Document:

AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.

 

EXECUTIVE RETIREMENT SAVINGS PLAN

 

Effective as of January 1, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

ARTICLE I - PURPOSE; EFFECTIVE DATE

 

	1.1.	
Purpose.  The purpose of this Executive Retirement Savings Plan (the “Plan”) is to provide a select group of highly compensated employees of American Axle & Manufacturing Holdings, Inc. (the “Company,” and together with its subsidiaries, the “Company Group”) and its selected subsidiaries the opportunity to defer the receipt of income that would otherwise be payable to them.  It is intended that the Plan, by providing these eligible persons with these benefits and the deferral of income tax recognition of these benefits, will assist in retaining and attracting individuals of exceptional ability.

 

	1.2.	
Effective Date.  It is the intent that all of the amounts contributed under the Plan and benefits provided hereunder will be subject to the terms of Section 409A of the Code, and the Plan shall be effective as of January 1, 2019.

 

	1.3.	
Plan Type.  For purposes of Section 409A of the Code, the Plan shall be considered a nonelective account balance plan as defined in Treas. Reg. §1.409A-1(c)(2)(i)(B), or as otherwise provided by the Code.

 

ARTICLE II - DEFINITIONS

 

For the purpose of the Plan, the following terms shall have the meanings indicated, unless the context clearly indicates otherwise:

 

	2.1.	
401(k) Plan.  “401(k) Plan” means the Company’s 401(k) Savings Plan.

 

	2.2.	
Account.  “Account” means the account or accounts maintained on the books of the Company used solely to calculate the amount payable to each Participant under the Plan and shall not constitute a separate fund of assets.  An Account shall be deemed to exist from the time amounts are first credited to an Account until such time that the entire Account balance has been distributed in accordance with the Plan.

 

	2.3.	
Administrator. “Administrator” means the Management Benefits Committee acting through the Company’s Human Resources Department in the administration of the Plan pursuant to Section 7.2.

 

	2.4.	
Beneficiary.  “Beneficiary” means the person, persons or entity as designated by the Participant, or who is otherwise entitled under Article VI, to receive any Plan benefits payable after the Participant’s death.

 

	2.5.	
Board.  “Board” means the Board of Directors of the Company, or any successor thereto.

 

	2.6.	
Cause.  “Cause” means with respect to a Participant, unless otherwise defined in the employment agreement of the Participant, any of the following: (a) the Participant’s willful and continued failure or refusal to perform the duties reasonably required of him or her to the Company Group;  (b) the Participant’s conviction of, or plea of nolo contendere to any felony or another crime involving dishonesty or moral turpitude or which reflects negatively upon the Company or its Subsidiaries or affiliates or otherwise impairs or impedes its operations; (c) the Participant’s engagement in any willful misconduct, gross negligence, act of dishonesty, violence or threat of violence (including any violation of federal securities laws) that is injurious to the Company Group; (d) the Participant’s material breach of any applicable agreement with or policy of the Company Group; (e) the Participant’s material failure to comply with any applicable laws and regulations or professional standards relating to the business of the Company Group; or (f) any other misconduct by the Participant that is injurious to the financial condition or business reputation of the Company Group.

 

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	2.7.	
Code.  “Code” means the Internal Revenue Code of 1986, as it may be amended from time to time and as interpreted by regulations and rulings issued pursuant to the Code.  Any references to a specific provision shall be deemed to include references to any successor Code provision.

 

	2.8.	
Company.  “Company” means American Axle & Manufacturing Holdings, Inc. and any successor.

 

	2.9.	
Compensation Committee.  “Compensation Committee” means the Compensation Committee of the Board.

 

	2.10.	
Determination Date.  “Determination Date” means any business day on which the New York Stock Exchange is open for trading.

 

	2.11.	
Disability.  “Disability” shall mean either of the following: (a) inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months; or (b) by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Company Group.

 

	2.12.	
Distribution Election.  “Distribution Election” means the form prescribed by the Management Benefits Committee and completed by the Participant, indicating the chosen form of payment for benefits payable from the Participant’s Account, as elected by the Participant.

 

	2.13.	
Eligible Person.  “Eligible Person” means (a) US-based executives of the Company Group having the title of Vice President and above and (b) any other US-based employee of the Company Group designated by the Compensation Committee consistent with Section 10.1.

 

	2.14.	
ERSP Contribution.  “ERSP Contribution” means the Company contribution credited to a Participant’s Account under Section 4.4.

 

	2.15.	
Executive Officer.  “Executive Officer” means any executive whose compensation must be reviewed and approved by the Compensation Committee.

 

	2.16.	
Interest.  “Interest” means the amount credited to or debited against a Participant’s Account on a Determination Date, which shall be based on the Valuation Funds chosen by the Participant pursuant to Section 4.3, in order to reflect the increase or decrease in value of the Account in accordance with the provisions of the Plan.

 

	2.17.	
Management Benefits Committee.  “Management Benefits Committee” means the committee appointed by the Compensation Committee to govern and monitor the administration of the Plan pursuant to Section 7.1.

 

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	2.18.	
Management Investment Committee. “Management Investment Committee” means the committee appointed by the Compensation Committee to govern and monitor all Plan assets and investments.

 

	2.19.	
Participant.  “Participant” means (i) any Eligible Person identified in Section 2.13(a) and (ii) any Eligible Person designated by the Compensation Committee in accordance with Section 2.13(b).

 

	2.20.	
Plan. “Plan” means this Executive Retirement Savings Plan, as amended from time to time.

 

	2.21.	
Plan Year. “Plan Year” shall mean a calendar year (January 1-December 31).

 

	2.22.	
Retirement. ”Retirement” means a Participant’s voluntary resignation at any time (a) after attaining age 65, (b) after attaining age 55 but prior to age 65 with ten or more years of continuous service with the Company Group, or (c) after attaining age 60 but prior to age 65 with five or more years of continuous service with the Company Group.

 

	2.23.	
Termination.  “Termination”, “terminates employment” or any other similar such phrase means the Participant’s “separation from service” with the Company Group, for any reason, within the meaning of Section 409A of the Code.

 

	2.24.	
Unforeseeable Emergency.  “Unforeseeable Emergency” means an event that results in a severe financial hardship to the Participant resulting from (a) an illness or accident of the Participant, the Participant’s spouse, the Participant’s beneficiary or a dependent of the Participant, (b) loss of the Participant’s property due to casualty or (c) other similar extraordinary and unforeseeable circumstances as a result of events beyond the control of the Participant, in each case in compliance with Section 409A of the Code.

 

	2.25.	
Valuation Funds.  “Valuation Funds” means one or more of the independently established funds or indices that are approved by the Management Investment Committee.  These Valuation Funds are used solely to calculate the Interest that is credited to each Participant’s Account in accordance with Article IV, and the term “Valuation Funds” does not represent, nor should it be interpreted to convey, any beneficial interest on the part of the Participant in any asset or other property of the Company or any member of the Company Group. The determination of the increase or decrease in the performance of each Valuation Fund shall be made by the Management Investment Committee in its reasonable discretion.  The Management Investment Committee shall select the various Valuation Funds available to the Participants and may add or remove any Valuation Funds on a prospective basis at any time in its sole discretion.

 

ARTICLE III - ELIGIBILITY AND PARTICIPATION

 

	3.1.	
Eligibility and Participation.

 

		a)	
Eligibility. All US-based executives of the Company Group having the title of Vice President and above shall be Eligible Persons. With respect to other employees of the Company, the Compensation Committee shall designate those employees of the Company Group who are Eligible Persons.

 

		b)	
Participation.  An individual’s participation in the Plan shall be effective upon the date such individual becomes an Eligible Person.

