Document:

EX-4.1

 

Exhibit 4.1

FIRST SUPPLEMENTAL INDENTURE

     THIS FIRST SUPPLEMENTAL INDENTURE (this “First Supplemental Indenture”), dated as of December
20, 2006, is made by and among ERICO International Corporation, a corporation duly organized and
existing under the laws of the State of Ohio, as issuer (the “Company”), ERICO Products, Inc., a
corporation duly organized and existing under the laws of the State of Ohio, as guarantor (the
“Guarantor”), and Wells Fargo Bank, N.A., as trustee (the “Trustee”). Capitalized terms used
herein and not otherwise defined shall have the meaning assigned to them in the Indenture (as
defined below).

RECITALS:

     A. The Company, the Guarantor and the Trustee have entered into an Indenture, dated as of
February 20, 2004 (the “Indenture”).

     B. Pursuant to the Indenture, the Company issued, the Guarantor guaranteed and the Trustee
authenticated and delivered an aggregate principal amount of $151,500,000 of the Company’s 87/8%
Senior Subordinated Notes due 2012 (the “Notes”), of which $141,000,000 remains outstanding as of
the date hereof.

     C. The Company desires and has requested the Guarantor and the Trustee to join with the
Company in the execution and delivery of this First Supplemental Indenture for the purpose of
amending the Indenture in order to eliminate certain covenants.

     D. Section 9.02 of the Indenture provides that a supplemental indenture may be entered into by
the Company, the Guarantor and the Trustee to amend or supplement certain provisions of the
Indenture with the consent of Holders of at least a majority in principal amount of the outstanding
Notes and a resolution of the Board of Directors of the Company authorizing the execution of any
such amended or supplemental indenture.

     E. Pursuant to a solicitation by the Company, consents to the amendments to the Indenture,
which will eliminate substantially all of the restrictive and certain other covenants pursuant to
this First Supplemental Indenture, of Holders of at least a majority in aggregate principal amount
of the outstanding Notes not owned by the Company or any of its Affiliates have been received and a
resolution of the Board of Directors of the Company has authorized the Company to enter into this
First Supplemental Indenture with the Guarantor and the Trustee.

     F. The Company has furnished, or caused to be furnished, to the Trustee, and the Trustee has
received, an Officers’ Certificate and an opinion of counsel relating to this First Supplemental
Indenture.

     G. All things necessary to make this First Supplemental Indenture a valid agreement of the
Company, the Guarantor and the Trustee and a valid amendment to the Indenture have been done.

     NOW THEREFORE, the parties hereto agree for the benefit of the other parties, as follows:

 

 

AGREEMENT:

     Section 1. Amendments to the Indenture.

          1.1 SECTION 4.02 of ARTICLE FOUR of the Indenture is amended by deleting the section in its
entirety, together with any references thereto in the Indenture, and replacing it with the
following: “Intentionally omitted.”

          1.2 SECTION 4.03 of ARTICLE FOUR of the Indenture is amended by deleting the section in its
entirety, together with any references thereto in the Indenture, and replacing it with the
following: “Intentionally omitted.”

          1.3 SECTION 4.04 of ARTICLE FOUR of the Indenture is amended by deleting the section in its
entirety, together with any references thereto in the Indenture, and replacing it with the
following: “Intentionally omitted.”

          1.4 SECTION 4.05 of ARTICLE FOUR of the Indenture is amended by deleting the section in its
entirety, together with any references thereto in the Indenture, and replacing it with the
following: “Intentionally omitted.”

          1.5 SECTION 4.06 of ARTICLE FOUR of the Indenture is amended by deleting the section in its
entirety, together with any references thereto in the Indenture, and replacing it with the
following: “Intentionally omitted.”

          1.6 SECTION 4.07 of ARTICLE FOUR of the Indenture is amended by deleting the section in its
entirety, together with any references thereto in the Indenture, and replacing it with the
following: “Intentionally omitted.”

          1.7 SECTION 4.08 of ARTICLE FOUR of the Indenture is amended by deleting the section in its
entirety, together with any references thereto in the Indenture, and replacing it with the
following: “Intentionally omitted.”

          1.8 SECTION 4.09 of ARTICLE FOUR of the Indenture is amended by deleting the section in its
entirety, together with any references thereto in the Indenture, and replacing it with the
following: “Intentionally omitted.”

          1.9 SECTION 4.10 of ARTICLE FOUR of the Indenture is amended by deleting the section in its
entirety, together with any references thereto in the Indenture, and replacing it with the
following: “Intentionally omitted.”

          1.10 SECTION 4.11 of ARTICLE FOUR of the Indenture is amended by deleting the section in its
entirety, together with any references thereto in the Indenture, and replacing it with the
following: “Intentionally omitted.”

2

 

          1.11 SECTION 4.12 of ARTICLE FOUR of the Indenture is amended by deleting the section in its
entirety, together with any references thereto in the Indenture, and replacing it with the
following: “Intentionally omitted.”

          1.12 SECTION 4.13 of ARTICLE FOUR of the Indenture is amended by deleting the section in its
entirety, together with any references thereto in the Indenture, and replacing it with the
following: “Intentionally omitted.”

          1.13 SECTION 4.14 of ARTICLE FOUR of the Indenture is amended by deleting the section in its
entirety, together with any references thereto in the Indenture, and replacing it with the
following: “Intentionally omitted.”

          1.14 SECTION 4.15 of ARTICLE FOUR of the Indenture is amended by deleting the section in its
entirety, together with any references thereto in the Indenture, and replacing it with the
following: “Intentionally omitted.”

          1.15 SECTION 4.16 of ARTICLE FOUR of the Indenture is amended by deleting the section in its
entirety, together with any references thereto in the Indenture, and replacing it with the
following: “Intentionally omitted.”

          1.16 SECTION 4.17 of ARTICLE FOUR of the Indenture is amended by deleting the section in its
entirety, together with any references thereto in the Indenture, and replacing it with the
following: “Intentionally omitted.”

          1.17 SECTION 4.18 of ARTICLE FOUR of the Indenture is amended by deleting the section in its
entirety, together with any references thereto in the Indenture, and replacing it with the
following: “Intentionally omitted.”

          1.18 SECTION 4.19 of ARTICLE FOUR of the Indenture is amended by deleting the section in its
entirety, together with any references thereto in the Indenture, and replacing it with the
following: “Intentionally omitted.”

          1.19 SECTION 5.01 of ARTICLE FIVE of the Indenture is amended by deleting the section in its
entirety, together with any references thereto in the Indenture, and replacing it with the
following: “Intentionally omitted.”

          1.20 SECTION 5.02 of ARTICLE FIVE of the Indenture is amended by deleting the section in its
entirety, together with any references thereto in the Indenture, and replacing it with the
following: “Intentionally omitted.”

          1.21 Any defined terms present in the Indenture, but no longer used as a result of the
amendments made by this First Supplemental Indenture are hereby eliminated. The definition of any
defined term used in the Indenture, where such definition is set forth in any of the sections that
are eliminated by this First Supplemental Indenture and the term it defines is still used in the
Indenture after the amendments hereby become effective, shall be deemed to become part of, and
defined in, Section 1.01 of the Indenture. Such defined terms are to be in alphanumeric order
within Section 1.01 of the Indenture.

3

 

     Section 2. Miscellaneous.

          2.1 Effect and Operation of First Supplemental Indenture. This First Supplemental Indenture
shall be effective and binding immediately upon its execution and thereupon this First Supplemental
Indenture shall form a part of the Indenture for all purposes, and every Note heretofore or
hereafter authenticated and delivered under the Indenture shall be bound hereby, but,
notwithstanding anything in the Indenture or this First Supplemental Indenture to the contrary,
this First Supplemental Indenture shall not be operative until after the Expiration Date (as
defined in the Company’s Offer to Purchase and Consent Solicitation Statement, dated November 28,
2006 (as amended, the “Statement”)) and upon notice to the Trustee of the satisfaction or waiver of
the conditions set forth in the Statement. If the Offer is terminated or withdrawn, the Company
does not provide notice to the Trustee after the Expiration Date or the Notes are not accepted for
purchase for any reason, this First Supplemental Indenture will not become operative and the
Indenture will remain in the same form as it was before this First Supplemental Indenture was
executed. Except as modified and amended by this First Supplemental Indenture, all provisions of
the Indenture shall remain in full force and effect.

          2.2 Confirmation and Preservation of the Indenture. The Indenture as modified and amended by
this First Supplemental Indenture is in all respects confirmed and preserved.

          2.3 Indenture and First Supplemental Indenture Construed Together. This First Supplemental
Indenture is an indenture supplemental to and in implementation of the Indenture, and the Indenture
and this First Supplemental Indenture shall henceforth be read and construed together.

          2.4 Trust Indenture Act Controls. If any provision of this First Supplemental Indenture
limits, qualifies or conflicts with the duties imposed by the Trust Indenture Act § 318(c), the
imposed duty shall control.

          2.5 Governing Law. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS FIRST SUPPLEMENTAL INDENTURE WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF
CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.

          2.6 Successors. All agreements of the Company in this First Supplemental Indenture shall bind
its successors. All agreements of the Trustee in this First Supplemental Indenture shall bind its
successors. All agreements of the Guarantor in this First Supplemental Indenture shall bind its
successors, except as provided in Section 11.05 of the Indenture.

          2.7 Severability. In case any provision in this First Supplemental Indenture shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

4

 

          2.8 Counterpart Originals. The parties may sign any number of copies of this First
Supplemental Indenture. Each signed copy shall be deemed an original, but all of them together
represent the same agreement.

          2.9 Table of Contents, Headings, etc. The headings of the Articles and Sections of this First
Supplemental Indenture have been inserted for convenience of reference only, are not to be
considered a part this Indenture and shall in no way modify or restrict any of the terms or
provisions hereof.

          2.10 Benefits of First Supplemental Indenture. Nothing in this First Supplemental Indenture,
express or implied, shall give to any Person, other than the parties hereto and their successors
and the Holders of Notes, any benefit or any legal or equitable right, remedy or claim under this
First Supplemental Indenture.

          2.11 Trustee. The Trustee makes no representations as to the validity or sufficiency of this
First Supplemental Indenture. The statements and recitals herein are deemed to be those of the
Company and the Guarantor and not of the Trustee.

[Signatures are on the following page.]

5

 

     IN WITNESS WHEREOF, the parties have caused this First Supplemental Indenture to be duly
executed as of the date and the year first written above.

	 	 	 	 	 
	 	ERICO INTERNATIONAL CORPORATION

 	 
	 	By:  	/s/ William A. Fullmer
 	 
	 	 	Name:  	William A. Fullmer 	 
	 	 	Title:  	Vice President and Secretary 	 
	 

	 	 	 	 	 
	 	ERICO PRODUCTS, INC.

