EXHIBIT 10.3

 

TRW AUTOMOTIVE HOLDINGS CORP.

2012 STOCK INCENTIVE PLAN

 

EXECUTIVE OFFICER

PERFORMANCE STOCK UNIT AGREEMENT

 

THIS AGREEMENT, is made effective as of                       , 20         (the
“Grant Date”), between TRW Automotive Holdings Corp. (the “Company”) and
                       (the “Participant”).

 

R E C I T A L S:

 

WHEREAS, the Company has adopted the Plan (as defined below), the terms of which
are hereby incorporated by reference and made a part of this Agreement; and

 

WHEREAS, the Compensation Committee of the Board of Directors of the Company
(the “Committee”) has determined that the Participant be granted the Performance
Stock Units provided for herein pursuant to the Plan and the terms set forth
herein.

 

NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth,
the parties agree as follows:

 

1.             Definitions.  Whenever the following terms are used in this
Agreement, they shall have the meanings set forth below.  Capitalized terms not
otherwise defined herein shall have the same meanings as in the Plan.

 

(a)           “409A Change of Control” means a Change of Control as defined in
the Plan that constitutes a change in ownership or effective control within the
meaning of Section 409A(a)(2)(A)(v) of the Code and the regulations promulgated
thereunder.

 

(b)           “Cause” means “Cause” as defined in the Employment Agreement.

 

(c)           “Disability” means, “disability” as defined in the Employment
Agreement or, if not defined therein, “disability” of the Participant shall have
the meaning ascribed to such term in the Company’s long-term disability plan or
policy, as in effect from time to time.

 

(d)           “Employment Agreement” means the written employment agreement
between the Company or any of its Subsidiaries and the Participant (as the same
may be amended, modified or supplemented in accordance with the terms thereof).

 

(e)           “Good Reason” means “Good Reason” as defined in the Employment
Agreement.

 

(f)            “Performance Stock Unit” means the unfunded, unsecured right of
the Participant to receive one share of the Company’s common stock, par value
$0.01 per share (the “Shares”) upon the attainment of certain specified
performance goals.

 

1

--------------------------------------------------------------------------------

 

(g)           “Plan” means the TRW Automotive Holdings Corp. 2012 Stock
Incentive Plan, as the same may be amended, supplemented or modified from time
to time.

 

(h)           “Retirement” means the termination of the Participant’s employment
with the Company and its Subsidiaries (i) at age 60 or older with 10 years of
service, or (ii) at age 65 or older, in each case provided that the
Participant’s employment with the Company and its Subsidiaries continues for at
least six months after the Grant Date.

 

2.             Grant of Performance Stock Units; Dividends.  The Company hereby
grants to the Participant, subject to the terms and conditions of this Agreement
and the Plan,                                            (        ) Performance
Stock Units (the “Target Number of  Performance Stock Units”). The Participant
shall not possess any voting rights in Shares in respect of the Performance
Stock Units until such Performance Stock Units have been distributed to the
Participant in the form of Shares.  If dividends are declared and paid by the
Company during the period in which the Performance Stock Units are outstanding
(the “Dividends”), then on each date on which Shares are delivered to the
Participant in respect of the Performance Stock Units pursuant to Sections 3(a),
3(b) and 3(c) (and only on such date or dates), the Participant shall also be
paid an amount in cash (in the case of a cash dividend declared and paid by the
Company) or distributed a number of Shares (in the case of a stock dividend
declared and paid by the Company), in each case equal to the aggregate Dividends
that would have been paid to the Participant if the Performance Stock Units with
respect to which the Shares are being delivered had in fact been Shares during
the period in which the Dividends were paid.

 

3.                                      Delivery of Shares Underlying the
Performance Stock Units.

 

(a)           In General.  Subject to Sections 3(b), 3(c) and 3(d), on or about
                      , 20          (the “Settlement Date”), the Company shall
issue or cause there to be transferred to the Participant a number of Shares
equal to the aggregate number of vested Performance Stock Units, if any,
determined by utilization of the vested percentage of the Target Number of
Performance Stock Units calculated in accordance with the formula set forth in
Appendix A to this Agreement (the “Vested Performance Stock Units”), but only if
the Participant has not incurred a termination of employment with the Company or
any of the Company’s  Subsidiaries prior to the end of the Performance Period
(as defined in Appendix A).

