Definitive Proxy Statement

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No.      )

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TRW Automotive Holdings Corp.

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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TRW Automotive Holdings Corp.
12001 Tech Center Drive
Livonia, Michigan 48150

April 3, 2009

TO OUR STOCKHOLDERS:

Our 2009 annual meeting of stockholders will be held at Loews Regency Hotel, 540 Park Avenue, New York, New York 10065, on Tuesday, May 19, 2009. The annual meeting will begin promptly at 4:00 p.m., local time.

The accompanying Notice of Annual Meeting of Stockholders describes the matters to be acted upon at the annual meeting, and this proxy statement provides detailed information about the annual meeting, the matters proposed for your consideration and vote at the meeting, and other matters regarding the Company. Please read these materials carefully.

Please also take the time to vote your shares. Instructions on how to vote are included in this proxy statement, as well as in the Notice Regarding the Availability of Proxy Materials (in addition, for stockholders who receive a printed copy of the proxy materials, voting instructions also appear on the proxy card enclosed with this proxy statement).

John C. Plant
Chief Executive Officer and President

Notice of Annual Meeting of Stockholders

The annual meeting of stockholders of TRW Automotive Holdings Corp. (“TRW”) will be held at Loews Regency Hotel, 540 Park Avenue, New York, New York 10065, on Tuesday, May 19, 2009, at 4:00 p.m., local time. The purpose of the meeting is to vote on the proposals listed below and to transact such other business as may properly come before the meeting or any adjournment or postponement of the meeting.

The record date for the annual meeting is March 23, 2009. Only stockholders of record at the close of business on that date may vote at the meeting.

BY ORDER OF THE BOARD OF DIRECTORS

David L. Bialosky
Secretary
Livonia, Michigan

April 3, 2009

Table of Contents

General Information			1
Voting Matters			2
Proposals Requiring Your Vote			5
PROPOSAL 1 — ELECTION OF DIRECTORS			5
PROPOSAL 2 — SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS			5
PROPOSAL 3 — APPROVAL OF AN AMENDMENT TO OUR 2003 STOCK INCENTIVE PLAN TO INCREASE THE NUMBER OF SHARES ISSUABLE UNDER THE PLAN			5
PROPOSAL 4 — APPROVAL OF A PLAN AMENDMENT TO AUTHORIZE A STOCK OPTION EXCHANGE PROGRAM FOR EMPLOYEES OTHER THAN DIRECTORS, EXECUTIVE OFFICERS AND CERTAIN OTHER SENIOR EXECUTIVES			8
The Board of Directors			13
Director Independence			13
Cesssation of Controlled Company Status			14
Director Information			14
Committees of the Board of Directors			17
Security Ownership of Certain Beneficial Owners and Management			21
Transactions with Related Persons			23
Compensation Committee Interlocks and Insider Participation			23
Audit Committee Report			25
Independent Registered Public Accounting Firm Fees			26
Executive Officers			27
Compensation Committee Report			28
Compensation Discussion and Analysis			28
Compensation of Executive Officers			39
Summary Compensation Table			39
Grants of Plan-Based Awards for 2008			41
Outstanding Equity Awards at Fiscal Year-End December 31, 2008			43
Option Exercises and Stock Vested for 2008			44
Pension Benefits			45
Nonqualified Deferred Compensation			47
Director Compensation			47
Termination and Change in Control Provisions			48
Stockholder Proposals			54
Annual Report and Other Matters			54

April 3, 2009

TRW Automotive Holdings Corp.
12001 Tech Center Drive
Livonia, Michigan 48150

Proxy Statement

General Information

What is this document?

This document is the Proxy Statement of TRW Automotive Holdings Corp. furnished in connection with our annual meeting of stockholders to be held on May 19, 2009. This Proxy Statement is first being sent or made available to stockholders electronically via the Internet on or about April 3, 2009. We will refer to the company throughout as “TRW,” the “Company,” “we” or “us”.

What is the Notice Regarding the Availability of Proxy Materials?

As permitted by rules adopted by the Securities and Exchange Commission (the “SEC”), TRW is furnishing this Proxy Statement and its 2008 annual report (the “proxy materials”) to certain record holders via the Internet, and providing a Notice Regarding the Availability of Proxy Materials (the “Notice of Availability”) by mail. We expect to mail the Notice of Availability or proxy materials, as appropriate, on or about April 3, 2009 to all such stockholders of record that are entitled to vote at the annual meeting. The Notice of Availability contains instructions on how to access and review the proxy materials and how to vote.

Will I receive a printed copy of any of the proxy materials?

If you receive a Notice of Availability by mail you will not receive a printed copy of the proxy materials or a proxy card unless you request copies by following the instructions included in the Notice of Availability.

Is there any other information that I should be provided?

Yes. In addition to this Proxy Statement, you should have access to our 2008 annual report, which contains financial and other information about TRW and our most recently completed fiscal year. You may also have received the Notice of Availability and, if you have not received one, a proxy card can be mailed to you upon request.

What is the purpose of this Proxy Statement?

We are providing this Proxy Statement and the form of proxy card to solicit your proxy (i.e. permission) to vote your shares of TRW stock upon certain matters. You are invited to attend the annual meeting and vote your shares directly. Even if you do not attend, however, you may vote by proxy, which allows you to direct another person to vote your shares at the meeting on your behalf.

Who is paying the costs of the Proxy Statement and the solicitation of my proxy?

TRW.

Who is soliciting my proxy and will anyone be compensated to solicit my proxy?

Your proxy is being solicited by and on behalf of our Board of Directors. TRW will solicit proxies by mail and may also solicit proxies in person, or by telephone, facsimile transmission or other means of electronic communication. Directors, officers and other employees of TRW who solicit proxies will do so without extra remuneration except reimbursement of out-of-pocket expenses. TRW may also pay brokers, nominees, fiduciaries and other custodians their reasonable fees and expenses for sending notices, proxies and proxy materials to beneficial owners of TRW common stock and for obtaining their instructions.

Voting Matters

What am I voting on?

You will be voting on the following:

	1.		The election of three directors nominated by the Board for a three-year term;
	2.		The ratification of Ernst & Young LLP as our independent public accountants for 2009;
	3.		The approval of an amendment to the Amended and Restated TRW Automotive Holdings Corp. 2003 Stock Incentive Plan (the “Plan”) to increase the number of shares issuable under the Plan.
	4.		The approval of an amendment to the Plan to permit a one-time stock option exchange program for employees other than directors, executive officers and certain other senior executives; and
	5.		Any other matter properly brought before the annual meeting.

Proposals 1 through 4, which are described further under “Proposals Requiring Your Vote,” will be presented at the meeting by management.

Who is entitled to vote?

Stockholders of record of our common stock at the close of business on March 23, 2009, the record date, may vote at the annual meeting. On March 23, 2009, 101,448,539 shares of our common stock were outstanding. Each stockholder has one vote for each share of common stock owned of record at the close of business on the record date.

How do I vote?

If you are a stockholder of record, you can vote your shares in the following manner:

•

In Person — You may vote in person at the annual meeting. You should bring photo identification for entrance to the annual meeting.

	•		Via the Internet — The Internet procedures are designed to authenticate a stockholder’s identity to allow stockholders to vote their shares and confirm that their instructions have been properly recorded.
			Internet voting facilities will close at 11:59 p.m. Eastern Time on May 18, 2009. You may access this Proxy Statement and other proxy materials by going to www.proxyvote.com and entering the control number shown on your Notice of Availability (or, if you did not receive a Notice of Availability, the control number appears on the proxy card sent to you). You will then be directed to select a link where you will be able to vote on the proposals presented here.

	•		By Mail — Stockholders who receive a paper proxy card may elect to vote by mail by completing, signing and dating their proxy card where indicated and mailing it in the pre-addressed envelope that accompanies the card. Proxy cards submitted by mail must be received by the time of the annual meeting in order for your shares to be voted.
			If you did not receive a package of printed materials containing a proxy card, a proxy card may be obtained by either calling (800) 579-1639 and requesting a copy or requesting a copy by e-mail. When requesting material by e-mail, send a blank e-mail to sendmaterial@proxyvote.com with the control number included in the Notice of Availability in the subject line. If you requested a printed copy of the proxy materials, a proxy card was enclosed with this Proxy Statement.

If you vote via the Internet or by returning your signed proxy to us before the annual meeting, we will vote your shares as you direct. However, if you submit your proxy without indicating your voting instructions, we will vote your shares “For” the election of the nominees for director identified under Proposal 1 in the section entitled “Proposals Requiring Your Vote,” and “For” Proposals 2, 3 and 4.

If you are a stockholder who holds shares through a broker, trustee or other nominee (in “street name”), rather than directly in your own name, you must vote your shares in the manner prescribed by your broker, trustee or nominee, which may include voting by using the Internet or by telephone.

Whether you are a stockholder of record or hold your shares in street name, you can specify whether your shares should be voted for all, some, or none of the nominees for director (Proposal 1). You can also specify whether you approve, disapprove, or abstain from the other proposals to be presented at the meeting.

Can I change my mind and revoke my proxy?

Yes. If you are a stockholder of record you may revoke your proxy at any time before it is exercised at the annual meeting in any of three ways:

	•		By notifying TRW’s secretary in writing before the annual meeting;
	•		By submitting another valid proxy with a later date; or
	•		By voting in person at the meeting.

You will not revoke a proxy merely by attending the meeting. To revoke a proxy, you must take one of the actions described above.

If you are a stockholder who holds shares through a broker, trustee or other nominee (in “street name”), you must follow the instructions provided by your broker, trustee or nominee if you wish to change your vote.

How do I vote under employee plans?

If you participate in the TRW Automotive Retirement Savings Plan for Salaried Employees or the TRW Automotive Retirement Savings Plan for Hourly Employees, then you will receive a set of the proxy materials either through the mail (which will include a proxy card) or by email (which will include the control number in the text of the email). In either case, you may vote your shares over the Internet or by mail, as described above. By voting, you are instructing the plan trustees, plan committees or independent fiduciaries of those plans how to vote your shares. They will vote the shares in accordance with your instructions and the terms of the plan. If you do not provide voting instructions for shares held for you in any of these plans, then your shares will be voted by an independent fiduciary.

In accordance with the terms of the applicable employee plan and to the extent permitted under applicable law, you are considered the “named fiduciary” (as defined in the Employee Retirement Income Security Act of 1974, as amended) of the employee plan with regard to the stock funds in which you invest and otherwise exercise control. If you participate in any of these plans or maintain other accounts under more than one name, you may have received more than one set of proxy materials. To be sure that all shares are counted, you must provide a separate valid proxy for shares held in each such name, either over the Internet or by signing and returning by mail a proxy card for all applicable shares.

How many votes must be present to hold the annual meeting?

The presence, in person or by proxy, of the holders of a majority of the issued and outstanding shares of our common stock on the record date is necessary to constitute a quorum.

How many votes are needed to elect directors and approve other matters?

In the election of directors, the three persons receiving the highest number of “For” votes (referred to as a “plurality” of votes) will be elected. Stockholders may not cumulate their votes in the election of directors.

The affirmative vote of a majority of shares present in person or represented by proxy at the meeting is required to approve each proposal other than the election of directors. Each share of common stock carries one vote.

How will abstentions and broker non-votes be treated?

Abstentions are counted as “shares present” at the meeting for purposes of determining whether a quorum exists. Proxies submitted by brokers that do not indicate a vote for some or all of the proposals because they do not have discretionary voting authority (as is the case for non-routine matters) and have not received instructions as to how to vote on those proposals (so-called “broker nonvotes”) are also considered “shares present.” Accordingly, abstentions and broker nonvotes are the equivalent of votes against a proposal where approval requires a majority of shares present. Abstentions and broker nonvotes will not affect the outcome in the election of directors because directors are elected by a plurality of votes rather than a majority of votes.

What if I have the same address as another stockholder?

The SEC’s proxy rules permit companies and intermediaries, such as brokers and banks, to satisfy delivery requirements for proxy statements, annual reports and notices of availability with respect to two or more stockholders sharing an address by delivering a single proxy statement, annual report or notice of availability to those stockholders. This procedure reduces the amount of duplicate information that stockholders receive and lowers printing and mailing costs for companies.

TRW has been notified that certain intermediaries will utilize this procedure for TRW’s Notice of Availability and its proxy materials. Therefore, only one copy may have been delivered to multiple stockholders sharing a single address. If you wish to opt out of this procedure and receive a separate Notice of Availability or set of proxy materials in the future, or if you are receiving multiple copies and would like to receive only one, you should contact your broker, trustee or other nominee or TRW at the address and telephone number below.

