AMERICAN AXLE & MANUFACTURING
HOLDINGS, INC.
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(Exact Name of Registrant as Specified in its Charter)
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Delaware
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(State of Incorporation)
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No. 001-4303
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No. 38-3161171
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(Commission File Number)
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(IRS Employer Identification Number)
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One Dauch Drive,
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Detroit, Michigan
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48211-1198
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(Address of principal executive offices)
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(Zip Code)
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☐
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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☐
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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☐
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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☐
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 5.02. |
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
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AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
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Dated: April 13, 2018
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By:
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/s/ David E. Barnes | |
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Name:
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David E. Barnes
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Title:
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Vice President, General Counsel & Secretary
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Page
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ARTICLE I INTRODUCTION
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1
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1.1
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Purpose of Plan.
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1
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1.2
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“Top Hat” Pension Benefit Plan.
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1
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1.3
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Funding.
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1
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1.4
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Effective Date.
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1
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ARTICLE II DEFINITIONS
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2
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2.1
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Actuarial Equivalent Value.
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2
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2.2
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Average Monthly Base Salary.
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2
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2.3
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Average Monthly Incentive Compensation.
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2
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2.4
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Average Total Direct Compensation.
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3
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2.5
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Base Salary.
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3
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2.6
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Board of Directors.
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3
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2.7
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Cash Balance Benefit.
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3
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2.8
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Cause.
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3
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2.9
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Code.
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4
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2.10
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Compensation Committee.
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4
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2.11
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Corporation.
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4
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2.12
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Credited Service.
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4
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2.13
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Disability.
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4
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2.14
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Employee.
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5
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2.15
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ERISA.
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5
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2.16
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Final Average Compensation.
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5
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2.17
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Frozen Benefit.
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6
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2.18
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Grandfathered Participant.
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6
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2.19
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Health Care Program.
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6
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2.20
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Joint and Survivor Annuity.
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6
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2.21
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Management Benefits Committee.
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6
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2.22
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Non-Grandfathered Participant.
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6
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2.23
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Participant.
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6
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2.24
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Salaried Savings Plan.
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6
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2.25
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Salaried Retirement Plan.
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7
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2.26
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Specified Employee.
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7
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2.27
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Spouse.
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7
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ARTICLE III PARTICIPATION AND ELIGIBILITY
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7
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3.1
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Participation.
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7
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3.2
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Eligibility for Retirement Benefits.
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7
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3.3
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Eligibility for Pre-Retirement Surviving Spouse Benefits.
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8
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ARTICLE IV BENEFITS
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9
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4.1
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Current Benefit Formula.
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9
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4.2
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Prior Benefit Formula.
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9
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4.3
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Time and Form of Payment of Benefits.
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11
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4.4
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Pre-Retirement Surviving Spouse Benefit.
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12
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4.5
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Terms and Conditions.
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12
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4.6
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Freeze of Accruals.
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12
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ARTICLE V ADMINISTRATION
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13
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5.1
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Management Benefits Committee.
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13
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5.2
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Administrator.
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13
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5.3
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Compensation.
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14
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5.4
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Agent for Service of Process.
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14
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5.5
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Indemnification.
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14
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ARTICLE VI CLAIMS PROCEDURE
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15
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6.1
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Filing of Claim.
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15
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6.2
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Denial of Claim.
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15
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6.3
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Appeal.
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16
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6.4
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Review of Appeal.
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16
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6.5
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Decision on Appeal.
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16
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ARTICLE VII MISCELLANEOUS
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17
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7.1
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No Contract of Employment.
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17
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7.2
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Non-Assignability of Benefits.
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17
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7.3
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Withholding.
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17
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7.4
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Amendment and Termination.
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17
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7.5
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No Fiduciary Relationship Created.
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17
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7.6
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Unsecured General Creditor Status of Employee.
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17
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7.7
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Severability.
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18
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7.8
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Offset.
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18
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7.9
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Intent to Comply with IRC Section 409A.
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18
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7.10
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Governing Laws.
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18
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7.11
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Binding Effect.
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18
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7.12
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Number and Gender.
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18
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7.13
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Headings.
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18
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7.14
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Entire Agreement.
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18
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1.1 |
Purpose of Plan
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1.2 |
“Top Hat” Pension Benefit Plan
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1.3 |
Funding
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1.4 |
Effective Date
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2.1 |
Actuarial Equivalent Value
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(a) |
In the case of a benefit payable pursuant to the Salaried Retirement Plan and, if applicable, the Albion Automotive Pension Plan, a benefit of equal value when computed on the basis of RP 2000 Unisex Mortality Table with white collar adjustments and projected improvements to 2020 using scale AA and interest rate assumption of 6.0% calculated using the date of May 1, 2018 for any Participant that would, assuming a not for Cause termination on such date, qualify under the Eligibility Criteria in Section 3.2 of this Plan. For any Participant that would fail to qualify under such formula, such hypothetical value to be calculated using the date the Participant would, assuming a not for Cause termination on such date, first qualify under the Eligibility Criteria; and
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(b) |
In the case of a Cash Balance Benefit, the hypothetical value of the Participant’s Cash Balance Account under the Salaried Retirement Plan. Such hypothetical value to be calculated using the date of May 1, 2018 for any Participant that would, assuming a not for Cause termination on such date, qualify under the Eligibility Criteria in Section 3.2 of this Plan. For any Participant that would fail to qualify under such formula, such hypothetical value to be calculated as of the date the Participant would, assuming a not for Cause termination on such date, first qualify under the Eligibility Criteria.
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2.2 |
Average Monthly Base Salary
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(a) |
For any month for which the Employee received Base Salary at less than his or her full monthly Base Salary rate, his or her full monthly Base Salary rate last received preceding such month shall be used for such month.
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(b) |
For any month during which an Employee was on the hourly payroll and subsequent to which the Employee commenced service as a salaried Employee, his or her monthly Base Salary rate immediately following the commencement of such service as a salaried Employee shall be used for such month.
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2.3 |
Average Monthly Incentive Compensation
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2.4 |
Average Total Direct Compensation
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2.5 |
Base Salary
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2.6 |
Board of Directors
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2.7 |
Cash Balance Benefit
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2.8 |
Cause
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(a) |
the willful and continued failure or refusal of the Employee to perform the duties reasonably required of him/her by the Corporation;
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(b) |
the Employee’s conviction of, or plea of
nolo contendere
to, (i) any felony or (ii) another crime involving dishonesty or moral turpitude or which reflects negatively upon the Corporation or otherwise impairs or impedes its operations;
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(c) |
the Employee’s engaging in any misconduct, gross negligence, act of dishonesty, violence or threat of violence (including any violation of federal securities laws) that is injurious to the Corporation or any of its subsidiaries or affiliates;
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(d) |
the Employee’s material breach of any applicable agreement with or policy of the Corporation or any of its subsidiaries or affiliates; or
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(e) |
any other willful misconduct by the Employee which is injurious to the financial condition or business reputation of the Corporation or any of its subsidiaries or affiliates.
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2.9 |
Code
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2.10 |
Compensation Committee
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2.11 |
Corporation
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2.12 |
Credited Service
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2.13 |
Disability
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2.14 |
Employee
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(a) |
General Definition
. “Employee” shall mean a regular employee of the Corporation compensated by salary or by commission who is (i) working in the United States, or (ii) a citizen of or domiciled in the United States and who has been or may hereafter be hired in the United States by the Corporation and who is sent out of the United States by the Corporation to work in foreign operations, and whose services, if discontinued, would be discontinued by recalling said employee to the United States and terminating his or her services in the United States and (iii) a nonresident alien receiving income from the Corporation’s United States payroll.
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(b) |
Temporary, Part-Time and Flexible Service Employees
. The term “Employee” shall not include employees who are classified by the Corporation as (i) Temporary Employees, including per diem employees, (ii) Part-Time Employees, or (iii) Flexible Service Employees.
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(c) |
Service with Controlled Group Members
. An Employee’s service with non-domestic members of the Corporation’s controlled group (as defined in Code Section 414(b) and (c)) shall be counted for eligibility purposes but not for benefit accrual purposes.
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(d) |
Leased Employees
. The term “Employee” shall not include any Leased Employee (within the meaning of Code Section 414(n)) or any individual classified as a Leased Employee by the Corporation. If a Leased Employee later becomes an Employee, service as a Leased Employee shall be counted under this Plan for eligibility purposes.
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(e) |
Union Employees
. The term “Employee” shall not include employees represented by a labor organization who are covered by a collective bargaining agreement so long as retirement benefits are the subject of good-faith bargaining and so long as the collective bargaining agreement does not expressly provide for participation in this Plan.
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(f) |
Directors
. The term “Employee” shall not include members of the Board of Directors of American Axle & Manufacturing Holdings, Inc., or of any committee appointed by such board, who are not regular employees of the Corporation.
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(g) |
Independent Contractors
. The term “Employee” shall not include an independent contractor or any individual classified as an independent contractor by the Corporation regardless of any later classification or reclassification of any such individual as a common law employee of the Corporation.
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2.15 |
ERISA
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2.16 |
Final Average Compensation
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2.17 |
Frozen Benefit
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2.18 |
Grandfathered Participant
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2.19 |
Health Care Program
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2.20 |
Joint and Survivor Annuity
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2.21 |
Management Benefits Committee
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2.22 |
Non-Grandfathered Participant
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2.23 |
Participant
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2.24 |
Salaried Savings Plan
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2.25 |
Salaried Retirement Plan
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2.26 |
Specified Employee
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2.27 |
Spouse
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3.1 |
Participation
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3.2 |
Eligibility for Retirement Benefits
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(a) |
Eligibility Criteria
. To be eligible for a benefit under Section IV of this Plan, an Employee must:
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(1) |
Prior to April 1, 2018, be defined as Unclassified, as such term is defined by the Corporation;
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(2) |
Be an active employee of the Corporation or an affiliated entity on his or her date of death, retirement or commencement of his or her Disability;
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(3) |
As of the date the employment relationship is terminated, (i) be credited with 10 or more years of Credited Service and have attained age 55 at the time of his or her retirement, death or commencement of his or her Disability, (ii) be credited with five or more years of Credited Service and have attained age 60 at the time of his or her retirement, death, or commencement of his or her Disability, or (iii) have attained age 65 at the time of his or her retirement, death, or commencement of his or her Disability; and
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(4) |
Not have been terminated by the Corporation for Cause.
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(b) |
Non-Grandfathered Participant
. A Non-Grandfathered Participant shall, upon meeting the requirements set forth in Section 3.1(a), be eligible for a benefit determined pursuant to Section 4.1.
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(c) |
Grandfathered Participant
. A Grandfathered Participant who continued in the employ of the Corporation after December 31, 2011 shall, upon meeting the requirements of Section 3.1, be eligible for the greater of:
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(1) |
his or her benefit determined pursuant to Section 4.1;
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(2) |
his or her Frozen Benefit under the Basic Benefit formula determined pursuant to Section 4.2 (a); or
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(3) |
if he or she shall have attained age 62 at the time of his or her retirement , death or commencement of his or her Disability, his or her Frozen Benefit under the Alternative Benefit formula determined pursuant to Section 4.2(c).
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3.3 |
Eligibility for Pre-Retirement Surviving Spouse Benefits
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4.1 |
Current Benefit Formula
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(a) |
The lump sum Actuarial Equivalent Value of his or her benefits payable pursuant to the Salaried Retirement Plan, including the Cash Balance Benefit, and, if applicable, the Albion Automotive Pension Plan (determined for the Albion Plan as of the date benefits are to commence under this Plan, without further indexing in the future and after conversion to U.S. dollars), and
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(b) |
The Participant’s AAM Retirement Contribution Account established pursuant to Section 3.2(b) of the Salaried Savings Plan, plus the Participant’s Account established to credit any employer contributions made under the Salaried Savings Plan which replaces or supplements the AAM Retirement Contributions.
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4.2 |
Prior Benefit Formula
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(a) |
Amount of Basic Benefit
. The Basic Benefit shall, subject to Section 4.2(b), be a monthly benefit equal to 2% of a Participant’s Average Monthly Base Salary (calculated as of December 31, 2011) multiplied by his or her years of Credited Service (calculated as of December 31, 2011), less the sum of:
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(1) |
All monthly benefits payable to the eligible Employee under the Salaried Retirement Plan, including the Cash Balance Benefit, before reduction for any survivor option, plus
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(2) |
2% of the eligible Employee’s monthly age 65 primary Social Security benefit multiplied by his or her years of Credited Service.
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(i) |
The monthly age 65 primary Social Security benefit will be determined and applied to the Basic Benefit formula at death or retirement, regardless of the Employee’s age at death or retirement and regardless of the Employee’s eligibility for Social Security benefits.
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(ii) |
The monthly age 65 primary Social Security benefit will be determined at death or retirement using the maximum monthly Social Security benefit amount payable at age 65 in the year the Employee retires or dies.
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(b) |
Rules Applicable to Basic Benefits
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(1) |
At age 62 and one month, for those retiring prior to age 62 with a Basic Benefit, the Basic Benefit will not be redetermined when Temporary Benefits or supplements under the Salaried Retirement Plan are reduced or eliminated.
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(2) |
The “Special” benefit (Part B Medicare reimbursement) paid under the Health Care Plan will not be taken into account in determining any monthly benefit amount payable under Section 4.2(a).
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(3) |
Post-retirement increases under the Salaried Retirement Plan will not reduce any monthly benefit amount payable under this Section 4.2(a).
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(4) |
The award or denial of a Social Security disability insurance benefit that affects the monthly amount of benefits payable under the Salaried Retirement Plan will be taken into account in determining any monthly benefit amount payable under Section 4.2(a). However, any subsequent modification of a Social Security disability insurance benefit will not be taken into account in determining the monthly benefit amount payable under Section 4.2(a).
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(c) |
Amount of Alternative Benefit
. The Alternative Benefit shall, subject to Section 4.2(d), be a monthly benefit equal to 1.5% of a Participant’s Average Total Direct Compensation (calculated as of December 31, 2011), multiplied by his or her years of Credited Service (determined as of December 31, 2011), less the sum of:
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(1) |
All monthly benefits determined under the terms of the Salaried Retirement Plan, including the Cash Balance Benefit, before reduction for any survivor option, plus
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(2) |
100% of the maximum monthly age 65 primary Social Security benefit.
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(i) |
Differing time periods over the last 10 years of employment with the Corporation may be used for the blended calculation of Average Monthly Base Salary and Average Monthly Incentive Compensation, both calculated as of December 31, 2011.
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(ii) |
The monthly age 65 primary Social Security benefit is the monthly age 65 primary Social Security benefit payable in the year of the Employee’s death or retirement, regardless of the Employee’s age at such time and regardless of the Employee’s eligibility for Social Security benefits.
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(iii) |
The monthly age 65 primary Social Security benefit will not be redetermined for any subsequent Social Security increase.
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(d) |
Rules Applicable to Alternative Benefits
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(1) |
Post-retirement increases under the Salaried Retirement Plan will not reduce any monthly benefit amount payable under Section 4.2(c).
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(2) |
The “Special” benefit (Part B Medicare reimbursement) payable under the Health Care Program will not be taken into account in determining any monthly benefit amount payable under Section 4.2(c).
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(e) |
Late Retirement
. If a participant remains employed after attaining age 65, the amount of benefit accrued in a calendar year will be the greater of (i) the benefit determined pursuant to Section 4 but without regard to this Section 4.2(e), or (ii) the accrued benefit at the end of the prior calendar year, actuarially increased to the end of the current calendar year, or, if earlier, to the date of retirement, death or disability. Actuarial increases for late retirement shall be calculated on the basis of the discount rate and a unisex version of the mortality table used to calculate the Plan’s obligations as disclosed in the Corporation’s audited financial statements for the year ended immediately prior to the year for which the actuarial increase is being calculated.
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4.3 |
Time and Form of Payment of Benefits
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(a) |
Lump Sum Payment
. Payments to (i) Non-Grandfathered Participants pursuant to Section 4.1, and (ii) Grandfathered Participants entitled to benefits pursuant to Section 4.1, will be paid in a lump sum payment. The lump sum payment shall be made six months after the date of the Participant’s separation from service. If the Participant dies prior to the receipt of his or her benefits pursuant to Section 4.1, the Spouse will receive a death benefit equal to the amount payable to the Participant. The death benefit shall be payable in one lump sum as soon as practicable after the death of the Participant. If a Participant is not survived by his Spouse, his or her benefits will be forfeited. No interest shall accrue on the lump sum payment for the six-month period from the separation of service date to the payment distribution date.
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(b) |
Annuity Payments to Grandfathered Participants
. A Grandfathered Participant entitled to benefits pursuant to Section 4.2 shall have his or her benefits paid in an annuity form as follows:
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(1) |
Commencement of Benefits
. Benefit payments shall commence as soon as practicable after an Employee separates from service with the Corporation (or a related entity); provided, however, that the portion of a Specified Employee’s benefit that was not vested within the meaning of Code Section 409A on December 31, 2004, may not be paid to the Employee before the date which is six months after the date of separation from service. A Specified Employee’s annuity for the post-December 31, 2004 benefits shall commence at the beginning of the seventh month following his or her separation from service date and shall include applicable payments for the previous six months. Any portion of the benefit payments which are deferred for six months shall not be adjusted for interest.
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(2) |
Single Life Annuity
. Except as provided in Section 4.3(b)(3), or Section 4.3(c), an Employee entitled to a Basic Benefit or an Alternative Benefit will receive his or her benefit in the form of a single life annuity for the Employee’s lifetime. Notwithstanding the foregoing, benefits are paid in accordance with the Corporation’s payroll cycle for salaried employees and all payments are subject to the restrictions and risk of forfeiture under Section 4.5(a) and (b) and Section 7.6.
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(3) |
Automatic Survivor Benefit
.
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(A) |
Basic Benefit
. An Employee entitled to a Basic Benefit or Alternative Benefit who has a Spouse who is otherwise eligible for survivor benefits under the Salaried Retirement Plan on the commencement date for benefits under this Plan, will receive his or her benefit determined in the form of a Joint and Survivor Annuity.
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(B) |
Alternative Benefit
. An Employee who (i) has attained age 62 or such earlier age specified in a special separation program, (ii) has been credited with 10 or more years of Credited Service, and (iii) on the date Alternative Benefits begin, has a Spouse who is otherwise eligible for survivor benefits under the Salaried Retirement Plan on the commencement date for benefits under this Plan, will receive his or her benefit in the form of a Joint and Survivor Annuity.
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(C) |
Loss of Spouse Due to Death or Divorce
. If an Employee who is receiving a Joint and Survivor Annuity loses his or her Spouse due to death or divorce, the Employee’s Basic or Alternative Benefit, as applicable, will be recalculated on a prospective basis in the form of a single life annuity under Section 4.3(b)(2) assuming the Corporation is notified of such death or divorce within 90 days of such event. If the Employee subsequently remarries, no Joint and Survivor Annuity is permitted for the Employee and his or her new spouse.
