Trw Automotive Holdings Corp 8-k (events Or Changes Between Quarterly Reports) 2009-02-24

Processed and formatted by SEC Watch - Visit SECWatch.com

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549

FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported) February 18, 2009 (TRW AUTOMOTIVE LOGO)

TRW Automotive Holdings Corp. (Exact Name of Registrant as Specified in Its Charter) Delaware (State or Other Jurisdiction of Incorporation) 001-31970 (Commission File Number)

81-0597059 (IRS Employer Identification No.)

12001 Tech Center Drive, Livonia, Michigan (Address of Principal Executive Offices)

48150 (Zip Code)

(734) 855-2600 (Registrant’s Telephone Number, Including Area Code) Not applicable (Former Name or Former Address, if Changed Since Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): o

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Processed and formatted by SEC Watch - Visit SECWatch.com

TABLE OF CONTENTS ITEM 5.02. DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS. ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS. (d) Exhibits SIGNATURE Form of Amendment to Employment Agreement, dated as of February 26, 2009, between TRW Automotive Inc. and TRW Limited, as applicable, and each of its named executive officers Form of TRW Automotive Inc. Executive Officer Cash Incentive Award Agreement, dated as of February 26, 2009 Form of TRW Automotive Inc. Executive Officer Retention Award Agreement, dated as of February 26, 2009 Form of TRW Automotive Inc. Director Cash Incentive Award Agreement, dated as of February 26, 2009 1

Processed and formatted by SEC Watch - Visit SECWatch.com

ITEM 5.02. DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS. At a meeting held on February 18, 2009, the Compensation Committee (the “Committee”) of the Board of Directors of TRW Automotive Holdings Corp. and TRW Automotive Inc. (collectively, the “Company”) approved and authorized the Company to amend the Annual NonEquity Incentive (Bonus) Plan (the “Bonus Plan”) for 2009 and the employment agreements of each of the named executive officers (each, an “Executive”) to reflect those Bonus Plan changes, and to enter into Executive Officer Cash Incentive Award Agreements and Executive Officer Retention Award Agreements with each Executive. The terms Disability, Cause, Good Reason and Change in Control as used below are defined in the Executives’ employment agreements. Amendment to Bonus Plan As a result of unstable economic conditions and the increased difficulty in accurately forecasting global automobile production and other factors, the Committee elected to increase the proportion of the 2009 Bonus Plan award calculation that will be subject to the Committee’s discretion. The three factors that comprise the Bonus Plan will remain the same as in previous years, however the weighting of each of these factors will be modified. The EBITDAP factor will be reduced to a 25% weighting (40% in previous years), the cash flow factor will be reduced to a 25% weighting (40% in previous years) and the discretionary additional factors will be increased to a 50% weighting (20% in previous years). The plan maximum payout of 125% of target awards will remain unchanged. Amendments to Employment Agreements of Named Executive Officers The Committee approved and authorized the Company to enter into amendments to the employment agreements of each of the Executives as of February 26, 2009 (the “Effective Date”) to reflect the changes to the Bonus Plan described above. This description of the amendments is qualified in its entirety by reference to the full text of the form of amendment which is attached hereto as Exhibit 10.1. Cash Incentive Awards for Named Executive Officers With falling equity values the Committee elected to add a cash incentive award for the Executives (and for certain other senior leaders) to complement the existing Long-Term Incentive Plan which offers stock options and restricted stock unit awards. The target value of each Executive’s cash incentive award was set so that the sum of his cash incentive, restricted stock unit and stock option awards for 2009 would be substantially equal to or less than the value of his restricted stock unit and option awards in 2008 (calculated at the time of the award). 2

Processed and formatted by SEC Watch - Visit SECWatch.com

Under the Executive Officer Cash Incentive Award Agreements, as of the Effective Date, the Company will set a target value for the award to each Executive. Subject to certain early vesting provisions, one-third of the target value will be adjusted on each of the first, second and third anniversaries of the Effective Date, based upon the average price of the Company’s common stock during the portion of the month of February preceding such anniversary as compared to the stock price on the Effective Date. If the stock price increases, then the applicable portion of the award will be increased from target, subject to a cap of 250% of target. If the stock price decreases, then the applicable portion of the award will be decreased from target, potentially to zero. The adjusted values will accumulate without interest until the third anniversary of the Effective Date, when they will vest and become payable, provided that the Executive remains employed by the Company. A pro rata portion of the award is subject to earlier vesting in the event of the Executive’s death, Disability, involuntary termination of employment without Cause, voluntary termination of employment for Good Reason or retirement. Further, in the event of a Change in Control, the award will immediately become payable. The target value of the cash incentive award to be granted to each of the Executives is as follows: John C. Plant, President and Chief Executive Officer Joseph S. Cantie, Executive Vice President and Chief Financial Officer Steven Lunn, Executive Vice President and Chief Operating Officer Peter J. Lake, Executive Vice President, Sales and Business Development David L. Bialosky, Executive Vice President, General Counsel and Secretary

$5,366,000 $1,490,000 $1,756,000 $ 928,000 $ 881,000

This description is qualified in its entirety by reference to the full text of the form of Executive Officer Cash Incentive Award Agreement which is attached hereto as Exhibit 10.2. Retention Agreements for Named Executive Officers Under the Executive Officer Retention Award Agreements, as of the Effective Date, the Company will grant to each Executive (and to certain other senior leaders) a cash award in return for the Executive remaining employed with the Company for the next 36 months. Subject to certain early vesting provisions, half of each award will vest and become payable on the 18 month anniversary of the Effective Date, provided that the Executive remains employed by the Company. The other half of each award will vest and become payable on the 36 month anniversary of the Effective Date, provided that the Executive remains employed by the Company and the price of the Company’s common stock is greater than $10 on any day during the last six months of the vesting period. A pro rata portion of the award is subject to earlier vesting in the event of the Executive’s death, Disability, involuntary termination of employment without Cause or voluntary termination for Good Reason. Further, in the event of Executive’s involuntary termination of employment without Cause or voluntary termination for Good Reason following or in connection with a Change in Control, the award will immediately become fully vested and payable. 3

Processed and formatted by SEC Watch - Visit SECWatch.com

In the event of an Executive’s voluntary termination (other than for Good Reason) or involuntary termination for Cause after receiving the first half of the retention award but prior to reaching the 36 month anniversary of the Effective Date, the Executive must repay such portion of the award. The retention award to be granted to each of the Executives is as follows: John C. Plant, President and Chief Executive Officer Joseph S. Cantie, Executive Vice President and Chief Financial Officer Steven Lunn, Executive Vice President and Chief Operating Officer Peter J. Lake, Executive Vice President, Sales and Business Development David L. Bialosky, Executive Vice President, General Counsel and Secretary

$5,000,000 $1,800,000 $1,400,000 $ 800,000 $ 800,000

This description is qualified in its entirety by reference to the full text of the form of Executive Officer Retention Award Agreement which is attached hereto as Exhibit 10.3. Cash Incentive Awards for Independent Directors At a meeting held on February 19, 2009, the Board of Directors of the Company approved and authorized the Company to enter into Director Cash Incentive Award Agreements with each of its independent directors as of the Effective Date to offset the reduction in the current value of the restricted stock units awarded to the independent directors. The terms of these agreements generally mirror the terms of the cash incentive award agreements with the named executive officers as described above, with the following exceptions: •

The director agreements have a one-year vesting schedule;

•

The only early vesting circumstances in the director agreement will be a director’s death (which results in pro rata vesting) or a Change in Control of the Company (which results in full vesting); and

•

Each independent director will receive the same target award, which will be calculated as $75,000 less the value of 3,500 shares of the Company’s common stock on the Effective Date.

