Document:

EX-10.24

 

EXHIBIT 10.24

STONERIDGE, INC.

LONG-TERM INCENTIVE PLAN

AMENDMENT TO RESTRICTED SHARES GRANT AGREEMENT

     Stoneridge, Inc., an Ohio corporation (the “Company”), and ___(the “Grantee”)
hereby agree to the following amendment to the Restricted Shares Grant Agreement by and between the
Company and Grantee dated April 18, 2005 (the “2005 RSGA”). The 2005 RSGA is inadvertently
inconsistent with a condition relating to the grant of restricted shares approved by the
Compensation Committee of the Company’s Board of Directors (the “Committee”) on April 18, 2005.
Specifically, the performance-based restricted shares should only vest in proportion to the elapsed
time in the performance period in the event of a change in control of the Company.

     Therefore, the parties agree that Section 5(b) of the RSGA shall be deleted in its entirety
and replaced with the following:

	5.	 	Notwithstanding anything to the contrary in this Agreement, the Restricted Shares awarded to
the Grantee hereunder shall no longer be subject to a substantial risk of forfeiture and shall
immediately vest in the Grantee and a certificate or certificates representing the Restricted
Shares shall be delivered to the Grantee or the Grantee’s estate, as the case may be, upon

	 	(b)	 	a Change in Control of the Company (as defined in the Plan); provided,
however, the Restricted Shares part of Award II and Award III shall only vest in
proportion to the number of months, including any partial month, elapsed in the
performance period at the time of a Change of Control divided by 36, subject to the
proviso below, or

The remainder of the RSGA remains unchanged.

     IN WITNESS WHEREOF, the Company has caused its corporate name to be subscribed by its duly
authorized officer as of the 4th day of January 2006.

	 	 	 	 	 	 	 
	 	 	STONERIDGE, INC.
	 

	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 	 	 
	The
foregoing is hereby accepted.

	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	(Signature)EX-10.25

 

EXHIBIT 10.25

STONERIDGE, INC.

CHANGE IN CONTROL AGREEMENT

     THIS CHANGE IN CONTROL AGREEMENT (the “Agreement”) is by and between Stoneridge, Inc., an Ohio
corporation (“Employer”), and ___(“Executive”), made this 6th day of
January, 2006.

RECITALS

	A.	 	Executive is presently employed by Employer as its ___;
	 
	B.	 	Employer wishes to induce Executive to continue as its ___and, accordingly, to
provide certain employment security to Executive in the event of a “Change in Control” (as
hereinafter defined);
	 
	C.	 	Employer believes that it is in the best interest of its shareholders for Executive to
continue in his position on an objective and impartial basis and without distraction, whether
based upon individual financial uncertainties or otherwise, or conflict of interest as a
result of a possible or actual Change in Control; and
	 
	D.	 	In consideration of this Agreement, Executive is willing to continue as Employer’s
___;

     NOW THEREFORE, in consideration of Executive continuing as the ___of Employer and
of the mutual promises herein contained, Executive and Employer, intending to be legally bound,
hereby agree as follows;

SECTION 1

DEFINITIONS

	1.	 	A “Change in Control” for the purpose of this Agreement will be deemed to have occurred if
during Executive’s employment with Employer, at any time:

	 	(a)	 	the Board of Directors or shareholders of Employer approve a consolidation or
merger that results in the shareholders of Employer, immediately prior to the
transaction giving rise to the consolidation or merger, owning less than 50% of the
total combined voting power of all classes of equity securities entitled to vote of
the surviving entity immediately after the consummation of the transaction giving rise
to the merger or consolidation;
	 
	 	(b)	 	the Board of Directors or shareholders of Employer approve the sale of
substantially all of the assets of Employer or the liquidation or dissolution of
Employer;
	 
