COOPER TIRE & RUBBER COMPANY Restricted Stock Unit Award Agreement
Exhibit (10.2)
▇▇▇▇▇▇ TIRE & RUBBER COMPANY
WHEREAS, [PARTICIPANT NAME] (the “Participant”) is an employee of ▇▇▇▇▇▇ Tire & Rubber Company
or a Subsidiary (the “Company”); and
WHEREAS, the Compensation Committee of the Board of ▇▇▇▇▇▇ Tire & Rubber Company (the
“Committee”) on [DATE] (the “Date of Grant”) approved the terms and authorized the grant of an
Award of RSUs payable in Common Shares pursuant to Section 7 of the ▇▇▇▇▇▇ Tire & Rubber Company
2010 Incentive Compensation Plan (the “Plan”).
NOW, THEREFORE, pursuant to the Plan and subject to the terms and conditions thereof and the
terms and conditions hereinafter set forth, the Company hereby confirms to the Participant
effective as of the Date of Grant an Award of _________ RSUs.
1. Vesting of RSUs.
The Participant’s right to receive Common Shares equal to the number of RSUs granted will
become fully vested and nonforfeitable if the Participant remains in the continuous employ of the
Company for a period of ____ (__) years from the Date of Grant.
In addition to becoming vested and nonforfeitable as provided in Section 1(a) above, in the
event of a Change in Control during the employment of the Participant and prior to the [
]anniversary of the Date of Grant, the RSUs shall become vested and nonforfeitable as follows:
If the Participant is a participant in ▇▇▇▇▇▇ Tire & Rubber Company’s Change in Control
Severance Pay Plan (the “Severance Plan”), RSUs shall become vested and nonforfeitable as
provided in the Severance Plan.
If the Participant is not a participant in the Severance Plan, if upon a Change
in Control, the successor to ▇▇▇▇▇▇ Tire & Rubber Company assumes (expressly or impliedly by
operation of law) the Company’s obligations under this Award Agreement or Plan or issues to
the Participant a substitute equity-based award of equivalent value on no less favorable
terms for vesting or payment as provided under the RSUs so replaced, the RSUs granted to the
Participant (including dividend equivalents credited thereon), if then unvested, shall vest
pursuant to Section 1(a) and be paid in accordance with the terms and conditions of this
Award Agreement; provided, however, if the Participant’s employment is subsequently
terminated during the Severance Period by the Company and such termination is without Cause,
the RSUs granted to the Participant (including dividend equivalents credited thereon), if
then unvested, shall fully vest immediately upon the Participant’s termination of
employment, and if not previously distributed, on the 31st day following the Participant’s
termination of employment (or, if applicable, in accordance with the terms of any previously
elected deferral election), the Company shall deliver to the Participant with respect to
each such vested RSU one (1) Common Share (or equivalent shares of the acquiring company’s
common stock). If the Participant’s employment is terminated during the Severance Period for
Cause, the RSUs shall terminate pursuant to Section 2.
If the Participant is not a participant in the Severance Plan, if upon a
Change in Control, the successor to ▇▇▇▇▇▇ Tire & Rubber Company has not assumed (expressly
or impliedly by operation of law) the Company’s obligations under this Award Agreement or
Plan or issued to the Participant a substitute equity-based award of equivalent value on no
less favorable terms for vesting or payment as provided under these RSUs so replaced, the
RSUs granted to the Participant (including dividend
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equivalents credited thereon), if then unvested, shall fully vest immediately upon the
consummation of the Change in Control, and if not previously distributed, the Company shall
pay to the Participant with respect to each such vested RSU the full value thereof based
upon the per-share consideration received by holders of the Common Shares upon the Change in
Control, payable at the same time as such holders of the Common Shares receive their
consideration (or, if applicable, in accordance with the terms of any previously elected
deferral election).
Notwithstanding the provisions of Section l(a) and Section 1(b), all of the RSUs shall vest
and become immediately nonforfeitable on the date on which the Participant ceases to be employed by
the Company due to the death, Disability or Retirement of the Participant; provided, however, that
vesting shall not occur by reason of Retirement unless the Participant has remained in the
continuous employ of the Company for at least 6 months after the Date of Grant.
2. Forfeiture of RSUs. Except as provided in Sections l(b) and 1(c), the Participant’s right
to receive Common Shares with respect to RSUs that have not theretofore become fully vested and
nonforfeitable pursuant to Section l(a) hereof shall be forfeited automatically and without further
notice on the date that the Participant’s employment terminates for any reason, whether voluntarily
or involuntarily.