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(c) |
Exception for Small Benefits
. Notwithstanding anything in this Section 4.3 to the contrary, if, upon separation from service or at any subsequent date during the annuity payment period, the value of the Employee’s Plan benefit, when aggregated with the value of the Employee’s benefit under any other nonqualified non-elective defined benefit plan sponsored by the Corporation or its controlled group members, does not exceed the then-annual limit set forth in Code Section 402(g)(1)(B) ($17,000 in 2012), the Employee’s benefits in all such non-elective defined benefit plans shall be terminated and liquidated in their entirety, in the form of a lump sum cash payment within 90 days following the Employee’s separation from service.
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4.4 |
Pre-Retirement Surviving Spouse Benefit
.
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(a) |
Current Benefit Formula
. The pre-retirement surviving spouse benefit payable pursuant to Section 4.1 to an eligible Spouse shall be equal to the Participant’s benefit calculated pursuant to Section 4.1 and shall be payable in one lump sum payment as soon as administratively practicable following the Participant’s death.
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(b) |
Prior Benefit Formula
. The pre-retirement surviving spouse benefit payable to the eligible spouse of a Grandfathered Participant pursuant to Section 4.2(a) or (c) shall equal the amount that the Spouse would have been entitled to receive under the Joint and Survivor Annuity if the Employee had retired with an immediate Joint and Survivor Annuity on the day before his death. In the event that an Employee is eligible for both a Basic Benefit and an Alternative Benefit on his date of death, the Pre-Retirement Surviving Spouse Benefit will equal the Pre-Retirement Surviving Spouse Benefit based on the greater of the Employee’s Basic Benefit or the Employee’s Alternative Benefit.
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4.5 |
Terms and Conditions
.
|
(a) |
Benefits Not Guaranteed
. Benefits payable under Article IV are not guaranteed and may be reduced or eliminated at any time, and from time to time, by the Compensation Committee, the Management Benefits Committee or the Board of Directors. No prior notice is required.
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(b) |
Forfeiture Upon Termination For Cause
. Notwithstanding any provision in the Plan to the contrary, an Employee whose employment is terminated for Cause shall forfeit all rights to benefits under the Plan.
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4.6 |
Freeze of Accruals
.
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5.1 |
Management Benefits Committee
.
|
(a) |
Appointment and Removal of Management Benefits Committee
. The Management Benefits Committee shall consist of three or more individuals appointed by, and serving at the discretion of, the Compensation Committee. A member of the Management Benefits Committee may (i) resign upon 30 days written notice to the Compensation Committee, or (ii) be removed from the Management Benefits Committee at any time at the discretion of the Compensation Committee.
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(b) |
Decisions by Management Benefits Committee
. The Management Benefits Committee shall act by majority vote either at a meeting of the Management Benefits Committee or by written consent. Meetings may be attended telephonically.
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(c) |
Authority
. The Management Benefits Committee shall have the following duties and authority under the Plan.
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(1) |
Compliance
. The Management Benefits Committee shall monitor the performance of the Plan to ensure that the Plan is administered in accordance with its terms and in compliance with applicable law or regulation.
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(2) |
Discretionary Authority
. The Management Benefits Committee shall have full and exclusive discretionary authority to determine all questions arising in the administration, application and interpretation of the Plan including the authority to correct any defect or reconcile any inconsistency or ambiguity in the Plan and the authority to determine an Employee’s or other individual’s eligibility to receive a benefit from the Plan and the amount of that benefit. The Management Benefits Committee shall determine all Claims appeals as set forth in Section 6.5 of this Plan and shall have the authority to determine all questions of fact relating to such an appeal. Any determination by the Management Benefits Committee pursuant to this Section 5.1(c)(2) or the Claims Procedure shall be binding and conclusive on all parties.
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(3) |
Plan Amendments
. The Management Benefits Committee shall have the authority to make Plan amendments as long as such amendments do not have a significant cost impact to the Corporation.
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(4) |
Adoption of Plan
. The Management Benefits Committee may provide for the adoption of the Plan by an affiliated employer pursuant to such terms and conditions as the Management Benefits Committee, in its discretion, may determine. The Management Benefits Committee shall have the right to remove an affiliated employer as a Plan sponsor if, in its discretion, it deems such removal to be appropriate.
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5.2 |
Administrator
.
|
(a) |
Procedures and Forms
. Establish such administrative procedures and prepare, or cause to be prepared, such forms, as may be necessary or desirable for the proper administration of the Plan;
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(b) |
Advisors
. Retain the services of such consultants and advisors as may be appropriate to the administration of the Plan;
|
(c) |
Claims
. Have the discretionary authority to determine all claims filed pursuant to Section 6.2 of this Plan and shall have the authority to determine issues of fact relating to such claim;
|
(d) |
Payment of Benefits
. Direct, or establish procedures for, the payment of benefits from the Plan; and
|
(e) |
Plan Records
. Maintain, or cause to be maintained, all documents and records necessary or appropriate to the maintenance of the Plan.
|
5.3 |
Compensation
.
|
5.4 |
Agent for Service of Process
.
|
5.5 |
Indemnification
.
|
6.1 |
Filing of Claim
.
|
6.2 |
Denial of Claim
.
|
(a) |
the specific reason or reasons for denial;
|
(b) |
specific reference to pertinent Plan provisions on which the denial is based;
|
(c) |
a description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary;
|
(d) |
an explanation of the Plan’s claim review procedures and the time limits applicable to such procedures including a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to and copies of, all documents, records and other information relevant to the claimant’s claim for benefits;
|
(e) |
a statement of the claimant’s right to bring a civil action under ERISA Section 502(a) following an adverse benefit determination on review; and, if applicable in the case of a disability benefit;
|
(f) |
the specific rule, guideline, protocol or similar criterion (if any) that was relied on in making the benefit determination, or a statement that the rule, guideline, protocol or other similar criterion was relied on and will be provided to the claimant free of charge upon request; and
|
(g) |
if a disability claim, the identity of the medical or vocational experts whose advice was obtained by the Plan Administrator in the process of deciding the claim, regardless of whether the advice was relied upon.
|
6.3 |
Appeal
.
|
6.4 |
Review of Appeal
.
|
6.5 |
Decision on Appeal
.
|
(a) |
the specific reason or reasons for the adverse determination;
|
(b) |
specific references to pertinent Plan provisions on which the denial is based;
|
(c) |
a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to and copies of, all documents, records and other information relevant to the claimant’s claim for benefits;
|
(d) |
for disability benefits, if an internal rule, guideline, protocol, or other similar criterion was relied upon in making the adverse determination, either the specific rule, guideline, protocol, or other similar criterion or a statement that such rule, guideline, protocol or other similar criterion was relied upon in making the adverse determination and that a copy will be provided free of charge to the claimant upon request; and
|
(e) |
a statement of the claimant’s right to bring an action under ERISA Section 502(a) and, for disability claims, the following statement: “You and your Plan may have other voluntary alternative dispute resolution options, such as mediation. One way to find out what may be available is to contact your local U.S. Department of Labor Office and your State insurance regulatory agency.
|
7.1 |
No Contract of Employment
.
|
7.2 |
Non-Assignability of Benefits
.
|
7.3 |
Withholding
.
|
7.4 |
Amendment and Termination
.
|
(a) |
Board of Directors
. The Board of Directors shall have the right to amend, in whole or in part, any or all of the provisions of the Plan or to terminate the Plan at any time and without the consent of any other party or person.
|
(b) |
Management Benefits Committee
. The Management Benefits Committee shall have the right, at any time, without the consent of any other party or person, to modify or amend any or all of the provisions of the Plan, but only to the extent provided in Section 5.1(c).
|
(c) |
Limitations
. Except as provided in Section 4.5, no amendment or termination of this Plan shall impair the rights of an Employee to the extent earned as of the date of amendment or termination. For purposes of this Section 7.4, a Participant’s right to Plan benefits shall not be considered earned until such date as the Employee terminates employment and has begun receiving benefits under the Plan.
|
7.5 |
No Fiduciary Relationship Created
.
|
7.6 |
Unsecured General Creditor Status of Employee
.
|
(a) |
The payments to a Participant, his or her Beneficiary or any other distributee hereunder shall be made from assets which shall continue, for all purposes, to be a part of the general, unrestricted assets of the Corporation; no person shall have nor acquire any interest in any such assets by virtue of the provisions of this Plan.
|
(b) |
The Corporation’s obligation hereunder shall be an unfunded and unsecured promise to pay money in the future. To the extent that the Employee or other distributee acquires a right to receive payments from the Corporation under the provisions hereof, such right shall be no greater than the right of any unsecured general creditor of the Corporation; no such person shall have nor require any legal or equitable right, interest or claim in or to any property or assets of the Corporation.
|
7.7 |
Severability
.
|
7.8 |
Offset
.
|
7.9 |
Intent to Comply with IRC Section 409A
.
|
7.10 |
Governing Laws
.
|
7.11 |
Binding Effect
.
|
7.12 |
Number and Gender
.
|
7.13 |
Headings
.
|
7.14 |
Entire Agreement
.
|
|
AMERICAN AXLE & MANUFACTURING, INC.
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Terri M. Kemp
|
|
Name: | Terri M. Kemp | ||
Title: | Vice President - Human Resources | ||
|
|
|
|
1) |
Section 1.14 of the Plan is hereby amended by inserting the following new sentence at the end thereof:
|
2) |
Section 1.16 of the Plan is hereby amended and restated as follows:
|
3) |
Section 1.19 of the Plan is hereby amended and restated as follows:
|
4) |
Section 1.46 of the Plan is hereby amended and restated as follows:
|
5) |
Section 2.1 of the Plan is hereby amended by inserting the following new sentence at the end thereof:
|
6) |
Section 3 of the Plan is hereby amended by inserting the following new Section at the end thereof:
|
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
|
|||
By:
|
/s/ Terri M. Kemp
|
||
Name:
|
Terri M. Kemp
|
||
Title
:
|
Vice President - Human Resources
|
ARTICLE 1
|
|
Definitions
|
1
|
1.1
|
Account Balance
|
1
|
|
1.2
|
Affiliate
|
1
|
|
1.3
|
Base Annual Salary
|
1
|
|
1.4
|
Beneficiary
|
1
|
|
1.5
|
Beneficiary Designation Form
|
2
|
|
1.6
|
Benefit Distribution Date
|
2
|
|
1.7
|
Board
|
2
|
|
1.8
|
Bonus
|
2
|
|
1.9
|
Change in Control
|
2
|
|
1.10
|
Claimant
|
3
|
|
1.11
|
Code
|
3
|
|
1.12
|
Committee
|
3
|
|
1.13
|
Company
|
3
|
|
1.14
|
Contributions
|
3
|
|
1.15
|
Control
|
3
|
|
1.16
|
Covered Termination
|
4
|
|
1.17
|
Deferral Contribution
|
4
|
|
1.18
|
Deferral Contribution Account
|
4
|
|
1.19
|
Disability
|
5
|
|
1.20
|
Disability Benefit
|
5
|
|
1.21
|
Discretionary Contribution
|
5
|
|
1.22
|
Discretionary Contribution Account
|
5
|
|
1.23
|
Election Form
|
6
|
|
1.24
|
Elective Deductions
|
7
|
|
1.25
|
Employer
|
7
|
|
1.26
|
Enrollment Forms
|
7
|
|
1.27
|
ERISA
|
7
|
|
1.28
|
Exchange Act
|
7
|
|
1.29
|
Financial Emergency
|
7
|
|
1.30
|
Interim Distribution Date
|
8
|
|
1.31
|
Investment Adjustment(s)
|
8
|
|
1.32
|
Investment Allocation Form
|
8
|
1.33
|
Investment Benchmark
|
9
|
|
1.34
|
Investment Management Committee
|
9
|
|
1.35
|
Investment Re-Allocation Form
|
9
|
|
1.36
|
Matching Contribution
|
9
|
|
1.37
|
Matching Contribution Account
|
9
|
|
1.38
|
Participant
|
10
|
|
1.39
|
Participation Agreement
|
10
|
|
1.40
|
Person
|
10
|
|
1.41
|
Plan
|
10
|
|
1.42
|
Plan Year
|
10
|
|
1.43
|
Post-2004 Subaccounts
|
11
|
|
1.44
|
Pre-2005 Subaccounts
|
11
|
|
1.45
|
Restricted Investment Benchmark
|
11
|
|
1.46
|
Retirement, Retires or Retired
|
11
|
|
1.47
|
Retirement Benefit
|
11
|
|
1.48
|
Retirement Benefit Distribution Form
|
11
|
|
1.49
|
Specified Employee
|
12
|
|
1.50
|
Termination Benefit
|
12
|
|
1.51
|
Termination of Employment
|
12
|
|
1.52
|
Trust
|
12
|
|
1.53
|
Trustee
|
12
|
|
1.54
|
Vested Account Balance
|
12
|
|
1.55
|
Years of Service
|
12
|
|
ARTICLE 2
|
|
Eligibility, Selection, Enrollment
|
13
|
2.1
|
Eligibility, Selection by Company or Employer
|
13
|
|
2.2
|
Enrollment Requirements
|
13
|
|
2.3
|
Commencement of Participation
|
13
|
|
ARTICLE 3
|
|
Deferral Contributions, Matching Contributions, Discretionary Contributions Investment Adjustments, Taxes and Vesting
|
13
|
3.1
|
Deferral Contributions
|
13
|
|
3.2
|
Matching Contributions
|
15
|
|
3.3
|
Discretionary Contributions
|
15
|
|
3.4
|
Selection of Investment Benchmarks
|
15
|
|
3.5
|
Adjustment of Participant Accounts
|
16
|
|
3.6
|
Withholding of Taxes
|
16
|
|
3.7
|
Vesting
|
17
|
|
ARTICLE 4
|
|
Suspension of Deferrals
|
18
|
4.1
|
Financial Emergencies
|
18
|
ARTICLE 5
|
|
Interim and Hardship Distributions
|
18
|
5.1
|
Interim Distributions
|
18
|
|
5.2
|
Withdrawal in the Event of a Financial Emergency
|
19
|
|
ARTICLE 6
|
|
Termination Benefit
|
19
|
6.1
|
Termination Benefit
|
19
|
|
6.2
|
Payment of Termination Benefit
|
19
|
|
6.3
|
Death Prior to Payment of Termination Benefit
|
19
|
|
ARTICLE 7
|
|
Retirement Benefit
|
20
|
7.1
|
Retirement Benefit
|
20
|
|
7.2
|
Payment of Retirement Benefit
|
20
|
|
7.3
|
Death Prior to Completion of Retirement Benefit
|
20
|
|
ARTICLE 8
|
|
Pre-Retirement Death Benefit
|
20
|
8.1
|
Pre-Retirement Death Benefit
|
20
|
|
8.2
|
Payment of Pre-Retirement Death Benefit
|
21
|
|
ARTICLE 9
|
Disability Benefit
|
21 | |
ARTICLE 10
|
|
Beneficiary Designation
|
21
|
10.1
|
Beneficiary
|
21
|
|
10.2
|
Beneficiary Designation; Change; Spousal Consent
|
21
|
|
10.3
|
Acceptance
|
22
|
|
10.4
|
No Beneficiary Designation
|
22
|
|
10.5
|
Doubt as to Beneficiary
|
22
|
|
10.6
|
Discharge of Obligations
|
22
|
|
ARTICLE 11
|
|
Termination, Amendment or Modification
|
22
|
11.1
|
Termination
|
22
|
|
11.2
|
Amendment
|
23
|
|
11.3
|
Effect of Payment
|
23
|
|
ARTICLE 12
|
|
Administration
|
23
|
12.1
|
Committee Duties
|
23
|
|
12.2
|
Agents
|
23
|
|
12.3
|
Binding Effect of Decisions
|
23
|
|
12.4
|
Indemnity of Committee
|
24
|
|
12.5
|
Employer Information
|
24
|
|
12.6
|
Investment Management Committee
|
24
|
|
ARTICLE 13
|
Other Benefits and Agreements
|
24
|
|
ARTICLE 14
|
Claims Procedures
|
24
|
|
14.1
|
Presentation of Claim
|
24
|
|
14.2
|
Notification of Decision
|
25
|
|
14.3
|
Review of a Denied Claim
|
26
|
|
14.4
|
Review of Appeal
|
26
|
|
14.5
|
Decision on Review
|
27
|
|
ARTICLE 15
|
Trust
|
28
|
|
15.1
|
Establishment of the Trust
|
28
|
|
15.2
|
Interrelationship of the Plan and the Trust
|
28
|
|
15.3
|
Distributions From the Trust
|
28
|
|
15.4
|
Trust Funding.
|
28
|
|
ARTICLE 16
|
Miscellaneous
|
29
|
|
16.1
|
Status of Plan
|
29
|
|
16.2
|
Unsecured General Creditor
|
29
|
|
16.3
|
Employer’s Liability
|
30
|
|
16.4
|
Nonassignability
|
30
|
|
16.5
|
Not a Contract of Employment
|
30
|
|
16.6
|
Furnishing Information
|
30
|
|
16.7
|
Terms
|
30
|
|
16.8
|
Captions
|
31
|
|
16.9
|
Governing Law
|
31
|
|
16.10
|
Notice
|
31
|
|
16.11
|
Successors
|
31
|
|
16.12
|
Validity
|
31
|
|
16.13
|
Incompetent
|
31
|
|
16.14
|
Distribution in the Event of Taxation
|
32
|
|
16.15
|
Insurance
|
32
|
|
1.1 |
Account Balance
. “Account Balance” shall mean as of any given date called for under the Plan, the sum of the following: (i) the balance of the Participant’s Deferral Contribution Account, (ii) the balance of the Participant’s Matching Contribution Account, and (iii) the balance of the Participant’s Discretionary Contribution Account, as such accounts have been adjusted to reflect all applicable Investment Adjustments and all prior withdrawals and distributions, in accordance with Article 3 of the Plan.
|
1.2 |
Affiliate
. “Affiliate” shall mean, with respect to any Person, (i) any other Person that directly or indirectly Controls, is Controlled by or is under common Control with, such Person or (ii) any director, officer, partner, member or employee of such Person or any Person specified in clause (i) above.
|
1.3 |
Base Annual Salary
. “Base Annual Salary” shall mean the base annual compensation payable to a Participant by an Employer for services rendered during a Plan Year, (i) excluding Bonus, commissions, director fees (for other than independent directors) or other additional incentives or awards payable to the Participant, but (ii) before reduction for any Elective Deductions.
|
1.4 |
Beneficiary
. “Beneficiary” shall mean one or more persons, trusts, estates or other entities, designated by the Participant in accordance with Article 10, to receive the Participant’s undistributed Vested Account Balance, in the event of the Participant’s death.
|
1.5 |
Beneficiary Designation Form
. “Beneficiary Designation Form” shall mean the document which shall be used by the Participant to designate his Beneficiary for the Plan.