 	 
	 	By:  	/s/ Jeffrey R. Steinhilber
 	 
	 	 	Name:  	Jeffrey R. Steinhilber 	 
	 	 	Title:  	Executive Vice President and

Chief Financial Officer 	 
	 

	 	 	 	 	 
	 	WELLS FARGO BANK, N.A., as Trustee

 	 
	 	By:  	/s/  Lynn M. Steiner
 	 
	 	 	Name:  	Lynn M. Steiner 	 
	 	 	Title:  	Vice President 	 
	 

S-1EX-10.1

 

Exhibit 10.1

EMPLOYMENT AGREEMENT

     THIS
EMPLOYMENT AGREEMENT (this “Agreement”) is made and
entered into this 19th day of December
2006, between COOPER TIRE & RUBBER COMPANY, a Delaware corporation (the “Company”), and
Roy V. Armes (the “Executive”).

W I T N E S S E T H:

     WHEREAS, the Company desires to employ the Executive as its President and Chief Executive
Officer and the Executive desires to be so employed; and

     WHEREAS, the Company and the Executive desire to enter into this Agreement setting forth the
terms and conditions of such employment.

     NOW, THEREFORE, in consideration of the premises and the mutual promises and agreements
contained herein and other good and valuable consideration, the sufficiency and receipt of which
are hereby acknowledged, and intending to be legally bound hereby, the Company and the Executive
hereby agree as follows:

     1. Certain Defined Terms. In addition to terms defined elsewhere herein, the following
terms have the following meanings when used in this Agreement with initial capital letters:

     (a) “Affiliate” means any corporation, limited liability company, joint venture, partnership,
or other legal entity in which the Company owns, directly or indirectly, or has previously owned,
at least fifty percent (50%) of the capital stock, profits, interest or capital interest.

     (b) “Annual Incentive Compensation” means the amount paid or (but for any deferral) payable to
the Executive for a year under any annual bonus compensation programs or arrangements. Annual
Incentive Compensation shall not include or take into account long-term incentive compensation,
stock option or other equity awards (regardless of whether granted annually), pension or other
retirement benefit contributions or accruals, perquisites or other fringe benefits. For the
avoidance of doubt, “Annual Incentive Compensation” may be zero.

     (c) “Average Annual Incentive Compensation” means:

     (i) the average of the Annual Incentive Compensation earned and certified by the
Compensation Committee of the Board for the Executive for the three (3) fiscal years
preceding the year in which a Termination Date occurs; (provided that, for purposes of this
Section 1(c), if a fiscal year is less than 12 complete months, the bonus will be
annualized by dividing the bonus amount for such year by the fraction the numerator of
which is the number of days constituting such short fiscal year and the denominator of
which is 365);

     (ii) if the Executive has been employed by the Company and the Annual Incentive
Compensation that has been earned and certified by the

 

 

Compensation Committee of the Board for the Executive for fewer than three (3) fiscal
years, the average of the Annual Incentive Compensation that has been earned and certified
by the Compensation Committee of the Board for the Executive for the number of fiscal years
through the Termination Date; or

     (iii) if the Termination Date occurs prior to the date Annual Incentive Compensation
is earned and certified by the Compensation Committee of the Board for the Executive for
the 2007 fiscal year, the target Annual Incentive Compensation for fiscal year 2007.

     (d) “Base Pay” means the Executive’s rate of annual base salary payable under this Agreement
(which rate shall not be deemed to be reduced for purposes of Sections 5 or Section 6 hereof by
reason of any elective deferrals of annual base salary) at the time a termination of employment
occurs or, if applicable, immediately before any reduction in such amount that serves as a basis
for a termination for Good Reason.

     (e) “Board” means the Board of Directors of the Company.

     (f) “Cause” means:

     (X) prior to a Change in Control, termination of the Executive’s employment with the
Company by the Board because of:

     (i) the willful and continued failure by the Executive to perform substantially the
duties of the Executive’s position, and the failure of the Executive to correct such
failure of performance within thirty (30) days after notification by the Board of any such
failure (other than by reason of the incapacity of the Executive 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
or any Affiliate thereof, and failure of the Executive 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 Executive due to physical or mental illness); or

     (iii) the Executive is found guilty of, or pleads guilty or nolo contendere to, a
felony or any criminal act involving fraud, embezzlement, theft, or moral turpitude; or

     (iv) the Executive is found guilty of, or pleads guilty or nolo contendere to, any
criminal act committed in the course of the Executive’s employment with the Company or
against the Company or any Affiliate, or the Executive is found liable in a civil action,
in which an allegation involves a dishonest act, fraud, embezzlement or theft committed in
the course of the Executive’s employment with the Company or against the Company or any
Affiliate.

2

 

     (Y) following a Change in Control, termination of the Executive’s employment with the
Company by the Board because of:

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

     (iii) the Executive is found guilty of, or pleads guilty or nolo contendere to, a
felony or any criminal act involving fraud, embezzlement, theft, or moral turpitude; or

     (iv) the Executive is found guilty of, or pleads guilty or nolo contendere to, any
criminal act committed in the course of the Executive’s employment with the Company or
against the Company or any Affiliate, or the Executive is found liable in a civil action,
in which an allegation involves a dishonest act, fraud, embezzlement or theft committed in
the course of the Executive’s employment with the Company or against the Company or any
Affiliate.

For purposes of this Agreement, no act, or failure to act, on the Executive’s part shall be
deemed “willful” if done, or omitted to be done, by the Executive in good faith and with a
reasonable belief that the Executive’s action or omission was in the best interest of the Company.
Any notification to be given by the Board in accordance with Section 1(f)(X)(i), 1(f)(X)(ii),
1(f)(Y)(i) or 1(f)(Y)(ii) shall be in writing and shall specifically identify the breach, failure,
refusal, act or omission to which the notification relates and, in the case of Section 1(f)(X)(ii),
1(f)(Y)(i) or 1(f)(Y)(ii), shall describe the injury to the Company, and such notification must be
given within twelve (12) months of the Board becoming aware, or within twelve (12) months of when
the Board should have reasonably become aware of the breach, failure, refusal, act, omission or
injury identified in the notification. Notwithstanding Section 23 hereto, failure to notify the
Executive 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 Executive and any such breach, failure,
refusal, act or omission by the Executive shall not then be determined to be a breach of this
Agreement.

3

 

     For the avoidance of doubt and for the purpose of determining Cause, the exercise of business
judgment by the Executive 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 or any Affiliate thereof, unless such business judgment by the Executive
was not made in good faith, or constitutes willful or wanton misconduct, or was an intentional
violation of state or federal law.

     (g) “Change in Control” means the occurrence during the Term of any of the following events:

     (i) the 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 the Company immediately prior to such transaction;

     (ii) all or substantially all the assets accounted for on the consolidated balance
sheet of the 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 former stockholders of the
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
date of this Agreement) of the Securities Exchange Act of 1934, (the “Exchange Act”)
becomes the beneficial owner (as defined in Rule 13d-3 of the Securities and Exchange
Commission pursuant to the Exchange Act) of 35% or more of the voting power of the
then-outstanding voting securities of the Company; provided, however, that the foregoing
does not apply to any such acquisition that is made by (w) any Affiliate of the Company;
(x) any employee benefit plan of the Company or any Affiliate; or (y) any person or group
of which employees of the Company or of any Affiliate 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 Executive; 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
date of this Agreement or (y) was nominated for election or 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 shall in no event be
deemed to be a Continuing Director.

4

 

     (h) “Code” means the Internal Revenue Code of 1986, as amended.

     (i) “Committee” means the Compensation Committee of the Board.

     (j) “Common Stock” means the Company’s common stock, par value $1.00 per share.

     (k) “Company” means the Company as hereinbefore defined.

     (l) “Disability” or “Disabled” means when the Executive has been totally disabled by bodily
injury or disease so as to prevent him from being physically able to perform the job duties as
required under this Agreement, and such total disability shall have continued for five (5)
consecutive months, and, in the opinion of a qualified physician selected by the Company (and
reasonably acceptable to the Executive), such disability will presumably be permanent and
continuous during the remainder of the Executive’s life.

     (m) “Good Reason” means the occurrence of any of the following, without the Executive’s
express, prior written consent:

     (i) a reduction in the Executive’s Base Pay, other than as part of a reduction
applicable at the same time to executive officers of the Company generally; provided, any
such reduction applicable to other executive officers shall not for the Executive exceed
the percentage of reduction applicable to such other executive officers, and thereafter
such reduction shall cease to apply at the same time and to the same extent (on a like
percentage basis) as the reduction may cease to apply to such other executive officers;

     (ii) a material breach by the Company of Section 2(a) or Section 4 of this Agreement,
including but not limited to, the assignment to the Executive of any duties inconsistent
with his status as President and Chief Executive Officer of the Company, or his removal
from such position, or a substantial alteration in the nature or status of his
responsibilities from those described herein, except, in each case, in connection with a
promotion of the Executive, and the failure of the Company to remedy such breach within
thirty (30) days after receipt of written notice of such breach from the Executive, or a
change in Executive’s reporting relationship such that the Executive no longer reports
directly to the full Board, or the failure of the Executive to be elected or reelected to
the Board;

     (iii) the relocation of the office of the Company where the Executive is employed to a
location other than Findlay, Ohio, except for required travel on the Company’s business to
an extent reasonably required to perform his duties hereunder;

     (iv) except as required by law, the Company directly or indirectly materially reducing
the level of benefits or award opportunities provided to the Executive under the Plans (as
defined in Section 4(b)) other than a reduction or change in such benefits or opportunities
applicable to executive officers of the

5

 

Company generally or the Company failing to provide the Executive with the number of
paid vacation days to which he is entitled on the basis of years of service with the
Company in accordance with the Company’s then current normal vacation policy for the
Company’s senior executives, and the failure of the Company to remedy such action within
thirty (30) days after receipt of written notice thereof from the Executive;

     (v) the failure of the Company to obtain a satisfactory agreement from any successor
to assume and agree to perform this Agreement, as contemplated in Section 19 hereof or, if
the business of the Company for which the Executive’s services are principally performed is
sold, the failure of the purchaser of such business to assume this Agreement or to provide
the Executive with the same or a comparable position, duties, benefits, base salary and
incentive compensation as provided in Sections 2 and 4 of this Agreement; or

     (vi) the failure of the Board to elect the Executive to his existing position or an
equivalent position.

     Any notification to be given by the Executive in accordance with Section 1(m)(ii) or 1(m)(iv)
shall specifically identify the breach or failure to which the notification relates, and such
notification must be given within twelve (12) months of the Executive becoming aware, or within
twelve (12) months of when the Executive should have reasonably become aware of the breach or
failure identified in the notification. Notwithstanding Section 23 hereto, failure to notify the
Company within any such twelve (12) month period shall be deemed to be a waiver by the Executive of
any such breach or failure and any such breach or failure shall not then be considered “Good
Reason.”

     (n) “Incentive Compensation Plan” means the Cooper Tire & Rubber Company 1998, 2001 and 2006
Incentive Compensation Plans, as amended, and any successor to such plans.

