(Mark One) | ||
þ
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the fiscal year ended December 31, 2006 . | ||
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period from to . |
Delaware
|
13-3386776 | |
(State or other jurisdiction
of
incorporation or organization) |
(I.R.S. Employer
Identification No.) |
|
21557 Telegraph Road,
Southfield, MI |
48033 | |
(Address of principal executive
offices)
|
(Zip code) |
Title of Each Class
|
Name of Each Exchange on Which Registered
|
|
Common Stock, par value
$0.01 per share
|
New York Stock Exchange |
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Leverage Core Product Lines.
In response to
the recent industry trend away from total interior integration,
we are taking a more product-focused approach to managing our
business. We have taken steps to exit the more commodity-like
components segment of the interior business and focus on the
seating and electronic and electrical segments where we can
provide greater value to our customers. The opportunity to
strengthen our global leadership position in these segments
exists as we develop new products, continue to expand our
relationships with global automakers and grow with our customers
as they enter new markets globally. In addition, we see an
opportunity to offer increased value to our customers and
improve our product line profitability through selective
vertical integration. In our seating segment, we are focused on
increasing our capabilities in structural components and
selected trim and foam products. In our electronic and
electrical segment, we believe that building upon our junction
box and terminals and connectors capabilities will allow us to
provide electrical distribution systems at a lower cost.
Invest in New Technology.
Automotive
manufacturers view the vehicle interior as a major selling point
and are increasingly responding to the consumer demands for more
interior features. Our Core Dimension Strategy focuses our
research and development efforts on innovative product solutions
for the seven attributes our research indicates that consumers
most value: safety, comfort and convenience, environmental,
craftsmanship, commonization, infotainment and flexibility.
Within seating, we provide industry-leading safety features such
as
ProTec
tm
PLuS, our second generation of self-aligning head restraints
that significantly reduce whiplash injuries, and we offer
numerous flexible seating configurations that meet a wide range
of customer requirements. Within our electronic and electrical
segment, our proprietary electrical distribution and Radio
Frequency (RF) technology provides several opportunities to
provide value. We participate in the wireless control systems
market with products such as our Car2UTM two-way keyless fobs
that embed features such as remote-controlled engine start, door
locks, climate controls, vehicle status and location. We also
offer the
Intellitire
®
Tire Pressure Monitoring System, an industry leading safety
5
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feature, and infotainment features such as integrated family
entertainment systems. To further these efforts, we maintain
five advanced technology centers and several customer-focused
product engineering centers where we design, develop and test
new products and analyze consumer responses to automotive
interior styling and innovations.
Enhance Strong Customer Relationships.
We
believe that the long-standing and strong relationships we have
built with our customers allow us to act as partners in
identifying business opportunities and anticipating the needs of
our customers in the early stages of vehicle design. Quality
continues to be a differentiating factor in the eyes of the
consumer and a competitive cost factor for our customers. We are
dedicated to providing superior customer service and maintaining
an excellent reputation for providing world-class quality at
competitive prices. According to the 2006 J.D. Power and
Associates Seat Quality
Report
tm
,
we have ranked as the highest-quality major seat manufacturer in
the United States for the last six years. In recognition of our
efforts, our facilities continue to receive awards from our
customers. Recently, Toyota honored us for Superior Supplier
Diversity and Excellence in Quality for 2006, and GM awarded us
the Best-In Class Launch Execution award for the
GMT900 program. We intend to maintain and improve the quality of
our products and services through our ongoing Quality
First initiatives.
Maintain Operational Excellence.
To withstand
fluctuations in industry demand, we continue to be proactive by
maintaining an intense focus on the efficiency of our
manufacturing operations and identifying opportunities to reduce
our cost structure. We manage our cost structure, in part,
through ongoing continuous improvement and productivity
initiatives throughout the organization, as well as initiatives
to promote and enhance the sharing of technology, engineering,
purchasing and capital investments across customer platforms.
Our current initiatives include:
Restructuring Program:
We initiated a
$250 million restructuring program in 2005 intended to
(1) better align our manufacturing capacity with the
changing needs of our customers, (2) eliminate excess
capacity and lower our operating costs and (3) streamline
our organization structure and reposition our business for
improved long- term profitability. Since undertaking the
restructuring program, we have initiated the closure of 14
manufacturing facilities and six administrative/engineering
facilities, with a cumulative headcount reduction of
approximately 6,000 employees. In light of the continuation of
challenging industry conditions, we have recently expanded the
restructuring program to include additional facility actions and
census reductions. We expect the full cost of the restructuring
program to be $300 million through 2007.
Common Architecture:
We are taking actions to
leverage our scale and expertise to develop common product
architecture. Common architecture allows us to leverage our
design, engineering and development costs and deliver an
enhanced end product with improved quality and craftsmanship.
Low-Cost Country Footprint:
Our low-cost
country strategy is designed to increase our global
competitiveness from both a manufacturing and sourcing
standpoint. We currently support our global operations through
more than 80 manufacturing and engineering facilities located in
20 low-cost countries. We plan to continue to aggressively
pursue this strategy by establishing expanded vertical
integration capabilities in Mexico, Central America, Eastern
Europe, Africa and Asia and leveraging our low-cost engineering
capabilities with engineering centers in China, India and the
Philippines. Excluding our interior business, approximately 30%
of our components currently come from low-cost countries, and
our target is to increase this percentage to 45% by 2010.
Expand in Asia and with Asian Automotive Manufacturers
Worldwide.
We believe that it is important to
have a manufacturing footprint that aligns with our
customers global presence. The Asian markets present
significant growth opportunities, as all major global automotive
manufacturers are expanding production in this region to meet
increasing demand. We believe we are well-positioned to take
advantage of Chinas emerging growth as we have an
extensive network of high-quality manufacturing facilities
across China providing seating and electronic and electrical
products to a variety of global customers for local production.
We also have operations in Korea, India, Thailand and the
Philippines, where we also see opportunities for significant
growth. This growth has been accomplished, in part, through a
series of joint ventures with our customers
and/or
local
suppliers. We currently have 16 joint ventures throughout Asia.
Additionally, we plan
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to continue to support the Asian automotive manufacturers as
they invest and expand beyond Asia, into North America and
Europe. We have recently increased our Asian related business in
the United States through seating and electrical business with
Hyundai and seating and flooring business with Nissan. We have
also entered into strategic alliances to support future programs
with both Nissan and Hyundai globally. We intend to continue
pursuing joint ventures and other alliances in order to expand
our geographic and customer diversity.
2006
2005
2004
65
%
65
%
67
%
17
17
16
18
18
17
Seating.
The seating segment consists of the
manufacture, assembly and supply of vehicle seating
requirements. Seat systems typically represent 30% to 40% of the
total cost of an automotive interior. We produce seat systems
for automobiles and light trucks that are fully assembled and
ready for installation. In most cases, seat systems are designed
and engineered for specific vehicle models or platforms. We have
recently developed Lear Flexible Seat Architecture, whereby we
can assist our customers in achieving a faster
time-to-market
by building a program-specific seat incorporating the latest
performance requirements and safety technology in a shorter
period of time. Seat systems are designed to achieve maximum
passenger comfort by adding a wide range of manual and power
features, such as lumbar supports, cushion and back bolsters and
leg supports.
Electronic and Electrical.
The migration from
conventional electrical distribution systems to electronic
products and electrical distribution systems is facilitating the
integration of wiring and electronic products within the overall
electrical architecture of a vehicle. This migration can reduce
the overall system cost and weight and improve reliability and
packaging by optimizing the overall system architecture and
eliminating a portion of the terminals, connectors and wires
normally required for a conventional electrical distribution
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system. Our umbrella technology,
Intertronics
®
,
reflects our ability to integrate electronic products with
automotive interior systems. This technology is already having
an impact on a number of new and next generation products. For
example, our integrated seat adjuster module has two dozen fewer
cut circuits and five fewer connectors, weighs a half of a pound
less and costs twenty percent less than a traditional separated
electronic control unit and seat wiring system. In addition, our
smart junction box expands the traditional junction box
functionality by utilizing printed circuit board technologies.
Electrical Distribution Systems.
Wire harness
assemblies are a collection of terminals, connectors and wires
that connect all of the various electronic/electrical devices in
the vehicle to each other
and/or
to a
power source. Terminals and connectors are components of wire
harnesses and other electronic/electrical devices that connect
wire harnesses and electronic/electrical devices. Fuse boxes are
centrally located boxes in the vehicle that contain fuses
and/or
relays for circuit and device protection, as well as power
distribution. Junction boxes serve as a connection point for
multiple wire harnesses. They may also contain fuses and relays
for circuit and device protection. Smart junction boxes are
junction boxes with integrated electronic functions, which
eliminate interconnections and increase overall system
reliability. Certain vehicles may have two or three smart
junction boxes linked as a multiplexed buss line.
Interior Control and Entertainment
Systems.
The instrument panel center console
module provides a control panel for the entertainment system,
accessory switch functions, heating, ventilation and air
conditioning. The integrated seat adjuster module combines seat
adjustment, power lumbar support, memory function and seat
heating into one package. The integrated door module
consolidates the controls for window lift, door lock, power
mirror and seat heating and ventilation. Our
Mechatronic
tm
lighting control module integrates electronic control
logic and diagnostics with the headlamp switch. Entertainment
products include sound systems, television modules and the
floor-, seat- or center console-mounted MediaConsole with a
flip-up
screen that provides DVD and video game viewing for back-seat
passengers.
Wireless systems.
Wireless products send and
receive signals using radio frequency technology. Our wireless
systems include passive entry systems, dual range/dual function
remote keyless entry systems and tire pressure monitoring
systems. Passive entry systems allow the vehicle operator to
unlock the door without using a key or physically activating a
remote keyless fob. Dual range/dual function remote keyless
entry systems allow a single transmitter to perform multiple
functions. For example, our
Car2U
tm
remote keyless entry system can control and display the status
of the vehicle, such as starting the engine, locking and
unlocking the doors, opening the trunk and setting the cabin
temperature. In addition, dual range/dual function remote
keyless entry systems combine remote keyless operations with
vehicle immobilizer capability. Our tire pressure monitoring
system, known as the Lear
Intellitire
®
Tire Pressure Monitoring System, alerts drivers when a tire has
low pressure. We have received production awards for
Intellitire
®
from Ford for many of their North American vehicles and from
Hyundai for several models beginning in 2005. Automotive
manufacturers are required to have tire pressure monitoring
systems on a portion of new vehicles sold in the United States
beginning with model year 2006 and on all new vehicles sold in
the United States by model year 2008.
Interior.
The interior segment consists of the
manufacture, assembly and supply of interior systems and
components. Interior products are designed to provide a
harmonious and comfortable interior for vehicle occupants, as
well as a variety of functional and safety features. Set forth
below is a description of our principal interior products:
Instrument Panels and Cockpit Systems.
The
instrument panel is a complex system of coverings and foam, as
well as plastic and metal
sub-structure
designed to house various components and to act as a safety
device for the vehicle occupant. The cockpit system consists of,
among other things, the instrument panel trim/pad, structural
subsystem, electrical distribution system, climate control,
driver control pedals, steering controls and driver and
passenger safety systems. Specific components of the cockpit
system include the instrument cluster/gauges, cross car
structure, electronic and electrical components, wire harness,
audio system, heating, ventilation and air conditioning module,
air distribution ducts, air vents, steering column and wheel and
glove compartment assemblies. Airbag technologies also continue
to be an
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important component of cockpit systems. As a result of our
research and development efforts, we have introduced
cost-effective, integrated, seamless airbag covers, which
provide greater styling flexibility for the automotive
manufacturer. We believe that future trends in instrument panels
and cockpit systems will focus on safety-related features. We
have also developed Spray
PUR
tm
,
a seamless polyurethane coating for instrument panels, which
eliminates visual seams. This process is currently being used on
several vehicle models, including the Cadillac DTS and Buick
Lucerne.