A separate copy of the proxy card, the 2008 annual report and/or the Proxy Statement for the annual meeting will be promptly delivered upon oral request to either TRW’s agent at (800) 579-1639 or an email request to sendmaterial@proxyvote.com , or to TRW’s Investor Relations Department at (800) 219-7411 or written request to Investor Relations, 12001 Tech Center Drive, Livonia, Michigan 48150.

How will TRW’s largest stockholder vote?

As of March 23, 2009, affiliates of The Blackstone Group L.P. (“Blackstone”) beneficially own and have the right to vote 45.4% of the outstanding shares of our common stock. Blackstone has advised us that they intend to vote all such shares in favor of the nominees for director and in favor of Proposals 2, 3 and 4. However, since Blackstone owns less than a majority of the shares, neither a quorum at the annual meeting, nor the approval of Proposals 2, 3 or 4 are assured.

Are there any other matters to be acted upon at the meeting?

We do not know of any other matters to be presented or acted upon at the meeting. If any other matter is presented at the meeting on which a vote may properly be taken, the shares represented by proxies will be voted in accordance with the judgment of the person or persons voting those shares.

Where do I find the results of the voting?

We will publish the voting results in our Form 10-Q for the second quarter of 2009. You will also be able to find the results in the “Investors” section of TRW’s home page on TRW’s Internet site ( www.trw.com ).

Proposals Requiring Your Vote

We have used a substantial portion of the previously authorized share pool under the Plan for existing awards. As of December 31, 2008, only 2,574,981 shares of our common stock remained available for future award grants under the Plan, a number that the Compensation Committee (the “Committee”) and the full Board of Directors (the “Board”) believes to be insufficient to meet our anticipated needs. As a result, on February 18, 2009, the Committee approved, subject to stockholder approval, an amendment to the Plan to increase the number of shares available for issuance by 4,500,000 shares, from 18,500,000 to 23,000,000 shares. The Board determined that the amendment would be submitted to the stockholders for approval at the annual meeting.

The Committee and the Board believe that the increased number of shares to be made available for issuance under the Plan represents a reasonable amount of potential additional equity dilution and allows the Company to continue awarding equity incentives, which have been an important component of our compensation program. The Company expects that it will seek stockholder approval periodically in the future for additional shares to continue the program.

In accordance with the applicable rules of The New York Stock Exchange (“NYSE”), our Board is asking stockholders to approve the Plan as so amended. If the plan, as amended, is not approved, we will not be able to make the proposed additional 4,500,000 shares available for issuance under the Plan but the Plan will otherwise remain in effect.

Description of the Plan

Following is a summary of the material features of the Plan, as proposed to be amended. This description does not purport to be complete and is qualified in its entirety by reference to the terms of the Plan, a copy of which was filed with the SEC on January 26, 2004 as Exhibit 10.20 to Amendment No. 5 to the Company’s Registration Statement on Form S-1 .

Eligibility . The Plan permits the grant of non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock and other stock-based awards to our employees, directors or consultants.

Shares Subject to the Plan . Assuming the stockholders approve this proposal, a total of 23,000,000 shares of the Company’s common stock will have been reserved for issuance pursuant to the Plan. As of March 23, 2009, the fair market value of a share of the Company’s common stock (calculated in accordance with the Plan as the average of the high and low sales price on such date) was $3.69. The number of shares authorized for issuance under the Plan is subject to adjustment on account of mergers, consolidations, reorganizations, stock splits and other dilutive changes in the common stock. Shares of common stock covered by awards that terminate or lapse will again be available for grant under the Plan.

Administration . The Plan is administered by the Committee, which may delegate its duties; provided that our Board may take any action delegated to the Committee. The Committee determines the employees, directors and consultants to whom awards may be granted under the Plan (subject to its ability to delegate such matters), and the manner in which such awards will vest. Options, stock appreciation rights, restricted stock and other stock-based awards are granted to employees, directors and consultants in such numbers and at such times during the term of the Plan as the Committee shall determine. The Committee is authorized to interpret the Plan, to establish, amend and rescind any rules and regulations relating to the Plan, and to make any other determinations that it deems necessary or desirable for the administration of the Plan. The Committee may correct any defect, supply any omission or reconcile any inconsistency in the Plan in the manner and to the extent the Committee deems necessary or desirable.

Options . The Committee determines the exercise price for each option; provided, however, that incentive stock options must have an exercise price that is at least equal to the fair market value of the common stock on the date the option is granted. Options granted are exercisable as determined by the Committee. An option holder may exercise an option by notice and payment of the exercise price in (i) cash, (ii) by the surrender of a number of shares of common stock already owned by the option holder for at least six months with a fair market value equal to the exercise price, (iii) through the delivery of irrevocable instructions to a broker to sell shares obtained upon the exercise of the option and to deliver to the Company an amount out of the proceeds of the sale equal to the aggregate exercise price for the shares obtained upon such exercise, or (iv) another method approved by the Committee. The Committee determines other terms and conditions of the options.

Stock Appreciation Rights . The Committee may grant stock appreciation rights independent of or in connection with an option. The exercise price per share of a stock appreciation right shall be determined by the Committee. Generally, each stock appreciation right shall entitle a participant upon exercise to an amount equal to the product of (i) the excess of (1) the fair market value on the exercise date of one share of common stock over (2) the exercise price, times (ii) the number of shares of common stock covered by the stock appreciation right. The Committee shall determine the other terms and conditions of any stock appreciation right, including whether payment for a stock appreciation right is made in cash, shares or a combination.

Other Stock-Based Awards . The Committee may grant awards of restricted stock units, rights to purchase stock, restricted stock, phantom stock units and other awards (including cash awards) that are valued in whole or in part by reference to, or are otherwise based on the fair market value of, shares of common stock. The other stock-based awards will be subject to terms and conditions established by the Committee.

Transferability . Unless otherwise determined by the Committee, awards granted under the Plan are not transferable other than by will or by the laws of descent and distribution.

Change of Control . In the event of a change of control, the Committee may provide for the (i) termination of an award upon the consummation of the change of control, but only if the award has vested and been paid out or the participant has been permitted to exercise an option in full for a period of not less than 30 days prior to the change of control, (ii) acceleration of all or any portion of an award, (iii) payment in exchange for the cancellation of an award and/or (iv) issuance of substitute awards that will substantially preserve the terms of any awards. A change of control would be triggered by (a) the sale or disposition of all or substantially all of the assets of the Company to any person or group other than Automotive Investors L.L.C. (“AI LLC”) or its affiliates, or (b) the beneficial ownership of more than 50% of the total voting power of the Company by any person or group other than AI LLC or its affiliates, and AI LLC or its affiliates ceasing to control the Company’s Board.

Named Executive Officers and Directors . The treatment of option and restricted stock unit awards held by the named executive officers in the event of a change of control, certain other termination scenarios and the executive’s death or disability is discussed below under “Termination and Change in Control Provisions.” The treatment of restricted stock unit awards held by the directors in the event of a change of control is discussed below under “Director Compensation.”

Amendment and Termination . The Committee may amend, alter or discontinue the Plan in any respect at any time, but no amendment may diminish any of the rights of a participant under any awards previously granted. The Committee may waive any conditions or rights under or amend the terms of or terminate any awards previously granted, but such action may not impair the rights of any participant without his or her consent.

Substitute Awards . In the discretion of the Committee, awards may be made under the Plan in assumption of or in substitution for, outstanding awards previously granted. The number of shares underlying such substitute awards shall be counted against the aggregate number of shares available under the Plan.

New Plan Benefits . Any future awards that will be granted to eligible participants under the Plan are subject to the discretion of the Committee and, therefore, are not determinable at this time.

Federal Income Tax Consequences of Awards Under the Plan . The following is a summary of the material U.S. federal income tax consequences of the issuance and exercise of awards under the Plan. It is based on existing U.S. laws and regulations, and there can be no assurance that those laws and regulations will not change in the future. This summary does not discuss any income tax law provisions of any municipality, state or foreign country in which a participating individual may reside. Tax consequences under such jurisdictions may vary.

When a non-qualified stock option is granted, there are no income tax consequences for the optionholder or us. When a non-qualified stock option is exercised, in general, the option holder recognizes compensation equal to the excess of the fair market value of the common stock on the date of exercise over the exercise price multiplied by the number of shares of common stock subject to the option that was exercised. We are generally entitled to a deduction equal to the compensation recognized by the option holder for the taxable year in which the optionholder recognizes the compensation.

When an incentive stock option is granted, there are no income tax consequences for the optionholder or us. When an incentive stock option is exercised, the optionholder does not recognize income and we do not receive a deduction. The option holder, however, must treat the excess of the fair market value of the common stock on the date of exercise over the exercise price as an item of adjustment for purposes of the alternative minimum tax.

If the optionholder disposes of the common stock after the option holder has held the common stock for at least two years after the incentive stock option was granted and one year after the incentive stock option was exercised, the amount the optionholder receives upon the disposition over the exercise price is treated as long-term capital gain for the optionholder. We are not entitled to a deduction. If the optionholder makes a “disqualifying disposition” of the common stock by disposing of the common stock before it has been held for at least two years after the date the incentive option was granted and one year after the date the incentive option was exercised, the optionholder recognizes compensation income equal to the excess of (i) the fair market value of the common stock on the date the incentive option was exercised or, if less, the amount received on the disposition over (ii) the exercise price. We are generally entitled to a deduction equal to the compensation recognized by the optionholder for the taxable year in which the option holder recognized the compensation.

When a stock appreciation right is granted, there are no income tax consequences for the participant or us. When a stock appreciation right is exercised, in general, the participant recognizes compensation equal to the cash and/or the fair market value of the shares received upon exercise. We are entitled to a deduction equal to the compensation recognized by the participant.

Generally, when a restricted stock unit or a share of restricted stock is granted, there are no income tax consequences for the participant or us. Upon the payment to the participant of common shares in respect of restricted stock units or the release of restrictions on restricted stock, the participant, generally, recognizes compensation equal to the fair market value of the shares as of the date of delivery or release. We are entitled to a deduction equal to the compensation recognized by the participant.

Amendment to the Plan

The Committee amended the Plan, subject to approval of the amendment by the Company’s stockholders at the annual meeting. If stockholders vote to approve the amendment, the following language will replace the first sentence of Section 3 of the Plan in its entirety:

“The total number of Shares which may be issued under the Plan is 23,000,000.”

The Board of Directors recommends a vote “For” Proposal 3 to amend the Company’s Plan to increase the number of shares issuable under the Plan. Proxies solicited by the Board of Directors will be voted “For” this Proposal 3 unless stockholders specify a different choice.

* * * * *

Stockholder approval is required for this proposal under NYSE rules and the terms of the Plan. If TRW stockholders approve this proposal to amend our Plan, the Board intends to commence the Exchange Program as soon as reasonably practicable after the annual meeting. If TRW stockholders do not approve this proposal, the Exchange Program will not take place.

Background

The Company’s compensation philosophy is intended to attract, retain and motivate employees using an appropriate mix and various levels of cash and equity compensation. Stock options for certain of the Company’s employees are important in the implementation of this philosophy. The sharp decline over recent months in the Company’s stock price have posed a major challenge to the overall goal of retaining and motivating employees upon whom the Company and stockholders rely to help move the Company forward in these challenging times in the automotive industry. Since becoming a public company, we have depended upon these awards to provide a long-term incentive for certain of our employees. However, all of the stock options that have been granted by the Company from 2003 through 2008 now have exercise prices that exceed the trading price of the Company’s common stock (hereinafter referred to as “out of the money” or “underwater”). As a result, the incentive and retention value of these outstanding options has been substantially eliminated.

The Exchange Program is intended to restore the incentive and retention value of our stock option program and to balance the interests of employees and stockholders by providing approximately 200 employees with a one-time opportunity to exchange their underwater options on a one-for-one basis for new stock options with an exercise price equal to the fair market value of our common stock on the grant date, and requiring another two years of future service in order for the new options to vest. In effect, the Exchange Program will enable us to realign the exercise prices of previously granted option awards with the current value of our common stock, so that outstanding option awards once again become important tools to help motivate and retain our existing employees and maintain the competitiveness of our compensation program.

