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

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the
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Exchange Act of 1934 (Amendment
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American Axle & Manufacturing Holdings, Inc.

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AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
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One Dauch Drive
Detroit, Michigan48211-1198

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www.aam.com
(American Axle & MFG Logo)

One Dauch Drive
Detroit, Michigan 48211-1198
www.aam.com


NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
May 1, 2014
April 28, 2011
American Axle & Manufacturing Holdings, Inc. (AAM)
Time and Place3:00 p.m., local time, on Thursday, April 28, 2011May 1, 2014
 
AAM World Headquarters Auditorium, One Dauch Drive, Detroit, Michigan
 
Items of Business
(1)   Elect fourthree members of the Board of Directors to serve until the Annual Meeting of Stockholders in 2014;
2017;
(2)   Cast a non-binding advisoryAdvisory vote onto approve named executive compensation(“say-on-pay”);officer compensation;
(3) Cast a non-binding advisory vote on the frequency ofsay-on-pay votes;
(4)   Ratify the appointment of Deloitte & Touche LLP as AAM’s independent registered public accounting firm for the year ending December 31, 2011;2014; and
(5)
(4)   Attend to other business properly presented at the meeting.
 
Record Date
You may vote if you were an AAM stockholder at the close of business on
March 3, 2011.4, 2014.
 
Meeting AdmissionAdmission may be limited to AAM stockholders as of the record date and holders of valid proxies. Please be prepared to present identification for admittance. Stockholders holding stock in brokerage accounts will need to bring a copy of a brokerage statement reflecting stock ownership as of the record date. Cameras and recording devices will not be permitted.
 
Proxy MaterialsWe have elected to furnish materials for the 20112014 Annual Meeting of Stockholders via the Internet. We believe the use of the Securities and Exchange Commission (SEC)e-proxy rule will expedite stockholders’ receipt of the Proxy Statement, 2010 Annual Report andForm 10-K (proxy materials) and lower the costs of our annual meeting. On March 18, 2011,21, 2014, we mailed a notice of Internet availability (notice) to most stockholders containing instructions on how to access the proxy materials on the Internet instead of receiving paper copies in the mail.
 
Important Notice Regarding Internet Availability of Proxy Materials for the April 28, 2011May 1, 2014 Stockholder Meeting. The Proxy Statement and 20102013 Annual Report andForm 10-K are available atwww.envisionreports.com/AX.AXL.
By Order of the Board of Directors,
-s- STEVEN R. KEYESDavid E. Barnes
Steven R. Keyes
Executive Director, AdministrationGeneral Counsel & Legal and Secretary
March 18, 201121, 2014










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20112014 ANNUAL MEETING OF STOCKHOLDERS
PROXY STATEMENT
TABLE OF CONTENTS
 
PROXY STATEMENT
TABLE OF CONTENTS
 
Page
No.
INTERNET AVAILABILITY OF PROXY MATERIALS
2
  
QUESTIONS AND ANSWERS ABOUT VOTING AND THE ANNUAL MEETING
2
  
PROPOSAL 1: ELECTION OF DIRECTORS
5
4
Nominees for Director
6
Returning Directors
5
CORPORATE GOVERNANCEReturning Directors
13
7
Corporate Governance
11
  
COMPENSATION OF EXECUTIVE OFFICERS
20
17
Compensation Discussion and Analysis
20
17
Summary Compensation Table
31
29
Grants of Plan-Based Awards
33
31
Outstanding Equity Awards at December 31, 20102013
36
34
Options Exercised and Stock Vested
38
35
Pension Benefits
39
36
Nonqualified Deferred Compensation
41
38
Potential Payments Upon Termination or Change of Control
43
40
  
PROPOSAL 2: ADVISORY VOTE ON EXECUTIVE COMPENSATION
53
45
  
PROPOSAL 3: FREQUENCY OF ADVISORY VOTE ON EXECUTIVE OFFICER COMPENSATION
54
20102013 COMPENSATION OF NON-EMPLOYEE DIRECTORS
55
46
  
SECURITY OWNERSHIP
57
48
Section 16(a) Beneficial Ownership Reporting Compliance
58
50
  
PROPOSAL 4:3: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 20112014
59
51
  
AUDIT COMMITTEE DISCLOSURE
60
51
Report of the Audit Committee
60
51
Policy for Pre-Approval of Audit and Non-Audit Services
61
52
Fees of Independent Public Accountants
61
52
  
OTHER MATTERS
62
53


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PROXY STATEMENT
Annual Meeting of Stockholders
To Be Held April 28, 2011May 1, 2014
INTERNET AVAILABILITY OF PROXY MATERIALS
American Axle & Manufacturing Holdings, Inc. (AAM or the Company) is providing proxy materials electronically via the Internet, instead of mailing printed copies of those materials to each stockholder. On March 18, 2011,21, 2014, we mailed to our stockholders (other than those who previously requestede-mail or paper delivery) a Notice of Availability of Proxy Materials containing instructions on how to access our proxy materials, including our proxy statement and 2010 Annual Report2013 annual report onForm 10-K. The Notice of Availability of Proxy Materials provides instructions on how you may submit your proxy over the Internet or by telephone.
This electronic delivery process is designed to expedite stockholder receipt of proxy materials, lower the cost of the Annual Meeting of Stockholders (annual meeting), and conserve natural resources. However, if you would prefer to receive printed proxy materials, please follow the instructions included in the Notice of Availability of Proxy Materials. If you have previously elected to receive our proxy materials electronically, you will continue to receive these materials bye-mail unless you elect otherwise. If you received a printed copy of proxy materials by mail and would like to view future proxy materials over the Internet, you can do so by accessing the Internet atwww.envisionreports.com/AXL.
QUESTIONS AND ANSWERS ABOUT VOTING AND THE ANNUAL MEETING
Why am I receiving this proxy statement?
You received these proxy materials because you owned shares of AAM common stock on March 3, 20114, 2014 (record date). AAM’s Board of Directors (Board) is soliciting your proxy to vote your shares at the annual meeting. By use of a proxy, you can vote whether or not you attend the meeting. This proxy statement includes information that we are required to provide to you and is designed to assist you in voting your shares.
Who is entitled to vote?
Holders of AAM common stock on the record date are entitled to one vote per share. You are a holder of record if your shares are held directly in your name with AAM’s transfer agent, Computershare Trust Company, N.A. If your shares are held in the name of a broker, bank, trustee or other record holder, you are a street name holder. If you hold shares in more than one account, each notice, proxyand/or voting instruction card you receive that has a unique control number must be voted so that all your shares are voted.
How do I vote?
You may vote by any of the following methods:
In person — attending the annual meeting and casting a ballot.
• In person— attending the annual meeting and casting a ballot.
• By mail— using the proxyand/or voting instruction card provided.
• By telephone or via the Internet— following the instructions on your notice card, proxyand/or voting instruction card.
By mail — using the proxy and/or voting instruction card provided.
By telephone or over the Internet — following the instructions on your notice card, proxy and/or voting instruction card.
If you vote by telephone or viaover the Internet, have your notice card or proxyand/or voting instruction card available. The control number on your card is necessary to process your vote. A telephone or Internet vote authorizes the named proxies to vote in the same manner as if you marked, signed and returned the card by mail. If you hold shares in street name, refer to the voting instructions provided by your broker, bank, trustee or other record holder.


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How many shares may vote at the meeting?
As of March 3, 2011,4, 2014, we had 75,301,26375,646,724 shares of common stock outstanding and entitled to vote. Under AAM’s by-laws, a majority of these shares must be present in person or by proxy to hold the annual meeting and take any action during the meeting.
Can I change my vote?
You may change your vote at any time before the annual meeting by:
• 
revoking it by written notice to AAM’s Secretary at the address on the cover of this proxy statement;
• voting in person at the annual meeting; or
• delivering a later-dated proxy vote by mail, telephone or the Internet.
voting in person at the annual meeting; or
delivering a later-dated proxy vote by mail, telephone or over the Internet.

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What are the Board’s recommendations on how I should vote my shares?
The Board recommends that you vote your shares as follows:
Proposal 1 —FORthe election of the four nominees with terms expiring at the 2014 annual meeting.
Proposal 2 —FORapproval, on an advisory basis, of the compensation of AAM’s named executive officers as described in the Compensation Discussion and Analysis, tables and related narrative (thesay-on-payProposal 1 — FOR the election of the three nominees with terms expiring at the 2017 annual meeting; proposal).
Proposal 3 —FORapproval, on an advisory basis, of a one year frequency for future advisory votes onsay-on-pay.
Proposal 4 —FORratification of the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2011.
Proposal 2 — FOR approval, on an advisory basis, of the compensation of AAM’s named executive officers as described in the Compensation Discussion and Analysis, tables and related narrative; and
Proposal 3 — FOR ratification of the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2014.
What are my choices when voting?
Proposal 1 — You may vote for or withhold your vote on one or more of the nominees.
Proposal 2 —Proposal 2 — You may vote for or against the say on pay proposal to approve the compensation of our named executive officers, or you may abstain from voting your shares.
Proposal 3 —You may vote for a one year, two year, or three year frequency of say on pay proposals, or you may abstain from voting your shares.
Proposal 4 —You may vote for or against the proposal to ratify the appointment of the Company’s independent registered public accounting firm, or you may abstain from voting your shares.
Proposal 3 — You may vote for or against the proposal to ratify the appointment of the Company’s independent registered public accounting firm, or you may abstain from voting your shares.
What vote is required to approve each proposal?
Proposal 1 — A plurality of the votes cast to elect a director, which means that nominees with the most affirmative votes will be elected to fill the available seats.
Proposal 1 —A plurality of the votes cast to elect a director, which means that nominees with the most affirmative votes will be elected to fill the available seats.
Proposal 2 —An affirmative vote of a majority of the shares voted in person or by proxy must be cast in favor of the advisory vote to approve thesay-on-pay proposal.
Proposal 3 —The advisory vote on the frequency ofsay-on-pay proposals (every one, two, or three years) is a plurality vote. The Company will consider stockholders to have expressed a non-binding preference for the frequency option that receives the most favorable votes.
Proposal 4 —
Proposal 2 — An affirmative vote of a majority of the shares voted in person or by proxy must be cast in favor of the advisory vote to approve the compensation of AAM’s named executive officers.
Proposal 3 — An affirmative vote of a majority of the shares voted in person or by proxy must be cast in favor of the ratification of the appointment of the Company’s independent registered public accounting firm.


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Proposals 2 and 3 are advisory votes only and, as discussed in more detail in each proposal, the voting results are not binding on AAM. However, with respect to proposal 2, the Board and the Compensation Committee will consider the outcome of the votesvote in making future determinations concerning the compensation of our named executive officers andofficers. With respect to proposal 3, the frequencyAudit Committee will consider whether the appointment of Deloitte & Touche, LLP is in thesay-on-pay vote. best interests of the Company if the appointment is not ratified.
Who will count the votes?
Representatives of Computershare Trust Company, N.A., AAM’s transfer agent, will count the votes and serve as our inspector of election. The inspector of election will attend the annual meeting.
What if I “withhold” my vote or “abstain”?
Votes withheld and abstentions will be counted as present for purposes of determining whether a majority of shares is present to establish a quorum and hold the annual meeting. Abstentions will not be counted in the tally of votes for or against any proposal. A withheld vote has the same effect as an abstention.
What if I do not vote and do not attend the annual meeting?
If you are a holder of record and you do not vote your shares at the annual meeting or by proxy, your shares will not be voted. If you sign and return your proxy card without specific voting instructions, your shares will be voted as recommended by the Board.
Under New York Stock Exchange (NYSE) rules, brokers have discretionary power to vote your shares only on “routine” matters. Brokers do not have discretionary power to vote your shares on “non-routine” matters. If you hold shares in street name, and you do not give your bank, broker, trustee or other holder of record specific voting instructions for your shares, your record holder can only vote your shares on the ratification of the Company’s independent registered public accounting firm (proposal 4)3), a “routine” matter.
Without your specific instructions, your record holder cannot vote your shares on the election of directors the advisory vote on executive compensation(say-on-pay),and the advisory vote on the frequency ofsay-on-pay proposals.named executive officer compensation. For each of these matters, if you do not instruct your record holder how to vote, the record holder may not vote your shares. Shares not voted will be broker non-votes and will not be counted in determining the outcome of the vote for proposals 1 2 and 3.2. Broker non-votes will have no impact on the outcome of these proposals. We urge you to give your record holder voting instructions on each proposal being presented at the annual meeting.


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PROPOSAL 1: ELECTION OF DIRECTORS
The Board proposes that the fourthree directors standing for re-election as Class III directors, Richard E. Dauch, James A. McCaslin, William P. Miller II and Larry K. Switzer,Samuel Valenti III, be elected to the Board for terms expiring at the annual meeting in 2014.
2017.
The Board is divided into three classes. Directors serve for staggered three-year terms. Class I and Class III each consists of four positions and Class II consists of three positions. The Board believes that the staggered election of directors helps to maintain continuity and ensures that a majority of directors at any given time will have in-depth knowledge of the Company.
The Board unanimously approved the nominations of our Class III directors based on their outstanding achievements, special competencies and integrity. Each nominee brings a strong and unique background and set of skills to the Board. Collectively, the Board has high levels of competence and experience in a variety of areas, including manufacturing, engineering, finance, international business, management, restructuring,law, risk management, strategic business development and the global automotive industry. A summary of the principal occupation, professional background and specific qualificationsand/or skills ofthat qualify each nominee and returning director to serve on our Board is provided in the following pages of this proxy statement.
The Board unanimously recommends a vote FOR each of the nominees.


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Nominees for Director
Class III — DirectorDirectors to hold office until the 20142017 Annual Meeting of Stockholders
 
 
(RICHARD E. DAUCH)RICHARD E. DAUCH
Age 68
Richard E. Dauch is Co-Founder, Chairman of the Board & Chief Executive Officer of AAM, and is also Chairman of the Executive Committee of the Board. He has been Chief Executive Officer and a member of the Board since AAM began operations in March 1994. In October 1997, he was named Chairman of the Board of Directors. He was also President of AAM from March 1994 through December 2000. Prior to March 1994, he spent 12 years at Chrysler Corporation, where he established the just-in-time materials management system and the three-shift manufacturing vehicle assembly process. He is a retired officer from the Chrysler Corporation. Mr. Dauch’s last position at Chrysler, in 1991, was Executive Vice President of Worldwide Manufacturing. Mr. Dauch also served as Group Vice President of Volkswagen of America, where he established the manufacturing facilities and organization for the successful launch of the first major automotive transplant in the United States. Mr. Dauch has more than 46 years of experience in the automotive industry. Mr. Dauch was the 2006 recipient of the Shien-Ming Wu Foundation Manufacturing Leadership Award. In 2005, he received the CEO Legend Award from Automation Alley. In 2003, he received the Harvard Business School of Michigan Business Statesman Award, the Ernst & Young Entrepreneur of the Year Award, and the Northwood University Outstanding Business Leader Award. In 1999, he was named the Michiganian of the Year byThe Detroit Newsand he was named the 1997 Manufacturer of the Year by the Michigan Manufacturers’ Association. In 1996, he was named Worldwide Automotive Industry Leader of the Year by the Automotive Hall of Fame. Mr. Dauch currently serves on the Board of Directors of the National Association of Manufacturers (N.A.M.), where he previously served as Chairman. He has lectured extensively on the subject of manufacturing and authored the book,Passion for Manufacturing, which is distributed in colleges and universities globally and in several languages. The Board considers Mr. Dauch’s continuing leadership and the services he provides to AAM as critical to the achievement of the Company’s strategic goals. Mr. Dauch’s leadership and extensive expertise in the global automotive industry and manufacturing operations address the Company’s need to maintain and reinforce AAM’s unique operating culture as AAM expands internationally.		Director since 1994


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(JAMES A. MCCASLIN)JAMES A. McCASLIN
Age 62
65
Mr. McCaslin retired from Harley Davidson, Inc. in April 2010. Mr. McCaslin joined Harley Davidson in 1992 and held various senior executive leadership positions, including President and Chief Operating Officer of Harley-Davidson Motor Company, from 2001 to 2009. From 1989 to 1992, he held manufacturing and engineering positions with JI Case, a manufacturer of agricultural equipment. Previously, he held executive positions in manufacturing and quality with Chrysler Corporation, Volkswagen of America and General Motors Corporation, where he began his 40-year career in manufacturing. From 2003 to 2006, he served on the Board of Directors of Maytag Corporation. Mr. McCaslin has served on a number of civic boards, including Boys and Girls Clubs of Greater Milwaukee, Manufacturing Skill Standards Council and Kettering University. Mr. McCaslin’s extensive operational expertise and experience in multiple manufacturing industries in the original equipment and aftermarket product markets providesprovide the Board with a valued resource in support of AAM's objectives, which include engineering, quality and technology leadership, operational excellence and global geographic and product diversification, one of AAM’s key strategic objectives.diversification.
  
Director since February 
2011
     
(WILLIAM P. MILLER)
 
WILLIAM P. MILLER II CFA
Age 55
58
Mr. Miller, Chartered Financial Analyst, is Head of Asset Allocation for the Senior Managing Director & Chief Financial Officer of Financial Marketing International, Inc., an international law and economics consulting firm.Saudi Arabian Investment Company. Since 2003, Mr. Miller has been a member of the Board of Directors of the Chicago Mercantile Exchange, serving on the Audit Committee, Finance Committee and Market Regulation Oversight Committee. Since June 2011, Mr. Miller has served on the Board of Directors of the Dubai Mercantile Exchange, where he also serves on the Compensation Committee and the Compliance Committee. From April 2011 to October 2013, he was the Senior Managing Director & Chief Financial Officer of Financial Markets International, Inc., an international law and economics consulting firm. From 2005 to 2011, he was employed by the Ohio Public Employees Retirement System, where he served as Deputy Chief Investment Officer. Previously, he served aswas Senior Risk Manager for the Abu Dhabi Investment Authority and as an Independent Risk Oversight Officer and Chief Compliance Officer for Commonfund Group, an investment management firm for educational institutions. Mr. Miller also served as Director, Trading Operations and Asset Mix Management with General Motors Investment Management Corp. and as a financial analyst with the U.S. Department of Transportation. Mr. Miller also was a member ofserved on the Public Company Accounting Oversight Board’s Standing Advisory Group, andthe Institutional Investor Advisory Board for Golub Capital, a memberU.S. asset manager with over $7 billion of assets under management, and the Board of Directors of the Dubai International Financial Exchange. Mr. Miller’s expertise in finance, investments, risk management, compliance, international business, audit and accounting provides the Board with valuable guidance in assessing and managing risks and in fulfilling the Board’s financial oversight role.
  
Director since
2005


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(LARRY K. SWITZER)
 LARRY K. SWITZER
SAMUEL VALENTI III
Age 67
Larry K. Switzer retired68
Mr. Valenti currently serves as Chairman and Chief Executive Officer of DANKA PLC, London, England,Valenti Capital LLC and World Capital Partners, investment firms located in Bloomfield Hills, Michigan. Since 2002, Mr. Valenti has served as Chairman of the Board of TriMas Corporation, a global independent distributormanufacturer of office equipment, in 2000. From 1994 to 1998,highly engineered precision products for industry. Until 2008, Mr. Switzer was Senior ExecutiveValenti had a 40-year career with Masco Corporation, a Fortune 500 manufacturer of home building and home improvement products, serving as Vice President - Investments from 1974 to 1998. From 1988 to 2008, Mr. Valenti was President and Chief Financial Officer of Fruita member of the Loom, Inc. Previously, he served as Executive Vice PresidentBoard of Directors of Masco Capital Corporation. Mr. Valenti is a member of the Business Leaders for Michigan and Chief Financial Officer for Alco Standard Corporation and, from 1989 to 1992, Senior Vice President and Chief Financial Officer for S.C. Johnson & Son, Inc. Mr. Switzer has also held senior executive positions at Bendix Corp., White Motor Corp. and Gencorp. As a former chief financial officer, Mr. Switzer serves as Chairman of the Renaissance Venture Capital Fund. AAM's Board selected Mr. Valenti as a valued resource todirector in consideration of his demonstrated leadership skills, breadth of management experience in diversified manufacturing businesses, and his subject matter expertise in the Board inareas of finance, accountingeconomics and tax matters and provides significant expertise and insight in addressing the Company’s capital structure, liquidity needs and strategic business development.asset management.
 Director since 20052013


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Returning Directors6

RETURNING DIRECTORS
Class I — Directors to hold office until the 20122015 Annual Meeting of Stockholders
 
 
(DAVID C. DAUCH)
DAVID C. DAUCH
Age 46
49
David C. Dauch is President & Chief OperatingExecutive Officer of AAM, a position he has held since September 2012. Mr. Dauch was appointed Chairman of the Board on August 16, 2013. Since June 2008. Previously,2008, he served as AAM's President & Chief Operating Officer and previously served as Executive Vice President & COO. Mr. D.C. Dauch joined AAM in July 1995 and has served in positions of increasing responsibility.Chief Operating Officer. Prior to joining AAM in 1995, Mr. D.C. Dauch served inheld several positions at Collins & Aikman Products Company, where he received the President’s Award for leadership and innovation. Mr. D.C. Dauch also served on the Collins & Aikman Board of Directors from 2002 to 2007. Presently, he is a Board memberserves on the boards of Business Leaders for Michigan, the Detroit Regional Chamber, the Great Lakes Council Boy Scouts of America, the Boys & Girls Club of Southeast Michigan and the Original Equipment Suppliers Association. Mr. Dauch also serves on the Miami University Business Advisory Council and the Board of Directors of the Boys & Girls Club of Southeast Michigan.Council. Mr. D.C. Dauch’s day to dayday-to-day leadership as President & COOChief Executive Officer provides him with intimate knowledge of and responsibility for developing and implementing the Company’s operating and strategic objectives. Mr. D.C. Dauch was instrumental in leading AAM through the successful completion of its comprehensive multi-year restructuring plan and returning AAM to profitability in 2009 and fiscal year 2010. Mr. D.C. Dauch’s leadership of AAM’s global business and operations provides the Board with strategic vision and insight regarding AAM’s strategic plans for the future.
 
Director since
2009
     
(FOREST J. FARMER)
 
FOREST J. FARMER
Age 70
Forest J.73
Mr. Farmer has served as Chairman of the Board, Chief Executive Officer & President of The Farmer Group, a holding company for fourthree technology and manufacturing corporations,companies, since 1998. Mr. Farmer is the President of Trillium Teamologies, an IT solutions provider located in Royal Oak, Michigan. Mr. Farmer serves on the BoardsBoard of Directors of Saturn Electronics & Engineering, Inc., a global supplier of electronic components, engineering and other services to the automotive, appliance and communications industries. From 1997 to 2011, Mr. Farmer was a member of the Board of Directors of The Lubrizol Corporation, and Saturn Electronics Corporation.serving on the Compensation Committee. In 1994, he retired from Chrysler Corporation after 26 years of service, which included six years as President of its Acustar automotive parts subsidiary. Through his senior management-level experience, and his service on the Board and Compensation Committee of another public company, Mr. Farmer brings strong leadership skills, extensive U.S. automotive and manufacturing experience and public company experiencevaluable manufacturing expertise to our Board.
  
Director since
1999


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(RICHARD C. LAPPIN)
 
RICHARD C. LAPPIN
Age 66
Richard C.69
Mr. Lappin is Executive Chairman of VOKAL Interactive, a maker of mobile applications for business. From 2007 to 2010, he served aswas Chairman of the Board & Chief Executive Officer of Clear Sky Power, an alternative energy company. Mr. Lappin retired in 2004 as Chairman of the Board of Haynes International, Inc. Previously, Mr. Lappin served as Senior Managing Director of The Blackstone Group L.P., where he was a member of the Private Equity Group from 1998 to 2002. He also helped monitor the operations of Blackstone Capital Partners portfolio companies and evaluated business strategy options. From 1989 to 1998, Mr. Lappin served aswas President of Farley Industries, which included West Point-Pepperell, Inc., Acme Boot Company, Inc., Tool and Engineering, Inc., Magnus Metals, Inc. and Fruit of the Loom, Inc. He also served as President & Chief Executive Officer of Doehler-Jarvis and Southern Fastening Systems, and he has held senior executive positions with Champion Spark Plug Company and RTE Corporation. Mr. Lappin’s experience as a CEO and his financial expertise providesprovide the Board with an important perspective in the areas of business strategy and organizational development, as well as the Company’ssound investment criteria, capital structure and liquidity needs.management.
  
Director since
1999
     
(THOMAS K. WALKER)
 
THOMAS K. WALKER
Age 70
Thomas K.73
Mr. Walker is Chairman of the Board & Chief Executive Officer of Lackawanna Acquisition Corporation and is the former President of Amcast Automotive, where from 1995 to 1999 he directed all activities for the $300 million automotive group. Previously, he held senior executive positions with ITT Automotive and Allied-Signal Automotive Catalyst Co. He also served in various manufacturing and engineering leadership positions with Volkswagen of America and with General Motors Corporation, where he began his 40-year51-year career in the automotive industry. Mr. Walker serves on the National Advisory Board for Michigan Technological University. Mr. Walker’s business acumen and extensive leadership experience in the automotive industry enables him to provide our Board with expertise related to engineering, manufacturing operations and strategic business development. Mr. Walker’s service on all Board committees makes him an effective lead independent director for the Board.
  
Director since
1999


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Class II — DirectorDirectors to hold office until the 20132016 Annual Meeting of Stockholders
 
(SALVATORE J. BONANNO)SALVATORE J. BONANNO, SR.
Age 70
Salvatore J. Bonanno, Sr. served as Chairman and Chief Executive Officer of Bonanno Enterprises L.L.C. from 2000 until 2007. The company provided discretionary capital, interim or transition management, and executive consulting services for industrial operations. While serving as President and Chief Executive Officer of Xymox Technologies, Inc. from 2003 to 2008, Mr. Bonanno led the company’s successful restructuring efforts. Mr. Bonanno served as the Chairman and Chief Executive Officer of Grove Worldwide L.L.C., the President and Chief Operating Officer of Foamex International, and held many senior executive positions in his 30 year tenure with Chrysler Corporation. Mr. Bonanno currently serves on the Board of Directors of Xymox Technologies, Inc. and Waukesha Tool & Stamping L.L.C. and has served on the boards of numerous manufacturing and engineering companies. Mr. Bonanno’s leadership experience in international automotive business and expertise in engineering and automotive technology is aligned with AAM’s strategic objectives and is important to the Board’s oversight of these areas.		Director since 2009
     
(ELIZABETH A. CHAPPELL)
 
ELIZABETH A. (BETH) CHAPPELL
Age 53
Elizabeth A. (Beth)56
Ms. Chappell has served as President and Chief Executive Officer of the Detroit Economic Club since 2002. Previously, she served as Executive Vice President, Corporate Communications & Investor Relations for Compuware Corporation. From 1995 to 2000, Ms. ChappellMs.Chappell was President and Chief Executive Officer of a consulting firm she founded, The Chappell Group, Inc. For 16 years, Ms. Chappell held executive positions at AT&T. From 1999 to 2009, Ms. Chappell served on the Board of Directors of the Handleman Company. She also serves on a number of civic boards, including Brother Rice High School,the Michigan State University Capital Campaign, Citizens Research Council, Detroit Regional Chamber, Airport Authority-Citizen’s Review Council,the United Way Board and Tocqueville Committee, and Michigan Economic Development Corporation.the Charter One Regional Advisory Board (Midwest). Ms. Chappell is a former board member of the Karmanos Cancer Institute, Michigan Economic Growth Authority and Hospice of Michigan. In 2009, Ms. Chappell was instrumental in convening The National Summit in Detroit, Michigan, a cross sector gathering of business, government, labor and academic leaders to develop and promote America’s competitiveness in a global economy. Ms. Chappell’s demonstrated leadership skills, entrepreneurial business experience and service on various Boards of Directorsboards enhance her contributions to the Board on mattersin the areas of significance to AAM’sinvestor relations, marketing and communications, and strategic business development.
 
Director since
2004


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STEVEN B. HANTLER
Age 61
Mr. Hantler is Director of Policy Initiatives for The Marcus Family Office. In this capacity, he advises Home Depot co-founder, Bernie Marcus, in the areas of government affairs, legal and regulatory policy, national security, free enterprise and higher education. Previously, he had a 27-year career with Chrysler Corporation, where he held positions as Assistant General Counsel, Manufacturing Group Counsel, and Senior Trial Attorney. Prior to joining Chrysler, Mr. Hantler was engaged in private law practice. Mr. Hantler is a Senior Fellow at the Pacific Research Institute and a member of the Legal Policy Advisory Board of the Washington Legal Foundation. Previously, Mr. Hantler served as Chair of the State Government Leadership Foundation, which educates state leaders on public policy issues, Chair of the Advisory Board of the National Judicial College, and on the Board of Directors of the New York University Law School Center for Labor and Employment. Mr. Hantler’s leadership experience and expertise in law, public relations and government affairs provide the Board with knowledge and insight in these areas of importance to the Board’s oversight of AAM’s global business growth and strategic initiatives.
 