The foregoing description is qualified in its entirety by reference to the full text of the form of Director Cash Incentive Award Agreement which is attached hereto as Exhibit 10.4. 4

Processed and formatted by SEC Watch - Visit SECWatch.com

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS. (d) Exhibits. Exhibit No.

Description

10.1*

Form of Amendment to Employment Agreement, dated as of February 26, 2009, between TRW Automotive Inc. and TRW Limited, as applicable, and each of its named executive officers

10.2*

Form of TRW Automotive Inc. Executive Officer Cash Incentive Award Agreement, dated as of February 26, 2009

10.3*

Form of TRW Automotive Inc. Executive Officer Retention Award Agreement, dated as of February 26, 2009

10.4*

Form of TRW Automotive Inc. Director Cash Incentive Award Agreement, dated as of February 26, 2009

*

Filed herewith 5

Processed and formatted by SEC Watch - Visit SECWatch.com

SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. TRW AUTOMOTIVE HOLDINGS CORP. Dated: February 24, 2009

By: /s/ David L. Bialosky David L. Bialosky Executive Vice President, General Counsel and Secretary 6

Processed and formatted by SEC Watch - Visit SECWatch.com

Index to Exhibits Exhibit No.

Description

10.1

Form of Amendment to Employment Agreement, dated as of February 26, 2009, between TRW Automotive Inc. and TRW Limited, as applicable, and each of its named executive officers

10.2

Form of TRW Automotive Inc. Executive Officer Cash Incentive Award Agreement, dated as of February 26, 2009

10.3

Form of TRW Automotive Inc. Executive Officer Retention Award Agreement, dated as of February 26, 2009

10.4

Form of TRW Automotive Inc. Director Cash Incentive Award Agreement, dated as of February 26, 2009 7

Exhibit 10.1 [

] AMENDMENT TO EMPLOYMENT AGREEMENT [Executive’s Name]

[ ] AMENDMENT dated as of February 26, 2009 (this “Amendment”) to EMPLOYMENT AGREEMENT dated as of February XX, 2003, as amended (the “Agreement”) by and between [TRW Automotive Inc.] (the “Company”) and (“Executive”). WHEREAS, in clarification of the manner in which the Company determines Executive’s Annual Bonus, Executive and Company desire to amend the Agreement as set forth below; In consideration of the premises and mutual covenants herein and for other good and valuable consideration, the parties agree as follows: 1. Defined Terms. Capitalized terms used herein but not defined shall have the meanings assigned to them in the Agreement. 2. Amendment to Section 4 of the Agreement. The second sentence of Section 4 of the Agreement shall be amended to read in its entirety as follows: “In addition, up to fifty percent of the Target Annual Bonus will be based on additional factors determined to be relevant by the Compensation Committee, which may include industry-specific and general economic conditions as well as strategic factors.” 3. No Other Amendments; Effectiveness. Except as set forth in this Amendment, the Agreement is ratified and confirmed in all respects. This Amendment shall be effective as of the date hereof. 4. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of [ conflicts of laws principles thereof.

], without regard to

5. Counterparts. This Agreement may be signed in counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same agreement. IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment as of the day and year first above written. [TRW Automotive Inc.] By: Title:

[Executive]

Exhibit 10.2 TRW AUTOMOTIVE INC. EXECUTIVE OFFICER CASH INCENTIVE AWARD AGREEMENT This Cash Incentive Award Agreement (this “Agreement”), is entered into and made effective as of February 26, 2009 (the “Effective Date”), by and between TRW Automotive Inc., a Delaware corporation (the “Company”), and _________ (the “Executive”). This Award is granted by the Compensation Committee of the Company’s Board of Directors (the “Committee”). Section 1. Definitions. (a) “Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder, or any successor statute thereto.

Processed and formatted by SEC Watch - Visit SECWatch.com

(b) “Affiliate” shall mean, with respect to any Person, any other Person directly or indirectly controlling, controlled by or under common control with such Person or any other Person designated by the Committee in which any Person has an interest. (c) “Award” shall mean the cash incentive award granted pursuant to this Agreement and calculated pursuant to Section 2(b). (d) “Cause” shall have the meaning given to such term in the Closing Date Employment Agreement or, if not defined therein or if there is no such agreement, “Cause” means (i) such Executive’s continued failure substantially to perform such Executive’s duties (other than as a result of total or partial incapacity due to physical or mental illness) for a period of 10 days following written notice by the Company or any of its Subsidiaries or Affiliates to the Executive of such failure, (ii) dishonesty in the performance of the Executive’s duties, (iii) such Executive’s conviction of, or plea of nolo contendere to, a crime constituting (A) a felony under the laws of the United States or any state thereof or (B) a misdemeanor involving moral turpitude, (iv) such Executive’s willful malfeasance or willful misconduct in connection with such Executive’s duties or any act or omission which is injurious to the financial condition or business reputation of the Company or any of its Subsidiaries or Affiliates or (v) such Executive’s breach of any non-competition, non-solicitation or confidentiality provisions to which the Executive is subject. (e) “Change in Control” shall mean (A) the sale or disposition, in one or a series of related transactions, of all or substantially all of the assets of Holdings or the Company to any “person” or “group” (as such terms are defined in Sections 13(d)(3) and 14(d)(2) of the Act) other than Automotive Investors L.L.C. (“AI”) or any of its Affiliates, (B) any person or group, other than AI or any of its Affiliates, is or becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Act), directly or indirectly, of more than 50% of the total voting power of the voting stock of Holdings or the Company, including by way of merger, consolidation or otherwise and AI or any of its Affiliates cease to control the Board of Directors 1

Processed and formatted by SEC Watch - Visit SECWatch.com

of Holdings (the “Holdings Board”) or the Board of Directors of the Company, (C) any “person” or “group” (as defined above) other than AI or its Affiliates acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition of such person or group) ownership of stock of Holdings or the Company possessing 30 percent or more of the total voting power of the stock of Holdings or the Company, as applicable, or (D) a majority of the members of the Holdings Board is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Holdings Board, as it was constituted at the beginning of such 12-month period. (f) “Closing Date” shall mean February 28, 2003. (g) “Closing Date Employment Agreement” shall mean a written employment agreement between the Company or any of its Subsidiaries and the Executive which is or was entered into as of or after the Closing Date (as the same may be amended, modified or supplemented in accordance with the terms thereof). (h) “Code” shall mean the Internal Revenue Code of 1986, as amended, or any successor thereto. (i) “Disability” shall have the meaning given such term in the Closing Date Employment Agreement or, if not defined therein or if there shall be no such agreement, “disability” of the Executive shall have the meaning ascribed to such term in the long-term disability plan or policy maintained by the Company or one or more members of the Company’s controlled group of corporations (as defined in Section 1563 of the Code), as in effect from time to time. (j) “Fair Market Value” of a Share on a given date shall mean the closing price of a Share as reported on the NYSE composite tape on such date, or, if there is no such reported sale price of a Share on the NYSE composite tape on such date, then the closing price of a Share as reported on the NYSE composite tape on the last previous day on which sale price was reported on the NYSE composite tape. If at any time the Shares are no longer listed or traded on the NYSE, the Fair Market Value of a Share shall be determined by the Committee in its sole but reasonable discretion from time to time. (k) “Good Reason” shall have the meaning given to such term in the Closing Date Employment Agreement. (l) “Holdings” shall mean TRW Automotive Holdings Corp., a Delaware corporation. (m) “NYSE” shall mean the New York Stock Exchange. (n) “Person” shall mean any individual, firm, corporation, partnership, limited liability company, trust, incorporated or unincorporated association, joint venture, joint stock company, governmental body or other entity of any kind. (o) “Retirement” shall mean the Executive’s voluntary Termination of Employment on or after the date that such Executive becomes Retirement Eligible. 2