 

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	3.2.	
Participant Elections.  No more than 30 days after a Participant is first designated as a Participant as set forth in Section 3.1(b) (or if such Participant was prior to such designation participating in another nonelective account balance plan of the Company Group, the first date on which such Participant may make such election in compliance with Section 409A of the Code), the Participant may submit the following forms to the Administrator:

 

		a)	
Distribution Election.  The Participant may submit a Distribution Election, on which the Participant shall elect a form of payment to be made with respect to the Participant’s Account.  The Participant may submit a new Distribution Election at any time prior to the end of the 30-day period referenced in this Section 3.2, and the Distribution Election most recently filed at the end of such 30-day period shall be irrevocable.  In the event that a Participant does not timely submit a properly completed Distribution Election, the form of payment deemed to be elected will be a lump sum.

 

		b)	
Allocation Election.  The Participant may submit an allocation form, which shall provide instructions on how the ERSP Contributions credited to the Participant’s Account shall be allocated among the various available Valuation Funds.  In the event that a Participant does not submit a timely and properly completed allocation form, the Administrator shall allocate the ERSP Contributions to the default Valuation Fund designated by the Management Benefits Committee until a properly completed allocation form is submitted.

 

	3.3.	
Subsequent Distribution Election.  Except to the extent otherwise required or permitted under Section 409A of the Code, the Participant shall not be permitted to change or revoke the form of payment with respect to his or her Account on or after the date on which such election would otherwise be irrevocable under Section 3.2(a) unless all of the following requirements are satisfied with respect to such Participant’s subsequent election to change the form of payment:  (i) such election shall not take effect until 12 months after the date on which the election is made; (ii) such election shall not apply to any scheduled distribution date that occurs 12 months or less after the date on which the election is made; and (iii) except in the case of a payment due to death, as described in Section 5.2, or Disability, as described in Section 5.3, the payment with respect to which such election is made must be deferred for a period of five years from the date such payment would otherwise have been paid (or in the case of annual installment payments, five years from the date the first annual installment payment would otherwise have been scheduled to be paid). A Participant may only make one subsequent Distribution Election under this Section 3.3, with respect to his or her Account.

 

ARTICLE IV - DEFERRED COMPENSATION ACCOUNT

 

	4.1.	
Accounts.  The ERSP Contributions and Interest thereon shall be credited to the Participant’s Account as otherwise provided in this Article IV.  The Participant’s Account shall be used solely to calculate the amount payable to the Participant under the Plan and shall not constitute a separate fund of assets.

 

	4.2.	
Timing of Credits; Withholding.  Any ERSP Contributions shall be credited to a Participant’s Account as of a time and in a manner provided by the Administrator, but typically as soon as practicable in the first quarter of the calendar year following the Plan Year to which such ERSP Contribution relates.  Any withholding of taxes or other amounts with respect to the ERSP Contribution credited to a Participant’s Account that is required by local, state or federal law shall reduce the amount credited to the Participant’s Account in any manner specified by the Management Benefits Committee.  Any Participant who suffers a Termination and is vested in his or her Account in accordance with Section 4.6 at the time of Termination shall receive a final contribution within 30 days following such Participant’s Termination date.

 

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	4.3.	
Valuation Funds.  A Participant shall be permitted to designate one or more Valuation Funds for the sole purpose of determining the amount of Interest to be credited or debited to the Participant’s Account.  Such election shall designate how each ERSP Contribution shall be allocated among the available Valuation Fund(s).  A Participant shall also be permitted to reallocate the balance in the Participant’s Account among the available Valuation Funds.  The manner in which such elections shall be made and the frequency with which such elections may be changed and the manner in which such elections shall become effective shall be determined in accordance with the procedures adopted by the Management Investment Committee from time to time.

 

	4.4.	
ERSP Contributions.  A Participant’s Account shall be credited with an ERSP Contribution in accordance with this Section 4.4. 

 

		a)	
Contribution Amount.  The amount of the ERSP Contribution for any Participant shall be stated as (i) a flat dollar amount, (ii) a percentage of the Participant’s base salary and annual incentive compensation paid in the applicable Plan Year less the maximum eligible Company matching and non-elective contributions to the 401(k) Plan in the Plan Year (irrespective of whether the Participant maximized the Company contributions or not) or (iii) a formula as determined by the Compensation Committee in its sole discretion.

 

The Compensation Committee, in its sole discretion, shall determine the maximum amount of the ERSP Contribution that may be made for a Participant, and may consider any factors it deems relevant in making such determination.  The Management Benefits Committee, in its sole discretion, shall determine the actual amount of the ERSP Contribution to be allocated to a Participant’s Account for each year (or portion thereof), if any, up to the maximum amount approved by the Compensation Committee, except for the Executive Officers, for whom such decision will be made by the Compensation Committee.  For a Participant’s initial year of participation, the ERSP Contribution shall be based on the applicable formula for the Plan Year and prorated from the date the Participant becomes an Eligible Person.  Once established, the ERSP Contribution formula for any Participant shall remain the same for each succeeding year, unless changed by either the Management Benefits Committee or the Compensation Committee pursuant to their respective authority indicated herein.  Any such changes must be made no later than December 31 and shall apply to the ERSP Contribution made with respect to services performed in the following Plan Year.

 

		b)	
Special Contributions.  By way of further clarity, notwithstanding the provisions of Section 4.4(a), the Compensation Committee may make, in its complete and sole discretion, a special contribution on behalf of a Participant to such Participant’s Account with respect to a particular Plan Year in any amount as determined by the Compensation Committee.  Such special contribution may be in addition to or in lieu of any other contribution with respect to the particular Plan Year, as determined by the Compensation Committee in its complete and sole discretion.

 

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		c)	
No Guarantee of Future Contributions.  The designation of any Participant as being eligible to receive an ERSP Contribution in any year shall not be a guarantee of future contributions, and the crediting of any particular level of ERSP Contribution in any year shall not be a guarantee of that level in future years.

 

	4.5.	
Determination of Accounts.  Each Participant’s Account on a Determination Date shall consist of the balance of the Account as of the immediately preceding Determination Date, adjusted as follows:

 

		a)	
ERSP Contributions.  Each Account shall be increased by any ERSP Contribution credited since such prior Determination Date as set forth in Section 4.4.

 

		b)	
Distributions.  Each Account shall be reduced by the amount of each benefit payment made from that Account since the prior Determination Date.  Distributions shall be deemed to have been made proportionally from each of the Valuation Funds maintained within such Account based on the proportion that such Valuation Fund bears to the sum of all Valuation Funds maintained within the Account for that Participant as of the Determination Date immediately preceding the date of payment.

 

		c)	
Interest.  Each Account shall be increased or decreased by the Interest credited or debited to such Account as though the balance of that Account was invested in the applicable Valuation Funds chosen by the Participant.

 

	4.6.	
Vesting of Accounts.  Unless otherwise specified by the Management Benefits Committee (with respect to non-Executive Officer Participants) or the Compensation Committee (with respect to Executive Officer Participants) in writing, or except as set forth in Section 4.7, each Participant shall be 100% vested in the Participant’s Account, including any Interest thereon, upon the earliest of: (a) death; (b) Disability; or (c) becoming eligible for Retirement.

 

	4.7.	
Forfeiture of Accounts.  Any Participant who Terminates employment before becoming fully vested in the Participant’s Account shall immediately forfeit the unvested balance of his or her Account.  Any Participant whose employment is terminated for Cause, or whose employment is terminated for any reason at a time when such termination could have been for Cause, shall immediately forfeit the balance of his or her Account, including any vested amounts.  In addition, if a Participant’s employment is not terminated for Cause, but the Management Benefits Committee (with respect to non-Executive Officer Participants) or the Compensation Committee (with respect to Executive Officer Participants) later determines that such termination could have been for Cause if all the facts had been known at the time of such termination, then any unpaid portion of the Participant’s Account shall be immediately forfeited as of the date of such Committee’s determination.

 

	4.8.	
Statement of Accounts.  To the extent that the Company does not arrange for a Participant’s Account balance to be accessible online by the Participant, the Administrator shall provide to each Participant a statement showing the balance in the Participant’s Account no less frequently than annually.

 

ARTICLE V - PLAN BENEFITS

 

	5.1.	
A Participant’s Account.  The Participant’s vested Account balance shall be distributable to the Participant upon the Participant’s Termination.