|
1.6 |
Benefit Distribution Date
. “Benefit Distribution Date” shall mean the date distribution of the Participant’s Vested Account Balance is triggered and, except as provided in Article 6 with respect to Specified Employees, it shall be deemed to occur as of the date on which the Participant’s employment or service as a member of the board of directors of the Company terminates for any reason whatsoever, including but not limited to death, Disability or any other reason. Notwithstanding the language of the prior sentence, if the Participant’s employment terminates due to his Retirement, his Benefit Distribution Date shall, except as provided in Article 7 with respect to Specified Employees, be deemed to occur as of the January 1 following such Participant’s Retirement. In the event the Benefit Distribution Date is triggered due to: (i) a Termination of Employment as such term is defined in Section 1.51, the Participant’s Vested Account Balance shall be payable pursuant to Article 6; (ii) a Retirement as such term is defined in Section 1.46, the Participant’s Vested Account Balance shall be payable pursuant to Article 7; (iii) a pre-retirement death, the Participant’s Vested Account Balance shall be payable pursuant to Article 8; and (iv) a Disability as such term is defined in Section 1.19, the Participant’s Vested Account Balance shall be payable pursuant to Article 9.
|
1.7 |
Board
. “Board” shall mean the board of directors of the Company.
|
1.8 |
Bonus
. “Bonus” shall mean the amounts earned by a Participant for services rendered with respect to a Plan Year under any bonus or incentive plan or arrangement sponsored by an Employer, before reduction for any Elective Deductions, but excluding commissions, stock-related awards and other non-monetary incentives.
|
1.9 |
Change in Control
. “Change in Control” shall be deemed to have occurred when:
|
(a) |
Any “person” as defined in Section 3(a)(9) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and as used in Sections 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d) of the Exchange Act, the Company and any subsidiary and any employee benefit plan sponsored or maintained by the Company or any subsidiary (including any trustee of such plan acting as trustee)), directly or indirectly, becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), of securities of the Company representing 20% or more of the combined voting power of the Company’s then outstanding securities; or
|
(b) |
The consummation of any merger or other business combination involving the Company, a sale of 51% or more of the Company’s assets, liquidation or dissolution of the Company or a combination of the foregoing transactions (the “Transactions”) other than a Transaction immediately following which the shareholders of the Company immediately prior to the Transaction own, in the same proportion, at least 51% of the voting power, directly or indirectly, of (i) the surviving corporation in any such merger or other business combination; (ii) the purchaser of or successor to the Company’s assets; (iii) both the surviving corporation and the purchaser in the event of any combination of Transactions; or (iv) the parent company owning 100% of such surviving corporation, purchaser or both the surviving corporation and the purchaser, as the case may be; or
|
(c) |
Within any 24 month period, the persons who were directors immediately before the beginning of such period (the “Incumbent Directors”) shall cease (for any reason other than death) to constitute at least a majority of the Company’s Board or the board of directors of a successor to the Company. For this purpose, any director who was not a director at the beginning of such period shall be deemed to be an Incumbent Director if such director was elected to the Board by, or on the recommendation of or with the approval of, at least two-thirds of the directors who then qualified as Incumbent Directors (so long as such director was not nominated by a person who commenced or threatened to commence an election contest or proxy solicitation by or on behalf of a person (other than the Board) or who has entered into an agreement to effect a Change in Control or expressed an intention to cause such a Change in Control).
|
1.10 |
Claimant
. “Claimant” shall mean the person or persons described in Section 14.1 who apply for benefits or amounts that may be payable under the Plan.
|
1.11 |
Code
. “Code” shall mean the Internal Revenue Code of 1986, as amended, and the regulations and other authority issued thereunder by the appropriate governmental authority. References to the Code shall include references to any successor section or provision of the Code.
|
1.12 |
Committee
. “Committee” shall mean the Management Benefits Committee described in Section 12.1 which shall administer the Plan.
|
1.13 |
Company
. “Company” shall mean American Axle & Manufacturing Holdings, Inc., a Delaware corporation, and any successor or assigns.
|
1.14 |
Contributions
. “Contributions” shall collectively refer to any and all Deferral Contributions, Matching Contributions and Discretionary Contributions, as such terms have been defined herein.
|
1.15 |
Control
. “Control” (including any correlative meaning, all conjugations thereof) shall mean with respect to any
Person, the ability of another Person to control or direct the actions or policies of such first Person, whether by ownership of voting securities, by contract or otherwise.
|
1.16 |
Covered Termination
. “Covered Termination” shall be defined solely for purposes of Section 3.7 and shall mean the termination of a Participant’s employment with the Company and all other Employers, or service as a member of the board of directors of the Company, within two (2) years following a Change in Control as a result of the Participant’s resignation for good reason or a termination by the Participant’s Employer without cause. For purposes of this definition, the phrase “resignation for good reason” shall mean a Participant’s resignation following (i) a diminution in the Participant’s status, title, position or responsibilities, or an assignment to the Participant of duties inconsistent with the Participant’s status, title or position, for reasons other than for cause or (ii) a material reduction in the Participant’s aggregate annualized compensation rate solely as a result of a change adopted unilaterally by the Company or Employer. For purposes of this definition, the phrase “termination without cause” shall mean an involuntary termination of the Participant’s employment by Participant’s Employer other than by reason of the Participant’s (i) willful and continued failure to perform the duties of his position after receiving notice of such failure and being given reasonable opportunity to cure such failure; (ii) willful misconduct which is demonstrably and materially injurious to the Employer; (iii) conviction of a felony; or (iv) material breach of applicable federal or state securities laws, regulations or licensing requirements or the applicable rules or regulations of any self-regulatory body. No act or failure to act on the part of a Participant shall be considered “willful” unless it is done or omitted to be done in bad faith or without reasonable belief that the action or omission was in the best interest of the Employer. No termination shall be considered a termination for cause, for purposes of this definition, unless it is effected by a written notice to the Participant stating in detail the grounds constituting cause.
|
1.17 |
Deferral Contribution
. “Deferral Contribution” shall mean the aggregate amount of Base Annual Salary or Bonus deferred by a Participant during a given Plan Year in accordance with the terms of the Plan and the Participant’s Election Form and “credited” to the Participant’s Deferral Contribution Account. Deferral Contributions shall be deemed to be made to the Plan by the Participant on the date the Participant would have received such compensation had it not been deferred pursuant to the Plan.
|
1.18 |
Deferral Contribution Account
. “Deferral Contribution Account” shall mean a Participant’s aggregate Deferral Contributions, as well as any appreciation (or depreciation) specifically attributable to such Deferral Contributions due to Investment Adjustments, reduced to reflect all prior distributions and withdrawals. The Committee shall maintain separate subaccounts for each individual who was a Participant prior to January 1, 2005. One such subaccount (referred to as the Pre-2005 Deferral Contribution Subaccount) shall consist of Deferral Contributions made to the Plan prior to January 1, 2005, as well as any appreciation (or depreciation) specifically attributable to such Deferral Contributions due to Investment Adjustments, reduced to reflect all prior distributions and withdrawals from such subaccount. The other such subaccount (referred to as the Post-2004 Deferral Contribution Subaccount) shall consist of Deferral Contributions made to the Plan on or after January 1, 2005, as well as any appreciation (or depreciation) specifically attributable to such Deferral Contributions due to Investment Adjustments, reduced to reflect all prior distributions and withdrawals from such subaccount. The Deferral Contribution Account shall be utilized solely as a device for the measurement of amounts to be paid to the Participant under the Plan. The Deferral Contribution Account shall not constitute or be treated as an escrow, trust fund, or any other type of funded account for Code or ERISA purposes and, moreover, contingent amounts credited thereto shall not be considered “plan assets” for ERISA purposes. The Deferral Contribution Account merely provides a record of the bookkeeping entries relating to the contingent benefits that the Employer intends to provide Participant and shall thus reflect a mere unsecured promise to pay such amounts in the future.
|
1.19 |
Disability
. “Disability” shall mean (i) in the case of a Participant who is a participant in an accident or health plan covering employees of the Company or an Employer, any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months and for which such Participant is receiving income replacement benefits for a period of not less than three (3) months under an accident or health plan covering employees of the Participant’s employer, or (ii) in the case of a Participant who is not a participant in an accident or health plan covering employees of the Company or an Employer, any medically determinable physical or mental impairment by reason of which such Participant is unable to engage in any substantial gainful activity and which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months.
|
1.20 |
Disability Benefit
. “Disability Benefit” shall mean the benefit set forth in Article 9.
|
1.21 |
Discretionary Contribution
. “Discretionary Contribution” shall mean the aggregate amounts, if any, declared and contributed by the Company or the Employer (as applicable) to the Plan on the Participant’s behalf during a given Plan Year. Such Discretionary Contributions shall be “credited” to the Participant’s Discretionary Contribution Account as of the date determined appropriate by the Company or Employer (as applicable), in its sole discretion. The amount of any Participant’s Discretionary Contribution shall be determined by the Company or the Employer (as applicable), within its sole discretion, and such amount shall not be subject to the formula which determines Matching Contributions.
|
1.22 |
Discretionary Contribution Account
. “Discretionary Contribution Account” shall mean a Participant’s aggregate Discretionary Contributions, as well as any appreciation (or depreciation) specifically attributable to such Discretionary Contributions due to Investment Adjustments, reduced to reflect all prior distributions and withdrawals. The Committee shall maintain separate subaccounts for each individual who was a Participant prior to January 1, 2005. One such subaccount (referred to as the Pre-2005 Discretionary Contribution Subaccount) shall consist of Discretionary Contributions that were vested within the meaning of Code Section 409A as of December 31, 2004, as well as any appreciation (or depreciation) specifically attributable to such Discretionary Contributions due to Investment Adjustments, reduced to reflect all prior distributions form such subaccount. The other such subaccount (referred to as the Post-2004 Discretionary Contribution Subaccount) shall consist of Discretionary Contributions that were not vested within the meaning of Code Section 409A as of December 31, 2004 and Discretionary Contributions made to the Plan on or after January 1, 2005, as well as appreciation (or depreciation) specifically attributable to such Discretionary Contributions due to Investment Adjustments; reduced to reflect all prior distributions from such subaccount. The Discretionary Contribution Account shall be utilized solely as a device for the measurement of amounts to be paid to the Participant under the Plan. The Discretionary Contribution Account shall not constitute or be treated as an escrow, trust fund, or any other type of funded account for Code or ERISA purposes and, moreover, contingent amounts credited thereto shall not be considered “plan assets” for ERISA purposes. The Discretionary Contribution Account merely provides a record of the bookkeeping entries relating to the contingent benefits that the Employer intends to provide Participant and shall thus reflect a mere unsecured promise to pay such amounts in the future.
|
1.23 |
Election Form
. “Election Form” shall mean the document required by the Committee to be submitted by a Participant, on a timely basis, which specifies (i) the amount of Base Annual Salary and/or Bonus the Participant has elected to defer with respect to a given Plan Year and (ii) the portion (if any) of Deferral Contributions which shall be distributable upon an Interim Distribution Date rather than the Benefit Distribution Date. For all Plan Years (excluding any partial Plan Year in which the Participant becomes eligible to participate pursuant to Article 2), an Election Form specifying the amount of Base Annual Salary the Participant has elected to defer with respect to a Plan Year and the portion (if any) of Deferral Contributions which shall be distributable upon an interim Distribution Date, rather than the Benefit Distribution Date, must be submitted at least fifteen (15) days prior to January 1, the effective date of the Election Form, in order to be deemed timely. Notwithstanding the foregoing, in the case of the first year in which an Employee becomes eligible to participate in the Plan, an election to defer Base Annual Salary may be made within thirty (30) days after the date the Participant becomes eligible to participate in the Plan. For any full or partial Plan Year, an Election Form shall only be effective with respect to Base Annual Salary or with respect to independent members of the board of directors, any direct compensation (other than long-term incentive compensation) for Service on the Board, which shall be earned after the effective date of the Election Form. For all Plan Years, an Election Form specifying the amount of the Participant’s Bonus that the Participant has elected to defer with respect to a Plan Year and the portion (if any) of such Bonus which shall be distributable upon an Interim Distribution Date, rather than the Benefit Distribution Date, must be submitted no later than June 30 of the Plan Year in which the Bonus is earned, in order to be deemed timely. In the event a Participant fails to submit an Election Form with respect to Base Annual Salary and/or Bonus with respect to a Plan Year or fails to submit such form on a timely basis, the Participant shall not make Deferral Contributions of Base Annual Salary and/or Bonus, as the case may be, during the Plan Year, and the Participant shall not be entitled to Matching Contributions attributable to Base Annual Salary and/or Bonus, as the case may be, for such Plan Year. In the event that a Participant fails to submit an Election Form for both Base Annual Salary or Bonus or fails to submit such form on a timely basis, the Participant shall not be entitled to Discretionary Contributions attributable to the Plan Year.
|
1.24 |
Elective Deductions
. “Elective Deductions” shall mean those deductions from a Participant’s Base Annual Salary or Bonus for amounts voluntarily deferred or contributed by the Participant pursuant to any qualified or non-qualified deferred compensation plan, including, without limitation, amounts deferred pursuant to Code Section 125, 132(f)(4), 402(e)(3) and 402(h), provided, however, that all such amounts would have been payable to the Participant in cash had there been no such deferral.
|
1.25 |
Employer
. “Employer” shall mean the Company and/or any of its subsidiaries (now in existence or hereafter formed or acquired) that have affirmatively adopted the Plan.
|
1.26 |
Enrollment Forms
. “Enrollment Forms” shall mean the Participation Agreement, the initial Election Form, the Retirement Benefit Distribution Form and any other forms or documents which may be required of a Participant by the Committee, in its sole discretion,
prior to
and as a condition of participating in the Plan.
|
1.27 |
ERISA
. “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended, and the regulations and other authority issued thereunder by the appropriate governmental authority. References herein to any section of ERISA shall include references to any successor section or provision of ERISA.
|
1.28 |
Exchange Act
. “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
|
1.29 |
Financial Emergency
. “Financial Emergency” shall mean an unanticipated emergency and severe financial hardship to the Participant resulting from a sudden and unexpected illness or accident of the Participant or a dependent (as defined in Code Section 152(a)) of the Participant, a loss of the Participant’s property due to casualty, or such other extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. The circumstances that will constitute an unforeseeable emergency will be determined by the Committee in its sole discretion and will depend upon the facts of each case, however, a Financial Emergency shall not be deemed to exist to the extent that such hardship is or may be relieved;
|
(i) |
through reimbursement or compensation by insurance or otherwise,
|
(ii) |
by liquidation of the Participant’s assets, to the extent the liquidation of such assets would not itself cause severe hardship, or
|
(iii) |
by cessation of Deferral Contributions under the Plan.
|
1.30 |
Interim Distribution Date
. “Interim Distribution Date” shall mean the first day of any calendar year, selected by the Participant, upon which the designated portion of Deferral Contributions (as well as any appreciation or depreciation of such amounts due to Investment Adjustments) attributable to a given Plan Year shall be distributed in a lump sum payment. Notwithstanding the prior sentence, in no event shall a Participant be permitted to select a date which is less than three (3) years from the end of the Plan Year to which the Election Form relates.
|
1.31 |
Investment Adjustment(s)
. “Investment Adjustment(s)” shall mean any appreciation credited to (as income or gains) or depreciation deducted from (as losses) a Participant’s Deferral Contribution Account, Matching Contribution Account and/or Discretionary Contribution Account, in accordance with such Participant’s selection of Investment Benchmarks pursuant to the Participant’s Investment Re-Allocation Form(s) and/or Investment Allocation Form(s).
|
1.32 |
Investment Allocation Form
. “Investment Allocation Form” shall be subject to the conditions described in Section 3.4 and (i) shall apply with respect to sixty (60) percent of those Deferral Contributions, Matching Contributions and Discretionary Contributions made to the Plan after the effective date of the Investment Allocation Form but prior to the timely filing of a subsequent Investment Allocation Form and (ii) shall determine the manner in which sixty (60) percent of such Deferral Contributions, Matching Contributions and/or Discretionary Contributions shall be
initially
allocated by the Participant among the various Investment Benchmarks within the Plan. The remaining forty (40) percent of all Deferral Contributions, Matching Contributions and Discretionary Contributions shall be automatically and irrevocably allocated to the Restricted Investment Benchmark pursuant to the language of Section 3.4. A new Investment Allocation Form may be submitted by the Participant in electronic, telephonic or paper format, on a daily basis provided that such new Investment Allocation Form is submitted in a timely manner. An Investment Allocation Form shall be deemed timely if submitted to the Committee in accordance with the procedures and deadlines established by the Committee.
|
1.33 |
Investment Benchmark
. “Investment Benchmark” shall mean an investment fund made available to Participants by the Investment Management Committee for purposes of valuing amounts contributed to the Plan.
|
1.34 |
Investment Management Committee
. “Investment Management Committee” shall mean the committee described in Section 12.6.
|
1.35 |
Investment Re-Allocation Form
. “Investment Re-Allocation Form” shall re-direct the manner in which the portion of any and all earlier Deferral Contributions, Matching Contributions and/or Discretionary Contributions, as well as any appreciation (or depreciation) to-date, (other than that portion irrevocably allocated to the Restricted Investment Benchmark), are invested within the Investment Benchmarks available in the Plan. An Investment Re-Allocation Form shall be inapplicable to those amounts initially allocated to the Restricted Investment Benchmark. An Investment Re-Allocation Form may be submitted by the Participant and may be submitted in electronic, telephonic or paper format on a daily basis with respect to any portion of the (i) Deferral Contribution Account, (ii) Matching Contribution Account and/or (iii) Discretionary Contribution Account, at such time (excluding that portion irrevocably allocated to the Restricted Investment Benchmark), provided that such Investment Re-Allocation. Form is submitted in a timely manner. An Investment Re-Allocation Form shall be deemed timely if submitted to the Committee in accordance with the procedures and deadlines established by the Committee.
|
1.36 |
Matching Contribution
. “Matching Contribution” shall mean the aggregate amount contributed by the Company or the Employer (as applicable) to the Plan on a Participant’s behalf during a given Plan Year, based on such Participant’s Deferral Contributions from Base Annual Salary only, of up to 3% of the amount of Base Annual Salary deferred by the Participant. Such Matching Contributions shall be “credited” to the Participant’s Matching Contribution Account as of the date determined appropriate by the Company or Employer (as applicable) in its sole discretion.
|
1.37 |
Matching Contribution Account
. “Matching Contribution Account” shall mean a Participant’s aggregate Matching Contributions, as well as any appreciation (or depreciation) specifically attributable to such Matching Contributions due to Investment Adjustments, reduced to reflect all prior distributions and withdrawals. The Committee shall maintain separate subaccounts for each individual who was a Participant prior to January 1, 2005. One such subaccount (referred to as the Pre-2005 Matching Contribution Subaccount) shall consist of Matching Contributions that were vested within the meaning of Code Section 409A as of December 31, 2004, as well as any appreciation (or depreciation) specifically attributable to such Matching Contributions due to Investment Adjustments, reduced to reflect all prior distributions form such subaccount. The other such subaccount (referred to as the Post-2004 Matching Contribution Subaccount) shall consist of Matching Contributions that were not vested within the meaning of Code Section 409A as of December 31, 2004 and Matching Contributions made to the Plan on or after January 1, 2005, as well as appreciation (or depreciation) specifically attributable to such Matching Contributions due to Investment Adjustments, reduced to reflect all prior distributions from such subaccount. The Matching Contribution Account shall be utilized solely as a device for the measurement of amounts to be paid to the Participant under the Plan. The Matching Contribution Account shall not constitute or be treated as an escrow, trust fund, or any other type of funded account for Code or ERISA purposes and, moreover, contingent amounts credited thereto shall not be considered “plan assets” for ERISA purposes. The Matching Contribution Account merely provides a record of the bookkeeping entries relating to the contingent benefits that the Employer intends to provide Participant and shall thus reflect a mere unsecured promise to pay such amounts in the future.
