Document:

Exhibit 10.17

 

EXHIBIT 10.17

STONERIDGE, INC.

DIRECTORS’ SHARE OPTION PLAN

SHARE OPTION AGREEMENT

     Stoneridge, Inc. (the “Company”), for $1.00 and other valuable consideration, the receipt of
which is hereby acknowledged, pursuant to and in accordance with the Directors’ Share Option Plan
(the “Plan”), hereby grants to XXX (the “Director”) the right to purchase (the “Option”), at the
option of the Director, an aggregate of XXX Common Shares, without par value, of the Company (the
“Shares”), at $XX.XX per share, upon the following terms and conditions:

     1. Exercise Date. The Option granted herein vests and is exercisable on and after
XXX.

     2. Manner of Exercise. The Option granted herein, when vested, subject to the
limitations and conditions set forth in this Agreement, may be exercised in blocks of 50 or more
Shares on and after XXX, and prior to a date ten years from the date hereof, but not thereafter, by
(i) the giving by the Director to the Company, at its corporate offices in Warren, Ohio, of a
written notice of such election, and specifying the number of Shares then being purchased and (ii)
the payment by the Director to the Company of the purchase price of the Shares so specified. Upon
receipt of such notice, payment and any required representation, the Company will promptly cause
certificates for such number of Shares so purchased to be issued and delivered to the Director; but
no Shares will be issued and delivered upon any exercise of this Option unless and until, in the
opinion of counsel for the Company, any and all applicable federal and state securities laws
pertaining to the issuance and delivery of such Shares have been complied with in full. In
addition, as a condition to the exercise of the Option and the obligation of the Company to issue
Shares upon the exercise thereof, the proposed recipient of the Shares shall make any
representation or warranty necessary to comply with any applicable law or regulation or to confirm
any factual matter reasonably requested by the Company or its counsel.

     If the Director’s status as an “Eligible Director” (as defined in the Plan) terminates for any
reason other than death or disability, then (i) to the extent the Option held by the Director is
not vested as of the date of termination it shall automatically terminate on such date; and (ii)
unless otherwise determined by the Board of Directors at or after the date hereof or the
termination date, to the extent this Option has vested as of the date of such termination, such
Option may only be exercised for a period of 90 days from the date of termination or XXX, whichever
is sooner.

     3. Payment of Purchase Price. Payment of the purchase price may be made in cash or in
Shares of the Company valued at the closing sales price per Share (or if there are no sales, then
the average of the closing bid and asked price per Share) on the New York Stock Exchange on the
last trading day preceding the date on which the Option is exercised.

     4. Death and Disability. Upon the death or permanent and total disability of the
Director, the Option must be exercised, if at all, within the period ending on the first
anniversary of that death or permanent and total disability. In the case of death, the Option may
be exercised only by the Director’s estate or the person designated by the Director by will, or as
otherwise designated by the laws of descent and distribution. Notwithstanding the foregoing, in no
event may the Option be exercisable after XXX, and it may be exercised after the Director’s death
only with respect to Shares which were Vested Shares at the time of the Director’s death. For
purposes hereof, “permanent and total disability” means a permanent and total disability as defined
in Section 22(e)(3) of the Internal Revenue Code of 1986, as amended (the “Code”).

     5. Transferability. The Option and the Director’s rights therein are not transferable
by the Director, except upon the death of the Director as provided in Paragraph 4. The Option is
exercisable (subject to any other applicable restrictions on exercise) only by the Director (or any
guardian or other legal representative duly appointed for the Director) for the Director’s own
account, except in the event of the Director’s death or permanent and total disability as provided
in Section 4.

 

 

     6. Changes in Capital Structure. On any change in the number or kind of outstanding
Shares of the Company by reason of a recapitalization, merger, consolidation, reorganization,
separation, liquidation, share split, share dividend, combination of shares or any other change in
the corporate structure or Shares of the Company, the Company, by action of the Board of Directors,
is empowered to make such adjustment, if any, in the number and kind of Shares subject to this
Option and in the price per Share to be paid upon any subsequent exercise of this Option as it
considers reasonably appropriate for the protection of the Company and of the Director.

