Document:

EX-10.6 - Form of Director Stock Option Award

EXHIBIT 10.6
REMY INTERNATIONAL, INC.

OMNIBUS INCENTIVE PLAN

Notice of Stock Option Grant for Directors

You (the “Optionee”) have been granted the following option to purchase Class A Common Stock of Remy International, Inc. (the “Company”), par value $0.0001 per share (“Share”), pursuant to the Remy International, Inc. Omnibus Incentive Plan (the “Plan”):

	
		
	Name of Optionee:
	 

	Total Number of Shares Subject to Option:
	 

	Type of Option:
	 

	Exercise Price Per Share:
	 

	Effective Date of Grant:
	 

	Vesting Schedule:
	Subject to the terms of the Plan and the Stock Option Agreement attached hereto, the right to exercise this Option shall vest with respect to one-half of the total number of Shares subject to this Option on each anniversary of the Effective Date of the grant.

	Expiration Date:
	7th Anniversary of Effective Date of Grant

The Option is subject to earlier expiration, as provided in Section 3(b) of the attached Stock Option Agreement.

By your electronic acceptance/signature, you agree and acknowledge that this Option is granted under and governed by the terms and conditions of the Plan and the attached Stock Option Agreement, which are incorporated herein by reference, and that you have been provided with a copy of the Plan and Stock Option Agreement.

	
					
	Grantee:
	Remy International, Inc.

	 
	 
	 
	 
	 

	By:
	 
	 
	By:
	 

	Name:
	 
	 
	Name:
	 

	Title:
	 
	 
	Title:
	 

	Date:
	 
	 
	Date:
	 

	Address:
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

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REMY INTERNATIONAL, INC.
OMNIBUS INCENTIVE PLAN

Stock Option Agreement for Directors

SECTION 1.GRANT OF OPTION.

(a)    Option.  On the terms and conditions set forth in the Notice of Stock Option Grant, which is incorporated by reference, and this Stock Option Agreement (the “Agreement”), the Company grants to the Optionee on the Effective Date of Grant the Option  to purchase at the Exercise Price the number of Shares set forth in the Notice of Stock Option Grant. 

(b)    Plan and Defined Terms.  The Option is granted pursuant to the Plan.  All terms, provisions, and conditions applicable to the Option set forth in the Plan and not set forth herein are hereby incorporated by reference herein.  To the extent any provision hereof is inconsistent with a provision of the Plan, the provisions of the Plan will govern.  All capitalized terms that are used in the Notice of Stock Option Grant or this Agreement and not otherwise defined therein or herein shall have the meanings ascribed to them in the Plan.

SECTION 2.    RIGHT TO EXERCISE.
The Option hereby granted shall be exercised by written notice to the Committee, specifying the number of Shares the Optionee desires to purchase together with provision for payment of the Exercise Price.  Subject to such limitations as the Committee may impose (including prohibition of one more of the following payment methods), payment of the Exercise Price may be made by (a) check payable to the order of the Company, for an amount in United States dollars equal to the aggregate Exercise Price of such Shares, (b) by tendering to the Company Shares having an aggregate Fair Market Value (as of the trading date immediately preceding the date of exercise) equal to such Exercise Price, (c) by broker-assisted exercise, or (d) by a combination of such methods.  The Company may require the Optionee to furnish or execute such other documents as the Company shall reasonably deem necessary (i) to evidence such exercise and (ii) to comply with or satisfy the requirements of the Securities Act of 1933, as amended, the Exchange Act, applicable state or non-U.S. securities laws or any other law.  
SECTION 3.    TERM AND EXPIRATION.

(a)    Basic Term.  Subject to earlier termination pursuant to the terms hereof, the Option shall expire on the expiration date set forth in the Notice of Stock Option Grant.  

(b)    Termination of Service.  If the Optionee’s service as a Director is terminated or discontinued, the Option shall expire on the earliest of the following occasions:

(i)    The expiration date set forth in the Notice of Stock Option Grant;

(ii)    The date three months following the termination of the Optionee’s employment or service for any reason other than death or Disability;

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(iii)    The date one year following the termination of the Optionee’s employment or service due to death or Disability; or

(iv)    The date of termination of the Optionee’s service for Cause.

