EX-10.4






Exhibit 10.4




FIFTH AMENDMENT TO EMPLOYMENT AGREEMENT




          FIFTH AMENDMENT dated as of December 18, 2008 (this “Amendment”) to EMPLOYMENT AGREEMENT dated
as of February 27, 2003, as amended (the “Agreement”) by and between TRW Limited (the “Company”)
and Peter J. Lake (“Executive”).




          WHEREAS, in order to comply with Section 409A of the Internal Revenue Code of 1986 and the
Treasury Regulations and related guidance promulgated thereunder, Executive and Company desire to
amend the Agreement as set forth below.




          In consideration of the premises and mutual covenants herein, the parties agree as follows:




          1. Defined Terms. Capitalized terms used herein but not defined shall have the
meanings assigned to them in the Agreement.




          2. Amendment to Section 4 of the Agreement. The last sentence of Section 4 of the
Agreement is amended in its entirety, effective January 1, 2009, to read as follows:





“Any Annual Bonus declared by the Compensation Committee of the Board of
Directors of TRW Automotive Holdings Corp. shall be paid by the Company to
Executive in the calendar year following the year to which it relates, as
soon as administratively practicable following the determination of the
Annual Bonus, but in no event later than March 15th of the calendar year
following the year to which the Annual Bonus relates.”



          3. Amendment to Sections 5 and 6 of the Agreement. Sections 5 and 6 of the Agreement
are each amended, effective January 1, 2009, by adding the following new sentence to the end
thereof:





“To the extent any reimbursement or in-kind benefit provided herein is
includable in Executive’s income, any such reimbursements or benefits shall
be paid promptly to Executive in accordance with past practice (if any),
but in no event later than December 31st of the year following the year in
which Executive incurs the expense, and the amount of any reimbursement or
in-kind benefit provided in one year shall not affect the amount of any
such reimbursement or benefit provided in a subsequent year.”



          4. Amendment to Section 7.c.(ii) of the Agreement. Section 7.c.(ii) of the Agreement
shall be amended in its entirety, effective January 1, 2009, to read as follows:




          “For purposes of this Agreement, “Good Reason” shall mean





(A) the failure of the Company to pay or cause to be paid or
provide Executive’s Base Salary, Annual Bonus or Employee Benefits
when due hereunder,




(B) any requirement that Executive’s principal office shall be
located other than within the Michigan counties of Wayne, Oakland,
Macomb and Washtenaw,


(C) any adverse change in Executive’s reporting relationship, or



 









 







(D) any material diminution for a period of at least 30 days in
Executive’s authority or responsibilities from those described in Section
2 hereof;




provided, that the events described in clauses (A), (B), (C), or (D) of
this Section 7(c)(ii) shall constitute Good Reason only if the Company fails to
cure such event within




(1) thirty days after receipt from Executive of written notice of the
event which constitutes Good Reason pursuant to clauses (B), (C) or (D) or




(2) ten days after receipt from Executive of written notice of the event
which constitutes Good Reason pursuant to clause (A) or such greater
period of time, but not more than thirty days, as shall be required by
Section 409A of the Internal Revenue Code of 1986 (the “Code”) and the
Treasury Regulations and related guidance promulgated thereunder
(collectively referred to herein as “Section 409A”).”



          5. Amendment to Section 7.c.(iv) of the Agreement. Section 7.c.(iv) of the Agreement
shall be amended, effective January 1, 2009, by adding the following new sentence to the end
thereof:





“Notwithstanding anything to the contrary herein, in the event the Change
in Control occurs within the first six (6) months following Executive’s
separation from service, payment of the amounts described in (x) and (y),
to the extent they constitute Excess Amounts (as defined in Section
7.h.(ii)(B)), shall not be paid until the six-month anniversary of the
date of Executive’s separation from service, in accordance with the
requirements of Section 7.h.”



          6. Amendment to Section 7.d.(ii) of the Agreement. The first sentence of Section
7.d.(ii) of the Agreement shall be amended, effective January 1, 2009, by eliminating subsection
(C) and adding the following subsections (C) and (D) to the end thereof:





“(C) any “person” or “group” (as defined above) other than AI or its
Affiliates (as defined below) acquires (or has acquired during the 12-month
period ending on the date of the most recent acquisition of such person or
group) ownership of stock of Holdings or TRW Automotive possessing 30
percent or more of the total voting power of the stock of Holdings or TRW
Automotive, as applicable, or




(D) a majority of the members of the Board of Directors of Holdings
(the “Holdings Board”) is replaced during any 12-month period by directors
whose appointment or election is not endorsed by a majority of the members
of the Holdings Board, as it was constituted at the beginning of such
12-month period.”



          7. Amendment to Section 7.d.(iii)(B) of the Agreement. Section 7.d.(iii)(B) of the
Agreement shall be amended, effective January 1, 2009, by replacing the phrase “as soon as
practicable, but in no event later than ten (10) business days, following such termination of
employment” with the phrase “as soon as practicable, but in no event later than ten (10) business
days, following such termination of employment, except as otherwise provided under Section 7.h. for
any Excess Amount (as defined in Section 7.h.(ii)(B)).”




