CVGI 10-Q
Commercial Vehicle Group, Inc. (CVGI)
10-Q
2026-08-03
For: 2026-06-30
View Original
Added on
August 04, 2026
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended June 30, 2026
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from to
Commission file number 001-34365
(Exact name of Registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||
(Address of principal executive offices) | (Zip Code) | ||||
(614 ) 289-5360
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ¨
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ | |||||||||||
| þ | Smaller reporting company | |||||||||||||
| Emerging growth company | ||||||||||||||
| If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ☐ | |||||||||||||
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑
The number of shares outstanding of the Registrant’s common stock, par value $.01 per share, at August 3, 2026 was 40,632,682 shares.
COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
QUARTERLY REPORT ON FORM 10-Q
| PART I FINANCIAL INFORMATION | |||||
| PART II OTHER INFORMATION | |||||
i
PART I. FINANCIAL INFORMATION
ITEM 1 – FINANCIAL STATEMENTS
COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (Unaudited) (In thousands, except per share amounts) | |||||||||||||||||||||||
| Revenues | $ | $ | $ | $ | |||||||||||||||||||
| Cost of revenues | |||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||
| Selling, general and administrative expenses | |||||||||||||||||||||||
| Gain on sale of assets | ( | ||||||||||||||||||||||
| Operating income (loss) | |||||||||||||||||||||||
| Other (income) expense | |||||||||||||||||||||||
| Warrant expense | |||||||||||||||||||||||
| Loss on extinguishment of debt | |||||||||||||||||||||||
| Interest expense | |||||||||||||||||||||||
| Income (loss) before provision for income taxes | ( | ( | ( | ( | |||||||||||||||||||
| Provision for income taxes | |||||||||||||||||||||||
| Net income (loss) from continuing operations | ( | ( | ( | ( | |||||||||||||||||||
| Net income (loss) from discontinued operations - Note 18 | ( | ( | ( | ( | |||||||||||||||||||
| Net income (loss) | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Earnings (loss) per Common Share: | |||||||||||||||||||||||
| Basic earnings (loss) per share | |||||||||||||||||||||||
| Income (loss) from continuing operations | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Income (loss) from discontinued operations | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Diluted earnings (loss) per share | |||||||||||||||||||||||
| Income (loss) from continuing operations | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Income (loss) from discontinued operations | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Weighted average shares outstanding: | |||||||||||||||||||||||
| Basic | |||||||||||||||||||||||
| Diluted | |||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
1
COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (Unaudited) (In thousands) | |||||||||||||||||||||||
| Net loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Other comprehensive income (loss): | |||||||||||||||||||||||
| Foreign currency exchange translation adjustments | ( | ||||||||||||||||||||||
| Minimum pension liability, net of tax | ( | ||||||||||||||||||||||
| Derivative instruments, net of tax | ( | ||||||||||||||||||||||
| Other comprehensive income (loss) | ( | ||||||||||||||||||||||
| Comprehensive income (loss) | $ | ( | $ | $ | ( | $ | |||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
2
COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
| June 30, 2026 | December 31, 2025 | ||||||||||
| (Unaudited) | |||||||||||
(In thousands, except share and per share amounts) | |||||||||||
| ASSETS | |||||||||||
| Current Assets: | |||||||||||
| Cash | $ | $ | |||||||||
Accounts receivable, net of allowances of $ | |||||||||||
| Inventories | |||||||||||
| Other current assets | |||||||||||
| Total current assets | |||||||||||
| Property, plant and equipment, net | |||||||||||
Intangible assets, net of accumulated amortization of $ | |||||||||||
| Deferred income taxes, net | |||||||||||
| Other assets, net | |||||||||||
| Total assets | $ | $ | |||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | $ | |||||||||
| Accrued liabilities and other | |||||||||||
| Current portion of long-term debt and short-term debt | |||||||||||
| Total current liabilities | |||||||||||
| Long-term debt | |||||||||||
| Pension and other post-retirement benefits | |||||||||||
| Other long-term liabilities | |||||||||||
| Total liabilities | |||||||||||
| Stockholders’ equity: | |||||||||||
Preferred stock, $ | $ | $ | |||||||||
Common stock, $ | |||||||||||
Treasury stock, at cost: | ( | ( | |||||||||
| Additional paid-in capital | |||||||||||
| Retained deficit | ( | ( | |||||||||
| Accumulated other comprehensive loss | ( | ( | |||||||||
| Total stockholders’ equity | |||||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | $ | |||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3
COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
| Six Months Ended June 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| (Unaudited) | |||||||||||
| (In thousands) | |||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
| Net income (loss) | $ | ( | $ | ( | |||||||
| Adjustments to reconcile net loss to cash flows from operating activities from continuing operations: | |||||||||||
| Depreciation and amortization | |||||||||||
| Noncash amortization of debt financing costs | |||||||||||
| Share-based compensation expense | |||||||||||
| Non-cash income on derivative contracts | ( | ( | |||||||||
| Non-cash loss on warrants | |||||||||||
| Gain on sale of assets | ( | ||||||||||
| Loss on extinguishment of debt | |||||||||||
| Recall expense - discontinued operations | |||||||||||
| Change in other operating items: | |||||||||||
| Accounts receivable | ( | ||||||||||
| Inventories | ( | ||||||||||
| Prepaid expenses | ( | ( | |||||||||
| Accounts payable | |||||||||||
| Accrued liabilities | ( | ||||||||||
| Other operating activities, net | |||||||||||
| Net cash provided by operating activities | |||||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||
| Purchases of property, plant and equipment | ( | ( | |||||||||
| Proceeds from disposal/sale of property, plant and equipment | |||||||||||
| Net cash provided by (used in) investing activities | ( | ||||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
| Proceeds from at-the-market offering program | |||||||||||
| At-the-market offering issuance costs | ( | ||||||||||
| Borrowings under Term Loan due 2030 | |||||||||||
| Repayment of Term Loan due 2030 | ( | ( | |||||||||
| Repayment of prior revolving credit facility | ( | ||||||||||
| Borrowings under ABL revolving credit facility due 2030 | |||||||||||
| Repayment under ABL revolving credit facility due 2030 | ( | ||||||||||
| Borrowings under China credit facility | |||||||||||
| Repayment of China credit facility | ( | ||||||||||
| Surrender of shares to pay withholding taxes | ( | ( | |||||||||
| Debt issuance and amendment costs | ( | ||||||||||
| Prepayment premium and make-whole interest payment | ( | ||||||||||
| Other financing activities | ( | ||||||||||
| Net cash used in financing activities | ( | ( | |||||||||
| EFFECT OF CURRENCY EXCHANGE RATE CHANGES ON CASH | ( | ||||||||||
| NET INCREASE IN CASH | |||||||||||
| CASH: | |||||||||||
| Beginning of period | |||||||||||
| End of period | $ | $ | |||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4
COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
| Common Stock | Treasury Stock | Additional Paid-In Capital | Retained Deficit | Accumulated Other Comp. Loss | Total CVG Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||||||||||||||||||||
| (Unaudited) (In thousands, except share amounts) | |||||||||||||||||||||||||||||||||||||||||
| Balance - December 31, 2024 | $ | $ | ( | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||
| Share-based compensation expense | ( | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Net income (loss) from continuing operations for the period | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
| Net income (loss) from discontinued operation for the period | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Balance - March 31, 2025 | $ | $ | ( | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||
| Share-based compensation expense | ( | — | — | ||||||||||||||||||||||||||||||||||||||
| Net income (loss) from continuing operations for the period | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
| Net income (loss) from discontinued operation for the period | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Balance - June 30, 2025 | $ | $ | ( | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||
| Balance - December 31, 2025 | $ | $ | ( | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||
| Share-based compensation expense | ( | — | — | ||||||||||||||||||||||||||||||||||||||
| Net income (loss) from continuing operations for the period | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
| Balance - March 31, 2026 | $ | $ | ( | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||
| Sale of common stock | — | — | — | ||||||||||||||||||||||||||||||||||||||
| Share-based compensation expense | ( | — | — | ||||||||||||||||||||||||||||||||||||||
| Net income (loss) from continuing operations for the period | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
| Net income (loss) from discontinued operation for the period | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Balance - June 30, 2026 | $ | $ | ( | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
5
COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(Amounts in thousands, except for share and per share amounts and where specifically disclosed)
1. Description of Business and Basis of Presentation
Commercial Vehicle Group, Inc. and its subsidiaries, is a global provider of systems, assemblies and components to global commercial vehicle markets and electric vehicle markets. References herein to the "Company", "CVG", "we", "our", or "us" refer to Commercial Vehicle Group, Inc. and its subsidiaries.
We have manufacturing operations in the United States, Mexico, China, United Kingdom, Czech Republic, Ukraine, Morocco, Thailand, India and Australia. Our products are primarily sold in North America, Europe, and the Asia-Pacific region.
We primarily manufacture customized products to meet the requirements of our customers. We believe our products are used by a majority of the North American Commercial Truck manufacturers, many construction and agricultural vehicle original equipment manufacturers ("OEMs"), parts and service dealers, and distributors.
The unaudited condensed consolidated interim financial statements have been prepared in accordance with generally accepted accounting principles ("GAAP") in the United States of America and the rules and regulations of the Securities and Exchange Commission and include the accounts of the Company and its subsidiaries. Except as disclosed within these condensed notes to unaudited quarterly consolidated financial statements, the adjustments made were of a normal, recurring nature. Certain information and footnote disclosures normally included in our annual consolidated financial statements have been condensed or omitted. Additionally, certain prior period amounts related to discontinued operations have been reclassified to conform to footnote presentation for the current year, as further described in this section.
The preparation of financial statements in conformity with GAAP in the United States requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. These estimates and assumptions are based on management's best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. We adjust such estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in these estimates resulting from continuing changes in the economic environment will be reflected in the consolidated financial statements in future periods.
2. Recently Issued Accounting Pronouncements
In November 2024, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income-Expense Disaggregation (Subtopic 220-40): Disaggregation of Income Statement Expenses. This ASU updates improve financial reporting by requiring that public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. This information is generally not presented in the financial statements today. The ASU also requires disclosure of the total amount of selling expenses and our definition of selling expenses. The standard is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. We are currently evaluating the impact of adopting this ASU on our consolidated financial statements and related disclosures.
In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. This ASU clarifies interim disclosure requirements and provides a new disclosure principle for reporting material events occurring after the most recent fiscal year. This standard is effective for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years, with early adoption permitted. We are currently evaluating the impact of adopting this ASU on our consolidated financial statements and related disclosures.
6
In December 2025, the FASB issued ASU 2025-12, Codification Improvements. This ASU updates a broad range of Topics arising from technical corrections, unintended application of the Codification, clarifications, and other minor improvements that has a wide application to any entity affected by accounting guidance. The amendments make the codification easier to understand and apply. The standard is effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years, with early adoption permitted. We are currently evaluating the impact of adopting this ASU on our consolidated financial statements and related disclosures.
3. Revenue Recognition
We had outstanding customer accounts receivable, net of allowances, of $115.4 million as of June 30, 2026 and $86.3 million as of December 31, 2025. We generally do not have material other assets or liabilities associated with customer arrangements.
Revenue Disaggregation - The following is the composition, by product category, of our revenues:
| Three Months Ended June 30, 2026 | |||||||||||||||||||||||
| Global Seating | Global Electrical Systems | Trim Systems and Components | Total | ||||||||||||||||||||
| Seats | $ | $ | $ | $ | |||||||||||||||||||
| Electrical wire harnesses, panels and assemblies | |||||||||||||||||||||||
| Plastic & Trim components | |||||||||||||||||||||||
| Mirrors, wipers and controls | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
| Three Months Ended June 30, 2025 | |||||||||||||||||||||||
| Global Seating | Global Electrical Systems | Trim Systems and Components | Total | ||||||||||||||||||||
| Seats | $ | $ | $ | $ | |||||||||||||||||||
| Electrical wire harnesses, panels and assemblies | |||||||||||||||||||||||
| Plastic & Trim components | |||||||||||||||||||||||
| Mirrors, wipers and controls | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
| Six Months Ended June 30, 2026 | |||||||||||||||||||||||
| Global Seating | Global Electrical Systems | Trim Systems and Components | Total | ||||||||||||||||||||
| Seats | $ | $ | $ | $ | |||||||||||||||||||
| Electrical wire harnesses, panels and assemblies | |||||||||||||||||||||||
| Plastic & Trim components | |||||||||||||||||||||||
| Mirrors, wipers and controls | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
| Six Months Ended June 30, 2025 | |||||||||||||||||||||||
| Global Seating | Global Electrical Systems | Trim Systems and Components | Total | ||||||||||||||||||||
| Seats | $ | ||||||||||||||||||||||
| Electrical wire harnesses, panels and assemblies | |||||||||||||||||||||||
| Plastic & Trim components | |||||||||||||||||||||||
| Mirrors, wipers and controls | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
7
4. Debt
Debt consisted of the following:
| June 30, 2026 | December 31, 2025 | ||||||||||
| Term Loan facility | $ | $ | |||||||||
| ABL Revolving credit facility | |||||||||||
| Unamortized value of warrants | ( | ( | |||||||||
| Unamortized debt discount and issuance costs | ( | ( | |||||||||
| $ | $ | ||||||||||
| Less: current portion of long-term debt | ( | ( | |||||||||
| Total long-term debt, net of current portion | $ | $ | |||||||||
| Short-term debt - China credit facility | $ | ||||||||||
Term Loan facility
On June 27, 2025, the Company entered into a $95 million secured credit facility (the “Term Loan”) pursuant to a term loan and security agreement with TCW Asset Management Company LLC (“TCW Management”), as administrative agent, and other lender parties thereto. All obligations of the Company under the Term Loan are unconditionally guaranteed by the Company and certain of its subsidiaries. The Company and each of its guarantor subsidiaries have granted liens in substantially all of their property to secure their respective obligations under the Term Loan, guaranties and related documents. The Term Loan matures on June 27, 2030.
The proceeds of the Term Loan were used, together with cash on hand of the Company, to (a) pay down the then existing term loan and revolving credit facilities due 2027 of the Company with Bank of America, N.A. as administrative agent (the “Prior Credit Facilities"), (b) pay related transaction costs, fees and expenses incurred in connection therewith, and (c) for working capital and other lawful corporate purposes of the Company.
Interest Rates and Fees
Amounts outstanding under the Term Loan accrue interest at a per annum rate based on the consolidated total leverage ratio ranging from SOFR plus 8.75 % with a leverage ratio < 3.50 x to SOFR plus 10.75 % with a leverage ratio > 6.25 x. The interest rate was set at SOFR plus 9.75 % through September 2025. At the Company’s option, interest may be paid at the base rate plus 9.75 % with a leverage ratio < 3.50 x to base rate plus 11.75 % with a leverage ratio > 6.25 x where the base rate is the greatest of (1) 3.0 %, (2) Federal Funds rate plus 0.5 %, (3) SOFR plus 1.0 %, or (4) Prime rate. The base rate margin was initially set at base rate plus 10.75 %. In connection with the initial funding of the Term Loan, the Company paid to the Term Loan lenders a fee equal to 3.0 % of the Term Loan amount.
Covenants and Other Terms
The Term Loan contains a maximum total leverage ratio covenant, a maximum capital expenditure covenant, an average liquidity covenant, and other customary restrictive covenants, including, without limitation, limitations on the ability of the Company and its subsidiaries to incur additional debt and guarantees; grant certain liens on assets; pay dividends or make certain other distributions; make certain investments or acquisitions; dispose of certain assets; make payments on certain indebtedness; merge, combine with any other person or liquidate; amend organizational documents; file consolidated tax returns with entities other than the Company and its subsidiaries; make material changes in accounting treatment or reporting practices; enter into certain restrictive agreements; enter into certain hedging agreements; engage in transactions with affiliates; enter into certain employee benefit plans; amend subordinated debt; and other matters customarily included in senior secured loan agreements. The consolidated total leverage ratio covenant did not exceed 7.25 to 1.00 for the quarter ended September 30, 2025; 6.50 to 1.00 for the quarter ended December 31, 2025; 6.00 to 1.00 for the quarter ended March 31, 2026; 5.25 to 1.00 for the quarter ended June 30, 2026. The consolidated total leverage ratio covenant may not exceed 5.00 to 1.00 for the quarter ending September 30, 2026; 4.75 to 1.00 for the quarter ending December 31, 2026; 4.50 to 1.00 for the quarter ending March 31, 2027; 4.25 to 1.00 for the quarter ending June 30, 2027; and 4.00 to 1.00 for the quarter ending September 30, 2027 and each fiscal quarter thereafter. The Term Loan also contains customary reporting and other affirmative covenants. We were in compliance with these covenants as of June 30, 2026.
The Term Loan contains customary events of default, including, without limitation, nonpayment of obligations under the Term Loan when due; material inaccuracy of representations and warranties; violation of covenants in the Term Loan and certain other documents executed in connection therewith; breach or default of agreements related to material debt; revocation or attempted revocation of guarantees; denial of the validity or enforceability of the loan documents or failure of the loan documents to be in full force and effect; certain material judgments; certain events of bankruptcy or insolvency; certain
8
Employee Retirement Income Securities Act events; loss, theft, damage or destruction of collateral; and a change in control of the Company. Certain of the defaults are subject to exceptions, materiality qualifiers, grace periods and baskets customary for credit facilities of this type.
Term Loan amortization payments are to be made quarterly in an amount equal to 0.25 % of the original principal balance of the Term Loan, stepping up to 1.25 % from and after June 30, 2027.
The Term Loan requires the Company to make mandatory prepayments (subject to reinvestment rights) with the proceeds of certain asset dispositions and upon the receipt of certain extraordinary payments (including, without limitation, insurance or condemnation proceeds, sales of Company securities, tax refunds, and judgments). In addition, the Company is required to make annual excess cash flow prepayments commencing after fiscal 2026 financial results are final, and mandatory prepayments with proceeds of debt not permitted under the Term Loan. During the quarter ended June 30, 2026, the Company made a mandatory prepayment of $11.1 million from the net proceeds of the sale of 2.6 million shares of common stock in an at-the-market offering program. During the quarter ended March 31, 2026, the Company made a mandatory prepayment of $14.6 million as the result of a sale and leaseback transaction.
Prepayment of amounts outstanding under the Term Loan are permitted at any time, subject to a make-whole amount for the first year immediately following the initial funding of the Term Loan, a 4 % premium for the second year and a 2 % premium for the third year and the payment of customary breakage costs, if applicable.
In connection with entering into the Term Loan due 2030, the Company issued to affiliates of TCW Management five-year warrants for the purchase of up to an aggregate of 3,934,776 shares of the Company’s common stock, issued in two equal tranches. See Note 5, Fair Value Measurement, for terms of these warrants.
Amendment
On December 22, 2025, the Company entered into an immaterial amendment to the Term Loan. The amendment enacted certain technical changes in connection with the provision of non-U.S. collateral securing the Term Loan.
ABL Revolving Credit Facility
On June 27, 2025, the Company and certain of its subsidiaries, as co-borrowers entered into a loan and security agreement (the “ABL Revolving Credit Facility”) with Bank of America, N.A. as agent, and certain financial institutions as lenders, which agreement governs the Company’s revolving credit facility and amends and restates the Company’s Prior Revolving Credit Facility due 2027. The Company and each of its co-borrower subsidiaries are jointly and severally liable for all obligations arising under the ABL Revolving Credit Facility and have granted liens in substantially all of their property to secure their respective obligations under the revolving loan agreement and related documents. The ABL Revolving Credit Facility matures on June 27, 2030, springing to 91 days prior to the maturity of the Term Loan or third-party subordinated debt.
In accordance with the terms of the ABL Revolving Credit Facility the Company and the other named borrowers thereunder are entitled (subject to the terms and conditions described therein) to request loans and other financial accommodations in an amount equal to the lesser of $115.0 million and a borrowing base composed of accounts receivable and inventory. The ABL Revolving Credit Facility is comprised of a US subfacility of $100.0 million and a UK subfacility of $15.0 million, in each case subject to availability under the borrowing base. The US subfacility further has a first-in-last-out tranche equal to the lesser of $12.5 million and its borrowing base. The Company can increase the size of the revolving commitments thereunder by an incremental $50.0 million, subject to the consent of the lenders providing the incremental commitments. Up to an aggregate of $10.0 million is available to the Company and the other borrowers for the issuance of letters of credit, which reduces availability under the ABL Revolving Credit Facility. Borrowings are available in US Dollars, Pounds Sterling and Euros.
Interest Rates and Commitment Fees
Amounts outstanding under the ABL Revolving Credit Facility accrue interest at a per annum rate based on SOFR, SONIA or EURIBOR, as applicable for the currency of the loan, with margins based on the average daily availability ranging from 1.50 % if average daily availability is greater than $50 million to 2.00 % if average daily availability is less than $30 million. The interest rate was initially set at SOFR plus 1.75 %. The first-in-last-out tranche accrues interest at a 1 % higher rate. At the Company’s option, interest may be paid at the base rate. The base rate spread ranges from 0.50 % if average daily availability is greater than $50 million to 1.00 % if average daily availability is less than $30 million.
The Company will pay an unused fee to the lenders equal to 0.25 % per annum of the unused amounts under the ABL Revolving Credit Facility.
Covenants and Other Terms
9
The ABL Revolving Credit Facility includes a springing minimum fixed charge coverage ratio of 1.0 :1.0, calculated when availability is less than the greater of $10.0 million and 10 % of the revolver commitments. The fixed charge coverage ratio is determined with respect to approved obligors only.
The ABL Revolving Credit Facility contains customary restrictive covenants, including, without limitation, limitations on the ability of the Company and its subsidiaries to incur additional debt and guarantees; grant liens on assets; pay dividends or make other distributions; make investments or acquisitions; dispose of assets; make payments on certain indebtedness; merge, combine with any other person or liquidate; amend organizational documents; file consolidated tax returns with entities other than the Company and its subsidiaries; make material changes in accounting treatment or reporting practices; enter into restrictive agreements; enter into hedging agreements; engage in transactions with affiliates; enter into certain employee benefit plans; amend subordinated debt; and other matters customarily included in senior secured loan agreements. The ABL Revolving Credit Facility also contains customary reporting and other affirmative covenants. We were in compliance with these covenants as of June 30, 2026.
The ABL Revolving Credit Facility contains customary events of default, including, without limitation, nonpayment of obligations under the ABL Revolving Credit Facility when due; material inaccuracy of representations and warranties; violation of covenants in the ABL Revolving Credit Facility and certain other documents executed in connection therewith; breach or default of agreements related to material debt; revocation or attempted revocation of guarantees; denial of the validity or enforceability of the loan documents or failure of the loan documents to be in full force and effect; certain material judgments; certain events of bankruptcy or insolvency; certain Employee Retirement Income Securities Act events; loss, theft, damage or destruction of collateral; and a change in control of the Company. Certain of the defaults are subject to exceptions, materiality qualifiers, grace periods and baskets customary for credit facilities of this type.
Voluntary prepayments of amounts outstanding under the ABL Revolving Credit Facility are permitted at any time, without premium or penalty, other than in respect of customary breakage costs, if applicable.
The ABL Revolving Credit Facility requires the borrowers to make mandatory prepayments with the receipt of any proceeds of certain insurance or condemnation awards paid in respect of revolving credit priority collateral.
At June 30, 2026, we had $24.8 million of borrowings under the ABL Revolving Credit Facility, outstanding letters of credit of $3.5 million and availability of $86.7 million (subject to customary borrowing base and other conditions). Combined with availability under our China Credit Facility (described below) of approximately $4.5 million, total consolidated availability was $91.2 million at June 30, 2026. The unamortized deferred financing fees associated with the ABL Revolving Credit Facility of $2.4 million and $2.5 million as of June 30, 2026 and December 31, 2025, respectively, are being amortized over the remaining life of the ABL Revolving Credit Facility. At December 31, 2025, we had $16.8 million borrowings under the ABL Revolving Credit Facility and we had outstanding letters of credit of $2.1 million.
Amendment
On December 22, 2025, the Company entered into an immaterial amendment to the ABL Revolving Credit Facility. The amendment enacted certain technical changes in connection with the provision of non-U.S. collateral securing the ABL Revolving Credit Facility.
See Note 15, Commitments and Contingencies, for the future minimum principal payments due on long-term debt for the next five years.
Foreign Facility
During 2023,we established a working capital credit facility in China consisting of a line of credit with contractual maturity of less than one year (the "China Credit Facility"). The Company periodically renews the China Credit Facility; however, renewal is subject to lender approval and is not contractually committed beyond the current maturity date. The China Credit Facility was renewed in the quarter ended December 31, 2025, with availability of approximately $7.4 million (denominated in the local currency). We utilize the China Credit Facility to meet local working capital demands, fund letters of credit and bank guarantees, and support other short-term cash requirements of our China operations. We had $2.9 million outstanding borrowings under the China Credit Facility as of June 30, 2026 and $1.4 million outstanding borrowings as of December 31, 2025. At June 30, 2026, we had $4.5 million of availability under the China Credit Facility.
Cash Paid for Interest
For the six months ended June 30, 2026 and 2025, cash payments for interest were $6.6 million and $5.6 million, respectively.
10
5. Intangible Assets
Our definite-lived intangible assets were comprised of the following:
| June 30, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||||||||||
| Weighted- Average Amortization Period | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||||||||||||||||||||||||||
| Trademarks/tradenames | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||
| Customer relationships | ( | ( | |||||||||||||||||||||||||||||||||||||||
| $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||
6. Fair Value Measurement
Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels, and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:
Level 1 - Unadjusted quoted prices in active markets for identical assets and liabilities.
Level 2 - Observable inputs other than those included in Level 1. For example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets.
Level 3 - Significant unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability.
Our financial instruments consist of cash, accounts receivable, accounts payable, accrued liabilities, pension assets and liabilities. The carrying value of these instruments approximates fair value as a result of the short duration of such instruments or due to the variability of the interest cost associated with such instruments.
Recurring Measurements
Foreign Currency Forward Exchange Contracts. Our derivative assets and liabilities represent foreign exchange contracts that are measured at fair value using observable market inputs such as forward rates, interest rates, our own credit risk and counterparty credit risk. Based on the utilization of these inputs, the derivative assets and liabilities are classified as Level 2. To manage our risk for transactions denominated in British Pound, Mexican Pesos, Czech Crown, and Ukrainian Hryvnia, we have entered into forward exchange contracts that are designated as cash flow hedge instruments, which are recorded in the Condensed Consolidated Balance Sheets at fair value. The gains and losses as a result of the changes in fair value of the hedge contract for transactions denominated in Mexican Pesos are deferred in accumulated other comprehensive loss and recognized in cost of revenues in the period the related hedge transactions are settled. As of June 30, 2026, hedge contracts for transactions denominated in British Pound and Czech Crown were not designated as hedging instruments; therefore, they are marked-to-market and the fair value of agreements is recorded in the Condensed Consolidated Balance Sheets with the offsetting gains and losses recognized in other (income) expense and recognized in cost of revenues in the period the related hedge transactions are settled in the Condensed Consolidated Statements of Operations.
Interest Rate Swaps. As of March 31, 2025, the Company settled its interest rate swap and received cash proceeds of $0.6 million. The gain on the swap settlement was recorded in Other comprehensive income (loss) and is being recognized over the life of the hedged transactions. As of June 30, 2026, there was no interest rate swap outstanding.
11
Stock Warrants Issued in Connection with Long-Term Debt — In connection with entering into the Term Loan due 2030, the Company issued to affiliates of TCW Management five-year warrants for the purchase of up to an aggregate of 3,934,776 shares of the Company’s common stock, issued in two equal tranches. The tranches have an exercise price of $1.52 and $2.07 per share, respectively. Until the fourth anniversary after issuance, the Company has the right to repurchase up to 50 % of each tranche of warrants at a price equal to $1.40 or $1.00 per share, respectively, above the applicable exercise price. Upon a refinancing of the Term Loan, the holders of the warrants can require the Company to repurchase up to 50 % of each tranche at a price equal to the per share price of the Company's common stock at the time of repurchase less the exercise price. The warrants contain anti-dilution adjustments that may result in a change in the number of shares of common stock issuable upon exercise. The Company also has provided TCW Management with certain information and registration rights, including filing a registration statement within 45 days to register the resale of the shares underlying the warrants, pursuant to an Investor Rights Agreement.
As of June 30, 2026, the warrants were valued at $10.9 million using the Binomial Lattice Model and were recorded in Other long-term liabilities on the Condensed Consolidated Balance Sheets with the offsetting gains and losses recognized in other (income) expense in the Condensed Consolidated Statements of Operations. Losses for the three and six months ended June 30, 2026 were $3.4 million and $8.4 million, respectively.
The fair values of our financial instruments measured on a recurring basis are categorized as follows:
| June 30, 2026 | December 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Total | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Foreign exchange contract designated as hedging instruments | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
| Foreign exchange contract not designated as hedging instruments | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
| Liabilities: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Foreign exchange contract designated as hedging instruments | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
| Foreign exchange contract not designated as hedging instruments | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
| Warrants | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
The following table summarizes the notional amount of our open foreign exchange contracts:
| June 30, 2026 | December 31, 2025 | ||||||||||||||||||||||
| U.S. $ Equivalent | U.S. $ Equivalent Fair Value | U.S. $ Equivalent | U.S. $ Equivalent Fair Value | ||||||||||||||||||||
| Commitments to buy or sell currencies - Foreign exchange contract designated as hedging instruments | $ | $ | $ | $ | |||||||||||||||||||
| Commitments to buy or sell currencies - Foreign exchange contract not designated as hedging instruments | $ | $ | $ | $ | |||||||||||||||||||
We consider the impact of our credit risk on the fair value of the contracts, as well as the ability to execute obligations under the contract.
12
The following table summarizes the fair value and presentation of financial instruments in the Condensed Consolidated Balance Sheets:
| Derivative Asset | |||||||||||||||||
| Balance Sheet Location | Fair Value | ||||||||||||||||
| June 30, 2026 | December 31, 2025 | ||||||||||||||||
| Foreign exchange contract designated as hedging instruments | Other current assets | $ | $ | ||||||||||||||
| Foreign exchange contract not designated as hedging instruments | Other current assets | $ | $ | ||||||||||||||
| Derivative Liability | |||||||||||||||||
| Balance Sheet Location | Fair Value | ||||||||||||||||
| June 30, 2026 | December 31, 2025 | ||||||||||||||||
| Foreign exchange contract designated as hedging instruments | $ | $ | |||||||||||||||
| Warrants | Other long term liabilities | $ | $ | ||||||||||||||
| Derivative Equity | |||||||||||||||||
| Balance Sheet Location | Fair Value | ||||||||||||||||
| June 30, 2026 | December 31, 2025 | ||||||||||||||||
| Foreign exchange contracts designated as hedging instruments | Accumulated other comprehensive income (loss) | $ | $ | ||||||||||||||
| Interest rate swap agreements | Accumulated other comprehensive income | $ | $ | ||||||||||||||
The following table summarizes the effect of derivative instruments on the Condensed Consolidated Statements of Operations:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||
| Location of Gain (Loss) Recognized on Derivatives | Amount of Gain (Loss) Recognized in Income on Derivatives | Amount of Gain (Loss) Recognized in Income on Derivatives | |||||||||||||||||||||||||||
| Foreign exchange contracts designated as hedging instruments | Cost of revenues | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||
| Settled interest rate swap agreements | Interest expense | $ | $ | $ | $ | ||||||||||||||||||||||||
| Foreign exchange contracts not designated as hedging instruments | Other (income) expense | $ | $ | $ | ( | $ | |||||||||||||||||||||||
We consider the impact of our credit risk on the fair value of the contracts, as well as our ability to honor obligations under the contract.
Other Fair Value Measurements
The fair value of long-term debt obligations is based on a fair value model utilizing observable inputs. Based on these inputs, our long-term debt fair value as disclosed was classified as Level 3 as of December 31, 2025 and June 30, 2026 due to the lack
13
of observable market inputs or comparable instruments. With the refinancing of our long-term debt on June 27, 2025, the carrying values of our long-term debt obligations approximate the fair values.
The carrying amounts and fair values of our long-term debt obligations are as follows:
| June 30, 2026 | December 31, 2025 | ||||||||||||||||||||||
| Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||||||||||
Term Loan 1 | $ | $ | $ | $ | |||||||||||||||||||
| Revolving credit facility | $ | $ | $ | $ | |||||||||||||||||||
1.Presented in the Condensed Consolidated Balance Sheets as the current portion of long-term debt of $1.9 million and long-term debt of $62.2 million as of June 30, 2026 and current portion of long-term debt of $0.9 million and long-term debt of $87.2 million as of December 31, 2025.
7. Leases
The components of lease expense are as follows:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
Operating lease cost | $ | $ | |||||||||||||||||||||
| Finance lease cost | |||||||||||||||||||||||
Short-term lease cost | |||||||||||||||||||||||
| Total lease expense | $ | $ | $ | $ | |||||||||||||||||||
Supplemental balance sheet information related to leases is as follows:
| Balance Sheet Location | June 30, 2026 | December 31, 2025 | ||||||||||||
| Operating Leases | ||||||||||||||
| Right-of-use assets, net | $ | $ | ||||||||||||
| Current liabilities | ||||||||||||||
| Non-current liabilities | ||||||||||||||
| Total operating lease liabilities | $ | $ | ||||||||||||
| Finance Leases | ||||||||||||||
| Right-of-use assets, net | $ | $ | ||||||||||||
| Current liabilities | ||||||||||||||
| Non-current liabilities | ||||||||||||||
| Total finance lease liabilities | $ | $ | ||||||||||||
Cash payments on operating leases were $7.0 million and $5.8 million for the six months ended June 30, 2026 and 2025, respectively.
14
Anticipated future lease costs, which are based in part on certain assumptions to approximate annual rental commitments under non-cancelable leases, are as follows:
| Operating | Financing | Total | ||||||||||||||||||
| Remainder of 2026 | $ | $ | $ | |||||||||||||||||
| 2027 | ||||||||||||||||||||
| 2028 | ||||||||||||||||||||
| 2029 | ||||||||||||||||||||
| 2030 | ||||||||||||||||||||
| Thereafter | ||||||||||||||||||||
| Total lease payments | $ | $ | $ | |||||||||||||||||
| Less: Imputed interest | ( | ( | ( | |||||||||||||||||
| Present value of lease liabilities | $ | $ | $ | |||||||||||||||||
8. Income Taxes
We recorded a $2.0 million tax provision, or (29 )% effective tax rate for the three months ended June 30, 2026, compared to a $1.7 million tax provision, or (72 )% effective tax rate for the three months ended June 30, 2025. The effective tax rate is impacted by the mix of the Company's profitable foreign operations and losses in the U.S. while maintaining its full valuation allowance position on U.S. deferred tax assets. Income tax expense is based on an estimated annual effective tax rate, which requires management to make its best estimate of annual pretax income or loss. During the year, management regularly updates forecasted annual pretax results for the various countries in which the Company operates based on changes in factors such as prices, shipments, product mix, material inflation and manufacturing operations. To the extent that actual 2026 pretax results for U.S. and foreign income or loss vary from estimates, the actual income tax expense recognized in 2026 could be different from the forecasted amount used to estimate the income tax expense for the three and six months ended June 30, 2026.
For the six months ended June 30, 2026 and 2025, cash paid for taxes, net of refunds received, were $2.8 million and $1.7 million, respectively.
9. Pension and Other Post-Retirement Benefit Plans
The components of net periodic (benefit) cost related to pension and other post-retirement benefit plans is as follows:
| Non-U.S. Pension Plan | |||||||||||
| Three Months Ended June 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Interest cost | $ | $ | |||||||||
| Expected return on plan assets | ( | ( | |||||||||
| Amortization of prior service cost | |||||||||||
| Recognized actuarial loss | |||||||||||
| Net cost | $ | $ | |||||||||
| Non-U.S. Pension Plan | |||||||||||
| Six Months Ended June 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Interest cost | $ | ||||||||||
| Expected return on plan assets | ( | ( | |||||||||
| Amortization of prior service cost | |||||||||||
| Recognized actuarial loss | |||||||||||
| Net cost | $ | $ | |||||||||
Net periodic cost components, not inclusive of service costs, are recognized in other (income) expense within the Condensed Consolidated Statements of Operations.
15
10. Performance Awards
The Company made awards, defined as cash, shares or other awards, to employees under the Second Amended and Restated Commercial Vehicle Group, Inc. 2020 Equity Incentive Plan (the “Second Amended and Restated 2020 EIP”). Effective May 14, 2026, the stockholders of the Company approved the Second Amended and Restated 2020 Equity Incentive Plan.
The following table summarizes performance awards granted in the form of cash awards under the equity incentive plans:
| Amount | ||||||||
| Adjusted Award Value at December 31, 2025 | $ | |||||||
| New grants | ||||||||
| Forfeitures/Surrenders | ( | |||||||
| Adjustments | ||||||||
| Payments | ( | |||||||
| Adjusted Award Value at June 30, 2026 | $ | |||||||
Unrecognized compensation expense was $5.9 million and $2.8 million as of June 30, 2026 and 2025, respectively.
11. Share-Based Compensation
The company's outstanding share-based compensation is comprised solely of restricted stock awards and performance stock awards to be settled in stock.
As of June 30, 2026, there was approximately $13.7 million of unrecognized compensation expense related to unvested share-based compensation arrangements granted under our equity incentive plans. This expense is subject to future adjustments and forfeitures and will be recognized on a straight-line basis over the remaining period listed above for each grant.
A summary of the status of our restricted stock awards and performance stock awards as of June 30, 2026 and changes during the six months ended June 30, 2026, are presented below:
| 2026 | |||||||||||
| Shares (in thousands) | Weighted- Average Grant-Date Fair Value | ||||||||||
| Unvested - December 31, 2025 | $ | ||||||||||
Granted1 | |||||||||||
| Vested | ( | ( | |||||||||
| Forfeited/Surrendered | ( | ||||||||||
| Unvested - June 30, 2026 | $ | ||||||||||
As of June 30, 2026, a total of 1.8 million shares were available for future grants from the shares authorized for award under our Second Amended and Restated 2020 Equity Incentive Plan, including cumulative forfeitures and surrenders.
On June 10, 2025, the Compensation Committee of the Board of Directors (the “Compensation Committee”) of the Company granted 805,031 shares of restricted stock pursuant to the Company's Amended and Restated 2020 Equity Incentive Plan (the “A&R 2020 EIP”) to James Ray, the Company’s President and Chief Executive Officer (“Mr. Ray”). It came to the attention of the Committee that, in light of the significant fluctuation in the Company's stock price, the original grant to Mr. Ray exceeded the A&R 2020 EIP share limitation by 85,031 shares. Effective April 22, 2026, Mr. Ray agreed to surrender and transfer to the Company for no consideration, all right, title and interest in and to 85,031 unvested shares of such restricted stock award so that the original grant will comply with the requirements of the A&R 2020 EIP. Effective June 2, 2026, the Compensation Committee awarded Mr. Ray 85,031 restricted shares under the Second Amended and Restated 2020 Equity Incentive Plan (the “Second A&R 2020 EIP”) and the terms of such award mirror the terms of the grant from June 10, 2025.
Due to limitations on the number of shares that can be granted under the A&R 2020 EIP, the 2025 LTIP award to Mr. Ray that would be settled in stock (“Mr. Ray’s 2025 Performance Award Settled in Stock”) was cancelled, as of April 23, 2026, unvested, with Mr. Ray irrevocably forfeiting all rights, title and interest in Mr. Ray’s 2025 Performance Award Settled in
16
Stock. Effective June 2, 2026, the Compensation Committee awarded Mr. Ray 603,774 performance shares with a potential payout in the form of stock under the Second A&R 2020 EIP and the terms of such award mirror the terms of Mr. Ray’s 2025 Performance Award Settled in Stock. The fair value of the 2026 replacement award was measured using a Monte Carlo simulation model, which reflects the impact of the revised market‑condition vesting criteria as of the grant date, and resulted in incremental compensation cost of $3.1 million, of which $0.2 million was recognized in the three months ended June 30, 2026. The remaining $2.9 million will be recognized over the remaining requisite service period of the award through December 31, 2027. The modification did not change the Company’s expectations regarding the number of awards expected to vest.
12. Stockholders’ Equity
Common Stock — Our authorized capital stock consists of 60,000,000 0.01 37,650,869 34,185,682
Preferred Stock — Our authorized capital stock also consists of 5,000,000 0.01 no
Earnings (Loss) Per Share — Basic earnings (loss) per share is determined by dividing net income (loss) by the weighted average number of common shares outstanding during the year. Diluted earnings (loss) per share presented is determined by dividing net income (loss) by the weighted average number of common shares and potential common shares outstanding during the period as determined by the treasury stock method. Potential common shares are included in the diluted earnings per share calculation when dilutive.
Diluted earnings (loss) per share for the three and six months ended June 30, 2026 and 2025 includes the effect of potential common shares issuable when dilutive, and is as follows:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Net loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Net income (loss) from continuing operations | ( | ( | ( | ( | |||||||||||||||||||
| Net loss from discontinued operations | ( | ( | ( | ( | |||||||||||||||||||
| Weighted average number of common shares outstanding (in '000s) | |||||||||||||||||||||||
| Dilutive shares outstanding | |||||||||||||||||||||||
| Basic loss per share from continuing operations | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Basic loss per share from discontinued operations | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Diluted loss per share from continuing operations | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Diluted loss per share from discontinued operations | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
17
13. Other Comprehensive Income (Loss)
The after-tax changes in accumulated other comprehensive income (loss), are as follows:
| Foreign currency translation adjustment | Pension and post-retirement benefits plans | Derivative instruments | Accumulated other comprehensive income (loss) | ||||||||||||||||||||
| Balance - December 31, 2025 | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||
| Net current period change | ( | ( | |||||||||||||||||||||
| Amounts reclassified into earnings | ( | ( | |||||||||||||||||||||
| Balance - June 30, 2026 | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||
| Foreign currency translation adjustment | Pension and post-retirement benefit plans | Derivative instruments | Accumulated other comprehensive income (loss) | ||||||||||||||||||||
| Balance - December 31, 2024 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Net current period change | ( | ||||||||||||||||||||||
| Amounts reclassified into earnings | |||||||||||||||||||||||
| Balance - June 30, 2025 | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||
The related tax effects allocated to each component of other comprehensive income (loss) are as follows:
| Three Months Ended June 30, 2026 | Six Months Ended June 30, 2026 | ||||||||||||||||||||||||||||||||||
| Before Tax Amount | Tax Expense | After Tax Amount | Before Tax Amount | Tax Expense | After Tax Amount | ||||||||||||||||||||||||||||||
| Net current period change | |||||||||||||||||||||||||||||||||||
| Cumulative translation adjustment | $ | $ | $ | ( | ( | ||||||||||||||||||||||||||||||
| Net actuarial gain (loss) and prior service credit | ( | ( | |||||||||||||||||||||||||||||||||
| Derivative instruments | |||||||||||||||||||||||||||||||||||
| Net unrealized gain (loss) | $ | $ | $ | ||||||||||||||||||||||||||||||||
| Amounts reclassified into earnings: | |||||||||||||||||||||||||||||||||||
| Actuarial gain and prior service cost | |||||||||||||||||||||||||||||||||||
| Derivative instruments | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
| Net realized gain | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
| Total other comprehensive income (loss) | $ | $ | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||
| Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | ||||||||||||||||||||||||||||||||||
| Before Tax Amount | Tax Expense | After Tax Amount | Before Tax Amount | Tax Expense | After Tax Amount | ||||||||||||||||||||||||||||||
| Net current period change | |||||||||||||||||||||||||||||||||||
| Cumulative translation adjustment | $ | $ | $ | ||||||||||||||||||||||||||||||||
| Net actuarial gain (loss) and prior service credit | ( | ( | |||||||||||||||||||||||||||||||||
| Derivative instruments | ( | ||||||||||||||||||||||||||||||||||
| Net unrealized gain (loss) | $ | $ | ( | $ | |||||||||||||||||||||||||||||||
| Amounts reclassified into earnings: | |||||||||||||||||||||||||||||||||||
| Actuarial gain and prior service cost | |||||||||||||||||||||||||||||||||||
| Derivative instruments | |||||||||||||||||||||||||||||||||||
| Net realized gain (loss) | |||||||||||||||||||||||||||||||||||
| Total other comprehensive income (loss) | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||
18
14. Cost Reduction and Manufacturing Capacity Rationalization
The Company's restructuring program seeks to align cost structure to support margin expansion. The program includes workforce reductions and footprint optimization across segments.
