LTI — 2015 - 2017 Performance Share Awards

Payouts under the long-term incentive performance share awards granted in 2015 were based on two equally weighted three-year performance metrics, EBITDA margin and relative TSR. The awards based on relative TSR resulted in a zero payout to senior management because the threshold performance level was not achieved. Our shareholders did not realize value on our stock over this time period. Consequently, our senior management team did not receive any value for these awards.



Governance Point
Payout capped at 50% if 3-year absolute TSR is negative.

The performance targets for the EBITDA performance share awards were determined in consideration of AAM's historical EBITDA margins in 2012 - 2014 as noted below. The maximum performance level was set to drive performance significantly above our peers and encourage EBITDA margin growth. Over this period, management delivered a result well in excess of targets and prior actual performance. This outstanding financial performance allowed us to reduce debt and position AAM for the strategic actions we took in 2017.

~~PROPOSAL 3: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2016~~			51

~~AUDIT COMMITTEE DISCLOSURE~~ Adjusted EBITDA Margin		51
~~Report of the Audit Committee~~	51
~~Policy for Pre-Approval of Audit and Non-Audit Services~~	52
~~Fees of Independent Public Accountants~~	52

~~OTHER MATTERS~~	53

~~Table of Contents~~

~~PROXY STATEMENT~~

~~Annual Meeting of Stockholders~~

~~To Be Held May 5, 2016~~

~~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 24, 2016, we mailed to our stockholders (other than those who previously requested e-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 2015 annual report on Form 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 by e-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 at ~~www.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 8, 2016 (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, proxy and/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.~~

2018 AAM Proxy Statement | 11

~~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 over the Internet, have your notice card or proxy and/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.

~~How many shares may vote at the meeting?~~

As of March 8, 2016, we had 76,484,312 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 over the Internet.~~

~~Table of Contents~~



Table of Contents	Proxy Summary

~~What are the Board’s recommendations on how I should vote my shares?~~

2018 Incentive Compensation

The ~~Board recommends that you vote your shares as follows:~~

~~Proposal 1 —~~ ~~FOR~~ ~~the election of the two nominees with terms expiring at the 2019 annual meeting;~~

~~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, 2016.~~

~~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 — You may vote for or against the proposal to approve the compensation of our named executive officers, 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 2 — An affirmative vote of a majority of the shares voted in person or~~performance levels set 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.

~~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~~for 2018 annual and long-term incentive metrics were set at a level above 2017 actual results and reflect stretch goals that are designed to reward growth and sustain profitability. In addition, the ~~outcome of~~2018 incentive compensation metrics were modified to drive significant focus on EBITDA for the ~~vote in making future determinations concerning~~short-term metric and free cash flow and relative TSR, weighted equally, for the ~~compensation of~~long-term metrics. These targets require our ~~named executive officers. With respect~~management team to ~~proposal 3, the Audit Committee will consider whether the appointment of Deloitte & Touche, LLP is in the best interests of~~continue to perform at a high level, achieve integration synergies, implement productivity improvements, successfully launch new product programs and align the Company ~~if the appointment is not ratified.~~with long-term value creation.

~~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.

2018 AAM Proxy Statement | 12

~~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 3), a “routine” matter.

Without your specific instructions, your record holder cannot vote your shares on the election of directors or the advisory vote on named executive officer compensation. If you do not instruct your record holder how to vote on these proposals, the record holder will 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 and 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.



Table of Contents	Election of Directors

Election of ~~Contents~~Directors

~~PROPOSAL 1: ELECTION OF DIRECTORS~~

Proposal 1: Election of Directors

The Board proposes that ~~Elizabeth A. Chappell~~David C. Dauch, William L. Kozyra and ~~John F. Smith~~Peter D. Lyons be re-elected to the Board as Class III directors for terms expiring at the annual meeting in 2019. Ms. Chappell has served on AAM's Board since 2004 and currently serves as Chair of the Compensation Committee and as a member of the Nominating/Corporate Governance Committee and Strategy & Technology Committee. Mr. Smith has served on AAM's Board since 2011 and currently serves as Chair of the Strategy & Technology Committee and as a member of the Audit Committee.2021.

The Board is divided into three classes. Directors serve for staggered three-year terms. 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 ~~Ms. Chappell~~Mr. Dauch, Mr. Kozyra and Mr. ~~Smith~~Lyons based on their demonstrated effectiveness as members of our Board and the ~~Committees~~committees on which they serve, their relevant experience and expertise, and their sound judgment 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, law, risk management, strategic business development and the global automotive industry. A summary of the principal occupation, professional background and specific knowledge and expertise that 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.~~



þ	The Board unanimously recommends a vote FOR each of the nominees.



Table of Contents	Election of Directors

Nominees for Director

Class I — Directors to hold office until the 2021 Annual Meeting of Stockholders



David C. Dauch	Chairman of the Board & Chief Executive Officer, AAM

	Current and Past Positions at AAM	Key Qualifications and Experience
	– Chairman of the Board since August 2013 – Chief Executive Officer since September 2012 – President & Chief Executive Officer September 2012 to August 2015 – President & Chief Operating Officer 2008 to 2012 – Various positions of greater responsibility 1995 to 2008	Based on his professional background and prior AAM Board experience, the following qualifications led the Board to conclude that Mr. Dauch should serve on AAM's Board: his leadership experience as an officer of AAM since 1998; the breadth of his management experience within, and knowledge of, AAM's global operations; and his subject matter knowledge in the areas of innovation and technology, manufacturing, strategic planning and risk management.






Age:53	Other Public Company Directorships	Current Directorships (non-profit) and Leadership Roles
Director Since:	Other Public Company Directorships	Current Directorships (non-profit) and Leadership Roles
2013 (Chairman)	– Amerisure Companies since 2014 – Horizon Global Corporation since 2015	– Business Leaders for Michigan – Detroit Economic Club – Detroit Regional Chamber – Great Lakes Council Boy Scouts of America – Boys & Girls Club of Southeastern Michigan – National Association of Manufacturers (NAM) – Original Equipment Suppliers Association (OESA) – Miami University Business Advisory Council – General Motors Supplier Council – FCA NAFTA Supplier Advisory Council
2009
Committees:
Executive (Chairman)



Table of Contents	Election of Directors



William L. Kozyra	President & Chief Executive Officer, TI Fluid Systems plc

	Current and Past Positions	Key Qualifications and Experience
	– President & Chief Executive Officer TI Fluid Systems plc (TI Automotive) (fluid storage, carrying and delivery systems) since 2008 – President & Chief Executive Officer Continental AG North America 1998 to 2008 – Member of Executive Board Continental AG (DAX) 2006 to 2008 – Vice President & General Manager Brake Products Division of Bosch Braking Systems 1995 to 1997	Based on his professional background and prior AAM Board experience, the following qualifications led the Board to conclude that Mr. Kozyra should serve on AAM's Board: his leadership experience as an officer of TI Automotive since 2008; the breadth of his international experience with global companies in the automotive industry; and his subject matter knowledge in the areas of engineering, manufacturing, innovation and technology, strategic planning and risk management.






Age:60	Other Public Company Directorships	Current Directorships (non-profit) and Leadership Roles
Director Since: 2015	Other Public Company Directorships	Current Directorships (non-profit) and Leadership Roles
Committees:	– TI Fluid Systems plc (TI Automotive) since 2008	– General Motors Supplier Council – Ford Motor Company Top 100 Supplier Forum – Notre Dame Preparatory School – Automotive Hall of Fame – Boy Scouts of America, Detroit – University of Detroit Alumni Council – Society of Automotive Engineers
Compensation
Nominating/Corp Gov
Technology



Peter D. Lyons	U.S. Regional Managing Partner, Freshfields Bruckhaus Deringer US LLP

	Current and Past Positions	Key Qualifications and Experience
	– Attorney, U.S. Regional Managing Partner Freshfields Bruckhaus Deringer US LLP New York, NY since September 2014 – Partner, Mergers & Acquisitions Group Shearman & Sterling LLP New York, NY 1979 to 2014	Based on his professional background and prior AAM Board experience, the following qualifications led the Board to conclude that Mr. Lyons should serve on AAM's Board: his experience as an attorney of a major law firm since 1979; the breadth of his experience in advising global businesses on complex legal matters and transactions; and his subject matter knowledge in the areas of corporate governance, mergers and acquisitions, international business and risk management.






Age: 62
Director Since: 2015
Committees:
Compensation
Nominating/Corp Gov



Table of Contents	Election of Directors

Returning Directors

Class II— Directors to hold office until the 2019 Annual Meeting of Stockholders



Elizabeth A. Chappell	Executive Chairwoman, RediMinds, Inc.

	Current and Past Positions	Key Qualifications and Experience
	– Executive Chairwoman (co-founder) RediMinds, Inc. (data strategy, engineering and innovation firm) since December 2017 – President & Chief Executive Officer Detroit Economic Club 2002 to November 2017 – Executive Vice President, Corporate Communications & Investor Relations Compuware Corporation 1997 to 2001 – President & Chief Executive Officer of a consulting firm she founded 1995 to 2000 – Various executive positions with increasing responsibility with AT&T for 16 years	Based on her professional background and prior AAM Board experience, the following qualifications led the Board to conclude that Ms. Chappell should serve on AAM's Board: her leadership experience as President & CEO of the Detroit Economic Club; the breadth of her community outreach and corporate citizenship experience in her professional, civic and charitable endeavors; and her subject matter knowledge in the areas of investor relations, marketing and communications, business development and risk management.





		Current Directorships (non-profit)
Age: 60	Previous Directorship	– Detroit Economic Club – Detroit Regional Chamber – Detroit Zoo – Michigan Israel Business Accelerator (MIBA) – Michigan State University Capital Campaign – United Way of Southeastern Michigan
Director Since: 2004	– Handleman Company 1999 to 2009
Committees:
Nominating/Corp Gov
(Chair)



John F. Smith	Principal, Eagle Advisors LLC

	~~ELIZABETH A. CHAPPELL~~ ~~Age 58~~ ~~Ms. Chappell has served as President~~	Current 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.Chappell was PresidentPast Positions	Key Qualifications 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 the Michigan State University Capital Campaign, Citizens Research Council, Detroit Regional Chamber, the United Way Board and Tocqueville Committee, and 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. Ms. Chappell’s demonstrated leadership skills, entrepreneurial business experience and service on various boards enhance her contributions to the Board in the areas of investor relations, community outreach and corporate citizenship, marketing and communications, executive compensation and strategic business development.Experience
~~Director since~~ – ~~2004~~
			~~JOHN F. SMITH~~ ~~Age 65~~ ~~Mr. Smith is principal of~~Principal, Eagle Advisors LLC ~~a consulting firm that specializes in strategy~~(strategy development and performance ~~improvement. From 2000 to 2010, Mr. Smith held positions of increasing responsibility with~~improvement consulting) since 2011 Positions at General ~~Motors Corporation in sales and marketing, product planning and corporate strategy, most recently as~~ Motors: – Group Vice President, Corporate Planning and ~~Alliances. During~~Alliances (most recent position) 2000 to 2010 – General Manager, Cadillac Motor Car 1997 to 1999 – President, Allison Transmission 1994 to 1996 – Vice President, Planning; International Operations, Zurich Switzerland 1989 to 1993	Based on his ~~42-year career~~professional background and prior AAM Board experience, the following qualifications led the Board to conclude that Mr. Smith should serve on AAM's Board: his leadership experience in the automotive ~~industry, Mr. Smith also served as General Manager~~industry; the breadth of ~~Cadillac Motor Car, President of Allison Transmission, and Vice President, Planning at~~his management experience with General Motors ~~International Operations~~international operations; and his subject matter knowledge in ~~Zurich, Switzerland. Mr. Smith serves on~~ the ~~boards~~areas of ~~CEVA Holdings LLC (where he serves on the Executive Committee)~~manufacturing, finance, innovation and ~~Arnold Magnetics. Mr. Smith also serves as an advisor to VNG.CO, a developer of compressed natural gas refueling stations,~~technology, strategic planning and ~~Enginetics LLC, a fuel-injection technology start-up company. Mr. Smith is a member of the National Advisory Board of~~ risk management.




		Current Directorship (non-profit)
– Boy Scouts of America ~~and Chairman of the~~ National Advisory Board ~~of Trustees of St. John's Providence Health System in Michigan. He served on the boards of~~
	Age: 67	Other Public Company Directorships
	Director Since: 2011	– TI Fluid Systems plc (TI Automotive) since October 2017 – CEVA Holdings LLC since 2013
	Committees:
	Audit	Previous Directorships
	Technology (Chair)	– Covisint Corporation -- September 2016 to July 2017 – Arnold Magnetics -- January 2015 to September 2016 – Plasan Carbon Composites -- December 2013 to December 2014 – Smith Electric Vehicles Corp. ~~(June~~-- June 2012 -to December ~~2013) and Plasan Carbon Composites (December~~ 2013 - December 2014). Mr. Smith's extensive experience in manufacturing, finance, business development, international operations, sales and marketing, product development and mergers and acquisitions is aligned with AAM's key business objectives, including continued global business growth and diversification.
	~~Director since 2011~~



Table of Contents	Election of Directors

~~Table of Contents~~

~~RETURNING DIRECTORS~~

~~Class III — Directors to hold office until the 2017 Annual Meeting of Stockholders~~



	~~JAMES A. McCASLIN~~ ~~Age 67~~ ~~Mr. McCaslin retired from Harley Davidson,~~George Thanopoulos	Former Chief Executive Officer, Metaldyne Performance Group, 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 provide the Board with a valued resource in support of AAM's operational objectives, which include engineering, quality and technology leadership, operational excellence and global geographic and product diversification.	~~Director since~~ ~~2011~~

	Past Positions	Key Qualifications and Experience
	– Chief Executive Officer Metaldyne Performance Group, Inc. August 2014 to April 2017 – Chief Executive Officer (founder) HHI Group Holdings (forged products) 2005 to 2015 Positions at former Metaldyne Corporation and predecessor company, MascoTech, Inc. – Engine Group President former Metaldyne Corporation 2001 to 2004 – Engineering, plant management and executive management positions with Mascotech, Inc. over 15 years	Based on his professional background and prior board experience with MPG, the following qualifications led the Board to conclude that Mr. Thanopoulos should serve on AAM's Board: his leadership experience as founder and CEO of HHI and as CEO of MPG until the acquisition by AAM; the breadth of his management experience within, and knowledge of, MPG's global operations; and his subject matter knowledge in the areas of innovation and technology, manufacturing, strategic planning and risk management.






Age: 54	Previous Directorships
Director Since:2017	– Metaldyne Performance Group, Inc. 2014 to April 2017 – Global Brass and Copper Holdings, Inc. 2011 to 2014 – Chassis Brakes International 2012 to 2013 – JL French Automotive Castings, Inc. 2006 to 2012
Committees:
Technology



~~WILLIAM~~Table of Contents	Election of Directors

Class III — Directors to hold office until the 2020 Annual Meeting of Stockholders



James A. McCaslin	Retired President & Chief Operating Officer, Harley-Davidson Motor Co.

	Past Positions	Key Qualifications and Experience
	Positions at Harley-Davidson (Retired 2010): – President & Chief Operating Officer 2001 to 2009 – Various senior executive positions 1992 to 2001 Other Manufacturing Company Positions: – Manufacturing and Engineering executive JI Case (agricultural equipment) 1989 to 1992 – Manufacturing and Quality executive Chrysler Corporation Volkswagen of America General Motors Corporation 1966 to 1989	Based on his professional background and prior AAM Board experience, the following qualifications led the Board to conclude that Mr. McCaslin should serve on AAM's Board: his leadership experience as President & COO of Harley-Davidson Motor Company; the breadth of his manufacturing and engineering experience at global manufacturing companies; and his subject matter knowledge in the areas of engineering, innovation and technology, manufacturing and risk management.






Age: 69
Director Since: 2011	Previous Public Company Directorship
Committees:	– Maytag Corporation 2003 to 2006
Audit
Compensation (Chair)
Nominating/Corp Gov
Technology
Executive



William P. ~~MILLER~~Miller II CFA	Head of Asset Allocation, Saudi Arabian Investment Company

	Current and Past Positions	Key Qualifications and Experience
	– Head of Asset Allocation ~~Age 60~~Saudi Arabian Investment Company since October 2013 – Senior Managing Director & Chief Financial Officer Financial Markets International, Inc. April 2011 to October 2013 – Deputy Chief Investment Officer Ohio Public Employees Retirement System 2005 to 2011 – Senior Risk Manager Abu Dhabi Investment Authority 2003 to 2005 – Independent Risk Oversight Officer and Chief Compliance Officer Commonfund Group 1996 to 2002	Based on his professional background and prior AAM Board and Audit Committee experience, the following qualifications led the Board to conclude that Mr. Miller ~~Chartered Financial Analyst, is~~should serve on AAM's Board: his leadership qualities developed from his experience as Head of Asset Allocation for the Saudi Arabian Investment ~~Company. Separately,~~Company and as an officer with oversight responsibilities for investments, risk and compliance since ~~2003, Mr. Miller has been a member~~1996; the breadth of his experience in serving on the ~~Board of Directors~~boards of the Chicago Mercantile Exchange ~~serving on~~and the ~~Audit Committee, Finance Committee~~Dubai Mercantile Exchange; and ~~Market Regulation Oversight Committee. From April 2011 to October 2013, he was~~his subject matter knowledge in the ~~Senior Managing~~ areas of finance, investments, audit and accounting, innovation and technology, regulatory matters and risk management.






Age: 62
Director ~~& Chief Financial Officer of Financial Markets International, Inc. From~~ Since: 2005 to 2011, he was employed by the Ohio Public Employees Retirement System, where he served as Deputy Chief Investment Officer. Previously, he was Senior Risk Manager for the Abu Dhabi Investment Authority and an Independent Risk Oversight Officer and Chief Compliance Officer for Commonfund Group. 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 served on the		Advisory Boards (Previous)
Committees:	Previous Directorships	– Public Company Accounting Oversight ~~Board’s~~ Board Standing Advisory Group ~~the~~ – Golub Capital Institutional Investor Advisory Board ~~for Golub Capital, the Board of Directors of the~~
Audit (Chair)	– Chicago Mercantile Exchange 2003 to May 2017 – Dubai Mercantile Exchange 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. 2011 to March 2017
~~Director since~~ ~~2005~~ Technology

~~Table of Contents~~



Table of Contents	~~SAMUEL VALENTI III~~ ~~Age 70~~ ~~Mr. Valenti serves as Chairman and Chief Executive Officer~~Election of 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 manufacturer of highly engineered precision products for industry. In June 2015, Mr. Valenti became Co-Chair of the Board of Directors of Horizon Global Corporation, a designer, manufacturer and distributor of custom-engineered towing, trailer and cargo management products. Until 2008, Mr. Valenti 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 a member of the Board of Directors of Masco Capital Corporation. Mr. Valenti is a member of the Business Leaders for Michigan and serves as Chairman of the Renaissance Venture Capital Fund. Mr. Valenti has demonstrated leadership skills, breadth of management experience in diversified manufacturing businesses, and highly recognized subject matter expertise in mergers and acquisitions, finance, economics and asset management.	~~Director since 2013~~

~~Table of Contents~~

~~Class I — Directors to hold office until the 2018 Annual Meeting of Stockholders~~



		Samuel Valenti III	~~DAVID C. DAUCH~~ ~~Age 51~~ ~~David C. Dauch is~~Chairman & Chief Executive Officer, of AAM, a position he has held since September 2012. Mr. Dauch was appointed Chairman of the Board in August 2013. From September 2012 through August 2015, Mr. Dauch served as AAM's President & CEO. Prior to that, Mr. Dauch served as President & Chief Operating Officer (2008 - 2012)Valenti Capital LLC and held several other positions of increasing responsibility from the time he joined AAM in 1995. Prior to joining AAM, Mr. Dauch held several positions at Collins & Aikman Products Company, where he received the President’s Award for leadership and innovation. Mr. Dauch also served on the Collins & Aikman Board of Directors from 2002 to 2007. Presently, he serves 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, the National Association of Manufacturers (NAM), the Original Equipment Suppliers Association (OESA), Amerisure Mutual Holdings, Inc. and the Amerisure Companies (since December 2014) and Horizon Global Corporation (since June 2015). Mr. Dauch also serves on the Miami University Business Advisory Council. Mr. Dauch’s leadership of AAM’s global business and operations provides the Board with strategic vision and insight that are vital to AAM’s strategic plans for the future.		~~Director since~~ ~~2009~~World Capital Partners

		~~WILLIAM L. KOZYRA~~	Current and Past Positions	Key Qualifications and Experience
	– Chairman & Chief Executive Officer ~~Age 58~~Valenti Capital LLC and ~~Mr. Kozyra is Chairman of~~World Capital Partners (investment firms) since 2000 Positions at Masco Corporation (1968 to 2008) – President, Masco Capital Corporation 1988 to 2008 – Vice President - Investments Masco Corporation 1974 to 1998		Based on his professional background and prior AAM Board experience, the following qualifications led the Board ~~and Chief Executive Officer of TI Automotive Ltd., a global supplier of automotive fluid storage, carrying and delivery technology. He has served as TI Automotive's CEO since June 2008. Prior~~ to conclude that Mr. ~~Kozyra was President and CEO~~Valenti should serve on AAM's Board: his leadership experience as an executive of ~~Continental AG North America~~Masco for ~~10 years. He was also a member~~40 years; the breadth of the Executive Board, Continental AG (DAX), Hanover, Germany, with responsibility for Continental AG's NAFTA businesses. Previously, at ITT Automotive, he served as Vice President and General Manager, Brake and Chassis Systems North America. Prior to joining ITT Automotive, he was Vice President and General Manager of Bosch Braking Systems' Brake Products Division. Mr. Kozyra is a member of the Board of Directors of the Motor & Equipment Manufacturers Association (MEMA), the Ford Motor Company Top 100 Supplier Forum, the Board of Trustees of the Notre Dame Preparatory School, the Boy Scouts of America Executive Board in Detroit, Michigan, the Board of Advisors of the University of Detroit and the University of Detroit Alumni Council and the Society of Automotive Engineers. Mr. Kozyra has 36 years ofhis management experience in ~~the global automotive industry~~diversified manufacturing businesses; and ~~demonstrated leadership skills and technical background~~his subject matter expertise in the areas of ~~manufacturing, engineering, quality systems~~strategic planning, finance, economics and ~~sales, all of which are aligned with AAM's business objectives.~~asset management, and risk management.






	Age: 72	Other Public Company Directorships	Current Directorships (non-profit) and Leadership Roles
	Director Since: 2013	– TriMas Corporation since 2002 – Horizon Global Corporation since 2015	Current Directorships (non-profit) and Leadership Roles
	Lead Independent Director		– Business Leaders for Michigan – Renaissance Venture Capital Fund (Michigan) Advisory Board Chairman
	Committees:	Previous Directorship
	Audit	– Masco Capital Corporation - 1988 to 2008
	Compensation
~~Director since 2015~~	Nominating/Corp Gov
	Executive



Table of Contents	Corporate Governance

Corporate Governance

Corporate Governance Highlights

At AAM, we believe that strong corporate governance contributes to long-term shareholder value. We are committed to sound governance practices, including those described below:



Independence		Accountability
– All of our continuing directors and nominees, except our CEO, are independent – Our Lead Independent Director has a role with significant governance responsibilities – All standing Board committees (except the Executive Committee) consist entirely of independent directors – Independent directors meet regularly in executive session without management present		– Extensive shareholder engagement reached investors representing approximately 50% of our shares in 2017 – In 2018, we adopted proxy access by-laws, giving eligible shareholders the ability to include nominees in AAM's proxy statement – In uncontested elections, directors are elected by a majority of votes cast – The Board and each Board committee conducts an annual self-assessment



Sound Practices	Risk Management
– Director orientation and continuing education program includes visits to AAM manufacturing facilities and technical centers – Directors and executives are subject to stock ownership requirements – Directors and executives are prohibited from hedging or pledging AAM stock or engaging in short sales	~~PETER D. LYONS~~ – ~~Age 60~~ Mr. Lyons, an attorney, is a partner and Co-Head of the Global Public Mergers & Acquisitions Group of Freshfields Bruckhaus Deringer US LLP, which he joined in September 2014. Based in the New York office of Freshfields, Mr. Lyons represents leading U.S. and global companies in acquisitions and sales of public and private companies, asset acquisition and disposition transactions, and joint ventures. Prior to joining Freshfields, Mr. Lyons was a partner with Shearman & Sterling LLP and a member of the Mergers & Acquisitions Group based in New York, New York. Mr. Lyons practiced law at Shearman & Sterling for 35 years. Mr. Lyons has been recognized and recommended as an Mergers & Acquisitions practitioner by ~~Chambers Global~~, ~~Chambers USA~~, The ~~Legal 500 US~~Board oversees AAM's overall risk-management structure – ~~, and~~ ~~IFLR1000.~~ ~~Mr. Lyons received his law degree from Georgetown University Law Center and his Bachelor of Arts degree from the University of Virginia. From 2003~~Individual Board committees oversee certain risks related to 2014, while a partner at Shearman & Sterling, Mr. Lyons served as lead counsel to AAM and as a key advisor to the Board on legal matters. Mr. Lyons has extensive experience advising global companies and corporate boards as well as highly recognized subject matter expertise in mergers and acquisitions and other corporate transactions, corporate governance and othertheir areas of ~~significance to~~responsibility – AAM has robust risk management processes throughout the ~~Board.~~company	~~Director since 2015~~

~~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 at~~ ~~http://investor.aam.com.~~

Director Independence

AAM’s Corporate Governance Guidelines provide that at least a majority of the members of the Board meet the independence criteria of the NYSE listing standards. Currently, eight of our nine directors are independent from the Company. Only David C. Dauch, who serves as AAM's Chief Executive Officer, is not independent due to his employment with AAM.

The Board has ~~established~~adopted Director Independence Guidelines to assist in determining the independence of our directors ~~for purposes~~under the independence standards of the ~~NYSE independence standards.~~New York Stock Exchange (NYSE). The Director Independence Guidelines are included in AAM’s Corporate Governance Guidelines, which are available on our website at http://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. No director qualifies as independent unless the Board determines that the director has no direct or indirect material relationship with the Company.

~~As a result~~In February 2018, the Board reviewed the independence of ~~this evaluation,~~each then-sitting director, applying the independence standards set forth in our Corporate Governance Guidelines. Based on these independence standards and the relevant facts and circumstances, the Board determined that ~~the following nominees and returning directors have~~ no director other than Mr. Dauch, our CEO, has a material ~~relationships~~relationship with AAM and ~~are independent: Elizabeth A. Chappell, William L. Kozyra, Peter D. Lyons, James A. McCaslin, William P. Miller II, John F. Smith and Samuel Valenti III.~~

~~In making these independence determinations, the Board considered Ms. Chappell’s position as President & CEO~~that each director other that Mr. Dauch is independent. Mr. Dauch is not independent because of the Detroit Economic Club, in light of the sponsorship fees AAM pays to this non-profit organization. The annual fees paid by AAM to the Detroit Economic Club are significantly below the threshold amount established under the NYSE independence standards and our Director Independence Guidelines, which is the greater of two percent of the outside entity’s annual gross revenues or $1 million.his employment with AAM.

Board Leadership Structure

~~The Board's current leadership structure includes~~Our Board consists of a combined Chairman and CEO role, complemented with a ~~lead~~Lead Independent Director chosen from our independent ~~director. In August 2013,~~directors. This structure, along with our sound governance practices, provides effective and independent oversight of the Company.

The Chairman and CEO role brings to the Board ~~appointed David C. Dauch as~~the experience and expertise of both the Company and the automotive industry. The skills and experience of our CEO are well-suited for the role of Chairman, putting the Board in the best position to identify and assess key industry drivers and important changes in the competitive landscape so that the Board can develop effective strategies. In light of the ~~Board.~~opportunities and challenges facing



Table of Contents	Corporate Governance

~~Our~~

AAM and the importance of the Chairman role, the Board believes that ~~it is~~shareholders are best served by having Mr. Dauch serve in the ~~best interest of the Company to combine the roles~~combined role 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 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. CEO.

While ~~the Company's~~our independent directors bring ~~experience, oversight~~diverse experiences and expertise from various perspectives outside ~~the Company, the CEO's~~AAM, Mr. Dauch's in-depth knowledge of our business enables him to identify important 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.

Lead Independent Director

Our Board leadership structure is further enhanced by a Lead Independent Director. The Lead Independent Director plays an important role in our governance structure, working with both the independent directors and the CEO to ensure the Company is well positioned with sound strategy, robust risk management and effective governance. The Lead Independent ~~Lead Director.~~ Director's key responsibilities are to:


–	preside at executive sessions of independent directors;


–	call special executive sessions of independent directors, as appropriate;


–	serve as liaison between the independent directors and the Chairman & CEO;


–	inform the Chairman & CEO of issues arising from executive sessions of the independent directors; and


–	with Board approval, retain outside advisors who report to the full Board on matters of interest to the Board.

In ~~April 2014,~~May 2017, the Board selected Mr. ~~McCaslin~~Valenti to serve in this role. Mr. McCaslin had served as Lead Independent Director since April 2014. The ~~Independent Lead Director's responsibilities are to:~~Board rotated Mr. Valenti to this position in conjunction with the rotation of certain directors' committee memberships as discussed below. The Board believes these periodic rotations provide the Board and committees with diverse views and robust deliberations.

~~preside at executive sessions~~Board Meetings

Under AAM's by-laws, regular meetings of the ~~independent directors, which~~Board are held at least quarterly. Our practice is to schedule certain Board meetings at an AAM manufacturing or technical center so our directors have an opportunity to observe different aspects of our business first-hand. During 2017, the ~~end~~Board held four regularly scheduled meetings, one of ~~each scheduled~~which was held at a manufacturing facility, and one special meeting.

