Exhibit 10(xxxix)

COOPER TIRE & RUBBER COMPANY

20XX Performance Stock Unit and Cash Unit Award Agreement

WHEREAS, (the “Participant”) is an employee of Cooper Tire & Rubber Company or a
Subsidiary (the “Company”); and

WHEREAS, the Compensation Committee of the Board of Directors of Cooper Tire &
Rubber Company (the “Committee”) approved the terms and authorized on
                    , (the “Date of Grant”) the grant of an Award of Performance
Stock Units and Performance Cash Units (these two types of awards being
collectively called “Performance Units”) pursuant to Sections 10 and 13 of the
Cooper Tire & Rubber Company 2014 Incentive Compensation Plan (the “Plan”).

NOW, THEREFORE, pursuant to the Plan and subject to the terms and conditions
thereof and hereinafter set forth, the Company hereby provides to the
Participant this 20XX Performance Stock Unit and Cash Unit Award Agreement
(“Award Agreement”) confirming to the Participant effective as of the Date of
Grant, a grant of an Award of          Performance Stock Units and $ Performance
Cash Units, each representing the opportunity to earn Target Payments.

1. Performance and Measurement Periods. The Performance Period shall be the
three-year period from January 1, 20XX, through December 31, 20XX, and shall be
divided into the following “Measurement Periods” in which 1/3 of the Performance
Units granted hereby may be notionally earned (as described below):

(a) The “First Measurement Period” shall be from January 1, 20XX, through
December 31, 20XX, and          of the Performance Stock Units and $            
of the Performance Cash Units shall be allocated thereto.

(b) The “Second Measurement Period” shall be from January 1, 20XX, through
December 31, 20XX, and          of the Performance Stock Units and $            
of the Performance Cash Units shall be allocated thereto.

(c) The “Third Measurement Period” shall be from January 1, 20XX, through
December 31, 20XX, and          of the Performance Stock Units and $            
of the Performance Cash Units shall be allocated thereto.

2. Performance Goals. The right to receive payments for any of the Performance
Units shall be contingent upon the achievement of specified Performance Goals
established for the applicable Measurement Period, as approved by the Committee
no later than ninety (90) days after the beginning of that Measurement Period,
provided, however, that the Committee is authorized at any time during or after
a Measurement Period or the Performance Period to increase, reduce or eliminate
the amount payable in respect of a Performance Award to any Participant with
respect to the satisfaction of the Performance Goals, for any reason, including,
without limitation, (a) in recognition of unusual or nonrecurring events
affecting the Company, or any business division or unit or the financial
statements of the Company, or in response to changes in applicable laws,
regulations, or accounting principles, (b) to take into account a change in the
position or duties of a Participant during the Measurement Period or Performance
Period or a change in the Participant’s employment status during the Measurement
Period or Performance Period, or (c) to take into account subjective or
objective performance factors not otherwise set forth in the Plan, this Award
Agreement or any other applicable Award Documents, except, in any such event,
where such action would result in the loss of the otherwise available exemption
of the Award under Section 162(m) of the Code.

 

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3. Crediting of Notionally Earned Performance Units Based Upon the Level of
Achievement as Set Forth in the Statement of Performance Goals.

(a) Below Threshold. If, upon the conclusion of a Measurement Period,
achievement for a particular Performance Goal falls below the threshold level,
no Performance Units for the Measurement Period shall become notionally earned
with respect to that Performance Goal.

(b) Threshold. If, upon the conclusion of a Measurement Period, the achievement
for a particular Performance Goal equals the threshold level, 50% of the
Performance Units allocated to such Performance Goal for the Measurement Period
shall become notionally earned.

(c) Between Threshold and Target. If, upon the conclusion of a Measurement
Period, the achievement for a particular Performance Goal exceeds the threshold
level, but is less than the Target, between 50% and 100% of the Performance
Units allocated to such Performance Goal for the Measurement Period shall become
notionally earned, based upon the payout methodology (e.g., a straightline
payout curve) established for that Measurement Period by the Committee, in its
sole discretion.