3. Plan Account.
(a) Plan Account. The Company shall establish an account on the books of the Company
(an “Account”) for the Participant and shall credit the Participant’s Account with the RSUs.
(b) Dividend Equivalents. The Participant’s Account shall be credited as of the last
business day of each calendar quarter with that number of additional RSUs determined by dividing
the amount of cash dividends paid on the dividend date by ▇▇▇▇▇▇ Tire & Rubber Company during such
quarter on that number of Common Shares equivalent to the number of RSUs credited to and held in
the Participant’s Account as of the dividend record date for that quarter by the Fair Market Value
per Common Share on the last business day of the current calendar quarter, rounded up to the
nearest whole share; however if a distribution pursuant to Section 4 occurs during the current
calendar quarter, no dividend equivalents shall be credited on that number of Common Shares
equivalent to the number of RSUs so distributed. Such additional RSUs shall become nonforfeitable
if and at the same time as the underlying RSUs pursuant to which they were credited become
nonforfeitable as provided in Section 1 of this Award Agreement.
(c) Statements. As soon as practicable following the close of a calendar year, the
Company shall furnish to the Participant a statement setting forth the number of RSUs in his
Account at the close of such calendar year.
(d) Nature of the Company’s Obligations/Participant’s Rights. The Company’s liability
to pay the amount in a Participant’s Account shall be reflected in its books of account as a
general, unsecured and unfunded obligation, and the rights of the Participant or his designated
beneficiary to receive payments from the Company under the Plan are solely those of a general,
unsecured creditor. The Company shall not be required to segregate any of its assets in respect to
its obligations hereunder, and the Participant or his designated beneficiary shall not have any
interest whatsoever, vested or contingent, in any properties or assets of the Company. Without
limiting the generality or effect of the foregoing, the Participant shall have no voting rights
with respect to the RSUs.
(e) No Trust. Nothing contained in the Plan and no action taken pursuant to the
provisions hereof shall create or be construed to create a trust of any kind, or a fiduciary
relationship between (i) the Company and the Committee (or any member thereof) and (ii) the
Participant, his designated beneficiary or any other person.
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(f) Optional Trust. The Committee, at any time, may authorize the establishment of a trust
for the benefit of the Participant, containing such other terms and conditions as the Committee
shall approve, including provisions pursuant to which the assets of the trust would be subject
under certain conditions to the claims of general creditors of the Company. If such a trust is
established, then the number of Common Shares issuable upon vesting of the RSU’s may be delivered
by the Company to the trust.
4. Distributions in Respect of Accounts.
(a) Scheduled Distributions. To the extent that the right to receive Common Shares
with respect to the RSUs has become nonforfeitable in accordance with Section 1 of this Award
Agreement, distributions in respect of the Participant’s Account shall be made, subject to the
terms and conditions of Section 5 hereof, in the form of Common Shares equivalent to the number of
vested RSUs in the Participant’s Account, deliverable to the Participant on the earlier of
___________________ or __________________. Distributions for which an election hereunder is made
by Participant pursuant to this Section to defer the distribution beyond March 15 of the year
following the year in which the RSUs become nonforfeitable under the terms of Section 1 must be
done in accordance with the rules and regulations established by §409A of the Internal Revenue
Code. These include the required six (6) month delay in a distribution for a Specified Employee
upon a “separation from service”. Further, any subsequent change to an election to delay the
distribution date must be for at least five (5) years beyond the initial deferred distribution date
and the modified election must be made at least twelve (12) months prior to the original
distribution date. There can be no acceleration of a distribution date other than as described in
Section 4(b).
(b) Accelerated Distributions.
(i) Death of Participant. Notwithstanding the election made under Section 4(a),
if the Participant dies, the amount of the RSUs credited to his Account shall, to the extent
vested under the terms of Section 1, including Section l(b) and 1(c), be distributed in an
equivalent number of Common Shares as soon as practicable to the designated beneficiary of
the Participant, or if there is no designated beneficiary or such beneficiary does not
survive the Participant, such distribution shall be made to the estate of the Participant.
