Exhibit 10.74

 

TOWER INTERNATIONAL, INC.

 

PERFORMANCE AWARD AGREEMENT

 

This Performance Award Agreement (the “Agreement” or “Award Agreement”), dated
as of the “Award Date” set forth in the attached Exhibit A, is entered into
between Tower International, Inc., a Delaware corporation (the “Company”), and
the individual named in Exhibit A hereto (the “Awardee”). For purposes of this
Agreement, the information referenced in Exhibit A shall be as provided to the
Awardee electronically via the website made accessible to the Awardee to accept
the terms and conditions of this Award as set forth herein.

 

WHEREAS, the Company desires to provide the Awardee an incentive to participate
in the long-term success and growth of the Company; and

 

WHEREAS, to give effect to the foregoing intention, the Company desires to make
a cash-based award to the Awardee pursuant to Section 12 of the Tower
International, Inc. 2010 Equity Incentive Plan (the “Plan”).

 

NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth
and for other good and valuable consideration, the parties hereto agree as
follows:

 

1.          Award. The Company hereby awards the Awardee a cash-based award (the
“Performance Award”) for the performance period set forth in Exhibit A (the
“Performance Period”) (which, for administrative purposes, the Company may
denominate as a number of units of equivalent notional value). The target amount
of the Performance Award is set forth in Exhibit A (the “Target Award Amount”).
The actual dollar amount of the Performance Award paid hereunder is dependent
upon the satisfaction of the performance conditions set forth in Section 2 below
and may range from zero to two hundred percent (200%) of the Target Award
Amount. The Performance Award represents an unfunded, unsecured obligation of
the Company. The Performance Award shall be subject to the terms and conditions
set forth in this Agreement and the provisions of the Plan, the terms of which
are incorporated herein by reference. Capitalized terms used but not otherwise
defined herein shall have the meanings as set forth in the Plan.

 

2.          Earning of Performance Award. Fifty percent (50%) of the Performance
Award shall be earned based upon the Company Adjusted EPS Growth Rate (as
hereinafter defined) for the Performance Period (as hereinafter defined) (the
“EPS Award”), and the remaining fifty percent (50%) of the Performance Award
shall be earned based upon the Company TSR Percentile for the Performance Period
(the “TSR Award”). Subject to Section 4 and Section 5 below, at the end of the
Performance Period, the Committee will determine the Company’s attained levels
of performance with respect to the Company Adjusted EPS Growth Rate and TSR
Percentile and determine the total dollar amount of the EPS Award and the TSR
Award earned, if any, by the Awardee for the Performance Period (collectively,
the “Earned Performance Award”) by reference to the following performance
matrix:

 

 

 

 

Earned Performance Award

 

   Threshold   Target   Maximum  Earned EPS Award or TSR Award (as applicable)
*   50%   100%   200% Company Adjusted EPS Growth Rate   5%   10%   20% Company
TSR Percentile   25%   50%   75%

 

*     As a % of the portion of the Target Award Amount attributable to the EPS
Award or TSR Award, as applicable.

 

If, at the end of the Performance Period, the threshold, target or maximum level
of performance set forth in the performance matrix above has been attained for
either or both of the Company Adjusted EPS Growth Rate or the Company TSR
Percentile, the Awardee will be entitled to receive payment pursuant to Section
3 below for the total amount of the Earned Performance Award, subject to the
Awardee’s Continuous Service with the Company or any of its Subsidiaries through
the Payment Date. If the attained level of performance for either performance
goal is between the threshold and target, or between the target and maximum, the
total amount of the Earned Performance Award for such performance goal will be
determined by straight-line interpolation. If the attained level of one of the
performance goals above is less than the threshold performance goal, then no
portion of the Performance Award subject to that performance goal shall be
earned or paid.

 

3.          Form and Timing of Payment. Except as otherwise provided in Section
4 or Section 5 below, the total amount of the Earned Performance Award shall be
paid by the Company to the Awardee in cash, less applicable tax withholdings,
following approval by the Board (or committee thereof) of the audited financial
statements of the Company for the fiscal year ending on the last day of the
Performance Period; provided that the Awardee remains in the Continuous Service
of the Company or any of its Subsidiaries through the date such payment is made
(the “Payment Date”).