 

(b)           Termination of Employment.  If the Participant ceases to be
employed by the Company or one of the Company’s Subsidiaries for any reason
prior to the end of the Performance Period, the Performance Stock Units, and any
corresponding Dividends as set forth in Section 2 of this Agreement, shall be
immediately and automatically canceled by the Company without any payment or
other consideration and without notice or any other action by the Company;
provided, however, that if (i) the Participant’s employment is terminated prior
to the end of the Performance Period due to death or  Disability or by the
Company or one of the Company’s Subsidiaries without Cause or by the Participant
for Good Reason, the Company shall within 60 days after the date of such
termination of employment (but subject to the provisions of Section 21 of the
Plan) issue, or cause there to be transferred, to the Participant (or, in the
case of death, the Participant’s estate) Shares equal to the number of  Vested
Performance Stock Units, if any, and any corresponding Dividends as described in
Section 2, determined, for purposes of this Section 3(b)(i), as if the
Performance Period ended on the date of such termination of employment, but
shall not issue, or cause there to be transferred, any other Shares

 

2

--------------------------------------------------------------------------------

 

that may be provided for under this Agreement, or (ii) the Participant’s
employment is terminated prior to the end of the Performance Period due to
Retirement by the Participant, subject to the provisions of Section 21 of the
Plan, on or about the Settlement Date the Participant will receive Shares equal
to the number of Vested Performance Stock Units, if any, and any corresponding
Dividends as described in Section 2, determined for purposes of this
Section 3(b)(ii) as if the Participant had not incurred a termination of
employment with the Company or any of the Company’s Subsidiaries prior to the
end of the Performance Period.  Notwithstanding any other provision of this
Agreement to the contrary, no distributions of any Shares underlying any
Performance Stock Units will be made to the Participant in the event of
Participant’s voluntary termination of employment in the absence of Good Reason
(other than Participant’s Retirement), or termination of employment by the
Company or one of the Company’s Subsidiaries due to Cause.

 

(c)           409A Change of Control.  Notwithstanding the foregoing, if from
the date of a 409A Change of Control until the second anniversary of the 409A
Change of Control the Participant’s employment is terminated and such
termination occurs prior to the end of the Performance Period (x) due to death
or Disability or (y) by the Company or one of the Company’s Subsidiaries without
Cause or by the Participant for Good Reason or due to Retirement by the
Participant, then (i) if Participant’s employment is terminated due to death or
Disability, the Company shall within 60 days after such termination of
employment (but subject to Section 21 of the Plan), issue or cause there to be
transferred, to the extent not previously issued, transferred, canceled or
forfeited in accordance with this Section 3, to the Participant (or, in the case
of death, the Participant’s estate) a number of Shares equal to (i) the number
of Shares that would be distributable under Section 3(b)(i) in the case of a
termination due to the Participant’s death or Disability, or (ii) if
Participant’s employment is terminated by the Company or one of the Company’s
Subsidiaries without Cause or by the Participant for Good Reason or due to
Retirement by the Participant, subject to the provisions of Section 21 of the
Plan, on or about the Settlement Date the Participant will receive Shares equal
to the number of Vested Performance Stock Units, if any, and any corresponding
Dividends as described in Section 2, determined for purposes of this
Section 3(c)(ii) as if the Participant had not incurred a termination of
employment with the Company or any of the Company’s Subsidiaries prior to the
end of the Performance Period.

 

(d)           Cancellation of Performance Stock Units.  Upon the issuance or
transfer of Shares in accordance with this Section 3, all of the Performance
Stock Units subject to this Agreement shall be canceled.