Processed and formatted by SEC Watch - Visit SECWatch.com

(p) “Retirement Eligible” shall mean satisfaction of the requirements for early or normal retirement under a defined benefit pension plan maintained by the Company or one or more members of the Company’s controlled group of corporations (as defined by Section 1563 of the Code) and receipt of pension benefits in accordance with such requirements as soon as administratively practicable following the last date of active employment with the Company or its controlled group of corporations. (q) “Share Price” shall mean the average Fair Market Value of a Share during the portion of the month of February immediately preceding the first, second, or third year anniversary of the Effective Date, as applicable. (r) “Shares” shall mean shares of the common stock, par value $0.01 per share, of Holdings. (s) “Subsidiary” shall mean a subsidiary corporation, as defined in Section 424(f) of the Code. (t) “Target Value” shall mean the initial value of the Award, as set forth in Section 2(a). (u) “Target Value Adjustment” shall mean the percentage by which the Target Value is increased or decreased under Section 2(b), based on the applicable Share Price pursuant to the formula attached hereto as Exhibit A, provided that the percentage to be used for such adjustment shall be the nearest tenth of a percentage determined pursuant to Exhibit A. (v) “Termination of Employment” shall mean a separation from service from the Company and all of its controlled group members (as defined by Section 1563 of the Code). Section 2. Grant of Cash Incentive Award. The Company hereby grants to the Executive an Award subject to the terms and conditions stated in this Agreement. The amount of the Award shall be equal to the Target Value specified under Section 2(a) as adjusted pursuant to Section 2(b). (a) Target Value. The Target Value of the Award is $

, which is subject to the terms and conditions stated in this Agreement.

(b) Adjustment to the Target Value. The Target Value of the Award shall be increased or decreased, as applicable, on the first, second, and third anniversary of the Effective Date by multiplying one-third of the Target Value (referred to respectively as Tranche A, Tranche B, and Tranche C) by the Target Value Adjustment percentage on each such anniversary date, as determined under Exhibit A with reference to the calculated Share Price as of that date, to establish the adjusted value of each such tranche (referred to respectively as Tranche A Adjusted Value, Tranche B Adjusted Value, and Tranche C Adjusted Value), as follows: (i) Tranche A. On the first anniversary of the Effective Date, $ (“Tranche A”), shall be multiplied by the Target Value Adjustment percentage under Exhibit A, determined with reference to the calculated Share Price on such anniversary date to establish the adjusted value of Tranche A (“Tranche A Adjusted Value”); plus 3

Processed and formatted by SEC Watch - Visit SECWatch.com

(ii) Tranche B. On the second anniversary of the Effective Date, $ (“Tranche B”) shall be multiplied by the Target Value Adjustment percentage under Exhibit A, determined with reference to the calculated Share Price on such anniversary date to establish the adjusted value of Tranche B (“Tranche B Adjusted Value”); plus (iii) Tranche C. On the third anniversary of the Effective Date, $ (“Tranche C”) shall be multiplied by the Target Value Adjustment percentage under Exhibit A, determined with reference to the calculated Share Price on such anniversary date to establish the adjusted value of Tranche C (“Tranche C Adjusted Value”). The adjusted values so determined shall accumulate (without interest) over the period ending on the third anniversary of the Effective Date and shall be payable to the Executive in one cash payment in accordance with Section 3, provided the vesting requirements under Section 4 have been satisfied at that time. Section 3. Payment of the Awards. Subject to the vesting requirements of Section 4 and Section 5, the Award determined in accordance with Section 2(b) shall be payable to the Executive in one cash payment as soon as administratively practicable on or after the third anniversary of the Effective Date, but in no event later than 90 days thereafter. Section 4. Service-Vesting Requirement. Except as otherwise provided in Section 5, the Award amount determined under Section 2(b) shall become vested on the third anniversary of the Effective Date, provided the Executive remains continuously employed with the Company or one of its Subsidiaries or Affiliates through that date. Once this requirement has been satisfied the Award shall thereafter be payable in accordance with Section 3. Section 5. Vesting Upon Certain Events. (a) Death. In the event of the Executive’s death prior to satisfying the vesting requirements under Section 4, a pro rata portion of the Award, determined as set forth below, is immediately vested and shall be paid as soon as administratively practicable following the date of death, but in no event later than 90 days thereafter. All other amounts hereunder are immediately forfeited and shall not be payable. The pro rata portion of the Award shall be determined as follows: (i) In the event of the Executive’s death prior to the first anniversary of the Effective Date, the pro rata portion of the Award shall be equal to Tranche A, without regard to any adjustment under Section 2(b)(i), multiplied by a fraction, the numerator of which is the number of completed calendar months from the Effective Date to the date of death and the denominator of which is 12. (ii) In the event of the Executive’s death after the first anniversary of the Effective Date, but prior to the second anniversary of the Effective Date, the pro rata portion of the Award shall be the sum of (1) and (2): (1)

Tranche A Adjusted Value, as determined by Section 2(b)(i); plus 4

Processed and formatted by SEC Watch - Visit SECWatch.com

(2)

Tranche B, without regard to any adjustment under Section 2(b)(ii), multiplied by a fraction, the numerator of which is the number of completed calendar months from the first anniversary of the Effective Date to the date of death and the denominator of which is 12.

(iii) In the event of the Executive’s death after the second anniversary of the Effective Date, but prior to the third anniversary of the Effective Date, the pro rata portion of the Award shall be the sum of (1), (2), and (3): (1)

Tranche A Adjusted Value, as determined by Section 2(b)(i); plus

(2)

Tranche B Adjusted Value, as determined by Section 2(b)(ii); plus

(3)

Tranche C, without regard to any adjustment under Section 2(b)(iii), multiplied by a fraction, the numerator of which is the number of completed calendar months from the second anniversary of the Effective Date to the date of death and the denominator of which is 12.

(b) Disability. In the event of the Executive’s Termination of Employment due to Disability prior to satisfying the vesting requirements under Section 4, a pro rata portion of the Award, determined as set forth below, is immediately vested and shall be paid as soon as administratively practicable following the date of Termination of Employment due to Disability, but in no event later than 90 days thereafter. All other amounts hereunder are immediately forfeited and shall not be payable. The pro rata portion of the Award shall be determined as follows: (i) In the event of the Executive’s Termination of Employment due to Disability prior to the first anniversary of the Effective Date, the pro rata portion of the Award shall be equal to Tranche A, without regard to any adjustment under Section 2(b)(i), multiplied by a fraction, the numerator of which is the number of completed calendar months from the Effective Date to the date of Termination of Employment due to Disability and the denominator of which is 12. (ii) In the event of the Executive’s Termination of Employment due to Disability after the first anniversary of the Effective Date, but prior to the second anniversary of the Effective Date, the pro rata portion of the Award shall be the sum of (1) and (2): (1)

Tranche A Adjusted Value, as determined by Section 2(b)(i); plus

(2)

Tranche B, without regard to any adjustment under Section 2(b)(ii), multiplied by a fraction, the numerator of which is the number of completed calendar months from the first anniversary of the Effective Date to the date of Termination of Employment due to Disability and the denominator of which is 12. 5

Processed and formatted by SEC Watch - Visit SECWatch.com

(iii) In the event of the Executive’s Termination of Employment due to Disability after the second anniversary of the Effective Date, but prior to the third anniversary of the Effective Date, the pro rata portion of the Award shall be the sum of (1), (2), and (3): (1)

Tranche A Adjusted Value, as determined by Section 2(b)(i); plus

(2)

Tranche B Adjusted Value, as determined by Section 2(b)(ii); plus

(3)

Tranche C, without regard to any adjustment under Section 2(b)(iii), multiplied by a fraction, the numerator of which is the number of completed calendar months from the second anniversary of the Effective Date to the date of Termination of Employment due to Disability and the denominator of which is 12.