 

4.          Termination of Employment. Notwithstanding the provisions of Section
2 and Section 3 above, in the event that the Awardee’s Continuous Service with
the Company and/or its Subsidiaries is terminated after the completion of the
first calendar year of the Performance Period but prior to the Payment Date: (i)
by the Company and/or its Subsidiaries without Cause (as hereinafter defined) or
(ii) due to the Awardee’s death or Disability (as hereinafter defined), not more
than two and one-half months after the calendar year during which the Awardee’s
termination date occurs, the Company shall pay the Awardee an amount in cash,
less applicable tax withholdings, equal to the product of: (1) the total amount
of the Performance Award that would have been earned had the Performance Period
ended as of the December 31st immediately prior to the date on which the
Awardee’s Continuous Service terminated (determined based on the actual Company
Adjusted EPS Growth Rate and the Company TSR Percentile from the beginning of
the Performance Period through such December 31st), and (2) a fraction, of which
(x) the numerator is the number of completed calendar months during the
Performance Period that the Awardee is in Continuous Service with the Company or
any of its Subsidiaries prior to the date of termination, and (y) the
denominator is thirty-six (36); and the remaining portion of the Performance
Award shall be forfeited. Except as provided above, in the event that the
Awardee’s Continuous Service with the Company or any of its Subsidiaries
terminates prior to the Payment Date (which, for the avoidance of doubt,
includes any termination that occurs during the first calendar year of the
Performance Period), the entire Performance Award shall be forfeited.

 

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5.          Change in Control. Notwithstanding the provisions of Section 2 and
Section 3 above, if a Change in Control (as hereinafter defined) occurs during
the Performance Period and while the Awardee is in the Continuous Service of the
Company or any of its Subsidiaries, not more than sixty (60) days following the
Change in Control, the Company shall pay the Awardee an amount in cash, less
applicable tax withholdings, equal to the product of: (1) the Target Award
Amount, and (2) a fraction, of which (1) the numerator is the number of
completed calendar months during the Performance Period prior to the Change in
Control, and (2) the denominator is thirty-six (36); and the remaining portion
of the Performance Award shall be forfeited.

 

6.           Transfer Restrictions. Neither this Agreement nor the Performance
Award may be sold, assigned, pledged or otherwise transferred or encumbered
without the prior written consent of the Committee.

 

7.          Withholding Taxes. The Awardee authorizes the Company to withhold
from any payment due hereunder, the amount of withholding taxes due any federal,
state or local authority in respect of such payment and to take such other
action as may be necessary in the opinion of the Company to satisfy all
obligations for the payment of such withholding taxes.

 

8.          Awardee Representations. The Awardee has reviewed with his or her
own tax advisors the federal, state, local and foreign tax consequences of the
transactions contemplated by this Agreement. The Awardee is relying solely on
such advisors and not on any statements or representations of the Company or any
of its agents, if any, made to the Awardee. The Awardee understands that the
Awardee (and not the Company) shall be responsible for the Awardee’s own tax
liability arising as a result of the transactions contemplated by this
Agreement.

 

9.          Employment. The Awardee acknowledges and agrees that (i) nothing in
this Agreement or the Plan confers on the Awardee any right to continue an
employment, service or consulting relationship with the Company, nor shall it
affect in any way the Awardee’s right or the Company’s right to terminate the
Awardee’s employment, service, or consulting relationship at any time, with or
without Cause (as hereinafter defined); and (ii) the Company would not have
granted this Award to the Awardee but for these acknowledgements and agreements.