     7. Intent. The Option does not, and is not intended to, qualify as an “Incentive
Stock Option”, as defined in IRC Section 422(b) of the tax code. The Option is to be construed as
a nonqualified stock option.

     8. Securities Law Compliance. Notwithstanding any provision of this Agreement to the
contrary, the Option is not exercisable unless, at the time the Director attempts to exercise the
Option, in the opinion of counsel for the Company, all applicable securities laws, rules and
regulations have been complied with. The Director agrees that the Company may impose such
restrictions on the Shares as are deemed advisable by the Company, including, without limitation,
restrictions relating to listing or trading requirements. The Director further agrees that
certificates representing the Shares may bear such legends and statements as the Company considers
appropriate or advisable to assure, among other things, compliance with applicable securities laws,
rules and regulations.

     9. Rights of the Director. The granting of the Option does not confer any right on
the Director to continue as a director of the Company. The Director has no dividend, voting or
other rights of a shareholder with respect to the Shares that are subject to the Option prior to
the purchase of those Shares upon exercise of the Option and the execution and delivery of all
other documents and instruments considered necessary or desirable by the Company in connection
therewith.

     10. Miscellaneous. This Agreement, the Option and the Plan shall be governed by and
construed in accordance with the laws of the State of Ohio.

     IN WITNESS WHEREOF, the parties have subscribed their names hereto as of the date first above
written.

	 	 	 
	 	Dated: XXX
 

	 	Stoneridge, Inc.
 
 

	 	By: 
	 

	 	 
	The foregoing Option is

hereby accepted.
 
 
	 
	(Signature)Exhibit 10.18

 

EXHIBIT 10.18

STONERIDGE, INC.

LONG-TERM INCENTIVE PLAN

RESTRICTED SHARES GRANT AGREEMENT

     Stoneridge, Inc., an Ohio corporation (the “Company”), pursuant to the terms and conditions
hereof, hereby grants to XXX (the “Grantee”) XXX Common Shares, without par value, of the Company
(the “Restricted Shares”).

     1. The Restricted Shares are in all respects subject to the terms, conditions and provisions
of this agreement and the Company’s Long-Term Incentive Plan (the “Plan”).

     2. Until vested (the “Vesting Date”) in accordance with the schedule set forth below, the
Restricted Shares may not be sold, transferred, pledged, assigned or otherwise encumbered, whether
voluntarily, involuntarily or by operation of law, and will be forfeited to the Company if the
Grantee voluntarily terminates his employment with the Company unless such voluntary termination is
for “good reason” (as described in Section 5); provided, however, the Compensation Committee of the
Board of Directors (the “Committee”) in its sole discretion modify the terms of this grant at any
time. The certificate or certificates representing the Restricted Shares will bear a legend
evidencing the restrictions contained herein.

     The Restricted Shares shall vest (become no longer subject to forfeiture) in the amounts and
on the dates set forth below:

	 	 	 	 	 
	Vesting Date	 	Number of Shares	 
	July 26, 2005
	 	XXX
	July 26, 2006
	 	XXX
	July 26, 2007
	 	XXX

     3. The Restricted Shares will be issued in the name of the Grantee. The Company’s transfer
agent and/or share transfer records will show the Grantee as the owner of record of the Restricted
Shares. Except as otherwise provided in this agreement, the Grantee will have all the rights of a
shareholder of the Company, including the right to vote and receive dividends.

     4. The Company or the Company’s agent will hold the Restricted Shares for the period of time
that the Restricted Shares are subject to forfeiture (until vested) and the certificate or
certificates representing the Restricted Shares will be delivered to the Grantee after the
Restricted Shares are no longer subject to forfeiture. The Grantee shall execute and deliver to
the Company one or more blank stock powers so that the Restricted Shares that may be forfeited can
be canceled.

