FORM OF NON QUALIFIED STOCK OPTION AGREEMENT
Exhibit 10.1
2002 Form
2002 Form
1999 AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
STOCK INCENTIVE PLAN
STOCK INCENTIVE PLAN
THIS AGREEMENT (the “Agreement”), is made effective as of {INSERT DATE}, 2002 (hereinafter called the
“Date of Grant”) between American Axle & Manufacturing Holdings, Inc., a Delaware corporation
(hereinafter called the “Company”), and {INSERT NAME} hereinafter called the “Participant”):
R E C I T A L S:
WHEREAS, the Company has adopted the 1999 American Axle & Manufacturing of Michigan, Inc.
Stock Incentive Plan (the “Plan”), which Plan is incorporated herein by reference and made a part
of this Agreement. Capitalized terms not otherwise defined herein shall have the same meanings as
in the Plan; and
WHEREAS, the Compensation Committee of the Board of Directors has determined that it would be
in the best interests of the Company and its stockholders to grant the option provided for herein
to the Participant pursuant to the Plan and the terms set forth herein.
NOW THEREFORE, in consideration of the mutual covenants hereinafter set forth, the parties
agree as follows:
1. Grant of the Option. The Company hereby grants to the Participant the right and
option (the “Option”) to purchase, on the terms and conditions hereinafter set forth, all or any
part of an aggregate of {Insert # of Options Granted} Shares, subject to adjustment as set forth in
the Plan. The purchase price of the Shares subject to the Option (the “Option Price”) shall be
${Insert Price} per share, the closing price of AAM stock on the Date of Grant. This one time Option is
intended to be a non-qualified stock option, and is not intended to be treated as an option that
complies with Section 422 of the Internal Revenue Code of 1986, as amended.
2. Vesting. At any time, the portion of the Option that has become vested and
exercisable as described in this Section 2 is hereinafter referred to as the “Vested Portion.”
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(a) Vesting Schedule.
(i) Subject to (a)(ii) and (b), the Option shall vest and become exercisable in accordance
with following schedule:
| Exercisable Shares* | ||||
Prior to the first anniversary of the Date of Grant |
0 | % | ||
On or after the first anniversary of the Date of Grant |
33 | % | ||
On or after the second anniversary of the Date of Grant |
67 | % | ||
On or after the third anniversary of the Date of Grant |
100 | % | ||
| * | whole shares only; fractional shares, if any, are added to the subsequent anniversary date. |
(ii) Notwithstanding the foregoing, the Options shall become immediately vested and
exercisable (by the Participant or the Participant’s beneficiary as applicable) upon the
Participant’s death, Disability, or retirement at or after age 65 under the Company’s Retirement
Program for Salaried Employees, Restatement dated January 1, 2001 (the “Program”), or Limited Early
Retirement under Section 7.11 of the Program; or upon retirement under the Program upon expiration
of any employment agreement between the Company and the Participant; or upon any other retirement
under the Program with the advance written approval of the Company’s Chief Executive Officer; or
termination of Participant’s employment by the Company because of a reorganization of the Company
in which the Participant’s position is eliminated; or in the event of a Change in Control.
(b) Termination of Employment
Except as otherwise expressly stated in Section 2(a)(ii), if the Participant’s employment with
the Company is terminated for any reason, the Option shall, to the extent not then vested, be
canceled by the Company without consideration and the Vested Portion of the Option shall remain
exercisable for the period set forth in Section 3(a).
3. Exercise of Option.
(a) Period of Exercise. Subject to the provisions of the Plan and this Agreement,
the Participant may exercise all or any part of the Vested Portion of the Option at any time prior
to the earliest to occur of:
(i) the tenth anniversary of the Date of Grant;
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(ii) one year following the date of the Participant’s termination of employment as a result
of the Participant’s death, Disability, or retirement at or after age 65 under the Program, or
Limited Early Retirement under Section 7.11 of the Program; or retirement under the Program upon
expiration of any employment agreement between the Company and the Participant; or any other
retirement under the Program with the advance written approval of the Company’s Chief Executive
Officer; or termination of Participant’s employment by the Company because of a reorganization of
the Company in which the Participant’s position is eliminated; or in the event of a Change in
Control (each of the foregoing hereinafter referred to as a “Termination Date”); except that if
Participant is a member of the Company’s Board of Directors on any such Termination Date, then one
year following the last date of Participant’s service as a member of the Company’s Board of
Directors.
(iii) ninety days following the date of the Participant’s termination of employment by the
Company without Cause; or, except as stated in Section 2(a)(ii), the Participant’s resignation;
and
(iv) the date of the Participant’s termination of employment by the Company for Cause.
For purposes of this Agreement:
“Cause” shall mean “cause” as defined in any employment agreement entered into by and between
the Participant and the Company or any of its Subsidiaries which is in effect as of or after the
Date of Grant (as the same may be amended in accordance with the terms thereof); or if not defined
therein or if there shall be no such agreement, “Cause” shall mean
(i) neglect of or willful and continuing refusal to perform one’s duties (other than due to
Disability),
(ii) a breach of any non-competition/no raid covenants the Participant is subject to,
(iii) engaging in conduct which is demonstrably injurious to the Company, the Company’s
Subsidiaries or Affiliates, as such terms are used in the Plan (including, without limitation, a
breach of any confidentiality covenant the Participant is subject to), or
(iv) a conviction or plea of guilty or nolo contendere to a felony or a misdemeanor involving
moral turpitude, dishonesty or theft, in each case as determined in the sole discretion of the
Committee.