     (o) “Long-Term Performance-Based Incentive Compensation” means any cash or equity-based
compensation program in which the amounts paid, earned or vested are based upon achievement of
specified performance goals over a period of more than one year. For the avoidance of doubt, equity
awards that are earned, vest or become exercisable based solely upon continued employment and/or
the passage of time are not “Long-Term Performance-Based Incentive Compensation.”

     (p) “Nonqualified Supplementary Benefit Plan” means the Cooper Tire & Rubber Company
Nonqualified Supplementary Benefit Plan, effective November 8, 1984, as amended.

     (q) “Retirement Plans” means the Spectrum Retirement Plan and the Nonqualified Supplementary
Benefit Plan or any successor plans thereto which provide comparable benefits.

     (r) “Spectrum Retirement Plan” means the Cooper Tire & Rubber Company Spectrum Retirement
Plan, effective January 1, 2002, as amended.

6

 

     (s) “Termination” means:

     (i) the involuntary termination of the Executive’s employment by the Company at any
time for any reason other than retirement, death, disability, Cause or the reason set forth
in subparagraph (iii) of this Section 1(s), or

     (ii) termination of the Executive’s employment by the Executive for Good Reason, or

     (iii) termination of the Executive’s employment at the end of the Term as a result of
the Company delivering a notice of non-extension pursuant to Section 3 prior to the
Executive’s 64th birthday.

     (t) “Termination Date” means the date on which the Executive’s employment with the Company is
terminated by the Company or the Executive for any reason or for no reason. If the Executive’s
employment is terminated by the Company, such date shall be specified in a written notice of
termination (which date shall be no earlier than the date of furnishing such notice), or if no such
date is specified therein, the date of receipt by the Executive of such written notice of
termination. The Executive shall specify such termination date in any written notice of his
resignation.

     (u) “1998 Option Plan” means the Cooper Tire & Rubber Company 1998 Employee Stock Option Plan,
as amended.

     2. Employment and Duties.

     (a) General. The Company hereby employs the Executive and the Executive agrees upon
the terms and conditions herein set forth to serve as President and Chief Executive Officer, said
employment to commence on January 1, 2007, and, in such capacity, shall perform such duties as may
be delineated in the Bylaws of the Company, and such other duties, commensurate with the
Executive’s title and position of President and Chief Executive Officer, as may be assigned to the
Executive from time to time by the Board. The Executive shall report directly to the full Board.
The Board shall appoint the Executive as a member of the Board effective January 1, 2007.

     (b) Exclusive Services. Throughout the Term (as defined in Section 3), the Executive
shall, except as may from time to time be otherwise agreed in writing by the Company and during
reasonable vacations and unless prevented by ill health, devote his full-time and undivided
attention during normal business hours to the business and affairs of the Company consistent with
his senior executive position, shall in all respects conform to and comply with the lawful and
reasonable directions and instructions given to him by the Board (provided that such directions and
instructions are not inconsistent with Section 2(a)), and shall use his best efforts to promote and
serve the interests of the Company.

     (c) Restrictions on Other Employment. Throughout the Term and provided that such
activities do not contravene the provisions of Section 2(b) hereof or Section 15 hereof:

7

 

     (i) the Executive may engage in charitable and community affairs;

     (ii) the Executive may perform inconsequential services without specific compensation
therefor in connection with the management of personal investments; and

     (iii) the Executive may, directly or indirectly, render services to any other person
or organization (including service as a member of the Board of Directors of any other
unaffiliated company), for which he receives compensation, that is not in competition with
the Company, subject in each case to the prior written approval of the Board which approval
will not be unreasonably withheld. The Executive may retain all fees he receives for such
services, and the Company shall not reduce his compensation by the amount of such fees. For
purposes of this Section 2(c)(iii) competition shall have the same meaning as intended for
the purposes of Section 15.

     3. Term of Employment. Subject to the provisions of Section 5 through Section 10
hereof, the Company shall retain the Executive pursuant to this Agreement and the Executive shall
serve in the employ of the Company for a period (the “Term”) commencing on January 1, 2007 and
continuing in effect through December 31, 2009; provided, however, that on each January 1 after the
commencement of the Term until the year in which the Executive’s 64th birthday occurs,
the Term shall automatically be extended for one additional year unless, no later than September 30
of the preceding year, the Company or the Executive shall have given notice to the other that it
does not wish to extend this Agreement.

     4. Compensation and Other Benefits. Subject to the provisions of this Agreement, the
Company shall pay and provide the following compensation and other benefits to the Executive during
the Term as compensation for services rendered hereunder:

     (a) Base Pay. The Company shall pay to the Executive Base Pay at the rate of $700,000
per annum, payable biweekly. The Base Pay will be reviewed not less frequently than annually by the
Board or by the Committee.

     (b) Employee Benefit Plans. At all times during the Term, the Executive shall be
provided the opportunity to participate in the Cooper Tire & Rubber Company Spectrum Retirement
Plan as a Spectrum Participant and the Cooper Tire & Rubber Company Nonqualified Supplementary
Benefit Plan, and such employee pension and retirement benefit plans, whether or not qualified, and
employee welfare benefit or perquisite plans, programs and arrangements (collectively, the “Plans”)
as are, from time to time hereafter, based on the Executive’s date of hire, generally made
available to executives of the Company.

     (c) Annual Incentive Compensation. The Executive shall be eligible to participate in
such Annual Incentive Compensation programs or arrangements established from time to time for
executives of the Company. The Executive shall be eligible for a

8

 

target award equal to 85% of Base Pay and a maximum award equal to 170% of Base Pay under such
Annual Incentive Compensation programs or arrangements pursuant to the terms and conditions
established therein, from time to time, for executives of the Company. Notwithstanding the terms
and conditions of the Annual Incentive Compensation programs or arrangements established for the
2007 fiscal year, the Executive shall receive an award of not less than 85% of Base Pay for Annual
Incentive Compensation attributable to the 2007 fiscal year.

     (d) Long-Term Performance-Based Incentive Compensation. The Executive shall be
eligible to participate in such long-term performance-based incentive compensation plans and
programs as the Company generally provides from time to time to its senior executives.

     (e) Initial Restricted Stock Unit Award.

     (i) Grant. As of commencement of employment or as soon thereafter as may be
practicable, the Executive shall be awarded a grant of such number of restricted stock
units pursuant to the Company’s 2006 Incentive Compensation Plan (“Plan”) as equals the
quotient of (x) $4,000,000 divided by (y) the average closing price of one (1) share of
Common Stock for all trading days during the month of December 2006, each such unit
representing a right to receive one (1) share of Common Stock (the “Initial RSU Award” and
each such restricted stock unit a “Unit”) in accordance with such terms and conditions as
may be determined by the Board, consistent with the provisions of this Section 4(e).

     (ii) Vesting and Deferral. The Initial RSU Award shall vest on December 31,
2009 provided that, except as set forth in Sections 5, 6, 8 and 9, the Executive is
continuously employed by the Company through such date for such Initial RSU Award to so
vest. The Initial RSU Award (including both Units initially awarded under Section 4(e)(i)
and dividend equivalent Units provided under Section 4(e)(iii)) shall be payable in two
installments: (x) the first such installment of vested Units shall be paid in shares of
Common Stock on the date following the date on which the Initial RSU Award vests in such
number of shares as are equal to 75% of the sum of the number of Units initially awarded
under Section 4(e)(i) and dividend equivalent Units provided under Section 4(e)(iii); and
(y) the second such installment of vested Units shall be paid in such number of shares of
Common Stock on the Termination Date (subject to any postponement as may be required to
comply with Section 409A of the Code) equal to the Units attributable to the Initial RSU
Award (including Units attributable to dividend equivalents) that have not been settled in
accordance with clause (x) next above; provided that, to the extent that the Termination
Date occurs prior to December 31, 2009 and the Units become vested by reason of the
occurrence of a Termination, such vesting and distribution will be subject to the
applicable requirements of Section 5 or Section 6, as applies, that the Executive sign a
Release. For the avoidance of doubt, it is recited here that, for purposes of this
Agreement, the Initial RSU Award shall be treated as an award that vests in a

9

 

single sum; provided that this sentence shall not be construed to exclude other awards
being treated as awards that vest in a single sum.

     (iii) Dividend Equivalents. The Initial RSU Award shall provide for accrual
of dividend equivalents until the date of payment of such award, as follows. As of each
dividend date with respect to shares of Common Stock, a dollar amount equal to the amount
of the dividend that would have been paid on the number of shares of Common Stock equal to
the number of Units awarded under the Initial RSU Award held by the Executive as of the
close of business on the record date for such dividend shall be converted into a number of
Units equal to the number of whole and fractional shares of Common Stock that could have
been purchased at the closing price on the dividend payment date with such dollar amount,
which Units shall be subject to all terms and conditions applicable to Units under the
Initial RSU Award. In the case of any dividend declared on shares of Common Stock which is
payable in shares of Common Stock, the Executive shall be credited with an additional
number of Units equal to the product of (x) the number of his Units then held on the
related dividend record date multiplied by the (y) the number of shares of Common Stock
(including any fraction thereof) distributable as a dividend on a share of Common Stock;
provided that in the event of a dividend of stock of a subsidiary of the Company, or other
similar event, the Initial RSU Award shall be adjusted in the same manner and to the same
extent as the adjustment to other restricted stock or restricted stock unit awards held by
executives of the Company.

     (f) Vacation. The Executive shall be entitled to paid annual vacation during the Term
in accordance with the Company’s then current vacation policy for the Company’s senior executives.

     5. Termination Without Cause or for Good Reason or Non-Renewal of Term Prior to a Change
in Control.

     (a) Severance and Benefits. Upon a Termination prior to, or more than two (2) years
following, a Change in Control, the Company shall pay the Executive the amount set forth in Section
5(a)(i) and, subject to and conditioned upon the provisions of Section 24 and to the Executive’s
delivering to the Company the Release provided for in Section 16 with all periods for revocation
expired, the Company shall pay or provide to the Executive the amounts and benefits set forth in
Section 5(a)(ii) through 5(a)(iii):

     (i) a single lump sum cash payment within thirty (30) days following the expiration of
such revocation period equal to the Executive’s then current Base Pay, to the extent
unpaid, through the date of the Executive’s Termination, plus the pro-rated portion of the
benefit payable under each Long-Term Performance-Based Compensation award or program in
which Executive participates (including, without limitation, any performance-based
restricted stock unit award); and

10

 

     (ii) a single lump sum in cash within thirty (30) days following the expiration of
such revocation period equal to the sum of (A) $75,000 plus (B)(I) two (2) times (II) the
sum of (x) the Executive’s Base Pay plus (y) the Average Annual Incentive Compensation;
provided, if such Termination occurs at any time on or prior to December 31, 2009 (other
than a Termination occurring at the end of the Term ending on December 31, 2009 as a result
of the Company delivering a notice of non-extension pursuant to Section 3), the amount set
forth in clause (B)(I) shall be equal to three (3); and

     (iii) for twenty-four (24) months following the Termination Date, the Company shall
provide the Executive with life, accident and health insurance benefits substantially
similar to those to which the Executive and the Executive’s family were entitled
immediately prior to the Termination, and thereafter the Company shall provide retiree
medical and life insurance coverage to the extent the Executive is eligible for such
benefits under the terms of the applicable Plans in effect immediately prior to the
Termination. Benefits otherwise receivable by the Executive pursuant to this Section
5(a)(iii) shall be reduced to the extent the Executive is eligible to receive comparable
benefits from other employment, and any such benefits eligibility shall be reported to the
Company.