(ii) Financial Hardship. Upon a finding by the Committee that the Participant
has suffered a Financial Hardship, the Committee may, in its sole discretion, distribute or
direct distribution of equivalent Common Shares equal to the number of vested RSUs to the
Participant in such amount that does not exceed the amount required to meet the immediate
financial needs created by the Financial Hardship and not reasonably available from other
sources available to the Participant. No distribution pursuant to this Section 4(b)(ii) may
be made in excess of the vested equivalent shares under the terms of Section 1 at the time
of such distribution.
(c) Designation of Beneficiary. The Participant shall have the right to designate a
beneficiary for the purposes of receiving an accelerated distribution as provided in Section 4(b)
above at any time by furnishing the Company with a beneficiary designation form. The Participant
may change or revoke a beneficiary designation at any time by furnishing a revised beneficiary
designation form to the Company.
5. Compliance with Law. Notwithstanding any other provision of this Award Agreement, the
Company shall not be obligated to issue any RSUs or Common Shares in settlement thereof, but may
instead, to the extent permitted by applicable law, pay cash with a value equal to the Fair Market
Value of a Common Share on the date of settlement of the RSUs, if the issuance of any RSUs or
Common Shares in settlement thereof would result in a violation of any law, including, without
limitation, any and all exchange controls, procedures and regulations, in any relevant
jurisdiction.
6. Transferability. The Participant’s right to receive the RSUs shall not be transferable by
the Participant except by will or the laws of descent and distribution.
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7. Withholding Taxes. To the extent that the Company is required to withhold any federal,
state, local or foreign taxes in connection with any issuance or transfer hereunder of Common
Shares to the Participant or his estate, as the case may be, it shall be a condition to such
issuance or transfer that the Participant or his estate pay, or make arrangements satisfactory to
the Company for the payment of such taxes required to be withheld, which may include by (a)
remitting the required amount to the Company, (b) authorizing the Company to withhold a portion of
the Common Shares otherwise issuable with a value equal to such tax, however, in no event shall the
Company accept Common Shares for payment of taxes in excess of the minimum amount of taxes required
to be withheld, (c) authorize the deduction of such amounts from the Participant’s other payments
from the Company, or (d) otherwise satisfy the applicable tax withholding requirement in a manner
satisfactory to the Company.
8. No Right to Continuation of Employment. Neither this Award Agreement nor any action taken
hereunder shall be construed as giving the Participant any right to continued employment with the
Company and neither this Award Agreement nor any action taken hereunder shall be construed as
entitling the Company to the services of the Participant for any period of time. For purposes of
this Award Agreement, the continuous employment of the Participant with the Company shall not be
deemed interrupted, and the Participant shall not be deemed to have ceased to be employed by the
Company, by reason of (a) the transfer of his employment among the Company or (b) a leave of
absence approved by the Committee in its sole discretion. This RSU Award is a voluntary,
discretionary Award being made on a one-time basis and it does not constitute a commitment to make
any future Awards. This RSU Award and any payments made hereunder will not be considered salary or
other compensation for purposes of any severance pay or similar allowance, except as otherwise
required by law.
9. Data Privacy. Information about the Participant and the Participant’s participation in the
Plan may be collected, recorded, and held, used and disclosed for any purpose related to the
administration of the Plan. The Participant understands that such processing of this information
may need to be carried out by the Company and by third-party administrators whether such persons
are located within the Participant’s country or elsewhere, including the United States of America.
The Participant consents to the processing of information relating to the Participant and the
Participant’s participation in the Plan in any one or more of the ways referred to above.
10. Amendments. Any amendment to the Plan shall be deemed to be an amendment to this Award
Agreement to the extent that the amendment is applicable hereto; provided, however, that no
amendment shall adversely affect the rights of the Participant hereunder without the Participant’s
consent.
11. Severability. In the event that one or more of the provisions of this Award Agreement
shall be invalidated for any reason by a court of competent jurisdiction, any provision so
invalidated shall be deemed to be separable from the other provisions hereof, and the remaining
provisions hereof shall continue to be valid and fully enforceable.
12. Binding Effect. Participant acknowledges the receipt of a copy of the Plan and agrees to
be bound by all the terms and provisions thereof. The terms of the Plan as it presently exists, and
as it may be amended, are deemed incorporated herein by reference, and any conflict between the
terms of the Award Agreement and the provisions of the Plan shall be resolved by the Committee,
whose determination shall be final and binding on all parties. In general, and except as otherwise
determined by the Committee, the provisions of the Plan shall be deemed to supersede the provisions
of this Award Agreement to the extent of any conflict between the Plan and this Award Agreement. In
addition, notwithstanding the terms set forth herein, the Committee shall have the right to grant
RSUs upon such terms as it deems appropriate, so long as such provisions are within the terms of
the Plan.