(c) Involuntary Termination of Employment without Cause or Voluntary Termination of Employment for Good Reason. In the event of the Executive’s involuntary Termination of Employment without Cause or voluntary Termination of Employment for Good Reason, prior to satisfying the vesting requirements under Section 4, a pro rata portion of the Award, determined as set forth below, is immediately vested and shall be paid as soon as administratively practicable following the date of such Termination of Employment, but in no event later than 90 days thereafter. All other amounts hereunder are immediately forfeited and shall not be payable. The pro rata portion of the Award shall be determined as follows: (i) In the event such Termination of Employment occurs prior to the first anniversary of the Effective Date, the pro rata portion of the Award shall be equal to Tranche A, without regard to any adjustment under Section 2(b)(i). (ii) In the event such Termination of Employment occurs after the first anniversary of the Effective Date, but prior to the second anniversary of the Effective Date, the pro rata portion of the Award shall be the sum of (1) and (2): (1)

Tranche A Adjusted Value, as determined by Section 2(b)(i); plus

(2)

Tranche B, without regard to any adjustment under Section 2(b)(ii).

(iii) In the event such Termination of Employment occurs after the second anniversary of the Effective Date, but prior to the third anniversary of the Effective Date, the pro rata portion of the Award shall be the sum of (1), (2), and (3): (1)

Tranche A Adjusted Value, as determined by Section 2(b)(i); plus

(2)

Tranche B Adjusted Value, as determined by Section 2(b)(ii); plus

(3)

Tranche C, without regard to any adjustment under Section 2(b)(iii).

(d) Retirement. In the event of the Executive’s Retirement, prior to satisfying the vesting requirements under Section 4, a pro rata portion of the Award, determined as set forth 6

Processed and formatted by SEC Watch - Visit SECWatch.com

below, is immediately vested and shall be paid as soon as administratively practicable following the date of Retirement, but in no event later than 90 days thereafter. All other amounts hereunder are immediately forfeited and shall not be payable. The pro rata portion of the Award shall be determined as follows: (i) In the event of the Executive’s Retirement prior to the first anniversary of the Effective Date, the pro rata portion of the Award shall be equal to Tranche A, without regard to any adjustment under Section 2(b)(i), multiplied by a fraction, the numerator of which is the number of completed calendar months from the Effective Date to the date of Retirement and the denominator of which is 12. (ii) In the event of the Executive’s Retirement after the first anniversary of the Effective Date, but prior to the second anniversary of the Effective Date, the pro rata portion of the Award shall be the sum of (1) and (2): (1)

Tranche A Adjusted Value, as determined by Section 2(b)(i); plus

(2)

Tranche B, without regard to any adjustment under Section 2(b)(ii), multiplied by a fraction, the numerator of which is the number of completed calendar months from the first anniversary of the Effective Date to the date of Retirement and the denominator of which is 12.

(iii) In the event of the Executive’s Retirement after the second anniversary of the Effective Date, but prior to the third anniversary of the Effective Date, the pro rata portion of the Award shall be the sum of (1), (2), and (3): (1)

Tranche A Adjusted Value, as determined by Section 2(b)(i); plus

(2)

Tranche B Adjusted Value, as determined by Section 2(b)(ii); plus

(3)

Tranche C, without regard to any adjustment under Section 2(b)(iii), multiplied by a fraction, the numerator of which is the number of completed calendar months from the second anniversary of the Effective Date to the date of Retirement and the denominator of which is 12.

(e) Change in Control. In the event of a Change in Control , prior to the satisfaction of the vesting requirements of Section 4, the Award shall be immediately 100 percent vested and shall be paid as soon as administratively practicable following the date of the completion of the Change in Control, but in no event later than 90 days thereafter. The amount of the Award shall be determined as follows: (i) In the event the Change in Control is completed prior to the first anniversary of the Effective Date, the Award shall be the sum of (1), (2), and (3): (1)

Tranche A, without regard to any adjustment under Section 2(b)(i), plus 7

Processed and formatted by SEC Watch - Visit SECWatch.com

(2)

Tranche B, without regard to any adjustment under Section 2(b)(ii), plus

(3)

Tranche C, without regard to any adjustment under Section 2(b)(iii).

(ii) In the event the Change in Control is completed after the first anniversary of the Effective Date, but prior to the second anniversary of the Effective Date, the Award shall be the sum of (1), (2), and (3): (1)

Tranche A Adjusted Value, as determined by Section 2(b)(i); plus

(2)

Tranche B, without regard to any adjustment under Section 2(b)(ii); plus

(3)

Tranche C, without regard to any adjustment under Section 2(b)(iii).

(iii) In the event the Change in Control is completed after the second anniversary of the Effective Date, but prior to the third anniversary of the Effective Date, the Award shall be the sum of (1), (2), and (3): (1)

Tranche A Adjusted Value, as determined by Section 2(b)(i); plus

(2)

Tranche B Adjusted Value, as determined by Section 2(b)(ii); plus

(3)

Tranche C, without regard to any adjustment under Section 2(b)(iii).

(f) Other Termination of Employment. In the event of the Executive’s Termination of Employment for any reason other than an event specified above, prior to satisfying the vesting requirements of Section 4 or 5, the Award is immediately forfeited in its entirety and shall not be payable. (g) Rules of Construction. In the event that more than one event occurs under this Section 5, the first event to occur shall be controlling and shall determine the timing and amount of the Award payable. Under no circumstances shall any provision of this Agreement be construed so as to require payment to the Executive in excess of the Award amount calculated under Section 2(b). Section 6. Miscellaneous. (a) Binding Agreement. This Agreement is binding on and enforceable by and against the parties, their successors, legal representatives and assigns. (b) Entire Agreement. This Agreement constitutes the whole agreement between the parties relating to the subject matter hereof and supersedes any prior agreements or understandings related to such subject matter. 8