     (b) Time-Vested Restricted Stock Units. Subject to and conditioned upon the
Executive’s delivering to the Company the Release provided for in Section 16 with all periods for
revocation expired, the Initial RSU Award (including dividend equivalents credited thereon pursuant
to Section 4(e)(iii)), if then unvested, shall fully vest immediately upon Termination and shall be
payable in accordance with Section 4(e)(ii). Notwithstanding any provision in any award agreement
between the Company and the Executive or this Section 5, subject to and conditioned upon the
Executive’s delivering to the Company the Release provided for in Section 16 with all periods for
revocation expired, (i) all restricted stock units granted to the Executive, other than the Initial
RSU Award, that vest based solely upon the Executive’s continued employment with the Company and
which have not otherwise vested shall vest and shall be payable in accordance with the terms of the
particular award under which they were granted; provided, any outstanding restricted stock unit
award that vests in a single sum determined solely on the basis of the Executive’s continuous
employment through a stated vesting date shall vest as to such number of restricted stock units on
the date of the Executive’s Termination as equals the fraction the numerator of which is the number
of full months (based on the monthly “anniversary” date of the award) so continuously employed from
the first day of such vesting period through the Termination Date and the denominator of which is
the total number of months comprising the vesting period of such award; and (ii) for all such
restricted stock units (other than the Initial RSU Award), within five (5) days after the
Termination Date, the Company shall either (1) pay to the Executive an amount equal to the fair
market value (computed as the average of the high and low trades reported on the New York Stock
Exchange) of the Common Stock represented by such vested restricted stock units determined as of
the Termination Date, or (2) issue Common Stock under such vested awards to the Executive. Any such
cash payment shall be deemed to be in lieu of and in substitution for any right the Executive may
have to such vested restricted stock units under the terms of any award agreement

11

 

between the Company and the Executive, and the Executive agrees to surrender all such vested
restricted stock units being cashed out hereunder immediately prior to receiving the cash payment
described above. For purposes hereunder, the term “restricted stock unit” should be read to include
all other similar equity instruments (other than the Initial RSU Award), including, but not limited
to, restricted stock.

     (c) Stock Options. Subject to and conditioned upon the Executive’s delivering to the
Company the Release provided for in Section 16 with all periods for revocation expired and
notwithstanding any provision in the Incentive Compensation Plan, the 1998 Option Plan, other
relevant plan or program or this Section 5:

     (i) for a period of ninety (90) days following the date of the Executive’s Termination
(or such longer period as may be set forth in the applicable stock option plan or award
agreement), but not later than the expiration of the stated option term under the award,
all stock options granted to the Executive by the Company that are both outstanding and
vested immediately prior to Termination (in accordance with their then existing terms and
this Section 5(c)) shall remain outstanding and exercisable, after which all such stock
options that have not been exercised shall immediately terminate; and

     (ii) all stock options granted to the Executive by the Company which have not
otherwise vested shall be forfeited immediately upon Termination; provided, any outstanding
unvested stock option award that vests in a single sum determined solely on the basis of
the Executive’s continuous employment through a stated vesting period of more than one (1)
year shall vest as to such number of stock options stock on the date of the Executive’s
Termination as equals the fraction the numerator of which is the number of full months
(based on the monthly “anniversary” date of the award) so continuously employed from the
first day of such vesting period through the Termination Date and the denominator of which
is the total number of months comprising the vesting period of such award, and such vested
options shall remain outstanding and exercisable thereafter for a period of ninety (90)
days following the date of the Executive’s Termination (or such longer period as may be set
forth in the applicable stock option plan or award agreement), but not later than the
expiration of the stated option term under the award, after which all such stock options
that have not been exercised shall immediately terminate.

    For purposes hereunder, the term “stock option” also means all other similar equity
instruments, including, but not limited to, stock appreciation rights.

     (d) Section 409A. Notwithstanding anything herein to the contrary, in no event shall
amounts in respect of any restricted stock units or stock options that, as determined by the
Company, provides for the “deferral of compensation” (as such term is defined under Section 409A of
the Code and the regulations and other Treasury Department guidance promulgated thereunder
(collectively, “Section 409A”)), be distributed pursuant to Section 5(b) or Section 5(c) prior to
the occurrence of the earlier of either (i) the Termination Date (or such later date required under
Section 24), (ii) the

12

 

Executive’s death or “disability” (as such term is defined under Section 409A), (iii) a
“change in the ownership or effective control” of the Company or in the “ownership of a substantial
portion of the assets” of the Company (each as defined under Section 409A), or (iv) the specified
time or fixed schedule as may be elected by the Executive in accordance with the applicable plan or
arrangement and Section 409A.

     6. Severance and Other Benefits Upon or Following a Change in Control.

     (a) Severance and Benefits. Upon a Termination that occurs at any time during the
period commencing on the occurrence of a Change in Control and ends on the second anniversary of
such Change in Control, the Company shall pay the Executive the amount set forth in Section 6(a)(i)
and, subject to and conditioned upon the provisions of Section 24 and to the Executive’s delivering
to the Company the Release provided for in Section 16 with all periods for revocation expired, the
Company shall pay or provide to the Executive the amounts and benefits set forth in Section
6(a)(ii) and 6(a)(iii):

     (i) a single lump sum cash payment within five (5) days following the expiration of
such revocation period equal to the Executive’s then current Base Pay, to the extent
unpaid, through the date of the Executive’s Termination, plus the pro-rated portion of the
benefit payable under each Long-Term Performance-Based Compensation award or program in
which Executive participates (including, without limitation, any performance-based
restricted stock unit award); and

     (ii) a single lump sum in cash within thirty (30) days following the expiration of
such revocation period equal to the sum of (A) $75,000 plus (B)(I) two (2) times (II) the
sum of (x) the Executive’s Base Pay plus (y) the Average Annual Incentive Compensation;
provided, if such Termination occurs at any time on or prior to December 31, 2009 (other
than a Termination occurring at the end of the Term ending on December 31, 2009 as a result
of the Company delivering a notice of non-extension pursuant to Section 3), the amount set
forth in clause (B)(I) shall be equal to three (3); and

     (iii) for twenty-four (24) months following the Termination Date, the Company shall
provide the Executive with life, accident and health insurance benefits substantially
similar to those to which the Executive and the Executive’s family were entitled
immediately prior to the Termination, and thereafter the Company shall provide retiree
medical and life insurance coverage to the extent the Executive is eligible for such
benefits under the terms of the applicable Plans in effect immediately prior to the
Termination. Benefits otherwise receivable by the Executive pursuant to this Section
6(a)(iv) shall be reduced to the extent the Executive is eligible to receive comparable
benefits from other employment, and any such benefits eligibility shall be reported to the
Company.

For purposes of Sections 5(a)(i), 6(a)(i), 8(a), 9(a) and 10, the “pro-rated portion of the benefit
payable” under a compensation arrangement shall be an amount pro-rated based upon the number of
full months (based on the monthly “anniversary” date of the first day

13

 

of the performance period) between the beginning of the year or other performance period and the
Termination Date relative to the total number of months in the year or in the applicable
performance period, and the amount that is so pro-rated shall be, for an amount or benefit that is
payable, earned and/or vested based solely on the achievement of objective performance criteria,
based on actual performance through the end of the most recent fiscal quarter prior to the
Termination Date.

     (b) Time-Vested Restricted Stock Units. Notwithstanding any provision in any award
agreement between the Company and the Executive or this Section 6, and subject to and conditioned
upon the Executive’s delivering to the Company the Release provided for in Section 16 with all
periods for revocation expired, (i) upon a Termination that occurs upon the date of the Change in
Control or thereafter on or before the second anniversary of the date of the Change in Control, all
restricted stock units granted to the Executive that vest based solely upon the Executive’s
continuous employment with the Company through a stated vesting date, including, without
limitation, the Initial RSU Award (including dividend equivalents credited thereon pursuant to
Section 4(e)(iii)), if then unvested, shall fully vest immediately upon Termination and shall be
payable in accordance with the terms thereof (the Initial RSU Award shall be payable in accordance
with Section 4(e)(ii)); provided, such restricted stock units shall vest immediately upon the
consummation of a Change in Control if the successor to the Company has not assumed (expressly or
impliedly) the Company’s obligations under the applicable restricted stock unit award or plan
document or issued to the Executive a substitute equity-based award of equivalent value on no less
favorable terms for vesting or payment as provided under the restricted stock unit award so
replaced (including, without limitation, the Initial RSU Award); and (ii) within five (5) days
after the Termination Date, the Company shall either (1) pay to the Executive an amount equal to
the fair market value (computed as the average of the high and low trades reported on the New York
Stock Exchange) of the Common Stock represented by such vested restricted stock units (other than
the Initial RSU Award) determined as of the Termination Date, or (2) issue Common Stock under such
vested awards to the Executive. Any such cash payment shall be deemed to be in lieu of and in
substitution for any right the Executive may have to such vested restricted stock units under the
terms of any award agreement between the Company and the Executive, and the Executive agrees to
surrender all such vested restricted stock units being cashed out hereunder immediately prior to
receiving the cash payment described above. For purposes hereunder, the term “restricted stock
unit” should be read to include all other similar equity instruments s (other than the Initial RSU
Award), including, but not limited to, restricted stock.

     (c) Stock Options. Subject to and conditioned upon the Executive’s delivering to the
Company the Release provided for in Section 16 with all periods for revocation expired and
notwithstanding any provision in the Incentive Compensation Plan, the 1998 Option Plan, other
relevant plan or program or this Section 6, all stock options granted to the Executive by the
Company which have not otherwise vested shall vest immediately upon a Termination that occurs upon
the date of the Change in Control or thereafter on or before the second anniversary of the Change
in Control and such vested stock options shall remain exercisable for a period of ninety (90) days
following the Termination Date (or such longer period as may be set forth in the applicable stock

14

 

option plan or award agreement), but not later than the expiration of the stated option term;
provided, however, such stock options shall vest immediately upon the consummation of a Change in
Control if the successor entity has not either assumed (expressly or impliedly) the Company’s
obligations under the applicable option award or plan document or issued to the Executive a
substitute stock option award of equivalent value on no less favorable terms for vesting or payment
as provided under the stock option award so replaced; provided further that, subject to Section
6(d), within five (5) days after all periods for revocation have expired in the Release provided
for in Section 16, the Company may, at its election, pay to the Executive in cash an amount equal
to the aggregate of the difference between the exercise price of each stock option granted to the
Executive prior to the consummation of the Change in Control that remains outstanding and
unexercised at the time of Termination, and the fair market value (computed as the average of the
high and low trades reported on the New York Stock Exchange) of the Common Stock subject to the
option, determined as of the Termination Date. Such cash payment shall be deemed to be in lieu of
and in substitution for any right the Executive may have to exercise such stock option or a related
stock appreciation right under the terms of the relevant stock option plan describing such rights,
and the Executive agrees to surrender all stock options and related stock appreciation rights being
cashed out hereunder prior to receiving the cash payment described above. For purposes hereunder,
the term “stock option” should be read to include all other similar equity instruments, including,
but not limited to, stock appreciation rights.

