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EXHIBIT 10.02
AGREEMENT
THIS AGREEMENT, dated as of June 14, 2001 by and between General Motors
Corporation ("GM") and American Axle & Manufacturing, Inc. ("AAM").
Without creating any precedents or waiving any rights under any other agreements
except as expressly provided herein, the parties hereto agree as follows:
1. GM designates AAM as the * * * Tier I supplier for all of GM's requirements
for driveline components for the * * * series program, including all
derivatives thereof based upon the * * * platform, which replace * * *
series program components, subject to the following:
a. The price of * * * series program components set forth in Exhibit
1 shall be the price as of the date of this agreement of the
* * * series program component being replaced, giving effect to
the price reductions set forth in Section 3 below. Such prices
shall be increased or decreased by the cost of the engineering
changes ordered by GM in the specifications for such products
(* * * & * * *) plus a proportional change in profit to AAM. AAM
and GM agree to pursue jointly achieved cost savings efforts as
provided in Section 2 below with respect to * * * axles.
b. With respect to * * * series program driveline components not
listed in Exhibit I, including without limitation, modules,
whether steerable or otherwise, except for steerable beam axles,
GM shall provide AAM with a right of last refusal with respect to
such products in accordance with the AAM/GM 30-Day Letter
Procedure, dated as of July 28, 2000, between GM and AAM.
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c. All * * * series program products sourced to AAM by GM shall be
for the life of the program and shall be included in Lifetime
Program Contracts as set forth in Paragraph 1 of the MOU.
2. GM hereby designates AAM as the advanced engineering/cooperative source and
Tier I supplier- systems integrator for the * * * series program including
all derivatives thereof based upon the * * * platform. Except with respect
to brakes, AAM shall be design responsible. With respect to potential
module steering cross member and suspension suppliers, AAM and GM
engineering shall jointly review and approve their technical capability
based on key product characteristics. AAM shall be solely responsible for
the final selection of all suppliers and the terms and conditions of supply
contracts. AAM and GM each recommit to continue support of the AAM/GM cost
reduction program as set forth in the MOU and Lifetime Program contracts
and to work together cooperatively and expeditiously with all appropriate
resources and to make all decisions timely on joint cost savings ideas, the
benefits of which shall be shared equally (50/50%) by AAM and GM.
3. Upon sourcing of the * * * series program to AAM, including all components
referred to above in Paragraph 1, the following agreements, as set forth in
(a), (b) and (c) below, will become effective:
a. AAM and GM agree to four * * *% reductions on * * * component
prices commencing January 1, 2002 and each January 1 thereafter
through January 1, 2005 based on the following: These reductions
will consist of * * *% annual price reductions on AAM's * * *
controllable sales (excluding directed buy sales) with the
balance coming from directed buy suppliers. AAM and GM shall
jointly seek such price reductions from direct buy suppliers with
the intention of achieving them by August 1, 2001. All such price
reductions from directed buy suppliers shall be for the benefit
of GM. To the extent that such price reductions shall not be
obtained from directed buy suppliers, AAM shall be under no
obligation to reduce prices beyond * * *% as set forth
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above. In addition, AAM will make a payment of $* * * million to
GM on or before December 31, 2001. This payment will include GM's
50% share of the next $* * * million of jointly-achieved savings
implemented after the date of this agreement. These actions shall
be in lieu of any other price reduction-related payments by AAM
to GM and shall be in lieu of any other * * * price reductions.
b. In the event that AAM is not receiving annual revenue from the
substitute business referenced in Section 2.K. of the Settlement
Agreement dated as of July 28, 2000 between AAM and GM in an
amount of at least $* * * million by December 1, 2002, then GM
shall pay to AAM an amount based upon a total annual amount of
$* * * million in proportion to the launch curve for the * * *
products on or before December 31, 2002 and 2003 and $* * *
million on or before December 31 of each year thereafter until
such time as AAM is receiving at least $* * * million annual
revenue from such substitute business. The amount of incremental
revenue received by AAM from new AAM content from the module
assemblies referenced in Section 1.b. above, excluding the amount
for brakes referenced in Section 2. above, in excess of the
revenue that would have been received by AAM for the axles such
modules replace shall be counted against GM's obligation to
source $* * * million of substitute business to AAM as set forth
in Section 2.K. of the Settlement Agreement dated as of July 28,
2000 between AAM and GM. AAM shall be entitled to quote on all
driveline components of GM and GM alliance partners such as Fiat,
Isuzu, Subaru, Saab and Suzuki, etc. relating to passenger car,
truck and crossover vehicles and programs.
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c. AAM and GM acknowledge that GM has received the benefit of $84
million savings, using model year 1996 as the base through model
year 2000, as the result of AAM's and GM's warranty performance.
AAM and GM commit to work cooperatively together to continually
improve GM's warranty performance on AAM products to meet and
exceed currently projected cumulative increment warranty savings
of $* * * million in 2001, $* * * million in 2002, $* * * million
in 2003, $* * * million in 2004 and $* * * million in 2005 based
on 1996 warranty performance and current assumptions.