Processed and formatted by SEC Watch - Visit SECWatch.com

(c) Amendment of this Agreement. This Agreement may not be amended, modified, or supplemented except by a written instrument executed by each of the parties hereto. (d) Restrictions on Transfer. The Award may not be sold, assigned, transferred, encumbered, hypothecated or pledged in any manner (whether by operation of law or otherwise) other than by will or applicable laws of decent and distribution. (e) No Right to Continued Employment. The Executive’s right, if any, to continue to serve the Company or its Subsidiaries or Affiliates as an employee or otherwise will not be enlarged or otherwise affected by this Agreement. This Agreement does not restrict the right of the Company or its Subsidiaries or Affiliates to terminate the Executive’s employment at any time. (f) Changes in Capitalization. In the event of any change in the outstanding Shares by reason of any stock split, stock dividend, split-up, split-off, spin-off, recapitalization, merger, consolidation, rights offering, reorganization, combination, subdivision or exchange of shares, or any distribution to stockholders other than a normal cash dividend, the Committee shall make an appropriate adjustment to the Share Price as may be determined in the sole but reasonable discretion of the Committee, and such adjustments shall be final, conclusive and binding for all purposes. (g) Severability. If any provision of this Agreement shall be held unlawful or otherwise invalid or unenforceable in whole or in part by a court of competent jurisdiction, such provision shall (i) be deemed limited to the extent that such court of competent jurisdiction deems it lawful, valid and/or enforceable and as so limited shall remain in full force and effect, and (ii) not affect any other provision of this Agreement or part thereof, each of which shall remain in full force and effect. If the making of any payment or the provision of any other benefit required under this Agreement shall be held unlawful or otherwise invalid or unenforceable by a court of competent jurisdiction, such unlawfulness, invalidity or unenforceability shall not prevent any other payment or benefit from being made or provided under this Agreement, and if the making of any payment in full or the provision of any other benefit required under this Agreement in full would be unlawful or otherwise invalid or unenforceable, then such unlawfulness, invalidity or unenforceability shall not prevent such payment or benefit from being made or provided in part, to the extent that it would not be unlawful, invalid or unenforceable, and the maximum payment or benefit that would not be unlawful, invalid or unenforceable shall be made or provided under this Agreement. (h) Waiver. Any party’s failure to insist on compliance with or enforcement of any provision of this Agreement shall not affect its validity or enforceability or constitute a waiver of future enforcement of that provision or of any other provision of this Agreement. (i) General Rules of Construction. The headings given to the Sections of this Agreement are solely as a convenience to facilitate reference, and are not intended to narrow, limit or affect the substance or interpretation of the provisions contained herein. The reference to any statute, regulation or other provision of law shall be construed to include any amendment thereto or refer to any successor thereof. 9

Processed and formatted by SEC Watch - Visit SECWatch.com

(j) Section 409A. To the extent required by law, this Agreement and the grant of the Award hereunder are intended to comply with the requirements of Section 409A of the Code and the Treasury Regulations promulgated and other official guidance issued thereunder (collectively, “Section 409A”), and this Agreement and the Award shall be administered and interpreted in a manner that is consistent with such intention. Notwithstanding the terms of Sections 3 and 5, to the extent that payment to the Executive is required to be delayed by six months pursuant to Section 409A, such payment shall be made as soon as administratively practicable following the first day of the seventh month following the Executive’s Termination of Employment, but in no event later than 90 days thereafter. (k) Rabbi Trust. In the event of a delay in payment upon a Change in Control beyond the date of completion of such Change in Control, amounts payable under Section 5(e) shall be contributed by the Company to a grantor trust established by the Company with an independent trustee immediately prior to the completion of the Change in Control giving rise to Executive’s entitlement to such amounts. The costs and fees associated with establishing and maintaining such grantor trust shall be borne by the Company. The amounts held in trust shall be invested in a stable value fund or other similar investment vehicle, which seeks to preserve principal while earning interest income. The investment vehicle shall be selected by an independent investment manager appointed by the Company. The interest income realized shall be included in and paid to Executive as and when Executive’s payment under this Section is made. (l) Governing Law. This Agreement, to the extent not otherwise governed by the Code or the laws of the United States, shall be governed by the laws of the State of New York, without reference to principles of conflict of laws, and construed accordingly. (m) Counterpart Execution. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original but all of which together shall be deemed one and the same instrument. TRW AUTOMOTIVE INC. By: Name: Title: EXECUTIVE

10

Processed and formatted by SEC Watch - Visit SECWatch.com

EXHIBIT A No payout if Share Price is less than $1.00. Share Price

T arget Value Adjustment*

Share Price less than $1.00

0.0%

Share Price less than Share Price on Effective Date, but at least $1.00

50.0%

Share Price equals Share Price on Effective Date [$2.50]

100.0%

[$5.00]

125.0%

[$12.50] or greater

250.0%

*

If the Share Price is between price levels set forth above, the Company shall use linear extrapolation to determine the resultant Target Value Adjustment.

Exhibit 10.3 TRW AUTOMOTIVE INC. EXECUTIVE OFFICER RETENTION AWARD AGREEMENT This Retention Award Agreement (this “Agreement”), is entered into and made effective as of February 26, 2009 (the “Effective Date”), by and between TRW Automotive Inc., a Delaware corporation (the “Company”), and _________ (the “Executive”). This Award is granted by the Compensation Committee of the Company’s Board of Directors (the “Committee”). Section 1. Definitions. (a) “Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder, or any successor statute thereto. (b) “Affiliate” shall mean, with respect to any Person, any other Person directly or indirectly controlling, controlled by or under common control with such Person or any other Person designated by the Committee in which any Person has an interest. (c) “Award” shall mean the retention award granted pursuant to this Agreement. (d) “Cause” shall have the meaning given to such term in the Closing Date Employment Agreement or, if not defined therein or if there is no such agreement, “Cause” means (i) such Executive’s continued failure substantially to perform such Executive’s duties (other than as a result of total or partial incapacity due to physical or mental illness) for a period of 10 days following written notice by the Company or any of its Subsidiaries or Affiliates to the Executive of such failure, (ii) dishonesty in the performance of the Executive’s duties, (iii) such Executive’s conviction of, or plea of nolo contendere to, a crime constituting (A) a felony under the laws of the United States or any state thereof or (B) a misdemeanor involving moral turpitude, (iv) such Executive’s willful malfeasance or willful misconduct in connection with such Executive’s duties or any act or omission which is injurious to the financial condition or business reputation of the Company or any of its Subsidiaries or Affiliates or (v) such Executive’s breach of any non-competition, non-solicitation or confidentiality provisions to which the Executive is subject. (e) “Change in Control” shall mean (A) the sale or disposition, in one or a series of related transactions, of all or substantially all of the assets of Holdings or the Company to any “person” or “group” (as such terms are defined in Sections 13(d)(3) and 14(d)(2) of the Act) other than Automotive Investors L.L.C. (“AI”) or any of its Affiliates, (B) any person or group, other than AI or any of its Affiliates, is or becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Act), directly or indirectly, of more than 50% of the total voting power of the voting stock of Holdings or the Company , including by way of merger, consolidation or otherwise and AI or any of its Affiliates cease to control the Board of Directors 1