 

10.         Definitions. For purposes of this Agreement, the following terms
have the meanings set forth below:

 

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a.           “Cause” means, as determined by the Company, (i) conviction of or
plea of nolo contendere to a felony by the Awardee; (ii) acts of dishonesty by
the Awardee resulting in personal gain or enrichment at the expense of the
Company or its Subsidiaries or the affiliates of the Company and its
Subsidiaries; (iii) conduct by the Awardee in connection with his duties to the
Company and/or its Subsidiaries that is fraudulent, unlawful or grossly
negligent; (iv) engaging in inappropriate personal conduct by the Awardee
including, but not limited to, harassment discrimination, or the use or
possession at work of any illegal controlled substance; (v) contravention of
specific lawful direction from the Board or supervisor or continuing failure by
the Awardee to perform his duties to the Company or its Subsidiaries, or (vi)
breach of any non-disclosure, non-competition, non-solicitation or other similar
agreement executed by the Awardee for the benefit of the Company or any of its
Subsidiaries; provided, that, the Awardee shall have fifteen (15) days after
notice from the Company to cure the deficiency leading to the Cause
determination (except with respect to (i) above), if curable. A termination for
“Cause” shall be effective immediately (or on such other date set forth by the
Company). Notwithstanding the foregoing, if the Awardee and the Company or any
of its Subsidiaries have entered into an employment agreement, consulting
agreement, advisory agreement or other similar agreement that specifically
defines “cause,” then “Cause” shall have the meaning defined in that employment
agreement, consulting agreement, advisory agreement or other agreement.

 

b.           “Change in Control” shall have the meaning ascribed thereto in the
Plan as of the date hereof.

 

c.           “Company Adjusted EPS” shall mean the EPS of the Company for a
specified period, after adjustments thereto (i) to exclude the effect of
extraordinary, unusual and/or nonrecurring items and (ii) solely to the extent
permitted under Section 16 below, to reflect such other factors as the Committee
deems appropriate to fairly reflect earnings per share. For the avoidance of
doubt, the Company Adjusted EPS for each fiscal year is intended to be the same
as reported in the Company’s fourth quarter earnings presentation for the
relevant fiscal year.

 

d.           “Company Adjusted EPS Growth Rate” shall mean the cumulative
Company Adjusted EPS for the specified period divided by the number of fiscal
years in the specified period, stated in terms of a percentage growth rate. For
the avoidance of doubt, the Company Adjusted EPS Growth Rate shall be calculated
on the basis of the Company Adjusted EPS for the fiscal year prior to the
specified period.

 

e.           “Company TSR Percentile” shall mean the percentile ranking as
determined by the Committee on the basis of the Total Shareholder Return for
each of the Peer Group Companies, including the Company.

 

f.            “Continuous Service” shall mean the absence of any interruption or
termination of service as an employee, director, consultant, advisor or other
individual service provider; provided, however, that periods of absence to the
extent permitted by Company policies due to vacations, holidays, sick days,
short term disability and other approved absences, will not be considered to be
an interruption or termination of service hereunder. Changes in status between
service as an employee, director, consultant, advisor or other individual
service provider to the Company or any of its Subsidiaries will not constitute
an interruption of service.

 

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g.           “Disability” shall have the meaning ascribed thereto in the Plan as
of the date hereof. Notwithstanding the foregoing, if the Awardee and the
Company or any of its Subsidiaries have entered into an employment agreement,
consulting agreement, advisory agreement or other similar agreement that
specifically defines “disability,” then “Disability” shall have the meaning
defined in that employment agreement, consulting agreement, advisory agreement
or other agreement.

 

h.           “EPS” shall mean the diluted earnings per share from continuing
operations for the Company.

 

i.            “Peer Group Companies” shall mean the Company and American Axle &
Manufacturing Holdings, Inc., Dana Holding Corporation, Delphi Automotive, PLC,
Federal-Mogul Corporation, Johnson Controls, Inc., Lear Corporation, Linamar
Corporation, Magna International, Inc, Martinrea International Inc., Meritor,
Inc., Tenneco Inc., TRW Automotive Holdings Corp. and Visteon Corporation. If,
prior to the end of the Performance Period, any Peer Group Company ceases to be
a public reporting company for any reason, then such company shall not be
considered a Peer Group Company.

 

j.            “Total Shareholder Return” shall mean, with respect to a specified
period, the total percentage return per share of common stock, assuming
contemporaneous reinvestment of all dividends and other distributions on the
date such dividend or other distribution was paid, and based on the average
stock price over the first twenty (20) trading days of the Performance Period
and the average stock price over the last twenty (20) trading days of the
Performance Period. If necessary, the measurement of Total Shareholder Return
shall be adjusted to reflect stock splits or similar changes in capitalization
which occur during a specified period.