Directors are expected to attend all Board ~~meeting;~~meetings, meetings of committees on which they serve, and the annual meeting of stockholders. Directors are expected to spend the time needed and meet as frequently as necessary to properly discharge their responsibilities. All continuing directors attended 100% of the Board and applicable committee meetings during 2017, except for one director who missed one committee meeting. Overall attendance at Board and committee meetings was 99%. All directors then in office attended the 2017 annual meeting of stockholders.

~~call special executive sessions~~Board Committees

The Board has delegated some of ~~independent directors, as appropriate;~~

~~serve as chair of~~its authority to five committees: the Executive Committee, the Audit Committee, the Compensation Committee, the Nominating/Corporate Governance ~~Committee;~~

~~serve as liaison between the independent directors~~Committee and the ~~Chairman & CEO;~~

~~inform the Chairman & CEO of issues arising from executive sessions~~Technology Committee. Each of the ~~independent directors;~~Audit, Compensation and Nominating/Corporate Governance Committees has adopted a charter that complies with current NYSE rules relating to corporate governance. Copies of these committee charters are available at http://investor.aam.com.

~~with~~The Board ~~approval, retain outside advisors and/or consultants who report directly~~approved the rotation of certain directors' committee memberships effective May 2017. The Board believes that periodic rotation of committee membership is generally desirable to ensure that committees regularly benefit from diverse views. Committee membership as of March 22, 2018, the number of meetings held during 2017, and each committee's primary responsibilities are summarized below. Every committee other than the Executive Committee regularly reports on its activities to the full ~~Board on matters of interest to the full~~ Board.



Table of Contents	Corporate Governance



Audit Committee

2017 Meetings: 4 Members: William P. Miller II (Chair) * James A. McCaslin John F. Smith* Samuel Valenti III *Financial Expert	– Oversees the independent auditors' qualifications, independence and performance
	– Oversees the quality and integrity of our financial statements
	– Oversees the performance of our internal audit function
	– Discusses with management the Company's risk assessment and risk management framework
	– Approves audit and non-audit services provided by the independent auditors
	– Oversees the Company's hedging and derivatives practices
*Financial Expert	– Provides oversight of the Company's ethics and compliance programs
	– Discusses with management the Company's information technology systems and related security



Compensation Committee

2017 Meetings: 5 Members: James A. McCaslin (Chair) William L. Kozyra Peter D. Lyons Samuel Valenti III	– Recommends the CEO's compensation to the Board and establishes the compensation of other executive officers
	– Recommends incentive compensation and equity-based plans to the Board
	– Approves executive officer compensation to ensure that is designed to support achievement of the Company's business strategy and objectives while considering competitive market practices and shareholder interests
	– Recommends non-employee director compensation to the Board
	– Oversees management's risk assessment of the Company's policies and practices regarding compensation of executive officers and other associates
	– Evaluates and approves corporate goals and objectives for executive officer compensation and evaluates performance in light of these criteria
	– Oversees the preparation of the Compensation Discussion and Analysis (CD&A) and produces a Committee report for inclusion in our annual proxy statement



Nominating/Corporate Governance Committee

2017 Meetings: 5 Members: Elizabeth A. Chappell (Chair) William L. Kozyra Peter D. Lyons James A. McCaslin Samuel Valenti III	– Identifies qualified individuals to serve on the Board and committees
	– Reviews our Corporate Governance Guidelines and Code of Business Conduct and recommends changes as appropriate
	– Oversees succession planning for the CEO and other executive officers
	– Oversees evaluation of the Board and its committees
	– Reviews committee charters and recommends any changes to the Board



Technology Committee

2017 Meetings: 4 Members: John F. Smith (Chair) William L. Kozyra James A. McCaslin William P. Miller II George Thanopoulos	– Advises the Board and management on the Company's strategy for innovation and technology
	– Maintains awareness of market demands for technology advancements relative to product, processes and systems
	– Oversees and advises management regarding product, process and systems technologies
	– Reviews technology opportunities as potential ways to increase productivity, efficiency, quality and warranty performance and to support the Company's goals and objectives



Table of Contents	Corporate Governance



Executive Committee

2017 Meetings: 0 Members: David C. Dauch (Chair) James A. McCaslin Samuel Valenti III	– Acts on matters requiring Board action between meetings of the full Board
	– Has authority to act on certain significant matters, limited by our by-laws
	– All members other than Mr. Dauch are independent

Board Oversight of Risk Management

The Board ~~directly~~believes that strong and ~~through its committees, is responsible for overseeing the management of potential risks affecting the Company. In connection with our overall~~effective internal controls and risk management ~~process,~~processes are essential for achieving shareholder value. The Board has oversight for risk management with a focus on the ~~Board regularly reviews information provided by senior management about~~most significant risks facing the ~~Company’s~~Company, including strategic, operational, financial and compliance risks. ~~In addition, the chairs of the Audit, Compensation, Nominating/Corporate Governance~~The Board's risk oversight process builds upon management's risk assessment and ~~Strategy &~~mitigation processes, which include an enterprise risk management program, regular internal management disclosure and compliance committee meetings, a global ethics and compliance program and comprehensive internal audit processes.

~~Table of Contents~~

~~Technology Committees~~The Board implements its risk oversight function both as a full Board and through delegation to Board committees, which regularly report to the full Board. The Board has delegated the oversight of specific risks to Board committees that align with their functional responsibilities, as summarized in the table below.



Responsible Party		Primary Areas of Risk Oversight

Full Board		Oversees overall risk management function and regularly receives reports from the chairs of individual Board committees on risk-related matters falling within each committee's oversight responsibilities. Also receives reports from management on particular risks facing the Company, including through the review of AAM's strategic plan.

Audit Committee		Monitors financial, operational, and compliance risks by regularly reviewing reports and presentations given by management, Company advisors and the independent auditors. Regularly reviews risk management practices and risk-related policies (for example, AAM's risk management process and cyber-security strategy) and evaluates potential risks related to internal controls over financial reporting. Monitors financial risks, including capital structure and liquidity risks, and reviews the policies and strategies for managing financial exposure and contingent liabilities.

Compensation Committee		Monitors potential risks related to the design and administration of our compensation plans, policies and programs, including our performance-based compensation programs, to promote appropriate incentives that do not encourage executive officers to take unnecessary and/or excessive risks.

Nominating / Corporate Governance Committee		Monitors potential risks related to our governance practices by, among other things, reviewing succession plans and performance evaluations of the Board and CEO and monitoring legal developments and trends regarding corporate governance practices.

Technology Committee		Monitors risks associated with the Company's product portfolio and our innovation and technology plans.

Selection Process for Director Nominees

In consultation with the Chairman & CEO, the Nominating/Corporate Governance Committee identifies, evaluates and recommends potential candidates for membership on the Board. This committee conducts inquiries into the backgrounds and qualifications of candidates and considers questions of independence and possible conflicts of interest. Based on the committee’s evaluation, candidates who meet the Board’s criteria may receive further



Table of Contents	Corporate Governance

consideration, which may include interviews with the committee and other directors. The committee then submits its recommendations for nominees to the Board for approval.

~~The Audit Committee oversees management~~the Board. After consideration of ~~financial risks~~each incumbent Class I director's qualifications and ~~receives regular reports from management~~independence, the committee recommended that the Board nominate Mr. Dauch, Mr. Kozyra and Mr. Lyons for re-election as Class I directors, each with a term expiring on the ~~Company’s overall risk management structure~~date of the 2021 annual meeting of stockholders. Upon review, the Board decided to recommend Mr. Dauch, Mr. Kozyra and ~~processes.~~ Mr. Lyons for re-election at the 2018 annual meeting.

Director Qualifications, Skills and Experience

AAM’s Corporate Governance Guidelines provide the qualifications for Board membership. Candidates for director nominees to the Board are reviewed in consideration of the current composition of the Board, the operating requirements of the Company and the interests of our shareholders. Although specific qualifications may vary from time to time, desired qualities and characteristics include:


–	high ethical character and shared values with AAM;


–	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;


–	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. The current mix of top skills and qualifications of our nine Board members is shown below.



Top Skills and Qualifications:	Number of Directors:
Top Skills and Qualifications:	1	2	3	4	5	6	7	8	9

Industry Experience

CEO/COO/President Experience

Global Manufacturing Operations

Strategic Planning

Innovation and Technology

Financial Expertise

Legal / Regulatory

Risk Management



Table of Contents	Corporate Governance

Succession Planning

The Nominating/Corporate Governance Committee ~~manages risks associated~~is responsible for overseeing the Company’s succession planning process for executive officers and other key executive positions at AAM. In performing this role, this committee monitors and approves management’s succession planning process and actions and, with ~~corporate governance and management succession planning. The Compensation Committee oversees risks related to AAM’s compensation programs. The Strategy & Technology Committee oversees risks related~~respect to the ~~Company's~~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. AAM's long-term and ongoing succession planning program is designed to support senior leadership development and succession in a manner that positions AAM to achieve its strategic, ~~plan~~operating and ~~AAM’s product, process~~financial performance goals, and ~~systems technology. Additional review or reporting of specific risks is conducted as appropriate or as requested by~~enhance shareholder value.

Communicating with the Board ~~or a committee.~~

~~Stockholder Engagement~~

Our Board and management team value the opinions and feedback of our ~~stockholders,~~shareholders, and we engage with stockholders throughout the year on a variety of issues, including our executive compensation program and corporate governance. ~~Stockholders~~Shareholders and other interested parties who wish to communicate with us on these or other matters may contact our Investor Relations Department by email at investorrelations@aam.com or by mail at One Dauch Drive, Detroit, Michigan 48211-1198 (corporate address).

~~Stockholders~~Shareholders or other interested parties may communicate with the Board through the Secretary of AAM by e-mail at AAMBoardofDirectors@aam.com or by mail at the corporate address above. 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~~instruct the Secretary to forward any communication received by the Secretary on behalf of the Board.

~~Code of Business Conduct~~Corporate Governance Policies

~~AAM~~Because we believe corporate governance is integral to creating long-term shareholder value, our Board has adopted ~~a Code~~company-wide corporate governance policies, which are periodically reviewed and revised as appropriate to ensure that they reflect the Board's corporate governance objectives.

Please visit the Governance section of ~~Business Conduct that is designed~~our website (http://investor.aam.com/governance) to ~~assist AAM associates, executive officers~~learn more about our corporate governance practices and ~~members~~to access the following materials:


–	Corporate Governance Guidelines


–	Code of Ethics for the CEO, CFO and other Senior Financial Executives (Code of Ethics)


–	Charters of our Board Committees


–	Code of Business Conduct

A written copy of ~~the Board in conducting AAM’s business with the highest standards of ethics and integrity. AAM has also adopted a Code of Ethics applicable to~~ our ~~CEO, CFO and other Senior Financial Executives (Code of Ethics). The Board annually reviews the Code of Business Conduct and makes updates as appropriate. AAM’s~~ Code of Business Conduct and Code of Ethics ~~are available on our website at~~ ~~http://investor.aam.com.~~ ~~A written copy~~ also may be obtained by any stockholder without charge upon request to the AAM Investor Relations Department by email at investorrelations@aam.com or by mail at our corporate address above.



Table of Contents	Compensation of Directors

Compensation of Directors

The Compensation Committee has authority to develop and recommend to the full Board the compensation policies and programs for non-employee directors. The committee retained Meridian Compensation Partners LLC (Meridian) to advise when setting non-employee director compensation to ensure it is market-based, aligned with shareholder interests and consistent with our compensation principles.

AAM's compensation program for our non-employee directors is designed to meet the following objectives:


–	recognize the significant investment of time and expertise required of directors to oversee AAM's global affairs;


–	align the directors' interests with the long-term interests of our shareholders; and


–	ensure that their compensation is well perceived by our shareholders.

In connection with AAM's acquisition of MPG in April 2017, which nearly doubled the size of the Company, the Committee recommended, and the Board approved, changes to director compensation to reflect updated market information provided by Meridian and to continue to align compensation levels with that of our comparative peer group. Additional information regarding Meridian and our 2017 comparative peer group is provided in Compensation Philosophy, Process and Market Analysis.

2017 Annual Retainer and Committee Chair Retainers



Annual retainer	$	110,000
Committee chair annual retainer:
Audit Committee chair	20,000
Compensation Committee chair	15,000
Other committee chair	10,000
Lead director annual retainer	30,000

The only change in cash compensation for 2017 was an increase in the annual retainer for the Compensation Committee Chair from $10,000 to $15,000, effective April 1, 2017.

Annual Equity Grant

Non-employee directors serving on the Board on the date of the 2017 annual meeting received a grant of Restricted Stock Units (RSUs) of 7,513, or a grant date value of $125,000. This amount reflected an increase in value from $110,000 based on Meridian's updated benchmarking analysis. The awards are payable in stock and vest in one year, unless vesting is accelerated upon death, disability or a change in control. Non-employee directors may elect to defer settlement of RSUs until after termination of service from the Board.

Director Stock Ownership Guidelines

In connection with the MPG acquisition and updated market analysis, the Compensation Committee had Meridian review our stock ownership guidelines for non-employee directors. Based on this analysis, the committee recommended and the Board approved an increase in the multiple from three times to five times the annual cash retainer. Non-employee directors are expected to meet the guidelines within five years from the date of election to the Board. Shares owned directly, deferred RSUs and unvested RSUs count toward the guidelines. Each non-employee director has met, or is on track to meet, these ownership guidelines. Current stock ownership of non-employee directors is shown in the Beneficial Stock Ownership section below.

Anti-hedging and Anti-pledging policy

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 the use of financial derivatives, short sales or any similar transactions. Pledging of AAM stock is also prohibited.



Table of Contents	Compensation of Directors

Total 2017 compensation of our non-employee directors is shown below.



Name	Fees Earned or Paid in Cash⁽¹⁾ ($)	Stock Awards⁽²⁾ ($)	All Other Compensation⁽³⁾ ($)	Total ($)
Elizabeth A. Chappell	120,000	125,016	1,400	246,416
Loren Easton ⁽⁴⁾	77,917	125,016	—	202,933
William L. Kozyra	110,000	125,016	1,500	236,516
Peter D. Lyons	110,000	125,016	800	235,816
James A. McCaslin	131,250	125,016	500	256,766
William P. Miller II	130,000	125,016	700	255,716
Kevin Penn ⁽⁴⁾	77,917	125,016	—	202,933
John F. Smith	120,000	125,016	1,900	246,916
George Thanopoulos	82,500	125,016	—	207,516
Samuel Valenti III	132,500	125,016	1,600	259,116


(1)	Fees earned in 2017 for services whether paid in cash or deferred. 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.

(2)

Reflects the full grant date fair value of restricted stock unit awards granted on May 4, 2017 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 $16.64. See Note 9 to the audited consolidated financial statements in our annual report on Form 10-K for the year ended December 31, 2017 regarding assumptions underlying the valuation of equity awards.

(3)

The Company reimburses non-employee directors for 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. Easton and Mr. Penn resigned from the Board on December 15, 2017 after completion of the sale by American Securities LLC of its interest in the Company. Outstanding equity awards were forfeited upon their resignation. Mr. Easton and Mr. Penn had been designated by American Securities LLC to serve on the Board in connection with the Company's acquisition of MPG on April 6, 2017.

As of December 31, 2017, each non-employee director had the following number of outstanding RSUs (including those deferred). No options were outstanding as of December 31, 2017.



Name	Restricted Stock Units Outstanding (#)
Elizabeth A. Chappell	51,446
William L. Kozyra	14,862
Peter D. Lyons	18,874
James A. McCaslin	40,346
William P. Miller II	54,696
John F. Smith	40,346
George Thanopoulos	7,513
Samuel Valenti III	24,333



Table of Contents	Beneficial Stock Ownership

Beneficial Stock Ownership

The following tables show the number of shares of AAM common stock beneficially owned by:


–	each person known to us who beneficially owns more than 5% of AAM common stock;


–	each of our non-employee directors and nominees as of March 6, 2018;


–	each of the named executive officers shown in the Summary Compensation Table; and


–	all directors, nominees and executive officers as a group as of March 6, 2018.

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 below have sole voting and investment power over the shares (unless otherwise noted).The beneficial ownership calculation includes 111,655,962 shares of AAM common stock outstanding on March 6, 2018 (record date).



	Shares Beneficially Owned	Percent of Shares Outstanding
Greater Than 5% Owners
Blackrock, Inc.⁽¹⁾	12,973,513	11.70
55 East 52nd Street
New York, NY 10055
The Vanguard Group⁽²⁾	9,188,924	8.25
100 Vanguard Blvd.
Malvern, PA 19355
Dimensional Fund Advisors LP⁽³⁾	8,503,164	7.64
6300 Bee Cave Road
Austin, TX 78746
Non-Employee Directors ⁽⁴⁾
Elizabeth A. Chappell	53,422	*
William L. Kozyra	18,874	*
Peter D. Lyons	23,874	*
James A. McCaslin	44,346	*
William P. Miller II	62,396	*
John F. Smith	45,346	*
George Thanopoulos	298,713	*
Samuel Valenti III	34,333	*
Named Executive Officers
David C. Dauch⁽⁵⁾	393,036	*
Christopher J. May	19,464	*
Michael K. Simonte	102,684	*
Alberto L. Satine	40,382	*
Gregory S. Deveson	—	*
All Directors and Executive Officers as a Group (19 persons)	1,227,566	1.1

(*) Less than 1% of the outstanding shares of AAM common stock.


(1)	Based on the Schedule 13G filed on January 17, 2018 by Blackrock, Inc., reporting sole voting power over 12,723,854 shares and sole investment power over 12,973,513 shares.


(2)	Based on the Schedule 13G filed on February 7, 2018 by The Vanguard Group, reporting sole voting power over 110,493 shares, sole investment power over 9,076,668, shared voting power over 11,000 shares and shared investment power over 112,256 shares.


(3)	Based on the Schedule 13G filed on February 9, 2018 by Dimensional Fund Advisors LP, reporting sole voting power over 8,143,183 shares and sole investment power over 8,503,164 shares.


(4)	Includes vested RSUs awarded to non-employee directors that have been deferred. For the number of RSUs held by each non-employee director, see table included in Compensation of Directors.


(5)	Includes 548 shares held in trusts for the benefit of Mr. Dauch’s children.



Table of Contents	Corporate Governance

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 person” as defined in the policy. This policy supplements AAM’s other conflict of interest policies in our Code of Business Conduct. The Audit Committee is responsible for reviewing, approving and ratifying all related person ~~transactions in accordance with the policy and the Audit Committee's charter.~~transactions.

For purposes of this policy, a related person transaction includes any transaction, arrangement or relationship or series of similar transactions, arrangements or relationships in which AAM is or is expected to be a participant, the amount involved exceeds $120,000, and a related person 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's outstanding common stock as of the last completed fiscal year, and any entity owned or controlled by any one of these persons.

The 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, the Audit Committee will take into account, among other factors it deems appropriate, (1) whether the transaction is on 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 do not require separate approval or ratification. During fiscal year ~~2015~~2017 and as of the date of this proxy statement, the Company has not engaged in any reportable related person transactions.

~~Table of Contents~~

~~Board and Committee Meetings~~

Directors are expected to attend all Board meetings, meetings of committees on which they serve, and stockholder meetings. Directors are expected to spend the time needed and meet as frequently as necessary to properly discharge their responsibilities. During 2015, the Board held four regularly scheduled meetings and one special meeting. All continuing directors attended 100% of the Board and applicable committee meetings during 2015, except two continuing directors each missed one committee meeting. No director attended less than 75% of required meetings. Overall attendance at such meetings was approximately 99%. All incumbent directors and nominees attended the 2015 annual meeting of stockholders.

~~The following table shows committee membership as of March 24, 2016 and the number of committee meetings held during 2015.~~

~~COMMITTEE MEMBERSHIP AS OF MARCH 24, 2016~~

Name of Director
Audit
Committee
Compensation
Committee
Nominating/
Corporate
Governance
Committee
Executive
Committee
Strategy & Technology
Committee ⁽¹⁾
David C. Dauch Chair X
Elizabeth A. Chappell Chair X X
Steven B. Hantler X X
William. L. Kozyra X X X
Peter D. Lyons X X X
James A. McCaslin X Chair X X
William P. Miller II Chair X
John F. Smith X Chair
Samuel Valenti III X X X X X
No. of Meetings in 2015 5 6 4 — 6

Section 16(a) Beneficial Ownership Reporting Compliance

~~(1) The Strategy & Technology Committee was created effective July 30, 2015 as a result~~Section 16(a) of the ~~Board's consolidation~~Securities Exchange Act of ~~the Strategy Committee~~1934 requires our directors and ~~Technology Committee. The number~~executive officers, and persons who own more than 10% of meetings held by each of these committees during 2015 is as follows: Strategy Committee, 3 meetings; Technology Committee, 2 meetings; and Strategy & Technology Committee, 1 meeting. This change in committee structure is discussed in the ~~Strategy & Technology Committee~~ ~~section below.~~

~~Audit Committee~~

~~The Audit Committee assists the Board in fulfilling its oversight responsibility with respect to:~~

~~the quality and integrity~~a registered class of our ~~financial statements;~~

~~our compliance~~equity securities, to file 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's responsibilities are more fully described in its written charter, which is available on AAM’s website at~~ ~~http://investor.aam.com.~~

All members of the Audit Committee are independent and financially literate under NYSE listing standards and independent under our Director Independence Guidelines. The Board has also determined that Mr. Miller and Mr. Smith are "audit committee financial experts" as defined by the Securities and Exchange Commission (SEC).

~~Compensation Committee~~

~~The Compensation Committee's responsibilities include the following:~~

~~establishing~~ initial reports of ownership and ~~reviewing AAM’s compensation philosophy and programs for executive officers;~~

~~approving executive officer compensation that is designed to support achievement~~reports of ~~AAM’s business strategy and objectives while considering competitive market practices and stockholder interests;~~

~~approving corporate goals and objectives for executive officer compensation and evaluating executive officer performance~~changes in ~~light~~ownership of our common stock. Based solely on our review of these ~~criteria;~~reports, and written representations from such reporting persons, we believe that the Section 16(a) filing requirements for such reporting persons were met during 2017.



Table of Contents	Advisory Vote on Executive Compensation

Proposal 2: Advisory vote on Executive Compensation

AAM is seeking a non-binding advisory vote from our stockholders to approve the compensation of ~~Contents~~

~~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~~our named executive officers ~~and other associates;~~

~~recommending non-employee director compensation and benefits to the Board;~~

~~overseeing the preparation of~~as disclosed in the Compensation Discussion and Analysis (CD&A) ~~for inclusion~~and narrative and tabular disclosures in ~~our annual~~this proxy ~~statement; and~~

~~producing~~statement. In the ~~Compensation Committee Report for inclusion in our annual proxy statement.~~

~~The Compensation Committee's responsibilities are more fully described in its written charter, which is available on our website at~~ ~~http://investor.aam.com.~~

All Compensation Committee members are independent under NYSE listing standards, including the standards applicable specifically to compensation committee members, and our Director Independence Guidelines. All Compensation Committee members are “outside directors” within the meaningCD&A, we provide a detailed description 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~~

We conducted an annual risk assessment for the Compensation Committee to determine whether the risks arising from our fiscal year 2015 compensation policies and practices are reasonably likely to have a material adverse effect on the Company. 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. Our annual assessment of compensation-related risks focuses on the program for executive officers in light of their decision-making authority and influence, but also includes a review of the compensation of our other salaried associates. Our risk assessment methodology was reviewed by the Compensation Committee and its independent compensation consultant, Meridian Compensation Partners, LLC (Meridian).

~~We have designed~~ our compensation programs, including ~~incentive~~our compensation plans, with specific features to address potential risks while rewarding our executive officers and other associates for achieving long-term financial and strategic objectives through prudent business judgment and appropriate risk taking. The following elements have been incorporated in our programs for executive officers:

A balanced mix of compensation components. The target compensation mix for our executive officers is composed of base salary, annual cash incentives and long-term equity incentives, representing a mix that is not overly weighted toward short-term cash incentives.

Multiple performance factors. Our annual incentive and long-term incentive plans include multiple measures of performance. Our use of various performance factors diversifies the risk associated with any single aspect of performance. The performance factors and target award opportunities are established in advance by the Compensation Committee in consideration of the Company's performance goalsphilosophy and objectives, the individual elements of executive pay, and ~~stockholder interests.~~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 (say-on-pay).

Long-term incentives. Our long-term incentives are 100% equity-based and have a three-year vesting schedule, which complements our annual cash incentive plan. Sixty-six percent of long-term incentive awards to executive officers are performance-based. These awards are capped at a maximum payout.Pay for Performance Philosophy

~~Stock ownership requirements.~~ Our executive ~~officers are required to maintain significant share ownership, which aligns their interests with those of our stockholders.~~

~~Clawback policy. Our clawback policy authorizes the Compensation Committee to recoup past incentive~~officer compensation ~~in the event of a material restatement of the Company's financial results due to fraud or intentional misconduct of an executive officer.~~

Based on our risk assessment and consideration of various mitigating factors, we 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.

~~Role of Management in Compensation Decisions~~

The Compensation Committee is responsible for making compensation decisions relative to executive officers. In making these decisions, the Compensation Committee seeks and considers input from senior management. Since management has direct involvement with and 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:

~~Table of Contents~~

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

~~The Vice President, Human Resources assists the Chair of the Compensation Committee in developing meeting agendas and oversees the preparation of meeting materials on the matters to be considered.~~

The CEO, President, Vice President & CFO, the Vice President, Human Resources and the General Counsel, Secretary & Chief Compliance Officer regularly attend Compensation Committee meetings. Management does not attend the executive session of the Compensation Committee.

~~Role of Compensation Consultant~~

The Compensation Committee has retained Meridian as its independent compensation consultant. Meridian provides the Compensation Committee with independent advice and ongoing recommendations on compensation matters related to our executive officers and non-employee 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 Chair 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 those described above has no other direct or indirect business relationships with the Company or any of its subsidiaries or affiliates.

The Compensation Committee determined that Meridian is independent of management and that the services provided by Meridian to the Compensation Committee do not give rise to any conflicts of interest. In written correspondence to the Compensation Committee, Meridian provided detailed information addressing each of the 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 Compensation Committee on executive compensation matters.

~~Nominating/Corporate Governance Committee~~

~~The Nominating/Corporate Governance Committee’s primary responsibilities are to:~~

~~identify 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.~~

~~The Nominating/Corporate Governance Committee's responsibilities are more fully described in its written charter, which is available on our website at~~ ~~http://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 & CEO, the Nominating/Corporate Governance Committee identifies, evaluates and recommends potential candidates for membership on the Board. This committee conducts inquiries into the backgrounds and qualifications of the candidates and considers questions of independence and possible conflicts of interest. Based on the committee’s evaluation, candidates who meet the Board’s criteria may receive further consideration, which may include interviews with the committee and other directors. The committee then submits its recommendations for nominees to the Board for approval.

Before the Board nominates an incumbent director for re-election by our stockholders, the incumbent director is evaluated by the Nominating/Corporate Governance Committee and/or the Board. This evaluation is based on, among other things, each incumbent director’s contributions to the activities of the Board. After consideration of each incumbent Class II director's qualifications and independence, the committee recommended that the Board nominate Ms. Chappell and Mr. Smith for re-election as Class II directors, each with a term expiring on the date of the 2019 annual meeting of stockholders. Upon review, the Board decided to recommend Ms. Chappell and Mr. Smith for re-election at the 2016 annual meeting of stockholders.

~~Table of Contents~~

Pursuant to AAM's by-laws, the Board may establish the size of the board by resolution, provided there is a minimum of three members. In February 2016, the Board determined that the Board shall consist of eight directors as of the date of the 2016 annual meeting.

~~Director Qualifications.~~ AAM’s Corporate Governance Guidelines provide the qualifications for Board membership. Candidates for director nominees to the 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-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;~~

~~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 Nominating/Corporate Governance Committee considers recommendations of potential candidates from members of our Board, our Chairman & CEO and our stockholders. For director candidates recommended by stockholders, the Nominating/Corporate Governance Committee follows the procedures described below in ~~Other Matters, Stockholder Proposals for 2017 Annual Meeting~~. The committee will evaluate candidates recommended by stockholders using substantially the same criteria that are considered in evaluating director candidates recommended by our Board members or Chairman & 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, this 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~~reward performance that ~~positions AAM to achieve its strategic, operating and financial performance goals, and enhance stockholder value.~~

~~Strategy & Technology Committee~~

~~In July 2015,~~supports the Board made a key change to its committee structure. By consolidating the Technology Committee and Strategy Committee, the Board created a new Strategy & Technology Committee and appointed all Board members to serve on this committee. This structural change reflects the Board's focus on product, process and systems technologies as an integral partachievement of ~~AAM's~~our business ~~growth strategy.~~

Effective July 30, 2015, the Strategy & Technology Committee assumed responsibility for the combined duties of the previously separate Technology Committee (formed in 2004) and Strategy Committee (formed in 2012). Accordingly, the Strategy & Technology Committee oversees the development and implementation of AAM’s strategic plan and provides advice to management regarding specific strategic opportunities. This committee also provides oversight and advice to management regarding product, process and systems technologies. Coordination of AAM's strategic plan with the development and acquisition of new technologies is a primary objective of this new committee. In addition, the committee conducts an interactive strategic planning process with management, which includes the committee's approval of strategic goals and objectives and ~~review of potential corporate acquisitions, divestitures, joint ventures and strategic alliances.~~

~~Executive Committee~~

creates long-term stockholder value. The ~~Executive~~Compensation Committee ~~exercises~~considers the ~~authority of the Board during the intervals between Board meetings and does not meet on a regular basis.~~following fundamental objectives, among others, in determining our compensation programs:

~~Table of Contents~~

~~COMPENSATION OF EXECUTIVE OFFICERS~~

~~Compensation Discussion and Analysis~~

~~Executive Summary~~


–	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 reward Company and individual performance; and


–	Compensation and benefit programs should foster the long-term focus required to deliver value to our shareholders.