     (d) Section 409A. Notwithstanding anything herein to the contrary, in no event shall
amounts in respect of any restricted stock units or stock options that, as determined by the
Company, provides for the “deferral of compensation” (as such term is defined under Section 409A)
be distributed pursuant to Section 6(b) or Section 6(c) prior to the occurrence of the earlier of
either (i) the Termination Date (or such later date required under Section 24), (ii) the
Executive’s death or “disability” (as such term is defined under Section 409A), (iii) a “change in
the ownership or effective control” of the Company or in the “ownership of a substantial portion of
the assets” of the Company (each as defined under Section 409A), or (iv) the specified time or
fixed schedule as may be elected by the Executive in accordance with the applicable plan or
arrangement and Section 409A.

     7. Termination for Cause or Without Good Reason. If, prior to the expiration of the
Term, the Executive’s employment is terminated by the Company for Cause, or if the Executive
terminates his employment hereunder without Good Reason, the Executive shall not be eligible to
receive Base Pay under Section 4(a) or to participate in any Plans under Section 4(b) with respect
to periods after the Termination Date, and except as otherwise provided by applicable law, and
except for the right to receive vested benefits under any Plan in accordance with the terms of such
Plan.

     8. Termination by Death. If the Executive dies prior to the expiration of the Term,
the Executive’s designated beneficiaries (and, with respect to amounts payable under Section 8(a),
the Executive’s estate if he has not designated any beneficiaries) shall be entitled to:

15

 

     (a) receive a single lump sum cash payment within thirty (30) days following the Termination
Date equal to the Executive’s then current Base Pay, to the extent unpaid, through the Termination
Date, plus a full target bonus for the year in which termination occurs under the Annual Incentive
Compensation program in which the Executive participates and the pro-rated portion of the benefit
payable under each Long-Term Performance-Based Incentive Compensation award or program in which the
Executive participates (including, without limitation, any performance-based restricted stock unit
award);

     (b) for twenty-four (24) months following the Termination Date, receive health insurance
benefits substantially similar to those to which the Executive’s family were entitled immediately
prior to the Executive’s death (which coverage shall not be counted toward the period of coverage
that the Company must provide in accordance with COBRA), and thereafter any continuation coverage
the Executive’s covered beneficiaries are entitled to under COBRA; and

     (c) to the extent not already vested, immediate vesting of the Initial RSU Award (including
dividend equivalents credited thereon pursuant to Section 4(e)(iii)).

     9. Termination by Disability. If, prior to the expiration of the Term, the Executive
becomes Disabled, the Company or the Executive shall be entitled to terminate his employment, and
the Executive shall be entitled to:

     (a) receive a single lump sum cash payment within thirty (30) days following the Termination
Date equal to the Executive’s then current Base Pay, to the extent unpaid, through the Termination
Date, plus a full target annual bonus for the year in which termination occurs under the Annual
Incentive Compensation program in which the Executive participates and the pro-rated portion of the
benefit payable under each Long-Term Performance-Based Incentive Compensation award or program in
which the Executive participates (including, without limitation, any performance-based restricted
stock unit award);

     (b) for twenty-four (24) months following the Termination Date, receive life, accident and
health insurance benefits substantially similar to those to which the Executive and the Executive’s
family were entitled immediately prior to the Termination Date (which coverage shall not be counted
toward the period of coverage that the Company must provide in accordance with COBRA), and
thereafter any continuation coverage the Executive and/or his covered beneficiaries are entitled to
under COBRA; and

     (c) to the extent not already vested, immediate vesting of the Initial RSU Award (including
dividend equivalents credited thereon pursuant to Section 4(e)(iii)).

     10. Termination by Retirement. If, prior to the expiration of the Term, the Executive
voluntarily elects to retire under Article B-I of the Spectrum Retirement Plan, the Executive’s
employment will be terminated as of the date of such retirement and the Executive shall be entitled
to a single lump sum cash payment within thirty (30) days

16

 

following the Termination Date equal to the Executive’s then current Base Pay, to the extent
unpaid, through the Termination Date, plus the pro-rated portion of the benefit payable under each
Annual Incentive Compensation program and Long-Term Performance-Based Incentive Compensation award
or program in which the Executive participates (including, without limitation, any
performance-based restricted stock unit award). All stock options (or similar equity instruments,
including, but not limited to stock appreciation rights) granted to the Executive by the Company
that are both outstanding and vested immediately prior to the Termination Date (in accordance with
their then existing terms) shall remain outstanding and exercisable for such period as set forth in
the applicable stock option plan or award agreement, after which all such stock options that have
not been exercised shall immediately terminate.

     11. Funding Upon Potential Change in Control.

     (a) Upon the earlier to occur of (i) a Change in Control or (ii) a declaration by the Board
that a Change in Control is imminent, the Company shall promptly pay to the extent it has not done
so, and in any event within five (5) business days, a sum equal to the present value on the date of
the Change in Control (or on such fifth business day if the Board has declared a Change in Control
to be imminent) of the payments to be made to the Executive under the provisions of Sections 6 and
12 hereof, which shall be transferred to National City Bank (the “Trustee”) and added to any
principal of the Trust under a Master Grantor Trust Agreement, dated November 9, 2001 between the
Company and Trustee (the “Trust Agreement”).

     (b) Any payments of compensation, pension, severance or other benefits by the Trustee pursuant
to the Trust Agreement shall, to the extent thereof, discharge the Company’s obligation to pay
compensation, pension, severance and other benefits hereunder, it being the intent of the Company
that assets in such Trust be held as security for the Company’s obligation to pay compensation,
pension, severance and other benefits under this Agreement.

     12. Certain Additional Payments by the Company.

     (a) In the event it shall be determined (as hereafter provided) that any payment, benefit or
distribution or combination thereof (other than the Gross-Up Payments provided for in this Section
12) from the Company, any affiliate, or trusts established by the Company or by any affiliate
thereof to the Executive or for the benefit of the Executive (whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or otherwise pursuant to or by
reason of any other agreement, policy, plan, program or arrangement, including without limitation
any stock option, performance share, performance unit, stock appreciation right or similar right,
or the lapse or termination of any restriction on or the vesting or exercisability of any of the
foregoing (a “Payment”) would be subject to the excise tax imposed by 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 tax (such tax or taxes, together with any such interest and
penalties, being hereafter collectively referred to as the “Excise Tax”), then the Executive shall
be entitled to receive an additional payment or payments

17

 

(collectively, a “Gross-Up Payment”); provided, however, that no Gross-Up Payment shall be
made with respect to the Excise Tax, if any, attributable to (i) any incentive stock option
(“ISO”), as defined by Section 422 of the Code (or any successor provision thereto) granted prior
to the execution of this Agreement where the addition of a Gross-Up Payment would cause the ISO to
lose such status, or (ii) any stock appreciation or similar right, whether or not limited, granted
in tandem with any ISO described in clause (i). The Gross-Up Payment shall be in an amount such
that, after payment by the Executive of all taxes (including any interest or penalties imposed with
respect to such taxes), including any Excise Tax imposed upon the Gross-Up Payment, the Executive
retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payment.
Notwithstanding the foregoing, to the extent that amounts are characterized as Payments by reason
of accelerated vesting or payment that results from the Executive’s termination of employment, the
right to the Gross-Up Payment shall be contingent on the Executive entering into a Release as
described in Section 16.

     (b) Subject to the provisions of Section 12(f), all determinations required to be made under
this Section 12, including whether an Excise Tax is payable by the Executive and the amount of such
Excise Tax and whether a Gross-Up Payment is required to be paid by the Company to the Executive
and the amount of such Gross-Up Payment, if any, shall be made by a nationally recognized
accounting firm (the “Accounting Firm”) selected by the Company in its sole discretion. The
Accounting Firm shall submit its determination and detailed supporting calculations to both the
Company and the Executive within 30 calendar days after the Termination Date, if applicable, and
any such other time or times as may be requested by the Company or the Executive. If the Accounting
Firm determines that any Excise Tax is payable by the Executive, the Company shall pay the required
Gross-Up Payment to the Executive within five (5) business days after receipt of such determination
and calculations with respect to any Payment to the Executive. If the Accounting Firm determines
that no Excise Tax is payable by the Executive, it shall, at the same time as it makes such
determination, furnish the Company and the Executive a written statement that the Executive has
substantial authority not to report any Excise Tax on his federal, state or local income or other
tax return. As a result of the uncertainty in the application of Section 4999 of the Code (or any
successor provision thereto) and the possibility of similar uncertainty regarding applicable state
or local tax law at the time of any determination by the Accounting Firm hereunder, it is possible
that Gross-Up Payments which will not have been made by the Company should have been made (an
“Underpayment”), consistent with the calculations required to be made hereunder. In the event that
the Company exhausts or fails to pursue its remedies pursuant to Section 12(f) and the Executive
thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the
amount of the Underpayment that has occurred and submit its determination and detailed supporting
calculations to both the Company and the Executive as promptly as possible. Any such Underpayment
shall be promptly paid by the Company to, or for the benefit of, the Executive within five (5)
business days after receipt of such determination and calculations.

     (c) The Company and the Executive shall each provide the Accounting Firm access to and copies
of any books, records and documents in the possession of the

18

 

Company or the Executive, as the case may be, reasonably requested by the Accounting Firm, and
otherwise cooperate with the Accounting Firm in connection with the preparation and issuance of the
determinations and calculations contemplated by Section 12(b). Any determination by the Accounting
Firm as to the amount of the Gross-Up Payment shall be binding upon the Company and the Executive.

     (d) The federal, state and local income or other tax returns filed by the Executive shall be
prepared and filed on a consistent basis with the determination of the Accounting Firm with respect
to the Excise Tax payable by the Executive. The Executive shall make proper payment of the amount
of any Excise Payment, and at the request of the Company, provide to the Company true and correct
copies (with any amendments) of his federal income tax return as filed with the Internal Revenue
Service and corresponding state and local tax returns, if relevant, as filed with the applicable
taxing authority, and such other documents reasonably requested by the Company, evidencing such
payment. If prior to the filing of the Executive’s federal income tax return, or corresponding
state or local tax return, if relevant, the Accounting Firm determines that the amount of the
Gross-Up Payment should be reduced, the Executive shall within five (5) business days pay to the
Company the amount of such reduction.