|
1.38 |
Participant
. “Participant” shall mean any employee or independent member of the board of directors (i) who is selected to participate in the Plan in accordance with Section 2.1, (ii) who elects to participate in the Plan, (iii) who signs the applicable Enrollment Forms (and other forms required by the Committee) on a timely basis, and (iv) whose signed Enrollment Forms (and other required forms) are accepted by the Committee.
|
1.39 |
Participation Agreement
. “Participation Agreement” shall mean the separate written agreement entered into by and between the Employer and the Participant, which shall indicate the Participant’s intent to defer compensation subject to the terms of the Plan and the Participation Agreement itself. The Participation Agreement shall include the matching formula applicable to such Participant for determining the amount of Matching Contributions as well as the vesting schedules (if any) which shall supercede the standard vesting schedule described in Section 3.7 of the Plan.
|
1.40 |
Person
. “Person” shall mean an individual, a partnership, a corporation, an association, a joint stock company, a trust, a joint venture, an unincorporated organization and a governmental entity or any department, agency or political subdivision thereof.
|
1.41 |
Plan
. “Plan” shall mean the American Axle & Manufacturing Holdings Inc. Executive Deferred Compensation Plan, which shall be evidenced by this instrument, each Participation Agreement and by each Enrollment Form, as they may be amended from time to time.
|
1.42 |
Plan Year
. “Plan Year” shall mean the initial period beginning on July 1, 1999 and ending on December 31, 1999. Thereafter, the term “Plan Year” shall mean the period beginning on January 1 of each year and ending December 31. Accordingly, Plan quarters shall commence on January 1, April 1, July 1 and October 1 of each year.
|
1.43 |
Post-2004 Subaccounts
. “Post-2004 Subaccounts” shall mean the aggregate of a Participant’s Post-2004 Deferral Contribution Subaccount, Post-2004 Matching Contribution Subaccount and Post-2004 Discretionary Contribution Subaccount.
|
1.44 |
Pre-2005 Subaccounts
. “Pre-2005 Subaccounts” shall mean the aggregate of a Participant’s Pre-2005 Deferral Contribution Subaccount, Post-2005 Matching Contribution Sub-Account and Post-2005 Discretionary Contribution Subaccount.
|
1.45 |
Restricted Investment Benchmark
. “Restricted Investment Benchmark” shall mean the investment fund which shall be used by the Investment Management Committee for purposes of valuing the portion of a Participant’s Deferral Contributions, Matching Contributions, and/or Discretionary Contributions which shall be, pursuant to Sections 1.33 and 3.4, automatically and irrevocably allocated to such fund at the time of initial deferral.
|
1.46 |
Retirement, Retires or Retired
. “Retirement,” “Retires” or “Retired” shall mean, with respect to a Participant, severance from regular employment from all Employers (and all other affiliates of the Company) on or after the earlier of the (i) attainment of age sixty-five (65), (ii) attainment of age fifty-five (55) with ten (10) Years of Service, or (iii) otherwise eligible to retire as an early retiree under a retirement plan sponsored the Company; for any reason excluding an authorized leave of absence, Disability, death or for-cause termination.
|
1.47 |
Retirement Benefit
. “Retirement Benefit” shall mean the benefit set forth in Article 7.
|
1.48 |
Retirement Benefit Distribution Form
. “Retirement Benefit Distribution Form” shall mean the document, executed by the Participant, which specifies the manner in which the Participant shall have the balance of his accounts distributed in the event his Benefit Distribution Date is triggered due to such Participant’s Retirement from the Company (or Employer, as applicable). The Participant shall select to receive the Retirement Benefit in a lump sum or in substantially equal annual payments over a period of five (5) or ten (10) years. The Retirement Benefit Distribution Form must be provided to the Committee along with all other Enrollment Forms, pursuant to Article 2, prior to participating in the Plan. Notwithstanding the prior language of this Section, the Participant may submit a subsequent Retirement Benefit Distribution Form in order to change the form of distribution of a Participant’s Pre-2005 Subaccounts, only if (I) in the case of a Participant’s Pre-2005 Subaccounts, it (A) is submitted at least thirteen (13) months prior to the Participant’s actual Benefit Distribution Date, and (B) it is approved by the Committee in its sole discretion, and (ii) in the case of a Participant’s Post-2004 Subaccounts, (A) such election may not take effect until at least twelve (12) months after the date on which the subsequent Retirement Benefit Distribution Form is submitted to the Committee, (B) the first payment with respect to such election is deferred for a period of at least five (5) years from the date such payment would otherwise have been made, (C) any election may not be made less than twelve (12) months prior to the date of the first scheduled payment, (D) the election does not result in the acceleration, within the meaning of Code Section 409A, of the time or schedule of any payment under the Plan, and (E) it is approved by the Committee in its sole discretion.
|
1.49 |
Specified Employee
. “Specified Employee” shall mean a key employee as defined in Code Section 416(i) without regard to paragraph (5) thereof.
|
1.50 |
Termination Benefit
“Termination Benefit” shall mean the benefit set forth in Article 6.
|
1.51 |
Termination of Employment
. “Termination of Employment” shall mean the voluntary or involuntary severing of employment, with any and all Employers, for any reason other than Retirement, Disability, death, or completion of a term as a member of the board of directors without re-election to the Board, or resignation from the board of directors
|
1.52 |
Trust
. “Trust” shall mean a grantor trust of the type commonly referred to as “rabbi trust” created to informally fund contingent benefits payable under the Plan.
|
1.53 |
Trustee
. “Trustee” shall mean the trustee named in the agreement establishing the Trust and such successor and/or additional trustees as may be named pursuant to the terms of the agreement establishing the Trust.
|
1.54 |
Vested Account Balance
. “Vested Account Balance” shall mean, as of any given measurement date called for under the Plan, the sum of the following: (i) the balance of the Participant’s Deferral Contribution Account, (ii) the Vested portion of the Participant’s Matching Contribution Account, and (iii) the Vested portion of the Participant’s Discretionary Contribution Account, as such accounts (or portions thereof) have been adjusted to reflect all applicable Investment Adjustments and all prior withdrawals and distributions, in accordance with Article 3 of the Plan and the Participation Agreement. Vesting in Matching Contributions and Discretionary Contributions shall occur in accordance with Section 3.7 of the Plan.
|
1.55 |
Years of Service
. “Years of Service” for purposes of vesting, matching and discretionary contributions shall mean the total number of twelve (12) month periods for which a Participant has earned credited service in any retirement plan sponsored by the Employer.
|
2.1 |
Eligibility, Selection by Company or Employer
. Those employees or independent members of the board of directors who are (i) determined by the Company (or Employer, as applicable) to be includable in a select group of management or highly compensated employees of the Company (or Employer, as applicable) and (ii) specifically chosen by the Company (or Employer, as applicable) to participate in the Plan shall be eligible to participate in the Plan subject to the enrollment requirements described in Section 2.2.
|
2.2 |
Enrollment Requirements
. Each employee deemed eligible to participate in the Plan pursuant to Section 2.1, shall, as a condition to participating in the Plan, complete and return to the Committee all of the required Enrollment Forms, on a timely basis. In addition, the Committee shall in its sole discretion, establish such other enrollment requirements necessary for continued participation in the Plan.
|
2.3 |
Commencement of Participation
. Provided a Participant has met all enrollment requirements set forth in this Plan and required by the Committee, including returning the Enrollment Forms and other required documents to the Committee within the specified time period, the Participant’s participation shall commence as of the date established by the Committee in its sole discretion; provided, however, that such date may not be earlier than thirty (30) days prior to the date that an Employee submits all Enrollment Forms to the Committee. If a Participant fails to meet all such requirements within the specified time period with respect to any Plan Year, the Participant shall not be eligible to participate during that Plan Year.
|
3.1 |
Deferral Contributions
.
|
(a) |
Election to Defer
. A Participant may make an election to defer the receipt of amounts earned by the Participant, in the form of Base Annual Salary or Bonus, or with respect to independent members of the board of directors, any direct compensation (other than long-term incentive compensation) for service on the Board, during any Plan Year. The Participant’s intent to defer shall be evidenced by a Participation Agreement and annual Election Form, both completed and submitted to the Committee in accordance with such procedures and time frames as may be established by the Committee in its sole discretion. Amounts deferred by a Participant with respect to a given Plan Year shall be referred to collectively as a Deferral Contribution and shall be credited to a Deferral Contribution Account established in the name of the Participant.
|
(b) |
Components of Deferral Contributions
.
|
(i) |
Base Annual Salary
. A Participant may designate a percentage amount to be deducted from his Base Annual Salary. Such amount shall be withheld, in substantially equal installments, from each regularly scheduled payment of Base Annual Salary. Such equal installments shall be rounded up to the nearest whole dollar amount and shall not be adjusted during the Plan Year to reflect changes, if any, in the Participant’s Base Annual Salary.
|
(ii) |
Bonus
. A Participant may designate a percentage amount or a percentage amount in excess of a fixed dollar amount, to be deducted from his Bonus attributable to the full or short Plan Year (as applicable).
|
(iii) |
Director Compensation
. A Participant may designate a percentage amount to be deducted from his direct compensation (other than long-term incentive compensation) for service on the Board. Such amount shall be withheld from each scheduled payment of such compensation. Such installments shall be rounded up to the nearest whole dollar amount.
|
(c) |
Minimum Deferral
.
|
(i) |
Minimum
. A Participant may elect to defer, pursuant to an Election Form, one or more of the following forms of compensation in the following minimum amounts:
|
Deferral Category
|
Minimum Amount
|
Base Annual Salary
|
6%
|
Bonus
|
6%
|
Director Compensation
|
6%
|
(ii) |
Short Plan Year
. If an employee first becomes a Participant after the first day of any Plan Year, the minimum deferral of each of the Participant’s Base Annual Salary or Bonus shall be an amount equal to the minimum set forth above, multiplied by a fraction, the numerator of which is the number of complete months remaining in the Plan Year and the denominator of which is 12.
|
(d) |
Maximum Deferral
. For any given Plan Year the Committee may permit a Participant to defer, pursuant to an Election Form, one or more of the following forms of compensation up to the following maximum percentages:
|
Deferral Category
|
Minimum Amount
|
Base Annual Salary
|
75%
|
Bonus
|
75%
(of total bonus)
|
Director Compensation
|
75%
|
3.2 |
Matching Contributions
. A Participant may be credited with a Matching Contribution for any Plan Year, of up to 3% of Base Annual Salary. Such Matching Contributions shall be credited to a Matching Contribution Account in the name of the Participant. The Committee shall have sole discretion to determine with respect to each Plan Year and each Participant; (i) whether any Matching Contribution is due to the Participant; and (ii) the amount of such Matching Contribution.
|
3.3 |
Discretionary Contributions
. A Participant may be credited with Discretionary Contributions for any Plan Year in which such amounts are declared by the Company with respect to the Participant. Such Discretionary Contributions shall be credited to a Discretionary Contribution Account in the name of the Participant. The Committee shall have sole discretion to determine with respect to each Plan Year and each Participant: (i) whether any Discretionary Contribution was declared with respect to the Participant; and (ii) the amount of such Discretionary Contribution.
|
3.4 |
Selection of Investment Benchmarks
. The Participant shall, via his Investment Allocation Form(s), as more fully described in Section 1.32, and his Investment Re-Allocation Form(s), as more fully described in Section 1.35, select one or more Investment Benchmarks among which sixty (60) percent of his various contributions shall be distributed. The remaining forty (40) percent of his various contributions shall be automatically and irrevocably allocated to the Restricted Investment Benchmark. At the beginning of each Plan Year, the Committee shall provide the Participant with a list and description of Investment Benchmarks available as well as a description of the Restricted Investment Benchmark. From time to time, in the sole discretion of the Investment Management Committee, the Investment Benchmarks available within the Plan may be revised. All Investment Benchmark selections must be denominated in whole percentages unless the Investment Management Committee determines that lower increments are acceptable. A Participant may make changes in his selected Investment Benchmarks on a daily basis via submission of a new Investment Allocation Form, as described in and subject to the language of Section 1.32 via submission of a new Investment Re-Allocation Form, as described in and subject to the language of Section 1.35.
|
3.5 |
Adjustment of Participant Accounts
. While a Participant’s accounts do not represent the Participant’s ownership of, or any ownership interest in, any particular assets, the Participant’s accounts shall be adjusted in accordance with the Investment Benchmark(s) chosen by the Participant on his (i) Investment Allocation Form or (ii) Investment Re-Allocation Form, subject to the conditions and procedures set forth herein or established by the Committee from time to time. Any cash earnings generated under an Investment Benchmark (such as interest and cash dividends and distributions) shall, at the Committee’s sole discretion, either be deemed to be reinvested in that Investment Benchmark or reinvested in one or more other Investment Benchmark(s) designated by the Committee. All notional acquisitions and dispositions of investments which occur within a Participant’s accounts, pursuant to the terms of the Plan, shall be deemed to occur at such times as the Committee shall determine to be administratively feasible in its sole discretion and the Participant’s accounts shall be adjusted accordingly. Therefore, if a distribution or re-allocation must occur pursuant to the terms of the Plan and all or some portion of the Account Balance must be valued in connection with such distribution or re-allocation (to reflect Investment Adjustments), the Committee may in its sole discretion, unless otherwise provided for in the Plan, select a date or dates which shall be used for valuation purposes. In the event the Committee exercises its discretion in selecting a proper date for purposes of valuing all or some portion of the Participant’s Account Balance in connection with a distribution or re-allocation, the Committee must do so on a basis which is reasonable and consistent. Notwithstanding anything to the contrary, following a Change in Control, Investment Adjustments shall be made to each Participant’s Account as of the end of each calendar quarter in a manner no less favorable to Participants than the practices and procedures employed under the Plan, or as otherwise in effect, as of the date of the Change in Control.
|
3.6 |
Withholding of Taxes
.
|
(a) |
Annual Withholding from Compensation
. Except as herein noted, for any Plan Year in which Deferral Contributions, Matching Contribution and/or Discretionary Contributions are made to or vested within the Plan (as applicable), the Employer shall withhold the Participant’s share of FICA and other employment taxes from the portion of the Participant’s Base Annual Salary not deferred. If FICA or other employment taxes are payable by an independent member of the Board of Directors, such taxes will be the personal liability of that Participant. If deemed appropriate by the Committee, the Participant’s Election Form may be reduced in certain instances where necessary to facilitate compliance with applicable withholding requirements.
|
(b) |
Withholding from Benefit Distributions
. The Participant’s Employer (or the trustee of the Trust, as applicable), shall withhold from any payments made to a Participant under this Plan all applicable federal, state and local income, employment and other taxes required to be withheld by the Employer (or the trustee of the Trust, as applicable), in connection with such payments, in amounts and in a manner to be determined in the sole discretion of the Employer (or the trustee of the Trust, as applicable).
|
3.7 |
Vesting
.
|
(a) |
Vesting in Contributions
. The Participant shall at all times be one hundred percent (100%) vested in his Deferral Contributions, as well as in any appreciation (or depreciation) specifically attributable to such Deferral Contributions due to Investment Adjustments. The Participant shall vest in Matching Contributions and/or Discretionary Contributions, as well as in any appreciation (or depreciation) specifically attributable to such amounts due to Investment Adjustments, pursuant to the vesting schedule shown below. Notwithstanding the prior sentence, in the event a vesting schedule is contained in a Participant’s Participation Agreement, such vesting schedule shall supercede the vesting schedule shown below.
|
Years of Service
|
Vesting Percentage
|
<1
|
0%
|
<2
|
0%
|
<3
|
0%
|
<4
|
0%
|
<5
|
0%
|
5 or more
|
100%
|
(b) |
Forfeiture of Unvested Amounts
. As of the date of a Participant’s Termination of Employment, the Participant shall forfeit any unvested Matching Contributions and/or Discretionary Contributions, as well as any appreciation (or depreciation) attributable to such amounts due to Investment Adjustments.
|
(c) |
Vesting Upon Retirement, Death, Disability or a Covered Termination
. Notwithstanding any contrary language of this Plan, upon a Participant’s (i) termination due to Retirement, (ii) termination due to death, (iii) Disability or (iv) a Covered Termination (as such term has been defined in Section 1.16), such Participant shall be one hundred percent (100%) vested in all of his undistributed Deferral Contributions, Matching Contributions and/or Discretionary Contributions, as well as any appreciation (or depreciation) specifically attributable to such amounts due to Investment Adjustments.
|
(d) |
Vesting Upon Plan Termination
. Notwithstanding any contrary language of this Plan, in the event the Plan itself is terminated, the Participant shall be one hundred percent (100%) vested in all of his undistributed Deferral Contributions, Matching Contributions and/or Discretionary Contributions, as well as any appreciation (or depreciation) specifically attributable to such amounts due to Investment Adjustments.
|
(e) |
Acceleration of Vesting by Committee
. Notwithstanding anything to the contrary contained in the Plan or any individual’s Participation Agreement, the Committee shall have the authority, exercisable in its sole discretion, to accelerate the vesting of any amounts credited to the Matching Contribution Account or Discretionary Contribution Account of any Participant and any such acceleration shall be evidenced by a written notice to the Participant setting forth in detail the amounts affected by the Committee’s decision to accelerate vesting as well as the terms of the new vesting schedule applicable to such amounts.
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4.1 |
Financial Emergencies
. If a Participant experiences a Financial Emergency, the Participant may petition the Committee to suspend any deferrals of Base Annual Salary and Bonus or direct compensation (other than long-term incentive compensation) for service on the Board required to be made by the Participant pursuant to his current Election Form. The Committee shall determine, in its sole discretion, whether to approve the Participant’s petition. If the petition for a suspension is approved, suspension shall commence upon the date of approval and shall continue until the earlier of (i) the end of the Plan Year or (ii) the date the Financial Emergency ceases to exist, as determined by the Committee in its sole discretion. The Participant’s eligibility for Matching Contributions and/or Discretionary Contributions shall be similarly suspended. The suspension shall apply to deferrals of Base Annual Salary as well as to the pro-rata portion of Bonus deferral attributable to the period of suspension.
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5.1 |
Interim Distributions
. A Participant may make an advance election, at the time he files any Election Form for a given Plan Year, to have certain amounts payable from his Deferral Contribution Account at an Interim Distribution Date designated by the Participant, instead of payable at the Participants Benefit Distribution Date. Such amount(s) shall be measured on the applicable Interim Distribution Date and shall be payable within sixty (60) days of such Interim Distribution Date. The Participant’s selection of an Interim Distribution Date must comply with the language of Section 1.30. Notwithstanding a Participant’s advance election to designate an Interim Distribution Date or Dates, the amounts which would otherwise be subject to such Interim Distribution Date or Dates shall be distributable at such time as provided in Articles 6, 7, 8 or 9 as applicable, if such date occurs prior to any Interim Distribution Date.