Our executive officer compensation program also reflects an externally competitive compensation structure based on a market study of executive compensation programs in AAM's comparative peer group. In addition to attracting and retaining key executives, our program is designed to drive Company and individual performance while aligning the interests of our executives with those of our stockholders. In order to ensure that our ~~executive~~ compensation program drives performance in support of our strategic ~~principles~~objectives and cultural values, we regularly compare our compensation practices ~~and governance~~ against market best practices and ~~consider stockholder~~shareholder feedback.

~~Named Executive Officers~~Responsiveness to Shareholder Feedback

Prior to 2017, we consistently received strong shareholder support of our say-on-pay proposal, averaging more than 97% approval from 2014 through 2017. At our 2017 annual meeting, approximately 38% of our shareholders voted in favor of our executive compensation programs. Our Board and Compensation Committee took this matter very seriously and sought to better understand what drove this decline in the say-on-pay vote.

We contacted our 25 largest shareholders representing approximately 80% of our then-outstanding shares and were able to speak with shareholders representing over 50% of outstanding shares and with proxy advisors ISS and Glass Lewis. We describe the feedback we received and our response in the Proxy Summary and in the CD&A of this proxy statement. We encourage you to consider our actions in response to shareholder feedback in deciding how to vote on this proposal.

Although your vote on this proposal is advisory and non-binding, the Board and the Compensation Committee will continue to carefully consider the voting results when making future compensation decisions.



þ	The Board unanimously recommends a vote FOR the approval of the compensation of our named executive officers.



Table of Contents	Compensation Discussion and Analysis

Compensation Discussion and Analysis

Our executive compensation program is designed to attract, motivate and retain the high quality leaders that are necessary to manage a company of AAM's size and complexity. In designing the Company's executive compensation program, the Compensation Committee (Committee) strives to align the incentives of our named executive officers (NEOs) with the interests of our shareholders by using performance metrics and challenging goals that tie directly to our business strategy. We believe consistent execution of our strategy will drive long-term value creation.

The Compensation Discussion and Analysis (CD&A) provides a description of our executive compensation programs, including the underlying philosophy, the individual pay elements, the methodology and processes used by the Board and the Committee to make compensation decisions and the relationship between AAM's performance and compensation delivered in 2017. Our NEOs for the fiscal year ending December 31, ~~2015 are:~~

~~David C. Dauch, Chairman & Chief Executive Officer;~~

~~Christopher J. May, Vice President & Chief Financial Officer;~~

~~Michael K. Simonte, President;~~

~~Alberto L. Satine, President Driveline;~~

~~Norman Willemse, President Metal Formed Products; and~~

~~Terry J. Woychowski,~~ ~~Former~~ ~~Senior Vice President, Advanced Engineering.~~

~~Mr. Woychowski's employment with the Company ended effective December 9, 2015. Mr. Woychowski is included as an NEO pursuant to SEC rules. The terms of Mr. Woychowski's separation from the Company~~2017 are ~~described below in the~~ ~~Narrative to Summary Compensation Table and Grants of Plan-Based Awards Table~~.

~~2015 Highlights~~

~~Senior Leadership~~

During 2015, the Board made executive officer appointments that enhance AAM's senior leadership team and reflect our ongoing commitment to succession planning. These key appointments were made effective August 1, 2015.shown below.

~~Mr. Simonte~~: Mr. Simonte, who was promoted to President, has been with AAM for 17 years, most recently serving as Executive Vice President & Chief Financial Officer since 2009. Mr. Simonte served as the Company's Chief Financial Officer since 2006. Mr. Simonte reports to Mr. Dauch.

Named Executive Officers

David C. Dauch

Chairman & Chief Executive Officer

Christopher J. May

Vice President & Chief Financial Officer

Michael K. Simonte

President

Alberto L. Satine

President Driveline

Gregory S. Deveson

President Powertrain

~~Mr. May~~: Mr. May, who was promoted to Vice President & Chief Financial Officer, has been with AAM for over 21 years, most recently serving as Treasurer since 2011. Mr. May has held positions of increasing responsibility in corporate finance, internal audit and treasury during his career with AAM. Mr. May reports to Mr. Dauch.

~~Mr. Satine and Mr. Willemse~~: The senior leadership team was also strengthened with the advancements of Mr. Satine, who was promoted to President, Driveline (most recently serving as Senior Vice President, Driveline Business Unit) and Mr. Willemse, who was promoted to President, Metal Formed Products (most recently serving as Vice President, Metal Formed Products Business Unit). Both Mr. Satine and Mr. Willemse joined AAM in 2001 and have served in leadership positions of increasing responsibility over AAM's global operations. Mr. Satine and Mr. Willemse each report to Mr. Simonte.

The Board believes these enhancements to AAM's leadership team further position AAM to meet its strategic business objectives and reinforce AAM's commitment to quality, technology leadership and operational excellence.

~~Performance and Pay~~

AAM had an outstanding year in 2015, achieving record sales and gross profit for the year. Strong sales growth, which outpaced the industry for the three-year period ending 2015, and solid operational performance resulted in increased profitability and cash flow. AAM also made measurable progress in diversifying our business. For the three-year period ending 2015, AAM's compound annual growth rate was nearly 20% for non-General Motors sales.

As discussed in more detail below, improvements in the Company's performance in 2015 resulted in higher incentive payouts as compared to 2014 payouts. The 2015 incentive payouts reflect an overall pay-for-

~~Table of Contents~~

~~performance alignment. This result supports AAM's compensation objectives of rewarding performance and aligning the interests of our executive officers with those of our stockholders.~~

~~Changes to Executive Compensation Program~~

~~In 2015, we made the following key changes to our executive compensation program:~~

Adopted a change in control (CIC) Plan for executive officers. The CIC Plan provides eligible executive officers with severance benefits only if a qualifying termination of employment occurs within two years of a CIC (double-trigger). Severance benefits under the CIC Plan include, among other things, a cash severance payment equal to a multiple of two times base salary and annual bonus. We adopted this arrangement to reflect the competitive market practice, aid in retention and enable our executive officers to objectively consider corporate transactions that could impact their employment status. Mr. Dauch and Mr. Simonte are entitled to similar CIC severance benefits under each of their employment agreements.

Entered into an amended and restated employment agreement with Mr. Dauch that increased cash severance benefits from two times to three times his annual salary and bonus that would be payable upon a qualifying termination of employment that occurs within two years following a CIC. Mr. Dauch's cash severance benefits were increased to reflect competitive market practice.

~~Entered into an employment agreement with Mr. Simonte on August 1, 2015 in connection with his appointment as President.~~

~~Adopted double-trigger vesting of all equity-based long-term incentive awards in connection with a CIC to reflect best practice.~~

Amended and restated our 2012 Omnibus Incentive Plan to add 2.1 million shares (approved by our stockholders for issuance under the plan), which will permit us to continue to grant equity compensation to our directors, executive officers and other key executives while maintaining dilution levels within industry practice.

Amended our annual incentive plan to include operating income margin as an additional performance metric for determining payouts to executive officers beginning in 2016. Operating income margin is a key metric that reflects our overall business results. We believe investors consider operating income margin as a factor in evaluating Company performance.

~~Results of 2015 Say-on-Pay Vote~~

At our 2015 annual meeting, over 98% of the votes cast were in favor of the Company's say-on-pay proposal. The Compensation Committee (Committee) and the Board considered this favorable outcome as a reflection of our stockholders' strong support of the overall executive compensation program for our NEOs.

~~What we do...~~.

~~Emphasize performance-based compensation~~

~~A substantial majority of total direct compensation is variable and at risk~~

~~Mix of annual and long-term incentives balances the focus between achievement of short-term results and long-term share appreciation~~

~~Annual incentive payouts are directly linked to achievement of short-term financial measures~~

~~Long-term incentive compensation is 66% performance based~~

~~Long-term incentives are designed to drive the Company's long-term success, profitability and growth~~

~~Use an independent compensation consultant and peer group analysis~~

~~Independent compensation consultant annually performs market study of pay and best practices~~

~~Compensation consultant provides independent advice to the Compensation Committee~~



• Table of Contents	Compensation Discussion and Analysis

~~Total direct compensation targeted at 50~~Shareholder Engagement and Our Response^th~~percentile of pay among our peer group~~

~~Mitigate undue risk in compensation programs~~

~~All incentive award payouts are capped~~

~~A risk assessment of compensation programs is performed annually~~

~~Clawback policy ensures accountability~~

~~Enforce stock ownership requirements for executive officers~~

~~CEO stock ownership requirements are 5 times annual base salary~~

~~Other NEO stock ownership requirements are 2~~Refinements to ~~3 times annual base salary~~

~~Table of Contents~~

~~Utilize double-trigger change-in-control plan~~

~~Severance payments and vesting of equity awards require both a change in control and a qualifying termination of employment~~

~~What we don't do....~~

~~No hedging or pledging of Company stock~~

~~No excise tax gross-ups~~

~~No excessive perquisites~~

~~No excessive change-in-control or executive severance provisions~~

AAM's Executive Compensation ~~Philosophy~~Program and ~~Objectives~~

Adoption of Proxy Access

Prior to 2017, we consistently received strong shareholder support on our say-on-pay proposal, averaging more than 97% approval from 2014 through 2016. In 2017, approximately 38% of our shareholders voted in favor of our executive compensation programs. The Board and the Committee ~~determines~~took this matter very seriously and sought to better understand what drove this decline in the ~~overall compensation philosophy of~~say-on-pay vote.

It is AAM's practice to meet with investors throughout the ~~Company. The~~year in various formats. However, following the 2017 annual meeting, the Committee ~~believes that the compensation paid~~and management conducted a targeted shareholder outreach program to ~~executives should be structured to provide AAM executives with meaningful rewards, while maintaining alignment with stockholder interests,~~discuss and obtain feedback regarding our ~~cultural values and strategic principles. Accordingly, AAM’s~~ executive compensation program ~~consists of a mix of base salary, annual incentive compensation and long-term incentive compensation, with limited perquisites~~ and other ~~personal benefits. A significant portion of total direct compensation is performance-based and contingent upon the achievement of stated Company performance goals.~~

~~Compensation Objectives.~~ ~~The following objectives are considered in determining compensation programs and pay levels for~~governance matters. We contacted our ~~NEOs.~~

~~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 pay levels~~25 largest shareholders representing approximately 80% of our ~~comparative peer group while considering industry conditions~~then-outstanding shares. As a result of this outreach, we spoke with shareholders representing over 50% of outstanding shares and ~~other market influences. Our compensation programs should encourage high-achieving, marketable executives to remain motivated~~with proxy advisors ISS and ~~committed to AAM for long~~Glass Lewis. The Chair of the Committee participated throughout this process, along with our CFO and ~~productive careers.~~

~~Compensation and benefit programs should reward Company and individual performance.~~ Our compensation programs strive to deliver competitive compensation for exceptional individual and Company performance as compared to companies in our comparative peer group. As executives progress to higher level leadership positions, a greater portion of their compensation is linked to Company performance measured against financial and operational objectives and to stockholder returns.

~~Compensation and benefit programs should foster the long-term focus required to deliver value to our stockholders.~~ Our long-term incentive compensation program motivates executive officers to achieve our strategic objectives and deliver long-term value creation to our stockholders. Executive officers who influence long-term results have a greater proportion of their compensation tied to long-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 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 executive officers should align their interests with those of our stockholders.~~ Our stock ownership requirements align our executive officers’ interests with those of stockholders and reinforce 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.

~~Table of Contents~~

~~Peer Group and Compensation Benchmarking~~

~~Determination of Comparative Peer Group~~Investor Relations Director.

The Committee uses a comparative peer group in determining competitive pay levels and compensation structure, setting incentive pay opportunities and assessing Company performance relative to its peers in support of AAM's executive compensation philosophy and objectives.information we received from shareholders was shared with the Board on multiple occasions. The Committee ~~annually reviews~~and the ~~composition~~full Board had robust discussions and thoughtfully considered our shareholders' constructive feedback. Below is a summary of the ~~comparative peer group~~feedback we received and ~~makes adjustments to reflect changes in the Company's business as well as industry and market conditions.~~our response.

~~Our current comparative peer group consists of the following companies:~~



~~A. O. Smith Corporation~~	~~Flowserve Corporation~~	~~Tower International Inc.~~
~~BorgWarner Inc.~~ ^*	~~Kennametal Inc.~~	~~Trinity Industries, Inc.~~
~~Briggs & Stratton~~	~~Lear Corporation~~ ^*	~~USG Corporation~~
~~Cooper-Standard Holdings, Inc.~~	~~Meritor Inc.~~ ^*	~~Valmont Industries, Inc.~~
~~Dana Holding Corporation~~ ^*	~~Regal-Beloit Corporation~~	~~Visteon Corporation~~ ^*
~~Donaldson Company, Inc.~~	~~Tenneco Automotive Inc.~~ ^*	~~Woodward Inc.~~
~~Federal-Mogul Corporation~~	~~Terex Corporation~~Shareholder Feedback		Response

* IncludedShareholders generally believe our executive compensation program is aligned with shareholder interests.	ð	Significant design improvements have been made over the last several years including:
		- no discretionary incentive payments - double-trigger equity vesting - clawback policy - 66% of LTI compensation is performance based - prohibit excise tax gross ups - no excessive executive severance arrangements - New in 2017: increased stock ownership requirements for CEO, CFO and outside directors
		These programs will continue to be reinforced.



Table of Contents	Compensation Discussion and Analysis



Shareholder Feedback		Response

Incentive metrics • Goal rigor • Alignment with strategy • Enhanced disclosure	ð	Goal Rigor: Although our goals contained the appropriate rigor to accomplish our strategic objectives, we heard shareholder concerns and increased the rigor of new awards in 2018 to achieve a level of performance that would be the highest in our ~~competitor~~history. Alignment with strategy: To continue alignment with AAM's strategic goals, the Committee changed annual incentive pay metrics in 2018 to focus senior leadership on EBITDA, a key valuation/leverage reduction driver. The LTI program was also modified to emphasize cash flow and capital deployment strategies, which are key to value creation. Enhanced disclosure: We enhanced our disclosure of our goal-setting process for better understanding and transparency. We re-designed our proxy statement to include a proxy summary, letters from our Chairman & CEO and lead independent director, and other features that enable us to more effectively communicate AAM's business strategy and the Board's ongoing efforts to represent the interests of our shareholders.

Alignment of CEO compensation with total shareholder return	ð	While AAM's financial and operational performance has been strong, our TSR performance has lagged in comparison to our comparative peer group ~~as disclosed~~over the last few years. AAM has increased EBITDA margin performance each year to a level that is one of the best in the industry and grown revenues to nearly $7 billion from $2.9 billion 5 years ago, while transforming AAM to become more diversified, with greater scale and increased global reach to support our ~~2015 annual report to~~customers with products that meet market demands. We believe this operational performance and growth will drive long-term value for our shareholders.
~~Our competitor~~	ð
Ratio of fixed and variable pay of the CEO as compared to the other NEOs	ð	The Committee believes that the CEO's pay should be more variable than that of the other NEOs. As the leader of the Company, the CEO should have the highest level of pay at risk, which we believe drives superior performance.
	ð
Proxy access	ð	We adopted proxy access in February 2018.

In addition to this outreach effort, we engaged in our regular investor communications, which included equity and high-yield credit conferences, on-site investor visits, road shows, and individual and group conference calls. In light of the recent transformation of our company, we also engaged a third party to conduct an investor perception study. We incorporated many of the recommendations we received into our investor relations program.

Throughout all of our engagement activities, we strengthened our relationships with our investors by receiving candid, constructive feedback that we shared with our Board. Our Board believes that fostering long-term relationships with our shareholders and maintaining their trust and goodwill is critical to AAM's achievement of our strategic objectives and shareholder value creation.



Table of Contents	Compensation Discussion and Analysis

Business & Financial Highlights

Driving Long-Term Shareholder Value

AAM is a global Tier 1 supplier to the automotive, commercial and industrial markets, with broad capabilities across multiple product lines. Our mission is to deliver efficient, powerful and innovative solutions for our customers while leading the industry in quality, operational excellence and technology to maximize shareholder value. Our Board believes that AAM is well positioned to deliver long-term shareholder value by utilizing the following fundamental elements of our business:

AAM's 2017 Highlights



þ	Delivered on our key strategic objectives of profitable growth, diversification, outstanding financial performance and technology leadership	þ	Following the MPG acquisition, reduced our debt leverage on both a gross and net basis, including the prepayment of $200 million of Senior Notes

þ	Closed on the acquisition of MPG, nearly doubling our size and scale	þ	Won several new business awards, including further commercialization of our e-AAM hybrid and electric driveline systems

þ	Achieved record sales and profitability for AAM	þ	Realized over 50% of our sales from customers other than General Motors for the first time in AAM history — a key strategic milestone

þ	Generated Adjusted Free Cash Flow of over $300 million	þ	Successfully launched approximately 75 programs and facilities across the globe

þ	Continued to fund significant capital and R&D investments in order to drive organic growth to meet our strategic goals	þ	Received several global quality and operations excellence awards from our customers, including being named a Supplier of the Year by General Motors



Table of Contents	Compensation Discussion and Analysis

Acquisition of Metaldyne Performance Group, Inc.

Our transformational acquisition of MPG in April 2017 nearly doubled the size of the Company and was supported by powerful industrial logic focused on driving long-term value for all shareholders through the benefits listed below. We have already begun to realize many of the key benefits from this transaction and they are evident in our financial results for 2017.



Acquisition Benefit	FY 2017 Result

Greater scale and financial profile	Pro forma sales of over $6.9 billion, an increase of over 75% compared to AAM's 2016 sales

Accelerated business diversification	Non-GM sales made up more than 50% of total sales Greater exposure to commercial and industrial business as those markets strengthened in 2017

Enhanced profitability and free cash flow generation	AAM achieved Adjusted EBITDA of approximately $1.1 billion AAM generated over $300 million of Adjusted Free Cash Flow

Synergy attainment and value capture	AAM recognized > $30 million of cost reduction synergies in 2017 and expects an annualized synergy attainment run rate of $73 million in January 2018 On track to meet our target of $120 million of annual run rate cost reduction synergies by 1Q 2019 and 70% of this total by 1Q 2018

2017 Compensation Overview

Components of Compensation Program

The primary components of AAM’s executive compensation program are summarized below.



Component	Purpose	Characteristics

Base Salary	Based on level of responsibility, experience, individual performance and internal pay equity	Fixed cash component generally targeted at the peer group ~~also includes Autoliv Inc.~~median

Annual Incentive Compensation	Incentive to drive short-term performance aligned with strategic goals	Cash award that is at-risk subject to the attainment of performance targets

Long-Term Incentive Compensation	Reward for creating shareholder value	Awarded in a combination of Performance Shares (66%) and ~~Magna International Inc.~~RSUs (34%) tied to financial and share performance that drive sustainable results and shareholder value

Retirement Benefits	Provide income upon retirement	401(k) and nonqualified defined benefit plans

Perquisites	Limited supplement to total direct compensation	Primary benefit is company-provided vehicles with AAM content

~~The Committee selected this peer group based on guidance from the Committee's independent compensation consultant, Meridian~~



Table of Contents	Compensation Discussion and Analysis

Total NEO Direct Compensation Partners, LLC (Meridian). Our comparative peer group includes companies in automotive and related industries with comparable (1) revenues (between one-third and three times our revenues), (2) complexity of global business and operations and (3) market capitalization. This group also includes companies that compete with AAM for executive talent and companies included in the proxy advisory firms' peer groups. AAM's projected revenues are at approximately the median of the comparative peer group's projected revenues.

~~Compensation Benchmarking~~

~~The Committee targets total direct compensation at approximately the 50~~^thpercentile of our comparative peer group. The Committee believes that this approach reflects a generally accepted benchmark of external competitiveness and supports our ability to attract and retain key executives.Pay Mix

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 50^thpercentile of our comparative peer group based on various factors, including an individual's level of responsibility, demonstrated skills and experience, significance of position, contribution to Company performance, time in position, potential for advancement and internal pay equity considerations. The Committee generally sets performance objectives for annual and long-term incentive compensation so that targeted total direct compensation levels can be achieved only when target performance objectives are met. Consequently, actual pay may vary from targeted levels based on achieved performance against pre-established performance objectives.

~~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 and a history of prior long-term incentive grants. The tally sheets also show estimates of potential payments and benefits that could be realized under various hypothetical termination scenarios. The tally sheets consist of information that is substantially similar to the information shown for each NEO in ~~Potential Payments Upon Termination or Change in Control~~ ~~below. The Committee did not change the NEOs’ compensation based on its review of this information in 2015.~~

~~Table of Contents~~

~~Total NEO Total Direct Compensation Pay Mix~~

The following chart illustrates the allocation of ~~2015~~2017 total direct compensation components at target for our CEO and for our other NEOs as a group as of December 31, ~~2015.~~2017. This analysis highlights the Company's emphasis on long-term and at-risk compensation.



CEO	Other NEOs (Average)

~~Total NEO~~



Table of Contents	Compensation Discussion and Analysis

Compensation Philosophy, Process

and Market Analysis

Executive Compensation Philosophy

~~For 2015,~~AAM is committed to a compensation philosophy that incorporates the principles of supporting business strategy and performance, aligning with stockholder interests, and paying competitively based on a framework of best governance practices. The Committee reviews and recommends to the full Board AAM's overall compensation philosophy and executive compensation programs to support our business strategy and objectives.



Compensation Principle	Objective	How we achieve our objective

Support of Business Strategy and Performance	Compensation is variable and at risk	–	86% of CEO compensation is variable and at risk
Support of Business Strategy and Performance	Utilize metrics that emphasize company performance that are aligned with business strategy	–	Performance goals include key drivers of enterprise value creation such EBITDA, Relative TSR and Cash Flow.

Alignment with Stockholder Interests	Balance focus between short-term results and long-term share appreciation	–	Mix of annual and long-term incentive programs
		–	66% of LTI is performance based
		–	Cap on payout of performance shares based on relative TSR if absolute TSR is negative
		–	CEO stock ownership requirement of 6 times base salary

Market Competitive Pay	Attract and retain executive talent	–	Benchmark pay against a peer group of similarly sized companies
	Align pay and performance	–	Target direct compensation at the 50^th percentile
		–	Ensure incentive plans reward for desired behaviors and pay outcomes align with results

Best Governance Practices	Implement best governance practices into compensation programs	–	Clawback policy
		–	Anti-hedging policy
		–	Double-trigger equity vesting and severance in a change in control
		–	Annually review risks associated with compensation programs
		–	Retain independent compensation consultant
		–	Prohibit excise tax gross-ups
		–	No excessive executive perquisites

Decision-Making Process

Comprised solely of independent, non-employee directors, the Committee ~~set total~~oversees the compensation and benefits programs for our executive officers, including the NEOs. In its oversight of our 2017 executive compensation program, the Committee worked with its independent compensation consultant, and with the CEO, the President, the CFO, and the Vice President, Human Resources. The CEO and the other officers provided information and recommendations with respect to:


–	Company performance objectives and goals, which serve as a basis for incentive compensation;


–	attracting, retaining and motivating executive officers;



Table of Contents	Compensation Discussion and Analysis


–	information regarding financial performance, budgets and forecasts as they pertain to compensation; and


–	industry and market conditions affecting AAM's business strategy.

The Committee exercises its independent judgment to approve the compensation level for the CEO. For all other executive officers, the Committee considers the CEO's recommendation for setting compensation levels. The compensation approved for the CEO and other executives is aligned with the Company's overall compensation philosophy. For 2017, the Committee made pay decisions based on Meridian's market analysis, Company performance and specific factors about each NEO, including individual performance, experience, internal equity, scope and responsibility of position, retention and other factors described in more detail below.

Role of the Compensation Consultant

The Committee has retained Meridian Compensation Partners LLC as its independent compensation consultant. Meridian provides the Committee with independent advice and ongoing recommendations on compensation matters related to our executive officers and non-employee directors. Meridian also provides the Committee with competitive market data, peer group analyses and updates on compensation trends and regulatory developments. Meridian also worked with the Company in evaluating its incentive programs and the selection of performance measures in response to shareholder feedback.

In the course of fulfilling its responsibilities, Meridian frequently communicates with the Chair of the Committee both prior to and following Committee meetings. Meridian also meets with management to gather information, prepare materials and review proposals to be made to the Committee. Meridian provides no other services to the Company and has no other direct or indirect business relationships with AAM or any of its subsidiaries or affiliates. Based on information provided by Meridian, the Committee assessed Meridian's independence pursuant to NYSE and SEC rules and concluded that no conflict of interest exists that prevents Meridian from independently advising the Committee.

Peer Group and Market Analysis

The Committee annually reviews the composition of our comparative peer group and makes adjustments to reflect changes in our business, as well as industry and market conditions. The overall purpose of this peer group is to provide a market frame of reference for evaluating our compensation ~~for Mr. Dauch~~arrangements, understanding compensation trends among comparable companies and ~~Mr. Simonte~~reviewing other compensation and governance-related topics. The companies are selected primarily based on the following criteria:


–	total revenue and market capitalization;


–	competitors in industry segment;


–	complexity of global business and operations; and


–	competition for talent and investor capital.

In April 2017, we completed the transformational acquisition of MPG. This transaction nearly doubled the size of the Company and significantly changed the complexity of our business operations. Based on these changes, the Committee requested Meridian to recommend a comparative peer group to reflect the size and complexity of the combined Company. This new peer group was used to benchmark executive compensation upon the closing of the MPG acquisition. AAM's revenues are at approximately the 50^th~~percentile~~median of the new comparative peer ~~group. At the time of Mr. May's appointment as CFO, the Committee set his total direct compensation below the 50~~^th~~percentile, subject to further review in 2016.~~revenues. The levels of total direct compensation for Mr. Satine and Mr. Willemse were determined in consideration of internal pay equity based on their positions. Accordingly, total direct compensation was set below the 50^th~~percentile~~new peer group consists of the ~~peer group for Mr. Satine and above the 50~~^th~~percentile for Mr. Willemse.~~

~~Table of Contents~~

~~Components of the AAM Compensation Program~~following companies:

~~The primary components of AAM’s executive compensation program for 2015 are summarized below:~~



~~Component~~	~~Key Characteristics~~	~~Purpose~~
~~Base Salary~~	* Part of competitive total compensation package * Determined based on market comparative positions and individual performance, experience, time in position, professional development, contributions to the Company and internal equity considerations	* Provides base level of cash compensation for attracting and retaining executive talent
~~Annual Incentive Compensation~~	* Determined based on pre-established financial performance factors, including: ~~- Net income as a % of sales (50%) and~~ ~~- Net operating cash flow (50%)~~	* Provides an opportunity to earn a cash-based annual incentive award * Aligns with financial performance * Target awards vary based on position and other factors
~~Long-Term Incentive Compensation~~2017 Comparative Peer Group
~~Performance Shares (66%)~~Ametek Inc.	Fluor Corp.	Navistar International Corp.
BorgWarner Inc.	Flowserve Corporation	Rockwell Automation
Cooper-Standard Holdings, Inc.	Goodyear Tire & Rubber Co	Tenneco Automotive Inc.
Cummins Inc.	Illinois Tool Works, Inc.	Terex Corporation
Dana Inc.	Lear Corporation	Trinity Industries, Inc.
Delphi Automotive plc	Meritor Inc.	Visteon Corporation
Dover Corporation	PACCAR Inc.
Federal-Mogul Corporation	Parker-Hannifin Corporation

* Performance Shares tie a substantial portion



Table of ~~total compensation to the Company's future achievement of pre-established performance goals over a three-year performance period, including:~~ ~~- EBITDA (33%)~~ ~~- Relative TSR (33%)~~Contents	* Aligns the interests of executive officers with those of shareholders by providing a mix of equity compensation tied to financialCompensation Discussion and ~~share performance~~ * CombinedAnalysis

The comparative peer group above reflects the following changes made by the Committee:



2017 Changes	Companies		Rationale
Additions	Ametek Inc.	Goodyear Tire & Rubber Co.	More closely aligned with the ~~Company's vesting~~size and ~~stock ownership requirements, as well as a clawback feature, equity-based awards balance the goals~~complexity of ~~encouraging sustainable results over time and reward those results with appropriate levels of actual compensation~~ * Total target awards vary based on position and other factorsour business
~~Restricted Stock Units (34%)~~	* Restricted Stock Units align awards with stock price performance and encourage executive retention with vesting after a three-year periodCummins Inc.	Illinois Tool Works, Inc.
~~Retirement Benefits and Deferred Compensation~~	* Includes qualified and nonqualified defined benefit and defined contribution plans, as well as a nonqualified retirement plan and deferred compensation planDelphi Automotive plc	* Provides income upon retirement including tax-deferred methods for general savingsPACCAR Inc.
~~Perquisites~~	* Primarily consists of the use of a Company-provided vehicleDover Corporation	Parker-Hannifin Corporation
	Fluor Corp.
Removals	A.O. Smith Corporation	Tower International Inc.	No longer aligned with ~~AAM content~~our size and business operations
	* Provides a limited supplement to total direct compensationBriggs & Stratton	USG Corporation
	Donaldson Company, Inc.	Valmont Industries, Inc.
	Kennametal Inc.	Woodward Inc.
	Regal-Beloit Corporation

Direct Compensation Elements

~~Table~~Base Salary

In connection with AAM's acquisition of ~~Contents~~

~~Base Salary.~~ InMPG in April 2017, which nearly doubled the ~~fourth quarter~~size of ~~each year,~~the Company, the Committee ~~reviews~~adjusted NEO base salaries ~~for executive officers~~to reflect the size and complexity of the combined companies considering their greater levels of responsibilities resulting from the acquisition. Taking the market median of the new comparative peer group into consideration, the Committee increased base salaries effective April 1, 2017 for the ~~following calendar year. In determining 2015~~NEOs, except for the CEO. Mr. Deveson's base salaries for executive officers, the Committee reviewed benchmark data comparing pay levels of our executive officers with those of executives holding similar positions at companies in our comparative peer group. The Committee considered the recommendations of Mr. Dauch in determining othersalary took effect on April 17, 2017 when he joined AAM. NEO ~~base salaries. The Committee approved 2015~~ base salaries as ~~follows:~~of December 31, 2017 and 2016 are shown below.