The Optionee may exercise all or part of this Option at any time before its expiration under the preceding sentence, but, subject to the following sentence, only to the extent that the Option had become vested in accordance with the terms of the Notice of Stock Option Grant or this Agreement before the Optionee’s employment or service terminated.  When the Optionee’s employment or service terminates, this Option shall expire immediately with respect to the number of Shares for which the Option is not yet vested.  If the Optionee dies after termination of employment or service, but before the expiration of the Option, all or part of this Option may be exercised (prior to expiration) by the personal representative of the Optionee or by any person who has acquired this Option directly from the Optionee by will, bequest or inheritance, but only to the extent that the Option was vested and exercisable upon termination of the Optionee’s employment or service.
Upon a Change in Control, all unvested Options on the effective date of such Change in Control shall vest.  
(c)    Definition of “Cause.”  The term “Cause” shall mean (i) the willful engaging by the Optionee in misconduct that is demonstrably injurious to the Company or any Parent or Subsidiary (monetarily or otherwise), (ii) the Optionee’s conviction of, or pleading guilty or nolo contendere to, a felony involving moral turpitude, or (iii) the Optionee’s violation of any confidentiality, non-solicitation, or non-competition covenant to which the Optionee is subject.

(d)    Definition of “Disability.”  The term “Disability” shall mean the inability to perform the Grantee’s duties as a Director due to a physical or mental illness for a period of at least six (6) months as determined in the sole discretion of the majority of the members (excluding Grantee) of the Board.  

SECTION 4.    TRANSFERABILITY OF OPTION.

(a)    Generally.  Except as provided in Section 4(b) herein, the Option shall not be transferable by the Optionee other than by will or the laws of descent and distribution, and the Option shall be exercisable during the Optionee’s lifetime only by the Optionee or on his or her behalf by the Optionee's guardian or legal representative.  

(b)    Transfers to Family Members.  Notwithstanding Section 4(a) herein, if the Option is a Nonqualified Stock Option, the Optionee may transfer the Option for no consideration to or for the benefit of a Family Member, subject to such limits as the Committee may establish, and the transferee shall remain subject to all the terms and conditions applicable to the Option.  

(c)    Definition of “Family Member.”  For purposes of this Agreement, the term “Family Member” shall mean any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law of the Optionee (including adoptive relationships), any person 

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sharing the same household as the Optionee (other than a tenant or employee), a trust in which the above persons have more than fifty percent of the beneficial interests, a foundation in which the Optionee or the above persons control the management of assets, and any other entity in which the Optionee or the above persons own more than fifty percent of the voting interests.

SECTION 5.    MISCELLANEOUS PROVISIONS.

(a)    Acknowledgements.  The Optionee hereby acknowledges that he or she has read and understands the terms of the Plan and this Agreement, and agrees to be bound by their respective terms and conditions.  The Optionee acknowledges that there may be tax consequences upon the exercise or transfer of the Option and that the Optionee should consult an independent tax advisor prior to any exercise or transfer of the Option.

(b)    Tax Withholding.  Pursuant to the Plan, the Committee shall have the power and the right to deduct or withhold, or require the Optionee to remit to the Company, an amount sufficient to satisfy any federal, state and local taxes (including the Optionee’s FICA obligations) required by law to be withheld with respect to this Option.  The Committee may condition the delivery of Shares upon the Optionee’s satisfaction of such withholding obligations.  The Optionee may elect to satisfy all or part of such withholding requirement by tendering previously-owned Shares or by having the Company withhold Shares having a Fair Market Value equal to the minimum statutory withholding (based on minimum statutory withholding rates for federal, state and local tax purposes, as applicable, including the Optionee’s FICA taxes) that could be imposed on the transaction, and, to the extent the Committee so permits, amounts in excess of the minimum statutory withholding to the extent it would not result in additional accounting expense.  Such election shall be irrevocable, made in writing and signed by the Optionee, and shall be subject to any restrictions or limitations that the Committee, in its sole discretion, deems appropriate.  