 

11.         Notices. Notices or communications to be made hereunder shall be in
writing and shall be delivered in person, by registered mail, by confirmed
facsimile or by a reputable overnight courier service to the Company at its
principal office or to the Awardee at his or her address contained in the
records of the Company. Alternatively, notices and other communications may be
provided in the form and manner of such electronic means as the Company may
permit.

 

12.         Entire Agreement; Governing Law. The Plan is incorporated herein by
reference. The Plan and this Award Agreement constitute the entire agreement of
the parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and the Awardee
with respect to the subject matter hereof, and may not be modified adversely to
the Awardee’s interest except by means of a writing signed by the Company and
the Awardee. In the event of any conflict between this Award Agreement and the
Plan, the Plan shall be controlling. This Award Agreement shall be construed
under the laws of the State of Delaware, without regard to conflict of laws
principles.

 

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13.         Opportunity for Review. Awardee and the Company agree that this
Award is granted under and governed by the terms and conditions of the Plan and
this Award Agreement. The Awardee has reviewed the Plan and this Award Agreement
in their entirety, has had an opportunity to obtain the advice of counsel prior
to accepting this Award Agreement and fully understands all provisions of the
Plan and this Award Agreement. The Awardee hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Committee upon any
questions relating to the Plan and this Award Agreement. The Awardee further
agrees to notify the Company upon any change in Awardee’s residence address.

 

14.         Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the Company and the Awardee and their respective permitted
successors, assigns, heirs, beneficiaries and representatives.

 

15.         Section 409A Compliance. To the extent that this Agreement and the
Performance Award hereunder are or become subject to the provisions of
Section 409A of the Code, the Company and the Awardee agree that the Performance
Award may be amended or modified by the Company as appropriate to maintain
compliance with the provisions of Section 409A of the Code.

 

16.         Section 162(m) Compliance. Notwithstanding anything in this
Agreement to the contrary, if the Awardee is a “covered employee” within the
meaning of Section 162(m) of the Code and this Performance Award is not exempt
from the deduction limitation under Section 162(m) of the Code by virtue of the
exception under Treas. Reg. Sec. 1.162-27(f), (i) no amounts shall be paid under
this Agreement unless the material terms of the performance goals hereunder are
approved by the stockholders of the Company in accordance with Section 162(m) of
the Code, (ii) prior to the payment of any amounts under this Agreement, the
Committee must certify in writing that the applicable performance goals and all
other material terms and conditions to payment were in fact satisfied, and (iii)
the Committee shall not exercise discretion to adjust any component of the
performance goals hereunder or the amount of the Performance Award in a manner
that is precluded by Section 162(m) of the Code.

 

17.         Recoupment. In the event the Company restates its financial
statements due to material noncompliance with any financial reporting
requirements under applicable securities laws, any payments pursuant to this
Performance Award for or in respect of the year that is restated, or the prior
three years, may be recovered to the extent the payments made exceed the amount
that would have been as a result of the restatement. In addition and without
limitation of the foregoing, any amounts paid hereunder shall be subject to
recoupment in accordance with The Dodd–Frank Wall Street Reform and Consumer
Protection Act and any implementing regulations thereunder, any clawback policy
adopted by the Company or as is otherwise required by applicable law or stock
exchange listing conditions.

 

18.         Electronic Acceptance. The Awardee shall be deemed to have accepted
and agreed to the terms and conditions of this Agreement (and the applicable
terms of the Plan) unless the Awardee rejects this Award Agreement within 90
days of the Award Date by such electronic means as the Company may permit. If
the Awardee rejects the Award Agreement, the Performance Award that would
otherwise have been made to the Awardee under this Award Agreement shall be null
and void and the Performance Award will be cancelled. 

 

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TOWER INTERNATIONAL, INC.

 

PERFORMANCE AWARD AGREEMENT

 

EXHIBIT A

 

1. (a) Awardee’s Name:  _______________________________________________________
        (b) Award Date:  ________________________         (c) Target Award
Amount: $_____________________         (d) Performance Period: January 1, 2013 -
December 31, 2015

 

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