Headliners and Overhead Systems.
Overhead
systems consist of a headliner, lighting, visors, consoles,
wiring and electronics, as well as all other products located in
the interior of the vehicle roof. Headliners consist of a
substrate, as well as a finished interior layer made of a
variety of fabrics and materials. While headliners are an
important contributor to interior aesthetics, they also provide
insulation from road noise and can serve as carriers for a
variety of other components, such as visors, overhead consoles,
grab handles, coat hooks, electrical wiring, speakers, lighting
and other electronic and electrical products. As the amount of
electronic and electrical content available in vehicles has
increased, headliners have emerged as an important carrier of
technology since electronic features ranging from garage door
openers to lighting systems are often optimally situated in the
headliner. In addition, headliners provide an important safety
function by mitigating the effects of head impact. We have
developed a system that molds the protective foam directly onto
the back of the headliner. This system is being used on several
vehicle models that were launched in 2006.
Door Panels.
Door panels consist of several
component parts, which are attached to a substrate by various
methods. Specific components include vinyl or cloth-covered
appliqués, armrests, radio speaker grilles, map pocket
compartments, carpet and sound-reducing insulation. In addition,
door systems often incorporate electronic products and
electrical distribution systems, including lock and latch,
window glass, window regulators and audio systems, as well as
wire harnesses for the control of power seats, windows, mirrors
and door locks. We have recently introduced a two-shot molding
process that allows a door panel with multiple materials to be
produced in a single injection molding machine. This technology,
which results in improved craftsmanship and lower costs, is
being used on several vehicle models that were launched in 2006.
Flooring and Acoustic Systems.
We have an
extensive and comprehensive portfolio of
SonoTec
®
acoustic products, including flooring systems and dash
insulators. These acoustic products provide noise, vibration and
harshness resistance. Carpet flooring systems generally consist
of tufted or non-woven carpet with a thermoplastic backcoating,
which when heated, allows the carpet to be fitted precisely to
the interior or trunk compartment of the vehicle. Non-carpeted
flooring systems, used primarily in commercial and fleet
vehicles, offer improved wear and maintenance characteristics.
The dash insulator, mounted onto the firewall, separates the
passenger compartment from the engine compartment and is the
primary component for preventing engine noise from entering the
passenger compartment.
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Seating.
Our seating facilities generally use
just-in-time
manufacturing techniques, and products are delivered to the
automotive manufacturers on a
just-in-time
basis. These facilities are typically located near our
customers manufacturing and assembly sites. Our seating
facilities utilize a variety of methods whereby foam and fabric
are affixed to an underlying seat frame. Raw materials used in
our seat systems, including steel, aluminum and foam chemicals,
are generally available and obtained from multiple suppliers
under various types of supply agreements. Leather, fabric and
certain components are also purchased from multiple suppliers
under various types of supply agreements. The majority of our
steel purchases are comprised of engineered parts that are
integrated into a seat system, such as seat frames, mechanisms
and mechanical components. Therefore, our exposure to changes in
steel prices is primarily indirect, through the supply base. We
are increasingly using long-term, fixed-price supply agreements
to purchase key components. We generally retain the right to
terminate these agreements if our supplier does not remain
competitive in terms of cost, quality, delivery, technology or
customer support.
Electronic and Electrical.
Electrical
distribution systems are networks of wiring and associated
control devices that route electrical power and signals
throughout the vehicle. Wire harness assemblies consist of raw,
coiled wire, which is automatically cut to length and
terminated. Individual circuits are assembled together on a jig
or table, inserted into connectors and wrapped or taped to form
wire harness assemblies. All materials are purchased from
suppliers, with the exception of a portion of the terminals and
connectors that are produced internally. Certain materials are
available from a limited number of suppliers. Supply agreements
typically last for up to one year. The assembly process is labor
intensive, and as a result, production is generally performed in
low-cost labor sites in Mexico, Honduras, the Philippines,
Eastern Europe and Northern Africa.
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Interior.
Our interior systems process
capabilities include injection molding, low-pressure injection
molding, blow molding, compression molding, rotational molding,
urethane foaming and vacuum forming, as well as various trimming
and finishing methods. Raw materials, including resin and
chemical products, and finished components are assembled into
end products and are obtained from multiple suppliers, under
supply agreements which typically last for up to one year. In
addition, we produce carpet at one North American plant.
DaimlerChrysler
Dongfeng
Fiat
Ford
GAZ
General Motors
Hyundai
Isuzu
Mahindra &
Mahindra
Mitsubishi
Porsche
PSA
Nissan
Subaru
Suzuki
Volkswagen
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Seating.
We are one of two primary independent
suppliers in the outsourced North American seat systems market.
Our primary independent competitor in this market is Johnson
Controls. Magna International Inc. and Faurecia also have a
presence in this market. Our major independent competitors are
Johnson Controls and Faurecia in Europe and Johnson Controls, TS
Tech Co., Ltd. and Toyota Boshoku in Asia.
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Electronic and Electrical.
We are one of the
leading independent suppliers of automotive electrical
distribution systems in North America and Europe. Our major
competitors include Delphi, Yazaki, Sumitomo, Leoni, AFL
Automotive and Valeo. The automotive electronic products
industry remains highly fragmented. Participants in this segment
include Alps, Bosch, Cherry, Delphi, Denso, Kostal, Methode,
Niles, Omron, Siemens VDO, TRW, Tokai Rika, Valeo, Visteon and
others.
Interior.
Our primary independent competitors
in the flooring and acoustic systems market are
Collins & Aikman and Rieter Automotive. Our major
independent competitors in the remaining interior markets
include Johnson Controls, Magna, Faurecia, Collins &
Aikman, Visteon, Delphi and a large number of smaller operations.
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A
decline in the production levels of our major customers could
reduce our sales and harm our profitability.
The
financial distress of our major customers and within the supply
base could significantly affect our operating
performance.
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The
discontinuation of, the loss of business with respect to or a
lack of commercial success of a particular vehicle model for
which we are a significant supplier could reduce our sales and
harm our profitability.
Our
substantial international operations make us vulnerable to risks
associated with doing business in foreign
countries.
exposure to local economic conditions;
expropriation and nationalization;
foreign exchange rate fluctuations and currency controls;
withholding and other taxes on remittances and other payments by
subsidiaries;
investment restrictions or requirements;
export and import restrictions; and
increases in working capital requirements related to long supply
chains.
High
raw material costs may continue to have a significant adverse
impact on our profitability.
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A
significant labor dispute involving us or one or more of our
customers or suppliers or that could otherwise affect our
operations could reduce our sales and harm our
profitability.
Adverse
developments affecting one or more of our major suppliers could
harm our profitability.
Our
financial position may be adversely affected if our merger with
AREP Car Acquisition Corp. is not completed.
The
inability to complete the divestiture of our North American
interior business could adversely affect our business strategy
and financial position.
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A
significant product liability lawsuit, warranty claim or product
recall involving us or one of our major customers could harm our
profitability.
We are
involved from time to time in legal proceedings and commercial
or contractual disputes, which could have an adverse impact on
our profitability and consolidated financial
position.
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Argentina
Escobar, BA (S)
Pacheco, BA (E)
Austria
Graz (S)
Koeflach (S)
Belgium
Genk (S)
Brazil
Betim (S)
Cacapava (S)
Camacari (S)
Gravatai (S)
Sao Paulo (S)
Canada
Ajax, ON (S)
Concord, ON (I)
Kitchener, ON (S)
Mississauga, ON (I)
St. Thomas, ON (S)
Whitby, ON (S)
Windsor, ON (S)
China
Changchun (S)
Chongqing (S)
Shanghai (I)
Shenyang (I)
Wuhan (E)
Czech Republic
Kolin (S)
Vyskov (E)
France
Cergy (S)
Feignies (S)
Guipry (S)
Lagny-Le-Sec (S)
Offranville(I)
Rueil-Malmaison (A/T)
Velizy-Villacoublay (A/T)
Germany
Allershausen-
Leonhardsbuch (S)
Bersenbruck (E)
Besigheim (S)
Boeblingen (S)
Bremen (S)
Eisenach (S)
Garching-Hochbruck (S)
Ginsheim-Gustavsburg (M)
Kranzberg (A/T)
Kronach (E)
Munich (S)
Quakenbruck (S)
Remscheid (E)
Rietberg (S)
Saarlouis (E)
Wackersdorf (S)
Wismar (E)
Wolfsburg (A/T)
Wuppertal (E)
Honduras
Naco, SB (E)
San Pedro Sula, CA (E)
Hungary
Godollo (E)
Gyongyos (E)
Gyor (S)
Mor (S)
India
Halol (S)
Nasik (S)
New Delhi (S)
Thane (A/T)
Italy
Caivano, NA (S)
Cassino, FR (M)
Grugliasco, TO (S)
Melfi, PZ (M)
Montelabate, PS (I)
Pianfei, CN (I)
Pozzo dAdda, MI (S)
Termini Imerese, PA (S)
Japan
Atsugi-shi (A/T)
Hiroshima (A/T)
Tokyo (E)
Toyota City (A/T)
Utsunomiya (A/T)
Mexico
Chihuahua, CH (E)
Cuautlancingo, PU (S)
Hermosillo, SO (S)
Juarez, CH (M)
Mexico City, DF (I)
Piedras Negras, CO (S)
Ramos Arizpe, CO (S)
Saltillo, CO (S)
Santa Catarina, NL (I)
Silao, GO (S)
Toluca, MX (I)
Morocco
Tangier (E)
Netherlands
Weesp (A/T)
Philippines
LapuLapu City, CE (E)
Poland
Jaroslaw (S)
Mielec (E)
Tychy (S)
Portugal
Palmela, SL (S)
Povoa de Lanhoso,
BR (E)
Valongo, PO (E)
Romania
Pitesti (E)
Russia
Nizhny Novgorod (S)
Singapore
Wisma Atria (S)
South Africa
East London (S)
Port Elizabeth (S) Rosslyn (S)
South Korea
Gyeongju (S)
Seoul (A/T)
Spain
Almussafes (E)
Avila (E)
Epila (S)
Logrono (S)
Roquetes (E)
Valdemoro (S)
Valls (E)
Sweden
Gothenburg (M)
Trollhattan (S)
Thailand
Bangkok (S)
Muang
Nakornratchasima (S)
Rayong (S)
Tunisia
Bir El Bey (E)
Turkey
Bostanci-Istanbul (E)
Bursa (S)
Gemlik (S)
United Kingdom
Coventry, CV (S)
Coventry, WM (S)
Nottingham, NG (S) Sunderland, SU (S)
United States
Alma, MI (I)
Arlington, TX (S)
Bridgeton, MO (S)
Canton, MS (I)
Carlisle, PA (I)
Chicago, IL (I)
Columbia City, IN (S)
Columbus, OH (E)
Covington, VA (I)
Dayton, TN (I)
Dearborn, MI (M)
Detroit, MI (S)
Duncan, SC (S)
Edinburgh, IN (I)
El Paso, TX (E)
Elsie, MI (S)
Farwell, MI (S)
Fenton, MI (S)
Frankfort, IN (S)
Fremont, OH (I)
Greencastle, IN (I)
Hammond, IN (S)
United States (Continued)
Hazelwood, MO (S)
Hebron, OH (S)
Huron, OH (I)
Indianapolis, IN (I)
Iowa City, IA (I)
Janesville, WI (S)
Lebanon, OH (I)
Lebanon, VA (I)
Liberty, MO (S)
Lordstown, OH (S)
Louisville, KY (S)
Madisonville, KY (I)
Manteca, CA (I)
Marshall, MI (I)
Mason, MI (S)
Mendon, MI (I)
Montgomery, AL (S)
Morristown, TN (S)
Newark, DE (M)
Northwood, OH (I)
Plymouth, IN (E)
Plymouth, MI (S)
Port Huron, MI (I)
Rochester Hills, MI (S)
Romulus, MI (S)
Roscommon, MI (S)
Saline, MI (S)
San Antonio, TX (I)
Selma, AL (S)
Sheboygan, WI (I)
Sidney, OH (I)
Southfield, MI (A/T)
Strasburg, VA (I)
Tampa, FL (E)
Taylor, MI (E)
Traverse City, MI (E)
Troy, MI (A/T)
Walker, MI (S)
Warren, MI (I)
Wauseon, OH (I)
Wentzville, MO (S)
Zanesville, OH (E)
Venezuela
Valencia (S)
(1)
Legend
S Seating
I − Interior
E Electronic and electrical
M Multiple segments
A/T Administrative/
technical
Certain administrative/ technical facilities are included within
the operating segments.