The Committee has determined that it would be in the best interest of the Company to implement the Exchange Program and has approved an amendment, subject to stockholder approval, to the Plan to expressly permit the Company to implement the Exchange Program. The Board has considered and recommends a vote “for” this proposal.

Description of the Exchange Program

Implementing the Exchange Program . If the Company receives stockholder approval of the Plan amendment permitting the Exchange Program, the Exchange Program may commence at a time determined by the Committee, with terms expected to be materially similar to those described in this proposal. The stockholder approval will be for a one-time Exchange Program. Even if stockholders approve this proposal, the Committee will still determine whether or not and when to implement the Exchange Program and the final terms of the Exchange Program.

The Exchange Program will be effectuated by means of a formal offer to eligible employees to exchange certain outstanding stock options for new options, subject to the terms and conditions set forth in the “tender offer” documents and related materials to be filed with the SEC and distributed to eligible employees (the “Exchange Offer”). Eligible employees would be given at least 20 business days (or such longer period as we may elect to keep the Exchange Program open) to elect to exchange all or none of their eligible options, on a grant-by-grant basis, for new options. After the Exchange Offer is closed, the eligible options surrendered for exchange would be cancelled, the Committee would approve grants of new options to participating employees and option documents would be distributed promptly thereafter. The new options would be granted under the Plan and would be subject to the terms of the Plan.

We currently anticipate that the Committee would establish the final terms of the Exchange Program and commence the Exchange Offer as soon as reasonably practicable following approval of this proposal by our stockholders. However, if the Exchange Program does not commence within one year after the date of stockholder approval, the Company will not commence the Exchange Program or any similar program without again seeking and receiving stockholder approval.

If you are both a stockholder and an eligible employee holding eligible options, please note that voting to approve the Plan amendment authorizing the Exchange Program does not constitute an election to participate in the Exchange Program.

Eligible Optionholders. The Exchange Program will generally be open to active employees of the Company and its subsidiaries holding eligible options, other than our executive officers (including the named executive officers) and such other of our 45 most senior executives as may be designated by the Committee. None of the members of our Board will be permitted to participate in the Exchange Program. Although the Company intends to include eligible employees located outside the United States, the Company may exclude such employees if, for any reason, the Committee believes that their participation would be illegal, inadvisable or impractical. To be eligible, an individual must be employed on the date the Exchange Offer commences and must remain employed through the date that the new options are granted. At March 23, 2009, we had approximately 200 employees who were eligible for the Exchange Program.

Eligible Outstanding Options. Generally, all outstanding stock options held by the eligible optionholders that, as of a date specified by the terms of the Exchange Offer (which date shall not be more than 20 business days prior to the commencement of the Exchange Program), have an exercise price in excess of the fair market value of a share of our common stock, will be eligible for the Exchange Program. All of our outstanding stock options are characterized for U.S. federal income tax purposes as non-qualified. Other outstanding stock awards, such as restricted stock units, are not eligible for the Exchange Program. As of March 23, 2009, a total of approximately 8.3 million shares were subject to outstanding options under the Plan. Of the total outstanding, options covering approximately 1.27 million shares, or 15% of the total, would have been eligible for participation in the Exchange Program if it had been implemented as of March 23, 2009 (and the Committee had not excluded any otherwise eligible tranches of existing options). The exercise prices of these eligible outstanding options range from $10.00 to $38.60. Eligible options ultimately will be determined at the time that the Committee approves the terms of the Exchange Offer.

One for One Exchange. Under the Exchange Program, eligible optionholders would be able to elect to exchange outstanding eligible options to purchase shares of our common stock for new stock options covering the same number of shares.

Election to Participate. Participation in the Exchange Offer will be voluntary, and we will not make any recommendation to employees as to whether or not they should participate. Eligible optionholders will be permitted to exchange all or none of their eligible options for new options on a grant-by-grant basis, meaning that an eligible optionholder who holds more than one eligible option need not surrender every eligible option he or she holds, but if any part of a single eligible option is surrendered, the entire eligible option must be surrendered. The Committee may determine to require an employee to tender all eligible options in the Exchange Program as a condition of participation. Any employee who chooses not to participate with respect to any particular outstanding option award would continue to hold such option subject to the existing terms and conditions of each such award.

Exercise Price of New Options. Each new stock option granted in the Exchange Program will be granted under the Plan and have an exercise price equal to the average of the high and low sales prices of our common stock on the grant date.

Vesting Terms of New Options. The new options will vest as to all of the underlying shares on the second anniversary of the grant date. This new vesting period will apply to each new option regardless of whether the surrendered options were already vested or not.

Expiration of New Options. Each new option will have the same expiration date as the corresponding surrendered option.

Other Terms of New Options. The other terms and conditions of the new options will be set forth in an option agreement to be entered into as of the grant date of the new options, and will be substantially similar to those of the options surrendered. Each new option will be granted pursuant to the Plan and, accordingly, will be governed by the terms and conditions of the Plan. The new options will be characterized for U.S. federal income tax purposes as non-qualified stock options.

Return of Eligible Options Surrendered. The eligible options tendered in the Exchange Offer will be cancelled unless we elect, in our sole discretion, not to accept any or all of such tendered options. The surrendered options will be terminated under the Plan and the shares subject to the surrendered options will return to the pool of shares available for grant in accordance with the Plan. Because each surrendered option will be replaced with a new option covering the same number of shares, the Exchange Program will not result in an increase or decrease in the number of shares available for issuance under the Plan.

Potential Modification of Terms. The terms of the Exchange Offer will be described in tender offer documents that will be filed with the SEC and distributed to eligible employees. Although we do not anticipate that the SEC will require us to modify the terms significantly, it is possible that we will need to alter the terms of the Exchange Offer, including an extension of the period we will keep the Exchange Offer open, to comply with comments from the SEC. In any case, we reserve the right, in our sole and absolute discretion, to suspend, modify or terminate the Exchange Offer at any time for any reason prior to the closing date, except that a modification that would materially increase our cost of the Exchange Program, broaden eligibility or otherwise materially adversely impact dilution to stockholders, or that otherwise would require stockholder approval under applicable rules of the NYSE, will be subject to the further approval of our stockholders.

Accounting Consequences. Under Statement of Financial Accounting Standards No. 123R (“FAS 123R”), the Company currently expenses stock options using the fair value method under which the cost of stock option grants is measured by the fair value of the awards on their grant date and is recognized over the vesting periods of the awards regardless of whether or not the awards had any intrinsic value during the period. Currently, 81%, or approximately 1.0 million of the 1.27 million options eligible under the Exchange Program are vested. Accordingly, as of December 31, 2008, we had already expensed approximately $6.0 million as compensation expense related to these options. We estimate that the additional non-cash expense for unvested eligible options subsequent to December 31, 2008 will be approximately $1.6 million, which the Company will continue to recognize as compensation expense. If the Exchange Program had been consummated at March 23, 2009, assuming a full exchange of all eligible options and a grant price of $3.69 per share (the fair market value of our common stock on that date), we estimate that the incremental non-cash compensation expense above this amount that would need to be recognized as compensation expense over the two-year vesting period of the new options would have been approximately $1.5 million.

The dilutive impact of the new options in calculating fully diluted earnings per share (“EPS”) may vary from the dilutive impact of the surrendered options. Given the lower exercise price of the new options, it is likely that the new options will result in dilution to EPS at times when the surrendered options would not have resulted in EPS dilution, specifically when the exercise price of the surrendered options exceeds the average market price of the stock.

U.S. Federal Income Tax Consequences of the Exchange Program. The following is a summary of the material U.S. federal income tax consequences of the Exchange Program. It is based on existing U.S. laws and regulations, and there can be no assurance that those laws and regulations will not change in the future. This discussion is intended for the information of stockholders considering how to vote at the annual meeting and not as tax guidance to participants in the Exchange Program, as the consequences may vary with the types of awards surrendered or made, the identity of the participants, and the method of settlement. This summary does not discuss any income tax law provisions of any municipality, state or foreign country in which a participating individual may reside. Tax consequences under such jurisdictions may vary.

The exchange of eligible options for new options should be treated as a non-taxable exchange, so that no income should be recognized for U.S. federal income tax purposes by us or by the participating employee upon the grant of the new options. Upon exercising a new option, the option holder generally recognizes compensation equal to the excess of the fair market value of the common stock on the date of exercise over the exercise price multiplied by the number of shares of common stock subject to the option that was exercised. A disposition of shares acquired upon exercise of an option generally will result in short-term or long-term capital gain or loss for the holder measured by the difference between the sale price and the individual’s tax “basis” in such shares. The tax “basis” normally is the amount that the holder recognized as ordinary income in connection with the option’s exercise. We normally can claim a tax deduction equal to the compensation recognized by the option holder in connection with the exercise of an option, but no tax deduction relating to a participant’s capital gains.

The Exchange Program is intended to be offered on a worldwide basis (except where illegal, inadvisable or impractical under local law). Eligible employees residing outside of the United States may be subject to laws other than those of this country. The international tax implications of the Exchange Program are not discussed in this proxy statement and will vary depending upon the tax laws of foreign jurisdictions.

New Plan Benefits Under the Plan

Because the decision of our employees to participate in the Exchange Offer will be completely voluntary, we are not able to determine who will participate or how many options will be tendered for exchange. Members of our Board hold no options and will not participate in the exchange offer. Further, neither our named executive officers nor certain other of our 45 most senior executives designated by the Committee will be eligible to participate in the Exchange Offer. Assuming that (i) all eligible optionholders elect to exchange all of their eligible options, and (ii) all of the options that would be considered eligible as of March 23, 2009, continue to be eligible options at the time of the Exchange Offer, approximately 1.27 million replacement options would be granted to eligible Company employees in the Exchange Offer. The value of the replacement options cannot be determined until the grant date under the Exchange Program.

Amendment to the Plan

In order to permit the Company to implement the Exchange Program in compliance with applicable NYSE rules, the Committee amended the Plan, subject to approval of the amendment by the Company’s stockholders at the annual meeting. If stockholders vote to approve the amendment, the following language will be added as a new Section 19 to the Plan:

“19. Option Exchange Program . Notwithstanding any other provision of the Plan to the contrary, the Company, by action of the Committee, may effect an option exchange program (the “Exchange Program”), to be commenced through one or more exchange offers prior to May 19, 2010, provided that in no event may more than one offer to exchange be made for any outstanding option. Under any exchange offer, Eligible Employees will be offered the opportunity to exchange Eligible Options (the “Surrendered Options”) for new Options (the “New Options”), as follows: (1) each New Option shall represent the right to purchase the same number of Shares underlying the corresponding Surrendered Option(s), (2) the per share exercise price of each New Option shall be not less than the Fair Market Value of a Share on the grant date of the New Option; (3) each New Option will have a two-year vesting period regardless of the vested or unvested status of the Surrendered Options; and (4) each New Option shall have the same expiration date as the corresponding Surrendered Option. All other material terms of each New Option shall be substantially similar to the Surrendered Option exchanged therefore. “Eligible Employees” means employees of the Company other than its executive officers (as designated by the Board of Directors pursuant to Rule 16a-1(f) under Section 16 of the Securities Exchange Act of 1934, as amended) and such other of the Company’s 45 most senior executives as may be designated by the Committee. “Eligible Options” means any Option other than a New Option where, as of a date specified by the terms of any exchange offer (which date shall be not more than 20 business days prior to any exchange offer), the Option Price is greater than the Fair Market Value per Share. Subject to the foregoing, the Committee shall be permitted to determine additional terms, restrictions or requirements relating to the Exchange Program.”

Other material terms of the Plan are discussed in Proposal 3 contained above in this proxy statement.

The Board of Directors recommends a vote “For” Proposal 4 to amend the Company’s Plan to permit a one-time stock option Exchange Program for employees other than directors, executive officers and certain other senior executives. Proxies solicited by the Board of Directors will be voted “For” this Proposal 4 unless stockholders specify otherwise.

The Board of Directors

The Board of Directors currently consists of nine directors divided into three classes (Class I, Class II and Class III) serving staggered three-year terms. The Board of Directors met six times during 2008, four of which were regular meetings and the remaining special meetings. All of the current directors who were directors in 2008 attended at least 75% of the aggregate of the total number of meetings of the Board of Directors and committees of the Board of Directors during their tenure on each in 2008. Directors are expected to attend all scheduled Board and committee meetings. Director presence at the annual meeting is encouraged, and all of our then eight-member Board of Directors attended the 2008 annual meeting, including one director who attended telephonically.