Director since
2011

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Table of Contents

 
(DR. HENRY T. YANG)DR. HENRY T. YANG
JOHN F. SMITH
Age 70
Dr. Henry T. Yang63
Mr. Smith is principal of Eagle Advisors LLC, a consulting firm in Bloomfield Hills, Michigan that specializes in strategy development and performance improvement. From 2000 to 2010, Mr. Smith held positions of increasing responsibility with General Motors Corporation in sales and marketing, product planning and corporate strategy, most recently as Group Vice President, Corporate Planning and Alliances. During his 42-year career in the Chancellorautomotive industry, Mr. Smith also served as General Manager of Cadillac Motor Car, President of Allison Transmission, and Vice President, Planning at General Motors International Operations in Zurich, Switzerland. Mr. Smith currently serves on the Universityboards of California, Santa Barbara, where heCEVA Holdings LLC, Plasan Carbon Composites and Enginetics, LLC. Mr. Smith also serves as professoran advisor to VNG.CO, a developer of mechanical engineering. Formerly the Deancompressed natural gas refueling stations, and Palogix International, a provider of Engineeringin-bound logistics and Neil Armstrong Distinguished Professor in Aerospace Engineering at Purdue University, Dr. Yang is a nationally recognized expert in automotive and aerospace engineering. He holds a Ph.D. degree in engineering from Cornell University as well as five honorary doctorates andcontainer management solutions. Mr. Smith is a member of the National AcademyAdvisory Board of Engineering. He is ChairmanBoy Scouts of the Executive Committee of the American Association of Universities, Chairman of the Association of Pacific Rim Universities, Chairman ofAmerica and the Board of Thirty Meter Telescope, and a directorTrustees of St. John's Providence Health System in Michigan. He served on the Board of Kavli Foundation. Dr. Yang’s distinguished academic careerDirectors of Smith Electric Vehicles Corp. from June 2012 to December 2013. Mr. Smith's extensive experience in manufacturing, finance, business development, international operations, sales and extensive knowledgemarketing, product development and leadership in advanced technology provides the Boardmergers and acquisitions is aligned with a valuable perspective relative to AAM’sAAM's key business objectives, including continued global business growth. Dr. Yang’s in-depth knowledgegrowth and expertise in engineering, science and technology and his leadership as Chairman of the Technology Committee provides the Board with a critical resource related to the Company’s advancements in technology.diversification.

 Director since 20042011

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Table of Contents

CORPORATE GOVERNANCE
Corporate Governance Guidelines
The Board has adopted Corporate Governance Guidelines that meet or exceed the requirements of the NYSE listing standards. AAM’s Corporate Governance Guidelines are available on our website athttp://www.aam.com/investors/corporategovernance.investor.aam.com.
Director Independence
AAM’s Corporate Governance Guidelines provide that at least a majority of the members of the Board and each member of the Audit Committee, Compensation Committee and Nominating/Corporate Governance Committee meet the independence criteria of the NYSE listing standards. In addition,Currently, nine of our ten directors are independent from the Company. Only David C. Dauch, who serves as AAM's President & Chief Executive Officer, is not independent due to his employment with AAM.
The Board has established Director Independence Guidelines to assist in determining the independence of our directors for purposes of the NYSE independence standards. The Director Independence Guidelines are included in AAM’s Corporate Governance Guidelines, which are available on our website athttp://www.aam.com/investors/corporategovernance.
investor.aam.com. The Board annually reviews and determines, on the recommendation of the Nominating/Corporate Governance Committee, whether any director has a material relationship with the Company that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. When assessing materiality, the Board considers relevant facts and circumstances of which it is aware. No director qualifies as independent unless the Board determines that the director has no direct or indirect material relationship with the Company.
TheAs a result of this evaluation, the Board has affirmatively determined that the following ninenominees and returning directors have no material relationships with AAM and are independent: Salvatore J. Bonanno, Sr., Elizabeth A. (Beth) Chappell, Forest J. Farmer, Steven B. Hantler, Richard C. Lappin, James A. McCaslin, William P. Miller II, Larry K. Switzer,John F. Smith, Samuel Valenti III and Thomas K. Walker and Dr. Henry T. Yang. Richard E. Dauch,Co-Founder, Chairman of the Board & CEO, and David C. Dauch, President & COO, are not independent due to their employment with AAM. Mr. D.C. Dauch is the son of Mr. R.E. Dauch.
Walker.
In making these director independence determinations, the Board considered certain business relationships that were found to be immaterial under applicable independence standards. Mr. Bonanno serves onMs. Chappell’s position as President & CEO of the BoardDetroit Economic Club, in light of and has a minority interest in a supplier that receives payments for sales made to AAM. Ms. Chappell is an officer of a non-profit organization that receivesthe sponsorship fees from AAM. PriorAAM pays to his election to AAM’s Board, Mr. McCaslin was an officer of Harley-Davidson, Inc., an AAM customer. He retired from Harley-Davidson in April 2010.
Each of these relationships arose in the ordinary course of business and existed before Mr. Bonanno, Ms. Chappell and Mr. McCaslin joined the Board. In addition, thethis non-profit organization. The annual amountsfees paid or received by AAM in connection with these relationships wereto the Detroit Economic Club are significantly below the threshold amount established under the NYSE independence standards and our Director Independence Guidelines. The applicable thresholdGuidelines, which is the greater of two percent of the outside entity’s annual gross revenues of the outside entity or $1 million. Accordingly,
Board Leadership Structure
The Board's current leadership structure includes a combined Chairman and CEO role with a lead independent director. On August 16, 2013, the Board determined that each relationship is immaterial and does not impair the independence of these directors.
Board Leadership Structure
The Board believes that as AAM’s co-founder, Richard E.appointed President & CEO David C. Dauch is uniquely qualified to serve as Chairman of the Board, while holdingfollowing the positionpassing of CEO. Mr. R.E.our Co-Founder and former Executive Chairman, Richard E. Dauch, has been CEO since he co-founded AAMon August 2, 2013.

Our Board believes that it is in 1994 and has served as Chairman since 1997. The Board benefits from this structure through Mr. R.E. Dauch’s contributions as a strong leader with extensive knowledge of the global automotive industry and a unique commitment to the successbest interest of the Company to combine the roles of Chairman and CEO at this time because it provides the Company with unified leadership and direction. The Board believes the Company's CEO is best situated to serve as Chairman because he co-founded.is the director most familiar with the Company's business and industry, and is in a position to effectively identify strategic priorities and lead the discussion and execution of strategy. While the Company's independent directors bring experience, oversight and expertise from various perspectives outside the Company, the CEO's in-depth knowledge of our business enables him to identify areas of focus for the Board and effectively recommend appropriate agendas. The Board believes that the combined role of Chairman and CEO facilitates information flow between management and the Board, provides clear accountability and promotes efficient decision making, all of which are essential to effective governance.
ThisOur Board leadership structure is further enhanced by independent director oversight.an Independent Lead Director. Effective April 30, 2014, Mr. McCaslin will hold this position, replacing Mr. Walker. The Board is comprised of nine independent directors, including a lead director. Independent directors and management have different perspectives and roles in strategy development. One of the keyLead Director's responsibilities


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of the Board is to develop strategic direction while holding management accountable for execution of its business plans. Our leadership structure provides the appropriate balance necessary to accomplish this objective and is the most effective leadership structure for the Board at this time. are to:
The Board recognizes that no single leadership model is appropriate for a Board at all times. Accordingly, the Board may consider a different leadership structure, including a separation of the roles of CEO and Chairman, as appropriate, as the Company’s business and leadership continue to evolve.
Lead Director and Executive Sessions
Thomas K. Walker was selected by the Board to serve as the lead director for all meetings of non-management directors held in executive session. Mr. Walker is an independent director and serves on every Board committee. The lead director’s responsibilities include presidingpreside at executive sessions of the Board’s non-managementindependent directors, and acting as a liaison between the Chairman and the independent directors.
Non-management directors, all of whomwhich are independent, meet in executive session without AAM management presentheld at the end of each scheduled Board meeting.meeting;
call special executive sessions of independent directors, as appropriate;
serve on all standing committees required by NYSE listing standards and the Executive Committee;
serve as chair of the Nominating/Corporate Governance Committee;
serve as liaison between the independent directors and the Chairman, President & CEO;
inform the Chairman, President & CEO of issues arising from executive sessions of the independent directors; and
with Board approval, retain outside advisors and/or consultants who report directly to the full Board on matters of interest to the full Board.

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Board Oversight of Risk
Management
The Board, as a wholedirectly and also atthrough its committees, is responsible for overseeing the committee level oversees management of potential risks affecting the Company’s risks. TheCompany. In connection with our overall risk management process, the Board regularly reviews information provided by senior management regardingabout the Company’s strategic, operational, financial and compliance risks. In addition, the chairs of the Audit, Compensation, Nominating/Corporate Governance, Strategy and Technology Committees regularly report to the Board on the activities of their respective Committees, including matters related to risk.
The Audit Committee oversees management of financial risks and receives an annual reportregular reports from management on the Company’s overall risk management structure and process.processes. The Nominating/Corporate Governance Committee manages risks associated with corporate governance and management succession planning. The Compensation Committee oversees risks related to AAM’s compensation programs. The Technology Committee oversees risks related to AAM’s product, process and systems technology. The Strategy Committee oversees risks related to the development and implementation of the Company’s strategic plan. Additional review or reporting of specific risks is conducted as necessaryappropriate or as requested by the Board or a Committee.committee.
Stockholder Communication with the Board
Stockholders or other interested parties may communicate with the Board through the Secretary of AAM by mail at One Dauch Drive, Detroit, Michigan48211-1198 or bye-mail at AAMBoardofDirectors@aam.com.
The Board has instructed the Secretary to review all such communications and to exercise his discretion not to forward correspondence to the Board that is inappropriate, such as advertising and business solicitations, routine business matters and personal grievances. However, any director may at any time request the Secretary to forward any communication received by the Secretary on behalf of the Board.
Code of Business Conduct
AAM has adopted a Code of Business Conduct that is designed to assist all AAM associates, executive officers and members of the Board in conducting AAM’s business with the highest standards of ethics and integrity. AAM has also adopted a Code of Ethics forapplicable to our CEO, COO, CAO, CFO and other Senior Financial Officers (Code of Ethics). The Board annually reviews the Code of Business Conduct and makes updates the Code as appropriate. AAM’s Code of Business Conduct and Code of Ethics are available on our website athttp://www.aam.com/investors/corporategovernance.investor.aam.com.A written copy also may be obtained by any stockholder without charge upon request to the AAM


14

Investor Relations Department by mail at One Dauch Drive, Detroit, Michigan48211-1198 or by email at investorrelations@aam.com.
Related Person Transactions Policy
The Board has adopted a written policy and procedure for the review, approval and ratification of transactions involving AAM and any “related persons”person” as defined in the policy. This policy supplements AAM’s other conflict of interest policies as set forth in AAM’sour Code of Business Conduct. The Board has delegated to the Audit Committee the responsibilityis responsible for reviewing, approving and ratifying all related person transactions in accordance with the policy.
policy and the Audit Committee's charter.
For purposes of this policy, a related person transaction includes any financial transaction, arrangement or relationship or series of similar transactions, arrangements or relationships in which:
• which AAM is or is expected to be a participant;
• the amount involved exceeds $100,000; and
• a related person has or will have a direct or indirect material interest.
However, a transaction between AAMparticipant, the amount involved exceeds $120,000, and a related person is not subject to this policy if the transaction:
• is available to all employees generally;
• involves less than $5,000 when aggregated with all similar transactions; or
• involves compensation of an executive officer that is approved by the Compensation Committee.
has or will have a material interest. A related person includes directors and executive officers and their immediate family members, stockholders owning more than five percent of the Company’sCompany's outstanding common stock as of the last completed fiscal year, and any entity owned or controlled by any one of these persons.
AThe Audit Committee makes a determination whether a related person's interest in a transaction is material based on a review of the facts and circumstances. In deciding whether to approve or ratify a related person transaction, meeting the above criteriaAudit Committee will be permitted only iftake into account, among other factors it deems appropriate, (1) whether the transaction is approvedon terms no less favorable than terms generally available to an unaffiliated third-party under the same or similar circumstances and (2) the significance of the related person's interest in the transaction.
A member of the Audit Committee may not participate in the review or vote concerning any related person transaction in which the Audit Committee member or his or her immediate family member is involved.
The policy also provides that certain types of transactions are deemed to be pre-approved by the Audit Committee, and is on terms comparable to those available to unrelated third parties. Any related person transaction involving a member of the Audit Committee must be presented to disinterested members of the full Board for review.do not require separate approval or ratification.
In considering a transaction, the Audit Committeeand/or the Board may consider the following factors, as applicable:
• the Company’s business reasons for entering into the transaction;
• the alternatives to entering into a related person transaction;
• the potential for the transaction to lead to an actual or apparent conflict of interest and any safeguards imposed to prevent such actual or apparent conflict;
• the extent of the related person’s interest in the transaction; and
• whether the transaction is in the best interests of AAM.
Every director and executive officer is required to report any existing or contemplated related person transaction to AAM’s Executive Director, Administration & Legal, who also serves as the Company’s Secretary. In addition, AAM’s directors and executive officers complete annual questionnaires designed to elicit information about potential related person transactions. The Company did not engage in any reportable related person transactions duringDuring fiscal year 2010. As2013 and as of the date of this proxy statement, nothe Company has not engaged in any reportable related person transaction has been brought to the attentiontransactions.

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Table of the Secretary, the AuditContents

Board and Committee or the Board.
Board Committee Composition
Meetings
Directors are expected to attend all Board meetings, meetings of the committees on which they serve and stockholder meetings. During 2010, all directors attended 100 percent of the meetings of the Board and the committees on which they served and the annual meeting of stockholders.


15

The Board held four regularly scheduled meetings and two special meetings during 2010. 2013. All nominees and continuing directors attended 100% of the Board and applicable committee meetings during 2013, except one continuing director missed one committee meeting. The 2013 annual meeting of stockholders was attended by eight of the eleven directors on the Board at that time.
The following table shows committee membership as of March 20, 2014, the membershipdate of the Board’s committees during 2010this proxy statement, and the number of committee meetings held during 2010.2013.
COMMITTEE MEMBERSHIP IN 2010AS OF MARCH 20, 2014
                
         Nominating/
      
         Corporate
      
   Audit
  Compensation
  Governance
  Executive
  Technology
Name of Director  Committee  Committee  Committee  Committee  Committee
Richard E. Dauch           Chairman   
                
Salvatore J. Bonanno, Sr.               X
                
Elizabeth A. Chappell     X         
                
David C. Dauch(1)
               
                
Forest J. Farmer     Chairman  X  X   
                
Richard C. Lappin        X     X
                
James A. McCaslin(2)
               
                
William P. Miller II  Chairman           X
                
Larry K. Switzer  X  X         
                
Thomas K. Walker  X  X  Chairman  X  X
                
Dr. Henry T. Yang              Chairman
                
No. of Meetings in 2010
  4  6  4  1  3
                
Name of Director
Audit
Committee
Compensation
Committee
Nominating/
Corporate
Governance
Committee
Executive
Committee
Technology
Committee
Strategy
Committee
David C. Dauch   Chair X
Elizabeth A. Chappell X    
Forest J. Farmer ChairXX  
Steven B. Hantler X    
Richard C. Lappin  X XChair
James A. McCaslin    XX
William P. Miller IIChair   X 
John F. SmithX   ChairX
Larry K. SwitzerXX   X
Samuel Valenti IIIX    X
Thomas K. WalkerXXChairX  
No. of Meetings in 2013455234


The Board approved changes in committee membership effective April 30, 2014 as shown in the table below.

COMMITTEE MEMBERSHIP AS OF APRIL 30, 2014

(1)Name of Director
Audit
Committee
Mr. D.
Compensation
Committee
Nominating/
Corporate
Governance
Committee
Executive
Committee
Technology
Committee
Strategy
Committee
David C. Dauch was appointed to the Executive Committee effective February 8, 2011.ChairX
Elizabeth A. ChappellChairX 
(2)Forest J. FarmerMr.XX
Steven B. HantlerX
Richard C. LappinXXChair
James A. McCaslin joined the Board and was appointed to the Technology Committee effective February 8, 2011.XX
Chair
X
XX
William P. Miller IIChairXX
John F. SmithXChairX
Larry K. Switzer
Samuel Valenti IIIXX
Thomas K. WalkerXX

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Table of Contents

Audit Committee
The Audit Committee provides assistance toassists the Board in fulfilling its oversight responsibility with respect to:
the quality and integrity of our financial statements;
our compliance with legal and regulatory requirements;
our independent auditors’ qualifications and independence; and
the performance of our internal audit function and independent auditors.
The Audit Committee operates under aCommittee's responsibilities are more fully described in its written charter, thatwhich is available on AAM’s website athttp://www.aam.com/investors/corporategovernance.investor.aam.com.
The Board has determined that allAll members of the Audit Committee members serving during 2010 are independent and financially literate under applicable NYSE listing standards.standards and independent under our Director Independence Guidelines. The Board has also determined that Mr. Miller and Mr. Switzer also qualify as auditSmith are "audit committee financial expertsexperts" as defined by SEC rules.
Compensation Committee
The Compensation Committee is responsible forCommittee's responsibilities include the following:
• Establishing and reviewing AAM’s compensation philosophy and programs with respect to ourestablishing and reviewing AAM’s compensation philosophy and programs for executive officers;
• Approving executive officer compensation with a view to support AAM’s business strategies and objectives;


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• Approving corporate goals and objectives for executive officer compensation and evaluating executive officer performance in light of these criteria, in consultation with the CEO (in the case of our other executive officers) and with input from other independent directors (in the case of the CEO);
• Recommending to the Board the approval, amendment and termination of incentive compensation and equity-based plans and certain other compensation matters;
• Overseeing the preparation of the Compensation Discussion and Analysis for inclusion in our annual proxy statement; and
• Producing the Compensation Committee Report for inclusion in our annual proxy statement.
approving executive officer compensation with a view to support AAM’s business strategies and objectives;
approving corporate goals and objectives for executive officer compensation and evaluating executive officer performance in light of these criteria;
recommending incentive compensation and equity-based plans to the Board;
overseeing management’s risk assessment of the Company’s policies and practices regarding its compensation programs for executive officers and other associates;
recommending non-employee director compensation and benefits to the Board;
overseeing the preparation of the Compensation Discussion and Analysis for inclusion in our annual proxy statement; and
producing the Compensation Committee Report for inclusion in our annual proxy statement.
The Compensation Committee operates under aCommittee's responsibilities are more fully described in its written charter, thatwhich is available on our website athttp://www.aam.com/investorsinvestor.aam.com. /corporategovernance.In accordance with our Corporate Governance Guidelines, the
All Compensation Committee is also responsible for recommending non-employee directormembers are independent under NYSE listing standards, including the standards applicable specifically to compensation committee members, and benefits for approval byour Director Independence Guidelines. All Compensation Committee members are “outside directors” within the Board.meaning of Section 162(m) of the Internal Revenue Code and are "non-employee" directors within the meaning of SEC Rule 16b-3.
Risk Assessment of Compensation Policies and Practices
In 2011,2013, AAM management conducted a risk assessment of the Company’s compensation policies and practices relating to AAM’s compensation programs for executive officers and other associates on a global basis.associates. The process used by management to conduct the risk assessment was approved by the Compensation Committee. The risk assessment considered, among other things, AAM’s annual and long-term incentive programs and pay mix, performance measures used to calculate payouts, and pay philosophy and governance. Based on this risk assessment and other factors, management concluded that the Company’s compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on the Company. The Compensation Committee agreed with management’s conclusion.
Role of Management in Compensation Decisions
The Compensation Committee is responsible for making compensation decisions relative to executive officers. However, in making its decisions, the Compensation Committee seeks and considers input from senior management. Since management has direct involvement with and an in-depth knowledge of the business strategy, goals and performance of the Company, certain executive officers play an important role in the executive compensation decision-making process. Senior management participates in the Compensation Committee’s activities in the following specific respects:
The President & CEO provides the Compensation Committee with his evaluation of the performance of the Company’s executive officers, including the other named executive officers (NEOs). The President & CEO and Vice President, Human Resources make compensation recommendations for executive officers, including base salary levels and the amount and mix of incentive awards.
• The CEO reports to the Committee with respect to his evaluation of the performance of the Company’s executive officers, including the other named executive officers (NEOs). Together with the President & COO and the Human Resources department head, the CEO makes compensation recommendations for these individuals, including base salary levels and the amount and mix of incentive awards.
• The CEO, the President & COO, the CFO and the Human Resources department head develop recommended performance objectives and targets for AAM’s incentive compensation programs. The Human Resources Department also assists the Chairman of the Committee in developing meeting agendas and manages the preparation and distribution of pre-meeting informational materials on the matters to be considered.
• The CEO, the President & COO, the CFO and the Human Resources department head regularly attend Committee meetings. Management generally does not attend the executive session of the Committee. However, there are times when the Committee requests that certain members of management, including the CEO, the President & COO and the Human Resources department head, be present for all or a portion of an executive session.
• The CEO, President & COO, the CFO and the Human Resources department head recommend long-term incentive grants for executive officers, other than the CEO, for approval by the Committee.

The President & CEO, the Executive Vice President & CFO and the Vice President, Human Resources develop and recommend performance objectives and targets for AAM’s incentive compensation programs.

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The Vice President, Human Resources assists the Chair of the Compensation Committee in developing meeting agendas and manages the preparation and distribution of pre-meeting informational materials on the matters to be considered.
The President & CEO, Executive Vice President & CFO and the Vice President, Human Resources regularly attend Compensation Committee meetings. Management generally does not attend the executive session of the Compensation Committee. On occasion, the Compensation Committee may request certain members of management to attend all or a portion of an executive session.
Role of Compensation Consultant
The Compensation Committee has retained Meridian Compensation Partners, LLC (Meridian) as its independent compensation consultant. Meridian provides independent advice and ongoing recommendations on compensation matters related to the CEO, otherour executive officers and non-employee directors, including:
• Provide independent input for the Committee’s decision-making with respect to executive compensation;
• Provide independent input related to non-employee director compensation;
• Prepare competitive market data, including current compensation trends, as a reference for the Committee to consider in evaluating compensation for executive officers.
directors. Meridian also provides the Compensation Committee with competitive market data, peer group analyses and updates on compensation trends and regulatory developments.
In the course of fulfilling its responsibilities, Meridian may communicate directly with the ChairmanChair of the Compensation Committee. Meridian also meets with management to gather information, prepare materials, and review proposals to be made to the Compensation Committee. Meridian provides no other services to the Company other than advice with respect to director and executive officer compensation and has no other direct or indirect business relationships with the Company of any of its subsidiaries or affiliates.
During 2010,The Compensation Committee determined that Meridian is independent of management and that the services provided by Meridian to the Compensation Committee engaged Meridiando not give rise to conduct a market studyany conflicts of non-employee director compensationinterest. In written correspondence to determine the competitiveness of AAM’s total compensation program for non-employee directors. Meridian was instructed to compare AAM’s non-employee director pay levels and design practices against that of the peer group established by the Compensation Committee, for evaluating the competitiveness of AAM’s executive compensation programs. This peer group is shown in theMarket Analysis and BenchmarkingsectionMeridian provided detailed information addressing each of the CD&A. Based on the results of Meridian’s analysis,six independence factors set forth in NYSE listing standards. In this correspondence and in communications with the Compensation Committee, Meridian affirmed its independence and that of its partners, consultants and employees who service the Board approved changes to non-employee directorCompensation Committee on executive compensation for 2011 as described in2011 Non-employee Director Compensationbelow.matters.
Nominating/Corporate Governance Committee
The Nominating/Corporate Governance Committee’s primary responsibilities are to:
• Identifyidentify qualified individuals to serve on the Board and committees;
• Review our Corporate Governance Guidelines and Code of Business Conduct and recommend changes as appropriate; and
• Oversee and approve the process for succession planning for the CEO and other executive officers.
review our Corporate Governance Guidelines and Code of Business Conduct and recommend changes as appropriate; and
oversee and approve the process for succession planning for the CEO and other executive officers.
The Nominating/Corporate Governance Committee operates under aCommittee's responsibilities are more fully described in its written charter, thatwhich is available on our website athttp://www.aam.com/investors/corporategovernance.investor.aam.com. All members of the Nominating/Corporate Governance Committee are independent under NYSE listing standards and our Director Independence Guidelines.
Selection Process for Director Nominees. In consultation with the Chairman, of the Board,President & CEO, the Nominating/Corporate Governance Committee identifies, evaluates and recommends potential candidates for membership on the Board. The Nominating/Corporate Governance Committee conducts necessary and appropriate inquiries into the backgrounds and qualifications of the candidates and considers questions of independence and possible conflicts of interest. Based on the Nominating/Corporate Governance Committee’s evaluation, candidates who meet the Board’s criteria may receive further consideration, which may include interviews with the Nominating/Corporate Governance Committee and other directors. The Nominating/Corporate Governance Committee then submits its recommendations for nominees to the Board for approval. Pursuant to AAM’s bylaws, the Board may establish the size of the Board by resolution, provided there is a minimum of three members.
Before the Board nominates an incumbent director for re-election by our stockholders, the incumbent director is evaluated by the Nominating/Corporate Governance Committeeand/or the Board. This evaluation is based on, among other things, theeach incumbent director’s meeting attendance record and contributions to the activities of the Board.
The Nominating/Corporate Governance Committee considers recommendations of potential candidates from current directorsmembers of our Board, our Chairman, President & CEO and our stockholders. In 2013, Mr. R.E.D.C. Dauch referred current


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director nominee James A. McCaslin,Samuel Valenti III for consideration by the Nominating/Corporate Governance Committee and the Board based upon Mr. McCaslin’s extensive operational experience in multiple manufacturing industries infor election by the original equipment and aftermarket product markets.Board as a Class III director. After consideration of Mr. McCaslin’sValenti's qualifications and based on the recommendation ofindependence, the Nominating/Corporate Governance Committee recommended that the Board addedelect Mr. McCaslin toValenti as a Class III director with a term expiring on the date of the 2014 annual meeting of stockholders. Upon review, the Board elected Mr. Valenti, effective February 8, 2011October 31, 2013, to fillserve as a new Class III position.director until the 2014 annual meeting.

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Table of Contents

Director Qualifications. AAM’s Corporate Governance Guidelines provide the qualifications for Board membership. Candidates for director nominees to the AAM Board are reviewed in consideration of the current composition of the Board, the operating requirements of the Company and the interests of stockholders. Although specific qualifications may vary from time to time, desired qualities and characteristics include:
high ethical character and shared values with AAM;
• High ethical character and shared values with AAM;
• Loyalty to AAM and concern for its success and welfare;
• High-level leadership experience and achievement at a policy-making level in business or in educational or professional activities;
• Knowledge of issues affecting AAM;
• The ability to contribute special competencies to Board activities, such as financial, technical, international business or other expertise, or industry knowledge;
• Willingness to apply sound, independent business judgment;
• Awareness of a director’s vital role in AAM’s good corporate citizenship and corporate image; and
• Sufficient time and availability to effectively carry out a director’s
loyalty to AAM and concern for its success and welfare;
high-level leadership experience and achievement at a policy-making level in business, educational or professional activities;
breadth of knowledge of issues affecting AAM;
the ability to contribute special competencies to Board activities, such as financial, technical, international business or other expertise, or industry knowledge;
willingness to apply sound, independent business judgment;
awareness of a director's vital role in AAM's good corporate citizenship and corporate image; and
sufficient time and availability to effectively carry out a director's duties.
The Board as a whole should reflect the appropriate balance of knowledge, experience, skills, expertise and diversity that, when taken together, will enhance the quality of the Board’s deliberations and decisions. Although the Board has no formal policy regarding diversity, the Board believes that diversity is an essential element of Board effectiveness. In this context, diversity is defined broadly to include differences in background, skills, education, experience, gender, race, national origin and culture.
For director candidates recommended by stockholders, the Nominating/Corporate Governance Committee follows the procedures described below inOther Matters, Stockholder Proposals for 20122015 Annual Meeting. The Nominating/Corporate Governance Committee will evaluate candidates recommended by stockholders using substantially the same criteria as it considersthat are considered in evaluating director candidates recommended by our Board members or Chairman, President & CEO.
Succession Planning. The Nominating/Corporate Governance Committee is responsible for overseeing the Company’s succession planning process for executive officers and other key executive positions at AAM. In performing this role, the Nominating/Corporate Governance Committee monitors and approves management’s succession planning process and actions and, with respect to the CEO, makes recommendations to the full Board for approval. The Board has primary responsibility for CEO succession planning and develops both long-term and contingency plans for CEO succession. The Company’s long-term and ongoing succession planning program is designed to support effective senior leadership development and succession in a manner that positions AAM to achieve its strategic, operating and financial performance goals, and enhance stockholder value.
Technology Committee
The Technology Committee oversees and provides advice to AAM regarding AAM’s product, process and systems technology. The Technology Committee reviews and makes recommendations to the Board and management concerning AAM's strategy relative to technology matters.
Strategy Committee
The Strategy Committee oversees the development and implementation of AAM’s strategic plan and provides advice to the Board and management regarding specific strategic opportunities. The Strategy Committee is responsible for maintaining a cooperative, interactive strategic planning process with management, including the approval of strategic goals and objectives and reviewing and providing advice concerning potential corporate acquisitions, divestitures, joint ventures and strategic alliances.
Executive Committee
The Executive Committee exercises the authority of the Board during the intervals between Board meetings and does not meet on a regular basis. Its members are identified in theCommittee Membership in 2010table.

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Technology Committee
The Technology Committee oversees and provides advice to AAM regarding AAM’s product, process and systems technology. Its members are identified in theCommittee Membership in 2010table.


