Exhibit 10.30
COOPER-STANDARD AUTOMOTIVE
INC.
CHANGE OF CONTROL SEVERANCE PAY
PLAN
As Amended and Restated Effective
July 1, 2008
COOPER-STANDARD AUTOMOTIVE
INC.
CHANGE OF CONTROL SEVERANCE PAY
PLAN
1. General Statement of
Purpose . The Board of Directors (the “ Board
”) of Cooper-Standard Automotive Inc. (the “
Company ”) has considered the effect a change of
control of the Company may have on certain executives of the
Company. The executives have made and are expected to continue to
make major contributions to the short-term and long-term
profitability, growth and financial strength of the Company. The
Company recognizes that the possibility of a change of control
exists, desires to assure itself of both the present and fixture
continuity of management, desires to establish certain minimum
severance benefits for certain of its executives applicable in a
change of control, and wishes to ensure that its executives are not
practically disabled from discharging their duties in respect of a
proposed or actual transaction involving a change of
control.
As a result, the Board believes that
the Cooper-Standard Automotive Inc. Change of Control Severance Pay
Plan (the “ Plan ”) will assist the Company in
attracting and retaining qualified executives.
2. Effective and Termination
Dates . The “ Effective Date ” of the Plan
is January 1, 2007. The Plan is restated as of July 1,
2008. The Plan will automatically terminate on the later of
(i) December 31, 2009 or (ii) the second anniversary
of a Change of Control (the “Termination Date”
); provided , however , that on each
December 31, commencing with the year 2007, the Termination
Date will automatically be extended for an additional year unless,
not later than 120 calendar days prior to such date, the Company
shall have given written notice to the Executives that the
Termination Date is not to be so extended.
3. Definitions. Where the
following words and phrases appear in the Plan, they shall have the
respective meanings set forth below, unless their context clearly
indicates otherwise:
(a) “ Affiliate ”
shall mean, with respect to an entity, any entity directly or
indirectly controlling, controlled by, or under common control with
such first entity.
(b) “ Base Pay ”
means, with respect to each Executive, the rate of annual base
salary, as in effect from time to time.
(c) “ Board ”
means the Board of Directors of the Company.
(d) “ Cause ”
means that, prior to any termination of employment pursuant to
Section 4(b), the Executive shall have committed:
(i) any act or omission constituting
a material breach by the Executive of any of his significant
obligations to or agreements with the Company or its Affiliate or
the continued failure or refusal of the Executive to adequately
perform the duties reasonably required by the Company or its
Affiliate which is materially injurious to the financial condition
or business reputation of, or is otherwise materially injurious to,
the Company or its Affiliate, after notification by the
Board of such breach, failure or
refusal and failure of the Executive to correct such breach,
failure or refusal within thirty (30) days of such
notification (other than by reason of the incapacity of the
Executive due to physical or mental illness); or
(ii) the commission by and
conviction of the Executive of a felony, or the perpetration by and
criminal conviction of or civil verdict finding the Executive
committed a dishonest act or common law fraud against the Company
or its Affiliate (for the avoidance of doubt, conviction and civil
verdict, in each case, shall mean when no further appeals may be
taken by the Executive from such conviction or civil verdict and
such conviction or civil verdict becomes final and binding upon the
Executive with no further right of appeal); or
(iii) 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 or its Affiliate, and failure of the Executive to
correct such act or omission after notification by the Board of any
such act or omission.
Any notification to be given by the
Board in accordance with Section 3(d)(i) or 3(d)(iii) shall
specifically identify the breach, failure, refusal, act or omission
to which the notification relates and, in the case of
Section 3(d)(i) or 3(d)(iii) shall describe the injury to the
Company or its Affiliate, and such notification must be given
within twelve (12) months of the Board’s becoming aware,
or within twelve (12) months of when the Board should have
reasonably become aware of the breach, failure, refusal, act, or
omission identified in the notification. Notwithstanding
Section 20, failure to notify the Executive 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
Executive and any such breach, failure, refusal, act or omission by
the Executive shall not then be determined to be a
breach.
For the avoidance of doubt and for
the purpose of determining Cause, the exercise of business judgment
by the Executive 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 or any of its Affiliates, unless such business judgment by
the Executive was not made in good faith, or constitutes willful or
wanton misconduct, or was an intentional violation of state or
federal law.
