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TRW AUTOMOTIVE INC. EXECUTIVE OFFICER CASH INCENTIVE AWARD AGREEMENT

Executive Compensation Plan Agreement

TRW AUTOMOTIVE INC. EXECUTIVE OFFICER CASH INCENTIVE AWARD AGREEMENT | Document Parties: TRW AUTOMOTIVE HOLDINGS CORP | TRW Automotive Inc You are currently viewing:
This Executive Compensation Plan Agreement involves

TRW AUTOMOTIVE HOLDINGS CORP | TRW Automotive Inc

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Title: TRW AUTOMOTIVE INC. EXECUTIVE OFFICER CASH INCENTIVE AWARD AGREEMENT
Governing Law: New York     Date: 2/24/2009
Industry: Auto and Truck Parts     Sector: Consumer Cyclical

TRW AUTOMOTIVE INC. EXECUTIVE OFFICER CASH INCENTIVE AWARD AGREEMENT, Parties: trw automotive holdings corp , trw automotive inc
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Exhibit 10.2

TRW AUTOMOTIVE INC.

EXECUTIVE OFFICER

CASH INCENTIVE AWARD AGREEMENT

     This Cash Incentive Award Agreement (this “Agreement”), is entered into and made effective as of February 26, 2009 (the “Effective Date”), by and between TRW Automotive Inc., a Delaware corporation (the “Company”), and _________ (the “Executive”). This Award is granted by the Compensation Committee of the Company’s Board of Directors (the “Committee”).

      Section 1. Definitions .

          (a) “ Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder, or any successor statute thereto.

          (b) “ Affiliate ” shall mean, with respect to any Person, any other Person directly or indirectly controlling, controlled by or under common control with such Person or any other Person designated by the Committee in which any Person has an interest.

          (c) “ Award ” shall mean the cash incentive award granted pursuant to this Agreement and calculated pursuant to Section 2(b).

          (d) “ Cause ” shall have the meaning given to such term in the Closing Date Employment Agreement or, if not defined therein or if there is no such agreement, “Cause” means (i) such Executive’s continued failure substantially to perform such Executive’s duties (other than as a result of total or partial incapacity due to physical or mental illness) for a period of 10 days following written notice by the Company or any of its Subsidiaries or Affiliates to the Executive of such failure, (ii) dishonesty in the performance of the Executive’s duties, (iii) such Executive’s conviction of, or plea of nolo contendere to, a crime constituting (A) a felony under the laws of the United States or any state thereof or (B) a misdemeanor involving moral turpitude, (iv) such Executive’s willful malfeasance or willful misconduct in connection with such Executive’s duties or any act or omission which is injurious to the financial condition or business reputation of the Company or any of its Subsidiaries or Affiliates or (v) such Executive’s breach of any non-competition, non-solicitation or confidentiality provisions to which the Executive is subject.

          (e) “ Change in Control ” shall mean (A) the sale or disposition, in one or a series of related transactions, of all or substantially all of the assets of Holdings or the Company to any “person” or “group” (as such terms are defined in Sections 13(d)(3) and 14(d)(2) of the Act) other than Automotive Investors L.L.C. (“AI”) or any of its Affiliates, (B) any person or group, other than AI or any of its Affiliates, is or becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Act), directly or indirectly, of more than 50% of the total voting power of the voting stock of Holdings or the Company, including by way of merger, consolidation or otherwise and AI or any of its Affiliates cease to control the Board of Directors

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of Holdings (the “Holdings Board”) or the Board of Directors of the Company, (C) any “person” or “group” (as defined above) other than AI or its Affiliates acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition of such person or group) ownership of stock of Holdings or the Company possessing 30 percent or more of the total voting power of the stock of Holdings or the Company, as applicable, or (D) a majority of the members of the Holdings Board is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Holdings Board, as it was constituted at the beginning of such 12-month period.

          (f) “ Closing Date ” shall mean February 28, 2003.

          (g) “ Closing Date Employment Agreement ” shall mean a written employment agreement between the Company or any of its Subsidiaries and the Executive which is or was entered into as of or after the Closing Date (as the same may be amended, modified or supplemented in accordance with the terms thereof).

          (h) “ Code ” shall mean the Internal Revenue Code of 1986, as amended, or any successor thereto.

          (i) “ Disability ” shall have the meaning given such term in the Closing Date Employment Agreement or, if not defined therein or if there shall be no such agreement, “disability” of the Executive shall have the meaning ascribed to such term in the long-term disability plan or policy maintained by the Company or one or more members of the Company’s controlled group of corporations (as defined in Section 1563 of the Code), as in effect from time to time.

          (j) “ Fair Market Value ” of a Share on a given date shall mean the closing price of a Share as reported on the NYSE composite tape on such date, or, if there is no such reported sale price of a Share on the NYSE composite tape on such date, then the closing price of a Share as reported on the NYSE composite tape on the last previous day on which sale price was reported on the NYSE composite tape. If at any time the Shares are no longer listed or traded on the NYSE, the Fair Market Value of a Share shall be determined by the Committee in its sole but reasonable discretion from time to time.

          (k) “ Good Reason ” shall have the meaning given to such term in the Closing Date Employment Agreement.

          (l) “ Holdings ” shall mean TRW Automotive Holdings Corp., a Delaware corporation.

          (m) “ NYSE ” shall mean the New York Stock Exchange.