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COMPENSATION OF EXECUTIVE OFFICERS
Compensation Discussion and Analysis
Executive Summary
In 2010, general economic conditions began to stabilize, credit markets improved and U.S. domestic automotive production levels increased. The U.S. Seasonally Adjusted Annual Rate (SAAR) of sales increased in 2010 forCompensation Committee (Committee) oversees the first time in three years to 11.6 million units as the U.S. domestic automotive industry began to recover from the severe downturn it had suffered. Over the past several years, AAM’s senior management team implemented a restructuring plan that resulted in a cost structure aligned with current and projected levels of customer demand and market requirements. This plan has proven successful, yielding significant, permanent structural cost reductions, which has driven down our operating breakeven level. These actions positioned AAM to significantly improve profitability and free cash flow in 2010.
Company's executive compensation program. Our executive compensation program reflects an externally competitive compensation structure based on a comprehensive market study of executive compensation programs in AAM’sAAM's comparative peer group. In addition to attracting and retaining key executives, the program is designed to drive Company and individual performance while aligning the interests of our executives with those of our stockholders.
Stockholder Outreach
At our 2013 annual meeting, 58% of our stockholders voted in favor of the Company's say on pay proposal. This result was considerably less favorable than the level of support AAM received for its 2012 and 2011 say on pay proposals, which was 95% and 98%, respectively. As a result of this outcome, the Board directed senior management to conduct stockholder outreach to gain an understanding of stockholder concerns about our executive compensation programs. The Board and the Committee believe that direct feedback from our stockholders is valuable in evaluating possible changes to our executive compensation programs in order to further align AAM's compensation programs and practices with the objectives of our stockholders.
Senior management contacted our top 25 institutional stockholders, representing approximately two-thirds of the total shares outstanding, to discuss the outcome of the 2013 vote. Nine of these investors agreed to meet with us. During the fall of 2013, senior management had discussions with these investors, which included eight of AAM's top 15 institutional holders.The dialog with these stockholders was open, positive and constructive. The key areas of concern expressed by these stockholders included the following:
composition of our comparative peer group and the need for clear, descriptive disclosures regarding the criteria used to select companies in our comparative peer group;
•
the importance of setting the target level of total executive compensation at the 50th percentile;
•lack of performance-based equity incentive compensation;
the importance of pay-for-performance alignment of CEO compensation;
the lack of a formal clawback policy; and
compensation of Co-Founder and former Executive Chairman (now deceased).
Throughout the outreach process, management reported the feedback received from our stockholders to the Board and the Committee. In consideration of this feedback and the written comments of proxy advisory firms, the Committee reviewed our compensation program and practices for executive officers, including our named executive officers (NEOs). In conducting this review, the Committee received advice from its independent compensation consultant and input from senior management and the Board. As a result, the Committee made changes to our executive compensation program as described below.
Key Changes to Executive Compensation Program
Approved a new comparative peer group for benchmarking executive compensation. The Committee approved a new comparative peer group, which has greater relevance to AAM in terms of industry, revenues, market capitalization, global complexity and competition. AAM's projected 2014 revenues approximate the median 2014 projected revenues of the new comparative peer group. The size of the comparative peer group was reduced from 38 to 20 companies.
•
Targeted the 50th percentile for total compensation of executive officers. In determining 2014 compensation, the Committee targeted total compensation at approximately the 50th percentile of our new comparative peer group. As a result, the Committee has moved away from setting annual and long-term incentive pay opportunities between the 50th and 75th percentile of our comparative peer group. This total compensation target is considered to be a generally accepted benchmark of external competitiveness that supports AAM's ability to attract and retain key executives.
Introduced a performance share award vehicle as a component of long-term incentive compensation. Stockholders commented that our long-term incentive (LTI) program includesshould include performance-based equity awards. Historically, our LTI program was comprised of 50% cash-based performance awards and 50% restricted stock units (RSUs) with time-based vesting. The Committee redesigned the LTI program to strengthen pay-for-performance alignment of executive compensation. For 2014, the Committee

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introduced performance share awards that account for 66% of the total LTI award value. The payouts earned under these awards will be measured by EBITDA margin and relative TSR performance over a mixthree-year period and paid only to the extent that pre-established performance targets are achieved. The Committee decided that the remaining 34% of base salaries, targetthe LTI equity awards should be in the form of RSUs with three-year cliff vesting in order to promote the retention of key executives. This new LTI design, which is 100% equity-based, further aligns the interests of executive officers with those of our stockholders.
Capped annual incentive opportunitiesperformance metrics. A 2013 report from a proxy advisory firm noted that a performance metric used in determining annual incentive award payouts -- net income as a percentage of sales (NIPS) -- did not have a stated maximum payout. Although the award opportunity for this metric was practically limited by its direct link to actual Company performance, the Committee considered this comment while setting financial targets for 2014 annual incentive award opportunities. Accordingly, the Committee established a stated maximum payout for the NIPS performance metric. As a result, all performance metrics for annual incentive compensation have stated maximum payouts.
Adopted a clawback policy. The Committee adopted a clawback policy applicable to executive officers effective January 1, 2014. Generally, if the Committee determines that an executive officer engaged in fraud or intentional misconduct that resulted in a material restatement of our financial statements, the Committee may seek to recover performance-based incentive compensation to the extent such compensation is based on the financial performance of the Company and if other criteria are met.
Eliminated discretionary bonuses to the former Executive Chairman and other NEOs. Stockholders expressed concern regarding the 2012 discretionary bonus paid to Mr. R.E. Dauch (now deceased). Mr. R.E. Dauch's 2012 bonus was determined under his prior employment agreement, which provided for the use of discretion in assessing performance and determining the annual bonus payout. Beginning in 2013, under his 2012 employment agreement, Mr. R.E. Dauch's annual incentive was calculated based on the Company's achievement of financial targets set by the Committee in advance of the performance period. These performance metrics were approved by our stockholders under the 2012 Omnibus Incentive Plan. No discretionary increases were made to 2013 annual incentive payouts for Mr. R.E. Dauch or any of our other NEOs.
We believe that the above changes to our executive compensation program address the concerns raised by the 2013 advisory vote on executive compensation and by our stockholders. The Company is committed to further engagement with our stockholders regarding executive compensation and related matters. We believe that these discussions are a valuable component of our overall investor relations program. The Committee will continue to consider feedback from our stockholders in determining AAM's executive compensation programs and practices.
2013 Performance
In 2013, our financial performance was highlighted by sales growth that outpaced the industry and profitability that solidly rebounded from our 2012 performance. The performance goals under our executive compensation programs are established to reward achievement of the Company's goals and objectives. The 2013 payouts of annual and cash-based long-term incentives as compared to incentive payouts for executive officers. In 2010,2012 reflect this pay-for-performance alignment. As discussed in more detail below, improvements in the Company's performance for 2013 resulted in higher incentive payouts for certain awards as compared to 2012 payments. For example, our annual incentives were based exclusively on achievement ofachievements related to net operating cash flow goals. Our current long-termand relative TSR resulted in higher incentive programpayouts for 2013 as compared to 2012. This result supports AAM's compensation objectives of rewarding performance and aligning the interests of our executive officers with those of our stockholders.
Leadership Changes - NEOs
On August 2, 2013, Richard E. Dauch, the Company's Co-Founder and Executive Chairman, passed away. Effective August 16, 2013, the Board appointed President & Chief Executive Officer David C. Dauch as Chairman of the Board. Mr. D.C. Dauch has served as AAM’s President & CEO since September 2012.
John J. Bellanti, AAM's Executive Vice President, Worldwide Operations, retired from AAM effective January 1, 2014. Upon Mr. Bellanti's retirement, Alberto L. Satine became Senior Vice President, Global Driveline Operations, assuming leadership responsibility for a significant portion of our global operations. Previously, Mr. Satine served as AAM's Group Vice President, Global Sales & Business Development and held numerous positions of increasing responsibility since he joined AAM in May 2001.

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Named Executive Officers
Our NEOs for the fiscal year ending December 31, 2013 include the following individuals whose titles shown below are the positions held as of that date (except for Mr. R.E. Dauch):
David C. Dauch, Chairman, President & Chief Executive Officer;
Michael K. Simonte, Executive Vice President & Chief Financial Officer;
John J. Bellanti, Executive Vice President, Worldwide Operations;
Alberto L. Satine, Group Vice President, Global Sales & Business Development;
Norman Willemse, Vice President, Metal Formed Products Business Unit; and
Richard E. Dauch, Co-Founder and former Executive Chairman (deceased).
Although Mr. R.E. Dauch passed away during 2013, he is a cash-based programidentified as a resultan NEO based on his 2013 compensation. Our discussion of AAM not having an equity plan availableAAM's executive compensation programs throughout the Compensation Discussion and Analysis (CD&A) applies generally to our NEOs, except for new equity-based awards. We use total shareholder return (TSR) and earnings before interest, taxes, depreciation and amortization (EBITDA) as the performance measures for long-term incentive awards.Mr. R.E. Dauch. His compensation is described separately under Compensation of former Executive Chairman below.

Executive Compensation Philosophy and Objectives
The Committee is responsible for establishing and reviewing the overall compensation philosophy of the Company. The Committee believes that the compensation paid to executives should be structured to provide AAM executives with meaningful rewards, while maintaining alignment with stockholder interests, corporate values and management initiatives. In addition, the annual compensation limit of $3 million for any executive officer and other restrictions contained in the 2009 Settlement and Commercial Agreement we entered into with GM (2009 Settlement and Commercial Agreement) will be considered by the Committee in order to ensure compliance with the agreement as long as it remains in effect.
The Committee believes that AAM’s executive compensation program should consist of a mix of base salary, annual incentive compensation and long-term incentive compensation, with limited perquisites and other personal benefits. One of the key objectives of establishing a mix of base salaries, annual incentive and long-term incentive compensation is to have a significant portion of total compensation be performance basedperformance-based and contingent upon the achievement of stated Company performance goals.
In an effort to more closely align the objectives of the philosophy to market competitive practices, theThe Committee approved stated target percentile goals for each component of pay. The following pay percentile goals are used as a guide to help set compensation levels for the NEOs, excluding the CEO (whose compensation is determined under his employment agreement, as described below). In addition to these goals, the Committeealso considers other factors in setting compensation levels for the NEOs includingsuch as Company and individual performance, succession planning and the specific needsrequirements of the position for the Company.
Pay Component
Target Percentile Goal
Base Salary50th Percentile
Target Annual IncentiveBetween 50th and 75th Percentiles
Long-Term IncentivesBetween 50th and 75th Percentiles
These percentile goals were established based on the Committee’s objective that base salaries should be consistent with market salaries at the 50th percentile. The percentile goals for annual


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incentives and long-term incentives were set between the 50th percentile and the 75th percentile to enableas determined by the Company from time to reward executive performance at a rate slightly above average in order to compete for executive talent. These pay percentile goals were implemented over a two-year period that concluded in 2010.time.
Compensation Objectives.The following fundamental objectives are considered in determining compensation programs and pay levels.levels for our NEOs.
• Compensation and benefit programs should appropriately reflect the size and financial resources of our Company in order to maintain long-term viability. These programs should be increasingly market-based (rather than legacy) to be competitive relative to the compensation paid to similarly situated executives in our peer group.
• Compensation and benefit programs should attract, motivate and retain experienced executives who are vital to our short-term and long-term success, profitability and growth. AAM makes an effort to remain competitive by targeting competitive pay levels based on the Company’s Compensation Philosophy with consideration of the specific business environment and other market influences.
• Compensation and benefit programs should reward Company and individual performance. Our programs should strive to deliver competitive compensation for exceptional individual and Company performance as compared to companies in our peer group. As associates progress to higher levels in the Company and assume key leadership positions, a greater portion of their compensation should be linked to Company performance and stockholder returns. Company performance is measured against financial and operational objectives and stockholder return.
• Compensation and benefit programs should foster the long-term focus required for success in the global automotive industry. We believe that long-term incentive compensation will motivate executive officers to deliver long-term value to our stockholders. Executives at higher levels should have a greater proportion of their compensation tied to longer-term performance because they are in a better position to influence longer-term results.
• Executive officers should be AAM stockholders. Stock ownership aligns our executive officers’ interests with those of stockholders and reinforces the importance of making sound long-term decisions. AAM’s executive officers are required to maintain a certain level of stock ownership based on their position.
• The objectives of rewarding performance and retention should be balanced.In periods of downturns in Company performance, particularly when driven by industry events or customer decisions, our compensation programs should continue to ensure that high-achieving, marketable executives remain motivated and committed to AAM. This principle is essential to our effort to encourage our strongest leaders to remain with AAM for long and productive careers.
• Compensation and benefit programs should be fair in consideration of each executive’s level of responsibility and contribution to AAM.While the overall structure of compensation and benefit programs should be broadly similar across the Company, individual pay levels and benefit packages will necessarily reflect differences in job responsibilities, geography and marketplace considerations.

Market AnalysisCompensation and Benchmarkingbenefit programs should attract, motivate and retain experienced executives who are vital to our short-term and long-term success, profitability and growth.
A AAM makes an effort to remain competitive by targeting competitive pay levels based on the Company’s comparative peer group while considering the Company's business environment, including industry conditions and other market influences. The Committee believes our compensation programs should encourage high-achieving, marketable executives to remain motivated and committed to AAM for long and productive careers.

Compensation and benefit programs should reward Company and individual performance. Our programs should strive to deliver competitive compensation for exceptional individual and Company performance as compared to companies in our comparative peer group. As associates progress to higher levels in the Company and assume key leadership positions, a greater portion of 38 broad industrial manufacturing companies, including 10 automotive suppliers, were identified bytheir compensation should be linked to Company performance measured against financial and operational objectives and to stockholder returns.

Compensation and benefit programs should foster the Committee’s independentlong-term focus required to deliver value to our stockholders. We believe that long-term incentive compensation consultant database,will motivate executive officers to deliver long-term value to our stockholders. Executives who are in positions to influence longer-term results should have a greater proportion of their compensation tied to longer-term performance.

Total compensation opportunities should reflect each executive’s level of responsibility and contribution to AAM. While the overall structure of compensation and benefit programs should be

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broadly similar across the Company, individual pay levels and benefit packages will reflect differences in job responsibilities, geography and marketplace considerations.

Stock ownership requirements for consideration byexecutive officers should align their interests with those of our stockholders. Stock ownership aligns our executive officers’ interests with those of stockholders and reinforces the importance of making sound long-term decisions. AAM’s executive officers are required to maintain a certain level of stock ownership based on their position.
Peer Group and Compensation Benchmarking
Determination of Comparative Peer Group
The Committee to help assessuses a comparative peer group for purposes of determining competitive pay levels and compensation structure, setting incentive pay opportunities and assessing Company performance relative to provide dataits peers in support of AAM's executive compensation philosophy and objectives. The Committee periodically reviews the composition of the comparative peer group with guidance from the Committee's independent compensation consultant, Meridian, and makes adjustments to reflect changes in the Company's business as well as industry and market conditions.
Following the results of the 2013 stockholder advisory vote on executive compensation, the Committee directed Meridian to evaluate the existing comparative peer group and recommend changes to to the peer group that would more closely reflect AAM's business profile. Meridian undertook a detailed study to develop a pool of potential peer companies from which to select the companies to be included in the comparative peer group. In developing the pool, Meridian considered companies in the automotive and related industries with annual revenues between one-third and three times our revenues and those in our competitor peer group as described below. The initial pool was then narrowed by Meridian through the use of a weighted scorecard based on additional criteria, which included:
complexity of global business and operations;
companies that compete with AAM for 2010executive talent;
market capitalization; and 2011 pay decisions. The
companies included in the peer groups established by proxy advisory firms for 2013.
Based on this analysis, Meridian recommended and the Committee approved a new comparative peer group of 20 companies, which resulted in the following changes:
the size of the peer group was selectedreduced from 38 companies;
23 companies were removed and five were added to be representativeimprove alignment with AAM based on the factors described above; and
six of a broad industrial sector in which


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AAM competes for executive talent. The criteria used to assess the market and to select theour eight competitor peer group included:companies were included and two were excluded (namely, Autoliv, a foreign corporation, and Magna International, which has significantly greater revenues than AAM).
• Operating/Industry Competitors — Companies with which we compete for the sale of products and services;
• Labor Market Competitors — Companies with which we compete for executive talent;
• Competitors for Capital — Companies with which we compete for investment dollars and against which investment performance is evaluated; and
• Revenue Size — Companies with revenues within a relevant range.
We believe the new comparative peer group has greater relevance to AAM in terms of industry, revenues, market capitalization, global complexity and competition. We expect that AAM's new and incremental backlog will drive AAM's sales to exceed the rate of growth expected in the industry. AAM's projected 2014 revenues are well positioned relative to the median of the comparative peer group's 2014 projected revenues.
BasedThe following table shows the companies in our new comparative peer group (used to determine 2014 compensation), the prior comparative peer group (used to determine 2013 compensation), and the companies in our competitor peer group as disclosed in our 2013 annual report to shareholders.

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Company2014 Peer Group2013 Peer GroupCompetitor Peer Group
A. O. Smith CorporationXX 
BorgWarner Inc.XXX
Briggs & StrattonX  
Cooper-Standard Holdings, Inc.X  
Dana Holding CorporationXXX
Donaldson Company, Inc.XX 
Federal-Mogul CorporationXX 
Flowserve CorporationXX 
Kennametal Inc.XX 
Lear CorporationXXX
Meritor Inc.XXX
Regal-Beloit CorporationX  
Tenneco Automotive Inc.X X
Terex CorporationXX 
Tower International Inc.X  
Trinity Industries, Inc.XX 
USG CorporationXX 
Valmont Industries, Inc.XX 
Visteon CorporationXXX
Woodward Inc.X  
Ball Corporation X 
Brady Corporation X 
Cameron International Corporation X 
Cummins Inc. X 
Dover Corporation X 
Eaton Corporation X 
Federal Signal Corporation X 
Fleetwood Enterprises, Inc. X 
FMC Technologies X 
Genuine Parts Company X 
Harley-Davidson Motor Company X 
Ingersoll-Rand Company X 
Joy Global Inc. X 
Navistar International X 
Owens-Illinois, Inc. X 
PACCAR Inc. X 
Polaris Industries Inc. X 
Rockwell Automation X 
Sauer-Danfoss Inc. X 
Sonoco Products Company X 
Thomas & Betts Corporation X 
The Timken Company X 
TRW Automotive Holdings Corp. X 
Woodward Governor Company X 
Autoliv Inc.  X
Magna International Inc.  X
Total Number of Companies20388
Compensation Benchmarking
The Committee targets approximately the 50th percentile of our comparative peer group for total direct compensation of executives holding similar positions at companies in our comparative peer group. Total direct compensation consists of base salary plus target annual and long-term incentive compensation. Total direct compensation for each NEO may be above or below the 50th percentile of our comparative peer group due to various factors, including an individual's level of responsibility, demonstrated skills and experience, significance of position, contribution to the Company's performance, time in position and potential for advancement in the context of succession planning. The Committee generally sets performance objectives for annual and long-term

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incentive compensation so that targeted total direct compensation levels can be achieved only when performance objectives are met. Consequently, actual pay earned by executives may vary from targeted levels based on the foregoing criteria,degree to which specific performance objectives are attained.
The Committee has moved away from setting annual and long-term incentive pay opportunities between the Committee approved the following50th and 75th percentile of our comparative peer group to be used for 2010targeting total direct compensation at approximately the 50th percentile. This target reflects a generally accepted benchmark of external competitiveness and 2011 pay decisions:supports our ability to attract and retain key executives.
A. O. Smith CorporationJoy Global Inc.
ArvinMeritor Inc. Kennametal Inc.
Ball CorporationLear Corporation
BorgWarner Inc. Navistar International
Brady CorporationOwens-Illinois, Inc.
Cameron International CorporationPACCAR Inc.
Cummins Inc. Polaris Industries Inc.
Dana CorporationRockwell Automation
Donaldson Company, Inc. Sauer-Danfoss Inc.
Dover CorporationSonoco Products Company
Eaton CorporationTerex Corporation
Federal Signal CorporationThomas & Betts Corporation
Federal-Mogul CorporationThe Timken Company
Fleetwood Enterprises, Inc. Trinity Industries, Inc.
Flowserve CorporationTRW Automotive Holdings Corp.
FMC TechnologiesUSG Corporation
Genuine Parts CompanyValmont Industries, Inc.
Harley-Davidson Motor CompanyVisteon Corporation
Ingersoll-Rand CompanyWoodward Governor Company
The market data analysis used in determining executive officer compensation levels was revenue size adjusted using regressed market values for each relevant position.
Tally Sheets
Annually, the Committee reviews compensation tally sheets for each executive officer, including the NEOs. The tally sheets, which are prepared by management, provide a summary of the current amounts of each component of pay includingand a historical reviewhistory of prior long-term incentive grants. The tally sheets also provide a summaryshow estimates of the potential payoutspayments and benefits uponthat could be realized under various hypothetical termination events.scenarios. The elements and calculations reviewed aretally sheets consist of information that is substantially similar to the information providedshown for each NEO inPotential Payments Upon Termination or Change in Controlbelow. The Committee did not change the NEOs’ compensation based on its review of this information. The Committee expects to review updated tally sheets on an annual basis.information in 2013.
Components of the AAM Compensation Program
The primary components of AAM’s executive compensation program are base salary, annual incentives, long-term incentives, and benefits and perquisites. The discussion below
Base Salary. In the fourth quarter of each year, the elements of compensation applies to the NEOs, other than Mr. R. E. Dauch, our CEO. Mr. R. E. Dauch’s compensation is discussed separately inCompensation of Chief Executive Officerbelow.
Base Salary.  BaseCommittee reviews base salaries provide fixed compensation to thefor executive for services rendered during the year. To more closely align its compensation programs with market competitive practices,


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the Company implemented market-based changes in compensation levels over a two-year period that concluded in 2010. The Committee based its salary determinationsofficers for the NEOs (other thanfollowing calendar year. In determining 2013 base salaries for executive officers, the CEO) by reference to the 50th percentileCommittee reviewed benchmarking data comparing pay levels of our executive officers with that of executives holding similar positions at companies in our comparative peer group. The recommendations of the CEO and President & COO wereCommittee also considered for other NEOs’ salaries. Those recommendations were based oneach individual’s experience, time in position, professional development, contribution to the Company, individual performance and other factors. For NEOs other than the Chairman, President & CEO, the Committee considered the recommendations of Mr. D.C. Dauch in determining NEO base salaries. The Committee approved 2013 base salary increases for the following base salaries for 2011:NEOs listed below as follows:
     
  Base Salary
 
Richard. E. Dauch $2,702,300 
Michael K. Simonte $515,000 
David C. Dauch (effective November 1, 2010) $650,000 
John J. Bellanti $473,800 
John E. Jerge $303,000 
  Base Salary
  2013 2012
David C. Dauch (effective September 1, 2013) $1,100,000
 $1,000,000
Michael K. Simonte $543,800
 $527,900
John J. Bellanti $500,300
 $485,700
Alberto L. Satine $360,000
 $320,000
Norman Willemse $320,000
 $310,600
Effective September 1, 2013, Mr. D.C. Dauch’s base salary was increased effective November 1, 2010 in connection withto $1,100,000. This increase reflects the additional leadership responsibilities he assumed in August 2013 upon the areaspassing of labor relations, legalMr. R.E. Dauch. In making this determination, the Committee considered benchmarking data provided by Meridian regarding CEO compensation among our comparative peer group. The Committee approved Mr. D.C. Dauch's base salary increase effective September 1, 2013 with the expectation that this level would remain in effect for fiscal 2014.
The increases in 2013 base salary shown above for Mr. Simonte, Mr. Bellanti (in lump sum) and administration. NEOMr. Willemse represent annual merit increases of 3%, which is consistent with the budgeted amount for the merit program for U.S. salaried associates.
The increase in Mr. Satine's 2013 base salaries for 2010, 2009salary was 12.5%. Based on the recommendation of the Chairman, President & CEO, the Committee considered Mr. Satine's significant role in strategic matters, the depth of his manufacturing and 2008 are shownengineering experience in light of AAM's expanding global operations and his demonstrated leadership capabilities. This salary adjustment was made in theSummary Compensation context of AAM's succession planning for a key leadership position previously held by Mr. Bellanti, who retired as head of worldwide operations on January 1, 2014. Mr. Satine assumed leadership responsibility for a significant portion of AAM's global operations upon Mr. Bellanti's retirement.

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Annual Incentive Compensation.  Annual incentive compensation at AAM is designed to:
encourage executives to achieve short-term objectives to foster achievement of the Company's long-term goals;
• Encourage executives to achieve short-term goals to foster the long-term goals of the Company;
• Reward performance to support strategic initiatives; and
• Provide incentives
reward performance to support strategic initiatives; and
provide incentive for executive retention.
Annual incentive compensation is measured by our achievement of financial targets established under AAM’s Incentive Compensation Plan for Executive Officers. All executive officers participated in this plan during 2013.
On an annual basis, the Committee determines one or more performance factors, and the relative weighting of each factor, in consideration of the Company’s key performance objectives. Under the plan, the performance factors that may be selected areare: (1) net income as a percentage of sales (NIPS); (2) after tax return on invested capital (ROIC); and (3) net operating cash flow. ROIC is defined as after-tax return divided by average invested capital. Net operating cash flow is defined as cash provided by or used in operating activities less capital expenditures.expenditures net of proceeds from the sale of property, plant and equipment. ROIC is defined as after-tax return divided by average invested capital. Target performance levels, established annually, are intended to be aggressive but achievable metrics based on industry conditions.
CashPayment of annual cash incentive awards are permitted to the extent the Company (1) meets or exceeds threshold levels of performance set by the Committee and (2) reports positive net income for the performance year. However, the
The annual incentive plan permits the Committee to make discretionary adjustments if the Committeeit determines that the achievement of performance targets for a plan year do not reflect the true performance of the Company due to unanticipated circumstances specified in the plan. No such adjustments wereAlthough the plan permits the Committee to exercise discretion in adjusting individual award payouts, the Committee made no discretionary increases to 2013 payouts for any of our NEOs.
The table below shows the 2013 target annual incentive opportunities for the 2008, 2009 or 2010 plan years.following NEOs, stated as a percentage of base salary:
Individual awards may be increased or decreased by the Committee, based on the CEO’s recommendation, in consideration of individual experience, time in position, professional development, contribution to the Company, individual performance and other factors. No changes were recommended for 2010
Target Annual Incentive
Opportunity
David C. Dauch125%
Michael K. Simonte80%
John J. Bellanti80%
Alberto L. Satine60%
Norman Willemse60%

The 2013 annual incentive awards paid to executive officers.target for each NEO remains unchanged from 2012.

20102013 Annual Incentives
Incentive Performance
In support of the Company’s 2010 strategic initiatives,2013 goals and objectives, the Committee approved the use of net operating cash flow and NIPS, each with equal weighting, as the sole performance metric to be used inmetrics for determining 20102013 annual incentivescash incentives. These performance metrics were selected for the following reasons:
• Cash flow is a critical financial metric for AAM at this time due to its impact on liquidity and debt reduction;


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• Increasing cash flow is key to achieving credit rating upgrades, which will have a favorable impact on the Company’s cost of future financing; and
• The Committee believes increasing cash flow benefits AAM stakeholders.
Net operating cash flow is a critical financial metric for AAM due to its impact on liquidity, debt reduction and stockholder value creation;
The following table summarizesIncreasing net operating cash flow is key to achieving credit rating upgrades, which will have a favorable impact on the approved target annual incentive opportunities for the NEOs in 2010Company’s cost of future financing;
Net income is a key indicator of financial and 2011 (stated as a percentage of base salary):operational performance; and
Annual Incentive
Opportunity
Richard. E. Dauch*
Michael K. Simonte80%
David C. Dauch90%
John J. Bellanti80%
John E. Jerge60%
Patrick S. Lancaster (Retired 1/1/2011)80%
Net income and net income growth are highly correlated to cash flow, cash flow growth and stockholder value creation.
* Mr. R.E. Dauch received no annual incentive award in 2010 in consideration of the $3 million compensation limitation under the 2009 Settlement and Commercial Agreement.

In the fourth quarter of 2009, the Committee determined the 2010 award levels for the net operating cash flow performance metric2012, in conjunction with a review of the Board-approved annual budget, the Committee set 2013 performance targets for the net operating cash flow and projections provided to AAM’s lenders. The award levels areNIPS performance metrics as follows:

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Net Operating Cash Flow
PerformancePayout
Threshold$(60) million50%
TargetBreakeven100%
Maximum$25 million125%
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Net Operating
Cash Flow
 
Net Income as a
Percentage of  Sales
  Performance Payout Performance Payout
Threshold $25 million 50% 1% 30%
Target $75 million 100% 3% 100%
Maximum $100 million 125% >3% >100%
Budgeted net operating cash flow for 2013 was $50 million. The 2010 threshold awardtarget performance level for net operating cash flow was based on projections provided to AAM’s lenders in 2009 in obtaining amendments to our senior credit agreements and refinancing substantially all senior debt maturities through 2014. The target awardthe Company outperforming the budget by $25 million; the maximum performance level was set at breakeven net operating cash flow. The maximum award level was determined to be an aggressive target based on outperforming the Company’s projected volumes and industry conditions when the target was established.
budget by $50 million. The 2013 annual budget also included $30 million in proceeds from anticipated sale-leaseback transactions.
The Company’s 2010 net operating cash flow performance exceeded the maximum target award level by more than $100 million. Accordingly, the Committee approved a payout of 125 percent of target. The annual incentive awards paid to the NEOs are shown in theSummary Compensation Table.
2011 Annual Incentives
In 2010, the Compensation Committee approved the use of net operating cash flow and net income as a percentage of sales (NIPS), each with an equal weighting, as the performance metrics to be used in determining 2011 annual incentives. Net operating cash flow was selected for the reasons described above under2010 Annual Incentives. NIPS was selected as a performance metric for 2011 for the following reasons:
• Net income is a key indicator of financial and operational performance; and
• Net income and net income growth is highly correlated to cash flow, return on invested capital and stockholder value creation.
Award levels for NIPS and net operating cash flow were determined in the fourth quarter of 2010. Target and threshold performance levels for NIPS were establisheddetermined based on a review ofour performance relative to our competitor peer group benchmarks for the three most recently completed years. AAM’s competitor


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peer group as shown in our 2010 annual report includes ArvinMeritor Inc.; Autoliv Inc.; BorgWarner Inc.; Dana Corporation; Lear Corporation; Magna International Inc.; Tenneco Automotive Inc. and Visteon Corporation (competitor peer group).group. The target performance level for NIPS, or 3 percent,3%, was set at a level to meet the performance of the top one-thirdone-half of our competitor peer group for the three most recently completedrecent fiscal years.
Although there was no stated maximum award opportunity based on NIPS for 2013, the Committee established a maximum payout for such awards beginning in 2014.
The Committee determined the performance award levels forCompany’s 2013 adjusted net operating cash flow performance based on the Board approved budget. The target performance level forwas $32.4 million. For 2013, net operating cash flow isincluded the proceeds from sale-leaseback transactions and excluded the impact of debt refinancing costs and other special charges totaling $28.1 million. Accordingly, a payout of 57% was made for 2013 based on our outperforming the budget by $25 millionnet operating cash flow metric.
The Company’s 2013 NIPS was 3.79%, excluding the impact of debt refinancing costs and other special charges. Accordingly, the maximumNIPS performance level is basedmetric resulted in an achievement of 117% of target.
Based on outperforming the budget by $50 million. These 2011weighting of each performance targets will be disclosedmetric, the 2013 annual incentive awards resulted in our 2012 proxy statement.a payout of 87% of target. No discretionary increases were made to 2013 annual incentive payouts for any NEO. The annual incentive awards paid are shown in the Summary Compensation Table.
Long-Term Incentives.Incentive Compensation. Long-term incentive compensation at AAM is designed to:
• Alignalign executive officer and stockholder interests;
• Reward achievement of long-term performance goals; and
• Provide incentives for executive retention.
In prior years, AAM granted equity awards toreward achievement of long-term performance goals; and
provide incentives for executive officers underretention.
The table below shows the 1999 Stock Incentive Plan. That plan expired in 2009 and was not replaced by the Company. Since AAM does not have an equity plan in place, the Committee approved changes to the2013 target long-term incentive programopportunities for executive officers that impact both (1) each executive officer’s award opportunity and (2) the type of long-term incentive awards.
Cash-Based Long-Term Incentive Plan.  In 2009, the Committee approved a cash-based long-term incentive program, which provides the entire long-term incentive opportunity for executive officers. Under the AAM 2009 Long-Term Incentive Plan (AAM LTIP), each participant receives a target award value,following NEOs, stated as a dollar amount based on a percentage of base salary.salary:
 Target Long-Term Incentive Opportunity
 20132012
David C. Dauch350%240%
Michael K. Simonte200%120%
John J. Bellanti200%120%
Alberto L. Satine120%80%
Norman Willemse100%80%
The following table summarizesIn determining 2013 long-term incentive target opportunities, the Committee considered Meridian’s market analysis, which indicated that long-term incentive target award amountsopportunities for our NEOs at 2012 levels were below the 50thpercentile for comparable positions at companies in our comparative peer group. As a result, the Committee approved 2013 long-term incentive targets shown above with the objective of targeting total compensation at approximately the 50th percentile.
2013 Long-Term Incentives
In March 2013, the Company granted the NEOs in 2011equity-based and 2010:
         
  2011
 2010
  Target Award
 Target Award
  Amount Amount
 
Richard. E. Dauch $—  $— 
Michael K. Simonte $618,000  $600,000 
David C. Dauch $1,170,000  $1,008,000 
John J. Bellanti $568,560  $552,000 
John E. Jerge $242,400  $228,000 
Patrick S. Lancaster (Retired 1/1/11) $—  $528,000 
* Mr. R.E. Dauch received no long-term incentive award in 2010 in consideration of the $3 million compensation limit under the 2009 Settlement and Commercial Agreement.
Award payouts can range from 0 percent to 200 percent of the target value based on the level of performance over a three-year period beginning in January of the year of the award.
Performance Measures
For grantscash-based long-term incentives under the AAM LTIP,2012 Omnibus Incentive Plan. The Committee determined the actual cash payouts will be determined based on the levelform and mix of performance against two performance metrics approved by the Committee. awards in consideration of AAM’s compensation objectives, current market practice and share usage.