(c)    Notice Concerning Disqualifying Dispositions.  If the Option is an Incentive Stock Option, the Optionee shall notify the Committee of any disposition of Shares issued pursuant to the exercise of the Option if the disposition constitutes a “disqualifying disposition” within the meaning of Sections 421 and 422 of the Code (or any successor provision of the Code then in effect relating to disqualifying dispositions). Such notice shall be provided by the Optionee to the Committee in writing within 10 days of any such disqualifying disposition.

(d)    Rights as a Stockholder.  Neither the Optionee nor the Optionee’s transferee or representative shall have any rights as a stockholder with respect to any Shares subject to this Option until the Option has been exercised and Share certificates have been issued to the Optionee, transferee or representative, as the case may be.  

(e)    Ratification of Actions.  By accepting this Agreement, the Optionee and each person claiming under or through the Optionee shall be conclusively deemed to have indicated the Optionee’s acceptance and ratification of, and consent to, any action taken under the Plan or this Agreement and Notice of Stock Option Grant by the Company, the Board, or the Committee.

(f)    Notice.  Any notice required by the terms of this Agreement shall be given in writing and shall be deemed effective upon personal delivery or upon deposit with the United States Postal 

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Service, by registered or certified mail, with postage and fees prepaid.  Notice shall be addressed to the Company at its principal executive office and to the Optionee at the address that he or she most recently provided in writing to the Company.

(g)    Choice of Law.  This Agreement and the Notice of Stock Option Grant shall be governed by, and construed in accordance with, the laws of Indiana, without regard to any conflicts of law or choice of law rule or principle that might otherwise cause the Plan, this Agreement or the Notice of Stock Option Grant to be governed by or construed in accordance with the substantive law of another jurisdiction.

(h)    Arbitration.  Subject to  the Plan, any dispute or claim arising out of or relating to the Plan, this Agreement or the Notice of Stock Option Grant shall be settled by binding arbitration before a single arbitrator in Indianapolis, Indiana  and in accordance with the Commercial Arbitration Rules of the American Arbitration Association. The arbitrator shall decide any issues submitted in accordance with the provisions and commercial purposes of the Plan, this Agreement and the Notice of Stock Option Grant, provided that all substantive questions of law shall be determined in accordance with the state and Federal laws applicable in Indiana, without regard to internal principles relating to conflict of laws. 

(i)    Modification or Amendment.  This Agreement may only be modified or amended by written agreement executed by the parties hereto; provided, however, that the adjustments permitted pursuant to  the Plan may be made without such written agreement. 

(j)    Severability.  In the event any provision of this Agreement shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining provisions of this Agreement, and this Agreement shall be construed and enforced as if such illegal or invalid provision had not been included.

(k)    References to Plan.  All references to the Plan (or to a Section or Article of the Plan) shall be deemed references to the Plan (or the Section or Article) as may be amended from time to time.  

(l)    Section 409A Compliance.  To the extent applicable, it is intended that the Plan and this Agreement comply with the requirements of Code Section 409A and any related regulations or other guidance promulgated with respect to such Section by the U.S. Department of the Treasury or the Internal Revenue Service and the Plan and the Award Agreement shall be interpreted accordingly.  

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  Exhibit 10.1    
    

 
    SUMMARY OF 2012 INCENTIVE COMPENSATION PLAN    
    

        On March 20, 2013, the Compensation Committee of the Board of Directors of Comfort Systems USA, Inc. (the "Compensation
Committee") authorized certain equity grants under the Company's Long-term Incentive Plan. The Named Executive Officers are Mr. Brian E. Lane, President and Chief Executive Officer;
Mr. William George, III, Executive Vice President and Chief Financial Officer; Mr. Trent T. McKenna, Vice President and General Counsel; and Ms. Julie S. Shaeff, Senior Vice
President and Chief Accounting Officer. 

 Long-term Incentive Plan Grants  

        The Compensation Committee determined grants under the Company's Long-term Incentive Plan. These grants were determined
based on the closing price of the Company's common stock on March 20, 2013, the date the Compensation Committee met to approve the grants. The distribution of awards under the
Long-term Incentive Plan is structured so that 30% of the awards were in the form of stock options, 30% in the form of time vesting restricted stock units, and 40% in the form of
dollar-denominated performance vesting restricted stock units. 

         Time vesting restricted stock units.    The time vesting restricted stock units vest in three equal installments over a three-year vesting
schedule. 