	 	(c)	 	any person or other entity (other than Employer or a subsidiary of Employer
or any Employer employee benefit plan (including any trustee of any such plan acting
in its capacity as trustee)) purchases any common shares (or securities convertible
into common shares) pursuant to a tender or exchange offer without the prior consent
of the Board of Directors, or becomes the beneficial owner of securities of Employer
representing 35% or more of the voting power of Employer’s outstanding securities; or
	 
	 	(d)	 	during any two-year period, individuals who at the beginning of such period
constitute the entire Board of Directors cease to constitute a majority of the Board
of Directors, unless the election or the nomination for election of each new director
is approved by the Nominating and Corporate Governance Committee (if comprised
entirely of directors who were in office at the beginning of that period) or at least
two-thirds of the directors then still in office who were directors at the beginning
of that period.

 

 

	2.	 	A “Triggering Event” for the purpose of this Agreement will be deemed to have occurred if
within two years after the date on which the Change in Control occurred:

	 	(a)	 	Employer separates Executive from the service of Employer, other than in the
case of a Termination For Cause, as hereafter defined;
	 
	 	(b)	 	Executive separates from the service of Employer after Employer reduces
Executive’s title, responsibilities, power or authority in comparison with his title,
responsibilities, power or authority at or about the time of the Change in Control;
	 
	 	(c)	 	Executive separates from service with Employer after Employer assigns
Executive duties which are inconsistent with the duties assigned to Executive on the
date on which the Change in Control occurred, and which duties Employer persists in
assigning to Executive despite the prior written objection of Executive;
	 
	 	(d)	 	Executive separates from service with Employer after Employer reduces
Executive’s base compensation (unless such decrease is proportionate with a decrease
in the base compensation of the executive officers of Employer as a group), or
materially reduces his group health, life, disability or other insurance programs
(including any such benefits provided to Executive’s family), his pension, retirement
or profit-sharing benefits or any benefits provided by Employer’s Long-Term Incentive
Plan or any substitute therefor, or excludes him from any plan, program or
arrangement, including but not limited to bonus or incentive plans, in which the other
executive officers of Employer are included; or
	 
	 	(f)	 	Executive separates from service with Employer after Employer requires
Executive to be based at or generally work from any location more than 100 miles from
the geographical center of the city where Executive worked on the date on which the
Change of Control occurred (the “Location of Employment”) or Employer over the course
of any calendar month requires Executive to be away from his Location of Employment
for more than 50% of the business days during that month.

	 
	 	 	 	        For purposes of this paragraph 2, the term “separates from the service of Employer”
shall mean Executive’s death, retirement or termination of employment with Employer.
However, the employment relationship shall not be treated as terminated and is treated as
continuing intact while Executive is on sick leave or other bonafide leave of absence if
the period of leave does not exceed six months, or, if longer, the right to continued
employment is guaranteed by contract. Executive will not be treated as having terminated
employment to the extent Executive provides more than insignificant services as defined by
Internal Revenue Code Section 409A and the regulations thereunder.

	3.	 	A “Termination For Cause” for the purposes of this Agreement will be deemed to have occurred
if, and only if, the Board of Directors of Employer, or its designee, in good faith determines
that termination is because of any one or more of the following:

	 	 	 	Executive’s:
	 
	 	(a)	 	misappropriation of funds from Employer;
	 
	 	(b)	 	conviction of a felony;
	 
	 	(c)	 	commission of a crime or act or series of acts involving moral turpitude;
	 
	 	(d)	 	commission of an act or series of acts of dishonesty that are materially
inimical to the best interests of Employer;
	 
	 	(e)	 	willful and repeated failure to perform the duties associated with
Executive’s position, which failure has not been cured within thirty (30) days after
Employer gives notice thereof to Executive; or
	 
	 	(f)	 	failure to cooperate with any Employer investigation or with any
investigation, inquiry, hearing or similar proceedings by any governmental authority
having jurisdiction over Employer or Executive.