The changes in accrued restructuring balances are as follows:
| Global Seating | Global Electrical Systems | Trim Systems and Components | Corporate/Other | Total | |||||||||||||||||||||||||
| December 31, 2025 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| New charges | |||||||||||||||||||||||||||||
| Payments and other adjustments | ( | ( | ( | ( | ( | ||||||||||||||||||||||||
| March 31, 2026 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| New charges | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Payments and other adjustments | $ | ( | $ | $ | $ | $ | ( | ||||||||||||||||||||||
| June 30, 2026 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Global Seating | Global Electrical Systems | Trim Systems and Components | Corporate/ Other | Total | |||||||||||||||||||||||||
| December 31, 2024 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| New charges | |||||||||||||||||||||||||||||
| Payments and other adjustments | ( | ( | ( | ( | ( | ||||||||||||||||||||||||
| March 31, 2025 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| New charges | |||||||||||||||||||||||||||||
| Payments and other adjustments | ( | ( | ( | ( | ( | ||||||||||||||||||||||||
| June 30, 2025 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Of the $1.0 million costs incurred in the three months ended June 30, 2026 for restructuring, $0.6 million related to headcount reductions and $0.4 million related to facility exit and other costs. Of the $1.0 million costs incurred, $0.7 million were recorded in and $0.3 million were recorded in .
Of the $2.2 million costs incurred in the six months ended June 30, 2026 for restructuring, $1.8 million related to headcount reductions and $0.4 million related to facility exist and other costs; $1.9 million were recorded in and $0.3 million were recorded in .
All of the $1.1 million costs incurred in the three months ended June 30, 2025 for restructuring related to headcount reductions and were recorded in
15. Commitments and Contingencies
Leases - As disclosed in Note 7, Leases, we lease office, warehouse and manufacturing space and equipment under non-cancelable operating lease agreements that generally require us to pay maintenance, insurance, taxes and other expenses in addition to annual rental fees. As of June 30, 2026, our equipment leases did not provide for any material guarantee of a specified portion of residual values.
Guarantees - Costs associated with guarantees are accrued when it is probable that a liability has been incurred and the amount can be reasonably estimated. The most likely cost to be incurred is accrued based on an evaluation of available facts; where no amount within a range of estimates is more likely, the minimum is accrued. As of June 30, 2026 and 2025, we had no such guarantees.
Litigation - We are subject to various legal proceedings and claims arising in the ordinary course of business, including but not limited to product liability claims, customer and supplier disputes, service provider disputes, examinations by taxing authorities,
19
employment disputes, workers’ compensation claims, unfair labor practice charges, OSHA investigations, intellectual property disputes and environmental claims arising out of the conduct of our businesses.
Management believes that the Company maintains adequate insurance and that we have established reserves for issues that are probable and estimable in amounts that are adequate to cover reasonable adverse judgments not covered by insurance. Based upon the information available to management and discussions with legal counsel, it is the opinion of management that the ultimate outcome of the various legal actions and claims that are incidental to our business are not expected to have a material adverse impact on the consolidated financial position, results of operations, equity or cash flows; however, such matters are subject to many uncertainties and the outcomes of individual matters are not predictable with any degree of assurance.
Warranty - We are subject to warranty claims for products that fail to perform as expected due to design or manufacturing deficiencies. Depending on the terms under which we supply products to our customers, a customer may hold us responsible for some or all of the repair or replacement costs of defective products when the product supplied did not perform as represented. Our policy is to record provisions for estimated future customer warranty costs based on historical trends and for specific claims. These amounts, as they relate to the periods ended June 30, 2026 and December 31, 2025, are included within accrued liabilities and other in the accompanying Condensed Consolidated Balance Sheets.
On July 24, 2023, one of our customers issued a voluntary safety recall related to certain wiper system components supplied by us. On October 6, 2025, one of our customers issued a safety recall related to certain truck cabs produced in our cab manufacturing facility. The facility was sold during 2024 and reported as discontinued operations. To the extent any additional loss occurs that is attributed to us, we believe that we have reasonable levels of insurance coverage to mitigate recall exposure risk. It is reasonably possible that we will incur additional losses and fees above the amount accrued for warranty claims but we cannot estimate a range of such reasonably possible losses or fees related to these claims at this time. There are no assurances, however, that settlements reached and/or adverse judgments received, if any, will not exceed amounts normally accrued.
The following presents a summary of the warranty provision for the six months ended June 30, 2026:
| Balance - December 31, 2025 | $ | ||||
| Provision for warranty claims | |||||
| Deduction for payments made and other adjustments | ( | ||||
| Balance - June 30, 2026 | $ | ||||
Debt Payments - As disclosed in Note 4, Debt, the Term Loan requires the Company to repay a fixed amount of principal on a quarterly basis and make voluntary prepayments that coincide with certain events.
The following table provides future minimum principal payments due on long-term debt for the next five years. The existing long-term debt matures in 2030; no payments are due thereafter:
| Total | ||||||||
| Remainder of 2026 | $ | |||||||
| 2027 | $ | |||||||
| 2028 | $ | |||||||
| 2029 | $ | |||||||
| 2030 and thereafter | $ | |||||||
16. Segment Reporting
Our President and Chief Executive Officer is the Company’s chief operating decision maker (“CODM”). The CODM uses segment operating income compared to historical results, budgets, and forecasted financial information, in order to assess segment performance and allocate operating and capital resources.
The Global Seating segment designs, manufactures and sells the following products:
•Commercial vehicle seats for the global commercial vehicle markets including heavy duty trucks, medium duty trucks, last mile delivery trucks and vans, construction and agriculture equipment in North America, Europe and Asia-Pacific. This segment includes a portion of the company’s activities in the electric vehicle market.
•Seats and components sold into the commercial vehicle channels that provide repair and refurbishing. These channels include Original Equipment Service ("OES") centers and retail distributors, and are spread across North America, Europe and Asia-Pacific.
•Office seats primarily sold into the commercial and home office furniture distribution channels in Europe and Asia-Pacific.
20
The Global Electrical Systems segment designs, manufactures and sells the following products:
•Cable and harness assemblies for both high and low voltage applications, control boxes, dashboard assemblies and design and engineering for these applications.
•The end markets for these products are construction, agricultural, industrial, automotive (both internal combustion and electric vehicles), truck, mining, rail, marine, power generation and the military/defense industries in North America, Europe and Asia-Pacific.
The Trim Systems and Components segment designs, manufactures and sells the following products:
•Plastic components ("Trim") primarily for the North America commercial vehicle market, MD/HD truck market and power sports markets.
•Commercial vehicle accessories including wipers, mirrors, and sensors. These products are sold both as Original Equipment and as repair products.
The following tables present financial information for the Company's reportable segments for the periods indicated:
| Three Months Ended June 30, 2026 | |||||||||||||||||||||||
| Global Seating | Global Electrical Systems | Trim Systems and Components | Total | ||||||||||||||||||||
| Revenues | $ | $ | $ | $ | |||||||||||||||||||
| Cost of revenues | |||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||
| Selling, general & administrative expenses | |||||||||||||||||||||||
| Gain on sale of assets | |||||||||||||||||||||||
Operating income (loss) 1 | $ | $ | $ | $ | |||||||||||||||||||
Corporate and other unallocated costs 2 | |||||||||||||||||||||||
| Other (income) expense | |||||||||||||||||||||||
| Warrant expense | |||||||||||||||||||||||
| Loss on early extinguishment of debt | |||||||||||||||||||||||
| Interest expense | |||||||||||||||||||||||
| Loss before provision for income taxes | $ | ( | |||||||||||||||||||||
| Three Months Ended June 30, 2025 | |||||||||||||||||||||||
| Global Seating | Global Electrical Systems | Trim Systems and Components | Total | ||||||||||||||||||||
| Revenues | $ | $ | $ | $ | |||||||||||||||||||
| Cost of revenues | |||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||
| Selling, general & administrative expenses | |||||||||||||||||||||||
Operating income (loss) 1 | $ | $ | $ | $ | |||||||||||||||||||
Corporate and other unallocated costs 2 | |||||||||||||||||||||||
| Other (income) expense | |||||||||||||||||||||||
| Interest expense | |||||||||||||||||||||||
| Loss on early extinguishment of debt | |||||||||||||||||||||||
| Loss before provision for income taxes | $ | ( | |||||||||||||||||||||
21
| Six Months Ended June 30, 2026 | |||||||||||||||||||||||
| Global Seating | Global Electrical Systems | Trim Systems and Components | Total | ||||||||||||||||||||
| Revenues | $ | $ | $ | $ | |||||||||||||||||||
| Cost of revenues | |||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||
| Selling, general & administrative expenses | |||||||||||||||||||||||
| Gain on sale of assets | ( | ( | |||||||||||||||||||||
Operating income (loss) 1 | $ | $ | $ | $ | |||||||||||||||||||
Corporate and other unallocated costs 2 | |||||||||||||||||||||||
| Other (income) expense | |||||||||||||||||||||||
| Warrant expense | |||||||||||||||||||||||
| Loss on early extinguishment of debt | |||||||||||||||||||||||
| Interest expense | |||||||||||||||||||||||
| Loss before provision for income taxes | $ | ( | |||||||||||||||||||||
| Six Months Ended June 30, 2025 | |||||||||||||||||||||||
| Global Seating | Global Electrical Systems | Trim Systems and Components | Total | ||||||||||||||||||||
| Revenues | $ | $ | $ | $ | |||||||||||||||||||
| Cost of revenues | |||||||||||||||||||||||
| Gross profit | $ | $ | $ | ||||||||||||||||||||
| Selling, general & administrative expenses | $ | $ | $ | ||||||||||||||||||||
| Operating income (loss) 1 | $ | $ | $ | $ | |||||||||||||||||||
| Corporate and other unallocated costs 2 | |||||||||||||||||||||||
| Other (income) expense | |||||||||||||||||||||||
| Interest expense | |||||||||||||||||||||||
| Loss on early extinguishment of debt | |||||||||||||||||||||||
| Loss before provision for income taxes | $ | ( | |||||||||||||||||||||
1.Segment operating income includes allocated corporate operating expenses associated with central services such as procurement, quality, logistics, environmental health and safety, information technology, insurance, finance, credit and collections, treasury and human resources. Operating expenses related to corporate headquarter functions are primarily allocated to each segment based on revenue contribution.
2.Unallocated corporate costs include enterprise and governance stewardship which include listing fees, audit fees, compliance costs, insurance costs, Board of Directors fees, and corporate management stock-based compensation expenses. Finally, interest expense, income taxes, and certain other items included in Other (income) expense, which are managed on a consolidated basis, are not allocated to the operating segments.
22
17. Other Financial Information
Items reported in inventories consisted of the following:
| June 30, 2026 | December 31, 2025 | ||||||||||
| Raw materials | $ | $ | |||||||||
| Work in process | |||||||||||
| Finished goods | |||||||||||
| Inventories | $ | $ | |||||||||
Items reported in property, plant, and equipment, net consisted of the following:
| June 30, 2026 | December 31, 2025 | ||||||||||
| Land and buildings | $ | $ | |||||||||
| Machinery and equipment | |||||||||||
| Construction in progress | |||||||||||
| Property, plant, and equipment, gross | |||||||||||
| Less accumulated depreciation | ( | ( | |||||||||
| Property, plant and equipment, net | $ | $ | |||||||||
Items reported in accrued expenses and other liabilities consisted of the following:
| June 30, 2026 | December 31, 2025 | ||||||||||
| Compensation and benefits | $ | $ | |||||||||
| Operating lease liabilities | |||||||||||
| Taxes payable | |||||||||||
| Accrued legal and professional fees | |||||||||||
| Accrued freight | |||||||||||
| Warranty costs | |||||||||||
| Product recall obligation | |||||||||||
| Other | |||||||||||
| Accrued liabilities and other | $ | $ | |||||||||
18. Discontinued Operations
The following table provides a reconciliation of the individual discontinued operations to the Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2026 and 2025.
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Income (loss) from discontinued operations, net of tax | |||||||||||||||||||||||
| Cab structures business | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Industrial Automation segment | ( | ( | |||||||||||||||||||||
| Total income (loss) from discontinued operations, net of tax | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
23
ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The discussion and analysis below describes material changes in financial condition and results of operations as reflected in our condensed consolidated financial statements for the three and six months ended June 30, 2026 and 2025. This discussion and analysis should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our 2025 Form 10-K.
Business Overview
CVG is a global provider of systems, assemblies and components to the global commercial vehicle market and the electric vehicle market. We deliver real solutions to complex design, engineering and manufacturing problems while creating positive change for our customers, industries, and communities we serve.
We have manufacturing operations in the United States, Mexico, China, United Kingdom, Czech Republic, Ukraine, Morocco, Thailand, India and Australia. Our products are primarily sold in North America, Europe, and the Asia-Pacific region.
We primarily manufacture customized products to meet the requirements of our customers. We believe our products are used by a majority of the North American Commercial Truck markets and many construction and agriculture vehicle OEMs, parts and service dealers, and distributors.
Key Developments
On March 27, 2026, the Company entered into a Purchase and Sale Agreement (the “Purchase Agreement”), pursuant to which the parties agreed to consummate a sale and leaseback transaction (the “Sale and Leaseback Transaction”). Under the terms of the Purchase Agreement, CVG agreed to sell that certain property located in Vonore, Tennessee (the “Vonore Property”) for a purchase price of $16 million. The Company completed the sale of the Vonore Property on March 27, 2026, and entered into a long-term lease, pursuant to which the Company will lease the Vonore Property at an initial annual base rent of approximately $1.4 million for the first year and annual increases of 3.5% thereafter. The lease will be for a twenty-year term. The closing of the sale of the Vonore Property provided the Company with net proceeds (after tax and transaction-related costs) of approximately $14.6 million. The Company used the net proceeds from the Sale and Leaseback Transaction to prepay a portion of its existing term loan facility, thereby reducing the Company’s leverage profile.
On June 18, 2026, the Company disclosed that it entered into a Capital on Demand™ Sales Agreement (the “Sales Agreement”) with JonesTrading Institutional Services LLC (“Sales Agent”), as sales agent, pursuant to which the Company may offer and sell, from time to time, through or to the Sales Agent, as agent or principal, shares of the Company’s Common Stock, par value $0.01 per share (“Common Stock”), having an aggregate offering price of up to $25,000,000 (the “ATM Program”).
As of June 30, 2026, the Company had sold 2.6 million shares of Common Stock in the ATM Program, generating net cash proceeds of approximately $11.6 million. As required by the Company’s secured term loan facility, all such net proceeds were used by the Company to pay down outstanding indebtedness and associated prepayment premium under such facility.
We are navigating through several challenging external factors which create uncertainty and volatility in our end markets, including, but not limited to, geopolitical dynamics, new and changing tariff actions and responses, tax regulation and fluctuating foreign exchange rates. We expect the Company’s cost of goods sold will continue to be impacted by tariffs which increase the price of materials purchased and products sold to customers. In the past, we have negotiated with our customers in an attempt to pass on a portion of the increased costs resulting from the tariffs to our customers, although there is significant uncertainty as to our ability to pass these costs, or a portion of these costs, along to our customers. Geopolitical uncertainties may continue to create a challenging operating environment. We continue to closely monitor the situation and are prepared to remain agile in responding to any new developments. In addition, lower courts and administrative processes will need to provide guidance with respect to refund-related questions with respect to the IEEPA tariffs paid prior to the recent U.S. Supreme Court decision.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”), which includes a broad range of tax reform provisions, was signed into law in the United States. Key provisions of the bill include, but are not limited to, immediate expensing of R&D expenditures, restoration and expansion of 100% bonus depreciation and permanent reinstatement of the EBITDA limitation for the calculation of the Section 163(j) business interest expense deduction. Additionally, the bill extends and modifies certain international tax provisions of the 2017 Tax Cuts and Jobs Act that were set to expire at the end of 2025. The tax provisions in OBBBA did not have a material impact on the Company’s consolidated financial statements or results of operations.
24
Consolidated Results of Operations
Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025
The table below sets forth certain consolidated operating data for the three months ended June 30 (dollars are in thousands):
| 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||
| Revenues | $ | 195,238 | $ | 171,956 | $ | 23,282 | 13.5% | ||||||||||||||||
| Gross profit | 24,728 | 19,529 | 5,199 | 26.6 | |||||||||||||||||||
| Selling, general and administrative expenses | 23,171 | 18,732 | 4,439 | 23.7 | |||||||||||||||||||
| Other (income) expense | 893 | 427 | 466 | 109.1 | |||||||||||||||||||
| Warrant expense | 3,443 | — | 3,443 | NM1 | |||||||||||||||||||
| Loss on extinguishment of debt | 1,029 | 460 | 569 | 123.7 | |||||||||||||||||||
| Interest expense | 2,947 | 2,291 | 656 | 28.6 | |||||||||||||||||||
| Provision for income taxes | 1,987 | 1,725 | 262 | 15.2 | |||||||||||||||||||
Net income (loss) from continuing operations | (8,742) | (4,106) | (4,636) | 112.9 | |||||||||||||||||||
1.Not meaningful
Revenues. The increase in consolidated revenues resulted from:
•a $21.9 million, or 15.7%, increase in OEM and other sales;
•a $1.4 million, or 4.3%, increase in aftermarket and OES sales.
The increase in revenues of 13.5% is primarily driven by increased customer demand in international markets and the ramp of previously awarded new business wins across all three of our segments.
Gross Profit. Included in gross profit is cost of revenues, which consists primarily of raw materials and purchased components for our products, wages and benefits for our employees and overhead expenses such as manufacturing supplies, facility rent and utilities costs related to our operations. The $5.2 million increase in gross profit is primarily attributable to the impact of increased sales volumes and operational efficiency improvements. Cost of revenues increased $18.1 million, or 11.9%, as a result of a increase in raw material and purchased component costs of $13.2 million, or 14.6%, and a increase in labor and overhead expenses of $4.9 million, or 7.9%. As a percentage of revenues, gross profit margin was 12.7% for the three months ended June 30, 2026 compared to 11.4% for the three months ended June 30, 2025. The three months ended June 30, 2026 results include charges of $0.5 million associated with restructuring programs, compared to $1.1 million for the three months ended June 30, 2025.
Selling, General and Administrative Expenses. Selling, general and administrative ("SG&A") expenses consist primarily of wages and benefits and other expenses such as marketing, travel, legal, audit, rent and utilities costs, which are not directly or indirectly associated with the manufacturing of our products. SG&A expenses increased $4.4 million compared to the three months ended June 30, 2025, primarily as a result of increased incentive compensation expense and advisory service fees. As a percentage of revenues, SG&A expense was 11.9% and 10.9% for the three months ended June 30, 2026 and 2025, respectively.
Other (Income) Expense. Other expense increased $0.5 million in the three months ended June 30, 2026 compared to the three months ended June 30, 2025, primarily related to unfavorable change in foreign currency.
Warrant expense. Change in fair value of warrant liabilities represents the mark-to-market fair value adjustments to the outstanding warrants issued in connection with entering into the Term Loan due 2030. The change in fair value of the outstanding warrants liability during three months ended June 30, 2026 was $3.4 million. The change in fair value of stock warrants was the result of changes in market prices and other observable inputs deriving the value of the financial instruments.
Loss on extinguishment of debt. The loss recognized from the extinguishment of debt includes a non-cash expense of $0.5 million for the write-off of deferred financing costs, as well as a prepayment premium and make-whole interest of $0.5 million, both of which are associated with the repayment of the Term Loan. The prior year loss on extinguishment of debt reflects the write-off of deferred financing fees related to early repayment of the prior revolver $0.5 million.
25
Interest Expense. Interest associated with our debt increased $0.7 million in the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The increase in interest expense was primarily attributed to higher interest rates from our refinancing completed during the second quarter of 2025.
Provision for Income Taxes. Income tax expense of $2.0 million and $1.7 million were recorded for the three months ended June 30, 2026 and 2025, respectively. The primary driver in the tax expense was the Company's mix of profitable foreign operations and losses in the U.S. while maintaining its full valuation allowance position on U.S. deferred tax assets.
Net Income (Loss) from continuing operations. Net loss from continuing operations was $8.7 million for the three months ended June 30, 2026 compared to net loss of $4.1 million for the three months ended June 30, 2025. The change in net income was attributable to the factors noted above.
Segment Results
Global Seating Segment Results
Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025
The table below sets forth certain Global Seating Segment operating data for the three months ended June 30 (dollars are in thousands):
| 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||
| Revenues | $ | 80,014 | $ | 74,457 | $ | 5,557 | 7.5% | ||||||||||||||||
| Gross profit | 11,133 | 9,930 | 1,203 | 12.1 | |||||||||||||||||||
| Selling, general & administrative expenses | 8,155 | 7,219 | 936 | 13.0 | |||||||||||||||||||
| Operating income | 2,978 | 2,711 | 267 | 9.8 | |||||||||||||||||||
Revenues. The increase in Global Seating Segment revenues of $5.6 million primarily resulted from higher international volumes, offset by decreased customer demand in North America.
Gross Profit. The increase in 2026 gross profit of $1.2 million was primarily due to the impact of increased sales volumes and operational efficiency improvements. The increase in cost of revenues was driven by a increase in raw material and purchased component costs of $3.1 million, or 7.8%, and a increase in labor and overhead expenses of $1.4 million, or 5.5%.
As a percentage of revenues, gross profit margin was 13.9% for the three months ended June 30, 2026 compared to 13.3% for the three months ended June 30, 2025. The three months ended June 30, 2026 results include charges of $0.7 million associated with restructuring programs, compared to $0.4 million for the three months ended June 30, 2025.
Selling, General and Administrative Expenses. SG&A expenses increased $0.9 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025, primarily as a result of increased incentive compensation expense.
Global Electrical Systems Segment Results
Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025
The table below sets forth certain Global Electrical Systems Segment operating data for the three months ended June 30 (dollars are in thousands):
| 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||
| Revenues | $ | 62,032 | $ | 53,585 | $ | 8,447 | 15.8% | ||||||||||||||||
| Gross profit | 6,900 | 5,911 | 989 | 16.7 | |||||||||||||||||||
| Selling, general & administrative expenses | 5,212 | 5,204 | 8 | 0.2 | |||||||||||||||||||
| Operating income | 1,688 | 707 | 981 | 138.8 | |||||||||||||||||||
26
Revenues. The increase in Global Electrical Systems Segment revenues of $8.4 million was primarily as a result of new business wins.
Gross Profit. The increase in gross profit of $1.0 million was primarily attributable to volume and product mix. The increase in cost of revenues was driven by an increase in raw material and purchased component costs of $4.6 million, or 18.1%, and an increase in labor and overhead expenses of $2.8 million, or 12.7%.
As a percentage of revenues, gross profit margin was 11.1% for the three months ended June 30, 2026 compared to 11.0% for the three months ended June 30, 2025. The increase in gross profit margin was primarily due to mix. The three months ended June 30, 2026 results include no charges associated with restructuring programs, compared to $0.5 million for the three months ended June 30, 2025.
Selling, General and Administrative Expenses. SG&A expenses were flat for the three months ended June 30, 2026 compared to the three months ended June 30, 2025.
Trim Systems and Components Segment Results
Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025
The table below sets forth certain Trim Systems and Components Segment operating data for the three months ended June 30 (dollars are in thousands):
| 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||
| Revenues | $ | 53,192 | $ | 43,914 | $ | 9,278 | 21.1% | ||||||||||||||||
| Gross profit | 6,695 | 3,688 | 3,007 | 81.5 | |||||||||||||||||||
| Selling, general & administrative expenses | 4,472 | 3,583 | 889 | 24.8 | |||||||||||||||||||
| Operating income (loss) | 2,223 | 105 | 2,118 | 2,017.1 | |||||||||||||||||||
Revenues. The increase in the Trim Systems and Components Segment revenues of $9.3 million was primarily driven by higher sales volume as a result of increased customer demand in North America, including improved product mix.
Gross Profit. The increase in gross profit of $3.0 million was primarily attributable to higher sales volume. The cost of revenues increased in line with the sales increase of 21.1%, driven by a increase in labor and overhead expenses of $0.9 million, or 5.9%; and a increase in raw material and purchased component costs of $5.4 million, or 21.8%.
As a percentage of revenues, gross profit margin was 12.6% for the three months ended June 30, 2026 compared to 8.4% for the three months ended June 30, 2025. The increase in gross profit margin was primarily due to volume leverage. The three months ended June 30, 2026 results include no charges associated with restructuring programs, compared to $0.2 million for the three months ended June 30, 2025.
Selling, General and Administrative Expenses. SG&A expenses increased $0.9 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025, primarily as a result of increased incentive compensation expense.
27
Consolidated Results of Operations
Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025
The table below sets forth certain consolidated operating data for the six months ended June 30, (dollars are in thousands):
| 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||
| Revenues | $ | 366,733 | $ | 341,751 | $ | 24,982 | 7.3% | ||||||||||||||||
| Gross profit | 44,543 | 37,322 | 7,221 | 19.3 | |||||||||||||||||||
| Selling, general and administrative expenses | 42,230 | 35,117 | 7,113 | 20.3 | |||||||||||||||||||
| Gain on sale of assets | (13,957) | — | (13,957) | NM1 | |||||||||||||||||||
| Other (income) expense | 1,782 | 355 | 1,427 | 402.0 | |||||||||||||||||||
| Warrant expense | 8,420 | — | 8,420 | NM1 | |||||||||||||||||||
| Loss on extinguishment of debt | 2,987 | 460 | 2,527 | 549.3 | |||||||||||||||||||
| Interest expense | 7,041 | 4,794 | 2,247 | 46.9 | |||||||||||||||||||
| Provision (benefit) for income taxes | 3,880 | 3,841 | 39 | 1.0 | |||||||||||||||||||
Net income (loss) from continuing operations | (7,840) | (7,245) | (595) | 8.2 | |||||||||||||||||||
1.Not meaningful
Revenues. The increase in consolidated revenues resulted from:
•a $24.0 million, or 8.6%, increase in OEM and other revenues; and
•a $1.0 million, or 1.6%, increase in aftermarket and OES sales.
The increase in revenues of $25.0 million was primarily driven by an increase in customer demand across all segments.
Gross Profit. The $7.2 million increase in gross profit is primarily attributable to the impact of increased sales volumes and operational efficiency improvements. Cost of revenues increased $17.8 million, or 5.8%, as a result of a increase in raw material and purchased component costs of $12.4 million, or 6.9%, and a increase in labor and overhead expenses of $5.4 million, or 4.3%.
As a percentage of revenues, gross profit margin was 12.1% for the six months ended June 30, 2026 compared to 10.9% for the six months ended June 30, 2025. The six months ended June 30, 2026 results include charges of $1.9 million associated with restructuring programs, compared to $1.6 million for the six months ended June 30, 2025.
Selling, General and Administrative Expenses. SG&A expenses increased $7.1 million compared to the six months ended June 30, 2025, primarily as a result of an increase in incentive compensation expense and advisory service fees. As a percentage of revenues, SG&A expense was 11.5% for the six months ended June 30, 2026 compared to 10.3% for the six months ended June 30, 2025. The six months ended June 30, 2026 results include charges of $0.3 million associated with the restructuring programs, compared to $0.2 million for the six months ended June 30, 2025.
Gain on sale of assets. During the six months ended June 30, 2026, the Company recognized a gain of $13.7 million related to the Sale and Leaseback Transaction.
Other (Income) Expense. Other expense increased $1.4 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily related to unfavorable change in foreign currency..
Warrant expense. Change in fair value of warrant liabilities represents the mark-to-market fair value adjustments to the outstanding warrants issued in connection with entering into the Term Loan due 2030. The change in fair value of the outstanding warrants liability during three months ended June 30, 2026 was $3.4 million. The change in fair value of stock warrants was the result of changes in market prices and other observable inputs deriving the value of the financial instruments.
Loss on extinguishment of debt. The loss recognized from the extinguishment of debt includes a non-cash expense of $1.6 million for the write-off of deferred financing costs, as well as a prepayment premium and make-whole interest of $1.4 million, both of which are associated with the repayment of the Term Loan. The prior year loss on extinguishment of debt reflects the write-off of deferred financing fees related to early repayment of the prior revolver $0.5 million..
28
Interest Expense. Interest associated with our debt was $7.0 million and $4.8 million for the six months ended June 30, 2026 and 2025, respectively. The increase in interest expense was primarily attributed to higher interest rates from our refinancing completed during the second quarter of 2025.
Provision (benefit) for Income Taxes. Income tax expense of $3.9 million and $3.8 million were recorded for the six months ended June 30, 2026 and 2025, respectively. The primary driver in the tax expense was the Company's mix of profitable foreign operations and losses in the U.S. while maintaining its full valuation allowance position on U.S. deferred tax assets.
Net Income (loss) from continuing operations. Net loss from continuing operations was $7.8 million for the six months ended June 30, 2026 compared to net loss of $7.2 million for the six months ended June 30, 2025. The change is attributable to the factors noted above.
Segment Results
Global Seating Segment Results
Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025
The table below sets forth certain Global Seating Segment operating data for the six months ended June 30, (dollars are in thousands):
| 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||
| Revenues | $ | 154,519 | $ | 147,866 | $ | 6,653 | 4.5% | ||||||||||||||||
| Gross profit | 21,565 | 19,023 | 2,542 | 13.4 | |||||||||||||||||||
| Selling, general & administrative expenses | 15,521 | 13,608 | 1,913 | 14.1 | |||||||||||||||||||
| Gain on sale of assets | (13,716) | — | (13,716) | NM1 | |||||||||||||||||||
| Operating income | 19,760 | 5,415 | 14,345 | 264.9 | |||||||||||||||||||
1.Not meaningful
Revenues. The increase in Global Seating Segment revenues of $6.7 million was primarily driven by higher international volume, offset by customer demand in North America.
Gross Profit. The increase in gross profit of $2.5 million was primarily attributable to increased sales volumes and operational efficiency improvements. The increase in cost of revenues was driven by a increase in raw material and purchased component costs of $2.2 million, or 2.7%, and a increase in labor and overhead expenses of $2.0 million, or 4.0%.
As a percentage of revenues, gross profit margin was 14.0% for the six months ended June 30, 2026 compared to 12.9% for the six months ended June 30, 2025. The six months ended June 30, 2026 results include charges of $1.3 million associated with restructuring programs, compared to $0.4 million for the six months ended June 30, 2025.
Selling, General and Administrative Expenses. SG&A expenses increased $1.9 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily as a result of increased incentive compensation expense.
Gain on sale of assets. During the six months ended June 30, 2026, the Company recognized a gain of $13.7 million related to the Sale and Leaseback Transaction.
29
Global Electrical Systems Segment Results
Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025
The table below sets forth certain Global Electrical Systems Segment operating data for the six months ended June 30, (dollars are in thousands):
| 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||
| Revenues | $ | 119,478 | $ | 104,037 | $ | 15,441 | 14.8% | ||||||||||||||||
| Gross profit | 12,669 | 9,900 | 2,769 | 28.0 | |||||||||||||||||||
| Selling, general & administrative expenses | 10,996 | 9,511 | 1,485 | 15.6 | |||||||||||||||||||
| Operating income (loss) | 1,673 | 389 | 1,284 | 330.1 | |||||||||||||||||||
Revenues. The increase in Global Electrical Systems Segment revenues of $15.4 million was primarily driven by new business wins.
Gross Profit. The increase in gross profit of $2.8 million is primarily attributable to volume and product mix. The increase in cost of revenues was driven by a increase in raw material and purchased component costs of $8.7 million, or 17.6%; and a increase in labor and overhead expenses of $3.9 million, or 8.8%.
As a percentage of revenues, gross profit margin was 10.6% for the six months ended June 30, 2026 compared to 9.5% for the six months ended June 30, 2025, driven by mix and volume leverage. The six months ended June 30, 2026 results include charges of $0.5 million associated with restructuring programs, compared to $1.0 million for the six months ended June 30, 2025.
Selling, General and Administrative Expenses. SG&A expenses increased $1.5 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily as a result of increased incentive compensation expense.
Trim Systems and Components Segment Results
Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025
The table below sets forth certain Trim Systems and Components Segment operating data for the six months ended June 30, (dollars are in thousands):
| 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||
| Revenues | $ | 92,736 | $ | 89,848 | $ | 2,888 | 3.2% | ||||||||||||||||
| Gross profit | 10,309 | 8,399 | 1,910 | 22.7 | |||||||||||||||||||
| Selling, general & administrative expenses | 8,186 | 6,761 | 1,425 | 21.1 | |||||||||||||||||||
| Operating income (loss) | 2,123 | 1,638 | 485 | 29.6 | |||||||||||||||||||
Revenues. The increase in Trim Systems and Components Segment revenues of $2.9 million was primarily driven by increased customer demand in North America.
Gross Profit. The increase in gross profit of $1.9 million is primarily attributable to higher sales volume. The increase in cost of revenues was driven by a increase in raw material and purchased component costs of $1.5 million, or 2.9%, and a decrease in labor and overhead expenses of $0.5 million, or 1.7%.
As a percentage of revenues, gross profit margin was 11.1% for the six months ended June 30, 2026 compared to 9.3% for the six months ended June 30, 2025. This was primarily due to volume leverage. The six months ended June 30, 2026 results include charges of $0.2 million associated with restructuring programs, compared to $0.2 million for the six months ended June 30, 2025.
Selling, General and Administrative Expenses. SG&A expenses increased $1.4 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily as a result of increased incentive compensation expense.
30
Liquidity and Capital Resources
Our primary sources of liquidity as of June 30, 2026 were operating income, cash and availability under our credit facility. We believe that these sources of liquidity will provide adequate funds for our working capital needs, capital expenditures and debt service throughout the next twelve months. However, no assurance can be given that this will be the case. We also rely on the timely collection of receivables as a source of liquidity. As of June 30, 2026, we had outstanding letters of credit of $3.5 million and borrowing availability of $91.2 million from our U.S. and China credit facilities (subject to customary borrowing base and other conditions), in addition to $36.0 million of cash.
As of June 30, 2026, cash of $35.6 million was primarily held by foreign subsidiaries. The Company had a $0.1 million deferred tax liability as of June 30, 2026 for the expected future income tax implications of repatriating cash from the foreign subsidiaries for which indefinite reinvestment is not expected.
We intend to allocate resources consistent with the following priorities: (1) invest in growth; (2) invest in operational improvements; (3) manage working capital; (4) reduce debt; and (5) other actions deemed appropriate by management to improve operational performance.
Covenants and Liquidity
Our ability to comply with the covenants in the Term Loan and ABL Revolving Credit Facility, as discussed in Note 4, Debt, may be affected by economic or business conditions beyond our control. Based on our current forecast, we believe that we will be able to maintain compliance with the financial maintenance covenants and the fixed charge coverage ratio covenant and other covenants in the Term Loan and ABL Revolving Credit Facility for the next twelve months; however, no assurances can be given that we will be able to comply. We base our forecasts on historical experience, industry forecasts and other assumptions that we believe are reasonable under the circumstances. If actual results are substantially different than our current forecast, we may not be able to comply with our financial covenants.
Sources and Uses of Cash
| Six Months Ended June 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| (In thousands) | |||||||||||
Cash provided by (used in): | |||||||||||
Net cash provided by (used in) operating activities | $ | 123 | $ | 34,041 | |||||||
Net cash provided by (used in) investing activities | 10,187 | (5,271) | |||||||||
Net cash used in financing activities | (7,091) | (12,219) | |||||||||
Effect of currency exchange rate changes on cash | (549) | 2,109 | |||||||||
Net increase (decrease) in cash | $ | 2,670 | $ | 18,660 | |||||||
Operating activities. For the six months ended June 30, 2026, net cash provided by operating activities was $0.1 million compared to net cash provided by operating activities of $34.0 million for the six months ended June 30, 2025. The decrease in net cash provided by operating activities is primarily attributable an increase in trade working capital for the six months ended June 30, 2026 as compared to a decrease in trade working capital for the six months ended June 30, 2025.
Investing activities. For the six months ended June 30, 2026, net cash provided by investing activities was $10.2 million compared to cash used in investing activities of $5.3 million for the six months ended June 30, 2025. The change was mainly due to $15.9 million in proceeds from the sale of assets in the current year. In 2026, we expect capital expenditures to be in the range of $13 million to $17 million.
Financing activities. For the six months ended June 30, 2026, net cash used in financing activities was $7.1 million compared to net cash used in financing activities of $12.2 million for the six months ended June 30, 2025. Use of cash in financing activities during the six months ended June 30, 2026 was primarily attributable to the prepayment of term loan debt which totaled $26.2 million, related to mandatory paydowns from the Sale and Leaseback Transaction and at-the-market equity offering proceeds.
Debt and Credit Facilities
31
The debt and credit facilities descriptions in Note 4, Debt are incorporated in this section by reference.
ATM Program
On June 18, 2026, the Company entered into the Sales Agreement with Sales Agent for the ATM Program which enables the Company to issue and sell shares of Common Stock in transactions that are deemed to be "at the market" offerings as defined in Rule 415 under the Securities Act of 1933, as amended, for a maximum aggregate offering amount of up to $25.0 million. During the three and six months ended June 30, 2026, we issue and sold 2.6 million shares of our Common Stock under the ATM program for net proceeds (after sales commissions and direct offering expenses) of $11.6 million. The direct costs of $0.2 million incurred in connection with the ATM program during the quarter ended June 30, 2026 were charged against the proceeds from the sale of Common Stock and reflected as a reduction of paid-in -capital. As of June 30, 2026, approximately $13.0 million remained available for sale under the ATM Program.
Critical Accounting Policies and Estimates
Our consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). For a comprehensive discussion of our significant accounting policies, see "Note 1. Significant Accounting Policies", to our consolidated financial statements in Item 8 in our 2025 Form 10-K.
Critical accounting estimates are those that are most important to the portrayal of our financial condition and results. These estimates require management's most difficult, subjective, or complex judgments, often as a result of the need to estimate matters that are inherently uncertain. We review the development, selection, and disclosure of our critical accounting estimates with the Audit Committee of our board of directors. For information about critical accounting estimates, see Critical Accounting Estimates in "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in our 2025 Form 10-K. At June 30, 2026, there have been no material changes to our critical accounting estimates from those disclosed in our 2025 Form 10-K.
Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. For this purpose, any statements contained herein that are not statements of historical fact, including without limitation, certain statements under “Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations” and located elsewhere herein regarding industry outlook, the Company’s plans to improve financial results, the future of the Company’s end markets, including, but not limited to, global commercial vehicle markets and electric vehicle markets, changes in the North America Class 8 and Class 5-7 truck build rates, performance of the global construction and agricultural equipment businesses, the Company’s prospects in the global commercial vehicle markets and electric vehicle markets, the Company’s initiatives to address customer needs, organic growth, the Company’s strategic plans and plans to focus on certain segments, competition faced by the Company, volatility in and disruption to the global economic environment, including global supply chain constraints, inflation and labor shortages, tariffs and counter-measures, financial covenant compliance, anticipated effects of acquisitions or divestitures, production of new products, plans for capital expenditures and our results of operations or financial position and liquidity, may be deemed to be forward-looking statements. Without limiting the foregoing, the words “believe”, “anticipate”, “plan”, “expect”, “intend”, “will”, “should”, “could”, “would”, “project”, “continue”, “likely”, and similar expressions, as they relate to us, are intended to identify forward-looking statements. The important factors discussed in “Item 1A - Risk Factors”, among others, could cause actual results to differ materially from those indicated by forward-looking statements made herein and presented elsewhere by management from time to time. Such forward-looking statements represent management’s current expectations and are inherently uncertain. Investors are warned that actual results may differ from management’s expectations. Additionally, various economic and competitive factors could cause actual results to differ materially from those discussed in such forward-looking statements, including, but not limited to, factors which are outside our control.
Any forward-looking statement that we make in this report speaks only as of the date of such statement, and we undertake no obligation to update any forward-looking statement or to publicly announce the results of any revision to any of those statements to reflect future events or developments. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless specifically expressed as such, and should only be viewed as historical data.
ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
32
For information relating to quantitative and qualitative disclosures about market risk, see the discussion under "Item 7A. Quantitative and Qualitative Disclosures About Market Risk" in our 2025 Form 10-K. As of June 30, 2026, there have been no material changes in our exposure to market risk from those disclosed in our 2025 Form 10-K.
ITEM 4 – CONTROLS AND PROCEDURES
Disclosure Controls and Procedures. Our senior management is responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms.
We evaluated, the effectiveness of our disclosure controls and procedures as of June 30, 2026. Based on this evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were effective as of June 30, 2026 to provide reasonable assurance that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and that such information is accumulated and communicated to management as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting. There were no changes during the quarter ended June 30, 2026 in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitations on Effectiveness of Controls. Our management, including our President and Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of error or mistake. Controls also can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.
33
PART II. OTHER INFORMATION
ITEM 1 Legal Proceedings
We are subject to various legal proceedings and claims arising in the ordinary course of business, including, but not limited to, product liability claims, customer and supplier disputes, service provider disputes, examinations by taxing authorities, employment disputes, workers’ compensation claims, unfair labor practice charges, OSHA investigations, intellectual property disputes and environmental claims arising out of the conduct of our businesses. Based upon the information available to management and discussions with legal counsel, it is the opinion of management that the ultimate outcome of the various legal actions and claims that are incidental to our business are not expected to have a material adverse impact on the consolidated financial position, results of operations, stockholders' equity or cash flows; however, such matters are subject to many uncertainties and the outcomes of individual matters are not predictable with any degree of assurance.
ITEM 1A Risk Factors
You should carefully consider the information in this Form 10-Q, the risk factors discussed in "Risk Factors" and other risks discussed in our 2025 Form 10-K and our filings with the SEC since December 31, 2025. These risks could materially and adversely affect our results of operations, financial condition, liquidity and cash flows. Our business also could be affected by risks that we are not presently aware of or that we currently consider immaterial to our operations.
ITEM 2 Unregistered Sales of Equity Securities and Use of Proceeds
None.
ITEM 3 Defaults Upon Senior Securities
Not applicable.
ITEM 4 Mine Safety Disclosures
Not applicable.
ITEM 5 Other Information
Neither the Company nor any of our officers or directors adopted terminated
34
ITEM 6 Exhibits
| The amended and restated restricted stock agreement to surrender such restricted stock award between the Company and James Ray, dated April 22, 2026 (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on April 28, 2026). | |||||
| Termination of the Stock Award Agreement between the Company and James Ray, dated April 23, 2024 (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed with the SEC on April 29, 2026). | |||||
| Second Amended and Restated Commercial Vehicle Group, Inc. 2020 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on May 19, 2026). | |||||
| Capital On Demand Sales Agreement, dated June 17, 2026, by and between Commercial Vehicle Group, Inc. and JonesTrading Institutional Services, LLC (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on June 18, 2026). | |||||
10.5* | James Ray 2026 Restricted Stock Agreement, dated June 2, 2026, 85031 replacement of 2025 RS Award. | ||||
10.6* | James Ray 2026 PS Stock for Stock Agreement, dated June 2, 2026,Replacement of 2025 Award. | ||||
10.7* | James Ray 2026 Restricted Stock Agreement, dated June 2, 2026, – Regular RS Award. | ||||
10.8* | James Ray 2026 Restricted PS Agreement, dated June 2, 2026, EBITDA and Share Price Stock for Stock Award. | ||||
10.9* | James Ray 2026 Restricted PS Agreement, dated June 2, 2026, EBITDA and Share Price Stock for Cash Award. | ||||
| 302 Certification by James R. Ray, President and Chief Executive Officer. | |||||
302 Certification by Angela O'Leary, Interim Chief Financial Officer. | |||||
| Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||
| Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||
| 101 | Interactive Data Files | ||||
| * | Management contract or compensatory plan or arrangement required to be filed as an exhibit to this quarterly report on Form 10-Q. | ||||
35
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| COMMERCIAL VEHICLE GROUP, INC. | ||||||||||||||
| Date: | August 3, 2026 | By | /s/ Angela M. O'Leary | |||||||||||
| Angela M. O'Leary | ||||||||||||||
Interim Chief Financial Officer, Chief Accounting Officer | ||||||||||||||
(Principal Financial and Principal Accounting Officer) | ||||||||||||||
36
EXHIBIT 10.1
AMENDED AND RESTATED RESTRICTED STOCK AGREEMENT
THIS AMENDED AND RESTATED RESTRICTED STOCK AGREEMENT (this “Agreement”) is made as of April 22, 2026, between Commercial Vehicle Group, Inc., a Delaware corporation (the “Company”), and James R. Ray (“Grantee”).