        Time vesting stock options.    The time vesting stock options are exercisable at $13.86 per share, will expire at the earlier of ten years
from the date
of grant or three months following the executive's termination from employment with the Company, and vest in three equal installments over a three-year vesting schedule. 

         Dollar-denominated performance vesting restricted stock units.    The dollar-denominated performance vesting restricted stock units
("PSUs") are subject
to two performance measures: 50% of the PSUs have an EPS measure and 50% of the PSUs have a measure based on total shareholder return relative to the Company's peer group. The PSUs have a
three-year performance period and will be eligible to vest at the end of the three-year performance period. Depending on the Company's performance in relation to the
established performance measures, the awards may vest at 0-200% of the targeted amount. The PSUs are a dollar-denominated award. The target award amount of PSUs reflected in the table
below is merely nominal, being based on the dollar amount specified in the award agreement divided by $13.86, the closing price of the Company's common stock on the date of grant. The dollar amount of
the target award is also provided in the table below. In the event the Company achieves the necessary performance metrics, the value of the grant will be determined in dollars and settled in stock, so
that the actual number of shares awarded will be based on the market price of the Company's common stock at the end of the performance period. 

        The
2013 awards were granted to the following executives for the purpose of providing an incentive for those individuals to work for the Company's long-term success: 

 

											
	Executive

 
	 	Time

Vesting RSUs 	 	Time Vesting

Stock Options 	 	Dollar-

Denominated

Performance

Vesting RSUs

(Target) 	 
	

 Brian E. Lane	 	 	16,234	 	 	44,476	 	$	300,000	 
	 

 President and Chief Executive Officer
	 	 	 	 	 	 	 	 	 	 
	
 William George, III	
 	
 	
10,909	
 	
 	
29,888	
 	
$	

201,600	
 
	 Executive Vice President and Chief Financial Officer
	 	 	 	 	 	 	 	 	 	 
	

 Trent McKenna	
 	
 	
6,169	
 	
 	
16,901	
 	
$	

114,000	
 
	 

 Vice President and General Counsel
	 	 	 	 	 	 	 	 	 	 
	
 Julie Shaeff	
 	
 	
3,896	
 	
 	
10,674	
 	
$	

72,000	
 
	 Senior Vice President and Chief Accounting Officer
	 	 	 	 	 	 	 	 	 	 

 

 
 2013 Incentive Compensation Plan for Executive Officers  

        On December 18, 2012, the Compensation Committee adopted the 2013 annual incentive compensation for the Named Executive
Officers, which is provided under a shareholder approved plan intended to satisfy the requirements for deductibility of performance-based compensation under Section 162(m) of the Internal
Revenue Code. The plan consists of two distinct elements. The first element of the plan rewards the senior executives of the Company for obtaining certain earnings per share ("EPS") target thresholds
(the "Objective Bonus"). The second element of the plan rewards the achievement of certain performance metrics individualized for each executive (the "Subjective Bonus"). 

        For
the Objective Bonus, the Compensation Committee has set a bonus range based on a target that is correlated with the Company's annual EPS. The range for the Objective Bonus for
Messrs. Lane and George will be 20 percent to 150 percent of 90 percent of their respective annual base salaries. For Ms. Shaeff and Mr. McKenna, the range
for the Objective Bonus will be 20 percent to 150 percent of 40 percent of their respective annual base salaries. The Objective Bonus is zero until a certain EPS threshold is met,
it then scales from 20 percent to 50 percent on a straight-line basis as it moves from 60 percent of the EPS target to 100 percent of the EPS target. Should the
Company's performance exceed the EPS target, it then scales from 50 percent to 150 percent on a straight-line basis as it moves from 100 percent of the EPS target to
300 percent of the EPS target. With regard to the Subjective Bonus, each executive is reviewed individually and at the sole discretion of the Compensation Committee is awarded a bonus within a
set range of potential outcomes based on a percentage of annual base salary. For Messrs. Lane and George, the range is 0 to 100 percent of 10 percent of annual base salary; for
Ms. Shaeff and Mr. McKenna, the range is 0 to 100 percent of 20 percent of annual base salary. 

QuickLinks

Exhibit 10.1

SUMMARY OF 2012 INCENTIVE COMPENSATION PLAN

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