 

 

	4.	 	“Executive’s Annual Bonus” means the greater of Executive’s average annual bonus over the
last three completed fiscal years or the last five completed fiscal years. If Executive has
not been employed by Employer for three completed fiscal years, Executive’s Annual Bonus means
the average annual bonus awarded to Executive for the completed fiscal years during his
employment, or if Executive has not been employed for a complete fiscal year, Executive’s
Annual Bonus means an amount equal to the incentive compensation Executive would have been
entitled to in the year the Triggering Event occurred calculated upon the assumption that 100%
of personal and Employer targets or performance goals were achieved in that year.
	 
	5.	 	“Executive’s Annual Salary” means the greater of Executive’s annual base salary at the time
of a Triggering Event or at the time of the occurrence of a Change in Control.
	 
	6.	 	“Executive Pro Rata Annual Bonus” means an amount equal to the pro rata amount of incentive
compensation Executive would have been entitled to at the time of a Triggering Event
calculated on the assumption that 100% of personal and Employer targets or performance goals
were achieved in the year in which the Triggering Event occurred.

SECTION 2

TRIGGERING EVENT PAYMENTS

	1.	 	Upon the earliest occurrence of a Triggering Event and upon the receipt of the release
described in Section 9, Employer shall commence payments to Executive of a benefit, which will
be in addition to any other compensation or remuneration to which Executive is, or becomes,
entitled to receive from Employer. The payment of the benefit shall be made monthly for a
period of twenty-four (24) months on the last business day of the month and shall commence on
the last business day of the month immediately following the later to occur of a Triggering
Event and the delivery of the release described in Section 9. The monthly payments shall be
made in immediately available funds in an amount equal to 1/24th of the sum of (i)
two times Executive’s Annual Compensation plus (ii) two times Executive’s Annual Bonus. In
addition to making the monthly payments described above, Employer shall pay Executive a lump
sum payment equal to the Executive Pro Rata Annual Bonus at the same time it makes the first
monthly payment described above. In addition, Employer shall, at its expense, provide
Executive, and his family with life and health insurance (“Health and Welfare Benefits”) in an
amount not less than that provided on the date on which the Change in Control occurred for a
period of twenty-four (24) months following the later to occur of a Triggering Event and the
delivery of the release described in Section 9; provided, however, Employer shall not be
obligated to pay for Health and Welfare Benefits after the date on which Executive shall be
eligible to receive benefits from another employer which are substantially equivalent to or
greater than the benefits Executive and his family received from Employer; provided, further,
that if Executive’s continuation in some or all of Employer Health and Welfare Benefits is not
available, then Employer shall make additional monthly payments to Executive at the same time
it makes the above monthly payments described above equal to the cost of the coverage, as
determined solely by Employer for similarly situated employees of Employer, over a period of
twenty-four (24) months with respect to those benefits among the Health and Welfare Benefits
not available. All payments pursuant to this Agreement shall be made less standard required
deductions and withholdings. Notwithstanding the above, if Executive is a “specified
employee” (within the meaning of Section 409A of the Internal Revenue Code (the “Code”)),
Executive’s date of payment shall be made or commence, as applicable, on the date which is six
(6) months after the date of Executive’s separation from service with Employer or (b)
Executive’s death.
	 
	2.	 	Notwithstanding anything to the contrary above, if any portion of the compensation under the
payments pursuant to this Agreement, or under any other agreement with, plan or program of,
Employer (in the aggregate “Total Payments”) would constitute an “excess parachute payment”
under Section 280G of the Code, then the payments to which Executive is entitled under
paragraph 1 of this Section 2 above shall be the value of the aggregate total payments that
Executive is entitled to receive under paragraph 1, or under any other agreement with, plan or
program of, Employer, up to the maximum amount of payments allowed under Section 280G of the
Code without being an “excess parachute payment” less 3% of the Total Payments so that
Executive is not subject to the tax imposed by Section 4999 of the Code and Employer does not
lose its deduction under Section 280G of the Code. The calculation of such potential excise
tax liability, as well as the method in which the compensation reduction is applied, shall be
conducted and determined by a national accounting firm selected by Employer and those
determinations shall be binding on all parties; provided, however, that if the calculation of
such national accounting firm will result in a reduction in the payments to be made to
Executive, prior to issuance of the final and binding determination, Executive shall be given
a reasonable opportunity to (i) review and comment upon all of the material,

 

 

	 	 	information and
documentation provided to the national accounting firm by Employer and (ii) offer such input
as Executive may determine to be helpful to the national accounting firm’s preliminary
determination.
	 