(e) “ Change of Control
” means the occurrence of any of the following events after
the Effective Date (i) the sale or disposition, in one or a
series of related transactions, of all or substantially all of the
assets of CSA to any “person” or “group”
(as such terms are defined in Sections 13(d)(3) and 14(d)(2) of the
Securities Exchange Act of 1934 (the “ Exchange Act
”)) other than Permitted Holders or (ii) any person or
group, other than Permitted Holders, is or becomes the
“beneficial owner” (as defined in Rules 13d-3 and l3d-5
under the Exchange Act), directly or indirectly, of greater than or
equal to 50% of the total voting power of the voting stock of CSA,
including by way of merger,
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consolidation or otherwise, except
where one or more of the Sponsors and/or their respective
Affiliates, immediately following such merger, consolidation or
other transaction, continue to have the ability to designate or
elect a majority of the Board of Directors of CSA (or the board of
directors of the resulting entity or its parent company).
Notwithstanding that a transaction or series of transactions does
not constitute a Change of Control, with respect to any Executive
it shall be deemed a Change of Control for purposes of the
Executive’s entitlement’s hereunder if clause (i),
above, is satisfied in respect of the business or division in which
such Executive is principally engaged. For the avoidance of doubt,
a Change of Control pursuant to the immediately preceding sentence
shall not apply to any Executive whose employment is not primarily
with and for the business or division that is sold.
(f) “Chairman”
means the Executive who is identified on Exhibit A as being the
Chairman.
(g) “ Chief Executive
Officer ” means the Executive who is identified on
Exhibit A as being the Chief Executive Officer.
(h) “ Code ”
means the Internal Revenue Code of 1986, as amended, or any
successor thereto. Any reference to a specific provision of the
Code shall be deemed to include any successor provision
thereto.
(i) “ Committee ”
means the Compensation Committee of the Board.
(j) “ Committee Action
” means a writing by, or minutes of the actions of, the
Committee, the substance of which, as to an Executive, has been
communicated to such Executive.
(k) “ Common Stock
” means CSA’s common stock.
(l) “ Company ”
means the Company as hereinbefore defined.
(m) “ CSA ” means
Cooper-Standard Holdings Inc.
(n) “ Employee Benefits
” means the perquisites, benefits and service credit for
benefits as provided under any and all employee; retirement income
and welfare benefit policies, plans, programs or arrangements in
which an Executive is entitled to participate, including without
limitation any savings, pension, supplemental executive retirement,
or other retirement income or welfare benefit, stock option,
performance share, performance unit, stock purchase, stock
appreciation, deferred compensation, incentive compensation, group
or other life, health, medical/hospital or other insurance (whether
funded by actual insurance or self-insured by the Company),
disability, salary continuation, expense reimbursement and other
employee benefit policies, plans, programs or arrangements that may
now exist or any policies, plans, programs or arrangements that may
be adopted hereafter by the Company or its Affiliate.
(o) “ Employer ”
means the Company.
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(p) “ Executive ”
means those employees of the Company listed on Exhibit A, as the
same may be amended from time to time by a Committee
Action.
(q) “ Management Group
” means the Executives who are identified on Exhibit A as
being members of such group.
(r) “ Nonqualified
Supplementary Benefit Plan ” means any plan which
provides for the payment of pension benefits which would be payable
under the terms of a tax-qualified defined benefit plan or scheme
sponsored by the Company or any of its Affiliates but for
government-imposed limitations on the amount that is permitted to
be paid from such tax qualified plan.
(s) “ Operations Group
” means the Executives who are identified on Exhibit A as
being members of such group.
(t) “ Permitted Holders
” means, as of the date of determination, any and all of
(i) an employee benefit plan (or trust forming a part thereof)
maintained by (A) the Company or its Affiliate, or
(B) any corporation or other person of which a majority of its
voting power of its voting securities or equity interest is owned,
directly or indirectly, by the Company or its Affiliate, and
(ii) Cypress Merchant Banking Partners II L.P., Cypress
Merchant Banking II C.V., 55th Street Partners II L.P., Cypress
Side-By-Side LLC, GS Capital Partners 2000, L.P., GS Capital
Partners 2000 Offshore, L.P., GS Capital Partners 2000
GmbH & Co. Beteiligungs KG, GS Capital Partners 2000
Employee Fund, L.P. and Goldman Sachs Direct Investment Fund 2000,
L.P. (collectively, the “ Sponsors ”) and any of
their respective Affiliates.
(u) “ Plan ”
means this Cooper-Standard Automotive Inc. Change of Control
Severance Pay Plan.
(v) “ Retirement Plans
” means any tax-qualified defined benefit plan or scheme
sponsored by the Company or any of its Affiliates and the
Nonqualified Supplementary Benefit Plan or any successor plans
thereto which provide comparable benefits.