Processed and formatted by SEC Watch - Visit SECWatch.com

of Holdings (the “Holdings Board”) or the Board of Directors of the Company, (C) any “person” or “group” (as defined above) other than AI or its Affiliates acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition of such person or group) ownership of stock of Holdings or the Company possessing 30 percent or more of the total voting power of the stock of Holdings or the Company , as applicable, or (D) a majority of the members of the Holdings Board is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Holdings Board, as it was constituted at the beginning of such 12-month period. (f) “Closing Date” shall mean February 28, 2003. (g) “Closing Date Employment Agreement” shall mean a written employment agreement between the Company or any of its Subsidiaries and the Executive which is or was entered into as of or after the Closing Date (as the same may be amended, modified or supplemented in accordance with the terms thereof). (h) “Code” shall mean the Internal Revenue Code of 1986, as amended, or any successor thereto. (i) “Disability” shall have the meaning given such term in the Closing Date Employment Agreement or, if not defined therein or if there shall be no such agreement, “disability” of the Executive shall have the meaning ascribed to such term in the long-term disability plan or policy maintained by the Company or one or more members of the Company’s controlled group of corporations (as defined in Section 1563 of the Code), as in effect from time to time. (j) “Good Reason” shall have the meaning given to such term in the Closing Date Employment Agreement. (k) “Holdings” shall mean TRW Automotive Holdings Corp., a Delaware corporation. (l) “NYSE” shall mean the New York Stock Exchange. (m) “Person” shall mean any individual, firm, corporation, partnership, limited liability company, trust, incorporated or unincorporated association, joint venture, joint stock company, governmental body or other entity of any kind. (n) “Shares” shall mean shares of the common stock, par value $0.01 per share, of Holdings. (o) “Subsidiary” shall mean a subsidiary corporation, as defined in Section 424(f) of the Code. (p) “Termination of Employment” shall mean a separation from service from the Company and all of its controlled group members (as defined by Section 1563 of the Code). 2

Processed and formatted by SEC Watch - Visit SECWatch.com

Section 2. Grant of Retention Award. The Company hereby grants to the Executive an Award of $ and conditions stated in this Agreement.

, which is subject to the terms

Section 3. Vesting Requirements. Except as otherwise provided in Section 4, the Award shall vest in two installments (“Tranche A” and “Tranche B”, respectively), each of which shall be equal to 50% of the Award amount, as follows: (a) Tranche A shall vest on the 18-month anniversary of the Effective Date, provided the Executive remains continuously employed by the Company or one of its Subsidiaries or Affiliates through that date; and (b) Tranche B shall vest on the 36-month anniversary of the Effective Date (the “36-month Vesting Date”), provided: (i) the Executive remains continuously employed by the Company or one of its Subsidiaries or Affiliates through that date; and (ii) the closing price of the Shares on the NYSE on any day during the six months immediately preceding the 36-month Vesting Date is greater than $10.00 (If at any time the Shares are no longer listed or traded on the NYSE, the foregoing price shall be calculated in such manner as may be determined by the Committee in its sole but reasonable discretion from time to time). Subject to Section 4, once the requirements of Section 3 have been satisfied with respect to either Tranche A or Tranche B, that tranche shall become vested and shall thereafter be payable in accordance with Section 5. Section 4. Effects of Certain Events. (a) Death. In the event of the Executive’s death prior to satisfying the vesting requirements of Section 3, a pro rata portion of the Award, determined as set forth below, is immediately vested and shall be paid as soon as administratively practicable following the date of death, but in no event later than 90 days thereafter. The pro rata portion of the Award shall be an amount equal to the following: (i) The amount of the Award multiplied by a fraction, the numerator of which is the number of completed calendar months from the Effective Date to the date of death and the denominator of which is 36; minus (ii) Any payment received under Section 5(a). Any remaining portion of the Award is immediately forfeited and shall not become payable. (b) Disability. In the event of the Executive’s Termination of Employment due to Disability prior to satisfying the vesting requirements of Section 3, a pro rata portion of the Award, determined as set forth below, is immediately vested and shall be paid as soon as 3

Processed and formatted by SEC Watch - Visit SECWatch.com

administratively practicable following the date of Termination of Employment due to Disability, but in no event later than 90 days thereafter. The pro rata portion of the Award shall be an amount equal to the following: (i) The amount of the Award multiplied by a fraction, the numerator of which is the number of completed calendar months from the Effective Date to the date of Termination of Employment due to Disability and the denominator of which is 36; minus (ii) Any payment received under Section 5(a). Any remaining portion of the Award is immediately forfeited and shall not become payable. (c) Involuntary Termination of Employment without Cause. Subject to Section 4(e), in the event of the Executive’s involuntary Termination of Employment without Cause prior to satisfying the vesting requirements of Section 3, a pro rata portion of the Award, determined as set forth below, is immediately vested and shall be paid as soon as administratively practicable following the date of such Termination of Employment, but in no event later than 90 days thereafter. The pro rata portion of the Award shall be an amount equal to the following: (i) The amount of the Award multiplied by a fraction, the numerator of which is the number of months from the Effective Date to the date of Termination of Employment and the denominator of which is 36; minus (ii) Any payment received under Section 5(a). Any remaining portion of the Award is immediately forfeited and shall not become payable. (d) Voluntary Termination for Good Reason. Subject to Section 4(e), in the event of the Executive’s voluntary Termination of Employment for Good Reason, prior to satisfying the vesting requirements of Section 3, a pro rata portion of the Award, determined as set forth below, is immediately vested and shall be paid as soon as administratively practicable following the date of such Termination of Employment, but in no event later than 90 days thereafter. The pro rata portion of the Award shall be an amount equal to the following: (i) The amount of the Award multiplied by a fraction, the numerator of which is the number of months from the Effective Date to the date of Termination of Employment and the denominator of which is 36; minus (ii) Any payment received under Section 5(a). Any remaining portion of the Award is immediately forfeited and shall not become payable. (e) Change in Control. In the event of the Executive’s involuntary Termination of Employment without Cause or voluntary Termination of Employment for Good Reason in each case following or in connection with a Change in Control, prior to satisfying the vesting requirements of Section 3, the Award shall be immediately 100 4

Processed and formatted by SEC Watch - Visit SECWatch.com

percent vested and, to the extent not already paid under Section 5, shall be paid as soon as administratively practicable following the date of such Termination of Employment, but in no event later than 90 days thereafter. (f) Other Termination of Employment. In the event of the Executive’s Termination of Employment for any reason other than voluntary Termination of Employment for Good Reason, involuntary Termination of Employment without Cause, or Termination of Employment due to Disability or death prior to satisfying the vesting requirements of Section 3, the Award shall be immediately forfeited and shall not become payable. (g) Rules of Construction. In the event that more than one event occurs under this Section 4, the first event to occur shall be controlling and shall determine the timing and amount of the Award payable. Under no circumstances shall any provision of this Agreement be construed so as to require payment to the Executive in excess of the Award amount set forth in Section 2. Section 5. Payment of Award. Upon vesting pursuant to Section 3, the Company shall pay the Award in cash as follows: (a) Tranche A. Payment of Tranche A shall be made as soon as administratively practicable following the date upon which the vesting requirements pursuant to Section 3(a) shall have been satisfied, but in no event later than 90 days thereafter. (b) Tranche B. Payment of Tranche B shall be made as soon as administratively practicable following the date upon which the vesting requirements pursuant to Section 3(b) shall have been satisfied, but in no event later than 90 days thereafter. Section 6. Forfeiture Policy. In the event of Executive’s Termination of Employment (other than in connection with one of the events enumerated in Section 4) after the 18-month anniversary of the Effective Date but before the 36-month anniversary of the Effective Date, the Executive shall repay the amount of Tranche A to the Company as soon as administratively practicable following the date of the Executive’s Termination of Employment, but in no event later than 90 days thereafter. Section 7. Miscellaneous. (a) Binding Agreement. This Agreement is binding on and enforceable by and against the parties, their successors, legal representatives and assigns. (b) Entire Agreement. This Agreement constitutes the whole agreement between the parties relating to the subject matter hereof and supersedes any prior agreements or understandings related to such subject matter. (c) Amendment of this Agreement. This Agreement may not be amended, modified, or supplemented except by a written instrument executed by each of the parties hereto. 5