GENERAL MOTORS CORPORATION AMERICAN AXLE &
MANUFACTURING, INC.
By: /s/ Xxxxxxx Xxxxxx By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------------------ -------------------------------
Title: Director Purchasing Title: GVP
--------------------------------- ----------------------------
/s/ Xx Xxxxxxxxx
EXECUTIVE IN CHARGE
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-------- LIFETIME PROGRAM CONTRACT --------------
logo * * * Exhibit: I
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5/21/01
PER
CURRENT P/N DESCRIPTION UNIT PRICE
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* * *-AUXILIARY PROPSHAFTS
* * * * * * Front Auxiliary Propshaft * * *
* * * * * * Front Auxiliary Propshaft * * *
* * * * * * Front Auxiliary Propshaft * * *
* * * * * * Front Auxiliary Propshaft * * *
* * * * * * Front Auxiliary Propshaft * * *
----------------------------------------------------------------------------------------------------
* * * PROPSHAFTS
* * * * * * 1 Piece Propshaft * * *
* * * * * * 1 Piece Propshaft * * *
* * * * * * 1 Piece Propshaft * * *
* * * * * * 1 Piece Propshaft * * *
* * * * * * 1 Piece Propshaft * * *
* * * * * * 1 Piece Propshaft * * *
* * * * * * 1 Piece Propshaft * * *
* * * * * * 1 Piece Propshaft * * *
----------------------------------------------------------------------------------------------------
* * * PROPSHAFTS
* * * * * * 2 Piece Propshafts * * *
* * * * * * 2 Piece Propshafts * * *
* * * * * * 2 Piece Propshafts * * *
* * * * * * 2 Piece Propshafts * * *
* * * * * * 2 Piece Propshafts * * *
* * * * * * 2 Piece Propshafts * * *
* * * * * * 2 Piece Propshafts * * *
----------------------------------------------------------------------------------------------------
* * * PROPSHAFTS
* * * * * * 1 Piece Propshaft * * *
* * * * * * 1 Piece Propshaft * * *
* * * * * * 1 Piece Propshaft * * *
----------------------------------------------------------------------------------------------------
* * * PROPSHAFTS
* * * * * * 1 Piece Propshaft * * *
* * * * * * 1 Piece Propshaft * * *
----------------------------------------------------------------------------------------------------
* * *
* * * * * * 2 Piece Propshaft * * *
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-------- LIFETIME PROGRAM CONTRACT --------------
logo * * * Exhibit: I
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5/21/01
PER
CURRENT P/N DESCRIPTION UNIT PRICE
----------- ----------- ----------
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* * * 8.6" REAR AXLE
* * * 8.6" Rear Axle - 3.08 Std. * * *
* * * 8.6" Rear Axle - 3.42 Std. * * *
* * * 8.6" Rear Axle - 3.42 L/D * * *
* * * 8.6" Rear Axle - 3.73 Std. * * *
* * * 8.6" Rear Axle - 3.73 L/D * * *
* * * 8.6" Rear Axle - 4.10 Std. * * *
* * * 8.6" Rear Axle - 4.10 L/D * * *
* * * 8.6" Rear Axle - 3.73 L/D * * *
----------------------------------------------------------------------------------------------------
* * * 8.6" REAR AXLE
* * * 8.6" Rear Axle - 3.42 Std. * * *
* * * 8.6" Rear Axle - 3.42 L/D * * *
* * * 8.6" Rear Axle - 3.73 Std. * * *
* * * 8.6" Rear Axle - 3.73 L/D * * *
* * * 8.6" Rear Axle - 4.10 Std. * * *
* * * 8.6" Rear Axle - 4.10 L/D * * *
----------------------------------------------------------------------------------------------------
* * * 9.5" REAR AXLE
* * * 9.5" Rear Axle - 3.42 Std. * * *
* * * 9.5" Rear Axle - 3.73 Std. * * *
* * * 9.5" Rear Axle - 3.73 L/D * * *
* * * 9.5" Rear Axle - 4.10 Std. * * *
* * * 9.5" Rear Axle - 4.10 L/D * * *
----------------------------------------------------------------------------------------------------
* * * 9.5" REAR AXLE
* * * 9.5" Rear Axle - 3.73 Std. * * *
* * * 9.5" Rear Axle - 3.75 L/D * * *
* * * 9.5" Rear Axle - 4.10 Std. * * *
* * * 9.5" Rear Axle - 4.10 L/C * * *
----------------------------------------------------------------------------------------------------
* * * 10.5" REAR AXLE
* * * 10.5" Rear Axle - 3.73 Std. * * *
* * * 10.5" Rear Axle - 3.73 L/D * * *
* * * 10.5" Rear Axle - 4.10 Std. * * *
* * * 10.5" Rear Axle - 4.10 L/D * * *
----------------------------------------------------------------------------------------------------
* * * 10.5" REAR AXLE
* * * 10.5" Rear Axle - 3.73 Std. * * *
* * * 10.5" Rear Axle - 3.73 L/D * * *
* * * 10.5" Rear Axle - 4.10 Std. * * *