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48
Senior Vice President and
President, European Operations
48
Vice President and Treasurer
45
President and Chief Operating
Officer
60
Senior Vice President, Human
Resources
55
Vice President and Corporate
Controller
42
Executive Vice President,
Secretary and General Counsel
61
Chairman and Chief Executive
Officer
41
Senior Vice President and
President, North American Seating Systems Group
46
Senior Vice President, Finance and
Chief Accounting Officer
57
Vice Chairman and Chief Financial
Officer
James M. Brackenbury
Mr. Brackenbury is our Senior Vice President and President,
European Operations, a position he has held since September
2006. Previously, he served as our Senior Vice President and
President, North American Seating Operations from April 2006
until September 2006 and our President, Mexican/Central American
Regional Group from November 2004 until September 2006. Prior to
that, he served as our President, DaimlerChrysler Division since
December 2003 and in other positions dating back to 1983 when he
joined Lear as a product engineer.
Shari L. Burgess
Ms. Burgess is our Vice President and Treasurer, a position
she has held since August 2002. Previously, she served as our
Assistant Treasurer since July 2000 and in various financial
positions since November 1992.
Douglas G. DelGrosso
Mr. DelGrosso is our President and Chief Operating Officer,
a position he has held since May 2005. Previously, he served as
our President and Chief Operating Officer Americas
since August 2004, our President and Chief Operating
Officer Europe, Asia and Africa since August 2002,
our Executive Vice President International since
September 2001, our Senior Vice President Product
Focus Group since October 2000 and our Senior Vice President and
President North American and South American
Operations since May 1999. Prior to this, Mr. DelGrosso
held several senior operational positions and has been employed
by Lear since 1984.
Roger A. Jackson
Mr. Jackson is our Senior Vice President, Human Resources,
a position he has held since October 1995. Prior to joining
Lear, he was employed as Vice President, Human Resources at
Allen Bradley, a wholly owned subsidiary of Rockwell
International, since 1991. Mr. Jackson was employed by
Rockwell International or one of its subsidiaries from December
1977 until September 1995.
24
Table of Contents
James L. Murawski
Mr. Murawski is our Vice President and Corporate
Controller, a position he has held since March 2005. Previously,
he served as our Vice President of Internal Audit since June
2003. Prior to joining Lear, Mr. Murawski was employed in
public accounting at Deloitte & Touche for fourteen
years and in various financial positions at Collins &
Aikman Corporation, TRW Automotive and LucasVarity.
Daniel A. Ninivaggi
Mr. Ninivaggi is our Executive Vice President, Secretary
and General Counsel, a position he has held since August 2006.
Mr. Ninivaggi also serves as our Chief Administrative
Officer. Previously, he served as our Senior Vice President,
Secretary and General Counsel since June 2004 and joined Lear as
our Vice President, Secretary and General Counsel in July 2003.
Prior to joining Lear, Mr. Ninivaggi was a partner since
1998 of Winston & Strawn LLP, specializing in corporate
finance, securities law and mergers and acquisitions.
Robert E. Rossiter
Mr. Rossiter is our Chairman and Chief Executive Officer, a
position he has held since January 2003. Mr. Rossiter has
served as our Chief Executive Officer since October 2000, as our
President from 1984 until December 2002 and as our Chief
Operating Officer from 1988 until April 1997 and from November
1998 until October 2000. Mr. Rossiter also served as our
Chief Operating Officer International Operations
from April 1997 until November 1998. Mr. Rossiter has been
a director of Lear since 1988.
Raymond E. Scott
Mr. Scott is our Senior Vice President and President, North
American Seating Systems Group, a position he has held since
August 2006. Previously, he served as our Senior Vice President
and President, North American Customer Group since June 2005,
our President, European Customer Focused Division since June
2004 and our President, General Motors Division since November
2000.
Matthew J. Simoncini
Mr. Simoncini is our Senior Vice President, Finance and
Chief Accounting Officer, a position he has held since August
2006. Previously, he served as our Vice President, Global
Finance since February 2006, our Vice President of Operational
Finance since June 2004, our Vice President of
Finance Europe since 2001 and prior to 2001, in
various senior financial positions for both Lear and
United Technologies Automotive, which was acquired by Lear
in 1999.
James H. Vandenberghe
Mr. Vandenberghe is our Vice Chairman, a position he has
held since November 1998, and has served as our Chief Financial
Officer since March 2006. Mr. Vandenberghe also served as
our President and Chief Operating Officer North
American Operations from April 1997 until November 1998, our
Chief Financial Officer from 1988 until April 1997 and as our
Executive Vice President from 1993 until April 1997.
Mr. Vandenberghe has been a director of Lear since 1995.
25
Table of Contents
45
78
81
87
90
92
105
114
115
116
117
118
119
120
ITEM 5
MARKET
FOR THE COMPANYS COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Price Range of
Cash Dividend
Common Stock
per Share
High
Low
$
34.01
$
20.70
$
$
24.41
$
18.30
$
$
28.00
$
16.24
$
$
29.73
$
16.01
$
0.25
Price Range of
Cash Dividend
Common Stock
per Share
High
Low
$
33.50
$
27.09
$
0.25
$
42.77
$
32.43
$
0.25
$
44.29
$
33.89
$
0.25
$
60.05
$
43.96
$
0.25
26
Table of Contents
12/31/01
12/31/02
12/31/03
12/31/04
12/31/05
12/31/06
$
100.00
$
87.26
$
161.33
$
162.59
$
78.51
$
82.15
$
100.00
$
78.03
$
100.16
$
110.92
$
116.28
$
134.43
$
100.00
$
99.44
$
148.12
$
169.02
$
172.52
$
196.70
$
100.00
$
92.03
$
135.02
$
149.18
$
149.42
$
250.78
(1)
We do not believe that there is a single published industry or
line of business index that is appropriate for comparing
stockholder returns. The current Peer Group, as referenced in
the graph above, that we have selected is comprised of
representative independent automobile suppliers of comparable
products whose common stock is publicly-traded. The current Peer
Group consists of ArvinMeritor, Inc., BorgWarner Automotive,
Inc., Eaton Corp., Gentex Corp., Johnson Controls, Inc., Magna
International, Inc., Superior Industries International and
Visteon Corporation. Our previous Peer Group, as referenced in
the graph above, consisted of each of the entities in the
current Peer Group, plus Collins & Aikman Corporation,
Dana Corporation, Delphi Corporation (f/k/a Delphi Automotive
Systems Corporation) and Tower Automotive. These four companies
are each currently in bankruptcy proceedings and, as a result,
were removed from the current Peer Group as no longer being
representative of our business and competitors.
27
Table of Contents
2006(1)
2005(2)
2004
2003
2002
(In millions(3))
$
17,838.9
$
17,089.2
$
16,960.0
$
15,746.7
$
14,424.6
927.7
736.0
1,402.1
1,346.4
1,260.3
646.7
630.6
633.7
573.6
517.2
2.9
1,012.8
636.0
209.8
183.2
165.5
186.6
210.5
85.7
38.0
38.6
51.8
52.1
(653.4
)
(1,128.6
)
564.3
534.4
480.5
54.9
194.3
128.0
153.7
157.0
18.3
7.2
16.7
8.8
13.3
(16.2
)
51.4
(2.6
)
(8.6
)
(1.3
)
(710.4
)
(1,381.5
)
422.2
380.5
311.5
2.9
(298.5
)
$
(707.5
)
$
(1,381.5
)
$
422.2
$
380.5
$
13.0
$
(10.31
)
$
(20.57
)
$
6.18
$
5.71
$
0.20
$
(10.31
)
$
(20.57
)
$
5.77
$
5.31
$
0.29
68,607,262
67,166,668
68,278,858
66,689,757
65,365,218
68,607,262
67,166,668
74,727,263
73,346,568
71,289,991
$
0.25
$
1.00
$
0.80
$
0.20
$
$
3,890.3
$
3,846.4
$
4,372.0
$
3,375.4
$
2,507.7
7,850.5
8,288.4
9,944.4
8,571.0
7,483.0
3,887.3
4,106.7
4,647.9
3,582.1
3,045.2
2,434.5
2,243.1
1,866.9
2,057.2
2,132.8
602.0
1,111.0
2,730.1
2,257.5
1,662.3
$
285.3
$
560.8
$
675.9
$
586.3
$
545.1
(312.2
)
(541.6
)
(472.5
)
(346.8
)
(259.3
)
277.4
(347.0
)
166.1
(158.6
)
(295.8
)
347.6
568.4
429.0
375.6
272.6
3.7
x
3.4
x
3.0x
104,276
115,113
110,083
111,022
114,694
$
646
$
586
$
588
$
593
$
579
15.2
15.8
15.7
15.9
16.4
$
335
$
345
$
351
$
310
$
247
19.2
18.9
18.9
18.2
18.1
28
Table of Contents
(1)
Results include $636.0 million of charges related to the
divestiture of the Interior business, $2.9 million of
goodwill impairment charges, $10.0 million of fixed asset
impairment charges, $99.7 million of restructuring and
related manufacturing inefficiency charges (including
$5.8 million of fixed asset impairment charges),
$47.9 million of charges related to the extinguishment of
debt, $26.9 million of gains related to the sales of our
interests in two affiliates and $19.5 million of net tax
benefits related to the expiration of the statute of limitations
in a foreign taxing jurisdiction, a tax audit resolution, a
favorable tax ruling and several other tax items.
(2)
Results include $1,012.8 million of goodwill impairment
charges, $82.3 million of fixed asset impairment charges,
$104.4 million of restructuring and related manufacturing
inefficiency charges (including $15.1 million of fixed
asset impairment charges), $39.2 million of
litigation-related charges, $46.7 million of charges
related to the divestiture
and/or
capital restructuring of joint ventures, $300.3 million of
tax charges, consisting of a U.S. deferred tax asset
valuation allowance of $255.0 million and an increase in
related tax reserves of $45.3 million, and a tax benefit
related to a tax law change in Poland of $17.8 million.
(3)
Except per share data, weighted average shares outstanding,
ratio of earnings to fixed charges, employees as of year end and
content per vehicle information.
(4)
Includes state and local non-income taxes, foreign exchange
gains and losses, discounts and expenses associated with our
asset-backed securitization and factoring facilities, losses on
the extinguishment of debt, gains and losses on the sales of
fixed assets and other miscellaneous income and expense.