(d) Target. If, upon the conclusion of a Measurement Period, the achievement for
a particular Performance Goal equals the Target, 100% of the Performance Units
allocated to such Performance Goal for the Measurement Period shall become
notionally earned.

(e) Between Target and Maximum. If, upon the conclusion of a Measurement Period,
achievement for a particular Performance Goal exceeds the Target, but is less
than the maximum level, between 100% and 200% of the Performance Units allocated
to such Performance Goal for the Measurement Period shall become notionally
earned, based upon the payout methodology (e.g., a straightline payout curve)
established for that Measurement Period by the Committee, in its sole
discretion.

(f) Maximum. If, upon the conclusion of a Measurement Period, achievement for a
particular Performance Goal equals or exceeds the maximum level, 200% of the
Performance Units allocated to such Performance Goal for the Measurement Period
shall become notionally earned.

(g) Exceeds Maximum. In no event may more than the 200% of the Performance Units
allocated to any Performance Goal or 200% of all the Performance Units for any
Measurement Period become notionally earned.

(h) Conditions; Determination of Notionally Earned Award. Following each
Measurement Period, the Committee shall determine whether and to what extent the
Performance Goals have been achieved for such Measurement Period and shall
determine the number of Performance Units that shall have become notionally
earned hereunder. For the avoidance of doubt, “notionally earned” Performance
Units are neither vested nor earned. They are credited to the Participant’s
Performance Unit Account as described in Section 4, but they are not vested or
earned until other requirements of this Award Agreement are met (e.g., remaining
continuously employed with the Company through the end of the Performance
Period, the Committee certifying achievement and approving payment, the
Participant not being terminated for Cause prior to payment, etc.).

 

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4. Performance Unit Account.

(a) Performance Unit Account. The Company shall establish an account on the
books of the Company (an “Account”) for the Participant and shall notionally
credit the Participant’s Account with any Performance Units notionally earned by
the Participant.

(b) Dividend Equivalents. The Participant’s Account shall be credited as of the
last business day of each calendar quarter with that number of additional
Performance Stock Units determined by dividing (i) the amount of cash dividends
paid on the dividend date by Cooper Tire & Rubber Company during such quarter on
that number of Common Shares equivalent to the number of notionally earned
Performance Stock Units credited to and held in the Participant’s Account as of
the dividend record date for that quarter (ii) by the Fair Market Value per
Common Share on the last business day of the current calendar quarter, rounded
up to the nearest whole share; however if a payment pursuant to Section 10
occurs during the current calendar quarter, no dividend equivalents shall be
credited on that number of Common Shares equivalent to the number of Performance
Stock Units so distributed. Such additional Performance Stock Units shall be
notionally earned and shall become vested if, and at the same time as, the
underlying Performance Stock Units pursuant to which they were notionally earned
become vested as provided in Section 5 of this Award Agreement. No dividend
equivalents shall be credited with respect to Performance Cash Units.

(c) Nature of the Company’s Obligations/Participant’s Rights. The Company’s
liability to make payments based on the amount in a Participant’s Account shall
be reflected in its books of account as a general, unsecured and unfunded
obligation, and the rights of the Participant or his designated beneficiary to
receive payments from the Company under the Plan are solely those of a general,
unsecured creditor. The Company shall not be required to segregate any of its
assets in respect to its obligations hereunder, and the Participant or his
designated beneficiary shall not have any interest whatsoever, vested or
contingent, in any properties or assets of the Company. Without limiting the
generality or effect of the foregoing, the Participant shall have no voting
rights with respect to the Performance Units.

(d) No Trust. Nothing contained in the Plan and no action taken pursuant to the
provisions hereof shall create or be construed to create a trust of any kind, or
a fiduciary relationship between (i) the Company and the Committee (or any
member thereof) and (ii) the Participant, his designated beneficiary or any
other person.

(e) Optional Trust. The Committee, at any time, may authorize the establishment
of a trust for the benefit of the Participant, containing such other terms and
conditions as the Committee shall approve, including provisions pursuant to
which the assets of the trust would be subject under certain conditions to the
claims of general creditors of the Company. If such a trust is established, then
the value of all Performance Units notionally earned and credited to
Participants’ accounts may be delivered by the Company to the trust.