     (e) The fees and expenses of the Accounting Firm for its services in connection with the
determinations and calculations contemplated by Section 12(b) shall be borne by the Company. If
such fees and expenses are initially paid by the Executive, the Company shall reimburse the
Executive the full amount of such fees and expenses within five (5) business days after receipt
from the Executive of a statement therefor and reasonable evidence of his payment thereof.

     (f) The Executive shall notify the Company in writing of any claim by the Internal Revenue
Service or any other taxing authority that, if successful, would require the payment by the Company
of a Gross-Up Payment. Such notification shall be given as promptly as practicable but no later
than ten (10) business days after the Executive actually receives notice of such claim and the
Executive shall further apprise the Company of the nature of such claim and the date on which such
claim is requested to be paid (in each case, to the extent known by the Executive). The Executive
shall not pay such claim prior to the earlier of (i) the expiration of the 30-calendar-day period
following the date on which he gives such notice to the Company and (ii) the date that any payment
of amount with respect to such claim is due. If the Company notifies the Executive in writing prior
to the expiration of such period that it desires to contest such claim, the Executive shall:

     (i) provide the Company with any written records or documents in his possession
relating to such claim reasonably requested by the Company;

     (ii) take such action in connection with contesting such claim as the Company shall
reasonably request in writing from time to time, including without limitation accepting
legal representation with respect to such claim by an attorney competent in respect of the
subject matter and reasonably selected by the Company;

19

 

     (iii) cooperate with the Company in good faith in order to effectively contest such
claim; and

     (iv) permit the Company to participate in any proceedings relating to such claim;

provided, however, that the Company shall bear and pay directly all costs and
expenses (including interest and penalties) incurred in connection with such contest and shall
indemnify and hold harmless the Executive, on an after-tax basis, for and against any Excise Tax or
income tax, including interest and penalties with respect thereto, imposed as a result of such
representation and payment of costs and expenses. Without limiting the foregoing provisions of this
Section 12(f), the Company shall control all proceedings taken in connection with the contest of
any claim contemplated by this Section 12(f) and, at its sole option, may pursue or forego any and
all administrative appeals, proceedings, hearings and conferences with the taxing authority in
respect of such claim (provided, however, that the Executive may participate therein at his own
cost and expense) and may, at its option, either direct the Executive to pay the tax claimed and
sue for a refund or contest the claim in any permissible manner, and the Executive agrees to
prosecute such contest to a determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall determine; provided,
however, that if the Company directs the Executive to pay the tax claimed and sue for a refund, the
Company shall advance the amount of such payment to the Executive on an interest-free basis and
shall indemnify and hold the Executive harmless, on an after-tax basis, from any Excise Tax or
income or other tax, including interest or penalties with respect thereto, imposed with respect to
such advance; and provided further, however, that any extension of the statute of limitations
relating to payment of taxes for the taxable year of the Executive with respect to which the
contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the
Company’s control of any such contested claim shall be limited to issues with respect to which a
Gross-Up Payment would be payable hereunder and the Executive shall be entitled to settle or
contest, as the case may be, any other issue raised by the Internal Revenue Service or any other
taxing authority.

     (g) If, after the receipt by the Executive of an amount advanced by the Company pursuant to
Section 12(f), the Executive receives any refund with respect to such claim, the Executive shall
(subject to the Company’s complying with the requirements of Section 12(f)) promptly pay to the
Company the amount of such refund (together with any interest paid or credited thereon after any
taxes applicable thereto). If, after the receipt by the Executive of an amount advanced by the
Company pursuant to Section 12(f), a determination is made that the Executive shall not be entitled
to any refund with respect to such claim and the Company does not notify the Executive in writing
of its intent to contest such denial or refund prior to the expiration of thirty (30) calendar days
after such determination, then such advance shall be forgiven and shall not be required to be
repaid and the amount of any such advance shall offset, to the extent thereof, the amount of
Gross-Up Payment required to be paid by the Company to the Executive pursuant to this Section 12.

20

 

     (h) Notwithstanding the foregoing provisions of this Section 12, if the Accounting Firm
determines that, absent this sentence, the Executive is entitled to a Gross-Up Payment, but that
the portion of the Payments that would be treated as “parachute payments” under Code Section 280G
(the “Parachute Payments”) does not exceed 110% of the greatest amount of Parachute Payments that
could be paid to the Executive such that the receipt of such Parachute Payments would not give rise
to any Excise Tax (the “Safe Harbor Amount”), then no Gross-Up Payment shall be paid to the
Executive (unless for any reason the Executive is determined to be subject to the Excise Tax after
application of the balance of this sentence, in which case the full Gross-Up Payment shall be
paid), and the Parachute Payments shall be reduced so that the Parachute Payments, in the
aggregate, are reduced to the Safe Harbor Amount. As soon as practicable, the Company shall notify
the Executive of any intent to reduce the amount of any Payments in accordance with this Section
12(h), and the Executive shall have the right to designate which of the Payments shall be reduced
and to what extent, provided that the Executive may not so elect to the extent that, in the
determination of the Company, such election would cause the Executive to be subject to the Excise
Tax.

     13. Mitigation. Nothing in this Agreement shall be construed to require the Executive
to mitigate his damages upon termination of employment without Cause or for Good Reason. The
Company hereby acknowledges that it will be difficult and may be impossible for the Executive to
find reasonably comparable employment following the Termination Date and that the non-competition
covenant contained in Section 15 will further limit the employment opportunities for the Executive.
In addition, the Company acknowledges that its severance pay plans applicable in general to its
salaried employees do not provide for mitigation, offset or reduction of any severance payment
received thereunder. Accordingly, the payment of the severance compensation by the Company to the
Executive in accordance with the terms of this Agreement is hereby acknowledged by the Company to
be reasonable, and the Executive will not be required to mitigate the amount of any payment
provided for in this Agreement by seeking other employment or otherwise, nor will any profits,
income, earnings or other benefits from any source whatsoever create any mitigation, offset,
reduction or any other obligation on the part of the Executive hereunder or otherwise, except as
provided in Sections 5(a)(iii) and 6(a)(iv); provided, to the extent that the Executive becomes
entitled to any payments, benefits or other entitlements pursuant to any severance payable in
connection with a severance or change in control severance plan, program or policy made available
to other employees of the Company, any amounts payable by the Company pursuant to any of Sections
5, 6, 7, 8, 9 or 10, shall be offset by such severance payments.

     14. Legal Fees and Expenses.

     (a) Agreement Negotiation. The Company shall reimburse the Executive for up to
$25,000 of reasonable attorneys’ fees incurred by the Executive in connection with the negotiation
and preparation of this Agreement, subject to submission to the Company of appropriate supporting
invoices. If applicable, any such reimbursement shall be grossed up for tax purposes.

21

 

     (b) Dispute Related to this Agreement. It is the intent of the Company that the
Executive not be required to incur legal fees and the related expenses associated with the
interpretation, enforcement or defense of the Executive’s rights under this Agreement by litigation
or otherwise because the cost and expense thereof would substantially detract from the benefits
intended to be extended to the Executive hereunder. Accordingly, if it should appear to the
Executive that the Company has failed to comply with any of its obligations under this Agreement or
in the event that the Company or any other person takes or threatens to take any action to declare
this Agreement void or unenforceable, or institutes any litigation or other action or proceeding
designed to deny, or to recover from, the Executive the benefits provided or intended to be
provided to the Executive hereunder, the Company irrevocably authorizes the Executive from time to
time to retain counsel of the Executive’s choice, at the expense of the Company as hereafter
provided, to advise and represent the Executive in connection with any such interpretation,
enforcement or defense. Notwithstanding any existing or prior attorney-client relationship between
the Company and such counsel, the Company irrevocably consents to the Executive’s entering into an
attorney-client relationship with such counsel, and in that connection the Company and the
Executive agree that a confidential relationship shall exist between the Executive and such
counsel. The Company will pay and be solely financially responsible for any and all reasonable
attorneys’ and related fees and reasonable expenses incurred by the Executive in connection with
any of the foregoing; provided that, in regard to such matters, the Executive has not failed to
prevail in at least one asserted claim, has not acted frivolously, in bad faith or with no
colorable claim, and has not asserted a claim in violation of the Release.

     15. Secrecy and Non-Competition.

     (a) No Competing Employment. For so long as the Executive is employed by the Company
and continuing for two (2) years after the Termination Date for any reason (the “Non-Compete
Period”), the Executive shall not, unless he receives the prior written consent of the Board,
directly or indirectly, whether as owner, consultant, employee, partner, venturer, agent, through
stock ownership (except ownership of less than one percent (1.0%) of the number of shares
outstanding of any securities which are publicly traded), investment of capital, lending of money
or property, rendering of services, or otherwise, compete with any of the businesses engaged in by
the Company or any Affiliate at the time of the termination of the Executive’s employment hereunder
(such businesses are herein after referred to as the “Business”), or assist, become interested in
or be connected with any corporation, firm, partnership, joint venture, sole proprietorship or
other entity which so competes with the Business. The restrictions imposed by this Section 15(a)
shall not apply to any geographic area in which neither the Company nor any Affiliate is engaged in
the Business.

     (b) No Interference. During the Non-Compete Period, the Executive shall not, whether
for his own account or for the account of any other individual, partnership, firm, corporation or
other business organization or entity (other than the Company), intentionally solicit, endeavor to
entice away from the Company or any Affiliate or otherwise interfere with the relationship of the
Company or any Affiliate with, any person who is employed by or associated with the Company or any
Affiliate (including, but not

22

 

limited to, any independent sales representatives or organizations) or any person or entity
who is, or was within the then most recent 12-month period, a customer or client of the Company or
any Affiliate.

     (c) Secrecy. The Executive recognizes that the services to be performed by him
hereunder are special, unique and extraordinary in that, by reason of his employment hereunder and
his past employment with the Company, he may acquire or has acquired confidential information and
trade secrets concerning the operation of the Company or any Affiliate, the use or disclosure of
which could cause the Company substantial loss and damages which could not be readily calculated
and for which no remedy at law would be adequate. Accordingly, the Executive covenants and agrees
with the Company that he will not at any time, except in performance of the Executive’s obligations
to the Company hereunder or with the prior written consent of the Board, directly or indirectly,
disclose any secret or confidential information that he may learn or has learned by reason of his
association with the Company or any Affiliate, or use any such information to the detriment of the
Company or any Affiliate. The term “confidential information”, includes, without limitation,
information not previously disclosed to the public or to the trade by the Company’s management with
respect to the Company’s or any Affiliate’s products, manufacturing processes, facilities and
methods, research and development, trade secrets, know-how and other intellectual property,
systems, procedures, manuals, confidential reports, product price lists, customer lists, marketing
plans or strategies, financial information (including the revenues, costs or profits associated
with the Company’s or any Affiliate’s products), business plans, prospects or opportunities. The
Executive understands and agrees that the rights and obligations set forth in this Section 15(c)
are perpetual and, in any case, shall extend beyond the Non-Compete Period and the Executive’s
employment hereunder.