Director Independence

TRW’s Board of Directors is currently comprised of six directors who qualify as “independent” as such term is defined by the rules adopted by the SEC and NYSE listing requirements. To be considered independent, the Board of Directors must determine each year that a director does not have any direct or indirect material relationship with TRW. When assessing the “materiality” of any relationship a director has with TRW, the Board of Directors reviews all the relevant facts and circumstances of the relationship to assure itself that no commercial or charitable relationship of a director impairs such director’s independence.

The Board of Directors established guidelines, which are set forth in the Corporate Governance Guidelines published on TRW’s Internet site ( www.trw.com ), to assist it in determining director independence under the NYSE listing requirements. These guidelines provide that a director will not be independent if, within the preceding three years (i) the director was employed by TRW or its subsidiaries; (ii) an immediate family member of the director was employed by TRW or its subsidiaries as an executive officer; (iii) a TRW executive officer was on the compensation committee (or a committee performing similar functions) of the board of directors of a company which employed the director, or which employed an immediate family member of the director, as an executive officer; or (iv) the director or an immediate family member of the director received more than $120,000 during any twelve-month period in direct compensation from TRW or its subsidiaries (other than payments for current or past service as a director or compensation received by a family member for service as a non-executive employee). In addition, a director will not be independent if (i) the director or an immediate family member of the director is a current partner of TRW’s independent auditor; (ii) the director is a current employee of such firm; (iii) an immediate family member of the director is a current employee of such firm and personally works on TRW’s audit; or (iv) the director or immediate family member of the director was within the last three years a partner or employee of such firm and personally worked on TRW’s audit within that time. The following commercial or charitable relationships will not be considered to be material relationships that would impair a director’s independence: (i) if a TRW director is an employee of another company that does business with TRW and the annual sales to, or purchases from, TRW or its subsidiaries are less than the greater of $1 million or two percent of the annual revenues of the company he or she is employed by; (ii) if a TRW director is an employee of another company which is indebted to TRW or its subsidiaries, or to which TRW or its subsidiaries is indebted, and the total amount of either company’s indebtedness to the other is less than two percent of the total consolidated assets of the company he or she is employed by; and (iii) if a TRW director serves as an officer, director or trustee of a charitable organization and TRW’s discretionary charitable contributions to the organization are less than the greater of $1 million or two percent of that organization’s total annual charitable receipts. (Automatic matching of employee charitable contributions will not be included in the amount of TRW’s contributions for this purpose.)

The Board of Directors has affirmatively determined that each of the following directors and nominees for director meet these standards for independence and qualify as independent: James F. Albaugh, Francois J. Castaing, Michael R. Gambrell, J. Michael Losh, Jody G. Miller and Paul H. O’Neill. Throughout this Proxy Statement, we refer to these directors as our “independent directors.” In determining the independence of these directors, the Board of Directors considered their charitable affiliations, but found that TRW either made no donations to their affiliated charities or donations were well below the prohibited levels. The Board also considered Mr. O’Neill’s status as a special advisor to Blackstone, in light of TRW’s payment of $5 million in annual fees to Blackstone under a transaction and monitoring agreement, which is described below under “Compensation Committee Interlocks and Insider Participation.” The Board concluded that Mr. O’Neill is nonetheless independent because he is not an employee or executive officer of Blackstone. In addition, as such, he is not deemed to beneficially own the TRW stock held by Blackstone and so is not an “affiliated person” of TRW. With respect to Mr. Gambrell, the Board also considered TRW’s purchases of product from The Dow Chemical Company (“Dow”), Mr. Gambrell’s employer, and Dow Corning which is 50% owned by Dow. However, given that TRW’s annual purchases total approximately 0.01% of Dow’s annual sales, the Board concluded that Mr. Gambrell is independent and does not have a material interest in the purchase transactions. In addition, although Mr. Losh serves on the audit committee of more than three publicly traded companies, the Board determined that such simultaneous service does not impair his ability to serve on TRW’s Audit Committee. There were no other relationships, transactions or arrangements with any of the independent directors required to be disclosed herein or not required to be so disclosed but considered by the Board.

Cesssation of Controlled Company Status

On June 4, 2007, we completed a secondary public offering of 11 million shares of our common stock held by Blackstone and certain members of our management. As a result of that transaction, Blackstone’s ownership stake in our common stock decreased from 56.4% to 46.5%. Prior to the completion of the offering, TRW availed itself of the “controlled company” exemptions under the NYSE corporate governance rules that eliminate the requirements that the board of directors be composed of a majority of independent directors and that the compensation and nominating and corporate governance committees be composed entirely of “independent” directors within the meaning of the NYSE listing requirements. Upon completion of the offering we ceased to be a “controlled company” for purposes of the NYSE corporate governance rules. Accordingly, we are now in full compliance with the NYSE independence requirements.

Director Information

Neil P. Simpkins, our Chairman of the Board, presides over meetings of the non-management directors. Stockholders and other interested persons may contact Mr. Simpkins, the non-management directors as a group, or the Audit Committee directly in writing c/o TRW Automotive Holdings Corp., P.O. Box 51701, Livonia, MI 48151-5701, USA. TRW’s Internet site ( www.trw.com ) includes: the Standards of Conduct, TRW’s code of business conduct and ethics applicable to all of TRW’s directors, officers and employees; Corporate Governance Guidelines; and charters for the Audit, Compensation and Corporate Governance and Nominating Committees. In addition, these documents are available in print to any stockholder who requests them.

The following information about the directors, including the nominees, has been provided by the directors. There is no family relationship among the directors or between any director and an executive officer. Mr. Simpkins, Mr. Friedman and Mr. O’Neill were originally designated by an affiliate of Blackstone for nomination to the Board of Directors pursuant to such affiliate’s right under a stockholders agreement, the current form of which is referenced under the “Transactions with Related Persons — Stockholders Agreement” section of this Proxy Statement.

Class II — Nominees Standing for Re-Election:

Committees of the Board of Directors

There are three standing committees of our Board of Directors: Audit Committee, Compensation Committee, and Corporate Governance and Nominating Committee, each of which is composed entirely of independent directors.

		•     ArvinMeritor, Inc.
		•     BorgWarner Inc.
		•     Caterpillar Inc.
		•     Cummins Inc.
		•     Danaher Corp.
		•     Deere & Co.
		•     Eaton Corporation
		•     Emerson Electric Co.
		•     The Goodyear Tire & Rubber Company
		•     Ingersol-Rand Co. Ltd.
		•     Johnson Controls, Inc.
		•     Lear Corporation
		•     Masco Corporation
		•     PACCAR Inc.
		•     Parker-Hannifin Corp.
		•     Tenneco Inc.
		•     Terex Corp.
		•     Textron Inc.
		•     Visteon Corporation
		•     Whirlpool Corp.
		Towers Perrin has been engaged by TRW to provide data from both of these sources on an ongoing basis from November 2007.
		The survey and other compensation data gathered is used to establish competitive levels for total direct compensation, targeting compensation to fall between market median and the 75th percentile of the market data, taking into account the executive’s experience, performance and value to TRW.
		Our Chief Executive Officer uses this data when recommending executive compensation to the Compensation Committee. The Compensation Committee uses these levels as guidelines but not rigid target ranges.
		In addition to providing the services identified above, both Mercer and Towers Perrin provide other services to TRW. Mercer provides TRW with the following additional services:
		•    Actuarial valuations with respect to our defined benefit plans in the U.S., Germany and Japan as well as valuations with respect to certain statutory plans in certain territories where required by legislation;
		•     Retiree medical plan consulting, including plan design recommendations; and
		•     Investment consulting with respect to our U.S. and U.K. pension plan investments.
		Towers Perrin provides TRW with the following additional services:
		•     Actuarial and administrative services with respect to our Canadian pension plans;
		•     Health care consulting for our Canadian active and retiree medical plans; and
		•     Investment consulting with respect to our Canadian pension plan investments.

Directors should possess high personal and professional ethics, integrity and values, and be committed to representing the long-term interests of the stockholders. They must also have an inquisitive and objective perspective, practical wisdom and mature judgment. Directors must be willing to devote sufficient time to carrying out their duties and responsibilities effectively, and should be committed to serve on the Board for an extended period of time. The Corporate Governance and Nominating Committee, after consultation with the Chairman and other members of the Board, shall review periodically the particular attributes that would be most beneficial to TRW in future Board nominees. This assessment shall include, but not be limited to, issues such as integrity, competence, experience, commitment, diversity and collegiality.

Our independent directors are also required to meet certain stock ownership guidelines. We feel this further aligns the interests of the independent directors with those of our stockholders. Under these guidelines, the independent directors are expected, over a period of five years from the date they are elected as a director, to acquire and hold a total of eight thousand (8,000) shares of our common stock. Unvested restricted stock units do not count toward satisfying these requirements. Each of our independent directors who has been a Board member for five years or more meets or exceeds these guidelines.

Each of the nominees for the Board of Directors included on the proxy card for the 2009 annual meeting is standing for re-election.

Code of Ethics

We have adopted a code of ethics that applies to our chief executive officer, chief financial officer, principal accounting officer and other employees. This code is called our Standards of Conduct and is available on TRW’s Internet site ( www.trw.com) under Investors/Corporate Governance and is available in print to any stockholder who requests it.

Security Ownership of Certain Beneficial Owners and Management

The table below shows how much of our common stock was beneficially owned as of March 23, 2009 (unless another date is indicated) by (i) each person known by TRW to beneficially own more than 5% of our common stock, (ii) each director (who was serving as a director as of that date) and nominee for director, (iii) each executive officer named in the Summary Compensation Table appearing later in this Proxy Statement, and (iv) all directors and executive officers as a group. In general, a person “beneficially owns” shares if he or she has or shares with others the right to vote those shares or to dispose of them, or if the person has the right to acquire such voting or disposition rights within 60 days of March 23, 2009 (such as by exercising options).

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires the Company’s executive officers, directors and beneficial owners of more than 10 percent of a registered class of the Company’s equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership of the Company’s common stock. Such officers, directors and persons are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms that they file with the SEC.

Based solely on our review of copies of such forms that were furnished to TRW or written representations from TRW’s officers and directors that no Form 5 ownership reports were required for those persons, the Company believes that all filing requirements applicable to its directors, executive officers and greater than 10 percent stockholders were complied with during fiscal year 2008.

Transactions with Related Persons

Stockholders Agreement

On May 29, 2007, we entered into a Third Amended and Restated Stockholders Agreement (the “Third Restated Agreement”) with Automotive Investors L.L.C. (“AI LLC”), an affiliate of Blackstone, which restated AI LLC’s registration rights as set forth in the Second Amended and Restated Stockholders Agreement dated as of January 28, 2004 among TRW, AI LLC and an affiliate of Northrop Grumman Corporation (the “Second Restated Agreement”). The Third Restated Agreement deleted provisions in the Second Restated Agreement that were no longer relevant. For a description of certain agreements and relationships with Blackstone and its affiliates, see “Compensation Committee Interlocks and Insider Participation” below.

Employee Stockholders Agreement

The employee stockholders agreement that we and our management group entered into with an affiliate of Blackstone at the closing of the acquisition by affiliates of Blackstone of the shares of the subsidiaries of TRW Inc. engaged in the automotive business from Northrop Grumman Corporation (the “Acquisition”) provides for certain restrictions and rights in connection with certain sales of shares of our common stock held by our management stockholders. Any stockholders party to this agreement transferring at least a majority of our outstanding stock in a transaction has the right to drag along the other stockholders in such transaction and is subject to the right of such other stockholders to tag along in such transaction. In addition, TRW has certain obligations with respect to piggyback registration rights held by the employee stockholders. The agreement ceases to apply with respect to any shares sold pursuant to Rule 144 under the Securities Act of 1933.

For a description of certain other agreements and relationships with Blackstone and its affiliates, see “Compensation Committee Interlocks and Insider Participation” below.