          (n) “ Person ” shall mean any individual, firm, corporation, partnership, limited liability company, trust, incorporated or unincorporated association, joint venture, joint stock company, governmental body or other entity of any kind.

          (o) “ Retirement ” shall mean the Executive’s voluntary Termination of Employment on or after the date that such Executive becomes Retirement Eligible.

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          (p) “ Retirement Eligible ” shall mean satisfaction of the requirements for early or normal retirement under a defined benefit pension plan maintained by the Company or one or more members of the Company’s controlled group of corporations (as defined by Section 1563 of the Code) and receipt of pension benefits in accordance with such requirements as soon as administratively practicable following the last date of active employment with the Company or its controlled group of corporations.

          (q) “ Share Price ” shall mean the average Fair Market Value of a Share during the portion of the month of February immediately preceding the first, second, or third year anniversary of the Effective Date, as applicable.

          (r) “ Shares ” shall mean shares of the common stock, par value $0.01 per share, of Holdings.

          (s) “ Subsidiary ” shall mean a subsidiary corporation, as defined in Section 424(f) of the Code.

          (t) “ Target Value ” shall mean the initial value of the Award, as set forth in Section 2(a).

          (u) “ Target Value Adjustment ” shall mean the percentage by which the Target Value is increased or decreased under Section 2(b), based on the applicable Share Price pursuant to the formula attached hereto as Exhibit A, provided that the percentage to be used for such adjustment shall be the nearest tenth of a percentage determined pursuant to Exhibit A.

          (v) “ Termination of Employment ” shall mean a separation from service from the Company and all of its controlled group members (as defined by Section 1563 of the Code).

      Section 2. Grant of Cash Incentive Award. The Company hereby grants to the Executive an Award subject to the terms and conditions stated in this Agreement. The amount of the Award shall be equal to the Target Value specified under Section 2(a) as adjusted pursuant to Section 2(b).

          (a) Target Value. The Target Value of the Award is $                      , which is subject to the terms and conditions stated in this Agreement.

          (b) Adjustment to the Target Value . The Target Value of the Award shall be increased or decreased, as applicable, on the first, second, and third anniversary of the Effective Date by multiplying one-third of the Target Value (referred to respectively as Tranche A, Tranche B, and Tranche C) by the Target Value Adjustment percentage on each such anniversary date, as determined under Exhibit A with reference to the calculated Share Price as of that date, to establish the adjusted value of each such tranche (referred to respectively as Tranche A Adjusted Value, Tranche B Adjusted Value, and Tranche C Adjusted Value), as follows:

               (i)  Tranche A. On the first anniversary of the Effective Date, $                      (“Tranche A”), shall be multiplied by the Target Value Adjustment percentage under Exhibit A, determined with reference to the calculated Share Price on such anniversary date to establish the adjusted value of Tranche A (“Tranche A Adjusted Value”); plus

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               (ii)  Tranche B . On the second anniversary of the Effective Date, $                      (“Tranche B”) shall be multiplied by the Target Value Adjustment percentage under Exhibit A, determined with reference to the calculated Share Price on such anniversary date to establish the adjusted value of Tranche B (“Tranche B Adjusted Value”); plus

               (iii)  Tranche C . On the third anniversary of the Effective Date, $                      (“Tranche C”) shall be multiplied by the Target Value Adjustment percentage under Exhibit A, determined with reference to the calculated Share Price on such anniversary date to establish the adjusted value of Tranche C (“Tranche C Adjusted Value”).

The adjusted values so determined shall accumulate (without interest) over the period ending on the third anniversary of the Effective Date and shall be payable to the Executive in one cash payment in accordance with Section 3, provided the vesting requirements under Section 4 have been satisfied at that time.

      Section 3. Payment of the Awards. Subject to the vesting requirements of Section 4 and Section 5, the Award determined in accordance with Section 2(b) shall be payable to the Executive in one cash payment as soon as administratively practicable on or after the third anniversary of the Effective Date, but in no event later than 90 days thereafter.

      Section 4. Service-Vesting Requirement. Except as otherwise provided in Section 5, the Award amount determined under Section 2(b) shall become vested on the third anniversary of the Effective Date, provided the Executive remains continuously employed with the Company or one of its Subsidiaries or Affiliates through that date. Once this requirement has been satisfied the Award shall thereafter be payable in accordance with Section 3.

      Section 5. Vesting Upon Certain Events.

          (a) Death . In the event of the Executive’s death prior to satisfying the vesting requirements under Section 4, a pro rata portion of the Award, determined as set forth below, is immediately vested and shall be paid as soon as administratively practicable following the date of death, but in no event later than 90 days thereafter. All other amounts hereunder are immediately forfeited and shall not be payable. The pro rata portion of the Award shall be determined as follows:

               (i) In the event of the Executive’s death prior to the first anniversary of the Effective Date, the pro rata portion of the Award shall be equal to Tranche A, without regard to any adjustment under Section 2(b)(i), multiplied by a fraction, the numerator of which is the number of completed calendar months from the Effective Date to the date of death and the denominator of which is 12.

               (ii) In the event of the Executive’s death after the first anniversary of the Effective Date, but prior to the second anniversary of the Effective Date, the pro rata portion of the Award shall be the sum of (1) and (2):

 

(1)

 

Tranche A Adjusted Value, as determined by Section 2(b)(i); plus

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(2)

 

Tranche B, without regard to any adjustment under Section 2(b)(ii), multiplied by a fraction, the numerator of which is the number of completed calendar months from the first anniversary of the Effective Date to the da


 
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