(5)
The cumulative effect of a change in accounting principle in
2006 resulted from the adoption of Statement of Financial
Accounting Standards No. 123(R), Share Based
Payment. The cumulative effect of a change in accounting
principle in 2002 resulted from goodwill impairment charges
recorded in conjunction with the adoption of Statement of
Financial Accounting Standards No. 142, Goodwill and
Other Intangible Assets.
(6)
On December 15, 2004, we adopted the provisions of Emerging
Issues Task Force
04-08,
The Effect of Contingently Convertible Debt on Diluted
Earnings per Share. Accordingly, diluted net income per
share and weighted average shares outstanding
diluted have been restated to reflect the 4,813,056 shares
issuable upon conversion of our outstanding zero-coupon
convertible senior notes since the issuance date of
February 14, 2002.
(7)
Fixed charges consist of interest on debt,
amortization of deferred financing fees and that portion of
rental expenses representative of interest. Earnings
consist of income (loss) before provision for income taxes,
minority interests in consolidated subsidiaries, equity in the
undistributed net (income) loss of affiliates, fixed charges and
cumulative effect of a change in accounting principle. Earnings
in 2006 and 2005 were insufficient to cover fixed charges by
$651.8 million and $1,123.3 million, respectively.
Accordingly, such ratio is not presented for these years.
(8)
North American content per vehicle is our net sales
in North America divided by estimated total North American
vehicle production. Content per vehicle data excludes business
conducted through non-consolidated joint ventures. Content per
vehicle data for 2005 has been updated to reflect actual
production levels.
(9)
North American vehicle production includes car and
light truck production in the United States, Canada and Mexico
as provided by Wards Automotive. Production data for 2005
has been updated to reflect actual production levels.
(10)
European content per vehicle is our net sales in
Europe divided by estimated total European vehicle production.
Content per vehicle data excludes business conducted through
non-consolidated joint ventures. Content per vehicle data for
2005 has been updated to reflect actual production levels.
(11)
European vehicle production includes car and light
truck production in Austria, Belgium, Bosnia,
Czech Republic, Finland, France, Germany, Hungary, Italy,
Kazakhstan, Netherlands, Poland, Portugal, Romania, Slovakia,
Slovenia, Spain, Sweden, Turkey, Ukraine and United Kingdom as
provided by J.D. Power and Associates. Production data for 2005
has been updated to reflect actual production levels.
29
Table of Contents
ITEM 7
MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
30
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31
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32
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33
Table of Contents
2006
2005
2004
$
3
$
1,013
$
10
82
636
100
104
48
48
(27
)
47
(20
)
(18
)
300
2006
2005
2004
$
11,624.8
65.2
%
$
11,035.0
64.6
%
$
11,314.6
66.7
%
2,996.9
16.8
2,956.6
17.3
2,680.4
15.8
3,217.2
18.0
3,097.6
18.1
2,965.0
17.5
17,838.9
100.0
17,089.2
100.0
16,960.0
100.0
927.7
5.2
736.0
4.3
1,402.1
8.3
646.7
3.6
630.6
3.7
633.7
3.7
2.9
1,012.8
5.9
636.0
3.6
209.8
1.2
183.2
1.1
165.5
1.0
85.7
0.5
38.0
0.2
38.6
0.2
54.9
0.3
194.3
1.1
128.0
0.8
(16.2
)
51.4
0.3
(2.6
)
(707.5
)
(4.0
)
(1,381.5
)
(8.1
)
422.2
2.5
34
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35
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2006
2005
$
11,624.8
$
11,035.0
604.0
323.3
5.2
%
2.9
%
(1)
See definition above.
36
Table of Contents
2006
2005
$
2,996.9
$
2,956.6
102.5
180.0
3.4
%
6.1
%
(1)
See definition above.
2006
2005
$
3,217.2
$
3,097.6
(183.8
)
(191.1
)
(5.7
)%
(6.2
)%
(1)
See definition above.
2006
2005
$
$
(241.7
)
(206.8
)
N/A
N/A
(1)
See definition above.
37
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38
Table of Contents
2005
2004
$
11,035.0
$
11,314.6
323.3
682.1
2.9
%
6.0
%
(1)
See definition above.
39
Table of Contents
2005
2004
$
2,956.6
$
2,680.4
180.0
210.9
6.1
%
7.9
%
(1)
See definition above.
2005
2004
$
3,097.6
$
2,965.0
(191.1
)
85.1
(6.2
)%
2.9
%
(1)
See definition above.
40
Table of Contents
2005
2004
$
$
(206.8
)
(209.7
)
N/A
N/A
(1)
See definition above.
41
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42
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43
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December 31,
2006
$
1,996.7
502.7
$
2,499.4
44
Table of Contents
Year Ended
December 31,
2006
$
835.9
(392.2
)
(200.4
)
(636.0
)
(77.7
)
(105.5
)
(12.9
)
(64.6
)
$
(653.4
)
$
200.4
(8.0
)
8.7
8.7
$
209.8
Table of Contents
2007
2008
2009
2010
2011
Thereafter
Total
$
25.6
$
85.9
$
53.1
$
10.7
$
8.6
$
2,276.2
$
2,460.1
196.3
184.8
179.7
177.6
177.1
407.7
1,323.2
93.7
75.6
65.3
52.9
43.5
71.3
402.3
$
315.6
$
346.3
$
298.1
$
241.2
$
229.2
$
2,755.2
$
4,185.6
46
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47
Table of Contents
Standard & Poors
Moodys
Fitch
Ratings Services
Investors Service
Ratings
B+
B2
BB
B
B2
B
CCC+
B3
B
Credit Watch/Negative
Review for possible
Rating Watch/Negative
downgrade
48
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49
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50
Table of Contents
51
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52
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53
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54
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55
Table of Contents
56
Table of Contents
57
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58
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Before Adoption of
After Adoption of
SFAS No. 158
Adjustments
SFAS No. 158
$
45.7
$
(45.7
)
$
(420.3
)
(120.9
)
(541.2
)
97.6
166.6
264.2
59
Table of Contents
general economic conditions in the markets in which we operate,
including changes in interest rates or currency exchange rates;
the financial condition of our customers or suppliers;
fluctuations in the production of vehicles for which we are a
supplier;
disruptions in the relationships with our suppliers;
labor disputes involving us or our significant customers or
suppliers or that otherwise affect us;
our ability to achieve cost reductions that offset or exceed
customer-mandated selling price reductions;
the outcome of customer productivity negotiations;
the impact and timing of program launch costs;
the costs and timing of facility closures, business realignment
or similar actions;
increases in our warranty or product liability costs;
risks associated with conducting business in foreign countries;
competitive conditions impacting our key customers and suppliers;
raw material costs and availability;
our ability to mitigate the significant impact of increases in
raw material, energy and commodity costs;
the outcome of legal or regulatory proceedings to which we are
or may become a party;
60
Table of Contents
unanticipated changes in cash flow, including our ability to
align our vendor payment terms with those of our customers;
the finalization of our restructuring strategy; and
other risks, described in Item 1A, Risk
Factors, and from time to time in our other SEC filings.
61
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Page
63
65
66
67
68
69
122
62
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63
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Internal Control over Financial Reporting
64
Table of Contents
2006
2005
(In millions,
except share data)
$
502.7
$
197.3
2,006.9
2,000.1
581.5
595.6
427.8
607.7
371.4
445.7
3,890.3
3,846.4
1,471.7
1,614.7
1,996.7
1,939.8
485.2
491.8
402.3
3,960.2
4,442.0
$
7,850.5
$
8,288.4
$
39.3
$
23.4
2,317.4
2,516.0
1,099.3
1,008.6
405.7
549.3
25.6
9.4
3,887.3
4,106.7
2,434.5
2,243.1
48.5
27.6
878.2
800.0
3,361.2
3,070.7
0.7
0.7
1,338.1
1,108.6
(210.2
)
(225.5
)
(362.5
)
361.8
(164.1
)
(134.6
)
602.0
1,111.0
$
7,850.5
$
8,288.4
65
Table of Contents
2006
2005
2004
(In million, except per share data)
$
17,838.9
$
17,089.2
$
16,960.0
16,911.2
16,353.2
15,557.9
646.7
630.6
633.7
2.9
1,012.8
636.0
209.8
183.2
165.5
85.7
38.0
38.6
(653.4
)
(1,128.6
)
564.3
54.9
194.3
128.0
18.3
7.2
16.7
(16.2
)
51.4
(2.6
)
(710.4
)
(1,381.5
)
422.2
2.9
$
(707.5
)
$
(1,381.5
)
$
422.2
$
(10.35
)
$
(20.57
)
$
6.18
0.04
$
(10.31
)
$
(20.57
)
$
6.18
$
(10.35
)
$
(20.57
)
$
5.77
0.04
$
(10.31
)
$
(20.57
)
$
5.77
66
Table of Contents
2006
2005
2004
(In millions, except share data)
$
0.7
$
0.7
$
0.7
$
1,108.6
$
1,064.4
$
1,027.7
199.2
30.7
43.8
26.4
(0.4
)
0.4
10.3
$
1,338.1
$
1,108.6
$
1,064.4
$
(225.5
)
$
(204.1
)
$
(110.8
)
15.3
(25.4
)
4.0
(97.7
)
4.4
$
(210.2
)
$
(225.5
)
$
(204.1
)
$
361.8
$
1,810.5
$
1,441.8
(707.5
)
(1,381.5
)
422.2
(16.8
)
(67.2
)
(53.5
)
$
(362.5
)
$
361.8
$
1,810.5
$
(115.0
)
$
(72.6
)
$
(62.2
)
17.4
(42.4
)
(10.4
)
(166.6
)
$
(264.2
)
$
(115.0
)
$
(72.6
)
$
9.0
$
17.4
$
(13.7
)
5.7
(8.4
)
31.1
$
14.7
$
9.0
$
17.4
$
(86.8
)
$
65.6
$
(61.5
)
90.7
(152.4
)
127.1
$
3.9
$
(86.8
)
$
65.6
$
58.2
$
48.2
$
35.5
23.3
10.0
12.7
$
81.5
$
58.2
$
48.2
$
(164.1
)
$
(134.6
)
$
58.6
$
602.0
$
1,111.0
$
2,730.1
$
(707.5
)
$
(1,381.5
)
$
422.2
17.4
(42.4
)
(10.4
)
5.7
(8.4
)
31.1
90.7
(152.4
)
127.1
23.3
10.0
12.7
$
(570.4
)
$
(1,574.7
)
$
582.7
67
Table of Contents
2006
2005
2004
(In millions)
$
(707.5
)
$
(1,381.5
)
$
422.2
(2.9
)
2.9
1,012.8
636.0
15.8
97.4
3.0
(55.0
)
44.7
8.7
(16.2
)
51.4
(2.6
)
392.2
393.4
355.1
194.9
(112.5
)
(32.5
)
(110.1