Related Persons Transactions

In May 2008 our Board of Directors adopted a written policy that requires the Audit Committee to approve or ratify certain transactions involving the Company in which any director, director nominee, executive officer, 5% beneficial stockholder or any of their immediate family members (collectively, “related persons”) has a direct or indirect material interest, as determined by the Committee. This policy covers, without limitation, financial transactions, arrangements or relationships, indebtedness and guarantees of indebtedness and transactions involving employment and similar relationships, but excludes certain transactions deemed not to involve a material interest on the part of the related person. The policy requires directors, director nominees and executive officers to promptly notify the General Counsel or the Chief Financial Officer of any transaction involving TRW and a related person so that it can be reviewed by the Audit Committee to determine whether the related person has a direct or indirect material interest. If the Audit Committee so determines, it considers all relevant information to assess whether the transaction is in, or not inconsistent with, the best interests of the Company and its stockholders. Prior to any renewal of a previously approved related person transaction the Committee will again review the transaction to determine whether it should be renewed. The participation agreement with Core Trust Purchasing Group referenced below was reviewed with the Audit Committee prior to being executed.

Compensation Committee Interlocks and Insider Participation

Mr. Losh and Mr. Castaing are members of the Compensation Committee. Mr. Neil Simpkins was a member of the Compensation Committee until his resignation from that Committee on June 4, 2008. None of Messrs. Simpkins, Losh or Castaing is or has been an employee or officer of TRW or its subsidiaries since the Acquisition. Mr. Simpkins is a senior managing director of Blackstone. For a description of the relationships of TRW’s directors with Blackstone and its affiliates, see “The Board of Directors — Director Information” and “Security Ownership of Certain Beneficial Owners and Management”.

Transaction and Monitoring Fee Agreement

In connection with the Acquisition, Blackstone entered into a transaction and monitoring fee agreement whereby Blackstone agreed to provide us monitoring, advisory and consulting services, including advice regarding (i) structure, terms and negotiation of debt and equity offerings; (ii) relationships with our and our subsidiaries’ lenders and bankers; (iii) corporate strategy; (iv) acquisitions or disposals; and (v) other financial advisory services as more fully described in the agreement. For these services, we paid an upfront transaction and advisory fee upon closing of the Acquisition, and have agreed to pay an annual monitoring fee of $5 million. Blackstone may elect, at any time, to receive, in lieu of annual payments of the monitoring fee, a single lump sum cash payment equal to the then-present value of all then-current and future monitoring fees payable under this agreement, assuming the termination date to be the tenth anniversary of the closing date of the Acquisition. We agreed to indemnify Blackstone and its affiliates, directors, officers and representatives for losses relating to the services contemplated by this agreement. The agreement terminates on the earliest of (1) the date on which Blackstone owns less than 5% of the number of shares of our common stock then outstanding; (2) Blackstone elects to receive a single lump sum cash payment in lieu of annual payments of the monitoring fee; and (3) such earlier date as we and Blackstone may mutually agree upon. Since the beginning of 2008, we have paid Blackstone $5 million in monitoring fees plus reimbursed approximately $0.2 million of Blackstone’s expenses in connection with this agreement, all of which pertained to 2008.

Core Trust Purchasing Group

In the first quarter of 2006, we entered into a five-year participation agreement (“participation agreement”) with Core Trust Purchasing Group, formerly named Cornerstone Purchasing Group LLC (“CPG”) designating CPG as exclusive agent for the purchase of certain indirect products and services. CPG is a “group purchasing organization” which secures from vendors pricing terms for goods and services that are believed to be more favorable than participants could obtain for themselves on an individual basis. Under the participation agreement we must purchase 80% of the requirements of our participating locations for the specified products and services through CPG or CPG may terminate the contract. In connection with purchases by its participants (including us), CPG receives a commission from the vendor in respect of purchases. Although CPG is not affiliated with Blackstone, in consideration for Blackstone’s facilitating our participation in CPG and monitoring the services CPG provides to us, CPG remits a portion of the commissions received from vendors in respect of purchases by us under the participation agreement to an affiliate of Blackstone, with whom certain members of our board, Messrs. Simpkins, Friedman and O’Neill, are affiliated and in which they may have an indirect pecuniary interest. Since the beginning of 2008, through December 19, 2008, the affiliate of Blackstone received de minimus fees from CPG in respect of TRW purchases.

Audit Committee Report

The Audit Committee of our Board of Directors currently consists of three directors. All three of these individuals are independent for purposes of NYSE listing requirements and the SEC’s rules promulgated under the Sarbanes-Oxley Act of 2002. The written charter under which the Audit Committee operates was adopted in 2004 and has been re-evaluated annually since its adoption. The charter is posted on TRW’s Internet site ( www.trw.com ).

Management has primary responsibility for the financial statements of TRW Automotive Holdings Corp. (the “Company” or “TRW”), including the audited consolidated financial statements of TRW for the year ended December 31, 2008, which we refer to herein as our audited financial statements, and TRW’s financial reporting process, including maintaining effective internal controls and assessing the effectiveness of internal control over financial reporting. TRW’s independent registered public accounting firm, Ernst & Young LLP (“EY”), is responsible for expressing an opinion on the conformity of those audited financial statements with generally accepted accounting principles and expressing an opinion on the effectiveness of TRW’s internal control over financial reporting. As provided in the Audit Committee’s charter, the Audit Committee oversees these matters.

The Audit Committee has prepared the following report on its activities:

	•		The Audit Committee has reviewed and discussed the annual audited financial statements with management and EY, in advance of the public release of operating results, and filing of annual reports with the SEC;
	•		The Audit Committee has reviewed and discussed the effectiveness of TRW’s internal control over financial reporting, management’s assessment thereof, and EY’s report of the effectiveness of the Company’s internal control over financial reporting with management, EY and the internal auditor;
	•		The Audit Committee has discussed with EY the matters required to be discussed by Statement on Auditing Standards No. 61, Communication with Audit Committees (as amended), other standards of the Public Company Oversight Board (United States), rules of the SEC, and other relevant professional and regulatory standards, which include, among other items, matters related to the conduct of the audit of our financial statements;
	•		The Audit Committee has received the written disclosures and the letter from EY required by applicable requirements of the Public Company Accounting Oversight Board (United States) regarding the independent accountant’s communications with the Audit Committee concerning independence, and has discussed with EY its independence from TRW; and
	•		Based on the review and discussions referred to above, the Audit Committee has recommended to the Board of Directors that the audited financial statements be included in TRW’s Annual Report on Form 10-K for the year ended December 31, 2008 for filing with the SEC.

AUDIT COMMITTEE:

J. Michael Losh (Chairman)
James F. Albaugh
Francois J. Castaing

Audit Fees

Audit fees are related to EY’s audit of our annual financial statements, timely interim reviews of the financial statements included in quarterly reports on Form 10-Q, statutory audits, assistance with registration statements and issuance of comfort letter and consents.

Audit-Related Fees

Audit-related services consisted primarily of audits of employee benefit plans and agreed upon procedure reports required to comply with financial accounting or regulatory reporting matters.

Tax Fees

Tax fees primarily represent fees for tax-related compliance and tax planning services provided to TRW and its subsidiaries by EY.

All Other Fees

These represent fees for all other services provided to TRW and its subsidiaries by EY.

The Audit Committee has considered the nature of the above-listed services provided by EY and determined that they are compatible with their provision of independent audit services. The Audit Committee has discussed these services with EY and management to determine that they are permitted under the Code of Professional Conduct of the American Institute of Certified Public Accountants and the SEC’s auditor independence requirements.

We have implemented procedures to ensure full compliance with the provisions of the Sarbanes-Oxley Act of 2002, including restrictions on the services which may be provided by EY. The Audit Committee believes that these restrictions would have had no significant effect on the nature and scope of services provided by EY nor on our ability to procure accounting, tax or other professional services as required. In addition, in connection with the audit of the 2008 financial statements, we entered into an engagement letter with EY. That agreement is subject to alternative dispute resolution procedures.

Pre-Approval Policy

The Audit Committee has also adopted procedures for pre-approving all audit and non-audit services provided by EY. These procedures include reviewing all requested audit and permitted non-audit services and a budget for such services. The budget includes a description of, and a budgeted amount for, particular categories of non-audit services that are recurring in nature and otherwise anticipated at the time the budget is submitted. Further Audit Committee approval is required to exceed the budget amount for a particular category of all audit and non-audit services by more than the greater of 10% or $20,000 (“Cost Over-Runs”) and to engage the independent auditor for any non-audit services not included in the budget. For both types of pre-approval, the Audit Committee considers whether such services are consistent with the SEC rules on auditor independence. The Audit Committee also considers whether the independent auditor is best positioned to provide the most effective and efficient service, for reasons such as its familiarity with our business, people, culture, accounting systems, risk profile, and whether the services enhance our ability to manage or control risks and improve audit quality. For any service that has been pre-approved by the Audit Committee, management has the authority to reimburse reasonable out-of-pocket expenses incurred by EY in connection therewith. These reimbursed expense amounts do not count toward the pre-approved cost levels or budgeted amounts and are not considered a Cost Over-Run. The Audit Committee may delegate pre-approval authority to one or more members of the Audit Committee. The Audit Committee periodically monitors the services rendered and actual fees paid to the independent auditors to ensure that such services are within the parameters approved by the Audit Committee.

Executive Officers

The name, age and position as of March 23, 2009 and a description of the business experience of each of our executive officers is listed below. There is no family relationship among the executive officers or between any executive officer and a director. Our executive officers are elected by the Board of Directors and hold office until their successors are elected and qualified or until their earlier resignation or removal.

John C. Plant has been our President and Chief Executive Officer as well as a member of our board of directors since February 2003. Prior to that, Mr. Plant had been a co-member of the Chief Executive Office of TRW Inc. and had been President and Chief Executive Officer of the automotive business of TRW Inc. since 2001. From 1999 — 2001, Mr. Plant was Executive Vice President and General Manager of TRW Chassis Systems. Prior to the TRW Inc. acquisition of Lucas Varity in 1999, Mr. Plant was President, Lucas Varity Automotive.

Joseph S. Cantie has been the Executive Vice President and Chief Financial Officer of TRW and TRW Automotive Inc. since April 2004. From February 2003 to April 2004, Mr. Cantie was the Vice President and Chief Financial Officer of TRW Automotive Inc. Prior to that time he served as Vice President, Finance for TRW Inc.’s automotive business since November 2001. Mr. Cantie served as Vice President, Investor Relations for TRW Inc. from October 1999 to November 2001. From November 1996 to September 1999, Mr. Cantie served in several executive positions with Lucas Varity plc, including serving as Vice President and Controller from July 1998 to September 1999. Prior to joining Lucas Varity, Mr. Cantie, a certified public accountant, spent ten years with the international accounting firm of KPMG.

Steven Lunn has been the Executive Vice President and Chief Operating Officer of TRW since November 2003, and the Executive Vice President and Chief Operating Officer of TRW Automotive Inc. since February 2003. Prior to that, Mr. Lunn had been Executive Vice President, Automotive Operations of TRW Inc. since 2001 and had served prior to that as Senior Vice President, Operations, of TRW Inc. Chassis Systems since May 1999. Mr. Lunn was Deputy President and Chief Operating Officer of Lucas Varity Automotive from August 1998 until April 1999. Prior to this position, he was Managing Director for Lucas Varity’s Light Vehicle Braking Systems Division.

Peter J. Lake has been the Executive Vice President, Sales and Business Development of TRW and TRW Automotive Inc. since April 2004. From February 2003 to April 2004, Mr. Lake was the Vice President, Sales and Business Development of TRW Automotive Inc. Prior to that time he served as Vice President, Sales and Business Development for TRW Inc.’s automotive business since February 2002. From October 2001 to February 2002, Mr. Lake held the position of Vice President, Planning and Business Development and also Vice President and General Manager, Parts and Services for TRW Inc.’s automotive business. From October 2000 to November 2001, he held the same position for TRW Inc. Chassis Systems. From October 1999 to October 2000, Mr. Lake served as Vice President, Planning and Business Development for TRW Inc. Chassis Systems. From 1996 to October 1999, Mr. Lake served in various executive positions with Lucas Varity.

David L. Bialosky has been the Executive Vice President, General Counsel and Secretary of TRW and TRW Automotive Inc. since April 2004. From February 2003 to April 2004, Mr. Bialosky was the Vice President, General Counsel and Secretary of TRW Automotive Inc. Prior to that time he served as Vice President and an Assistant General Counsel of TRW Inc. since 1997. Since November 2001, he had been responsible for the legal function at TRW Inc.’s automotive business. He was Vice President and Assistant General Counsel of TRW Chassis Systems from October 1999 to November 2001 and of TRW Inc.’s automotive business from January to October 1999. From April 1997 to December 1998, Mr. Bialosky served as Vice President and Assistant General Counsel, TRW Inc. Automotive Electronics.