5. Vesting of the Performance Units. Except as otherwise provided herein, if the
Participant remains in the employment of the Company through the end of the
Performance Period, the Performance Units notionally earned and credited to the
Participant’s Account shall become vested as of the end of the Performance
Period and earned upon approval and certification by the

 

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Committee; however, in the event the Participant’s employment is terminated for
Cause after the end of the Performance Period but prior to payment of
Participant’s Account, any Performance Units credited to the Participant’s
Account shall be forfeited.

6. Effect of Change in Control. In the event of a Change in Control during the
employment of the Participant prior to the termination of the Performance
Period, the Performance Units shall become vested as follows:

(a) If the Participant is not a participant in the Cooper Tire & Rubber
Company’s Change in Control Severance Pay Plan (the “Severance Plan”) upon the
occurrence of a Change in Control, the Participant shall be deemed vested in:
(i) any outstanding Performance Units which have been notionally earned by the
Participant for a Measurement Period completed prior to the date of the Change
in Control but have not yet been paid (or settled in the case of Performance
Stock Units), based on the achievement of Performance Goals for such completed
Measurement Period; and (ii) any outstanding Performance Units which have not
been notionally earned by the Participant for an uncompleted Measurement Period,
assuming achievement of Performance Goals at Target, prorated for the number of
full and partial months (on a fractional basis based on the number of days in
the applicable month) between the commencement date of the current uncompleted
Measurement Period and ending on the date of the Change in Control. Any other
unvested Performance Units shall be forfeited. The Performance Cash Units shall
be paid to the Participant on the 5th day following the Change in Control and
the Performance Stock Units shall be paid to the Participant at the same time
(and in the same form) as Cooper Tire & Rubber Company pays the per-share
transaction consideration to holders of its Common Shares.

(b) If the Participant is a participant in the Severance Plan, the Performance
Units shall also become vested as provided in the Severance Plan.

7. Effect of Death, Disability, Retirement. If the Participant’s employment with
the Company terminates during the Performance Period, but before the occurrence
of a Change in Control, due to (a) the Participant’s death, or (b) the
Participant’s Disability, or (c) the Participant’s Retirement, then notionally
earned Performance Units for completed Measurement Periods will vest in full and
a pro rata number of Performance Units for uncompleted Measurement Periods shall
become vested. The pro rata portion which shall become vested is determined by
multiplying the total number of Performance Units allocated to each such
uncompleted Measurement Period by the number of days the Participant has been
employed by the Company between the first day of the Measurement Period and the
date of such termination, divided by the total number of days in each such
uncompleted Measurement Period. Any other unvested Performance Units shall be
forfeited. The payment of such Performance Units will be in accordance with
Section 10 of this Award Agreement.

8. Effect of Voluntary or Involuntary Termination. If the Participant’s
employment with the Company terminates during the Performance Period, but before
the occurrence of a Change in Control, due to the Participant’s voluntary or
involuntary termination of employment, for any reason other than death,
Disability or Retirement, then all Performance Units with respect to the
uncompleted Performance Period will be forfeited upon such termination of
employment.

9. Effect of Termination for Cause. For the avoidance of doubt, if the
Participant’s employment with the Company terminates for Cause after the end of
the Performance Period and before any Change in Control, but prior to payment of
the Participant’s Account, any Performance Units credited to the Participant’s
Account shall be forfeited.

 