* * * 10.5" Rear Axle - 4.10 L/D * * *
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-------- LIFETIME PROGRAM CONTRACT --------------
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5/21/01
PER
CURRENT P/N DESCRIPTION UNIT PRICE
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* * * 11.5" SINGLE WHEEL * * * REAR AXLE
* * * 11.5" SW Rear Axle - 3.73 Std. * * *
* * * 11.5" SW Rear Axle - 3.73 L/D * * *
* * * 11.5" SW Rear Axle - 3.73 Std. * * *
* * * 11.5" SW Rear Axle - 3.73 L/D * * *
* * * 11.5" SW Rear Axle - 4.10 Std. * * *
* * * 11.5" SW Rear Axle - 4.10 L/D * * *
* * * 11.5" SW Rear Axle - 4.10 Std. * * *
* * * 11.5" SW Rear Axle - 4.10 L/D * * *
----------------------------------------------------------------------------------------------------
* * * 11.5" DUAL WHEEL * * * REAR AXLE
* * * 11.5" DW Rear Axle - 3.73 Std. * * *
* * * 11.5" DW Rear Axle - 3.73 L/D * * *
* * * 11.5" DW Rear Axle - 3.73 Std. * * *
* * * 11.5" DW Rear Axle - 3.73 L/D * * *
* * * 11.5" DW Rear Axle - 4.10 Std. * * *
* * * 11.5" DW Rear Axle - 4.10 L/D * * *
* * * 11.5" DW Rear Axle - 4.10 Std. * * *
* * * 11.5" DW Rear Axle - 4.10 L/D * * *
----------------------------------------------------------------------------------------------------
* * * 11.5" DUAL WHEEL * * * REAR AXLE
* * * 11.5" SW Rear Axle - 3.73 Std. * * *
* * * 11.5" SW Rear Axle - 3.73 L/D * * *
* * * 11.5" SW Rear Axle - 3.73 Std. * * *
* * * 11.5" SW Rear Axle - 3.73 L/D * * *
* * * 11.5" SW Rear Axle - 4.10 Std. * * *
* * * 11.5" SW Rear Axle - 4.10 L/D * * *
* * * 11.5" SW Rear Axle - 4.10 Std. * * *
* * * 11.5" SW Rear Axle - 4.10 L/D * * *
----------------------------------------------------------------------------------------------------
* * * 11.5" DUAL WHEEL * * * REAR AXLE
* * * 11.5" DW Rear Axle - 3.73 Std. * * *
* * * 11.5" DW Rear Axle - 3.73 L/D * * *
* * * 11.5" DW Rear Axle - 3.73 Std. * * *
* * * 11.5" DW Rear Axle - 3.73 L/D * * *
* * * 11.5" DW Rear Axle - 4.10 Std. * * *
* * * 11.5" DW Rear Axle - 4.10 L/D * * *
* * * 11.5" DW Rear Axle - 4.10 Std. * * *
* * * 11.5" DW Rear Axle - 4.10 L/D * * *
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-------- LIFETIME PROGRAM CONTRACT --------------
logo * * * Exhibit: I
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5/21/01
PER
CURRENT P/N DESCRIPTION UNIT PRICE
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* * * 8.25" FRONT AXLE
* * * 8.25" Front Axle - 3.73 * * *
* * * 8.25" Front Axle - 4.10 * * *
----------------------------------------------------------------------------------------------------
* * * 8.25" FRONT AXLE - (AWD)
* * * 8.25" Front Axle - 3.73 (AWD) * * *
* * * 8.25" Front Axle - 4.10 (AWD) * * *
----------------------------------------------------------------------------------------------------
* * * 9.25" FRONT AXLE - (POWER DENSE)
* * * 9.25" Front Axle - 3.73 (Power Dense) * * *
* * * 9.25" Front Axle - 4.10 (Power Dense) * * *
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-------- LIFETIME PROGRAM CONTRACT --------------
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5/21/01
PER
CURRENT P/N DESCRIPTION UNIT PRICE
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* * * STABILIZER BAR
* * * Front Stabilizer Bar * * *
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* * * STABILIZER BAR
* * * Rear Stabilizer Bar * * *
* * * Rear Stabilizer Bar * * *
* * * STABILIZER BAR
* * * Rear Stabilizer Bar Assembly * * *
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-------- LIFETIME PROGRAM CONTRACT --------------
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5/21/01
PER
CURRENT P/N DESCRIPTION UNIT PRICE
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* * * LINKAGE ASSEMBLY
* * * * * * Linkage Assembly * * *
* * * * * * Linkage Assembly * * *
* * * XXXXXX ARM
* * * * * * Xxxxxx Arm * * *
* * * * * * Xxxxxx Arm * * *
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* Portions of this Exhibit 10.02 were omitted and filed separately with the
Secretary of the Securities and Exchange Commission (the "Commission") pursuant
to an application for confidential treatment filed with the Commission pursuant
to Rule 406 under the Securities Act of 1933, as amended. Such portions are
marked by the symbol "* * *".
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