 

(e)           Shares.  On the date or dates set forth above on which the Shares
subject to the Performance Stock Units are to be delivered to, or with respect
to, the Participant, the Company shall deliver such Shares in the Participant’s
name (or, in the event of a delivery of Shares made upon the death of the
Participant, such delivery shall be made to Participant’s estate).  However, the
Company shall not be liable to the Participant or to Participant’s estate for
damages relating to any delays in issuing such Shares to the Participant or to
Participant’s estate, any loss by the Participant or by the Participant’s estate
of any certificates that may be issued therefore, or any mistakes or errors in
the issuance of any certificates or in the certificates themselves.

 

3

--------------------------------------------------------------------------------

 

4.             Legend on Certificates.  The Shares issued to the Participant in
respect of the Performance Stock Units shall be subject to such stop transfer
orders and other restrictions as the Committee may deem reasonably advisable
under the Plan or the rules, regulations, and other requirements of the
Securities and Exchange Commission, any stock exchange upon which such Shares
are listed, any applicable federal or state laws or the Company’s Certificate of
Incorporation and Bylaws, and the Committee may cause a legend or legends to be
put on any certificates that may be issued representing the Shares to make
appropriate reference to such restrictions.

 

5.             No Right to Continued Employment.  Neither the Plan nor this
Agreement shall be construed as giving the Participant the right to be retained
in the employ of, or in any consulting relationship to, the Company or any of
its Subsidiaries.  Further, the Company or its Subsidiary may at any time
dismiss the Participant or discontinue any consulting relationship, free from
any liability or any claim under the Plan or this Agreement, except as otherwise
expressly provided herein.

 

6.             Transferability.  Unless otherwise determined by the Committee, a
Performance Stock Unit may not be assigned, alienated, pledged, attached, sold
or otherwise transferred or encumbered by the Participant otherwise than by will
or by the laws of descent and distribution, and any such purported assignment,
alienation, pledge, attachment, sale, transfer or encumbrance shall be void and
unenforceable against the Company or any Affiliate; provided that the
designation of a beneficiary shall not constitute an assignment, alienation,
pledge, attachment, sale, transfer or encumbrance.

 

7.             Withholding.  The Company or its Affiliate shall have the right
to withhold from any payment due or transfer made with respect to the
Performance Stock Unit or any Dividend thereon or any other compensatory amounts
due to the Participant, any applicable withholding taxes in respect of the
Performance Stock Unit or the Shares to which they relate or any Dividend or
other payment or transfer with respect to the Performance Stock Unit or under
the Plan and to take such action as may be necessary at the option of the
Company to satisfy all obligations for the payment of such taxes.

 

8.             Securities Laws.  Upon the acquisition of any Shares delivered in
respect of  the Performance Stock Units pursuant to Sections 3(a), 3(b) and
3(c), the Participant will make or enter into such written representations,
warranties and agreements as the Committee may reasonably request in order to
comply with applicable securities laws or with this Agreement.

 

9.             Notices.  Any notice under this Agreement shall be addressed to
the Company in care of its General Counsel at the principal executive office of
the Company and to the Participant at the address appearing in the personnel
records of the Company for the Participant or to either party at such other
address as either party hereto may hereafter designate in writing to the other. 
Any such notice shall be deemed effective upon delivery to the addressee.

 

10.          Governing Law.  This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware, without regard to
conflicts of laws.

 

4

--------------------------------------------------------------------------------

 

11.          Performance Stock Units Subject to the Plan.  By entering into this
Agreement the Participant agrees and acknowledges that the Participant has
received and read a copy of the Plan.  The Performance Stock Units and any
Shares delivered in respect thereto are subject to the Plan.  The terms and
provisions of the Plan as it may be amended from time to time are hereby
incorporated by reference.  In the event of a conflict between any term or
provision contained herein and a term or provision of the Plan, the applicable
terms and provisions of the Plan will govern and prevail.

 

12.          Counterparts.  This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement. 
Any counterpart or other signature hereupon delivered by facsimile or electronic
image scan shall be deemed for all purposes as constituting good and valid
execution and delivery of this Agreement by such party.

 

13.          Electronic Delivery.  The Company may, in its sole discretion,
decide to deliver any documents related to the Performance Stock Units granted
under this Agreement and participation in the Plan or future awards that may be
granted under the Plan by electronic means or to request the Participant consent
to participate in the Plan by electronic means. The Participant hereby consents
to receive such documents by electronic delivery and, if requested, to agree to
participate in the Plan through an on-line or electronic system established and
maintained by the Company or another third party designated by the Company.