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5.2 |
Withdrawal in the Event of a Financial Emergency
. A Participant who believes he has experienced a Financial Emergency may request in writing a withdrawal of a portion of his accounts necessary to satisfy the emergency. The Committee shall determine, in its sole discretion, (i) whether a Financial Emergency has occurred, (ii) the amount reasonably required to satisfy the Financial Emergency as well as (iii) the accounts from which the withdrawal shall be made; provided, however, that the withdrawal shall not exceed the Participant’s Vested Account Balance. In making any determinations under this Section 5.2, the Committee shall be guided by the prevailing authorities under the Code. If, subject to the sole discretion of the Committee, the petition for a withdrawal is approved, the distribution shall be made within sixty (60) days of the date of approval by the Committee.
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6.1 |
Termination Benefit
. In the event the Participant’s Benefit Distribution Date is triggered due to his Termination of Employment (as such term is defined in Section 1.50), the Participant shall receive a Termination Benefit and no other benefits shall be payable under the Plan.
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6.2 |
Payment of Termination Benefit
. Except as hereinafter provided, the Termination Benefit shall be a lump sum payment equal to the Participant’s Vested Account Balance and shall be made no later than sixty (60) days after the occurrence of the Participant’s Benefit Distribution Date. Notwithstanding the foregoing, distribution of a Specified Employee’s vested Post-2004 Subaccounts may not be made before the date which is six (6) months after the date of separation from service (or, if earlier, the date of death of the Specified Employee).
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6.3 |
Death Prior to Payment of Termination Benefit
. If a Participant dies after his Termination of Employment but before the Termination Benefit is paid to him, the Participant’s unpaid Termination Benefit shall be paid to the Participant’s Beneficiary at such time as it would otherwise have been paid to the Participant or Specified Employee under Section 6.2.
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7.1 |
Retirement Benefit
. In the event the Participant’s Benefit Distribution Date is triggered due to his Retirement (as such term is defined in Section 1.46), the Participant shall receive the Retirement Benefit and no other benefit shall be payable under the Plan.
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7.2 |
Payment of Retirement Benefit
. The Retirement Benefit shall be payable in the form previously selected by the Participant, pursuant to his Retirement Benefit Distribution Form, and shall commence (or be fully paid, in the event a lump sum form of distribution was selected) no later than sixty (60) days after the occurrence of the Participant’s Benefit Distribution Date; provided, however, that distribution of a Specified Employee’s Post-2004 Subaccounts may not be paid before the date which is six (6) months after the date of separation from service (or, if earlier, the date of death of the Specified Employee). The initial installment shall be based on the value of the Participant’s Vested Account Balance, measured on his Benefit Distribution Date and shall be equal to 1/n (where ‘n’ is equal to the total number of annual benefit payments not yet distributed). Subsequent installment payments shall be computed in a consistent fashion, with the measurement date being the anniversary of the original measurement date. In the event that the Post-2004 Subaccounts of a Specified Employee is to be paid in installments commencing on a date which is after the date on which the Specified Employee’s Pre-2005 Subaccounts is to begin, the amount of each installment shall be measured in the manner set forth in this Section 7.2 from the date on which distribution of each such subaccount begins. Notwithstanding the prior language of this Section, in the event the value of the Participant’s Vested Account Balance is less than fifty thousand dollars ($50,000), measured on the Benefit Distribution Date, the Participant’s Benefit Distribution Form shall be inapplicable and the Participant’s Retirement Benefit shall only be payable in a lump sum form.
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7.3 |
Death Prior to Completion of Retirement Benefit
. If a Participant dies after Retirement but before the Retirement Benefit has commenced or been paid in full, the Participant’s unpaid Retirement Benefit shall be paid to the Participant’s Beneficiary in a lump sum. Such lump sum payment shall be made within sixty (60) days of the date of the Participant’s death, equal to the Participant’s remaining Vested Account Balance.
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8.1 |
Pre-Retirement Death Benefit
. In the event the Participant’s Benefit Distribution Date is triggered due to his death during employment, the Participant’s Beneficiary shall receive the pre-retirement death benefit described below and no other benefits shall be payable under the Plan.
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8.2 |
Payment of Pre-Retirement Death Benefit
. The pre-retirement death benefit shall be a lump sum payment equal to the Participant’s Vested Account Balance and shall be made no later than sixty (60) days after the occurrence of the Participant’s Benefit Distribution Date.
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9.1 |
A Participant suffering a Disability shall receive a Disability Benefit equal to his Vested Account Balance. Subject to Article 5, the Disability Benefit shall be paid in a lump sum within sixty (60) days of the Committee’s exercise of such right, provided, however, that should the Participant otherwise have been eligible to Retire, he or she shall be paid a Retirement Benefit in accordance with Article 7.
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10.1 |
Beneficiary
. Each Participant shall have the right, at any time, to designate a Beneficiary or Beneficiaries to receive, in the event of the Participant’s death, those benefits payable under the Plan. The Beneficiary(les) designated under this Plan may be the same as or different from the Beneficiary designation made under any other plan of the Employer.
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10.2 |
Beneficiary Designation: Chance: Spousal Consent
. A Participant shall designate his Beneficiary by completing and signing a Beneficiary Designation Form, and returning it to the Committee or its designated agent. A Participant shall have the right to change his Beneficiary by completing, signing and submitting to the Committee a revised Beneficiary Designation Form in accordance with the Committee’s rules and procedures, as in effect from time to time. If the Participant names someone other than his spouse as a Beneficiary, a spousal consent, in the form designated by the Committee, must be signed by that Participant’s spouse and returned to the Committee. Upon acknowledgement by the Committee of a revised Beneficiary Designation Form, all Beneficiary designations previously filed shall be deemed canceled. The Committee shall be entitled to rely on the last Beneficiary Designation Form both (i) filed by the Participant and (ii) accepted by the Committee, prior to his death.
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10.3 |
Acceptance
. No designation or change in designation of a Beneficiary shall be effective until received and accepted by the Committee or its designated agent:
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10.4 |
No Beneficiary Designation
. If a Participant fails to designate a Beneficiary as provided above or, if all designated Beneficiaries predecease the Participant or die prior to complete distribution of the Participant’s benefits, then the Participant’s designated Beneficiary shall be deemed to be his surviving spouse. If the Participant has no surviving spouse, the benefits remaining under the Plan shall be payable to the executor or personal representative of the Participant’s estate.
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10.5 |
Doubt as to Beneficiary
. If the Committee has any doubt as to the proper Beneficiary to receive payments pursuant to this Plan, the Committee shall have the right, exercisable in its discretion, to cause the Participant’s Employer to withhold such payments until this matter is resolved to the Committee’s satisfaction.
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10.6 |
Discharge of Obligations
. The payment of benefits under the Plan to a Beneficiary shall fully and completely discharge all Employers and the Committee from all further obligations under this Plan with respect to the Participant, and the Participant’s Participation Agreement shall terminate upon such full payment of benefits.
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11.1 |
Termination
. Although the Employers anticipate that they will continue the Plan for an indefinite period of time, there is no guarantee that any Employer will continue the Plan or will not terminate the Plan at any time in the future. Accordingly, each Employer reserves the right to discontinue its sponsorship of the Plan and to terminate the Plan, at any time, with respect to its participating employees by action of its board of directors. Upon the termination of the Plan with respect to any Employer, all amounts credited to each of the Participant accounts of each affected Participant shall be 100% vested, and a Participant’s Pre-2005 Deferral Contribution Subaccount, Pre-2005 Matching Contribution Subaccount and Pre-2005 Discretionary Contribution Subaccount shall be paid to the Participant or, in the case of the Participant’s death, to the Participant’s Beneficiary, in a lump sum notwithstanding any elections made by the Participant, and the Participation Agreements relating to each of the Participant’s Pre-2005 Subaccounts shall terminate upon full payment of such Vested Account Balance. A Participant’s Post-2004 Subaccounts shall be paid to a Participant in accordance with the Participation Agreements relating to each of the Participant’s Post-2004 Subaccounts.
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11.2 |
Amendment
. The Company may, at any time, amend or modify the Plan in whole or in part with respect to any or all Employers by the actions of the Board; provided, however, that (i) no amendment or modification shall be effective to decrease or restrict the value of a Participant’s Vested Account Balance in existence at the time the amendment or modification is made, calculated as if the Participant had experienced a Termination of Employment as of the effective date of the amendment or modification, or, if the amendment or modification occurs after the date upon which the Participant was
eligible
to Retire, calculated as if the Participant had Retired as of the effective date of the amendment or modification, and (ii) except as specifically provided in Section 11.1, no amendment or modification shall be made after a Change in Control which adversely affects the vesting, calculation or payment of benefits hereunder or diminishes any other rights or protections any Participant or Beneficiary would have had, but for such amendment or modification, unless each affected Participant or Beneficiary consents in writing to such amendment
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11.3 |
Effect of Payment
. The full payment of the applicable benefit under the provisions of the Plan shall completely discharge all obligations to a Participant and his designated Beneficiaries under this Plan and each of the Participant’s Participation Agreements shall terminate.
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12.1 |
Committee Duties
. Except as provided in Section 12.6, this Plan shall be administered by the Management Benefits Committee (“Committee”) as specified by the Compensation Committee of the Board. Members of the Committee may be Participants under this Plan. The Committee shall also have the discretion and authority to (i) make, amend, interpret, and enforce all appropriate rules and regulations for the administration of this Plan and (ii) decide or resolve any and all questions including interpretations of this Plan, as may arise in connection with the Plan. Any individual serving on the Committee who is a Participant shall not vote or act on any matter relating solely to himself or herself. When making a determination or calculation, the Committee shall be entitled to rely on information furnished by Participant or the Company.
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12.2 |
Agents
. In the administration of this Plan, the Committee may, from time to time, employ agents and delegate to them such administrative duties as it sees fit (including acting through a duly appointed representative) and may from time to time consult with counsel who may be counsel to any Employer.
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12.3 |
Binding Effect of Decisions
. The decision or action of the Committee with respect to any question arising out of or in connection with the administration, interpretation and application of the Plan and rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in the Plan.
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12.4 |
Indemnity of Committee
. All Employers shall defend, indemnify and hold harmless the members of the Committee and the Investment Management Committee, and any employee to whom duties of the Committee or the Investment Management Committee may be delegated, against any and all claims, losses, damages, expenses or liabilities arising from any action or failure to act with respect to this Plan, except in case of willful misconduct by the Committee, the Investment Management Committee or any of its members or any such employee.
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12.5 |
Employer Information
. To enable the Committee to perform its functions, each Employer shall supply full and timely information to the Committee on all matters relating to the compensation of its Participants, the date and circumstances of the Retirement, Disability, death or Termination of Employment of its Participants, and such other pertinent information as the Committee may reasonably require.
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12.6 |
Investment Management Committee
. The Compensation Committee of the Board shall appoint an Investment Management Committee of three or more individuals who shall serve at the discretion of the Compensation Committee of the Board. The Investment Management Committee shall have the following duties and authority under the Plan:
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(a) |
The Investment Management Committee shall determine the Investment Benchmarks and Restricted Investment Benchmarks. The Investment Management Committee may suspend or terminate the use of any separate Investment Benchmark or Restricted Investment Benchmark at any time or times without necessity of Plan amendment.
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(b) |
The Investment Management Committee shall direct the investment and reinvestment of the principal and income of the Trust.
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13.1 |
The benefits provided for a Participant and Participant’s Beneficiary under the Plan are in addition to any other benefits available to such Participant under any other plan or program for employees of the Participant’s Employer. The Plan shall supplement and shall not supersede, modify or amend any other such plan or programs except as may otherwise be expressly provided.
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14.1 |
Presentation of Claim
. Any Participant or Beneficiary of a deceased Participant (such Participant or Beneficiary being referred to below as a “Claimant”) may deliver to the Committee a written claim for a determination with respect to the amounts distributable to such Claimant from the Plan. If such a claim relates to the contents of a notice received by the Claimant, the claim must be made within sixty (60) days after such notice was received by the Claimant. The claim must state with particularity the determination desired by the Claimant. All other claims must be made within one hundred eighty (180) days of the date on which the event that caused the claim to arise occurred. The claim must state with particularity the determination desired by the Claimant
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14.2 |
Notification of Decision
. The Committee shall consider a Claimant’s claim and shall deliver a Written reply within ninety (90) days. The Committee may, however, extend the reply period for a period not to exceed ninety (90) days beyond the initial ninety 90-day period, if special circumstances require an extension. If an extension is necessary, the Claimant shall receive a notice, before the initial 90-day period expires, which explains why the extension is necessary and when a decision on the claim is expected.
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(a) |
that the Claimant’s requested determination has been made, and that the claim has been allowed in full; or
|
(b) |
that the Committee has reached a conclusion contrary, in whole or in part, to the Claimant’s requested determination, and such notice must set forth in a manner calculated to be understood by the Claimant:
|
(i) |
the specific reason(s) for the denial of the claim, or any part of it;
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(ii) |
specific reference(s) to pertinent provisions of the Plan upon which such denial was based;
|
(iii) |
description of any additional material or information necessary for the Claimant to perfect the claim, and an explanation of why such material or information is necessary;
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(iv) |
an explanation of the claim review procedure set forth in Section 14.3 below;
|
(v) |
a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to copies of all documents, records and other information relevant to the Claimant’s claim for benefits;
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(vi) |
a statement of the Claimant’s right to bring a civil action under ERISA Section 502(a) following an adverse benefit determination on review;
|
(vii) |
the specific rule, guideline, protocol or similar criterion (if any) that was relied on in making the benefit determination, or a statement that the rule, guideline, protocol or other similar criterion was relied on and will be provided to the claimant free of charge upon request;
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(viii) |
the identity of the medical or vocational experts whose advice was obtained by the Committee in the process of deciding the claim, regardless of whether the advice was relied upon; and
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(ix) |
the identity of the medical or vocational experts whose advice was obtained by the Committee in the process of deciding the claim, regardless of whether the advice was relied upon.
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14.3 |
Review of a Denied Claim
. Within sixty (60) days after receiving a notice from the Committee that a claim has been denied, in whole or in part, or one hundred eighty (180) days in the case of a Disability Claim, a Claimant (or the Claimant’s duly authorized representative) may file with the Committee a written request for a review of the denial of the claim. Thereafter, the Claimant (or the Claimant’s duly authorized representative):
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(a) |
may review pertinent documents;
|
(b) |
may submit written comments, documents, records and other information relating to the claim; and/or
|
(c) |
may request a hearing, which the Committee, in its sole discretion, may grant.
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14.4 |
Review of Appeal
. The Committee’s decision on review shall take into account all comments, documents, records and other information submitted as part of the request for review, whether or not submitted as part of the initial benefit determination. In the case of a Disability Claim, the review of a denied claim shall be conducted by a reviewer, which is neither the individual who made the adverse benefit determination nor a subordinate of that individual. The reviewer shall not give deference to the original adverse determination, and if the claim denial was based, in whole or part, on a medical judgment, shall consult with a health care professional who has appropriate training and experience in the field of medicine involved in the medical judgment, but who was not consulted in connection with the adverse claim determination, or a subordinate of that individual.
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14.5 |
Decision on Review
. The Committee shall render its decision on review promptly, and not later than sixty (60) days (forty-five (45) days in the case of a Disability Claim) after the filing of a written request for review of the denial, unless a hearing is held or other special circumstances require additional time, in which case the Committee’s decision must be rendered within one hundred twenty (120) days (ninety (90) days in the case of a Disability Claim) from the request for review. If an extension is required, the Claimant shall receive a notice before the initial 60-day (or 45-day) period expires, which explains why the extension is required. Such decision must be written in a manner calculated to be understood by the Claimant, and it must contain:
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(a) |
specific reasons for the decision;
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(b) |
specific reference(s) to the pertinent Plan provisions upon which the decision was based;
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(c) |
a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the Claimant’s claim for benefits;
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(d) |
for Disability Claims, if an internal rule, guideline, protocol or other similar criterion was relied upon in making the adverse determination, either the specific rule, guideline or protocol, or other similar criterion or a statement that such rule, guideline, protocol or other similar criterion was relied upon in making the adverse determination and that a copy will be provided free of charge to the claimant upon request; and
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(e) |
a statement of the claimant’s right to bring an action under ERISA Section 502(a) and for Disability Claims the following statement: “You and your Plan may have other voluntary alternative dispute resolution options, such as mediation. One way to find out what may be available is to contact your local U.S. Department of Labor Office and your State insurance regulatory agency; and
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15.1 |
Establishment of the Trust
. The Company may establish a Trust which the Company and/or Employer shall fund in accordance with Section 15.4. The Trust is intended to be treated as a “grantor” trust under the Code, and the establishment of the Trust is not intended to cause Participants to realize current income an amounts contributed thereto, and the Trust shall be so interpreted.
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15.2 |
Interrelationship of the Plan and the Trust
. The provisions of the Plan and the Participation Agreement shall govern the rights of a Participant to receive distributions pursuant to the Plan. The provisions of the Trust shall govern the rights of the Employers, Participants and the creditors of the Employers to the assets transferred to the Trust.
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15.3 |
Distributions From the Trust
. Each Employer’s obligations under the Plan may be satisfied with Trust assets distributed pursuant to the terms of the Trust, and any such distribution shall reduce the Employer’s obligations under this Agreement.
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15.4 |
Trust Funding
.
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(a) |
Prior to Change of Control
.
The Company, in its sole discretion, may at any time, or from time to time, make deposits of cash or other property acceptable to the Trustee to be held, administered and disposed of by the Trustee as provided in the Trust Agreement.
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(b) |
After Change of Control
.
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(i) |
Initial Contribution
. Upon a Change of Control, Company shall as soon as possible, but in no event later than five days following the Change of Control, make a contribution to the Trust in an amount sufficient to pay each Participant or Beneficiary the benefits to which Participants or their Beneficiaries would be entitled pursuant to the terms of the Plan as of the date on which the Change of Control occurred, assuming that all Participants were 100% vested in their Account Balance as of such date.
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(ii) |
Elective Deductions
. As soon as practicable following the date on which a Participant would have received compensation had it not been deferred pursuant to the Plan, Company shall contribute to the Trust an amount equal to the Elective Deductions contributed to the Plan by Participant.
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(iii) |
Discretionary Contributions and Matching Contributions
. Discretionary Contributions and Matching Contributions, if any, declared by the Company or the Employer (as applicable) shall be contributed to the Trust as soon as practicable following the date the Company or the Employer (as applicable) declares such Discretionary Contribution or Matching Contribution.
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(iv) |
Additional Contributions
. As soon as possible after the end of each calendar quarter, but in no event later than the date the Company receives the written account of the Trustee’s administration of the trust for such calendar quarter, the Company shall determine the aggregate amount of the benefits which would be payable to all Participants and their Beneficiaries, assuming that all Participants are 100% vested in their Account Balance as of the end of such calendar quarter. In the event that the aggregate amount of benefits which would be payable to all Participants and their Beneficiaries, assuming that all Participants are 100% vested in their Account Balance as of the end of such calendar quarter, exceeds the aggregate value of Trust assets as of such date, the Company shall, within five days of its receipt of the written account of the Trustee, contribute to the Trust an amount equal to the excess of the Participant Account Balances over the aggregate value of the Trust assets.
