Exhibit 10.32
2004 COOPER-STANDARD HOLDINGS
INC. STOCK INCENTIVE PLAN
NONQUALIFIED STOCK OPTION
AGREEMENT
THIS AGREEMENT (the
“Agreement”), is made effective as of the
day of
,
20 , (hereinafter called the “Date of
Grant”), between Cooper-Standard Holdings Inc., a Delaware
corporation (hereinafter called the “Company”), and the
individual whose name is set forth on the signature page hereof
(hereinafter called the “Participant”):
R E C I T A
L S :
WHEREAS, the Company has adopted the
2004 Cooper-Standard Holdings Inc. Stock Incentive Plan (the
“Plan”), which Plan is incorporated herein by reference
and made a part of this Agreement. Capitalized terms not otherwise
defined herein shall have the same meanings as in the Plan;
and
WHEREAS, the Committee has
determined that it would be in the best interests of the Company
and its shareholders to grant the options provided for herein (the
“Options”) to the Participant pursuant to the Plan and
the terms set forth herein.
NOW THEREFORE, in consideration of
the mutual covenants hereinafter set forth, the parties agree as
follows:
1. Definitions . Whenever the
following terms are used in this Agreement, they shall have the
meaning specified below unless the context clearly indicates to the
contrary.
(a) “Cause” shall mean
(i) the Participant’s willful failure to perform duties
or directives which is not cured following written notice,
(ii) the Participant’s commission of a (x) felony
or (y) crime involving moral turpitude, (iii) the
Participant’s willful malfeasance or misconduct which is
demonstrably injurious to the Company or its Affiliate, or
(iv) material breach by the Participant of the restrictive
covenants, including, without limitation, any non-compete,
non-solicitation or confidentiality provisions to which the
Participant is bound.
(b) “Consolidated
EBITDA” means, for any period, the sum, without duplication,
of the amounts for such period of (i) net income, plus, to the
extent included as a deduction in arriving at consolidated net
income for such period, (ii) (a) interest expense, net of
interest income, (b) provisions for taxes based on income,
(c) total depreciation expense, (d) total amortization
expense, (e) non-cash compensation to employees related to
stock options or other incentive programs, and (f) non-cash
restructuring charges (as reviewed and confirmed by the
Company’s independent public accountants), all of the
foregoing as determined on a consolidated basis for the Company in
conformity with United States generally accepted accounting
principles.
(c) “Disability” shall
mean the Participant becomes physically or mentally incapacitated
and is therefore unable for a period of six (6) consecutive
months or for an aggregate of nine (9) months in any
twenty-four (24)
consecutive month period to perform
the Participant’s duties (such incapacity is hereinafter
referred to as “Disability”). Any question as to the
existence of the Disability of the Participant as to which the
Participant and the Company cannot agree shall be determined in
writing by a qualified independent physician mutually acceptable to
the Participant and the Company. If the Participant and the Company
cannot agree as to a qualified independent physician, each shall
appoint such a physician and those two physicians shall select a
third who shall make such determination in writing. The
determination of Disability made in writing to the Company and the
Participant shall be final and conclusive for all purposes of the
Agreement.
(d) “Good Reason” shall
mean (i) a substantial diminution in the Participant’s
position or duties; adverse change of reporting lines; or
assignment of duties materially inconsistent with the
Participant’s position; (ii) any reduction in the
Participant’s base salary or annual bonus opportunity;
(iii) any reduction in the Participant’s long-term cash
incentive compensation opportunities, other than reductions
generally affecting other senior executives participating in the
applicable long-term incentive compensation programs or
arrangements; (iv) the failure of the Company or its Affiliate
to pay the Participant any compensation or benefits when due under
any employment agreement between the Participant and the Company or
its Affiliate; (v) relocation of the Participant’s
principal place of work in excess of fifty (50) miles from the
Participant’s current principal place of work or
(vi) any material breach by the Company or its Affiliate, as
applicable, of the terms of any employment agreement between the
Participant and the Company or its Affiliate; provided that
none of the events described in (i) through (vi), above, shall
constitute Good Reason unless the Company or its Affiliate, as
applicable, fails to cure such event within 10 calendar days after
receipt from the Participant of written notice of the event which
constitutes Good Reason.
(e) “Options” shall mean
the Time Option and Performance Option to purchase Shares granted
under this Agreement.
(f) “Performance Option”
shall mean an Option with respect to which the commencement of
exercisability is governed by Section 3(b) hereof.
(g) “Performance Target”
shall mean the achievement of Consolidated EBITDA in the calendar
year(s) ending December 31,
of
$ .
(h)
“Sponsors” shall mean Cypress Merchant Banking Partners
II L.P., Cypress Merchant Banking II C.V., 55
th
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.
2
(i)
“Stockholders Agreement” shall mean the Stockholders
Agreement dated as of December 23, 2004 among by and among the
Company, Cypress Merchant Banking Partners II L.P., Cypress
Merchant Banking II C.V., 55 th 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. and the persons listed on Annex I thereto.