Neil E. Marchuk has been our Executive Vice President Human Resources since July 2006 and was our Vice President Human Resources from September 2004 to July 2006. Prior to joining TRW, from December 2001 to August 2004, Mr. Marchuk was Director Corporate Human Resources for E.I. Du Pont De Nemours and Company (“E.I. Du Pont”), a company involved in science and technology in a range of disciplines, including high-performance materials, synthetic fibers, electronics, specialty chemicals, agriculture and biotechnology. From September 1999 to November 2001, Mr. Marchuk was Director Global HR Delivery for E.I. Du Pont. From February 1999 to August 1999, Mr. Marchuk served E.I. Du Pont as its Global HR Director Global Services Division.

Compensation Committee Report

The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis set forth in the Proxy Statement and based on such review and discussion recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the Proxy Statement and incorporated by reference into the Annual Report on Form 10-K.

		COMPENSATION COMMITTEE:
		Francois J. Castaing (Chairman) J. Michael Losh

Compensation Discussion and Analysis

Introduction

Our compensation philosophy has been developed to attract first-class executive talent, retain key leaders, reward past performance, incentivize future performance, and align the long-term interests of our executive officers with those of our stockholders. We use a variety of compensation elements to achieve these objectives, primarily base salary, annual cash incentive payments, stock options, and restricted stock units. Pension and termination benefits also serve as an important compensation tool for our executive officers.

These compensation elements for our executive officers and the broader leadership team help to create an environment that focuses executives on working collaboratively to deliver business results and increase stockholder value.

Most of the facets of our compensation program for executive officers, including the termination and severance packages described below, are covered by employment agreements that were negotiated in 2003 between the executive officers and Blackstone at the time of the leveraged buyout of our company by a Blackstone affiliate. These employment agreements, the term of certain of which have been extended, remain in effect today and cover matters such as base salary, annual cash incentive payments, pension plan arrangements and severance arrangements. While these agreements were negotiated in connection with a leveraged buyout and the risks inherent thereto, we believe that the benefits set forth in such agreements are in line with benefits afforded to executives of similarly sized companies. This belief is based in part on conclusions drawn by, and information received from, Mercer. In the fall of 2003 management hired Mercer to review and analyze the change in control and other severance benefit provisions in the executive officers’ employment agreements, and Mercer concluded that the provisions were generally in line with market practice. The Committee’s review of compensation information gathered by consultants as described above under “Committees of the Board of Directors — Compensation Committee — Consultants and Benchmarking” also supports this view.

While the Compensation Committee recognizes the potential value of the termination and severance plans in the event of a termination or change in control, it considers severance plans separate and distinct from ongoing compensation plans with each serving a separate and unique purpose. As a result, no direct relationship between those arrangements and current compensation decisions is considered.

Oversight of the Executive Compensation Program

The Compensation Committee (the “Committee”) administers our executive compensation program. The members of the Committee are Messrs. Francois J. Castaing and J. Michael Losh. Mr. Neil P. Simpkins was a member of the Committee until his resignation from the Committee on June 4, 2008. Mr. Simpkins is and, at the time he served on the Committee was, employed by Blackstone, which controls approximately 45.4% of the voting rights of TRW’s shares, and as such is not an independent director.

The Committee has responsibility for establishing overall compensation philosophy, setting compensation for the Chief Executive Officer (the “CEO”) and approving compensation for the other executive officers, including the Chief Financial Officer (the “CFO”), upon the recommendation of the CEO. In the case of the CEO’s compensation, the Committee sets the goals and objectives for his compensation at the beginning of each fiscal year, evaluates his performance after the end of the year in light of these goals and objectives, and then determines his compensation levels, primarily with respect to base salary, an annual cash incentive payment, stock options and restricted stock units.

The Committee also has responsibility for approving the pension plans and welfare benefit plans for the executive officers, other than plans covering employees on a non-discriminatory basis. Finally, the Committee approves grants (or delegates such responsibility to the CEO with respect to grants to non-executive officers) under TRW’s 2003 Stock Incentive Plan, as amended and restated (the “Plan”) and exercises general oversight over compensation practices. The Plan was filed with the SEC on January 26, 2004 as Exhibit 10.20 to Amendment No. 5 to the Company’s Registration Statement on Form S-1.

On at least an annual basis, the Committee reviews survey market data and recommendations submitted by management regarding base salaries, cash incentive payments, stock options, restricted stock units and other forms of compensation. In addition, the Committee annually reviews market data submitted by management comparing our compensation levels and mix to that of an industry peer group.

From time to time the Committee may utilize the services of an independent compensation consultant with respect to the following:

•

collecting competitive market data related to executive officers’ compensation levels and incentive compensation design;

•

analyzing executive compensation trends and implications for TRW;

•

evaluating our executive compensation program design and effectiveness; and

•

recommending compensation mix between base salary, cash incentive awards and equity based awards such as stock options and restricted stock units.

The Committee utilized Mercer’s services in 2004 to establish the current executive compensation program and in 2008 relative to consideration being given to the total direct compensation of the Company’s CEO. Further detail about the Committee’s engagement of Mercer as well as management’s engagement of Mercer is provided above in “Committees of the Board of Directors — Compensation Committee — Consultants and Benchmarking.”

Executive Compensation Philosophy and Principles

Our executive compensation program is intended to motivate the executive officers to improve our financial position, to be personally accountable for our Company performance and to make decisions about our business that will increase stockholder value.

The following principles reflect our compensation philosophy:

1.     Compensation levels will be market competitive and will recognize skill, knowledge and experience.

The Committee reviews compensation survey data to ensure that our executive compensation program is competitive. This survey data is used to ensure that, for each executive position, the Committee’s compensation actions regarding base salary, annual cash incentive compensation, stock options, restricted stock units, retirement plans and all other compensation and perquisites are appropriate, reasonable and consistent with our philosophy, considering the various markets in which we compete for executive talent.

The Committee does not limit its analysis to organizations in the automotive industry because our competition for qualified executives is not limited to the automotive industry. In addition, for some executive positions, we may desire skills or experience from a more varied set of backgrounds.

The survey data gathered is used to establish competitive levels for each executive officer’s individual total direct compensation (base salary, annual cash incentive compensation, and long-term incentive compensation) targeting such compensation to fall between the 50 ^th and the 75 ^th percentile of the market. Information about the market data consulted is set forth above in “Committees of the Board of Directors — Compensation Committee — Consultants and Benchmarking.” Although the Committee uses these levels as guidelines rather than rigid target ranges, the total direct compensation of all but one of our executive officers falls within the targeted range, with the remaining officer, who is not the CEO or CFO, being above the range, in part due to difficulties in identifying appropriate comparable matches to the market data due to the nature and breadth of his position.

2.     Compensation will be performance-related.

The executive compensation program is designed to reinforce and reward achievement of specific metrics that measure attainment of our business objectives which should, over the long run, enhance stockholder value. The Committee believes that a significant portion of an executive officer’s total compensation should be tied to how well we perform in both the short-term and long-term.

Short-term performance is evaluated against specific financial objectives which are set annually. The annual cash incentive plan is designed to reward the achievement of short-term results. Our equity plan consists of awards of stock options and restricted stock units which are allocated according to individual performance and the individual’s importance to achieving our strategic objectives. It is designed to reward long-term performance as measured by the growth in our share price.

The Committee believes that, in years when our performance is better than the objectives established for the relevant performance period, executive officers should be paid more than their target annual cash incentive and when performance does not meet such objectives, annual cash incentive payments should be less than their target.

3.     Compensation at risk will rise with position level.

The Committee believes that the proportion of an executive officer’s total compensation that varies with performance (either our financial performance or the value of our stock) should increase as the scope and level of the individual’s responsibilities increase. Accordingly, for fiscal 2008, approximately 83% and 80%, respectively, of the total direct compensation (the sum of base salary, annual cash incentive payments, and compensation attributed to stock options and restricted stock units) of the CEO and CFO was at risk in terms of either our financial performance or the value of our stock. For the other named executive officers approximately 76% was at risk.

4.		Incentive compensation will balance short- and long-term business performance and align executive interests with stockholder interests.

In selecting the specific elements of our executive compensation program, the Committee seeks to structure a balance between achieving strong short-term or annual results and ensuring TRW’s long-term viability and success. The Committee also seeks to align the long-term income growth potential for executives with the long-term growth in stockholder value. We achieve this balance and alignment through the combination of the annual cash incentive program, which focuses on annual financial objectives, and the equity award program, which bases the value of the award on the growth in value of our stock.

Annual Cash Incentive Program . The annual cash incentive program provides executives with the opportunity to earn an annual cash incentive based upon our achievement of specific goals which are set by the Committee at the beginning of each fiscal year. For 2008 compensation there were three components to the annual cash incentive program: a defined EBITDAP target with a weighting of 40%, a defined cash flow target with a weighting of 40% and a 20% weighting for additional factors which could include industry-specific and general economic conditions as well as strategic factors (“Additional Factors”). Each of these components is more fully described below under “2008 Execution of the Executive Compensation Program — Annual Cash Incentive Payments.”

The Committee believes that annual cash incentive compensation, based on TRW’s achievement of the specific goals described above, should be capped at 125% of an executive’s target award regardless of the extent to which we exceed annual Company performance goals. Accordingly, the payout range as a percentage of base pay established for fiscal 2008 for each named executive officer was as follows:

Once the executive officers’ contractual incentive percentage is determined as described above, the Committee may, based upon exceptional circumstances which would be identified, increase the incentive compensation paid to a particular executive officer based upon the Committee’s assessment of that individual’s contributions toward the achievement of TRW’s goals.

Long-Term Equity Awards . The equity award program provides executives with an opportunity to earn both stock options and restricted stock units. A stock option rewards an executive officer only if the market value of the common stock increases above the exercise price of the option and the individual remains employed with us for the period required for the option to vest. Stock options link a significant portion of the executive officers’ compensation to the interests of our stockholders by providing an incentive to take actions that increase the value of the common stock over the term of the vesting period. Restricted stock units retain value no matter the price of the common stock as long as the executive officer is employed until the units vest. Since 2004 the vesting period for stock options and restricted stock units has generally been ratable over three years. The Committee believes using restricted stock units in combination with stock option grants provides a better balance for executive officers between risk and potential reward than a grant of only stock options, thus serving as more effective incentives for our most effective managers to remain with us and continue that performance.

In late February of each year, the Committee determines the overall size of the long-term incentive award for all employees, including the CEO and CFO, and makes an annual grant of stock options and restricted stock units to certain employees including the CEO and CFO. These awards are made after the end of the fiscal year when the Committee has had an opportunity to evaluate our operating results for the prior fiscal year and is making compensation decisions for the current fiscal year. After considering the cost of equity awards and the perceived value by employees, the Committee determines an appropriate balance between options and restricted stock units in an individual’s equity award.

To be eligible for equity awards, executives and other senior managers are required to meet stock ownership guidelines. We feel this further aligns the interests of executives with those of stockholders. Under these guidelines, executive officers and other senior managers are expected, over time, to acquire and hold shares of our common stock. Depending on their level and whether they are new to TRW, executive officers and other senior managers generally have a three to five year period over which to meet the stock ownership guidelines. These guidelines are reviewed annually and the progress toward meeting their suggested ownerships levels monitored. Unexercised stock options and unvested restricted stock units do not count toward satisfying the requirements.

The stock ownership requirements of the CEO, the CFO and the other three named executive officers are as follows:

Each of the executive officers meets or exceeds these suggested guidelines.

5.     There will be balance between current and long-term compensation.

Although the Committee believes that a considerable amount of executive compensation should be linked to the delivery of stockholder value, the Committee also recognizes that, while stock prices may reflect corporate performance over the long term, other factors, such as general economic conditions and varying attitudes among investors toward the stock market in general and specific industries and/or companies in particular, may significantly affect stock prices at any point in time. Accordingly, the annual cash components of the executive compensation program, consisting of base salary and annual incentive opportunities, emphasize current corporate performance and the realization of specific financial objectives, which are independent of short-range fluctuations in the stock price.

Each executive officer receives a competitive amount of cash compensation each year with the opportunity to increase that amount based on the extent to which we attain our specific financial objectives (primarily EBITDAP and cash flow). That cash compensation is complemented by an opportunity to earn a substantial amount of additional compensation through awards of stock options and restricted stock units that increase in value with increases in our share price.