 

		a)	
Form of Payment.  The form of benefit payment shall be that form selected by the Participant in his or her Distribution Election made (or deemed made) pursuant to Section 3.2(a) (as may be amended in accordance with a subsequent Distribution Election under Section 3.3), and as permitted pursuant to Section 5.5.

 

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		b)	
Timing of Payment.  Benefits payable from a Participant’s Account shall be paid (if a lump sum) or commence (if installments) on the first Determination Date that occurs on or immediately following six months following the Participant’s Termination date.  If installments, each subsequent payment shall occur in January of the next calendar year following the initial benefit payment.

 

	5.2.	
Death Benefit. Upon the death of a Participant prior to the commencement of distributions from the Participant’s Account, the Company shall pay to the Participant’s Beneficiary an amount equal to the Participant’s vested Account balance in the form of a lump sum payment as soon as administratively practicable (but in no event more than 90 days) after the Participant’s death.  In the event of the death of the Participant after the commencement of distributions from the Participant’s Account, the remaining unpaid balance of the Participant’s Account shall be paid to the Participant’s Beneficiary in the form of a lump sum as soon as administratively possible (but in no event more than 90 days) after the Participant’s death.  If the Participant’s Beneficiary, estate or legal representative fails to notify the Management Benefits Committee of the death of the Participant in the manner specified in Section 10.9, such that the Company is unable to make timely payment hereunder, then the Company shall not be treated as in breach of the Plan and shall not be liable to the Beneficiary, estate or legal representative for any losses, damages, or other claims resulting from such late payment.

 

	5.3.	
Disability Distributions.  Upon a finding by the Management Benefits Committee that a Participant has suffered a Disability, the Company shall make a full distribution of the Participant’s Account.  The payment of such distribution shall be made in the form of a lump sum in an amount equal to the Participant’s vested Account balance as soon as administratively practical (but in no event more than 90 days) after the date of such Disability.

 

	5.4.	
Permitted Acceleration of Payments.  To the extent permitted by Section 409A of the Code, the Management Benefits Committee may, in its sole discretion, accelerate the time or schedule of a distribution under the Plan, such as accelerated distributions to address the payment of employment taxes or early income inclusion that may occur for a Participant’s Account balance.

 

	5.5.	
Form of Payment.  Unless otherwise specified in this Article V, the benefits payable from a Participant’s Account shall be paid in the form of benefit as provided below, and specified by the Participant in the Distribution Election or as otherwise set forth in Section 3.2(a).  The permitted forms of benefit payments are:

 

		a)	
A lump sum amount that is equal to the Participant’s vested Account balance; and

 

		b)	
Annual installments for a period of up to 10 years where the annual payment shall be equal to the Participant’s vested Account balance immediately prior to the payment, multiplied by a fraction, the numerator of which is one and the denominator of which commences at the number of annual payments initially chosen and is reduced by one in each succeeding year.  Interest on the unpaid balance shall be based on the most recent allocation among the available Valuation Funds chosen by the Participant, made in accordance with Section 4.3.

 

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	5.6.	
Small Account.  If the Participant’s vested Account balance as of the time the payments are to commence is less than $50,000, then such Account shall be paid in a lump sum, notwithstanding any election by the Participant to the contrary.

 

	5.7.	
Unforeseeable Emergency Distribution.  The Management Benefits Committee may at any time, upon written request of a Participant, cause to be paid to such Participant, an amount equal to all or any part of the Participant’s vested Account balance if the Management Benefits Committee determines, based on such reasonable evidence that it shall require, that such a payment is necessary for the purpose of alleviating the consequences of an Unforeseeable Emergency.  Payments of amounts because of an Unforeseeable Emergency may not exceed the amount necessary to satisfy the Unforeseeable Emergency plus amounts necessary to pay taxes or penalties reasonably anticipated as a result of the distribution after taking into account the extent to which the Unforeseeable Emergency is or may be relieved through reimbursement or compensation from insurance or otherwise, or by liquidation of the Participant’s assets (to the extent the liquidation of such assets would not itself cause severe financial hardship).  The amount of a Participant’s Account shall be reduced by the amount of any Unforeseeable Emergency distribution to the Participant.

 

	5.8.	
Withholding; Payroll Taxes.  The Company shall withhold from any payment made pursuant to the Plan any taxes required to be withheld from such payments under local, state or federal law.

 

	5.9.	
Payments in Connection with a Domestic Relations Order.  Notwithstanding anything herein to the contrary, the Company may make distributions to someone other than the Participant if such payment is necessary to comply with a domestic relations order, as defined in Section 414(p)(1)(B) of the Code, involving the Participant.

 

	5.10.	
Payment to Guardian.  If a Plan benefit is payable to a minor or a person declared incompetent or to a person incapable of handling the disposition of the property, then the Management Benefits Committee may direct payment to the guardian, legal representative or person having the care and custody of such minor, incompetent or person.  The Management Benefits Committee may require proof of incompetency, minority, incapacity or guardianship as it may deem appropriate prior to distribution.  Such distribution shall completely discharge the Management Benefits Committee and the Company from all liability with respect to such benefit.

 

	5.11.	
Effect of Payment.  The full payment of the applicable benefit under this Article V shall completely discharge all obligations on the part of the Company to the Participant (and the Participant’s Beneficiary) with respect to the operation of the Plan, and the Participant’s (and the Participant’s Beneficiary’s) rights under the Plan shall terminate.

 

	5.12.	
Amount of Payment.  Notwithstanding anything herein to the contrary, the amount payable from a Participant’s vested Account balance may be determined and valued within a period of up to 10 business days preceding the date of actual payment.

 

ARTICLE VI - BENEFICIARY DESIGNATION

 

	6.1.	
Beneficiary Designation.  Each Participant shall have the right, at any time, to designate one or more persons or entity as a Beneficiary (both primary as well as secondary) to whom benefits under the Plan shall be paid in the event of the Participant’s death prior to complete distribution of the Participant’s vested Account balance.  Each Beneficiary designation shall be in the form prescribed by the Administrator, including through an online designation system, and shall be effective only when filed with the Administrator during the Participant’s lifetime.

 

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	6.2.	
Changing Beneficiary.  Except in instances when the listed Beneficiary is the spouse of the Participant, a Participant may change the Beneficiary designation without the consent of the previously named Beneficiary by filing a new Beneficiary designation with the Administrator during the Participant’s lifetime. If the listed Beneficiary is the spouse of the Participant, the Participant shall obtain such Beneficiary’s consent by the execution of a spousal consent form provided by the Company.

 

	6.3.	
No Beneficiary Designation.  If any Participant fails to designate a Beneficiary in the manner provided above, if the designation is void, or if the Beneficiary designated by a deceased Participant dies before the Participant or before complete distribution of the Participant’s benefits, and the Beneficiary designation form does not specify to whom payments should be made in such event, then the Participant’s Beneficiary shall be the Participant’s estate.

 

	6.4.	
Effect of Payment.  Payment to the Beneficiary shall completely discharge the Company’s obligations under the Plan.

 

ARTICLE VII - ADMINISTRATION

 

	7.1.	
Management Benefits Committee. The Compensation Committee shall appoint a Management Benefits Committee for the Plan.

 

		a)	
Appointment and Removal of Management Benefits Committee. The Management Benefits Committee shall consist of three or more individuals appointed by, and serving at the discretion of, the Compensation Committee.  A member of the Management Benefits Committee may (i) resign upon 30 days’ written notice to the Compensation Committee, or (ii) be removed from the Management Benefits Committee at any time at the discretion of the Compensation Committee.

 

		b)	
Decisions by Management Benefits Committee. The Management Benefits Committee shall act by majority vote either at a meeting of the Management Benefits Committee or by written consent. Meetings may be attended telephonically.