)
9.7
(62.4
)
(178.0
)
411.1
(70.4
)
113.2
34.3
54.8
285.3
560.8
675.9
(347.6
)
(568.4
)
(429.0
)
(30.5
)
(11.8
)
(103.0
)
65.9
33.3
56.3
5.3
3.2
(312.2
)
(541.6
)
(472.5
)
900.0
399.2
(1,356.9
)
(600.0
)
597.0
400.0
(36.5
)
(32.7
)
(49.4
)
(11.8
)
(23.8
)
(29.8
)
199.2
(16.8
)
(67.2
)
(68.0
)
0.2
4.7
24.4
(25.4
)
(97.7
)
3.0
(3.3
)
(12.6
)
0.7
277.4
(347.0
)
166.1
54.9
(59.8
)
46.1
305.4
(387.6
)
415.6
197.3
584.9
169.3
$
502.7
$
197.3
$
584.9
$
153.2
$
(250.3
)
$
(147.7
)
29.4
(76.9
)
(7.0
)
(358.9
)
298.1
189.8
66.2
38.8
(97.5
)
$
(110.1
)
$
9.7
$
(62.4
)
$
218.5
$
172.6
$
153.5
$
84.8
$
112.7
$
140.0
68
Table of Contents
69
Table of Contents
2006
2005
$
439.9
$
449.2
35.6
36.7
106.0
109.7
$
581.5
$
595.6
2006
2005
$
87.7
$
160.4
116.2
146.9
$
203.9
$
307.3
20 to 40 years
5 to 15 years
70
Table of Contents
2006
2005
$
131.0
$
131.5
516.7
572.8
2,077.5
2,116.0
60.7
56.1
2,785.9
2,876.4
(1,314.2
)
(1,261.7
)
$
1,471.7
$
1,614.7
71
Table of Contents
Electronic and
Seating
Electrical
Interior
Total
$
1,075.7
$
945.9
$
1,017.8
$
3,039.4
(1,012.8
)
(1,012.8
)
(41.5
)
(40.3
)
(5.0
)
(86.8
)
$
1,034.2
$
905.6
$
$
1,939.8
16.1
2.9
19.0
(2.9
)
(2.9
)
26.5
14.3
40.8
$
1,060.7
$
936.0
$
$
1,996.7
Weighted
Gross
Average
Carrying
Accumulated
Net Carrying
Useful Life
Value
Amortization
Value
(Years)
$
2.8
$
(0.8
)
$
2.0
10.0
23.0
(8.4
)
14.6
7.7
29.8
(4.5
)
25.3
19.0
$
55.6
$
(13.7
)
$
41.9
14.7
Weighted
Gross
Average
Carrying
Accumulated
Net Carrying
Useful Life
Value
Amortization
Value
(Years)
$
2.8
$
(0.4
)
$
2.4
10.0
20.8
(4.9
)
15.9
7.7
27.2
(2.4
)
24.8
18.8
$
50.8
$
(7.7
)
$
43.1
14.2
72
Table of Contents
73
Table of Contents
2006
2005
2004
$
101.3
$
41.8
$
38.6
(15.6
)
(3.8
)
$
85.7
$
38.0
$
38.6
74
Table of Contents
2005
2004
$
(1,381.5
)
$
422.2
14.7
10.9
(18.1
)
(21.6
)
$
(1,384.9
)
$
411.5
$
(20.57
)
$
6.18
$
(20.62
)
$
6.03
$
(20.57
)
$
5.77
$
(20.62
)
$
5.63
2006
2005
2004
$
(707.5
)
$
(1,381.5
)
$
422.2
9.3
$
(707.5
)
$
(1,381.5
)
$
431.5
2006
2005
2004
68,607,262
67,166,668
68,278,858
1,635,349
4,813,056
68,607,262
67,166,668
74,727,263
75
Table of Contents
2006
2005
2004
2,790,305
2,983,405
$
22.12 $55.33
$
22.12 $55.33
1,964,571
2,234,122
169,909
123,672
1,751,854
1,215,046
76
Table of Contents
2006
2005
$
19.2
$
10.3
284.5
337.5
69.2
92.7
52.7
157.2
2.2
10.0
427.8
607.7
404.5
80.7
485.2
$
427.8
$
1,092.9
77
Table of Contents
2006
2005
323.7
477.6
79.8
71.7
2.2
405.7
549.3
19.6
28.9
27.6
48.5
27.6
$
454.2
$
576.9
Table of Contents
Accrual as of
Accrual as of
December 31,
Utilization
December 31,
2005
Charges
Cash
Non-cash
2006
$
15.1
$
79.3
$
(58.0
)
$
$
36.4
5.8
(5.8
)
5.0
5.6
(7.2
)
3.4
1.6
(1.6
)
$
20.1
$
92.3
$
(66.8
)
$
(5.8
)
$
39.8
Accrual as of
Utilization
December 31,
Charges
Cash
Non-cash
2005
$
56.5
$
(41.4
)
$
$
15.1
15.1
(15.1
)
11.4
(6.4
)
5.0
3.8
(3.8
)
$
86.8
$
(51.6
)
$
(15.1
)
$
20.1
79
Table of Contents
2006
2005
2004
60
%
60
%
60
%
60
60
60
55
55
55
51
51
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
49
41
41
41
40
40
50
39
39
39
39
39
39
35
35
35
33
50
50
21
21
60
51
50
49
49
43
40
2006
2005
$
580.1
$
183.8
317.2
64.5
610.0
186.0
12.9
16.5
80
Table of Contents
2006
2005
2004
$
956.8
$
1,248.4
$
1,127.1
50.7
56.1
87.7
16.3
0.9
16.0
11.5
(4.2
)
11.3
2006
2005
2004
$
35.8
$
144.9
$
140.3
51.1
224.9
120.9
12.5
13.6
12.5
0.6
3.3
1.6
5.3
3.2
(1)
Includes $4.0 million, $4.3 million and
$3.5 million in 2006, 2005 and 2004, respectively, paid to
CB Richard Ellis (formerly Trammell Crow Company in 2005 and
2004) for real estate brokerage, as well as property and
project management services; includes $6.6 million,
$7.0 million and $7.3 million in 2006, 2005 and 2004,
respectively, paid to Analysts International, Sequoia Services
Group for the purchase of computer equipment and for
computer-related services; includes $0.5 million,
$0.4 million and $0.4 million in 2006, 2005 and 2004,
respectively, paid to Elite Support Management Group, L.L.C. for
the provision of information technology temporary support
personnel; includes $1.4 million, $1.9 million and
$1.3 million in 2006, 2005 and 2004, respectively, paid to
Creative Seating Innovations, Inc. for prototype tooling and
parts; and includes $0.7 million and $2.4 million in
2006 and 2005, respectively, paid to the Materials Group for
plastic resins. Each entity employed a relative of the
Companys Chairman and Chief Executive Officer in 2006. In
addition, Elite Support Management and Creative Seating
Innovations were each partially owned by relatives of the
Companys Chairman and Chief Executive Officer in 2006. As
a result, such entities may be deemed to be related parties.
These purchases were made in the ordinary course of the
Companys business and in accordance with the
Companys normal procedures for engaging service providers
or normal sourcing procedures for suppliers, as applicable.
Table of Contents
82
Table of Contents
2006
2005
Weighted
Weighted
Long-Term
Average
Long-Term
Average
Debt
Interest Rate
Debt
Interest Rate
$
997.0
7.49
%
$
400.0
5.67
%
300.0
8.50
%
600.0
8.75
%
399.3
5.635
%
399.3
5.635
%
3.6
4.75
%
300.1
4.75
%
73.3
8.125
%
295.6
8.125
%
41.4
8.11
%
800.0
8.35
%
45.5
7.06
%
57.5
6.34
%
2,460.1
2,252.5
(25.6
)
(9.4
)
$
2,434.5
$
2,243.1
83
Table of Contents
Borrowings
Repayments
$
11,978.2
$
11,381.2
8,942.4
8,542.4
4,153.1
4,153.1
84
Table of Contents
2013 Notes
2016 Notes
104.250
%
N/A
102.125
%
104.375
%
100.0
%
102.917
%
100.0
%
101.458
%
100.0
%
100.0
%
85
Table of Contents
December 31,
2006
$
1,996.7
502.7
$
2,499.4
86
Table of Contents
Year Ended
December 31,
2006
$
835.9
(392.2
)
(200.4
)
(636.0
)
(77.7
)
(105.5
)
(12.9
)
(64.6
)
$
(653.4
)
$
200.4
(8.0
)
8.7
8.7
$
209.8
Table of Contents
Maturities
$
25.6
85.9
53.1
10.7
8.6
2006
2005
2004
$
(785.3
)
$
(1,520.8
)
$
47.7
131.9
392.2
516.6
$
(653.4
)
$
(1,128.6
)
$
564.3
$
30.6
$
(12.9
)
$
7.2
(1.6
)
65.3
(4.0
)
29.0
52.4
3.2
79.3
162.5
112.1
(53.4
)
(20.6
)
12.7
25.9
141.9
124.8
$
54.9
$
194.3
$
128.0
88
Table of Contents
2006
2005
2004
$
(228.7
)
$
(395.0
)
$
197.5
10.2
(34.0
)
(46.5
)
259.4
275.2
13.3
(11.4
)
(22.6
)
(16.6
)
1.0
354.4
(6.7
)
(22.8
)
(7.4
)
31.1
39.1
(12.3
)
$
54.9
$
194.3
$
128.0
2006
2005
$
451.1
$
259.0
140.1
85.7
113.5
90.1
66.7
71.7
41.1
29.7
19.6
20.6
84.0
39.5
15.3
20.2
57.5
102.2
8.2
22.0
0.2
1,042.0
696.0
(843.9
)
(478.3
)
$
198.1
$
217.7
89
Table of Contents
2006
2005
$
$
(137.4
)
(14.7
)
(106.4
)
(86.8
)
(4.3
)
$
(121.1
)
$
(228.5
)
$
77.0
$
(10.8
)
2006
2005
$
83.3
$
138.6
110.5
76.0
(20.8
)
(33.3
)
(96.0
)
(192.1
)
$
77.0
$
(10.8
)
Table of Contents
Pension
Other Postretirement
2006
2005
2006
2005
$
788.3
$
630.8
$
265.5
$
222.1
50.3
41.0
12.7
11.7
44.2
37.6
15.0
13.5
3.5
5.6
(1.0
)
(30.5
)
96.0
(16.3
)
22.4
(24.9
)
(21.6
)
(9.1
)
(7.8
)
(4.6
)
(1.7
)
0.1
1.7
0.1
0.4
0.3
(1.5
)
22.5
0.5
10.4
1.5
(0.3
)
4.2
$
860.9
$
788.3
$
267.9
$
265.5
91
Table of Contents
Pension
Other Postretirement
2006
2005
2006
2005
$
474.2
$
394.5
$
$
42.7
45.6
69.5
48.7
9.1
7.8
(24.9
)
(21.6
)
(9.1
)
(7.8
)
(1.5
)
11.5
0.2
0.6
8.3
$
573.6
$
474.2
$
$
$
(287.3
)
$
(314.1
)
$
(267.9
)
$
(265.5
)
11.9
15.8
2.1
1.8
(275.4
)
(298.3
)
(265.8
)
(263.7
)
182.9
111.3
(0.2
)
8.9
50.5
(37.1
)
$
(275.4
)
$
(65.1
)
$
(265.8
)
$
(180.6
)
$
(4.9
)
$
(19.8
)
$
(10.0
)
$
(7.6
)
(270.5
)
(208.8
)
(255.8
)
(173.0
)
48.5
115.0
$
(275.4
)
$
(65.1
)
$
(265.8
)
$
(180.6
)
Table of Contents
After
Before Adoption of
Adoption of
SFAS No. 158
Adjustments
SFAS No. 158
$
45.7
$
(45.7
)
$
(420.3
)
(120.9
)
(541.2
)
97.6
166.6
264.2
Other
Pension
Postretirement
$
150.1
$
91.8
(0.1
)
7.8
47.9
(33.3
)
$
197.9
$
66.3
Other
Pension
Postretirement
$
3.1
$
4.5
(0.1
)
1.0
4.7
(3.5
)
$
7.7
$
2.0
93
Table of Contents
Pension
Other Postretirement
2006
2005
2004
2006
2005
2004
$
50.3
$
41.0
$
36.7
$
12.7
$
11.7
$
13.1
44.2
37.6
32.2
15.0
13.5
12.3
(39.4
)
(30.2
)
(24.3
)
7.1
3.0
2.8
5.8
3.6
3.9
(0.1
)
(0.2
)
(0.3
)
1.0
1.1
1.2
5.4
5.4
4.3
(3.7
)
(3.1
)
(2.8
)
1.7
0.1
0.4
0.3
0.2
1.0
0.5
0.9
0.5
1.9
1.4
(7.7
)
$
70.1
$
58.1
$
53.9
$
31.2
$
28.5
$
20.2
Pension
Other Postretirement
2006
2005
2006
2005
6.00
%
5.75
%
5.90
%
5.70
%
5.00
%
5.00
%
5.30
%
5.30
%
3.75
%
3.75
%
N/A
N/A
4.00
%
3.25
%
N/A
N/A
Pension
Other Postretirement
2006
2005
2004
2006
2005
2004
5.75
%
6.00
%
6.25
%
5.70
%
6.00
%
6.25
%
5.00
%
6.00
%
6.25
%
5.30
%
6.50
%
6.50
%
8.25
%
7.75
%
7.75
%
N/A
N/A
N/A
6.90
%
7.00
%
7.00
%
N/A
N/A
N/A
3.75
%
3.00
%
3.00
%
N/A
N/A
N/A
3.90
%
3.25
%
3.25
%
N/A
N/A
N/A
94
Table of Contents
2006
2005
69
%
71
%
58
%
59
%
28
%
27
%
36
%
38
%
3
%
2
%
6
%
3
%
95
Table of Contents
Other
Pension
Postretirement
$
27.1
$
10.0
29.0
10.7
31.1
11.5
34.8
12.2
37.6
12.6
241.9
73.5
96
Table of Contents
Stock Options
Price Range
4,002,625
$15.50 - $55.33
(14,450
)
$15.50 - $54.22
(693,495
)
$15.50 - $54.22
3,294,680
$22.12 - $55.33
(176,800
)
$22.12 - $54.22
(134,475
)
$22.12 - $54.22
2,983,405
$22.12 - $55.33
(186,100
)
$22.12 - $54.22
(7,000
)
$22.12
2,790,305
$22.12 - $55.33
$
22.12 - 27.25
$
33.00 - 39.83
$
41.83 - 42.32
$
54.22 - 55.33
215,475
795,080
1,389,300
390,450
3.16
3.56
5.42
1.56
$
22.58
$
36.98
$
41.83
$
54.27
97
Table of Contents
Stock
Restricted
Appreciation
Stock
Performance
Rights(1)
Units
Shares(2)
1,394,716
256,158
954,637
53,193
(39,332
)
(6,664
)
(476,337
)
(93,660
)
1,833,684
209,027
1,215,046
605,811
56,733
(74,528
)
(67,452
)
(130,845
)
(74,636
)
1,215,046
2,234,122
123,672
642,285
406,086
130,655
(91,002
)
(146,045
)
(84,418
)
(14,475
)
(529,592
)
1,751,854
1,964,571
169,909
(1)
Does not include cash-settled stock appreciation rights.