 

14.          Benefits of Agreement.  This Agreement shall inure to the benefit
of the Company, the Participant and their respective heirs, executors,
administrators, personal representatives, successors and assigns.

 

15.          Severability.  In the event that any one or more provisions of this
Agreement shall be deemed to be illegal or unenforceable, such illegality or
unenforceability shall not affect the validity and enforceability of the
remaining legal and enforceable provisions hereof, which shall be construed as
if such illegal or unenforceable provision or provisions had not been inserted.

 

5

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
parties hereto as of the date first above written.

 

 

 

TRW AUTOMOTIVE HOLDINGS CORP.

 

 

 

By:

 

 

 

Name:

 

 

Its:

 

 

 

 

 

 

 

Participant

 

6

--------------------------------------------------------------------------------

 

Appendix A

 

Determination of Vested Performance Stock Units

 

The schedule below reflects the vested percentage of the target number of
Performance Stock Units earned based upon the Company’s TSR Percentile Ranking
which shall be determined in accordance with paragraph (d) below.  For
performance between the specified levels, straight-line interpolation will be
applied to determine the TSR Percentile Ranking and corresponding portion of the
Target Number of Performance Stock Units that vest.  As described below, a
consistent methodology will be used to calculate TSR for the Company and each
member of the Peer Group.

 

COMPANY TSR PERCENTILE RANKING
(RELATIVE TO THE MEMBERS OF THE PEER
GROUP ASSESSED AT THE END OF THE
PERFORMANCE PERIOD)

 

VESTED PERCENTAGE OF TARGET NUMBER
OF PERFORMANCE STOCK UNITS

 

Below 25th

 

0

%

25th

 

25

%

50th

 

100

%

75th or Higher

 

150

%

 

For purposes of the foregoing table:

 

a.              “Performance Period” means the period beginning on January 1,
2014 and ending on December 31, 2016.

 

b.              “Peer Group” means the members of the Russell 3000 Auto Parts
Group.

 

c.               “TSR” is determined as follows:  Change in Stock Price +
Dividends Paid

Beginning Stock Price

 

i.                  “Beginning Stock Price” shall mean the average of the
Closing Prices for each of the 20 trading days immediately prior to the first
day of the Performance Period (i.e., 20 trading days ending December 31, 2013).

 

ii.               “Ending Stock Price” shall mean the average of the Closing
Prices for each of the last 20 trading days of the Performance Period (i.e., 20
trading days ending December 31, 2016).

 

iii.            “Change in Stock Price” shall equal the Ending Stock Price minus
the Beginning Stock Price.

 

7

--------------------------------------------------------------------------------

 

iv.           “Dividends Paid” shall mean the total of all dividends paid on one
share of stock during the Performance Period, provided that dividends shall be
treated as though they are reinvested on the ex-dividend date.

 

v.              “Closing Price” shall mean the last reported sale price on the
applicable stock exchange or market of one share of stock for a particular
trading day.

 

vi.           In all events, TSR shall be adjusted to give effect to any and all
stock dividends, stock splits, reverse stock splits and similar transactions.

 

d.              Calculation of the Company’s TSR Percentile Ranking.  The
Company’s TSR Percentile Ranking is computed by (A) computing the Company’s TSR
for the Performance Period and (B) computing the TSR for the Performance Period
of each company that was in the Peer Group as of the end of the Performance
Period, provided that if a company declares bankruptcy at any time during the
Performance Period, such company will be removed from the Peer Group and if a
company does not have publicly-reported stock prices for the whole Performance
Period, such company will also be removed from the Peer Group. The Company TSR
Percentile Ranking is the percentage of TSRs of the Peer Group calculated that
are lower than the Company’s TSR (e.g., if the Company’s TSR is greater than 75%
of the TSRs of the members of the Peer Group, the Company TSR Percentile Ranking
is the 75th percentile).

 

8

--------------------------------------------------------------------------------