American Axle & Manufacturing Holdings, Inc. Deferred Compensation Unit - Form of Award Agreement
American
Axle & Manufacturing Holdings, Inc.
Deferred
Compensation Unit - Form of Award Agreement
THIS AGREEMENT (the “Agreement”), is made
effective as of {INSERT DATE}
(the “Date of
Grant” or “Effective Date”), between American Axle & Manufacturing
Holdings, Inc., a Delaware corporation (the “Company”), and {INSERT NAME} (the “Participant”):
RECITALS:
A. Prior to
2009, members of the Board of Directors received a portion of their compensation
in the form of restricted stock units granted under the 1999 American Axle &
Manufacturing Holdings, Inc. Stock Incentive Plan (the “Plan”);
and
B. The Plan
expired in January 2009 and the Company wishes to continue to have a portion of
the Participants’ compensation tied to a measure of total shareholder
return.
Therefore,
the parties agree as follows:
1. Grant of the Award.
The Company grants to the Participant, on the terms and conditions set forth in
this Agreement, a deferred compensation unit (a “DCU”) award covering an
aggregate of {INSERT
NUMBER} DCUs (the “Award”). Each DCU granted hereunder shall have a value
equal to $1.00 U.S.
2. Vesting of the
Award.
(a) Vesting Schedule.
Subject to Section 2(b) and Section 2(c), the Award shall vest in full twelve
(12) months following the Date of Grant or such earlier date in accordance with
Section 2(b) below (the “Vesting Date”).
(b) Earlier Vesting. To
the extent not already vested, the Award shall vest in full and be paid out upon
the death or Disability (as defined below) of the Participant or upon the
occurrence of a Change in Control (as defined below).
(c) Forfeiture. Except as
otherwise stated in Section 2(b), if the Participant’s service as a member of
the Board ceases for any reason, prior to the Vesting Date, the Award shall be
forfeited and canceled without consideration.
|
3.
|
Payment of the
Award.
|
a) Total Shareholder Return
Measurement. As provided in Section 3(b) below, the number of DCUs earned
under this Agreement shall be based on the Company’s Total Shareholder Return
during the period beginning on the Date of Grant and ending on the Vesting Date
(the “Measurement Period”).
For this
purpose, Total Shareholder Return shall be determined as follows:
|
Total
Shareholder Return
|
=
|
Change in Stock Price + Dividends
Paid
Beginning
Stock
Price
|
Beginning
Stock Price shall mean the average closing price on the applicable stock
exchange of one share of stock for the thirty (30) trading days immediately
prior to the first day of the Measurement Period; Ending Stock Price shall mean
the average closing price on the applicable stock exchange of one share of stock
for the thirty (30) trading days immediately prior to the last day of the
Measurement Period; Change in Stock Price shall mean the difference between the
Beginning Stock Price and the Ending Stock Price; and Dividends Paid shall mean
the total of all dividends paid on one (1) share of stock during the Measurement
Period, provided that dividends shall be treated as though they are reinvested
at the end of each calendar quarter.
b) Determination of Number of
DCUs Earned. Except as otherwise provided herein, the number of DCUs
earned as of the Vesting Date shall equal the product of: (a) the number of DCUs
granted to the Participant pursuant to this Agreement and (b) the resulting
Multiplier as determined in the Two-Step Table below. The Committee shall have
the sole authority to calculate the number of earned DCUs under this
Agreement.
Two-Step
Table
|
Total
Shareholder Return
|
Multiplier
|
|
20%
or More
|
120%
|
|
10%
– < 20%
|
112%
|
|
5%
– < 10%
|
105%
|
|
-5%
– < 5%
|
100%
|
|
-10%
– < 5%
|
-105%
|
|
-20%
– < -10%
|
-115%
|
|
-21%
or Less
|
-120%
|
c) Calculation of Payment
Amount. Payment of DCUs earned (as determined in Section 3(b) above)
shall be settled in cash with the amount equal to the product of (i) $1.00 U.S.
and (ii) the number of DCUs earned.
d) Normal Payment.
Subject to Section 3(e), the Participant shall receive the cash payment for the
earned DCUs on or before the fifteenth (15th) day of
the second month following the Vesting Date (the “Payment
Date”).
e) Deferred Payment
Date. If the Participant so elects on the Date of Grant, then the
Participant shall have the right to receive from the Company, within 90 days
after the Deferred Payment Date, the cash payment (as determined in Sections
3(a-c)) with respect to this Award if vested on or before that date. “Deferred Payment Date” shall
mean the earlier of the date of the Participant’s “separation from service”
within the meaning of Section 409A of the Code or the Participant’s
death.
f) No Right to Continued
Service as a Director. This Agreement shall not be construed as giving
the Participant the right to be retained as a member of the Board.
4. Transferability.
Except as otherwise provided in this Agreement, the Award may not be assigned,
alienated, pledged, attached, sold or otherwise transferred or encumbered by the
Participant other than by will or by the laws of descent and distribution.