(2)
Performance shares reflected as granted are notional
shares granted at the beginning of a three-year performance
period whose eventual payout is subject to satisfaction of
performance criteria. Performance shares reflected as
distributed are those that are paid out in shares of
common stock upon satisfaction of the performance criteria at
the end of the three-year performance period.
98
Table of Contents
99
Table of Contents
$
43.4
16.7
(26.0
)
(1.7
)
32.4
17.5
(12.4
)
3.4
$
40.9
100
Table of Contents
101
Table of Contents
102
Table of Contents
$
93.7
75.6
65.3
52.9
43.5
71.3
$
402.3
103
Table of Contents
2006
Electronic
Seating
and Electrical
Interior
Other
Consolidated
$
11,624.8
$
2,996.9
$
3,217.2
$
$
17,838.9
604.0
102.5
(183.8
)
(241.7
)
281.0
167.3
110.1
93.8
21.0
392.2
161.1
77.0
98.7
10.8
347.6
4,386.4
2,374.5
528.3
561.3
7,850.5
104
Table of Contents
2005
Electronic
Seating
and Electrical
Interior
Other
Consolidated
$
11,035.0
$
2,956.6
$
3,097.6
$
$
17,089.2
323.3
180.0
(191.1
)
(206.8
)
105.4
150.7
106.0
116.6
20.1
393.4
229.2
102.9
190.9
45.4
568.4
3,985.2
2,122.4
1,506.8
674.0
8,288.4
2004
Electronic
Seating
and Electrical
Interior
Other
Consolidated
$
11,314.6
$
2,680.4
$
2,965.0
$
$
16,960.0
682.1
210.9
85.1
(209.7
)
768.4
133.4
89.9
108.9
22.9
355.1
208.6
116.4
86.9
17.1
429.0
4,172.7
2,297.3
2,403.6
1,070.8
9,944.4
(1)
See definition above.
Table of Contents
2006
2005
2004
$
522.7
$
312.2
$
978.1
(241.7
)
(206.8
)
(209.7
)
281.0
105.4
768.4
2.9
1,012.8
636.0
209.8
183.2
165.5
85.7
38.0
38.6
$
(653.4
)
$
(1,128.6
)
$
564.3
2006
2005
2004
$
6,624.3
$
6,252.2
$
6,200.7
1,375.3
1,374.1
1,317.8
2,034.3
2,123.4
2,026.0
1,789.5
1,595.6
1,475.7
6,015.5
5,743.9
5,939.8
$
17,838.9
$
17,089.2
$
16,960.0
2006
2005
$
472.6
$
563.3
51.5
50.6
161.3
185.1
168.2
153.9
618.1
661.8
$
1,471.7
$
1,614.7
106
Table of Contents
2006
2005
2004
31.9
%
28.3
%
31.4
%
22.6
24.7
24.1
10.3
11.4
11.8
7.4
7.6
7.5
107
Table of Contents
2006
2005
2004
$
(150.0
)
$
150.0
$
4,476.2
4,288.1
4,664.4
6.1
5.3
5.5
108
Table of Contents
109
Table of Contents
Thirteen Weeks Ended
April 1,
July 1,
September 30,
December 31,
2006
2006
2006
2006
$
4,678.5
$
4,810.2
$
4,069.7
$
4,280.5
219.2
284.1
186.8
237.6
2.9
28.7
607.3
15.0
(6.4
)
(74.0
)
(645.0
)
17.9
(6.4
)
(74.0
)
(645.0
)
0.22
(0.10
)
(1.10
)
(8.90
)
0.27
(0.10
)
(1.10
)
(8.90
)
0.22
(0.10
)
(1.10
)
(8.90
)
0.26
(0.10
)
(1.10
)
(8.90
)
Thirteen Weeks Ended
April 2,
July 2,
October 1,
December 31,
2005
2005
2005
2005
$
4,286.0
$
4,419.3
$
3,986.6
$
4,397.3
199.9
220.8
86.4
228.9
670.0
342.8
15.6
(44.4
)
(750.1
)
(602.6
)
0.23
(0.66
)
(11.17
)
(8.97
)
0.23
(0.66
)
(11.17
)
(8.97
)
110
Table of Contents
111
Table of Contents
112
Table of Contents
113
Table of Contents
Table of Contents
For the Year Ended December 31, 2006
Non-
Parent
Guarantors
Guarantors
Eliminations
Consolidated
(In millions)
$
1,580.3
$
6,889.8
$
12,729.4
$
(3,360.6
)
$
17,838.9
1,691.5
6,755.6
11,824.7
(3,360.6
)
16,911.2
240.5
75.0
331.2
646.7
2.9
2.9
240.4
259.6
136.0
636.0
(114.4
)
126.1
198.1
209.8
(281.2
)
77.4
203.8
27.6
48.8
9.3
85.7
(224.1
)
(455.6
)
26.3
(653.4
)
5.4
(67.4
)
116.9
54.9
18.3
18.3
(12.7
)
(5.2
)
1.7
(16.2
)
493.6
(80.1
)
(413.5
)
(710.4
)
(302.9
)
(110.6
)
413.5
(710.4
)
2.9
2.9
$
(707.5
)
$
(302.9
)
$
(110.6
)
$
413.5
$
(707.5
)
Table of Contents
For the Year Ended December 31, 2005
Non-
Parent
Guarantors
Guarantors
Eliminations
Consolidated
(In millions)
$
1,657.2
$
6,599.0
$
11,350.1
$
(2,517.1
)
$
17,089.2
1,727.4
6,568.4
10,574.5
(2,517.1
)
16,353.2
309.6
2.8
318.2
630.6
1,012.8
1.012.8
45.9
94.2
43.1
183.2
(373.7
)
308.2
65.5
6.4
19.4
12.2
38.0
(58.4
)
(1,406.8
)
336.6
(1,128.6
)
270.2
(140.6
)
64.7
194.3
7.2
7.2
40.6
(3.5
)
14.3
51.4
1,012.3
(193.9
)
(818.4
)
$
(1,381.5
)
$
(1,068.8
)
$
250.4
$
818.4
$
(1,381.5
)
Table of Contents
For the Year Ended December 31, 2004
Non-
Parent
Guarantors
Guarantors
Eliminations
Consolidated
(In millions)
$
1,652.1
$
6,937.7
$
10,990.3
$
(2,620.1
)
$
16,960.0
1,739.9
6,270.1
10,168.0
(2,620.1
)
15,557.9
205.3
129.5
298.9
633.7
30.2
100.5
34.8
165.5
(317.2
)
339.4
(22.2
)
(17.8
)
29.5
26.9
38.6
11.7
68.7
483.9
564.3
(17.9
)
25.1
120.8
128.0
16.7
16.7
0.3
(3.3
)
0.4
(2.6
)
(392.9
)
(305.8
)
698.7
$
422.2
$
352.7
$
346.0
$
(698.7
)
$
422.2
Table of Contents
For the Year Ended December 31, 2006
Non-
Parent
Guarantors
Guarantors
Eliminations
Consolidated
(In millions)
$
28.9
$
(102.0
)
$
358.4
$
$
285.3
(47.8
)
(94.8
)
(205.0
)
(347.6
)
(24.9
)
(5.6
)
(30.5
)
(1.4
)
22.5
44.8
65.9
(49.2
)
(97.2
)
(165.8
)
(312.2
)
900.0
900.0
(1,356.9
)
(1,356.9
)
597.0
597.0
(44.8
)
(10.5
)
18.8
(36.5
)
(11.8
)
(11.8
)
(102.0
)
192.6
(90.6
)
199.2
199.2
(16.8
)
(16.8
)
0.2
0.2
1.6
(2.3
)
3.7
3.0
177.5
179.8
(79.9
)
277.4
18.6
36.3
54.9
157.2
(0.8
)
149.0
305.4
38.6
4.8
153.9
197.3
$
195.8
$
4.0
$
302.9
$
$
502.7
Table of Contents
For the Year Ended December 31, 2005
Non-
Parent
Guarantors
Guarantors
Eliminations
Consolidated
(In millions)
$
(260.7
)
$
(15.8
)
$
837.3
$
$
560.8
(123.0
)
(235.9
)
(209.5
)
(568.4
)
(11.8
)
(11.8
)
7.8
16.1
9.4
33.3
1.9
0.6
2.8
5.3
(113.3
)
(219.2
)
(209.1
)
(541.6
)
(600.0
)
(600.0
)
400.0
400.0
(17.7
)
(2.2
)
(12.8
)
(32.7
)
(23.8
)
(23.8
)
601.1
234.5
(835.6
)
(67.2
)
(67.2
)
4.7
4.7
(25.4
)
(25.4
)
(7.1
)
1.5
2.3
(3.3
)
0.7
0.7
289.1
233.8
(869.9
)
(347.0
)
2.2
(62.0
)
(59.8
)
(84.9
)
1.0
(303.7
)
(387.6
)
123.5
3.8
457.6
584.9
$
38.6
$
4.8
$
153.9
$
$
197.3
Table of Contents
For the Year Ended December 31, 2004
Non-
Parent
Guarantors
Guarantors
Eliminations
Consolidated
(In millions)
$
100.6
$
64.6
$
510.7
$
$
675.9
(71.6
)
(146.2
)
(211.2
)
(429.0
)
(14.1
)
(3.3
)
(85.6
)
(103.0
)
15.3
13.2
27.8
56.3
0.8
0.1
2.3
3.2
(69.6
)
(136.2
)
(266.7
)
(472.5
)
399.2
399.2
(11.4
)
1.0
(39.0
)
(49.4
)
(0.3
)
(0.1
)
(29.4
)
(29.8
)
(189.1
)
66.2
122.9
(68.0
)
(68.0
)
24.4
24.4
(97.7
)
(97.7
)
(6.1
)
(5.3
)
(1.2
)
(12.6
)
51.0
61.8
53.3
166.1
4.5
41.6
46.1
82.0
(5.3
)
338.9
415.6
41.5
9.1
118.7
169.3
$
123.5
$
3.8
$
457.6
$
$
584.9
Table of Contents
2006
2005
$
997.0
$
400.0
1,417.6
1,795.0
4.6
12.3
2,419.2
2,207.3
(6.0
)
(4.2
)
$
2,413.2
$
2,203.1
Maturities
$
6.0
79.3
47.2
6.0
6.0
121
Table of Contents
Balance
|
Balance
|
|||||||||||||||||||
as of Beginning
|
Other
|
as of End
|
||||||||||||||||||
of Year | Additions | Retirements | Changes | of Year | ||||||||||||||||
(In millions) | ||||||||||||||||||||
FOR THE YEAR ENDED
DECEMBER 31, 2006:
|
||||||||||||||||||||
Valuation of accounts deducted
from related assets:
|
||||||||||||||||||||
Allowance for doubtful accounts
|
$ | 20.4 | $ | 7.7 | $ | (12.2 | ) | $ | (1.0 | ) | $ | 14.9 | ||||||||
Reserve for unmerchantable
inventories
|
85.7 | 28.4 | (23.3 | ) | (3.7 | ) | 87.1 | |||||||||||||
Restructuring reserves
|
25.5 | 92.3 | (75.9 | ) | | 41.9 | ||||||||||||||
Allowance for deferred tax assets
|
478.3 | 364.6 | (28.4 | ) | 29.4 | 843.9 | ||||||||||||||
$ | 609.9 | $ | 493.0 | $ | (139.8 | ) | $ | 24.7 | $ | 987.8 | ||||||||||
FOR THE YEAR ENDED
DECEMBER 31, 2005:
|
||||||||||||||||||||
Valuation of accounts deducted
from related assets:
|
||||||||||||||||||||
Allowance for doubtful accounts
|
$ | 26.7 | $ | 12.5 | $ | (15.8 | ) | $ | (3.0 | ) | $ | 20.4 | ||||||||
Reserve for unmerchantable
inventories
|
86.4 | 33.8 | (23.3 | ) | (11.2 | ) | 85.7 | |||||||||||||
Restructuring reserves
|
20.9 | 86.8 | (80.3 | ) | (1.9 | ) | 25.5 | |||||||||||||
Allowance for deferred tax assets
|
277.7 | 276.3 | (44.5 | ) | (31.2 | ) | 478.3 | |||||||||||||
$ | 411.7 | $ | 409.4 | $ | (163.9 | ) | $ | (47.3 | ) | $ | 609.9 | |||||||||
FOR THE YEAR ENDED
DECEMBER 31, 2004:
|
||||||||||||||||||||
Valuation of accounts deducted
from related assets:
|
||||||||||||||||||||
Allowance for doubtful accounts
|
$ | 30.6 | $ | 11.7 | $ | (16.0 | ) | $ | 0.4 | $ | 26.7 | |||||||||
Reserve for unmerchantable
inventories
|
55.8 | 45.5 | (16.0 | ) | 1.1 | 86.4 | ||||||||||||||
Restructuring reserves
|
8.1 | 18.8 | (6.0 | ) | | 20.9 | ||||||||||||||
Allowance for deferred tax assets
|
220.8 | 84.4 | (27.5 | ) | | 277.7 | ||||||||||||||
$ | 315.3 | $ | 160.4 | $ | (65.5 | ) | $ | 1.5 | $ | 411.7 | ||||||||||
122
ITEM 9 | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE |
123
124
125
| optimize profitability and growth; | |
| link the interests of management with those of stockholders; |
126
| align managements compensation mix with our business strategy and compensation philosophy; | |
| provide management with incentives for excellence in individual performance; | |
| maintain a strong link between executive pay and performance; | |
| promote teamwork among our global managers; and | |
| attract and retain highly qualified and effective officers and key employees. |
base salary
|
annual incentives | |
long-term incentives
|
retirement plan benefits | |
termination/change in
control benefits
|
certain health, welfare and other benefits |
127
3M
|
Goodyear Tire & Rubber* | Oshkosh Truck* | ||
Alcoa
|
Harley-Davidson | Parker Hannifin | ||
American
Axle & Mfg*
|
Hayes-Lemmerz* | Phelps Dodge | ||