WHEREAS, the Grantee is an employee of the Company;
WHEREAS, a grant (the “Original Grant”) of 805,031 restricted shares of Common Stock (as governed by the Company’s Amended and Restated 2020 Equity Incentive Plan (the “Plan”)) to the Grantee was approved by the Compensation Committee (the “Committee”) of the Board of Directors of the Company effective June 10, 2025 (the “Original Grant Date”), and, in connection therewith, the Company and the Grantee entered into a restricted stock agreement (the “Original Agreement”), and the shares of restricted stock covered by the Grant were issued to Grantee on June 10, 2025;
WHEREAS, the Plan includes, among other things, a limitation on the number of shares underlying awards granted under the Plan that may be granted in one calendar year to a participant of the Plan who is not a Non-Employee Director (as defined in the Plan) (the “Plan Share Limitation”);
WHEREAS, it has come to the attention of the Committee that, in light of the significant fluctuation in the Company’s stock price prior to and during the time of the Original Grant Date, the Original Grant to the Grantee exceeded the Plan Share Limitation by 85,031 shares;
WHEREAS, the Grantee has agreed to surrender and transfer to the Company all right, title and interest in and to 85,031 unvested shares of such restricted stock (the “Excess Share Surrender”) so that the Original Grant will comply with the requirements of the Plan;
WHEREAS, the Original Agreement provided that it may be amended with the prior written consent of the Company and the Grantee and pursuant to a written instrument executed by the Company and the Grantee; and
WHEREAS, the Grantee and Company have agreed to amend and restate the Original Agreement to reflect the Excess Share Surrender as follows.
NOW, THEREFORE, pursuant to the Plan, effective the Original Grant Date, the Company, upon the terms and conditions set forth in the Original Agreement, granted and issued to the Grantee 805,031 restricted shares of Common Stock, par value $.01 (“Common Stock”), of the Company (the “Original Restricted Shares”), and
the Grantee now hereby agrees, upon the terms and conditions set forth herein, and subject to the terms and conditions of the Plan and the terms and conditions of this Agreement to surrender and transfer to the Company all right, title and interest in and to 85,031 of unvested Restricted Shares (the “Excess Shares”) for no consideration effective as of April 22, 2026. The Original Restricted Shares minus the Excess Shares are referred to herein as the “Restricted Shares”. The Company and the Grantee hereby further agree that the grant of the Restricted Shares shall be subject to the terms and conditions of the Plan and the terms and conditions of this Agreement.
1.Definitions. All capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to them in the Plan.
2.Issuance of Shares. In consideration of the Grantee’s service as an employee of the Company, the Restricted Shares were issued to the Grantee, upon payment to the Company by the Grantee of the aggregate par value thereof, and are fully paid and non-assessable shares represented by an electronic certificate or certificates issued in the name of the Grantee and endorsed with an appropriate legend referring to the restrictions hereinafter set forth.
3.Restrictions on Transfer of Shares. The Restricted Shares may not be sold, assigned, transferred, conveyed, pledged, exchanged or otherwise encumbered or disposed of (each, a “Transfer”) by the Grantee, except to the Company, unless and until they have become nonforfeitable as provided in Section 4 hereof. Any purported encumbrance or disposition in violation of the provisions of this Section 3 shall be void AB INITIO, and the other party to any such purported transaction shall not obtain any rights to or interest in the Restricted Shares. As and when permitted by the Plan, the Committee may in its sole discretion waive the restrictions on transferability with respect to all or a portion of the Restricted Shares. Notwithstanding the foregoing, Grantee may not Transfer Restricted Shares which have become nonforfeitable as provided in Section 4 hereof unless such Restricted Shares are registered pursuant to the Securities Act of 1933 (the “Securities Act”), are sold under Rule 144 promulgated under the Securities Act or unless the Company, after consultation with counsel, and its counsel agree with Grantee that such Transfer is not required to be registered under the Securities Act.
4.Vesting of Shares.
(a)Subject to paragraph Section 5 hereof, the Original Restricted Shares or the Restricted Shares, as applicable, shall vest and become nonforfeitable if the Grantee remains an employee of the Company through the vesting dates set forth below with respect to the percentage of the Original Restricted Shares or the Restricted Shares, as applicable, (in each case, rounded to the nearest whole share) set forth next to such date:
2
Vesting Date | Percentage of Original Restricted Shares or Restricted Shares Vesting on such Vesting Date | ||||
| March 31, 2026 | 33⅓% of the Original Restricted Shares (the “2026 Vested Shares”) | ||||
| March 31, 2027 | 50% of the Restricted Shares minus the 2026 Vested Shares | ||||
| March 31, 2028 | All remaining Restricted Shares | ||||
(b)Notwithstanding the provisions of Section 4(a) above, in connection with a Change in Control, the provisions set forth in Section 13 of the Plan shall govern with respect to the acceleration of the vesting of the Restricted Shares.
(c)Notwithstanding the provisions of Section 4(a) above, the Committee may, in its sole discretion, vest or accelerate the vesting of the Restricted Shares at any time.
(d)If Grantee’s employment with the Company terminates (other than for Cause) on or after Grantee’s Rule of 66 Date, as defined below, then the Restricted Shares shall vest immediately, except that any shares granted less than 180 days prior to the termination date shall be forfeited. For this purpose, the “Rule of 66 Date” means the date that the sum of Grantee’s age plus total Service, as defined below, is equal to or greater than sixty-six (66), so long as Grantee’s age is equal to or greater than sixty (60). “Service” means the aggregate number of completed years of continued employment with the Company, as conclusively determined by the Company without regard to any later determinations or findings regarding Grantee’s employment status by any third party.
5.Forfeiture of Shares. If the Grantee ceases to be an employee of the Company due to death or Disability during any period of restriction, any non-vested Restricted Shares shall immediately vest and all restrictions on the Restricted Shares shall lapse and certificate(s) representing such Restricted Shares shall be delivered by the Company reasonably promptly upon a request by the Grantee. Subject to Section 4(d), above, if the Grantee ceases to be an employee of the Company for any other reason, any non-vested Restricted Shares shall be forfeited by the Grantee and the certificate(s) representing the non-vested portion of the Restricted Shares so forfeited shall be canceled.
6.Dividend, Voting and Other Rights. Except as otherwise provided in this Agreement, the Grantee shall have all of the rights of a stockholder with respect to the Restricted Shares, including the right to vote the Restricted Shares and receive any dividends that may be paid thereto, provided, however, that any additional Common Stock or other securities that the Grantee may become entitled to receive pursuant to a stock dividend, stock split, recapitalization, combination of shares, merger, consolidation, separation or reorganization or any other change in the capital structure of the Company shall be subject to the same risk of forfeiture, certificate delivery provisions and restrictions on transfer as the forfeitable Restricted Shares in respect of which they are issued or transferred and shall become Restricted Shares for the
3
purposes of this Agreement, and provided further that, any dividend paid with respect to unvested Restricted Shares for which an election under Section 83(b) of the Code has not been made (i) constitutes compensation income subject to all applicable tax withholding and (ii) shall be paid on or about the Vesting Date for the underlying Restricted Shares, but in any event not later than the fifteenth (15th) day of the third month of the calendar year following the Vesting Date.
7.Retention of Stock Certificate(s) by the Company. The certificate(s) representing the Restricted Shares shall be held in custody by the Company, together with a stock power in the form of Exhibit A hereto which has previously been endorsed in blank by the Grantee and delivered to the Company, until such shares have become nonforfeitable in accordance with Section 4. Notwithstanding the foregoing, if the Grantee has attained his or her Rule of 66 Date, the certificate(s) representing the Restricted Shares shall be released to the Grantee within 30 days of the Vesting Date with respect to such shares, and the Vesting Date(s) shall be treated as fixed dates of distribution for purposes of Section 409A of the Internal Revenue Code of 1986, as amended, if applicable to the Restricted Shares.
8.Compliance with Law. The Company shall make reasonable efforts to comply with all applicable federal and state securities laws, provided, however, notwithstanding any other provision of this Agreement, the Company shall not be obligated to issue or release from restrictions on transfer any Restricted Shares pursuant to this Agreement if such issuance or release would result in a violation of any such law.
9.Withholding Taxes. If the Company shall be required to withhold any federal, state, local or foreign tax in connection with any issuance or vesting of Restricted Shares or other securities pursuant to this Agreement, including any employment taxes (collectively, the “Tax Withholding Obligation”), and the amounts available to the Company for such withholding are insufficient, the Grantee shall pay the tax or make provisions that are satisfactory to the Company for the payment thereof. Unless Grantee elects to satisfy the Tax Withholding Obligation by an alternative means that is then permitted by the Company, Grantee’s acceptance of this Agreement constitutes Grantee’s instruction and authorization to the Company to withhold on Grantee’s behalf the number of Restricted Shares from those shares issuable to Grantee under this Agreement as the Company determines to be sufficient to satisfy the Tax Withholding Obligation as and when any such Tax Withholding Obligation becomes due. Restricted Shares so surrendered by the Grantee shall be credited against any such withholding obligation at the market value (determined with reference to the then current price of the Company’s Common Stock as quoted on The Nasdaq Global Select Market) per share of such Restricted Shares on the date of such surrender.
10.Conformity with Plan. The Agreement and the Restricted Shares granted pursuant hereto are intended to conform in all respects with, and are subject to all applicable provisions of, the Plan (which is incorporated herein by reference). Inconsistencies between this Agreement and the Plan shall be resolved in accordance with the terms of this Agreement. By executing this Agreement, Grantee acknowledges and agrees to be bound by all of the terms of this Agreement and the Plan.
11.Amendments. The provisions of this Agreement may be amended and waived only with the prior written consent of the Company and the Grantee.
12.Confidentiality.
4
(a)Non-use and Non-Disclosure of Confidential Information. Grantee acknowledges that the Company and its subsidiaries continually develop Confidential Information (defined below), that the Grantee may develop Confidential Information for the Company or its subsidiaries during Grantee’s employment with the Company, and that Grantee may learn of Confidential Information during the course of such employment. Grantee will comply with the policies and procedures of the Company and its subsidiaries for protecting Confidential Information and shall never use or disclose to any Person (except as required by applicable law or for the proper performance of his or her duties and responsibilities to the Company and its subsidiaries), any Confidential Information obtained by Grantee incident to his or her employment or other association with the Company or any of its subsidiaries. Grantee agrees to only use the Company’s Confidential Information as necessary to perform his or her job during employment with the Company. Grantee understands that this restriction shall continue to apply after his or her employment terminates, regardless of the reason for such termination. All documents, records, tapes and other media of every kind and description relating to the business, present or otherwise, of the Company or its subsidiaries and any copies, in whole or in part, thereof (the “Documents”), whether or not prepared by Grantee, shall be the sole and exclusive property of the Company and its subsidiaries. Grantee shall safeguard all Documents and shall surrender to the Company at the time his or her employment terminates, or at such earlier time or times as the Company may specify, all Documents then in the Grantee’s possession or control.
(b)Definitions. For purposes of this Agreement, “Confidential Information” means any and all information of the Company and its subsidiaries that is not generally known by others with whom the Company or its subsidiaries compete or do business, or with whom they plan to compete or do business and any and all information which, if disclosed by the Company or its subsidiaries, would assist in competition against them. Confidential Information includes without limitation such information relating to (i) the development, research, testing, manufacturing, marketing and financial activities of the Company and its subsidiaries, (ii) the Company and its subsidiaries Products (defined below), (iii) the costs, sources of supply, financial performance and strategic plans of the Company and its subsidiaries, (iv) the identity and special needs of the customers of the Company and its subsidiaries and (v) the people and organizations with whom the Company and its subsidiaries have business relationships and those relationships. Confidential Information also includes any information that the Company or any of its subsidiaries have received, or may receive hereafter, from others which was received by the Company or any of its subsidiaries with any understanding, express or implied, that the information would not be disclosed. For purposes of this Agreement, “Products” means all products planned, researched, developed, tested, manufactured, sold, licensed, leased or otherwise distributed or put into use by the Company or any of its subsidiaries, together with all services provided or planned by the Company or any of its subsidiaries, during Grantee’s employment with the Company or any of its subsidiaries.
13.Restricted Activities. Grantee, as a condition to the Award and in consideration of Grantee’s continued employment by the Company and/or its subsidiaries, agrees that some restrictions on Grantee’s activities during and after his or her employment are necessary to protect the goodwill, Confidential Information and other legitimate interests of the Company and its subsidiaries and agrees as follows:
(a)Noncompetition. For a period of time beginning on the date Grantee executed the Original Agreement and continuing for a period ending on the date which is one (1) year after Grantee’s employment terminates (the “Noncompetition Period”) Grantee shall not, whether as owner, partner, investor, consultant, agent, Grantee, co-venturer or otherwise, engage in, assist or have any active interest in a business that
5
competes with the Company or any of its subsidiaries (“Competing Business Line”) or otherwise compete with the Company or any of its subsidiaries: (i) anywhere throughout the world; (ii) in North America; (iii) in the United States; and/or (iv) in those states of the United States in which the Company or any of its subsidiaries sells products or conducts business activities. Specifically, but without limiting the foregoing, Grantee agrees that during the Noncompetition Period, Grantee shall not: (A) undertake any planning for any business competitive with the Company or any of its subsidiaries; or (B) engage in any manner in any activity that is competitive with the business of the Company or any of its subsidiaries. For the purposes of this Section 4, Grantee’s undertaking shall encompass all items, products and services that may be used in substitution for Products.
(b)Conflict of Interest. During the Grantee’s employment with the Company, the Grantee shall devote all of the Grantee’s business time, energy, business judgment, knowledge and skill and the Grantee’s best efforts to the performance of the Grantee’s duties with the Company, provided that the foregoing shall not prevent the Grantee from (i) serving on the boards of directors of non-profit organizations and, with the prior written approval of the Board, other for profit companies, (ii) participating in charitable, civic, educational, professional, community or industry affairs, and (iii) managing the Grantee’s passive personal investments so long as such activities in the aggregate do not interfere or conflict with the Grantee’s duties hereunder or create a potential business or fiduciary conflict. Grantee further agrees to comply fully with all policies and practices of the Company as are from time to time in effect.
(c)Nonsolicitation. Grantee further agrees that while he or she is employed by the Company and during the Noncompetition Period, Grantee will not, (i) hire or attempt to hire any employee of the Company or any of its subsidiaries, (ii) hire or attempt to hire any independent contractor providing services to the Company or any of its subsidiaries, (iii) assist in hiring or any attempt to hire anyone identified in clauses (i) or (ii) of this sentence by any other Person, (iv) encourage any employee or independent contractor of the Company or any of its subsidiaries to terminate his or her relationship with the Company or any of its subsidiaries, or (v) solicit or encourage any customer or vendor of the Company or any of its subsidiaries to terminate or diminish its relationship with any of them, or, in the case of a customer, to conduct with any Person any competing business or activity. For purposes of Grantee’s obligations hereunder during that portion of the Noncompetition Period that follows termination of Grantee’s employment, employee, independent contractor, customer or vendor of the Company or any of its subsidiaries shall mean any Person who was such at any time during the six (6) months immediately preceding the date of the termination of Grantee’s employment.
(d)Enforceability. In the event that the one (1) year period stated above is held unenforceable by a court of competent jurisdiction due to its length, then the period shall be six (6) months or such other time as determined enforceable by such court.
14.Non-Inducement. Grantee will not directly or indirectly assist or encourage any person or entity in carrying out or conducting any activity that would be prohibited by this Agreement if such activity were carried out or conducted by Grantee.
15.Assignment of Rights to Intellectual Property. Grantee shall promptly and fully disclose all Intellectual Property (defined below) to the Company. Grantee hereby assigns and agrees to assign to the Company (or as otherwise directed by the Company) Grantee’s full right, title and interest in and to all Intellectual Property. Grantee agrees to execute any and all applications for domestic and foreign patents, copyrights or other proprietary rights and to do such other acts (including without
6
limitation the execution and delivery of instruments of further assurance or confirmation) requested by the Company to assign the Intellectual Property to the Company and to permit the Company to enforce any patents, copyrights or other proprietary rights to the Intellectual Property. Grantee will not charge the Company for time spent in complying with these obligations. All copyrightable works that Grantee creates shall be considered “work made for hire” and shall, upon creation, be owned exclusively by the Company. For purposes of this Section 8, “Intellectual Property” means inventions, discoveries, developments, methods, processes, compositions, works, concepts and ideas (whether or not patentable or copyrightable or constituting trade secrets) conceived, made, created, developed or reduced to practice by Grantee (whether alone or with others and whether or not during normal business hours or on or off the premises of the Company or any of its subsidiaries) during Grantee’s employment with the Company or any of its subsidiaries (including prior to the Effective Date if applicable) that relate to either the Products or any prospective activity of the Company or any of its subsidiaries or that make use of Confidential Information or any of the equipment or facilities of the Company or any of its subsidiaries.
16.Consideration and Acknowledgments. Grantee acknowledges and agrees that the covenants described in Sections 12 through 15 of this Agreement are essential terms, and the underlying Award would not be provided by the Company in the absence of these covenants. Grantee further acknowledges that these covenants are supported by adequate consideration as set forth in this Agreement, that full compliance with these covenants will not prevent Grantee from earning a livelihood following the termination of his or her employment, and that these covenants do not place undue restraint on Grantee and are not in conflict with any public interest. Grantee acknowledges that (i) Grantee has had access to Company’s trade secrets and Confidential Information at the highest levels, including without limitation manufacturing and marketing strategy, customer strategy and lists, technical know-how, product and process research and development, and business plans, (ii) Grantee has had access to Confidential Information regarding and has been privy to discussions and strategy sessions at the highest levels of the Company regarding all aspects, business lines and product segments of the Company, and (iii) that these trade secrets and Confidential Information would inevitably be disclosed were Grantee to work for a competitor. Grantee further acknowledges and agrees that Grantee fully understands these covenants, has had full and complete opportunity to discuss and resolve any ambiguities or uncertainties regarding these covenants before signing this Agreement, that these covenants are reasonable and enforceable in every respect, and has voluntarily agreed to comply with these covenants for their stated term. Grantee agrees that in the event he or she is offered employment with a competing business at any time in the future, Grantee shall immediately notify the competing business of the existence of the covenants set forth above.
17.Severability. In the event that one or more of the provisions of this Agreement shall be invalidated for any reason by a court of competent jurisdiction, any provision so invalidated shall be deemed to be separable from the other provisions hereof, and the remaining provisions hereof shall continue to be valid and fully enforceable.
18.Successors and Assigns. The provisions of this Agreement shall inure to the benefit of, and be binding upon, the successors, administrators, heirs, legal representatives and assigns of the Grantee and the successors and assigns of the Company.
7
19.Notices. Any notice to the Company provided for herein shall be in writing to the attention of the Secretary of the Company at Commercial Vehicle Group, Inc., 7800 Walton Parkway, New Albany, Ohio 43504, and any notice to the Grantee shall be addressed to the Grantee at his or her address currently on file with the Company. Except as otherwise provided herein, any written notice shall be deemed to be duly given if and when hand delivered, or five business days after having been mailed by United States registered or certified mail, return receipt requested, postage prepaid, or three business days after having been sent by a nationally recognized overnight courier service, addressed as aforesaid. Any party may change the address to which notices are to be given hereunder by written notice to the other party as herein specified, except that notices of changes of address shall be effective only upon receipt.
20.No Right to Continued Employment or Service. Nothing in this Agreement shall confer upon the Grantee any right to continued employment or other service with the Company or its Subsidiaries, or to interfere in any way with the right of the Company or its Subsidiaries to terminate the Grantee’s employment or other service at any time and for any reason (or no reason).
21.Entire Agreement. This Agreement is subject to all of the terms, conditions and provisions of the Plan, including, without limitation, the amendment provisions thereof, and to such rules, regulations and interpretations relating to the Plan as may be adopted thereunder and as may be in effect from time to time. This Agreement may be amended or modified only by a written instrument executed by the Company and the Grantee.
22.Governing Law. The laws of the State of Delaware, without giving effect to the principles of conflict of laws thereof, shall govern the interpretation, performance and enforcement of this Agreement.
23.Surrender of Excess Shares and Related Stock Power. Grantee hereby surrenders, transfers and assigns all right, title and interest in and to the Excess Shares, standing in his name, to the Company for no consideration and hereby irrevocably constitutes and appoints Aneezal Mohamed, the Chief Legal Officer of the Company, as attorney to transfer the said Excess Shares on the books of the Company with full power of substitution in the premises.
* * * * *
8
IN WITNESS WHEREOF, this Agreement is effective as of the date set forth above.
COMMERCIAL VEHICLE GROUP, INC.
By: /s/ Aneezal Mohamed
Name: Aneezal Mohamed
Title Chief Legal Officer
ACKNOWLEDGED AND AGREED:
/s/ James Ray
Employee Name James Ray_________
Grantee
9
EXHIBIT A
FORM OF ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, _________________, hereby sells, assigns and transfers unto _________________________________, ____ shares of the Common Stock, par value $0.01 per share, of Commercial Vehicle Group, Inc., a Delaware corporation (the “Company”) standing in its name on the books of said Company represented by Certificate Number ____, and does hereby irrevocably constitute and appoint ________________ as attorney to transfer the said stock on the books of the Company with full power of substitution in the premises.
Date: ___________________ | Employee Name | ||||
10
Exhibit 10.2
COMMERCIAL VEHICLE GROUP, INC.
2020 EQUITY INCENTIVE PLAN
2020 EQUITY INCENTIVE PLAN
TERMINATION OF
PERFORMANCE-BASED RESTRICTED STOCK AWARD AGREEMENT
BASED ON EBITDA AND STOCK PRICE
This Termination of Performance -Based Restricted Stock Award Agreement Based on EBITDA and Stock Price (“Agreement”) is entered into by and between James R. Ray (“Grantee”) and Commercial Vehicle Group, Inc. (the “Company”) effective as of April 23, 2026.
WHEREAS, Grantee, the Company’s Chief Executive Officer, and the Company entered into (i) that certain Performance-Based Restricted Stock Award Agreement Based on EBITDA and Stock Price Agreement (the “Stock Award Agreement”), and (ii) that certain Performance-Based Restricted Cash Award Agreement Based on EBITDA and Stock Price Agreement (the “Cash Award Agreement” and, together with the Stock Award Agreement, collectively, the “Original PSU Agreements”), each effective as March 31, 2025;
WHEREAS, in light of certain restrictions under the 2020 Amended and Restated Equity Incentive Plan (the “Plan”) of the Company, the Grantee and the Company desire to terminate the Stock Award Agreement.
NOW, THEREFORE, the Grantee and the Company hereby agree as follows:
1.The Stock Award Agreement is hereby terminated and cancelled. Grantee hereby irrevocably forfeits all rights, title and interest in and to such Stock Award Agreement and any stock that may have been issuable thereunder.
2.Promptly following execution of this Agreement, the Compensation Committee (the “Committee”) of the Company’s Board of Directors will engage with Meridian Compensation Partners, the Committee’s compensation consultant, to evaluate alternative compensation approaches intended to reasonably compensate Grantee for the cancelled award represented by the Stock Award Agreement.
3.The Company will use reasonable good faith efforts to identify an alternative compensation approach acceptable to the Company and to Grantee to replace the compensation foregone by Grantee as a result of the cancellation of the award represented by the Stock Award Agreement and to enter into an agreement with respect to such alternative compensation on or prior to June 30, 2026.
[THE REST OF THIS PAGE INTENTIONALLY LEFT BLANK]
4.Agreement shall be governed by, and construed under and in accordance with, the internal laws of the State of Delaware, without reference to rules relating to conflicts of laws.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date above written.
COMPANY:
Commercial Vehicle Group, Inc.
By: /s/ Aneezal Mohamed
Title: Chief Legal Officer
GRANTEE:
_/s/ James Ray
James R. Ray
Exhibit 10.1
COMMERCIAL VEHICLE GROUP, INC.
SECOND AMENDED AND RESTATED 2020 EQUITY INCENTIVE PLAN
1.Purpose.
The purpose of the Commercial Vehicle Group, Inc. Second Amended and Restated 2020 Equity Incentive Plan (the “A&R 2020 Equity Incentive Plan”) is to promote the long-term growth and profitability of Commercial Vehicle Group, Inc. (the “Company”) and its Subsidiaries by (i) providing certain directors, officers and employees of, and certain other individuals who perform services for, or to whom an offer of employment has been extended by, the Company and its Subsidiaries with incentives to maximize stockholder value and otherwise contribute to the success of the Company and (ii) enabling the Company to attract, retain and reward the best available persons for positions of responsibility. Grants of incentive or non-qualified stock options, stock appreciation rights (“SARs”), restricted stock, restricted stock units and deferred stock units, performance awards, dividend equivalent rights and other stock-based awards, or any combination of the foregoing may be made under the Plan.
The Commercial Vehicle Group, Inc. 2020 Equity Incentive Plan (the “2020 Equity Incentive Plan”) was adopted and effective June 15, 2020, was amended and restated by the Amended and Restated 2020 Equity Incentive Plan and is being further amended and restated by the A&R 2020 Equity Incentive Plan. The A&R 2020 Equity Incentive Plan will be effective on the date it is approved by the Company’s stockholders. The 2020 Equity Incentive Plan and the 2020 Equity Incentive Plan as amended and as further amended hereby are referred to herein as the “Plan.”
1
2.Definitions.
(a)“Board of Directors” and “Board” mean the board of directors of the Company.
(b)“Cause” shall, with respect to any participant, have the equivalent meaning as the term “cause” or “for cause” in any employment, consulting, or independent contractor’s agreement between the participant and the Company or any Subsidiary, or in the absence of such an agreement that contains such a defined term, shall mean the occurrence of one or more of the following events:
(i)Conviction of any felony or any crime or offense lesser than a felony involving the property of the Company or a Subsidiary; or
(ii)Deliberate or reckless conduct that has caused demonstrable and serious injury to the Company or a Subsidiary, monetary or otherwise, or any other serious misconduct of such a nature that the participant’s continued relationship with the Company or a Subsidiary may reasonably be expected to adversely affect the business or properties of the Company or any Subsidiary; or
(iii)Willful refusal to perform or reckless disregard of duties properly assigned, as determined by the Company; or
(iv)Breach of duty of loyalty to the Company or a Subsidiary or other act of fraud or dishonesty with respect to the Company or a Subsidiary.
For purposes of this Section 2(b), any good faith determination of “Cause” made by the Committee shall be binding and conclusive on all interested parties.
(c)“Change in Control” means the occurrence of one of the following events:
2
(i)if any “person” or “group” as those terms are used in Sections 13(d) and 14(d) of the Exchange Act or any successors thereto, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act or any successor thereto), directly or indirectly, of securities of the Company representing more than 50% of either the then outstanding shares or the combined voting power of the then outstanding securities of the Company; or
(ii)during any period of two consecutive years, individuals who at the beginning of such period constitute the Board and any new directors whose election by the Board or nomination for election by the Company’s stockholders was approved by at least two-thirds of the directors then still in office who either were directors at the beginning of the period or whose election was previously so approved, cease for any reason to constitute a majority thereof; or
(iii)the consummation of a merger or consolidation of the Company with any other corporation or other entity, other than a merger or consolidation which would result in all or a portion of the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; or
(iv)the consummation of a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all the Company’s assets, other than a sale to an Exempt Person.
3
(d)“Code” means the Internal Revenue Code of 1986, as amended.
(e)“Committee” means the Compensation Committee of the Board, which shall consist solely of two or more members of the Board, and each member of the Committee shall be (i) a “non-employee director” within the meaning of Rule 16b-3 under the Exchange Act, unless administration of the Plan by “non-employee directors” is not then required in order for exemptions under Rule 16b-3 to apply to transactions under the Plan, and (ii) independent, as defined by the rules of the Nasdaq Stock Market or any national securities exchange on which any securities of the Company are listed for trading, and if not listed for trading, by the rules of the Nasdaq Stock Market.
(f)“Common Stock” means the Common Stock, par value $.01 per share, of the Company, and any other shares into which such stock may be changed by reason of a recapitalization, reorganization, merger, consolidation or any other change in the corporate structure or capital stock of the Company.
(g)“Competition” is deemed to occur if a person whose employment with the Company or its Subsidiaries has terminated obtains a position as a full-time or part-time employee of, as a member of the board of directors of, or as a consultant or advisor with or to, or acquires an ownership interest in excess of 2% of, a corporation, partnership, firm or other entity that engages, in any state in which the Company or any Subsidiary is doing business at the time of such person’s termination of employment, in any business which competes with any product or service of the Company or any Subsidiary.
4
(h)“Disability” means a disability that would entitle an eligible participant to payment of monthly disability payments under any Company disability plan or any agreement between the eligible participant and the Company as otherwise determined by the Committee.
(i)“Effective Date” has the meaning given in Section 22 of the A&R 2020 Equity Incentive Plan.
(j)“Exchange Act” means the Securities Exchange Act of 1934, as amended.
(k)“Family Member” has the meaning given to such term in General Instructions A.1(a)(5) to Form S-8 under the Securities Act of 1933, as amended, and any successor thereto.
(l)“Fair Market Value” of a share of Common Stock of the Company means, as of the date in question, the officially-quoted closing selling price of the stock (or if no selling price is quoted, the bid price) on the principal securities exchange on which the Common Stock is then listed for trading (including for this purpose the Nasdaq Stock Market) (the “Market”) for the applicable trading day or, if the Common Stock is not then listed or quoted in the Market, the Fair Market Value shall be the fair value of the Common Stock determined in good faith by the Board; provided, however, that when shares received upon exercise of an option are immediately sold in the open market, the net sale price received may be used to determine the Fair Market Value of any shares used to pay the exercise price or applicable withholding taxes and to compute the withholding taxes.
(m)“Full-Value Award” means any award under the Plan other than an Incentive Stock Option, Non-qualified Stock Option, or SAR.
5
(n)“Good Reason” shall, with respect to any participant, have the equivalent meaning as the term “good reason” or “for good reason” in any employment, consulting, or independent contractor’s agreement between the participant and the Company or any Subsidiary, or in the absence of such an agreement that contains such a defined term, shall mean (i) the assignment to the participant of any duties materially inconsistent with the participant’s duties or responsibilities as assigned by the Company (or a Subsidiary), or any other action by the Company (or a Subsidiary) which results in a material diminution in such duties or responsibilities, excluding for this purpose any isolated, insubstantial and inadvertent actions not taken in bad faith and which are remedied by the Company (or a Subsidiary) promptly after receipt of notice thereof given by the participant; (ii) any material failure by the Company (or a Subsidiary) to make any payment of compensation or pay any benefits to the participant that have been agreed upon between the Company (or a Subsidiary) and the participant in writing, other than an isolated, insubstantial and inadvertent failure not occurring in bad faith and which is remedied by the Company (or a Subsidiary) promptly after receipt of notice thereof given by the participant; or (iii) the Company’s (or Subsidiary’s) requiring the participant to be based at any office or location outside of fifty miles from the location of employment or service as of the date of award, except for travel reasonably required in the performance of the participant’s responsibilities.
(o)“Incentive Stock Option” means an option conforming to the requirements of Section 422 of the Code and any successor thereto.
(p)“Non-Employee Director” has the meaning given to such term in Rule 16b-3 under the Exchange Act and any successor thereto.
6
(q)“Non-qualified Stock Option” means any stock option other than an Incentive Stock Option.
(r)“Other Company Securities” mean securities of the Company other than Common Stock, which may include, without limitation, unbundled stock units or components thereof, debentures, preferred stock, warrants and securities convertible into or exchangeable for Common Stock or other property.
(s)“Performance Award” means a right, granted to a participant under Section 10 hereof, to receive awards based upon performance goals specified by the Committee.
(t)“Performance Goal” has the meaning set forth in Section 10 hereof.
(u)“Retirement” means retirement as defined under any Company pension plan or retirement program or termination of one’s employment on retirement with the approval of the Committee.
(v)“Share” means a share of Common Stock that may be issued pursuant to the Plan.
(w)“Subsidiary” means a corporation or other entity of which outstanding shares or ownership interests representing 50% or more of the combined voting power of such corporation or other entity entitled to elect the management thereof, or such lesser percentage as may be approved by the Committee, are owned directly or indirectly by the Company.
3.Administration.
The Plan shall be administered by the Committee; provided that the Board may, in its discretion, at any time and from time to time, resolve to administer the Plan, in which case the term “Committee” shall be deemed to mean the Board for all purposes herein. Subject to the
7
provisions of the Plan, the Committee shall be authorized to (i) select persons to participate in the Plan, (ii) determine the form and substance of grants made under the Plan to each participant, and the conditions and restrictions, if any, subject to which such grants will be made, (iii) make determinations with regard to awards, in accordance with the terms of the Plan, (iv) interpret the Plan and grants made thereunder, (v) make any adjustments necessary or desirable in connection with grants made under the Plan to eligible participants located outside the United States and (vi) adopt, amend, or rescind such rules and regulations, and make such other determinations, for carrying out the Plan as it may deem appropriate. The validity, construction, and effect of the Plan and any rules and regulations relating to the Plan shall be determined in accordance with applicable federal and state laws and rules and regulations promulgated pursuant thereto. No member of the Committee and no officer of the Company shall be liable for any action taken or omitted to be taken by such member, by any other member of the Committee or by any officer of the Company in connection with the performance of duties under the Plan, except for such person’s own willful misconduct or as expressly provided by statute. Notwithstanding the foregoing or anything herein to the contrary, the Committee may only accelerate the vesting, exercisability, and/or payment (as applicable) of an award on a discretionary basis upon a termination of the applicable participant’s status as an Employee, Non-Employee Director, or consultant (as applicable) due to the participant’s death or Disability.
The expenses of the Plan shall be borne by the Company. The Plan shall not be required to establish any special or separate fund or make any other segregation of assets to assume the payment of any award under the Plan, and rights to the payment of such awards shall be no greater than the rights of the Company’s general creditors.
4.Shares Available for the Plan; Limit on Awards.
8
Subject to adjustments as provided in Section 19, the maximum number of Shares that may be issued pursuant to the Plan as awards shall be 7,450,000 Shares. Such Shares may be in whole or in part authorized and unissued or held by the Company as treasury shares. If any grant under the Plan expires, terminates unexercised, becomes unexercisable or is surrendered or forfeited as to any Shares, then such unpurchased, surrendered or forfeited Shares shall thereafter be available for further grants under the Plan. Any Shares that are tendered or withheld in payment of the exercise price of an Incentive Stock Option, Non-qualified Stock Option or SAR, or the taxes payable with respect to the grant, vesting or settlement of an Incentive Stock Option, Non-qualified Stock Option, SAR or Full Value Award shall not thereafter be available for further grants under the Plan. In addition, shares underlying outstanding awards granted under the 2014 Plan that expire, or are terminated, surrendered or forfeited for any reason without issuance of such shares are also available for the grant of new awards under the Plan. For this purpose, for any performance-vesting share-based awards granted under the 2014 Plan that become earned after June 15, 2020, (i) any shares earned will be satisfied from the 2014 Plan share pool to the extent available, (ii) any shares earned in excess of the 2014 Plan share pool will be issued from the aggregate number of shares available for issuance under the Plan, and (iii) any shares that are not earned as a result of performance results will be treated as forfeitures.
Without limiting the generality of the foregoing provisions of this Section 4 or the generality of the provisions of Sections 3, 6 or 21 or any other section of this Plan, the Committee may, at any time or from time to time, and on such terms and conditions (that are consistent with and not in contravention of the other provisions of this Plan) as the Committee may, in its sole discretion, determine, enter into agreements (or take other actions with respect to
9
the options) for new options containing terms (including exercise prices) more (or less) favorable than the outstanding options.
In any one calendar year, the Committee shall not: (i) grant to any one Non-Employee Director awards that relate to a number of Shares in excess of five percent (5%) of the total number of Shares authorized under the Plan pursuant to this Section 4; or (ii) grant to any one Participant Performance Awards providing for the payment or distribution to any Participant of cash or other property (other than Shares) having a value in excess of $4,000,000.
5.Participation.
Participation in the Plan shall be limited to those directors (including Non-Employee Directors), officers (including non-employee officers) and employees of, and other individuals performing services for, or to whom an offer of employment has been extended by, the Company and its Subsidiaries selected by the Committee (including participants located outside the United States). Nothing in the Plan or in any grant thereunder shall confer any right on a participant to continue in the employ as a director or officer of or in the performance of services for the Company or shall interfere in any way with the right of the Company to terminate the employment or performance of services or to reduce the compensation or responsibilities of a participant at any time. By accepting any award under the Plan, each participant and each person claiming under or through him or her shall be conclusively deemed to have indicated his or her acceptance and ratification of, and consent to, any action taken under the Plan by the Company, the Board or the Committee.
Incentive Stock Options or Non-qualified Stock Options, SARs, restricted stock units, restricted stock awards, performance awards, or any combination thereof, may be granted to such
10
persons and for such number of Shares as the Committee shall determine (such individuals to whom grants are made being sometimes herein called “optionees” or “grantees,” as the case may be). Determinations made by the Committee under the Plan need not be uniform and may be made selectively among eligible individuals under the Plan, whether or not such individuals are similarly situated. A grant of any type made hereunder in any one year to an eligible participant shall neither guarantee nor preclude a further grant of that or any other type to such participant in that year or subsequent years.
6.Incentive and Non-qualified Options and SARs.
The Committee may from time to time grant to eligible participants Incentive Stock Options, Non-qualified Stock Options, or any combination thereof; provided that the Committee may grant Incentive Stock Options only to eligible employees of the Company or its subsidiaries (as defined for this purpose in Section 424(f) of the Code or any successor thereto). The options granted shall take such form as the Committee shall determine, subject to the following terms and conditions.
It is the Company’s intent that Non-qualified Stock Options granted under the Plan not be classified as Incentive Stock Options, that Incentive Stock Options be consistent with and contain or be deemed to contain all provisions required under Section 422 of the Code and any successor thereto, and that any ambiguities in construction be interpreted in order to effectuate such intent. If an Incentive Stock Option granted under the Plan does not qualify as such for any reason, then to the extent of such non-qualification, the stock option represented thereby shall be regarded as a Non-qualified Stock Option duly granted under the Plan, provided that such stock option otherwise meets the Plan’s requirements for Non-qualified Stock Options.
11
(a)Price. The price per Share deliverable upon the exercise of each option (“exercise price”) shall be established by the Committee, except that the exercise price may not be less than 100% of the Fair Market Value of a share of Common Stock as of the date of grant of the option, and in the case of the grant of any Incentive Stock Option to an employee who, at the time of the grant, owns more than 10% of the total combined voting power of all classes of stock of the Company or any of its Subsidiaries, the exercise price may not be less than 110% of the Fair Market Value of a share of Common Stock as of the date of grant of the option, in each case unless otherwise permitted by Section 422 of the Code or any successor thereto.
(b)Payment. Options may be exercised, in whole or in part, upon payment of the exercise price of the Shares to be acquired. Unless otherwise determined by the Committee, payment shall be made (i) in cash (including check, bank draft, money order or wire transfer of immediately available funds), (ii) by delivery of outstanding shares of Common Stock with a Fair Market Value on the date of exercise equal to the aggregate exercise price payable with respect to the options’ exercise, (iii) by simultaneous sale through a broker reasonably acceptable to the Committee of Shares acquired on exercise, as permitted under Regulation T of the Federal Reserve Board, (iv), if the Shares are traded on an established securities market at the time of exercise, by authorizing the Company to withhold from issuance a number of Shares issuable upon exercise of the options which, when multiplied by the Fair Market Value of a share of Common Stock on the date of exercise, is equal to the aggregate exercise price payable with respect to the options so exercised, or (v) by any combination of the foregoing.
In the event a grantee elects to pay the exercise price payable with respect to an option pursuant to clause (ii) above, (A) only a whole number of share(s) of Common Stock (and not fractional shares of Common Stock) may be tendered in payment, (B) such grantee must present
12
evidence acceptable to the Company that he or she has owned any such shares of Common Stock tendered in payment of the exercise price (and that such tendered shares of Common Stock have not been subject to any substantial risk of forfeiture) for at least six months prior to the date of exercise, and (C) Common Stock must be delivered to the Company. Delivery for this purpose may, at the election of the grantee, be made either by (A) physical delivery of the certificate(s) for all such shares of Common Stock tendered in payment of the price, accompanied by duly executed instruments of transfer in a form acceptable to the Company, or (B) direction to the grantee’s broker to transfer, by book entry, such shares of Common Stock from a brokerage account of the grantee to a brokerage account specified by the Company. When payment of the exercise price is made by delivery of Common Stock, the difference, if any, between the aggregate exercise price payable with respect to the option being exercised and the Fair Market Value of the shares of Common Stock tendered in payment (plus any applicable taxes) shall be paid in cash. No grantee may tender shares of Common Stock having a Fair Market Value exceeding the aggregate exercise price payable with respect to the option being exercised (plus any applicable taxes).
In the event a grantee elects to pay the exercise price payable with respect to an option pursuant to clause (iv) above, (A) only a whole number of Share(s) (and not fractional Shares) may be withheld in payment and (B) such grantee must present evidence acceptable to the Company that he or she has owned a number of shares of Common Stock at least equal to the number of Shares to be withheld in payment of the exercise price (and that such owned shares of Common Stock have not been subject to any substantial risk of forfeiture) for at least six months prior to the date of exercise. When payment of the exercise price is made by withholding of Shares, the difference, if any, between the aggregate exercise price payable with respect to the
13
option being exercised and the Fair Market Value of the Shares withheld in payment (plus any applicable taxes) shall be paid in cash. No grantee may authorize the withholding of Shares having a Fair Market Value exceeding the aggregate exercise price payable with respect to the option being exercised (plus any applicable taxes). Any withheld Shares shall no longer be issuable under such option.
(c)Terms of Options. The term during which each option may be exercised shall be determined by the Committee, but if required by the Code and except as otherwise provided herein, no option shall be exercisable in whole or in part more than ten years from the date it is granted, and no Incentive Stock Option granted to an employee who at the time of the grant owns more than 10% of the total combined voting power of all classes of stock of the Company or any of its Subsidiaries shall be exercisable more than five years from the date it is granted. All rights to purchase Shares pursuant to an option shall, unless sooner terminated, expire at the date designated by the Committee. The Committee shall determine the date on which each option shall become exercisable and may provide that an option shall become exercisable in installments. The Shares constituting each installment may be purchased in whole or in part at any time after such installment becomes exercisable, subject to such minimum exercise requirements as may be designated by the Committee. Prior to the exercise of an option and delivery of the Shares represented thereby, the optionee shall have no rights as a stockholder with respect to any Shares covered by such outstanding option (including any dividend or voting rights).