Base Salary
2015 2014
David C. Dauch $ 1,150,000
$ 1,100,000
Christopher J. May (effective August 1, 2015) $ 350,000
NA
Michael K. Simonte (effective August 1, 2015) $ 640,000
$ 560,100
Alberto L. Satine (effective August 1, 2015) $ 510,000
$ 450,000
Norman Willemse (effective August 1, 2015) $ 450,000
$ 385,000
Terry J. Woychowski (through December 9, 2015) $ 463,500
$ 463,500



	2017		2016		% Change
David C. Dauch	$	1,150,000	$	1,150,000	—	%
Christopher J. May	$	500,000	$	400,000	25	%
Michael K. Simonte	$	750,000	$	640,000	17	%
Alberto L. Satine	$	610,000	$	510,000	20	%
Gregory S. Deveson	$	530,000	$	—	—	%

The Committee increased Mr. ~~Dauch's~~May's base salary was adjusted to $1,150,000 effective January 1, 2015. The Committee approved this increase of 4.5% in consideration of the Company's financial performance and Mr. Dauch's leadership in strengthening AAM's management team and advancing product technology and innovation.

~~For Mr. May, the Committee determined~~for 2017, recognizing that his base salary ~~upon~~had been below the market median since his appointment as CFO ~~on August 1,~~in 2015. ~~The~~Since that time, the Committee ~~initially set~~periodically reviewed Mr. May's ~~salary below~~compensation in consideration of his professional development and strong performance in the 50^th ~~percentile based on Mr. May being new to the CFO~~ position. The ~~Committee made this determination subject to further review in 2016. In connection with their new appointments, other NEOs received base salary~~ increases ~~as follows: Mr. Simonte, 11%; Mr. Satine, 10%; and Mr. Willemse, 10%.~~for Mr. Simonte and Mr. Satine also reflect that they had not received ~~an annual merit~~a base salary increase ~~of 3%, which is consistent with~~since 2015.

In October 2017, the ~~budgeted amount~~Committee determined that base salaries for the ~~merit program~~CEO and the NEOs (other than Mr. May) will remain unchanged for ~~U.S. salaried associates.~~2018. The Committee decided to increase Mr. ~~Willemse also received a 6.5% increase, which reflects~~May's 2018 base salary to $550,000 in consideration of his performance and pay level relative to the ~~annual merit increase and an adjustment for internal pay equity as discussed above.~~market median. The Summary Compensation Table shows the base salary earned in ~~2015~~2017 for each NEO.



Table of Contents	Compensation Discussion and Analysis

Incentive Compensation

Compensation Program Metrics Link to Strategic Business Objectives

The Committee utilizes both short- and long-term financial metrics relative to our business objectives, as well as relative TSR as a long-term metric. The following chart demonstrates how our incentive compensation metrics correlate to our strategic business objectives.



Strategic Business Objective	Alignment	Incentive Metric

Continue to strengthen the balance sheet; provide funding for organic growth, research and development, and other capital priorities.		Cash Flow - 2017 Annual Incentive Plan (50% component) - 2018 LTI Performance Shares (50% component)

Develop innovative technology, including electrification. Reinvest in research and development.		Relative TSR - LTI Performance Shares, including 2018 (50% component)

Create sustainable value for shareholders.

Achieve profitable growth, along with the ability to be flexible as the market changes, and reduce leverage.		EBITDA - 2017 LTI Performance Shares (50% component) - 2018 Annual Incentive Plan (100% component) Operating Income Margin - 2017 Annual Incentive Plan (50% component)

Deliver integration synergies from recent acquisitions.

Goal Rigor

The Committee annually reviews performance metrics, targets and payouts to ensure that they are challenging, stretch goals and are designed to mitigate risk.

Annual Incentive Compensation.

Each NEO's annual incentive compensation is based on achieved results against ~~pre-established~~ financial targets approved by the Committee ~~and established~~ under AAM’s Incentive Compensation Plan for Executive Officers. Payment of annual cash incentive awards ~~are~~is permitted to the extent the Company meets or exceeds threshold performance levels and reports positive net income.

The Committee ~~may make discretionary adjustments if it determines that~~approved the ~~achievement~~use of net operating cash flow and operating income margin for determining 2017 annual cash incentives considering their alignment to our strategic business objectives. In February 2017, taking into consideration the then-pending MPG acquisition, the Committee set the target level for each performance ~~targets~~metric based on the 2017 financial objectives for ~~a plan year do not reflect~~ the ~~true performance~~combined companies, which included anticipated integration synergies. Recognizing the importance of achieving integration synergies, the Committee increased the rigor of the ~~Company due~~threshold, target and maximum performance levels in order to ~~unanticipated circumstances specified in~~drive management to achieve the ~~plan.~~key benefits of this transformational acquisition. In addition, these performance levels were set above our 2016 actual performance.



Table of Contents	Compensation Discussion and Analysis

The ~~2015~~operating income margin target was also compared to that of our competitor peer group for the three most recent fiscal years. This target was set to drive a level of performance to exceed the top one-third of our competitor peer group. The following table describes the performance levels and results for 2017.



	Weighting		Threshold (Payout 50%)	Target (Payout 100%)		Maximum (Payout 200%)		2017 Actual Performance
Net Operating Cash Flow	50	%	$195 million	$260 million		$300 million		$340.9 million⁽¹⁾

Operating Income Margin	50	%	8.1%	10.75	%	11.25	%	11.10%⁽²⁾

(1) Excludes the impact of cash paid for restructuring and acquisition-related costs of $169.1 million. See Reconciliation of Non-GAAP and GAAP Information.

(2) Excludes the impact of restructuring and acquisition-related costs of $152.6 million. See Reconciliation of Non-GAAP and GAAP Information.

Based on the weighting of each performance metric, the 2017 annual incentive ~~targets~~awards resulted in a payout of 185% of target. No discretionary increases were made to 2017 annual incentive payouts for ~~Mr. May, Mr. Simonte, Mr. Satine and Mr. Willemse were increased~~any NEO. The amounts paid are shown in ~~connection with their appointments to new positions.~~ the Summary Compensation Table.

Target Annual Incentive Award Opportunities

The table below shows the ~~2015~~2017 target annual incentive opportunities for our NEOs, stated as a percentage of base ~~salary:~~salary.


	Target Annual Incentive Opportunity		Target Annual Incentive Opportunity
	2015	2014	2017		2016
David C. Dauch	125%	125%	135	%	125	%
Christopher J. May	54%	NA	80	%	60	%
Michael K. Simonte	88%	80%	100	%	100	%
Alberto L. Satine	68%	60%	80	%	80	%
Norman Willemse	68%	60%
Terry J. Woychowski	60%	60%
Gregory S. Deveson (effective April 17, 2017)			80	%	—	%

In connection with the acquisition of MPG and based on market data, the Committee increased Mr. Dauch's annual incentive target, effective April 1, 2017, to reflect his new challenges in leading a much larger, more complex organization.

~~Effective August 1, 2015,~~For Mr. May, the Committee increased his annual incentive target opportunity, ~~for certain NEOs was increased~~recognizing that his bonus target had been below the market median since his appointment as ~~follows: Mr. May, from 50% to 60%; Mr. Simonte, from 80% to 100%; Mr. Satine and Mr. Willemse; each from 60% to 80%.~~

~~Table of Contents~~

~~2015 Annual Incentive Performance~~

~~In support of the Company’s 2015 goals and objectives,~~CFO in 2015. Since that time, the Committee ~~approved the use~~periodically reviewed Mr. May's compensation in consideration of ~~net operating cash flow~~his professional development and net income as a percentage of sales (NIPS), each with equal weighting, as the performance metrics for determining 2015 annual cash incentives. These performance metrics were selected for the following reasons:strong

~~net operating cash flow is an important financial metric for AAM due to its impact on liquidity, debt reduction and stockholder value creation;~~

~~increasing net operating cash flow is key to achieving credit rating upgrades, which has a favorable impact on the Company’s cost of future financing; and~~

~~net income is a key indicator of financial and operational performance.~~



Table of Contents	Compensation Discussion and Analysis

Net operating cash flow is defined as net cash provided by or used in operating activities less capital expenditures net of proceeds from the sale of property, plant and equipment and from government grants.

In the fourth quarter of 2014, in conjunction with a review of the Board-approved annual budget, the Committee set 2015 performance targets for the net operating cash flow and NIPS performance metrics as follows:

Net Operating
Cash Flow

Net Income as a
Percentage of Sales
Performance Payout Performance Payout
Threshold $50 million 25% 1.5% 25%
Target $175 million 100% 4% 100%
Maximum $275 million 200% 6% 200%

Budgeted net operating cash flow for 2015 was $175 million. Generating positive cash flow was a critical objective for 2015. Accordingly, the threshold performance level was set at $50 million. The target performance level for net operating cash flow was based on achieving the budget and the maximum performance level was based on outperforming budgeted cash flow by $100 million. The target and threshold performance levels for NIPS were determined based on our performance relative to our competitor peer group. The target performance level for NIPS, or 4%, was set at a level to meet the performance of the median net income of our competitor peer group for the three most recent fiscal years. The maximum award opportunity for NIPS was set at a level to meet the performance in the ~~top one-third of our competitor peer group. Target performance levels are intended to be aggressive but achievable based on industry conditions.~~

The Company’s 2015 net operating cash flow was $189.5 million. Accordingly, the net operating cash flow metric resulted in the achievement of 114% of target payout. The Company’s 2015 NIPS was 6.05%, excluding the impact of debt redemption costs, net of tax, of approximately $0.5 million. Accordingly, the NIPS performance metric resulted in an achievement of 200% of target.

Based on the weighting of each performance metric, the 2015 annual incentive awards resulted in a payout of 157% of target. No discretionary adjustments were made to 2015 annual incentive payouts for any NEO. The annual incentive awards paid are shown in the ~~Summary Compensation Table~~.

~~2016 Amendment & Restatement of Annual Incentive Plan~~

In February 2016, the Committee approved the use of operating income margin as an additional performance measure for annual incentives awarded under the Annual Incentive Plan for Executive Officers. The Committee selected this additional performance measure based on a market analysis performed by Meridian that compared the performance metrics used by AAM under our annual incentive plan to the performance metrics used by companies in our comparative peer group and among a broader industry group.position. As a result, the Committee decided to maintain the existing performance measures and add operating income margin, a pre-tax earnings measure under the plan. Accordingly, the Second Amended & Restated AAM Annual Incentive Plan for Executive Officers was adoptedincrease his annual incentive target to 80% effective ~~January~~April 1, ~~2016 and filed as Exhibit 10.38 to our annual report on Form 10-K for the fiscal year ended December 31, 2015.~~

~~Table of Contents~~

~~Long-Term Incentive Compensation.The table below shows the 2015 target long-term incentive opportunities for our NEOs:~~

2017.

2015 Target Long-Term Incentive Opportunity

($)⁽¹⁾

%⁽²⁾
David C. Dauch 4,312,500
375%
Christopher J. May 148,320
60%
Michael K. Simonte 1,153,800
200%
Alberto L. Satine 556,200
120%
Norman Willemse 410,000
100%
Terry Woychowski 540,000
120%

~~(1) Amounts reflect the value~~In October 2017, the Committee ~~considered when granting~~determined that the ~~awards for 2015. These amounts differ from the value of the awards shown in the 2015~~ ~~Summary Compensation Table~~ ~~and~~ ~~Grants of Plan-Based Awards Table~~ ~~because those tables reflect the probable outcome of the performance metrics for the performance shares.~~

~~(2) Stated as a percentage of base salary.~~

Mr. Dauch's LTI opportunity was increased to 375% from 350% of base salary effective January 1, 2015. The Committee approved this increase in consideration of the Company's financial performance and Mr. Dauch's leadership in strengthening AAM's management team and advancing product technology and innovation. Mr. Dauch's LTI opportunity was increased to 400% for 2016 based on the market benchmark study provided by Meridian.

~~For Mr. Simonte, Mr. Satine, Mr. Willemse and Mr. Woychowski, 2015 LTI targets were not changed from 2014. Mr. May's 2015 LTI target was determined based on his prior position as Treasurer. The~~annual incentive target opportunities for ~~Mr. May (100%), Mr. Simonte (230%), Mr. Satine (150%) and Mr. Willemse (150%) were increased~~each NEO will remain unchanged for ~~2016 awards in connection~~2018.

2018 Changes to Annual Incentive Compensation Program

During our shareholder outreach, emphasis was placed on our continuing to align performance measures with ~~their appointments to new positions.~~

~~2015 Long-Term Incentives~~

our business strategy. The Committee ~~determined~~considered this feedback in selecting absolute EBITDA dollars as the sole metric for determining 2018 annual incentive payouts. Strong EBITDA performance positions AAM to generate cash, reduce debt and provide funding for profitable growth and other capital priorities. The selection of EBITDA dollars as the sole performance measure emphasizes its importance to our business strategy.

For 2018, the Committee set the annual incentive target at a level that drives management to continue to perform at a high level, achieve integration synergies, implement productivity improvements and successfully launch new product programs.

Long-Term Incentive Compensation

Our LTI program ~~and each NEO's target LTI opportunity~~ for ~~2015 in consideration of peer group data, market trends, pay-for-performance alignment and~~ executive retention. Under the 2015 LTI program, each NEO was granted performance shares of 66% and RSUs of 34% of the NEO's target LTI value. RSU awards vest in full on the third anniversary of the grant date and are payable in shares.

Performance share awards are subject to two equally weighted three-year performance metrics: (1) cumulative earnings before interest, taxes, depreciation and amortization (EBITDA) margin and (2) relative total shareholder return (TSR). The Committee selected EBITDA margin because it is a key indicator of our financial and operational performance and is useful in analyzing entity valuation. The Committee selected relative TSR because of its alignment with stock price performance. This TSR performance metricofficers is designed to reward NEOs for creating sustained shareholder value, to encourage ownership of Company stock, and to retain and motivate executive officers to build long-term value for our stockholders. The EBITDA and relative TSR performance measures also complement the metrics we use to determine payouts under our annual incentive program.

The following table shows the threshold, target and maximum EBITDA margin and relative TSR performance levels to be used in determining 2015 performance share payouts. These performance levels were designed to drive a level of performance in the top one-halfexecutives while aligning their interests with those of our ~~competitor peer group. The competitor peer group consists of companies listed above in~~ ~~Peer Group and Compensation Benchmarking.~~

EBITDA Margin Performance Measure Relative 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
Threshold 10% 25%
35^th
50%
Target 12% 100%
50^th
100%
Maximum 15% 200%
75^th
200%

~~Table of Contents~~

~~Payout of 2013 Performance Unit Awards~~

Payouts of the 2013 cash-based performance unit awards were determined based on EBITDA margin for the performance period beginning January 1, 2013 through December 31, 2015. The Company's cumulative EBITDA margin for the performance period was 13.9%, after adjustments approved by the Committee for certain special charges, including debt refinancing costs and the payout of certain terminated vested participants under our defined benefit U.S. pension plans. The adjusted EBITDA margin resulted in a payment at 163% of target. See ~~Summary Compensation Table~~ ~~for the amounts paid to NEOs (other than Mr. May) in March 2016.~~

~~Payout of 2012 Performance Unit Award~~

The payout of a 2012 cash-based performance unit award to Mr. Dauch was determined based on EBITDA margin for the performance period beginning July 1, 2012 through June 30, 2015. The Company's cumulative EBITDA margin for the performance period was 13.1% after adjustments approved by the Committee for certain special charges, including debt refinancing costs and the payout of certain terminated vested participants under our defined benefit U.S. pension plans. The adjusted EBITDA margin resulted in a payment at 135.4% of target. See ~~Summary Compensation Table~~ ~~for the amount paid to Mr. Dauch in August 2015.~~

~~Equity Grant Practices~~

shareholders. AAM generally makes equity grants to its executive officers and other executives on an annual basis, subject to the approval of the Committee. Grants are typically made in the first quarter of each year to coincide 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 performance.

2017 LTI Award Overview



	Form of Award
	Performance Shares		RSUs
LTI Mix	66	%	34	%

Objective	Drive and reward performance key to strategic business objectives		Encourage retention and ownership supporting shareholder alignment

Performance Measure	50% EBITDA Margin 50% RelativeTSR		Continued service with AAM

Competitor Peer Group for Relative TSR	Autoliv Inc. Borg Warner Inc. Dana Inc. Lear Corporation Magna International Inc Meritor Inc, Tenneco Automotive, Inc. Visteon Corporation		Not applicable

Performance / Vesting Period	Subject to achievement of performance measures over the three-year performance period January 1, 2017 through December 31, 2019		Cliff vest on the third anniversary of the grant date

Conversion	Converted to AAM stock upon vesting		Converted to AAM stock upon vesting

Our competitor peer group is used to assess relative performance for establishing long-term incentive award performance levels. The competitor peer group consists of companies that compete with AAM ~~has never allowed backdating, spring loading or other timing~~for capital and operate in similar markets. This group of ~~option grants~~eight companies serves as an appropriate benchmark for long-term incentives because of the likelihood that these companies will experience similar business conditions over a three-year cycle.



Table of Contents	Compensation Discussion and Analysis

The Committee approved the use of EBITDA margin and relative TSR as the 2017 LTI performance share measures considering their alignment to our strategic business objectives as described above. The target performance was set above the median of our competitor peer group based on estimated performance for the period 2015 to 2017. The maximum performance level was set above the 75th percentile of the competitor peer group in order to drive superior performance. The following table shows the threshold, target and maximum EBITDA margin and relative TSR performance levels to be used in determining the payouts for these awards for the performance period January 1, 2017 through December 31, 2019.



	EBITDA Margin Performance Measure				Relative 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
Threshold	10	%	25	%	35^th	50	%
Target	12	%	100	%	50^th	100	%
Maximum	15	%	200	%	75^th	200	%

LTI Award Values

The table below shows the 2017 target long-term incentive opportunities for our NEOs.



	2017 Target Long-Term Incentive Opportunity
	($)⁽¹⁾	%⁽²⁾
David C. Dauch	5,175,000	450	%
Christopher J. May	412,000	100	%
Michael K. Simonte	1,516,160	230	%
Alberto L. Satine	787,950	150	%
Gregory S. Deveson	1,060,000	200	%

(1) Amounts reflect the value the Committee considered when granting the awards for 2017. These amounts differ from the value of the awards shown in the 2017 Summary Compensation Table and Grants of Plan-Based Awards Table because those tables reflect the probable outcome of the performance metrics for the performance shares.

(2) Stated as a percentage of base salary.

In connection with the ~~release~~acquisition of ~~material non-public information. Currently,~~MPG and based on the market median of the new comparative peer group, the Committee increased the 2018 LTI target opportunities for the NEOs (except for Mr. Deveson) to reflect the significant increase in size and complexity of the Company. The Committee also considered the greater levels of responsibility and challenges ahead for each of the NEOs to deliver expected results. Mr. Deveson's 2018 LTI target was set when he joined AAM on April 17, 2017, after the MPG acquisition.



	2018 Target Long-Term Incentive Opportunity
	%
David C. Dauch	500	%
Christopher J. May	250	%
Michael K. Simonte	300	%
Alberto L. Satine	200	%
Gregory S. Deveson	200	%

For Mr. May, the Committee increased his LTI target opportunity, recognizing that his target had been below the market median since his appointment as CFO in 2015. Since that time, the Committee periodically reviewed Mr. May's compensation in consideration of his professional development and strong performance in the position. Accordingly, the Committee made incremental increases to Mr. May's 2018 target, resulting in the total amount shown above.



Table of Contents	Compensation Discussion and Analysis

Payout of 2015 Performance Share Awards

The performance period for 2015 performance awards ended on December 31, 2017. The number of shares earned was based on relative TSR and EBITDA margin over the three-year performance period as shown below.



	Actual Performance	% of Target Shares Earned		Award Weighting		Weighted Payout
Relative TSR	11^th percentile	0	%	50	%	0	%

EBITDA Margin	16.2%⁽¹⁾	200	%	50	%	100	%
		Final Payout as a % of Target				100	%

(1) Excludes the restructuring and acquisition-related costs and debt refinancing costs. See Reconciliation of Non-GAAP and GAAP information.

Payouts under the relative TSR performance share awards resulted in a zero payout to senior management because the threshold performance level was not achieved. Our shareholders did not realize value on our stock ~~options~~over this time period. Consequently, our senior management team did not receive any value for these awards.



Governance Point
Payout capped at 50% if 3-year absolute TSR is negative.



Table of Contents	Compensation Discussion and Analysis

The performance targets for the EBITDA margin performance share awards were determined in consideration of AAM's historical EBITDA margins in 2012 - 2014. The maximum performance level was set to drive performance significantly above our peers and encourage EBITDA margin growth. Over this period, management delivered a result well in excess of targets and prior actual performance. This outstanding financial performance allowed us to reduce debt and position AAM for the strategic actions we took in 2017.



Adjusted EBITDA Margin

2018 Changes to LTI Program

The Committee evaluated the performance measures for 2018 LTI performance share awards to ensure that the measures are aligned with our business strategy. In 2017, AAM acquired MPG to drive a much stronger long-term business profile. We incurred higher debt levels to finance this strategic acquisition. A key objective of the Company is to strengthen our balance sheet and continue to provide for profitable growth, research and development of innovative technology and other capital priorities. As a result, free cash flow is a key driver to reduce gross leverage and ultimately convert value to shareholders through the valuation process. Accordingly, the Committee replaced the EBITDA margin performance measure with free cash flow for the 2018 LTI performance share awards. The Committee believes that relative TSR continues to be an important measure of performance because of its alignment with shareholder value creation.

Based on these considerations, the 2018 performance share awards will be based 50% on free cash flow and 50% on relative TSR. Significantly, achievement of the 2018 LTI free cash flow target would represent the highest free cash flow performance in AAM's history.

Summary of Direct Compensation

The Committee believes each pay element of direct compensation is consistent with our compensation philosophy. The Committee reviews direct compensation for each NEO and compares each compensation element to the market data of our comparative peer group. The Committee also considers individual performance, experience, internal equity, scope and responsibility of position, retention and other factors.

Direct compensation for our CEO is higher than for the other NEOs due to the CEO's breadth of executive and operating responsibilities for the entire global enterprise. The Committee does not ~~used~~target CEO pay as a ~~vehicle~~certain multiple of the pay of the other NEOs.

For 2017, the Committee set total direct compensation for ~~long-term incentive awards under our~~Mr. Dauch, Mr. Simonte and Mr. Satine at approximately the 50^thpercentile of the peer group. For Mr. May, who was appointed CFO in August 2015, the Committee set total direct compensation ~~programs.~~below the 50^th percentile based on his limited time in this position. The level of total direct compensation for Mr. Deveson was determined in consideration of internal pay equity for his position as a business unit leader and was set between the 50^thand the 75^th percentiles.



Table of Contents	Compensation Discussion and Analysis

Indirect Compensation Elements

Retirement and Other Benefits

~~Benefits.~~Our NEOs participate in the same ~~benefit~~medical and ~~retirement~~401(k) plans ~~in which~~as our U.S. salaried ~~associates participate.~~associates. A group of approximately 60 senior executives, including the NEOs, also receive supplemental life, supplemental disability and umbrella liability insurance benefits. Our NEOs are eligible to participate in AAM’s ~~qualified and~~ nonqualified defined benefit pension ~~plans~~plan and ~~defined contribution plans. They are also eligible to participate in~~ a nonqualified deferred compensation ~~plan that permits deferrals of a portion of base salary and/or annual cash incentive compensation on a pretax basis.~~plan. These plans are described in the Pension Benefits and Nonqualified Deferred Compensation sections below.

Perquisites

~~Perquisites.~~AAM provides a very limited number of perquisites to senior executives, including our NEOs. ~~AAM does not pay for country club memberships.~~ Senior executives are eligible for the use of a Company-provided vehicle with AAM content. Mr. Dauch has the use of two Company-provided vehicles. Occasionally, the Company invites spouses of AAM executives to attend Company business events and pays for the spouse’s travel and related non-business expenses. ~~The Company~~AAM reimburses the executive for taxes attributable to the income associated with this benefit. We do not otherwise provide tax gross ups for executives except for those available for all salaried associates generally. Perquisites are further described in the footnotes to the Summary Compensation Table.

Other Compensation Matters

~~Employment Agreements~~

In February 2015, Mr. Dauch's employment agreement was amended to change the severance payments and benefits in the event his employment is terminated on or within two years following a change in control (CIC). The amendment reflects an increase in his severance payment from two times to three times his annual base salary and bonus. The CIC benefits for Mr. Dauch were determined in consideration of market data and the level of CIC benefits provided to other executive officers under the AAM Executive Officer Change in Control Plan (CIC Plan) discussed below.

~~The Company entered into an employment agreement with Mr. Simonte effective August 1, 2015 in connection with his appointment as President of the Company.~~

~~The terms of Mr. Dauch's and Mr. Simonte's employment agreements are described in the~~ ~~Narrative to the Summary Compensation Table and Grants of Plan-Based Awards Table~~ ~~and~~ ~~Potential Payments Upon Termination or Change in Control.~~

~~Table of Contents~~

~~Change in Control Plan~~

In February 2015, upon the recommendation of the Committee, the Board approved the CIC Plan for executive officers. The CIC Plan provides eligible executive officers with severance payments and benefits in the event of termination of employment on or within two years following a CIC. Mr. Dauch and Mr. Simonte do not participate in the CIC Plan due to the severance payments and benefits provided under each of their employment agreements.

Severance payments and benefits under the CIC Plan include, among other things, a severance payment equal to two times annual base salary and annual bonus and continuation of medical benefits for two years. CIC severance payments and benefits are subject to continued compliance following termination of employment for two years with the non-competition provision of the CIC Plan. CIC severance payments and benefits for all executive officers are subject to the execution and non-revocation of a general waiver and release of claims against the Company. Certain severance payments are also subject to the Company's clawback policy as described below.

The Board believes the CIC Plan enhances stockholder value by encouraging executive officers to consider CIC transactions that may be in the best interests of the Company and our stockholders while keeping them neutral to potential job loss. The Board also believes that the CIC Plan is aligned with competitive market practices and will help to retain key talent. Severance benefits provided to our NEOs are further described under ~~Potential Payments Upon Termination or Change in Control.~~

~~Executive Compensation Recoupment (Clawback) Policy~~

The clawback policy authorizes the Committee to determine whether to require recoupment of 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 annual incentives for periods beginning with the 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.

~~Executive Officer Stock Ownership Requirements~~



	~~Multiple of~~ ~~Base Salary~~
~~Chief Executive Officer~~	5
~~President; Executive Vice President~~	3
~~Senior Vice President; Group Vice President; Vice President~~	2

Executive officers have five years from April 2012 to meet these requirements or, for new executive officers, five years from the date of appointment. Shares owned directly, unvested RSUs and performance shares (at target) 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 NEO has met or is on track to meet the ownership requirements established for his position.

~~Table of Contents~~

~~Anti-hedging and Anti-pledging Policy~~

AAM prohibits employees and non-employee directors 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.

~~Tax Deductibility of Compensation~~

In general, the compensation awarded to 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 Code precludes a public corporation from taking a tax deduction for annual compensation in excess of $1 million paid to the CEO or to other NEOs 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.

Although deductibility of compensation is preferred, tax deductibility is not the primary objective of our compensation programs. The Committee may decide to pay compensation or grant awards that serve the objectives of our executive compensation program even though such compensation or awards may not be deductible by the Company.

The annual incentives and long-term incentive performance share awards granted in 2015 to our NEOs are intended to comply with the performance-based compensation exemption under Section 162(m). RSUs granted to NEOs in 2015, although not deductible, were considered to be the appropriate vehicle for a portion of the long-term incentive component of our executive compensation program.

~~Table of Contents~~

~~REPORT OF THE COMPENSATION COMMITTEE~~

We have reviewed and discussed the Compensation Discussion and Analysis with management. Based on such review and discussion, we recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement.

~~Compensation Committee of the Board of Directors~~

~~Elizabeth A. Chappell, Chair~~

~~Steven B. Hantler~~

~~William L. Kozyra~~

~~James A. McCaslin~~

~~Samuel Valenti III~~

~~Table of Contents~~

~~SUMMARY COMPENSATION TABLE~~

The following table summarizes the compensation of our named executive officers (NEOs) for the fiscal years ended December 31, 2015, December 31, 2014 and December 31, 2013 to the extent they served as our NEOs in such years.