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10. Form and Time of Payment of Performance Units. Payments for any Performance
Stock Units that become vested as set forth herein will be made in the form of
Common Shares, and, except as otherwise provided in this Section 10 in the event
of the Participant’s termination of employment due to death or Disability during
the Performance Period, will be made as soon as practicable after the end of the
Performance Period, but in no event shall such payment occur later than two and
one-half (2 1⁄2) months after the end of the Performance Period. Payments for
any Performance Cash Units that become vested and earned as set forth herein
will be made in the form of cash, and, except as otherwise provided in this
Section 10 in the event of the Participant’s termination of employment due to
death or Disability during the Performance Period, will be made as soon as
practicable after the end of the Performance Period, but in no event shall such
payment occur later than two and one-half (2 1⁄2) months after the end of the
Performance Period. In the event of a termination due to death or Disability
pursuant to Section 7, payment of notionally earned amounts and the pro rata
number of Performance Units allocated to any uncompleted Measurement Period
shall be paid as soon as practicable after Committee certification of the extent
to which Performance Goals have been achieved for any uncompleted Measurement
Period and in the event of death, such payment shall be made to the designated
beneficiary of the Participant, or if there is no designated beneficiary or such
beneficiary does not survive the Participant, such payment shall be made to the
estate of the Participant. The Participant shall have the right to designate a
beneficiary at any time by furnishing the Company with a beneficiary designation
form. The Participant may change or revoke a beneficiary designation at any time
by furnishing a revised beneficiary designation form to the Company. For the
avoidance of doubt, in the event of a termination of employment due to
Retirement pursuant to Section 7, any payment will be made as soon as
practicable after the end of the Performance Period, but in no event shall such
payment occur later than two and one-half (2 1⁄2) months after the end of the
Performance Period.

11. Tax Withholding. To the extent that the Company is required to withhold any
federal, state, local or foreign tax in connection with the payment of earned
and vested Performance Units pursuant to this Award Agreement, it shall be a
condition to the receipt of any such cash and Common Shares that the Participant
make arrangements satisfactory to the Company for payment of such taxes required
to be withheld, which may include by (a) remitting the required amount to the
Company, (b) authorizing the Company to withhold a portion of the Common Shares
otherwise issuable with a value equal to such tax, however, in no event shall
the Company accept Common Shares for payment of taxes in excess of the minimum
amount of taxes required to be withheld, (c) authorize the deduction of such
amounts from the Participant’s other payments from the Company, or (d) otherwise
satisfy the applicable tax withholding requirement in a manner satisfactory to
the Company.

12. Compliance with Law. Notwithstanding any other provision of this Award
Agreement, if the issuance of any Performance Stock Units or Common Shares in
settlement thereof would result in a violation of any law, including, without
limitation, any and all exchange controls, procedures and regulations, in any
relevant jurisdiction, the Company shall not be obligated to issue any
Performance Stock Units or Common Shares in settlement thereof, but may instead,
to the extent permitted by applicable law, pay cash with a value equal to the
Fair Market Value of a Common Share on the date of certification of the
Performance Stock Units.

 

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13. Transferability. The Participant’s right to receive the Performance Units
shall not be transferable by the Participant except by beneficiary designation
as set forth Section 10, by will or by the laws of descent and distribution.

14. No Right to Continuation of Employment. Neither this Award Agreement nor any
action taken hereunder shall be construed as giving the Participant any right to
continued employment with the Company and neither this Award Agreement nor any
action taken hereunder shall be construed as entitling the Company to the
services of the Participant for any period of time. For purposes of this Award
Agreement, the continuous employment of the Participant with the Company shall
not be deemed interrupted, and the Participant shall not be deemed to have
ceased to be employed by the Company, by reason of (a) the transfer of his
employment among the Companies or (b) a leave of absence approved by the
Committee in its sole discretion. This Performance Unit Award is a voluntary,
discretionary Award being made on a one-time basis and it does not constitute a
commitment to make any future Awards. This Performance Unit Award and any
payments made hereunder will not be considered salary or other compensation for
purposes of any severance pay or similar allowance, except as otherwise required
by law.

15. Data Privacy. Information about the Participant and the Participant’s
participation in the Plan may be collected, recorded, and held, used and
disclosed for any purpose related to the administration of the Plan. The
Participant understands that such processing of this information may need to be
carried out by the Company and by third-party administrators whether such
persons are located within the Participant’s country or elsewhere, including the
United States of America. The Participant consents to the processing of
information relating to the Participant and the Participant’s participation in
the Plan in any one or more of the ways referred to above.

16. Amendments. Any amendment to the Plan shall be deemed to be an amendment to
this Award Agreement to the extent that the amendment is applicable hereto;
provided, however, that no amendment shall adversely affect the rights of the
Participant hereunder without the Participant’s consent.