(d)Limitations on Grants. If required by the Code, the aggregate Fair Market Value (determined as of the grant date) of Shares for which an Incentive Stock Option is exercisable for the first time during any calendar year under all equity incentive plans of the Company and its
14
Subsidiaries (as defined in Section 422 of the Code or any successor thereto) may not exceed $100,000.
(e)Termination.
(i)Death or Disability. Except as otherwise determined by the Committee, if a participant ceases to be a director, officer or employee of, or to perform other services for, the Company and any Subsidiary due to death or Disability, all of the participant’s options and SARs that were exercisable on the date of such cessation shall remain so for a period of 180 days from the date of such death or Disability, but in no event after the expiration date of the options or SARs; provided that the participant does not engage in Competition during such 180-day period unless he or she received written consent to do so from the Board or the Committee. Notwithstanding the foregoing, if the Disability giving rise to the termination of employment is not within the meaning of Section 22(e)(3) of the Code or any successor thereto, Incentive Stock Options not exercised by such participant within 90 days after the date of termination of employment will cease to qualify as Incentive Stock Options and will be treated as Non-qualified Stock Options under the Plan if required to be so treated under the Code.
(ii)Retirement. Except as otherwise determined by the Committee, if a participant ceases to be a director, officer or employee of, or to perform other services for, the Company or any Subsidiary upon the occurrence of his or her Retirement, (A) all of the participant’s options and SARs that were exercisable on the date of Retirement shall remain exercisable for, and shall otherwise terminate at the end of, a period of 90 days after the date of Retirement, but in no event after the expiration date of the options
15
or SARs; provided that the participant does not engage in Competition during such 90-day period unless he or she receives written consent to do so from the Board or the Committee, and (B) all of the participant’s options and SARs that were not exercisable on the date of Retirement shall be forfeited immediately upon such Retirement; provided, however, that such options and SARs may become fully vested and exercisable in the discretion of the Committee. Notwithstanding the foregoing, Incentive Stock Options not exercised by such participant within 90 days after Retirement will cease to qualify as Incentive Stock Options and will be treated as Non-qualified Stock Options under the Plan if required to be so treated under the Code.
(iii)Discharge for Cause. Except as otherwise determined by the Committee, if a participant ceases to be a director, officer or employee of, or to perform other services for, the Company or a Subsidiary due to Cause, or if a participant does not become a director, officer or employee of, or does not begin performing other services for, the Company or a Subsidiary for any reason, all of the participant’s options and SARs shall expire and be forfeited immediately upon such cessation or non-commencement, whether or not then exercisable.
(iv)Other Termination. Except as otherwise determined by the Committee, if a participant ceases to be a director, officer or employee of, or to otherwise perform services for, the Company or a Subsidiary for any reason other than death, Disability, Retirement or Cause, (A) all of the participant’s options and SARs that were exercisable on the date of such cessation shall remain exercisable for, and shall otherwise terminate at the end of, a period of 90 days after the date of such cessation, but in no event after the expiration date of the options or SARs; provided that the participant does not engage in
16
Competition during such 90-day period unless he or she receives written consent to do so from the Board or the Committee, and (B) all of the participant’s options and SARs that were not exercisable on the date of such cessation shall be forfeited immediately upon such cessation.
(f)Options Exercisable for Restricted Stock. The Committee shall have the discretion to grant options which are exercisable for Shares of restricted stock. Should the participant cease to be a director, officer or employee of, or to perform other services for, the Company or any Subsidiary while holding such Shares of restricted stock, the Company shall have the right to repurchase, at the exercise price paid per share, any or all of those Shares of restricted stock. The terms upon which such repurchase right shall be exercisable (including the period and procedure for exercise and the appropriate vesting schedule for the purchased shares) shall be established by the Committee and set forth in the document evidencing such repurchase right.
7.Stock Appreciation Rights.
The Committee shall have the authority to grant SARs under this Plan. SARs shall be subject to such terms and conditions as the Committee may specify; provided that (a) the exercise price of an SAR may never be less than the Fair Market Value of the Shares subject to the SAR on the date the SAR is granted and (b) no SAR will be exercisable in whole or in part more than ten years from the date the SAR is granted.
Prior to the exercise of the SAR and delivery of the cash and/or Shares represented thereby, the participant shall have no rights as a stockholder with respect to Shares covered by such outstanding SAR (including any dividend or voting rights).
17
Upon the exercise of an SAR, the participant shall be entitled to a distribution in an amount equal to (a) the difference between the Fair Market Value of a share of Common Stock on the date of exercise and the exercise price of the SAR multiplied by (b) the number of Shares as to which the SAR is exercised. The Committee shall decide whether such distribution shall be in cash or in Shares having a Fair Market Value equal to such amount. Upon distribution, the full number of Shares covered by the SAR, rather than the actual number of Shares distributed, will be counted as issued under the Plan for purposes of the limit on awards set forth in Section 4 above.
All SARs will be exercised automatically on the last day prior to the expiration date of the SAR so long as the Fair Market Value of a share of Common Stock on that date exceeds the exercise price of the SAR.
8.Restricted Stock.
The Committee may at any time and from time to time grant Shares of restricted stock under the Plan to such participants and in such amounts as it determines. Each grant of restricted stock shall specify the applicable restrictions on such Shares, the duration of such restrictions (which shall be at least six months except as otherwise determined by the Committee or provided in the third paragraph of this Section 8), and the time or times at which such restrictions shall lapse with respect to all or a specified number of Shares that are part of the grant.
The participant will be required to pay the Company the aggregate par value of any Shares of restricted stock (or such larger amount as the Board may determine to constitute capital under Section 154 of the Delaware General Corporation Law, as amended, or any successor thereto) within ten days of the date of grant, unless such Shares of restricted stock are treasury
18
shares. The par value (or such larger amount) must be paid in cash or other legal consideration permitted by the Delaware General Corporation Law. Unless otherwise determined by the Committee, certificates representing Shares of restricted stock granted under the Plan will be held in escrow by the Company on the participant’s behalf during any period of restriction thereon and will bear an appropriate legend specifying the applicable restrictions thereon, and the participant will be required to execute a blank stock power therefor. Except as otherwise provided by the Committee and subject to Section 11 hereof, during such period of restriction the participant shall have all of the rights of a holder of Common Stock, including but not limited to the rights to receive dividends and to vote, and any stock or other securities received as a distribution with respect to such participant’s restricted stock shall be subject to the same restrictions as then in effect for the restricted stock.
Except as otherwise provided by the Committee, at such time as a participant ceases to be a director, officer, or employee of, or to otherwise perform services for, the Company and its Subsidiaries due to death, Disability or Retirement during any period of restriction, all restrictions on Shares granted to such participant shall lapse. At such time as a participant ceases to be, or in the event a participant does not become, a director, officer or employee of, or otherwise performing services for, the Company or its Subsidiaries for any other reason, all Shares of restricted stock granted to such participant on which the restrictions have not lapsed shall be immediately forfeited to the Company.
9.Restricted Stock Units; Deferred Stock Units.
The Committee may at any time and from time to time grant restricted stock units under the Plan to such participants and in such amounts as it determines. Each grant of restricted stock units shall specify the applicable restrictions on such units, the duration of such restrictions
19
(which shall be at least six months except as otherwise determined by the Committee or provided in the third paragraph of this Section 9), and the time or times at which such restrictions shall lapse with respect to all or a specified number of units that are part of the grant.
Each restricted stock unit shall be equivalent in value to one share of Common Stock and shall entitle the participant to receive one Share from the Company at the end of the vesting period (the “Vesting Period”) of the applicable restricted stock unit, unless the participant elects in a timely fashion, as provided below, to defer the receipt of such Shares with respect to the restricted stock units. The Committee may require the payment by the participant of a specified purchase price in connection with any restricted stock unit award.
Except as otherwise provided by the Committee, during the Vesting Period the participant shall not have any rights as a stockholder of the Company; provided that the participant shall have the right to receive accumulated dividends or distributions with respect to the corresponding number of shares of Common Stock underlying each restricted stock unit at the end of the Vesting Period, unless the participant elects in a timely fashion, as provided below, to defer the receipt of the Shares with respect to the restricted stock units, in which case such accumulated dividends or distributions shall be paid by the Company to the participant at such time as the payment of the Shares with respect to the deferred stock units.
Except as otherwise provided by the Committee, immediately prior to a Change in Control or at such time as a participant ceases to be a director, officer or employee of, or to otherwise perform services for, the Company and any of its Subsidiaries due to death, Disability or Retirement during any Vesting Period, all restrictions on restricted stock units granted to such participant shall lapse and the participant shall be then entitled to receive payment in Shares with
20
respect to the applicable restricted stock units. At such time as a participant ceases to be a director, officer or employee of, or otherwise performing services for, the Company and any of its Subsidiaries for any other reason, all restricted stock units granted to such participant on which the restrictions have not lapsed shall be immediately forfeited to the Company.
A participant may elect by written notice to the Company, which notice must be made before the later of (i) the close of the tax year preceding the year in which the restricted stock units are granted or (ii) 30 days of first becoming eligible to participate in the Plan (or, if earlier, the last day of the tax year in which the participant first becomes eligible to participate in the plan) and on or prior to the date the restricted stock units are granted, to defer the receipt of all or a portion of the Shares due with respect to the vesting of such restricted stock units; provided that the Committee may impose such additional restrictions with respect to the time at which a participant may elect to defer receipt of Shares subject to the deferral election, and any other terms with respect to a grant of restricted stock units to the extent the Committee deems necessary to enable the participant to defer recognition of income with respect to such units until the Shares underlying such units are issued or distributed to the participant. Upon such deferral, the restricted stock units so deferred shall be converted into deferred stock units. Except as provided below, delivery of Shares with respect to deferred stock units shall be made at the end of the deferral period set forth in the participant’s deferral election notice (the “Deferral Period”). Deferral Periods shall be no less than one year after the vesting date of the applicable restricted stock units.
Except as otherwise provided by the Committee, during such Deferral Period the participant shall not have any rights as a stockholder of the Company; provided that, the participant shall have the right to receive accumulated dividends or distributions with respect to
21
the corresponding number of shares of Common Stock underlying each deferred stock unit at the end of the Deferral Period.
Except as otherwise provided by the Committee, if a participant ceases to be a director, officer or employee of, or to otherwise perform services for, the Company or any Subsidiary due to his or her death prior to the end of the Deferral Period, the participant shall receive payment in Shares in respect of such participant’s deferred stock units which would have matured or been earned at the end of such Deferral Period as if the applicable Deferral Period had ended as of the date of such participant’s death.
Except as otherwise provided by the Committee, if a participant ceases to be a director, officer or employee of, or to otherwise perform services for, the Company or any Subsidiary upon becoming disabled (as defined under Section 409A(a)(2)(C) of the Code) or Retirement or for any other reason except death or termination for Cause prior to the end of the Deferral Period, the participant shall receive payment in Shares in respect of such participant’s deferred stock units at the end of the applicable Deferral Period or on such accelerated basis as the Committee may determine, to the extent permitted by regulations issued under Section 409A(a)(3) of the Code.
Except as otherwise provided by the Committee, if a participant ceases to be a director, officer or employee of, or to otherwise perform services for, the Company or any Subsidiary due to termination for Cause such participant shall immediately forfeit any deferred stock units which would have matured or been earned at the end of the applicable Deferral Period.
Except as otherwise provided by the Committee, in the event of a Change in Control that also constitutes a “change in the ownership or effective control of” the Company, or a “change in
22
the ownership of a substantial portion of the assets” of the Company (in each case as determined under IRS Notice 2005-1, as amended or supplemented from time to time, or regulations issued pursuant to Section 409A(a)(2)(A)(v) of the Code), a participant shall receive payment in Shares in respect of such participant’s deferred stock units which would have matured or been earned at the end of the applicable Deferral Period as if such Deferral Period had ended immediately prior to the Change in Control; provided, however, that if an event that constitutes a Change in Control hereunder does not constitute a “change in control” under Section 409A of the Code (or the regulations promulgated thereunder), no payments with respect to the deferred stock units shall be made under this paragraph to the extent such payments would constitute an impermissible acceleration under Section 409A of the Code.
10.Performance Awards.
The Committee is authorized to make Performance Awards payable in cash, Shares or other awards, on terms and conditions established by the Committee, subject to the provisions of this Section 10. In particular, the amounts payable under a Performance Award may vary based on, be indexed to, or be conditioned all or in part on, the satisfaction of one or more performance goals, which performance goals may relate to such measures or combination of measures of individual performance and/or the Company’s or a Subsidiary’s performance (including, without limitation, any divisional, business unit or other performance) as the Committee, in its sole discretion, deems appropriate. Achievement of performance goals in respect of such Performance Awards shall be measured over any performance period determined by the Committee.
The Committee may condition the grant, vesting, exercise and/or settlement of Performance Awards upon achievement during a specified performance period of no less than three months of one or more performance goals established by the Committee (herein,
23
“Performance Goals”) which may be based on, without limitation: net income, operating income, earnings before interest and taxes, earnings before interest, taxes, depreciation and amortization, earnings per share, return on investment, return on capital, return on invested capital, return on capital compared to cost of capital, return on capital employed, return on equity, return on assets, return on net assets, total shareholder return, cash return on capitalization, enterprise value, net debt, revenue, revenue ratios (per employee or per customer), stock price, market share, shareholder value, net cash flow, cash flow, cash flow from operations, cash balance, cash conversion cycle, cost reductions and cost ratios (per employee or per customer), new product releases and strategic positioning programs, including the achievement of specified milestones or the completion of specified projects. The Performance Goals may be absolute or relative, and may include, without limitation, risk-based adjustments or adjustments for items that are unusual in nature or infrequent in occurrence.
The Committee may adjust the time and/or Performance Goals applicable to Performance Awards to take into account changes in law, accounting and tax rules, and to make such adjustments as the Committee deems appropriate to reflect the inclusion or exclusion of the impact of extraordinary or unusual items, events or circumstances in order to avoid windfalls or hardships. The Committee may not increase the Common Stock or other amount that would otherwise be payable upon achievement of the stated Performance Goal(s), but may reduce the Common Stock or other amount due upon attainment of the stated Performance Goal(s), basing such cutback either upon subjective performance criteria, individual performance evaluations, or any other standards that are provided in the terms of the Performance Award.
The Committee may establish a Performance Award pool, which shall be an unfunded pool, for purposes of measuring Company performance in connection with Performance Awards.
24
The amount of such Performance Award pool shall be based upon the achievement of one or more Performance Goals during the given performance period, as specified by the Committee. The Committee may specify the amount of the Performance Award pool as a percentage of any of such business criteria, a percentage thereof in excess of a threshold amount, or as another amount which need not bear a strictly mathematical relationship to such business criteria.
Settlement of Performance Awards shall be in cash, Shares, other awards or other property, in the discretion of the Committee. The Committee may, in its discretion, reduce the amount of a settlement otherwise to be made in connection with such Performance Awards. The Committee shall specify the circumstances in which such Performance Awards shall be paid or forfeited in the event of termination of the participant’s employment or service prior to the end of a performance period or settlement of Performance Awards. Any earned Performance Award shall be paid no later than two and one-half months after the last day of the tax year in which a performance period is completed.
11.Dividends and Dividend Equivalents.
The Committee is authorized to grant dividend equivalents to a participant entitling the participant to receive cash, Shares, other awards, or other property equal in value to dividends paid with respect to a specified number of shares of Common Stock of the Company, or other periodic payments. Dividend equivalents may be awarded on a free-standing basis or in connection with another award. Notwithstanding anything in the Plan to the contrary, the Committee may not provide for the current payment of dividends or dividend equivalents with respect to any shares of Common Stock subject to an outstanding award (or portion thereof) that has not vested. For any such award, the Committee may provide only for the accrual of dividends or dividend equivalents that will not be payable to the participant unless and until, and only to
25
the extent that, the award vests. Dividend or dividend equivalent rights shall be as specified in the award agreement or pursuant to a resolution adopted by the Committee with respect to outstanding awards. No dividend equivalents shall be granted with respect to Non-qualified Stock Options, Incentive Stock Options or SARs.
12.Other Stock-Based Awards.
The Committee is authorized, subject to limitations under applicable law, to grant to participants such other awards that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, shares of Common Stock of the Company, as deemed by the Committee to be consistent with the purposes of the Plan, including, without limitation, convertible or exchangeable debt securities, other rights convertible or exchangeable into Shares, purchase rights for Shares, awards with value and payment contingent upon performance of the Company or any other factors designated by the Committee, and awards valued by reference to the book value of Shares or the value of securities of or the performance of specified Subsidiaries. The Committee shall determine the terms and conditions of such awards. Shares delivered pursuant to an award in the nature of a purchase right granted under this Section 12 shall be purchased for such consideration (including without limitation loans from the Company or a Subsidiary to the extent permissible under the Sarbanes Oxley Act of 2002 and other applicable law), paid for at such times, by such methods, and in such forms, including, without limitation, cash, Shares, other awards or other property, as the Committee shall determine. Cash awards, as an element of or supplement to any other award under the Plan, may also be granted pursuant to this Section 12.
13.Change in Control.
26
Unless otherwise determined by the Committee, if there is a Change in Control of the Company and a participant’s employment or service as a director, officer, or employee of the Company or a Subsidiary, is terminated (1) by the Company without Cause, (2) by reason of the participant’s death or Disability, or (3) by the participant for Good Reason, within twelve months after such Change in Control:
(i)any award carrying a right to exercise that was not previously vested and exercisable as of the time of the Change in Control, shall become immediately vested and exercisable, and shall remain so for up to 180 days after the date of termination (but in no event after the expiration date of the award), subject to applicable restrictions;
(ii)any restrictions, deferral of settlement, and forfeiture conditions applicable to any other award granted under the Plan shall lapse and such awards shall be deemed fully vested as of the time of the Change in Control, except to the extent of any waiver by the participant, and subject to applicable restrictions; and
(iii)with respect to any outstanding Performance Award, the Committee may, within its discretion, deem the performance goals and other conditions relating to the Performance Award as having been met, at 100% of the target level, as of the date of the Change in Control. Such Performance Award shall be paid no later than two and one-half months after the last day of the tax year in which such Change of Control occurred (or in the event that such Change in Control causes the tax year to end, no later than two and one-half months after the closing of such Change in Control).
Notwithstanding the foregoing, or any other provision of this Plan to the contrary, in connection with any transaction of the type specified by clause (iii) of the definition of a Change
27
in Control in Section 2(c), the Committee may, in its discretion, (i) cancel any or all outstanding options under the Plan in consideration for payment to the holders thereof of an amount equal to the portion of the consideration that would have been payable to such holders pursuant to such transaction if their options had been fully exercised immediately prior to such transaction, less the aggregate exercise price that would have been payable therefor, or (ii) if the amount that would have been payable to the option holders pursuant to such transaction if their options had been fully exercised immediately prior thereto would be equal to or less than the aggregate exercise price that would have been payable therefor, cancel any or all such options for no consideration or payment of any kind. Payment of any amount payable pursuant to the preceding sentence may be made in cash or, in the event that the consideration to be received in such transaction includes securities or other property, in cash and/or securities or other property in the Committee’s discretion.
14.Withholding Taxes.
(a)Participant Election. Unless otherwise determined by the Committee, a participant may elect to deliver shares of Common Stock (or have the Company withhold shares acquired upon exercise of an option or SAR or deliverable upon grant or vesting of restricted stock, as the case may be) to satisfy, in whole or in part, the amount the Company is required to withhold for taxes in connection with the exercise of an option or SAR or the delivery of restricted stock upon grant or vesting, as the case may be. Such election must be made on or before the date the amount of tax to be withheld is determined. Once made, the election shall be irrevocable. The fair market value of the shares to be withheld or delivered will be the Fair Market Value as of the date the amount of tax to be withheld is determined. In the event a participant elects to deliver or have the Company withhold shares of Common Stock pursuant to
28
this Section 14(a), such delivery or withholding must be made subject to the conditions and pursuant to the procedures set forth in Section 6(b) with respect to the delivery or withholding of Common Stock in payment of the exercise price of options.
(b)Company Requirement. The Company may require, as a condition to any grant or exercise under the Plan or to the delivery of certificates for Shares issued hereunder, that the grantee make provision for the payment to the Company, either pursuant to Section 14(a) or this Section 14(b), of federal, state or local taxes of any kind required by law to be withheld with respect to any grant or delivery of Shares. The Company, to the extent permitted or required by law, shall have the right to deduct from any payment of any kind (including salary or bonus) otherwise due to a grantee, an amount equal to any federal, state or local taxes of any kind required by law to be withheld with respect to any grant or delivery of Shares under the Plan.
15.Written Agreement; Minimum Vesting Period.
Each employee to whom a grant is made under the Plan shall enter into a written agreement with the Company that shall contain such provisions, including without limitation vesting and holding requirements, consistent with the provisions of the Plan, as may be approved by the Committee. Notwithstanding any other provision of the Plan to the contrary, no grant of an Option or SAR under this Plan to any participant on or after the Effective Date may be exercised, and no restrictions relating to Full-Value Awards may lapse, earlier than the date that is one (1) year following the date the award is made; provided, however, that, notwithstanding the foregoing, (a) the Committee may waive or provide for the lapse of such vesting restrictions upon the participant’s death, retirement or Disability, and (b) grants or awards that result in the issuance of an aggregate of up to five percent (5%) of the shares of Common Stock that may be authorized for grant under Section 4 of the Plan (as such authorized number of shares of
29
Common Stock may be adjusted as provided under the terms of the Plan) may be granted or awarded to any one or more participants without regard to the minimum vesting requirement of this Section 15.
16.Transferability.
Unless the Committee determines otherwise, no award granted under the Plan shall be transferable by a participant other than by will or the laws of descent and distribution or to a participant’s Family Member by gift or a qualified domestic relations order as defined by the Code. No award granted under the Plan shall be transferable by a participant for consideration. Unless the Committee determines otherwise, an option, SAR or performance award may be exercised only by the optionee or grantee thereof; by his or her Family Member if such person has acquired the option, SAR or performance award by gift or qualified domestic relations order; by the executor or administrator of the estate of any of the foregoing or any person to whom the Option is transferred by will or the laws of descent and distribution; or by the guardian or legal representative of any of the foregoing; provided that Incentive Stock Options may be exercised by any Family Member, guardian or legal representative only if permitted by the Code and any regulations thereunder. All provisions of this Plan shall in any event continue to apply to any option, SAR, performance award or restricted stock granted under the Plan and transferred as permitted by this Section 16, and any transferee of any such option, SAR, performance award or restricted stock shall be bound by all provisions of this Plan as and to the same extent as the applicable original grantee.
17.Listing, Registration and Qualification.
If the Committee determines that the listing, registration or qualification upon any securities exchange or under any law of Shares subject to any option, SAR, performance award,
30
restricted stock unit, or restricted stock grant is necessary or desirable as a condition of, or in connection with, the granting of same or the issue or purchase of Shares thereunder, no such option or SAR may be exercised in whole or in part, no such performance award may be paid out, and no Shares may be issued, unless such listing, registration or qualification is effected free of any conditions not acceptable to the Committee.
18.Transfers Between Company and Subsidiaries.
The transfer of an employee, consultant or independent contractor from the Company to a Subsidiary, from a Subsidiary to the Company, or from one Subsidiary to another shall not be considered a termination of employment or services; nor shall it be considered a termination of employment if an employee is placed on military or sick leave or such other leave of absence which is considered by the Committee as continuing intact the employment relationship.
19.Adjustments.
In the event of a reorganization, recapitalization, stock split, stock dividend, combination of shares, merger, consolidation, distribution of assets, or any other change in the corporate structure or shares of the Company, the Committee shall make such adjustment as it deems appropriate in the number and kind of Shares or other property available for issuance under the Plan (including, without limitation, the total number of Shares available for issuance under the Plan pursuant to Section 4), in the number and kind of options, SARs, Shares or other property covered by grants previously made under the Plan, and in the exercise price of outstanding options and SARs; provided, however, that the Committee shall not be required to make any adjustment that would (i) require the inclusion of any compensation deferred pursuant to provisions of the Plan (or an award thereunder) in a participant’s gross income pursuant to Section 409A of the Code and the regulations issued thereunder from time to time and/or (ii)
31
cause any award made pursuant to the Plan to be treated as providing for the deferral of compensation pursuant to such Code section and regulations. Any such adjustment shall be final, conclusive and binding for all purposes of the Plan. In the event of any merger, consolidation or other reorganization in which the Company is not the surviving or continuing corporation or in which a Change in Control is to occur, all of the Company’s obligations regarding awards that were granted hereunder and that are outstanding on the date of such event shall, on such terms as may be approved by the Committee prior to such event, be (a) canceled in exchange for payment of cash or other property determined by the Committee to be equal to the intrinsic value of such awards at the time of the Change in Control (but, with respect to deferred stock units, only if such merger, consolidation, other reorganization, or Change in Control constitutes a “change in ownership or control” of the Company or a “change in the ownership of a substantial portion of the assets” of the Company, as determined pursuant to regulations issued under Section 409A(a)(2)(A)(v) of the Code) or (b) assumed by the surviving or continuing corporation.
20.Amendment and Termination of the Plan.
The Board of Directors or the Committee, without approval of the stockholders, may amend or terminate the Plan, except that no amendment shall become effective without prior approval of the stockholders of the Company if stockholder approval would be required by applicable law or regulations, including if required for continued compliance with the provisions of Section 422 of the Code or any successor thereto, or by any listing requirement of the principal stock exchange on which the Common Stock is then listed.
Notwithstanding any other provisions of the Plan, and in addition to the powers of amendment set forth in this Section 20 and Section 21 hereof or otherwise, the provisions hereof and the provisions of any award made hereunder may be amended unilaterally by the Committee
32
from time to time to the extent necessary (and only to the extent necessary) to prevent the implementation, application or existence (as the case may be) of any such provision from (i) requiring the inclusion of any compensation deferred pursuant to the provisions of the Plan (or an award thereunder) in a participant’s gross income pursuant to Section 409A of the Code, and the regulations issued thereunder from time to time and/or (ii) inadvertently causing any award hereunder to be treated as providing for the deferral of compensation pursuant to such Code section and regulations.
21.Amendment of Awards under the Plan.
To the extent specifically permitted by other provisions of this Plan, the terms of any outstanding award under the Plan may be amended by the Committee in its discretion; provided that, except as otherwise provided in Section 16, no such amendment shall adversely affect in a material manner any right of a participant under the award without his or her written consent. Without prior shareholder approval, neither the Board nor the Committee may amend the Plan or the terms of any outstanding options or SARs awarded under the Plan to (i) lower or reduce the exercise price, (ii) cancel, exchange or surrender any outstanding option or SAR in exchange for cash or another award for the purpose of repricing the award, or (iii) cancel, exchange or surrender any outstanding option or SAR in exchange for an option or SAR with an exercise price that is less than the exercise price of the original award; provided that the foregoing shall not apply to any adjustment of an option or SAR pursuant to Section 19.
22.Commencement Date; Termination Date.
The A&R 2020 Equity Incentive Plan will be effective on the date it is approved by the Company’s stockholders (the “Effective Date”). Unless previously terminated upon the adoption of a resolution of the Board terminating the Plan, the Plan shall terminate at the close of business
33
on May 14, 2036. No termination of the Plan shall materially and adversely affect any of the rights or obligations of any person, without his or her written consent, under any awards theretofore granted under the Plan.
23.Severability.
Whenever possible, each provision of the Plan shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of the Plan is held to be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of the Plan.
24.Governing Law.
The Plan shall be governed by the corporate laws of the State of Delaware, without giving effect to any choice of law provisions that might otherwise refer construction or interpretation of the Plan to the substantive law of another jurisdiction.
34
Exhibit 1.1
COMMERCIAL VEHICLE GROUP, INC.
Common Stock
($0.01 par value per share)
Capital on Demand™ Sales Agreement
June 18, 2026
JonesTrading Institutional Services LLC
325 Hudson Street, 6th Floor
New York, NY 10013
Ladies and Gentlemen:
Commercial Vehicle Group, Inc., a Delaware corporation (the “Company”), confirms its agreement (this “Agreement”) with JonesTrading Institutional Services LLC (the “Agent”), as follows:
1. Issuance and Sale of Shares. The Company agrees that, from time to time during the term of this Agreement, on the terms and subject to the conditions set forth herein, it may issue and sell through or to the Agent, as agent or principal, shares (the “Placement Shares”) of common stock of the Company, $0.01 par value per share (the “Common Stock”), provided, however, that in no event shall the Company issue or sell, through or to Agent, Placement Shares for an aggregate gross sales proceeds that would exceed (a) the dollar amount of shares of Common Stock registered on the Registration Statement (as defined below), (b) the number of authorized but unissued shares of Common Stock, or (c) the dollar amount of shares of Common Stock permitted to be sold under Form S-3, including, if applicable, General Instruction I.B.6 of Form S-3, or (d) the dollar amount of shares of Common Stock for which the Company has filed a Prospectus (as defined below) (the least of (a), (b), (c) and (d), the “Maximum Amount”). Notwithstanding anything to the contrary contained herein, the parties hereto agree that compliance with the limitations set forth in this Section 1 on the amount of Placement Shares issued and sold under this Agreement shall be the sole responsibility of the Company and that Agent shall have no obligation in connection with such compliance, provided that the Agent follows the trading instructions provided by the Company pursuant to any Placement Notice in all material respects. The issuance and sale of Placement Shares hereunder will be effected pursuant to the Registration Statement and at no earlier time than such time as the Registration Statement shall have been declared effective by the Securities and Exchange Commission (the “Commission”), although nothing in this Agreement shall be construed as requiring the Company to issue any Placement Shares.
As of the date hereof, the Company has filed, in accordance with the provisions of the Securities Act of 1933, as amended, and the rules and regulations thereunder (the “Securities Act”), with the Commission a registration statement on Form S-3 (333-296502), including a base prospectus, relating to certain securities, including the Placement Shares to be issued from time to time by the Company, and which incorporates by reference documents that the Company has filed or will file in accordance with the provisions of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder (the “Exchange Act”). The Company has prepared a prospectus supplement to the base prospectus included as part of the registration statement specifically relating to the Placement Shares (the “Prospectus Supplement”). The Company will furnish to the Agent, for use by the Agent, copies of the base prospectus included as part of such registration statement, as supplemented by the Prospectus Supplement, relating to the Placement Shares. Except where the context otherwise requires, such
registration statement, and any post-effective amendment thereto, including all documents filed as part thereof or incorporated by reference therein, and including any information contained in a Prospectus (as defined below) subsequently filed with the Commission pursuant to Rule 424(b) under the Securities Act or deemed to be a part of such registration statement pursuant to Rule 430B or 462(b) under the Securities Act or any subsequent registration statement on Form S-3 filed pursuant to Rule 415(a)(6) under the Securities Act by the Company to cover any Placement Shares, as a result of the end of the three-year period described in Rule 415(a)(5) of the Securities Act, is herein called the “Registration Statement.” The base prospectus, including all documents incorporated therein by reference, to the extent such information has not been superseded or modified in accordance with Rule 412 under the Securities Act (as qualified by Rule 430B(g) of the Securities Act), included in the Registration Statement, as it may be supplemented by one or more prospectus supplements, in the form in which such Prospectus Supplement has most recently been filed by the Company with the Commission pursuant to Rule 424(b) under the Securities Act, together with any then issued Issuer Free Writing Prospectus (defined below), is herein called the “Prospectus.”
Any reference herein to the Registration Statement, the Prospectus Supplement, the Prospectus or any Issuer Free Writing Prospectus shall be deemed to refer to and include the documents, if any, incorporated by reference therein (the “Incorporated Documents”), including, unless the context otherwise requires, the documents, if any, filed as exhibits to such Incorporated Documents. Any reference herein to the terms “amend,” “amendment” or “supplement” with respect to the Registration Statement, the Prospectus Supplement, the Prospectus or any Issuer Free Writing Prospectus shall be deemed to refer to and include the filing of any document under the Exchange Act on or after the most-recent effective date of the Registration Statement, or the date of the Prospectus or such Issuer Free Writing Prospectus, as the case may be, and incorporated therein by reference. For purposes of this Agreement, all references to the Registration Statement, the Prospectus or to any amendment or supplement thereto shall be deemed to include any copy filed with the Commission pursuant to its Electronic Data Gathering Analysis and Retrieval system, or if applicable, the Interactive Data Electronic Application system when used by the Commission (collectively, “EDGAR”).
2. Placements. Each time that the Company wishes to issue and sell Placement Shares hereunder (each, a “Placement”), it will notify the Agent by email notice (or other method mutually agreed to in writing by the Parties) of the number or dollar value of Placement Shares to be sold, the time period during which sales are requested to be made, any limitation on the number of Placement Shares that may be sold in any one Trading Day and any minimum price below which sales may not be made (a “Placement Notice”), the form of which is attached hereto as Schedule 1. The Placement Notice shall originate from any of the individuals from the Company set forth on Schedule 3 (with a copy to each of the other individuals from the Company listed on such schedule), and shall be addressed to each of the individuals from the Agent set forth on Schedule 3, as such Schedule 3 may be amended from time to time. The Placement Notice shall be effective unless and until (i) the Agent declines to accept the terms contained therein for any reason, in its sole discretion, (ii) the entire amount of the Placement Shares to be sold thereunder have been sold, (iii) the Company suspends or terminates the Placement Notice for any reason, in its sole discretion, (iv) the Company issues a subsequent Placement Notice with parameters superseding those of the earlier dated Placement Notice, or (v) this Agreement has been terminated under the provisions of Section 12. The amount of any discount, commission or other compensation to be paid by the Company to the Agent in connection with the sale of the Placement Shares shall be calculated in accordance with the terms set forth in Schedule 2. It is expressly acknowledged and agreed that neither the Company nor the Agent will have any obligation whatsoever with respect to a Placement or any Placement Shares unless and until the Company delivers a Placement Notice to the Agent and the Agent does not decline such Placement Notice pursuant to the terms set forth above, and then only upon the
2
terms specified therein and herein. In the event of a conflict between the terms of this Agreement and the terms of a Placement Notice, the terms of the Placement Notice will control.
3. Sale of Placement Shares by the Agent. Subject to the provisions of Section 5(a), the Agent, for the period specified in the Placement Notice, will use its commercially reasonable efforts consistent with its normal trading and sales practices and applicable state and federal laws, rules and regulations and the rules of the Nasdaq Global Select Market (the “Exchange”), to sell the Placement Shares up to the amount specified in, and otherwise in accordance with the terms of, such Placement Notice. The Agent will provide written confirmation to the Company no later than the opening of the Trading Day immediately following the Trading Day on which it has made sales of Placement Shares hereunder setting forth the number of Placement Shares sold on such day, the compensation payable by the Company to the Agent pursuant to Section 2 with respect to such sales, and the Net Proceeds (as defined below) payable to the Company, with an itemization of the deductions made by the Agent (as set forth in Section 5(b)) from the gross proceeds that it receives from such sales. Subject to the terms of the Placement Notice, the Agent may sell Placement Shares by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415(a)(4) under the Securities Act.
4. Suspension of Sales.
(a) The Company or the Agent may, upon notice to the other party in writing (including by email correspondence to each of the individuals of the other party set forth on Schedule 3, if receipt of such correspondence is actually acknowledged by any of the individuals to whom the notice is sent, other than via auto-reply) or by telephone (confirmed immediately by verifiable facsimile transmission or email correspondence to each of the individuals of the other party set forth on Schedule 3), suspend any sale of Placement Shares; provided, however, that such suspension shall not affect or impair any party’s obligations with respect to any Placement Shares sold hereunder prior to the receipt of such notice. While a suspension is in effect, any obligation under Sections 7(l), 7(m) and 7(n) with respect to the delivery of certificates, opinions, or comfort letters to the Agent shall be waived. Each party agrees that no such notice under this Section 4 shall be effective against any other party unless it is made to one of the individuals named on Schedule 3 hereto as associated with such other party, as such Schedule may be amended in writing from time to time.
5. Sale and Delivery to the Agent; Settlement.
(a) Sale of Placement Shares. On the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, upon the Agent’s acceptance of the terms of a Placement Notice, and unless the sale of the Placement Shares described therein has been declined, suspended, or otherwise terminated in accordance with the terms of this Agreement, the Agent, for the period specified in the Placement Notice, will use its commercially reasonable efforts consistent with its normal trading and sales practices and applicable state and federal laws, rules and regulations and the rules of the Exchange to sell such Placement Shares up to the amount specified in such Placement Notice, and otherwise in accordance with the terms of such Placement Notice. The Company acknowledges and agrees that (i) there can be no assurance that the Agent will be successful in selling Placement Shares, (ii) the Agent will incur no liability or obligation to the Company or any other person or entity if it does not sell Placement Shares for any reason other than a failure by the Agent to use its commercially reasonable efforts consistent with its normal trading and sales practices and applicable law and regulations to sell such Placement Shares as required under this Agreement and (iii) the Agent shall be under no obligation to purchase Placement Shares on a principal basis pursuant to this Agreement, except as otherwise agreed by the Agent and the Company.
3
(b) Settlement of Placement Shares. Unless otherwise specified in the applicable Placement Notice, settlement for sales of Placement Shares will occur on the first (1st) Trading Day (or such other day as is industry practice for regular-way trading) following the date on which such sales are made (each, a “Settlement Date”). The amount of proceeds to be delivered to the Company on a Settlement Date against receipt of the Placement Shares sold (the “Net Proceeds”) will be equal to the aggregate sales price received by the Agent, after deduction for (i) the Agent’s commission, discount or other compensation for such sales payable by the Company pursuant to Section 2 hereof, and (ii) any transaction fees imposed by any governmental or self-regulatory organization in respect of such sales.
(c) Delivery of Placement Shares. On or before each Settlement Date, the Company will, or will cause its transfer agent to, electronically transfer the Placement Shares being sold by crediting the Agent’s or its designee’s account (provided the Agent shall have given the Company written notice of such designee at least one Trading Day prior to the Settlement Date) at The Depository Trust Company through its Deposit and Withdrawal at Custodian System or by such other means of delivery as may be mutually agreed upon by the parties hereto which in all cases shall be freely tradable, transferable, registered shares in good deliverable form. On each Settlement Date, the Agent will deliver the related Net Proceeds in same day funds to an account designated by the Company on, or prior to, the Settlement Date. The Company agrees that if the Company, or its transfer agent (if applicable), defaults in its obligation to deliver Placement Shares on a Settlement Date through no fault of the Agent, the Company agrees that in addition to and in no way limiting the rights and obligations set forth in Section 10(a) hereto, it will (i) hold the Agent harmless against any loss, claim, damage, or reasonable and documented expense (including reasonable and documented legal fees and expenses), as incurred, arising out of or in connection with such default by the Company or its transfer agent (if applicable) and (ii) pay to the Agent (without duplication) any commission, discount, or other compensation to which it would otherwise have been entitled absent such default.
(d) Limitations on Offering Size. Under no circumstances shall the Company cause or request the offer or sale of any Placement Shares if, after giving effect to the sale of such Placement Shares, the aggregate gross sales proceeds of Placement Shares sold pursuant to this Agreement would exceed the lesser of (A) together with all sales of Placement Shares under this Agreement, the Maximum Amount and (B) the amount authorized from time to time to be issued and sold under this Agreement by the Company’s board of directors, a duly authorized committee thereof or a duly authorized executive committee, and notified to the Agent in writing. Under no circumstances shall the Company cause or request the offer or sale of any Placement Shares pursuant to this Agreement at a price lower than the minimum price authorized from time to time by the Company’s board of directors, duly authorized committee thereof or a duly authorized executive committee, and notified to the Agent in writing. Further, under no circumstances shall the Company cause or permit the aggregate gross sales proceeds of Placement Shares sold pursuant to this Agreement to exceed the Maximum Amount.
(e) No Market Making. During the term of this Agreement and notwithstanding anything to the contrary herein, the Agent agrees that in no event shall it or its affiliates engage in any market making, bidding, stabilization, or other trading activity with regard to the Common Stock or related derivative securities if such activity would be prohibited under Regulation M or other anti-manipulation rules under the Exchange Act.
6. Representations and Warranties of the Company. Except as disclosed in the Registration Statement or Prospectus (including the Incorporated Documents), the Company represents and warrants
4
to, and agrees with the Agent that as of the date of this Agreement and as of each Applicable Time (as defined below), unless such representation, warranty or agreement specifies otherwise:
(a) Registration Statement and Prospectus. As of the date of this Agreement, the Company and the transactions contemplated by this Agreement meet the requirements for and comply with the conditions for the use of Form S-3 under the Securities Act. The Registration Statement has been or will be filed with the Commission and has been or will be declared effective by the Commission under the Securities Act prior to the issuance of any Placement Notice by the Company. The Prospectus Supplement will name Agent as agent, in the section entitled “Plan of Distribution.” The Company has not received, and has no notice of, any order of the Commission preventing or suspending the use of the Registration Statement, or threatening or instituting proceedings for that purpose. The Registration Statement and the offer and sale of Placement Shares as contemplated hereby meet the applicable requirements of Rule 415 under the Securities Act and comply in all material respects with the applicable requirements of said Rule. Any statutes, regulations, contracts or other documents that are required to be described in the Registration Statement or the Prospectus or to be filed as exhibits to the Registration Statement have been or will be so described or filed. Copies of the Registration Statement, the Prospectus, and any such amendments or supplements and all documents incorporated by reference therein that were filed with the Commission on or prior to the date of this Agreement have been delivered, or are available through EDGAR, to the Agent and its counsel. The Company has not distributed and, prior to the later to occur of each Settlement Date and completion of the distribution of the Placement Shares, will not distribute any offering material in connection with the offering or sale of the Placement Shares other than the Registration Statement and the Prospectus and any Issuer Free Writing Prospectus to which the Agent has consented. The Company has taken no action designed to, or likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act, delisting the Common Stock from the Exchange, nor has the Company received any notification that the Commission or the Exchange is contemplating terminating such registration or listing. To the Company's knowledge, it is in compliance with all applicable listing requirements of the Exchange.
(b) No Misstatement or Omission. The Registration Statement, when it became or becomes effective, and the Prospectus, and any amendment or supplement thereto, on the date of such Prospectus or amendment or supplement, conformed and will conform in all material respects with the requirements of the Securities Act. At each Settlement Date, the Registration Statement and the Prospectus, as of such date, will conform in all material respects with the requirements of the Securities Act. The Registration Statement, when it became or becomes effective, did not, and will not, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. The Prospectus and any amendment or supplement thereto, on the date thereof and at each Applicable Time (defined below), did not and will not include an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading provided, however, that no representation or warranty is made as to information contained in or omitted from the Prospectus in reliance upon and in conformity with information furnished to the Company by or through the Agent specifically for inclusion therein, it being understood and agreed that the only such information furnished by the Agent to the Company consists of the “Agent Information” as defined below. The documents incorporated by reference in the Prospectus did not, and any further documents filed and incorporated by reference therein will not, when filed with the Commission, contain an untrue statement of a material fact or omit to state a material fact required to be stated in such document or necessary to make the statements in such document, in light of the circumstances under which they were made, not misleading. The foregoing shall not apply to statements in, or omissions from, any such document made in reliance upon,
5
and in conformity with, information furnished to the Company by Agent specifically for use in the preparation thereof.
(c) Conformity with Securities Act and Exchange Act. The Registration Statement, the Prospectus, any Issuer Free Writing Prospectus or any amendment or supplement thereto, and the Incorporated Documents, when such documents were or are filed with the Commission under the Securities Act or the Exchange Act or became or become effective under the Securities Act, as the case may be, conformed and will conform in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable.