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16.1 |
Status of Plan
. The Plan is intended to be a plan that is not qualified within the meaning of Code Section 401(a) and that “is unfunded and is maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees” within the meaning of ERISA. The Plan shall be administered and interpreted to the extent possible in a manner consistent with that intent. All Participant accounts and all credits and other adjustments to such Participant accounts shall be bookkeeping entries only and shall be utilized solely as a device for the measurement and determination of amounts to be paid under the Plan. No Participant accounts, credits or other adjustments under the Plan shall be interpreted as an indication that any benefits under the Plan are in any way funded.
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16.2 |
Unsecured General Creditor
. Participants and their Beneficiaries, heirs, successors and assigns shall have no legal or equitable rights, interests or claims in any Property or assets of an Employer. For purposes of the payment of benefits under this Plan, any and all of an Employer’s assets, shall be, and remain, the general, unpledged unrestricted assets of the Employer. Any Employer’s obligation under the Plan shall be merely that of an unfunded and unsecured promise to pay money in the future.
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16.3 |
Employer’s Liability
. An Employer’s liability for the payment of benefits shall be defined only by the Plan and the Participation Agreement, as entered into between the Employer and a Participant. An Employer shall have no obligation to a Participant under the Plan except as expressly provided in the Plan and his Participation Agreement.
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16.4 |
Nonassignability
. Neither a Participant nor any other person shall have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, hypothecate, alienate or convey in actual receipt, the amount, if any, payable hereunder, or any part thereof, which are, and all rights to which are expressly declared to be, unassignable and non-transferable. No part of the amounts payable shall, prior to actual payment, be subject to seizure, attachment, garnishment or sequestration for the payment of any debts, judgments, alimony or separate maintenance owned by a Participant or any other person, be transferable by operation of law in the event of a Participant’s or any other person’s bankruptcy or insolvency or be transferable to a spouse as a result of a property settlement or otherwise.
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16.5 |
Not a Contract of Employment
. The terms and conditions of this Plan and the Participation Agreement shall not be deemed to constitute a contract of employment between any Employer and the Participant. By participating in the Plan, the Participant hereby acknowledges that such employment is “at will” and can be terminated at any time for any reason, or no reason, with or without cause, and with or without notice, except as otherwise provided in a written employment agreement. Nothing in this Plan or any Participation Agreement shall be deemed to give a Participant the right to be retained in the service of any Employer as an employee or to interfere with the right of any Employer to discipline or discharge the Participant at any time.
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16.6 |
Furnishing Information
. A Participant or his Beneficiary will cooperate with the Committee by furnishing any and all information requested by the Committee and take such other actions as may be requested in order to facilitate the administration of the Plan and the payments of benefits hereunder, as the Committee may deem necessary.
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16.7 |
Terms
. Whenever any words are used herein in the masculine, they shall be construed as though they were in the feminine in all cases where they would so apply; and whenever any words are used herein in the singular or in the plural, they shall be construed as though they were used in the plural or the singular, as the case may be, in all cases where they would so apply.
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16.8 |
Captions
. The captions of the articles, sections or paragraphs of this Plan are for convenience only and shall not control or affect the meaning or construction of any of its provisions.
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16.9 |
Governing Law
. Subject to ERISA, the provisions of this Plan shall be construed and interpreted according to the internal laws of the State of Delaware without regard to its conflicts of laws and principles.
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16.10 |
Notice
. Any notice or filing required or permitted to be given to the Committee under this Plan shall be sufficient if in writing and hand-delivered, or sent by registered or certified mail, to the address below:
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16.11 |
Successors
. The provisions of this Plan shall bind and inure to the benefit of the Participant’s Employer and its successors and assigns and the Participant and the Participant’s designated Beneficiaries.
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16.12 |
Validity
. In case any provision of this Plan shall be illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but this Plan shall be construed and enforced as if such illegal or invalid provision had never been inserted herein.
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16.13 |
Incompetent
. If the Committee determines in its discretion that a benefit under this Plan is to be paid to a minor, a person declared incompetent or to a person incapable of handling the disposition of that person’s property, the Committee may direct payment of such benefit to the guardian, legal representative or person having the care and custody of such minor, incompetent or incapable person. The Committee may require proof of minority, incompetence, incapacity or guardianship, as it may deem appropriate prior to distribution of the benefit. Any payment of a benefit shall be a payment for the account of the Participant and the Participant’s Beneficiary, as the case may be, and shall be a complete discharge of any liability under the Plan for such payment amount.
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16.14 |
Distribution in the Event of Taxation
. lf, for any reason, all or any portion of a Participant’s Pre-2005 Subaccounts under this Plan becomes taxable to the Participant prior to receipt, a Participant may petition the Committee or the trustee of the Trust, as applicable, for a distribution of that portion of his Pre-2005 Subaccounts that has become taxable. Upon the grant of such a petition, which grant shall not be unreasonably withheld, a Participant’s Employer shall distribute to the Participant immediately, funds from the Participant’s Pre-2005 Subaccounts in an amount equal to the taxable portion of his Pre-2005 Subaccounts (which amount shall not exceed a Participant’s unpaid Vested Account Balance of the Participant’s Pre-2005 Subaccounts). If the petition is granted, the tax liability distribution shall be made within ninety (90) days of the date when the Participant’s petition is granted. Such a distribution shall affect and reduce the benefits to be paid under this Plan.
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16.15 |
Insurance
. The Employers, on their own behalf or on behalf of the trustee of the Trust, and, in their sole discretion, may apply for and procure insurance on the life of the Participant, in such amounts and in such forms as the Trust may choose. The Employers or the trustee of the Trust, as the case may be, shall be the sole owner and beneficiary of any such insurance. The Participant shall have no interest whatsoever in any such policy or policies, and at the request of the Employers shall submit to medical examinations and supply such information and execute such documents as may be required by the insurance company or companies to whom the Employers have applied for insurance.
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American Axle & Manufacturing Holdings, Inc.
A Delaware Corporation |
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By:
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/s/ John. E. Jerge |
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Name:
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John E. Jerge
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(printed name) | |||
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Title:
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Vice President Human Resources
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American Axle & Manufacturing Holdings, Inc.,
a Delaware Corporation |
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By:
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/s/ John. E. Jerge |
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John. E. Jerge
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Its:
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Vice President Human Resources
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American Axle & Manufacturing Holdings, Inc.,
a Delaware Corporation
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By:
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/s/ John. E. Jerge |
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John. E. Jerge
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Vice President Human Resources
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AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.,
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a Delaware Corporation
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By:
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/s/ Terri M. Kemp
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Its:
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Ex Dir - HR & LR
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1. |
Section 1.32 of the Plan is hereby amended in its entirety to state as follows
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2 . |
Section 1.35 of the Plan is hereby amended in its entirety to state as follows:
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AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
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By:
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/s/ Terri M. Kemp
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Terri M. Kemp
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Vice President Human Resources
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1.1. |
Purpose
. The purpose of this Executive Retirement Savings Plan (the “
Plan
”) is to provide a select group of highly compensated employees of American Axle & Manufacturing Holdings, Inc. (the “
Company
,” and together with its subsidiaries, the “
Company Group
”) and its selected subsidiaries the opportunity to defer the receipt of income that would otherwise be payable to them. It is intended that the Plan, by providing these eligible persons with these benefits and the deferral of income tax recognition of these benefits, will assist in retaining and attracting individuals of exceptional ability.
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1.2. |
Effective Date
. It is the intent that all of the amounts contributed under the Plan and benefits provided hereunder will be subject to the terms of Section 409A of the Code, and the Plan shall be effective as of January 1, 2019.
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1.3. |
Plan Type
. For purposes of Section 409A of the Code, the Plan shall be considered a nonelective account balance plan as defined in Treas. Reg. §1.409A-1(c)(2)(i)(B), or as otherwise provided by the Code.
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2.1. |
401(k) Plan
. “401(k) Plan” means the Company’s 401(k) Savings Plan.
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2.2. |
Account
. “Account” means the account or accounts maintained on the books of the Company used solely to calculate the amount payable to each Participant under the Plan and shall not constitute a separate fund of assets. An Account shall be deemed to exist from the time amounts are first credited to an Account until such time that the entire Account balance has been distributed in accordance with the Plan.
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2.3. |
Administrator
. “Administrator” means the Management Benefits Committee acting through the Company’s Human Resources Department in the administration of the Plan pursuant to Section 7.2.
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2.4. |
Beneficiary
. “Beneficiary” means the person, persons or entity as designated by the Participant, or who is otherwise entitled under Article VI, to receive any Plan benefits payable after the Participant’s death.
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2.5. |
Board
. “Board” means the Board of Directors of the Company, or any successor thereto.
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2.6. |
Cause
. “Cause” means with respect to a Participant, unless otherwise defined in the employment agreement of the Participant, any of the following: (a) the Participant’s willful and continued failure or refusal to perform the duties reasonably required of him or her to the Company Group; (b) the Participant’s conviction of, or plea of
nolo contendere
to any felony or another crime involving dishonesty or moral turpitude or which reflects negatively upon the Company or its Subsidiaries or affiliates or otherwise impairs or impedes its operations; (c) the Participant’s engagement in any willful misconduct, gross negligence, act of dishonesty, violence or threat of violence (including any violation of federal securities laws) that is injurious to the Company Group; (d) the Participant’s material breach of any applicable agreement with or policy of the Company Group; (e) the Participant’s material failure to comply with any applicable laws and regulations or professional standards relating to the business of the Company Group; or (f) any other misconduct by the Participant that is injurious to the financial condition or business reputation of the Company Group.
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2.7. |
Code
. “Code” means the Internal Revenue Code of 1986, as it may be amended from time to time and as interpreted by regulations and rulings issued pursuant to the Code. Any references to a specific provision shall be deemed to include references to any successor Code provision.
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2.8. |
Company
. “Company” means American Axle & Manufacturing Holdings, Inc. and any successor.
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2.9. |
Compensation Committee
. “Compensation Committee” means the Compensation Committee of the Board.
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2.10. |
Determination Date
. “Determination Date” means any business day on which the New York Stock Exchange is open for trading.
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2.11. |
Disability
. “Disability” shall mean either of the following: (a) inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months; or (b) by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Company Group.
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2.12. |
Distribution Election
. “Distribution Election” means the form prescribed by the Management Benefits Committee and completed by the Participant, indicating the chosen form of payment for benefits payable from the Participant’s Account, as elected by the Participant.
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2.13. |
Eligible Person
. “Eligible Person” means (a) US-based executives of the Company Group having the title of Vice President and above and (b) any other US-based employee of the Company Group designated by the Compensation Committee consistent with Section 10.1.
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2.14. |
ERSP Contribution
. “ERSP Contribution” means the Company contribution credited to a Participant’s Account under Section 4.4.
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2.15. |
Executive Officer
. “Executive Officer” means any executive whose compensation must be reviewed and approved by the Compensation Committee.
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2.16. |
Interest
. “Interest” means the amount credited to or debited against a Participant’s Account on a Determination Date, which shall be based on the Valuation Funds chosen by the Participant pursuant to Section 4.3, in order to reflect the increase or decrease in value of the Account in accordance with the provisions of the Plan.
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2.17. |
Management Benefits Committee
. “Management Benefits Committee” means the committee appointed by the Compensation Committee to govern and monitor the administration of the Plan pursuant to Section 7.1.
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2.18. |
Management Investment Committee
. “Management Investment Committee” means the committee appointed by the Compensation Committee to govern and monitor all Plan assets and investments.
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2.19. |
Participant
. “Participant” means (i) any Eligible Person identified in Section 2.13(a) and (ii) any Eligible Person designated by the Compensation Committee in accordance with Section 2.13(b).
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2.20. |
Plan
. “Plan” means this Executive Retirement Savings Plan, as amended from time to time.
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2.21. |
Plan Year
.
“Plan Year” shall mean a calendar year (January 1-December 31).
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2.22. |
Retirement
. ”Retirement” means a Participant’s voluntary resignation at any time (a) after attaining age 65, (b) after attaining age 55 but prior to age 65 with ten or more years of continuous service with the Company Group, or (c) after attaining age 60 but prior to age 65 with five or more years of continuous service with the Company Group.
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2.23. |
Termination
. “Termination”, “terminates employment” or any other similar such phrase means the Participant’s “separation from service” with the Company Group, for any reason, within the meaning of Section 409A of the Code.
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2.24. |
Unforeseeable Emergency
. “Unforeseeable Emergency” means an event that results in a severe financial hardship to the Participant resulting from (a) an illness or accident of the Participant, the Participant’s spouse, the Participant’s beneficiary or a dependent of the Participant, (b) loss of the Participant’s property due to casualty or (c) other similar extraordinary and unforeseeable circumstances as a result of events beyond the control of the Participant, in each case in compliance with Section 409A of the Code.
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2.25. |
Valuation Funds
. “Valuation Funds” means one or more of the independently established funds or indices that are approved by the Management Investment Committee. These Valuation Funds are used solely to calculate the Interest that is credited to each Participant’s Account in accordance with Article IV, and the term “Valuation Funds” does not represent, nor should it be interpreted to convey, any beneficial interest on the part of the Participant in any asset or other property of the Company or any member of the Company Group. The determination of the increase or decrease in the performance of each Valuation Fund shall be made by the Management Investment Committee in its reasonable discretion. The Management Investment Committee shall select the various Valuation Funds available to the Participants and may add or remove any Valuation Funds on a prospective basis at any time in its sole discretion.
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3.1. |
Eligibility and Participation
.
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a) |
Eligibility
. All US-based executives of the Company Group having the title of Vice President and above shall be Eligible Persons. With respect to other employees of the Company, the Compensation Committee shall designate those employees of the Company Group who are Eligible Persons.
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b) |
Participation
. An individual’s participation in the Plan shall be effective upon the date such individual becomes an Eligible Person.
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3.2. |
Participant Elections
. No more than 30 days after a Participant is first designated as a Participant as set forth in Section 3.1(b) (or if such Participant was prior to such designation participating in another nonelective account balance plan of the Company Group, the first date on which such Participant may make such election in compliance with Section 409A of the Code), the Participant may submit the following forms to the Administrator:
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a) |
Distribution Election
. The Participant may submit a Distribution Election, on which the Participant shall elect a form of payment to be made with respect to the Participant’s Account. The Participant may submit a new Distribution Election at any time prior to the end of the 30-day period referenced in this Section 3.2, and the Distribution Election most recently filed at the end of such 30-day period shall be irrevocable. In the event that a Participant does not timely submit a properly completed Distribution Election, the form of payment deemed to be elected will be a lump sum.
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b) |
Allocation Election
. The Participant may submit an allocation form, which shall provide instructions on how the ERSP Contributions credited to the Participant’s Account shall be allocated among the various available Valuation Funds. In the event that a Participant does not submit a timely and properly completed allocation form, the Administrator shall allocate the ERSP Contributions to the default Valuation Fund designated by the Management Benefits Committee until a properly completed allocation form is submitted.
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3.3. |
Subsequent Distribution Election
. Except to the extent otherwise required or permitted under Section 409A of the Code, the Participant shall not be permitted to change or revoke the form of payment with respect to his or her Account on or after the date on which such election would otherwise be irrevocable under Section 3.2(a) unless all of the following requirements are satisfied with respect to such Participant’s subsequent election to change the form of payment: (i) such election shall not take effect until 12 months after the date on which the election is made; (ii) such election shall not apply to any scheduled distribution date that occurs 12 months or less after the date on which the election is made; and (iii) except in the case of a payment due to death, as described in Section 5.2, or Disability, as described in Section 5.3, the payment with respect to which such election is made must be deferred for a period of five years from the date such payment would otherwise have been paid (or in the case of annual installment payments, five years from the date the first annual installment payment would otherwise have been scheduled to be paid). A Participant may only make one subsequent Distribution Election under this Section 3.3, with respect to his or her Account.
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4.1. |
Accounts
. The ERSP Contributions and Interest thereon shall be credited to the Participant’s Account as otherwise provided in this Article IV. The Participant’s Account shall be used solely to calculate the amount payable to the Participant under the Plan and shall not constitute a separate fund of assets.
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4.2. |
Timing of Credits; Withholding
. Any ERSP Contributions shall be credited to a Participant’s Account as of a time and in a manner provided by the Administrator, but typically as soon as practicable in the first quarter of the calendar year following the Plan Year to which such ERSP Contribution relates. Any withholding of taxes or other amounts with respect to the ERSP Contribution credited to a Participant’s Account that is required by local, state or federal law shall reduce the amount credited to the Participant’s Account in any manner specified by the Management Benefits Committee. Any Participant who suffers a Termination and is vested in his or her Account in accordance with Section 4.6 at the time of Termination shall receive a final contribution within 30 days following such Participant’s Termination date.
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4.3. |
Valuation Funds
. A Participant shall be permitted to designate one or more Valuation Funds for the sole purpose of determining the amount of Interest to be credited or debited to the Participant’s Account. Such election shall designate how each ERSP Contribution shall be allocated among the available Valuation Fund(s). A Participant shall also be permitted to reallocate the balance in the Participant’s Account among the available Valuation Funds. The manner in which such elections shall be made and the frequency with which such elections may be changed and the manner in which such elections shall become effective shall be determined in accordance with the procedures adopted by the Management Investment Committee from time to time.
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4.4. |
ERSP Contributions
. A Participant’s Account shall be credited with an ERSP Contribution in accordance with this Section 4.4.
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a) |
Contribution Amount
. The amount of the ERSP Contribution for any Participant shall be stated as (i) a flat dollar amount, (ii) a percentage of the Participant’s base salary and annual incentive compensation paid in the applicable Plan Year
less
the maximum eligible Company matching and non-elective contributions to the 401(k) Plan in the Plan Year (irrespective of whether the Participant maximized the Company contributions or not) or (iii) a formula as determined by the Compensation Committee in its sole discretion.
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b) |
Special Contributions
. By way of further clarity, notwithstanding the provisions of Section 4.4(a), the Compensation Committee may make, in its complete and sole discretion, a special contribution on behalf of a Participant to such Participant’s Account with respect to a particular Plan Year in any amount as determined by the Compensation Committee. Such special contribution may be in addition to or in lieu of any other contribution with respect to the particular Plan Year, as determined by the Compensation Committee in its complete and sole discretion.
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c) |
No Guarantee of Future Contributions
. The designation of any Participant as being eligible to receive an ERSP Contribution in any year shall not be a guarantee of future contributions, and the crediting of any particular level of ERSP Contribution in any year shall not be a guarantee of that level in future years.
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4.5. |
Determination of Accounts
. Each Participant’s Account on a Determination Date shall consist of the balance of the Account as of the immediately preceding Determination Date, adjusted as follows:
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a) |
ERSP Contributions
. Each Account shall be increased by any ERSP Contribution credited since such prior Determination Date as set forth in Section 4.4.