     5. Notwithstanding anything to the contrary in this agreement, the Restricted Shares awarded
to the Grantee hereunder shall immediately vest in the name of the Grantee and a certificate or
certificates representing the Restricted Shares shall be delivered to the Grantee or the Grantee’s
estate upon (i) the Grantee’s death or disability (as determined by the Committee in accordance
with the Plan), but only to the extent such Restricted Shares would have become vested or no longer
are subject to restriction within one year from the time of death or disability, as the case may
be, had the Grantee continued to fulfill all of the conditions of the Restricted Share Award during
such period, (ii) a Change in Control of the Company (as defined in the Plan), or (iii) the
termination “without cause” of the Grantee’s employment by the Company. Termination shall be
deemed to be “without cause” unless the Board of Directors of the Company, or its designee, in good
faith determines that termination is because of any one or more of the following:

     The Grantee’s:

 

 

	 	(i)  	fraud;
	 
	 	(ii)  	misappropriation of funds;
	 
	 	(iii)  	commission of a felony or of an act or series of acts which result in material
injury to the business reputation of the Company;
	 
	 	(iv)  	commission of a crime or act or series of acts involving moral turpitude;
	 
	 	(v)  	violation of the Company’s policies;
	 
	 	(vi)  	commission of an act or series of repeated acts of dishonesty that are
materially inimical to the best interests of the Company;
	 
	 	(vii)  	willful and repeated failure to perform his duties, which failure has not been
cured within fifteen (15) days after the Company gives notice thereof to the Grantee;
	 
	 	(viii)  	material breach of any material provision of an employment agreement, if any, which
breach has not been cured in all substantial respects within ten (10) days after the
Company gives notice thereof to the Grantee; or
	 
	 	(ix)  	failure to carry out the reasonable directions or instructions of the Grantee’s
superiors, provided the directions or instructions are consistent with the duties of
the Grantee’s office, which failure has not been cured in all substantial respects
within ten (10) days after the Company gives notice thereof to the Grantee.

     Provided, however, the Company’s obligation to provide notice and an opportunity to cure,
pursuant to subsections 5(g)-(i) above, shall only apply to the Grantee’s first breach, first
failure to perform or first failure to follow directions, as the case may be, of the nature giving
rise to the right of the Company to provide notice thereof. The Grantee may voluntarily terminate
his employment with the Company, and the termination shall be deemed a termination “for good
reason,” if it is based on the Company materially changing the Grantee’s duties and
responsibilities in effect on the date set forth below without the Grantee’s consent.

     6. On any change in the number or kind of outstanding common shares of the Company by reason
of a recapitalization, merger, consolidation, reorganization, separation, liquidation, share split,
share dividend, combination of shares or any other change in the corporate structure or common
shares of the Company, the Company, by action of the Committee, is empowered to make such
adjustment, if any, in the number and kind of Restricted Shares subject to this agreement as it
considers appropriate for the protection of the Company and of the Grantee.

     7. No later than the date as of which an amount first becomes includable in the gross income
of the Grantee for federal income tax purposes with respect to the Restricted Shares granted
hereunder, the Grantee shall pay to the Company, or make arrangements satisfactory to the Committee
regarding the payment of, any federal, state or local taxes of any kind required by law to be
withheld with respect to that amount. Unless otherwise determined by the Committee, withholding
obligations may be settled with previously owned Common Shares or Restricted Shares that have
vested. The making of that payment or those arrangements is a condition to the obligations of the
Company under the Plan, and the Company and its subsidiaries and affiliates may, to the extent
permitted by law, deduct any taxes from any payment of any kind otherwise payable to the Grantee.

     8. Nothing in this Agreement shall affect in any manner any conflicting or other provision of
any other agreement between the Grantee and the Company.

     9. The laws of the State of Ohio govern the Plan and the Restricted Shares granted hereunder.

 

 

     IN WITNESS WHEREOF, the Company has caused its corporate name to be subscribed by its duly
authorized officer as of the XXX.

	 	 	 	 	 
	 	STONERIDGE, INC.

 

 	 
	 	By  	 	 
	 	 	 	 
	 	 	 	 
	 

	 	 
	The foregoing is hereby accepted.
 
 
	 
	(Signature)

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