13. Notices. Any notice pursuant to this Award Agreement to the Company shall be addressed to
it at its office at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, Attention: Secretary of ▇▇▇▇▇▇ Tire &
Rubber Company. Any notice pursuant to the Award Agreement to Participant shall be addressed to the
Participant at the address as set forth below. Either party shall have the right to designate at
any time hereafter in writing a different address.
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14. Governing Law. This Award Agreement shall be governed by and construed in accordance with
the laws of the State of Ohio and shall in all respects be interpreted, enforced and governed under
the internal and domestic laws of such state. Any claims or legal actions by one party against the
other arising out of the relationship between the parties contemplated herein (whether or not
arising under this Award Agreement) shall be governed by the laws of the State of Ohio.
15. RSUs Subject to the Company’s Clawback Policy. Notwithstanding anything in this Award
Agreement to the contrary, the RSUs and Common Shares payable upon vesting shall be subject to the
Company’s clawback policy, as it may be in effect from time to time, including, without limitation,
the provisions of such clawback policy required by Section 10D of the Exchange Act and any
applicable rules or regulations issued by the U.S. Securities and Exchange Commission or any
national securities exchange or national securities association on which the Common Shares may be
traded.
16. Defined Terms.
(a) For the purposes of this Award Agreement:
“Affiliated Employer” means any corporation, partnership, limited liability company, joint
venture, unincorporated association or other entity in which the ▇▇▇▇▇▇ Rubber & Tire Company has a
direct or indirect ownership or other equity interest.
“Cause” means that prior to any termination of employment, the Participant shall have
committed:
any act or omission constituting a material breach by the Participant of any of his
significant obligations to or agreements with the Company or the continued failure or
refusal of the Participant to adequately perform the duties reasonably required by the
Company which, in each case, is materially injurious to the financial condition or business
reputation of, or is otherwise materially injurious to, the Company, after notification by
the Board of such breach, failure or refusal and failure of the Participant to correct such
breach, failure or refusal within thirty (30) days of such notification (other than by
reason of the incapacity of the Participant due to physical or mental illness); or
any other willful act or omission which is materially injurious to the financial
condition or business reputation of, or is otherwise materially injurious to, the Company,
and failure of the Participant to correct such act or omission within thirty (30) days after
notification by the Board of any such act or omission (other than by reason of the
incapacity of the Participant due to physical or mental illness); or
the Participant is found guilty of, or pleads guilty or nolo contendere to, a felony or
any criminal act involving fraud, embezzlement, or theft.
For purposes of this Award Agreement, no act, or failure to act, on the Participant’s part
shall be deemed “willful” if done, or omitted to be done, by the Participant in good faith and with
a reasonable belief that the Participant’s action or omission was in the best interest of the
Company. Any notification to be given by the Board in accordance with Section 16(a)(i) or 16(a)(ii)
shall be in writing and shall specifically identify the breach, failure, refusal, act, omission or
injury to which the notification relates and, in the case of Section 16(a)(i) or Section 16(a)(ii)
shall describe the injury to the Company, and such notification must be given within twelve (12)
months of the Board becoming aware of the breach, failure, refusal, act, omission or injury
identified in the notification. Failure to notify the Participant within any such twelve (12) month
period shall be deemed to be a waiver by the Board of any such breach, failure, refusal, act or
omission by the Participant and any such breach, failure, refusal, act or omission by the
Participant shall not then be determined to be a breach of this Award Agreement. For the avoidance
of doubt and for the purpose of determining Cause, the exercise of business judgment by the
Participant shall not be determined to be Cause, even if such business judgment materially injures
the financial condition or business reputation of, or is otherwise materially injurious to the
Company,
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unless such business judgment by the Participant was not made in good faith, or constitutes
willful or wanton misconduct, or was an intentional violation of state or federal law.