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b) |
Distributions
. Each Account shall be reduced by the amount of each benefit payment made from that Account since the prior Determination Date. Distributions shall be deemed to have been made proportionally from each of the Valuation Funds maintained within such Account based on the proportion that such Valuation Fund bears to the sum of all Valuation Funds maintained within the Account for that Participant as of the Determination Date immediately preceding the date of payment.
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c) |
Interest
. Each Account shall be increased or decreased by the Interest credited or debited to such Account as though the balance of that Account was invested in the applicable Valuation Funds chosen by the Participant.
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4.6. |
Vesting of Accounts
. Unless otherwise specified by the Management Benefits Committee (with respect to non-Executive Officer Participants) or the Compensation Committee (with respect to Executive Officer Participants) in writing, or except as set forth in Section 4.7, each Participant shall be 100% vested in the Participant’s Account, including any Interest thereon, upon the earliest of: (a) death; (b) Disability; or (c) becoming eligible for Retirement.
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4.7. |
Forfeiture of Accounts
. Any Participant who Terminates employment before becoming fully vested in the Participant’s Account shall immediately forfeit the unvested balance of his or her Account. Any Participant whose employment is terminated for Cause, or whose employment is terminated for any reason at a time when such termination could have been for Cause, shall immediately forfeit the balance of his or her Account, including any vested amounts. In addition, if a Participant’s employment is not terminated for Cause, but the Management Benefits Committee (with respect to non-Executive Officer Participants) or the Compensation Committee (with respect to Executive Officer Participants) later determines that such termination could have been for Cause if all the facts had been known at the time of such termination, then any unpaid portion of the Participant’s Account shall be immediately forfeited as of the date of such Committee’s determination.
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4.8. |
Statement of Accounts
. To the extent that the Company does not arrange for a Participant’s Account balance to be accessible online by the Participant, the Administrator shall provide to each Participant a statement showing the balance in the Participant’s Account no less frequently than annually.
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5.1. |
A Participant’s Account
. The Participant’s vested Account balance shall be distributable to the Participant upon the Participant’s Termination.
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a) |
Form of Payment
. The form of benefit payment shall be that form selected by the Participant in his or her Distribution Election made (or deemed made) pursuant to Section 3.2(a) (as may be amended in accordance with a subsequent Distribution Election under Section 3.3), and as permitted pursuant to Section 5.5.
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b) |
Timing of Payment
. Benefits payable from a Participant’s Account shall be paid (if a lump sum) or commence (if installments) on the first Determination Date that occurs on or immediately following six months following the Participant’s Termination date. If installments, each subsequent payment shall occur in January of the next calendar year following the initial benefit payment.
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5.2. |
Death Benefit
. Upon the death of a Participant prior to the commencement of distributions from the Participant’s Account, the Company shall pay to the Participant’s Beneficiary an amount equal to the Participant’s vested Account balance in the form of a lump sum payment as soon as administratively practicable (but in no event more than 90 days) after the Participant’s death. In the event of the death of the Participant after the commencement of distributions from the Participant’s Account, the remaining unpaid balance of the Participant’s Account shall be paid to the Participant’s Beneficiary in the form of a lump sum as soon as administratively possible (but in no event more than 90 days) after the Participant’s death. If the Participant’s Beneficiary, estate or legal representative fails to notify the Management Benefits Committee of the death of the Participant in the manner specified in Section 10.9, such that the Company is unable to make timely payment hereunder, then the Company shall not be treated as in breach of the Plan and shall not be liable to the Beneficiary, estate or legal representative for any losses, damages, or other claims resulting from such late payment.
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5.3. |
Disability Distributions
. Upon a finding by the Management Benefits Committee that a Participant has suffered a Disability, the Company shall make a full distribution of the Participant’s Account. The payment of such distribution shall be made in the form of a lump sum in an amount equal to the Participant’s vested Account balance as soon as administratively practical (but in no event more than 90 days) after the date of such Disability.
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5.4. |
Permitted Acceleration of Payments
. To the extent permitted by Section 409A of the Code, the Management Benefits Committee may, in its sole discretion, accelerate the time or schedule of a distribution under the Plan, such as accelerated distributions to address the payment of employment taxes or early income inclusion that may occur for a Participant’s Account balance.
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5.5. |
Form of Payment
. Unless otherwise specified in this Article V, the benefits payable from a Participant’s Account shall be paid in the form of benefit as provided below, and specified by the Participant in the Distribution Election or as otherwise set forth in Section 3.2(a). The permitted forms of benefit payments are:
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a) |
A lump sum amount that is equal to the Participant’s vested Account balance; and
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b) |
Annual installments for a period of up to 10 years where the annual payment shall be equal to the Participant’s vested Account balance immediately prior to the payment, multiplied by a fraction, the numerator of which is one and the denominator of which commences at the number of annual payments initially chosen and is reduced by one in each succeeding year. Interest on the unpaid balance shall be based on the most recent allocation among the available Valuation Funds chosen by the Participant, made in accordance with Section 4.3.
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5.6. |
Small Account
. If the Participant’s vested Account balance as of the time the payments are to commence is less than $50,000, then such Account shall be paid in a lump sum, notwithstanding any election by the Participant to the contrary.
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5.7. |
Unforeseeable Emergency Distribution
. The Management Benefits Committee may at any time, upon written request of a Participant, cause to be paid to such Participant, an amount equal to all or any part of the Participant’s vested Account balance if the Management Benefits Committee determines, based on such reasonable evidence that it shall require, that such a payment is necessary for the purpose of alleviating the consequences of an Unforeseeable Emergency. Payments of amounts because of an Unforeseeable Emergency may not exceed the amount necessary to satisfy the Unforeseeable Emergency plus amounts necessary to pay taxes or penalties reasonably anticipated as a result of the distribution after taking into account the extent to which the Unforeseeable Emergency is or may be relieved through reimbursement or compensation from insurance or otherwise, or by liquidation of the Participant’s assets (to the extent the liquidation of such assets would not itself cause severe financial hardship). The amount of a Participant’s Account shall be reduced by the amount of any Unforeseeable Emergency distribution to the Participant.
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5.8. |
Withholding; Payroll Taxes
. The Company shall withhold from any payment made pursuant to the Plan any taxes required to be withheld from such payments under local, state or federal law.
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5.9. |
Payments in Connection with a Domestic Relations Order
. Notwithstanding anything herein to the contrary, the Company may make distributions to someone other than the Participant if such payment is necessary to comply with a domestic relations order, as defined in Section 414(p)(1)(B) of the Code, involving the Participant.
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5.10. |
Payment to Guardian
. If a Plan benefit is payable to a minor or a person declared incompetent or to a person incapable of handling the disposition of the property, then the Management Benefits Committee may direct payment to the guardian, legal representative or person having the care and custody of such minor, incompetent or person. The Management Benefits Committee may require proof of incompetency, minority, incapacity or guardianship as it may deem appropriate prior to distribution. Such distribution shall completely discharge the Management Benefits Committee and the Company from all liability with respect to such benefit.
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5.11. |
Effect of Payment
. The full payment of the applicable benefit under this Article V shall completely discharge all obligations on the part of the Company to the Participant (and the Participant’s Beneficiary) with respect to the operation of the Plan, and the Participant’s (and the Participant’s Beneficiary’s) rights under the Plan shall terminate.
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5.12. |
Amount of Payment
. Notwithstanding anything herein to the contrary, the amount payable from a Participant’s vested Account balance may be determined and valued within a period of up to 10 business days preceding the date of actual payment.
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6.1. |
Beneficiary Designation
. Each Participant shall have the right, at any time, to designate one or more persons or entity as a Beneficiary (both primary as well as secondary) to whom benefits under the Plan shall be paid in the event of the Participant’s death prior to complete distribution of the Participant’s vested Account balance. Each Beneficiary designation shall be in the form prescribed by the Administrator, including through an online designation system, and shall be effective only when filed with the Administrator during the Participant’s lifetime.
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6.2. |
Changing Beneficiary
. Except in instances when the listed Beneficiary is the spouse of the Participant, a Participant may change the Beneficiary designation without the consent of the previously named Beneficiary by filing a new Beneficiary designation with the Administrator during the Participant’s lifetime. If the listed Beneficiary is the spouse of the Participant, the Participant shall obtain such Beneficiary’s consent by the execution of a spousal consent form provided by the Company.
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6.3. |
No Beneficiary Designation
. If any Participant fails to designate a Beneficiary in the manner provided above, if the designation is void, or if the Beneficiary designated by a deceased Participant dies before the Participant or before complete distribution of the Participant’s benefits, and the Beneficiary designation form does not specify to whom payments should be made in such event, then the Participant’s Beneficiary shall be the Participant’s estate.
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6.4. |
Effect of Payment
. Payment to the Beneficiary shall completely discharge the Company’s obligations under the Plan.
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7.1. |
Management Benefits Committee
. The Compensation Committee shall appoint a Management Benefits Committee for the Plan.
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a) |
Appointment and Removal of Management Benefits Committee
. The Management Benefits Committee shall consist of three or more individuals appointed by, and serving at the discretion of, the Compensation Committee. A member of the Management Benefits Committee may (i) resign upon 30 days’ written notice to the Compensation Committee, or (ii) be removed from the Management Benefits Committee at any time at the discretion of the Compensation Committee.
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b) |
Decisions by Management Benefits Committee
. The Management Benefits Committee shall act by majority vote either at a meeting of the Management Benefits Committee or by written consent. Meetings may be attended telephonically.
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c) |
Authority
. The Management Benefits Committee shall: (i) monitor the performance of the Plan to ensure that the Plan is administered in accordance with its terms and in compliance with applicable law or regulation; (ii) have full and exclusive discretionary authority to determine all questions arising in the administration, application and interpretation of the Plan including the authority to correct any defect or reconcile any inconsistency or ambiguity in the Plan and the authority to determine a Participant’s eligibility to receive a benefit from the Plan and the amount of that benefit; (iii) determine all Claims appeals as set forth in Section 8.1 of the Plan and shall have the authority to determine all questions of fact relating to such an appeal, and any determination by the Management Benefits Committee pursuant to this Section 7.1(c) or Section 8.1 shall be binding and conclusive on all parties; and (iv) have the authority to make Plan amendments as long as such amendments do not have a significant cost impact to the Company. The Management Benefits Committee may also provide for the adoption of the Plan by an affiliated employer pursuant to such terms and conditions as the Management Benefits Committee, in its discretion, may determine. The Management Benefits Committee shall have the right to remove an affiliated employer as a Plan sponsor if, in its discretion, it deems such removal to be appropriate.
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d) |
Liability
. No member of the Management Benefits Committee or any other committee to which Plan administrative authority has been delegated, shall be personally liable by reason of any action taken by him or her in good faith or on his or her behalf as the Management Benefits Committee, nor for any mistake in judgment made in good faith.
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7.2. |
Administrator
. The Company shall be the Plan Administrator. The Administrator shall act on its behalf and perform the duties of the Plan Administrator as set forth herein. The Administrator shall administer the Plan in accordance with all applicable laws and regulations and, except as otherwise expressly provided to the contrary herein, shall have all powers and discretionary authority to carry out that obligation. Specifically, but not by way of limitation, the Administrator shall:
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a) |
Procedures and Forms
. Establish such administrative procedures and prepare, or cause to be prepared, such forms, as may be necessary or desirable for the proper administration of the Plan;
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b) |
Advisors
. Retain the services of such consultants and advisors as may be appropriate to the administration of the Plan;
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c) |
Payment of Benefits
. Direct, or establish procedures for, the payment of benefits from the Plan; and
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d) |
Plan Records
. Maintain, or cause to be maintained, all documents and records necessary or appropriate to the maintenance of the Plan.
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7.3. |
Binding Effect of Decisions
. The decision or action of any member of the Management Benefits Committee with respect to any question arising out of or in connection with the administration, interpretation and application of the Plan and the rules and regulations promulgated hereunder shall be final, conclusive and binding upon all persons having any interest in the Plan.
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7.4. |
Indemnity of Members of the Management Benefits Committee
. The Company shall indemnify and hold harmless the members of the Management Benefits Committee against any and all claims, loss, damage, expense or liability arising from any action or failure to act with respect to the Plan on account of such member’s service for the Management Benefits Committee, except in the case of gross negligence or willful misconduct.
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8.1. |
Claim
. Any person or entity claiming a benefit, or requesting an interpretation, ruling, or information under the Plan, shall present the request in writing to the Management Benefits Committee within one year following the date that such person or entity knew or, exercising reasonable care, should have known of such claim in accordance with Company policy. All decisions on review shall be final and bind all parties concerned.
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9.1. |
Amendment
. The Board or its appointed delegates may at any time amend the Plan by written instrument, notice of which is given to all the Participants and to each Beneficiary receiving installment payments who are affected by such amendment, except that no amendment shall reduce the amount vested or accrued in any Participant’s Account as of the date the amendment is adopted. In addition, any amendment which adds a distribution event to the Plan shall not be affective with respect to any Participant’s Account that is already established as of the time of such amendment. Notwithstanding anything in the Plan to the contrary, the Board or its appointed delegates shall have the unilateral right to amend the Plan to comply with Section 409A of the Code.
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9.2. |
Company’s Right to Terminate
. The Board may, in its sole discretion, terminate the entire Plan and require distribution of all benefits due under the Plan or portion thereof, provided that:
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a) |
The termination of the Plan does not occur proximate to a downturn in the financial health, as determined by the Management Benefits Committee, of the Company and all entities considered to be part of the same controlled group under Treas. Reg. §1.409A-1(g) (the “
AAM Controlled Group
”);
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b) |
The AAM Controlled Group also terminates all other plans or arrangements which are considered to be of a similar type as defined in Treas. Reg. §1.409A-1(c)(2)(i), or as otherwise provided by the Code;
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c) |
No payments made in connection with the termination of the Plan occur earlier than 12 months following the Plan termination date other than payments the Plan would have made irrespective of Plan termination;
|
d) |
All payments made in connection with the termination of the Plan are completed within 24 months following the Plan termination date;
|
e) |
The AAM Controlled Group does not establish a new plan of a similar type as defined in Treas. Reg. §1.409A-1(c)(2)(i), within three years following the Plan termination date; and
|
f) |
The AAM Controlled Group meets any other requirements deemed necessary to comply with provisions of the Code and applicable regulations which permit the acceleration of the time and form of payment made in connection with plan terminations and liquidations.
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10.1. |
Unfunded Plan
. The Plan is an unfunded plan maintained primarily to provide deferred compensation benefits for a select group of “management or highly-compensated employees” within the meaning of Sections 201, 301, and 401 of the Employee Retirement Income Security Act of 1974, as amended (“
ERISA
”), and therefore is exempt from the provisions of Parts 2, 3 and 4 of Title I of ERISA.
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10.2. |
Unsecured General Creditor
. The Plan constitutes an unsecured promise by the Company to pay benefits in the future. Notwithstanding any other provision of the Plan, all Participants and each Participant’s Beneficiary shall be unsecured general creditors, with no secured or preferential rights to any assets of the Company or any other party for payment of benefits under the Plan. The Plan is unfunded for Federal tax purposes and for purposes of Title I of the Employee Retirement Income Security Act of 1974. Any property held by the Company for the purpose of generating the cash flow for benefit payments shall remain its general, unpledged and unrestricted assets. The Company’s obligation under the Plan shall be an unfunded and unsecured promise to pay money in the future. No other member of the Company Group shall have any obligations or liabilities under the Plan. Any obligations on the Plan are solely those of the Company.
|
10.3. |
Trust Fund
. The Company shall be responsible for the payment of all benefits provided under the Plan. At its discretion, the Company may establish one or more trusts, with such trustees as the Board may approve, for the purpose of assisting in the payment of such benefits. The assets of any such trust shall be held for payment of all the Company’s general creditors in the event of insolvency. To the extent any benefits provided under the Plan are paid from any such trust, the Company shall have no further obligation to pay them. If not paid from the trust, such benefits shall remain the obligation of the Company.
|
10.4. |
Compliance with Section 409A of the Code
. It is intended that the Plan comply with the provisions of Section 409A of the Code, so as to prevent the inclusion in gross income of any amounts deferred hereunder in a taxable year that is prior to the taxable year or years in which such amounts would otherwise actually be paid or made available to the Participants or Beneficiaries. The Plan shall be construed, administered, and governed in a manner that affects such intent. Neither the Company, any other member of the Company Group nor any Committee guarantees or provides any warranties with respect to the tax treatment of amounts deferred under the Plan. Neither the Company, any other member of the Company Group, the Board, any director, officer, employee and advisor, nor any Committee (nor its designee) shall be held liable for any taxes, interest, penalties or other monetary amounts owed by any Participant, Beneficiary or other taxpayer as a result of the Plan. For purposes of the Plan, the phrase “permitted by Section 409A of the Code,” or words or phrases of similar import, shall mean that the event or circumstance shall only be permitted to the extent it would not cause an amount deferred or payable under the Plan to be includible in the gross income of a Participant or Beneficiary under Section 409A(a)(1) of the Code.
|
10.5. |
Nonassignability and Offset
.
|
a) |
Nonassignability
. Neither a Participant nor any other person shall have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer, hypothecate or convey in advance of actual receipt the amounts, if any, payable hereunder, or any part thereof, which are, and all rights to which are, expressly declared to be unassignable and non-transferable, other than (i) to a Participant’s Beneficiary pursuant to Article VI, (ii) pursuant to a domestic relations order deemed legally sufficient by the Management Benefits Committee, or (iii) by will or the laws of descent and distribution. No part of the amounts payable shall, prior to actual payment, be subject to seizure or sequestration for the payment of any debts, judgments, alimony or separate maintenance owed by a Participant or any other person, nor be transferable by operation of law in the event of a Participant’s or any other person’s bankruptcy or insolvency.
|
b) |
Offset
. If, at the time a payment is due hereunder, the Company determines that the Participant is indebted or obligated to the Company or any other member of the Company Group (including, but not limited to, for amounts owed as a result of the Participant’s breach of his or her fiduciary duty owed to, or breach of any restrictive covenant in effect with, the Company Group), then the payment to be made to or with respect to such Participant (including a payment to the Participant’s Beneficiary) may, at the discretion of the Company, be reduced by the amount of such indebtedness or obligation;
provided
,
however
, that an election by the Company to not reduce any such payment shall not constitute a waiver of its claim for such indebtedness or obligation.
|
10.6. |
Not a Contract of Employment
. The Plan shall not constitute a contract of employment between the Company Group and the Participant. Nothing in the Plan shall give a Participant the right to be retained in the service of the Company Group or to interfere with the right of the Company Group to discipline or discharge a Participant at any time.
|
10.7. |
Protective Provisions
. A Participant will cooperate with the Company by furnishing any and all information requested by the Company, in order to facilitate the payment of benefits hereunder, and by taking such physical examinations as the Company may deem necessary and taking such other action as may be requested by the Company.
|
10.8. |
Governing Law
. The provisions of the Plan shall be construed and interpreted according to the laws of the State of Michigan, without giving effect to any choice of law or conflict of law provision or rule, except as preempted by federal law.
|
10.9. |
Validity
. If any provision of the Plan shall be held illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but the Plan shall be construed and enforced as if such illegal and invalid provision had never been inserted herein.