(j) “Time Option” shall
mean an Option with respect to which the commencement of
exercisability is governed by Section 3(a) hereof.
2. Grant of the Options . The
Company hereby grants to the Participant the right and option to
purchase, on the terms and conditions hereinafter set forth and
subject to adjustment as set forth in the Plan, (i) a Time
Option to purchase any part or all of an aggregate number of Shares
set forth on the signature page hereof, and (ii) a Performance
Option to purchase any part or all of an aggregate number of Shares
set forth on the signature page hereof. The purchase price of the
Shares subject to the Option shall be $ .00
per Share (the “Option Price”). The Option is intended
to be a non-qualified stock option, and is not intended to be
treated as an option that complies with Section 422 of the
Internal Revenue Code of 1986, as amended.
3. Vesting .
(a) Time Option .
(i) Subject to Section 4(a) and
to the Participant’s continued Employment with the Company or
its Affiliate, the Option shall vest and become exercisable with
respect to percent
( %) of the Shares initially covered by the
Time Option as of
and with respect to the remaining percent
( %) of such Shares as of
.
(ii) Notwithstanding the foregoing,
in the event of a Change of Control while the Participant remains
in Employment with the Company or its Affiliate, the Time Option
shall, to the extent outstanding and unvested, immediately become
fully vested and exercisable.
(b) Performance Option .
Subject to Section 4(a) and to the Participant’s
continued Employment by the Company or its Affiliate, the
Performance Option shall become vested and exercisable as
follows:
(i) As of March 31,
20 , the Performance Option shall become
vested and exercisable with respect to
( %) of the Shares subject to such
Performance Option (the Performance “Tranche”) if and
only if the Committee determines the Company has achieved at least
85% of the Performance Target established in respect of the
calendar year(s) ending
.
If the Company’s Consolidated EBITDA for a calendar year is
between 85% and 100% of the applicable Performance Target, 20% to
100% of the Shares subject to the Performance Tranche, determined
on a straight-line basis for
3
performance between 85% and 100% of
such Performance Target, shall vest and become exercisable.
Achievement of the Performance Target will be determined with
reference to the Company’s consolidated financial statements
in conformity with United States generally accepted accounting
principles; provided that the Committee shall have discretion to
exclude the impact of one-time or non-recurring gains or losses and
the Committee may adjust the Performance Target in its reasonable
discretion to reflect the impact of any corporate acquisitions and
divestitures. If the Company does not achieve at least 85% of the
applicable Performance Target, determined as described above, no
portion of the Performance Option shall become vested or
exercisable in respect of such year. The Committee intends to
provide the Participant with an annual written notice of the extent
to which the Performance Option vested in the immediately prior
year.
(ii) Notwithstanding
Section 3(b)(i), the Performance Option shall become vested
and exercisable as to 100% of the outstanding and unvested Shares
subject to such Performance Option on the date that is eight
(8) years following the Date of Grant, whether or not the
Performance Target has been achieved; provided ,
however , that the 8th anniversary vesting date will no
longer be of any effect if the elimination of such vesting date
will not cause the Performance Option to be subject to variable
accounting treatment as determined by the Committee.
(c) At any time, the portion of an
Option that has become vested and exercisable as described above
(or pursuant to Section 3(d) below) is hereinafter referred to
as the “Vested Portion”.
(d) If the Participant’s
Employment with the Company and its Affiliates is terminated for
any reason, the Options shall, to the extent not then vested, be
canceled by the Company without consideration and the Vested
Portion of the Options shall remain exercisable for the period set
forth in Section 4(a); provided that in the event of
the termination of the Participant’s Employment by the
Company or its Affiliate without Cause or by the Participant for
Good Reason, or in the event of a termination of the
Participant’s Employment due to death or Disability, the
Participant shall be deemed vested in any Shares subject to the
Time Option that would otherwise have vested in the calendar year
in which such termination of Employment occurs.
4. Exercise of Option
.
(a) Period of Exercise .
Subject to the provisions of the Plan and this Agreement, the
Participant may exercise all or any part of the Vested Portion of
the Option at any time prior to the earliest to occur
of:
(i) the tenth anniversary of the
Date of Grant;
(ii) the first anniversary of the
date of the Participant’s termination of Employment due to
death, Disability, retirement at normal retirement age under the
Company’s or its Affiliate’s qualified retirement plan
or the Company’s sale of the business or division (that does
not constitute a Change of Control) in which the Participant was
principally employed;
4
(iii) 90 days following the date of
the Participant’s termination of Employment by the Company
and its Affiliates without Cause or other than due to the
Participant’s death, Disability, retirement at normal
retirement age under the Company’s or its Affiliate’s
qualified retirement plan or the Company’s sale of the
business or division (that does not constitute a Change of Control)
in which the Participant was principally employed; and
(iv) the date of the
Participant’s termination of Employment by