Name and
Principal Position
Year
Salary
($)
Bonus
($)
Stock
Awards⁽²⁾
($)
Options
Awards
($)
Non-Equity
Incentive
Plan
Compen-
sation⁽³⁾
($)
Change in
Pension Value
And
Nonqualified
Deferred
Compensation
Earnings⁽⁴⁾
($)
All Other
Compen-
sation⁽⁵⁾
($)
Total
($)
David C. Dauch⁽¹⁾Chairman & Chief Executive Officer
2015 1,150,000
—
5,348,595
—
5,447,875
1,201,615
67,131
13,215,216
2014 1,100,000
—
4,454,330
—
2,638,120
1,081,679
75,189
9,349,318
2013 1,033,333
—
1,750,002
—
3,185,250
245,423
116,389
6,330,397
Christopher J. May
Vice President & Chief Financial Officer 2015 292,505
—
148,344
—
297,646
107,445
44,199
890,139

Michael K. Simonte
President 2015 603,192
—
1,431,050
—
1,773,967
347,876
52,561
4,208,646
2014 560,100
—
1,296,049
—
961,046
375,597
52,666
3,245,458
2013 543,800
—
543,810
—
1,429,085
27,943
50,817
2,595,455
Alberto L. Satine President Driveline 2015 482,875
—
689,895
—
899,225
224,587
52,473
2,349,055
2014 450,000
—
624,777
—
498,640
237,798
41,032
1,852,247
2013 360,000
—
216,006
—
565,800
—
41,399
1,183,205
Norman Willemse
President Metal Formed Products 2015 426,667
—
508,544
—
743,575
169,498
32,065
1,880,349
2014 375,767
—
445,473
—
445,467
135,322
48,459
1,450,488
2013 320,000
—
160,006
—
579,120
12,546
50,348
1,122,020
Terry J. Woychowski ⁽⁶⁾ Former Senior Vice President, Advanced Engineering
2015 437,932
—
669,787
—
440,100
—
492,901
2,040,720
2014 463,500
—
624,777
—
305,100
57,407
50,819
1,501,603


~~(1)~~	~~Compensation of Mr. Dauch is based solely on employment as an executive officer. He received no compensation for serving as a director.~~

~~(2)~~

Reflects the grant date fair value of restricted stock units and performance share awards made during fiscal year 2015 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. See Note 6 to the audited consolidated financial statements in our annual report on Form 10-K for the year ended December 31, 2015 regarding assumptions underlying the valuation of equity awards. Assuming the maximum performance levels are achieved for the performance share awards granted on March 2, 2015, the maximum value of performance share awards would be $5,692,562 for Mr. Dauch, $1,523,080 for Mr. Simonte, $734,270 for Mr. Satine, $541,259 for Mr. Willemse and $712,858 for Mr. Woychowski based on grant date fair value. These amounts may not reflect the actual value realized upon vesting or settlement, if any. Mr. May did not receive a grant of performance share awards during 2015.

(3)Reflects amounts earned under the AAM Incentive Compensation Plan for Executive Officers for 2015 and cash-based performance unit awards granted under the 2012 Omnibus Incentive Plan for the 3-year performance period ending December 31, 2015. For Mr. Dauch, also reflects the payment of $338,500 for a cash-based performance~~award for the performance period July 1, 2012 through July 30, 2015. The 2015 amounts earned are as follows:~~

Name
AAM Incentive
Compensation Plan
2012 Omnibus Incentive Plan Total
David C. Dauch $ 2,256,875
$ 3,191,000
$ 5,447,875
Christopher J. May $ 297,646
$ —
$ 297,646
Michael K. Simonte $ 887,573
$ 886,394
$ 1,773,967
Alberto L. Satine $ 547,145
$ 352,080
$ 899,225
Norman Willemse $ 482,775
$ 260,800
$ 743,575
Terry Woychowski $ —
$ 440,100
$ 440,100

~~Table of Contents~~

~~(4)~~

Reflects the annualized increase in pension value under the Salaried Retirement Program, the Albion Pension Plan and the Supplemental Executive Retirement Program (SERP). For Mr. Woychowski, reflects a net negative change in pension value for 2015 of $82,596 resulting from the forfeiture of his SERP benefit upon termination of employment. See ~~Pension Benefits Table~~ ~~below. There are no above-market or preferential earnings on compensation deferred under our Executive Deferred Compensation Plan.~~

~~(5) The components of All Other Compensation for 2015 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. Dauch 13,086
13,250
10,859
22,214
2,033
5,689
67,131
Christopher J. May 12,855
12,855
1,096
16,978
—
415
44,199
Michael K. Simonte 13,250
13,250
5,047
20,414
—
600
52,561
Alberto L. Satine 12,975
13,250
6,362
18,376
—
1,510
52,473
Norman Willemse 12,865
13,250
4,943
—
407
600
32,065
Terry Woychowski 9,000
7,950
5,620
20,303
—
450,028
492,901

~~(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 paid by the Company.~~

~~(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 50%. For Mr. Dauch, includes the cost of personal use of a second Company-provided vehicle. For Mr. May, reflects a vehicle allowance of $5,000 through May 2015 and the personal use of a Company-provided vehicle for the remainder of the year.


~~(e)~~	~~Includes amounts reimbursed for taxes attributable to the income associated with the cost of spousal travel for participation in Company business meetings and events.~~

~~(f)~~

For Mr. Dauch, includes the cost of travel for spousal participation in Company business meetings or events, personal umbrella liability insurance premiums, cost of an executive physical and meals provided during business hours. For Mr. May, Mr. Simonte and Mr. Willemse, includes the cost of personal umbrella liability insurance premiums. For Mr. Satine, includes the cost of an executive physical and the cost of personal umbrella liability insurance premiums. For Mr. Woychowski, includes a severance payment of $448,168 in connection with the termination of his employment effective December 9, 2015, the cost of personal umbrella insurance premiums and the cost of an executive physical.

~~(6) Refer to the~~ ~~Narrative to Summary Compensation Table and Grants of Plan-Based Awards Table~~ ~~and the~~ ~~Potential Payments Upon Termination or Change in Control~~ ~~section below for a description of the terms of the separation agreement with Mr. Woychowski effective December 9, 2015.~~

~~Table of Contents~~

~~GRANTS OF PLAN-BASED AWARDS~~

~~Annual and long-term incentive awards granted in 2015 to the NEOs are shown in the following table. The annual and long-term incentive compensation programs are described in the~~ ~~Compensation Discussion and Analysis~~ ~~and the~~ ~~Narrative to Summary Compensation Table and Grants of Plan-Based Awards Table~~ ~~below.~~

Name Grant Date
Approval
Date
Estimated Future Payouts under
Non Equity Incentive Plan Awards⁽¹⁾
Estimated Future Payouts under
Equity Incentive Plan Awards⁽²⁾
All Other
Stock Awards:
Number of
Shares of Stock
or Units⁽³⁾
(#)
Grant Date
Fair
Value of
Stock and
Option
Awards⁽⁴⁾
($)
Threshold
($)
Target
($)
Maximum
($)
Threshold
(#)
Target
(#)
Maximum
(#)
David C. Dauch
Annual Incentive 1/1/2015 10/28/2014 359,375
1,437,500
2,875,000
—
—
—
—
—
Performance Shares (TSR) 3/2/2015 2/4/2015 —
—
—
28,181
56,362
112,724
—
1,759,002
Performance Shares (EBITDA) 3/2/2015 2/4/2015 —
—
—
14,091
56,362
112,724
—
2,123,325
Restricted Stock Units 3/2/2015 2/4/2015 —
—
—
—
—
—
58,070
1,466,268
Christopher J. May
Annual Incentive 1/1/2015 10/28/2014 47,396
189,583
379,166
—
—
—
—
—
Restricted Stock Units 3/2/2015 2/4/2015 —
—
—
—
—
—
5,875
148,344
Michael K. Simonte
Annual Incentive 1/1/2015 10/28/2014 141,333
565,333
1,130,666
—
—
—
—
—
Performance Shares (TSR) 3/2/2015 2/4/2015 —
—
—
7,540
15,080
30,160
—
470,632
Performance Shares (EBITDA) 3/2/2015 2/4/2015 —
—
—
3,770
15,080
30,160
—
568,109
Restricted Stock Units 3/2/2015 2/4/2015 —
—
—
—
—
—
15,537
392,309
Alberto L. Satine
Annual Incentive 1/1/2015 10/28/2014 87,125
348,500
697,000
—
—
—
—
—
Performance Shares (TSR) 3/2/2015 2/4/2015 —
—
—
3,635
7,270
14,540
—
226,889
Performance Shares (EBITDA) 3/2/2015 2/4/2015 —
—
—
1,817
7,270
14,540
—
273,883
Restricted Stock Units 3/2/2015 2/4/2015 —
—
—
—
—
—
7,490
189,123
Norman Willemse
Annual Incentive 1/1/2015 10/28/2014 76,875
307,500
615,000
—
—
—
—
—
Performance Shares (TSR) 3/2/2015 2/4/2015 —
—
—
2,680
5,359
10,718
—
167,249
Performance Shares (EBITDA) 3/2/2015 2/4/2015 —
—
—
1,340
5,359
10,718
—
201,890
Restricted Stock Units 3/2/2015 2/4/2015 —
—
—
—
—
—
5,521
139,405
Terry J. Woychowski
Annual Incentive 1/1/2015 10/28/2014 67,500
270,000
540,000
—
—
—
—
—
Performance Shares (TSR) 3/2/2015 2/4/2015 —
—
—
3,529
7,058
14,116
—
220,273
Performance Shares (EBITDA) 3/2/2015 2/4/2015 —
—
—
1,765
7,058
14,116
—
265,896
Restricted Stock Units 3/2/2015 2/4/2015 —
—
—
—
—
—
7,272
183,618


~~(1)~~	~~Reflects annual incentive awards granted under the AAM Incentive Compensation Plan for Executive Officers.~~


~~(2)~~	Reflects performance share awards granted under the 2012 Omnibus Incentive Plan. The awards are payable in common stock based on the Company's EBITDA margin and relative TSR performance, each weighted 50%, over the 3-year performance period January 1, 2015 through December 31, 2017.


~~(3)~~	Reflects RSUs granted under the 2012 Omnibus Incentive Plan. The awards are payable in common stock, contingent upon continued employment through the 3-year vesting period. No options were granted in 2015.


~~(4)~~	Reflects the full grant date fair value of performance share awards and RSUs made during fiscal year 2015 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. See Note 6 to the audited consolidated financial statements in our annual

~~Table of Contents~~

~~report on Form 10-K for the year ended December 31, 2015 regarding assumptions underlying the valuation of equity awards.~~

~~Narrative to Summary Compensation Table and Grants of Plan-Based Awards Table~~

Employment Agreements

The terms of Mr. Dauch's and Mr. Simonte's employment agreements are described in the Narrative to the Summary Compensation Table and Grants of Plan-Based Awards Table and Potential Payments Upon Termination or Change in Control.

Change in Control Plan

The AAM Executive Officer Change in Control (CIC) Plan provides eligible executive officers severance payments and benefits in the event of termination of employment on or within two years following a CIC. Mr. Dauch and Mr. Simonte do not participate in the CIC Plan due to the severance payments and benefits provided under each of their employment agreements. The Board believes the CIC Plan enhances stockholder value by encouraging executive officers to consider CIC transactions that may be in the best interests of the Company and our stockholders while keeping them neutral to potential job loss. The Board also believes that the CIC Plan is aligned with competitive market practices and will help to retain key talent. Severance benefits provided to our NEOs are described under Potential Payments Upon Termination or Change in Control.

Executive Compensation Recoupment (Clawback) Policy

The clawback policy authorizes the Committee to determine whether to require recoupment of 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 annual and long-term incentive awards, whether paid in cash or equity, to the extent the awards are based on the Company's financial performance.



Table of Contents	Compensation Discussion and Analysis

Executive Officer Stock Ownership Requirements

A 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 2017, the Committee requested Meridian to provide an analysis of the stock ownership requirements of our peer group. Based on this analysis, the Committee increased the stock ownership requirements for the CEO from five times to six times base salary and from two times to three times base salary for the Chief Financial Officer. The Company's current stock ownership requirements are shown below.



	Multiple of Base Salary
Chief Executive Officer	6
Chief Financial Officer; President	3
Other Executive Officers	2

Executive officers have five years to meet these requirements or, for new executive officers, five years from the date of appointment. Shares owned directly, unvested RSUs and performance shares (at target) count toward the requirement. These ownership levels must be maintained as long as the person is an executive officer of AAM. NEOs who have not met these requirements may not sell shares. The Committee annually reviews each executive officer’s stock ownership level according to this policy. Each NEO has met or is on track to meet the ownership requirements established for his position.

Anti-Hedging and Anti-Pledging Policy

AAM prohibits employees and non-employee directors from entering into transactions that may result in a financial benefit if our stock price declines, or any hedging transaction involving our stock, including the use of financial derivatives, short sales or any similar transactions. Pledging of AAM stock is also prohibited.

Risk Assessment of Compensation Policies and Practices

We conducted an annual risk assessment for the Committee to determine whether the risks arising from our fiscal year 2017 compensation practices are reasonably likely to have a material adverse effect on the Company. The risk assessment considered AAM’s annual and long-term incentive programs and pay mix, performance measures used to calculate payouts, and pay philosophy and governance. Our annual assessment focuses on the program for executive officers in light of their decision-making authority and influence, but also considers the compensation of other salaried associates. Our methodology was reviewed by the Committee and Meridian.

We have designed our compensation programs with specific features to address potential risks while rewarding our executive officers and other associates for achieving long-term financial and strategic objectives through prudent business judgment and appropriate risk taking. Based on our risk assessment and consideration of various mitigating factors, we concluded that our compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on the Company.

Tax Deductibility of Compensation

Section 162(m) of the Code (Section 162(m)) generally disallows a tax deduction to public companies for compensation over $1 million paid to certain “covered employees,” which historically included a company's CEO and the three other most highly compensated executive officers, other than the CFO, employed by the company at year end. Pursuant to the Tax Cuts and Jobs Act, enacted on December 22, 2017, the definition of “covered employees” under Section 162(m) was amended to include the CFO. Once an officer is a “covered employee,” the officer’s pay will remain subject to Section 162(m) for so long as the officer is receiving compensation from the company. Further, the Tax Cuts and Jobs Act repealed the exclusion for “qualified performance‑based compensation” under Section 162(m) effective January 1, 2018, except for compensation payable pursuant to a written binding contract in place before November 2, 2017 that is not materially modified thereafter (a grandfathered arrangement). For 2017, although we had plans in place that were intended to permit the award of qualified performance-based compensation under Section 162(m), the Committee did not necessarily limit executive compensation to deductible amounts. Beginning in 2018, there will be no qualified performance-based compensation exemption, other than for grandfathered arrangements. Outstanding awards that previously qualified for the performance-based compensation exclusion under Section 162(m) may or may not qualify as grandfathered awards.



Table of Contents	Compensation Discussion and Analysis

Reconciliation of Non-GAAP and GAAP Information

AAM has included in the proxy statement adjusted operating income margin, adjusted net operating cash flow and adjusted EBITDA margin, which are financial metrics used in our Incentive Compensation Plan for Executive Officers and the 2012 Omnibus Incentive Plan. These metrics are non-GAAP financial measures. Such information is reconciled to its closest GAAP measure in the tables below in accordance with SEC rules.

Management believes that these non-GAAP financial measures are useful to both management and its shareholders in their analysis of the Company's business and operating performance. Management also uses this information for operational planning and decision-making purposes. Non-GAAP financial measures are not and should not be considered a substitute for any GAAP measure. Additionally, non-GAAP financial measures, as presented by AAM, may not be comparable to similarly titled measures reported by other companies.



2017 Annual Incentive Performance Metrics	Twelve Months Ended
	December 31, 2017
Adjusted Operating Income Margin:	(in millions)
Operating income, as reported	$	543.0
Restructuring and acquisition-related costs	110.7
Non-recurring items:
Acquisition-related fair value inventory adjustment	24.9
Other⁽¹⁾	(0.5		)
Adjustment for purchase accounting (primarily depreciation and amortization) for the acquisition of MPG and USM Mexico not included target	35.7
Impact of financial performance for acquisitions not included in target	(18.2		)
Adjusted operating income	$	695.6

Net sales, as reported	$	6,266.0

Adjusted operating income margin ⁽²⁾	11.10		%

Net Operating Cash Flow:
Cash provided by operations, as reported	$	647.0
Purchases of property, plant and equipment, net of proceeds from sale of property, plant and equipment and from government grants	(475.2		)
Cash payments for restructuring and acquisition-related costs	109.3
Acquisition-related settlement of pre-existing accounts payable balances with acquired entities	35.2
Interest payments upon settlement of acquired company debt	24.6
Net operating cash flow ⁽²⁾	$	340.9

(1) Includes the impact of a change in accounting principle and a pension settlement.

(2) The Committee established the performance goals for our annual incentive plan prior to the closing of the MPG and USM Mexico acquisitions. As a result, the impact of purchase accounting adjustments and the financial impact of USM Mexico were not known at the time that the performance goals were established. Accordingly, our GAAP reported operating income and net operating cash flow, for purposes, of calculating performance achievements under the annual incentive plan, were adjusted for certain restructuring and acquisition-related costs and non-recurring items as detailed above.



Table of Contents	Compensation Discussion and Analysis



2015 Long-term Incentive Performance Metric	Twelve Months Ended
	December 31,
	2017			2016			2015
Earnings before interest expense, income taxes and depreciation and amortization (EBITDA) and Adjusted EBITDA:	(in millions)
Net income	$	337.5		$	240.7		$	235.6
Interest expense	195.6			93.4			99.2
Income tax expense	2.5			58.3			37.1
Depreciation and amortization	428.5			201.8			198.4
EBITDA	$	964.1		$	594.2		$	570.3
Restructuring and acquisition-related costs	110.7			26.2			—
Debt refinancing and redemption costs	3.5			—			0.8
Non-recurring items:
Acquisition-related fair value inventory adjustment	24.9			—			—
Other⁽¹⁾	(0.5		)	(1.0		)	—
Adjusted EBITDA	$	1,102.7		$	619.4		$	571.1

Net sales, as reported	$	6,266.0		$	3,948.0		$	3,903.1

Adjusted EBITDA margin	17.6		%	15.7		%	14.6		%

3-year cumulative EBITDA margin	16.2		%

(1) For 2017, includes the impact of a change in accounting principle and a pension settlement.



Table of Contents	Compensation Committee Report

Compensation Committee Report

Compensation Committee of the Board of Directors

James A. McCaslin, Chair

William L. Kozyra

Peter D. Lyons

Samuel Valenti III



Table of Contents	Executive Compensation Tables

Executive Compensation Tables

Summary Compensation Table

The following table summarizes the compensation of our named executive officers (NEOs) for the fiscal years ended December 31, 2017, December 31, 2016 and December 31, 2015 to the extent they served as NEOs in such years.



Name and Principal Position	Year	Salary ($)	Bonus ($)	Stock Awards⁽²⁾($)	Options Awards ($)	Non-Equity Incentive Plan Compen- sation⁽³⁾ ($)	Change in Pension Value And Nonqualified Deferred Compensation Earnings⁽⁴⁾ ($)	All Other Compen- sation⁽⁵⁾ ($)	Total ($)
David C. Dauch⁽¹⁾Chairman & Chief Executive Officer	2017	1,150,000	—	7,319,937	—	2,819,000	1,869,698	86,982	13,245,617
	2016	1,150,000	—	5,617,069	—	2,875,000	1,385,652	74,599	11,102,320
	2015	1,150,000	—	5,348,595	—	5,447,875	1,201,615	67,131	13,215,216
Christopher J. May Vice President & Chief Financial Officer	2017	478,003	—	582,790	—	693,800	397,791	44,586	2,196,970
	2016	391,667	—	488,450	—	480,000	231,058	47,641	1,638,816
	2015	292,505	—	148,344	—	297,646	107,445	44,199	890,139
Michael K. Simonte President	2017	727,300	—	2,144,593	—	1,387,500	720,741	56,779	5,036,913
	2016	640,000	—	1,797,486	—	1,280,000	397,940	50,836	4,166,262
	2015	603,192	—	1,431,050	—	1,773,967	347,876	52,561	4,208,646
Alberto L. Satine President Driveline	2017	588,825	—	1,114,572	—	902,800	482,501	59,099	3,147,797
	2016	510,000	—	934,146	—	814,500	280,651	58,130	2,597,427
	2015	482,875	—	689,895	—	899,225	224,587	52,473	2,349,055
Gregory S. Deveson⁽⁶⁾ President Powertrain	2017	375,417	—	1,512,287	—	588,300	22,485	40,331	2,538,820


(1)	Compensation of Mr. Dauch is based solely on employment as an executive officer. He received no compensation for serving as a director.

(2)

Reflects the grant date fair value of restricted stock units and performance share awards made during fiscal year 2017 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. See Note 9 to the audited consolidated financial statements in our annual report on Form 10-K for the year ended December 31, 2017 regarding assumptions underlying the valuation of equity awards. Assuming the maximum performance levels are achieved for the performance share awards granted on February 28, 2017, the maximum value of performance share awards would be $6,831,003 for Mr. Dauch, $543,861 for Mr. May, $2,001,344 for Mr. Simonte, $1,040,154 for Mr. Satine and $1,399,174 for Mr. Deveson based on grant date fair value. These amounts may not reflect the actual value realized upon vesting or settlement, if any.


(3)	Reflects amounts earned under the AAM Incentive Compensation Plan for Executive Officers for 2017.


(4)	Reflects the annualized increase in pension value under the Salaried Retirement Program and the Supplemental Executive Retirement Program (SERP). See Pension Benefits Table below. There are no above-market or preferential earnings on compensation deferred under our Executive Deferred Compensation Plan.



Table of Contents	Executive Compensation Tables


(5)	The components of All Other Compensation for 2017 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. Dauch	13,500	13,500	13,117	27,738	7,545	11,582	86,982
Christopher J. May	13,050	13,500	2,448	15,019	—	569	44,586
Michael K. Simonte	13,500	13,500	6,791	21,434	—	1,554	56,779
Alberto L. Satine	13,050	13,500	8,861	22,134	—	1,554	59,099
Gregory S. Deveson	6,750	4,725	3,096	24,175	—	1,585	40,331

(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 paid by the Company.


(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 50%. For Mr. Dauch, includes the cost of personal use of a second Company-provided vehicle.


(e)	Includes amounts reimbursed for taxes attributable to the income associated with the cost of travel for spouse accompanying the NEO to Company business meetings and events.

(f)

For Mr. Dauch, includes the cost of travel for spouse accompanying him to Company business meetings or events, personal umbrella liability insurance premiums, cost of an executive physical and meals provided during business hours. For Mr. Simonte, Mr. Satine and Mr. Deveson, includes the cost of personal umbrella liability insurance premiums and the cost of an executive physical. For Mr. May includes the cost of personal umbrella liability insurance premiums.


(6)	For Mr. Deveson, amounts reflect compensation from April 17, 2017, the date he joined the Company, through December 31, 2017.



Table of Contents	Executive Compensation Tables

Grants of Plan-Based Awards

Annual and long-term incentive awards granted in 2017 to the NEOs are shown in the following table. The annual and long-term incentive compensation programs are described in the Compensation Discussion and Analysis and the Narrative to Summary Compensation Table and Grants of Plan-Based Awards Table below.



			Estimated Future Payouts under Non Equity Incentive Plan Awards⁽¹⁾			Estimated Future Payouts under Equity Incentive Plan Awards⁽²⁾
Name	Grant Date	Approval Date	Threshold ($)	Target ($)	Maximum ($)	Threshold (#)	Target (#)	Maximum (#)	All Other Stock Awards: Number of Shares of Stock or Units⁽³⁾ (#)	Grant Date Fair Value of Stock and Option Awards⁽⁴⁾ ($)
David C. Dauch
Annual Incentive	—	—	761,875	1,523,750	3,047,500	—	—	—	—	—
Performance Shares (TSR)	2/28/2017	2/1/2017	—	—	—	43,082	86,163	172,326	—	2,144,935
Performance Shares (EBITDA)	2/28/2017	2/1/2017	—	—	—	21,541	86,163	172,326	—	3,415,501
Restricted Stock Units	2/28/2017	2/1/2017	—	—	—	—	—	—	88,774	1,759,501
Christopher J. May
Annual Incentive	—	—	187,500	375,000	750,000	—	—	—	—	—
Performance Shares (TSR)	2/28/2017	2/1/2017	—	—	—	3,430	6,860	13,720	—	170,772
Performance Shares (EBITDA)	2/28/2017	2/1/2017	—	—	—	1,715	6,860	13,720	—	271,930
Restricted Stock Units	2/28/2017	2/1/2017	—	—	—	—	—	—	7,068	140,088
Michael K. Simonte
Annual Incentive	—	—	375,000	750,000	1,500,000	—	—	—	—	—
Performance Shares (TSR)	2/28/2017	2/1/2017	—	—	—	12,622	25,244	50,488	—	628,422
Performance Shares (EBITDA)	2/28/2017	2/1/2017	—	—	—	6,311	25,244	50,488	—	1,000,672
Restricted Stock Units	2/28/2017	2/1/2017	—	—	—	—	—	—	26,009	515,499
Alberto L. Satine
Annual Incentive	—	—	244,000	488,000	976,000	—	—	—	—	—
Performance Shares (TSR)	2/28/2017	2/1/2017	—	—	—	6,560	13,120	26,240	—	326,608
Performance Shares (EBITDA)	2/28/2017	2/1/2017	—	—	—	3,280	13,120	26,240	—	520,077
Restricted Stock Units	2/28/2017	2/1/2017	—	—	—	—	—	—	13,516	267,887
Gregory S. Deveson
Annual Incentive	—	—	159,000	318,000	636,000	—	—	—	—	—
Performance Shares (TSR)	5/1/2017	2/1/2017	—	—	—	9,977	19,954	39,908	—	452,283
Performance Shares (EBITDA)	5/1/2017	2/1/2017	—	—	—	4,989	19,954	39,908	—	699,587
Restricted Stock Units	5/1/2017	2/1/2017	—	—	—	—	—	—	20,560	360,417


(1)	Reflects annual incentive awards granted under the AAM Incentive Compensation Plan for Executive Officers.


(2)	Reflects performance share awards granted under the 2012 Omnibus Incentive Plan. The awards are payable in common stock based on the Company's EBITDA margin and relative TSR performance, each weighted 50%, over the 3-year performance period January 1, 2017 through December 31, 2019.


(3)	Reflects RSUs granted under the 2012 Omnibus Incentive Plan. The awards are payable in common stock, contingent upon continued employment through the 3-year vesting period. No options were granted in 2017.

(4)

Reflects the full grant date fair value of performance share awards and RSUs made during fiscal year 2017 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. See Note 9 to the audited consolidated financial statements in our annual report on Form 10-K for the year ended December 31, 2017 regarding assumptions underlying the valuation of equity awards.



Table of Contents	Executive Compensation Tables

Narrative to Summary Compensation Table and Grants of Plan-Based Awards Table

Employment Agreements

Our employment agreements with Mr. Dauch as CEO and Mr. Simonte as President provide for the following compensation and benefits as of December 31, ~~2015:~~2017.



	CEO Employment Agreement	President Employment Agreement
Base Salary	$1,150,000 effective January 1, ~~2015,~~2017, subject to annual review and increase by the Compensation Committee	$750,000 effective April 1, 2017, subject to annual review and increase by the Compensation ~~Committee.~~	~~$640,000 effective August 1, 2015, subject to annual review and increase by the Compensation Committee. (Actual amount paid for 2015, $603,192)~~Committee
Annual Incentive	Participation in the annual incentive plan for executive officers. Target opportunity of ~~125%~~135% of base salary effective April 1, 2017, subject to the annual review and increase by the Compensation ~~Committee.~~Committee	Participation in the annual incentive plan for executive officers. ~~Initial target~~Target opportunity as of ~~August~~100% effective January 1, ~~2015 is 100%~~2017 of base salary, subject to annual review and increase by the Compensation ~~Committee.~~Committee
Long-Term Incentive	Participation in the long-term incentive plans for executive officers. Target opportunity of ~~375%~~450% for ~~2015,~~2017, subject to annual review and increase by the Compensation ~~Committee.~~Committee	Participation in the long-term incentive plans for executive officers. ~~Initial target~~Target opportunity of 230% for ~~2016 is 220% of base salary,~~2017, subject to annual review and increase by the Compensation ~~Committee.~~Committee
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 salaried associates as of September 1, ~~2012.~~2012	Participation in plans applicable to executive ~~officers.~~officers
Term	Initial ~~term: September 1, 2012 through~~term expired August 31, 2015. Additional one-year extensions unless either party provides 60 days' written notice of intent not to ~~renew.~~renew	Initial ~~term:~~term is August 1, 2015 through July 31, 2018. Additional one-year extensions unless either party provides 60 days' written notice of intent not to ~~renew.~~renew

Mr. Dauch and Mr. Simonte are also entitled to certain payments and benefits in the event of termination of employment under the scenarios described below in Potential Payments Upon Termination or Change in Control.

~~Agreement with Former Executive~~

The Company entered into a separation agreement and release with Mr. Woychowski in connection with his separation from employment with AAM as of December 9, 2015. Pursuant to the separation agreement, Mr. Woychowski received a lump sum severance payment of $448,168 (less withholding taxes) and executed a full and final release of claims against AAM. Payments made to Mr. Woychowski are shown in the ~~Potential Payments Upon Termination or Change in Control~~ ~~section below.~~

Payment or settlement of outstanding LTI awards were made to Mr. Woychowski under the terms of applicable award agreements. Mr. Woychowski received full payment of the 2013 performance unit award of $440,100 for the performance period January 1, 2013 through December 31, 2015. He also received pro-rata payouts of two-thirds of his 2014 performance share awards and one-third of his 2015 performance share awards, less shares withheld for taxes. The remaining balance of each of these performance awards was forfeited. Outstanding RSU awards for 2013, 2014 and 2015 were forfeited. Pursuant to the AAM Incentive Compensation Plan for Executive Officers, Mr. Woychowski was not eligible to receive payment of an annual incentive award for 2015.