 

		c)	
Authority.  The Management Benefits Committee shall:  (i) monitor the performance of the Plan to ensure that the Plan is administered in accordance with its terms and in compliance with applicable law or regulation; (ii) have full and exclusive discretionary authority to determine all questions arising in the administration, application and interpretation of the Plan including the authority to correct any defect or reconcile any inconsistency or ambiguity in the Plan and the authority to determine a Participant’s eligibility to receive a benefit from the Plan and the amount of that benefit; (iii) determine all Claims appeals as set forth in Section 8.1 of the Plan and shall have the authority to determine all questions of fact relating to such an appeal, and any determination by the Management Benefits Committee pursuant to this Section 7.1(c) or Section 8.1 shall be binding and conclusive on all parties; and (iv) have the authority to make Plan amendments as long as such amendments do not have a significant cost impact to the Company.  The Management Benefits Committee may also provide for the adoption of the Plan by an affiliated employer pursuant to such terms and conditions as the Management Benefits Committee, in its discretion, may determine.  The Management Benefits Committee shall have the right to remove an affiliated employer as a Plan sponsor if, in its discretion, it deems such removal to be appropriate.

 

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		d)	
Liability.  No member of the Management Benefits Committee or any other committee to which Plan administrative authority has been delegated, shall be personally liable by reason of any action taken by him or her in good faith or on his or her behalf as the Management Benefits Committee, nor for any mistake in judgment made in good faith.

 

	7.2.	
Administrator.  The Company shall be the Plan Administrator.  The Administrator shall act on its behalf and perform the duties of the Plan Administrator as set forth herein. The Administrator shall administer the Plan in accordance with all applicable laws and regulations and, except as otherwise expressly provided to the contrary herein, shall have all powers and discretionary authority to carry out that obligation. Specifically, but not by way of limitation, the Administrator shall:

 

		a)	
Procedures and Forms. Establish such administrative procedures and prepare, or cause to be prepared, such forms, as may be necessary or desirable for the proper administration of the Plan;

 

		b)	
Advisors. Retain the services of such consultants and advisors as may be appropriate to the administration of the Plan;

 

		c)	
Payment of Benefits. Direct, or establish procedures for, the payment of benefits from the Plan; and

 

		d)	
Plan Records. Maintain, or cause to be maintained, all documents and records necessary or appropriate to the maintenance of the Plan.

 

	7.3.	
Binding Effect of Decisions.  The decision or action of any member of the Management Benefits Committee with respect to any question arising out of or in connection with the administration, interpretation and application of the Plan and the rules and regulations promulgated hereunder shall be final, conclusive and binding upon all persons having any interest in the Plan.

 

	7.4.	
Indemnity of Members of the Management Benefits Committee.  The Company shall indemnify and hold harmless the members of the Management Benefits Committee against any and all claims, loss, damage, expense or liability arising from any action or failure to act with respect to the Plan on account of such member’s service for the Management Benefits Committee, except in the case of gross negligence or willful misconduct.

 

ARTICLE VIII - CLAIMS PROCEDURE

 

	8.1.	
Claim.  Any person or entity claiming a benefit, or requesting an interpretation, ruling, or information under the Plan, shall present the request in writing to the Management Benefits Committee within one year following the date that such person or entity knew or, exercising reasonable care, should have known of such claim in accordance with Company policy.  All decisions on review shall be final and bind all parties concerned.

 

ARTICLE IX - AMENDMENT AND TERMINATION OF PLAN

 

	9.1.	
Amendment.  The Board or its appointed delegates may at any time amend the Plan by written instrument, notice of which is given to all the Participants and to each Beneficiary receiving installment payments who are affected by such amendment, except that no amendment shall reduce the amount vested or accrued in any Participant’s Account as of the date the amendment is adopted.  In addition, any amendment which adds a distribution event to the Plan shall not be affective with respect to any Participant’s Account that is already established as of the time of such amendment.  Notwithstanding anything in the Plan to the contrary, the Board or its appointed delegates shall have the unilateral right to amend the Plan to comply with Section 409A of the Code.

 

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	9.2.	
Company’s Right to Terminate.  The Board may, in its sole discretion, terminate the entire Plan and require distribution of all benefits due under the Plan or portion thereof, provided that:

 

		a)	
The termination of the Plan does not occur proximate to a downturn in the financial health, as determined by the Management Benefits Committee, of the Company and all entities considered to be part of the same controlled group under Treas. Reg. §1.409A-1(g) (the “AAM Controlled Group”);

 

		b)	
The AAM Controlled Group also terminates all other plans or arrangements which are considered to be of a similar type as defined in Treas. Reg. §1.409A-1(c)(2)(i), or as otherwise provided by the Code;

 

		c)	
No payments made in connection with the termination of the Plan occur earlier than 12 months following the Plan termination date other than payments the Plan would have made irrespective of Plan termination;

 

		d)	
All payments made in connection with the termination of the Plan are completed within 24 months following the Plan termination date;

 

		e)	
The AAM Controlled Group does not establish a new plan of a similar type as defined in Treas. Reg. §1.409A-1(c)(2)(i), within three years following the Plan termination date; and

 

		f)	
The AAM Controlled Group meets any other requirements deemed necessary to comply with provisions of the Code and applicable regulations which permit the acceleration of the time and form of payment made in connection with plan terminations and liquidations.

 

ARTICLE X - MISCELLANEOUS

 

	10.1.	
Unfunded Plan.  The Plan is an unfunded plan maintained primarily to provide deferred compensation benefits for a select group of “management or highly-compensated employees” within the meaning of Sections 201, 301, and 401 of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and therefore is exempt from the provisions of Parts 2, 3 and 4 of Title I of ERISA.

 

	10.2.	
Unsecured General Creditor.  The Plan constitutes an unsecured promise by the Company to pay benefits in the future.  Notwithstanding any other provision of the Plan, all Participants and each Participant’s Beneficiary shall be unsecured general creditors, with no secured or preferential rights to any assets of the Company or any other party for payment of benefits under the Plan.  The Plan is unfunded for Federal tax purposes and for purposes of Title I of the Employee Retirement Income Security Act of 1974. Any property held by the Company for the purpose of generating the cash flow for benefit payments shall remain its general, unpledged and unrestricted assets.  The Company’s obligation under the Plan shall be an unfunded and unsecured promise to pay money in the future.  No other member of the Company Group shall have any obligations or liabilities under the Plan.  Any obligations on the Plan are solely those of the Company.

 

11

	10.3.	
Trust Fund.  The Company shall be responsible for the payment of all benefits provided under the Plan.  At its discretion, the Company may establish one or more trusts, with such trustees as the Board may approve, for the purpose of assisting in the payment of such benefits. The assets of any such trust shall be held for payment of all the Company’s general creditors in the event of insolvency.  To the extent any benefits provided under the Plan are paid from any such trust, the Company shall have no further obligation to pay them.  If not paid from the trust, such benefits shall remain the obligation of the Company.

 

	10.4.	
Compliance with Section 409A of the Code.  It is intended that the Plan comply with the provisions of Section 409A of the Code, so as to prevent the inclusion in gross income of any amounts deferred hereunder in a taxable year that is prior to the taxable year or years in which such amounts would otherwise actually be paid or made available to the Participants or Beneficiaries.  The Plan shall be construed, administered, and governed in a manner that affects such intent.  Neither the Company, any other member of the Company Group nor any Committee guarantees or provides any warranties with respect to the tax treatment of amounts deferred under the Plan.  Neither the Company, any other member of the Company Group, the Board, any director, officer, employee and advisor, nor any Committee (nor its designee) shall be held liable for any taxes, interest, penalties or other monetary amounts owed by any Participant, Beneficiary or other taxpayer as a result of the Plan.  For purposes of the Plan, the phrase “permitted by Section 409A of the Code,” or words or phrases of similar import, shall mean that the event or circumstance shall only be permitted to the extent it would not cause an amount deferred or payable under the Plan to be includible in the gross income of a Participant or Beneficiary under Section 409A(a)(1) of the Code.