American Standard
|
Honeywell | PPG Industries* | ||
ArvinMeritor*
|
ITT-Corporate | Raytheon | ||
Black & Decker
|
Johnson Controls* | Rockwell Automation | ||
Boeing
|
Lafarge North America | Rockwell Collins | ||
BorgWarner*
|
Lockheed Martin | Schlumberger | ||
Caterpillar
|
Masco | Textron | ||
Cooper Tire &
Rubber*
|
Modine Manufacturing* | United States Steel | ||
Dura Automotive
Systems*
|
Motorola | United Technologies | ||
Emerson Electric
|
Navistar International* | USG | ||
General Dynamics
|
Northrop Grumman | Visteon* | ||
Goodrich
|
128
129
| granted awards that reward increases in the value of our stock (stock-settled stock appreciation rights); | |
| granted awards that support retention of our management team and reward both maintaining and increasing the value of our stock (restricted stock units); | |
| granted long-term cash incentives tied to the achievement of specific business objectives (cash- based performance units); and | |
| granted long-term stock incentives tied to the achievement of specified business objectives that also reward increases in the value of our stock (performance share awards). |
| approved stock ownership guidelines for members of senior management; and | |
| permitted certain members of senior management to defer a portion of their base salary and annual incentive bonus into restricted stock units under the Management Stock Purchase Plan. |
130
131
Multiple of
|
||||
Position
|
Base Salary | |||
Chief Executive Officer
|
5x | |||
Vice Chairman and Chief Financial
Officer
|
4x | |||
Chief Operating Officer
|
3x | |||
Executive/Senior Vice Presidents
|
2.5x | |||
Corporate Vice Presidents
|
2x |
132
Total Dollar Amount of Salary and Bonus
|
Value of Restricted Stock Units
|
|||||||
Deferrals, Expressed as a Percentage of
|
Applicable
|
Received as a Percentage of the
|
||||||
the Participants Base Salary
|
Discount Rate | Amount Deferred | ||||||
15% or less
|
20 | % | 125 | % | ||||
Over 15% and up to 100%
|
30 | % | 143 | % | ||||
Over 100%
|
20 | % | 125 | % |
133
134
Change in
|
||||||||||||||||||||||||||||||||||||
Pension
|
||||||||||||||||||||||||||||||||||||
Value
|
||||||||||||||||||||||||||||||||||||
Non-Equity
|
and
|
|||||||||||||||||||||||||||||||||||
Incentive
|
Nonqualified
|
|||||||||||||||||||||||||||||||||||
Plan
|
Deferred
|
All Other
|
||||||||||||||||||||||||||||||||||
Stock
|
Option
|
Compen-
|
Compensation
|
Compen-
|
Total
|
|||||||||||||||||||||||||||||||
Salary
|
Bonus
|
Awards
|
Awards
|
sation
|
Earnings
|
sation
|
Compensation
|
|||||||||||||||||||||||||||||
(1)
|
(1), (2)
|
(3)
|
(4)
|
(1), (2)
|
(5)
|
(6)
|
(7)
|
|||||||||||||||||||||||||||||
Name and Principal
|
Year
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
|||||||||||||||||||||||||||
Position (a)
|
(b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | |||||||||||||||||||||||||||
Robert E. Rossiter,
|
2006 | $ | 1,100,000 | $ | 132,000 | $ | 2,540,097 | $ | 944,106 | $ | 693,000 | $ | 697,329 | $ | 192,344 | (8) | $ | 6,298,876 | ||||||||||||||||||
Chairman and Chief
Executive Officer |
||||||||||||||||||||||||||||||||||||
James H. Vandenberghe,
|
2006 | $ | 925,000 | $ | 74,000 | $ | 1,417,369 | $ | 524,503 | $ | 388,500 | $ | 416,243 | $ | 93,658 | $ | 3,839,273 | |||||||||||||||||||
Vice Chairman and Chief
Financial Officer |
||||||||||||||||||||||||||||||||||||
David C. Wajsgras,
|
2006 | $ | 130,000 | $ | 0 | $ | (639,537 | ) | $ | (57,791 | ) | $ | 0 | $ | 0 | (10) | $ | 11,243 | (11) | $ | (556,085 | ) | ||||||||||||||
Former Executive Vice President and
Chief Financial Officer(9)
|
||||||||||||||||||||||||||||||||||||
Douglas G. DelGrosso,
|
2006 | $ | 770,000 | $ | 74,000 | $ | 1,013,164 | $ | 466,709 | $ | 388,500 | $ | 82,210 | $ | 0 | (12) | $ | 2,794,583 | ||||||||||||||||||
President and Chief
Operating Officer |
||||||||||||||||||||||||||||||||||||
Daniel A. Ninivaggi,
|
2006 | $ | 572,917 | $ | 169,850 | $ | 863,627 | $ | 232,497 | $ | 150,150 | $ | 30,089 | $ | 57,716 | $ | 2,076,846 | |||||||||||||||||||
Executive Vice President, Secretary
and General Counsel
|
||||||||||||||||||||||||||||||||||||
Raymond E. Scott,
|
2006 | $ | 453,958 | $ | 22,560 | $ | 455,591 | $ | 224,021 | $ | 118,440 | $ | 28,082 | $ | 139,700 | (13) | $ | 1,442,352 | ||||||||||||||||||
Senior Vice President and
President, North American Seating Systems Group
|
(1) | Under the Management Stock Purchase Plan, Named Executive Officers elected to defer portions of their 2006 salaries and bonuses. Salaries and bonuses are reported without giving effect to any amount deferred under that plan. The Named Executive Officers deferred the following amounts of their total salary and bonus earned in 2006: Mr. Rossiter, $577,500; Mr. Vandenberghe, $416,250; Mr. DelGrosso, $215,625; Mr. Ninivaggi, $153,000; and Mr. Scott, $141,000. Amounts deferred under the Management Stock Purchase Plan are used to purchase restricted stock units at a discount to the fair market value of our common stock. The respective amounts charged as an expense to the Company in 2006 for this premium portion is reflected in the stock awards column. Messrs. DelGrosso and Scott have deferred receipt of supplemental restricted stock unit awards into the Management Stock Purchase Plan in the amounts of $144,896 and $46,042, respectively. For further information regarding the Management Stock Purchase Plan, see Compensation Discussion and Analysis above and the Grants of Plan-Based Awards table (including footnote (4) thereto) beginning on page 138. | |
(2) | The total annual incentive bonus for 2006 is divided between columns (d) and (g). The amount shown in column (g) was earned based on the pre-established criteria approved by the Compensation Committee. The amount shown in column (d) is the discretionary portion of the annual incentive bonus that was approved by the Compensation Committee based on a variety of qualitative factors. | |
(3) | Represents the compensation costs of restricted stock units, restricted stock and performance shares for financial reporting purposes for the year under FAS 123(R). See Note 11 of the Companys financial statements for 2006 for the assumptions made in determining FAS 123(R)values. For retirement eligible grantees, the first half of the grant is expensed in the year of the grant and the second half is expensed over two |
135
years. There can be no assurance that the FAS 123(R) value will ever be realized. The amount for Mr. Wajsgras reflects the net result of reversing a portion of the compensation costs of awards that were previously expensed by the Company which he forfeited upon his resignation. | ||
(4) | Represents the compensation costs of stock-settled stock appreciation rights for financial reporting purposes for the year under FAS 123(R). See Note 11 of the Companys financial statements for 2006 for the assumptions made in determining FAS 123(R) values. For retirement eligible grantees, the entire amount is expensed in one year. There can be no assurance that the FAS 123(R) value will ever be realized. The amount for Mr. Wajsgras reflects the net result of reversing a portion of the compensation costs of awards that were previously expensed by the Company which he forfeited upon his resignation. | |
(5) | Represents the aggregate change in actuarial present value of the executives accumulated benefit under all defined benefit and actuarial pension plans (including supplemental plans) from the pension plan measurement date used for financial statement reporting purposes with respect to the prior fiscal years audited financial statements to the respective measurement date for the covered fiscal year. | |
(6) | The amount shown in column (i) reflects for each Named Executive Officer (with those amounts in each category in excess of $10,000 specifically noted): |
| matching contributions allocated by the Company to each of the Named Executive Officers pursuant to the Retirement Savings Plan (described below) and the Executive Supplemental Savings Plan (fully described on page 146 under the heading Nonqualified Deferred Compensation); | |
| imputed income with respect to life insurance coverage; | |
| life insurance premiums paid by the Company, including $12,128 in premiums for Mr. Rossiter and $12,720 in premiums for Mr. Vandenberghe; and | |
| a perquisite allowance provided by the Company that is equal to the greater of 7.5% of the base salary rate as of December 31, 2006 and $42,000, which amounted to allowances as follows: Mr. Rossiter, $82,500; Mr. Vandenberghe, $69,375; Mr. DelGrosso, $69,375 (based on a salary rate of $925,000, which includes the value of a supplemental restricted stock unit grant awarded in January 2006); Mr. Ninivaggi, $52,500; and Mr. Scott, $42,000. |
(7) | For each Named Executive Officer, the percentages of total compensation in 2006 that were attributable to base salary and total bonus (the amounts identified in columns (d) and (g)) were as follows: Mr. Rossiter, base salary 17.5%, bonus 13.1%; Mr. Vandenberghe, base salary 24.1%, bonus 12.0%; Mr. Wajsgras, base salary 92.0% (disregarding negative amounts in the Summary Compensation Table), bonus 0%; Mr. DelGrosso, base salary 27.6%, bonus 16.5%; Mr. Ninivaggi, base salary 27.6%, bonus 15.4%; Mr. Scott, base salary 31.5%, bonus 9.8%. | |