(w) “ Severance
Compensation ” means Severance Pay and other benefits
provided by Section 5(a).
(x) “ Severance Pay
” means the amounts payable as set forth in
Section 5(a).
(y) “ Severance Period
” means the period of time commencing on the date of the
first occurrence of a Change of Control and continuing until the
earlier of (i) the second anniversary of the occurrence of the
Change of Control or (ii) the Executive’s
death.
4. Eligibility; Termination
Following a Change of Control .
(a) Subject to the limitations
described below, the Plan applies to Executives who are employed on
the date that a Change of Control occurs; provided ,
however , that
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in the event of a Change of Control
described in the second to last sentence of Section 3(e), the
Plan shall only apply to: (i) Executives who are employed on
the date that the Change of Control occurs with the group whose
assets are being sold as a result of the Change of Control and
(ii) Executives who are employed by the corporate headquarters
of the Company on the date that such Change of Control occurs and
in each case (A) whose positions are transferred to the
successor of the group whose assets are being sold, or
(B) whose employment is terminated as a result of the Change
of Control.
(b) If an Executive’s
employment is terminated by the Employer during the Severance
Period and such termination is without Cause, the Executive will be
entitled to the Severance Compensation described in
Section 5.
(c) An Executive may, during the
Severance Period, terminate his employment with the Employer with
the right to Severance Compensation described in Section 5
upon the occurrence of one or more of the following events
(regardless of whether any other reason, other than Cause, for such
termination exists or has occurred, including without limitation
other employment):
(i) (A) if the Executive is the
Chairman, Chief Executive Officer or a member of the Operations
Group, a significant adverse change in the nature or scope of the
authorities, powers, functions, responsibilities or duties attached
to the position with the Employer which the Executive held
immediately prior to the Change in Control, (B) a reduction in
the Executive’s Base Pay, or a reduction in the
Executive’s opportunities for incentive compensation pursuant
to any long-term incentive compensation plan or program established
by the Company, or (C) the termination or denial of the
Executive’s rights to Employee Benefits or a reduction in the
scope or aggregate value thereof, any of which is not remedied by
the Company within ten (10) calendar days after receipt by the
Company of written notice from the Executive of such change,
reduction or termination, as the case may be;
(ii) if the Executive is the
Chairman, Chief Executive Officer or a member of the Operations
Group, the Company requires the Executive to have his principal
location of work changed to any location that is in excess of 50
miles from the location thereof immediately prior to or after the
Change in Control;
(iii) any material breach of its
obligations under the Plan by the Company or any successor thereto
which is not remedied by the Company within ten (10) calendar
days after receipt by the Company of written notice from the
Executive of such breach; or
(iv) if the Executive is the
Chairman, voluntary termination for any reason or without reason
during the thirty-day period immediately following the date that is
six months after a Change of Control has occurred (for the
avoidance of doubt, this subsection (iv) would not be
applicable upon a Change of Control related to an initial public
offering).
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(d) A termination by the Employer
pursuant to Subsection (b) of this Section or by an Executive
pursuant to Subsection (c) of this Section will not affect any
rights that the Executive may have pursuant to any agreement,
policy, plan, program or arrangement of the Company providing
Employee Benefits (other than as expressly provided in such
agreement, policy, plan, program or arrangements), which rights
shall be governed by the terms thereof.
(e) Notwithstanding the preceding
provisions of this Section, an Executive will not be entitled to
Severance Compensation if his employment with the Employer is
terminated during the Severance Period because:
(i) of the Executive’s death;
or
(ii) the Executive becomes
permanently disabled within the meaning of, and begins actually to
receive disability benefits pursuant to, the long-term disability
plan in effect for, or applicable to, the Executive immediately
prior to the Change of Control.
5. Severance Compensation
.
(a) Subject to the provisions of
this Plan, if an Executive’s employment is terminated
pursuant to Section 4(b) or if an Executive terminates his
employment pursuant to Section 4(c), the Company will pay to
the Executive as Severance Pay the amounts described, and will
continue to provide to the Executive the other Severance
Compensation described, on Exhibit B for the periods described
therein.
(b) Without limiting the rights of
an Executive at law or in equity, if the Company fails to make any
payment or provide any benefit required to be made or provided
hereunder on a timely basis, the Company will pay interest on the
amount or value thereof at an annualized rate of interest equal to
the so-called composite “prime rate” as quoted from
tune to time during the relevant period in the Midwest Edition of
The Wall Street Journal plus the lesser of 5% or the maximum
rate of interest allowed by law. Such interest will be payable as
it accrues on demand. Any change of such prime rate or maximum rate
will be effective on and as of the date of such change.