 

	10.5.	
Nonassignability and Offset.

 

		a)	
Nonassignability.  Neither a Participant nor any other person shall have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer, hypothecate or convey in advance of actual receipt the amounts, if any, payable hereunder, or any part thereof, which are, and all rights to which are, expressly declared to be unassignable and non-transferable, other than (i) to a Participant’s Beneficiary pursuant to Article VI, (ii) pursuant to a domestic relations order deemed legally sufficient by the Management Benefits Committee, or (iii) by will or the laws of descent and distribution.  No part of the amounts payable shall, prior to actual payment, be subject to seizure or sequestration for the payment of any debts, judgments, alimony or separate maintenance owed by a Participant or any other person, nor be transferable by operation of law in the event of a Participant’s or any other person’s bankruptcy or insolvency.

 

		b)	
Offset.  If, at the time a payment is due hereunder, the Company determines that the Participant is indebted or obligated to the Company or any other member of the Company Group (including, but not limited to, for amounts owed as a result of the Participant’s breach of his or her fiduciary duty owed to, or breach of any restrictive covenant in effect with, the Company Group), then the payment to be made to or with respect to such Participant (including a payment to the Participant’s Beneficiary) may, at the discretion of the Company, be reduced by the amount of such indebtedness or obligation; provided, however, that an election by the Company to not reduce any such payment shall not constitute a waiver of its claim for such indebtedness or obligation.

 

12

	10.6.	
Not a Contract of Employment.  The Plan shall not constitute a contract of employment between the Company Group and the Participant.  Nothing in the Plan shall give a Participant the right to be retained in the service of the Company Group or to interfere with the right of the Company Group to discipline or discharge a Participant at any time.

 

	10.7.	
Protective Provisions.  A Participant will cooperate with the Company by furnishing any and all information requested by the Company, in order to facilitate the payment of benefits hereunder, and by taking such physical examinations as the Company may deem necessary and taking such other action as may be requested by the Company.

 

	10.8.	
Governing Law.  The provisions of the Plan shall be construed and interpreted according to the laws of the State of Michigan, without giving effect to any choice of law or conflict of law provision or rule, except as preempted by federal law.

 

	10.9.	
Validity.  If any provision of the Plan shall be held illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but the Plan shall be construed and enforced as if such illegal and invalid provision had never been inserted herein.

 

	10.10.	
Notice.  Any notice required or permitted under the Plan shall be sufficient if in writing and sent by (i) registered, certified mail, or (ii) electronic mail at benefits@aam.com (with a simultaneous confirmation copy sent by first class mail properly addressed and postage prepaid).  Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification.  Mailed notice shall be directed to “Administrator: ERSP, Attention Human Resources Department” at the Company’s headquarters address.  Mailed notice to a Participant or Beneficiary shall be directed to the individual’s last known address in the Company’s records.

 

	10.11.	
Successors.  The provisions of the Plan shall bind and inure to the benefit of the Company and its successors and assigns.  The term successors as used herein shall include any corporate or other business entity which shall, whether by merger, consolidation, purchase or otherwise acquire all or substantially all of the business and assets of the Company, and successors of any such corporation or other business entity.

 

 

 

 

 

 

13AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.

 

Executive Officer Severance Plan

 

	1.	
Purpose.  The purpose of the American Axle & Manufacturing Holdings, Inc. Executive Officer Severance Plan (the “Plan”) is to advance the interests of American Axle & Manufacturing Holdings, Inc. (the “Company,” and together with its subsidiaries, the “Company Group”)  and its shareholders by providing financial protection to selected executive officers and certain other employees as determined by the Administrator in its sole discretion from time to time upon termination of a participant’s employment in specific circumstances and to attract and retain talent.

 

	2.	
Definitions.  For purposes of the Plan, the following words and phrases have the meanings specified below:

 

		2.1	
“Accountants” has the meaning set forth in Section 9.2.

 

		2.2	
“Administrator” has the meaning set forth in Section 3.

 

		2.3	
“Base Salary” with respect to a Participant means the rate of annual base salary paid to the Participant by the Company Group immediately preceding the Participant’s Date of Separation.

 

		2.4	
“Benefit Continuation” has the meaning set forth in Section 6.2.

 

		2.5	
“Board” means the Board of Directors of the Company.

 

		2.6	
“Bonus” with respect to a Participant means the target annual bonus amount for the year in which the Participant’s Date of Separation occurs.

 

		2.7	
“Cause” means any one or more of the following: “Cause” means with respect to a Participant, unless otherwise defined in the employment agreement of the Participant, any of the following:  (a) the Participant’s willful and continued failure or refusal to perform the duties reasonably required of him or her to the Company Group;  (b) the Participant’s conviction of, or plea of nolo contendere to any felony or another crime involving dishonesty or moral turpitude or which reflects negatively upon the Company Group or otherwise impairs or impedes its operations; (c) the Participant’s engagement in any willful misconduct, gross negligence, act of dishonesty, violence or threat of violence (including any violation of federal securities laws) that is injurious to the Company Group; (d) the Participant’s material breach of any applicable agreement with or policy of the Company Group; (e) the Participant’s material failure to comply with any applicable laws and regulations or professional standards relating to the business of the Company Group; or (f) any other misconduct by the Participant that is injurious to the financial condition or business reputation of the Company Group.

 

		2.8	
“Code” means the Internal Revenue Code of 1986, as it may be amended from time to time and as interpreted by regulations and rulings issued pursuant to the Code.  Any references to a specific provision shall be deemed to include references to any successor Code provision.

 

		2.9	
“Committee” means the Compensation Committee of the Board.

 

		2.10	
“Covered Payments” has the meaning set forth in Section 9.1.

 

		2.11	
“Date of Separation” means, with respect to a Participant, the date on which a Participant incurs a termination of employment that is a “separation from service” within the meaning of Section 409A of the Code.

 

		2.12	
“Effective Date” has the meaning set forth in Section 17.

 

		2.13	
“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, or any successor act thereto.

 

		2.14	
“Excise Tax” has the meaning set forth in Section 9.1.

 

		2.15	
“Good Reason” means any one or more of the following actions or omissions:

 

		(a)	
any material reduction in a Participant’s annual base salary or bonus opportunity as in effect immediately prior to the reduction; or

 

		(b)	
the relocation (other than by mutual agreement) of the office at which the Participant is to perform the majority of his or her duties to a location more than 50 miles from the location at which the Participant performed such duties prior to the relocation;

 

provided, however, that the Participant must provide the Company with (a) 45 days advance notice of termination in writing and (b) notice of the conduct that is the basis for the potential Good Reason termination in writing within 90 days of its initial existence, and such notice shall describe the conduct the Participant believes to constitute Good Reason.  The Company shall have 30 days to cure such conduct upon receipt of the notice of termination from the Participant.  If the Company cures the conduct that is the basis for the potential termination for Good Reason within such 30-day period, the Participant’s notice of termination shall be deemed withdrawn.  If the Participant does not give notice to the Company as described in this Section 2.15 within 90 days after an event giving rise to Good Reason, the Participant’s right to claim Good Reason termination on the basis of such event shall be deemed waived.

 

		2.16	
“Participant” has the meaning set forth in Section 4.

 

		2.17	
“Plan” means this Executive Officer Severance Plan, as described in this document and as amended from time to time.

 

		2.18	
“Release” has the meaning set forth in Section 7.

 

		2.19	
“Severance Multiple” means the number applicable to a Participant’s position as set forth on Exhibit A, as amended from time to time.

 

		2.20	
“Severance Period” has the meaning set forth in Section 6.2.

 

	3.	
Administration.  The Plan shall be administered by the Committee (the “Administrator”).  Subject to the provisions of the Plan, the Administrator shall have exclusive authority to interpret and administer the Plan, to establish, amend and rescind appropriate rules and regulations relating to the Plan, to delegate some or all of its authority under the Plan to the extent permitted by law, and to take all such steps and make all such determinations in connection with the Plan and the benefits granted pursuant to the Plan as it may deem necessary or advisable.  Any decision of the Administrator in the interpretation and administration of the Plan, as described herein, shall lie within its sole and absolute discretion and shall be final, conclusive and binding on all parties concerned.  Except to the extent it would violate applicable law or rules, the Administrator may delegate all or a portion of its authority for administering the Plan to an officer or officers of the Company.  To the extent so delegated, the term “Administrator” hereunder shall be deemed to refer to such officer or officers.  The Administrator shall take such actions it deems necessary or desirable to ensure that such officer or officers have sufficient and appropriate authority for carrying out the intent and purpose of the Plan.

