EXECUTIVE EMPLOYMENT
AGREEMENT
This Executive
Employment Agreement (“Agreement”), dated for reference
purposes only as of the 16 th day of December, 2008, is entered into by and
between Dana Holding Corporation, a Delaware corporation, with its
principal executive office at 4500 Dorr Street, Toledo, Ohio (the
“Company”), and John M. Devine, an individual, residing
in California (“Executive”), effective as of
January 1, 2009 (the “Effective Date”).
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A.
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The
Company and Executive entered into an Executive Employment
Agreement dated April 16, 2008, effective February 4,
2008 (the “2008 Agreement”). Under the terms of the
2008 Agreement, Executive has been employed as Executive Chairman
of the Board of Directors of the Company (the “Board”).
The initial term of the 2008 Agreement expires on February 3,
2009.
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B.
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The
Company wishes to appoint Executive as Executive Chairman of the
Board, Chief Executive Officer and President of the Company
effective as of January 1, 2009, and wishes to extend
Executive’s employment with the Company beyond the expiration
of the initial term of the 2008 Agreement.
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C.
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In
connection with Executive’s new appointments and the
extension of Executive’s employment, the parties have agreed
to amend certain terms of Executive’s employment with the
Company to be effective as of January 1, 2009.
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Therefore, in
consideration of the promises and respective covenants and
agreements of the parties herein contained, and intending to be
legally bound, the parties hereto agree as follows:
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1.
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Employment; 2008
Agreement . The Company and Executive hereby
agree that as of the Effective Date Executive will be employed by
the Company on the terms set forth in this Agreement. The Company
and Executive intend that the 2008 Agreement shall continue to
govern Executive’s employment until the Effective Date, and
that any matters that arise during the term of the 2008 Agreement
before the Effective Date will be governed by the 2008 Agreement.
As of the Effective Date, Executive’s employment with the
Company will be governed exclusively by the terms of this Agreement
and will not be governed by the 2008 Agreement.
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2.
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Term . The employment of Executive by the
Company under the terms of this Agreement will commence on the
Effective Date and shall continue in effect for a one (1) year
period (the “Term”), unless earlier terminated as set
forth in Section 6 of this Agreement. The Term may be renewed
for additional one-year periods (each to be considered a separate
“Term”) upon mutual agreement of the
parties.
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3.
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Position and Duties
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Executive shall serve as
Executive Chairman of the Board of Directors of the Company, Chief
Executive Officer and President of the Company and shall have such
responsibilities and authority commensurate with such position as
may from time to time be assigned to Executive by the Board of
Directors of the Company.
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Executive shall devote substantially
all his working time and efforts to the business and affairs of the
Company.
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4.
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Directorship
Agreement. Executive shall serve as a Director
for the Company while acting as Executive Chairman of the Board of
Directors.
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5.
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Compensation and Related
Matters .
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5.1
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Salary . The Company shall pay to Executive
a salary of U.S. $1,350,000 per year (the “Base
Salary”), which rate may be increased from time to time in
accordance with normal business practices of the Company. The Base
Salary shall be payable by the Company in accordance with the
normal payroll practices of the Company then in effect.
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5.2
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Contract Extension
Award .
Executive shall receive a one-time cash contract extension award of
U.S. $1,500,000, which award has been paid to Executive. In the
event Executive is terminated by the Company for Cause or Executive
voluntarily terminates this Agreement without Good Reason before
December 31, 2009, Executive shall repay to the Company the
pro-rata amount of this award based on the date of such
termination.
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5.3
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Bonus . Executive will be eligible for an
annual bonus with a target of 150% of the Base Salary.
Executive’s eligibility for the bonus and the amount thereof
will be based on the achievement of performance measures to be set
by the Board of Directors. If the Company terminates
Executive’s employment without Cause or if Executive
terminates for Good Reason or if there is a Change in Control
during a Term, Executive will be entitled to payment of the entire
annual bonus compensation applicable for such Term (whether or not
the applicable performance measures are achieved). If the Company
terminates Executive’s employment for Cause during a Term,
Executive will not be entitled to payment of any portion of the
annual bonus compensation for such Term. If Executive’s
employment terminates for any other reason during a Term, Executive
will at a minimum be entitled to payment of the annual bonus
compensation for such Term pro rated to the effective date of the
termination.