     (d) Exclusive Property. The Executive confirms that all confidential information is
and shall remain the exclusive property of the Company. All business records, papers and documents
kept or made by the Executive relating to the business of the Company shall be and remain the
property of the Company. Upon the termination of his employment with the Company or upon the
request of the Company at anytime, the Executive shall promptly deliver to the Company, and shall
not, without the consent of the Board (which consent shall not be unreasonably withheld), retain
copies of, any written materials not previously made available to the public, records and documents
made by the Executive or coming into his possession concerning the business or affairs of the
Company excluding records relating exclusively to the terms and conditions of his employment
relationship with the Company; provided, however, that the Executive shall be entitled to retain a
copy of any rolodex or other compilation maintained by him of the names of business contacts with
their addresses, telephone numbers and similar information. The Executive understands and agrees
that the rights and obligations set forth in this Section 15(d) are perpetual and, in any case,
shall extend beyond the Non-Compete Period and the Executive’s employment hereunder.

     (e) Stock Ownership. Other than as specified in Section 2(c) or 15(a) hereof, nothing
in this Agreement shall prohibit the Executive from acquiring or holding any issue of stock or
securities of any company or other business entity.

23

 

     (f) Injunctive Relief. Without intending to limit the remedies available to the
Company, executive acknowledges that a breach of any of the covenants contained in this Section 15
may result in material irreparable injury to the Company for which there is no adequate remedy at
law, that it will not be possible to measure damages for such injuries precisely and that, in the
event of such a breach or threat thereof, the Company shall be entitled to obtain a temporary
restraining order and/or a preliminary or permanent injunction restraining the Executive from
engaging in activities prohibited by this Section 15 or such other relief as may be required to
specifically enforce any of the covenants in this Section 15.

     (g) Extension of Non-Compete Period. In addition to the remedies the Company may seek
and obtain pursuant to Section 15(f), the Non-Compete Period shall be extended by any and all
periods during which the Executive shall be found by a court possessing personal jurisdiction over
him to have been in violation of the covenants contained in this Section 15.

     16. Release. The receipt of payments provided for in Section 5, Section 6 and Section
12 is conditioned upon the Executive executing and delivering a release substantially in the form
of Annex A hereto, and upon the expiration of the revocation period provided for in Annex A;
provided that payments under Section 12 shall be subject to this Section 16 only to the extent
required by Section 12(a).

     17. Breach; Reimbursement.

     (a) In addition to the remedies provided for in Section 15(f), in the case of a breach of any
of Section 15(a), Section 15(b) or Section 15(c) of this Agreement, the Company may immediately
suspend payment or provision of all remaining payments and benefits described in Section 5, Section
6 or Section 12 of this Agreement, and terminate all remaining payments and benefits described in
Section 5, Section 6 or Section 12 of this Agreement and obtain reimbursement from the Executive of
all payments by the Company already provided pursuant to Section 5, Section 6 or Section 12 of this
Agreement, plus any expenses, fees and damages incurred as a result of the breach; provided, the
Board shall give the Executive a written notice (that provides detail as to the contractual and
factual basis for the alleged breach of Section 15(a), 15(b) or 15(c)) (the “Notice”) and, within
thirty (30) days after the date of the Notice, an opportunity for the Executive to appear before
the Board with counsel to respond and/or, at the Executive’s option, to present to the Board a
written response to the Notice (the opportunity to appear with counsel and/or provide a written
response within thirty (30) days of the date of the Notice is hereafter referred to as a
“Hearing”), and after due consideration of the Executive’s appearance and/or written response, a
majority of the Board specifically determines that the acts or omissions that gave rise to the
alleged breach actually occurred as described in the Notice and that such acts or omissions
constitute a breach of Section 15(a), 15(b) or 15(c), as applicable.

     (b) In the event that the Company issues restated or reclassified annual financial statements
after the Termination Date that reflect a reduction in previously published financial results and
such restatement or reclassification is attributable, in

24

 

whole or in material part, directly or indirectly, to the malfeasance or gross negligence of
the Executive, the Company may, at its sole option, immediately suspend payment or provision of all
remaining payments and benefits described in Section 5, Section 6 or Section 12 of this Agreement,
and terminate all remaining payments and benefits described in Section 5, Section 6 or Section 12
of this Agreement and obtain reimbursement from the Executive of all payments by the Company
already provided pursuant to Section 5, Section 6 or Section 12 of this Agreement; provided that
the Board provides the Executive Notice (that provides detail as to the contractual and factual
basis for the suspension of payments and benefits by the Company and, if applicable, for the claim
for reimbursement of previously paid amounts) and a Hearing, and that a majority of the Board
(excluding any directors who have been recused from such determination due to a conflict of
interest) specifically determines, after due consideration of the Executive’s appearance and/or
written response to the Notice, that the acts or omissions specified in the Notice occurred and
that such acts or omissions constitute malfeasance or gross negligence of the Executive with
respect to which the issuance of such restated or reclassified annual financial statements is
attributable, in whole or material part, which determination shall not be unreasonably delayed. In
the event that the Company issues restated or reclassified annual financial statements, regardless
of whether before or after the Termination Date, that reflect a reduction in previously published
financial results as a result of misconduct and the previously published financial results provided
the basis for any previously paid incentive compensation, the Company may, at its sole option,
obtain reimbursement from the Executive of all payments by the Company to the extent such payments
would not have been made based upon the restated or reclassified financial statements.

     (c) If the Company suspends or terminates the Executive’s payments or benefits or seeks
reimbursement under this Section 17, the remainder of this Agreement, and all promises and
covenants herein, will nonetheless remain in full force and effect. Notwithstanding anything herein
to the contrary, any payments or benefits suspended will immediately be reinstated, no benefits or
payments will be terminated and any effort to obtain reimbursement will be halted within five (5)
days of the applicable Board determination described in this Section 17 under which the Board
determines that there is no basis for the suspension, termination or repayment of such benefits or
payments pursuant hereto. Nothing herein shall be interpreted to deny Executive his rights to a de
novo review in an arbitration pursuant to Section 26 of this Agreement of the Board’s determination
under this Section 17.

     18. Continued Availability and Cooperation.

     (a) Following any Termination Date, the Executive shall cooperate fully with the Company and
with the Company’s counsel in connection with any present and future actual or threatened
litigation or administrative proceeding involving the Company that relates to events, occurrences
or conduct occurring (or claimed to have occurred) during the period of the Executive’s employment
by the Company. This cooperation by the Executive shall include, but not be limited to:

25

 

     (i) making himself reasonably available for interviews and discussions with the
Company’s counsel as well as for depositions and trial testimony;

     (ii) if depositions or trial testimony are to occur, making himself reasonably
available and cooperating in the preparation therefor as and to the extent that the Company
or the Company’s counsel reasonably requests;

     (iii) refraining from impeding in any way the Company’s prosecution or defense of such
litigation or administrative proceeding; and

     (iv) cooperating fully in the development and presentation of the Company’s
prosecution or defense of such litigation or administrative proceeding.

     (b) In addition to the Executive’s obligations under this Section 18, during the Non-Compete
Period, the Executive shall make himself available for consultation with and advice to the Company
at times and for periods of time which are mutually agreeable to the Company and the Executive.

     (c) Notwithstanding the foregoing, the Executive’s obligation under this Section 18 shall be
subject to the following: (i) The Company will consult with the Executive, and make reasonable
efforts to schedule any assistance otherwise required so as not to materially disrupt the
Executive’s other full-time business endeavors. (ii) The Executive shall not be required to take
any action, or fail to take any action, that would otherwise be required under this Section 18, if
the Executive or the Executive’s counsel determines that compliance with this Section 18 would
require him to violate any law or otherwise compromise or interfere with his legal rights. (iii)
This Section 18 shall not prevent the Executive from honestly testifying at a legal proceeding in
response to a lawful and properly served subpoena in a proceeding involving the Company or its
Affiliates or from cooperating with any governmental investigation.

     19. Successors; Assignability.

     (a) By the Executive. Neither this Agreement nor any right, duty, obligation or
interest hereunder shall be assignable or delegable by the Executive without the Company’s prior
written consent; provided, however, that nothing in this Section 19(a) shall preclude the Executive
from designating any of his beneficiaries to receive any benefits payable hereunder upon his death,
or the executors, administrators, or other legal representatives, from assigning any rights
hereunder to the person or persons entitled thereto.

     (b) By the Company. The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to expressly assume and agree to perform this Agreement in
the same manner and to the same extent that the Company would be required to perform it if no such
succession had taken place. Failure of the Company to obtain such assumption and agreement prior to
the effectiveness of any such succession shall be a breach of this Agreement and shall entitle the
Executive to

26

 

compensation from the Company in the same amount and on the same terms as the Executive would
be entitled to hereunder if the Executive had terminated his employment for Good Reason subsequent
to a Change in Control, except that for purposes of implementing the foregoing, the date on which
any such succession becomes effective shall be deemed the Termination Date.

     20. Employment Rights. Nothing expressed or implied in this Agreement shall create
any right or duty on the part of the Company or the Executive to have the Executive remain in the
employment of the Company at any time prior to a Change in Control; provided, however, that any
Termination of the Executive or the removal of the Executive from the office or position in the
Company following the commencement of any discussion with a third person that ultimately results in
a Change in Control shall be deemed to be a Termination of the Executive after a Change in Control
for purposes of this Agreement. The Executive expressly acknowledges that he is an employee at
will, and that the Company may terminate him at any time during the Term for any reason if the
Company makes the payments and provides the benefits provided for under Section 5 or 6 of this
Agreement, and otherwise comply with its other continuing covenants in this Agreement, including
without limitation, Sections 4, 12 and 14(b).

     21. Withholding of Taxes. The Company may withhold from any amounts payable under
this Agreement all federal, state, city or other taxes as shall be required pursuant to any law or
government regulation or ruling.

     22. Severability. If the final determination of a court of competent jurisdiction
declares, after the expiration of the time within which judicial review (if permitted) of such
determination may be perfected, that any term or provision hereof is invalid or unenforceable, (a)
the remaining terms and provisions hereof shall be unimpaired and (b) the invalid or unenforceable
term or provision shall be replaced by a term or provision that is mutually agreeable to the
parties hereto and is valid and enforceable and that comes closest to expressing the intention of
the invalid or unenforceable term or provision. Notwithstanding the foregoing, the invalidity or
unenforceability of any provision of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement which shall nevertheless remain in full force and effect.

     23. Amendment; Waiver. This Agreement may not be modified, amended or waived in any
manner except by an instrument in writing signed by both parties hereto. The waiver by either party
of compliance with any provision of this Agreement by the other party shall not operate or be
construed as a waiver of any other provision of this Agreement, or of any subsequent breach by such
party of a provision of this Agreement.