Annual Incentive Awards

In ~~2015,~~2017, annual incentive awards were granted under the AAM Incentive Compensation Plan for Executive Officers. Net operating cash flow and ~~NIPS~~operating income margin were selected as performance metrics for these awards. The maximum payout for ~~both~~each performance ~~metrics~~metric is 200%. See Annual Incentive Compensation in the CD&A.

Long-Term Incentive Awards

In ~~2015,~~2017, the Company granted long-term incentive awards to NEOs in the form of RSUs and performance share awards. The terms of these awards are described in Long-Term Incentive Compensation in the CD&A.

~~Table of Contents~~

~~2015~~2017 Awards Granted Under the 2012 Omnibus Incentive Plan

Restricted Stock Units (RSUs).

The RSUs granted ~~on March 2, 2015~~in 2017 to NEOs vest in three years. All RSUs are payable in common stock.

Performance Share ~~Awards.~~ Awards

The performance share awards granted to NEOs ~~on March 2, 2015~~in 2017 are based upon the attainment of certain EBITDA margin performance targets and relative TSR over a three-year performance period beginning January 1, ~~2015~~2017 through December 31, ~~2017.~~2019. The performance share awards represented 66% of the total LTI award opportunity for executive officers. One-half of the ~~2015~~2017 performance share payouts, or 33% of the total LTI award, ~~earned~~ will be measured by EBITDA margin performance and one-half, or 33% of the total LTI award, will be measured by relative TSR performance over a three-year period. TSR performance share payouts will be capped if the Company's TSR is negative for the three-year period. All performance shares are payable in common stock.



Table of Contents	Executive Compensation Tables

The following ~~tables illustrate~~table illustrates the threshold, target and maximum performance levels for determining ~~2015~~2017 award payouts for each performance measure.


	EBITDA Margin Performance Measure		Relative TSR Performance Measure		EBITDA Margin				Relative TSR
Performance Level	3-Year Cumulative EBITDA Margin	Percent of Target Award Opportunity Earned	Company TSR Percentile Rank	Percent of Target Award Opportunity Earned	3-Year Cumulative EBITDA Margin		Percent of Target Award Opportunity Earned		Company TSR Percentile Rank	Percent of Target Award Opportunity Earned
Threshold	10%	25%	35^th	50%	10	%	25	%	35^th	50	%
Target	12%	100%	50^th	100%	12	%	100	%	50^th	100	%
Maximum	15%	200%	75^th	200%	15	%	200	%	75^th	200	%

~~OTHER MATTERS~~

~~Expenses~~

Electronic Delivery of Proxy Materials

Can I access AAM's proxy solicitation materials electronically?

Most stockholders can elect to view future proxy statements and annual reports online instead of receiving copies in the mail. You can choose this option and save us the cost of printing and mailing these documents by:


–	following the instructions provided on your proxy card, voter instruction form, or notice


–	going to www.envisionreports.com/axl and following the instructions provided

If you choose to receive future proxy statements and annual reports electronically, you will receive an e-mail message next year containing the Internet address to access these documents as well as voting instructions.

2019 Stockholder Proposals and Nominations

Proposals for Inclusion in 2019 Proxy Statement

If you intend to present a proposal at next year's annual meeting and you wish to have the proposal included in the proxy statement for that meeting, the Secretary of AAM must receive your proposal in writing, at the address below, no later than November 20, 2018.

Director Nomination for Inclusion in 2019 Proxy Statement

In February 2018, our Board amended AAM's by-laws to permit a shareholder or a group of up to 20 shareholders that has owned at least 3% of our outstanding common stock for at least three years to nominate and include in our proxy statement candidates for our Board, subject to certain requirements. Written notice of any such nomination must be received by the Company's Secretary on or before January 5, 2019 but no earlier than December 5, 2018. The requirements for such notice are set forth in our by-laws, a copy of which can be found on our website at http://investor.aam.com/governance.

Other Proposals and Nominations

In addition, AAM’s by-laws require stockholders intending to present any matter for consideration at the 2019 annual meeting of stockholders, other than through inclusion in our proxy materials, to notify AAM’s Secretary in writing at the address below on or before February 23, 2019, but no earlier than February 3, 2019.

Where to Send All Proposals and Nominations

Proponents must submit stockholder proposals and recommendations for nomination as a director in writing to the Secretary, American Axle & Manufacturing Holdings, Inc.,One Dauch Drive, Detroit, Michigan 48211-1198.

The Secretary will forward the proposals and recommendations to the Nominating/Corporate Governance Committee for consideration.



Table of Contents	Additional Information

Cost 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 ~~$11,000~~$20,000, plus ~~reimbursement of certain out-of-pocket~~reasonable and customary expenses. Georgeson may be contacted at ~~(888) 216-0459.~~(866) 413-5899. In addition, our officers and ~~certain~~ other employees may solicit proxies personally or by telephone ~~fax~~ or e-mail. They will receive no special compensation for these services.

~~Stockholder Proposals for 2017 Annual Meeting~~

~~Under SEC rules, stockholder proposals for~~We do not know of any other matters that will be considered at the ~~2017~~ annual meeting. If any other appropriate business should properly come before the meeting, ~~of stockholders must be received by~~ the ~~Secretary of AAM at One Dauch Drive, Detroit, MI 48211-1198, on or before November 20, 2016 in order to be eligible for inclusion~~individuals named in the ~~Company’s 2017~~accompanying proxy ~~materials. In addition, AAM’s bylaws require stockholders intending~~card will have discretionary authority to ~~present any matter for consideration at~~vote according to their best judgment.

For the ~~2017 annual meeting~~Board of ~~stockholders, other than through inclusion in our proxy materials, to notify AAM’s~~Directors,

David E. Barnes

Vice President, General Counsel & Secretary ~~in writing at the above address on or before February 23, 2017, but no earlier than February 3, 2017.~~

~~Obtaining a copy of 2015 Form 10-K~~Detroit, Michigan

March 22, 2018



Table of Contents	Appendix A - Omnibus Incentive Plan

Appendix

Appendix A

American Axle & Manufacturing Holdings, Inc.

2018 Omnibus Incentive Plan

ARTICLE 1. ESTABLISHMENT, PURPOSE AND DURATION

~~AAM will furnish to stockholders without charge a copy of our annual report on Form 10-K for the year ended December 31, 2015. Requests should be directed to~~1.1 Establishment. American Axle & Manufacturing Holdings, Inc., ~~Investor Relations Department, One Dauch Drive, Detroit, MI 48211-1198,~~a Delaware corporation, establishes an incentive compensation plan to be known as the Amended and Restated American Axle & Manufacturing Holdings, Inc. 2018 Omnibus Incentive Plan, as set forth in this document. This Plan permits the grant of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Shares, Performance Units, Cash-Based Awards and Other Stock-Based Awards. This Plan shall become effective on May 3, 2018 (the “Effective Date”) and shall remain in effect as provided in Section 1.3.

1.2 Purpose of this Plan. The purpose of this Plan is to foster and promote the long-term financial success of the Company and materially increase shareholder value by (a) motivating superior performance by means of performance-related incentives, (b) encouraging and providing for the acquisition of an ownership interest in the Company by Employees as well as Non-Employee Directors, and (c) enabling the Company to attract and retain qualified and competent persons to serve as members of an outstanding management team and the Board of Directors of the Company upon whose judgment, interest, and performance are required for the successful and sustained operations of the Company.

1.3 Duration of this Plan. Unless sooner terminated as provided herein, this Plan shall terminate ten (10) years from the Effective Date. After this Plan is terminated, no Awards may be granted but Awards previously granted shall remain outstanding in accordance with their applicable terms and conditions and this Plan’s terms and conditions.

ARTICLE 2. DEFINITIONS

Whenever used in this Plan, the following terms shall have the meanings set forth below, and when the meaning is intended, the initial letter of the word shall be capitalized.

2.1 “Annual Award Limit” or “Annual Award Limits” have the meaning set forth in Section 4.3.

2.2 “Award” means, individually or collectively, a grant under this Plan of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Shares, Performance Units, Cash-Based Awards or Other Stock-Based Awards, in each case subject to the terms of this Plan.

2.3 “Award Agreement”means either (i) a written or electronic agreement entered into by the Company and a Participant setting forth the terms and provisions applicable to an Award granted under this Plan, including any amendment or modification thereof, or (ii) a written or electronic statement issued by the Company to a Participant describing the terms and provisions of such Award, including any amendment or modification thereof. The Committee may provide for the use of electronic, Internet or other non-paper Award Agreements, and the use of electronic, Internet or other non-paper means for the acceptance thereof and actions thereunder by a Participant. The Committee shall have the exclusive authority to determine the terms of an Award Agreement evidencing an Award granted under this Plan, subject to the provisions herein. The terms of an Award Agreement need not be uniform among all Participants or among similar types of Awards.

2.4 “Beneficial Owner” or “Beneficial Ownership” shall have the meaning ascribed to such term in Rule 13d-3 of the General Rules and Regulations under the Exchange Act.

2.5 “Board” or“Board of Directors” means the Board of Directors of the Company.

2.6 “Cash-Based Award” means an Award, denominated in cash, granted to a Participant as described in Article 12.

2.7 “Code” means the U.S. Internal Revenue Code of 1986, as amended from time to time and the applicable regulations and guidance promulgated thereunder and any successor or similar provision.



Table of Contents	Appendix A - Omnibus Incentive Plan

2.8 “Committee” means the Compensation Committee of the Board or a subcommittee thereof or any other committee designated by the Board to administer this Plan. The members of the Committee shall be appointed from time to time by and shall serve at the discretion of the Board. If the Committee does not exist or cannot function for any reason, the Board may take any action under this Plan that would otherwise be the responsibility of the Committee in which case references to the “Committee” shall be deemed references to the Board. The Committee shall be constituted to comply with the requirements of Rule 16(b) of the Exchange Act and any applicable listing or governance requirements of any securities exchange on which the Shares are listed; provided, however, that, if any Committee member is found not to have met the qualification requirements of Section 16(b) of the Exchange Act, any actions taken or Awards granted by the Committee shall not be invalidated by such failure to so qualify.

2.9 “Change in Control” means any one of the following:

(a) any person or entity, including a “group” as defined in Section 13(d)(3) of the Exchange Act other than the Company or a wholly owned Subsidiary thereof or any employee benefit plan of the Company or any of its Subsidiaries, becomes the beneficial owner of the Company’s securities having 30% or more of the combined voting power of the then outstanding securities of the Company that may be cast for the election of Directors of the Company (other than as a result of an issuance of securities initiated by the Company in the ordinary course of business);

(b) as the result of, or in connection with, any cash tender or exchange offer, merger or other business combination, sale of assets or contested election, or any combination of the foregoing transactions, less than a majority of the combined voting power of the then outstanding securities of the Company or any successor corporation or entity entitled to vote generally in the election of the Directors of the Company or such other corporation or entity after such transaction are held in the aggregate by the holders of the Company’s securities entitled to vote generally in the election of Directors of the Company immediately prior to such transaction;

(c) during any period of two consecutive years, individuals who at the beginning of any such period constitute the Board cease for any reason to constitute at least a majority thereof, unless the election, or the nomination for election by the Company’s stockholders, of each Director of the Company first elected during such period was approved by a vote of at least two-thirds of the Directors of the Company then still in office who were Directors of the Company at the beginning of any such period; or

(d) the stockholders of the Company approve a plan of complete liquidation of the Company or the sale or disposition by the Company of all or substantially all of the Company’s assets, other than a liquidation of the Company into a wholly owned subsidiary.

2.10 “Common Stock” means the common stock of the Company, par value $0.01 per share, or such other class of share or other securities as may be applicable under Section 4.4 of this Plan.

2.11 “Company” means American Axle & Manufacturing Holdings, Inc., and any successor thereto as provided in Section 23.23.

2.12 “Director” means any individual who is a member of the Board of Directors of the Company.

2.13 “Disability” meanseither of the following: (a) inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months; or (b) by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than 3 months under an accident and health plan covering Employees.

2.14 “Dividend Equivalent” has the meaning set forth in Article 18.

2.15 “Effective Date” has the meaning set forth in Section 1.1.

2.16 “Employee” means any individual performing services for the Company or a Subsidiary and designated as an employee of the Company or the Subsidiary on its payroll records. An Employee shall not include any individual during any period he or she is classified or treated by the Company or Subsidiary as an independent contractor, a consultant or an employee of an employment, consulting or temporary agency or any other entity other than the Company or Subsidiary, without regard to whether such individual is subsequently determined to have been, or is subsequently retroactively reclassified, as a common-law employee of the Company or Subsidiary during such period. An individual shall not cease to be an Employee in the case of (i) any leave of absence approved by the Company or (ii) transfers between locations of the



Table of Contents	Appendix A - Omnibus Incentive Plan

Company or between the Company or any Subsidiaries. For purposes of Incentive Stock Options, no such leave may exceed 90 days, unless reemployment upon expiration of such leave is guaranteed by statute or contract. If reemployment upon expiration of a leave of absence approved by the Company is not so guaranteed, then three months following the 91st day of such leave, any Incentive Stock Option held by a Participant shall cease to be treated as an Incentive Stock Option and shall be treated for tax purposes as a Nonqualified Stock Option. Neither service as a Director nor payment of a director’s fee by the Company shall be sufficient to constitute “employment” by the Company.

2.17 “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, or any successor act thereto and the regulations and guidance promulgated thereunder.

2.18 “Fair Market Value”or “FMV” means, with respect to a Share, the fair market value thereof as of the relevant date of determination, as determined in accordance with the valuation methodology approved by the Committee (based on objective criteria) from time to time. In the absence of any alternative valuation methodology approved by the Committee, Fair Market Value shall be deemed to be equal to the closing selling price of a Share on the trading day immediately preceding the date on which such valuation is made on the New York Stock Exchange (“NYSE”), or such established national securities exchange as may be designated by the Committee or, in the event that the Common Stock is not listed for trading on the NYSE or such other national securities exchange as may be designated by the Committee but is quoted on an automated system, in any such case on the valuation date (or, if there were no sales on the valuation date, the average of the highest and lowest quoted selling prices as reported on said composite tape or automated system for the most recent day during which a sale occurred). The definition of FMV may differ depending on whether FMV is in reference to the grant, exercise, vesting, settlement or payout of an Award.

2.19 “Grant Date” means the date an Award is granted to a Participant pursuant to this Plan.

2.20 “Grant Price” means the price established at the time of grant of an SAR pursuant to Article 7.

2.21 “Incentive Stock Option”or “ISO” means an Award granted pursuant to Article 6 that is designated as an Incentive Stock Option and that is intended to meet the requirements of Code Section 422 or any successor provision.

2.22 “Insider” shall mean an individual who is, on the relevant date, an officer (as defined in Rule 16a-1(f) of the Exchange Act (or any successor provision)) or Director of the Company, or a more than 10% Beneficial Owner of any class of the Company’s equity securities that is registered pursuant to Section 12 of the Exchange Act, as determined by the Board in accordance with Section 16 of the Exchange Act.

2.23 “Non-Employee Director” means a Director who is not an Employee.

2.24 “Nonqualified Stock Option”or “NQSO” means an Award granted pursuant to Article 6 that is not intended to meet the requirements of Code Section 422, or that otherwise does not meet such requirements.

2.25 “Option” means an Award granted to a Participant pursuant to Article 6, which Award may be an Incentive Stock Option or a Nonqualified Stock Option.

2.26 “Option Price” means the price at which a Share may be purchased by a Participant pursuant to an Option.

2.27 “Other Stock-Based Award” means an equity-based or equity‑related Award not otherwise described by the terms of this Plan that is granted pursuant to Article 12.

2.28 “Participant” means any eligible individual as set forth in Article 5 to whom an Award is granted.

2.29 “Performance Measures” means measures, as described in Article 14, upon which performance goals are based.

2.30 “Performance Period” means the period of time during which performance goals must be met in order to determine the degree of payout and/or vesting with respect to an Award.

2.31 “Performance Share” means an Award granted pursuant to Article 10.

2.32 “Performance Unit” means an Award granted pursuant to Article 11.

2.33 “Period of Restriction” means the period when Restricted Stock or Restricted Stock Units are subject to a substantial risk of forfeiture (based on the passage of time, the achievement of performance goals or upon the occurrence of other events as determined by the Committee, in its discretion) as provided in Articles 8 and 9.



Table of Contents	Appendix A - Omnibus Incentive Plan

2.34 “Person”shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d) thereof.

2.35 “Plan” means the American Axle & Manufacturing Holdings, Inc. 2018 Omnibus Incentive Plan, as may be amended from time to time.

2.36 “Restricted Stock” means an Award granted pursuant to Article 8.

2.37 “Restricted Stock Unit” means an Award granted pursuant to Article 9.

2.38 “Retirement” means the Participant’s voluntary resignation at any time (i) after attaining age 65, (ii) after attaining age 55 but prior to age 65 with ten or more years of continuous service with the Company or a Subsidiary or (iii) after attaining age 60 but prior to age 65 with five or more years of continuous service with the Company or a Subsidiary.

2.39 “Share” means a share of Common Stock.

2.40 “Stock Appreciation Right” or “SAR”means an Award granted pursuant to Article 7.

2.41 “Subsidiary” means (i) a corporation or other entity (domestic or foreign) with respect to which the Company, directly or indirectly, has the power, whether through the ownership of voting securities, by contract or otherwise, to elect at least a majority of the members of such corporation’s board of directors or analogous governing body, or (ii) any other corporation or entity in which the Company, directly or indirectly, has an equity or similar interest and which the Committee designates as a Subsidiary for purposes of this Plan.

2.42 “Successor”has the meaning set forth in Section 23.23.

2.43 “Termination of Employment” means the termination of the Participant’s employment with the Company and the Subsidiaries, regardless of the reason for the termination of employment.

2.44 “Termination of Directorship” means the time when a Non‑Employee Director ceases to be a Non-Employee Director for any reason, including, but not by way of limitation, a termination by resignation, failure to be elected or death.

2.45 “Third-Party Service Provider” means any consultant, agent, advisor or independent contractor who renders bona fide services to the Company or a Subsidiary that (a) are not in connection with the offer and sale of the Company’s securities in a capital raising transaction, (b) do not directly or indirectly promote or maintain a market for the Company’s securities, and (c) are provided by a natural person who has contracted directly with the Company or Subsidiary to render such services.

ARTICLE 3. ADMINISTRATION

3.1 General. The Committee shall be responsible for administering this Plan, subject to this Article 3 and the other provisions of this Plan. The Committee may employ attorneys, consultants, accountants, agents and other individuals, any of whom may be an Employee, and the Committee, the Company, and its officers and Directors shall be entitled to rely upon the advice, opinions or valuations of any such individuals. No member of the Committee shall be liable for any action taken or not taken in reliance upon any such information and/or advice. All actions taken and all interpretations and determinations made by the Committee shall be made in its sole discretion and shall be final, binding and conclusive upon the Participants, the Company or Subsidiary, and all other interested individuals.

3.2 Authority of the Committee. Subject to any express limitations set forth in this Plan, the Committee shall have full and exclusive discretionary power and authority to take such actions as it deems necessary and advisable with respect to the administration, interpretation and implementation of this Plan including, but not limited to, the following:

(a) To determine from time to time which of the persons eligible under the Plan shall be granted Awards, when and how each Award shall be granted, what type or combination of types of Awards shall be granted, the provisions of each Award granted (which need not be identical), including the time or times when a person shall be permitted to receive Shares pursuant to an Award and the number of Shares subject to an Award;

(b) To construe and interpret this Plan and Awards granted under it, and to establish, amend, and revoke rules and regulations for its administration. The Committee, in the exercise of this power, may correct any defect, omission or inconsistency in this Plan or in an Award Agreement, in a manner and to the extent it shall deem necessary or expedient to make this Plan fully effective;



Table of Contents	Appendix A - Omnibus Incentive Plan

(d) To determine Fair Market Value of a Share in accordance with Section 2.18 of this Plan;

(e) To amend this Plan, an Award or any Award Agreement after the date of grant subject to the terms of this Plan;

(f) To adopt sub-plans and/or special provisions applicable to stock awards regulated by the laws of a jurisdiction other than and outside of the United States. Such sub-plans and/or special provisions may take precedence over other provisions of this Plan, but unless otherwise superseded by the terms of such sub-plans and/or special provisions, the provisions of this Plan shall govern;

(g) To authorize any person to execute on behalf of the Company any instrument required to effect the grant of an Award previously granted by the Board;

(h) To determine whether Awards will be settled in Shares, cash or in any combination thereof;

(i) To determine whether Awards will provide for Dividend Equivalents;

(j) To establish a program whereby Participants designated by the Committee may elect to receive Awards under this Plan in lieu of compensation otherwise payable in cash; and

(k) To impose such restrictions, conditions or limitations as it determines appropriate as to the timing and manner of any resales by a Participant or other subsequent transfers by a Participant of any Shares, including, without limitation, restrictions under an insider trading policy and restrictions as to the use of a specified brokerage firm for such resales or other transfers.

3.3 Delegation. To the extent not prohibited by applicable laws, rules and regulations, the Committee may delegate to (i) one or more of its members, (ii) one or more officers of the Company or any Subsidiary or (iii) one or more agents or advisors such administrative duties or powers as it may deem appropriate or advisable under such conditions and limitations as the Committee may set at the time of such delegation or thereafter. The Committee or any individuals to whom it has delegated duties or powers as aforesaid may employ one or more individuals to render advice with respect to any responsibility the Committee or such individuals may have under this Plan. Notwithstanding the foregoing, the Committee may not delegate its authority (i) to make Awards to Employees (A) who are Insiders or (B) who are officers of the Company who are delegated authority by the Committee hereunder, or (ii) pursuant to Section 21 of this Plan. For purposes of this Plan, reference to the Committee shall be deemed to refer to any subcommittee, subcommittees, or other persons or groups of persons to whom the Committee delegates authority pursuant to this Section 3.3.

ARTICLE 4. SHARES SUBJECT TO THIS PLAN AND MAXIMUM AWARDS

4.1 Number of Shares Authorized and Available for Awards. Subject to adjustment as provided under the Plan, the maximum number of Shares that are available for Awards under this Plan shall be 3,600,000 Shares plus (i) any reserved Shares not issued or subject to outstanding grants under the Amended and Restated 2012 Omnibus Incentive Plan (the "Prior Plan") on the Effective Date and (ii) the number of Shares underlying any award granted under the Prior Plan that expires, terminates, or is canceled or forfeited and which the shares related thereto are again available for grant under the terms of the Prior Plan. Such Shares may be authorized and unissued Shares, Shares that have been reacquired by the Company, treasury Shares or any combination of the foregoing, as may be determined from time to time by the Board or by ~~e-mail~~the Committee. Any of the authorized Shares may be used for any type of Award under this Plan, and any or all of the Shares may be allocated to ~~investorrelations@aam.com.~~Incentive Stock Options.

4.2 Share Usage. The ~~2015~~number of Shares remaining available for issuance will be reduced by the number of Shares subject to outstanding Awards and, for Awards that are not denominated by Shares, by the number of Shares actually delivered upon settlement or payment of the Award. For purposes of determining the number of Shares that remain available for issuance under this Plan, the number of Shares related to an Award granted under this Plan that terminates by expiration, forfeiture, cancellation or otherwise without the issuance of the Shares, are settled through the issuance of consideration other than Shares (including cash), shall be available again for grant under this Plan. The following Shares, however, shall not be available again for grant under this Plan;

(a) Shares not issued or delivered as a result of net settlement of an outstanding Option or SAR;

(b) Shares delivered to or withheld by the Company to pay the exercise price of or withholding taxes with respect to an Option or a SAR; and



Table of Contents	Appendix A - Omnibus Incentive Plan

4.3 Annual ~~Report~~Award Limits. Subject to adjustments pursuant to Section 4.4 and, in the case of Non-Employee Directors, Section 16.1:

(a) the maximum number of Shares that may be issued pursuant to Options and SARs granted to any Participant in any calendar year shall be 2,000,000 Shares;

(b) the maximum number of Shares that may be paid to any Participant in any calendar year under an Award of Restricted Stock, Restricted Stock Units, Performance Shares or Other Stock Based Awards shall be 2,000,000 Shares determined as of the date of grant; and

(c) the maximum aggregate amount that may be paid to any Participant in any calendar year under an Award of Performance Units, Cash-Based Awards or any other Award that is payable in cash shall be $6,000,000, determined as of the date of grant.

4.4 Adjustments in Authorized Shares. Adjustment in authorized Shares available for issuance under this Plan or under an outstanding Award and adjustments in Annual Award Limits shall be subject to the following provisions:

(a) In the event of any corporate event or transaction such as a merger, consolidation, reorganization, recapitalization, separation, reclassification, partial or complete liquidation, stock dividend, stock split, reverse stock split, split up, spin-off, distribution of stock or property of the Company, combination of Shares, exchange of Shares, dividend in kind, extraordinary cash dividend, rights offering to purchase Shares at a price that is substantially below FMV or any other similar corporate event or transaction (“Corporate Transactions”), the Committee, in order to preserve, but not increase, Participants’ rights under this Plan, shall substitute or adjust, as applicable, (1) the number and kind of Shares that may be issued under this Plan or under particular forms of Awards, (2) the number and kind of Shares subject to outstanding Awards (including by payment of cash to a Participant), (3) the Option Price or Grant Price applicable to outstanding Awards, and (4) the Annual Award Limits and other value determinations applicable to outstanding Awards. The Committee, in its discretion, shall determine the methodology or manner of making such substitution or adjustment subject to applicable laws, rules and regulations.

(b) In addition to the adjustments permitted under paragraph 4.4(a) above, the Committee, in its sole discretion, may make such other adjustments or modifications in the terms of any Award that it deems appropriate to reflect any Corporate Transaction, including, but not limited to, modifications of performance goals and changes in the length of Performance Periods, subject to the limitations set forth in Section 14.2.

(c) The determination of the Committee as to the foregoing adjustments, if any, shall be conclusive and binding on Participants under this Plan. Unless otherwise determined by the Committee, such adjusted Awards shall be subject to the same restrictions and vesting or settlement schedule to which the underlying Award is subject.

ARTICLE 5. ELIGIBILITY AND PARTICIPATION

5.1 Eligibility to Receive Awards. Individuals eligible to participate in this Plan include all Employees, Directors and Third-Party Service Providers.

5.2 Participation in this Plan. Subject to the provisions of this Plan, the Committee may, from time to time, select from all individuals eligible to participate in this Plan, those individuals to whom Awards shall be granted and shall determine, in its sole discretion, the nature of any and all terms permissible by law and the amount of each Award.

ARTICLE 6. STOCK OPTIONS

6.1 Grant of Options. Options may be granted to Participants in such number, and upon such terms, and at any time and from time to time as shall be determined by the Committee, in its sole discretion. Each grant of an Option shall be evidenced by an Award Agreement which shall specify whether the Option is in the form of a Nonqualified Stock Option or an Incentive Stock Option.

6.2 Option Price. The Option Price for each grant of an Option shall be determined by the Committee in its sole discretion and shall be specified in the Award Agreement evidencing such Option; provided, however, the Option Price must be at least equal to 100% of the FMV of a Share as of the Option’s Grant Date, subject to adjustment as provided for under Section 4.4.



Table of Contents	Appendix A - Omnibus Incentive Plan

6.3 Term of Option. The term of an Option granted to a Participant shall be determined by the Committee, in its sole discretion; provided, however, no Option shall be exercisable later than the tenth anniversary date of its grant. If upon the expiration of the term of an Option (other than an Incentive Stock Option), a Participant is prohibited from trading in the Shares by applicable laws, rules or regulations or the Company’s insider trading plan as in effect from time to time, the term of the Option shall be automatically extended to the 30th day following the expiration of such prohibition; provided, however, that this provision shall not apply if prohibited by applicable laws, rules and regulations in effect from time to time.

6.4 Exercise of Option. An Option shall be exercisable at such times and be subject to such restrictions and conditions as the Committee shall in each instance approve, which terms and restrictions need not be the same for each grant or for each Participant.

6.5 Payment of Option Price. An Option shall be exercised by the delivery of a notice of exercise to the Company or an agent designated by the Company in a form specified or accepted by the Committee, or by complying with any alternative procedures that may be authorized by the Committee, setting forth the number of Shares with respect to which the Option is to be exercised, accompanied by full payment for the Shares. A condition of the issuance of the Shares as to which an Option shall be exercised shall be the payment of the Option Price. The Option Price of any exercised Option shall be payable to the Company in accordance with one of the following methods:

(a) in cash or its equivalent;

(b) by tendering (either by actual delivery or attestation) previously acquired Shares having an aggregate Fair Market Value at the time of exercise equal to the Option Price;

(c) by a cashless (broker-assisted) exercise in accordance with procedures authorized by the Committee from time to time;

(d) through net share settlement or similar procedure involving the withholding of Shares subject to the Option with a value equal to the Option Price;

(e) by any combination of (a), (b), (c) and (d); or

(f) any other method approved or accepted by the Committee in its sole discretion.

Unless otherwise determined by the Committee, all payments under all of the methods indicated above shall be paid in United States dollars or Shares, as applicable.

6.6 Special Rules Regarding ISOs. The terms of any Incentive Stock Option (“ISO”) granted under this Plan shall comply in all respects with the provisions of Code Section 422, or any successor provision thereto, as amended from time to time. Notwithstanding any provision of the Plan to the contrary, an Option granted in the form of an ISO to a Participant shall be subject to the following rules:

(a) Special ISO definitions:

(i) “Parent Corporation” shall mean as of any applicable date a corporation in respect of the Company that is a parent corporation within the meaning of Code Section 424(e).