	3.	 	If, notwithstanding the determination of the national accounting firm, the Total Payments are
determined by the Internal Revenue Service to be an “excess parachute payment” within the
meaning of Section 280G of the Code that are subject to the excise tax imposed by Section 4999
of the Code (or any similar tax or assessment), the amounts payable to Executive by Employer
shall be increased to the extent necessary to place Executive in the same after-tax position
as Executive would have been in had no such tax been imposed on any such amount paid or
payable to Executive under this Agreement.
	 
	4.	 	If in any future year a determination is made that the decrease described in Section 2,
paragraph 2 is not required in order to satisfy such paragraph 2, such payment shall be made
as soon as administratively feasible.

SECTION 3

SETOFF

     No amounts otherwise due or payable under this Agreement will be subject to setoff or
counterclaim by either party hereto.

SECTION 4

ATTORNEY’S FEES

     All attorney’s reasonable fees and related expenses incurred in good faith by Executive in
connection with or relating to the enforcement by him of his rights under this Agreement will be
paid for by Employer.

SECTION 5

SUCCESSORS AND PARTIES IN INTEREST

     This Agreement will be binding upon and will inure to the benefit of Employer and its
successors and assigns, including, without limitation, any corporation or other person which
acquires, directly or indirectly, by purchase, merger, consolidation or otherwise, all or
substantially all of the business or assets of Employer. Without limitation of the foregoing,
Employer will require any such successor, by agreement in form and substance satisfactory to
Executive, expressly to assume and agree to perform this Agreement in the same manner and to the
same extent that it is required to be performed by Employer. This Agreement will be binding upon
and will inure to the benefit of Executive, his heirs at law and his personal representatives.

SECTION 6

ATTACHMENT

     Neither this Agreement nor any benefits payable hereunder will be subject to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance or charge or to execution, attachment,
levy or similar process at law, whether voluntary or involuntary.

SECTION 7

NO EMPLOYMENT CONTRACT; TERMINATION

     This Agreement will not in any way constitute an employment agreement between Employer and
Executive and it will not oblige Executive to continue in the employ of Employer, nor will it
oblige Employer to continue to employ Executive, but it will merely require Employer to pay
benefits hereunder to Executive under the agreed upon circumstances. In addition, provided a
Change in Control has not occurred, this Agreement shall terminate and be of no further force or
effect one year from the date Executive ceases to be a Board-elected officer or key employee (as
determined by the Board of Directors of Employer in its sole discretion and reflected in the
minutes of Board of Directors after notice to such Executive) of Employer.

 

 

SECTION 8

RIGHTS UNDER OTHER PLANS AND AGREEMENTS

     The Change in Control benefits herein provided will be in addition to, and are not intended to
reduce, restrict or eliminate any benefit to which Executive may otherwise be entitled by virtue of
his termination of employment or otherwise.

SECTION 9

RELEASE

     As a condition to the payment of the benefits by Employer to Executive pursuant to this
Agreement, Executive shall deliver a signed release of claims against Employer. Such release shall
be delivered to Employer no later than thirty (30) days following a Triggering Event and shall be
in a form and substance reasonably satisfactory to Employer and it must include the operative
language substantially similar to the following:

	 	 	In exchange for the payments set forth in the Change in Control Agreement by and
between Stoneridge, Inc. (the “Employer”) and me (the “CIC Agreement”), I and my heirs,
personal representatives, successors and assigns, hereby forever release, remise and
discharge Employer and each of its past, present, and future officers, directors,
shareholders, members, employees, trustees, agents, representatives, affiliates,
successors and assigns (collectively the “Employer Released Parties”) from any and all
claims, claims for relief, demands, actions and causes of action of any kind or
description whatsoever, known or unknown, whether arising out of contract, tort,
statute, treaty or otherwise, in law or in equity, which I now have, have had, or may
hereafter have against any of the Employer Released Parties from the beginning of my
employment with Employer to the date of this release, arising from, connected with, or
in any way growing out of, directly or indirectly, my employment by Employer, my service
as an officer or key employee, as the case may be, of Employer, the services provided by
me to Employer, or any transaction prior to the date of this release and all effects,
consequences, losses and damages relating thereto, including, but not limited to, all
claims arising under the Civil Rights Acts of 1866 and 1964, the Fair Labor Standards
Act of 1938, the Equal Pay Act of 1963, the Age Discrimination in Employment Act of
1967, the Rehabilitation Act of 1973, the Older Workers Benefit Protection Act of 1990,
the Americans with Disabilities Act of 1990, the Civil Rights Act of 1991, the Family
and Medical Leave Act of 1993, the Consolidated Omnibus Budget Reconciliation Act
(“COBRA”), Title 4112 of the Ohio Revised Code, and all other federal or state laws
governing employers and employees; provided, however, that nothing in this release will
bar, impair or affect the obligations, covenants and agreements of Employer set forth
in the CIC Agreement.

     If the release described in this Section 9 is not timely delivered by Executive to Employer,
then this Agreement shall terminate and be of no further force or effect.

SECTION 10

NOTICES

     All notices and other communications required to be given hereunder shall be in writing and
will be deemed to have been delivered or made when mailed, by certified mail, return receipt
requested, if to Executive, to the last address which Executive shall provide to Employer, in
writing, for this purpose, but if Executive has not then provided such an address, then to the last
address of Executive then on file with Employer; and if to Employer, then to the last address which
Employer shall provide to Executive, in writing, for this purpose, but if Employer has not then
provided Executive with such an address, then to:

Secretary

Stoneridge, Inc.

9400 East Market Street

Warren, Ohio 44484

 

 

SECTION 11

GOVERNING LAW AND JURISDICTION

     This Agreement will be governed by, and construed in accordance with, the laws of the State of
Ohio, except for the laws governing conflict of laws. If either party institutes a suit or other
legal proceedings, whether in law or equity, Executive and Employer hereby irrevocably consent to
the jurisdiction of the Common Pleas Court of the State of Ohio (Trumbull County) or the United
States District Court for the Northern District of Ohio.

SECTION 12

ENTIRE AGREEMENT AND COMPLIANCE WITH LAW

     This Agreement constitutes the entire understanding between Employer and Executive concerning
the subject matter hereof and supersedes all prior written or oral agreements or understandings
between the parties hereto. No term or provision of this Agreement may be changed, waived, amended
or terminated except by a written instrument. This Agreement shall be administered to the extent
possible in a manner consistent with the provisions of Section 409A of the Code. Further, Employer
reserves the right, in its sole discretion, to amend this Agreement to comply with Section 409A of
the Code (which amendment may be retroactive to the extent permitted by Section 409A of the Code
and may be made by Employer without the consent of Executive). In particular, to the extent
Executive becomes entitled to receive payment subject to Section 409A upon an event that does not
constitute a permitted distribution event under Section 409A(a)(2) of the Code, then
notwithstanding anything to the contrary in this Agreement, the timing of payment to Executive will
be adjusted accordingly.

     IN WITNESS WHEREOF, and as conclusive evidence of the adoption of this Agreement, the parties
have hereunto set their hands as of the date and year first above written.

	 	 	 
	 

	 	STONERIDGE, INC.
	 
	 
	 

	 	By
___________________________________
	 

	 	 
	 
	 

	 	______________________________________
	 

	 	EXECUTIVE

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