2008 Execution of the Executive Compensation Program

As with 2007, the primary elements of our 2008 executive compensation program were:

•

base salary;

•

an annual cash incentive opportunity;

•

equity awards in the form of stock options and restricted stock units;

•

retirement and other post-termination benefits; and

•

other miscellaneous benefits.

Annually, the Committee reviews each executive officer’s total compensation and compares the compensation of the executive officers to management-provided market data. For information regarding such market data, see “Committees of the Board of Directors — Compensation Committee - Consultants and Benchmarking.” The CEO presents to the Committee his evaluation of each executive officer, which includes a review of contribution and performance over the past year and proposed compensation. Following this presentation and review of the market data, the Committee makes its own assessments and formulates compensation amounts for each executive officer with respect to base salary, stock options and restricted stock units.

The members of the Committee also have the opportunity to meet with each of the executive officers at various times during the year, which allows the Committee to complement the CEO’s assessment with its own observations of each individual’s performance.

Base Salary

Annually the Committee reviews and determines any increases in the base salaries of the CEO, the CFO, and the other executive officers after receiving management-provided market data and evaluating individual performance. The executive officers’ employment agreements provide that their salary at any point cannot be decreased.

In 2008 the base salary increase for our named executive officers ranged from 3.9% to 16.3% with the average for the group being 6.7%. The CFO received an increase of 16.3% because his base salary was below the market median. The Committee determined these increases were appropriate given the projected market increase of 4.1% at the time increases were awarded and TRW’s overall performance in light of the difficult North American automotive environment.

Annual salaries TRW paid to the CEO, the CFO and the other three named executive officers during fiscal 2008 are shown in the Summary Compensation Table on page 39.

Annual Cash Incentive Payments

Our annual cash incentive (bonus) target for each executive officer is set at a fixed percentage of base pay, which is specified in each executive’s employment agreement. For our CEO the target is 200% of base pay, the COO 130% and the other named executive officers 90%. This is in line with our philosophy of higher reward potential for positions of greater responsibility. Annual cash incentive awards are capped at 125% of each executive’s target award regardless of the extent to which TRW exceeds 125% of its annual company performance goals. Although the executive’s target goals are above market median, this cap is below market median resulting in the maximum cash incentive opportunity at market median.

At the beginning of each year, the Committee establishes the financial targets for determination of the annual cash incentive payment for the named executive officers. These targets are established after the end of the prior fiscal year when our preliminary financial results have been made available to the Board of Directors and the Board has reviewed the annual operating plan for the current fiscal year. For 2008, forty percent of the annual incentive payment was tied to a defined EBITDAP target, forty percent to a defined cash flow target and the remaining twenty percent to Additional Factors which could include industry-specific and general economic conditions as well as strategic factors.

While the Committee may exercise judgment over all three components, the first two are primarily formulaic and provide payout amounts that are directly attributable to the percentage of the metric attained. Attaining 100% of the stated objective will result in a cash incentive payment of the target amount. An overachievement of the objective delivers a percentage increase in the cash incentive payment equal to the percentage of overachievement, subject to the cap of 125% of the targeted payment described above (which applies if the Company achieves 110% or more of the stated objective). Attaining less than 100% of the stated objective delivers a percentage decrease in the target cash incentive payment greater than the percentage of underachievement as a penalty for the underperformance. At the low end of the payout range, achievement of 90% of the stated objective results in a cash incentive payment of only 33% of the target amount. No annual cash incentive compensation for the EBITDAP and cash flow components is earned unless the Company achieves at least 90% of its performance goals for the year. The Committee may make adjustments to EBITDAP or cash flow objectives to reflect unusual or other factors, such as unbudgeted acquisitions or disposals.

The definition of EBITDAP and cash flow are as follows:

•

EBITDAP is earnings before interest, taxes, depreciation and amortization, defined benefit pension and post-retirement benefits other than pensions (“OPEB”) expense, certain non-cash charges, one-time transaction related costs and unbudgeted major recalls.

•

Cash Flow is EBITDAP (as defined above) minus capital expenditures plus or minus change in net working capital and plus or minus a capital charge on working capital levels in excess of, or below, budgeted levels.

For the purpose of such calculations, annual cash incentive payments are accrued at targeted levels.

The final component, Additional Factors, is discretionary by its nature and allows the Committee to consider such items as TRW’s performance versus general industry conditions, and managements’ achievement of specific strategic factors. Examples include the integration of an acquisition, execution of a desired shift in customer mix, the launch of a new product line, new business awards, advancement of strategic customer and supplier relationships, acquisition and disposal activity, or management of benefit plans and taxes, among others. For 2008, this component had a target weighting of 20% of the total target value. This component also had a maximum payout of 125% of the target weighting.

Annual cash incentive payments are made in late February or early March for the prior fiscal year’s performance and are based upon the Committee’s assessment of actual performance of TRW against the financial targets established by the Committee for the prior fiscal year and the Committee’s subjective consideration of Additional Factors (as it pertains to the 20% component described above). In most years the Committee will award all named officers with the same payout percentage based on the description provided above. The Committee may award an executive a higher percentage payout if the Committee believes that the individual executive’s contributions significantly exceeded the Committee’s expectations.

For the 2008 annual cash incentive awards, the financial targets established at the beginning of 2008 were target EBITDAP of $1.155 billion and target cash flow of $411 million. In January of 2009, the Committee reviewed TRW’s actual performance against each of these financial targets, and concluded that (i) EBITDAP achievement was $949 million, which was 18% below target, generating a score of 0% for this component, and (ii) cash flow achievement was $884 million, which was 115% above target, generating a score that was limited to 50% for this component due to the 125% cap. In making its assessment of the Additional Factors component, the Committee recognized the following achievements, in light of the unprecedented economic and automotive industry conditions: management’s restructuring actions to address the industry decline; TRW’s cash flow result exceeded plan and net debt declined, although credit for the excess cash generation was capped; the executive officers’ extensive involvement and efforts in industry downturn management, including headcount reductions, focus on capital expenditures and working capital optimization and other cost reduction activities; effective capital structure management, including active management of global cash flows and debt positions and the advancement of an internal restructuring project; the proactive mitigation of commodity inflation and management of a weakened supply base; improved quality metrics and lack of any major product recalls during 2008; continued restructuring of benefit plans; and the effective management of supplier, customer and business issues, including keeping new business awards on pace to support future growth. Based on these achievements, the Committee awarded the maximum score of 25% for this component. As a result of the foregoing, the Committee awarded an overall annual cash incentive score of 75%, resulting in payment to each executive officer of 75% of his target annual cash incentive award, which was a 38.5% reduction in the score for 2007.

The Committee believes that the fiscal 2008 incentive cash payments are consistent with our strategy of rewarding our executive officers for the achievement of important, challenging business goals and resulted in reasonable performance-related bonus payments to the executive officers.

Annual cash incentive payments paid to the CEO, the CFO and the other three named executive officers for fiscal 2008 are shown in the Summary Compensation Table on page 39.

Stock Options and Restricted Stock Units

In deciding on the 2008 awards of stock options and restricted stock units (shown in the Grants of Plan-Based Awards table below), after assessing the dilutive effect of such awards, the Committee considered the 2008 market data provided by Towers Perrin to establish the target value for each executive based on such executive’s position, and then evaluated each executive’s recent performance, overall contribution and value to TRW and the need to retain the executive to provide long-term value to TRW. The Committee did not judge performance, contribution or value to TRW based on a formal rating scale but rather holistically through discussion with the CEO on each executive as well as through the Committee members’ own observations in interactions with the executive officers.

In addition, each executive confirmed he had met his share ownership guidelines and was therefore eligible for an award.

Each stock option granted permits the executive officer to purchase one share of common stock from us at the exercise price. For grants made after our initial public offering, the exercise price was calculated at fair market value under the Plan, which is the average of the high and low sales price of our common stock on the NYSE on the date of grant. The stock options granted in fiscal 2008 vest in three equal annual installments beginning one year after the date of grant and expire after 8 years.

Restricted stock units represent the right to receive shares of common stock on a one-for-one basis on the vesting date if the individual continues to be employed. The restricted stock units granted by the Committee in fiscal 2008 vest in three equal annual installments beginning one year after the date of grant.

Annual grants of equity awards were made to eligible senior leaders including executive officers in each year following our initial public offering (2005 through 2009). These grants are targeted to be made within one week after we file our Annual Report on Form 10-K. We believe this practice allows the market to absorb material information (such as fourth quarter and annual financial results) before options are granted and priced and we intend to continue with this practice. The Committee determined the number of options and restricted stock units granted to each executive officer individually and the aggregate amount of options and restricted stock units to be granted to non-executive employees. The Committee delegated to the CEO the authority to determine the non-executive employees who would receive such grants and the individual amounts granted to each such employee, as long as this determination was made prior to the grant date (which was the same date grants were made to executive officers) and the total did not exceed the aggregate amount authorized for non-executive employees. In addition, to the extent this total was not exceeded, the Committee authorized the CEO to grant additional options and restricted stock units in the future to new hires or other employees excluding executive officers. In 2008 the CEO made grants under this delegation to ten individuals.

Stock options and restricted stock units granted to the CEO, the CFO, and the other three named executive officers during fiscal 2008 are shown in the Grants of Plan-Based Awards table on page 41.

Defined Benefit Pension Plans

The CFO and General Counsel participate in our tax-qualified defined benefit pension plan on the same terms as other salaried employees. Because the Internal Revenue Code limits the pension benefits (based on an annual compensation limit) that can be accrued under a tax-qualified defined benefit pension plan, we have established and maintain an unfunded supplemental defined benefit pension plan for executive officers to compensate these individuals for the limitations on their pension benefit and provide comparable level retirement benefits to those provided to other employees. Because there is no benefit enhancement incorporated in this supplemental plan, the Committee does not consider gains from prior equity awards when setting retirement benefits.

The CEO, COO and Executive Vice President, Sales and Business Development participate in the TRW Pension Scheme, a tax-approved defined benefit pension plan, on the same basis as similarly situated employees in the United Kingdom. See note 1 to the Pension Benefits table on page 45.

The CEO, in accordance with the terms of his employment agreement, has participated in the TRW Automotive Inc. Executive Supplemental Retirement Plan (the “Original SERP”), a nonqualified plan, the intent of which was to provide the CEO with a benefit in an amount equal to what he otherwise would have received had he participated in the pension plans for salaried employees in the United States (as such pension plans existed on the date of his employment agreement) and been credited for his years of service under the TRW Pension Scheme except for any postretirement cost-of-living adjustments. Benefits otherwise payable under this plan were to be offset by payments the CEO would receive under the TRW Pension Scheme. Accordingly, certain of the terms were modified from what otherwise would have been provided for in the U.S. plans to allow for this coordination. We had established a so-called “rabbi trust” to provide a source of payments under this plan. Contributions to this trust in 2008 were $2,718,147. In December 2008 the Company agreed to modify this arrangement by terminating the Original SERP and placing into a secular trust, in respect of which Mr. Plant is a contingent beneficiary, his entire accrued benefit of $19,436,710 under that plan as of January 2, 2009. A portion of the amount contributed was made from funds then held in the “rabbi trust” mentioned above. The amounts placed in the secular trust are subject to a two year cliff vesting provision pursuant to which Mr. Plant will generally forfeit all rights to receive such amounts from the trust if he voluntarily quits or is terminated for Cause prior to December 31, 2010, subject to accelerated vesting and payment in the event of his death, Disability, a termination without Cause, a termination for Good Reason or his termination during a Window Period following a Change in Control (as such terms are defined below under “Termination and Change in Control Provisions”). If Mr. Plant becomes vested in his right to receive the amounts held in the secular trust either on December 31, 2010 or on one of the earlier accelerated vesting dates, then such amounts will be paid to him, subject to adjustment to reflect possible changes in U.S. federal income tax rates from the tax rates in effect on December 31, 2008. Amounts held in the secular trust are not intended to be subject to claims of the Company’s general creditors in the event of the Company’s insolvency. The Company also established the John C. Plant 2009 Supplemental Retirement Plan, effective as of January 1, 2009 (the “New SERP”) with essentially the same terms as the Original SERP to provide Mr. Plant with pension benefits for his service from January 1, 2009 forward, although under the New SERP the interest rate used in the determination of lump sum distributions was fixed at the 30 Year U.S. Treasury Rate as of November 30, 2008, of 4.0%. The effect of this provision resulted in an increase in pension value of $1 million dollars in 2008. Accruals under the New SERP will be reduced by the amounts paid from the secular trust and by future accruals under the TRW Pension Scheme. Accruals under the New SERP may also be increased to reflect an additional retention incentive credit of up to $3.7 million, which is subject to a four year cliff vesting provision pursuant to which Mr. Plant will generally forfeit all rights to receive such amounts if he voluntarily quits or is terminated for Cause prior to December 31, 2012. Similarly, Mr. Plant’s regular benefits under the New SERP are subject to two year cliff vesting, such that he will generally forfeit all rights to receive such amounts if he voluntarily quits or is terminated for Cause prior to December 31, 2010. However, in the event of Mr. Plant’s death, Disability, a termination without Cause, a termination for Good Reason or his termination during a Window Period following a Change in Control, he will be vested in the portion of the accrued benefits, including the retention incentive credit, earned through the date of such termination.