(d) Financial Information. The financial statements of the Company included or incorporated by reference in the Registration Statement, the Prospectus and the Issuer Free Writing Prospectuses, if any, together with the related notes and schedules, present fairly, in all material respects, the financial position of the Company and the Subsidiaries (as defined below) as of the dates indicated and the results of operations, cash flows and changes in stockholders’ equity of the Company and the Subsidiaries for the periods specified (subject, in the case of unaudited interim financial statements, to normal year-end audit adjustments) and have been prepared in compliance with the requirements of the Securities Act and Exchange Act and in conformity with GAAP (as defined below) applied on a consistent basis (except for (i) such adjustments to accounting standards and practices as are noted therein, (ii) in the case of unaudited interim financial statements, to the extent such financial statements may not include footnotes required by GAAP or may be condensed or summary statements and (iii) such adjustments which will not be material, either individually or in the aggregate) during the periods involved. The summary and selected financial data, if any, with respect to the Company and the Subsidiaries contained or incorporated by reference in the Registration Statement, the Prospectus and the Issuer Free Writing Prospectuses, if any, fairly present in all material respects the information shown therein as of the respective dates and for the respective periods specified and are derived from the financial statements set forth in the Registration Statement and the Prospectus and the other books and records of the Company. There are no financial statements that are required to be included or incorporated by reference in the Registration Statement, or the Prospectus that are not included or incorporated by reference as required; the Company and the Subsidiaries do not have any material liabilities or obligations, direct or contingent (including any off-balance sheet obligations), not described in the Registration Statement (excluding the exhibits thereto), and the Prospectus. All disclosures contained or incorporated by reference in the Registration Statement, the Prospectus and the Issuer Free Writing Prospectuses, if any, regarding “non-GAAP financial measures” (as such term is defined by the rules and regulations of the Commission) comply in all material respects with Regulation G of the Exchange Act and Item 10 of Regulation S-K under the Securities Act, to the extent applicable.
(e) Conformity with EDGAR Filing. The Prospectus delivered to the Agent for use in connection with the sale of the Placement Shares pursuant to this Agreement will be identical to the versions of the Prospectus created to be transmitted to the Commission for filing via EDGAR, except to the extent permitted by Regulation S-T.
(f) Organization. The Company and its Subsidiaries, if any, are, and will be, duly organized, validly existing as a corporation or other entity and in good standing under the laws of their respective jurisdictions of organization. Each of the Company and the Subsidiaries is duly licensed or qualified as a foreign corporation or other entity for transaction of business and in good standing under the laws of each other jurisdiction in which its ownership or lease of property or the conduct of its business requires such license or qualification, and has all corporate or other entity power and authority necessary to own or hold its properties and to conduct its business as described in the Registration
6
Statement and the Prospectus, except where the failure to be so qualified or in good standing or have such power or authority would not, individually or in the aggregate, have a material adverse effect or would reasonably be expected to have a material adverse effect on or affecting the assets, business, operations, earnings, properties, condition (financial or otherwise), prospects, stockholders’ equity or results of operations of the Company and the Subsidiaries taken as a whole, or prevent or materially interfere with consummation of the transactions contemplated hereby (a “Material Adverse Effect”).
(g) Subsidiaries. The Company’s only Subsidiaries, if any, are set forth on Exhibit 21.1 to the Company’s Annual Report on Form 10-K for the most recently ended fiscal year, other than any Subsidiaries formed or acquired after the date of filing of such Annual Report on Form 10-K. The Company owns directly or indirectly, all of the equity interests of the Subsidiaries free and clear of any lien, charge, security interest, encumbrance, right of first refusal or other restriction, and all the equity interests of the Subsidiaries are validly issued and are fully paid, nonassessable and free of preemptive and similar rights.
(h) No Violation or Default. Neither the Company nor any Subsidiary is (i) in violation of its charter or by-laws or similar organizational documents; (ii) in default, and no event has occurred that, with notice or lapse of time or both, would constitute such a default, in the due performance or observance of any term, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any Subsidiary is a party or by which the Company or any Subsidiary is bound or to which any of the property or assets of the Company or any Subsidiary is subject; or (iii) in violation of any law or statute or any judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory authority, except, in the case of each of clauses (ii) and (iii) above, for any such violation or default that would not, individually or in the aggregate, have a Material Adverse Effect. To the Company’s knowledge, no other party under any material contract or other agreement to which it or any Subsidiary is a party is in default in any respect thereunder where such default would have a Material Adverse Effect.
(i) No Material Adverse Effect. Subsequent to the latest date of which information is given in the Registration Statement, the Prospectus and the Issuer Free Writing Prospectuses, if any, (including any document deemed incorporated by reference therein), there has not been (i) any Material Adverse Effect or the occurrence of any development that the Company reasonably expects will result in a Material Adverse Effect, (ii) any transaction which is material to the Company and the Subsidiaries taken as a whole, (iii) any obligation or liability, direct or contingent (including any off-balance sheet obligations), incurred by the Company or the Subsidiaries which is material to the Company and the Subsidiaries taken as a whole, (iv) any material change in the capital stock or outstanding long-term indebtedness of the Company or the Subsidiaries (other than (A) the grant of awards under equity incentive plans, (B) changes in the number of shares of outstanding Common Stock due to exercise or conversion of securities exercisable for or convertible into Common Stock outstanding as of the date of this Agreement, (C) any repurchase of capital stock of the Company, (D) as a result of the sale of Placement Shares or (E) other than as publicly reported or announced) or (v) any dividend or distribution of any kind declared, paid or made on the capital stock of the Company or any Subsidiary, other than in each case above in the ordinary course of business or as otherwise disclosed in the Registration Statement or Prospectus (including any document deemed incorporated by reference therein).
(j) Capitalization. The issued and outstanding shares of capital stock of the Company have been validly issued, are fully paid and non-assessable and, other than as disclosed in the Registration Statement or the Prospectus, are not subject to any preemptive rights, rights of first refusal or similar rights. The Company has an authorized, issued and outstanding capitalization as set forth in the
7
Registration Statement and the Prospectus as of the dates referred to therein (other than the grant of performance shares and restricted stock units under the Company’s existing equity incentive plans, or changes in the number of outstanding shares of Common Stock of the Company due to the issuance of shares upon the exercise or conversion of securities exercisable for, or convertible into, Common Stock outstanding on the date hereof) and such authorized capital stock conforms in all material respects to the description thereof set forth in the Registration Statement and the Prospectus. The description of the securities of the Company in the Registration Statement and the Prospectus is complete and accurate in all material respects. Except as disclosed in the Registration Statement or the Prospectus, as of the date referred to therein, the Company does not have outstanding any options to purchase, or any rights or warrants to subscribe for, or any securities or obligations convertible into, or exchangeable for, or any contracts or commitments to issue or sell, any shares of capital stock or other securities.
(k) Authorization; Enforceability. The Company has full legal right, power and authority to enter into this Agreement and perform the transactions contemplated hereby. This Agreement has been duly authorized, executed and delivered by the Company and is a legal, valid and binding agreement of the Company enforceable in accordance with its terms, except to the extent that enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and by general equitable principles or by federal or state securities laws or public policy considerations with respect to provisions for indemnification or limitations of liability.
(l) Authorization of Placement Shares. The Placement Shares, when issued and delivered pursuant to the terms approved by the board of directors of the Company or a duly authorized committee thereof, against payment therefor as provided herein, will be duly authorized, validly issued and fully paid and non-assessable, free and clear of any pledge, lien, encumbrance, security interest or other claim, including any statutory or contractual preemptive rights, resale rights, rights of first refusal or other similar rights, and will be registered pursuant to Section 12 of the Exchange Act. The Placement Shares, when issued, will conform in all material respects to the description thereof set forth in or incorporated into the Prospectus.
(m) No Consents Required. No consent, approval, authorization, order, registration or qualification of or with any court or arbitrator or governmental or regulatory authority having jurisdiction over the Company is required for the execution, delivery and performance by the Company of this Agreement or the issuance and sale by the Company of the Placement Shares, except for such consents, approvals, authorizations, orders and registrations or qualifications as have been obtained or may be required under applicable state securities laws or by the by-laws and rules of the Financial Industry Regulatory Authority (“FINRA”) or the Exchange in connection with the sale of the Placement Shares by the Agent.
(n) No Preferential Rights. (i) No person, as such term is defined in Rule 1-02 of Regulation S-X promulgated under the Securities Act (each, a “Person”), has the right, contractual or otherwise, to cause the Company to issue or sell to such Person any Common Stock or shares of any other capital stock or other securities of the Company (other than upon the exercise of warrants to purchase Common Stock or settlement of restricted stock and performance stock awards), (ii) no Person has any preemptive rights, resale rights, rights of first refusal, or any other rights (whether pursuant to a “poison pill” provision or otherwise) to purchase any Common Stock or shares of any other capital stock or other securities of the Company, (iii) no Person has the right to act as an underwriter or as a financial advisor to the Company in connection with the offer and sale of the Placement Shares, and (iv) no Person has the right, contractual or otherwise, to require the Company to register under the Securities Act any Common
8
Stock or shares of any other capital stock or other securities of the Company, or to include any such shares or other securities in the Registration Statement or the offering contemplated thereby, whether as a result of the filing or effectiveness of the Registration Statement or the sale of the Placement Shares as contemplated thereby or otherwise, except for such rights as have been or will be satisfied or duly waived on or prior to the date hereof.
(o) Independent Public Accountant. The Company’s accountants, whose report on the financial statements of the Company is filed with the Commission as part of the Company’s most recent Annual Report on Form 10-K filed with the Commission and incorporated by reference into the Registration Statement and the Prospectus, are and, during the periods covered by their report, were an independent registered public accounting firm with respect to the Company within the meaning of the Securities Act and the Public Company Accounting Oversight Board (United States). To the Company’s knowledge, the Company’s accountants are not in violation of the auditor independence requirements of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) with respect to the Company.
(p) Enforceability of Agreements. All agreements between the Company and third parties expressly referenced in the Prospectus, other than such agreements that have expired by their terms or the termination of which is disclosed in documents filed by the Company on EDGAR, are legal, valid and binding obligations of the Company enforceable in accordance with their respective terms, except to the extent that (i) enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and by general equitable principles and (ii) the indemnification provisions of certain agreements may be limited by federal or state securities laws or public policy considerations in respect thereof; except for any unenforceability that, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.
(q) Litigation. There are no legal, governmental or regulatory actions, suits or proceedings pending, nor, to the Company’s knowledge, any legal, governmental or regulatory investigations, to which the Company or any Subsidiary is a party or to which any property of the Company or any Subsidiary is the subject, (i) that are required to be described in the Registration Statement or the Prospectus and are not so described or (ii) other than proceedings accurately described in all material respects in the Prospectus, which, individually or in the aggregate, if determined adversely to the Company or any Subsidiary, would have a Material Adverse Effect or materially and adversely affect the ability of the Company to perform its obligations under this Agreement; to the Company’s knowledge, no such actions, suits or proceedings are threatened or contemplated by any governmental or regulatory authority or threatened by others that, individually or in the aggregate, if determined adversely to the Company or any Subsidiary, would reasonably be expected to have a Material Adverse Effect; and (i) there are no current or pending legal, governmental or regulatory actions, suits or proceedings or, to the Company’s knowledge, audits or investigations that are required under the Securities Act to be described in the Prospectus that are not so described; and (ii) there are no contracts or other documents that are required under the Securities Act to be filed as exhibits to the Registration Statement that are not so filed.
(r) Licenses and Permits. The Company and the Subsidiaries have made all filings, applications and submissions required by, possesses and is operating in compliance with, all approvals, licenses, certificates, consents, orders, permits and other authorizations issued by, and have made all declarations and filings with, the appropriate federal, state, local or foreign governmental or regulatory authorities that are necessary for the ownership or lease of their respective properties or the conduct of their respective businesses as described in the Registration Statement and the Prospectus (the “Permits”), except where the failure to possess, obtain or make the same would not, individually or in the aggregate,
9
have a Material Adverse Effect. Neither the Company nor any Subsidiary has received written notice of any proceeding relating to revocation or modification of any such Permit or has any reason to believe that such Permit will not be renewed in the ordinary course, except where the failure to obtain any such renewal would not, individually or in the aggregate, have a Material Adverse Effect.
(s) Regulatory Filings. The Company has not failed to file with the applicable regulatory authorities any required filing, declaration, listing, registration, report or submission, except for such failures that, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect; all such filings, declarations, listings, registrations, reports or submissions were in compliance with applicable laws when filed and no deficiencies have been asserted by any applicable regulatory authority with respect to any such filings, declarations, listings, registrations, reports or submissions, except for any deficiencies that, individually or in the aggregate, would not have a Material Adverse Effect.
(t) Market Capitalization. (i) At the time of filing the Registration Statement and (ii) at the time of the most recent amendment thereto for the purposes of complying with Section 10(a)(3) of the Securities Act (whether such amendment was by post-effective amendment, incorporated report filed pursuant to Section 13 or 15(d) of the Exchange Act or form of prospectus), the Company met the then applicable requirements for use of Form S-3 under the Securities Act, including compliance with General Instruction I.B.1 of Form S-3, as applicable. The Company is not a shell company (as defined in Rule 405 under the Securities Act) and has not been a shell company for at least 12 calendar months previously and if it has been a shell company at any time previously, has filed current Form 10 information (as defined in Instruction I.B.6 of Form S-3) with the Commission at least 12 calendar months previously reflecting its status as an entity that is not a shell company.
(u) No Material Defaults. Neither the Company nor any Subsidiary has defaulted on any installment on indebtedness for borrowed money or on any rental on one or more long-term leases, which defaults, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect. The Company has not filed a report pursuant to Section 13(a) or 15(d) of the Exchange Act since the filing of its last Annual Report on Form 10-K, indicating that it (i) has failed to pay any dividend or sinking fund installment on preferred stock or (ii) has defaulted on any installment on indebtedness for borrowed money or on any rental on one or more long-term leases, which defaults, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect.
(v) Certain Market Activities. Neither the Company, any Subsidiary nor, to the Company’s knowledge, any of its directors, officers or controlling persons has taken, directly or indirectly, any action designed, or that has constituted or would reasonably be expected to cause or result in, under the Exchange Act or otherwise, the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Placement Shares.
(w) Broker/Dealer Relationships. Neither the Company, any of its Subsidiaries, nor any of the Company’s affiliates (i) is required to register as a “broker” or “dealer” in accordance with the provisions of the Exchange Act or (ii) directly or indirectly through one or more intermediaries, controls or is a “person associated with a member” or “associated person of a member” (within the meaning set forth in the rules and regulations of FINRA).
(x) No Reliance. The Company has not relied upon the Agent or legal counsel for the Agent for any legal, tax or accounting advice in connection with the offering and sale of the Placement Shares.
10
(y) Taxes. The Company and the Subsidiaries have filed all federal, state, local and foreign tax returns which have been required to be filed and paid all taxes shown thereon through the date hereof, to the extent that such taxes have become due and are not being contested in good faith, except where the failure to file or pay would not have a Material Adverse Effect. Except as otherwise disclosed in or contemplated by the Registration Statement or the Prospectus, no tax deficiency has been determined adversely to the Company or any Subsidiary which has had, individually or in the aggregate, a Material Adverse Effect. The Company has no knowledge of any federal, state or other governmental tax deficiency, penalty or assessment which has been asserted or threatened against it which would reasonably be expected to have a Material Adverse Effect.
(z) Title to Real and Personal Property. The Company and the Subsidiaries have good and marketable title to all items of real property owned by them and good and valid title to all personal property described in the Registration Statement or Prospectus as being owned by them that are material to the businesses of the Company or such Subsidiary, in each case free and clear of all liens, encumbrances and claims, except those that (i) do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries or (ii) would not, individually or in the aggregate, have a Material Adverse Effect. Any real property described in the Registration Statement or Prospectus as being leased by the Company and the Subsidiaries is held by them under valid, existing and enforceable leases, except those that (A) do not materially interfere with the use made or proposed to be made of such property by the Company or the Subsidiaries or (B) would not have a Material Adverse Effect.
(aa) Intellectual Property. The Company and the Subsidiaries own or possess, or, to the Company’s knowledge, can acquire on reasonable terms, enforceable rights to use all patents, patent applications, trademarks (both registered and unregistered), service marks, trade names, trademark registrations, service mark registrations, copyrights, licenses and know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures) (collectively, the “Intellectual Property”), necessary for the conduct of their respective businesses as conducted as of the date hereof, except to the extent that the failure to own or possess adequate rights to use such Intellectual Property would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; neither the Company nor any Subsidiary has received any written notice of any claim of infringement or conflict which asserted Intellectual Property rights of others, which infringement or conflict, if the subject of an unfavorable decision, would result in a Material Adverse Effect; there are no pending, or to the Company’s knowledge, threatened judicial proceedings or interference proceedings challenging the Company’s or any Subsidiary’s rights in or to or the validity of the scope of any of the Company’s or any Subsidiary’s patents, patent applications or proprietary information, except if such proceedings would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(bb) Environmental Laws. Except as set forth in the Registration Statement or the Prospectus, the Company and the Subsidiaries (i) are in compliance with any and all applicable federal, state, local and foreign laws, rules, regulations, decisions and orders relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (collectively, “Environmental Laws”); (ii) have received and are in compliance with all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses as described in the Registration Statement and the Prospectus; and (iii) have not received notice of any actual or potential liability for the investigation or remediation of any disposal or release of hazardous or toxic substances or wastes, pollutants or contaminants, except, in the case of any of clauses
11
(i), (ii) or (iii) above, for any such failure to comply or failure to receive required permits, licenses, other approvals or liability as would not, individually or in the aggregate, have a Material Adverse Effect.
(cc) Disclosure Controls. The Company maintains systems of internal controls designed to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company is not aware of any material weaknesses in its internal control over financial reporting (other than as set forth in the Prospectus or the Incorporated Documents). Since the date of the latest audited financial statements of the Company included in the Prospectus, there has been no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting (other than as set forth in the Prospectus). The Company has established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 and 15d-15) for the Company and designed such disclosure controls and procedures to ensure that material information relating to the Company is made known to the certifying officers by others within those entities, particularly during the period in which the Company’s Annual Report on Form 10-K or Quarterly Report on Form 10-Q, as the case may be, is being prepared. The Company’s certifying officers have evaluated the effectiveness of the Company’s disclosure controls and procedures as of a date within 90 days prior to the filing date of the Form 10-K for the fiscal year most recently ended (such date, the “Evaluation Date”). The Company presented in its Form 10-K for the fiscal year most recently ended the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no significant changes in the Company’s internal controls or, to the Company’s knowledge, in other factors that would be reasonably expected to significantly affect the Company’s internal controls. To the knowledge of the Company, the Company’s “internal controls over financial reporting” and “disclosure controls and procedures” are effective.
(dd) Sarbanes-Oxley. There has been no failure on the part of the Company or, to the Company’s knowledge, any of the Company’s directors or officers, in their capacities as such, to comply in all material respects with any applicable provisions of the Sarbanes-Oxley Act and the applicable rules and regulations promulgated thereunder in all material respects. Each of the principal executive officer and the principal financial officer of the Company (or each former principal executive officer of the Company and each former principal financial officer of the Company as applicable) has made all certifications required by Sections 302 and 906 of the Sarbanes-Oxley Act with respect to all reports, schedules, forms, statements and other documents required to be filed by it or furnished by it to the Commission during the 12 months prior to the date of this Agreement. For purposes of the preceding sentence, “principal executive officer” and “principal financial officer” shall have the meanings given to such terms in the Sarbanes-Oxley Act.
(ee) Finder’s Fees. Neither the Company nor any Subsidiary has incurred any liability for any finder’s fees, brokerage commissions or similar payments in connection with the transactions herein contemplated, except as may otherwise exist with respect to the Agent pursuant to this Agreement.
12
(ff) Labor Disputes. No labor disturbance by or dispute with employees of the Company or any Subsidiary exists or, to the knowledge of the Company, is threatened which would have a Material Adverse Effect
(gg) Investment Company Act. Neither the Company or any Subsidiary is or, after giving effect to the offering and sale of the Placement Shares, will it be an “investment company” or an entity “controlled” by an “investment company,” as such terms are defined in the Investment Company Act of 1940, as amended (the “Investment Company Act”).
(hh) Operations. The operations of the Company and the Subsidiaries are and have been conducted at all times in compliance with applicable financial record keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all jurisdictions to which the Company or the Subsidiaries are subject, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Money Laundering Laws”), except as would not have a Material Adverse Effect; and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.
(ii) Off-Balance Sheet Arrangements. There are no transactions, arrangements and other relationships between and/or among the Company, and/or, to the knowledge of the Company, any of its affiliates and any unconsolidated entity, including, but not limited to, any structured finance, special purpose or limited purpose entity (each, an “Off Balance Sheet Transaction”) that would reasonably be expected to affect materially the Company’s liquidity or the availability of or requirements for its capital resources required to be described in the Prospectus which have not been described as required.
(jj) Other Agreements. The Company is not a party to any agreement with an agent or underwriter for any other “at the market” or continuous equity transaction other than this Agreement.
(kk) ERISA. To the knowledge of the Company, each material employee benefit plan, within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), that is maintained, administered or contributed to by the Company or any of its affiliates for employees or former employees of the Company and the Subsidiaries has been maintained in material compliance with its terms and the requirements of any applicable statutes, orders, rules and regulations, including but not limited to ERISA and the Internal Revenue Code of 1986, as amended (the “Code”); no prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975 of the Code, has occurred which would result in a material liability to the Company with respect to any such plan excluding transactions effected pursuant to a statutory or administrative exemption; and for each such plan that is subject to the funding rules of Section 412 of the Code or Section 302 of ERISA, no “accumulated funding deficiency” as defined in Section 412 of the Code has been incurred, whether or not waived, and the fair market value of the assets of each such plan (excluding for these purposes accrued but unpaid contributions) exceeds the present value of all benefits accrued under such plan determined using reasonable actuarial assumptions.
(ll) Forward Looking Statements. No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act) (a “Forward Looking Statement”) contained in the Registration Statement and the Prospectus (i) has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith, and (ii) been prepared in accordance with Item 10 of Regulation S-K under the Securities Act.
13
(mm) Agent Purchases. The Company acknowledges and agrees that Agent has informed the Company that the Agent may, to the extent permitted under the Securities Act and the Exchange Act, purchase and sell Common Stock for its own account while this Agreement is in effect, provided, that (i) no such purchase or sales shall take place while a Placement Notice is in effect (except to the extent the Agent may engage in sales of Placement Shares purchased or deemed purchased from the Company as a “riskless principal” or in a similar capacity) and (ii) the Company shall not be deemed to have authorized or consented to any such purchases or sales by the Agent.
(nn) Margin Rules. Neither the issuance, sale and delivery of the Placement Shares nor the application of the proceeds thereof by the Company as described in the Registration Statement and the Prospectus will violate Regulation T, U or X of the Board of Governors of the Federal Reserve System or any other regulation of such Board of Governors.
(oo) Insurance. The Company and the Subsidiaries carry, or are covered by, insurance in such amounts and covering such risks as the Company and the Subsidiaries reasonably believe is adequate for the conduct of their business and as is customary for companies of similar size engaged in similar businesses in similar industries.
(pp) No Improper Practices. (i) Neither the Company nor, to the Company’s knowledge, the Subsidiaries nor any of their respective executive officers has, in the past five years, made any unlawful contributions to any candidate for any political office (or failed fully to disclose any contribution in violation of law) or made any contribution or other payment to any official of, or candidate for, any federal, state, municipal, or foreign office or other person charged with similar public or quasi-public duty in violation of any law or of the character required to be disclosed in the Prospectus; (ii) no relationship, direct or indirect, exists between or among the Company or, to the Company’s knowledge, the Subsidiaries or any affiliate of any of them, on the one hand, and the directors, officers and stockholders of the Company or, to the Company’s knowledge, the Subsidiaries, on the other hand, that is required by the Securities Act to be described in the Registration Statement and the Prospectus that is not so described; (iii) no relationship, direct or indirect, exists between or among the Company or the Subsidiaries or, to the Company’s knowledge, any affiliate of them, on the one hand, and the directors, officers or stockholders of the Company or, to the Company’s knowledge, the Subsidiaries, on the other hand, that is required by the rules of FINRA to be described in the Registration Statement and the Prospectus that is not so described; (iv) there are no material outstanding loans or advances or material guarantees of indebtedness by the Company or, to the Company’s knowledge, the Subsidiaries to or for the benefit of any of their respective officers or directors or any of the members of the families of any of them; (v) the Company has not offered, or caused any placement agent to offer, Common Stock to any person with the intent to influence unlawfully (A) a customer or supplier of the Company or the Subsidiaries to alter the customer’s or supplier’s level or type of business with the Company or the Subsidiaries or (B) a trade journalist or publication to write or publish favorable information about the Company or the Subsidiaries or any of their respective products or services, and, (vi) neither the Company nor the Subsidiaries nor, to the Company’s knowledge, any employee or agent of the Company or the Subsidiaries has made any payment of funds of the Company or the Subsidiaries or received or retained any funds in violation of any law, rule or regulation (including, without limitation, the Foreign Corrupt Practices Act of 1977), which payment, receipt or retention of funds is of a character required to be disclosed in the Registration Statement or the Prospectus.
(qq) Status Under the Securities Act. The Company was not and is not an ineligible issuer as defined in Rule 405 under the Securities Act at the times specified in Rules 164 and 433 under the Securities Act in connection with the offering of the Placement Shares.
14
(rr) No Misstatement or Omission in an Issuer Free Writing Prospectus. Each Issuer Free Writing Prospectus, as of its issue date and as of each Applicable Time (as defined below), did not, does not and will not, through the completion of the Placement for which such Issuer Free Writing Prospectus is used or deemed used, include any information that conflicted, conflicts or will conflict with the information contained in the Registration Statement or the Prospectus, including any incorporated document deemed to be a part thereof that has not been superseded or modified. The foregoing sentence does not apply to statements in or omissions from any Issuer Free Writing Prospectus based upon and in conformity with written information furnished to the Company by the Agent specifically for use therein.
(ss) No Conflicts. Neither the execution of this Agreement by the Company, nor the issuance, offering or sale of the Placement Shares, nor the consummation of any of the transactions contemplated herein, nor the compliance by the Company with the terms and provisions hereof will conflict with, or will result in a breach of, any of the terms and provisions of, or has constituted or will constitute a default under, or has resulted in or will result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company pursuant to the terms of any contract or other agreement to which the Company may be bound or to which any of the property or assets of the Company is subject, except (i) such conflicts, breaches or defaults as may have been waived and (ii) such conflicts, breaches and defaults that would not have a Material Adverse Effect; nor will such action result (x) in any violation of the provisions of the organizational or governing documents of the Company, or (y) in any violation of the provisions of any statute or any order, rule or regulation applicable to the Company or of any court or of any federal, state or other regulatory authority or other government body having jurisdiction over the Company, other than in each case any such conflict, breach or violation that, individually or in the aggregate, which would not have a Material Adverse Effect.
(tt) Sanctions. (i) The Company represents that, neither it nor any Subsidiary (collectively, the “Entity”) nor, to the Company’s knowledge, any director, officer, employee, agent, affiliate or representative of the Entity, is a government, individual, or entity (in this paragraph (uu), “Covered Person”) that is, or is owned or controlled by a Covered Person that is:
(A) the subject of any sanctions administered or enforced by the U.S. Department of Treasury’s Office of Foreign Assets Control (“OFAC”), the United Nations Security Council, the European Union, His Majesty’s Treasury, or other relevant sanctions authority (collectively, “Sanctions”), nor
(B) located, organized or resident in a country or territory that is the subject of Sanctions administered by OFAC.
(ii) The Entity represents and covenants that it will not, directly or indirectly, use the proceeds of the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other Covered Person:
(A) to fund or facilitate any activities or business of or with any Covered Person or in any country or territory that, at the time of such funding or facilitation, is the subject of Sanctions; or
(B) in any other manner that will result in a violation of Sanctions by any Covered Person (including any Covered Person participating in the offering, whether as underwriter, advisor, investor or otherwise).
15
(iii) The Entity represents and covenants that, except as detailed in the Prospectus, since April 24, 2019, it has not knowingly engaged in, is not now knowingly engaged in, and will not knowingly engage in, any dealings or transactions with any Covered Person, or in any country or territory, that at the time of the dealing or transaction is or was the subject of Sanctions.
(uu) Stock Transfer Taxes. On each Settlement Date, all stock transfer or other taxes (other than income taxes) which are required to be paid in connection with the sale and transfer of the Placement Shares to be sold hereunder will be, or will have been, fully paid or provided for by the Company and all laws imposing such taxes will be or will have been fully complied with in all material respects.
(vv) IT Systems. (i)(x)There has been no material security breach or attack or other compromise of or relating to any of the Company’s and its subsidiaries’ information technology and computer systems, networks, hardware, software, data (including the data of their respective customers, employees, suppliers, vendors and any third party data maintained by or on behalf of them), equipment or technology (“IT Systems and Data”), and (y) the Company and its subsidiaries have not been notified of, and have no knowledge of any event or condition that would reasonably be expected to result in any material security breach, attack or compromise to their IT Systems and Data, (ii) the Company and each of its subsidiaries have complied, and are presently in compliance with, in all material respects all applicable laws, statutes or any judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory authority and all industry guidelines, standards, internal policies and contractual obligations relating to the privacy and security of IT Systems and Data and to the protection of such IT Systems and Data from unauthorized use, access, misappropriation or modification and (iii) the Company and each of its subsidiaries have implemented backup and disaster recovery technology consistent with industry standards and practice.
(ww) FINRA Exemption. As of the date of this Agreement, the Company qualifies as an “experienced issuer” (within the meaning of FINRA Conduct Rule 5110(j)(6)) for purposes of the exemption from filing under FINRA Conduct Rule 5110(h)(1)(C).
Any certificate signed by an officer of the Company and delivered to the Agent or to counsel for the Agent pursuant to or by the express terms of this Agreement shall be deemed to be a representation and warranty by the Company, as applicable, to the Agent as to the matters set forth therein.
7. Covenants of the Company. The Company covenants and agrees with Agent that:
(a) Registration Statement Amendments. After the date of this Agreement and during any period in which a Prospectus relating to any Placement Shares is required to be delivered by Agent under the Securities Act (including in circumstances where such requirement may be satisfied pursuant to Rule 172 under the Securities Act), (i) the Company will notify the Agent promptly of the time when any subsequent amendment to the Registration Statement has been filed with the Commission and/or has become effective or any subsequent supplement to the Prospectus has been filed and of any request by the Commission for any amendment or supplement to the Registration Statement or Prospectus or for additional information related to the transactions contemplated by this Agreement, (ii) the Company will prepare and file with the Commission, promptly upon the Agent’s reasonable request, any amendments or supplements to the Registration Statement or Prospectus that, in the Agent’s reasonable opinion, may be necessary or advisable in connection with the distribution of the Placement Shares by the Agent (provided, however, that the failure of the Agent to make such request shall not relieve the Company of any obligation or liability hereunder, or affect the Agent’s right to rely on the representations
16
and warranties made by the Company in this Agreement and provided, further, that the only remedy the Agent shall have with respect to the failure to make such filing shall be to cease making sales under this Agreement until such amendment or supplement is filed); (iii) the Company will not file any amendment or supplement to the Registration Statement or Prospectus, other than documents incorporated by reference, relating to the Placement Shares or a security convertible into the Placement Shares unless a copy thereof has been submitted to the Agent within a reasonable period of time before the filing and the Agent has not reasonably objected thereto in writing within two (2) Business Days (provided, however, that (A) the failure of the Agent to make such objection shall not relieve the Company of any obligation or liability hereunder, or affect the Agent’s right to rely on the representations and warranties made by the Company in this Agreement and (B) the Company has no obligation to provide the Agent any advance copy of such filing or to provide Agent an opportunity to object to such filing if the filing does not name the Agent or does not relate to the transactions contemplated by this Agreement; and provided, further, that the only remedy Agent shall have with respect to the failure by the Company to obtain such consent shall be to cease making sales under this Agreement) and the Company will furnish to the Agent at the time of filing thereof a copy of any document that upon filing is deemed to be incorporated by reference into the Registration Statement or Prospectus, except for those documents available via EDGAR; and (iv) the Company will cause each amendment or supplement to the Prospectus to be filed with the Commission as required pursuant to the applicable paragraph of Rule 424(b) of the Securities Act or, in the case of any document to be incorporated therein by reference, to be filed with the Commission as required pursuant to the Exchange Act, within the time period prescribed (the determination to file or not file any amendment or supplement with the Commission under this Section 7(a), based on the Company’s reasonable opinion or reasonable objections, shall be made exclusively by the Company).
(b) Notice of Commission Stop Orders. The Company will advise the Agent, promptly after it receives notice or obtains knowledge thereof, of the issuance or threatened issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement, of the suspension of the qualification of the Placement Shares for offering or sale in any jurisdiction, or of the initiation or threatening of any proceeding for any such purpose; and it will promptly use its commercially reasonable efforts to prevent the issuance of any stop order or to obtain its withdrawal if such a stop order should be issued. The Company will advise the Agent promptly after it receives any request by the Commission for any amendments to the Registration Statement or any amendment or supplements to the Prospectus or any Issuer Free Writing Prospectus or for additional information related to the offering of the Placement Shares or for additional information related to the Registration Statement, the Prospectus or any Issuer Free Writing Prospectus.
(c) Delivery of Prospectus; Subsequent Changes. During any period in which a Prospectus relating to the Placement Shares is required to be delivered by the Agent under the Securities Act with respect to the offer and sale of the Placement Shares (including in circumstances where such requirement may be satisfied pursuant to Rule 172 under the Securities Act), the Company will use its commercially reasonable efforts to comply with all requirements imposed upon it by the Securities Act, as from time to time in force, and to file on or before their respective due dates (taking into account any extensions available under the Exchange Act) all reports and any definitive proxy or information statements required to be filed by the Company with the Commission pursuant to Sections 13(a), 13(c), 14, 15(d) or any other provision of or under the Exchange Act. If the Company has omitted any information from the Registration Statement pursuant to Rule 430B under the Securities Act, it will use commercially reasonable efforts to comply with the provisions of and make all requisite filings with the Commission pursuant to said Rule 430B and to notify the Agent promptly of all such filings. If during such period any event occurs as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state a material fact necessary to make the
17
statements therein, in the light of the circumstances then existing, not misleading, or if during such period it is necessary to amend or supplement the Registration Statement or Prospectus to comply with the Securities Act, the Company will promptly notify Agent to suspend the offering of Placement Shares during such period and the Company will promptly amend or supplement the Registration Statement or Prospectus (at the expense of the Company) so as to correct such statement or omission or effect such compliance; provided, however, that the Company may delay the filing of any amendment or supplement, if in the judgment of the Company, it is in the best interests of the Company.
(d) Listing of Placement Shares. During any period in which the Prospectus relating to the Placement Shares is required to be delivered by the Agent under the Securities Act with respect to the offer and sale of the Placement Shares, the Company will use commercially reasonable efforts to cause the Placement Shares to be listed on the Exchange.
(e) Delivery of Registration Statement and Prospectus. The Company will furnish to the Agent and its counsel (at the reasonable expense of the Company) copies of the Registration Statement, the Prospectus (including all documents incorporated by reference therein) and all amendments and supplements to the Registration Statement or Prospectus that are filed with the Commission during any period in which a Prospectus relating to the Placement Shares is required to be delivered under the Securities Act (including all documents filed with the Commission during such period that are deemed to be incorporated by reference therein), in each case as soon as reasonably practicable and in such quantities as the Agent may from time to time reasonably request and, at Agent’s reasonable request, will also furnish copies of the Prospectus to each exchange or market on which sales of the Placement Shares may be made; provided, however, that the Company shall not be required to furnish any document (other than the Prospectus) to the Agent or its counsel to the extent such document is available on EDGAR.
(f) Earnings Statement. The Company will make generally available to its security holders as soon as practicable, but in any event not later than 15 months after the end of the Company’s current fiscal quarter, an earnings statement covering a 12-month period that satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 under the Securities Act, provided that the Company will be deemed to have furnished such statements to its security holders to the extent they are filed with the Commission on EDGAR.
(g) Use of Proceeds. The Company will use the Net Proceeds as described in the Prospectus in the section entitled “Use of Proceeds.”
(h) Notice of Other Sales. Without prior written notice to the Agent, the Company will not, (A) directly or indirectly, offer to sell, sell, contract to sell, grant any option to sell or otherwise dispose of any Common Stock (other than the Placement Shares offered pursuant to this Agreement) or securities convertible into or exchangeable for Common Stock, warrants or any rights to purchase or acquire, Common Stock during the period beginning on the date on which any Placement Notice is delivered to the Agent hereunder and ending on the second (2nd) Trading Day immediately following the final Settlement Date with respect to Placement Shares sold pursuant to such Placement Notice (or, if the Placement Notice has been terminated or suspended prior to the sale of all Placement Shares covered by a Placement Notice, the date of such suspension or termination); and (B) directly or indirectly in any other “at the market” or continuous equity transaction offer to sell, sell, contract to sell, grant any option to sell or otherwise dispose of any Common Stock (other than the Placement Shares offered pursuant to this Agreement) or securities convertible into or exchangeable for Common Stock, warrants or any rights to purchase or acquire, Common Stock prior to the termination of this Agreement; provided, however, that
18
such restrictions will not apply in connection with the Company’s issuance, grant or sale of (i) Common Stock, restricted stock units, performance stock awards, options to purchase Common Stock or Common Stock issuable upon the exercise of options, or the vesting of any of the foregoing, pursuant to any equity incentive or benefits plan, stock ownership plan or dividend reinvestment plan (but not Common Stock subject to a waiver to exceed plan limits in its dividend reinvestment plan) of the Company whether now in effect or hereafter implemented, (ii) Common Stock issuable upon conversion of securities or the exercise of warrants, options, convertible notes or other rights in effect or outstanding, and disclosed in filings by the Company available on EDGAR or otherwise in writing to the Agent and (iii) Common Stock or securities convertible into or exchangeable for shares of Common Stock issued in privately negotiated transactions to vendors, customers or other commercial or strategic partners or potential commercial or strategic partners, as consideration for mergers, acquisitions, other business combinations or strategic alliances occurring after the date of this Agreement which are not issued for capital raising purposes.
(i) Change of Circumstances. The Company will, at any time during the pendency of a Placement Notice advise the Agent promptly after it shall have received notice or obtained knowledge thereof, of any information or fact that would alter or affect in any material respect any opinion, certificate, letter or other document required to be provided to the Agent pursuant to this Agreement.
(j) Due Diligence Cooperation. The Company will cooperate with any reasonable due diligence review conducted by the Agent or its representatives in connection with the transactions contemplated hereby, including, without limitation, providing information and making available documents and senior corporate officers, during regular business hours and at the Company’s principal offices, as the Agent may reasonably request.
(k) Required Filings Relating to Placement of Placement Shares. The Company agrees that on such dates as the Securities Act shall require with respect to the Placement Shares, the Company will (i) file a prospectus supplement with the Commission under the applicable paragraph of Rule 424(b) under the Securities Act (each and every filing under Rule 424(b), a “Filing Date”), which prospectus supplement will set forth, within the relevant period, the amount of Placement Shares sold through the Agent, the Net Proceeds to the Company and the compensation payable by the Company to the Agent with respect to such Placement Shares, and (ii) deliver such number of copies of each such prospectus supplement to each exchange or market on which such sales were effected as may be required by the rules or regulations of such exchange or market. Notwithstanding the foregoing, to the extent permitted by the Securities Act and the applicable rules and interpretations of the Commission, the Company may disclose such information through Incorporated Documents at least quarterly, rather than by filing a prospectus supplement.
(l) Representation Dates; Certificate. On or prior to the date of the first Placement Notice delivered by the Company to the Agent (such date, the “First Placement Date”) and each time the Company:
(i) amends or supplements (other than a prospectus supplement relating solely to an offering of securities other than the Placement Shares) the Registration Statement or the Prospectus relating to the Placement Shares by means of a post-effective amendment, sticker, or supplement but not by means of incorporation of documents by reference into the Registration Statement or the Prospectus relating to the Placement Shares;
19
(ii) files an annual report on Form 10-K under the Exchange Act (including any Form 10-K/A containing amended financial information or a material amendment to the previously filed Form 10-K);
(iii) files a quarterly report on Form 10-Q under the Exchange Act; or
(iv) files a current report on Form 8-K containing amended financial information (other than information “furnished” pursuant to Items 2.02 or 7.01 of Form 8-K or to provide disclosure pursuant to Item 8.01 of Form 8-K relating to the reclassification of certain properties as discontinued operations in accordance with Statement of Financial Accounting Standards No. 144) under the Exchange Act;
(each date of filing of one or more of the documents referred to in clauses (i) through (iv) shall be a “Representation Date.”)
the Company shall furnish the Agent (but in the case of clause (iv) above only if the Agent reasonably determines that the information contained in such Form 8-K is material) with a certificate dated the Representation Date, in the form attached hereto as Exhibit 7(l). The requirement to provide a certificate under this Section 7(l) shall be waived for any Representation Date occurring at a time at which no Placement Notice is pending (including if a suspension pursuant to Section 4 hereof is in effect with respect to any Placement Notice), which waiver shall continue until the earlier to occur of the date the Company delivers a Placement Notice hereunder (or, if applicable, a suspension is no longer in effect with respect to a Placement Notice) (which for such calendar quarter shall be considered a Representation Date) and the next occurring Representation Date. Notwithstanding the foregoing, if the Company subsequently decides to sell Placement Shares following a Representation Date when the Company relied on such waiver and did not provide the Agent with a certificate under this Section 7(l), then before the Company delivers the Placement Notice or the Agent sells any Placement Shares, the Company shall provide the Agent with a certificate, in the form attached hereto as Exhibit 7(l), dated the date of the Placement Notice.
(m) Legal Opinion and Negative Assurance Letter. (1) On or before the First Placement Date, the Company shall cause to be furnished to the Agent a written opinion and negative assurance letter of Baker & Hostetler, LLP (“Company Counsel”), or other counsel reasonably satisfactory to the Agent, each in form and substance reasonably satisfactory to Agent and its counsel; and (2) within five (5) Trading Days of each Representation Date with respect to which the Company is obligated to deliver a certificate in the form attached hereto as Exhibit 7(l) for which no waiver is applicable, the Company shall cause to be furnished to the Agent a negative assurance letter of Company Counsel, or other counsel reasonably satisfactory to the Agent, in form and substance reasonably satisfactory to Agent and its counsel; provided, however, the Company shall not be required to furnish any such letter if the Company does not intend to deliver a Placement Notice in such calendar quarter until such time as the Company delivers its next Placement Notice; provided further, if Company Counsel has previously furnished to the Agent such negative assurance letter substantially in the form previously agreed between the Company and the Agent, such counsel may, in respect of any future Representation Date, furnish the Agent with a letter (a “Reliance Letter”) in lieu of such negative assurance letter to the effect that the Agent may rely on the prior negative assurance letter of such counsel delivered pursuant to this Section 7(m) to the same extent as if it were dated the date of such Reliance Letter (except that statements in such prior negative assurance letter shall be deemed to relate to the Registration Statement and Prospectus as amended or supplemented to the date of such Reliance Letter).
20
(n) Comfort Letter. (1) On or before the First Placement Date and (2) within five (5) Trading Days of each Representation Date, other than pursuant to Section 7(l)(iii), with respect to which the Company is obligated to deliver a certificate in the form attached hereto as Exhibit 7(l) for which no waiver is applicable, the Company shall cause its independent accountants to furnish the Agent letters (the “Comfort Letters”), dated the date the Comfort Letter is delivered, which shall meet the requirements set forth in this Section 7(n). The Comfort Letter from the Company’s independent accountants shall be in a form and substance reasonably satisfactory to the Agent, (i) confirming that they are an independent public accounting firm within the meaning of the Securities Act and the Public Company Account Oversight Board, (ii) stating, as of such date, the conclusions and findings of such firm with respect to the financial information and other matters ordinarily covered by accountants’ “comfort letters” to underwriters in connection with registered public offerings (the first such letter, the “Initial Comfort Letter”) and (iii) updating the Initial Comfort Letter with any information that would have been included in the Initial Comfort Letter had it been given on such date and modified as necessary to relate to the Registration Statement and the Prospectus, as amended and supplemented to the date of such letter.