|
10.10. |
Notice
. Any notice required or permitted under the Plan shall be sufficient if in writing and sent by (i) registered, certified mail, or (ii) electronic mail at
benefits@aam.com
(with a simultaneous confirmation copy sent by first class mail properly addressed and postage prepaid). Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification. Mailed notice shall be directed to “Administrator: ERSP, Attention Human Resources Department” at the Company’s headquarters address. Mailed notice to a Participant or Beneficiary shall be directed to the individual’s last known address in the Company’s records.
|
10.11. |
Successors
. The provisions of the Plan shall bind and inure to the benefit of the Company and its successors and assigns. The term successors as used herein shall include any corporate or other business entity which shall, whether by merger, consolidation, purchase or otherwise acquire all or substantially all of the business and assets of the Company, and successors of any such corporation or other business entity.
|
1. |
Purpose
. The purpose of the American Axle & Manufacturing Holdings, Inc. Executive Officer Severance Plan (the “
Plan
”) is to advance the interests of American Axle & Manufacturing Holdings, Inc. (the “
Company
,” and together with its subsidiaries, the “
Company Group
”) and its shareholders by providing financial protection to selected executive officers and certain other employees as determined by the Administrator in its sole discretion from time to time upon termination of a participant’s employment in specific circumstances and to attract and retain talent
.
|
2. |
Definitions
. For purposes of the Plan, the following words and phrases have the meanings specified below:
|
2.1 |
“
Accountants
”
has the meaning set forth in Section 9.2.
|
2.2 |
“
Administrator
” has the meaning set forth in Section 3.
|
2.3 |
“
Base Salary
” with respect to a Participant means the rate of annual base salary paid to the Participant by the Company Group immediately preceding the Participant’s Date of Separation.
|
2.4 |
“
Benefit Continuation
” has the meaning set forth in Section 6.2
.
|
2.5 |
“
Board
” means the Board of Directors of the Company.
|
2.6 |
“
Bonus
” with respect to a Participant means the target annual bonus amount for the year in which the Participant’s Date of Separation occurs
.
|
2.7 |
“
Cause
” means any one or more of the following: “Cause” means with respect to a Participant, unless otherwise defined in the employment agreement of the Participant, any of the following: (a) the Participant’s willful and continued failure or refusal to perform the duties reasonably required of him or her to the Company Group; (b) the Participant’s conviction of, or plea of nolo contendere to any felony or another crime involving dishonesty or moral turpitude or which reflects negatively upon the Company Group or otherwise impairs or impedes its operations; (c) the Participant’s engagement in any willful misconduct, gross negligence, act of dishonesty, violence or threat of violence (including any violation of federal securities laws) that is injurious to the Company Group; (d) the Participant’s material breach of any applicable agreement with or policy of the Company Group; (e) the Participant’s material failure to comply with any applicable laws and regulations or professional standards relating to the business of the Company Group; or (f) any other misconduct by the Participant that is injurious to the financial condition or business reputation of the Company Group.
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2.8 |
“
Code
” means the Internal Revenue Code of 1986, as it may be amended from time to time and as interpreted by regulations and rulings issued pursuant to the Code. Any references to a specific provision shall be deemed to include references to any successor Code provision.
|
2.9 |
“
Committee
” means the Compensation Committee of the Board.
|
2.10 |
“
Covered Payments
” has the meaning set forth in Section 9.1.
|
2.11 |
“
Date of Separation
” means, with respect to a Participant, the date on which a Participant incurs a termination of employment that is a “separation from service” within the meaning of Section 409A of the Code.
|
2.12 |
“
Effective Date
” has the meaning set forth in Section 17.
|
2.13 |
“
Exchange Act
” means the Securities Exchange Act of 1934, as amended from time to time, or any successor act thereto.
|
2.14 |
“
Excise Tax
” has the meaning set forth in Section 9.1.
|
2.15 |
“
Good Reason
” means any one or more of the following actions or omissions:
|
(a) |
any material reduction in a Participant’s annual base salary or bonus opportunity as in effect immediately prior to the reduction; or
|
(b) |
the relocation (other than by mutual agreement) of the office at which the Participant is to perform the majority of his or her duties to a location more than 50 miles from the location at which the Participant performed such duties prior to the relocation;
|
2.16 |
“
Participant
” has the meaning set forth in Section 4.
|
2.17 |
“
Plan
” means this Executive Officer Severance Plan, as described in this document and as amended from time to time.
|
2.18 |
“
Release
” has the meaning set forth in Section 7.
|
2.19 |
“
Severance Multiple
” means the number applicable to a Participant’s position as set forth on
Exhibit A
, as amended from time to time.
|
2.20 |
“
Severance Period
” has the meaning set forth in Section 6.2.
|
3. |
Administration
. The Plan shall be administered by the Committee (the “Administrator”). Subject to the provisions of the Plan, the Administrator shall have exclusive authority to interpret and administer the Plan, to establish, amend and rescind appropriate rules and regulations relating to the Plan, to delegate some or all of its authority under the Plan to the extent permitted by law, and to take all such steps and make all such determinations in connection with the Plan and the benefits granted pursuant to the Plan as it may deem necessary or advisable. Any decision of the Administrator in the interpretation and administration of the Plan, as described herein, shall lie within its sole and absolute discretion and shall be final, conclusive and binding on all parties concerned. Except to the extent it would violate applicable law or rules, the Administrator may delegate all or a portion of its authority for administering the Plan to an officer or officers of the Company. To the extent so delegated, the term “Administrator” hereunder shall be deemed to refer to such officer or officers. The Administrator shall take such actions it deems necessary or desirable to ensure that such officer or officers have sufficient and appropriate authority for carrying out the intent and purpose of the Plan.
|
4. |
Eligibility
. The participants under the Plan shall be limited to (i) executive officers of the Company, other than those executive officers who have an employment agreement or other separate arrangement providing for severance benefits upon a termination of employment (the
“Executive Officer Participants”
) and (ii) certain other employees of the Company Group as determined by the Administrator in its sole discretion from time to time (the
“Associate Participants”
and, together with the Executive Officer Participants, the
“Participants”
). Individuals who qualify under the definition of Executive Officer Participant under this Section 4 shall automatically, without any independent action by the Administrator, become eligible to and shall participate in the Plan as Participants as of such date. In the event that an individual no longer meets the definition of Executive Officer Participant, he or she shall automatically, without any independent action by the Administrator, no longer be eligible to participate in the Plan and such individual’s participation shall automatically, without any independent action by the Administrator, be terminated as of such date, subject to Section 15 of the Plan;
provided
, that for the avoidance of doubt, the Administrator may in its sole discretion elect to designate such individual as an Associate Participant. The Administrator from time to time in its sole discretion shall select and notify any employees of the Company who will participate as Participants in the Plan. Individuals who are designated by the Administrator as Associate Participants in accordance with this Section 4 and who undergo a change in title or job grade other than for reason of a promotion shall automatically, without any independent action by the Administrator, no longer be eligible to participate in the Plan and such individual’s participation shall automatically, without any independent action by the Administrator, be terminated as of such date, subject to Section 15 of the Plan;
provided
, that for the avoidance of doubt, the Administrator may in its sole discretion elect to treat any such individual differently in accordance with the terms of the Plan.
|
5. |
No Effect on Equity Awards
. The Plan does not alter or amend any vesting or other terms and conditions of any equity-based compensation awards under the Company’s equity incentive compensation plans (including, but not limited to, the Company’s 2012 Omnibus Incentive Plan or 2018 Omnibus Incentive Plan), which shall be governed by the terms and conditions set forth in the equity incentive compensation plans and separate written grant agreements.
|
6. |
Severance Benefits
.
|
6.1 |
No severance benefits shall be payable under the Plan unless the Participant’s employment with the Company is involuntarily terminated by the Company without Cause or by the Participant’s resignation with Good Reason (a “
Qualifying Event
”).
|
6.2 |
Upon a Qualifying Event, subject to the provisions of the Plan (including compliance with the Restrictive Covenants) and timely execution and nonrevocation of a Release, the Participant shall receive the following benefits:
|
(a) |
Severance
. A cash amount equal to the Participant’s Base Salary plus Bonus multiplied by the applicable Severance Multiple, payable in a lump sum on the 60th day following the Date of Separation;
|
(b) |
Annual Bonus
. Any unpaid annual bonus for any completed performance year immediately preceding the year in which the Qualifying Event occurs as determined based on actual performance, payable to the Participant on the date such bonus would have been paid had the Participant remained employed with the Company, but in no event later than March 15th of the year in which the Qualifying Event occurs, notwithstanding anything to the contrary in an applicable plan or award document;
|
(c) |
Pro rata Annual Bonus
. A cash amount equal to the annual bonus for the performance year in which the Qualifying Event occurs, determined based on actual performance and then prorated based on the number of days in such performance year elapsed through the date of the Qualifying Event, payable to the Participant on the date such bonus would have been paid had the Participant remained employed with the Company, but in no event later than March 15th of the year following the year in which the Qualifying Event occurs, notwithstanding anything to the contrary in an applicable plan or award document;
|
(d) |
Medical Coverage
. Upon a Qualifying Event, the Participant (and his or her eligible dependents) shall be entitled to continued participation in the Company’s medical plans, as in effect from time to time, at then-existing participation and coverage levels for active similarly situated employees (the “
Benefit Continuation
”) for the number of months equal to 12 multiplied by the applicable Severance Multiple (the “
Severance Period”)
.
In the event that such Benefit Continuation is not permitted or advisable or the Company, in its sole discretion, elects, in lieu of Benefit Continuation, the Company shall pay to the Participant a cash amount (in the Company’s determination) equal to the then-current difference between the Participant’s monthly medical insurance cost immediately prior to the applicable Qualifying Event and the monthly cost for COBRA multiplied by the number of months remaining in the Severance Period, payable in three separate semi-annual installments. Any obligation to provide Benefit Continuation or payment in lieu of such Benefit Continuation shall cease upon the earlier of (i) the Participant becoming eligible to receive group health benefits under a program of a subsequent employer or (ii) the Participant not complying with the provisions of this Plan. For the avoidance of doubt, the Participant (and his or her eligible dependents) shall be responsible for paying all employee contributions, deductibles and other cost-sharing items under such plans. Nothing in this Section 6.2 shall be construed to impair or reduce a Participant’s rights under COBRA or other applicable law.
|
(e) |
Outplacement
. The Participant shall be entitled to reimbursement for outplacement service costs incurred (which shall include appropriate itemization and substantiation of expenses incurred) during the period from the Participant’s Date of Separation through the end of the applicable Severance Period, subject to a maximum amount of $20,000;
provided
, that such claims for reimbursement are submitted to the Company within 90 days following the date of invoice.
|
6.3 |
General
. Nothing in this Section 6 shall be construed to impair or reduce a Participant’s right to any other accrued but unpaid compensation or benefits nor create a right or entitlement to any additional senior executive retirement benefit.
|
7. |
Release and Restrictive Covenant
.
|
7.1 |
Release
. A Participant shall only be entitled to receive the payments and benefits pursuant to Section 6 if he or she shall have executed and delivered (and not revoked) a release of claims against the Company (and its officers, directors, employees, affiliates, stockholders, etc.) substantially in the form attached hereto as
Exhibit B
(the
“Release”
), and such Release is in full force and effect by the 60th day following the Date of Separation. Should the Participant revoke all or any portion of the Release within any allowed revocation period, then the Participant will be treated hereunder as if he or she did not execute the Release.
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7.2 |
Restrictive Covenant
. During the Severance Period, the Participant shall not, without the prior written consent of the Company, directly or indirectly, and whether as principal or investor or as an employee, officer, director, manager, partner, consultant, agent or otherwise, alone or in association with any other person, firm, corporation or other business organization, carry on a business competitive with the Company in any geographic area in which the Company Group has engaged in business, or is reasonably expected to engage in business during such Severance Period (including, without limitation, any area in which any customer of the Company Group may be located);
provided
,
however
, that nothing herein shall limit the Participant’s right to own not more than 1% of any of the debt or equity securities of any business organization that is then filing reports with the Securities and Exchange Commission pursuant to Section 13 or 15(d) of the Exchange Act (the
“Restrictive Covenant”
). For the avoidance of doubt, (i) amounts payable pursuant to Section 6.2 are consideration for the Participant’s compliance with this Restrictive Covenant and (ii) the Restrictive Covenant shall be effective for the full Severance Period irrespective of whether any payments under Section 6.2 are terminated prior to the end of the Severance Period
.
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7.3 |
Breach
. If a Participant breaches any provision of the Release or the Restrictive Covenant, the Administrator may determine that the Participant (i) will forfeit any unpaid portion of the payments provided pursuant to
the
Plan and (ii) will repay to the Company any amounts previously paid to him or her pursuant to the Plan
.
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8. |
No Funding
. Nothing herein contained shall require or be deemed to require the Company to segregate, earmark or otherwise set aside any funds or other assets to provide for any payments made hereunder. The rights of any Participant under the Plan shall be solely those of a general creditor of the Company. However, in the event the Company foresees payment under the Plan, the Company may deposit cash or property, or both, equal in value to all or a portion of the benefits anticipated to be payable hereunder for any or all Participants into a trust, the assets of which are to be distributed at such times as are otherwise provided for in the Plan and are subject to the rights of the general creditors of the Company.
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9. |
Section 280G
.
|
9.1 |
Notwithstanding any other provision of the Plan or any other plan, arrangement or agreement to the contrary, if any of the payments or benefits provided or to be provided by the Company or its affiliates to a Participant or for the Participant’s benefit pursuant to the terms of the Plan or otherwise (
“Covered Payments”
) constitute parachute payments within the meaning of Section 280G of the Code and would, but for this Section 9, be subject to the excise tax imposed under Section 4999 of the Code (or any successor provision thereto) or any similar tax imposed by state or local law or any interest or penalties with respect to such taxes (collectively, the
“Excise Tax”
), then the Covered Payments shall be payable either (i) in full or (ii) reduced to the minimum extent necessary to ensure that no portion of the Covered Payments is subject to the Excise Tax, whichever of the foregoing (i) or (ii) results in the Participant’s receipt on an after-tax basis of the greatest amount of payments and benefits after taking into account the applicable federal, state, local and foreign income, employment and excise taxes (including the Excise Tax). Any such reduction shall be made by the Company in its sole discretion consistent with the requirements of Section 409A of the Code.
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9.2 |
Any determination required under this Section 9 shall be made in writing in good faith by the accounting firm that was the Company’s independent auditor immediately before the Qualifying Event (the
“Accountants”
). The Company and the Participant shall provide the Accountants with such information and documents as the Accountants may reasonably request in order to make a determination under this Section 9. The Company shall be responsible for all fees and expenses of the Accountants.
|
10. |
Section 409A
. Notwithstanding anything to the contrary contained in the Plan, the payments and benefits provided under the Plan are intended to comply with or be exempt from Section 409A of the Code, and the provisions of the Plan shall be interpreted or construed consistently with that intent. The Administrator may modify the payments and benefits under the Plan at any time solely as necessary to avoid adverse tax consequences under Section 409A;
provided
,
however
, that this Section 10 shall not create any obligation on the part of the Administrator to make such modifications or take any other action.
|
10.1 |
It is intended that the terms “termination” and “termination of employment” as used herein shall constitute a “separation from service” within the meaning of Section 409A.
|
10.2 |
Anything in the Plan to the contrary notwithstanding, each payment of compensation made to a Participant shall be treated as a separate and distinct payment from all other such payments for purposes of Section 409A.
|
10.3 |
In no event may a Participant be permitted to control the year in which any payment occurs.
|
10.4 |
Anything in the Plan to the contrary notwithstanding, if a Participant is a “specified employee” (within the meaning of Treasury Regulation Section 1.409A-1(i)) on the date of the Participant’s termination of employment, then any payment or benefit which would be considered “nonqualified deferred compensation” within the meaning of Section 409A that the Participant is entitled to receive upon the Participant’s termination of employment and which otherwise would be payable during the six-month period immediately following the Participant’s termination of employment will instead be paid or made available on the first day of the seventh month following the Participant’s termination of employment (or, if earlier, the date of the Participant’s death).
|
10.5 |
With regard to any provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by Section 409A: (i) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit; (ii) the amount of expenses eligible for reimbursement, or in-kind benefits, provided during any taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year; and (iii) such payments shall be made on or before the last day of the Participant’s taxable year following the taxable year in which the expense occurred, or such earlier date as required hereunder.
|
11. |
Clawback
. Any amounts payable under the Plan are subject to any policy providing for clawback, recoupment or recovery of amounts that were paid to the Participant as established from time to time by the Committee. The Company shall make any determination for clawback, recoupment or recovery in its sole discretion and in accordance with any such policy and applicable law or regulation.
|
12. |
Withholding
. The Company shall be entitled to withhold from payments to or on behalf of the Participant taxes and other authorized deductions.
|
13. |
Governing Law
. The Plan shall be construed, interpreted and governed in accordance with the laws of the State of Michigan, without giving effect to the principles of conflicts of law.
|
14. |
Effect on Other Plans
. The Plan supersedes in all respects any other severance benefit plans, arrangements or policies of the Company that apply to Participants upon a Qualifying Event, but does not supersede (i) employment agreements between an employee and the Company Group and (ii) to the extent applicable, the Company Executive Officer Change in Control Plan. No Participant shall be eligible to receive severance benefits under more than one severance arrangement of the Company (whether through an employment agreement or a benefit plan) at any time. Notwithstanding the foregoing, the Company and the Board reserve the right to adhere to other policies and practices that may be in effect for other groups of employees.
|
15. |
Amendment, Modification and Termination
. The Plan (including Exhibit A) may be modified, amended or terminated at any time by the Administrator without notice to Participants.
|
16. |
No Employment Rights
. Neither the Plan nor the benefits hereunder shall be a term of the employment of any employee, and the Company Group shall not be obligated in any way to continue the Plan. The terms of the Plan shall not give any employee the right to be retained in the employment of the Company Group
.
|
17. |
Effective Date and Term
. The Plan shall become effective as of April 10, 2018 (the
“Effective Date”
).
|
Participants
|
Applicable Severance Multiple
|
Business Unit Presidents;
VP/CFO;
VP-HR;
VP- Controller;
|
1.5
|
VP- General Counsel;
VP – Strategic Business Development;
President AAM-Americas
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1
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AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
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By:
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PARTICIPANT | |||
By: | |||
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AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
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By:
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/s/ Terri M. Kemp
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Name:
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Terri M. Kemp
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Title:
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Vice President - Human Resources
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EXECUTIVE | |||
/s/ David C. Dauch | |||
David C. Dauch | |||
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AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
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By:
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/s/ Terri M. Kemp 7/30/15
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Name:
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Terri M. Kemp
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Title: | Vice President - Human Resources | ||
EXECUTIVE | |||
/s/ David C. Dauch 7/30/15 | |||
David C. Dauch | |||
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AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
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By:
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/s/ Terri M. Kemp | |
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Name:
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Terri M. Kemp
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Title:
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Vice President - Human Resources
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EXECUTIVE
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/s/ Michael K. Simonte
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Michael K. Simonte
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