Exhibit 10.30
COOPER-STANDARD AUTOMOTIVE
INC.
CHANGE OF CONTROL SEVERANCE
PAY PLAN
As Amended and Restated Effective
January 1, 2007
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 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) “ Chief Executive
Officer ” means the Executive who is identified on
Exhibit A as being the Chief Executive Officer.
(g) “ 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.
(h) “ Committee ”
means the Compensation Committee of the Board.
(i) “ 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.
(j) “ Common Stock ”
means CSA’s common stock.
(k) “ Company ” means
the Company as hereinbefore defined.
(l) “ CSA ” means
Cooper-Standard Holdings Inc.
(m) “ 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.
(n) “ Employer ” means
the Company.
(o) “ 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.
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(p) “ Management Group
” means the Executives who are identified on Exhibit A as
being members of such group.
(q) “ 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.
(r) “ Operations Group
” means the Executives who are identified on Exhibit A as
being members of such group.
(s) “ 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.
(t) “ Plan ” means
this Cooper-Standard Automotive Inc. Change of Control Severance
Pay Plan.
(u) “ 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.
(v) “ Severance Compensation
” means Severance Pay and other benefits provided by Section
5(a).
(w) “ Severance Pay ”
means the amounts payable as set forth in Section 5(a).
(x) “ 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
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
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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 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 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 individual who is the
Chief Executive Officer as of the Effective Date, 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).
(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
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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 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
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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 within five (5) business days after receipt of
such determination and calculations with respect to any Payment to
the Executive, or if later, the date the Severance Pay is paid as
provided in Exhibit B. 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 within five (5) business days after receipt of such
determination and calculations; provided that, if the
payment at such time would cause an additional tax under Code
Section 409A, then the Underpayment shall be made on the seventh (7
th ) anniversary of the date of the Executive’s
termination of employment, or on such other date as shall be
acceptable under Code Section 409A.
(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