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One-half of the targettotal 2013 long-term incentive award payment will be earned based onvalue for NEOs was in the cumulative amountform of earnings before interest, taxes, depreciationcash-based performance units (PUs) with a notional value of one dollar and amortization (EBITDA) over a three-year performance period. In calculating this award,one-half was in the plan gives the Committee discretion to exclude certain special items from EBITDA, such as special charges or gains, non-recurring operating costs, extraordinary gains or losses, the impactform of changesrestricted stock units (RSUs). The RSUs are payable in accounting principles, or any other unusual items. EBITDA was chosen as one of the measures of Company performance as it is a key indicator of the Company’s financial and operational


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performance and is useful in analyzing entity valuation. In addition, EBITDA as a performance measure complements the metrics used to determine payouts under other incentive programs.
The remaining one-half of the target award amount will be earned based on a total shareholder return (TSR) measure that compares the Company’s TSR overcommon stock, contingent upon continued employment through the three-year performance period relativevesting period. The RSUs were designed to the TSR of AAM’s competitor peer group. Relative TSR was chosen as one of the measures of Company performance in orderprovide opportunities for share ownership and to motivate executive officers to build long-term value for our stockholders above that of our competitor peer group. Share price appreciation and dividends paidstockholders.
The target award payment for PUs will be measured overdetermined based on the Company’s cumulative earnings before interest, taxes, depreciation and amortization (EBITDA) margin performance from January 1, 2013 through December 31, 2015. These awards were designed to align executive officer performance goals with those of the Company. The Committee selected EBITDA as the performance periodmeasure based on its belief that EBITDA is a key indicator of the Company’s financial and operational performance and is useful in analyzing entity valuation.
The terms of the RSUs and PUs are described in more detail in the Narrative to determine TSR.Summary Compensation Table and Grants of Plan-Based Awards Table below.
The following tables illustratetable shows the threshold, target and maximum EBITDA margin performance levels forused in determining 2013 award payouts for each performance measure. ThePUs. These EBITDA performance levels shown below were designed to drive a level of performance in the top one-thirdone-half of our competitor peer group. The competitor peer group consists of companies listed in the table shown above in Peer Group and Compensation Benchmarking.
EBITDA Performance Measure
Performance Level 
3 Year Cumulative
EBITDA Margin
 
Percent of
Target Award
Opportunity Earned
Threshold 10% 25%
Target 12% 100%
Maximum 15% 200%
         
    Percent of
  3-Year Cumulative
 Target Award
Performance Level
 EBITDA Opportunity Earned
 
Threshold  8%  25%
Target  12%  100%
Maximum  15%  200%
2014 Long-Term Incentives
TSR Performance Measure
Percent of
Company’s TSR
Target Award
Percentile
Opportunity
Performance Level
RankEarned
Threshold35(th)50%
Target50(th)100%
Maximum75(th)200%
Senior Executive Special Incentive Program.  On March 15, 2010,Following the Compensationresults of our 2013 stockholder advisory vote on executive compensation and feedback received during our stockholder outreach, the Committee redesigned our LTI program for 2014 to strengthen the pay-for-performance alignment of long-term incentive compensation for executive officers. In determining the new program design, the Committee received guidance from Meridian regarding design alternatives and market trends. Meridian evaluated the 2013 LTI program described above, considering our LTI program objectives, pay-for-performance alignment and mix of award vehicles. In consideration of Meridian's recommendations, the Committee approved LTI program design changes for 2014.
A key design change was the introduction of performance shares as a special incentivenew equity-based award vehicle. Under our 2014 LTI program, performance share awards account for certain NEOs. The special incentive program was developed to recognize the extraordinary efforts of Mr. Simonte, Mr. D.C. Dauch, Mr. Bellanti and Mr. Lancaster in navigating the Company through the turbulent financial and market conditions in 2009. As a result of their individual and collective efforts, the Company was able to successfully complete its restructuring outside of bankruptcy, gain contract clarity with GM, and address liquidity concerns by entering into the 2009 Settlement and Commercial Agreement, amending senior credit agreements and raising cash proceeds through an equity offering.
Payments under the special incentive program for Mr. Simonte, Mr. D.C. Dauch and Mr. Bellanti are contingent upon termination66% of the financial accommodations providedtotal LTI award opportunity for executive officers. This proportion of performance-based equity awards exceeds the current market practice of approximately 50% of total LTI compensation being performance-based. Payouts earned under these awards will be measured by GM in connection with the 2009 Settlementcumulative EBITDA margin and Commercial Agreementrelative total shareholder return (TSR) performance over a three-year performance period and the Access and Security Agreement (Access Agreement). The Committee and the full Board believe that termination of the financial accommodations provided by GM and the Access Agreement is in the best interests of AAM, its stockholders and other key stakeholders. The benefits to AAM of terminating the financial accommodations provided by GM and the Access Agreement include, among other things, a cost savings associated with eliminating the one percent sales discount relatedpaid only to the expedited payment terms. The Company also anticipates improved flexibility in accessing new sources of debt capital by eliminating certain covenants and other restrictionsextent that accompany the financial accommodations provided by GM and the Access Agreement.
The special incentive program was also designed to retain Mr. Simonte, Mr. D.C. Dauch and Mr. Bellanti and to motivate them to accomplish the objectives described above. It is expected that


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they will be instrumental to the Company in strengthening our financial and competitive position in the future. The special incentive program for Mr. Lancaster was designed to reward his efforts in 2009 and provide him with an additional retirement incentive. The special incentive program awards for Mr. Simonte, Mr. D. C. Dauch, Mr. Bellanti and Mr. Lancaster (award recipients)pre-established performance targets are as follows:
     
  Total
 
  Award Value 
 
David C. Dauch $5,000,000 
Michael K. Simonte $3,000,000 
John J. Bellanti $1,000,000 
Patrick S. Lancaster $1,000,000 
     
Total $10,000,000 
     
achieved. The Committee determined that the specialremaining 34% of long-term incentive equity awards should be in the form of RSUs settled in common stock with three-year cliff vesting. The Committee believes these RSUs promote retention of key executives.
Our new LTI program was appropriately valued at $10 million in considerationdesign, which is 100% equity-based, further aligns the interests of executive officers with those of our stockholders by tying a substantial portion of each executive officer's long-term incentive award to Company performance and by promoting increased stock ownership.
Prior Long-Term Incentive Awards under the AAM 2009 Long-Term Incentive Plan
Prior to adoption of the total value that the award recipients preserved for2012 Omnibus Incentive Plan, the Company’s stockholders and other key stakeholders. TheLTI program is cash based due in part toconsisted of cash-based performance awards made under the lackAAM 2009 Long-Term Incentive Plan (2009 AAM LTIP). Payouts of equity available for compensation awards. The amount allocated to each award recipient wasthe 2011 cash-based performance awards were determined based on individual contributions. As President & COO, Mr. D.C. Dauch ledcumulative EBITDA margin and relative TSR for the operational restructuring of the Company and negotiations with GM resulting in the 2009 Settlement and Commercial Agreement described above. Mr. Simonte led the Company’s financial restructuring, including negotiations with lenders and GM, and effectively managed investor and media communications. Mr. Bellanti played a critical role in the operational restructuring efforts, while maintaining excellence in the Company’s quality, warranty, delivery and launch performance during an extremely difficult and volatile production environment. Mr. Bellanti’s management of theday-to-day operations of the Company enabled Mr. D.C. Dauch and Mr. Simonte to focus their efforts on the broader restructuring plans, negotiations and liquidity issues. Mr. Lancaster supported the GM negotiations with a focus on gaining commercial contract clarity and protecting the Company’s interests during GM’s bankruptcy proceedings.
The awards for Mr. Simonte, Mr. D.C. Dauch and Mr. Bellanti are comprised of special incentives and annual incentives. Special incentives are approximately 30 percent to 40 percent of the total award and will be payable to the award recipients upon termination of the financial accommodations provided by GM and the Access Agreement. Annual incentives are comprised of four equal installments and the date on which the installment payments commence is contingent upon the date of termination of the GM financial accommodations and the Access Agreement. The first annual incentive installment payment will be made no earlier than October 31, 2011 and the final annual incentive installment payment will be made no later than January 31, 2015. In the case of both the special incentives and the annual incentives, the recipient will forfeit the award if the Access Agreement is not terminated by December 31, 2014. The award recipients must be employed with AAM on the relevant payment date to receive payment under the award, except in the event of death, disability, and resignation for good reason or termination other than for cause. Upon his retirement, the award for Mr. Lancaster became payable in a lump sum.
The contributions of Mr. R.E. Dauch and his leadership role with the Company are discussed further inCompensation of Chief Executive Officer.
Settlement Agreement with Mr. Lancaster
On July 12, 2010, the Committee approved a settlement agreement between AAM and Mr. Lancaster to provide cash payments and certain other benefits to Mr. Lancaster in connection with his retirement from AAM effectiveperiod beginning January 1, 2011 (Settlement Agreement).through December 31, 2013. The Company’s cumulative EBITDA percentage for the performance period was 13.2%, after adjustments approved by the Committee for certain special charges, including costs associated with plant closures and debt refinancing. The adjusted EBITDA percentage resulted in a payment at 140% of target. The Company’s relative TSR for the performance period ranked above the 75th percentile of our competitor peer group and resulted in a payout of 200% of target.

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Based on the 50% weighting of EBITDA and relative TSR performance, total award payments were 170% of target for each NEO. See Summary Compensation Table for the amounts paid in March 2014.
Equity Grant Practices
AAM generally makes equity grants to its executive officers and benefits payable to Mr. Lancaster pursuantother executives on an annual basis, subject to the Settlement Agreementapproval of the Committee. Grants are describedtypically made in theNarrative first quarter of each year to Summary Compensation Tablecoincide with the communication to executive officers of their annual cash incentive awards for the previous year’s performance. This timing increases the impact of the awards by strengthening the link between pay and Grantsperformance. AAM does not and has never permitted backdating, spring loading or other timing of Plan-Based Awards TableandPotential Payments Upon Termination or Change in Control.


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Other Compensation Componentsoption grants with the release of material non-public information.
Benefits. Our executive officersNEOs participate in the benefitssame benefit and retirement plans provided toin which our U.S. salaried associates.associates participate. A group of approximately 4050 senior executives, including executive officers,the NEOs, also receive supplemental life, supplemental disability and umbrella liability and travel accident insurance benefits.
Executive officers Our NEOs are eligible to participate in AAM’s qualified and nonqualified defined benefit pension plans and defined contribution plan.plans. They are also eligible to participate in a nonqualified deferred compensation plan that permits deferrals of a portion of base salaryand/or annual cash incentive compensation on a pretax basis. These plans are described in thePension BenefitsandNonqualified Deferred Compensationsections below.
Change in Control Payments and Benefits.  Under the 2009 Settlement and Commercial Agreement, all executive officer continuity agreements were terminated. These agreements had provided enhanced severance benefits following a change in control of the Company.
Perquisites. AAM provides a limited number of perquisites forto senior executives, including executive officers, which are described in the footnotes to theSummary Compensation Table. The most significant perquisite provided is the use of a Company-provided vehicle with AAM content. This perquisite is common among automotive suppliers.our NEOs. AAM has never owned a corporate aircraft and generally does not provide leased aircraft for personal use. AAM does not pay for country club memberships. Senior executives are eligible for the use of a Company-provided vehicle with AAM content. The President & CEO is entitled to the use of two Company-provided vehicles. From time to time, the Company invites spouses of AAM senior executives to attend Company business events. For attendance that requires a spouse to travel, the Company pays for the spouse’s travel and other related non-business expenses and reimburses the executive for taxes attributable to the income associated with this benefit. Perquisites are further described in the footnotes to the Summary Compensation Table.
Total NEO Compensation. In determining NEO pay levels, the Committee reviews each element of compensation -- base salary, annual incentive compensation and long-term incentive compensation -- with the objective of targeting total compensation at approximately the 50th percentile of executives holding similar positions at companies in our comparative peer group.
Based on Meridian's market data analysis, 2013 total compensation for Mr. D.C. Dauch, Mr. Bellanti and Mr. Willemse was at approximately the 50thpercentile of pay among executives holding similar positions at companies in our comparative peer group. Total 2013 compensation for Mr. Simonte and Mr. Satine was between the 50thand 75thpercentile among executives holding similar positions at companies in our comparative peer group. For purposes of this comparison, the scope of responsibilities of both Mr. Simonte and Mr. Satine is broader than those holding similar positions at the companies in the comparative peer group. As a result, the pay levels for Mr. Simonte and Mr. Satine were set above the 50th percentile to reflect the additional leadership responsibilities they have as compared to the benchmarked positions. Mr. Simonte has significant leadership responsibilities over key functional areas beyond his role as CFO and leader of AAM's global finance organization. These functional areas include information technology, legal, and marketing and communications. Mr. Satine's position was benchmarked against the lead sales position among our comparative peer group; however, Mr. Satine has broader responsibilities associated with his leadership of AAM's global strategic business development.
Compensation of Chiefformer Executive OfficerChairman
Mr. R. E. Dauch’sThe compensation of AAM's Co-Founder and former Executive Chairman of the Board is governed by anset forth in his employment agreement dated August 27, 2012. The terms of his employment agreement, which was amended in December 2009. The agreement is furtherterminated upon his death on August 2, 2013, are described in theNarrative to Summary Compensation and Grants of Plan-Based Awards Tablebelow. The CEO’s
Mr. R.E. Dauch's total compensation arrangements are structured in consideration of the breadth ofreflected his responsibilities for the entire Company, his unique experienceextensive knowledge and expertise in the global automotive industry his leadership skills and service to AAM since he co-founded the Company in 1994.
Compensation Limit.  In accordance with the December 22, 2009 employment agreement amendment between the Company and Mr. R. E. Dauch, the CEO agreed to forego compensation payable to him under his then current employment agreement to the extent his annual compensation would exceed the $3 million limit set forth in the 2009 Settlement and Commercial Agreement.
The primary elements of the CEO’s compensation as set forth in his employment agreement are base salary, annual cash bonus, benefits and perquisites, subject in each case to the $3 million compensation limit described above. As discussed below, effective January 1, 2010, Mr. R.E. Dauch will no longer receive annual equity awards from the Company.
Base Salary.  Base salary is determined by the Committee as part of the annual compensation review process. In determining Mr. R.E. Dauch’s compensation in 2009, the Committee considered his role in overseeing and directing the Company’s successful restructuring outside of bankruptcy under the extraordinary circumstances facing the automotive industry in 2009. As a result, value was preserved for AAM’s stockholders and other key stakeholders. The Committee considers Mr. R.E. Dauch’s continuing leadership, unique role and the services he provides to AAM criticalBoard’s expectations regarding his contribution to the achievement of the Company’s strategicAAM’s goals for 2010. No change was made to Mr. R.E. Dauch’s base salary for 2010 or 2011.and business strategy objectives. The components of his compensation are described below.
In connection with the annual compensation limit set forth in the 2009 Settlement and Commercial Agreement, Mr. R.E. Dauch agreed to forego certain compensation and benefits that he was entitled to in accordance with his employment agreement. As described below, Mr. R. E. Dauch will no longer receive equity grants and did not receive a bonus in 2010, 2009 and 2008. He also agreed to terminate his change in control agreement. These factors were also taken into consideration by the Committee in determining Mr. R.E. Dauch’s base salary. Pursuant to the December 22, 2009


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employment agreement amendment,Base Salary. Mr. R.E. Dauch’s annual base salary is $2,702,300, effective June 16, 2009. Base salary for 2010, 20092013 was set at $2 million. The amounts paid through August 2, 2013 and 2008 isin 2012 and 2011 are shown in theSummary Compensation Table.
Annual Cash Bonus.Incentive. For calendar year 2013, Mr. R. E.R.E. Dauch iswas eligible for ana target annual cash bonus asincentive opportunity of two times his annual base salary. His 2013 annual incentive was determined under AAM's Incentive

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Compensation Plan for Executive Officers. Accordingly, his 2013 annual incentive was based on the achievement of the pre-established performance metrics described above in 2013 Annual Incentive Performance. Based on the weighting of each performance metric, he was eligible to receive a 2013 annual incentive of 87% of his employment agreement. Seetarget opportunity. The annual incentive paid to Mr. R.E. Dauch's beneficiary was pro-rated based on time served through August 2, 2013. The Committee exercised no discretion in determining his 2013 annual incentive award payout. See Narrative to Summary Compensation Table and Grants of Plan-Based Awards Tablebelow. The annual cash bonus is based on the Committee’s assessment of Company performance as compared to that of the competitor peer group. Pursuant to his employment agreement,
Long-Term Incentives. Mr. R.E. Dauch iswas not entitled to receive an annual bonus paymenta long-term incentive award in 2013. Vesting of three times his annual salary if AAM outperforms its competitor peer group by greater thanoutstanding long-term incentive awards was accelerated upon his death pursuant to the historical amount. However, his annual bonus will be reduced, if necessary, to comply with the $3 million limit on annual compensation set forthapplicable award agreements. The grant date fair value of these awards was reported in the 2009 Settlement and Commercial Agreement. In determining Mr. R. E. Dauch’s annual cash award, the Committee may use discretion in considering other factors, which may differ from year to year.
Long-term Incentives.  Pursuantsummary compensation table for 2012. See Narrative to the December 22, 2009 employment agreement amendment, Mr. R. E. Dauch agreed to forego receipt of the annual equity awards the Company had agreed to provide under his employment agreement since it was first executed in November 1997. As a result, effective January 1, 2010, Mr. R.E. Dauch will no longer receive annual equity awards from the Company. The terms of the outstanding awards granted prior to 2010 are described in theNarrative to Summary Compensation Table and Grants of Plan-Based Awards Table.Table and Options Exercised and Stock Vested table below.
Benefits and Perquisites. Mr. R. E.R.E. Dauch participatesparticipated in the same benefit programs provided forin which other executive officers. In addition, underofficers participate. Under his employment agreement, AAM provides Mr. R. E. Dauchprovided him with the use of an additionaltwo Company vehiclevehicles and reimbursesreimbursed him for premiums underpaid for a $5 million life insurance policy. The Company will also provide postretirement health care benefits upon expiration of his employment agreement. Perquisites provided to the CEO in 2010, 20092013, 2012 and 20082011 are reported in theSummary Compensation Table.
Management’sExecutive Officer Stock Ownership Requirements & Anti-Hedging Policy
 
The Committee has establishedA fundamental objective of our compensation program is for executive officers to own AAM stock in order to align their interests with those of our stockholders and to reinforce the importance of making sound long-term decisions. In April 2012, based on an analysis provided by Meridian and in order to align the Company's stock ownership requirements for executive officers. The lack of an equity plan to grant restricted stock or other equity awards restricts the Company’s ability to support their achievement of stock ownership requirements. To address this issue,with prevalent market practices, the Committee determined provisionalrevised the Company's stock ownership requirements, based on a set number of shares.as follows:
Fixed Share Requirement for Executive Officers
 No.
Multiple of Shares
Base Salary
Chief Executive Officer350,000
President & COO50,0005
Executive Vice President25,0003
Senior Vice President, Group Vice President and Vice President15,0002

The stock ownershipExecutive officers have five years from April 2012 to meet these requirements must be attained withinor, for new executive officers, five years from the effective date of appointment. Shares owned directly and any unvested RSUs (settled in stock) count toward the requirement, while unexercised stock options are not included. These ownership levels must be maintained as long as the person is an executive officer of AAM.
The Committee annually reviews each executive officer’s stock ownership level according to this policy. Each of our current NEOs has met the ownership requirements established for his position.
Anti-hedging and Anti-pledging Policy
All employees and non-employee directors are prohibited from entering into transactions that may result in a financial benefit if our stock price declines, or any hedging transaction involving our stock, including but not limited to the use of financial derivatives, short sales or any similar transactions. Pledging of Company stock is also prohibited.
Severance Benefits and Restrictive Covenants
On September 27, 2013, Mr. D.C. Dauch's employment agreement was amended and restated to provide for newly appointedcertain severance benefits if his employment is terminated as a result of a change in control of the Company (CIC). His employment agreement also provides for an automatic two-year extension following a CIC. Benefits payable to Mr. D.C. Dauch upon termination of employment without cause or upon resignation for good reason remain unchanged from his prior employment agreement. Severance benefits provided under his employment agreement are described under Potential Payments Upon Termination or Change in Control below.
The Board believes the CIC arrangement with Mr. D.C. Dauch is in the best interests of the Company and our stockholders. The CIC arrangement will enhance stockholder value by encouraging him to consider CIC transactions that may be in the best interests of the Company and our stockholders, even if the transaction may ultimately result in termination of his employment.
AAM does not provide any other NEO with severance benefits upon termination of employment for any reason, including as a result of a ClC. However, early vesting of certain long-term incentive awards is allowed upon a

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CIC. The Committee believes this feature reflects competitive market practices, encourages retention of key executives and reduces their concerns that payment of these awards will be jeopardized by a CIC.
Each of the NEOs has agreed to non-competition and non-solicitation covenants for a period following termination of employment. For additional information, see Potential Payments Upon Termination or Change in Control below.
Executive Compensation Recoupment (Clawback) Policy
During our outreach efforts following the 2013 vote, stockholders expressed a concern that we had not adopted a clawback policy. Based on this feedback, the Committee adopted an executive officers, within five yearscompensation recoupment (clawback) policy. This policy authorizes the Committee to determine whether to require recoupment of such appointment. Currently,performance-based incentive compensation actually paid or awarded to any executive officer if certain conditions are met. For purposes of this policy, performance-based compensation includes all executive officers are in complianceannual incentives for periods beginning with the stock ownership requirements.2014 fiscal year and long-term incentives awarded after January 1, 2014, whether paid in cash or equity, to the extent the awards are determined based on the Company's financial performance.
The Committee may require recoupment if the executive officer engaged in fraud or intentional misconduct that caused or contributed to the need for a material restatement of the Company's financial statements filed with the SEC. If the Committee determines that any performance-based compensation paid or awarded to the executive officer would not have been awarded or would have been awarded at a lower amount had it been calculated based on such restated financial statements (adjusted compensation), the Committee may seek to recover for the benefit of the Company the excess of the awarded compensation over the adjusted compensation (excess compensation). In deciding whether to seek recovery of excess compensation from the executive officer, the Committee will consider the factors it deems relevant under the circumstances and whether the assertion of a claim is in the best interests of the Company.
AAM prohibits hedging and pledging ofTax Gross Ups
The Company stock.does not provide tax gross ups to an executive officer upon a change in control.
Federal Income Tax Considerations
Deductibility of Executive Compensation.Compensation
In general, the compensation awarded to the NEOs will be taxable to the executive and will give rise to a corresponding corporate deduction at the time the compensation is paid. Section 162(m) of the Internal Revenue Code (Code) deniesprecludes a federal incomepublic corporation from taking a tax deduction for certain compensation in excess of $1 million per year paid to the CEO or to any of the other NEOs other than the CFO. The portion of theannual compensation in excess of $1 million paid to certainthe CEO or to other NEOs in 2010 was not deductible for federal income tax purposes.other than the CFO. One exception applies to performance-based compensation paid pursuant to stockholder-approved employee benefit plans. Performance-based compensation is compensation that is paid only if the individual’s performance meets pre-established objective performance goals based on performance criteria approved by our stockholders.


29

Although deductibility of compensation is preferred, tax deductibility is not athe primary objective of the Company’sour compensation programs. The Committee believesmay decide to pay compensation or grant awards that achievingserve the objectives of our executive compensation objectives set forth above is more important thanprogram even though such compensation or awards may not be deductible by the benefit of tax deductibility. Company.
The Company reservesannual incentives and long-term incentive performance unit awards granted in 2013 to our NEOs are intended to comply with the rightperformance-based compensation exemption under Section 162(m). RSUs granted to maintain flexibilityNEOs in how executive officers are compensated, which may result in limiting2013, although not deductible, were considered to be the deductibility of amounts of compensation from time to time.
Risk Assessment of Compensation Policies and Practices
In 2011, AAM management conductedappropriate vehicle for a risk assessmentportion of the Company’slong-term incentive component of our executive compensation policies and practices relating to AAM’s compensation programs for executive officers and other associates on a global basis. The process used by management to conduct the risk assessment was approved by the Compensation Committee. Based on the risk assessment and other factors, management concluded that AAM’s compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on the Company. The Compensation Committee agreed with management’s conclusion.program.
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee hasWe have reviewed and discussed with management the Compensation Discussion and Analysis required by Item 402(b) ofRegulation S-K, and basedwith management. Based on such review and discussions,discussion, we recommended to the Board of Directors that suchthe Compensation Discussion and Analysis be included in this proxy statement.
Compensation Committee of the Board of Directors
Forest J. Farmer, Chairman
Elizabeth A. Chappell
Steven B. Hantler
Larry K. Switzer
Thomas K. Walker


30

28


SUMMARY COMPENSATION TABLE
The following table summarizes the compensation of our named executive officers (Richard E. Dauch, Co-Founder, Chairman of the Board & Chief Executive Officer, Michael K. Simonte, Executive Vice President — Finance & Chief Financial Officer, David C. Dauch, President & Chief Operating Officer, John J. Bellanti, Executive Vice President, Worldwide Operations, John E. Jerge, President — AAM Americas and Patrick S. Lancaster, retired effective January 1, 2011, former Executive Vice President, Chief Administrative Officer & Secretary, for the fiscal years ended December 31, 2010,2013, December 31, 20092012 and December 31, 2008.2011.
 