(c) Notwithstanding any provision of
the Plan to the contrary, the rights and obligations under this
Section and under Sections 7 and 12 will survive any termination or
expiration of the Plan or the termination of an Executive’s
employment following a Change of Control for any reason
whatsoever.
6. Funding Upon Potential Change
of Control .
(a) Upon the earlier to occur of
(i) a Change of Control or (ii) a declaration by the
Board of Directors of CSA that a Change of Control is imminent, the
Company shall promptly pay, to the extent it has not previously
done so, and in any event within five (5) business days after
such Change of Control (or on such fifth business day if the Board
has declared that a Change of Control is imminent), a sum equal to
the present value on the date of the Change of Control (or on such
fifth business day if the Board of Directors of
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CSA has declared that a Change of
Control is imminent) of the payments to be made to the Executives
under the provisions of Sections 5 and 7 (to the extent calculable
at such time) hereof, which shall be transferred to National City
Bank or its successor (the “Trustee” ) and added
to the principal of a grantor “rabbi” trust (the
“ Trust ”) to be established pursuant to an
agreement between the Company and the Trustee (the “ Trust
Agreement ”), which Trust Agreement shall become
irrevocable upon the Change of Control; provided that in the
event of the Change of Control with respect to one or more
Executives described in the second to last sentence of the
definition of Change of Control (i.e., a sale of all or
substantially all of the assets of the business or division in
which such Executive was principally engaged), the Company’s
funding obligation shall be limited to the payments to be made to
the affected Executives. Notwithstanding the foregoing, the Company
shall not be obligated to fund the Trust if such funding obligation
would violate Code Section 409A.
(b) Any payments of compensation,
pension, severance or other benefits by the Trustee pursuant to the
Trust Agreement shall, to the extent thereof, discharge the
Company’s obligation to pay compensation, pension, severance
and other benefits hereunder, it being the intent of the Company
that assets in such Trust be held as security for the
Company’s obligation to pay compensation, pension, severance
and other benefits under this Agreement.
7. Certain Additional Payments by
the Company .
(a) Anything in the Plan to the
contrary notwithstanding, in the event that it shall be determined
(as hereafter provided) that following, and as a result of, a
Change of Control, any payment or distribution by the Company to or
for the benefit of an Executive, whether paid or payable or
distributed or distributable pursuant to the terms of the Plan or
otherwise pursuant to or by reason of any other agreement, policy,
plan, program or arrangement, including without limitation any
stock option, performance share, performance unit, stock
appreciation right or similar right, or the lapse or termination of
any restriction on, or the vesting or exercisability of, any of the
foregoing (a “ Payment ”), would be subject to
the excise tax imposed by Section 4999 of the Code by reason
of being considered “contingent on a change of ownership or
control” of the Company, within the meaning of
Section 280G of the Code or to any similar tax imposed by
state or local law, or any interest or penalties with respect to
such tax (such tax or taxes, together with any such interest and
penalties, being hereafter collectively referred to as the “
Excise Tax ”), then the Executive shall be entitled to
receive an additional payment or payments (collectively, a “
Gross-Up Payment ”); provided , however
, that no Gross-up Payment shall be made with respect to the Excise
Tax, if any, attributable to (i) any incentive stock option
(“ ISO ”), as defined by Section 422 of the
Code (or any successor provision thereto) granted prior to the
execution of the Plan where the addition of a Gross-Up Payment
would cause the ISO to lose such status, or (ii) any stock
appreciation or similar right, whether or not limited, granted in
tandem with any ISO described in clause (i). The Gross-Up Payment
shall be in an amount such that, after payment by the Executive of
all taxes (including any interest or penalties imposed with respect
to such taxes), including any Excise Tax imposed upon the Gross-Up
Payment, the Executive retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Payment.