“Change in Control” means the occurrence of any of the following events:
▇▇▇▇▇▇ Tire & Rubber Company merges into itself, or is merged or consolidated with,
another entity and as a result of such merger or consolidation less than 51% of the voting
power of the then-outstanding voting securities of the surviving or resulting entity
immediately after such transaction are directly or indirectly beneficially owned in the
aggregate by the former stockholders of ▇▇▇▇▇▇ Tire & Rubber Company immediately prior to
such transaction;
all or substantially all the assets accounted for on the consolidated balance sheet of
▇▇▇▇▇▇ Tire & Rubber Company are sold or transferred to one or more entities or persons, and
as a result of such sale or transfer less than 51% of the voting power of the
then-outstanding voting securities of such entity or person immediately after such sale or
transfer is directly or indirectly beneficially held in the aggregate by the stockholders of
▇▇▇▇▇▇ Tire & Rubber Company immediately prior to such transaction or series of
transactions;
a person, within the meaning of Section 3(a)(9) or 13(d)(3) (as in effect on the
effective date of the Severance Plan) of the Securities Exchange Act of 1934, (the “Exchange
Act”) (a “Person”) becomes the beneficial owner (as defined in Rule 13d-3 of the Securities
and Exchange Commission pursuant to the Exchange Act) (a “Beneficial Owner”) of 35% or more
of the voting power of the then-outstanding voting securities of ▇▇▇▇▇▇ Tire & Rubber
Company; provided, however, that the foregoing does not apply to any such acquisition that
is made by (w) any Affiliated Employer; (x) any employee benefit plan of ▇▇▇▇▇▇ Tire &
Rubber Company or any Affiliated Employer; or (y) any person or group of which employees of
▇▇▇▇▇▇ Tire & Rubber Company or of any Affiliated Employer control a greater than 25%
interest unless the Board determines that such person or group is making a “hostile
acquisition;” or (z) any person or group that directly or indirectly through one or more
intermediaries, controls or is controlled by, or is under common control with, the
Participant; or
a majority of the members of the Board are not Continuing Directors, where a
“Continuing Director” is any member of the Board who (x) was a member of the Board on the
effective date of the Severance Plan or (y) was nominated for election or elected to such
Board with the affirmative vote of a majority of the Continuing Directors who were members
of such Board at the time of such nomination or election, provided that any director
appointed or elected to the Board to avoid or settle a threatened or actual proxy contest
(including but not limited to a consent solicitation) shall in no event be deemed to be a
Continuing Director.
“Disability” means the Participant becomes disabled and qualifies, or would have qualified, to
receive disability benefits pursuant to the Company’s long-term disability plan in effect, provided
the Participant is eligible to participate in such long-term disability plan (regardless of whether
or not the Participant has elected to participate in such long-term disability plan).
“Financial Hardship” means within the meaning of Treasury Regulation 1.409A-3(i)(3) an
unforeseeable financial emergency of the Participant determined by the Committee as provided in
Section 4(b)(ii) on the basis of information supplied by the Participant, arising from an illness,
casualty loss, sudden financial reversal or other such unforeseeable occurrence beyond the control
of the Participant, but not including foreseeable events such as the purchase of a house or
education expenses for children. The Participant shall furnish the Committee, in writing and in
reasonable detail, with the relevant facts and information, and the determination of the Committee
as to whether a distribution is warranted pursuant to Section 4(b)(ii) and the amount of any such
distribution shall be binding and conclusive.
“Retirement” means termination of employment with the Company after the sum of the
Participant’s years of continuous employment with the Company and the Participant’s age equal at
least 75 years.
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“Severance Period” means the period of time commencing on the date of the first occurrence of
a Change in Control and continuing until the earlier of (i) the second anniversary of the
occurrence of the Change in Control; (ii) the Participant’s death; or (iii) the date the
Participant’s employment is terminated due to Disability.
“Specified Employee” means any Participant designated by the Company as such in accordance
with Treasury Regulation 1.409A-1(i) on December 31 each year for the following year.
(b) Capitalized terms that are used but not defined herein are as defined in the Plan.
The undersigned Participant hereby acknowledges receipt of this Award Agreement and accepts
the RSUs granted thereunder, subject to the terms and conditions of the Plan and the terms and
conditions hereinabove set forth.
Date:
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| [PARTICIPANT NAME] | ||||||
| Signature | ||||||
| Social Security No./Tax Identification No. | ||||||
| Home Address | ||||||
| City State Zip |
This undersigned officer executes this Award Agreement on behalf of ▇▇▇▇▇▇ Tire & Rubber
Company.
| ▇▇▇▇▇▇ TIRE & RUBBER COMPANY |
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| By: | ||||
| [Name] | ||||
| [Title] | ||||
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