          8. Amendment to Section 7.e.(iii)(B) of the Agreement. Section 7.e.(iii)(B) of the
Agreement shall be amended, effective January 1, 2009, in its entirety to read as follows:




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     “(B) subject to Executive’s continued compliance with the
provisions of Section 9 (except for insignificant breaches of
Section 9 as reasonably determined by the Company), (x) continued
payment of Executive’s Base Salary and (y) a monthly payment equal
to Executive’s Average Annual Bonus (as defined in Section
7.c.(iii)) divided by twelve (12), for a period of twelve (12)
months following the date of such termination; provided, that
Executive shall not be entitled to any other cash severance or cash
termination benefits under any other plans, programs or
arrangements of the Company or its affiliates other than retirement
benefit plans;”



          9. Addition of Section 7.h. to the Agreement. Section 7 of the Agreement shall be
amended by adding, effective January 1, 2009, the following new subsection h.:





“h. In order to comply with Section 409A, the following provisions shall
apply:




(i) For purposes of Section 7 of this Agreement, a termination of
employment means a “separation from service” as defined by Section 409A.




(ii) All payments due under Sections 7.c. through e. (other than the
Permitted Items, as defined in Section 7.h.(ii)(C)) following an
involuntary separation from service, as defined by Section 409A, including
any resignation by Executive for Good Reason, whether in connection with
any Change in Control or otherwise, shall be made subject to the following:




     (A) During the first six (6) months following Executive’s
involuntary separation from service, in no event shall the amount
payable hereunder exceed two times the lesser of (1) Executive’s
annualized compensation based on his annual rate of pay for the
calendar year preceding the calendar year in which the separation
from service occurs and (2) the limitation in effect under Code
Section 401(a)(17) for the year in which Executive’s separation
from service occurs ($230,000 for 2008).




     (B) To the extent the amount otherwise payable hereunder
during the first six (6) months following Executive’s involuntary
separation from service would, but for subsection (A) above, exceed
two times the lesser of (1) Executive’s annualized compensation
based on his annual rate of pay for the calendar year preceding the
calendar year in which the separation from service occurs and (2)
the limitation in effect under Code Section 401(a)(17) for the year
in which Executive’s separation from service occurs (referred to
herein as the “Excess Amount”), the Excess Amount shall be
accumulated and paid to Executive in a lump sum on the six-month
anniversary of the date of Executive’s separation from service (or
the first business day thereafter, if such anniversary date is not
a business day). Any remaining installments or lump sum payments
payable hereunder shall continue or otherwise be made in accordance with the
applicable provisions of this Agreement.



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     (C) All amounts to be provided to Executive under Sections
7.c. through e. shall be taken into account in determining the
Excess Amount, and therefore subject to the six (6) month delay in
payment described above, other than the following
(collectively, the “Permitted Items”):




(1) The Accrued Rights.




(2) Any Pro Rata Bonus.




     (3) Any benefits continued hereunder for medical,
dental, life insurance and disability benefits following
Executive’s separation from service that are excludable
from income.




     (4) Expenses or benefits that are includable in
income to the extent such amounts do not exceed the limit
in effect under Code Section 402(g) ($15,500 for 2008) for
the year in which Executive’s separation from service
occurs.




Accordingly, the Permitted Items may be paid or provided to
Executive during the first six months following separation from
service in accordance with the applicable provisions of this
Agreement.




(iii) To the extent any reimbursement for an expense or in-kind
benefit incurred prior to separation from service is includable in
Executive’s income, such reimbursements shall be paid promptly to Executive
in accordance with past practice, but in no event later than December 31st
of the year following the year in which Executive incurs the expense, and
the amount of any reimbursement or in-kind benefit provided in one year
shall not affect the amount of any such reimbursement or benefit provided
in a subsequent year.”



          10. Addition of Section 7.i. to the Agreement. Section 7 of the Agreement shall be
amended by adding, effective January 1, 2009, the following new subsection i. to the end thereof:





“i. Amounts otherwise payable under Sections 7.c.(iv) or 7.d.(iii) that are delayed
for a period of six (6) months following Executive’s separation from service in
accordance with Section 7.h. and the entire amount payable under Section 7.e.(iii),
shall be contributed by the Company to a grantor trust established by the Company
with an independent trustee immediately following the occurrence of all events
giving rise to Executive’s entitlement to such amounts. The costs and fees
associated with establishing and maintaining such grantor trust shall be borne by
the Company. The amounts held in trust shall be invested in a stable value fund or
other similar investment vehicle, which seeks to preserve principal while earning
interest income. The investment vehicle shall be selected by an independent
investment manager appointed by the Company. The interest income realized shall be
included in and paid to Executive as and when Executive’s severance payments under
this Section 7 are made.”



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          11. Amendment to Section 11.j. of the Agreement. Section 11.j. of the Agreement is
amended, effective January 1, 2009, by adding the following new sentence to the end thereof:





“To the extent any reimbursement provided herein is includable in
Executive’s income, any such reimbursement shall be paid promptly to
Executive, but in no event later than December 31st of the year following
the year in which Executive’s right to such reimbursement is established
hereunder, and the amount of any reimbursement provided in one year shall
not affect the amount of any such reimbursement provided in a subsequent
year.”



          12. No Other Amendments; Effectiveness. Except as set forth in this Amendment, the
Agreement is ratified and confirmed in all respects. This Amendment shall be effective as of the
date hereof, except that provisions which expressly set forth a later effective date shall become
effective on such later date.




          13. Governing Law. This Amendment shall be governed by and construed in accordance
with the laws of the State of New York, without regard to conflicts of laws principles thereof.




          14. Counterparts. This Amendment may be signed in two or more counterparts, each of
which shall be deemed to be an original, but all of which together shall constitute one and the
same agreement.




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     IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment as of the day and
year first above written.



	 	 	 	 	 	 	 	 
	TRW Limited	 	 	 	 	 
	 
	By: 

Name:

	 	/s/ David L. Bialosky
 

David L. Bialosky
	 	 
	 	/s/ Peter J. Lake  

     Peter J. Lake	 
	Title:

	 	Attorney-in-Fact	 	 	 	 	 







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