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(b) Subject to the provisions of
Subsection (f) of this Section, all determinations required to
be made under this Section, including whether an Excise Tax is
payable by the Executive and the amount of such Excise Tax and
whether a Gross-Up Payment is required to be paid by the Company to
the Executive and the amount of such Gross-Up Payment, if any,
shall be made by the accounting firm serving as the Company’s
independent public accountants immediately prior to the Change of
Control (the “ Accounting Firm ”). The Company
shall direct the Accounting Firm to submit its determination and
detailed supporting calculations to both the Company and the
Executive within thirty (30) calendar days after the date of
the Executive’s termination, if applicable, and any such
other time or times as may be requested by the Company or the
Executive. If the Accounting Firm determines that any Excise Tax is
payable by the Executive, the Company shall pay the required
Gross-Up Payment to the Executive at the same time as the lump sum
Severance Pay is paid as provided in Exhibit B, or if earlier,
coincident with or immediately following the date the Executive
remits such Excise Tax to the Internal Revenue Service. If the
Accounting Firm determines that no Excise Tax is payable by the
Executive, it shall, at the same time as it makes such
determination, furnish the Company and the Executive an opinion
that the Executive has substantial authority not to report any
Excise Tax on his federal, state or local income or other tax
return. As a result of the uncertainty in the application of
Section 4999 of the Code and the possibility of similar
uncertainty regarding applicable state or local tax law at the time
of any determination by the Accounting Firm hereunder, it is
possible that Gross-Up Payments which will not have been made by
the Company should have been made (an “ Underpayment
”), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts or fails to
pursue its remedies pursuant to Subsection (f) of this Section
and the Executive thereafter is required to make a payment of any
Excise Tax, the Executive shall direct the Accounting Firm to
determine the amount of the Underpayment that has occurred and to
submit its determination and detailed supporting calculations to
both the Company and the Executive promptly as possible. Any such
Underpayment shall be promptly paid by the Company to, or for the
benefit of, the Executive coincident with or promptly following the
date the Executive remits such Excise Tax to the Internal Revenue
Service.
(c) The Company and the Executive
shall each provide the Accounting Firm access to and copies of any
books, records and documents in the possession of the Company or
the Executive, as the case may be, reasonably requested by the
Accounting Firm, and otherwise cooperate with the Accounting Firm
in connection with the preparation and issuance of the
determinations and calculations contemplated by Subsection
(b) of this Section. Any determination by the Accounting Firm
as to the amount of the Gross-Up Payment shall be binding upon the
Company and the Executive.
(d) The federal, state and local
income or other tax returns filed by the Executive shall be
prepared and filed on a consistent basis with the determination of
the Accounting Firm with respect to the Excise Tax payable by the
Executive. The Executive shall make proper payment of the amount of
any Excise Tax and Gross-Up
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Payment, and at the request of the
Company, provide to the Company true and correct copies (with any
amendments) of his federal income tax return as filed with the
Internal Revenue Service and corresponding state and local tax
returns, if relevant, as filed with the applicable taxing
authority, and such other documents reasonably requested by the
Company, evidencing such payment. If prior to the filing of the
Executive’s federal income tax return, or corresponding state
or local tax return, if relevant, the Accounting Firm determines
that the amount of the Gross-Up Payment should be reduced, the
Executive shall within five (5) business days pay to the
Company the amount of such reduction.
(e) The fees and expenses of the
Accounting Firm for its services in connection with the
determinations and calculations contemplated by Subsection
(b) of this Section shall be borne by the Company. If such
fees and expenses are initially paid by the Executive, the Company
shall reimburse the Executive the full amount of such fees and
expenses within ten (10) business days after receipt from the
Executive of a statement therefor and reasonable evidence of his
payment thereof.
(f) The Executive shall notify the
Company in writing of any claim by the Internal Revenue Service or
any other taxing authority that, if successful, would require the
payment by the Company of a Gross-Up Payment. Such notification
shall be given as promptly as practicable but no later than ten
(10) business days after the Executive actually receives
notice of such claim and the Executive shall further apprise the
Company of the nature of such claim and the date on which such
claim is requested to be paid (in each case, to the extent known by
the Executive). The Executive shall not pay such claim prior to the
earlier of (i) the expiration of the 30-calendar-day period
following the date on which he gives such notice to the Company and
(ii) the date that any payment of amount with respect to such
claim is due. If the Company notifies the Executive in writing
prior to the expiration of such period that it desires to contest
such claim, the Executive shall:
(A) provide the Company with any
written records or documents in his possession relating to such
claim reasonably requested by the Company;
(B) take such action in connection
with contesting such claim as the Company shall reasonably request
in writing from time to time, including without limitation
accepting legal representation with respect to such claim by an
attorney competent in respect of the subject matter and reasonably
selected by the Company;
(C) cooperate with the Company in
good faith in order to effectively contest such claim;
and
(D) permit the Company to
participate in any proceedings relating to such claim;
provided , however , that the Company shall bear
and pay directly all costs and expenses (including interest and
penalties) incurred in connection with such
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contest and shall indemnify and hold
harmless the Executive, on an after-tax basis, for and against any
Excise Tax or income tax, including interest and penalties with
respect thereto, imposed as a result of such representation and
payment of costs and expenses. Without limiting the foregoing
provisions of this subsection, the Company shall control all
proceedings t