“Disability” shall mean the inability of a Participant to perform in all material respects his
duties and responsibilities to the Company, or any Subsidiary of the Company, by reason of a
physical or mental disability or infirmity which inability is reasonably expected to be permanent
and has continued (i) for a period of six consecutive months or (ii) such shorter period as the
Committee may reasonably determine in good faith. The Disability
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determination shall be in the
sole discretion of the Committee and a Participant (or his representative) shall furnish the Committee with medical evidence documenting the
Participant’s disability or infirmity that is satisfactory to the Committee.
(b) Method of Exercise.
(i) Subject to Section 3(a), the Vested Portion of the Option may be exercised by delivering
to the Company at its principal office, or its designee, written notice of intent to so exercise;
provided that, the Option may be exercised with respect to whole Shares only. Such notice shall
specify the number of Shares for which the Option is being exercised and shall be accompanied by
payment in full of the Exercise Price. The payment of the Exercise Price shall be made (i) in cash
or its equivalent (e.g., by check), (ii) in Shares having a Fair Market Value equal to the
aggregate Option Price for the Shares being purchased and satisfying such other requirements as may
be imposed by the Committee; provided, that such Shares have been held by the Participant for no
less than six months, (iii) partly in cash and partly in such Shares or (iv) through the delivery
of irrevocable instructions to a broker to deliver promptly to the Company an amount equal to the
aggregate option price for the shares being purchased. The Participant shall also be required to
pay all withholding taxes relating to the exercise.
(ii) Notwithstanding any other provision of the Plan or this Agreement to the contrary, the
Option may not be exercised prior to the completion of any registration or qualification of the
Option or the Shares that is required to comply with applicable state and federal securities laws
or any ruling or regulation of any governmental body or national securities exchange that the
Committee shall in its sole discretion determine in good faith to be necessary or advisable.
(iii) Upon the Company’s determination that the Option has been validly exercised as to any
of the Shares, the Company, upon request by the Participant, shall issue certificates in the
Participant’s name for such Shares. However, the Company shall not be liable to the Participant
for damages relating to any delays in issuing the certificates to him, any loss of the
certificates, or any mistakes or errors in the issuance of the certificates or in the certificates
themselves.
(iv) In the event of the Participant’s death, the Vested Portion of the Option shall remain
exercisable by the Participant’s executor or administrator, or the person or persons to whom the
Participant’s rights under this Agreement shall pass by will or by the laws of descent and
distribution as the case may be, to the extent set forth in Section 3(a). Any heir or legatee of
the Participant shall take rights herein granted subject to the terms and conditions hereof.
4. No Right to Continued Employment. Neither the Plan nor this Agreement shall be
construed as giving the Participant the right to be retained in the employ of , or in any
consulting relationship to, the Company or any Affiliate. Further, the Company or any Affiliate
may at any time dismiss the Participant or discontinue any consulting relationship, free from any
liability or any claim under the Plan or this Agreement, except as otherwise expressly provided
herein.
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5. Legend on Certificates. The Committee may cause a legend or legends to be put on
certificates representing the Shares purchased by exercise of the Option to make appropriate
reference to such restrictions as the Committee may deem advisable under the Plan or as may be
required by the rules, regulations, and other requirements of the Securities and Exchange
Commission, any stock exchange upon which such Shares are listed, and any applicable Federal or
state laws.
6. Transferability. Except as otherwise provided in the Plan, the Option may not be
assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by the
Participant otherwise than by will or by the laws of descent and distribution, and any such
purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void
and unenforceable against the Company or any Affiliate; provided that the designation of a
beneficiary shall not constitute an assignment, alienation, pledge, attachment, sale, transfer or
encumbrance.
No such permitted transfer of the Option to heirs or legatees of the Participant shall be effective
to bind the Company unless the Committee shall have been furnished with written notice thereof and
a copy of such evidence as the Committee may deem necessary to establish the validity of the
transfer and the acceptance by the transferee or transferees of the
terms and conditions hereof. Except as otherwise provided in the Plan, during the Participant’s lifetime, the Option is
exercisable only by the Participant.
7. Withholding. A Participant shall be required to pay to the Company or any
Affiliate, and the Company shall have the right and is hereby authorized to withhold, any
applicable withholding taxes in respect of an Option, its exercise or any payment or transfer under
an Option or under the Plan and to take such other action as may be necessary in the opinion of the
Company to satisfy all obligations for the payment of such withholding taxes.
8. Securities Laws. Upon the acquisition of any Shares pursuant to the exercise of
the Option, the Participant will make or enter into such written representations, warranties and
agreements as the Committee may reasonably request in order to comply with applicable securities
laws or with this Agreement.
9. Notices. Any notice necessary under this Agreement shall be addressed to the
Company in care of its Secretary at the principal executive office 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 such other address as either party hereto may hereafter designate in writing to the other.
Any such notice shall be deemed effective upon receipt thereof by the addressee.
10. 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.
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11. Option Subject to Plan. By entering into this Agreement the Participant agrees
and acknowledges that the Participant has received a copy of the Plan. The Option is subject to
the Plan, the terms and provisions of which, as may be amended from time to time, are hereby
incorporated herein by reference. In the event of a conflict between any term or provision
contained herein and a term or provision of the Plan, the applicable terms and provisions of the
Plan will govern and prevail.
12. Signature in Counterparts. This Agreement may be signed in counterparts, each of
which shall be an original, with the same effect as if the signatures thereto and hereto were upon
the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement.
| AMERICAN AXLE & MANUFACTURING HOLDINGS, INC. | ||||
| By: | ||||
| ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | ||||
| Executive Director Human Resources | ||||
Agreed and acknowledged as
of the date first above written:
of the date first above written:
{Insert Participant Name}