The COO’s employment agreement provides for the extension of his participation in The Lucas Group Funded Executive Pension Scheme, a funded unapproved supplemental plan intended to provide additional benefits approximately equivalent to those he would have otherwise been entitled to under the TRW Pension Scheme without regard to Her Majesty’s Revenues and Customs limits on pensionable earnings. Benefits are payable from this plan through a trust. A contribution to this trust in the amount of $1,251,138 was made in January 2009 based on requirements as of October 31, 2008. This contribution included a provision for income taxes of $506,455 which will ultimately be paid by our COO at the time of his retirement in respect of this contribution. These amounts are included in the Summary Compensation Table for 2008 on page 39.

The actuarial present value of the accumulated pension benefits of the CEO, the CFO, and the other three named executive officers as of December 31, 2008, as well as other information about our pension plans, are shown in the Pension Benefits table on page 45.

Retiree CEO Medical Plan

The CEO participates in the TRW Executive Postretirement Medical Plan, which is intended to provide medical benefits as provided for in his employment agreement. Such benefits are intended to duplicate the benefits he would have received under the National Health System in the United Kingdom and the TRW retiree medical benefit plan in effect at the time he entered into the employment agreement. These benefits are extended to the CEO and to his covered spouse for the remainder of their respective lifetimes upon the CEO’s termination of employment for any reason, other than by the Company for Cause (as defined below in “Termination and Change in Control Provisions”). Coverage is noncontributory and is designed to pay secondary to Medicare upon attainment of Medicare eligibility. The obligation as of December 31, 2008 associated with these benefits as determined in accordance with Financial Accounting Standards Board Statement No. 106 approximates $1,437,065 and has been recognized for financial reporting purposes. The more significant assumptions used in the determination of this amount include a discount rate of 6.25%, an initial health care trend rate of 8.5% as of December 31, 2008 descending down to an ultimate trend of 5.0% in 2014 and a normal retirement age, as defined in the plans in which the CEO participates.

Severance Plans

To ensure that the executive officers are protected against the loss of their positions in certain events or following a transaction that involves a change in our ownership or control, and fulfill their expectations with respect to their long-term incentive compensation arrangements, each executive officer’s employment agreement includes change in control language as well as severance in the event of certain other terminations. These employment agreements were negotiated in 2003 in connection with a leveraged buyout of TRW by a Blackstone affiliate, and the term of certain of the agreements has been extended. The Committee continues to believe that it is in our best interests and the best interests of our stockholders to offer such protection to executive officers as embodied in their employment agreements. We compete for executive talent in a highly competitive market in which companies routinely offer similar benefits to senior employees.

In the Committee’s view, the accelerated vesting of all or a portion of outstanding equity awards upon an involuntary termination without cause, or a voluntary termination with good reason, or following a change in control is a customary and reasonable component of an equity incentive program. The Committee believes that the equity awards granted to the executive officers have been reasonable in amount, and a substantial part of the value that would be received by them in the event of certain terminations or a change in control would result from the increase in the price of our common stock over the years. The Committee believes that this is an appropriate result since the share price increase would also benefit our long-term stockholders, and the current executive team would have contributed to that increase in past years.

The amount of the estimated payments and benefits payable to the named executive officers assuming a change in control and a qualifying termination of employment as of the last day of fiscal 2008 are shown in the Potential Payments Upon Termination or CIC tables on page 51.

Perquisites and Other Personal Benefits

We maintain an executive medical plan for our executive officers. In addition, executive officers are eligible to receive reimbursement for certain financial counseling. The CEO is also eligible for club memberships. All executive officers receive automobile allowances. The Committee believes that in comparison to peer companies the level of perquisites is minimal and that this practice is consistent with our philosophy to maximize the amount of “at risk” pay of our executive officers.

The aggregate incremental cost to us of providing these personal benefits to the named executive officers during fiscal 2008 is shown in the Summary Compensation Table on page 39 and is detailed in footnote 4 to such table.

Other benefits available to executive officers are as follows:

Benefit Equalization Plan

U.S. based executive officers may participate in our Benefits Equalization Plan (“BEP”), which mirrors Retirement Savings Plan benefits available to all U.S. employees who meet the Internal Revenue Service definition of a “highly compensated employee.”

As a result of the requirements applicable to nonqualified deferred compensation arrangements included in the American Jobs Creation Act of 2004 and the Treasury regulations and related guidance issued under Section 409A of the Internal Revenue Code (collectively, “Section 409A”), in December 2008 the BEP was amended to offer the opportunity provided by the Section 409A transition relief rules to allow participants (which include certain named executive officers) to elect an early withdrawal of all or a designated percentage of their December 31, 2008 vested account balances under the BEP, to be paid in a lump sum in July 2009.

The individual contributions of the eligible named executive officers during fiscal 2008 to the BEP, including earnings on contributions to the BEP and total account balances as of the end of the fiscal year are shown in the Nonqualified Deferred Compensation Table on page 47.

Tax Implications of Executive Compensation

Section 162(m) of the Internal Revenue Code limits to $1 million per year the federal income tax deduction to public corporations for compensation paid for any fiscal year to the corporation’s Chief Executive Officer and the four other most highly-compensated executive officers as of the end of the fiscal year. This limitation does not apply to qualifying “performance-based compensation.” Generally, to qualify for this exception: (a) the compensation must be payable solely on account of the attainment of one or more pre-established objective performance goals; (b) the performance goals must be established by a compensation committee of the board of directors that is comprised solely of two or more “outside directors”; (c) the material terms of the performance goals must be disclosed to and approved by stockholders before payment; and (d) the compensation committee must certify in writing prior to payment that the performance goals and any other material terms have been satisfied. In addition, for options to meet the criteria in (a) above, the exercise price cannot be less than the fair market value of the stock as of the grant date, and the plan under which the options are granted must state the maximum number of shares for which options may be granted to any employee during a specified period.

The incentive compensation, including the stock options, restricted stock units and annual cash incentive payments, awarded to executive officers do not qualify as performance-based. Notwithstanding the foregoing, the Committee believes that the interests of our stockholders are best served by not restricting the Committee’s discretion and flexibility in crafting compensation plans and arrangements, even though such plans and arrangements may result in certain non-deductible compensation expenses. Accordingly, the Committee may from time to time approve elements of compensation for certain executive officers that are not fully deductible, and reserves the right to do so in the future in appropriate circumstances.

Accounting Implications of Executive Compensation

Effective January 1, 2006, we were required to recognize compensation expense of all stock-based awards pursuant to the principles set forth in Statement of Financial Accounting Standards 123(R), Share-based Payment . We voluntarily adopted this standard beginning in the third quarter of 2005. Consequently, we began recording a compensation expense in our financial statements for stock options and other equity awards unvested as of July 1, 2005 and stock options and other equity awards granted during fiscal 2006 and thereafter. Despite the accounting change, the Committee believes that stock options and other forms of equity compensation are an essential component of our compensation strategy, and it intends to continue to offer options and restricted stock as a major portion of its long-term incentives.

Compensation of Executive Officers

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Non-Equity Incentive Plan Compensation:

2006: $1.96 = £1.00
2007: $1.97 = £1.00
2008: $1.43 = £1.00

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Gross-up:

2006: $1.75 = £1.00
2008: $1.46 = £1.00

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Other Amounts:

2006: $1.86 = £1.00
2007: $2.01 = £1.00
2008: $1.85 = £1.00

Grants of Plan-Based Awards for 2008

Summary Compensation and Plan-Based Awards

General . Each of our named executive officers has an employment agreement with us or one of our subsidiaries. The agreements with Mr. Plant and Mr. Lunn extend for an indefinite term and the agreements with the other named executive officers extend until December 31, 2011. Each of the agreements provided for an initial base salary, which is reviewed annually by the Committee and increased at its discretion. The agreements provide for certain severance and change in control payments as described under “Termination and Change in Control Provisions” later in this Proxy Statement.

Non-Equity Incentive Plan Award targets shown in the tables above represent annual incentive targets set by each named executive officer’s employment agreement. Mr. Plant has a target of 200% of his salary. Mr. Lunn has a target of 130% of his salary. The remaining named executive officers have targets of 90% of their salary. Each named executive officer also generally has a maximum award potential of 125% of their target award and a minimum or threshold of 33% of their target award. The executive officers’ annual bonuses for 2008 were based forty percent on defined measures of each of EBITDAP and cash flow and twenty percent on Additional Factors determined to be relevant by the Committee, which could include industry-specific and general economic conditions as well as strategic factors, as described above. For the 2008 awards, target EBITDAP was $1.155 billion and target cash flow was $411 million. See “Compensation Discussion and Analysis — Annual Cash Incentive Payments” for a discussion of the extent to which these financial targets were exceeded and for a further discussion of the nonfinancial measures considered. For the actual amount awarded for 2008, see the Non-Equity Incentive Plan Compensation column in the Summary Compensation Table.

In 2008 our named executive officers received the options and restricted stock units under the 2003 Stock Incentive Plan as set forth in the above tables. See “Compensation Discussion and Analysis — Stock Options and Restricted Stock Units” for a discussion of the factors considered in these awards. The options vest one-third on the first anniversary of the grant date and one-third on each anniversary thereafter, and are subject to accelerated vesting under certain circumstances as discussed below under “Termination and Change in Control Provisions.”

The restricted stock units granted in 2008 vest one-third on the first anniversary of the grant date and one-third on each anniversary thereafter, and are subject to accelerated vesting or other special vesting provisions as discussed below under “Termination and Change in Control Provisions.” If dividends are declared and paid by us during the period in which the restricted stock units are outstanding, then on the date the restricted stock units vest and shares of common stock are exchanged therefore, the executive will be paid the dividends on such shares as if such shares had been outstanding during the period in which the dividends were paid.

Comparison of Compensation Levels of Named Executive Officers . The Committee has not set a policy or practice to link or ratio any component of total direct compensation (base salary, annual cash incentive and long-term incentive compensation) or pension values between its named executive officers. The Committee continues to believe that comparing these compensation elements to the market for each executive is a more appropriate method for establishing market competitive compensation.

The Committee recognizes that in 2008 the CEO’s Total Compensation was approximately 1.8 times greater than the Total Compensation of the next highest paid executive, which is a lower multiple than the 2007 comparison in which the CEO’s Total Compensation was 2.8 times greater. The differential is primarily due to additional compensation for Mr. Lunn in 2008 in connection with contributions made by the Company to a funded unapproved retirement plan in the U.K. and the related tax gross-ups totaling $1,251,138 (which contributions have been made on a biannual basis so were not included in Mr. Lunn’s 2007 compensation) and an approximate $4.6 million decrease in the value attributed to the CEO’s change in pension value and nonqualified deferred compensation year over year, which pension value changes are more fully discussed in footnotes 2 and 3 to the Summary Compensation Table. While the Committee believes that each of the named executive officers is compensated appropriately in comparison to the market for each position, the Committee also attributes the differences between the CEO’s and the other executive officers’ levels of compensation to the following:

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the tenure of the CEO in his role,

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the Committee’s assessment of the relative value of the CEO’s contribution to TRW versus other executive officers’ contributions,

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the CEO’s option grants, restricted stock awards and non-equity incentive plan compensation were a higher multiple of his salary than the other executive officers reflecting the Committee’s philosophy, discussed above under “Compensation Discussion and Analysis,” that compensation at risk will rise with position level, and

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a significant portion of the CEO’s Total Compensation is attributed to pension benefits which result from his long service to TRW and its predecessors (whereas the other executive officers have fewer years of service and/or participate in different legacy plans), combined with his supplemental retirement plan, to which he is entitled under the terms of his employment agreement, and which is further described above under “Defined Benefit Pension Plans.”