17. Severability. In the event that one or more of the provisions of this Award
Agreement shall be invalidated for any reason by a court of competent
jurisdiction, any provision so invalidated shall be deemed to be separable from
the other provisions hereof, and the remaining provisions hereof shall continue
to be valid and fully enforceable.

18. Binding Effect. Participant acknowledges the receipt of a copy of the Plan
and agrees to be bound by all the terms and provisions thereof. The terms of the
Plan as it presently exists, and as it may be amended, are deemed incorporated
herein by reference, and any conflict between the terms of the Award Agreement
and the provisions of the Plan shall be resolved by the Committee, whose
determination shall be final and binding on all parties. In general, and except
as otherwise determined by the Committee, the provisions of the Plan shall be
deemed to supersede the provisions of this Award Agreement to the extent of any
conflict between the Plan and this Award Agreement. In addition, notwithstanding
the terms set forth herein, the Committee shall have the right to grant
Performance Units upon such terms as it deems appropriate, so long as such
provisions are within the terms of the Plan.

19. Notices. Any notice to the Company pursuant to this Award Agreement shall be
addressed to the Company at its office at 701 Lima Avenue, Findlay, Ohio 45840,
Attention: Secretary of Cooper Tire & Rubber Company. Any notice to Participant
pursuant to the Award Agreement shall be addressed to the Participant at the
address set forth below. Either party shall have the right to designate at any
time hereafter in writing a different address.

 

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20. Governing Law. This Award Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware and shall in all respects be
interpreted, enforced and governed under the internal and domestic laws of such
state. Any claims or legal actions by one party against the other arising out of
the relationship between the parties contemplated herein (whether or not arising
under this Award Agreement) shall be governed by the laws of the State of
Delaware.

21. Performance Units Subject to the Company’s Clawback Policy. Notwithstanding
anything in this Award Agreement to the contrary, the Performance Units and
Common Shares and cash payable with respect thereto shall be subject to the
Company’s clawback policy, as it may be in effect from time to time, including,
without limitation, the provisions of such clawback policy required by
Section 10D of the Exchange Act and any applicable rules or regulations issued
by the U.S. Securities and Exchange Commission or any national securities
exchange or national securities association on which the Common Shares may be
traded.

22. Defined Terms. For the purposes of this Award Agreement, the following terms
are defined. Capitalized terms that are not defined herein are used as defined
in the Plan.

(a) “Affiliated Employer” means any corporation, partnership, limited liability
company, joint venture, unincorporated association or other entity in which
Cooper Tire & Rubber Company has a direct or indirect ownership or other equity
interest.

(b) “Cause” means that prior to any termination of employment, the Participant
shall have committed:

(i) any act or omission constituting a material breach by the Participant of any
of his or her significant obligations to or agreements with the Company or the
continued failure or refusal of the Participant to adequately perform the duties
reasonably required by the Company which, in each case, is materially injurious
to the financial condition or business reputation of, or is otherwise materially
injurious to, the Company, after notification by the Board of such breach,
failure or refusal and failure of the Participant to correct such breach,
failure or refusal within thirty (30) days of such notification (other than by
reason of the incapacity of the Participant due to physical or mental illness);
or

(ii) any other willful act or omission which is materially injurious to the
financial condition or business reputation of, or is otherwise materially
injurious to the Company, and failure of the Participant to correct such act or
omission within thirty (30) days after notification by the Board of any such act
or omission (other than by reason of the incapacity of the Participant due to
physical or mental illness); or

(iii) the Participant is found guilty of, or pleads guilty or nolo contendere
to, a felony or any criminal act involving fraud, embezzlement, or theft.

For purposes of this Award Agreement, no act, or failure to act, on the
Participant’s part shall be deemed “willful” if done, or omitted to be done, by
the Participant in good faith and with a reasonable belief that the
Participant’s action or omission was in the best interest of

 