 

	4.	
Eligibility.  The participants under the Plan shall be limited to (i) executive officers of the Company, other than those executive officers who have an employment agreement or other separate arrangement providing for severance benefits upon a termination of employment (the “Executive Officer Participants”) and (ii) certain other employees of the Company Group as determined by the Administrator in its sole discretion from time to time (the “Associate Participants” and, together with the Executive Officer Participants, the “Participants”).  Individuals who qualify under the definition of Executive Officer Participant under this Section 4 shall automatically, without any independent action by the Administrator, become eligible to and shall participate in the Plan as Participants as of such date.  In the event that an individual no longer meets the definition of Executive Officer Participant, he or she shall automatically, without any independent action by the Administrator, no longer be eligible to participate in the Plan and such individual’s participation shall automatically, without any independent action by the Administrator, be terminated as of such date, subject to Section 15 of the Plan; provided, that for the avoidance of doubt, the Administrator may in its sole discretion elect to designate such individual as an Associate Participant.  The Administrator from time to time in its sole discretion shall select and notify any employees of the Company who will participate as Participants in the Plan.  Individuals who are designated by the Administrator as Associate Participants in accordance with this Section 4 and who undergo a change in title or job grade other than for reason of a promotion shall automatically, without any independent action by the Administrator, no longer be eligible to participate in the Plan and such individual’s participation shall automatically, without any independent action by the Administrator, be terminated as of such date, subject to Section 15 of the Plan; provided, that for the avoidance of doubt, the Administrator may in its sole discretion elect to treat any such individual differently in accordance with the terms of the Plan.

 

	5.	
No Effect on Equity Awards.  The Plan does not alter or amend any vesting or other terms and conditions of any equity-based compensation awards under the Company’s equity incentive compensation plans (including, but not limited to, the Company’s 2012 Omnibus Incentive Plan or 2018 Omnibus Incentive Plan), which shall be governed by the terms and conditions set forth in the equity incentive compensation plans and separate written grant agreements.

 

	6.	
Severance Benefits.

 

		6.1	
No severance benefits shall be payable under the Plan unless the Participant’s employment with the Company is involuntarily terminated by the Company without Cause or by the Participant’s resignation with Good Reason (a “Qualifying Event”).

 

		6.2	
Upon a Qualifying Event, subject to the provisions of the Plan (including compliance with the Restrictive Covenants) and timely execution and nonrevocation of a Release, the Participant shall receive the following benefits:

 

		(a)	
Severance.  A cash amount equal to the Participant’s Base Salary plus Bonus multiplied by the applicable Severance Multiple, payable in a lump sum on the 60th day following the Date of Separation;

 

		(b)	
Annual Bonus.  Any unpaid annual bonus for any completed performance year immediately preceding the year in which the Qualifying Event occurs as determined based on actual performance, payable to the Participant on the date such bonus would have been paid had the Participant remained employed with the Company, but in no event later than March 15th of the year in which the Qualifying Event occurs, notwithstanding anything to the contrary in an applicable plan or award document;

 

		(c)	
Pro rata Annual Bonus. A cash amount equal to the annual bonus for the performance year in which the Qualifying Event occurs, determined based on actual performance and then prorated based on the number of days in such performance year elapsed through the date of the Qualifying Event, payable to the Participant on the date such bonus would have been paid had the Participant remained employed with the Company, but in no event later than March 15th of the year following the year in which the Qualifying Event occurs, notwithstanding anything to the contrary in an applicable plan or award document;

 

		(d)	
Medical Coverage. Upon a Qualifying Event, the Participant (and his or her eligible dependents) shall be entitled to continued participation in the Company’s medical plans, as in effect from time to time, at then-existing participation and coverage levels  for active similarly situated employees (the “Benefit Continuation”) for the number of months equal to 12 multiplied by the applicable Severance Multiple (the “Severance Period”).  In the event that such Benefit Continuation is not permitted or advisable or the Company, in its sole discretion, elects, in lieu of Benefit Continuation, the Company shall pay to the Participant a cash amount (in the Company’s determination) equal to the then-current difference between the Participant’s monthly medical insurance cost immediately prior to the applicable Qualifying Event and the monthly cost for COBRA multiplied by the  number of months remaining in the Severance Period, payable in three separate semi-annual installments. Any obligation to provide Benefit Continuation or payment in lieu of such Benefit Continuation shall cease upon the earlier of (i) the Participant becoming eligible to receive group health benefits under a program of a subsequent employer or (ii) the Participant not complying with the provisions of this Plan. For the avoidance of doubt, the Participant (and his or her eligible dependents) shall be responsible for paying all employee contributions, deductibles and other cost-sharing items under such plans. Nothing in this Section 6.2 shall be construed to impair or reduce a Participant’s rights under COBRA or other applicable law.

 

		(e)	
Outplacement.  The Participant shall be entitled to reimbursement for outplacement service costs incurred (which shall include appropriate itemization and substantiation of expenses incurred) during the period from the Participant’s Date of Separation through the end of the applicable Severance Period, subject to a maximum amount of $20,000; provided, that such claims for reimbursement are submitted to the Company within 90 days following the date of invoice.

 

All payments under this Section 6.2 are subject to the Participant executing the Release and the Release becoming effective and irrevocable in its entirety.  If the Release does not become effective and irrevocable prior to the 60th day following the Date of Separation, the Company shall have no obligation to make any payments or provide benefits pursuant to the Plan.

 

		6.3	
General.  Nothing in this Section 6 shall be construed to impair or reduce a Participant’s right to any other accrued but unpaid compensation or benefits nor create a right or entitlement to any additional senior executive retirement benefit.

 

	7.	
Release and Restrictive Covenant.

 

		7.1	
Release.  A Participant shall only be entitled to receive the payments and benefits pursuant to Section 6 if he or she shall have executed and delivered (and not revoked) a release of claims against the Company (and its officers, directors, employees, affiliates, stockholders, etc.) substantially in the form attached hereto as Exhibit B (the “Release”), and such Release is in full force and effect by the 60th day following the Date of Separation.  Should the Participant revoke all or any portion of the Release within any allowed revocation period, then the Participant will be treated hereunder as if he or she did not execute the Release.

 

		7.2	
Restrictive Covenant.  During the Severance Period, the Participant shall not, without the prior written consent of the Company, directly or indirectly, and whether as principal or investor or as an employee, officer, director, manager, partner, consultant, agent or otherwise, alone or in association with any other person, firm, corporation or other business organization, carry on a business competitive with the Company in any geographic area in which the Company Group has engaged in business, or is reasonably expected to engage in business during such Severance Period (including, without limitation, any area in which any customer of the Company Group may be located); provided, however, that nothing herein shall limit the Participant’s right to own not more than 1% of any of the debt or equity securities of any business organization that is then filing reports with the Securities and Exchange Commission pursuant to Section 13 or 15(d) of the Exchange Act (the “Restrictive Covenant”).  For the avoidance of doubt, (i) amounts payable pursuant to Section 6.2 are consideration for the Participant’s compliance with this Restrictive Covenant and (ii) the Restrictive Covenant shall be effective for the full Severance Period irrespective of whether any payments under Section 6.2 are terminated prior to the end of the Severance Period.

 

		7.3	
Breach.  If a Participant breaches any provision of the Release or the Restrictive Covenant, the Administrator may determine that the Participant (i) will forfeit any unpaid portion of the payments provided pursuant to the Plan and (ii) will repay to the Company any amounts previously paid to him or her pursuant to the Plan.

 

	8.	
No Funding.  Nothing herein contained shall require or be deemed to require the Company to segregate, earmark or otherwise set aside any funds or other assets to provide for any payments made hereunder.  The rights of any Participant under the Plan shall be solely those of a general creditor of the Company.  However, in the event the Company foresees payment under the Plan, the Company may deposit cash or property, or both, equal in value to all or a portion of the benefits anticipated to be payable hereunder for any or all Participants into a trust, the assets of which are to be distributed at such times as are otherwise provided for in the Plan and are subject to the rights of the general creditors of the Company.