(ii) “ISO Subsidiary” shall mean as of any applicable date any corporation in respect of the Company that is a subsidiary corporation within the meaning of Code Section 424(f).

(iii) A “10% Owner” is an individual who owns stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or its Parent Corporation or any ISO Subsidiary.

(b) Eligible Employees. An ISO may be granted solely to eligible Employees of the Company, Parent Corporation, or ISO Subsidiary.

(c) Specified as an ISO. An Award Agreement evidencing the grant of an ISO shall specify that such grant is intended to be an ISO.

(d) Option Price. The Option Price for each grant of an ISO shall be determined by the Committee in its sole discretion and shall be specified in the Award Agreement; provided, however, the Option Price must be at least equal 100% of the Fair Market Value of a Share as of the ISO’s Grant Date (in the case of 10% Owners, the Option Price may not be less than 110% of such Fair Market Value), subject to adjustment provided for under Section 4.4.



Table of Contents	Appendix A - Omnibus Incentive Plan

(e) Right to Exercise. Any ISO granted to a Participant shall be exercisable during his or her lifetime solely by such Participant.

(f) Exercise Period. The period during which a Participant may exercise an ISO shall not exceed ten years (five years in the case of a Participant who is a 10% Owner) from the date on which the ISO was granted.

(g) Termination of Employment. In the event a Participant terminates employment due to death or Disability (as defined in Code Section 22(e)(3)), the Participant (or, in the case of death, the person(s) to whom the Option is transferred by will or the laws of descent and distribution) shall have the right to exercise the Participant’s ISO award during the period specified in the applicable Award Agreement solely to the extent the Participant had the right to exercise the ISO on the date of his death or Disability; as applicable, provided, however, that such period may not exceed one year from the date of such termination of employment or if shorter, the remaining term of the ISO. In the event a Participant terminates employment for reasons other than death or Disability, the Participant shall have the right to exercise the Participant’s ISO during the period specified in the applicable Award Agreement solely to the extent the Participant had the right to exercise the ISO on the date of such termination of employment; provided, however, that such period may not exceed three months from the date of such termination of employment or if shorter, the remaining term of the ISO.

(h) Dollar Limitation. To the extent that the aggregate Fair Market Value of (i) the Shares with respect to which Options designated as Incentive Stock Options plus (ii) the shares of stock of the Company, Parent Corporation and any ISO Subsidiary with respect to which other Incentive Stock Options are exercisable for the first time by a holder of such Incentive Stock Options during any calendar year under all plans of the Company and ISO Subsidiary exceeds $100,000, such Options shall be treated as Nonqualified Stock Options. For purposes of the preceding sentence, Options shall be taken into account in the order in which they were granted, and the Fair Market Value of the Shares shall be determined as of the time the Option or other incentive stock option is granted.

(i) Duration of Plan. No ISO may be granted more than ten years after the earlier of (a) adoption of this Plan by the Board and (b) the Effective Date.

(j) Notification of Disqualifying Disposition. If any Participant shall make any disposition of Shares issued pursuant to the exercise of an ISO, such Participant shall notify the Company of such disposition within 30 days thereof. The Company shall use such information to determine whether a disqualifying disposition as described in Code Section 421(b) has occurred.

(k) Transferability. No ISO may be sold, transferred, pledged, assigned or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution; provided, however, that at the discretion of the Committee, an ISO may be transferred to a grantor trust under which Participant making the transfer is the sole beneficiary.

ARTICLE 7. STOCK APPRECIATION RIGHTS

7.1 Grant of SARs. SARs may be granted to Participants in such number, and upon such terms, and at any time and from time to time as shall be determined by the Committee, in its sole discretion. Each grant of SARs shall be evidenced by an Award Agreement.

7.2 Grant Price. The Grant Price for each grant of an SAR shall be determined by the Committee and shall be specified in the Award Agreement evidencing the SAR; provided, however, the Grant Price must be at least equal to 100% of the FMV of a Share as of the Grant Date, subject to adjustment as provided for under Section 4.4.

7.3 Term of SAR. The term of an SAR granted to a Participant shall be determined by the Committee, in its sole discretion; provided, however, no SAR shall be exercisable later than the tenth anniversary date of its grant.

7.4 Exercise of SAR. An SAR shall be exercisable at such times and be subject to such restrictions and conditions as the Committee shall in each instance approve, which terms and restrictions need not be the same for each grant or for each Participant.

7.5 Notice of Exercise. An SAR shall be exercised by the delivery of a notice of exercise to the Company or an agent designated by the Company in a form specified or accepted by the Committee, or by complying with any alternative procedures that may be authorized by the Committee, setting forth the number of Shares with respect to which the SAR is to be exercised.



Table of Contents	Appendix A - Omnibus Incentive Plan

7.6 Settlement of SARs. Upon the exercise of an SAR, pursuant to a notice of exercise properly completed and submitted to the Company in accordance with Section 7.5, a Participant shall be entitled to receive payment from the Company in an amount equal to the product of (a) and (b) below:

(a) The excess of the Fair Market Value of a Share on the date of exercise over the Grant Price.

(b) The number of Shares with respect to which the SAR is exercised.

Payment shall be made in cash, Shares or a combination thereof as specified in the Award Agreement.

ARTICLE 8. RESTRICTED STOCK

8.1 Grant of Restricted Stock. Restricted Stock may be granted to Participants in such number, and upon such terms, and at any time and from time to time as shall be determined by the Committee, in its sole discretion. Each grant of Restricted Stock shall be evidenced by an Award Agreement.

8.2 Nature of Restrictions. Each grant of Restricted Stock shall subject to a Restriction Period that shall lapse upon the satisfaction of such conditions and restrictions as are determined by the Committee in its sole discretion and set forth in an applicable Award Agreement. Such conditions or restrictions may include, without limitation, one or more of the following:

(a) A requirement that a Participant pay a stipulated purchase price for each Share of Restricted Stock;

(b) Restrictions based upon the achievement of specific performance goals;

(d) Time-based restrictions; and/or

(e) Restrictions under applicable laws and restrictions under the requirements of any stock exchange or market on which such Shares are listed or traded.

8.3 Issuance of Shares. To the extent deemed appropriate by the Committee, the Company may retain the certificates representing Shares of Restricted Stock in the Company’s possession until such time as all conditions or restrictions applicable to such Shares have been satisfied or lapse. Shares of Restricted Stock covered by each Restricted Stock grant shall become freely transferable by the Participant after all conditions and restrictions applicable to such Shares have been satisfied or lapsed (including satisfaction of any applicable tax withholding obligations).

8.4 Shareholder Rights. Unless otherwise determined by the Committee and set forth in a Participant’s applicable Award Agreement, to the extent permitted or required by law a Participant holding Shares of Restricted Stock granted hereunder shall be granted full rights as a shareholder (including voting rights) with respect to those Shares during the Period of Restriction.

ARTICLE 9. RESTRICTED STOCK UNITS

9.1 Grant of Restricted Stock Units. Restricted Stock Units may be granted to Participants in such number, and upon such terms, and at any time and from time to time as shall be determined by the Committee, in its sole discretion. A grant of a Restricted Stock Unit or Restricted Stock Units shall not represent the grant of Shares but shall represent a promise to deliver a corresponding number of Shares or the value of each Share based upon the completion of service, performance conditions, or such other terms and conditions as specified in the applicable Award Agreement over the Restriction Period. Each grant of Restricted Stock Units shall be evidenced by an Award Agreement.

9.2 Nature of Restrictions. Each grant of Restricted Stock Units shall be subject to a Restriction Period that shall lapse upon the satisfaction of such conditions and restrictions as are determined by the Committee in its sole discretion and set forth in an applicable Award Agreement. Such conditions or restrictions may include, without limitation, one or more of the following:

(a) A requirement that a Participant pay a stipulated purchase price for each Restricted Stock Unit;

(b) Restrictions based upon the achievement of specific performance goals;

(d) Time-based restrictions; and/or

(e) Restrictions under applicable laws or under the requirements of any stock exchange on which Shares are listed or traded.



Table of Contents	Appendix A - Omnibus Incentive Plan

9.3 Settlement and Payment Restricted Stock Units. Unless otherwise elected by the Participant or otherwise provided for in the Award Agreement, Restricted Stock Units shall be settled upon the date such Restricted Stock Units vest. Such settlement may be made in Shares, cash or a combination thereof, as specified in the Award Agreement.

ARTICLE 10. PERFORMANCE SHARES

10.1 Grant of Performance Shares. Performance Shares may be granted to Participants in such number, and upon such terms and at any time and from time to time as shall be determined by the Committee, in its sole discretion. Each grant of Performance Shares shall be evidenced by an Award Agreement.

10.2 Value of Performance Shares. Each Performance Share shall have an initial value equal to the Fair Market Value of a Share on the Grant Date. The Committee shall set performance goals in its discretion that, depending on the extent to which they are met over the specified Performance Period, shall determine the number of Performance Shares that shall be paid to a Participant.

10.3 Earning of Performance Shares. After the applicable Performance Period has ended, the number of Performance Shares earned by the Participant over the Performance Period shall be determined as a function of the extent to which the applicable corresponding performance goals have been achieved. This determination shall be made solely by the Committee.

10.4 Form ~~10-K~~and Timing of Payment of Performance Shares. The Committee shall pay at the close of the applicable Performance Period, or as soon as practicable thereafter, any earned Performance Shares in the form of cash or in Shares or in a combination thereof, as specified in a Participant’s applicable Award Agreement. Any Shares paid to a Participant under this Section 10.4 may be subject to any restrictions deemed appropriate by the Committee.

ARTICLE 11. PERFORMANCE UNITS

11.1 Grant of Performance Units. Subject to the terms and provisions of this Plan, Performance Units may be granted to a Participant in such number, and upon such terms and at any time and from time to time as shall be determined by the Committee, in its sole discretion. Each grant of Performance Units shall be evidenced by an Award Agreement.

11.2 Value of Performance Units. Each Performance Unit shall have an initial notional value equal to a dollar amount determined by the Committee, in its sole discretion. The Committee shall set performance goals in its discretion that, depending on the extent to which they are met over the specified Performance Period, will determine the number of Performance Units that shall be settled and paid to the Participant.

11.3 Earning of Performance Units. After the applicable Performance Period has ended, the number of Performance Units earned by the Participant over the Performance Period shall be determined as a function of the extent to which the applicable corresponding performance goals have been achieved. This determination shall be made solely by the Committee.

11.4 Form and Timing of Payment of Performance Units. The Committee shall pay at the close of the applicable Performance Period, or as soon as practicable thereafter, any earned Performance Units in the form of cash or in Shares or in a combination thereof, as specified in a Participant’s applicable Award Agreement. Any Shares paid to a Participant under this Section 11.4 may be subject to any restrictions deemed appropriate by the Committee.

ARTICLE 12. OTHER STOCK-BASED AWARDS AND CASH-BASED AWARDS

12.1 Grant of Other Stock-Based Awards and Cash-Based Awards

(a) The Committee may grant Other Stock-Based Awards not otherwise described by the terms of this Plan, including, but not limited to, the grant or offer for sale of unrestricted Shares and the grant of deferred Shares or deferred Share units, in such amounts and subject to such terms and conditions, as the Committee shall determine, in its sole discretion. Such Awards may involve the transfer of actual Shares to Participants, or payment in cash or otherwise of amounts based on the value of Shares.

(b) The Committee, at any time and from time to time, may grant Cash-Based Awards to a Participant in such amounts and upon such terms as the Committee shall determine, in its sole discretion.

12.2 Value of Other Stock-Based Awards and Cash-Based Awards.

(a) Each Other Stock-Based Award shall be expressed in terms of Shares or units based on Shares, as determined by the Committee, in its sole discretion.



Table of Contents	Appendix A - Omnibus Incentive Plan

(b) Each Cash-Based Award shall specify a payment amount or payment range as determined by the Committee, in its sole discretion. If the Committee exercises its discretion to establish performance goals, the value of Cash-Based Awards paid to the Participant will depend on the extent to which such performance goals are met.

12.3 Payment of Other Stock-Based Awards and Cash-Based Awards. Payment, if any, with respect to Cash-Based Awards and Other Stock-Based Award shall be made in accordance with the terms of the applicable Award Agreement, in cash, Shares or a combination of both as determined by the Committee in its sole discretion.

ARTICLE 13. TRANSFERABILITY OF AWARDS AND SHARES

13.1 Transferability of Awards. Except as provided in Section 13.2, during a Participant’s lifetime, Options and SARs shall be exercisable only by the Participant. Awards shall not be transferable other than by will or the laws of descent and distribution or pursuant to a domestic relations order entered into by a court of competent jurisdiction. No Awards shall be subject, in whole or in part, to attachment, execution or levy of any kind. Any purported transfer in violation of this Section 13.1 shall be null and void.

13.2 Committee Action. Notwithstanding Section 13.1, the Committee may, subject to applicable laws, rules and regulations and such terms and conditions as it shall specify, determine that any or all Awards shall be transferable, for no consideration to a Permitted Transferee. Any Award transferred to a Permitted Transferee shall be further transferable only by last will and testament or the laws of descent and distribution or, for no consideration, to another Permitted Transferee of the Participant. “Permitted Transferees” include (i) a Participant’s family member, (ii) one or more trusts established in whole or in part for the benefit of one or more of such family members, (iii) one or more entities which are beneficially owned in whole or in part by one or more such family members, or (iv) a charitable or not-for-profit organization. No Award may be transferred for value without shareholder approval.

13.3 Restrictions on Share Transferability. The Committee may impose such restrictions on any Shares acquired by a Participant under this Plan as it may deem advisable, including, without limitation, minimum holding period requirements, restrictions under applicable federal securities laws, under the requirements of any stock exchange or market upon which such Shares are then listed or traded or under any blue sky or state securities laws applicable to such Shares.

ARTICLE 14. PERFORMANCE MEASURES

14.1 Performance Measures. Any Award to a Participant may be subject to performance goals as determined at the discretion of the Committee, which may include, but are not limited to, any of the following:

(a) Book value or earnings per Share;

(b) Cash flow, free cash flow or operating cash flow;

(d) Expenses/costs;

(e) Gross, net or pre-tax income (aggregate or on a per-share basis);

(f) Net income as a percentage of sales;

(g) Gross or net operating margins or income, including operating income;

(h) Gross or net sales or revenues;

(i) Gross profit or gross margin;

(j) Improvements in capital structure, cost of capital or debt reduction;

(k) Market share or market share penetration;

(l) Growth in managed assets;

(m) Reduction of losses, loss ratios and expense ratios;

(n) Asset turns, inventory turns or fixed asset turns;



Table of Contents	Appendix A - Omnibus Incentive Plan

(o) Operational performance measures;

(p) Profitability ratios (pre or post tax);

(q) Profitability of an identifiable business unit or product;

(r) Return measures (including return on assets, return on equity, return on investment, return on capital, return on invested capital, gross profit return on investment, gross margin return on investment, economic value added or similar metric);

(s) Share price (including growth or appreciation in share price and total shareholder return);

(t) Strategic business objectives (including objective project milestones);

(u) Transactions relating to acquisitions or divestitures; or

(v) Working capital.

Any Performance Measure(s) may, as the Committee in its sole discretion deems appropriate, (i) relate to the performance of the Company or any Subsidiary as a whole or any business unit or division of the Company or any Subsidiary or any combination thereof, (ii) be compared to the performance of a group of comparator companies, or published or special index, (iii) be based on change in the Performance Measure over a specified period of time and such change may be measured based on an arithmetic change over the specified period (e.g., cumulative change or average change), or percentage change over the specified period (e.g., cumulative percentage change, average percentage change or compounded percentage change), (iv) relate to or be compared to one or more other Performance Measures, or (v) any combination of the foregoing. Subject to Section 23.1, the Committee also has the authority to provide for accelerated vesting of any Award based on the achievement of performance goals pursuant to any Performance Measures.

14.2 Evaluation of Performance. The Performance Measures shall, to the extent possible, be determined in accordance with generally accepted accounting principles consistently applied on a business unit, divisional, subsidiary or consolidated basis or any combination thereof. The Committee may provide in any Award that any evaluation of performance may include or exclude the impact, if any, on reported financial results of any events that occurs during a Performance Period including, but not limited to: (a) asset write-downs, (b) litigation or claim judgments or settlements, (c) changes in tax laws, accounting principles or other laws or provisions, (d) reorganization or restructuring programs, (e) acquisitions or divestitures, (f) foreign exchange gains and losses and (g) gains and losses that are treated as unusual or infrequently occurring items within the meaning of the accounting standards of the Financial Accounting Standard Board or such comparable successor term.

14.3 Adjustment of Awards. The Committee shall retain the discretion to adjust any Awards, either on a formula or discretionary basis or any combination, as the Committee determines, in its sole discretion.

ARTICLE 15. TERMINATION OF EMPLOYMENT; TERMINATION OF DIRECTORSHIP AND TERMINATION AS A THIRD-PARTY SERVICE PROVIDER

The Committee shall specify at or after the time of grant of an Award the provisions governing the disposition of an Award in the event of a Participant’s Termination of Employment or Termination of Directorship. Subject to applicable laws, rules and regulations, in connection with a Participant’s termination, as well as Section 23.1, the Committee shall have the discretion to accelerate the vesting, exercisability or settlement of, eliminate the restrictions and conditions applicable to, or extend the post-termination exercise period of an outstanding Award. Such provisions shall be determined by the Committee in its sole discretion and may be specified in the applicable Award Agreement or determined at a subsequent time. The Committee’s decisions need not be uniform among all Award Agreements and Participants and may reflect distinctions based on the reasons for termination. In addition, the Committee shall determine, in its sole discretion, the circumstances constituting a termination as a Third-Party Service Provider and shall set forth those circumstances in each Award Agreement entered into with each Third‑Party Service Provider.

ARTICLE 16. NON-EMPLOYEE DIRECTOR AWARDS

16.1 Awards to Non-Employee Directors. The Board or Committee shall determine and approve all Awards to Non-Employee Directors. The terms and conditions of any grant of any Award to a Non-Employee Director shall be set forth in an Award Agreement. The aggregate maximum Fair Market Value (determined as of the Grant Date) of the Shares with respect to Awards granted under this Plan in any calendar year to any



Table of Contents	Appendix A - Omnibus Incentive Plan

Non-Employee Director when added to retainer fees, meeting fees and any other compensation earned in respect of services as a Non-Employee Director for such a year shall not exceed $1,000,000.

16.2 Awards in Lieu of Fees. The Board or Committee may permit a Non-Employee Director the opportunity to receive an Award in lieu of payment of all or a portion of future director fees (including but not limited to cash retainer fees and meeting fees) or other type of Awards pursuant to such terms and conditions as the Board or Committee may prescribe and set forth in an applicable sub-plan or Award Agreement.

ARTICLE 17. EFFECT OF A CHANGE IN CONTROL

17.1 Change in Control. Subject to Section 23.1,if a Participant has in effect an employment, retention, Change in Control, severance or similar agreement with the Company or any Subsidiary or is subject to a policy or plan that discusses the effect of a Change in Control on a Participant’s Awards, then such agreement, plan or policy shall control. In all other cases, unless provided otherwise in an Award agreement or by the Committee prior to the date of the Change in Control, in the event of a Change in Control:

(a) If a Successor so agrees, some or all outstanding Awards shall be assumed, or replaced with the same type of award with similar terms and conditions, by a Successor in the Change in Control transaction. If applicable, each Award that is assumed by a Successor shall be appropriately adjusted, immediately after such Change in Control, to apply to the number and class of securities that would have been issuable to a Participant upon the consummation of such Change in Control had the Award been exercised, vested or earned immediately prior to such Change in Control, and other appropriate adjustments in the terms and conditions of the Award shall be made. Subject to Section 23.1, upon the termination of a Participant’s employment with a Successor in connection with or within twenty-four (24) months following the Change in Control for any reason other than an involuntary termination by a Successor for cause or a voluntary termination by the Participant without good reason (as cause and good reason (or analogous terms) are defined by an applicable employment agreement or a change in control plan or policy (including, without limitation, the AAM Executive Officer Change in Control Plan) or, if not applicable, the policies generally applicable to employees of a Successor), all of the Participant’s Awards that are in effect as of the date of such termination shall be vested in full or deemed earned in full (assuming the target performance goals provided under such Award were met, if applicable) effective on the date of such termination.

(b) Subject to Section 23.1, to the extent a Successor in the Change in Control transaction does not assume the Awards or issue replacement awards as provided in clause (a), then, unless provided otherwise in an Award agreement or by the Committee, immediately prior to the date of the Change in Control all Awards that are then held by Participants shall be cancelled in exchange for the right to receive the following:

(i) For each Option or SAR, a cash payment equal to the excess of the Change in Control price of the Shares covered by the Option or SAR that is so cancelled over the purchase or grant price of such Shares under the Award;

(ii) For each Share of Restricted Stock and each Restricted Stock Unit, the Change in Control price per Share in cash or such other consideration as the Company or the shareholders of the Company receive in such Change in Control;

(iii) For all Performance Shares and/or Performance Units that are earned but not yet paid, a cash payment equal to the value of the Performance Share and/or Performance Unit;

(iv) For all Performance Shares and Performance Units for which the performance period has not expired, a cash payment equal to the product of (x) and (y) where (x) is the Award the Participant would have earned based on target performance and (y) is a fraction, the numerator of which is the number of calendar months that the Participant was employed by the Company during the performance period (with any partial month counting as a full month for this purpose) and the denominator of which is the number of months in the performance period;

(v) For all other Awards that are earned but not yet paid, a cash payment equal to the value of the other Awards;

(vi) For all other Awards that are not yet earned, a cash payment equal to either the amount that would have been due under such Award(s) if any performance goals (as measured at the time of the Change in Control) were to be achieved at the target level through the end of the performance period or a cash payment based on the value of the Award as of the date of the Change in Control; and

(vii) For all Dividend Equivalents, a cash payment equal to the value of the Dividend Equivalents as of the date of the Change in Control.



Table of Contents	Appendix A - Omnibus Incentive Plan

If the value of an Award is based on the Fair Market Value of a Share, Fair Market Value shall be deemed to mean the per share Change in Control price. The Committee shall determine the per share Change in Control price paid or deemed paid in the Change in Control transaction.

ARTICLE 18. DIVIDENDS AND DIVIDEND EQUIVALENTS

The Committee may provide Participants with the right to receive dividends or payments equivalent to dividends (“Dividend Equivalents”) or interest with respect to an outstanding Award, which payments can either be paid in cash or deemed to have been reinvested in Shares, or a combination thereof, as the Committee shall determine, in each case, subject to all applicable laws, rules and regulations, including, without limitation, Code Section 409A. Dividends or Dividend Equivalents with respect to Awards that vest based on the achievement of Performance Measures shall be accumulated until such Award is earned and vested, and the dividends or Dividend Equivalents shall not be paid if the Performance Measures and time-based vesting restrictions are not satisfied. Dividends or Dividend Equivalents with respect to Awards that are subject to time-based vesting restrictions shall be accumulated until such Awards vest in accordance with their terms, and the dividends or Dividend Equivalents shall not be paid if the time-based vesting restrictions are not satisfied. Notwithstanding the foregoing, no dividends or Dividend Equivalents shall be paid with respect to Options or Stock Appreciation Rights.

ARTICLE 19. BENEFICIARY DESIGNATION

Each Participant under this Plan may, from time to time, name any beneficiary or beneficiaries (who may be named contingently or successively) to whom any benefit under this Plan is to be paid in case of his death before he receives any or all of such benefit. Each such designation shall revoke all prior designations by the same Participant, shall be in a form prescribed by the Committee, and will be effective only when filed by the Participant in writing with the Company during the Participant’s lifetime. In the absence of any such beneficiary designation, benefits remaining unpaid or rights remaining unexercised at the Participant’s death shall be paid to or exercised by the Participant’s executor, administrator or legal representative.

ARTICLE 20. RIGHTS OF PARTICIPANTS

20.1 Employment. Nothing in this Plan or an Award Agreement shall (a) interfere with or limit in any way the right of the Company or any Subsidiary to terminate any Participant’s employment with the Company or any Subsidiary at any time or for any reason not prohibited by law or (b) confer upon any Participant any right to continue his employment or service as a Director or Third-Party Service Provider for any specified period of time. Neither an Award nor any benefits arising under this Plan shall constitute an employment contract with the Company or any Subsidiary and, accordingly, subject to Articles 3 and 21, this Plan and the benefits hereunder may be amended or terminated at any time in the sole and exclusive discretion of the Board without giving rise to any liability on the part of the Company, any Subsidiary, the Committee or the Board.

20.2 Participation. No individual shall have the right to be selected to receive an Award under this Plan, or, having been so selected, to be selected to receive a future Award. The Committee may grant more than one Award to a Participant and may designate an individual as a Participant for overlapping periods of time.

20.3 Rights as a Shareholder. Except as otherwise provided herein, a Participant shall have none of the rights of a shareholder with respect to Shares covered by any Award until the Participant becomes the record holder of such Shares. No adjustment shall be made for dividends or other rights for which the record date is prior to the date on which the Participant becomes the record holder of the Shares.

ARTICLE 21. AMENDMENT AND TERMINATION

21.1 Amendment and Termination of this Plan and Awards. Subject to applicable laws, rules and regulations and Section 21.3 of this Plan, the Board may at any time amend or terminate this Plan or amend or terminate any outstanding Award. Notwithstanding the foregoing, no amendment of this Plan shall be made without shareholder approval if shareholder approval is required pursuant to rules promulgated by any stock exchange or quotation system on which Shares are listed or quoted or by applicable U.S. state corporate laws or regulations, applicable U.S. federal laws or regulations and the applicable laws of any foreign country or jurisdiction where Awards are, or will be, granted under this Plan.

21.2 Adjustment of Awards Upon the Occurrence of Certain Unusual or Nonrecurring Events. Subject to Section 14.4, the Committee may make adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring events (including, without limitation, the events described in Section 4.4) affecting the Company or the financial statements of the Company or of changes in applicable laws, regulations, or accounting principles, whenever the Committee determines that such



Table of Contents	Appendix A - Omnibus Incentive Plan

adjustments are appropriate in order to prevent unintended dilution or enlargement of the benefits or potential benefits intended to be made available under this Plan. The determination of the Committee as to the foregoing adjustments, if any, shall be conclusive and binding on ~~our~~Participants under this Plan. By accepting an Award under this Plan, a Participant agrees to any adjustment to the Award made pursuant to this Section 21.2 without further consideration or action.

21.3 Awards Previously Granted. Notwithstanding any other provision of this Plan to the contrary, other than Sections 21.2, 21.4 and 23.15, no termination or amendment of this Plan or an Award Agreement shall adversely affect in any material way any Award previously granted under this Plan, without the written consent of the Participant holding such Award.

21.4 Amendment to Conform to Law. Notwithstanding any other provision of this Plan to the contrary, the Committee shall have the broad authority to amend this Plan, an Award or an Award Agreement, to take effect retroactively or otherwise, as deemed necessary or advisable in order to comply with, take into account changes in, or interpretations of, applicable tax laws, securities laws, employment laws, accounting rules and other applicable laws, rules, rulings and regulations promulgated thereunder. By accepting an Award under this Plan, a Participant agrees to any amendment made pursuant to this Section 21.4 to this Plan and any Award without further consideration or action.

21.5 Repricing of Options and Stock Appreciation Rights. Except in connection with a corporate transaction involving the Company (including, without limitation, any stock dividend, stock split, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination, or exchange of Shares), the terms of outstanding Awards may not be amended, without stockholder approval, to reduce the exercise price of outstanding Options or Stock Appreciation Rights, or to cancel outstanding Options or Stock Appreciation Rights in exchange for cash, other Awards, or Options or Stock Appreciation Rights with an exercise price that is less than the exercise price of the original Options or Stock Appreciation Rights.

ARTICLE 22. TAX WITHHOLDING

22.1 Tax Withholding. The Company may require any individual entitled to receive a payment of an Award to remit to the Company prior to payment, an amount sufficient to satisfy any applicable federal, state, local and foreign tax withholding requirements. The Company shall also have the right to deduct from all cash payments made to a Participant (whether or not such payment is made in connection with an Award) any applicable taxes required to be withheld with respect to such Award.

22.2 Share Withholding. With respect to withholding required upon the exercise of Options or SARs, upon the lapse of restrictions on Restricted Stock, upon the settlement of Restricted Stock Units, or upon the achievement of performance goals related to Performance Shares, or any other taxable event arising as a result of an Award granted hereunder (collectively and individually referred to as a “Share Payment”), the Committee may permit or require a Participant to satisfy the withholding requirement, in whole or in part, by having the Company withhold Shares from a Share Payment (or repurchase Shares that were previously issued) having a Fair Market Value on the date the withholding is to be determined equal to the minimum statutory withholding requirement or such other rate as will not result in any adverse accounting consequences, as determined by the Company in its sole discretion.

ARTICLE 23. GENERAL PROVISIONS

23.1 Minimum Vesting. All Awards shall be subject to a minimum time-based vesting restriction or Performance Period, as applicable, of not less than one year; provided, however, the requirements set forth in this sentence shall not apply (i) to acceleration in the event of a Termination of Employment or Termination of Directorship on or following a Change in Control, or due to Retirement, death or Disability, (ii) to substitute Awards subject to time-based vesting restrictions no less than the restrictions of the Awards being replaced, and (iii) Awards involving an aggregate number of Shares not in excess of 5% of the total shares authorized for issuance under this Plan.