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5.4
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Stock Options
. The Company has
awarded Executive, as of October 31, 2008, a stock option (the
“Option”) under the Company’s 2008 Omnibus
Incentive Plan (the “2008 Plan”) to purchase up to
1,000,000 shares of the Company’s Common Stock (the
“Option Shares”) at an exercise price of $1.90 per
share, which is the closing stock price of shares of the
Company’s Common Stock as of the date of the award. The grant
of the Option Shares will be documented in a Nonqualified Stock
Option Agreement to be entered into between the Company and
Executive. The Option Shares shall vest and become exercisable by
Executive ratably over a three (3) year period if Executive
remains continuously employed by the Company until Executive is
eligible for Normal Retirement; provided , however, that if
Executive dies or becomes disabled, or in the event of a Change in
Control, any unvested Option Shares shall immediately vest and
become exercisable. For
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the
avoidance of doubt, the Option Shares will continue to vest and
will not be forfeited in the event of Executive’s termination
of employment if Executive is eligible for Normal Retirement at the
time of the termination. Further, if Executive is eligible for
Normal Retirement at the time of termination, the Option shall
terminate five (5) years after Executive ceases to be an
employee or ten (10) years from the date of the award, whichever is
earlier. For purposes of this Agreement, “Change in
Control” and “Normal Retirement” shall have the
meaning provided in the 2008 Plan. The terms of this Agreement will
supercede and take precedence over any terms of the Nonqualified
Stock Option Agreement to the extent the terms of the Nonqualified
Stock Option Agreement are contradictory or inconsistent with the
terms of this Agreement.
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5.5
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Performance Shares
. The Company grants to
Executive 250,000 performance shares under the 2008 Plan (the
“Performance Shares”), vesting ratably over a three
(3) year period if Executive remains continuously employed by
the Company until Executive is eligible for Normal Retirement;
provided , however, that if Executive dies or becomes
disabled, or in the event of a Change in Control, any unvested
Performance Shares shall immediately vest. For the avoidance of
doubt, the Performance Shares will continue to vest and will not be
forfeited in the event of Executive’s termination of
employment if Executive is eligible for Normal Retirement at the
time of the termination. The Performance Shares will be awarded
based on the attainment of Management Objectives (as defined in the
2008 Plan), which Management Objectives will be determined by the
Compensation Committee of the Board of Directors in accordance with
its standard practices. The Performance Shares will be earned and
paid in shares of the Company’s Common Stock upon
certification by the Compensation Committee that the applicable
Management Objectives have been satisfied.
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5.6
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Restricted Stock
Units .
The Company grants to Executive 250,000 restricted stock units
under the 2008 Plan (the “Restricted Stock Units”),
vesting ratably over a three (3) year period (the
“Restriction Period”) if Executive remains continuously
employed by the Company until Executive is eligible for Normal
Retirement; provided , however, that if Executive dies or
becomes disabled, or in the event of a Change in Control, any
unvested Restricted Stock Units shall immediately vest. For the
avoidance of doubt, the Restricted Stock Units will continue to
vest and will not be forfeited in the event of Executive’s
termination of employment before the expiration of the Restriction
Period if Executive is eligible for Normal Retirement at the time
of the termination. Upon vesting, the Restricted Stock Units will
be earned and paid in shares of the Company’s Common
Stock.
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5.7
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Additional Payments
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5.7.1
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To
the extent any compensation received under the Nonqualified Stock
Option Agreement, under any other awards under the 2008 Plan or
under this Agreement would be subject to the tax imposed by
Section 4999 of the Code (the “Excise Tax”), the
Company will pay Executive an additional amount (the
“Gross-Up
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Payment”) such that the net
amount retained by Executive shall be equal to the compensation
Executive would have received had there been no Excise Tax
imposed.
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5.7.2
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Upon any payment to Executive in
connection with a Change in Control or a termination of this
Agreement, the Company shall, at the Company’s expense, cause
an independent public accounting firm mutually agreeable to the
Company and Executive to determine whether the payment would be
subject to any Excise Tax and if so, the amount of the Gross-Up
Payment. Such accounting firm shall provide detailed supporting
calculations to both the Company and Executive within fifteen
(15) business days after receiving notice that such payments
have been made (or at such earlier time as requested by the
Company). If the accounting firm determines that no Excise Tax is
payable by Executive, the accounting firm shall provide Executive
with a written opinion that the failure to report an excise tax on
Executive’s applicable federal income tax return would not
result in the imposition of any penalty. In the event the Excise
Tax is subsequently determined to be less than the amount taken
into account in calculating the Gross-Up Payment, Executive shall
repay to the Company, at the time that the amount of such reduction
in Excise Tax is finally determined, the portion of the Gross-Up
Payment attributable to such reduction. In the event that the
Excise Tax is determined to exceed t
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