is $___, which is subject to the terms and conditions stated in this Agreement.
(b) Adjustment to the Amount of the Target Value. The Target Value of the Award shall be increased or decreased, as applicable, on the
first anniversary of the Effective Date by multiplying the Target Value by the Target Value Adjustment percentage as determined under Exhibit
A with reference to the calculated Share Price as of that date.
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Section 3. Payment of the Awards. Subject to the vesting requirements of Section 4 and Section 5, the Award amount determined under
Section 2(b) shall be payable to the Director in cash as soon as administratively practicable on or after the first anniversary of the Effective
Date, but in no event later than 90 days thereafter.
Section 4. Service-Vesting Requirement. Except as otherwise provided in Section 5, the Award determined in accordance with Section 2(b)
shall become vested on the first anniversary of the Effective Date, provided the Director remains continuously on the Board of Directors of the
Company or Holdings through that date. Once this vesting requirement has been satisfied, the Award shall thereafter be payable in
accordance with Section 3.
Section 5. Vesting Upon Certain Events.
(a) Death. In the event of the Director’s death prior to satisfying the vesting requirements under Section 4, a pro rata portion of the
Award (determined by multiplying the amount of the Award, without any adjustment under Section 2(b), by a fraction, the numerator of which
is the number of completed calendar months from the Effective Date to the date of death and the denominator of which is 12) is immediately
vested and shall be paid as soon as administratively practicable following the date of death, but in no event later than 90 days thereafter.
(b) Change in Control. In the event the Director’s service with the Company is involuntarily terminated following or in connection with a
Change in Control prior to the satisfaction of the vesting requirements of Section 4, the Award, without regard to any adjustment under
Section 2(b), shall be immediately 100 percent vested and shall be paid as soon as administratively practicable following the date of termination
of service following or in connection with the Change in Control event, but in no event later than 90 days thereafter.
(c) Termination of Service. In the event of the Director’s termination of service on the Board of Directors of the Company or Holdings for
any reason other than an event specified above, prior to satisfying the vesting requirements of Section 4 or 5, the Award is immediately
forfeited in its entirety and shall not be payable.
(d) Rules of Construction. In the event that more than one event occurs under this Section 5, the first event to occur shall be controlling
and shall determine the timing and amount of the Award payable. Under no circumstances shall any provision of this Agreement be construed
so as to require payment to the Director in excess of the Award amount calculated under Section 2(b).
Section 6. Miscellaneous.
(a) Binding Agreement. This Agreement is binding on and enforceable by and against the parties, their successors, legal representatives
and assigns.
(b) Entire Agreement. This Agreement constitutes the whole agreement between the parties relating to the subject matter hereof and
supersedes any prior agreements or understandings related to such subject matter.
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(c) Amendment of this Agreement. This Agreement may not be amended, modified, or supplemented except by a written instrument
executed by each of the parties hereto.
(d) Restrictions on Transfer. The Award may not be sold, assigned, transferred, encumbered, hypothecated or pledged in any manner
(whether by operation of law or otherwise) other than by will or applicable laws of decent and distribution.
(e) No Right to Continued Service. The Director’s right, if any, to continue to serve the Company or Holdings as a director will not be
enlarged or otherwise affected by this Agreement.
(f) Changes in Capitalization. In the event of any change in the outstanding Shares by reason of any stock split, stock dividend, split-up,
split-off, spin-off, recapitalization, merger, consolidation, rights offering, reorganization, combination, subdivision or exchange of shares, or
any distribution to stockholders other than a normal cash dividend the Committee shall make an appropriate adjustment to the Share Price as
may be determined in the sole but reasonable discretion of the Committee, and such adjustments shall be final, conclusive and binding for all
purposes.
(g) Severability. If any provision of this Agreement shall be held unlawful or otherwise invalid or unenforceable in whole or in part by a
court of competent jurisdiction, such provision shall (i) be deemed limited to the extent that such court of competent jurisdiction deems it
lawful, valid and/or enforceable and as so limited shall remain in full force and effect, and (ii) not affect any other provision of this Agreement
or part thereof, each of which shall remain in full force and effect. If the making of any payment or the provision of any other benefit required
under this Agreement shall be held unlawful or otherwise invalid or unenforceable by a court of competent jurisdiction, such unlawfulness,
invalidity or unenforceability shall not prevent any other payment or benefit from being made or provided under this Agreement, and if the
making of any payment in full or the provision of any other benefit required under this Agreement in full would be unlawful or otherwise
invalid or unenforceable, then such unlawfulness, invalidity or unenforceability shall not prevent such payment or benefit from being made or
provided in part, to the extent that it would not be unlawful, invalid or unenforceable, and the maximum payment or benefit that would not be
unlawful, invalid or unenforceable shall be made or provided under this Agreement.
(h) Waiver. Any party’s failure to insist on compliance with or enforcement of any provision of this Agreement shall not affect its
validity or enforceability or constitute a waiver of future enforcement of that provision or of any other provision of this Agreement.
(i) Rules of Construction. The headings given to the Sections of this Agreement are solely as a convenience to facilitate reference, and
are not intended to narrow, limit or affect the substance or interpretation of the provisions contained herein. The reference to any statute,
regulation or other provision of law shall be construed to include any amendment thereto or refer to any successor thereof .
(j) Section 409A. To the extent required by law, this Agreement and the grant of the Award hereunder are intended to comply with the
requirements of Section 409A of
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the Code and the Treasury Regulations promulgated and other official guidance issued thereunder (collectively, “Section 409A”), and this
Agreement and the Award shall be administered and interpreted in a manner that is consistent with such intention. Notwithstanding the terms
of Sections 3 and 5, to the extent that payment to the Director is required to be delayed by six months pursuant to Section 409A, such payment
shall be made as soon as administratively practicable following the first day of the seventh month following the Director’s Termination of
Employment, but in no event later than 90 days thereafter.
(k) Rabbi Trust. In the event of a delay in payment upon a Change in Control beyond the date of completion of such Change in Control,
amounts payable under Section 5(b) shall be contributed by the Company to a grantor trust established by the Company with an independent
trustee immediately prior to the completion of the Change in Control giving rise to Director’s entitlement to such amounts. The costs and fees
associated with establishing and maintaining such grantor trust shall be borne by the Company. The amounts held in trust shall be invested in
a stable value fund or other similar investment vehicle, which seeks to preserve principal while earning interest income. The investment vehicle
shall be selected by an independent investment manager appointed by the Company. The interest income realized shall be included in and paid
to Executive as and when Executive’s payment under this Section is made.
(l) Governing Law. This Agreement, to the extent not otherwise governed by the Code or the laws of the United States, shall be governed
by the laws of the State of New York, without reference to principles of conflict of laws, and construed accordingly.
(m) Counterpart Execution. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original
but all of which together shall be deemed one and the same instrument.
By:
Name:
Title:
DIRECTOR
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EXHIBIT A
No payout if Share Price is less than $1.00
[$5.00] 125.0%
* If the Share Price is between price levels set forth above, the Company shall use linear extrapolation to
determine the resultant Target Value Adjustment.