FOURTH AMENDMENT TO EMPLOYMENT
AGREEMENT
FOURTH AMENDMENT
dated as of December 18, 2008 (this “Amendment”)
to EMPLOYMENT AGREEMENT dated as of February 6, 2003, as
amended (the “Agreement”) by and between TRW Automotive
Inc. (the “Company”), TRW Limited
(“Limited”) and John C. Plant
(“Executive”).
WHEREAS, in order
to (i) bring the Agreement into compliance with
Section 409A of the Internal Revenue Code of 1986 and the
Treasury Regulations and related guidance promulgated thereunder
and (ii) reflect certain changes to Executive’s
supplemental retirement benefit arrangements (including, without
limitation, Executive’s agreement to forgo his rights under
the Company’s Executive Supplemental Retirement Plan in
exchange for the contingent payment described below under the
Employee Trust (as defined below) and certain additional
supplemental retirement benefit accrual opportunities and
incentives as set forth under the 2009 SERP (as defined below),
Executive, Limited and Company desire to amend the Agreement as set
forth below.
In consideration
of the premises and mutual covenants herein, the parties agree as
follows:
1.
Defined Terms. Capitalized terms used herein but not defined
shall have the meanings assigned to them in the
Agreement.
2.
Amendment to Section 4 of the Agreement . The last
sentence of Section 4 of the Agreement is amended in its
entirety, effective January 1, 2009, to read as
follows:
“Any
Annual Bonus declared by the Company shall be paid by Limited to
Executive in the calendar year following the year to which it
relates, as soon as administratively practicable following the
determination of the Annual Bonus, but in no event later than
March 15th of the calendar year following the year to which
the Annual Bonus relates.”
3.
Amendment to Sections 5(a) and 6 of the Agreement . Sections
5(a) and 6 of the Agreement are each amended, effective
January 1, 2009, by adding the following new sentence to the
end thereof:
“To the
extent any reimbursement or in-kind benefit provided herein is
includable in Executive’s income, any such reimbursements or
benefits shall be paid promptly to Executive in accordance with
past practice (if any), but in no event later than
December 31st of the year following the year in which
Executive incurs the expense, and the amount of any reimbursement
or in-kind benefit provided in one year shall not affect the amount
of any such reimbursement or benefit provided in a subsequent
year.”
4.
Amendment to Section 5.c. of the Agreement .
Section 5.c. of the Agreement is amended, effective
January 1, 2009, by adding the following to the end
thereof:
Notwithstanding
the foregoing, the Company, Limited and Executive hereby agree to
terminate the Nonqualified Plan initially established pursuant to
this Section 5.c. (i.e., the TRW Automotive Inc. Executive
Supplemental Retirement Plan, as amended) and the Company shall
contribute to the Employee Trust (as defined below) a lump sum
payment of $19,436,710 on January 2, 2009 in full satisfaction
of Executive’s rights under the Nonqualified Plan as of such
date,
2
provided that
Executive has not terminated employment with the Company or Limited
prior to January 1, 2009. The Company has established the John
C. Plant 2009 Supplemental Retirement Plan (the “2009
SERP”) as a replacement to the Nonqualified Plan for purposes
of Executive’s supplemental retirement benefit accruals from
and after January 1, 2009. Effective as of January 1,
2009, all references in the Agreement to the “Nonqualified
Plan” shall be deemed to refer to the 2009 SERP, and
Executive’s rights to receive benefits thereunder shall be
subject to the terms set forth in the 2009 SERP. As used herein,
the “Employee Trust” means a funded
“secular” trust created for the benefit of Executive,
pursuant to which Executive shall be entitled to receive the
amounts contributed to such trust together with earnings (positive
or negative) thereon payable immediately in a single lump sum on
the earlier of (i) December 31, 2010 or (ii) the Early
Vesting Date (as defined below), in each case, subject to
Executive’s continued employment with the Company and Limited
through such dates (such earlier date, the “Trust Payment
Date”). As used herein, the “Early Vesting Date”
means the earliest to occur of (i) Executive’s
termination of employment by the Company or Limited without Cause,
(ii) Executive’s termination of employment for Good
Reason, (iii) Executive’s termination of employment due
to death or Disability or (iv) the first day of any Window
Period. In the event that Executive voluntarily terminates
employment with the Company (other than for Good Reason or upon
commencement of a Window Period) or is terminated by the Company or
Limited for Cause, in each case, prior to the Trust Payment Date,
Executive shall forfeit all rights under the Employee Trust and the
amounts held in the Employee Trust at such time shall immediately
revert to the Company without any payment of consideration to
Executive. For so long as amounts are held in the Employee Trust,
the trust agreement governing such Employee Trust shall require the
Company to pay the relevant trustee fees and trust expenses, and
shall require taxes on trust income to be paid out of trust assets.
On the Trust Payment Date, either (i) the Company shall
pay to Executive an additional amount or (ii) a portion of the
Employee Trust assets shall revert to the Company rather than being
paid to Executive, such that after application of clause
(i) or (ii) of this sentence (whichever is applicable)
Executive is in the same net after tax position (taking into
account only
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