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the Company. Any notification to be given by the Board in accordance with
Section 22(b)(i) or 22(b)(ii) shall be in writing and shall specifically
identify the breach, failure, refusal, act, omission or injury to which the
notification relates and, in the case of Section 22(b)(i) or Section 22(b)(ii)
shall describe the injury to the Company, and such notification must be given
within twelve (12) months of the Board becoming aware of the breach, failure,
refusal, act, omission or injury identified in the notification. Failure to
notify the Participant within any such twelve (12) month period shall be deemed
to be a waiver by the Board of any such breach, failure, refusal, act or
omission by the Participant and any such breach, failure, refusal, act or
omission by the Participant shall not then be determined to be a breach of this
Award Agreement. For the avoidance of doubt and for the purpose of determining
Cause, the exercise of business judgment by the Participant shall not be
determined to be Cause, even if such business judgment materially injures the
financial condition or business reputation of, or is otherwise materially
injurious to, the Company, unless such business judgment by the Participant was
not made in good faith, or constitutes willful or wanton misconduct, or was an
intentional violation of state or federal law.

(c) “Change in Control” means the occurrence of any of the following events:

(i) Cooper Tire & Rubber Company merges into itself, or is merged or
consolidated with, another entity and as a result of such merger or
consolidation less than 51% of the voting power of the then-outstanding voting
securities of the surviving or resulting entity immediately after such
transaction are directly or indirectly beneficially owned in the aggregate by
the former stockholders of Cooper Tire & Rubber Company immediately prior to
such transaction;

(ii) all or substantially all the assets accounted for on the consolidated
balance sheet of Cooper Tire & Rubber Company are sold or transferred to one or
more entities or persons, and as a result of such sale or transfer less than 51%
of the voting power of the then-outstanding voting securities of such entity or
person immediately after such sale or transfer is directly or indirectly
beneficially held in the aggregate by the stockholders of Cooper Tire & Rubber
Company immediately prior to such transaction or series of transactions;

(iii) a person, within the meaning of Section 3(a)(9) or 13(d)(3) (as in effect
on the effective date of the Severance Plan) of the Securities Exchange Act of
1934, (the “Exchange Act”) (a “Person”) becomes the beneficial owner (as defined
in Rule 13d-3 of the Securities and Exchange Commission pursuant to the Exchange
Act) (a “Beneficial Owner”) of 35% or more of the voting power of the
then-outstanding voting securities of Cooper Tire & Rubber Company; provided,
however, that the foregoing does not apply to any such acquisition that is made
by (w) any Affiliated Employer; (x) any employee benefit plan of Cooper Tire &
Rubber Company or any Affiliated Employer; or (y) any person or group of which
employees of Cooper Tire & Rubber Company or of any Affiliated Employer control
a greater than 25% interest unless the Board determines that such person or
group is making a “hostile acquisition;” or (z) any person or group that
directly or indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with, the Participant; or

(iv) a majority of the members of the Board are not Continuing Directors, where
a “Continuing Director” is any member of the Board who (x) was a member of the
Board on the effective date of the Severance Plan or (y) was nominated for
election or

 

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elected to such Board with the affirmative vote of a majority of the Continuing
Directors who were members of such Board at the time of such nomination or
election, provided that any director appointed or elected to the Board to avoid
or settle a threatened or actual proxy contest (including but not limited to a
consent solicitation) shall in no event be deemed to be a Continuing Director.

(d) “Disability” means the Participant becomes disabled and qualifies, or would
have qualified, to receive disability benefits pursuant to the Company’s
long-term disability plan in effect, provided the Participant is eligible to
participate in such long-term disability plan (regardless of whether or not the
Participant has elected to participate in such long-term disability plan).

(e) “Performance Cash Unit” has the value of $1 each.

(f) “Performance Stock Unit” has the value of one Common Share each.

(g) “Retirement” means termination of employment with the Company on or after
the earlier of (i) the date the Participant becomes age 65, or (ii) the date the
sum of the Participant’s years of continuous employment with the Company and the
Participant’s age equals at least 70 years.

The undersigned Participant hereby acknowledges receipt of this Award Agreement
and accepts the Performance Units granted thereunder, subject to the terms and
conditions of the Plan and the terms and conditions hereinabove set forth.

 

 

 

Signature

 

Social Security No./Tax Identification No.

 

Home Address

 

City   State   Zip

The undersigned officer executes this Award Agreement on behalf of Cooper Tire &
Rubber Company.

 

COOPER TIRE & RUBBER COMPANY By:  

 

 

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