(o) Market Activities. The Company will not, directly or indirectly, (i) take any action designed to cause or result in, or that constitutes or would reasonably be expected to constitute, the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of Common Stock or (ii) sell, bid for, or purchase Common Stock in violation of Regulation M, or pay anyone any compensation for soliciting purchases of the Placement Shares other than the Agent; provided, however, that the Company may bid for and purchase shares of its Common Stock in accordance with Rule 10b-18 under the Exchange Act.
(p) Investment Company Act. The Company will conduct its affairs in such a manner so as to reasonably ensure that neither it nor the Subsidiaries will be or become, at any time prior to the termination of this Agreement, an “investment company,” as such term is defined in the Investment Company Act, assuming no change in the Commission’s current interpretation as to entities that are not considered an investment company.
(q) No Offer to Sell. Other than the Prospectus and the Issuer Free Writing Prospectus approved in advance by the Company and the Agent in its capacity as agent hereunder, neither the Agent nor the Company (including its agents and representatives, other than the Agent in its capacity as such) will make, use, prepare, authorize, approve or refer to any written communication (as defined in Rule 405 under the Securities Act), required to be filed with the Commission, that constitutes an offer to sell or solicitation of an offer to buy Placement Shares hereunder.
(r) Blue Sky and Other Qualifications. The Company will use its commercially reasonable efforts, in cooperation with the Agent, to qualify the Placement Shares for offering and sale, or to obtain an exemption for the Placement Shares to be offered and sold, under the applicable securities laws of such states and other jurisdictions (domestic or foreign) as the Agent may designate and to maintain such qualifications and exemptions in effect for so long as required for the distribution of the Placement Shares (but in no event for less than one year from the date of this Agreement); provided, however, that the Company shall not be obligated to file any general consent to service of process or to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not so qualified or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject. In each jurisdiction in which the Placement Shares have been so qualified or exempt, the Company will file such statements and reports as may be required by the laws of such jurisdiction to continue such qualification or exemption, as the case may be, in effect for so long as
21
required for the distribution of the Placement Shares (but in no event for less than one year from the date of this Agreement).
(s) Sarbanes-Oxley Act. The Company will maintain and keep accurate books and records reflecting its assets and maintain internal accounting controls in a manner designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and including those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company, (ii) provide reasonable assurance that transactions are recorded as necessary to permit the preparation of the Company's financial statements in accordance with generally accepted accounting principles, (iii) that receipts and expenditures of the Company are being made only in accordance with management's and the Company’s directors’ authorization, and (iv) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on its financial statements. The Company will maintain such controls and other procedures, including, without limitation, those required by Sections 302 and 906 of the Sarbanes-Oxley Act, and the applicable regulations thereunder that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms, including, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company's management, including its principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure and to ensure that material information relating to the Company is made known to it by others within the organization, particularly during the period in which such periodic reports are being prepared.
8. Payment of Expenses. The Company will pay all expenses incident to the performance of its obligations under this Agreement, including (i) the preparation, filing, including any fees required by the Commission, and printing of the Registration Statement (including financial statements and exhibits) as originally filed and of each amendment and supplement thereto, in such number as the Agent shall reasonably deem necessary, (ii) the printing and delivery to the Agent of this Agreement and such other documents as may be required in connection with the offering, purchase, sale, issuance or delivery of the Placement Shares, (iii) the fees and disbursements of the counsel, accountants and other advisors to the Company, (iv) the reasonable and documented out-of-pocket expenses of Agent, including reasonable and documented fees and disbursements of counsel to the Agent incurred in connection with (a) entering into the transactions contemplated by this Agreement in an amount not to exceed $75,000 in the aggregate, and (b) ongoing diligence arising from the transactions contemplated by this Agreement in an amount not to exceed $7,500 in the aggregate per calendar quarter payable in connection with each Representation Date with respect to which the Company is required to deliver a certificate pursuant to Section 7(l) for which no waiver is applicable; (v) the printing and delivery to the Agent of copies of any Permitted Issuer Free Writing Prospectus (defined below) and the Prospectus and any amendments or supplements thereto in such number as the Agent shall deem reasonably necessary, (vi) the preparation, printing and delivery to the Agent of copies of the blue sky survey, (vii) the documented fees and expenses of the transfer agent and registrar for the Common Stock, (viii) the reasonable and documented fees and expenses incident to any review by FINRA of the terms of the sale of the Placement Shares, including fees and expenses of counsel to the Agent (subject to the limitations set forth in clause (iv) above), and (ix) the documented fees and expenses incurred in connection with the listing of the Placement Shares on the Exchange.
22
9. Conditions to the Agent’s Obligations. The obligations of the Agent hereunder with respect to a Placement will be subject to the continuing accuracy and completeness of the representations and warranties made by the Company herein, to the due performance by the Company of its obligations hereunder, to the completion by the Agent of a due diligence review satisfactory to it in its reasonable judgment, and to the continuing reasonable satisfaction (or waiver by the Agent in its sole discretion) of the following additional conditions:
(a) Registration Statement Effective. The Registration Statement shall have become effective and shall be available for the sale of all Placement Shares contemplated to be issued by any Placement Notice.
(b) No Material Notices. None of the following events shall have occurred and be continuing: (i) receipt by the Company of any request for additional information from the Commission or any other federal or state governmental authority during the period of effectiveness of the Registration Statement, the response to which would require any post-effective amendments or supplements to the Registration Statement or the Prospectus; (ii) the issuance by the Commission or any other federal or state governmental authority of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose; (iii) receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Placement Shares for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; or (iv) the occurrence of any event that makes any statement of material fact made in the Registration Statement or the Prospectus or any material document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires the making of any changes in the Registration Statement, the Prospectus or Incorporated Documents so that, in the case of the Registration Statement, it will not contain any materially untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading and, that in the case of the Prospectus, it will not contain any materially untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(c) No Misstatement or Material Omission. The Agent shall not have advised the Company that the Registration Statement or Prospectus, or any amendment or supplement thereto, contains an untrue statement of fact that in the Agent’s reasonable opinion, in consultation with outside counsel, is material, or omits to state a fact that in the Agent’s reasonable opinion is material and is required to be stated therein or is necessary to make the statements therein not misleading.
(d) Material Changes. Except as contemplated in the Prospectus, or disclosed in the Company’s reports filed with the Commission, there shall not have been any Material Adverse Effect, or any development that would reasonably be expected to cause a Material Adverse Effect, or a downgrading in or withdrawal of the rating assigned to any of the Company’s securities (other than asset backed securities) by any rating organization or a public announcement by any rating organization that it has under surveillance or review its rating of any of the Company's securities (other than asset backed securities), the effect of which, in the case of any such action by a rating organization described above, in the reasonable judgment of the Agent (without relieving the Company of any obligation or liability it may otherwise have), is so material as to make it impracticable or inadvisable to proceed with the offering of the Placement Shares on the terms and in the manner contemplated in the Prospectus..
23
(e) Legal Opinion. The Agent shall have received the opinion and the negative assurance letter of Company Counsel required to be delivered pursuant to Section 7(m) on or before the date on which such delivery of such opinion and letter, as applicable, is required pursuant to Section 7(m).
(f) Comfort Letter. The Agent shall have received the Comfort Letter required to be delivered pursuant to Section 7(n) on or before the date on which such delivery of such Comfort Letter is required pursuant to Section 7(n).
(g) Representation Certificate. The Agent shall have received the certificate required to be delivered pursuant to Section 7(l) on or before the date on which delivery of such certificate is required pursuant to Section 7(l).
(h) Secretary’s Certificate. On or prior to the First Placement Date, the Agent shall have received a certificate, signed on behalf of the Company by its corporate Secretary, in form and substance satisfactory to the Agent and its counsel.
(i) No Suspension. Trading in the Common Stock shall not have been suspended on the Exchange, and the Common Stock shall not have been delisted from the Exchange.
(j) Other Materials. On each date on which the Company is required to deliver a certificate pursuant to Section 7(l), the Company shall have furnished to the Agent such appropriate further information, certificates and documents as the Agent may reasonably request and that are usually and customarily furnished by an issuer of securities in connection with a securities offering. All such opinions, certificates, letters and other documents will be in compliance with the provisions hereof. The Company will furnish the Agent with such conformed copies of such opinions, certificates, letters and other documents as the Agent shall reasonably request.
(k) Securities Act Filings Made. All filings with the Commission required by Rule 424 under the Securities Act with respect to the Placement Shares to have been filed prior to the issuance of any Placement Notice hereunder shall have been made within the applicable time period prescribed for such filing by Rule 424.
(l) Approval for Listing. The Placement Shares shall either have been approved for listing on the Exchange, subject only to notice of issuance, or the Company shall have filed a listing of additional shares notice for the Placement Shares with the Exchange at, or prior to, the issuance of any Placement Notice.
(m) FINRA. FINRA shall have raised no objection to the terms of this offering and the amount of compensation allowable or payable to the Agent as described in the Prospectus.
(n) No Termination Event. There shall not have occurred any event that would permit the Agent to terminate this Agreement pursuant to Section 12(a).
10. Indemnification and Contribution.
(a) Company Indemnification. The Company agrees to indemnify and hold harmless the Agent, its partners, members, directors, officers, employees and agents and each person, if any, who
24
controls the Agent within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act as follows:
(i) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, joint or several, arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading, or arising out of any untrue statement or alleged untrue statement of a material fact included in any related Issuer Free Writing Prospectus or the Prospectus (or any amendment or supplement thereto), or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, joint or several, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission; provided that (subject to Section 10(d) below) any such settlement is effected with the written consent of the Company, which consent shall not unreasonably be delayed or withheld; and
(iii) against any and all expense whatsoever, as incurred (including the reasonable and documented fees and disbursements of counsel), reasonably incurred in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, of the Company to the extent that any such expense is not paid under (i) or (ii) above,
provided, however, that this indemnity agreement shall not apply to any loss, liability, claim, damage or expense to the extent arising out of any untrue statement or omission or alleged untrue statement or omission made solely in reliance upon and in conformity with written information furnished to the Company by the Agent expressly for use in the Registration Statement (or any amendment thereto), or in any related Issuer Free Writing Prospectus or the Prospectus (or any amendment or supplement thereto).
(b) Agent Indemnification. Agent agrees to indemnify and hold harmless the Company and its directors and each officer of the Company who signed the Registration Statement, and each person, if any, who (i) controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act or (ii) is controlled by or is under common control with the Company against any and all loss, liability, claim, damage and expense described in the indemnity contained in Section 10(a), as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Registration Statement (or any amendments thereto) or the Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with information relating to the Agent and furnished to the Company in writing by the Agent expressly for use therein. The Company hereby acknowledges that the only information that the Agent has furnished to the Company expressly for use in the Registration Statement, the Prospectus, any Prospectus Supplement or any Issuer Free Writing Prospectus (or any amendment or supplement thereto) are the statements set forth in the ninth and tenth paragraphs under the caption “Plan of Distribution” in the Prospectus (the “Agent Information”).
25
(c) Procedure. Any party that proposes to assert the right to be indemnified under this Section 10 will, promptly after receipt of notice of commencement of any action against such party in respect of which a claim is to be made against an indemnifying party or parties under this Section 10, notify each such indemnifying party of the commencement of such action, enclosing a copy of all papers served, but the omission so to notify such indemnifying party will not relieve the indemnifying party from (i) any liability that it may have to any indemnified party otherwise than under this Section 10 and (ii) any liability that it may have to any indemnified party under the foregoing provision of this Section 10 unless, and only to the extent that, such omission results in the forfeiture of substantive rights or defenses by the indemnifying party. If any such action is brought against any indemnified party and it notifies the indemnifying party of its commencement, the indemnifying party will be entitled to participate in and, to the extent that it elects by delivering written notice to the indemnified party promptly after receiving notice of the commencement of the action from the indemnified party, jointly with any other indemnifying party similarly notified, to assume the defense of the action, with counsel reasonably satisfactory to the indemnified party, and after notice from the indemnifying party to the indemnified party of its election to assume the defense, the indemnifying party will not be liable to the indemnified party for any legal or other expenses except as provided below and except for the reasonable and documented costs of investigation subsequently incurred by the indemnified party in connection with the defense. The indemnified party will have the right to employ its own counsel in any such action, but the fees, expenses and other charges of such counsel will be at the expense of such indemnified party unless (1) the employment of counsel by the indemnified party has been authorized in writing by the indemnifying party, (2) the indemnified party has reasonably concluded (based on advice of counsel) that there may be legal defenses available to it or other indemnified parties that are different from or in addition to those available to the indemnifying party, (3) a conflict or potential conflict exists (based on advice of counsel to the indemnified party) between the indemnified party and the indemnifying party (in which case the indemnifying party will not have the right to direct the defense of such action on behalf of the indemnified party) or (4) the indemnifying party has not in fact employed counsel to assume the defense of such action within a reasonable time after receiving notice of the commencement of the action, in each of which cases the reasonable and documented fees, disbursements and other charges of counsel will be at the expense of the indemnifying party or parties. It is understood that the indemnifying party or parties shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees, disbursements and other charges of more than one separate firm admitted to practice in such jurisdiction at any one time for all such indemnified party or parties. All such fees, disbursements and other charges will be reimbursed by the indemnifying party promptly after the indemnifying party receives a written invoice related to fees, disbursements and other reasonable charges in detail. An indemnifying party will not, in any event, be liable for any settlement of any action or claim effected without its written consent. No indemnifying party shall, without the prior written consent of each indemnified party, settle or compromise or consent to the entry of any judgment in any pending or threatened claim, action or proceeding relating to the matters contemplated by this Section 10 (whether or not any indemnified party is a party thereto), unless such settlement, compromise or consent (1) includes an unconditional release of each indemnified party from all liability arising out of such litigation, investigation, proceeding or claim and (2) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.
(d) Contribution. In order to provide for just and equitable contribution in circumstances in which the indemnification provided for in the foregoing paragraphs of this Section 10 is applicable in accordance with its terms but for any reason is held to be unavailable from the Company or the Agent, the Company and the Agent will contribute to the total losses, claims, liabilities, expenses and damages (including any investigative, legal and other expenses reasonably incurred and documented in connection with, and any amount paid in settlement of, any action, suit or proceeding or any claim
26
asserted, but after deducting any contribution received by the Company from persons other than the Agent, such as persons who control the Company within the meaning of the Securities Act, officers of the Company who signed the Registration Statement and directors of the Company, who also may be liable for contribution) to which the Company and the Agent may be subject in such proportion as shall be appropriate to reflect the relative benefits received by the Company on the one hand and the Agent on the other hand. The relative benefits received by the Company on the one hand and the Agent on the other hand shall be deemed to be in the same proportion as the total net proceeds from the sale of the Placement Shares (before deducting expenses) received by the Company bear to the total compensation received by the Agent (before deducting expenses) from the sale of Placement Shares on behalf of the Company. If, but only if, the allocation provided by the foregoing sentence is not permitted by applicable law, the allocation of contribution shall be made in such proportion as is appropriate to reflect not only the relative benefits referred to in the foregoing sentence but also the relative fault of the Company, on the one hand, and the Agent, on the other hand, with respect to the statements or omission that resulted in such loss, claim, liability, expense or damage, or action in respect thereof, as well as any other relevant equitable considerations with respect to such offering. Such relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or the Agent, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Agent agree that it would not be just and equitable if contributions pursuant to this Section 10(d) were to be determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to herein. The amount paid or payable by an indemnified party as a result of the loss, claim, liability, expense, or damage, or action in respect thereof, referred to above in this Section 10(d) shall be deemed to include, for the purpose of this Section 10(d), any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim to the extent consistent with Section 10(c) hereof. Notwithstanding the foregoing provisions of this Section 10(d), the Agent shall not be required to contribute any amount in excess of the commissions received by it under this Agreement and no person found guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 10(d), any person who controls a party to this Agreement within the meaning of the Securities Act, and any officers, directors, partners, employees or agents of the Agent, will have the same rights to contribution as that party, and each director of the Company and each officer of the Company who signed the Registration Statement will have the same rights to contribution as the Company, subject in each case to the provisions hereof. Any party entitled to contribution, promptly after receipt of notice of commencement of any action against such party in respect of which a claim for contribution may be made under this Section 10(d), will notify any such party or parties from whom contribution may be sought, but the omission to so notify will not relieve that party or parties from whom contribution may be sought from any other obligation it or they may have under this Section 10(d) except to the extent that the failure to so notify such other party materially prejudiced the substantive rights or defenses of the party from whom contribution is sought. Except for a settlement entered into pursuant to the last sentence of Section 10(c) hereof, no party will be liable for contribution with respect to any action or claim settled without its written consent if such consent is required pursuant to Section 10(c) hereof.
11. Additional Covenants.
(a) Representations and Covenants of the Agent. The Agent represents and warrants that it is duly registered as a broker-dealer under FINRA, the Exchange Act and the applicable statutes and regulations of each state in which the Placement Shares will be offered and sold, except such states in
27
which the Agent is exempt from registration or such registration is not otherwise required. The Agent shall continue, for the term of this Agreement, to be duly registered as a broker-dealer under FINRA, the Exchange Act and the applicable statutes and regulations of each state in which the Placement Shares will be offered and sold, except such states in which the Agent is exempt from registration or such registration is not otherwise required, during the term of this Agreement. The Agent shall comply with all applicable law and regulations in connection with the transactions contemplated by this Agreement, including the issuance and sale through the Agent of the Placement Shares
(b) Representations and Agreements to Survive Delivery. The indemnity and contribution agreements contained in Section 10 of this Agreement and all representations and warranties of the Company herein or in certificates delivered pursuant hereto shall survive, as of their respective dates, regardless of (i) any investigation made by or on behalf of the Agent, any controlling persons, or the Company (or any of their respective officers, directors or controlling persons), (ii) delivery and acceptance of the Placement Shares and payment therefor or (iii) any termination of this Agreement.
12. Termination.
(a) The Agent may terminate this Agreement, by written notice to the Company, as hereinafter specified at any time (1) if there has been, since the time of execution of this Agreement or since the date as of which information is given in the Prospectus, any Material Adverse Effect, or any development that would reasonably be expected to result in a Material Adverse Effect has occurred, which in the reasonable judgment of the Agent, is material and adverse and makes it impractical or inadvisable to market the Placement Shares, (2) if there has occurred any material adverse change in the financial markets in the United States or the international financial markets, any outbreak of hostilities or escalation thereof or other calamity or crisis or any change or development involving a prospective change in national or international political, financial or economic conditions, in each case the effect of which is such as to make it, in the judgment of the Agent, impracticable or inadvisable to market the Placement Shares or to enforce contracts for the sale of the Placement Shares, (3) if trading in the Common Stock has been suspended or limited by the Commission or the Exchange, or if trading generally on the Exchange has been suspended or limited, or minimum prices for trading have been fixed on the Exchange, (4) if any suspension of trading of any securities of the Company on any exchange or in the over-the-counter market shall have occurred and be continuing, (5) if a major disruption of securities settlements or clearance services in the United States shall have occurred and be continuing, or (6) if a banking moratorium has been declared by either U.S. Federal or New York authorities. Any such termination shall be without liability of any party to any other party except that the provisions of Section 8 (Expenses), Section 10 (Indemnification), Section 11 (Survival of Representations), Section 17 (Governing Law; Consent to Jurisdiction) and Section 18 (Waiver of Jury Trial) hereof shall remain in full force and effect notwithstanding such termination. If the Agent elects to terminate this Agreement as provided in this Section 12(a), the Agent shall provide the required written notice as specified in Section 13 (Notices).
(b) The Company shall have the right, by giving three (3) days written notice as hereinafter specified to terminate this Agreement in its sole discretion at any time after the date of this Agreement. Any such termination shall be without liability of any party to any other party except that the provisions of Section 8, Section 10, Section 11, Section 17 and Section 18 hereof shall remain in full force and effect notwithstanding such termination. Additionally, the Company may reduce the amount to be sold under this Agreement in its sole discretion at any time upon prompt written notice; provided, however, that the Company shall continue to comply with its obligations under Section 7(a)(iii) hereof.
28
(c) The Agent shall have the right, by giving three (3) days written notice as hereinafter specified to terminate this Agreement in its sole discretion at any time after the date of this Agreement. Any such termination shall be without liability of any party to any other party except that the provisions of Section 8, Section 10, Section 11, Section 17 and Section 18 hereof shall remain in full force and effect notwithstanding such termination.
(d) Unless earlier terminated pursuant to this Section 12, this Agreement shall automatically terminate upon the issuance and sale of all of the Placement Shares through the Agent on the terms and subject to the conditions set forth herein; provided that the provisions of Section 8, Section 10, Section 11, Section 17 and Section 18 hereof shall remain in full force and effect notwithstanding such termination.
(e) This Agreement shall remain in full force and effect unless terminated pursuant to Sections 12(a), (b), (c), or (d) above or otherwise by mutual agreement of the parties; provided, however, that any such termination by mutual agreement shall in all cases be deemed to provide that Section 8, Section 10, Section 11, Section 17 and Section 18 shall remain in full force and effect.
(f) Any termination of this Agreement shall be effective on the date specified in such notice of termination; provided, however, that such termination shall not be effective until the close of business on the date of receipt of such notice by the Agent or the Company, as the case may be; provided, further, any termination of this Agreement in accordance with the terms of Section 12(b) or (c) shall not be effective until the date that is three (3) days after the date of such written notice. If such termination shall occur prior to the Settlement Date for any sale of Placement Shares, such Placement Shares shall settle in accordance with the provisions of this Agreement.
(g) Subject to the additional limitations set forth in Section 8 of this Agreement, in the event of termination of this Agreement prior to the sale of any Placement Shares, the Agent shall be entitled only to reimbursement of its reasonable and documented out-of-pocket expenses actually incurred.
13. Notices. All notices or other communications required or permitted to be given by any party to any other party pursuant to the terms of this Agreement shall be in writing, unless otherwise specified, and if sent to the Agent, shall be delivered to:
JonesTrading Institutional Services LLC
880 Island Park Drive, 3rd Floor
Charleston, SC 29492
Email: [email protected]
and
Duane Morris, LLP
22 Vanderbilt
335 Madison Avenue, 23rd Floor
New York, NY 10017
Attn: Dean M. Colucci
Email: [email protected]
29
and if to the Company, shall be delivered to:
Commercial Vehicle Group, Inc.
7800 Walton Parkway
New Albany, Ohio 43054
Attn: Aneezal Mohamed
Email: [email protected]
with a copy to:
Baker & Hostetler, LLP
200 Civic Center Drive, Suite 1200
Columbus, Ohio 43215
Attn: Amy M. Shepherd, Esq.
Email: [email protected]
Each party to this Agreement may change such address for notices by sending to the parties to this Agreement written notice of a new address for such purpose. Each such notice or other communication shall be deemed given (i) when delivered personally or by verifiable email correspondence (with an original to follow) on or before 4:30 p.m., New York City time, on a Business Day (as defined below) or, if such day is not a Business Day, on the next succeeding Business Day, (ii) on the next Business Day after timely delivery to a nationally-recognized overnight courier and (iii) on the Business Day actually received if deposited in the U.S. mail (certified or registered mail, return receipt requested, postage prepaid).
An electronic communication (“Electronic Notice”) shall be deemed written notice for purposes of this Section 13 if sent to the electronic mail address specified by the receiving party under separate cover. Electronic Notice shall be deemed received at the time the party sending Electronic Notice receives verification of receipt by the receiving party. Any party receiving Electronic Notice may request and shall be entitled to receive the notice on paper, in a nonelectronic form (“Nonelectronic Notice”) which shall be sent to the requesting party within ten (10) days of receipt of the written request for Nonelectronic Notice.
14. Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the Company and the Agent and their respective successors and the affiliates, controlling persons, officers and directors referred to in Section 10 hereof. References to any of the parties contained in this Agreement shall be deemed to include the successors and permitted assigns of such party. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and permitted assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. Neither party may assign its rights or obligations under this Agreement without the prior written consent of the other party; provided, however, that the Agent may assign its rights and obligations hereunder to an affiliate thereof without obtaining the Company’s consent, so long as such affiliate is a registered broker dealer.
15. Adjustments for Stock Splits. The parties acknowledge and agree that all share-related numbers contained in this Agreement shall be adjusted to take into account any stock split, stock dividend or similar event effected with respect to the Placement Shares.
30
16. Entire Agreement; Amendment; Severability. This Agreement (including all schedules and exhibits attached hereto and Placement Notices issued pursuant hereto) constitutes the entire agreement and supersedes all other prior and contemporaneous agreements and undertakings, both written and oral, among the parties hereto with regard to the subject matter hereof. Neither this Agreement nor any term hereof may be amended except pursuant to a written instrument executed by the Company and the Agent. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable as written by a court of competent jurisdiction, then such provision shall be given full force and effect to the fullest possible extent that it is valid, legal and enforceable, and the remainder of the terms and provisions herein shall be construed as if such invalid, illegal or unenforceable term or provision was not contained herein, but only to the extent that giving effect to such provision and the remainder of the terms and provisions hereof shall be in accordance with the intent of the parties as reflected in this Agreement.
17. GOVERNING LAW AND TIME; WAIVER OF JURY TRIAL. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME. EACH PARTY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
18. CONSENT TO JURISDICTION. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN, FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH ANY TRANSACTION CONTEMPLATED HEREBY, AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT, THAT SUCH SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM OR THAT THE VENUE OF SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER. EACH PARTY HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF (CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED) TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW.
19. Use of Information. The Agent may not use any information gained in connection with this Agreement and the transactions contemplated by this Agreement, including due diligence, to advise any party with respect to transactions not expressly approved by the Company.
20. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Delivery of an executed Agreement by one party to the other may be made by facsimile or other electronic transmission.
31
21. Effect of Headings. The section and Exhibit headings herein are for convenience only and shall not affect the construction hereof.
22. Permitted Free Writing Prospectuses.
The Company represents, warrants and agrees that, unless it obtains the prior consent of the Agent (which consent shall not be unreasonably withheld or delayed), and the Agent represents, warrants and agrees that, unless it obtains the prior consent of the Company, it has not made and will not make any offer relating to the Placement Shares that would constitute an Issuer Free Writing Prospectus, or that would otherwise constitute a “free writing prospectus,” as defined in Rule 405, required to be filed with the Commission. Any such free writing prospectus consented to by the Agent or by the Company, as the case may be (a “Permitted Free Writing Prospectus”). The Company represents and warrants that it has treated and agrees that it will treat each Permitted Free Writing Prospectus as an “issuer free writing prospectus,” as defined in Rule 433, and has complied and will use its commercially reasonable efforts to comply with the requirements of Rule 433 applicable to any Permitted Free Writing Prospectus, including timely filing with the Commission where required, legending and record keeping.
23. Absence of Fiduciary Relationship.
The Company acknowledges and agrees that:
(a) The Agent is acting solely as agent in connection with the public offering of the Placement Shares and in connection with each transaction contemplated by this Agreement and the process leading to such transactions, and no fiduciary or advisory relationship between the Company or any of its respective affiliates, stockholders (or other equity holders), creditors or employees or any other party, on the one hand, and the Agent, on the other hand, has been or will be created in respect of any of the transactions contemplated by this Agreement, irrespective of whether or not the Agent has advised or is advising the Company on other matters, and the Agent has no obligation to the Company with respect to the transactions contemplated by this Agreement except the obligations expressly set forth in this Agreement;
(b) it is capable of evaluating and understanding, and understands and accepts, the terms, risks and conditions of the transactions contemplated by this Agreement;
(c) the Agent has not provided any legal, accounting, regulatory or tax advice with respect to the transactions contemplated by this Agreement and it has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate;
(d) it is aware that the Agent and its affiliates are engaged in a broad range of transactions which may involve interests that differ from those of the Company and the Agent has no obligation to disclose such interests and transactions to the Company by virtue of any fiduciary, advisory or agency relationship or otherwise; and
(e) it waives, to the fullest extent permitted by law, any claims it may have against the Agent for breach of fiduciary duty or alleged breach of fiduciary duty in connection with the sale of Placement Shares under this Agreement and agrees that the Agent shall not have any liability (whether direct or indirect, in contract, tort or otherwise) to it in respect of such a fiduciary duty claim or to any person asserting a fiduciary duty claim on its behalf or in right of it or the Company, employees or creditors of Company, other than in respect of the Agent’s obligations under this Agreement and to keep
32
information provided by the Company to the Agent and the Agent’s counsel confidential to the extent not otherwise publicly-available.
24. Definitions.
As used in this Agreement, the following terms have the respective meanings set forth below:
“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person as such terms are used in and construed under Rule 405 under the Securities Act.
“Applicable Time” means (i) each Representation Date, (ii) the time of each sale of any Placement Shares pursuant to this Agreement, and (iii) each Settlement Date.
“Business Day” shall mean any day on which the Exchange and commercial banks in the City of New York are open for business.
“Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in Rule 433, relating to the Placement Shares that (1) is required to be filed with the Commission by the Company, (2) is a “road show” that is a “written communication” within the meaning of Rule 433(d)(8)(i) whether or not required to be filed with the Commission, or (3) is exempt from filing pursuant to Rule 433(d)(5)(i) because it contains a description of the Placement Shares or of the offering that does not reflect the final terms, in each case in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Company’s records pursuant to Rule 433(g) under the Securities Act.
“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Rule 172,” “Rule 405,” “Rule 415,” “Rule 424,” “Rule 424(b),” “Rule 430B,” and “Rule 433” refer to such rules under the Securities Act.
“Subsidiary” means any subsidiary of the Company that may be identified on Exhibit 21.1 to the Company’s Annual Report on Form 10-K for the most recently ended fiscal year, and shall, where applicable, also include any direct or indirect subsidiary of the Company formed or acquired after the date hereof.
“Trading Day” means any day on which shares of Common Stock are purchased and sold on the Exchange.
All references in this Agreement to financial statements and schedules and other information that is “contained,” “included” or “stated” in the Registration Statement or the Prospectus (and all other references of like import) shall be deemed to mean and include all such financial statements and schedules and other information that is incorporated by reference in the Registration Statement or the Prospectus, as the case may be.
All references in this Agreement to the Registration Statement, the Prospectus or any amendment or supplement to any of the foregoing shall be deemed to include the copy filed with the Commission pursuant to EDGAR; all references in this Agreement to any Issuer Free Writing Prospectus (other than
33
any Issuer Free Writing Prospectuses that, pursuant to Rule 433, are not required to be filed with the Commission) shall be deemed to include the copy thereof filed with the Commission pursuant to EDGAR; and all references in this Agreement to “supplements” to the Prospectus shall include, without limitation, any supplements, “wrappers” or similar materials prepared in connection with any offering, sale or private placement of any Placement Shares by the Agent outside of the United States.
34
If the foregoing correctly sets forth the understanding between the Company and the Agent, please so indicate in the space provided below for that purpose, whereupon this letter shall constitute a binding agreement between the Company and the Agent.
Very truly yours,
| COMMERCIAL VEHICLE GROUP, INC. | ||||||||
By: | /s/ Aneezal Mohamed | |||||||
Name: Aneezal Mohamed | ||||||||
Title: Chief Legal Officer | ||||||||
ACCEPTED as of the date first-above written:
JONESTRADING INSTITUTIONAL SERVICES LLC | ||||||||
By: | /s/ Burke Cook | |||||||
Name: Burke Cook | ||||||||
Title: General Counsel and Secretary | ||||||||
SCHEDULE 1
__________________________
FORM OF PLACEMENT NOTICE
__________________________
| From: | COMMERCIAL VEHICLE GROUP, INC. | |||||||
| To: | JONESTRADING INSTITUTIONAL SERVICES LLC | |||||||
| Attention: _____________________ | ||||||||
| Subject: | Placement Notice | |||||||
| Date: | [•] | |||||||
Ladies and Gentlemen:
Pursuant to the terms and subject to the conditions contained in the Capital on Demand™ Sales Agreement between Commercial Vehicle Group, Inc. (the “Company”) and JonesTrading Institutional Services LLC (“Agent”), dated June 18, 2026, the Company hereby requests that the Agent sell up to ____________ of the Company’s Common Stock, $0.01 par value per share, at a minimum market price of $_______ per share, during the time period beginning [month, day, time] and ending [month, day, time].
SCHEDULE 2
__________________________
Compensation
__________________________
The Company shall pay to the Agent in cash, upon each sale of Placement Shares pursuant to this Agreement, an amount up to 3.0% of the gross proceeds from each sale of Placement Shares.
SCHEDULE 3
__________________________
Notice Parties
__________________________
The Company
| Aneezal Mohamed | [email protected] | ||||
| Angie O'Leary | Angie.O'[email protected] | ||||
| James Ray | [email protected] | ||||
The Agent
| Moe Cohen | [email protected] | ||||
| Bryan Turley | [email protected] | ||||
| Ryan Loforte | [email protected] | ||||
| Burke Cook | [email protected] | ||||
With a copy to [email protected]
EXHIBIT 7(l)
Form of Representation Date Certificate
____________________, 20__
This Representation Date Certificate (this “Certificate”) is executed and delivered in connection with Section 7(l) of the Capital on Demand™ Sales Agreement (the “Agreement”), dated June 18, 2026, and entered into between Commercial Vehicle Group, Inc. (the “Company”) and JonesTrading Institutional Services LLC. All capitalized terms used but not defined herein shall have the meanings given to such terms in the Agreement
The undersigned, a duly appointed and authorized officer of the Company, having made all necessary inquiries to establish the accuracy of the statements below and having been authorized by the Company to execute this certificate, in the undersigned’s official capacity and not individually, hereby certifies as follows:
1. As of the date of this Certificate, (i) the Registration Statement does not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading and (ii) neither the Registration Statement nor the Prospectus contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading and (iii) no event has occurred as a result of which it is necessary to amend or supplement the Prospectus in order to make the statements therein not untrue or misleading.
2. Each of the representations and warranties of the Company contained in the Agreement (A) to the extent such representations and warranties are subject to qualifications and exceptions contained therein relating to materiality or Material Adverse Effect, are true and correct on and as of the date hereof with the same force and effect as if expressly made on and as of the date hereof, except for those representations and warranties that speak solely as of a specific date and which were true and correct as of such date, and (B) to the extent such representations and warranties are not subject to any qualifications or exceptions, are true and correct in all material respects as of the date hereof as if made on and as of the date hereof with the same force and effect as if expressly made on and as of the date hereof except for those representations and warranties that speak solely as of a specific date and which were so true and correct as of such date.
3. Each of the covenants required to be performed by the Company in the Agreement on or prior to the date of the Agreement, this Representation Date, and each such other date as set forth in the Agreement, has been duly, timely and fully performed in all material respects and each condition required to be complied with by the Company on or prior to the date of the Agreement, this Representation Date, and each such other date as set forth in the Agreement has been duly, timely and fully complied with in all material respects.
4. Subsequent to the date of the most recent financial statements in the Prospectus, there has been no Material Adverse Effect.
5. No stop order suspending the effectiveness of the Registration Statement or of any part thereof has been issued, and no proceedings for that purpose have been instituted or are pending or
37
threatened by any securities or other governmental authority (including, without limitation, the Commission).
6. No order suspending the effectiveness of the Registration Statement or the qualification or registration of the Placement Shares under the applicable securities or blue sky laws of any applicable jurisdiction are in effect and no proceeding for such purpose is pending before, or threatened, to the Company's knowledge or in writing by, any applicable securities or other governmental authority (including, without limitation, the Commission).
The undersigned has executed this Representation Date Certificate as of the date first written above.
COMMERCIAL VEHICLE GROUP, INC. | |||||||||||||||||||||||
By: | |||||||||||||||||||||||
| Name: | |||||||||||||||||||||||
| Title: | |||||||||||||||||||||||
38
EXHIBIT 10.5
RESTRICTED STOCK AGREEMENT
THIS RESTRICTED STOCK AGREEMENT (this “Agreement”) is made as of June 2, 2026, between Commercial Vehicle Group, Inc., a Delaware corporation (the “Company”), and James R. Ray (“Grantee”).
WHEREAS, the Grantee is an employee of the Company; and
WHEREAS, the grant of the shares of restricted stock (as governed by the Company’s Second Amended and Restated 2020 Equity Incentive Plan (the “Plan”)) to the Grantee described herein has been approved by the Company’s Compensation Committee (the “Committee”), and replaces the number of restricted shares surrendered by the Grantee as disclosed in the 2026 proxy statement.
NOW, THEREFORE, pursuant to the Plan, the Company, upon the terms and conditions set forth herein, hereby grants to the Grantee 85,031 restricted shares of Common Stock, par value $.01 (“Common Stock”), of the Company (the “Restricted Shares”) effective as of the date hereof (the “Date of Grant”), and subject to the terms and conditions of the Plan and the terms and conditions of this Agreement.
1.Definitions. All capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to them in the Plan.
2.Issuance of Shares. In consideration of the Grantee’s service as an employee of the Company, the Restricted Shares shall be issued to the Grantee, and, upon payment to the Company by the Grantee of the aggregate par value thereof, which payment shall be made within 10 days of the date hereof, shall be fully paid and non-assessable and shall be represented by a certificate or certificates issued in the name of the Grantee and endorsed with an appropriate legend referring to the restrictions hereinafter set forth.
3.Restrictions on Transfer of Shares. The Restricted Shares may not be sold, assigned, transferred, conveyed, pledged, exchanged or otherwise encumbered or disposed of (each, a “Transfer”) by the Grantee, except to the Company, unless and until they have become nonforfeitable as provided in Section 4 hereof. Any purported encumbrance or disposition in violation of the provisions of this Section 3 shall be void AB INITIO, and the other party to any such purported transaction shall not obtain any rights to or interest in the Restricted Shares. As and when permitted by the Plan, the Committee may in its sole discretion waive the restrictions on transferability with respect to all or a portion of the Restricted Shares. Notwithstanding the foregoing, Grantee may not Transfer Restricted Shares which have become nonforfeitable as provided in Section 4 hereof unless such Restricted Shares are registered pursuant to the Securities Act of 1933 (the “Securities Act”), are sold under Rule 144 promulgated under the Securities Act or unless the Company, after consultation with counsel, and its counsel agree with Grantee that such Transfer is not required to be registered under the Securities Act.
US_Active\117765860\V-1
4.Vesting of Shares.
(a)Subject to paragraph Section 5 hereof, the Restricted Shares shall vest and become nonforfeitable if the Grantee remains an employee of the Company through the vesting dates set forth below with respect to the percentage of Restricted Shares (rounded to the nearest whole share) set forth next to such date:
Vesting Date | Percentage of Restricted Shares Vesting on such Vesting Date | ||||
| March 31, 2027 | 50% | ||||
| March 31, 2028 | 50% | ||||
(b)Notwithstanding the provisions of Section 4(a) above, in connection with a Change in Control, the provisions set forth in Section 13 of the Plan shall govern with respect to the acceleration of the vesting of the Restricted Shares.
(c)Notwithstanding the provisions of Section 4(a) above, the Committee may, in its sole discretion, vest or accelerate the vesting of the Restricted Shares at any time.
(d)If Grantee’s employment with the Company terminates (other than for Cause) on or after Grantee’s Rule of 66 Date, as defined below, then the Restricted Shares shall vest on the latter of 180 days after the grant date or January 4, 2027, except that any shares granted less than 180 days prior to the termination date shall be forfeited. For this purpose, the “Rule of 66 Date” means the date that the sum of Grantee’s age plus total Service, as defined below, is equal to or greater than sixty-six (66), so long as Grantee’s age is equal to or greater than sixty (60). “Service” means the aggregate number of completed years of continued employment with the Company, as conclusively determined by the Company without regard to any later determinations or findings regarding Grantee’s employment status by any third party.
5.Post-Vesting Restrictions. For a period of one-year following the vesting of the Restricted Shares granted under this Agreement, the Grantee shall not directly or indirectly sell such Restricted Shares.
6.Forfeiture of Shares. If the Grantee ceases to be an employee of the Company due to death or Disability during any period of restriction, any non-vested Restricted Shares shall immediately vest and all restrictions on the Restricted Shares shall lapse and certificate(s) representing such Restricted Shares shall be delivered by the Company reasonably promptly upon a request by the Grantee. Subject to Section 4(d), above, if the Grantee ceases to be an employee of the Company for any other reason, any non-vested Restricted Shares shall be forfeited by the Grantee and the certificate(s) representing the non-vested portion of the Restricted Shares so forfeited shall be canceled.
7.Dividend, Voting and Other Rights. Except as otherwise provided in this Agreement, from and after the Date of Grant, the Grantee shall have all of the rights of a stockholder with respect to the Restricted Shares, including the right to vote the Restricted Shares and receive any dividends that may be paid thereto, provided, however, that any additional Common Stock or other securities that the Grantee may become entitled to receive pursuant to a stock dividend, stock split, recapitalization,
2
US_Active\117765860\V-1
combination of shares, merger, consolidation, separation or reorganization or any other change in the capital structure of the Company shall be subject to the same risk of forfeiture, certificate delivery provisions and restrictions on transfer as the forfeitable Restricted Shares in respect of which they are issued or transferred and shall become Restricted Shares for the purposes of this Agreement, and provided further that, any dividend paid with respect to unvested Restricted Shares for which an election under Section 83(b) of the Code has not been made (i) constitutes compensation income subject to all applicable tax withholding and (ii) shall be paid on or about the Vesting Date for the underlying Restricted Shares, but in any event not later than the fifteenth (15th) day of the third month of the calendar year following the Vesting Date.
8.Retention of Stock Certificate(s) by the Company. The certificate(s) representing the Restricted Shares shall be held in custody by the Company, together with a stock power in the form of Exhibit A hereto which shall be endorsed in blank by the Grantee and delivered to the Company within 10 days of the date hereof, until such shares have become nonforfeitable in accordance with Section 4. Notwithstanding the foregoing, if the Grantee has attained his or her Rule of 66 Date, the certificate(s) representing the Restricted Shares shall be released to the Grantee within 30 days of the Vesting Date with respect to such shares, and the Vesting Date(s) shall be treated as fixed dates of distribution for purposes of Section 409A of the Internal Revenue Code of 1986, as amended, if applicable to the Restricted Shares.
9.Compliance with Law. The Company shall make reasonable efforts to comply with all applicable federal and state securities laws, provided, however, notwithstanding any other provision of this Agreement, the Company shall not be obligated to issue or release from restrictions on transfer any Restricted Shares pursuant to this Agreement if such issuance or release would result in a violation of any such law.
10.Withholding Taxes. If the Company shall be required to withhold any federal, state, local or foreign tax in connection with any issuance or vesting of Restricted Shares or other securities pursuant to this Agreement, including any employment taxes (collectively, the “Tax Withholding Obligation”), and the amounts available to the Company for such withholding are insufficient, the Grantee shall pay the tax or make provisions that are satisfactory to the Company for the payment thereof. Unless Grantee elects to satisfy the Tax Withholding Obligation by an alternative means that is then permitted by the Company, Grantee’s acceptance of this Agreement constitutes Grantee’s instruction and authorization to the Company to withhold on Grantee’s behalf the number of Restricted Shares from those shares issuable to Grantee under this Agreement as the Company determines to be sufficient to satisfy the Tax Withholding Obligation as and when any such Tax Withholding Obligation becomes due. Restricted Shares so surrendered by the Grantee shall be credited against any such withholding obligation at the market value (determined with reference to the then current price of the Company’s Common Stock as quoted on The Nasdaq Global Select Market) per share of such Restricted Shares on the date of such surrender.
11.Conformity with Plan. The Agreement and the Restricted Shares granted pursuant hereto are intended to conform in all respects with, and are subject to all applicable provisions of, the Plan (which is incorporated herein by reference). Inconsistencies between this Agreement and the Plan shall be resolved in accordance with the terms of this Agreement. By executing this Agreement, Grantee acknowledges and agrees to be bound by all of the terms of this Agreement and the Plan.
3
US_Active\117765860\V-1
12.Amendments. The provisions of this Agreement may be amended and waived only with the prior written consent of the Company and the Grantee.