     24. Effect of Section 409A of the Code. Notwithstanding anything to the contrary in
this Agreement, if the Company determines that any payments or benefits to be provided to the
Executive pursuant to Sections 5 through 12 of this Agreement are or may become subject to the
additional tax under Section 409A(a)(1)(B) of the Code or any other taxes or penalties imposed
under Section 409A (the “409A Taxes”) as applicable at the time such payments and benefits are
otherwise required under this Agreement, then:

27

 

     (a) (i) such payments shall be delayed until the date that is six months after the date of the
Executive’s “separation from service” (as such term is defined under Section 409A) with the
Company, or for shorter period of time that the Company determines is sufficient to avoid the
imposition of the 409A Taxes (the “Payments Delay Period”), and (ii) such payments shall be
increased by an amount equal to interest on such payments for the Payments Delay Period at a rate
equal to the prime rate in effect as of the date the payment was first due (for this purpose, the
prime rate will be based on the rate published from time to time in the Wall Street Journal) (the
“Interest Rate”); and

     (b) (i) with respect to the provision of such benefits, for a period of six months following
the date of the Executive’s “separation from service” (as such term is defined under Section 409A)
with the Company, or for shorter period of time that the Company determines is sufficient to avoid
the imposition of the 409A Taxes (the “Benefits Delay Period”), the Executive shall be responsible
for the full cost of providing such benefits, and (ii) on the first day following the Benefits
Delay Period, the Company shall reimburse the Executive for the costs of providing such benefits
imposed on the Executive during the Benefits Delay Period, plus interest accrued at the Interest
Rate.

     25. Governing Law. All matters affecting this Agreement, including the validity
thereof, are to be governed by, interpreted and construed in accordance with the substantive laws
of the State of Ohio, without giving effect to the principles of conflict of laws of such State.

     26. Arbitration. The parties hereto shall endeavor to settle all disputes by amicable
negotiations. Any claim, dispute, disagreement or controversy that arises among the parties
relating to this Agreement (excluding enforcement by the Company of its rights under the Section
15) that is not amicably settled shall be resolved by arbitration with respect to any claims as to
which arbitration is not prohibited by applicable federal or state law. Such arbitration shall be
conducted, as follows:

     (a) An arbitration may be commenced by any party to this Agreement by the service of a written
request for arbitration upon the other affected party(ies). Such request for arbitration shall
summarize the controversy or claim to be arbitrated.

     (b) Any such arbitration shall be heard in the State of Ohio, and except as the parties may
otherwise agree, before a panel consisting of three (3) arbitrators, each of whom shall be
independent and impartial. One of the arbitrators shall be appointed by the Company, one shall be
appointed by the Executive, and the third shall be appointed by the first two arbitrators. If the
first two arbitrators cannot agree on the third arbitrator within 30 days of the appointment of the
second arbitrator, then the third arbitrator shall be named by the appropriate official in the
Cincinnati, Ohio office of the American Arbitration Association or, in the event of his or her
unavailability by reason of disqualification or otherwise, by the appropriate official in the New
York City office of the American Arbitration Association. In determining the appropriate background
of the third arbitrator, the appointing authority shall give due consideration to the issues to be
resolved, but his or her decision as to the identity of the arbitrator shall be final. Any

28

 

arbitrator shall be an individual who is an attorney licensed to practice law in the State of
Ohio. Such arbitrator shall be neutral within the meaning of the Commercial Rules of Dispute
Resolution of the American Arbitration Association; provided, however, that the arbitration shall
not be administered by the American Arbitration Association. Any challenge to the neutrality of an
arbitrator shall be resolved by the arbitrator whose decision shall be final and conclusive. The
arbitration shall be administered and conducted by the arbitrator(s) pursuant to the then-current
employment dispute resolution rules of the American Arbitration Association.

     (c) The parties hereby expressly waive punitive damages, and under no circumstances shall an
award contain any amount that in any way reflects punitive damages.

     (d) The decision of the arbitrator on the issue(s) presented for arbitration shall be final
and conclusive and may be enforced in any court of competent jurisdiction.

     (e) It is intended that controversies or claims submitted to arbitration under this Section 26
shall remain confidential, and to that end it is agreed by the parties that neither the facts
disclosed in the arbitration, the issues arbitrated, nor the views or opinions of any persons
concerning them, shall be disclosed to third persons at any time, except to the extent necessary to
enforce an award or judgment or as required by law or regulation, including the federal securities
laws and the regulations thereunder, in response to legal process or in connection with such
arbitration.

     27. Notices. Any notice hereunder by either party to the other shall be given in
writing by personal delivery or certified mail, return receipt requested. If addressed to the
Executive, the notice shall be delivered or mailed to the Executive at his principal residence, or
to such other address as the Executive shall give notice in writing in accordance herewith. If
addressed to the Company, the notice shall be delivered or mailed to the Company at its executive
offices at 701 Lima Avenue, Findlay, Ohio 45840 to the attention of the Board. A notice shall be
deemed given, if by personal delivery, on the date of such delivery or, if by certified mail, on
the date shown on the applicable return receipt.

     28. Representations; Entire Agreement.

     (a) The Executive represents and warrants that he is free to enter into and perform each of
the terms and conditions of this Agreement and is not subject to any agreement, judgment, order or
restriction that would be violated by being employed by the Company or that in any way restricts
the services that may be rendered to the Company.

     (b) This agreement embodies the entire representations, warranties, covenants and agreements
in relation to the subject matter hereof. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by either party that
are not expressly set forth in this Agreement.

29

 

     29. Counterparts. This Agreement may be executed by either of the parties hereto in
counterpart, each of which shall be deemed to be an original, but all such counterparts shall
together constitute one and the same instrument.

     30. Headings. The headings of sections herein are included solely for convenience of
reference and shall not control the meaning or interpretation of any of the provisions of this
Agreement.

[signature page follows]

30

 

     IN WITNESS WHEREOF, the Company has caused the Agreement to be signed by an officer pursuant
to the authority of its Board, and the Executive has executed this Agreement, as of the day and
year first written above.

COOPER TIRE & RUBBER COMPANY

	 	 	 	 	 
	By:

	 	/s/ Byron O. Pond
	 	 
	 

	 	 	 	 
	Title:

	 	Interim Chief Executive Officer and	 	 
	 

	 	President	 	 
	 
	 	 	 	 
	EXECUTIVE:

	 	/s/ Roy V. Armes	 	 
	 

	 	 	 	 
	 

	 	Roy V. Armes	 	 

31

 

ANNEX A

Form of Release

     WHEREAS, there has been a Termination (as such term is defined in the Employment Agreement
(the “Agreement”) made and entered into on  , 20___between the undersigned (the
“Executive”) and COOPER TIRE & RUBBER COMPANY (“Cooper”), of the Executive’s employment from
Cooper; and

     WHEREAS, the Executive is required to sign this Release in order to receive the severance
benefits as described in Section 5, Section 6 and Section 12 (to the extent provided in Section 12)
of the Agreement.

     NOW THEREFORE, in consideration of the promises and agreements contained herein and other good
and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, and
intending to be legally bound, the Executive agrees as follows:

     1. This Release is effective on the date hereof and will continue in effect as provided
herein.

     2. In consideration of the payments to be made and the benefits to be received by the
Executive pursuant to Section 5, Section 6 and Section 12 of the Agreement, which the Executive
acknowledges are in addition to payments and benefits which the Executive would be entitled to
receive absent the Agreement, the Executive, for himself and his dependents, successors, assigns,
heirs, executors and administrators (and his and their legal representatives of every kind), hereby
releases, dismisses, remises and forever discharges its predecessors, parents, subsidiaries,
divisions, related or affiliated companies, officers, directors, stockholders, members, employees,
heirs, successors, assigns, representatives, agents and counsel (the “Company”) from any and all
arbitrations, claims, including claims for attorney’s fees, demands, damages, suits, proceedings,
actions and/or causes of action of any kind and every description, whether known or unknown, which
the Executive now has or may have had for, upon, or by reason of any cause whatsoever (“claims”),
against the Company, including but not limited to:

     (a) any and all claims arising out of or relating to the Executive’s employment by or service
with the Company and his termination from the Company;

     (b) any and all claims of discrimination, including but not limited to claims of
discrimination on the basis of sex, race, age, national origin, marital status, religion or
handicap, including, specifically, but without limiting the generality of the foregoing, any claims
under the Age Discrimination in Employment Act, as amended, Title VII of the Civil Rights Act of
1964, as amended, the Americans with Disabilities Act, Ohio Revised Code Section 4101.17 and Ohio
Revised Code Chapter 4112, including Sections 4112.02 and 4112.99 thereof, and any other applicable
state statutes and regulations, and

32

 

     (c) any and all claims of wrongful or unjust discharge or breach of any contract or promise,
express or implied;

     provided, however, that the foregoing shall not apply to claims to enforce rights
that the Executive may have as of the date hereof or in the future under any of Cooper’s health,
welfare, retirement, pension or incentive plans, under any indemnification agreement between the
Executive and Cooper, under Cooper’s indemnification by-laws, under the directors’ and officers’
liability coverage maintained by Cooper, under the applicable provisions of the Delaware General
Corporation Law, or that the Executive may have in the future under the Agreement or under this
Release.

     3. The Executive understands and acknowledges that the Company does not admit any violation of
law, liability or invasion of any of his rights and that any such violation, liability or invasion
is expressly denied. The consideration provided for this Release is made for the purpose of
settling and extinguishing all claims and rights (and every other similar or dissimilar matter)
that the Executive ever had or now may have against the Company to the extent provided in this
Release. The Executive further agrees and acknowledges that no representations, promises or
inducements have been made by the Company other than as appear in the Agreement.

     4. The Executive further agrees and acknowledges that:

     (a) The release provided for herein releases claims to and including the date of this Release;

     (b) The Executive has been advised by the Company to consult with legal counsel prior to
executing this Release, has had an opportunity to consult with and to be advised by legal counsel
of his choice, fully understands the terms of this Release, and enters into this Release freely,
voluntarily and intending to be bound;

     (c) The Executive has been given a period of twenty-one (21) days to review and consider the
terms of this Release, prior to its execution and that he may use as much of the twenty-one (21)
day period as he desires; and

     (d) The Executive may, within 7 days after execution, revoke this Release. Revocation shall be
made by delivering a written notice of revocation to the General Counsel at Cooper. For such
revocation to be effective, written notice must be actually received by the General Counsel at
Cooper no later than the close of business on the 7th day after the Executive executes this
Release. If the Executive does exercise his right to revoke this Release, all of the terms and
conditions of the Release shall be of no force and effect and Cooper shall not have any obligation
to make further payments or provide benefits to the Executive as set forth in Section 5, Section 6,
and Section 12 of the Agreement.

     5. The Executive agrees that he will never file a lawsuit or other complaint asserting any
claim that is released in this Release.

33

 

     6. The Executive waives and releases any claim that he has or may have to reemployment after
the Termination Date as defined in the Agreement.

     IN WITNESS WHEREOF, the Executive has executed and delivered this Release on the date set
forth below.

Dated: ______________________, _________

                                                                    
            

  
   Roy V. Armes     

34

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00114-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00114-of-00352.parquet"}]]