                                              
                     Change in
      
                     Pension Value
      
                  Non-Equity
  and
      
                  Incentive
  Nonqualified
      
                  Plan
  Deferred
  All Other
   
            Stock
  Options
  Compen-
  Compensation
  Compen-
   
Name and
     Salary
  Bonus(2)
  Awards(3)
  Awards(3)
  sation(4)
  Earnings(5)
  sation(6)
  Total
Principal Position  Year  ($)  ($)  ($)  ($)  ($)  ($)  ($)  ($)
                                              
Richard E. Dauch(1)                                             
Co-Founder, Chairman &   2010    2,702,304    —    —    —    —    2,692,143(7)   158,981    5,553,428(7)
Chief Executive Officer   2009    2,156,269    —    167,583    210,000    —    7,074,845    112,485    9,721,182 
    2008    1,620,667    —    596,655    400,500    —    3,081,360    105,673    5,804,855 
                                              
Michael K. Simonte                                             
Executive Vice President —   2010    500,004    —    —    —    500,000    97,430    51,294    1,148,728 
Finance & Chief Financial Officer   2009    372,375    —    —    —    —    69,597    46,477    488,449 
    2008    271,125    —    100,800    33,375    —    59,884    44,235    509,419 
                                              
David C. Dauch(1)                                             
President & Chief   2010    575,004    —    —    —    731,250    97,540    27,006    1,430,800 
Operating Officer   2009    411,125    —    —    —    —    101,071    27,748    539,944 
    2008    358,875    —    120,960    41,385    —    96,222    21,460    638,902 
                                              
John J. Bellanti                                             
Executive Vice President,   2010    459,996    —    —    —    460,000    357,673    30,312    1,307,981 
Worldwide Operations   2009    355,417    —    —    —    —    224,999    31,518    611,934 
                                              
John E. Jerge                                             
President — AAM Americas   2010    288,000    —    —    —    227,250    74,685    43,226    633,161 
                                              
Patrick S. Lancaster(8)                                             
Former Executive Vice President,   2010    440,004    704,000    —    —    173,184    283,152(8)   1,081,878(9)   2,682,218(10)
Chief Administrative Officer &   2009    356,158    —    —    —    —    348,353    31,999    736,510 
Secretary   2008    268,896    —    146,160    32,040    —    145,474    33,979    626,549 
                                              
Name and
Principal Position
Year
Salary
($)
Bonus
($)
Stock
Awards(1)
($)
Options
Awards
($)
Non-Equity
Incentive
Plan
Compen-
sation(2)
($)
Change in
Pension Value
And
Nonqualified
Deferred
Compensation
Earnings(3)
($)
All Other
Compen-
sation(4)
($)
Total
($)
David C. Dauch(5)
Chairman, President & Chief Executive Officer
20131,033,333
—
1,750,002
—
3,185,250
245,423
116,389
6,330,397
2012873,333
21,500
979,013
—
1,728,100
565,534
67,695
4,235,175
2011650,004
111,150
—
—
7,169,180
397,228
28,778
8,356,340
Michael K. Simonte
Executive Vice President & Chief Financial Officer
2013543,800
—
543,810


1,429,085
27,943
50,817
2,595,455
2012527,900
4,617
316,743
—
935,383
294,245
48,942
2,127,830
2011515,004
37,080
—
—
4,255,095
251,101
49,604
5,107,884
John J. Bellanti(6)
Executive Vice President, Worldwide Operations
2013500,300
—
485,713
—
1,678,896
—
45,240
2,710,149
2012485,700
—
291,424
—
802,400
188,187
42,429
1,810,140
2011473,796
—
—
—
2,166,972
446,401
33,823
3,120,992
Alberto L. Satine(6)
Group Vice President
Global Sales & Business Development
2013360,000
—
216,006
—
565,800
—
41,399
1,183,205
Norman Willemse
Vice President, Metal Formed Product Business Unit
2013320,000
—
160,006
—
579,120
12,546
50,348
1,122,020
2012310,600
—
124,249
—
376,808
100,562
48,162
960,381
2011303,000
—
—
—
603,180
113,444
41,412
1,061,036
Richard E. Dauch(5)
Co-Founder & Former Executive Chairman
(deceased August 2, 2013)
20131,181,818
—
—
—
2,030,000
—
155,822
3,367,640
20122,000,000
4,000,000
6,874,007
627,000
—
4,201,202
141,916
17,844,125
20112,526,728
6,000,000
—
—
—
2,802,700
149,441
11,478,869

(1)Mr. R. E. Dauch and Mr. D.C. Dauch receive compensation based solely on their role as executive officers. They receive no additional compensation for serving as directors.
(2)Mr. R.E. Dauch received no annual incentive award in 2010 in consideration of the $3 million compensation limitation in the 2009 Settlement and Commercial Agreement. Mr. Lancaster received a 2010 bonus payment pursuant to the Settlement Agreement as described in theNarrative to Summary Compensation Table and Grants of Plan-Based Award Table.
(3)Reflects the full grant date fair value of equity awards made during fiscal years 2009 and 2008.year 2013 calculated in accordance with FASB ASC 718 (without any reduction for risk of forfeiture) as determined based on applying the assumptions used in our financial statements. The grant date fair value of stock awards is calculated using the closing market price of AAM common stock on the date of grant. The grant date fair valueSee Note 7 to the audited consolidated financial statements in our annual report on Form 10-K for the year ended December 31, 2013 regarding assumptions underlying the valuation of option awards was $1.40 and $2.67 per share of common stock covered by the award for 2009 and 2008 respectively, calculated using the Black-Scholes option pricing model. Fiscal year amounts for 2008 were recomputed based on each award’s full grant date fair value reported in that fiscal year’sGrants of Plan-Based Awards Table.equity awards.
(4)(2)Reflects amounts earned under the AAM Incentive Compensation Plan for Executive Officers for Mr. Simonte, Mr. D.C. Dauch, Mr. Bellanti and Mr. Jerge. Amount reflected for Mr. Lancaster is a pro-rata payment of the 2010 performance award under the2009 AAM LTIP that vested upon his retirement;with respect to the remaining amount was forfeited.three-year performance period ending December 31, 2013. The 2013 amounts are as follows:


31

 
AAM Incentive
Compensation Plan
 AAM LTIP Total
David C. Dauch$1,196,250
 $1,989,000
 $3,185,250
Michael K. Simonte$378,485
 $1,050,600
 $1,429,085
John J. Bellanti(a)
$285,000
 $1,393,896
 $1,678,896
Alberto L. Satine$185,000
 $380,800
 $565,800
Norman Willemse$167,040
 $412,080
 $579,120
Richard E. Dauch$2,030,000
 $—
 $2,030,000

(a) For Mr. Bellanti, amount also includes pro-rata payments of the 2012 and 2013 performance unit awards under the 2012 Omnibus Incentive Plan. The awards were pro-rated through December 31, 2013 due to his retirement on January 1, 2014.

29
Table of Contents


(5)(3)This column reflects
Reflects the annualized increase in pension value under the Salaried Retirement Program, the Albion Pension Plan and the Supplemental Executive Retirement Program (SERP). There was a net negative change in pension values for 2013 of ($256,846) for Mr. Bellanti; ($104,383) for Mr. Satine and ($12,731,110) for Mr. R.E. Dauch. See also Pension Benefits Table below. There are no above-market or preferential earnings on compensation deferred under our Executive Deferred Compensation Plan.
(4) The components of All Other Compensation for 2013 are as follows:
Name
Employer
401(k) Match
Contributions(a)
($)
Retirement
Contributions(b)
($)
Executive
Life
Insurance
Premiums(c)
($)
Company-Provided
Vehicles(d)
($)
Tax Gross Ups for Spousal Travel(e)
($)
Other(f)
($)
Total
($)
David C. Dauch12,569
12,750
7,640
31,632
22,704
29,094
116,389
Michael K. Simonte12,575
12,750
3,681
20,301
—
1,510
50,817
John J. Bellanti8,750
12,750
7,155
14,188
424
1,973
45,240
Albert L. Satine—
12,750
3,171
23,618
—
1,860
41,399
Norman Willemse12,469
12,750
3,219
—
424
21,486
50,348
Richard E. Dauch6,906
6,906
110,046
31,364
—
600
155,822
(a)Includes employer matching contributions under AAM’s 401(k) plan.
(b)Includes employer retirement contributions under AAM’s 401(k) plan.
(c)Includes executive life insurance premiums.
(d)Includes personal use of Company-provided vehicles. The aggregate incremental cost of Company-provided vehicles is based on total vehicle cost if business use of the vehicle is less than 30%. For Mr. D.C. Dauch and Mr. R.E. Dauch, includes the cost of the personal use of a second Company-provided vehicle for each of them.
(6)(e)Includes amounts reimbursed for 2010, employer contributions undertaxes attributable to the 401(k) plan,income associated with the cost of spousal travel for participation in Company business meetings and events.
(f)For Mr. D.C. Dauch, includes the cost of travel for spousal participation in Company business meetings and events of $26,091, meals provided during business hours, the cost of an executive life insurance premiumsphysical and personal umbrella liability insurance premiums. Also includes meals provided during business hours for each NEO and personal use of Company-provided vehicles for Mr. R.E. Dauch, Mr. Simonte, Mr. Bellanti, Mr. Jerge and Mr. Lancaster, and executive physical examinations for Mr. R.E. Dauch, Mr. D.C. Dauch, Mr. Bellanti, Mr. Jerge and Mr. Lancaster. Employer contributions under the Company’s 401(k) Plan consisted of matching contributions of $11,925 for Mr. R.E. Dauch,For Mr. Simonte and Mr. Jerge; $11,740 for Mr. D.C. Dauch;Satine, includes the cost of an executive physical and $8,250 forpersonal umbrella liability insurance premiums. For Mr. Bellanti, includes the cost of travel for spousal participation in Company business meetings and events, the cost of an executive physical and personal umbrella liability insurance premiums. For Mr. Lancaster; retirementWillemse, includes the cost of travel for spousal participation in Company business meetings and events, the cost of airfare for personal travel under an international relocation arrangement, employer matching contributions under the Executive Deferred Compensation Plan and the cost of $12,250 for Mr. Simonte, Mr. D.C. Dauch and Mr. Jerge. The total forpersonal umbrella liability insurance premiums. For Mr. R.E. Dauch, includes $117,586 for executive life insurance premiums and the cost of his spouse’s attendance at Company business events.
(7)The benefits associated with the change in other pension values are excluded from the measurement of total compensation under the 2009 Settlement and Commercial Agreement. Under the 2009 Settlement and Commercial Agreement, annual compensation for any executive officer, current or former, cannot exceed $3 million. The following table illustrates AAM’s compliance with this provision of the 2009 Settlement and Commercial Agreement as it relates to Mr. R.E. Dauch’s 2010 compensation:personal umbrella liability insurance premiums.
     
Total 2010 compensation as presented on Summary Compensation Table $5,553,428 
Less: Value of pension / SERP benefits granted prior to 2010  2,692,143 
     
Total 2010 compensation as measured under the 2009 Settlement and Commercial Agreement $2,861,285 
     
(5) Compensation of Mr. D.C. Dauch and Mr. R.E. Dauch is based solely on employment as executive officers. They received no compensation for serving as directors.
(6) Mr. Satine was appointed Senior Vice President, Global Driveline Operations effective January 1, 2014 upon the retirement of Mr. Bellanti.
(8)Effective July 12, 2010, Mr. Lancaster assumed the role of Special Advisor to AAM’s Co-Founder, Chairman & CEO, a non-officer position, and retired from AAM effective January 1, 2011. His Salaried Pension and SERP benefit commenced in 2011. The change in pension value reflects actual commencement dates and form of payment elections.
(9)Includes a $1 million special incentive program award earned by Mr. Lancaster as of December 31, 2010. Also includes $47,444, which represents the value of the Company vehicle transferred to Mr. Lancaster pursuant to the Settlement Agreement.
(10)Mr. Lancaster’s total 2010 annual compensation is in compliance with the $3 million annual compensation limit under the 2009 Settlement and Commercial Agreement.


32

30


GRANTS OF PLAN-BASED AWARDS
Annual and long-term incentive awards granted in 20102013 to the NEOs are shown in the following table. The annual and long-term incentive compensation programs are described inCompensation Discussion and Analysis and following the table below.
                     
       Estimated Future Payouts Under
 
       Non-Equity Incentive Plan Awards(2)(3) 
Name  Grant Date   Threshold ($)   Target ($)   Maximum ($) 
Richard E. Dauch(1)
   —    —    —    — 
                     
Michael K. Simonte                    
                     
Annual Incentive(2)
   —    200,000    400,000    500,000 
                     
Long-Term Incentive(3)
   01/07/2010    225,000    600,000    1,200,000 
                     
Senior Executive Special Incentive Program(4)
   03/15/2010    3,000,000    3,000,000    3,000,000 
                     
David C. Dauch                    
                     
Annual Incentive(2)
   —    292,500    585,000    731,250 
                     
Long-Term Incentive(3)
   01/07/2010    378,000    1,008,000    2,016,000 
                     
Senior Executive Special Incentive Program(4)
   03/15/2010    5,000,000    5,000,000    5,000,000 
                     
John J. Bellanti                    
                     
Annual Incentive(2)
   —    184,000    368,000    460,000 
                     
Long-Term Incentive(3)
   01/07/2010    207,000    552,000    1,104,000 
                     
Senior Executive Special Incentive Program(4)
   03/15/2010    1,000,000    1,000,000    1,000,000 
                     
John E. Jerge                    
                     
Annual Incentive(2)
   —    90,900    181,800    227,250 
                     
Long-Term Incentive(3)
   01/07/2010    85,500    228,000    456,000 
                     
Patrick S. Lancaster                    
                     
Annual Incentive(5)
   —    176,000    352,000    440,000 
                     
Long-Term Incentive(3)(6)
   01/07/2010    198,000    528,000    1,056,000 
                     
NameGrant Date
Approval
Date
Estimated Future Payouts under
Non Equity Incentive Plan Awards(1)
All Other
Stock Awards:
Number of
Shares of Stock
or Units(2)
(#)
All Other
Option
Awards:
Number of
Securities
Underlying
Options
 (#)
Exercise
or Base
Price of
Option
Awards
($/Sh)
Grant Date
Fair
Value of
Stock and
Option
Awards(3)
($)
Threshold
($)
Target
($)
Maximum
($)
David C. Dauch         
Annual Incentive1/1/201310/24/2012550,000
1,375,000
—
—
—
—
—
Long-Term Incentive3/6/20132/6/2013—
—
—
137,687
—
—
1,750,002
Long-Term Incentive3/6/20132/6/2013437,500
1,750,000
3,500,000
—
—
—
—
Michael K. Simonte         
Annual Incentive1/1/201310/24/2012174,016
435,040
—
—
—
—
—
Long-Term Incentive3/6/20132/6/2013—
—
—
42,786
—
—
543,810
Long-Term Incentive3/6/20132/6/2013135,950
543,800
1,087,600
—
—
—
—
John J. Bellanti         
Annual Incentive1/1/201310/24/2012155,424
388,560
—
—
—
—
—
Long-Term Incentive3/6/20132/6/2013—
—
—
38,215
—
—
485,713
Long-Term Incentive3/6/20132/6/2013121,425
485,700
971,400
—
—
—
—
Alberto L. Satine         
Annual Incentive1/1/201310/24/201286,400
216,000
—
—
—
—
—
Long-Term Incentive3/6/20132/6/2013—
—
—
16,995
—
—
216,006
Long-Term Incentive3/6/20132/6/201354,000
216,000
432,000
—
—
—
—
Norman Willemse         
Annual Incentive1/1/201310/24/201276,800
192,000
—
—
—
—
—
Long-Term Incentive3/6/20132/6/2013—
—
—
12,589
—
—
160,006
Long-Term Incentive3/6/20132/6/201340,000
160,000
320,000
—
—
—
—
Richard E. Dauch   
 
 
 
 
 
 
Annual Incentive1/1/201310/24/20121,600,000
4,000,000
—
—
—
—
—

(1)Mr. R.E. Dauch received no
Reflects annual incentive or long-term incentive awards in 2010 in consideration of the $3 million annual compensation limit set forth in the 2009 Settlement and Commercial Agreement.
(2)Annual incentive awards granted under the AAM Incentive Compensation Plan for Executive Officers. Also reflects the long-term incentive performance unit awards (PUs) granted under the 2012 Omnibus Incentive Plan. The PUs are payable in cash based on the Company’s EBITDA performance. See further discussion of determinationthese incentive awards under the Narrative to Summary Compensation Table and Grants of the awards underAnnual Incentive Compensationin theCompensation Discussion and Analysis.Plan-Based Award Table.
(2)
Reflects RSU awards granted under the 2012 Omnibus Incentive Plan. The awards are payable in common stock, contingent upon continued employment through the three-year vesting period. See further discussion in the Narrative to the Summary Compensation Table and the Grants of Plan-Based Awards Table. No options were granted in 2013.
(3)Long-term incentive performance awards were granted underReflects the AAM LTIP. See further discussionfull grant date fair value of the awards underLong-Term Incentivesin theCompensation Discussion and Analysis.
(4)Mr. Simonte, Mr. D.C. Dauch and Mr. Bellanti received awards under the Senior Executive Special Incentive Program further described in theCompensation Discussion and Analysis.
(5)Mr. Lancaster received a bonus payment of $704,000 for 2010RSUs made during fiscal year 2013 calculated in accordance with FASB ASC 718 (without any reduction for risk of forfeiture) as determined based on applying the Settlement Agreement.
(6)Mr. Lancaster received a pro-rata paymentassumptions used in our financial statements. The grant date fair value of stock awards is calculated using the 2010 performance award, shownclosing market price of AAM common stock on the date of grant. See Note 7 to the audited consolidated financial statements in our annual report on Form 10-K for theSummary Compensation Table, in connection with his retirement effective January 1, 2011. year ended December 31, 2013 regarding assumptions underlying the valuation of equity awards.


33

31
Table of Contents

Narrative to Summary Compensation Table and Grants of Plan-Based Awards Table
President & CEO Employment Agreement
In accordance with the December 22, 2009Mr. D.C. Dauch’s employment agreement amendment betweenas President & CEO provides for the Companyfollowing compensation and benefits:
Term
Initial Term: September 1, 2012 through August 31, 2015
Additional one-year extensions unless either party provides 60 days’ written notice of intent not to renew. Automatic two-year extension upon a change in control.
Base Salary$1 million effective September 1, 2012, subject to annual review and increase by the Compensation Committee in its sole discretion. Base salary increased to $1.1 million effective September 1, 2013.
Annual Incentive
Participation in the AAM Annual Incentive Plan for Executive Officers
Target opportunity is 125% of base salary
Long-Term Incentive
Participation in the plans applicable to executive officers
Target opportunity is 350% of base salary

Other Benefits
Participation in plans applicable to executive officers
Retiree medical, dental and vision coverage equivalent to the benefit levels offered in the Company’s group health care plans for active salaried associates as of September 1, 2012
Mr. R. E.D.C. Dauch the CEO agreedis also entitled to forego compensation payable to him under his then current Employment Agreement to the extent his annual compensation would exceed the $3 million limit set forthcertain payments and benefits in the 2009 Settlement and Commercial Agreement. event of termination of employment under the scenarios described below in Potential Payments Upon Termination or Change in Control.
Former Executive Chairman Employment Agreement
Mr. R.E. Dauch’s employment agreement as amended, providesthe former Executive Chairman, which terminated upon his death on August 2, 2013, provided for the following compensation and benefits (subject to the $3 million compensation limit under the 2009 Settlement and Commercial Agreement with GM):benefits:
Term• Annual base salary of $2,702,300 (effective June 16, 2009), subject to annual adjustment by the Committee;In effect through August 2, 2013
Base Salary• $2 million per year
2013 Annual IncentiveSubject to
Participation in the $3 million limit on annual compensation described above, annual cash bonus in an amount determined by the CommitteeAAM Annual Incentive Plan for Executive Officers
Target opportunity is 200% of base salary. 2013 award pro-rated based on our financial performance, relative to our competitor peer group:
time served through August 2, 2013.
Long-Term Incentive• equalNo grants subsequent to 3 times annual base salary if we continue to outperform our competitor peer group;2012.
Other Benefits• greater than 3 times annual base salary if we outperform our competitor peer group by greater than the historical amount; or
• up
Participation in plans applicable to the amount of Mr. R.E. Dauch’s base salary if we do not outperform our competitor peer group;
• executive officers
Reimbursement of premiums under a $5 million life insurance policy purchased by Mr. R.E. Dauch;
• Annual executive physical examination and health and disability coverage as provided to other senior executives; and
• Dauch
Use and maintenance of two Company-provided automobiles and the perquisites and other benefits provided to our senior executives.
Annual Incentive Awards
In 2013, annual incentive awards were granted under the AAM Incentive Compensation Plan for Executive Officers. Net operating cash flow and NIPS were selected as performance metrics for these awards. The current term continues through December 31, 2011maximum payout for net operating cash flow is 125%. Although there was no established maximum payout for NIPS in 2013, a stated maximum was established in 2014. See Annual Incentive Compensation in the CD&A.
Long-Term Incentive Awards
In 2013, the Company granted long-term incentive awards to NEOs in the form of RSUs and is automatically extended for successive one-yearcash-based performance units. The terms unless either party gives notice of termination at least 60 days priorthese awards, as well as the outstanding cash-based performance awards granted to NEOs under the end of the applicable term. The potential payments and benefits upon termination of Mr. R.E. Dauch’s employment2009 AAM LTIP are described inPotential Payments Upon Termination or Change in Control.
Settlement Agreement with Mr. Lancaster
In accordance with the Settlement Agreement between AAM and Mr. Lancaster effective July 12, 2010, the Committee approved the following cash payments and other benefits to Mr. Lancaster in connection with his retirement effective January 1, 2011 (Retirement Date):
• Continued payment of his annual base salary in consideration of his services as Special Advisor to the CEO through December 31, 2010;
• A 2010 bonus payment of $704,000 on March 15, 2011;
• Payment of $850,000, less withholding taxes, on or before August 15, 2010 in settlement of a claim;
• Title to his Company-provided vehicle as of December 31, 2010;
• Consulting fees of $420,000 for services provided during 2011, payable in monthly installments, provided that Mr. Lancaster performs no work for a competitor of AAM;
• Vesting of his outstanding restricted stock and restricted stock units on the Retirement Date;
• Continued eligibility for the $1,000,000 Senior Special Incentive Program award granted to him on March 15, 2010; and
• Continued eligibility to receive a pro rata portion of outstanding long-term cash incentive awards granted in 2009 and 2010.


34

Payments made pursuant to this agreement were conditioned upon Mr. Lancaster’s execution of a full waiver and release of claims against AAM, which he signed on January 5, 2011. The payments and benefits payable to Mr. Lancaster pursuant to the Settlement Agreement are described inPotential Payments Upon Termination or Change in Control.
Long-Term Incentive AwardsCompensation
The following description refers to awards granted prior to 2010 under in the Company’s 1999 StockCD&A.

32

2013 Awards Granted Under the 2012 Omnibus Incentive Plan which has since expired. Information concerning outstanding awards is included
Restricted Stock Units (RSUs). The RSUs granted to NEOs underOutstanding Equity Awards age 57 at December 31, 2010below.
Stock Options.  Outstanding optionsthe date of grant vest in three years, while RSUs granted to NEOs age 57 and over vest ratably in three approximately equal installments on the first, second and third anniversaries of the grant date. Generally,annual installments. Upon vesting, may accelerateall RSUs are payable in common stock. Vesting is accelerated upon termination of employment due to death or disability or upon a change in control. The award is forfeited if employment is terminated for any other reason prior to vesting. Vested options expire ten years after
Performance Unit Awards (PUs). The PUs granted to the grant dateNEOs on March 6, 2013 are based upon the attainment of certain EBITDA margin performance targets over a three-year performance period beginning January 1, 2013 through December 31, 2015. PUs have an initial notional value equal to one dollar and maywill be exercised any time before the earliest of: (1) the expirationsettled in cash. A pro-rata portion of the grant, (2) five years following termination of employment (one year following termination for options granted before 2002) due toaward is payable upon death, disability, retirement, or a change in control, (3) 90 days following termination of employment without cause and (4) termination of employment for cause.
Restricted Stock.  Restricted stock awarded to executives under age 60 vests on the third anniversary of the grant date. Restricted stock awarded to executives age 60 and over vests in three approximately equal annual installments through March 14, 2011. Vesting accelerates upon death, disability, termination of employment by the Company pursuant to a reduction in force or similar program approved by the CEO, or upon a change in control.
The following table illustrates the threshold, target and maximum EBITDA margin performance levels for determining awards under PUs.
Performance Level
3 Year Cumulative
EBITDA Margin
 
Percent of
Target Award
Opportunity Earned
Threshold10% 25%
Target12% 100%
Maximum15% 200%
2011 Awards granted under the AAM 2009 Long-Term Incentive Plan
Cash-Based Performance Accelerated Restricted Stock (PARS) and Performance Accelerated Restricted Stock Units (RSUs).  PARS and RSUs vest on the fifth anniversaryAwards. Prior to adoption of the grant date unless vesting is accelerated on2012 Omnibus Incentive Plan, the third or fourth anniversariesCompany’s long-term incentive program consisted of cash-based performance awards made under the grant date2009 AAM LTIP. The cash payouts are determined based on our total shareholder return. Vesting may also accelerate upon termination of employment due to death, disability or upon a change in control. If the NEO’s employment is terminated for any other reason, he will forfeit his unvested PARSEBITDA margin and RSUs.
Vesting is accelerated on the third anniversary of the grant date if AAM’srelative total shareholder return for the preceding(TSR) performance levels as shown below over a three-year period meets or exceeds the 66th percentile of our competitor peer group. If vesting is not accelerated on the third anniversary, then vesting is accelerated on the fourth anniversary of the grant date if shareholder return exceeds the 66th percentile of our competitor peer group for the preceding four years. Total shareholder return is definedperformance period. The 2011 awards were paid in March 2014 as the cumulative appreciation (assuming reinvestment of dividends) of an investment in common stock. Vesting will not accelerate unless AAM has positive TSR.
PARS consist of issued and outstanding shares of AAM common stock, subject to forfeiture and transfer restrictions prior to vesting of the awards, and carry voting and dividend rights from the date of grant. RSUs consist of the right to receive, upon vesting of the award, an amount in cash equal to the fair market value of the number of shares of common stock covered by the award. RSUs carry the right to receive dividend equivalent payments from the date of grant, payableshown in the calendar quarter when dividends are paid on our common stock.Summary Compensation Table above. No other awards under the 2009 AAM LTIP remain outstanding at December 31, 2013. In calculating these awards, the Committee has discretion to exclude certain special items from EBITDA, such as special charges or gains, non-recurring operating costs, extraordinary gains or losses, the impact of changes in accounting principles, or other unusual items.
The following tables illustrate the threshold, target and maximum performance levels for determining 2011 award payouts for each performance measure.
2008 Performance Awards.  In 2008, Mr. Simonte, Mr. D.C. Dauch, Mr. Bellanti and Mr. Jerge received 25 percent of their long-term incentive award in the form of performance awards. The award represented the right to a payment in cash based on AAM’s relative TSR over a three year performance period beginning in January 2008. Based on AAM’s relative TSR for the period January 2008 through December 2010, the awards did not result in a payment to Mr. Simonte, Mr. D.C. Dauch, Mr. Bellanti or Mr. Jerge.
 EBITDA Performance Measure TSR Performance Measure
Performance Level
3-Year
Cumulative
EBITDA Margin
 
Percent of
Target Award
Opportunity
Earned
 
Company’s TSR
Percentile
Rank
 
Percent of
Target Award
Opportunity
Earned
Threshold8% 25% 
35th
 50%
Target12% 100% 
50th
 100%
Maximum15% 200% 
75th
 200%

Performance Awards.  The Performance Awards are discussed in theCompensation Discussion and Analysis.
33


35


OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 20102013
 
                               
       Option Awards       Stock Awards 
                       Market
 
                   Number of
   Value of
 
                   Shares
   Shares
 
   Number of
   Number of
           or Units
   or Units
 
   Securities
   Securities
           of Stock
   of Stock
 
   Underlying
   Underlying
           That
   That
 
   Unexercised
   Unexercised
   Option
       Have
   Have
 
   Options
   Options
   Exercise
   Option
   Not
   Not
 
   Exercisable
   Unexercisable
   Price
   Expiration
   Vested
   Vested(8)
 
Name  (#)   (#)   ($)   Date   (#)   ($) 
Richard E. Dauch   240,000         8.85    4/2/2011    19,534(1)   251,207 
    300,000         24.15    1/23/2012    39,958(2)   513,860 
    300,000         23.73    1/22/2013           
    300,000         38.70    2/2/2014           
    150,000         26.65    3/15/2015           
    150,000         15.58    3/15/2016           
    150,000         26.02    3/14/2017           
    100,500    49,500(1)   10.08    6/25/2018           
    —    100,500(2)   2.81    1/6/2019           
Michael K. Simonte   39,664         15.56    2/2/2011    3,600(3)(6)   46,296 
    9,500         24.15    1/23/2012    2,400(4)(6)   30,864 
    10,000         23.73    1/22/2013    3,600(3)(7)   46,296 
    8,500         38.70    2/2/2014    2,400(4)(7)   30,864 
    9,000         26.65    3/15/2015    10,000(5)   128,600 
    10,000         15.58    3/15/2016           
    10,000         26.02    3/14/2017           
    8,375    4,125(1)   10.08    6/25/2018           
David C. Dauch   7,260         8.85    4/2/2011    4,800(3)(6)   61,728 
    16,750         24.15    1/23/2012    3,200(4)(6)   41,152 
    28,000         23.73    1/22/2013    4,500(3)(7)   57,870 
    28,000         38.70    2/2/2014    3,000(4)(7)   38,580 
    12,000         26.65    3/15/2015    12,000(5)   154,320 
    15,000         15.58    3/15/2016           
    13,000         26.02    3/14/2017           
    10,385    5,115(1)   10.08    6/25/2018           
John J. Bellanti   12,000         24.15    1/23/2012    3,600(3)(6)   46,296 
    13,000         23.73    1/22/2013    2,400(4)(6)   30,864 
    16,000         38.70    2/2/2014    3,600(3)(7)   46,296 
    9,000         26.65    3/15/2015    2,400(4)(7)   30,864 
    6,700         15.58    3/15/2016    9,000(5)   115,740 
    10,000         26.02    3/14/2017           
    7,370    3,630(1)   10.08    6/25/2018           
John E. Jerge   11,500         24.15    1/23/2012    3,600(3)(6)   46,296 
    12,000         23.73    1/22/2013    2,400(4)(6)   30,864 
    10,000         38.70    2/2/2014    3,300(3)(7)   42,438 
    8,000         26.65    3/15/2015    2,200(4)(7)   28,292 
    10,000         15.58    3/15/2016    7,000(5)   90,020 
    9,500         26.02    3/14/2017           
    6,030    2,970(1)   10.08    6/25/2018           
                               


36

                               
       Option Awards       Stock Awards 
                       Market
 
                   Number of
   Value of
 
                   Shares
   Shares
 
   Number of
   Number of
           or Units
   or Units
 
   Securities
   Securities
           of Stock
   of Stock
 
   Underlying
   Underlying
           That
   That
 
   Unexercised
   Unexercised
   Option
       Have
   Have
 
   Options
   Options
   Exercise
   Option
   Not
   Not
 
   Exercisable
   Unexercisable
   Price
   Expiration
   Vested
   Vested(8)
 
Name  (#)   (#)   ($)   Date   (#)   ($) 
Patrick S. Lancaster   35,000         8.85    4/2/2011    3,900(10)   50,154 
    40,000         24.15    1/23/2012    2,600(10)   33,436 
    30,000         23.73    1/22/2013    3,300(10)   42,438 
    25,000         38.70    2/2/2014    2,200(10)   28,292 
    9,000         26.65    3/15/2015    4,785(10)   61,535 
    11,000(9)        15.58    1/1/2016           
    9,500(9)        26.02    1/1/2016           
    8,040(9)   3,960(9)   10.08    1/1/2016           
                               