13.Confidentiality.
(a)Non-use and Non-Disclosure of Confidential Information. Grantee acknowledges that the Company and its subsidiaries continually develop Confidential Information (defined below), that the Grantee may develop Confidential Information for the Company or its subsidiaries during Grantee’s employment with the Company, and that Grantee may learn of Confidential Information during the course of such employment. Grantee will comply with the policies and procedures of the Company and its subsidiaries for protecting Confidential Information and shall never use or disclose to any Person (except as required by applicable law or for the proper performance of his or her duties and responsibilities to the Company and its subsidiaries), any Confidential Information obtained by Grantee incident to his or her employment or other association with the Company or any of its subsidiaries. Grantee agrees to only use the Company’s Confidential Information as necessary to perform his or her job during employment with the Company. Grantee understands that this restriction shall continue to apply after his or her employment terminates, regardless of the reason for such termination. All documents, records, tapes and other media of every kind and description relating to the business, present or otherwise, of the Company or its subsidiaries and any copies, in whole or in part, thereof (the “Documents”), whether or not prepared by Grantee, shall be the sole and exclusive property of the Company and its subsidiaries. Grantee shall safeguard all Documents and shall surrender to the Company at the time his or her employment terminates, or at such earlier time or times as the Company may specify, all Documents then in the Grantee’s possession or control.
(b)Definitions. For purposes of this Agreement, “Confidential Information” means any and all information of the Company and its subsidiaries that is not generally known by others with whom the Company or its subsidiaries compete or do business, or with whom they plan to compete or do business and any and all information which, if disclosed by the Company or its subsidiaries, would assist in competition against them. Confidential Information includes without limitation such information relating to (i) the development, research, testing, manufacturing, marketing and financial activities of the Company and its subsidiaries, (ii) the Company and its subsidiaries Products (defined below), (iii) the costs, sources of supply, financial performance and strategic plans of the Company and its subsidiaries, (iv) the identity and special needs of the customers of the Company and its subsidiaries and (v) the people and organizations with whom the Company and its subsidiaries have business relationships and those relationships. Confidential Information also includes any information that the Company or any of its subsidiaries have received, or may receive hereafter, from others which was received by the Company or any of its subsidiaries with any understanding, express or implied, that the information would not be disclosed. For purposes of this Agreement, “Products” means all products planned, researched, developed, tested, manufactured, sold, licensed, leased or otherwise distributed or put into use by the Company or any of its subsidiaries, together with all services provided or planned by the Company or any of its subsidiaries, during Grantee’s employment with the Company or any of its subsidiaries.
14.Restricted Activities. Grantee, as a condition to the Award and in consideration of Participant's continued employment by the Company and/or its subsidiaries, agrees that some restrictions on Grantee’s activities during and after his or her employment are necessary to protect the goodwill, Confidential Information and other legitimate interests of the Company and its subsidiaries and agrees as follows:
4
US_Active\117765860\V-1
(a)Noncompetition. For a period of time beginning on the date Grantee executes a copy of this Agreement and continuing for a period ending on the date which is one (1) year after Grantee’s employment terminates (the “Noncompetition Period”) Grantee shall not, whether as owner, partner, investor, consultant, agent, Grantee, co-venturer or otherwise, engage in, assist or have any active interest in a business that competes with the Company or any of its subsidiaries (“Competing Business Line”) or otherwise compete with the Company or any of its subsidiaries: (i) anywhere throughout the world; (ii) in North America; (iii) in the United States; and/or (iv) in those states of the United States in which the Company or any of its subsidiaries sells products or conducts business activities. Specifically, but without limiting the foregoing, Grantee agrees that during the Noncompetition Period, Grantee shall not: (A) undertake any planning for any business competitive with the Company or any of its subsidiaries; or (B) engage in any manner in any activity that is competitive with the business of the Company or any of its subsidiaries. For the purposes of this Section 4, Grantee’s undertaking shall encompass all items, products and services that may be used in substitution for Products.
(b)Conflict of Interest. During the Grantee’s employment with the Company, the Grantee shall devote all of the Grantee’s business time, energy, business judgment, knowledge and skill and the Grantee’s best efforts to the performance of the Grantee’s duties with the Company, provided that the foregoing shall not prevent the Grantee from (i) serving on the boards of directors of non-profit organizations and, with the prior written approval of the Board, other for profit companies, (ii) participating in charitable, civic, educational, professional, community or industry affairs, and (iii) managing the Grantee’s passive personal investments so long as such activities in the aggregate do not interfere or conflict with the Grantee’s duties hereunder or create a potential business or fiduciary conflict. Grantee further agrees to comply fully with all policies and practices of the Company as are from time to time in effect.
(c)Nonsolicitation. Grantee further agrees that while he or she is employed by the Company and during the Noncompetition Period, Grantee will not, (i) hire or attempt to hire any employee of the Company or any of its subsidiaries, (ii) hire or attempt to hire any independent contractor providing services to the Company or any of its subsidiaries, (iii) assist in hiring or any attempt to hire anyone identified in clauses (i) or (ii) of this sentence by any other Person, (iv) encourage any employee or independent contractor of the Company or any of its subsidiaries to terminate his or her relationship with the Company or any of its subsidiaries, or (v) solicit or encourage any customer or vendor of the Company or any of its subsidiaries to terminate or diminish its relationship with any of them, or, in the case of a customer, to conduct with any Person any competing business or activity. For purposes of Grantee’s obligations hereunder during that portion of the Noncompetition Period that follows termination of Grantee’s employment, employee, independent contractor, customer or vendor of the Company or any of its subsidiaries shall mean any Person who was such at any time during the six (6) months immediately preceding the date of the termination of Grantee’s employment.
(d)Enforceability. In the event that the one (1) year period stated above is held unenforceable by a court of competent jurisdiction due to its length, then the period shall be six (6) months or such other time as determined enforceable by such court.
15.Non-Inducement. Grantee will not directly or indirectly assist or encourage any person or entity in carrying out or conducting any activity that would be prohibited by this Agreement if such activity were carried out or conducted by Grantee.
5
US_Active\117765860\V-1
16.Assignment of Rights to Intellectual Property. Grantee shall promptly and fully disclose all Intellectual Property (defined below) to the Company. Grantee hereby assigns and agrees to assign to the Company (or as otherwise directed by the Company) Grantee’s full right, title and interest in and to all Intellectual Property. Grantee agrees to execute any and all applications for domestic and foreign patents, copyrights or other proprietary rights and to do such other acts (including without limitation the execution and delivery of instruments of further assurance or confirmation) requested by the Company to assign the Intellectual Property to the Company and to permit the Company to enforce any patents, copyrights or other proprietary rights to the Intellectual Property. Grantee will not charge the Company for time spent in complying with these obligations. All copyrightable works that Grantee creates shall be considered “work made for hire” and shall, upon creation, be owned exclusively by the Company. For purposes of this Section 8, “Intellectual Property” means inventions, discoveries, developments, methods, processes, compositions, works, concepts and ideas (whether or not patentable or copyrightable or constituting trade secrets) conceived, made, created, developed or reduced to practice by Grantee (whether alone or with others and whether or not during normal business hours or on or off the premises of the Company or any of its subsidiaries) during Grantee’s employment with the Company or any of its subsidiaries (including prior to the Effective Date if applicable) that relate to either the Products or any prospective activity of the Company or any of its subsidiaries or that make use of Confidential Information or any of the equipment or facilities of the Company or any of its subsidiaries.
17.Consideration and Acknowledgments. Grantee acknowledges and agrees that the covenants described in Sections 12 through 15 of this Agreement are essential terms, and the underlying Award would not be provided by the Company in the absence of these covenants. Grantee further acknowledges that these covenants are supported by adequate consideration as set forth in this Agreement, that full compliance with these covenants will not prevent Grantee from earning a livelihood following the termination of his or her employment, and that these covenants do not place undue restraint on Grantee and are not in conflict with any public interest. Grantee acknowledges that (i) Grantee has had access to Company’s trade secrets and Confidential Information at the highest levels, including without limitation manufacturing and marketing strategy, customer strategy and lists, technical know-how, product and process research and development, and business plans, (ii) Grantee has had access to Confidential Information regarding and has been privy to discussions and strategy sessions at the highest levels of the Company regarding all aspects, business lines and product segments of the Company, and (iii) that these trade secrets and Confidential Information would inevitably be disclosed were Grantee to work for a competitor. Grantee further acknowledges and agrees that Grantee fully understands these covenants, has had full and complete opportunity to discuss and resolve any ambiguities or uncertainties regarding these covenants before signing this Agreement, that these covenants are reasonable and enforceable in every respect, and has voluntarily agreed to comply with these covenants for their stated term. Grantee agrees that in the event he or she is offered employment with a competing business at any time in the future, Grantee shall immediately notify the competing business of the existence of the covenants set forth above.
18.Severability. In the event that one or more of the provisions of this Agreement shall be invalidated for any reason by a court of competent jurisdiction, any provision so invalidated shall be deemed to be separable from the other provisions hereof, and the remaining provisions hereof shall continue to be valid and fully enforceable.
6
US_Active\117765860\V-1
19.Successors and Assigns. The provisions of this Agreement shall inure to the benefit of, and be binding upon, the successors, administrators, heirs, legal representatives and assigns of the Grantee and the successors and assigns of the Company.
20.Notices. Any notice to the Company provided for herein shall be in writing to the attention of the Secretary of the Company at Commercial Vehicle Group, Inc., 7800 Walton Parkway, New Albany, Ohio 43504, and any notice to the Grantee shall be addressed to the Grantee at his or her address currently on file with the Company. Except as otherwise provided herein, any written notice shall be deemed to be duly given if and when hand delivered, or five business days after having been mailed by United States registered or certified mail, return receipt requested, postage prepaid, or three business days after having been sent by a nationally recognized overnight courier service, addressed as aforesaid. Any party may change the address to which notices are to be given hereunder by written notice to the other party as herein specified, except that notices of changes of address shall be effective only upon receipt.
21.No Right to Continued Employment or Service. Nothing in this Agreement shall confer upon the Grantee any right to continued employment or other service with the Company or its Subsidiaries, or to interfere in any way with the right of the Company or its Subsidiaries to terminate the Grantee’s employment or other service at any time and for any reason (or no reason).
22.Entire Agreement. This Agreement is subject to all of the terms, conditions and provisions of the Plan, including, without limitation, the amendment provisions thereof, and to such rules, regulations and interpretations relating to the Plan as may be adopted thereunder and as may be in effect from time to time. This Agreement may be amended or modified only by a written instrument executed by the Company and the Grantee.
23.Governing Law. The laws of the State of Delaware, without giving effect to the principles of conflict of laws thereof, shall govern the interpretation, performance and enforcement of this Agreement.
* * * * *
7
US_Active\117765860\V-1
IN WITNESS WHEREOF, this Agreement is effective as of the date set forth above.
ACKNOWLEDGED AND AGREED:
/s/ James Ray
Signature of Grantee
_____James Ray_____________
Printed Name of Grantee
COMMERCIAL VEHICLE GROUP, INC.
/s/ Aneezal Mohamed
Signature of Company Representative
Aneezal Mohamed
Printed Name
Chief Legal Officer & Secretary
Title
8
US_Active\117765860\V-1
EXHIBIT A
FORM OF ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, _________________, hereby sells, assigns and transfers unto _________________________________, ____ shares of the Common Stock, par value $0.01 per share, of Commercial Vehicle Group, Inc., a Delaware corporation (the “Company”) standing in its name on the books of said Company represented by Certificate Number ____, and does hereby irrevocably constitute and appoint ________________ as attorney to transfer the said stock on the books of the Company with full power of substitution in the premises.
Date: ___________________ | Employee Name | ||||
9
US_Active\117765860\V-1
Exhibit 10.6
COMMERCIAL VEHICLE GROUP, INC.
SECOND AMENDED AND RESTATED 2020 EQUITY INCENTIVE PLAN
PERFORMANCE-BASED RESTRICTED STOCK AWARD AGREEMENT
SECOND AMENDED AND RESTATED 2020 EQUITY INCENTIVE PLAN
PERFORMANCE-BASED RESTRICTED STOCK AWARD AGREEMENT
BASED ON EBITDA AND STOCK PRICE
James Ray (the “Grantee”) is granted, effective as of June 2, 2026, a performance award (the “Award”) of 603,774 performance shares with a potential payout in the form of stock, as set forth below subject to the terms and conditions of this Agreement and the Second Amended and Restated 2020 Equity Incentive Plan (the “Plan”) of Commercial Vehicle Group, Inc. (the “Company”). To the extent that there is a conflict between the terms of the Plan and this Agreement, the terms of the Plan shall govern. Any term not defined herein shall have the meaning assigned to such term in the Plan.
1.Earning Stock Awards under the 2025 Long Term Incentive Plan:
The Compensation Committee approved this Award as a replacement award of the same award that was cancelled as of April 23, 2026 as disclosed in the 2026 proxy statement and mirrors the terms of Mr. Ray’s 2025 Performance Award Settled in Stock.
The 2025 Long Term Incentive Plan provides for participants to earn stock awards based on the greater of either EBITDA performance or stock price performance as provided for in this Agreement.
The EBITDA component is measured at the end of each year (the “EBITDA Performance Period”) and weighted as 1/3 of the potential EBITDA payout for the performance period. EBITDA, for any period means Earnings Before Interest, Taxes, Depreciation, and Amortization, a financial metric that measures the Company's operational profitability by excluding non-operating expenses and non-cash items.
The stock price component will be measured beginning on the first day of month-19 (July 1, 2026) through the last day of month-36 (December 31, 2027) (the “Stock Price Performance Period”).
For the 2025 plan year, the performance goals and performance periods used for calculating the potential payout are set forth below.
Two Conditions for Stock Payout
1.The higher of the EBITDA hurdle payout level that is met during an EBITDA Performance Period compared to the highest stock price hurdle payout level that is maintained for 20-consecutive trading days during the Stock Price Performance Period, as set forth above, determines the number of performance shares of CVG stock that are “banked” for potential payout; and
2.The Grantee must remain an employee on the vesting date, i.e., December 31, 2027. The payment, if any, will be made as soon as administratively possible after EBITDA
and stock price performance are approved by the Compensation Committee of the Board of Directors of the Company (the “Committee”) following December 31, 2027.
Based on the determination of the above two conditions, the Grantee will receive the value of the performance shares (as of the Determination Date) in CVG stock as set forth above.
The calculation of any payout is explained in Exhibit 1 with examples and incorporated herein by reference.
2.Post-Vesting Restrictions. For a period of one-year following the vesting of stock earned under this Agreement, the Grantee shall not directly or indirectly sell such stock.
(a)Committee Authority. The Committee shall in good faith make all determinations necessary or appropriate to determine whether the performance conditions hereunder have been satisfied. The Committee’s determinations shall be final, binding and conclusive upon all parties, absent manifest error or bad faith.
(b)Adjustments. Notwithstanding any other provision herein to the contrary, in the event of an exchange, tender offer, sale, merger, consolidation, recapitalization, split, combination or otherwise of the Company, that is closed any time between (a) grant date and June 30, 2026 (the “First Transaction Closing Date”), and the transaction is valued on such closing date with the CVG stock at a price greater than $2.00 per share, then the stock price on the First Transaction Closing Date shall determine the Payout Level when compared to the Stock Price Hurdle in the chart above, or (b) July 1, 2026 and December 31, 2027 (the “Second Transaction Closing Date”), and the transaction is valued on such closing date with the CVG stock at a price greater than any one or all of the stock price hurdles already reached, if applicable, then the stock price on the Second Transaction Closing Date shall determine the Payout Level when compared to the Stock Price Hurdle in the chart above. The Committee shall calculate the Payout Level preserving the intended economic benefits hereunder. The Committee’s adjustment shall be made in accordance with this provision and shall be effective and final, binding and conclusive for all purposes of the Plan and this Agreement, absent manifest error or bad faith.
(c)Forfeiture of Unearned Award. Any portion of the Award hereunder that does not become earned in accordance with the provisions of this Agreement shall be automatically forfeited and cancelled at no value without any consideration being paid therefore and otherwise without any further action of the Company whatsoever.
3.Termination:
(a)General. Except as provided in Section 2(b) hereof, or unless otherwise determined by the Committee in its sole discretion, in the event of the Grantee’s termination of employment or other service with the Company and its Subsidiaries for any reason prior to the expiration of the Performance Period, the Award hereunder shall be automatically forfeited and cancelled as of the date of such termination without any consideration being paid therefor and otherwise without any further action of the Company whatsoever. In the event of the Grantee’s termination of employment or other service with the Company and its Subsidiaries for any reason on or following expiration of the Performance Period, the Grantee shall retain the right to receive payment of the Award hereunder in accordance with the provisions of Section 1 hereof, provided that upon a termination for Cause at any time prior to payment of the Award hereunder, the Award shall be automatically forfeited and cancelled for no value without any consideration being paid therefore and otherwise without any further action of the Company whatsoever.
(b)Rule of 66. If Grantee’s employment with the Company terminates (other than for Cause) prior to the expiration of the Performance Period and on or after Grantee’s Rule of 66 Date, as defined below, then the Award shall be earned on a pro-rata basis and paid based on each EBITDA and stock price measurement calculated through the end of the Performance Period, as if the Grantee remained an active employee of the Company. For this purpose, the “Rule of
2 | ||||||||
66 Date” means the date that the sum of the Grantee’s age plus total Service, as defined below, is equal to or greater than sixty-six (66), so long as Grantee’s age is equal to or greater than 60. “Service” means the aggregate number of completed years of continued employment with the Company, as conclusively determined by the Company without regard to any later determinations or findings regarding Grantee’s employment status by any third party.
(c)Expiration of Performance Period on Change in Control. Notwithstanding any other provision herein to the contrary, in the event of a Change in Control prior to the expiration of the Performance Period, the Award shall be earned based on the greater of EBITDA calculated through the day prior to closing date of the Change in Control (which date shall be deemed the end of the Performance Period in such event), or the stock price calculation as set forth in the Section above titled “Adjustments”, provided, however, the Award earned and paid shall be the greater of the Target Award or the amount set forth in the chart in Section 1 above if performance is above the Target Award, subject to any terms and conditions set forth in the Plan.
4.Confidentiality.
(a)Non-use and Non-Disclosure of Confidential Information. Grantee acknowledges that the Company and its subsidiaries continually develop Confidential Information (defined below), that the Grantee may develop Confidential Information for the Company or its subsidiaries during Grantee’s employment with the Company, and that Grantee may learn of Confidential Information during the course of such employment. Grantee will comply with the policies and procedures of the Company and its subsidiaries for protecting Confidential Information and shall never use or disclose to any Person (except as required by applicable law or for the proper performance of his or her duties and responsibilities to the Company and its subsidiaries), any Confidential Information obtained by Grantee incident to his or her employment or other association with the Company or any of its subsidiaries. Grantee agrees to only use the Company’s Confidential Information as necessary to perform his or her job during employment with the Company. Grantee understands that this restriction shall continue to apply after his or her employment terminates, regardless of the reason for such termination. All documents, records, tapes and other media of every kind and description relating to the business, present or otherwise, of the Company or its subsidiaries and any copies, in whole or in part, thereof (the “Documents”), whether or not prepared by Grantee, shall be the sole and exclusive property of the Company and its subsidiaries. Grantee shall safeguard all Documents and shall surrender to the Company at the time his or her employment terminates, or at such earlier time or times as the Company may specify, all Documents then in the Grantee’s possession or control.
(b)Definition of Confidential Information. For purposes of this Agreement, “Confidential Information” means any and all information of the Company and its subsidiaries that is not generally known by others with whom the Company or its subsidiaries compete or do business, or with whom they plan to compete or do business and any and all information which, if disclosed by the Company or its subsidiaries, would assist in competition against them. Confidential Information includes without limitation such information relating to (i) the development, research, testing, manufacturing, marketing and financial activities of the Company and its subsidiaries, (ii) the Company and its subsidiaries Products (defined below), (iii) the costs, sources of supply, financial performance and strategic plans of the Company and its subsidiaries, (iv) the identity and special needs of the customers of the Company and its subsidiaries and (v) the people and organizations with whom the Company and its subsidiaries have business relationships and those relationships. Confidential Information also includes any information that the Company or any of its subsidiaries have received, or may receive hereafter, from others which was received by the Company or any of its subsidiaries with any understanding, express or implied, that the information would not be disclosed. For purposes of this Agreement, “Products” means all products planned, researched, developed, tested, manufactured, sold, licensed, leased or otherwise distributed or put into use by the Company or any of its subsidiaries, together with all services provided or planned by the Company or any of its subsidiaries, during Grantee’s employment with the Company or any of its subsidiaries.
5.Restricted Activities. Grantee, as a condition to the Award and in consideration of Participant's continued employment by the Company and/or its subsidiaries, agrees that some restrictions on Grantee’s activities during and after his or her employment are necessary to protect the goodwill, Confidential Information and other legitimate interests of the Company and its subsidiaries and agrees as follows:
(a)Noncompetition. For a period of time beginning on the date Grantee executes a copy of this Agreement and continuing for a period ending on the date which is one (1) year after Grantee’s employment terminates (the “Noncompetition Period”) Grantee shall not, whether as owner,
3 | ||||||||
partner, investor, consultant, agent, Grantee, co-venturer or otherwise, engage in, assist or have any active interest in a business that competes with the Company or any of its subsidiaries (“Competing Business Line”) or otherwise compete with the Company or any of its subsidiaries: (i) anywhere throughout the world; (ii) in North America; (iii) in the United States; and/or (iv) in those states of the United States in which the Company or any of its subsidiaries sells products or conducts business activities. Specifically, but without limiting the foregoing, Grantee agrees that during the Noncompetition Period, Grantee shall not: (A) undertake any planning for any business competitive with the Company or any of its subsidiaries; or (B) engage in any manner in any activity that is competitive with the business of the Company or any of its subsidiaries. For the purposes of this Section 4, Grantee’s undertaking shall encompass all items, products and services that may be used in substitution for Products.
(b)Conflict of Interest. Grantee agrees that, during his or her employment with the Company, he or she will not undertake any outside activity, whether or not competitive with the business of the Company or its subsidiaries that could reasonably give rise to a conflict of interest or otherwise interfere with his or her duties and obligations to the Company or any of its subsidiaries.
(c)Non-solicitation. Grantee further agrees that while he or she is employed by the Company and during the Noncompetition Period, Grantee will not, (i) hire or attempt to hire any employee of the Company or any of its subsidiaries, (ii) hire or attempt to hire any independent contractor providing services to the Company or any of its subsidiaries, (iii) assist in hiring or any attempt to hire anyone identified in clauses (i) or (ii) of this sentence by any other Person, (iv) encourage any employee or independent contractor of the Company or any of its subsidiaries to terminate his or her relationship with the Company or any of its subsidiaries, or (v) solicit or encourage any customer or vendor of the Company or any of its subsidiaries to terminate or diminish its relationship with any of them, or, in the case of a customer, to conduct with any Person any competing business or activity. For purposes of Grantee’s obligations hereunder during that portion of the Noncompetition Period that follows termination of Grantee’s employment, employee, independent contractor, customer or vendor of the Company or any of its subsidiaries shall mean any Person who was such at any time during the six (6) months immediately preceding the date of the termination of Grantee’s employment.
(d)Enforceability. In the event that the one (1) year period stated above is held unenforceable by a court of competent jurisdiction due to its length, then the period shall be six (6) months, or such other time as determined enforceable by such court.
6.Non-Inducement. Grantee will not directly or indirectly assist or encourage any person or entity in carrying out or conducting any activity that would be prohibited by this Agreement if such activity were carried out or conducted by Grantee.
7.Assignment of Rights to Intellectual Property. Grantee shall promptly and fully disclose all Intellectual Property (defined below) to the Company. Grantee hereby assigns and agrees to assign to the Company (or as otherwise directed by the Company) Grantee’s full right, title and interest in and to all Intellectual Property. Grantee agrees to execute any and all applications for domestic and foreign patents, copyrights or other proprietary rights and to do such other acts (including without limitation the execution and delivery of instruments of further assurance or confirmation) requested by the Company to assign the Intellectual Property to the Company and to permit the Company to enforce any patents, copyrights or other proprietary rights to the Intellectual Property. Grantee will not charge the Company for time spent complying with these obligations. All copyrightable works that Grantee creates shall be considered “work made for hire” and shall, upon creation, be owned exclusively by the Company. For purposes of this Section 8, “Intellectual Property” means inventions, discoveries, developments, methods, processes, compositions, works, concepts and ideas (whether or not patentable or copyrightable or constituting trade secrets) conceived, made, created, developed or reduced to practice by Grantee (whether alone or with others and whether or not during normal business hours or on or off the premises of the Company or any of its subsidiaries) during Grantee’s employment with the Company or any of its subsidiaries (including prior to the Effective Date if applicable) that relate to either the Products or any prospective activity of the Company or any of its subsidiaries or that make use of Confidential Information or any of the equipment or facilities of the Company or any of its subsidiaries.
8.Consideration and Acknowledgments. Grantee acknowledges and agrees that the covenants described in Sections 3 through 6 of this Agreement are essential terms, and the underlying Award would not be provided by the Company in the absence of these covenants. Grantee further acknowledges that these covenants are supported by adequate consideration as set forth in this Agreement, that full compliance with these covenants will not prevent Grantee from earning a livelihood following the termination of his or her employment, and that these covenants do not place undue restraint on Grantee and are not in conflict with any public interest. Grantee acknowledges that (i) Grantee has had access to Company’s trade secrets and Confidential Information at the highest levels, including without limitation
4 | ||||||||
manufacturing and marketing strategy, customer strategy and lists, technical know-how, product and process research and development, and business plans, (ii) Grantee has had access to Confidential Information regarding and has been privy to discussions and strategy sessions at the highest levels of the Company regarding all aspects, business lines and product segments of the Company, and (iii) that these trade secrets and Confidential Information would inevitably be disclosed were Grantee to work for a competitor. Grantee further acknowledges and agrees that Grantee fully understands these covenants, has had full and complete opportunity to discuss and resolve any ambiguities or uncertainties regarding these covenants before signing this Agreement, that these covenants are reasonable and enforceable in every respect, and has voluntarily agreed to comply with these covenants for their stated term. Grantee agrees that in the event he or she is offered employment with a competing business at any time in the future, Grantee shall immediately notify the competing business of the existence of the covenants set forth above.
9.No Assignments: This Agreement is personal to each Grantee. The Grantee shall not assign, transfer or delegate any right or obligation hereunder without first obtaining the written consent of the Company.
10.Withholding Taxes: The Company may withhold any and all amounts payable to the Grantee hereunder such federal, state and local taxes as may be required to be withheld pursuant to any applicable law or regulation.
11.Governing Law: This Agreement shall be governed by, and construed under and in accordance with, the internal laws of the State of Delaware, without reference to rules relating to conflicts of laws.
12.Other Benefits: The Award is an incentive award and shall not be taken into account in computing the amount of salary or compensation for purposes of determining any bonus, incentive, pension, retirement, death or other benefit under any other bonus, incentive pension, retirement, insurance or other employee benefit plan of the Company, unless such plan or agreement expressly provides otherwise.
13.No Right to Continued Employment or Service: Nothing in this Agreement shall confer upon the Grantee any right to continued employment or other service with the Company or its Subsidiaries, or to interfere in any way with the right of the Company or its Subsidiaries to terminate the Grantee’s employment or other service at any time and for any reason (or no reason).
14.Unfunded Benefit: The Award shall not be deemed to create a trust or other funded arrangement. The Grantee’s rights with respect to the Award shall be those of a general unsecured creditor of the Company, and under no circumstances shall the Grantee have any other interest in any asset of the Company by virtue of the grant of the Award. Notwithstanding the foregoing, the Company shall have the right (but not the obligation) to implement or set aside funds in a grantor trust, subject to the claims of the Company’s creditors or otherwise, to discharge its obligations with respect to the Award.
15.Code Section 409A Compliance: Although the Company makes no guarantee with respect to the tax treatment of payment of the Award hereunder and shall not be responsible in any event with regard to non-compliance with Section 409A of the Code and the treasury regulations and other official guidance promulgated thereunder, this Agreement is intended to either comply with, or be exempt from, the requirements of Section 409A of the Code. To the extent that this Agreement is not exempt from the requirements of Section 409A of the Code, this Agreement is intended to comply with the requirements of Section 409A of the Code and shall be limited, construed and interpreted in accordance with such intent. In no event whatsoever shall the Company be liable for any additional tax, interest, income inclusion or other penalties that may be imposed on the Grantee by Section 409A of the Code or for damages for failing to comply with Section 409A of the Code.
16.Entire Agreement: This Agreement is subject to all of the terms, conditions and provisions of the Plan, including, without limitation, the amendment provisions thereof, and to such rules, regulations and interpretations relating to the Plan as may be adopted thereunder and as may be in effect from time to time. This Agreement may be amended or modified only by a written instrument executed by the Company and the Grantee. To the extent there are any conflicts between provisions this Agreement and any applicable employment agreement entered into between Grantee and the Company or its subsidiaries, the provisions of such employment agreement shall govern and nothing in this Agreement shall in any way amend, supersede or otherwise change any provisions or rights contained in such employment agreement.
[THE REST OF THIS PAGE INTENTIONALLY LEFT BLANK]
5 | ||||||||
17.Recoupment: The Grantee’s rights with respect to the Award hereunder shall in all events be subject to (i) any right that the Company may have under any Company recoupment policy or other agreement or arrangement with the Grantee, and (ii) any right or obligation that the Company may have regarding the clawback of “incentive-based compensation” under Section 10D of the Exchange Act and any applicable rules and regulations promulgated thereunder from time to time by the U.S. Securities and Exchange Commission.
ACKNOWLEDGED AND AGREED: COMMERCIAL VEHICLE GROUP, INC.
_/s/ James Ray____________________ __/s/ Aneezal Mohamed_________________
Signature of Employee - Grantee Signature of Company Representative
__James Ray_____________________ _Aneezal Mohamed_____________________
Printed Name Printed Name
_Chief Legal Officer & Secretary___________
Title
6 | ||||||||
RESTRICTED STOCK AGREEMENT Exhibit 10.7
THIS RESTRICTED STOCK AGREEMENT (this “Agreement”) is made as of June 2, 2026, between Commercial Vehicle Group, Inc., a Delaware corporation (the “Company”), and James R. Ray (“Grantee”).
WHEREAS, the Grantee is an employee of the Company; and
WHEREAS, the grant of the shares of restricted stock (as governed by the Company’s Second Amended and Restated 2020 Equity Incentive Plan (the “Plan”)) to the Grantee described herein has been approved by the Company’s Compensation Committee (the “Committee”).
NOW, THEREFORE, pursuant to the Plan, the Company, upon the terms and conditions set forth herein, hereby grants to the Grantee 335,079 restricted shares of Common Stock, par value $.01 (“Common Stock”), of the Company (the “Restricted Shares”) effective as of the date hereof (the “Date of Grant”), and subject to the terms and conditions of the Plan and the terms and conditions of this Agreement.
1.Definitions. All capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to them in the Plan.
2.Issuance of Shares. In consideration of the Grantee’s service as an employee of the Company, the Restricted Shares shall be issued to the Grantee, and, upon payment to the Company by the Grantee of the aggregate par value thereof, which payment shall be made within 10 days of the date hereof, shall be fully paid and non-assessable and shall be represented by a certificate or certificates issued in the name of the Grantee and endorsed with an appropriate legend referring to the restrictions hereinafter set forth.
3.Restrictions on Transfer of Shares. The Restricted Shares may not be sold, assigned, transferred, conveyed, pledged, exchanged or otherwise encumbered or disposed of (each, a “Transfer”) by the Grantee, except to the Company, unless and until they have become nonforfeitable as provided in Section 4 hereof. Any purported encumbrance or disposition in violation of the provisions of this Section 3 shall be void AB INITIO, and the other party to any such purported transaction shall not obtain any rights to or interest in the Restricted Shares. As and when permitted by the Plan, the Committee may in its sole discretion waive the restrictions on transferability with respect to all or a portion of the Restricted Shares. Notwithstanding the foregoing, Grantee may not Transfer Restricted Shares which have become nonforfeitable as provided in Section 4 hereof unless such Restricted Shares are registered pursuant to the Securities Act of 1933 (the “Securities Act”), are sold under Rule 144 promulgated under the Securities Act or unless the Company, after consultation with counsel, and its counsel agree with Grantee that such Transfer is not required to be registered under the Securities Act.
US_Active\117765860\V-1
4.Vesting of Shares.
(a)Subject to paragraph Section 5 hereof, the Restricted Shares shall vest and become nonforfeitable if the Grantee remains an employee of the Company through the vesting dates set forth below with respect to the percentage of Restricted Shares (rounded to the nearest whole share) set forth next to such date:
Vesting Date | Percentage of Restricted Shares Vesting on such Vesting Date | ||||
| March 31, 2027 | 33 1/3% | ||||
| March 31, 2028 | 33 1/3% | ||||
| March 31, 2029 | 33 1/3% | ||||
(b)Notwithstanding the provisions of Section 4(a) above, in connection with a Change in Control, the provisions set forth in Section 13 of the Plan shall govern with respect to the acceleration of the vesting of the Restricted Shares.
(c)Notwithstanding the provisions of Section 4(a) above, the Committee may, in its sole discretion, vest or accelerate the vesting of the Restricted Shares at any time.
(d)If Grantee’s employment with the Company terminates (other than for Cause) on or after Grantee’s Rule of 66 Date, as defined below, then the Restricted Shares shall vest on the latter of 180 days after the grant date or January 4, 2027, except that any shares granted less than 180 days prior to the termination date shall be forfeited. For this purpose, the “Rule of 66 Date” means the date that the sum of Grantee’s age plus total Service, as defined below, is equal to or greater than sixty-six (66), so long as Grantee’s age is equal to or greater than sixty (60). “Service” means the aggregate number of completed years of continued employment with the Company, as conclusively determined by the Company without regard to any later determinations or findings regarding Grantee’s employment status by any third party.
5.Post-Vesting Restrictions. For a period of one-year following the vesting of the Restricted Shares granted under this Agreement, the Grantee shall not directly or indirectly sell such Restricted Shares.
6.Forfeiture of Shares. If the Grantee ceases to be an employee of the Company due to death or Disability during any period of restriction, any non-vested Restricted Shares shall immediately vest and all restrictions on the Restricted Shares shall lapse and certificate(s) representing such Restricted Shares shall be delivered by the Company reasonably promptly upon a request by the Grantee. Subject to Section 4(d), above, if the Grantee ceases to be an employee of the Company for any other reason, any non-vested Restricted Shares shall be forfeited by the Grantee and the certificate(s) representing the non-vested portion of the Restricted Shares so forfeited shall be canceled.
7.Dividend, Voting and Other Rights. Except as otherwise provided in this Agreement, from and after the Date of Grant, the Grantee shall have all of the rights of a stockholder with respect to the Restricted Shares, including the right to vote the Restricted Shares and receive any dividends that may be paid thereto, provided, however, that any additional Common Stock or other securities that the Grantee may
2
US_Active\117765860\V-1
become entitled to receive pursuant to a stock dividend, stock split, recapitalization, combination of shares, merger, consolidation, separation or reorganization or any other change in the capital structure of the Company shall be subject to the same risk of forfeiture, certificate delivery provisions and restrictions on transfer as the forfeitable Restricted Shares in respect of which they are issued or transferred and shall become Restricted Shares for the purposes of this Agreement, and provided further that, any dividend paid with respect to unvested Restricted Shares for which an election under Section 83(b) of the Code has not been made (i) constitutes compensation income subject to all applicable tax withholding and (ii) shall be paid on or about the Vesting Date for the underlying Restricted Shares, but in any event not later than the fifteenth (15th) day of the third month of the calendar year following the Vesting Date.
8.Retention of Stock Certificate(s) by the Company. The certificate(s) representing the Restricted Shares shall be held in custody by the Company, together with a stock power in the form of Exhibit A hereto which shall be endorsed in blank by the Grantee and delivered to the Company within 10 days of the date hereof, until such shares have become nonforfeitable in accordance with Section 4. Notwithstanding the foregoing, if the Grantee has attained his or her Rule of 66 Date, the certificate(s) representing the Restricted Shares shall be released to the Grantee within 30 days of the Vesting Date with respect to such shares, and the Vesting Date(s) shall be treated as fixed dates of distribution for purposes of Section 409A of the Internal Revenue Code of 1986, as amended, if applicable to the Restricted Shares.
9.Compliance with Law. The Company shall make reasonable efforts to comply with all applicable federal and state securities laws, provided, however, notwithstanding any other provision of this Agreement, the Company shall not be obligated to issue or release from restrictions on transfer any Restricted Shares pursuant to this Agreement if such issuance or release would result in a violation of any such law.
10.Withholding Taxes. If the Company shall be required to withhold any federal, state, local or foreign tax in connection with any issuance or vesting of Restricted Shares or other securities pursuant to this Agreement, including any employment taxes (collectively, the “Tax Withholding Obligation”), and the amounts available to the Company for such withholding are insufficient, the Grantee shall pay the tax or make provisions that are satisfactory to the Company for the payment thereof. Unless Grantee elects to satisfy the Tax Withholding Obligation by an alternative means that is then permitted by the Company, Grantee’s acceptance of this Agreement constitutes Grantee’s instruction and authorization to the Company to withhold on Grantee’s behalf the number of Restricted Shares from those shares issuable to Grantee under this Agreement as the Company determines to be sufficient to satisfy the Tax Withholding Obligation as and when any such Tax Withholding Obligation becomes due. Restricted Shares so surrendered by the Grantee shall be credited against any such withholding obligation at the market value (determined with reference to the then current price of the Company’s Common Stock as quoted on The Nasdaq Global Select Market) per share of such Restricted Shares on the date of such surrender.
11.Conformity with Plan. The Agreement and the Restricted Shares granted pursuant hereto are intended to conform in all respects with, and are subject to all applicable provisions of, the Plan (which is incorporated herein by reference). Inconsistencies between this Agreement and the Plan shall be resolved in accordance with the terms of this Agreement. By executing this Agreement, Grantee acknowledges and agrees to be bound by all of the terms of this Agreement and the Plan.
3
US_Active\117765860\V-1
12.Amendments. The provisions of this Agreement may be amended and waived only with the prior written consent of the Company and the Grantee.
13.Confidentiality.
(a)Non-use and Non-Disclosure of Confidential Information. Grantee acknowledges that the Company and its subsidiaries continually develop Confidential Information (defined below), that the Grantee may develop Confidential Information for the Company or its subsidiaries during Grantee’s employment with the Company, and that Grantee may learn of Confidential Information during the course of such employment. Grantee will comply with the policies and procedures of the Company and its subsidiaries for protecting Confidential Information and shall never use or disclose to any Person (except as required by applicable law or for the proper performance of his or her duties and responsibilities to the Company and its subsidiaries), any Confidential Information obtained by Grantee incident to his or her employment or other association with the Company or any of its subsidiaries. Grantee agrees to only use the Company’s Confidential Information as necessary to perform his or her job during employment with the Company. Grantee understands that this restriction shall continue to apply after his or her employment terminates, regardless of the reason for such termination. All documents, records, tapes and other media of every kind and description relating to the business, present or otherwise, of the Company or its subsidiaries and any copies, in whole or in part, thereof (the “Documents”), whether or not prepared by Grantee, shall be the sole and exclusive property of the Company and its subsidiaries. Grantee shall safeguard all Documents and shall surrender to the Company at the time his or her employment terminates, or at such earlier time or times as the Company may specify, all Documents then in the Grantee’s possession or control.
(b)Definitions. For purposes of this Agreement, “Confidential Information” means any and all information of the Company and its subsidiaries that is not generally known by others with whom the Company or its subsidiaries compete or do business, or with whom they plan to compete or do business and any and all information which, if disclosed by the Company or its subsidiaries, would assist in competition against them. Confidential Information includes without limitation such information relating to (i) the development, research, testing, manufacturing, marketing and financial activities of the Company and its subsidiaries, (ii) the Company and its subsidiaries Products (defined below), (iii) the costs, sources of supply, financial performance and strategic plans of the Company and its subsidiaries, (iv) the identity and special needs of the customers of the Company and its subsidiaries and (v) the people and organizations with whom the Company and its subsidiaries have business relationships and those relationships. Confidential Information also includes any information that the Company or any of its subsidiaries have received, or may receive hereafter, from others which was received by the Company or any of its subsidiaries with any understanding, express or implied, that the information would not be disclosed. For purposes of this Agreement, “Products” means all products planned, researched, developed, tested, manufactured, sold, licensed, leased or otherwise distributed or put into use by the Company or any of its subsidiaries, together with all services provided or planned by the Company or any of its subsidiaries, during Grantee’s employment with the Company or any of its subsidiaries.
14.Restricted Activities. Grantee, as a condition to the Award and in consideration of Participant's continued employment by the Company and/or its subsidiaries, agrees that some restrictions on Grantee’s activities during and after his or her employment are necessary to protect the goodwill, Confidential Information and other legitimate interests of the Company and its subsidiaries and agrees as follows:
4
US_Active\117765860\V-1
(a)Noncompetition. For a period of time beginning on the date Grantee executes a copy of this Agreement and continuing for a period ending on the date which is one (1) year after Grantee’s employment terminates (the “Noncompetition Period”) Grantee shall not, whether as owner, partner, investor, consultant, agent, Grantee, co-venturer or otherwise, engage in, assist or have any active interest in a business that competes with the Company or any of its subsidiaries (“Competing Business Line”) or otherwise compete with the Company or any of its subsidiaries: (i) anywhere throughout the world; (ii) in North America; (iii) in the United States; and/or (iv) in those states of the United States in which the Company or any of its subsidiaries sells products or conducts business activities. Specifically, but without limiting the foregoing, Grantee agrees that during the Noncompetition Period, Grantee shall not: (A) undertake any planning for any business competitive with the Company or any of its subsidiaries; or (B) engage in any manner in any activity that is competitive with the business of the Company or any of its subsidiaries. For the purposes of this Section 4, Grantee’s undertaking shall encompass all items, products and services that may be used in substitution for Products.
(b)Conflict of Interest. During the Grantee’s employment with the Company, the Grantee shall devote all of the Grantee’s business time, energy, business judgment, knowledge and skill and the Grantee’s best efforts to the performance of the Grantee’s duties with the Company, provided that the foregoing shall not prevent the Grantee from (i) serving on the boards of directors of non-profit organizations and, with the prior written approval of the Board, other for profit companies, (ii) participating in charitable, civic, educational, professional, community or industry affairs, and (iii) managing the Grantee’s passive personal investments so long as such activities in the aggregate do not interfere or conflict with the Grantee’s duties hereunder or create a potential business or fiduciary conflict. Grantee further agrees to comply fully with all policies and practices of the Company as are from time to time in effect.
(c)Nonsolicitation. Grantee further agrees that while he or she is employed by the Company and during the Noncompetition Period, Grantee will not, (i) hire or attempt to hire any employee of the Company or any of its subsidiaries, (ii) hire or attempt to hire any independent contractor providing services to the Company or any of its subsidiaries, (iii) assist in hiring or any attempt to hire anyone identified in clauses (i) or (ii) of this sentence by any other Person, (iv) encourage any employee or independent contractor of the Company or any of its subsidiaries to terminate his or her relationship with the Company or any of its subsidiaries, or (v) solicit or encourage any customer or vendor of the Company or any of its subsidiaries to terminate or diminish its relationship with any of them, or, in the case of a customer, to conduct with any Person any competing business or activity. For purposes of Grantee’s obligations hereunder during that portion of the Noncompetition Period that follows termination of Grantee’s employment, employee, independent contractor, customer or vendor of the Company or any of its subsidiaries shall mean any Person who was such at any time during the six (6) months immediately preceding the date of the termination of Grantee’s employment.
(d)Enforceability. In the event that the one (1) year period stated above is held unenforceable by a court of competent jurisdiction due to its length, then the period shall be six (6) months or such other time as determined enforceable by such court.