Except for the designation of the Participant’s beneficiary, the purported
assignment, alienation, pledge, attachment, sale, transfer or encumbrance of the
Award shall be void and unenforceable against the Company or any Affiliate. No
permitted transfer of the Award to heirs or legatees of the Participant shall be
effective to bind the Company unless the Company has been furnished with written
notice of the transfer and a copy of the evidence that the Company deems
necessary to establish the validity of the transfer and the acceptance by the
transferee or transferees of the terms and conditions of the Award.
5. Withholding. In the
event that the Company is required to withhold taxes from any payments to
Participants, the Company will withhold and forward the amounts to the
appropriate authorities.
6. Securities Laws. In
connection with the grant, vesting or payment of the Award, the Participant will
make or enter into any written representations, warranties and agreements that
the Committee may reasonably request in order to comply with applicable
securities laws or with this Agreement.
7. Notices. Notice under
this Agreement shall be addressed to the Company in care of its Secretary at the
principal executive offices of the Company and to the Participant at the address
appearing in the records of the Company for the Participant, or to either party
at another address that the party designates in writing to the other. Notice
shall be effective upon receipt.
8. Choice of Law. The
interpretation, performance and enforcement of this Agreement shall be governed
by the laws of the State of New York without regard to principles of conflicts
of law.
9. Definitions.
(a) “Affiliate”
means any corporation or other entity that is affiliated with the Company
through stock or equity ownership or otherwise, and is designated as an
Affiliate for purposes of this Agreement by the compensation committee of the
Company.
(b) “Beneficial
Owner” or “Beneficial Ownership” shall have the meaning ascribed to such terms
in Rule 13d-3 of the General Rules and Regulations under the Exchange
Act.
(c) “Board of
Directors” or “Board” means the Board of
Directors of the Company.
|
(d)
|
“Change
in Control” means any of the following
events:
|
(i) Any
Person, excluding the Company and any subsidiary and any employee benefit plan
sponsored or maintained by the Company or any subsidiary (including any trustee
of such plan acting as trustee), directly or indirectly, becomes the beneficial
owner (as defined in Rule 13d-3 under the Exchange Act), of securities of
the Company representing 20% or more of the combined voting power of the
Company’s then outstanding securities; or
(ii) The
consummation of any merger or other business combination involving the Company,
a sale of 51% or more of the Company’s assets, liquidation or dissolution of the
Company or a combination of the foregoing transactions (the “Transactions”) other than a
Transaction immediately following which the shareholders of the Company
immediately prior to the Transaction own, in the same proportion, at least 51%
of the voting power, directly or indirectly, of (A) the surviving
corporation in any such merger or other business combination; (B) the
purchaser of or successor to the Company’s assets; (C) both the surviving
corporation and the purchaser in the event of any combination of Transactions;
or (D) the parent company owning 100% of such surviving corporation,
purchaser or both the surviving corporation and the purchaser, as the case may
be; or
(iii) Within
any 24-month period, the persons who were directors immediately before the
beginning of such period (the “Incumbent Directors”) cease
(for any reason other than death) to constitute at least a majority of the Board
or the board of directors of a successor to the Company. For this purpose, any
director who was not a director at the beginning of such period shall be deemed
to be an Incumbent Director if such director was elected to the Board by, or on
the recommendation of or with the approval of, at least two thirds of the
directors who then qualified as Incumbent Directors, so long as such director
was not nominated by a person who commenced or threatened to commence an
election contest or proxy solicitation by or on behalf of a person (other than
the Board) or who has entered into an agreement to effect a Change in Control or
expressed an intention to cause such a Change in Control.
(e) “Disability”
means the Participant’s inability to engage in any substantial gainful activity
by reason of any medically determinable physical or mental impairment that can
be expected to result in death or can be expected to last for a continuous
period of not less than 12 months.
(f) “Person”
shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange
Act and used in Sections 13(d) and 14(d) thereof, including a “group” as defined
in Section 13(d) thereof.
10. Section 409A. The
Award is intended to satisfy the requirements of Section 409A of the Code with
respect to amounts subject thereto and shall be interpreted and construed in a
manner consistent with that intent. If any provision of this Agreement or the
Plan causes the Award not to satisfy the requirements of Section 409A of the
Code, or could otherwise cause the Participant to recognize income or be subject
to the interest and penalties under Section 409A of the Code, then the provision
shall have no effect or, to the extent practicable, the Company may modify the
provision to maintain the original intent without violating the requirements of
Section 409A of the Code.
11. Signature in Counterparts.
This agreement may be signed in counterparts. Each counterpart shall be
an original, with the same effect as if the signatures were on the same
instrument.
AMERICAN AXLE &
MANUFACTURING
HOLDINGS, INC.
By: ______________________________________
Name:
Title:
Agreed
and acknowledged
as of the
Date of Grant:
______________________
{Insert
Participant Name}
______
(initials) I,
{Insert Name}, the
Participant named above, wish to defer the payment of the Award, inaccordance
with and subject to the terms of Section 3(e) of this Agreement, until the date
of myseparation from service, and do hereby so elect.