23.2 Forfeiture Events. The Committee may specify in an Award Agreement that the Participant’s rights, payments and benefits with respect to an Award shall be subject to reduction, cancellation, forfeiture or recoupment upon the occurrence of certain specified events as determined by the Committee in its sole discretion.

23.3 Legend. All certificates for Shares delivered under this Plan shall be subject to such stock-transfer orders and other restrictions as the Committee may deem advisable under the rules, regulations, and other requirements of the Securities and Exchange Commission, any exchange upon which the Shares are then



Table of Contents	Appendix A - Omnibus Incentive Plan

listed, and any applicable securities law, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions.

23.4 Gender and Number. Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine, the plural shall include the singular, and the singular shall include the plural.

23.5 Severability. In the event any provision of this Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of this Plan, and this Plan shall be construed and enforced as if the illegal or invalid provision had not been included.

23.6 Requirements of Law. The granting of Awards and the issuance of Shares under this Plan shall be subject to all applicable laws, rules and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.

23.7 Delivery of Title. The Company shall have no obligation to issue or deliver evidence of title for Shares issued under this Plan prior to:

(a) Obtaining any approvals from governmental agencies that the Company determines are necessary or advisable; and

(b) Completion of any registration or other qualification of the Shares under any applicable national, state or foreign law or ruling of any governmental body that the Company determines to be necessary or advisable.

23.8 Inability to Obtain Authority. The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained.

23.9 Investment Representations. The Committee may require any individual receiving Shares pursuant to an Award under this Plan to represent and warrant in writing that the individual is acquiring the Shares for investment and without any present intention to sell or distribute such Shares.

23.10 Employees Based Outside of the United States. Notwithstanding any provision of this Plan to the contrary, subject to Section 23.1, in order to comply with the laws in other countries in which the Company or any Subsidiaries operate or have Employees, Directors or Third-Party Service Providers, the Committee, in its sole discretion, shall have the power and authority to:

(a) Determine which Subsidiaries shall be covered by this Plan;

(b) Determine which Employees, Directors or Third-Party Service Providers outside the United States are eligible to participate in this Plan;

(c) Modify the terms and conditions of any Award granted to Employees, Directors or Third-Party Service Providers outside the United States to comply with applicable foreign laws;

(d) Establish sub-plans and modify exercise procedures and other terms and procedures, to the extent such actions may be necessary or advisable. Any sub-plans and modifications to Plan terms and procedures established under this Section 23.10 by the Committee shall be attached to this Plan document as appendices; and

(e) Take any action, before or after an Award is made, that it deems advisable to obtain approval or comply with any necessary local government regulatory exemptions or approvals.

Notwithstanding the above, the Committee may not take any actions hereunder, and no Awards shall be granted, that would violate applicable law.

23.11 Uncertificated Shares. To the extent that this Plan provides for issuance of certificates to reflect the transfer of Shares, the transfer of such Shares may be affected on a noncertificated basis, to the extent not prohibited by applicable law or the rules of any stock exchange.

23.12 Unfunded Plan. Participants shall have no right, title or interest whatsoever in or to any investments that the Company or any Subsidiaries may make to aid it in meeting its obligations under this Plan. Nothing contained in this Plan, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind, or a fiduciary relationship between the Company and any Participant, beneficiary, legal representative or any other individual. To the extent that any individual acquires a right to



Table of Contents	Appendix A - Omnibus Incentive Plan

receive payments from the Company or any Subsidiary under this Plan, such right shall be no greater than the right of an unsecured general creditor of the Company or the Subsidiary, as the case may be. All payments to be made hereunder shall be paid from the general funds of the Company, or the Subsidiary, as the case may be, and no special or separate fund shall be established, and no segregation of assets shall be made to assure payment of such amounts except as expressly set forth in this Plan.

23.13 No Fractional Shares. No fractional Shares shall be issued or delivered pursuant to this Plan or any Award. The Committee shall determine whether cash, Awards or other property shall be issued or paid in lieu of fractional Shares or whether such fractional Shares or any rights thereto shall be forfeited or otherwise eliminated.

23.14 Retirement and Welfare Plans. Neither Awards made under this Plan nor Shares or cash paid pursuant to such Awards may be included as “compensation” for purposes of computing the benefits payable to any Participant under the Company’s or any Subsidiary’s retirement plans (both qualified and nonqualified) or welfare benefit plans unless such other plan expressly provides that such compensation shall be taken into account in computing a Participant’s benefit.

23.15 Deferrals.

(a) Notwithstanding any contrary provision in this Plan or an Award Agreement, if any provision of this Plan or an Award Agreement contravenes any regulations or guidance promulgated under Code Section 409A or would cause an Award to be subject to additional taxes, accelerated taxation, interest and/or penalties under Code Section 409A, such provision of this Plan or Award Agreement may be modified by the Committee without consent of the Participant in any manner the Committee deems reasonable or necessary. In making such modifications the Committee shall attempt, but shall not be obligated, to maintain, to the maximum extent practicable, the original intent of the applicable provision without contravening the provisions of Code Section 409A. Moreover, any discretionary authority that the Committee may have pursuant to this Plan shall not be applicable to an Award that is subject to Code Section 409A to the extent such discretionary authority would contravene Code Section 409A or the guidance promulgated thereunder.

(b) If a Participant is a “specified employee” as defined under Code Section 409A and the Participant’s Award is to be settled on account of the Participant’s separation from service (for reasons other than death) and such Award constitutes “deferred compensation” as defined under Code Section 409A, then any portion of the Participant’s Award that would otherwise be settled during the six-month period commencing on the Participant’s separation from service shall be settled as soon as practicable following the conclusion of the six-month period (or following the Participant’s death if it occurs during such six-month period).

(c) In accordance with the procedures authorized by, and subject to the approval of, the Committee, Participants may be given the opportunity to defer the payment or settlement of an Award to one or more dates selected by the Participant; provided, however, that the terms of any deferrals must comply with all applicable laws, rules and regulations, including, without limitation, Code Section 409A. No deferral opportunity shall exist with respect to an Award unless explicitly permitted by the Committee on or after the time of grant.

23.16 Nonexclusivity of this Plan. The adoption of this Plan shall not be construed as creating any limitations on the power of the Board or Committee to adopt such other compensation arrangements as it may deem desirable for any Participant.

23.17 No Constraint on Corporate Action. Nothing in this Plan shall be construed to: (i) limit, impair, or otherwise affect the Company’s or a Subsidiary’s right or power to make adjustments, reclassifications, reorganizations or changes of its capital or business structure, or to merge or consolidate, or dissolve, liquidate, sell or transfer all or any part of its business or assets; or, (ii) limit the right or power of the Company or a Subsidiary to take any action that such entity deems to be necessary or appropriate. The proceeds received by the Company from the sale of Shares pursuant to Awards will be used for general corporate purposes.

23.18 Conflicts. In the event of any conflict or inconsistency between the Plan and any Award Agreement, this Plan shall govern and the Award Agreement shall be interpreted to minimize or eliminate any such inconsistency.

23.19 Recoupment. Notwithstanding anything in this Plan to the contrary, all Awards granted under this Plan and any payments made under this Plan shall be subject to claw-back or recoupment as permitted or mandated by applicable law, rules, regulations or Company policy as enacted, adopted or modified from time to time. For the avoidance of doubt, this provision shall apply to any gains realized upon exercise or settlement of an Award.



Table of Contents	Appendix A - Omnibus Incentive Plan

23.20 Delivery and Execution of Electronic Documents. To the extent permitted by applicable law, the Company may (i) deliver by email or other electronic means (including posting on a website maintained by the Company or by a third party under contract with the Company) all documents relating to this Plan or any Award thereunder (including without limitation, prospectuses and other securities requirements) and all other documents that the Company is required to deliver to its security holders (including without limitation, annual reports and proxy statements) and (ii) permit Participants to electronically execute applicable Plan documents (including, but not limited to, Award Agreements) in a manner prescribed to the Committee.

23.21 No Representations or Warranties Regarding Tax Effect. Notwithstanding any provision of this Plan to the contrary, the Company, Subsidiaries, the Board and the Committee neither represent nor warrant the tax treatment under any federal, state, local or foreign laws and regulations thereunder (individually and collectively referred to as the “Tax Laws”) of any Award granted or any amounts paid to any Participant under this Plan including, but not limited to, when and to what extent such Awards or amounts may be subject to tax, penalties and interest under the Tax Laws.

23.22 Indemnification. Subject to applicable laws, rules and regulations and the Company’s Certificate of Incorporation as it may be amended from time to time, each individual who is or shall have been a member of the Board, or a Committee appointed by the Board, or an officer of the Company to whom authority was delegated in accordance with Article 3, shall be indemnified and held harmless by the Company against and from (i) any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him or her in connection with or resulting from any claim, action, suit or proceeding to which he or she may be a party or in which he or she may be involved by reason of any good faith action taken or failure to act under this Plan, (ii) any and all amounts paid by him or her in settlement thereof, with the Company’s approval, or paid by him or her in satisfaction of any judgment in any such action, suit, or proceeding against him or her, provided he or she shall give the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his/her own behalf. Notwithstanding the foregoing, no individual shall be entitled to indemnification if such loss, cost, liability or expense is a result of his/her own willful misconduct. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such individuals may be entitled under the Company’s Articles of Incorporation or By-laws, as a matter of law or otherwise, or any power that the Company may have to indemnify them or hold them harmless.

23.23 Successors~~http://investor.aam.com.~~. Subject to Article 17, all obligations of the Company under this Plan with respect to Awards granted hereunder shall be binding on any successor to the Company (each, a “Successor”), whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.

5323.24 Governing Law. The Plan and each Award Agreement shall be governed by the laws of the State of Delaware excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Plan to the substantive law of another jurisdiction.




		Electronic Voting Instructions Available 24 hours a day, 7 days a week! Instead of mailing your proxy, you may choose one of the 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 May ~~5, 2016.~~3, 2018.
			Vote by Internet • Go to www.envisionreports.com/axl • Or scan the QR code with your smartphone • Follow the steps outlined on the secure website
		Vote by telephone • Call toll free 1-800-652-VOTE (8683) within the USA, US territories & Canada on a touch tone telephone • Follow the instructions provided by the recorded message
Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas.	x

q IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ~~ENVELOPE.~~ENVELOPEq

A Proposals —
The Board of Directors recommends a vote FOR all nominees listed in Proposal 1, FOR Proposal 2 and FOR Proposal 3.
1 Election of Directors: For Withhold For Withhold +

01 - Elizabeth A. Chappell

o

o

02 - John F. Smith

o

o

For Against Abstain For Against Abstain
2 Approval, on an advisory basis, of the compensation of the Company's named executive officers.

o

o

o
3 Ratification of the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2016.

o

o
4 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.

Proposals —

The Board of Directors recommends a vote FOR all nominees listed in Proposal 1, FOR Proposal 2, FOR Proposal 3, and FOR Proposal 4.

Election of Directors:

For

Against

Abstain

For

Against

Abstain

For

Against

Abstain

01 - David C. Dauch

02 - William L. Kozyra

03 - Peter D. Lyons

For

Against

Abstain

For

Against

Abstain

Approval on an advisory basis, of the compensation of the Company's named executive officers.

Approval of the American Axle & Manufacturing Holdings, Inc. 2018 Omnibus Incentive Plan

1 Year

2 Years

3 Years

Abstain

Ratification of appointment of Deloitte & Touche LLP as the Company's independent registered public accounting firm for the year ending December 31, 2018.

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 below.		Meeting Attendance
		Mark box to the right if you plan to attend the Annual Meeting.	åŒ



C	Authorized Signatures — This section must be completed for your vote to be counted. — 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.
		/ /



å o	Preliminary Proxy Statement
å o	Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
ý	Definitive Proxy Statement
å o	Definitive Additional Materials
å o	Soliciting Material Pursuant to §240.14a-12
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
ý	No fee required.
å o	Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
	1	Title of each class of securities to which transaction applies:
	2	Aggregate number of securities to which transaction applies:
	3	Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
	4	Proposed maximum aggregate value of transaction:
	5	Total fee paid:
å o	Fee paid previously with preliminary materials.
å o	Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
	1	Amount Previously Paid:
	2	Form, Schedule or Registration Statement No.:
	3	Filing Party:
	4	Date Filed:



Meeting Information			Voting Information

Time and ~~Place~~	Date	8:00 a.m., local time, on Thursday, May ~~5, 2016~~3, 2018		Please vote your shares as soon as possible, even if you plan to attend the annual meeting.

Attend in Person	AAM World Headquarters Auditorium		Your broker will not be able to vote your shares on the election of directors and most of the other matters presented at the meeting unless you give your broker specific instructions to do so. We strongly encourage you to vote.
	One Dauch Drive
	Detroit, MI 48211
		~~AAM World Headquarters Auditorium, One Dauch Drive, Detroit, Michigan~~
Record Date	March 6, 2018		You may vote via the internet, by telephone, or by mail

	You may vote if you owned shares on the record date.		See "Voting and Meeting Information" beginning on page XX of this proxy statement for more information.



Voting Matters and Board Recommendations:		Votes Required	Board Vote Recommendation	More Information

Proposal 1	Election of three members of the Board of Directors to serve until the Annual Meeting of Stockholders in 2021	Majority of votes cast	FOR each nominee	Page 13
	Each nominee brings a strong and unique background and set of skills to the Board and has demonstrated sound judgment and integrity.
Proposal 2	Advisory vote on named executive officer compensation	Majority of votes cast	FOR	Page 30
	Our shareholder-approved incentive plan is designed to motivate superior performance by means of performance-related incentives that promote long-term financial success and shareholder value.
Proposal 3	Approval of 2018 Omnibus Incentive Plan	Majority of votes cast	FOR	Page 69
	AAM's executive compensation program is market-based, performance driven and aligns with stockholders' interests.
Proposal 4	Ratification of the appointment of Deloitte & Touche LLP as independent public accounting firm for the year ending December 31, ~~2016; and~~ ~~(4) Attend to other business properly presented at the meeting.~~ 2018	Majority of votes cast	FOR	Page 76

~~Record Date~~All independence standards have been met and sound practices are employed to ensure independent financial governance.		~~You may vote if you were an AAM stockholder at the close of business on~~ ~~March 8, 2016.~~

~~Meeting Admission~~

		~~Admission may be limited~~
By Internet		By Telephone	By Mail	In Person
Go to ~~AAM stockholders as of~~www.envisionreports.com/axl and follow the ~~record date and holders of valid proxies. Please be prepared to present identification for admittance. Stockholders holding stock in brokerage accounts~~instructions. You 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 Materials~~control number on your proxy card or voter instruction form.		~~We have elected to furnish materials for~~Call the ~~2016 Annual Meeting of Stockholders via~~number shown on your proxy card or voter instruction form. You will need the ~~Internet. On March 24, 2016, we mailed a notice of Internet availability to most stockholders containing instructions~~control number on ~~how to access~~your proxy card or voting instruction form.	Complete, sign and date the proxy ~~materials on the Internet instead of receiving paper copies~~card or voting instruction form and return it in the ~~mail.~~envelope provided.
	Attend the annual meeting and cast your ballot.



Acquisition Benefit	~~Page~~ ~~No.~~ FY 2017 Result
~~INTERNET AVAILABILITY OF PROXY MATERIALS~~
Greater scale and financial profile	2Pro forma sales of over $6.9 billion, an increase of over 75% compared to AAM's 2016 sales

~~QUESTIONS AND ANSWERS ABOUT VOTING AND THE ANNUAL MEETING~~ Accelerated business diversification	2Non-GM sales made up more than 50% of total sales Greater exposure to commercial and industrial business as those markets strengthened in 2017

~~PROPOSAL 1: ELECTION OF DIRECTORS~~ Enhanced profitability and free cash flow generation	4AAM achieved Adjusted EBITDA of approximately $1.1 billion
~~Nominees for Director~~	5
~~Returning Directors~~	6
~~Corporate Governance~~	10AAM generated over $300 million of Adjusted Free Cash Flow

~~COMPENSATION OF EXECUTIVE OFFICERS~~ Synergy attainment and value capture	AAM recognized > $30 million of cost reduction synergies in 2017 and expects an annualized synergy attainment run rate of $73 million in January 2018 On track to meet our target of $120 million of annual run rate cost reduction synergies by 1Q 2019 and 70% of this total by 1Q 2018



SEC 1913 (02-02)		Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.



	David C. Dauch ~~One Dauch Drive~~Chairman of the Board and ~~Detroit, Michigan 48211-1198~~ ~~www.aam.com~~Chief Executive Officer


–	Strategic acquisitions of Metaldyne Performance Group Inc. (MPG) and USM Mexico Manufacturing LLC (USM)


–	Substantial new business wins, including further commercialization of our e-AAM hybrid and electric driveline systems


–	Diversification of our customer base, product portfolio, global footprint, vehicle segment and end market


–	Continued investment in and advancement of advanced innovative mobility solutions


–	Continued to align the metrics and rigor of our incentive plans to drive achievement of business strategy


–	Enhanced our disclosures, particularly in the area of executive compensation, and re-designed our proxy statement to include a succinct proxy summary, letters from our Chairman & CEO and myself, and other features that enable us to more effectively communicate AAM's business strategy and the Board's ongoing efforts to represent the interests of our shareholders.



Proxy Summary			Ratification of Independent Registered Public Accounting Firm
2	Proxy Summary		76	Proposal 4 - Ratification of Independent Registered Public Accounting Firm
			77	Policy for Pre-Approval of Audit and Non-Audit Services
Election of Directors			77	Independent Registered Public Accounting Firm's Fees
13	Proposal 1 - Election of Directors		78	Report of the Audit Committee
20	Corporate Governance
26	Compensation of Directors		Additional Information
28	Beneficial Stock Ownership		79	Voting and Meeting Information
29	Related Person Transactions Policy		81	Annual Report
29	Section 16(a) Beneficial Ownership Reporting Compliance		81	Electronic Delivery of Proxy Materials
			81	2019 Stockholder Proposals and Nominations
Advisory Vote on Executive Compensation			82	Cost of Solicitation
30	Proposal 2 - Advisory Vote on Executive Compensation
31	Compensation Discussion and Analysis
		Shareholder Engagement and Our Response	Appendix
		Business & Financial Highlights	A-1	Appendix A - 2018 Omnibus Incentive Plan
		2017 Compensation Overview
		Compensation Philosophy, Process and Market Analysis
		Direct Compensation Elements
		Indirect Compensation Elements
		Other Compensation Matters
50	Compensation Committee Report
51	Executive Compensation Tables
68	CEO Pay Ratio

Approval of 2018 Omnibus Incentive Plan
69	Proposal 3 - Approval of 2018 Omnibus Incentive Plan



þ	8 of 9 directors are independent (all except our CEO)	þ	No hedging or pledging of our securities permitted

þ	Lead Independent Director	þ	Alignment of director and shareholder interests through equity grants and stock ownership guidelines

þ	Independent directors meet regularly without management present	þ	Active shareholder engagement

þ	All standing committees are comprised of 100% independent directors	þ	Adopted a majority vote standard for uncontested director elections (2017)

þ	Our Nominating/Corporate Governance Committee is led by a woman	þ	Adopted proxy access by-laws (2018)



Shareholder Feedback		Response

Shareholders generally believe our executive compensation program is aligned with shareholder interests.	ð	Significant design improvements have been made over the last several years including:
		- no discretionary incentive payments - double-trigger equity vesting - clawback policy - 66% of LTI compensation is performance based - prohibit excise tax gross ups - no excessive executive severance arrangements - New in 2017: increased stock ownership requirements for CEO, CFO and outside directors
		These programs will continue to be reinforced.

Incentive metrics • Goal rigor • Alignment with strategy • Enhanced disclosure	ð	Goal Rigor: Although our goals contained the appropriate rigor to accomplish our strategic objectives, we heard shareholder concerns and increased the rigor of new awards in 2018 to achieve a level of performance that would be the highest in our history. Alignment with strategy: To continue alignment with AAM's strategic goals, the Committee changed annual incentive pay metrics in 2018 to focus senior leadership on EBITDA, a key valuation/leverage reduction driver. The LTI program was also modified to emphasize cash flow and capital deployment strategies, which are key to value creation. Enhanced disclosure: We enhanced our disclosure of our goal-setting process for better understanding and transparency. We re-designed our proxy statement to include a proxy summary, letters from our Chairman & CEO and lead independent director, and other features that enable us to more effectively communicate AAM's business strategy and the Board's ongoing efforts to represent the interests of our shareholders.


~~Grants of Plan-Based Awards~~	31
~~Outstanding Equity Awards at December 31, 201~~5 Shareholder Feedback	34	Response
~~Options Exercised and Stock Vested~~	35
~~Pension Benefits~~ Alignment of CEO compensation with total shareholder return	ð	36While AAM's financial and operational performance has been strong, our TSR performance has lagged in comparison to our comparative peer group over the last few years.
~~Nonqualified Deferred Compensation~~	ð	38
~~Potential Payments Upon Termination or Change~~AAM has increased EBITDA margin performance each year to a level that is one of ~~Control~~	40the best in the industry and grown revenues to nearly $7 billion from $2.9 billion 5 years ago, while transforming AAM to become more diversified, with greater scale and increased global reach to support our customers with products that meet market demands. We believe this operational performance and growth will drive long-term value for our shareholders.

~~PROPOSAL 2: ADVISORY VOTE ON EXECUTIVE COMPENSATION~~Ratio of fixed and variable pay of the CEO as compared to the other NEOs	ð	The Committee believes that the CEO's pay should be more variable than that of the other NEOs. As the leader of the Company, the CEO should have the highest level of pay at risk, which we believe drives superior performance.
	ð
Proxy access	ð	We adopted proxy access in February 2018.



~~Section 16(a) Beneficial Ownership Reporting Compliance~~Table of Contents	Proxy Summary



Name of Director	Audit Committee	Compensation Committee	Nominating/ Corporate Governance Committee	Executive Committee	Strategy & Technology Committee ⁽¹⁾
David C. Dauch				Chair	X
Elizabeth A. Chappell		Chair	X		X
Steven B. Hantler		X			X
William. L. Kozyra		X	X		X
Peter D. Lyons	X		X		X
James A. McCaslin		X	Chair	X	X
William P. Miller II	Chair				X
John F. Smith	X				Chair
Samuel Valenti III	X	X	X	X	X
No. of Meetings in 2015	5	6	4	—	6



	Net Operating Cash Flow		Net Income as a Percentage of Sales
	Performance	Payout	Performance	Payout
Threshold	$50 million	25%	1.5%	25%
Target	$175 million	100%	4%	100%
Maximum	$275 million	200%	6%	200%



Name and Principal Position	Year	Salary ($)	Bonus ($)	Stock Awards⁽²⁾ ($)	Options Awards ($)	Non-Equity Incentive Plan Compen- sation⁽³⁾ ($)	Change in Pension Value And Nonqualified Deferred Compensation Earnings⁽⁴⁾ ($)	All Other Compen- sation⁽⁵⁾ ($)	Total ($)
David C. Dauch⁽¹⁾Chairman & Chief Executive Officer	2015	1,150,000	—	5,348,595	—	5,447,875	1,201,615	67,131	13,215,216
	2014	1,100,000	—	4,454,330	—	2,638,120	1,081,679	75,189	9,349,318
	2013	1,033,333	—	1,750,002	—	3,185,250	245,423	116,389	6,330,397
Christopher J. May Vice President & Chief Financial Officer	2015	292,505	—	148,344	—	297,646	107,445	44,199	890,139


Michael K. Simonte President	2015	603,192	—	1,431,050	—	1,773,967	347,876	52,561	4,208,646
	2014	560,100	—	1,296,049	—	961,046	375,597	52,666	3,245,458
	2013	543,800	—	543,810	—	1,429,085	27,943	50,817	2,595,455
Alberto L. Satine President Driveline	2015	482,875	—	689,895	—	899,225	224,587	52,473	2,349,055
	2014	450,000	—	624,777	—	498,640	237,798	41,032	1,852,247
	2013	360,000	—	216,006	—	565,800	—	41,399	1,183,205
Norman Willemse President Metal Formed Products	2015	426,667	—	508,544	—	743,575	169,498	32,065	1,880,349
	2014	375,767	—	445,473	—	445,467	135,322	48,459	1,450,488
	2013	320,000	—	160,006	—	579,120	12,546	50,348	1,122,020
Terry J. Woychowski ⁽⁶⁾ Former Senior Vice President, Advanced Engineering	2015	437,932	—	669,787	—	440,100	—	492,901	2,040,720
	2014	463,500	—	624,777	—	305,100	57,407	50,819	1,501,603



Name	AAM Incentive Compensation Plan		2012 Omnibus Incentive Plan		Total
David C. Dauch	$	2,256,875	$	3,191,000	$	5,447,875
Christopher J. May	$	297,646	$	—	$	297,646
Michael K. Simonte	$	887,573	$	886,394	$	1,773,967
Alberto L. Satine	$	547,145	$	352,080	$	899,225
Norman Willemse	$	482,775	$	260,800	$	743,575
Terry Woychowski	$	—	$	440,100	$	440,100



	Option Awards			Stock Awards
Name	Number of Securities Underlying Unexercised Options Exercisable⁽¹⁾ (#)	Option Exercise Price ($)	Option Expiration Date	Number of Shares or Units of Stock That Have Not Vested (#)	Market Value of Shares or Units of Stock That Have Not Vested⁽²⁾ ($)	Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)	Equity Incentive Plan Awards: Market of Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)⁽⁸⁾
David C. Dauch	15,000	15.58	3/15/2016	137,687⁽³⁾	2,607,792
	13,000	26.02	3/14/2017	66,447⁽⁴⁾	1,258,506
				58,070⁽⁵⁾	1,099,846
						64,493⁽⁶⁾	1,221,497
						128,986⁽⁶⁾	2,442,995
						28,181⁽⁷⁾	533,748
						112,724⁽⁷⁾	2,134,993
Christopher J. May				9,678⁽³⁾	183,301
				7,310⁽⁴⁾	138,451
				5,875⁽⁸⁾	111,273
Michael K. Simonte	10,000	26.02	3/14/2017	42,786⁽³⁾	810,367
				19,334⁽⁴⁾	366,186
				15,537⁽⁵⁾	294,271
						18,765⁽⁶⁾	355,409
						37,530⁽⁶⁾	710,818
						7,540⁽⁷⁾	142,808
						30,160⁽⁷⁾	571,230
Alberto L. Satine	8,000	26.02	3/14/2017	16,995⁽³⁾	321,885
				9,320⁽⁴⁾	176,521
				7,490⁽⁵⁾	141,861
						9,046⁽⁶⁾	171,331
						18,092⁽⁶⁾	342,662
						3,635⁽⁷⁾	68,847
						14,540⁽⁷⁾	275,388
Norman Willemse	9,700	10.08	6/25/2018	12,589⁽³⁾	238,436
				6,645⁽⁴⁾	125,856
				5,521⁽⁵⁾	104,568
						6,450⁽⁶⁾	122,163
						12,900⁽⁶⁾	244,326
						2,680⁽⁷⁾	50,759
						10,718⁽⁷⁾	202,999



	Actual Performance	%of Target Shares Earned		Award Weighting		Weighted Payout
Relative TSR	11^th percentile	0	%	50	%	0	%

EBITDA Margin	16.2%⁽¹⁾	200	%	50	%	100	%
		Final Payout as a % of Target				100	%


(1)	~~All outstanding options are vested as~~ Excludes the impact of ~~December 31, 2015.~~restructuring and acquisition-related costs, debt refinancing and redemption costs and other non-recurring items. See Reconciliation of Non-GAAP and GAAP Information in the CD&A.


~~(2)~~(1)	Reflects value of outstanding RSUs at ~~$18.94,~~$17.03, the closing price of AAM common stock on December ~~31, 2015.~~29, 2017.


(2)	Reflects RSUs granted on March 2, 2015 that vested on March 2, 2018.


(3)	Reflects RSUs granted on March ~~6, 2013 that vested on March 6,~~4, 2016. RSUs vest three years from the date of grant.


(4)	Reflects RSUs granted on ~~March 6, 2014.~~February 28, 2017 for Mr. Dauch, Mr. May, Mr. Simonte and Mr. Satine and on May 1, 2017 for Mr. Deveson. RSUs vest three years from the date of grant.


(5)	Reflects ~~RSUs granted on March 2, 2015. RSUs vest three years from the date of grant.~~


~~(8)~~	Reflects the value of ~~2014~~2016 and ~~2015~~2017 performance shares based on performance through December 31, ~~2015~~2017 as described above in footnotes ~~(6)~~(5) and ~~(7)~~(6) multiplied by $17.03, the closing price of AAM common stock on December ~~31, 2015.~~29, 2017.


(1)	~~Reflects~~No stock options were exercised by the ~~number of shares acquired upon exercise of stock options. Value realized upon exercise is based on the difference between the market price upon exercise and the exercise price of the options.~~NEOs in 2017.


(2)	Reflects the number of shares vested in ~~May 2015~~March 2017 under RSU awards granted in ~~May 2012. For Mr. Dauch, also~~March 2014. Also includes the number of performance shares ~~vested in September 2015 under an RSU award granted in September 2012.~~earned for the performance period ending December 31, 2017.


(3)	Reflects the number of shares underlying vested RSUs multiplied by the closing market price of AAM common stock on the vesting date. Also, includes the number of performance shares earned for the period ending December 31, 2017 multiplied by the closing market price of AAM common stock at December 29, 2017.



~~(4)~~ Table of Contents	Reflects the number of shares (approximately 1/3) that vested ratably in March 2015 under an RSU award granted in March 2013. Amount also includes the pro-rata vesting (at target) of 2/3 of the performance share awards granted in March 2014 and 1/3 of the performance share awards granted in March 2015 in connection with the termination of Mr. Woychowski's employment in December 2015.Executive Compensation Tables