Name
Number of
Securities
Underlying
Unexercised
Options
Exercisable(1)
(#)
Option
Exercise
Price
($)
Option
Expiration
Date
Number of
Shares
or Units
of  Stock
That
Have
Not
Vested
(#)
Market
Value of
Shares
or Units
of Stock
That
Have
Not
Vested(2)
($)
David C. Dauch28,000
38.70
2/2/2014
79,326(3)
1,622,217
 12,000
26.65
3/15/2015
22,382(4)
457,712
 15,000
15.58
3/15/2016
137,687(5)
2,815,699
 13,000
26.02
3/14/2017

Michael K. Simonte8,500
38.70
2/2/2014
34,466(3)
704,830
 9,000
26.65
3/15/2015
42,786(5)
874,974
 10,000
15.58
3/15/2016

 10,000
26.02
3/14/2017

John J. Bellanti16,000
38.70
2/2/2014
21,247(3)
434,501
 9,000
26.65
3/15/2015
38,215(5)
781,497
 6,700
15.58
3/15/2016

 10,000
26.02
3/14/2017

 11,000
10.08
6/25/2018

Alberto L. Satine9,000
38.70
2/2/2014
13,929(3)
284,848
 8,000
26.65
3/15/2015
16,995(5)
347,548
 8,000
26.02
3/14/2017  
Norman Willemse7,500
38.70
2/2/2014
13,520(3)
276,484
 9,700
10.08
6/25/2018
12,589(5)
257,445
Richard E. Dauch(6)
300,000
38.70
2/2/2014  
 150,000
26.65
3/15/2015  
 150,000
15.58
3/15/2016  
 150,000
26.02
3/14/2017  
 100,500
9.19
8/2/2017  

(1)All outstanding options are vested as of December 31, 2013.
Granted under the 1999 Stock Incentive Plan on June 25, 2008. The remaining shares and options vested on March 14, 2011.
(2)Reflects value of outstanding RSUs using a share price of $20.45, the closing price of AAM common stock on December 31, 2013.
Granted under the 1999 Stock Incentive Plan on January 6, 2009. Approximately one-half of the shares vested on January 6, 2011 and one-half vest on January 6, 2012.
(3)Reflects PARS granted under the 1999 Stock Incentive Plan. PARS vest on the fifth anniversary of the grant date, unless vesting is accelerated at the end of the fourth year after the grant date. Accelerated vesting is contingent upon our achievement of predetermined performance goals, measured by our relative TSR. Vesting will not be accelerated unless TSR is positive.
(4)Reflects RSUs granted on May 30, 2012 under the 1999 Stock2012 Omnibus Incentive Plan. RSUs for Mr. D.C. Dauch, Mr. Simonte, Mr. Satine and Mr. Willemse vest three years from the date of grant. RSUs for Mr. Bellanti were forfeited upon retirement on the fifth anniversary of the grant date, unless vesting is accelerated at the end of the fourth year after the grant date. Accelerated vesting is contingent upon our achievement of predetermined performance goals, measured by our relative TSR. Vesting will not be accelerated unless TSR is positive.January 1, 2014.
(4)Reflects RSUs granted on September 1, 2012 under the 2012 Omnibus Incentive Plan pursuant to Mr. D.C. Dauch’s employment agreement. The RSUs for Mr. D.C. Dauch vest three years from the date of grant.
(5)Reflects restricted stockRSUs granted on March 6, 2013 under the 1999 Stock2012 Omnibus Incentive PlanPlan. RSUs for Mr. D.C. Dauch, Mr. Simonte, Mr. Satine and Mr. Willemse vest three years from the date of grant. RSUs for Mr. Bellanti were forfeited upon his retirement on June 25, 2008. The restricted stock awards vested on March 14, 2011.January 1, 2014.
(6)Granted on March 15, 2006. The PARS and RSUs vested on March 15, 2011.
(7)Granted on March 14, 2007. The PARS and RSUs vest on March 14, 2012. VestingUpon his death, vesting of theseMr. R.E.Dauch's outstanding long-term incentive awards did not accelerate on March 14, 2011.
(8)Reflectswas accelerated under the closing market value on December 31, 2010 ($12.86)terms of the numberapplicable award agreements. Unexercised stock options remain exercisable by his beneficiary until the earlier of shares of AAM common stock covered by outstanding PARS, RSUs and restricted stock awards on December 31, 2010.
(9)Mr. Lancaster hasthe option expiration date or five years from retirement to exercise these vested options. Unvested options were forfeited.
(10)Mr. Lancaster’s outstanding stock awards vested upon his retirement effective January 1, 2011 pursuant to the Settlement Agreement.date of death.

37


34


OPTIONS EXERCISED AND STOCK VESTED
 
                     
   Option Awards   Stock Awards 
   Number of
       Number of
     
   Shares
   Value
   Shares
   Value
 
   Acquired on
   Realized on
   Acquired on
   Realized on
 
   Exercise
   Exercise(1)
   Vesting(2)(3)(4)
   Vesting(5)
 
Name  (#)   ($)   (#)   ($) 
Richard E. Dauch   49,500    430,758    39,805    361,413 
                     
Michael K. Simonte   10,000    36,601    5,500    55,275 
                     
David C. Dauch   —    —    7,000    70,350 
                     
John J. Bellanti   —    —    5,000    50,250 
                     
John E. Jerge   11,000    24,938    5,000    50,250 
                     
Patrick S. Lancaster   —    —    10,930    102,698 
                     
  
Option AwardsStock Awards
Name
Number of
Shares
Acquired on
Exercise(1)
(#)
Value
Realized  on
Exercise(1)
($)
Number of
Shares
Acquired on
Vesting(2)
(#)
Value
Realized  on
Vesting(3)
($)
David C. Dauch—
—
—
—
Michael K. Simonte12,500
119,115
—
—
John J. Bellanti—
—
10,464
190,445
Alberto L. Satine16,700
120,046
—
—
Norman Willemse—
—
—
—
Richard E. Dauch49,500
445,995
627,493
13,078,015

(1)For Mr. R.E. Dauch, Mr. Simonte and Mr. Jerge, reflectsReflects the number of shares receivedacquired upon exercise of stock options multiplied byoptions. Value realized upon exercise is based on the difference between the salemarket price of AAM common stock acquired upon exercise and the exercise price for such options.stock options on the exercise date.
(2)Reflects the lapse of the transfer and forfeiture restrictions under awards of restricted stockRSUs granted in May 2012 to Mr. Bellanti and Mr. R.E. Dauch in January 2009. Restricted stock awarded to executives age 60 and over vest inDauch. The first of three approximately equal annual installments through January 6, 2012.
(3)Reflectsvested in May 2013. For Mr. R.E. Dauch, also reflects the lapse of the transfer and forfeiture restrictions under awardsRSUs that were unvested as of restricted stock granted to Mr. R.E. Dauch and Mr. Lancaster in June 2008. Restricted stock awarded to executives over age 60 vest in three approximately equal annual installments through March 14, 2011.his death.
(4)Reflects the lapse of the transfer and forfeiture restrictions under awards of PARS and RSUs granted to Mr. Simonte, Mr. D.C. Dauch, Mr. Bellanti, Mr. Jerge and Mr. Lancaster in March 2005. These awards vested in March 2010.
(5)(3)Reflects the number of restricted shares PARS andunderlying vested RSUs vested, multiplied by the closing market price of AAM common stock on the vesting date. For Mr. R.E. Dauch, the value realized on vesting upon death was $12,228,260.


38

35


PENSION BENEFITS
The following table shows the value of the benefits accumulated by the NEOs and their years of credited service under AAM’s Salaried Retirement Program (SRP), the Albion Pension Plan and the SERP.AAM’s Supplemental Executive Retirement Program (SERP). The years of credited service are through December 31, 2010,2013, AAM’s fiscal year-end measurement date used for financial statement reporting purposes. The values shown are based on unreduced benefits deferred to the earliest age at which unreduced benefits are payable. The assumptions used to calculate the actuarial present value of accumulated benefits are the same assumptions used in our audited consolidated financial statements for the fiscal year ended December 31, 2010, except that the values in the table do not reflect assumptions for future compensation increases or future service credits2013 and assume continued serviceemployment until unreduced retirement age is attained. For material assumptions, see Note 6 to the audited consolidated financial statements in our annual report on Form 10-K for the fiscal year ended December 31, 2013.
              
      Number of
  Present
      Years of
  Value of
      Credited
  Accumulated
      Service
  Benefit
Name  Plan Name  (#)  ($)
Richard E. Dauch(1)
  AAM Retirement Program for Salaried Employees   16.8333    843,319 
   AAM Supplemental Executive Retirement Program   21.0000(2)   22,862,681 
              
Michael K. Simonte  AAM Retirement Program for Salaried Employees   8.0833(3)   117,400 
   AAM Supplemental Executive Retirement Program   12.0833    300,241 
              
David C. Dauch  AAM Retirement Program for Salaried Employees   11.5000(3)   176,622 
   AAM Supplemental Executive Retirement Program   15.5000    483,193 
              
John J. Bellanti(4)
  AAM Retirement Program for Salaried Employees   16.8333    647,252 
   AAM Supplemental Executive Retirement Program   16.8333    614,249 
              
John E. Jerge  AAM Retirement Program for Salaried Employees   12.8333(3)   206,053 
   AAM Supplemental Executive Retirement Program   16.8333    335,632 
              
Patrick S. Lancaster(5)
  AAM Retirement Program for Salaried Employees   16.5833    861,446 
   AAM Supplemental Executive Retirement Program   16.5833    727,786 
              
NamePlan Name
Number of
Years of
Credited
Service
(#)
Present
Value of
Accumulated
Benefit
($)
Payments During Last Fiscal Year
($)
David C. DauchAAM Retirement Program for Salaried Employees
   11.5000(1)
250,031
—
AAM Supplemental Executive Retirement Program18.50001,617,968
—
Michael K. SimonteAAM Retirement Program for Salaried Employees
    8.0833(1)
167,221
—
AAM Supplemental Executive Retirement Program15.0833823,708
—
John J. Bellanti(2)
AAM Retirement Program for Salaried Employees
  17.8333(1)
804,187
—
AAM Supplemental Executive Retirement Program19.8333835,056
—
Alberto Satine(3)
AAM Retirement Program for Salaried Employees
  10.5833(1)
399,540
—
AAM Supplemental Executive Retirement Program12.5833281,112
—
Norman Willemse(4)
Albion Pension Plan6.3333276,017
—
AAM Supplemental Executive Retirement Program11.9167279,998
—
Richard E. Dauch(5)
AAM Retirement Program for Salaried Employees
  17.8333(1)
544,571
16,163
AAM Supplemental Executive Retirement Program23.583317,434,222
503,028

(1)Benefits under the SRP were frozen effective December 31, 2006 for Mr. D.C. Dauch and Mr. Simonte. Benefits under the SRP were frozen effective December 31, 2011 for Mr. Bellanti, Mr. Satine and Mr. R.E. Dauch.
(2)Mr. R.E. DauchBellanti retired on January 1, 2014 under the SRP and the SERP. The present value of accumulated benefits as of December 31, 2013 was reduced to reflect Mr. Bellanti's actual pension elections.
(3)Mr. Satine was eligible to retire on December 31, 2010 with full benefits under the Salaried Retirement Program and the SERP.
(2)As of December 31, 2009, Mr. R.E. Dauch earned 20 years of credited service in accordance with his employment agreement extension dated November 3, 2005.
(3)Benefits were frozen effective December 31, 2006 under the Salaried Retirement Program for Mr. Simonte, Mr. D.C. Dauch and Mr. Jerge.
(4)Mr. Bellanti was eligible to retire on December 31, 20102013 under both the Salaried Retirement ProgramSRP and the SERP. He qualifies for a reduced benefit of approximately 68%54% of the unreduced benefit under the Salaried Retirement ProgramSRP and for the basic form of benefit under the SERP.
(4)Mr. Willemse is not a participant in the SRP. Mr. Willemse was eligible to retire on December 31, 2013 under both the Albion Pension Plan and the SERP. He qualifies for the current benefit formula under the SERP.
(5)Mr. Lancaster retired effective January 1, 2011. BenefitsR.E. Dauch's present value of accumulated benefits as of December 31, 2013 was reduced to the survivorship portion of the benefits payable under both plans commencethe SERP and the SRP. His surviving spouse began receiving benefit payments in 2011. The present values reflect actual commencement dates and form of payment elections.September 2013.
We provide pension benefits for NEOs under our Salaried Retirement Program,the SRP, a broad-based defined benefit pension plan open tocovering substantially all of our U.S. salaried associates hired prior to January 1, 2002,2007, and our SERP. The purpose of the SERP is to provide total retirement benefits at a competitive level with executives of other major industrial companies. Our Albion Automotive Limited

36

subsidiary located in Glasgow, Scotland provides pension benefits under the Albion Pension Plan for its salaried associates. Mr. Willemse was a participant in the Albion Pension Plan while an associate of Albion Automotive Limited.
Salaried Retirement Program.Program (SRP). The annual retirement benefit payable to each executive, commencing on retirement at or after age 65, equals the sum of the executive’s contributions plus an additional benefit based on the executive’s average monthly salary (determined as the average of the executive’s base salary in the highest 60 months during his final 10 years of service) and years of credited service. The SRP also includes a cash benefit structure for participants hired between January 1, 2002 and December 31, 2006. None of the NEOs are covered by the cash benefit structure. The amount of compensation that may be taken into account for determining benefits is limited under the Internal Revenue Code. The maximum annual compensation under this limit was $245,000 for the year ended December 31, 2010.


39

Benefits under the Salaried Retirement ProgramSRP may be paid as a single life annuity or, upon election, in the form of a joint and survivor annuity with a reduction in the amount of the annual benefit.
Effective December 31, 2006, the Salaried Retirement ProgramSRP was amended to freeze benefits at current levels for associates who willwere not be eligible to retire by December 1, 2011. Mr. R.E. Dauch, Mr. Lancaster and Mr. Bellanti are grandfathered and will continueAssociates who were eligible for early or normal retirement on or before December 31, 2011 continued to accrue benefits through December 31, 2011. The NEOs did not accrue benefits under the program throughplan in 2013.
Albion Pension Plan. The annual retirement benefit payable, commencing on retirement at or after age 65, is based on the earlierexecutive’s average salary (determined as the average of (1) December 31, 2011 or (2) the dateexecutive’s base salary in the highest 36 months during the final 10 years of retirement or other terminationservice with Albion Automotive Limited), years of employment.pensionable service and the percentage of participant contributions made to the plan. Benefits under the Albion Pension Plan will be paid as an annuity; however, a participant may elect to receive a portion of the benefit payable in a lump sum.
Supplemental Executive Retirement Program.Program (SERP). Mr. R.E. Dauch, Mr. LancasterBellanti and Mr. BellantiSatine, who were grandfathered under the SRP, are eligible to receive the basic form of pension benefit under ourthe SERP upon retirement. In addition, they are eligible to receive the alternative form of benefit, if greater than the basic benefit, upon retirement at or after age 62. The executive must have at least 10 years of credited service to receive either form of benefit under the SERP.
The total monthly benefit payable under the basic form of SERP is equal to the following amount:
Two percent of the executive’s average monthly salary calculated as of December 31, 2011 (as determined for the SRP excluding the limitations as specified under the Internal Revenue Code), multiplied by the executive’s years of credited service; less
• Two percent of the executive’s average monthly salary (as determined for the Salaried Retirement Program excluding the limitations as specified under the Internal Revenue Code), multiplied by the executive’s years of credited service; less
• The benefit payable to the executive under the Salaried Retirement Program (without reduction for survivor benefits), plus two percent
The benefit payable to the executive under the SRP (without reduction for survivor benefits), plus 2% of the maximum monthly social security benefit payable at age 65 multiplied by the executive’s years of credited service.
The Compensation Committee has discretion to reduce or eliminate the amount payable under the alternative form of benefit. Subject to the Compensation Committee’s discretion, the total monthly benefit payable under the alternative form of SERP is equal to the following amount:
1.5% of the executive’s average monthly salary calculated as of December 31, 2011 (as determined for the SRP excluding the limitations as specified under the Internal Revenue Code) and average monthly incentive compensation as of December 31, 2011 (determined as the average of the highest five of the executive’s last 10 annual cash incentive awards, divided by 12) multiplied by the executive’s years of credited service; less
• 1.5 percent of the executive’s average monthly salary (as determined for the Salaried Retirement Program excluding the limitations as specified under the Internal Revenue Code) and average monthly incentive compensation (determined as the average of the highest five of the executive’s last 10 annual cash incentive awards, divided by 12) multiplied by the executive’s years of credited service; less
• The benefit payable to the executive under the Salaried Retirement Program
The benefit payable to the executive under the SRP (without reduction for survivor benefits), plus the maximum monthly social security benefit payable at age 65.
SERP benefits payable under the basic and alternative forms are generally paid as a single life annuity. If the executive’s spouse is eligible for survivor benefits under the Salaried Retirement Program,SRP; however, the executive’s monthly SERP benefit will be reduced and paid in the form of a joint and survivor annuity.
Effective January 1, 2007, the SERP was amended to change the benefit accrual formulae for executivesMr. D.C. Dauch, Mr. Simonte and Mr. Willemse, who arewere not grandfathered under the Salaried Retirement Program. Because they are grandfathered, Mr. R.E. Dauch and Mr. Bellanti may continue to accrue SERP benefits under the basic and alternative forms through December 31, 2011.
Mr. Simonte, Mr. D.C. Dauch and Mr. Jerge, who are not grandfathered under the Salaried Retirement Program,SRP, are eligible to receive a defined contribution benefit under the current SERP formula, payable six months after retirement in a lump sum. The amount of the benefit will be equal to 12.5 percent12.5% of the executive’s final average compensation (determined as the executive’s average annual base salary and cash incentive for the highest five consecutive years), multiplied by the executive’s years of credited service, less the sum of the actuariallyactuarial equivalent value of the executive’s benefits payable under the Salaried Retirement ProgramSRP, Albion Pension Plan and the balance of the executive’s employer retirement contribution account under ourAAM’s 401(k) plan.


40

37


NONQUALIFIED DEFERRED COMPENSATION
The following table summarizes the NEOs compensation under the Executive Deferred Compensation Plan for the 20102013 fiscal year. All of the NEOs are fully vested in any applicable Company matching contributions.
 
                          
   Executive
   Registrant
   Aggregate
   Aggregate
   Aggregate
 
   Contributions
   contributions in
   Earnings
   Withdrawals
   Balance at
 
   in Last FY
   Last FY
   In Last FY(1)
   Distributions
   Last FYE
 
 Name  ($)   ($)   ($)   ($)   ($) 
Richard E. Dauch   —    —    360,214    —    4,865,696 
Michael K. Simonte   —    —    —    —    — 
David C. Dauch   —    —    30,545    —    263,066 
John J. Bellanti   —    —    58,046    —    498,071 
John E. Jerge   —    —    —    —    — 
Patrick S. Lancaster   —    —    —    —    — 
                          
Name
Executive
Contributions
in Last FY(1)
($)
Registrant
contributions in
Last FY(2)
($)
Aggregate
Earnings
In Last FY(3)
($)
Aggregate
Withdrawals
Distributions(4)
($)
Aggregate
Balance at
Last FYE(5)
($)
David C. Dauch—
—
50,956
—
352,194
Michael K. Simonte—
—
—
—
—
John J. Bellanti—
—
93,646
—
661,521
Alberto L. Satine—
—
—
—
—
Norman Willemse35,100
768
11,069
—
75,904
Richard E. Dauch—
—
55,056
(5,557,373)—

(1)
For Mr. Willemse, reflects $25,600 of his 2013 base salary and $9,500 of his 2012 annual incentive award paid March 2013. Base salary amounts deferred are included in the salary column for 2013 in the Summary Compensation Table and the 2012 annual incentive award deferred is included in the non-equity incentive compensation column for 2012 in the Summary Compensation Table.
(2)
Reflects the Company's 3% match on Mr. Willemse's 2013 base salary deferral. This amount is included in the all other compensation column for 2013 in the Summary Compensation Table.
(3)
Reflects hypothetical accrued earnings during 20102013 on notional investments designed to track the performance of funds similar to those available to participants in the Company’s 401(k) plan. None of the earnings shown in this column are reported as compensation in theSummary Compensation Table.
(4)Upon his death, Mr. R.E. Dauch's beneficiary received a distribution of the plan account balance.
(5)
Of the aggregate balance, the amounts reflect compensation previously reported in the Summary Compensation Table for each of the NEOs. For Mr. Willemse, the amount includes $26,368 reported as compensation in the Summary Compensation Table for 2013.
Under AAM’s Executive Deferred Compensation Plan, a nonqualified, tax-deferred savings plan, certain executives, including our NEOs, may elect to defer the payment of six6% to 75 percent75% of their base salaryand/or their annual incentive compensation award during any plan year. Base salary deferred into the Executive Deferred Compensation Planplan receives a three percent3% Company match. Matching contributions are vested after five years of credited service. The amounts deferred are unfunded and unsecured obligations of AAM.
Amounts deferred or credited into this plan are represented in the executive’s notional account and are “invested” among funds similar to those available under the Company’sAAM’s 401(k) plan. Forty percent of deferral elections are automatically and irrevocably allocated to the restricted investment benchmark, the PIMCO Total Return Fund. The remaining 60 percent of deferral elections60% may be allocated by the executive to any of the investments available under the plan and may be reallocated on a daily basis among any of the investments available under the plan.available. Although the executive has no actual or constructive ownership of shares in the investment funds, the return on the executive’s account is determined as if the amounts were notionally invested in these funds.


41

38



The table below shows the investment fund options available under the Executive Deferred Compensation Plan and the annual rates of return for the calendar year ended December 31, 2010.2013.
 
          
   Rate of
     Rate of
Name of Fund  Return  Name of Fund  Return
Fidelity Retirement Money Market Portfolio  .02%  Fidelity Freedom Income Fund  7.63%
PIMCO Total Return Fund  8.83%  Fidelity Freedom 2000 Fund  7.86%
PIMCO High Yield Fund  14.24%  Fidelity Freedom 2005 Fund  10.57%
Fifth Third Disciplined Large Cap Value Fund  13.44%  Fidelity Freedom 2010 Fund  11.65%
Domini Social Equity Fund  14.36%  Fidelity Freedom 2015 Fund  11.75%
Spartan U.S. Equity Index Fund  14.98%  Fidelity Freedom 2020 Fund  12.93%
American Funds Growth Fund of America  12.63%  Fidelity Freedom 2025 Fund  13.82%
Fidelity Growth Company Fund  20.55%  Fidelity Freedom 2030 Fund  14.04%
Fidelity Low-Priced Stock Fund  20.70%  Fidelity Freedom 2035 Fund  14.46%
Nuveen Mid Cap Growth Opportunities(1)
  27.91%  Fidelity Freedom 2040 Fund  14.62%
American Beacon Small Cap Value Fund  26.19%  Fidelity Freedom 2045 Fund  14.72%
Munder Small Cap Value Fund  27.16%  Fidelity Freedom 2050 Fund  14.90%
Fidelity Diversified International Fund  9.65%      
Spartan International Index Fund  7.70%      
Vanguard External Market Index  27.37%      
          
(1)Formerly First American Mid Cap Growth Opportunities.
Name of Fund
Rate of
Return
Name of Fund
Rate of
Return
Fidelity Retirement Money Market Portfolio0.01 %Vanguard External Market Index38.37%
PIMCO Total Return Fund(1.92)%Fidelity Freedom Income K Fund4.60%
PIMCO High Yield Fund5.77 %Fidelity Freedom K 2000 Fund4.56%
Domini Social Equity Fund33.30 %Fidelity Freedom K 2005 Fund8.15%
Spartan 500 Index Fund32.35 %Fidelity Freedom K 2010 Fund11.20%
Touchstone Value Y Fund31.29 %Fidelity Freedom K 2015 Fund11.96%
T. Rowe Price Growth Stock Fund39.20 %Fidelity Freedom K 2020 Fund13.35%
Fidelity Growth Company Fund37.61 %Fidelity Freedom K 2025 Fund16.65%
Fidelity Low-Priced Stock Fund34.45 %Fidelity Freedom K 2030 Fund18.21%
Nuveen Mid Cap Growth Opportunities36.86 %Fidelity Freedom K 2035 Fund20.86%
American Beacon Small Cap Value Fund40.06 %Fidelity Freedom K 2040 Fund21.25%
Royce PA Mutual Fund35.25 %Fidelity Freedom K 2045 Fund21.84%
Fidelity Diversified International Fund25.19 %Fidelity Freedom K 2050 Fund22.08%
Spartan International Index Fund21.80 %Fidelity Freedom K 2055 Fund22.78%
Distributions can be received (1) upon retirement in a lump sum or in annual payments over a period of five or ten years, (2) in a lump sum upon death, disability, termination of employment, change in control or (3) if elected by the executive, during employment at a specified date after a minimum deferral period. The minimum deferral period is at least three years following the end of the plan year to which the deferral election relates, and distributions during employment consist of employee deferrals and related earnings or losses (not the Company contributions and related earnings or losses).


42

39


POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
Under the employment agreement with our CEO and other arrangements covering our NEOs, certain payments and benefits will be provided to the NEOs in the event of termination of employment. The following tables show the estimated potential payments and benefits that each of the NEOs would receive upon termination of employment under different scenarios,various circumstances that would trigger payments under applicable employment agreements and the Company’s plans and programs, assuming that the termination was effectiveevent occurred on December 31, 2010.2013. Although the calculations are intended to provide reasonable estimates of the potential payments, they are based on numerous assumptions and may not represent the actual amounts the NEOs would receive upon each termination event.
Termination of Continuity Agreements
Prior to 2009, all executive officers had continuity agreements with the Company, which provided certain severance benefits following a change in control. In accordance with the 2009 Settlement and Commercial Agreement, all executive officers agreed to terminate their continuity agreements in 2009.
President & CEO Employment Agreement
Under our employment agreement with Mr. R.E.D.C. Dauch, the Company may terminate his employment with or without cause, or upon his disability. Cause exists if he:means:
a material breach of his obligations under the agreement;
• is convicted of a felony involving an intentional act;
• engages in dishonesty or fraud; or
• breaches any of his material obligations to AAM, including willful neglect or misconduct of his duties or willful and material breach of any of the terms and conditions of his employment agreement.
the willful and continued failure or refusal to satisfactorily perform his duties;
a conviction of or pleading guilty (or no contest) to a felony or to another crime involving dishonesty or moral turpitude or which reflects negatively upon the Company or impairs its operations;
engaging in any misconduct, negligence, act of dishonesty (including any violation of federal securities laws) or violence that is materially injurious to the Company;
a material breach of a restrictive covenant (i.e., non-competition, non-solicitation) or Company policy;
refusal to follow the directions of the Board; or
any other willful misconduct that is materially injurious to AAM's financial condition or business reputation.
In addition, he may resign for good reason, meaningwhich means:
a material decrease in compensation or a failure by the Company:Company to pay material compensation;
• reduces his base salary or bonus opportunity;
• substantially reduces his duties, responsibilities or reporting responsibilities; or
• relocates him outside of the Detroit-metropolitan area.
a material diminution of responsibilities, positions or titles (other than solely as a result of the Company ceasing to be a publicly-traded company);
If his employment is terminatedrelocation outside the Detroit-metropolitan area; or
a material breach by the Company.
Upon termination for cause or upon resignation without good reason, Mr. R.E.D.C. Dauch will beis entitled to receive only accrued butand unpaid amounts as ofcompensation. Participation in the termination date.
Company’s benefit plans would cease upon termination.
If his employment is terminated without cause, or if he resignsupon his resignation for good reason, Mr. D.C. Dauch is entitled to receive accrued and unpaid compensation and continued payment of base salary for two years following termination. He is also entitled to receive $50,000 of outplacement services and health care benefits for two years.
If Mr. D.C. Dauch's employment is terminated without cause or for good reason within two years of a change in control, he will be entitled to:
• severance payments equal to two years of his annual base salary;
• continuation of his health care benefits for two years;
• bonus payments accrued as of the termination date; and
• reimbursement of premiums for his purchase of a $5 million executive life insurance policy for two years.
If he resigns without good reason, Mr. R.E. Dauchto payment of his base salary, annual incentive and medical benefits for two years, as well as any accrued and unpaid compensation and benefits and outplacement services. The annual incentive payment will be entitled todetermined based on the higher of (1) accrued but unpaid amounts ashis average annual bonus for the three fiscal years preceding termination of employment or the change in control, or (2) his target bonus for the year of the termination date and (2) reimbursement of premiumsemployment or of the change in control.
Mr. D.C. Dauch's employment agreement contains the following restrictive covenants that extend for two years for a $5 million executive life insurance policy purchased by Mr. R.E. Dauch.
Underfollowing termination of employment or the expiration of his employment agreement, Mr. R.E. Dauch is subject to:
• a non-disclosure and confidentiality provision extending two years following termination or expiration of the agreement;
• a non-competition covenant, which prohibits him, throughout the term of the employment agreement and for two years following the termination or expiration of the agreement, from directly or indirectly engaging in any business competitive with AAM and our products and business plans; and a covenant prohibiting solicitation of our employees and customers for two years thereafter.


