39550 Orchard Hill Place Drive Novi, MI 48375 Phone: (248) 596-5900 Fax: (248) 596-6550
Exhibit 10.2
World Headquarters |
October 1, 2012
Jeffrey S. Edwards
4514 Cross Creek Drive
Ann Arbor, MI 48108
Dear Jeff:
On behalf of Cooper-Standard Holdings Inc. (the Company), and at the direction of the Companys Board of Directors (the Board), I am pleased to offer you the position of President and Chief Executive Officer of the Company and Cooper-Standard Automotive Inc., the Companys principal operating entity (CS Automotive), on the terms provided below.
1. Title, Reporting Responsibility. As President and Chief Executive Officer of the Company and CS Automotive, you will report to the Board and will be responsible for the supervision and control of all the business and affairs of the Company and CS Automotive, subject to direction from the Board. In addition, you will be appointed to the Board of Directors of both the Company and CS Automotive.
2. Term of Employment. Your employment will commence between October 15 and November 1, 2012, on a date to be determined by you. Your employment is not for any specific duration and may be terminated at will by either you or the Company.
3. Base Salary. Your base salary from the date you commence your employment through 2013 will be at the rate of $800,000 per year and, thereafter, will be reviewed annually consistent with the Companys practice for other senior executives.
4. Annual Incentive Plan. You will eligible for an incentive cash bonus beginning in 2013 pursuant to the Cooper-Standard Automotive Inc. Annual Incentive Plan (AIP). Your target annual bonus for 2013 will equal 100% of your annual base salary. Bonus payouts will be dependent on the achievement of performance targets for the year established by the Compensation Committee of the Board and approved by the Board. As a reference, for 2012, AIP participants will receive 50% of their target bonuses upon achieving 80% of the performance target (the threshold level for receiving a bonus) with the opportunity to receive 200% of the target amount (the maximum bonus) upon achieving 120% or more of the performance target which, in the case of the CEO, is based on 2012 Company-wide adjusted EBITDA. For the period beginning with the commencement of your employment through the end of 2012, you will be eligible for a partial-year bonus, at the discretion of the Board.
5. Omnibus/Long-Term Incentive Plans. You will also be eligible for long-term incentive awards under the Cooper-Standard Holdings Inc. 2011 Omnibus Incentive Plan (the Omnibus Plan) and the Cooper-Standard Automotive Inc. Long-Term Incentive Plan (together, the LTIP). In recent years, LTIP awards have included both a cash and an equity component. As a reference, in 2012, the LTIP awards granted to the Companys senior management team consisted of (i) a cash component dependent on the achievement of performance objectives over a three-year period, equal to 50% of the total LTIP target amount (with
39550 Orchard Hill Place Drive Novi, MI 48375 Phone: (248) 596-5900 Fax: (248) 596-6550
Jeffrey S. Edwards
October 1, 2012
Page 2
adjustments discussed below), (ii) restricted stock units vesting three years following the date of grant, with a market value at the time of the grant equal to 20% of the total LTIP target amount, and (iii) stock options with an exercise price equal to the market price of the Companys common stock on the date of grant, vesting three years following the date of grant, with a value equal to 30% of the total LTIP target amount at the time of the grant using valuation principles consistent with GAAP. Similar to the 2012 AIP grants, the 2012 LTIP grants were structured so that actual payouts of the cash component will fall in a range between 50% and 200% of the target cash component provided that 80% or more of the applicable performance target (based on Company-wide operating cash generation over the 3-year period) is achieved.
In the first quarter of 2013, you will receive LTIP awards designed to have an aggregate value, at the time of grant, equal to 250% of your annual base salary. In addition, in the event the Fair Market Value (as defined in the Omnibus Plan) of the Companys common stock appreciates during the period beginning on the date of this letter and ending on the date of your 2013 LTIP grant (the Interim Period), the equity portion of your 2013 LTIP grant (your Base 2013 Equity Award) will be supplemented by an additional equity award having a value equal to your Base 2013 Equity Award multiplied by a fraction, the numerator of which is the amount by which the Fair Market Value of the Companys common stock appreciated during the Interim Period and the denominator of which is the Fair Market Value of the Companys common stock on the last trading day prior to the commencement of the Interim Period.
6. Special Initial Equity Awards. In addition to your eligibility for equity awards under the LTIP, you will be granted the following special equity award upon the commencement of your employment:
| An option to purchase 125,000 shares of the Companys common stock at an exercise price of $45.00 per share (or the Fair Market Value of the Companys common stock on the date of grant in the event it is higher than $45.00), vesting ratably over five years (20% per year on each anniversary of the grant) subject to your continued employment with the Company and expiring seven years after the grant date. |
| An option to purchase 125,000 shares of the Companys common stock at an exercise price of $52.50 per share (or the Fair Market Value of the Companys common stock on the date of grant in the event it is higher than $52.50), vesting ratably over five years (20% per year on each anniversary of the grant) subject to your continued employment with the Company and expiring seven years after the grant date. |
The options that will be part of this special initial equity award will vest 100% immediately upon a change of control of the Company as defined in the Omnibus Plan.
7. Benefits and Perquisites. You will be eligible to participate in the Companys health, welfare and retirement benefit programs, including the Companys 401(k) Enhanced Investment Savings Plan and the Companys Supplemental Executive Retirement Plan, on the same terms as similarly situated employees of the Company. Health and welfare benefit eligibility begins on the first day of the month following or coinciding with your employment commencement date. You will also be eligible to participate in the Companys Executive-level leased vehicle program.
Jeffrey S. Edwards
October 1, 2012
Page 3
8. Executive Severance Pay Plan. You will be eligible for coverage under the Cooper-Standard Automotive, Inc. Executive Severance Play Plan, as may be amended from time to time (the Severance Plan). Under the current terms of the Severance Plan, you will be eligible to receive severance pay equal to two times your annual compensation (base pay plus your prior years annual bonus target) and other benefits if your employment is terminated by the Company without cause (as defined in the Severance Plan), regardless of whether there has been a change of control of the Company. Any severance paid under the Severance Plan shall be subject to the terms and conditions of the Severance Plan.
9. Other Agreements and Requirements. As discussed, upon acceptance of the Companys offer of employment, you will be required to sign the attached confidentiality and non-competition agreement. In addition, you will also be subject to all Company policies applicable to the Companys employees, including but not limited to the Code of Business Conduct and Ethics of Cooper-Standard Holdings Inc. and Cooper-Standard Automotive Inc.
10. At Will Statement. Please understand that this offer does not constitute a contract or a guarantee of continued employment for any period of time. This offer supersedes any oral or prior written offers or verbal discussions that you have had with the Company related to employment with the Company. Any changes to this offer must be in writing and signed by you and an authorized representative of the Company. As is the case throughout the Company, employment is at will and may be terminated by either you or the Company at any time for any reason. Please note that the Company reserves the right to amend or terminate any or all of its employee benefit plans, compensation programs and corporate policies at any time, in its sole discretion.
We are extremely pleased that you share our enthusiasm about Cooper Standards future, and look forward to your leadership as we work together to accomplish the Companys goals. This letter agreement is intended to be a binding obligation upon both the Company and you. If this letter agreement correctly reflects your understanding, please sign and return one copy to me for the Companys records.
Sincerely, |
Cooper-Standard Holdings Inc. |
/s/ David J. Mastrocola |
David J. Mastrocola |
Lead Director |
This letter agreement correctly reflects our understanding, and I hereby confirm my agreement to the same as of the date set forth above.
/s/ Jeffrey S. Edwards |
Jeffrey S. Edwards |