Processed and formatted by SEC Watch - Visit SECWatch.com

(d) Restrictions on Transfer. The Award may not be sold, assigned, transferred, encumbered, hypothecated or pledged in any manner (whether by operation of law or otherwise) other than by will or applicable laws of decent and distribution. (e) No Right to Continued Employment. The Executive’s right, if any, to continue to serve the Company or its Subsidiaries or Affiliates as an employee or otherwise will not be enlarged or otherwise affected by this Agreement. This Agreement does not restrict the right of the Company or its Subsidiaries or Affiliates to terminate the Executive’s employment at any time. (f) Changes in Capitalization. In the event of any change in the outstanding Shares by reason of any stock split, stock dividend, split-up, split-off, spin-off, recapitalization, merger, consolidation, rights offering, reorganization, combination, subdivision or exchange of shares, or any distribution to stockholders other than a normal cash dividend, the Committee shall make an appropriate adjustment to the Share price amount in Section 3(b)(ii) as may be determined in the sole but reasonable discretion of the Committee, and such adjustments shall be final, conclusive and binding for all purposes. (g) Severability. If any provision of this Agreement shall be held unlawful or otherwise invalid or unenforceable in whole or in part by a court of competent jurisdiction, such provision shall (i) be deemed limited to the extent that such court of competent jurisdiction deems it lawful, valid and/or enforceable and as so limited shall remain in full force and effect, and (ii) not affect any other provision of this Agreement or part thereof, each of which shall remain in full force and effect. If the making of any payment or the provision of any other benefit required under this Agreement shall be held unlawful or otherwise invalid or unenforceable by a court of competent jurisdiction, such unlawfulness, invalidity or unenforceability shall not prevent any other payment or benefit from being made or provided under this Agreement, and if the making of any payment in full or the provision of any other benefit required under this Agreement in full would be unlawful or otherwise invalid or unenforceable, then such unlawfulness, invalidity or unenforceability shall not prevent such payment or benefit from being made or provided in part, to the extent that it would not be unlawful, invalid or unenforceable, and the maximum payment or benefit that would not be unlawful, invalid or unenforceable shall be made or provided under this Agreement. (h) Waiver. Any party’s failure to insist on compliance with or enforcement of any provision of this Agreement shall not affect its validity or enforceability or constitute a waiver of future enforcement of that provision or of any other provision of this Agreement. (i) General Rules of Construction. The headings given to the Sections of this Agreement are solely as a convenience to facilitate reference, and are not intended to narrow, limit or affect the substance or interpretation of the provisions contained herein. The reference to any statute, regulation or other provision of law shall be construed to include any amendment thereto or refer to any successor thereof. (j) Section 409A. To the extent required by law, this Agreement and the grant of the Award hereunder are intended to comply with the requirements of Section 409A of the Code and the Treasury Regulations promulgated and other official guidance issued 6

Processed and formatted by SEC Watch - Visit SECWatch.com

thereunder (collectively, “Section 409A”), and this Agreement and the Award shall be administered and interpreted in a manner that is consistent with such intention. Notwithstanding the terms of Section 4 and Section 5, to the extent that payment to the Executive is required to be delayed by six months pursuant to Section 409A, such payment shall be made no earlier than the first day of the seventh month following the Executive’s Termination of Employment. (k) Governing Law. This Agreement, to the extent not otherwise governed by the Code or the laws of the United States, shall be governed by the laws of the State of New York without reference to principles of conflict of laws, and construed accordingly. (l) Counterpart Execution. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original but all of which together shall be deemed one and the same instrument. TRW AUTOMOTIVE INC. By: Name: Title: EXECUTIVE

7

Exhibit 10.4 TRW AUTOMOTIVE INC. DIRECTOR CASH INCENTIVE AWARD AGREEMENT This Cash Incentive Award Agreement (this “Agreement”), is entered into and made effective as of February 26, 2009 (the “Effective Date”), by and between TRW Automotive Inc., a Delaware corporation (the “Company”), and _________ (the “Director”). This Award is granted by the Compensation Committee of the Company’s Board of Directors (the “Committee”). Section 1. Definitions. (a) “Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder, or any successor statute thereto. (b) “Affiliate” shall mean, with respect to any Person, any other Person directly or indirectly controlling, controlled by or under common control with such Person or any other Person designated by the Committee in which any Person has an interest. (c) “Award” shall mean the cash incentive award granted pursuant to this Agreement and calculated pursuant to Section 2(b). (d) “Change in Control” shall mean (A) the sale or disposition, in one or a series of related transactions, of all or substantially all of the assets of Holdings or the Company to any “person” or “group” (as such terms are defined in Sections 13(d)(3) and 14(d)(2) of the Act) other than Automotive Investors L.L.C. (“AI”) or any of its Affiliates, (B) any person or group, other than AI or any of its Affiliates, is or becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Act), directly or indirectly, of more than 50% of the total voting power of the voting stock of Holdings or the Company, including by way of merger, consolidation or otherwise and AI or any of its Affiliates cease to control the Board of Directors of Holdings (the “Holdings Board”) or the Board of Directors of the Company, (C) any “person” or “group” (as defined above) other than AI or its Affiliates acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition of such person or group) ownership of stock of Holdings or the Company possessing 30 percent or more of the total voting power of the stock of Holdings or the Company, as applicable, or (D) a majority of the members of the Holdings Board is replaced during any 12month period by directors whose appointment or election is not endorsed by a majority of the members of the Holdings Board, as it was constituted at the beginning of such 12-month period. (e) “Code” shall mean the Internal Revenue Code of 1986, as amended, or any successor thereto. (f) “Fair Market Value” of a Share on a given date shall mean the closing price of a Share as reported on the NYSE composite tape on such date, or, if there is no such reported sale price of a Share on the NYSE composite tape on such date, then the closing price of a Share as reported on the NYSE composite tape on the last previous day on which sale price

Processed and formatted by SEC Watch - Visit SECWatch.com

was reported on the NYSE composite tape. If at any time the Shares are no longer listed or traded on the NYSE, the Fair Market Value of a Share shall be calculated in such manner as may be determined by the Committee in its good faith judgment from time to time. (g) “Holdings” shall mean TRW Automotive Holdings Corp., a Delaware corporation. (h) “NYSE” shall mean the New York Stock Exchange. (i) “Person” shall mean any individual, firm, corporation, partnership, limited liability company, trust, incorporated or unincorporated association, joint venture, joint stock company, governmental body or other entity of any kind. (j) “Share Price” shall mean the average Fair Market Value of a Share during the portion of the month of February immediately preceding the first anniversary of the Effective Date. (k) “Shares” shall mean shares of the common stock, par value $0.01 per share, of Holdings. (l) “Subsidiary” shall mean a subsidiary corporation, as defined in Section 424(f) of the Code. (m) “Target Value” shall mean the initial value of the Award, as set forth in Section 2(a). (n) “Target Value Adjustment” shall mean the percentage by which the Target Value is increased or decreased under Section 2(b), based on the applicable Share Price pursuant to the table attached hereto as Exhibit A, provided that the percentage to be used for such adjustment shall be the nearest tenth of a percentage determined pursuant to Exhibit A. Section 2. Grant of Cash Incentive Award. The Company hereby grants to the Director an Award subject to the terms and conditions stated in this Agreement. The amount of the Award shall be equal to the Target Value determined under Section 2(a) as adjusted pursuant to Section 2(b). (a) Target Value. The Target Value of the Award is $___, which is subject to the terms and conditions stated in this Agreement. (b) Adjustment to the Amount of the Target Value. The Target Value of the Award shall be increased or decreased, as applicable, on the first anniversary of the Effective Date by multiplying the Target Value by the Target Value Adjustment percentage as determined under Exhibit A with reference to the calculated Share Price as of that date. 2