15.Non-Inducement. Grantee will not directly or indirectly assist or encourage any person or entity in carrying out or conducting any activity that would be prohibited by this Agreement if such activity were carried out or conducted by Grantee.
5
US_Active\117765860\V-1
16.Assignment of Rights to Intellectual Property. Grantee shall promptly and fully disclose all Intellectual Property (defined below) to the Company. Grantee hereby assigns and agrees to assign to the Company (or as otherwise directed by the Company) Grantee’s full right, title and interest in and to all Intellectual Property. Grantee agrees to execute any and all applications for domestic and foreign patents, copyrights or other proprietary rights and to do such other acts (including without limitation the execution and delivery of instruments of further assurance or confirmation) requested by the Company to assign the Intellectual Property to the Company and to permit the Company to enforce any patents, copyrights or other proprietary rights to the Intellectual Property. Grantee will not charge the Company for time spent in complying with these obligations. All copyrightable works that Grantee creates shall be considered “work made for hire” and shall, upon creation, be owned exclusively by the Company. For purposes of this Section 8, “Intellectual Property” means inventions, discoveries, developments, methods, processes, compositions, works, concepts and ideas (whether or not patentable or copyrightable or constituting trade secrets) conceived, made, created, developed or reduced to practice by Grantee (whether alone or with others and whether or not during normal business hours or on or off the premises of the Company or any of its subsidiaries) during Grantee’s employment with the Company or any of its subsidiaries (including prior to the Effective Date if applicable) that relate to either the Products or any prospective activity of the Company or any of its subsidiaries or that make use of Confidential Information or any of the equipment or facilities of the Company or any of its subsidiaries.
17.Consideration and Acknowledgments. Grantee acknowledges and agrees that the covenants described in Sections 12 through 15 of this Agreement are essential terms, and the underlying Award would not be provided by the Company in the absence of these covenants. Grantee further acknowledges that these covenants are supported by adequate consideration as set forth in this Agreement, that full compliance with these covenants will not prevent Grantee from earning a livelihood following the termination of his or her employment, and that these covenants do not place undue restraint on Grantee and are not in conflict with any public interest. Grantee acknowledges that (i) Grantee has had access to Company’s trade secrets and Confidential Information at the highest levels, including without limitation manufacturing and marketing strategy, customer strategy and lists, technical know-how, product and process research and development, and business plans, (ii) Grantee has had access to Confidential Information regarding and has been privy to discussions and strategy sessions at the highest levels of the Company regarding all aspects, business lines and product segments of the Company, and (iii) that these trade secrets and Confidential Information would inevitably be disclosed were Grantee to work for a competitor. Grantee further acknowledges and agrees that Grantee fully understands these covenants, has had full and complete opportunity to discuss and resolve any ambiguities or uncertainties regarding these covenants before signing this Agreement, that these covenants are reasonable and enforceable in every respect, and has voluntarily agreed to comply with these covenants for their stated term. Grantee agrees that in the event he or she is offered employment with a competing business at any time in the future, Grantee shall immediately notify the competing business of the existence of the covenants set forth above.
18.Severability. In the event that one or more of the provisions of this Agreement shall be invalidated for any reason by a court of competent jurisdiction, any provision so invalidated shall be deemed to be separable from the other provisions hereof, and the remaining provisions hereof shall continue to be valid and fully enforceable.
6
US_Active\117765860\V-1
19.Successors and Assigns. The provisions of this Agreement shall inure to the benefit of, and be binding upon, the successors, administrators, heirs, legal representatives and assigns of the Grantee and the successors and assigns of the Company.
20.Notices. Any notice to the Company provided for herein shall be in writing to the attention of the Secretary of the Company at Commercial Vehicle Group, Inc., 7800 Walton Parkway, New Albany, Ohio 43504, and any notice to the Grantee shall be addressed to the Grantee at his or her address currently on file with the Company. Except as otherwise provided herein, any written notice shall be deemed to be duly given if and when hand delivered, or five business days after having been mailed by United States registered or certified mail, return receipt requested, postage prepaid, or three business days after having been sent by a nationally recognized overnight courier service, addressed as aforesaid. Any party may change the address to which notices are to be given hereunder by written notice to the other party as herein specified, except that notices of changes of address shall be effective only upon receipt.
21.No Right to Continued Employment or Service. Nothing in this Agreement shall confer upon the Grantee any right to continued employment or other service with the Company or its Subsidiaries, or to interfere in any way with the right of the Company or its Subsidiaries to terminate the Grantee’s employment or other service at any time and for any reason (or no reason).
22.Entire Agreement. This Agreement is subject to all of the terms, conditions and provisions of the Plan, including, without limitation, the amendment provisions thereof, and to such rules, regulations and interpretations relating to the Plan as may be adopted thereunder and as may be in effect from time to time. This Agreement may be amended or modified only by a written instrument executed by the Company and the Grantee.
23.Governing Law. The laws of the State of Delaware, without giving effect to the principles of conflict of laws thereof, shall govern the interpretation, performance and enforcement of this Agreement.
* * * * *
7
US_Active\117765860\V-1
IN WITNESS WHEREOF, this Agreement is effective as of the date set forth above.
ACKNOWLEDGED AND AGREED:
/s/ James Ray
Signature of Grantee
____James Ray___________________
Printed Name of Grantee
COMMERCIAL VEHICLE GROUP, INC.
/s/ Aneezal Mohamed
Signature of Company Representative
Aneezal Mohamed
Printed Name
Chief Legal Officer & Secretary
Title
8
US_Active\117765860\V-1
EXHIBIT A
FORM OF ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, _________________, hereby sells, assigns and transfers unto _________________________________, ____ shares of the Common Stock, par value $0.01 per share, of Commercial Vehicle Group, Inc., a Delaware corporation (the “Company”) standing in its name on the books of said Company represented by Certificate Number ____, and does hereby irrevocably constitute and appoint ________________ as attorney to transfer the said stock on the books of the Company with full power of substitution in the premises.
Date: ___________________ | Employee Name | ||||
9
US_Active\117765860\V-1
Exhibit 10.8
COMMERCIAL VEHICLE GROUP, INC.
SECOND AMENDED AND RESTATED 2020 EQUITY INCENTIVE PLAN
PERFORMANCE-BASED RESTRICTED STOCK AWARD AGREEMENT
SECOND AMENDED AND RESTATED 2020 EQUITY INCENTIVE PLAN
PERFORMANCE-BASED RESTRICTED STOCK AWARD AGREEMENT
BASED ON EBITDA AND STOCK PRICE
James R. Ray (the “Grantee”) is granted, effective as of June 2, 2026, a performance award (the “Award”) of 251,309 performance shares with a potential payout in the form of stock, as set forth below subject to the terms and conditions of this Agreement and the Second Amended and Restated 2020 Equity Incentive Plan (the “Plan”) of Commercial Vehicle Group, Inc. (the “Company”). To the extent that there is a conflict between the terms of the Plan and this Agreement, the terms of the Plan shall govern. Any term not defined herein shall have the meaning assigned to such term in the Plan.
1.Earning Stock Awards under the 2026 Long Term Incentive Plan:
The 2026 Long Term Incentive Plan provides for participants to earn stock awards based on the greater of either EBITDA performance or stock price performance as provided for in this Agreement.
The EBITDA component is measured at the end of each year (the “EBITDA Performance Period”) and weighted as 1/3 of the potential EBITDA payout for the performance period. EBITDA, for any period means Earnings Before Interest, Taxes, Depreciation, and Amortization, a financial metric that measures the Company's operational profitability by excluding non-operating expenses and non-cash items.
The stock price component will be measured beginning on the first day of month-19 (July 1, 2027) through the last day of month-36 (December 31, 2028) (the “Stock Price Performance Period”).
For the 2026 plan year, the performance goals and performance periods used for calculating the potential payout are set forth below.
Two Conditions for Stock Payout
1.The higher of the EBITDA hurdle payout level that is met during an EBITDA Performance Period compared to the highest stock price hurdle payout level that is maintained for 20-consecutive trading days during the Stock Price Performance Period, as set forth above, determines the number of performance shares of CVG stock that are “banked” for potential payout; and
2.The Grantee must remain an employee on the vesting date, i.e., December 31, 2028. The payment, if any, will be made as soon as administratively possible after EBITDA and stock price performance are approved by the Compensation Committee of the Board of Directors of the Company (the “Committee”) following December 31, 2028 (the “Determination Date”).
Based on the determination of the above two conditions, the Grantee will receive the value of the performance shares (as of the Determination Date) in CVG stock as set forth above.
The calculation of any payout is explained in Exhibit 1 with examples and incorporated herein by reference.
2.Post-Vesting Restrictions. For a period of one-year following the vesting of stock earned under this Agreement, the Grantee shall not directly or indirectly sell such stock.
(a)Committee Authority. The Committee shall in good faith make all determinations necessary or appropriate to determine whether the performance conditions hereunder have been satisfied. The Committee’s determinations shall be final, binding and conclusive upon all parties, absent manifest error or bad faith.
(b)Adjustments. Notwithstanding any other provision herein to the contrary, in the event of an exchange, tender offer, sale, merger, consolidation, recapitalization, split, combination or otherwise of the Company, that is closed any time between (a) grant date and June 30, 2027 (the “First Transaction Closing Date”), and the transaction is valued on such closing date with the CVG stock at a price greater than $2.00 per share, then the stock price on the First Transaction Closing Date may determine the Payout Level when compared to the Stock Price Hurdle in the chart above, or (b) July 1, 2027 and December 31, 2028 (the “Second Transaction Closing Date”), and the transaction is valued on such closing date with the CVG stock at a price greater than any one or all of the stock price hurdles already reached, if applicable, then the stock price on the Second Transaction Closing Date shall determine the Payout Level when compared to the Stock Price Hurdle in the chart above. The Committee shall calculate the Payout Level preserving the intended economic benefits hereunder. The Committee’s adjustment shall be made in accordance with this provision and shall be effective and final, binding and conclusive for all purposes of the Plan and this Agreement, absent manifest error or bad faith.
(c)Forfeiture of Unearned Award. Any portion of the Award hereunder that does not become earned in accordance with the provisions of this Agreement shall be automatically forfeited and cancelled at no value without any consideration being paid therefore and otherwise without any further action of the Company whatsoever.
3.Termination:
(a)General. Except as provided in Section 2(b) hereof, or unless otherwise determined by the Committee in its sole discretion, in the event of the Grantee’s termination of employment or other service with the Company and its Subsidiaries for any reason prior to the expiration of the Performance Period, the Award hereunder shall be automatically forfeited and cancelled as of the date of such termination without any consideration being paid therefor and otherwise without any further action of the Company whatsoever. In the event of the Grantee’s termination of employment or other service with the Company and its Subsidiaries for any reason on or following expiration of the Performance Period, the Grantee shall retain the right to receive payment of the Award hereunder in accordance with the provisions of Section 1 hereof, provided that upon a termination for Cause at any time prior to payment of the Award hereunder, the Award shall be automatically forfeited and cancelled for no value without any consideration being paid therefore and otherwise without any further action of the Company whatsoever.
(b)Rule of 66. If Grantee’s employment with the Company terminates (other than for Cause) prior to the expiration of the Performance Period and on or after Grantee’s Rule of 66 Date, as defined below, then the Award shall be earned on a pro-rata basis and paid based on each EBITDA and stock price measurement calculated through the end of the Performance Period, as if the Grantee remained an active employee of the Company. For this purpose, the “Rule of 66 Date” means the date that the sum of the Grantee’s age plus total Service, as defined below, is equal to or greater than sixty-six (66), so long as Grantee’s age is equal to or greater than 60. “Service” means the aggregate number of completed years of continued employment with the Company, as conclusively determined by the Company without regard to any later determinations or findings regarding Grantee’s employment status by any third party.
2 | ||||||||
(c)Expiration of Performance Period on Change in Control. Notwithstanding any other provision herein to the contrary, in the event of a Change in Control prior to the expiration of the Performance Period, the Award shall be earned based on the greater of EBITDA calculated through the day prior to closing date of the Change in Control (which date shall be deemed the end of the Performance Period in such event), or the stock price calculation as set forth in the Section above titled “Adjustments”, provided, however, the Award earned and paid shall be the greater of the Target Award or the amount set forth in the chart in Section 1 above if performance is above the Target Award, subject to any terms and conditions set forth in the Plan.
4.Confidentiality.
(a)Non-use and Non-Disclosure of Confidential Information. Grantee acknowledges that the Company and its subsidiaries continually develop Confidential Information (defined below), that the Grantee may develop Confidential Information for the Company or its subsidiaries during Grantee’s employment with the Company, and that Grantee may learn of Confidential Information during the course of such employment. Grantee will comply with the policies and procedures of the Company and its subsidiaries for protecting Confidential Information and shall never use or disclose to any Person (except as required by applicable law or for the proper performance of his or her duties and responsibilities to the Company and its subsidiaries), any Confidential Information obtained by Grantee incident to his or her employment or other association with the Company or any of its subsidiaries. Grantee agrees to only use the Company’s Confidential Information as necessary to perform his or her job during employment with the Company. Grantee understands that this restriction shall continue to apply after his or her employment terminates, regardless of the reason for such termination. All documents, records, tapes and other media of every kind and description relating to the business, present or otherwise, of the Company or its subsidiaries and any copies, in whole or in part, thereof (the “Documents”), whether or not prepared by Grantee, shall be the sole and exclusive property of the Company and its subsidiaries. Grantee shall safeguard all Documents and shall surrender to the Company at the time his or her employment terminates, or at such earlier time or times as the Company may specify, all Documents then in the Grantee’s possession or control.
(b)Definition of Confidential Information. For purposes of this Agreement, “Confidential Information” means any and all information of the Company and its subsidiaries that is not generally known by others with whom the Company or its subsidiaries compete or do business, or with whom they plan to compete or do business and any and all information which, if disclosed by the Company or its subsidiaries, would assist in competition against them. Confidential Information includes without limitation such information relating to (i) the development, research, testing, manufacturing, marketing and financial activities of the Company and its subsidiaries, (ii) the Company and its subsidiaries Products (defined below), (iii) the costs, sources of supply, financial performance and strategic plans of the Company and its subsidiaries, (iv) the identity and special needs of the customers of the Company and its subsidiaries and (v) the people and organizations with whom the Company and its subsidiaries have business relationships and those relationships. Confidential Information also includes any information that the Company or any of its subsidiaries have received, or may receive hereafter, from others which was received by the Company or any of its subsidiaries with any understanding, express or implied, that the information would not be disclosed. For purposes of this Agreement, “Products” means all products planned, researched, developed, tested, manufactured, sold, licensed, leased or otherwise distributed or put into use by the Company or any of its subsidiaries, together with all services provided or planned by the Company or any of its subsidiaries, during Grantee’s employment with the Company or any of its subsidiaries.
5.Restricted Activities. Grantee, as a condition to the Award and in consideration of Participant's continued employment by the Company and/or its subsidiaries, agrees that some restrictions on Grantee’s activities during and after his or her employment are necessary to protect the goodwill, Confidential Information and other legitimate interests of the Company and its subsidiaries and agrees as follows:
(a)Noncompetition. For a period of time beginning on the date Grantee executes a copy of this Agreement and continuing for a period ending on the date which is one (1) year after Grantee’s employment terminates (the “Noncompetition Period”) Grantee shall not, whether as owner, partner, investor, consultant, agent, Grantee, co-venturer or otherwise, engage in, assist or have any active interest in a business that competes with the Company or any of its subsidiaries (“Competing Business Line”) or otherwise compete with the Company or any of its subsidiaries: (i) anywhere throughout the world; (ii) in North America; (iii) in the United States; and/or (iv) in those states of the United States in which the Company or any of its subsidiaries
3 | ||||||||
sells products or conducts business activities. Specifically, but without limiting the foregoing, Grantee agrees that during the Noncompetition Period, Grantee shall not: (A) undertake any planning for any business competitive with the Company or any of its subsidiaries; or (B) engage in any manner in any activity that is competitive with the business of the Company or any of its subsidiaries. For the purposes of this Section 4, Grantee’s undertaking shall encompass all items, products and services that may be used in substitution for Products.
(b)Conflict of Interest. Grantee agrees that, during his or her employment with the Company, he or she will not undertake any outside activity, whether or not competitive with the business of the Company or its subsidiaries that could reasonably give rise to a conflict of interest or otherwise interfere with his or her duties and obligations to the Company or any of its subsidiaries.
(c)Non-solicitation. Grantee further agrees that while he or she is employed by the Company and during the Noncompetition Period, Grantee will not, (i) hire or attempt to hire any employee of the Company or any of its subsidiaries, (ii) hire or attempt to hire any independent contractor providing services to the Company or any of its subsidiaries, (iii) assist in hiring or any attempt to hire anyone identified in clauses (i) or (ii) of this sentence by any other Person, (iv) encourage any employee or independent contractor of the Company or any of its subsidiaries to terminate his or her relationship with the Company or any of its subsidiaries, or (v) solicit or encourage any customer or vendor of the Company or any of its subsidiaries to terminate or diminish its relationship with any of them, or, in the case of a customer, to conduct with any Person any competing business or activity. For purposes of Grantee’s obligations hereunder during that portion of the Noncompetition Period that follows termination of Grantee’s employment, employee, independent contractor, customer or vendor of the Company or any of its subsidiaries shall mean any Person who was such at any time during the six (6) months immediately preceding the date of the termination of Grantee’s employment.
(d)Enforceability. In the event that the one (1) year period stated above is held unenforceable by a court of competent jurisdiction due to its length, then the period shall be six (6) months, or such other time as determined enforceable by such court.
6.Non-Inducement. Grantee will not directly or indirectly assist or encourage any person or entity in carrying out or conducting any activity that would be prohibited by this Agreement if such activity were carried out or conducted by Grantee.
7.Assignment of Rights to Intellectual Property. Grantee shall promptly and fully disclose all Intellectual Property (defined below) to the Company. Grantee hereby assigns and agrees to assign to the Company (or as otherwise directed by the Company) Grantee’s full right, title and interest in and to all Intellectual Property. Grantee agrees to execute any and all applications for domestic and foreign patents, copyrights or other proprietary rights and to do such other acts (including without limitation the execution and delivery of instruments of further assurance or confirmation) requested by the Company to assign the Intellectual Property to the Company and to permit the Company to enforce any patents, copyrights or other proprietary rights to the Intellectual Property. Grantee will not charge the Company for time spent complying with these obligations. All copyrightable works that Grantee creates shall be considered “work made for hire” and shall, upon creation, be owned exclusively by the Company. For purposes of this Section 8, “Intellectual Property” means inventions, discoveries, developments, methods, processes, compositions, works, concepts and ideas (whether or not patentable or copyrightable or constituting trade secrets) conceived, made, created, developed or reduced to practice by Grantee (whether alone or with others and whether or not during normal business hours or on or off the premises of the Company or any of its subsidiaries) during Grantee’s employment with the Company or any of its subsidiaries (including prior to the Effective Date if applicable) that relate to either the Products or any prospective activity of the Company or any of its subsidiaries or that make use of Confidential Information or any of the equipment or facilities of the Company or any of its subsidiaries.
8.Consideration and Acknowledgments. Grantee acknowledges and agrees that the covenants described in Sections 3 through 6 of this Agreement are essential terms, and the underlying Award would not be provided by the Company in the absence of these covenants. Grantee further acknowledges that these covenants are supported by adequate consideration as set forth in this Agreement, that full compliance with these covenants will not prevent Grantee from earning a livelihood following the termination of his or her employment, and that these covenants do not place undue restraint on Grantee and are not in conflict with any public interest. Grantee acknowledges that (i) Grantee has had access to Company’s trade secrets and Confidential Information at the highest levels, including without limitation manufacturing and marketing strategy, customer strategy and lists, technical know-how, product and process research and development, and business plans, (ii) Grantee has had access to Confidential Information regarding and has been privy to discussions and strategy sessions at the highest levels of the
4 | ||||||||
Company regarding all aspects, business lines and product segments of the Company, and (iii) that these trade secrets and Confidential Information would inevitably be disclosed were Grantee to work for a competitor. Grantee further acknowledges and agrees that Grantee fully understands these covenants, has had full and complete opportunity to discuss and resolve any ambiguities or uncertainties regarding these covenants before signing this Agreement, that these covenants are reasonable and enforceable in every respect, and has voluntarily agreed to comply with these covenants for their stated term. Grantee agrees that in the event he or she is offered employment with a competing business at any time in the future, Grantee shall immediately notify the competing business of the existence of the covenants set forth above.
9.No Assignments: This Agreement is personal to each Grantee. The Grantee shall not assign, transfer or delegate any right or obligation hereunder without first obtaining the written consent of the Company.
10.Withholding Taxes: The Company may withhold any and all amounts payable to the Grantee hereunder such federal, state and local taxes as may be required to be withheld pursuant to any applicable law or regulation.
11.Governing Law: This Agreement shall be governed by, and construed under and in accordance with, the internal laws of the State of Delaware, without reference to rules relating to conflicts of laws.
12.Other Benefits: The Award is an incentive award and shall not be taken into account in computing the amount of salary or compensation for purposes of determining any bonus, incentive, pension, retirement, death or other benefit under any other bonus, incentive pension, retirement, insurance or other employee benefit plan of the Company, unless such plan or agreement expressly provides otherwise.
13.No Right to Continued Employment or Service: Nothing in this Agreement shall confer upon the Grantee any right to continued employment or other service with the Company or its Subsidiaries, or to interfere in any way with the right of the Company or its Subsidiaries to terminate the Grantee’s employment or other service at any time and for any reason (or no reason).
14.Unfunded Benefit: The Award shall not be deemed to create a trust or other funded arrangement. The Grantee’s rights with respect to the Award shall be those of a general unsecured creditor of the Company, and under no circumstances shall the Grantee have any other interest in any asset of the Company by virtue of the grant of the Award. Notwithstanding the foregoing, the Company shall have the right (but not the obligation) to implement or set aside funds in a grantor trust, subject to the claims of the Company’s creditors or otherwise, to discharge its obligations with respect to the Award.
15.Code Section 409A Compliance: Although the Company makes no guarantee with respect to the tax treatment of payment of the Award hereunder and shall not be responsible in any event with regard to non-compliance with Section 409A of the Code and the treasury regulations and other official guidance promulgated thereunder, this Agreement is intended to either comply with, or be exempt from, the requirements of Section 409A of the Code. To the extent that this Agreement is not exempt from the requirements of Section 409A of the Code, this Agreement is intended to comply with the requirements of Section 409A of the Code and shall be limited, construed and interpreted in accordance with such intent. In no event whatsoever shall the Company be liable for any additional tax, interest, income inclusion or other penalties that may be imposed on the Grantee by Section 409A of the Code or for damages for failing to comply with Section 409A of the Code.
16.Entire Agreement: This Agreement is subject to all of the terms, conditions and provisions of the Plan, including, without limitation, the amendment provisions thereof, and to such rules, regulations and interpretations relating to the Plan as may be adopted thereunder and as may be in effect from time to time. This Agreement may be amended or modified only by a written instrument executed by the Company and the Grantee. To the extent there are any conflicts between provisions this Agreement and any applicable employment agreement entered into between Grantee and the Company or its subsidiaries, the provisions of such employment agreement shall govern and nothing in this Agreement shall in any way amend, supersede or otherwise change any provisions or rights contained in such employment agreement.
Recoupment: The Grantee’s rights with respect to the Award hereunder shall in all events be subject to (i) any right that the Company may have under any Company recoupment policy or other agreement or arrangement with the Grantee, and (ii) any right or obligation that the Company may have regarding the clawback of “incentive-based compensation” under Section 10D of the Exchange Act and any applicable rules and regulations promulgated thereunder from time to time by the U.S. Securities and Exchange Commission.
5 | ||||||||
ACKNOWLEDGED AND AGREED: COMMERCIAL VEHICLE GROUP, INC.
___/s/ James Ray______________________ ____/s/ Aneezal Mohamed_______________
Signature of Employee - Grantee Signature of Company Representative
__James Ray____________________ ____Aneezal Mohamed__________________
Printed Name Printed Name
___Chief Legal Officer & Secretary_________
Title
6 | ||||||||
Exhibit 10.9
COMMERCIAL VEHICLE GROUP, INC.
SECOND AMENDED AND RESTATED 2020 EQUITY INCENTIVE PLAN
PERFORMANCE-BASED RESTRICTED CASH AWARD AGREEMENT
SECOND AMENDED AND RESTATED 2020 EQUITY INCENTIVE PLAN
PERFORMANCE-BASED RESTRICTED CASH AWARD AGREEMENT
BASED ON EBITDA AND STOCK PRICE
James R. Ray (the “Grantee”) is granted, effective as of June 2, 2026, a performance award (the “Award”) of 251,309 performance shares with a potential payout in the form of cash, as set forth below subject to the terms and conditions of this Agreement and the Second Amended and Restated 2020 Equity Incentive Plan (the “Plan”) of Commercial Vehicle Group, Inc. (the “Company”). To the extent that there is a conflict between the terms of the Plan and this Agreement, the terms of the Plan shall govern. Any term not defined herein shall have the meaning assigned to such term in the Plan.
1.Earning Cash Awards under the 2026 Long Term Incentive Plan:
The 2026 Long Term Incentive Plan provides for participants to earn cash awards based on the greater of either EBITDA performance or stock price performance as provided for in this Agreement.
The EBITDA component is measured at the end of each year (the “EBITDA Performance Period”) and weighted as 1/3 of the potential EBITDA payout for the performance period. EBITDA, for any period means Earnings Before Interest, Taxes, Depreciation, and Amortization, a financial metric that measures the Company's operational profitability by excluding non-operating expenses and non-cash items.
The stock price component will be measured beginning on the first day of month-19 (July 1, 2027) through the last day of month-36 (December 31, 2028) (the “Stock Price Performance Period”).
For the 2026 plan year, the performance goals and performance periods used for calculating the potential payout are set forth below.
Two Conditions for Cash Payout
1.The higher of the EBITDA hurdle payout level that is met during an EBITDA Performance Period compared to the highest stock price hurdle payout level that is maintained for 20-consecutive trading days during the Stock Price Performance Period, as set forth above, determines the number of performance shares of CVG stock that are “banked” for potential payout; and
2.The Grantee must remain an employee on the vesting date, i.e., December 31, 2028. The payment, if any, will be made as soon as administratively possible after EBITDA and stock price performance are approved by the Compensation Committee of the Board of Directors of the Company (the “Committee”) following December 31, 2028 (the “Determination Date”).
Based on the determination of the above two conditions, the Grantee will receive the cash value of the performance shares (as of the Determination Date) of CVG stock as set forth above.
The calculation of any payout is explained in Exhibit 1 with examples and incorporated herein by reference.
2.Post-Vesting Restrictions. For a period of one-year following the vesting of stock earned under this Agreement, the Grantee shall not directly or indirectly sell such stock.
(a)Committee Authority. The Committee shall in good faith make all determinations necessary or appropriate to determine whether the performance conditions hereunder have been satisfied. The Committee’s determinations shall be final, binding and conclusive upon all parties, absent manifest error or bad faith.
(b)Adjustments. Notwithstanding any other provision herein to the contrary, in the event of an exchange, tender offer, sale, merger, consolidation, recapitalization, split, combination or otherwise of the Company, that is closed any time between (a) grant date and June 30, 2027 (the “First Transaction Closing Date”), and the transaction is valued on such closing date with the CVG stock at a price greater than $2.00 per share, then the stock price on the First Transaction Closing Date may determine the Payout Level when compared to the Stock Price Hurdle in the chart above, or (b) July 1, 2027 and December 31, 2028 (the “Second Transaction Closing Date”), and the transaction is valued on such closing date with the CVG stock at a price greater than any one or all of the stock price hurdles already reached, if applicable, then the stock price on the Second Transaction Closing Date shall determine the Payout Level when compared to the Stock Price Hurdle in the chart above. The Committee shall calculate the Payout Level preserving the intended economic benefits hereunder. The Committee’s adjustment shall be made in accordance with this provision and shall be effective and final, binding and conclusive for all purposes of the Plan and this Agreement, absent manifest error or bad faith.
(c)Forfeiture of Unearned Award. Any portion of the Award hereunder that does not become earned in accordance with the provisions of this Agreement shall be automatically forfeited and cancelled at no value without any consideration being paid therefore and otherwise without any further action of the Company whatsoever.
3.Termination:
(a)General. Except as provided in Section 2(b) hereof, or unless otherwise determined by the Committee in its sole discretion, in the event of the Grantee’s termination of employment or other service with the Company and its Subsidiaries for any reason prior to the expiration of the Performance Period, the Award hereunder shall be automatically forfeited and cancelled as of the date of such termination without any consideration being paid therefor and otherwise without any further action of the Company whatsoever. In the event of the Grantee’s termination of employment or other service with the Company and its Subsidiaries for any reason on or following expiration of the Performance Period, the Grantee shall retain the right to receive payment of the Award hereunder in accordance with the provisions of Section 1 hereof, provided that upon a termination for Cause at any time prior to payment of the Award hereunder, the Award shall be automatically forfeited and cancelled for no value without any consideration being paid therefore and otherwise without any further action of the Company whatsoever.
(b)Rule of 66. If Grantee’s employment with the Company terminates (other than for Cause) prior to the expiration of the Performance Period and on or after Grantee’s Rule of 66 Date, as defined below, then the Award shall be earned on a pro-rata basis and paid based on each EBITDA and stock price measurement calculated through the end of the Performance Period, as if the Grantee remained an active employee of the Company. For this purpose, the “Rule of 66 Date” means the date that the sum of the Grantee’s age plus total Service, as defined below, is equal to or greater than sixty-six (66), so long as Grantee’s age is equal to or greater than 60. “Service” means the aggregate number of completed years of continued employment with the Company, as conclusively determined by the Company without regard to any later determinations or findings regarding Grantee’s employment status by any third party.
2 | ||||||||
(c)Expiration of Performance Period on Change in Control. Notwithstanding any other provision herein to the contrary, in the event of a Change in Control prior to the expiration of the Performance Period, the Award shall be earned based on the greater of EBITDA calculated through the day prior to closing date of the Change in Control (which date shall be deemed the end of the Performance Period in such event), or the stock price calculation as set forth in the Section above titled “Adjustments”, provided, however, the Award earned and paid shall be the greater of the Target Award or the amount set forth in the chart in Section 1 above if performance is above the Target Award, subject to any terms and conditions set forth in the Plan.
4.Confidentiality.
(a)Non-use and Non-Disclosure of Confidential Information. Grantee acknowledges that the Company and its subsidiaries continually develop Confidential Information (defined below), that the Grantee may develop Confidential Information for the Company or its subsidiaries during Grantee’s employment with the Company, and that Grantee may learn of Confidential Information during the course of such employment. Grantee will comply with the policies and procedures of the Company and its subsidiaries for protecting Confidential Information and shall never use or disclose to any Person (except as required by applicable law or for the proper performance of his or her duties and responsibilities to the Company and its subsidiaries), any Confidential Information obtained by Grantee incident to his or her employment or other association with the Company or any of its subsidiaries. Grantee agrees to only use the Company’s Confidential Information as necessary to perform his or her job during employment with the Company. Grantee understands that this restriction shall continue to apply after his or her employment terminates, regardless of the reason for such termination. All documents, records, tapes and other media of every kind and description relating to the business, present or otherwise, of the Company or its subsidiaries and any copies, in whole or in part, thereof (the “Documents”), whether or not prepared by Grantee, shall be the sole and exclusive property of the Company and its subsidiaries. Grantee shall safeguard all Documents and shall surrender to the Company at the time his or her employment terminates, or at such earlier time or times as the Company may specify, all Documents then in the Grantee’s possession or control.
(b)Definition of Confidential Information. For purposes of this Agreement, “Confidential Information” means any and all information of the Company and its subsidiaries that is not generally known by others with whom the Company or its subsidiaries compete or do business, or with whom they plan to compete or do business and any and all information which, if disclosed by the Company or its subsidiaries, would assist in competition against them. Confidential Information includes without limitation such information relating to (i) the development, research, testing, manufacturing, marketing and financial activities of the Company and its subsidiaries, (ii) the Company and its subsidiaries Products (defined below), (iii) the costs, sources of supply, financial performance and strategic plans of the Company and its subsidiaries, (iv) the identity and special needs of the customers of the Company and its subsidiaries and (v) the people and organizations with whom the Company and its subsidiaries have business relationships and those relationships. Confidential Information also includes any information that the Company or any of its subsidiaries have received, or may receive hereafter, from others which was received by the Company or any of its subsidiaries with any understanding, express or implied, that the information would not be disclosed. For purposes of this Agreement, “Products” means all products planned, researched, developed, tested, manufactured, sold, licensed, leased or otherwise distributed or put into use by the Company or any of its subsidiaries, together with all services provided or planned by the Company or any of its subsidiaries, during Grantee’s employment with the Company or any of its subsidiaries.
5.Restricted Activities. Grantee, as a condition to the Award and in consideration of Participant's continued employment by the Company and/or its subsidiaries, agrees that some restrictions on Grantee’s activities during and after his or her employment are necessary to protect the goodwill, Confidential Information and other legitimate interests of the Company and its subsidiaries and agrees as follows:
(a)Noncompetition. For a period of time beginning on the date Grantee executes a copy of this Agreement and continuing for a period ending on the date which is one (1) year after Grantee’s employment terminates (the “Noncompetition Period”) Grantee shall not, whether as owner, partner, investor, consultant, agent, Grantee, co-venturer or otherwise, engage in, assist or have any active interest in a business that competes with the Company or any of its subsidiaries (“Competing Business Line”) or otherwise compete with the Company or any of its subsidiaries: (i) anywhere throughout the world; (ii) in North America; (iii) in the United States; and/or (iv) in those states of the United States in which the Company or any of its subsidiaries
3 | ||||||||
sells products or conducts business activities. Specifically, but without limiting the foregoing, Grantee agrees that during the Noncompetition Period, Grantee shall not: (A) undertake any planning for any business competitive with the Company or any of its subsidiaries; or (B) engage in any manner in any activity that is competitive with the business of the Company or any of its subsidiaries. For the purposes of this Section 4, Grantee’s undertaking shall encompass all items, products and services that may be used in substitution for Products.
(b)Conflict of Interest. Grantee agrees that, during his or her employment with the Company, he or she will not undertake any outside activity, whether or not competitive with the business of the Company or its subsidiaries that could reasonably give rise to a conflict of interest or otherwise interfere with his or her duties and obligations to the Company or any of its subsidiaries.
(c)Non-solicitation. Grantee further agrees that while he or she is employed by the Company and during the Noncompetition Period, Grantee will not, (i) hire or attempt to hire any employee of the Company or any of its subsidiaries, (ii) hire or attempt to hire any independent contractor providing services to the Company or any of its subsidiaries, (iii) assist in hiring or any attempt to hire anyone identified in clauses (i) or (ii) of this sentence by any other Person, (iv) encourage any employee or independent contractor of the Company or any of its subsidiaries to terminate his or her relationship with the Company or any of its subsidiaries, or (v) solicit or encourage any customer or vendor of the Company or any of its subsidiaries to terminate or diminish its relationship with any of them, or, in the case of a customer, to conduct with any Person any competing business or activity. For purposes of Grantee’s obligations hereunder during that portion of the Noncompetition Period that follows termination of Grantee’s employment, employee, independent contractor, customer or vendor of the Company or any of its subsidiaries shall mean any Person who was such at any time during the six (6) months immediately preceding the date of the termination of Grantee’s employment.
(d)Enforceability. In the event that the one (1) year period stated above is held unenforceable by a court of competent jurisdiction due to its length, then the period shall be six (6) months, or such other time as determined enforceable by such court.
6.Non-Inducement. Grantee will not directly or indirectly assist or encourage any person or entity in carrying out or conducting any activity that would be prohibited by this Agreement if such activity were carried out or conducted by Grantee.
7.Assignment of Rights to Intellectual Property. Grantee shall promptly and fully disclose all Intellectual Property (defined below) to the Company. Grantee hereby assigns and agrees to assign to the Company (or as otherwise directed by the Company) Grantee’s full right, title and interest in and to all Intellectual Property. Grantee agrees to execute any and all applications for domestic and foreign patents, copyrights or other proprietary rights and to do such other acts (including without limitation the execution and delivery of instruments of further assurance or confirmation) requested by the Company to assign the Intellectual Property to the Company and to permit the Company to enforce any patents, copyrights or other proprietary rights to the Intellectual Property. Grantee will not charge the Company for time spent complying with these obligations. All copyrightable works that Grantee creates shall be considered “work made for hire” and shall, upon creation, be owned exclusively by the Company. For purposes of this Section 8, “Intellectual Property” means inventions, discoveries, developments, methods, processes, compositions, works, concepts and ideas (whether or not patentable or copyrightable or constituting trade secrets) conceived, made, created, developed or reduced to practice by Grantee (whether alone or with others and whether or not during normal business hours or on or off the premises of the Company or any of its subsidiaries) during Grantee’s employment with the Company or any of its subsidiaries (including prior to the Effective Date if applicable) that relate to either the Products or any prospective activity of the Company or any of its subsidiaries or that make use of Confidential Information or any of the equipment or facilities of the Company or any of its subsidiaries.
8.Consideration and Acknowledgments. Grantee acknowledges and agrees that the covenants described in Sections 3 through 6 of this Agreement are essential terms, and the underlying Award would not be provided by the Company in the absence of these covenants. Grantee further acknowledges that these covenants are supported by adequate consideration as set forth in this Agreement, that full compliance with these covenants will not prevent Grantee from earning a livelihood following the termination of his or her employment, and that these covenants do not place undue restraint on Grantee and are not in conflict with any public interest. Grantee acknowledges that (i) Grantee has had access to Company’s trade secrets and Confidential Information at the highest levels, including without limitation manufacturing and marketing strategy, customer strategy and lists, technical know-how, product and process research and development, and business plans, (ii) Grantee has had access to Confidential Information regarding and has been privy to discussions and strategy sessions at the highest levels of the
4 | ||||||||
Company regarding all aspects, business lines and product segments of the Company, and (iii) that these trade secrets and Confidential Information would inevitably be disclosed were Grantee to work for a competitor. Grantee further acknowledges and agrees that Grantee fully understands these covenants, has had full and complete opportunity to discuss and resolve any ambiguities or uncertainties regarding these covenants before signing this Agreement, that these covenants are reasonable and enforceable in every respect, and has voluntarily agreed to comply with these covenants for their stated term. Grantee agrees that in the event he or she is offered employment with a competing business at any time in the future, Grantee shall immediately notify the competing business of the existence of the covenants set forth above.
9.No Assignments: This Agreement is personal to each Grantee. The Grantee shall not assign, transfer or delegate any right or obligation hereunder without first obtaining the written consent of the Company.
10.Withholding Taxes: The Company may withhold any and all amounts payable to the Grantee hereunder such federal, state and local taxes as may be required to be withheld pursuant to any applicable law or regulation.
11.Governing Law: This Agreement shall be governed by, and construed under and in accordance with, the internal laws of the State of Delaware, without reference to rules relating to conflicts of laws.
12.Other Benefits: The Award is an incentive award and shall not be taken into account in computing the amount of salary or compensation for purposes of determining any bonus, incentive, pension, retirement, death or other benefit under any other bonus, incentive pension, retirement, insurance or other employee benefit plan of the Company, unless such plan or agreement expressly provides otherwise.
13.No Right to Continued Employment or Service: Nothing in this Agreement shall confer upon the Grantee any right to continued employment or other service with the Company or its Subsidiaries, or to interfere in any way with the right of the Company or its Subsidiaries to terminate the Grantee’s employment or other service at any time and for any reason (or no reason).
14.Unfunded Benefit: The Award shall not be deemed to create a trust or other funded arrangement. The Grantee’s rights with respect to the Award shall be those of a general unsecured creditor of the Company, and under no circumstances shall the Grantee have any other interest in any asset of the Company by virtue of the grant of the Award. Notwithstanding the foregoing, the Company shall have the right (but not the obligation) to implement or set aside funds in a grantor trust, subject to the claims of the Company’s creditors or otherwise, to discharge its obligations with respect to the Award.
15.Code Section 409A Compliance: Although the Company makes no guarantee with respect to the tax treatment of payment of the Award hereunder and shall not be responsible in any event with regard to non-compliance with Section 409A of the Code and the treasury regulations and other official guidance promulgated thereunder, this Agreement is intended to either comply with, or be exempt from, the requirements of Section 409A of the Code. To the extent that this Agreement is not exempt from the requirements of Section 409A of the Code, this Agreement is intended to comply with the requirements of Section 409A of the Code and shall be limited, construed and interpreted in accordance with such intent. In no event whatsoever shall the Company be liable for any additional tax, interest, income inclusion or other penalties that may be imposed on the Grantee by Section 409A of the Code or for damages for failing to comply with Section 409A of the Code.
16.Entire Agreement: This Agreement is subject to all of the terms, conditions and provisions of the Plan, including, without limitation, the amendment provisions thereof, and to such rules, regulations and interpretations relating to the Plan as may be adopted thereunder and as may be in effect from time to time. This Agreement may be amended or modified only by a written instrument executed by the Company and the Grantee. To the extent there are any conflicts between provisions this Agreement and any applicable employment agreement entered into between Grantee and the Company or its subsidiaries, the provisions of such employment agreement shall govern and nothing in this Agreement shall in any way amend, supersede or otherwise change any provisions or rights contained in such employment agreement.
Recoupment: The Grantee’s rights with respect to the Award hereunder shall in all events be subject to (i) any right that the Company may have under any Company recoupment policy or other agreement or arrangement with the Grantee, and (ii) any right or obligation that the Company may have regarding the clawback of “incentive-based compensation” under Section 10D of the Exchange Act and any applicable rules and regulations promulgated thereunder from time to time by the U.S. Securities and Exchange Commission.
5 | ||||||||
ACKNOWLEDGED AND AGREED: COMMERCIAL VEHICLE GROUP, INC.
__/s/ James Ray________________________ ____/s/ Aneezal Mohamed______________
Signature of Employee - Grantee Signature of Company Representative
_____James Ray________________________ ___Aneezal Mohamed__________________
Printed Name Printed Name
__Chief Legal Officer & Secretary__________
Title
6 | ||||||||
EXHIBIT 31.1
302 CERTIFICATION
I, James R. Ray, certify that:
1.I have reviewed this quarterly report on Form 10-Q of Commercial Vehicle Group, Inc. and Subsidiaries;
2.Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3.Based on my knowledge, the financial statements, and other information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4.The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and
d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and audit committee of the registrant’s board of directors (or persons performing the equivalent function):
a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
August 3, 2026
| /s/ James R. Ray | ||
| James R. Ray | ||
| President and Chief Executive Officer | ||
| (Principal Executive Officer) | ||
EXHIBIT 31.2
302 CERTIFICATION
I, Angela O'Leary, certify that:
1.I have reviewed this quarterly report on Form 10-Q of Commercial Vehicle Group, Inc. and Subsidiaries;
2.Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3.Based on my knowledge, the financial statements, and other information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4.The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and
d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and audit committee of the registrant’s board of directors (or persons performing the equivalent function):
a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
August 3, 2026
/s/ Angela M. O'Leary | ||
| Angela M. O'Leary | ||
| Interim Chief Financial Officer | ||
| (Principal Financial Officer) | ||
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Commercial Vehicle Group, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2026 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, James R. Ray, President and Chief Executive Officer (Principal Executive Officer) of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
August 3, 2026
| /s/ James R. Ray | ||
| James R. Ray | ||
| President and Chief Executive Officer | ||
| (Principal Executive Officer) | ||
EXHIBIT 32.2
CERTIFICATION PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Commercial Vehicle Group, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2026 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Angela O'Leary, Interim Chief Financial Officer (Principal Financial Officer) of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
August 3, 2026
/s/ Angela M. O'Leary | ||
| Angela M. O'Leary | ||
| Interim Chief Financial Officer | ||
| (Principal Financial Officer) | ||