 

	9.	
Section 280G.

 

		9.1	
Notwithstanding any other provision of the Plan or any other plan, arrangement or agreement to the contrary, if any of the payments or benefits provided or to be provided by the Company or its affiliates to a Participant or for the Participant’s benefit pursuant to the terms of the Plan or otherwise (“Covered Payments”) constitute parachute payments within the meaning of Section 280G of the Code and would, but for this Section 9, be subject to the excise tax imposed under 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 taxes (collectively, the “Excise Tax”), then the Covered Payments shall be payable either (i) in full or (ii) reduced to the minimum extent necessary to ensure that no portion of the Covered Payments is subject to the Excise Tax, whichever of the foregoing (i) or (ii) results in the Participant’s receipt on an after-tax basis of the greatest amount of payments and benefits after taking into account the applicable federal, state, local and foreign income, employment and excise taxes (including the Excise Tax).  Any such reduction shall be made by the Company in its sole discretion consistent with the requirements of Section 409A of the Code.

 

		9.2	
Any determination required under this Section 9 shall be made in writing in good faith by the accounting firm that was the Company’s independent auditor immediately before the Qualifying Event (the “Accountants”).  The Company and the Participant shall provide the Accountants with such information and documents as the Accountants may reasonably request in order to make a determination under this Section 9.  The Company shall be responsible for all fees and expenses of the Accountants.

 

	10.	
Section 409A.  Notwithstanding anything to the contrary contained in the Plan, the payments and benefits provided under the Plan are intended to comply with or be exempt from Section 409A of the Code, and the provisions of the Plan shall be interpreted or construed consistently with that intent.  The Administrator may modify the payments and benefits under the Plan at any time solely as necessary to avoid adverse tax consequences under Section 409A; provided, however, that this Section 10 shall not create any obligation on the part of the Administrator to make such modifications or take any other action.

 

		10.1	
It is intended that the terms “termination” and “termination of employment” as used herein shall constitute a “separation from service” within the meaning of Section 409A.

 

		10.2	
Anything in the Plan to the contrary notwithstanding, each payment of compensation made to a Participant shall be treated as a separate and distinct payment from all other such payments for purposes of Section 409A.

 

		10.3	
In no event may a Participant be permitted to control the year in which any payment occurs.

 

		10.4	
Anything in the Plan to the contrary notwithstanding, if a Participant is a “specified employee” (within the meaning of Treasury Regulation Section 1.409A-1(i)) on the date of the Participant’s termination of employment, then any payment or benefit which would be considered “nonqualified deferred compensation” within the meaning of Section 409A that the Participant is entitled to receive upon the Participant’s termination of employment and which otherwise would be payable during the six-month period immediately following the Participant’s termination of employment will instead be paid or made available on the first day of the seventh month following the Participant’s termination of employment (or, if earlier, the date of the Participant’s death).

 

		10.5	
With regard to any provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by Section 409A:  (i) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit; (ii) the amount of expenses eligible for reimbursement, or in-kind benefits, provided during any taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year; and (iii) such payments shall be made on or before the last day of the Participant’s taxable year following the taxable year in which the expense occurred, or such earlier date as required hereunder.

 

	11.	
Clawback.  Any amounts payable under the Plan are subject to any policy providing for clawback, recoupment or recovery of amounts that were paid to the Participant as established from time to time by the Committee.  The Company shall make any determination for clawback, recoupment or recovery in its sole discretion and in accordance with any such policy and applicable law or regulation.

 

	12.	
Withholding.  The Company shall be entitled to withhold from payments to or on behalf of the Participant taxes and other authorized deductions.

 

	13.	
Governing Law.  The Plan shall be construed, interpreted and governed in accordance with the laws of the State of Michigan, without giving effect to the principles of conflicts of law.

 

	14.	
Effect on Other Plans.  The Plan supersedes in all respects any other severance benefit plans, arrangements or policies of the Company that apply to Participants upon a Qualifying Event, but does not supersede (i) employment agreements between an employee and the Company Group and (ii) to the extent applicable, the Company Executive Officer Change in Control Plan. No Participant shall be eligible to receive severance benefits under more than one severance arrangement of the Company (whether through an employment agreement or a benefit plan) at any time. Notwithstanding the foregoing, the Company and the Board reserve the right to adhere to other policies and practices that may be in effect for other groups of employees.

 

	15.	
Amendment, Modification and Termination.  The Plan (including Exhibit A) may be modified, amended or terminated at any time by the Administrator without notice to Participants.

 

	16.	
No Employment Rights.  Neither the Plan nor the benefits hereunder shall be a term of the employment of any employee, and the Company Group shall not be obligated in any way to continue the Plan.  The terms of the Plan shall not give any employee the right to be retained in the employment of the Company Group.

 

	17.	
Effective Date and Term.  The Plan shall become effective as of April 10, 2018 (the “Effective Date”).

 

 

 

 

 

 

 

Exhibit A

Severance Multiples

 

	
Participants

	
Applicable Severance Multiple

	
Business Unit Presidents;

VP/CFO;

VP-HR;

VP- Controller;

	
1.5

	
VP- General Counsel;

VP – Strategic Business Development;

President AAM-Americas

	
1

For any Executive Officer Participant whose role is not identified above or employee designated as an Associate Participant by the Administrator, the Administrator shall determine the applicable Severance Multiple at the time such employee becomes eligible to participate in this Plan.

For the avoidance of doubt, notwithstanding an employee’s title being listed on the chart, such employee is not eligible to participate in this Plan if he or she is subject to an employment agreement providing for severance benefits.

 

 

 

 

Exhibit B

Form of Release

 

FORM OF WAIVER AND MUTUAL RELEASE

 

This Waiver and Mutual Release, dated as of                   (this “Release”), by and between [NAME] (the “Participant”) and American Axle & Manufacturing Holdings, Inc., a Delaware corporation (the “Company”).

 

WHEREAS, the Participant participates in the Company’s Executive Officer Severance Plan (the “Plan”); and

 

WHEREAS, pursuant to Section 7 of the Plan, the Participant has agreed to execute and deliver a release and waiver of claims of the type and nature set forth herein as a condition to his or her entitlement to certain payments and benefits upon a Qualifying Event (as defined in the Plan), effective as of                   (the “Termination Date”).

 

NOW, THEREFORE, in consideration of the premises and mutual promises herein contained and for other good and valuable consideration received or to be received in accordance with the terms of the Plan, the Participant and the Company agree as follows:

 

1.          Return of Property.  On or prior to the Termination Date, the Participant represents and warrants that he or she will return all property made available to him in connection with his or her service to the Company, including, without limitation, credit cards, any and all records, manuals, reports, papers and documents kept or made by the Participant in connection with his or her employment as an officer or employee of the Company and its subsidiaries and affiliates, all computer hardware or software, cellular phones, files, memoranda, correspondence, vendor and customer lists, financial data, keys and security access cards.

 

2.          Participant Release.

 

(a)          In consideration of the payments and benefits provided to the Participant under the Plan and after consultation with counsel, the Participant and each of the Participant’s respective heirs, executors, administrators, representatives, agents, successors and assigns (collectively, the “Participant Parties”) hereby irrevocably and unconditionally release and forever discharge the Company and its subsidiaries and affiliates and each of their respective officers, employees, directors, shareholders and agents (“Company Parties”) from any and all claims, actions, causes of action, rights, judgments, obligations, damages, demands, accountings or liabilities of whatever kind or character (collectively, “Claims”), including, without limitation, any Claims under any federal, state, local or foreign law, that the Participant Parties may have, or in the future may possess, arising out of (i) the Participant’s employment relationship with and service as an employee, officer or director of the Company, and the termination of such relationship or service, and (ii) any event, condition, circumstance or obligation that occurred, existed or arose on or prior to the date hereof; provided, however, that the Participant does not release, discharge or waive (w) any rights to payments and benefits provided under the Plan that are contingent upon the execution by the Participant of this Release, (x) any right the Participant may have to enforce this Release or the Plan, (y) the Participant’s eligibility for indemnification in accordance with the Company’s certificate of incorporation, bylaws or other corporate governance document, or any applicable insurance policy, with respect to any liability he or she incurred or might incur as an employee, officer or director of the Company, or (z) any claims for accrued, vested benefits under any long-term incentive, employee benefit or retirement plan of the Company subject to the terms and conditions of such plan and applicable law including, without limitation, any such claims under the Employee Retirement Income Security Act of 1974, as amended.  This Section 2(a) does not apply to any Claims that the Participant Parties may have as of the date the Participant signs this Release arising under the Federal Age Discrimination in Employment Act of 1967, as amended, and the applicable rules and regulations promulgated thereunder (“ADEA”).  Claims arising under ADEA are addressed in Section 2(b) of this Release.