Processed and formatted by SEC Watch - Visit SECWatch.com

Section 3. Payment of the Awards. Subject to the vesting requirements of Section 4 and Section 5, the Award amount determined under Section 2(b) shall be payable to the Director in cash as soon as administratively practicable on or after the first anniversary of the Effective Date, but in no event later than 90 days thereafter. Section 4. Service-Vesting Requirement. Except as otherwise provided in Section 5, the Award determined in accordance with Section 2(b) shall become vested on the first anniversary of the Effective Date, provided the Director remains continuously on the Board of Directors of the Company or Holdings through that date. Once this vesting requirement has been satisfied, the Award shall thereafter be payable in accordance with Section 3. Section 5. Vesting Upon Certain Events. (a) Death. In the event of the Director’s death prior to satisfying the vesting requirements under Section 4, a pro rata portion of the Award (determined by multiplying the amount of the Award, without any adjustment under Section 2(b), by a fraction, the numerator of which is the number of completed calendar months from the Effective Date to the date of death and the denominator of which is 12) is immediately vested and shall be paid as soon as administratively practicable following the date of death, but in no event later than 90 days thereafter. (b) Change in Control. In the event the Director’s service with the Company is involuntarily terminated following or in connection with a Change in Control prior to the satisfaction of the vesting requirements of Section 4, the Award, without regard to any adjustment under Section 2(b), shall be immediately 100 percent vested and shall be paid as soon as administratively practicable following the date of termination of service following or in connection with the Change in Control event, but in no event later than 90 days thereafter. (c) Termination of Service. In the event of the Director’s termination of service on the Board of Directors of the Company or Holdings for any reason other than an event specified above, prior to satisfying the vesting requirements of Section 4 or 5, the Award is immediately forfeited in its entirety and shall not be payable. (d) Rules of Construction. In the event that more than one event occurs under this Section 5, the first event to occur shall be controlling and shall determine the timing and amount of the Award payable. Under no circumstances shall any provision of this Agreement be construed so as to require payment to the Director in excess of the Award amount calculated under Section 2(b). Section 6. Miscellaneous. (a) Binding Agreement. This Agreement is binding on and enforceable by and against the parties, their successors, legal representatives and assigns. (b) Entire Agreement. This Agreement constitutes the whole agreement between the parties relating to the subject matter hereof and supersedes any prior agreements or understandings related to such subject matter. 3

Processed and formatted by SEC Watch - Visit SECWatch.com

(c) Amendment of this Agreement. This Agreement may not be amended, modified, or supplemented except by a written instrument executed by each of the parties hereto. (d) Restrictions on Transfer. The Award may not be sold, assigned, transferred, encumbered, hypothecated or pledged in any manner (whether by operation of law or otherwise) other than by will or applicable laws of decent and distribution. (e) No Right to Continued Service. The Director’s right, if any, to continue to serve the Company or Holdings as a director will not be enlarged or otherwise affected by this Agreement. (f) Changes in Capitalization. In the event of any change in the outstanding Shares by reason of any stock split, stock dividend, split-up, split-off, spin-off, recapitalization, merger, consolidation, rights offering, reorganization, combination, subdivision or exchange of shares, or any distribution to stockholders other than a normal cash dividend the Committee shall make an appropriate adjustment to the Share Price as may be determined in the sole but reasonable discretion of the Committee, and such adjustments shall be final, conclusive and binding for all purposes. (g) Severability. If any provision of this Agreement shall be held unlawful or otherwise invalid or unenforceable in whole or in part by a court of competent jurisdiction, such provision shall (i) be deemed limited to the extent that such court of competent jurisdiction deems it lawful, valid and/or enforceable and as so limited shall remain in full force and effect, and (ii) not affect any other provision of this Agreement or part thereof, each of which shall remain in full force and effect. If the making of any payment or the provision of any other benefit required under this Agreement shall be held unlawful or otherwise invalid or unenforceable by a court of competent jurisdiction, such unlawfulness, invalidity or unenforceability shall not prevent any other payment or benefit from being made or provided under this Agreement, and if the making of any payment in full or the provision of any other benefit required under this Agreement in full would be unlawful or otherwise invalid or unenforceable, then such unlawfulness, invalidity or unenforceability shall not prevent such payment or benefit from being made or provided in part, to the extent that it would not be unlawful, invalid or unenforceable, and the maximum payment or benefit that would not be unlawful, invalid or unenforceable shall be made or provided under this Agreement. (h) Waiver. Any party’s failure to insist on compliance with or enforcement of any provision of this Agreement shall not affect its validity or enforceability or constitute a waiver of future enforcement of that provision or of any other provision of this Agreement. (i) Rules of Construction. The headings given to the Sections of this Agreement are solely as a convenience to facilitate reference, and are not intended to narrow, limit or affect the substance or interpretation of the provisions contained herein. The reference to any statute, regulation or other provision of law shall be construed to include any amendment thereto or refer to any successor thereof . (j) Section 409A. To the extent required by law, this Agreement and the grant of the Award hereunder are intended to comply with the requirements of Section 409A of 4

Processed and formatted by SEC Watch - Visit SECWatch.com

the Code and the Treasury Regulations promulgated and other official guidance issued thereunder (collectively, “Section 409A”), and this Agreement and the Award shall be administered and interpreted in a manner that is consistent with such intention. Notwithstanding the terms of Sections 3 and 5, to the extent that payment to the Director is required to be delayed by six months pursuant to Section 409A, such payment shall be made as soon as administratively practicable following the first day of the seventh month following the Director’s Termination of Employment, but in no event later than 90 days thereafter. (k) Rabbi Trust. In the event of a delay in payment upon a Change in Control beyond the date of completion of such Change in Control, amounts payable under Section 5(b) shall be contributed by the Company to a grantor trust established by the Company with an independent trustee immediately prior to the completion of the Change in Control giving rise to Director’s entitlement to such amounts. The costs and fees associated with establishing and maintaining such grantor trust shall be borne by the Company. The amounts held in trust shall be invested in a stable value fund or other similar investment vehicle, which seeks to preserve principal while earning interest income. The investment vehicle shall be selected by an independent investment manager appointed by the Company. The interest income realized shall be included in and paid to Executive as and when Executive’s payment under this Section is made. (l) Governing Law. This Agreement, to the extent not otherwise governed by the Code or the laws of the United States, shall be governed by the laws of the State of New York, without reference to principles of conflict of laws, and construed accordingly. (m) Counterpart Execution. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original but all of which together shall be deemed one and the same instrument. TRW AUTOMOTIVE INC. By: Name: Title: DIRECTOR

5

Processed and formatted by SEC Watch - Visit SECWatch.com

EXHIBIT A No payout if Share Price is less than $1.00

*

Share Price

T arget Value Adjustment*

Share Price less than $1.00

0.0%

Share Price less than Share Price on Effective Date, but at least $1.00

50.0%

Share Price equals Share Price on Effective Date [$2.50]

100.0%

[$5.00]

125.0%

[$12.50] or greater

250.0%

If the Share Price is between price levels set forth above, the Company shall use linear extrapolation to determine the resultant Target Value Adjustment.