43

agreement: (1) non-disclosure and confidentiality; (2) non-competition; and (3) non-solicitation of AAM employees and customers.
If AAM terminates his employment terminates due to disability or death, Mr. R.E.D.C. Dauch will be entitled to accrued benefits under applicable benefit plans and programs (such as our Deferred Compensation Plan, Salaried Retirement Plan and SERP) and reimbursement of executive life insurance premiums as described above. Should Mr. R.E. Dauch die during the term of his employment agreement, his estateand/or spouse would be entitled to accrued benefits under applicable benefit plans and programs.
In accordance with his employment agreement, as amended, the CEO agreed to forego compensation payable to him to the extent his annual compensation would exceed the $3 million limit.
Settlement Agreement with Mr. Lancaster
On July 12, 2010, the Compensation Committee approved an agreement between AAM and Mr. Lancaster to provide cash payments and certain other benefits to Mr. Lancaster in connection with his retirement from AAM effective January 1, 2011. The terms of the Settlement Agreement are described in theNarrative to Summary Compensation Table and Grants of Plan-Based Awards Table.
Non-Competition Agreements
Mr. Simonte, Mr. D.C. Dauch,Bellanti, Mr. BellantiWillemse and Mr. JergeSatine each have each entered into a non-competition agreement that prohibits each of them, while employed by AAM and for one year following termination of employment, the executive from:
directly or indirectly engaging in any business that competes with AAM;
• directly or indirectly engaging in any business or activity that is in competition with AAM and its products for one year following termination of employment unless the reason for such termination is a reduction in force by AAM;
• recruiting, soliciting or inducing (or attempting to recruit, solicit or induce) any of our employees to leave AAM, or offer employment to our employees or otherwise interfere with our relationship with our employees, agents or consultants; and
• using, exploiting, disclosing or communicating our confidential information to any third party without our prior written consent.

soliciting or inducing our employees to leave AAM, or offering employment to our employees or otherwise interfering with our relationship with our employees, agents or consultants; and
using, exploiting or disclosing our confidential information to any third party without our prior written consent.

44

40

Potential Payments Upon Termination or Change in Control
Richard E. Dauch
The following table shows estimatedtables below reflect potential payments to each NEO upon resignation for good reason, termination without cause, disability, retirement and a change in control for Mr. R.E. Dauch. Mr. R.E. Dauch was eligible to retire onas of December 31, 2010.2013. Upon termination for cause or resignation without good reason, each NEO would receive only accrued and unpaid compensation. The assumptions used to determine retirement benefits for eligible NEOs are the same assumptionsas those used in our audited consolidated financial statements for the fiscal year ended December 31, 2010.
                          
      Not for
         
   For Cause
  Cause
  Disability
     Change in
   Termination
  Termination
  Retirement(1)
  Retirement
  Control
   ($)  ($)  ($)  ($)  ($)
Compensation:
   —    —    —    —    — 
Bonus(2)
   —    —    —    —    — 
Severance(3)
   —    —    —    —    — 
Retirement Plans:
                         
Defined Benefit
                         
Retirement Program(4)
   —    —    843,319    843,319    — 
SERP(5)
   —    —    22,862,681    22,862,681    — 
Welfare Benefit(6)
   —    —    1,440,270    1,440,270    — 
Equity:
   —    —    —    —    — 
Stock Options(7)
   —    —    1,147,635    —    1,147,635 
Restricted Stock(8)
   —    —    765,067    —    765,067 
Other Benefits:
   —    —    —    —    — 
Deferred Compensation(9)
   4,865,696    4,865,696    4,865,696    4,865,696    4,865,696 
Health care(10)
   —    17,858    —    —    — 
Life Insurance(11)
   —    47,780    47,780    47,780    — 
Use of Vehicles(3)
   —    —    —    —    — 
280G TaxGross-Up(3)
   —    —    —    —    — 
Total
   4,865,696    4,931,334    31,972,448    30,059,746    6,778,398 
                          
(1)Assumes retirement due to total and permanent disability on December 31, 2010.
(2)Assumes $3 million compensation limit is in effect on December 31, 2010.
(3)Benefit was previously provided under the continuity agreement that was terminated in 2009.
(4)Reflects a present value of a joint and survivor annuity benefit payable monthly.
(5)The present value calculated under the alternative formula assuming a joint and survivor annuity benefit payable monthly.
(6)Reflects benefits for Mr. R.E.2013. See Note 6 to the audited consolidated financial statements in our 2013 annual report on Form 10-K. Mr. D.C. Dauch and his spouse assuming retirement or disability on December 31, 2010 as set forth in his employment agreement.
(7)Generally, outstanding stock option awards vest upon termination of employment due to death, disability or upon a change in control. At December 31, 2010, the fair market value of the underlying shares was greater than the exercise price of certain unvested options.
(8)Vesting of outstanding restricted stock awards is accelerated upon disability, termination of employment by the Company pursuant to a reduction in force or similar program approved by the CEO or upon a change in control. The value of restricted stock reflects the fair market value of unvested awards.
(9)Assumes amount is payable in a lump sum upon occurrence of termination event.


45

(10)Upon termination without cause, Mr. R.E. Dauch would receive two years of health care benefits.
(11)Represents reimbursement for the premiums associated with Mr. R.E. Dauch’s purchase of a $5 million executive life insurance policy for two years.
Michael K. Simonte
The following table shows estimated potential payments upon resignation, termination, disability and a change in control for Mr. Simonte as of December 31, 2010. Mr. Simonte waswere not eligible to retire as of December 31, 2010.2013. The footnotes following the tables provide additional detail regarding the potential payments and benefits shown for each termination scenario.
David C. DauchFor Good
Reason
Resignation
($)		Without
Cause
Termination
($)
Disability
Retirement(1)
($)
Retirement
($)
Change in
Control
($)
Compensation:     
Severance(2)
2,200,000
2,200,000
—
—
2,200,000
Annual Incentive(3)
1,196,250
1,196,250
1,196,250
—
2,750,000
Long Term Incentives:     
RSUs(4)
—
—
4,895,628
—
4,895,628
2011 Performance Awards(5)
—
1,989,000
1,989,000
—
—
2012 Performance Unit Awards(6)
—
588,909
588,909
—
588,909
2013 Performance Unit Awards(6)
—
583,333
583,333
—
583,333
    2010 Special Incentive Program(7)
875,000
875,000
875,000
—
—
Other Benefits:     
Retirement Plans—
—
—
—
—
SERP—
—
—
—
—
Welfare Benefit—
—
—
—
—
Deferred Compensation(8)
352,194
352,194
352,194
—
352,194
Health care(9)
29,819
29,819
316,971
—
29,819
Disability(10)
—
—
7,787,266
—
—
Life Insurance(11)
—
—
143,981
—
—
Outplacement Services(12)
50,000
50,000
—
—
50,000
Total4,703,263
7,864,505
18,728,532
—
11,449,883

 
                     
         Disability
  Change in
   Resignation
  Termination
  Retirement(1)
  Control
   ($)  ($)  ($)  ($)
Compensation:
   —    —    —    — 
Bonus(2)
   —    —    —    — 
Severance(2)
   —    —    —    — 
Long Term Incentives:
   —    —    —    — 
Stock Options(3)
   —    —    11,468    11,468 
PARS and RSUs(4)
   —    —    154,320    154,320 
Restricted Stock(5)
   —    —    128,600    128,600 
2009 Performance Award(6)
   —    —    337,500    506,250 
2010 Performance Award(7)
   —    —    200,000    — 
Other Benefits:
   —    —    —    — 
Health care(8)
   —    —    237,857    — 
Disability(9)
   —    —    4,078,916    — 
Life Insurance(10)
   —    —    59,822    — 
Use of Vehicles(2)
   —    —    —    — 
280G TaxGross-Up(2)
   —    —    —    — 
Total
   —    —    5,208,483    800,638 
                     
Michael K. SimonteFor Good
Reason
Resignation
($)		Without
Cause
Termination
($)
Disability
Retirement(1)
($)
Retirement
($)
Change in
Control
($)
Compensation:     
Severance—
—
—
—
—
Annual Incentive(13)
—
—
378,485
—
—
Long Term Incentives:     
RSUs(4)
—
—
1,579,804
—
1,579,804
2011 Performance Awards(5)
—
1,050,600
1,050,600
—
—
2012 Performance Unit Awards(6)
—
201,562
201,562
—
201,562
2013 Performance Unit Awards(6)
—
181,267
181,267
—
181,267
    2010 Special Incentive Program(7)
500,000
500,000
500,000
—
—
Other Benefits:     
Retirement Plans—
—
—
—
—
SERP—
—
—
—
—
Welfare Benefit—
—
—
—
—
Deferred Compensation—
—
—
—
—
Health care(14)
—
—
312,521
—
—
Disability(10)
—
—
4,158,162
—
—
Life Insurance(11)
—
—
71,264
—
—
Outplacement Services—
—
—
—
—
Total500,000
1,933,429
8,433,665
—
1,962,633

41


(1)John J. BellantiFor Good
Reason
Resignation
($)		Without
Cause
Termination
($)
Disability
Retirement
($)
Retirement(15)
($)
Change in
Control
($)
Compensation:
Severance—
—
—
—
—
Annual Incentive—
—
—
285,000
—
Long Term Incentives:
RSUs—
—
—
—
—
2011 Performance Awards—
—
—
966,552
—
2012 Performance Unit Awards—
—
—
212,232
—
2013 Performance Unit Awards—
—
—
215,112
—
    2010 Special Incentive Program—
—
—
—
—
Other Benefits:
Retirement Plans—
—
—
804,187
—
SERP—
—
—
835,056
—
Welfare Benefit—
—
—
195,617
—
Deferred Compensation(8)
—
—
—
661,521
—
Health care—
—
—
—
—
Disability—
—
—
—
—
Life Insurance—
—
—
—
—
Outplacement Services—
—
—
—
—
Total—
—
—
4,175,277
—
Alberto L. SatineFor Good
Reason
Resignation
($)		Without
Cause
Termination
($)
Disability
Retirement
($)
Retirement
($)
Change in
Control
($)
Compensation:     
Severance—
—
—
—
—
Annual Incentive(13)
—
—
185,000
185,000
—
Long Term Incentives:     
RSUs(4)
—
—
632,396
—
632,396
2011 Performance Awards(5)
—
380,800
380,800
380,800
—
2012 Performance Unit Awards(6)
—
81,455
81,455
81,455
81,455
2013 Performance Unit Awards(6)
 72,000
72,000
72,000
72,000
    2010 Special Incentive Program—
—
—
—
—
Other Benefits:     
Retirement Plans(16)
—
—
690,218
357,635
—
SERP(17)
—
—
—
281,112
—
Welfare Benefit(18)
  13,678
—
 
Deferred Compensation—
—
—
—
—
Health care—
—
—
—
—
Disability—
—
—
—
—
Life Insurance—
—
—
—
—
Outplacement Services—
—
—
—
—
Total—
534,255
2,055,547
1,358,002
785,851

42


Norman WillemseFor Good
Reason
Resignation
($)		Without
Cause
Termination
($)
Disability
Retirement
($)
Retirement
($)
Change in
Control
($)
Compensation:     
Severance—
—
—
—
—
Annual Incentive(13)
—
—
167,040
167,040
—
Long Term Incentives:     
RSUs(4)
—
—
533,929
—
533,929
2011 Performance Awards(5)
—
412,080
412,080
412,080
—
2012 Performance Unit Awards(6)
—
79,062
79,062
79,062
79,062
2013 Performance Unit Awards(6)
—
53,333
53,333
53,333
53,333
    2010 Special Incentive Program—
—
—
—
—
Other Benefits:     
Retirement Plans(19)
—
—
261,558
261,558
—
SERP(17)
—
—
279,998
279,998
—
Welfare Benefit(18)
—
—
13,236
—
—
Deferred Compensation(8)
75,904
75,904
75,904
75,904
75,904
Health care—
—
—
—
—
Disability—
—
—
—
—
Life Insurance—
—
—
—
—
Outplacement Services—
—
—
—
—
Total75,904
620,379
1,876,140
1,328,975
742,228

Notes to Termination Tables

(1)
Assumes total and permanent disability on December 31, 2010.2013. Because Mr. D.C. Dauch and Mr. Simonte hashave more than 10 years of service, he isboth are eligible to retire due to total and permanent disability and receive pension and postretireepost-retiree health care benefits. Amount assumesAs a result, their amounts assume continued employment (on leave) until retirement.
(2)
Benefit was previously provided under the continuity agreement that was terminated in 2009.
(3)Generally, outstanding stock option awards vest uponUpon resignation for good reason, termination of employment due to death, disabilitywithout cause or upon a change in control, Mr. D.C. Dauch is entitled to receive two years’ base salary, payable semimonthly.
(3)
Under Mr. D.C. Dauch's employment agreement, he is entitled to accrued and unpaid compensation upon termination without cause or resignation for good reason. In the event of disability, AAM’s Incentive Compensation Plan for Executive Officers provides a pro-rated award payout through the date of disability. Accordingly, the amount reflects his 2013 award paid in March 2014 under these termination events. He is also entitled to payment of an annual bonus for two years if he is terminated without cause or resigns for good reason within two years of a change in control. At December 31, 2010,The annual bonus will be determined based on the fair market valuehigher of (a) his average annual bonus for the three fiscal years preceding termination of employment or the change in control, or (b) his target bonus for the year of the underlying shares was greater thantermination of his employment or of the exercise pricechange in control. In the event of certain unvested options.a change in control, the amount reflects his target bonus for two years.
(4)
Outstanding PARS and RSU awardsRSUs vest upon termination of employment due to death, disability or upon a change in control. The value for PARS and RSUs reflects the fair market valuenumber of unvested awards.RSUs multiplied by the closing price of AAM common stock on December 31, 2013.
(5)
The 2011 performance award payable in the event of disability or termination without cause would be based on actual performance through December 31, 2013. Reflects award earned through December 31, 2013 and paid in March 2014.
(5)
(6)
VestingThe 2012 and 2013 performance unit awards payable in the event of outstanding restricted stock awards is accelerated upona disability, termination of employment by the Company pursuant to a reduction in force or similar program approved by the CEOwithout cause or upon a change in control. The value for restricted stock reflects the fair market value of unvested awards.
(6)The 2009 performance award payable to Mr. Simonte in the event of a disabilitycontrol would be based on actual performance and on the pro-rata portion of his employment as compared to the


46

performance period. As of December 31, 2010, two-thirds of the performance period would have lapsed. Reflects pro-rata award assuming target is achieved. Upon a change in control, the award is payable at target.
(7)The 2010 performance award payable to Mr. Simonte in the event of a disability would be based on actual performance and on the pro-rata portion of his employment as compared to the performance period. As of December 31, 2010,2013, approximately two-thirds and one-third of the performance period for the 2012 and 2013 awards, respectively, would have lapsed. Reflects pro-rata award assuming target is achieved. The actual payout may range from 0% to 200%.
(7)
Under a special incentive program adopted in March 2010, awards do not includeupon resignation for good reason, termination without cause or in the event of disability, Mr. D.C. Dauch and Mr. Simonte would be entitled to program amounts earned and unpaid. Amounts reflect the final annual installments payable in October 2014.
(8)
Reflects account balance in the Executive Deferred Compensation Plan as of December 31, 2013. Assumes amount is payable in a provisionlump sum upon occurrence of the termination event.

43

(9)Under Mr. D.C. Dauch’s employment agreement, he is entitled to two years of health care benefits (including his spouse) if his employment is terminated without cause or if he resigns for payment upongood reason. He is also entitled to this benefit if his employment is terminated without cause or if he resigns for good reason within two years of a change in control.
(8)Under In the event of disability, scenario,the amount reflects health care benefits until retirement.
(9)(10)Reflects benefits equal to 100% of base salary for year one and 662/3%60% and 66-2/3% of base salary until retirement.retirement for Mr. D.C. Dauch and Mr. Simonte, respectively, based on participant elections.
(10)(11)Under the disability scenario, reflects basic and supplemental life insurance benefits until retirement.
David C. Dauch
The following table shows estimated potential payments upon resignation, termination, disability and a change in control for Mr. D.C. Dauch as of December 31, 2010. Mr. D.C. Dauch was not eligible to retire as of December 31, 2010.
                     
         Disability
  Change in
   Resignation
  Termination
  Retirement(1)
  Control
   ($)  ($)  ($)  ($)
Compensation:
   —    —    —    — 
Bonus(2)
   —    —    —    — 
Severance(2)
   —    —    —    — 
Long Term Incentives:
   —    —    —    — 
Stock Options(3)
   —    —    14,220    14,220 
PARS and RSUs(4)
   —    —    199,330    199,330 
Restricted Stock(5)
   —    —    154,320    154,320 
2009 Performance Award(6)
   —    —    621,000    931,500 
2010 Performance Award(7)
   —    —    336,000    — 
Other Benefits:
   —    —    —    — 
Deferred Compensation(8)
   263,066    263,066    263,066    263,066 
Health care(9)
   —    —    241,068    — 
Disability(10)
   —    —    4,885,679    — 
Life Insurance(11)
   —    —    80,062    — 
Use of Vehicles(2)
   —    —    —    — 
280G TaxGross-Up(2)
   —    —    —    — 
Total
   263,066    263,066    6,794,745    1,562,436 
                     
(1)(12)Assumes total and permanent disability on December 31, 2010. BecauseUnder Mr. D.C. Dauch has more than 10 years of service,Dauch’s employment agreement, he is eligibleentitled to retire due to total and permanent disability and receive pension and postretiree health care benefits. Amount assumes continued employment (on leave) until retirement.
(2)Benefit was previously provided under the continuity agreement that was terminated in 2009.
(3)Generally, outstanding stock option awards vest$50,000 of outplacement services upon termination of employment duewithout cause or resignation for good reason. He is also entitled to death, disabilitythis benefit if his employment is terminated without cause or uponif he resigns for good reason within two years of a change in control. At December 31, 2010, the fair market value of the underlying shares was greater than the exercise price of certain unvested options.


47

(4)(13)Outstanding PARS and RSU awards vest upon terminationUnder AAM's Incentive Compensation Plan for Executive Officers, the award payout is pro-rated through the date of employment due to death, disability or upon a change in control.retirement. The value for PARS and RSUsamount reflects the fair market value of unvested awards.2013 award paid in March 2014.
(5)Vesting of outstanding restricted stock awards is accelerated upon disability, termination of employment by the Company pursuant to a reduction in force or similar program approved by the CEO or upon a change in control. The value for restricted stock reflects the fair market value of unvested awards.
(6)The 2009 performance award payable to Mr. D.C. Dauch in the event of a disability would be based on actual performance and on the pro-rata portion of his employment as compared to the performance period. As of December 31, 2010, two-thirds of the performance period would have lapsed. Reflects pro-rata award assuming target is achieved. Upon a change in control, the award is payable at target.
(7)The 2010 performance award payable to Mr. D.C. Dauch in the event of a disability would be based on actual performance and on the pro-rata portion of his employment as compared to the performance period. As of December 31, 2010, one-third of the performance period would have lapsed. Reflects pro-rata award assuming target is achieved. The 2010 awards do not include a provision for payment upon change in control.
(8)Assumes amount is payable in a lump sum upon occurrence of termination event.
(9)(14)Under the disability scenario, reflects health care benefits tountil retirement.
(10)Reflects benefits equal to 100% of base salary for year one and 60% of base salary to retirement.
(11)Under the disability scenario, reflects basic and supplemental life insurance benefits to retirement.


48

John J. Bellanti
The following table shows the estimated potential payments upon termination, retirement and a change in control for Mr. Bellanti as of December 31, 2010. Mr. Bellanti was eligible to retire on December 31, 2010. The assumptions used to determine retirement benefits are the same assumptions used in our audited consolidated financial statements for the fiscal year ended December 31, 2010.
                     
      Disability
     Change in
   Termination
  Retirement(1)
  Retirement
  Control
   ($)  ($)  ($)  ($)
Compensation:
   —    —    —    — 
Bonus(2)
   —    —    —    — 
Severance(2)
   —    —    —    — 
Retirement Plans:
   —    —    —    — 
Defined Benefit
   —    —    —    — 
Retirement Program(3)
   —    972,382    661,351    — 
SERP(4)
   —    265,752    614,249    — 
Welfare Benefit(5)
   —    120,377    120,377    — 
Equity:
   —    —    —    — 
Stock Options(6)
   —    10,091    —    10,091 
PARS and RSUs(7)
   —    154,320    —    154,320 
Restricted Stock(8)
   —    115,740    —    115,740 
2009 Performance Award(9)
   —    315,000    315,000    472,500 
2010 Performance Award(10)
   —    184,000    184,000    — 
Other Benefits:
   —    —    —    — 
Deferred Compensation(11)
   498,071    498,071    498,071    498,071 
Use of Vehicles(2)
   —    —    —    — 
280G TaxGross-Up(2)
   —    —    —    — 
Total
   498,071    2,635,733    2,393,048    1,250,722 
                     
(1)(15)Upon his retirement on January 1, 2014, Mr. Bellanti was entitled to receive his 2013 annual incentive and certain long-term incentive awards. The annual and long-term incentive amounts reflect payments made to Mr. Bellanti under these awards in March 2014. Upon his retirement, he forfeited unvested RSUs and the remaining annual installment payment under the 2010 special incentive program. The pension and SERP amounts reflect Mr. Bellanti's actual pension elections.
Assumes retirement due to total and permanent disability on December 31, 2010.
(2)Benefit was previously provided under the continuity agreement that was terminated in 2009.
(3)(16)Reflects a joint and survivor annuity benefit payable monthly.
(4)(17)TheReflects the present value of the SERP calculated under the alternative formula assuming a lump sum benefit for Mr. Satine and a joint and survivor annuity benefit payable monthly for Mr. Willemse under the disability and retirement scenarios.
(5)Reflects benefits for Mr. Bellanti and his spouse assuming retirement on December 31, 2010 under the welfare benefit plan effective January 1, 2008.
(6)Generally, outstanding stock option awards vest upon termination of employment due to death, disability or upon a change in control. At December 31, 2010, the fair market value of the underlying shares was greater than the exercise price of certain unvested options.
(7)Outstanding PARS and RSU awards vest upon termination of employment due to death, disability or upon a change in control. The value for PARS and RSUs reflects the fair market value of unvested awards.


49

(8)(18)Reflects welfare benefits assuming retirement under our retiree welfare plan.
Vesting of outstanding restricted stock awards is accelerated upon disability, termination of employment by the Company pursuant to a reduction in force or similar program approved by the CEO or upon a change in control. The value of restricted stock reflects the fair market value of unvested awards.
(9)(19)The 2009 performance award payable toReflects Mr. BellantiWillemse's benefits in the event of a disability or retirement would be based on actual performance and on the pro-rata portion of his employmentAlbion Pension Plan as compared to the performance period. As of December 31, 2010, two-thirds of the performance period would have lapsed. Reflects pro-rata award assuming target is achieved. Upon a change in control, the award is payable at target.
(10)The 2010 performance award payable to Mr. Bellanti in the event of a disability would be based on actual performance and on the pro-rata portion of his employment as compared to the performance period. As of December 31, 2010, one-third of the performance period would have lapsed. Reflects pro-rata award assuming target is achieved. The 2010 awards do not include a provision for payment upon change in control.
(11)Assumes amount is payable in a lump sum upon occurrence of termination event.2013.

44
John E. Jerge
The following table shows estimated potential payments upon resignation, termination, disability and a change in control for Mr. Jerge asTable of December 31, 2010. Mr. Jerge was not eligible to retire as of December 31, 2010.Contents

                     
         Disability
  Change in
   Resignation
  Termination
  Retirement(1)
  Control
   ($)  ($)  ($)  ($)
Compensation:
   —    —    —    — 
Bonus(2)
   —    —    —    — 
Severance(2)
   —    —    —    — 
Long Term Incentives:
   —    —    —    — 
Stock Options(3)
   —    —    8,257    8,257 
PARS and RSUs(4)
   —    —    147,890    147,890 
Restricted Stock(5)
   —    —    90,020    90,020 
2009 Performance Award(6)
   —    —    162,000    243,000 
2010 Performance Award(7)
   —    —    76,000    — 
Other Benefits:
   —    —    —    — 
Health care(8)
   —    —    216,631    — 
Disability(9)
   —    —    2,000,624    — 
Life Insurance(10)
   —    —    36,246    — 
Use of Vehicles(2)
   —    —    —    — 
280G TaxGross-Up(2)
   —    —    —    — 
Total
   —    —    2,737,668    489,167 
                     
(1)Assumes total and permanent disability on December 31, 2010. Because Mr. Jerge has more than 10 years of service, he is eligible to retire due to total and permanent disability and receive pension and postretiree health care benefits. Amount assumes continued employment (on leave) until retirement.
(2)Benefit was previously provided under the continuity agreement that was terminated in 2009.


50

(3)Generally, outstanding stock option awards vest upon termination of employment due to death, disability or upon a change in control. At December 31, 2010, the fair market value of the underlying shares was greater than the exercise price of certain unvested options.
(4)Outstanding PARS and RSU awards vest upon termination of employment due to death, disability or upon a change in control. The value for PARS and RSUs reflects the fair market value of unvested awards
(5)Vesting of outstanding restricted stock awards is accelerated upon disability, termination of employment by the Company pursuant to a reduction in force or similar program approved by the CEO or upon a change in control. The value for restricted stock reflects the fair market value of unvested awards.
(6)The 2009 performance award payable to Mr. Jerge in the event of a disability would be based on actual performance and on the pro-rata portion of his employment as compared to the performance period. As of December 31, 2010, two-thirds of the performance period would have lapsed. Reflects pro-rata award assuming target is achieved. Upon a change in control, the award is payable at target.
(7)The 2010 performance award payable to Mr. Jerge in the event of a disability would be based on actual performance and on the pro-rata portion of his employment as compared to the performance period. As of December 31, 2010, one-third of the performance period would have lapsed. Reflects pro-rata award assuming target is achieved. The 2010 awards do not include a provision for payment upon change in control.
(8)Under the disability scenario, reflects health care benefits to retirement.
(9)Reflects benefits equal to 100% of base salary for year one and 60% of base salary to retirement.
(10)Under the disability scenario, reflects basic and supplemental life insurance benefits to retirement.
Patrick S. Lancaster
The following table shows estimated payments and other benefits for Mr. Lancaster as of December 31, 2010 in accordance with the Settlement Agreement between AAM and Mr. Lancaster effective July 12, 2010. Mr. Lancaster retired effective January 1, 2011.
Retirement
($)
Compensation:
—
Bonus(1)
704,000
Retirement Plans:
—
Defined Benefit
—
Retirement Program(2)
861,446
SERP(2)
727,786
Welfare Benefit(3)
182,338
Long Term Incentives:
—
PARS and RSUs(4)
154,320
Restricted Stock(4)
61,535
2009 Performance Award(5)
315,000
2010 Performance Award(6)
173,184
Senior Executive Special Incentive Award(7)
1,000,000
Other Benefits:
—
Consulting Fees(8)
420,000
Total
4,599,609
(1)Mr. Lancaster received a 2010 bonus payment of $704,000 in March 2011 in accordance with the Settlement Agreement.


51

(2)Mr. Lancaster retired on January 1, 2011. His Salaried Pension Plan benefit commenced as a 65% Joint and Survivor annuity on January 1, 2011 and his SERP benefit will commence as a 65% Joint and Survivor annuity on July 1, 2011. The amounts presented reflect the actual commencement dates, form of payment elections and his spouse’s date of birth.
(3)Mr. Lancaster is entitled to retiree medical account balance and executive life insurance. The amount presented reflects these benefits.
(4)In accordance with the Settlement Agreement, Mr. Lancaster’s outstanding PARS, RSU awards and restricted stock vested upon his retirement effective January 1, 2011.
(5)The 2009 performance award payable to Mr. Lancaster is based on actual performance through March 31, 2011 prorated for the portion of his employment as compared to the performance period. Reflects pro-rata award assuming target is achieved.
(6)The 2010 performance award payable to Mr. Lancaster is based on actual performance through December 31, 2010 prorated for the portion of his employment as compared to the performance period. Mr. Lancaster received payment of the award in March 2011.
(7)In accordance with the Senior Executive Special Incentive award, upon his retirement as of January 1, 2011, Mr. Lancaster will receive payment of $1 million in 2011.
(8)Mr. Lancaster will receive consulting fees of $420,000, payable in monthly installments in 2011, for services provided pursuant to the Settlement Agreement.


52

PROPOSAL 2: ADVISORY VOTE ON EXECUTIVE COMPENSATION

Section 951 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (theDodd-Frank Act) requires AAM to seekis seeking a non-binding advisory vote from our stockholders to approve the compensation of our named executive officers as disclosed in the Compensation Discussion and Analysis (CD&A) and narrative and tabular disclosures in this Proxy Statement.proxy statement. In the CD&A, we have providedprovide a detailed description of our compensation programs, including our compensation philosophy and objectives, the individual elements of executive pay, and how the programs are administered. We encourage you to review the CD&A, together with the other narrative and tabular disclosures, in considering your advisory vote on our named executive officers’ compensation.
Our executive officer compensation program is designed to reward performance that supports the achievement of the Company’sour business objectives and creates long-term stockholder value. The Compensation Committee considers the following fundamental objectives, among others, in determining our compensation programs:
Compensation and benefit programs forshould attract, motivate and retain experienced executives who are vital to our short-term and long-term success, profitability and growth;
Compensation and benefit programs should reward Company and individual performance; and
Compensation and benefit programs should foster the long-term focus required to deliver value to our stockholders.
At our 2013 annual meeting, 58% of our stockholders voted in favor of the Company's say on pay proposal. This result was considerably less favorable than the level of support we received in prior years. As a result of this outcome, the Board directed senior management to conduct stockholder outreach to gain an understanding of stockholder concerns about our executive officers:
• Compensation and benefit programs should attract, motivate and retain experienced executives who are vital to our short-term and long-term success, profitability and growth.
• Compensation and benefit programs should foster the long-term focus required for success in the global automotive industry.
• Executive officers should be AAM stockholders.
• The objectives of rewarding performance and retention should be balanced.
Features of our compensation program and practices include the following:
• A significant portion of executive compensation is tied to Company performance. Payouts of annual and long-term incentive awards are based on the achievement of a mix of financial objectives.
• Executive officers are required to comply with stock ownership guidelines established by the Compensation Committee and are prohibited from hedging/pledging Company stock.
• There are no golden parachute agreements and no excise taxgross-ups.
program. The Board and the Compensation Committee believe that AAM’sthe feedback we received from our stockholders was valuable in evaluating and implementing changes to our executive compensation programs have been effective in motivating our senior management team to successfully deliver on our strategic goals and achieve superior results for AAM and its stockholders and other key stakeholders. We believe the effectiveness of our compensation programs and policies is demonstrated by the recent accomplishments of AAM’s senior management team. Our senior management team led a comprehensive, multi-year restructuring of our business, yielding significant, permanent structural cost reductions and positioning us to significantly improve our profitability and free cash flow performance in 2010.program. We believe that the changes we made to AAM's executive compensation program and practices address the primary concerns raised by the 2013 advisory vote.
Key changes to our executive compensation programs are designed to continue to drive positive performanceprogram
As described in more detail in the achievementCD&A, we made the following changes to our compensation program:
Approved a new comparative peer group for benchmarking executive compensation;
Targeted the 50th percentile for total compensation of AAM’sexecutive officers;
Introduced a performance share award vehicle for long-term strategic goalsincentive compensation;
Re-designed the long-term incentive program to include 100% equity-based award vehicles;
Set a maximum payout for annual incentive pay opportunities for a key performance metric, which resulted in all performance metrics having stated maximum payouts;
Adopted a clawback policy; and provide value
Eliminated discretionary increases in bonuses for all NEOs.
We believe these changes strengthen the alignment of AAM's executive compensation program and practices with the objectives of our stockholders. The Board and the Compensation Committee are committed to further engagement with our stockholders regarding executive compensation matters.
For the reasons stated above, and more fully discussed in the CD&A, the Board unanimously recommends a vote for the approval of the compensation of our named executive officers.
Although the vote on this proposal is advisory vote is not binding,and non-binding, the Board and the Compensation Committee will consider the outcome of the advisory vote on executive compensationvoting results when making future compensation decisions.
The Board of Directors unanimously recommends a vote FOR the following non-binding resolution:
RESOLVED, that the stockholders approveapproval of the compensation of our named executive officers as described in the Compensation Discussion and Analysis, tables and related narrative disclosure in this proxy statement made pursuant to the compensation disclosure rulesofficers.