 

(b)          Participant’s Specific Release of ADEA Claims.  In further consideration of the payments and benefits provided to the Participant under the Plan, the Participant Parties hereby unconditionally release and forever discharge the Company Parties from any and all Claims that the Participant Parties may have as of the date the Participant signs this Release arising under ADEA.  By signing this Release, the Participant hereby acknowledges and confirms the following:  (i) the Participant was advised by the Company in connection with his or her termination to consult with an attorney of his or her choice prior to signing this Release and to have such attorney explain to the Participant the terms of this Release, including, without limitation, the terms relating to the Participant’s release of claims arising under ADEA, and the Participant has in fact consulted with an attorney; (ii) the Participant was given a period of not fewer than [21 days][45 days, to the extent required by ADEA,] to consider the terms of this Release and to consult with an attorney of his or her choosing with respect thereto; and (iii) the Participant knowingly and voluntarily accepts the terms of this Release.  The Participant also understands that he or she has seven days following the date on which he or she signs this Release (the “Revocation Period”) within which to revoke the release contained in this paragraph, by providing the Company a written notice of his or her revocation of the release and waiver contained in this paragraph.  No such revocation by the Participant shall be effective unless it is in writing and signed by the Participant and received by the Company prior to the expiration of the Revocation Period.

 

3.          Company Release.  The Company, for itself and on behalf of the Company Parties, hereby irrevocably and unconditionally releases and forever discharges the Participant Parties from any and all Claims, including, without limitation, any Claims under any federal, state, local or foreign law, that the Company Parties may have, or in the future may possess, arising out of (a) the Participant’s employment relationship with and service as an employee, officer or director of the Company, and the termination of such relationship or service, and (b) any event, condition, circumstance or obligation that occurred, existed or arose on or prior to the date hereof, excepting any Claim which would constitute or result from conduct by the Participant that would constitute a crime under applicable state or federal law; provided, however, notwithstanding the generality of the foregoing, nothing herein shall be deemed to release the Participant Parties from (x) any rights or claims of the Company arising out of or attributable to (A) the Participant’s actions or omissions involving or arising from fraud, deceit, theft or intentional or grossly negligent violations of law, rule or statute while employed by the Company and (B) the Participant’s actions or omissions taken or not taken in bad faith with respect to the Company; and (y) the Participant or any other Participant Party’s obligations under this Release or the Plan.

 

4.          No Assignment.  The parties represent and warrant that they have not assigned any of the Claims being released under this Release.

 

5.          Proceedings.

 

(a)          General Agreement Relating to Proceedings.  The parties represent and warrant that they have not filed, and they agree not to initiate or cause to be initiated on their behalf, any complaint, charge, or claim against the other party before any local, state or federal agency, court or other body relating to the Participant’s employment or the termination thereof, other than with respect to any claim that is not released hereunder including with respect to the obligations of the Company to the Participant and the Participant to the Company under the Plan (each, individually, a “Proceeding”), and each party agrees not to participate voluntarily in any Proceeding.  The parties waive any right they may have to benefit in any manner from any relief (whether monetary or otherwise) arising out of any Proceeding.

 

(b)          Proceedings Under ADEA.  Section 5(a) shall not preclude the Participant from filing any complaint, charge or claim challenging the validity of the Participant’s waiver of Claims arising under ADEA (which is set forth in Section 2(b) of this Release).  However, both the Participant and the Company confirm their belief that the Participant’s waiver of claims under ADEA is valid and enforceable, and that their intention is that all claims under ADEA will be waived.

 

(c)          Certain Administrative Proceedings.  In addition, Section 5(a) shall not preclude the Participant from filing a charge with or participating in any administrative investigation or proceeding by the Equal Employment Opportunity Commission or another Fair Employment Practices agency.  The Participant is, however, waiving his or her right to recover money in connection with any such charge or investigation.  The Participant is also waiving his or her right to recover money in connection with any charge filed by any other entity or individual, or by any federal, state or local agency.

 

6.          Remedies.

 

(a)          Each of the parties understands that by entering into this Release such party will be limiting the availability of certain remedies that such party may have against the other party and such party’s ability to pursue certain claims against the other party.

 

(b)          Each of the parties acknowledges and agrees that the remedies at law available to such party for breach of any of the obligations under this Release would be inadequate and that damages flowing from such a breach may not readily be susceptible to being measured in monetary terms.  Accordingly, each of the parties acknowledges, consents and agrees that, in addition to any other rights or remedies that such party may have at law or in equity, such party shall be entitled to seek a temporary restraining order or a preliminary or permanent injunction, or both, without bond or security, restraining the other party from breaching its obligations under this Release.  Such injunctive relief in any court shall be available to the relevant party, in lieu of, or prior to or pending determination in, any arbitration proceeding.

 

7.          Cooperation.  From and after the Termination Date, the Participant shall cooperate in all reasonable respects with the Company, its affiliates and subsidiaries and their respective directors, officers, attorneys and experts in connection with the conduct of any action, proceeding, investigation or litigation involving the Company or any of its affiliates or subsidiaries, including any such action, proceeding, investigation or litigation in which the Participant is called to testify.

 

8.          Unfavorable Comments.

 

(a)          Public Comments by the Participant.  The Participant agrees to refrain from making, directly or indirectly, now or at any time in the future, whether in writing, orally or electronically:  (i) any derogatory comment concerning the Company, its affiliates or subsidiaries or any of their current or former directors, officers, employees or shareholders, or (ii) any other comment that could reasonably be expected to be detrimental to the business or financial prospects or reputation of the Company or any of its affiliates or subsidiaries.

 

(b)          Public Comments by the Company.  The Company agrees to instruct its directors and employees to refrain from making, directly or indirectly, now or at any time in the future, whether in writing, orally or electronically:  (i) any derogatory comment concerning the Participant, or (ii) any other comment that could reasonably be expected to be detrimental to the Participant’s business or financial prospects or reputation.

 

9.          Severability Clause.  In the event any provision or part of this Release is found to be invalid or unenforceable, only that particular provision or part so found, and not the entire Release, will be inoperative.

 

10.          Non-admission.  Nothing contained in this Release will be deemed or construed as an admission of wrongdoing or liability on the part of the Company or the Participant.

 

11.          Governing Law.  All matters affecting this Release, including the validity thereof, are to be governed by, and interpreted and construed in accordance with, the laws of the State of Michigan applicable to contracts executed in and to be performed in that State.

 

THE PARTICIPANT ACKNOWLEDGES THAT HE OR SHE HAS READ THIS RELEASE, THAT HE OR SHE HAS REVIEWED IT WITH AND OBTAINED THE ADVICE OF COUNSEL AND THAT HE OR SHE FULLY KNOWS, UNDERSTANDS AND APPRECIATES ITS CONTENTS, AND THAT HE OR SHE HEREBY EXECUTES THE SAME AND MAKES THIS RELEASE AND THE RELEASES PROVIDED FOR HEREIN VOLUNTARILY AND OF HIS OR HER OWN FREE WILL.

 

IN WITNESS WHEREOF, the parties have executed this Release as of the date first set forth above.

 

	
 

	
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.

	
 

	
 

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	 	PARTICIPANT	 
	 	 	 	 
	 	By:

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