45

53

PROPOSAL 3: FREQUENCY OF ADVISORY VOTE ON EXECUTIVE OFFICER COMPENSATION
Under the Dodd-Frank Act, AAM is also required to submit for stockholder vote a non-binding resolution to determine whether the advisory stockholder vote on executive compensation(say-on-pay) shall occur every one, two or three years. Although this vote is advisory and non-binding, the Board will review voting results and give consideration to the outcome of the vote when considering the frequency of futuresay-on-pay proposals.
The Board believes that submitting the advisory vote on executive compensation to stockholders on an annual basis is appropriate for AAM and its stockholders at this time. While the Board is recommending that you vote in favor of submitting advisory votes every year, you are not voting to approve or disapprove the Board’s recommendation. The proxy card provides you with a choice of voting to submit the vote every one, two or three years, or of abstaining from voting.
The Board unanimously recommends that you vote for the alternative of “one year” for future advisory votes on executive compensation.


54

20102013 COMPENSATION OF NON-EMPLOYEE DIRECTORS
Total 20102013 compensation of our non-employee directors is shown below.
 
             
    Non-Equity
  
  Fees Earned or
 Incentive Plan
  
  Paid in Cash
 Compensation(2)
 Total
Name(1)
 ($) ($) ($)
 
Salvatore J. Bonanno, Sr.   63,450   84,000   147,450 
Elizabeth A. Chappell  71,250   79,632   150,882 
Forest J. Farmer  86,150   84,000   170,150 
Richard C. Lappin  71,450   84,000   155,450 
William P. Miller II  75,450   75,264   150,714 
Larry K. Switzer  79,250   75,264   154,514 
Thomas K. Walker  97,250   84,000   181,250 
Dr. Henry T. Yang  66,450   79,632   146,082 
Name
Fees Earned or
Paid in Cash(1)
($)
Stock Awards(2)
($)
All Other
Compensation(3)
($)
Total
($)
Salvatore J. Bonanno, Sr.(4)
43,667
—
—
43,667
Elizabeth A. Chappell93,667
100,013
—
193,680
Forest J. Farmer114,667
100,013
—
214,680
Steven B. Hantler95,667
100,013
—
195,680
Richard C. Lappin113,667
100,013
—
213,680
James A. McCaslin99,667
100,013
—
199,680
William P. Miller II103,667
100,013
—
203,680
John F. Smith108,667
100,013
—
208,680
Larry K. Switzer111,667
100,013
1,500
213,180
Samuel Valenti III(5)
—
—
—
—
Thomas K. Walker147,667
100,013
—
247,680
Dr. Henry T. Yang(4)
42,667
—
—
42,667
(1)For Mr. Walker, reflects an additional $10,000 paid for temporary services he provided in January 2013 as non-executive chairman.
James A. McCaslin
(2)Reflects the full grant date fair value of equity awards granted on May 2, 2013 calculated in accordance with FASB ASC 718 (without any reduction for risk of forfeiture) as determined based on applying the assumptions used in our financial statements. The grant date fair value of equity awards is calculated using the closing market price of AAM common stock on the grant date of $13.74. See Note 7 to the audited consolidated financial statements in our annual report on Form 10-K for the year ended December 31, 2013 regarding assumptions underlying the valuation of equity awards.
(3)The Company reimburses non-employee directors for their travel and related out-of-pocket expenses in connection with attending Board, committee and stockholder meetings. From time to time, the Company invites spouses of non-employee directors to attend Company events associated with these meetings. The Company pays for spousal travel and certain other expenses and reimburses non-employee directors for taxes attributable to the income associated with this benefit. Amounts reflect reimbursement of taxes on this income.
(4)Mr. Bonanno and Dr. Yang served on the Board through May 2, 2013.
(5)Mr. Valenti joined the Board effective February 8, 2011October 31, 2013 and received no compensation in 2010.
(2)Reflects amounts earned under the 2009 deferred compensation unit (DCUs) award as described below. The 2009 annual awards were adjusted for certain directors based on the amount of restricted stock unit grants received in 2008.during 2013.

No equity awards were granted to non-employee directors during 2010. As of December 31, 2010,2013, each non-employee director had the following number of outstanding options and restricted stock units (RSUs):RSUs, including RSUs deferred:
         
  Option Awards
 Restricted Stock
  Outstanding
 Units Outstanding
Name
 ($) ($)
 
Salvatore J. Bonanno, Sr.   —   — 
Elizabeth A. Chappell  5,000   11,100 
Forest J. Farmer  7,500   4,600 
Richard C. Lappin  7,500   5,650 
William P. Miller II  7,500   14,350 
Larry K. Switzer  7,500   14,350 
Thomas K. Walker  7,500   7,850 
Dr. Henry T. Yang  7,500   11,100 
Elements
Name
Option Awards    
Outstanding    
(#)
Restricted Stock
Units Outstanding
(#)
Elizabeth A. Chappell5,00027,113
Forest J. Farmer—20,613
Steven B. Hantler—16,013
Richard C. Lappin—21,663
James A. McCaslin—16,013
William P. Miller II7,50030,363
John F. Smith—16,013
Larry K. Switzer7,50030,363
Samuel Valenti III——
Thomas K. Walker—23,863

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Narrative Description of Non-Employee Director Compensation
Our non-employee director compensation program in effect during 2010 consisted of annual retainer and meeting attendance fees and an annual award of deferred compensation units (DCUs) as described below. Employee directors do not receive compensation for service on the Board.
20102013 Annual Retainer and Meeting Attendance Fees
     
Annual retainer $50,000 
Board meeting attendance fee  1,500 
Committee meeting attendance fee:    
Committee chairman  3,000 
Other committee members  2,000 
Committee chairman attendance at meetings at the Company
for Committee-related business		  1,000 


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Deferred Compensation Units
Annual retainer$80,000
Board meeting attendance fee1,500
Committee meeting attendance fee: 
Committee chairman3,000
Other committee members2,000
Lead director annual retainer20,000
In April 2010, annual DCU awards of $70,000 were made to eachRestricted Stock Units (RSUs). Each non-employee director asis entitled to receive an annual award of RSUs equal to a grant date value of $100,000 on the date of the 2010 annual meeting of stockholders.stockholder meeting. The DCU awards are payable in stock and vest in one year, and the total payment will be based on AAM’s total shareholder return, with payments ranging from 80 percent to 120 percent of the DCU award amount.unless vesting is accelerated upon death, disability or a change in control.
2011 Non-Employee Director CompensationDeferral.
The Board of Directors, upon the recommendation of the Compensation Committee, approved an increase in the annual retainer and the annual DCU award amount for non-employee directors for 2011. Effective January 1, 2011, the retainer was increased to $60,000. Effective at the 2011 annual meeting of stockholders, non-employee directors will receive an annual DCU award in the amount of $80,000. These adjustments to AAM’s non-employee director compensation program were made in consideration of a market study of non-employee director compensation performed in 2010 by the Compensation Committee’s independent compensation consultant, Meridian Compensation Partners, LLC.
Deferral
Non-employee directors may elect to defer, on a pre-tax basis, a portion of their retainer and meeting fees and receive tax-deferred earnings (or losses) on the deferrals under AAM’s Executive Deferred Compensation Plan. The rate of return on deferred amounts is based on the performance of selected benchmark funds identified in the plan, which is described inNonqualified Deferred Compensationabove. Non-employee directors may also elect to defer settlement of RSUs and DCUs until after termination of service from the Board.
Stock Ownership GuidelinesGuidelines.
The Compensation Committee has adopted non-employee director stock ownership guidelines equal to a multiple of three times the annual retainer. Non-employee directors are expected to meet the guidelines within three years from April 2012 or, for non-employeenew directors, recommend a minimumwithin three years from the date of election to the Board. Current stock ownership of 4,000 shares of AAM common stock. Stock ownership of our non-employee directors is shown in theSecurity Ownership section below. Non-employee directors are also subject to our anti-hedging and anti-pledging restrictions.


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47


SECURITY OWNERSHIP
The following tables show the number of shares of AAM common stock beneficially owned as of March 3, 20114, 2014 (unless otherwise noted) by:
•each person known to us who beneficially owns more than 5% of AAM common stock;
• each person known to us who beneficially owns more than 5 percent of AAM common stock;
• each of our non-employee directors and nominees;
• our named executive officers;and
• all directors, nominees and executive officers (as of March 3, 2011) as a group.
•each of our non-employee directors and nominees;
•our named executive officers (unless otherwise noted); and
•all directors, nominees and executive officers as a group.
A beneficial owner of stock is a person who has voting power (the power to control voting decisions) or investment power (the power to cause the sale of the stock). All individuals listed in the tables have sole voting and investment power over the shares unless(unless otherwise noted.
noted).
The beneficial ownership calculation includes 75,301,26375,646,724 shares of AAM common stock outstanding on March 3, 2011.4, 2014.
MORE THAN 5% BENEFICIAL OWNERS
The following persons have filed reports withtable below shows the SEC for the period ending December 31, 2010, stating that they beneficially ownname, address and share ownership of each person or organization known by us to be a beneficial owner of more than five percent5% of AAM’s common stock.
 
         
  Shares of
  
  Common Stock
 Percent of
  Beneficially
 Shares
Name and Address
 Owned Outstanding
 
Barrow, Hanley, Mewhinney & Strauss, Inc.(1)  4,529,426   6.35 
2200 Ross Avenue, 31st Floor
Dallas, TX 75201		        
Eagle Asset Management, Inc.(2)  4,817,674   6.75 
880 Carillon Parkway
St. Petersburg, FL 33716		        
TIAA-CREF Investment Management, LLC(3)  6,417,325   8.99 
730 Third Avenue
New York, NY 10017		        
Name and Address
Shares of
Common Stock
Beneficially
Owned
Percent of
Shares
Outstanding
Sandra J. Dauch(1)
7,285,2329.64
1430 Caxambas Court, Marco Island, FL 34145  
JANA Partners LLC(2)
6,663,6988.80
767 Fifth Avenue, 8th Floor New York, NY 10153  
Barrow, Hanley, Mewhinney & Strauss, LLC(3)
4,982,0556.59
2200 Ross Avenue, 31st Floor Dallas, TX 75201  
Ameriprise Financial, Inc. and Columbia Management
Investment Advisers LLC(4)
4,883,3686.46
145 Ameriprise Financial Center Minneapolis, MN 55474  

(1)Based on the Schedule 13G filed on February 14, 2014 by Barrow, Hanley, Mewhinney & Strauss, Inc.,Sandra J. Dauch, reporting sole voting power over 7,243,522 shares, shared voting power over 2,628,40041,710 shares, sole voting power over 1,901,026 shares, and sole investment power over 4,529,4267,243,522 shares and shared investment power over 41,710 shares.
(2)Based on the Schedule 13G filed on February 14, 2014 by Eagle Asset Management, Inc.,JANA Partners, LLC, reporting sole voting power over 6,663,698 shares and sole investment power over 4,817,6746,663,698 shares.
(3)Based on the Schedule 13G filed on February 12, 2014 by Barrow, Hanley, Mewhinney & Strauss, LLC, reporting shared voting power over 2,368,600 shares, sole voting power over 2,613,455 shares, and sole investment power over 4,982,055 shares.
(4)Based on the Schedule 13G filed jointly on February 13, 2014 by TIAA-CREFAmeriprise Financial, Inc. and Columbia Management Investment Management,Advisers, LLC, reporting shared voting power over 204,753 shares and Teachers Advisors, Inc., reporting sole voting andshared investment power over 6,417,3254,883,368 shares.


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48

DIRECTORS AND EXECUTIVE OFFICERS
 
             
     Percent
    
  Shares
  of
    
  Beneficially
  Shares
    
  Owned(1)(2)  Outstanding    
 
Directors
            
Salvatore J. Bonanno, Sr.   25,000   *     
Elizabeth A. Chappell  17,100   *     
Forest J. Farmer  30,350   *     
Richard C. Lappin  21,950   *     
James A. McCaslin  —   *     
William P. Miller II  27,850   *     
Larry K. Switzer  22,850   *     
Thomas K. Walker  21,350   *     
Dr. Henry T. Yang  19,600   *     
Named Executive Officers(3)
            
Richard E. Dauch(4)
  7,249,187   9.5     
Michael K. Simonte  96,951   *     
David C. Dauch(5)
  168,025   *     
John J. Bellanti  107,400   *     
John E. Jerge  116,900   *     
Directors and Executive Officers as a Group (24 persons)(6)
  8,605,202   11.1     
 
Shares
Beneficially
Owned(1)(2)
Percent of
Shares
Outstanding
Directors  
Elizabeth A. Chappell33,113
*
Forest J. Farmer42,081
*
Steven B. Hantler21,013
*
Richard C. Lappin30,463
*
James A. McCaslin20,013
*
William P. Miller II43,863
*
John F. Smith21,013
*
Larry K. Switzer38,863
*
Samuel Valenti III—
—
Thomas K. Walker34,863
*
Named Executive Officers(3)
  
David C. Dauch(4)
91,131
*
Michael K. Simonte34,001
*
John J. Bellanti(5)
70,245
*
Alberto L. Satine22,739
*
Norman Willemse25,291
*
Directors and Executive Officers as a Group (27 persons)734,959
1.0

(*) Less than 1% of the outstanding shares of AAM common stock.
(*)Less than 1 percent of the outstanding shares of AAM common stock.
(1)
Includes vested RSUs awarded to non-employee directors that have vested or will vest within 60 days.been deferred. For the number of RSUs held by each non-employee director, see table to the20102013 Compensation of Non-Employee Directors.Directors.
(2)Includes the following number of shares of common stock which may be acquired upon exercise of options that were exercisable or would become exercisable within 60 days: 5,000 for Ms. Chappell; 7,500 for Messrs. Farmer, Lappin,Mr. Miller Switzer, Walker and Yang; 1,399,500 for Mr. R.E. Dauch; 69,500 for Mr. Simonte; 117,865Switzer; 40,000 for Mr. D.C. Dauch; 77,70029,000 for Mr. Bellanti and 70,000Simonte; 36,700 for Mr. Jerge.Bellanti; 16,000 for Mr. Satine; and 9,700 for Mr. Willemse.
(3)Includes shares of restricted stock held by named executive officers over which they have sole voting power but no investment power: 39,215 forDoes not include Mr. R.E. Dauch; 17,200 for Mr. Simonte; 21,300 for Mr. D.C. Dauch; 16,200 for Mr. Bellanti and 13,900 for Mr. Jerge.Dauch, who passed away on August 2, 2013.
(4)Includes 1,938,060 shares of AAM common stock held in family trusts and 111,710 held in a charitable family foundation. Mr. R.E. Dauch shares voting and investment power over shares held by the family trusts and the charitable family foundation. Also includes 3,760,702 shares held by the Sandra J. Dauch Gift Trust, of which Mr. R.E. Dauch is trustee.
(5)Includes 532548 shares held in trusts for the benefit of Mr. D.C. Dauch’s children.
(6)(5)Includes 10,000 shares held jointly with family members over which a director or executive officer shares voting and/or investment power.by Mr. Bellanti's spouse.
.

49

Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires our directors and executive officers, and persons who own more than 10 percent10% of a registered class of our equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership of our common stock. Based solely on our review of these reports, and written representations from such reporting persons, we believe that allthe Section 16(a) filing requirements applicable to our executive officers, directors and owners of more than 10 percent of AAM’s common stockfor such reporting persons were met during 2010.2013.


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50

PROPOSAL 4: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2011
Table of Contents

PROPOSAL 3: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2014
The Audit Committee of the Board of Directors of AAM has appointed Deloitte & Touche LLP to serve as the independent registered public accounting firm to examine the Company’s consolidated financial statements for the year ending December 31, 2011.2014. Although ratification is not required by our bylaws or otherwise, the Board is submitting the appointment of Deloitte & Touche LLP to our stockholders as a matter of good corporate practice. If the appointment is not ratified, the Audit Committee will consider whether the appointment is appropriate and will use its discretion in determining whether the appointment of Deloitte & Touche LLP is in the best interests of the Company and its stockholders.
Representatives of Deloitte & Touche LLP will attend the 20112014 annual meeting and be available to make a statement or respond to appropriate questions.
The Board unanimously recommends a vote FOR ratification of the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for 2011.2014.


59

AUDIT COMMITTEE DISCLOSURE
Report of the Audit Committee
The Audit Committee assists the Board in fulfilling its oversight responsibilities with respect to the Company’s financial reporting process by monitoring, among other matters, the quality and integrity of the Company’s financial statements, the independence and performance of Deloitte & Touche LLP (D&T), the Company’s independent registered public accounting firm, and the performance of the Company’s internal auditors. Management has primary responsibility for preparing the consolidated financial statements and for the reporting processes, including the design and maintenance of the Company’s system of internal controls. The independent registered public accounting firm is responsible for auditing the Company’s consolidated financial statements and opining upon the effectiveness of the internal control over financial reporting under the standards of the Public Company Accounting Oversight Board (PCAOB). The Audit Committee is solely responsible for the compensation, appointment and oversight of the Company’s independent registered public accounting firm.
In this context, the Audit Committee has met and held discussions with management, D&T and the internal auditors, separately and together, with and without management present, regarding the Company’s audited consolidated financial statements for the year ended December 31, 2010,2013, and the Company’s internal controls.controls over financial reporting. Management represented to the Audit Committee that the Company’s consolidated financial statements were prepared in accordance with generally accepted accounting principles in the U.S. The Audit Committee also discussed with the independent registered public accounting firmD&T the matters required to be discussed by PCAOB Auditing StandardsStandard No. 61, as amended (AICPA, Professional Standards, Vol. 1, AU section 380)16, Communications with Audit Committees, as adopted byapplicable rules of the Public Company Accounting Oversight Board in Rule 3200T.SEC, and other relevant professional and regulatory standards, which include, among other items, matters related to the conduct of the audit of the Company’s consolidated financial statements. Further, the Audit Committee discussed with the internal auditors the Company’s plans for and scope of internal audits, identification of audit risks and results of audit activities.
The Audit Committee reviewed and discussed with the independent registered public accounting firmD&T the auditor’s independence from the Company and itsthe Company’s management. As part of that review, D&T submitted to the Audit Committee the written disclosures and the letter required by the applicable requirements of the PCAOB regarding D&T’s communication with the Audit Committee concerning independence from the Company.independence. Further, the Audit Committee discussed with D&T the firm’s independence and considered whether D&T’s provisionperformance of non-audit services to the Company was compatible with maintaining D&T’s independence. The Audit Committee concluded that D&T is independent from the Company and its management.
Based uponon the considerations described above and subject to the limitations uponof the role and responsibilities of the Audit Committee, the Audit Committee recommended to the Board that the audited consolidated financial statements for the year ended December 31, 20102013 be included in the Company’s 2010 Annual Report2013 annual report onForm 10-K.
Audit Committee of the Board of DirectorsDirectors*
William P. Miller II, Chairman
John F. Smith
Larry K. Switzer
Thomas K. Walker

*Samuel Valenti III, whose service on the Audit Committee began in February 2014, did not participate in the preparation of this report.

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51


Policy for Pre-Approval of Audit and Non-Audit Services
The Audit Committee’s policy is to approve in advance all audit and permitted non-audit services (including scope, fee structure and the potential effect of the service on the auditor’s independence) to be performed for the Company by its independent registered public accounting firm. Pre-approval is generally provided for up to one year, is detailed as to the particular service or category of services and is generally subject to a specific budget. The Audit Committee may also pre-approve particular services on acase-by-case basis. The Chairman of the Audit Committee may pre-approve permissible non-audit services that arise between Audit Committee meetings, provided the fees do not exceed a limit established by the Audit Committee and the Audit Committee is informed of the decision to pre-approve the service at its next scheduled meeting. The Audit Committee received regular updates on the amount of fees and scope of audit, non-audit and tax services provided by D&T during 2010. During fiscal 2010, all2013. All services provided by D&T as noted in the table belowduring fiscal 2013 were authorized and approved by the Audit Committee in compliance with applicable pre-approval policies and procedures described herein.procedures.
Independent Registered Public Accounting Firm’s Fees
The aggregate amountfollowing table shows the fees for professional services rendered by D&T for the audit of the Company's financial statements for the years ended December 31, 2013 and December 31, 2012, and fees billed for other services rendered by D&T, the member firms of Deloitte Touche Tohmatsu, and their respective affiliates during the previous two fiscal years is as follows:those periods.
         
  December 31, 
  2010  2009 
 
Audit Fees(1)
 $1,181,000  $1,353,000 
Audit Related Fees(2)
  —   — 
Tax Fees(3)
  238,000   32,000 
All Other Fees  —   — 
         
Total $1,419,000  $1,385,000 
         
 December 31,
 20132012
Audit Fees(1)
$1,615,877
$1,357,550
Audit Related Fees(2)
—
—
Tax Fees(3)
151,000
80,539
All Other Fees(4)
90,000
—
Total$1,856,877
$1,438,089

(1)IncludesAudit fees include fees for the audit of annual consolidated financial statements and internal controls over financial reporting, reviews of quarterly consolidated financial statements, statutory audits, consents and comfort letters, reviews of documents filed with the SEC and other services related to SEC matters. Audit fees also include fees incurred in connection with an audit of internal control over financial reporting as required by Section 404 of the Sarbanes-Oxley Act.
(2)Audit-related fees are for services that are reasonably related to the performance of the audit or review of the Company’s consolidated financial statements. This category includesalso refers to fees related to internal control, financial accounting and reporting standards.for the audit of employee benefit plans.
(3)Fees for tax services in 20102013 and 20092012 consisted of fees for tax compliance, tax advice and tax planning services.

(4)Other fees in 2013 are for advisory services provided to a foreign subsidiary in connection with a government grant application.

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52


OTHER MATTERS
Expenses of Solicitation
The Board is soliciting your proxy, and the expense of soliciting proxies will be borne by AAM. Proxy materials were distributed by mail by Computershare Trust Company, N.A. In addition, AAM will reimburse brokers, banks and other holders of record for their expenses in forwarding proxy materials to stockholders.
We have retained Georgeson Inc. to assist in the solicitation of proxies for an estimated fee of $10,000$11,000 plus reimbursement of certain out-of-pocket expenses. Georgeson may be contacted at(866) 432-2791. (888) 607-6511. In addition, our officers and certain other employees may solicit proxies personally or by telephone, fax ore-mail. They will receive no special compensation for these services.
Stockholder Proposals for 20122015 Annual Meeting
Under SEC rules, stockholder proposals for the 20122015 annual meeting of stockholders must be received by the Secretary of AAM at One Dauch Drive, Detroit, MI48211-1198, on or before November 20, 20112014 in order to be eligible for inclusion in the Company’s 20122015 proxy materials. In addition, AAM’s bylaws require stockholders intending to present any matter for consideration at the 20122015 annual meeting of stockholders, other than through inclusion in our proxy materials, to notify AAM’s Secretary in writing at the above address on or before February 19, 2012,20, 2015, but no earlier than January 30, 2012.31, 2015.
Obtaining a copy of 20102013 Form 10-K
AAM will furnish to stockholders without charge a copy of our Annual Reportannual report onForm 10-K for the year ended December 31, 2010.2013. Requests should be directed to American Axle & Manufacturing Holdings, Inc., Investor Relations Department, One Dauch Drive, Detroit, MI48211-1198, or bye-mail to investorrelations@aam.com. The 20102013 Annual Report onForm 10-K is available on our website athttp://investor.aam.com/sec.cfm.investor.aam.com.


62

(AAM 2006 LOGO)53

(GRAPHIC)
IMPORTANT ANNUAL MEETING INFORMATION
Electronic Voting Instructions You can vote by Internet or telephone!
Available 24 hours a day, 7 days a week!
Instead of mailing your proxy, you may choose one of the two voting methods outlined below to vote your proxy.
VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR.
Proxies submitted by the Internet or telephone must be received by 1:00 a.m., Central Time, on April 28, 2011. May 1, 2014.
Vote by Internet
• Log on    Go to www.envisionreports.com/axl
•    Or scan the Internet and go towww.envisionreports.com/axlQR code with your smartphone
•    Follow the steps outlined on the secured website.secure website
Vote by telephone
•     Call toll free 1-800-652-VOTE (8683) within the USA, US territories & Canada any time on a touch tone telephone. There isNO CHARGEto you for the call.telephone
•     Follow the instructions provided by the recorded message. 000004 message
Using ablack inkpen, mark your votes with anXas shown in this example. Please do not write outside the designated areas.Annual Meeting Proxy Card
x
qIF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.q
A Proposals —
The Board of Directors recommends a vote FOR all the nominees listed in Proposal 1, FOR Proposal 2, and FOR Proposal 3.
1Election of Directors:ForWithhold   ForWithhold ForWithhold+
 
 
01 - James A. McCaslin
 
o
 
o
 
02 - William P. Miller II
 
o
 
o
 
03 - Samuel Valenti III
 
o
 
o
    ForAgainstAbstain   ForAgainstAbstain
2Approval, on an advisory basis, of the compensation of the Company’s named executive officers.
 
o
 
o
 
o
3Ratification of the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2014.
 
o
 
o
 
o
     In their discretion, the proxies are authorized to the extent permitted by law to vote on any and all other matters as may properly come before the meeting, including the authority to vote to adjourn the meeting.
1234 5678 9012 345 _IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE A Proposals — The Board of Directors recommends a vote FOR all the nominees listed in Proposal 1, FOR Proposal 2, FOR an annual frequency on Proposal 3, and FOR Proposal 4. 1. Election of Directors:For Withhold For Withhold For Withhold 01 — Richard E. Dauch 02 — James A. McCaslin 03 — William P. Miller II 04 — Larry K. SwitzerFor Against Abstain 2. Approval, on a advisory basis, of the compensation of the Company’s named executive officers as described in the Compensation Discussion and Analysis, tables and related narrative. 3. Approval, on an advisory basis, of frequency for future advisory votes on say-on-pay.1 Yr 2 Yrs 3 Yrs Abstain 4. Ratification of the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for year ending December 31, 2011.For Against Abstain In their discretion, the proxies are authorized to the extent permitted by law to vote on any and all other matters as may properly come before the meeting, including the authority to vote to adjourn the meeting.
B Non-Voting Items
Change of Address— Please print new address belowbelow.
Meeting Attendance
Mark box to the right if you plan to attend the Annual Meeting.¬


CAuthorized Signatures — This section must be completed for your vote to be counted. C — Date and Sign Below
Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title.This section must be completed for your instructions to be executed.
Date (mm/dd/yyyy) — Please print date below.Signature 1 — Please keep signature within the box.Signature 2 — Please keep signature within the box.

(GRAPHIC)
_IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. Proxy — American Axle & Manufacturing Holdings, Inc./    /        
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS ON APRIL 28, 2011 SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS Richard E. Dauch and Steven R. Keyes, or either of them, with full power of substitution, are authorized to vote all of your shares as if you were present at the Annual Meeting of Stockholders of American Axle & Manufacturing Holdings, Inc. to be held in the Auditorium at AAM’s World Headquarters Complex, One Dauch Drive, Detroit, Michigan, at 3:00 p.m. on April 28, 2011 or at any adjournments of the meeting.This proxy will be voted as you specify on the reverse side. If you do not make a choice, this proxy will be voted for the director nominees in Proposal 1, for the approval of the compensation of the Company’s named executive officers in Proposal 2, “1 year” for the frequency for future advisory votes in Proposal 3 and ratification of the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm in Proposal 4. Voting by the Internet or by telephone reduces costs to AAM. If you vote over the Internet or by telephone, please do not mail this card. (Items to be voted appear on reverse side.)

01RYHA
qIF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.q
 
Proxy — American Axle & Manufacturing Holdings, Inc.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS ON May 1, 2014
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
David C. Dauch and David E. Barnes, or either of them, with full power of substitution, are authorized to vote all of your shares as if you were present at the Annual Meeting of Stockholders of American Axle & Manufacturing Holdings, Inc. to be held in the Auditorium at AAM’s World Headquarters Complex, One Dauch Drive, Detroit, Michigan, at 3:00 p.m. on May 1, 2014 or at any adjournments of the meeting.
This proxy will be voted as you specify on the reverse side. If you do not make a choice, this proxy will be voted for the director nominees in Proposal 1, for the approval, on an advisory basis, of the compensation of the Company’s named executive officers in Proposal 2 and for ratification of the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm in Proposal 3.
Voting over the Internet or by telephone reduces costs to AAM. If you vote over the Internet or by telephone, please do not mail this card.
(Items to be voted appear on reverse side.)