(8) | In addition to the items noted in footnote 6 above, the amount in column (i) includes the aggregate incremental cost of $45,866 for personal use of the corporate aircraft, which was determined based on the variable cost to the Company of such use, and an associated tax gross-up of $33,822. | |
(9) | Mr. Wajsgras resigned as our Executive Vice President and Chief Financial Officer effective March 10, 2006. | |
(10) | Mr. Wajsgrass aggregate pension value decreased by $182,082 as a result of his resignation prior to becoming fully vested in the Pension Equalization Program and the Executive Supplemental Savings Plan. | |
(11) | The amount in column (i) includes $10,719 relating to financial counseling services and country club membership dues. | |
(12) | Mr. DelGrosso received the items noted in footnote 6 above, however, these amounts were more than offset by net tax reimbursements of $96,563 paid by Mr. DelGrosso to Lear related to his foreign assignment. The net tax reimbursements are comprised of taxes paid by Lear in the amount of $182,500, offset by tax equalization payments made by Mr. DelGrosso to Lear in the amount of $279,063. | |
(13) | Includes $56,643 relating to Mr. Scotts overseas assignment compensation (which primarily reflects tax equalization payments, reimbursement for foreign housing costs and certain associated tax gross-ups), $20,000 relating to country club membership fees and $13,529 for a tax gross-up relating to country club membership fees. |
136
137
All Other
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|||||||||||||||||||||||||||||||||||||||||||
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Awards:
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||||||||||||||||||||||||||||||||||||||||||
Stock
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Number
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Fair
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||||||||||||||||||||||||||||||||||||||||||
Awards:
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of
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Exercise
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Value of
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|||||||||||||||||||||||||||||||||||||||||
Number
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Securities
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or Base
|
Stock
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|||||||||||||||||||||||||||||||||||||||||
of Shares
|
Under-
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Price of
|
and
|
|||||||||||||||||||||||||||||||||||||||||
Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1) | Estimated Future Payouts Under Equity Incentive Plan Awards(2) |
of Stock
|
lying
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Option
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Option
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|||||||||||||||||||||||||||||||||||||||
Grant
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Threshold
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Target
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Maximum
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Threshold
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Target
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Maxi-mum
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or Units
|
Options
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Awards
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Awards
|
||||||||||||||||||||||||||||||||||
Name
|
Date
|
Approval
|
($)
|
($)
|
($)
|
(#)
|
(#)
|
(#)
|
(#)
|
(#)
|
($/Sh)
|
(3)
|
||||||||||||||||||||||||||||||||
(a)
|
(b) | Date | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | (k) | (l) | ||||||||||||||||||||||||||||||||
Robert E. Rossiter
|
3/15/2006(4) | 11/10/2005(5) | 15,606 | $ | 111,975 | |||||||||||||||||||||||||||||||||||||||
3/23/2006 | $ | 0 | $ | 1,650,000 | $ | 2,310,000 | ||||||||||||||||||||||||||||||||||||||
3/23/2006 | 9,711 | 19,421 | 29,132 | |||||||||||||||||||||||||||||||||||||||||
11/9/2006(6) | 23,626 | $ | 739,966 | |||||||||||||||||||||||||||||||||||||||||
11/9/2006(7) | 70,875 | $ | 31.32 | $ | 936,259 | |||||||||||||||||||||||||||||||||||||||
James H. Vandenberghe
|
3/15/2006(4) | 11/10/2005(5) | 13,124 | $ | 94,161 | |||||||||||||||||||||||||||||||||||||||
3/23/2006 | $ | 0 | $ | 925,000 | $ | 1,295,000 | ||||||||||||||||||||||||||||||||||||||
3/23/2006 | 4,083 | 8,166 | 12,249 | |||||||||||||||||||||||||||||||||||||||||
11/9/2006(6) | 13,126 | $ | 411,106 | |||||||||||||||||||||||||||||||||||||||||
11/9/2006(7) | 39,375 | $ | 31.32 | $ | 520,144 | |||||||||||||||||||||||||||||||||||||||
David C. Wajsgras
|
1/3/2006 | 11/10/2005(8) | 2,562 | $ | 72,479 | |||||||||||||||||||||||||||||||||||||||
Douglas G. DelGrosso
|
1/3/2006 | 11/10/2005(8) | 5,121 | $ | 144,873 | |||||||||||||||||||||||||||||||||||||||
3/15/2006(4) | 11/10/2005(5) | 11,488 | $ | 225,346 | ||||||||||||||||||||||||||||||||||||||||
3/23/2006 | $ | 0 | $ | 925,000 | $ | 1,295,000 | ||||||||||||||||||||||||||||||||||||||
3/23/2006 | 4,083 | 8,166 | 12,249 | |||||||||||||||||||||||||||||||||||||||||
11/9/2006(6) | 13,126 | $ | 411,106 | |||||||||||||||||||||||||||||||||||||||||
11/9/2006(7) | 39,375 | $ | 31.32 | $ | 520,144 | |||||||||||||||||||||||||||||||||||||||
Daniel A. Ninivaggi
|
3/15/2006(4) | 11/10/2005(5) | 1,103 | $ | 6,245 | |||||||||||||||||||||||||||||||||||||||
3/23/2006 | $ | 0 | $ | 357,500 | $ | 500,500 | ||||||||||||||||||||||||||||||||||||||
3/23/2006 | 2,207 | 4,414 | 6,621 | |||||||||||||||||||||||||||||||||||||||||
11/9/2006(6) | 10,150 | $ | 317,898 | |||||||||||||||||||||||||||||||||||||||||
11/9/2006(6) | 9,578 | $ | 300,000 | |||||||||||||||||||||||||||||||||||||||||
11/9/2006(7) | 30,450 | $ | 31.32 | $ | 402,245 | |||||||||||||||||||||||||||||||||||||||
Raymond E. Scott
|
3/15/2006(4) | 11/10/2005(5) | 2,032 | $ | 57,543 | |||||||||||||||||||||||||||||||||||||||
3/23/2006 | $ | 0 | $ | 282,000 | $ | 394,800 | ||||||||||||||||||||||||||||||||||||||
3/23/2006 | 2,031 | 4,061 | 6,092 | |||||||||||||||||||||||||||||||||||||||||
11/9/2006(6) | 6,300 | $ | 197,316 | |||||||||||||||||||||||||||||||||||||||||
11/9/2006(7) | 18,900 | $ | 31.32 | $ | 249,669 |
(1) | The threshold, target and maximum amounts represent 0%, 100% and 140%, respectively, of the total bonus opportunity for each Named Executive Officer. The total bonus opportunity for the Named Executive Officers is based on a percentage of base salary, which was 150% for Mr. Rossiter, 100% for Messrs. Vandenberghe and DelGrosso, and 60% for Mr. Scott. The total bonus opportunity for Mr. Ninivaggi was 60% through August 21, 2006, at which time it was increased to 80% of base salary. Amounts actually paid for 2006 performance were equal to 50% of target, except with respect to Mr. Ninivaggi, who received an additional discretionary amount. Those amounts are set forth in columns (d) and (g) of the Summary Compensation Table. | |
(2) | Represents the performance share awards granted under the Long-Term Stock Incentive Plan for the 2006 through 2008 performance period. | |
(3) | See Note 11 of the Companys financial statements for 2006 for the assumptions made in determining FAS 123(R) values. | |
(4) | Represents total restricted stock units awarded under the Management Stock Purchase Plan (MSPP) in 2006 based on deferral elections with respect to salary and bonus. The Grant Date Fair Value, however, reflects only the premium portion (as a result of the discounted unit price) awarded to each Named Executive Officer based on such officers deferral election. The amounts shown for this award would include deferrals of 2006 salary and 2005 bonus payable in 2006, however, no bonus was paid in 2006. For Messrs. DelGrosso and Scott, the fair value of their MSPP awards also includes the amounts of their supplemental restricted stock unit awards that they deferred into the MSPP which were $144,896 and $46,042, respectively. | |
(5) | The Compensation Committee approved the 2006 Management Stock Purchase Plan Terms and Conditions at its meeting in November 2005. | |
(6) | Represents restricted stock units granted under the Long-Term Stock Incentive Plan. | |
(7) | Represents stock-settled stock appreciation rights awarded under the Long-Term Stock Incentive Plan. |
138
(8) | The Compensation Committee approved the awards at its meeting in November 2005, to be granted on January 3, 2006. |
139
140
Stock Awards | ||||||||||||||||||||||||||||||||||||
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Plan
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Option Awards |
Incentive
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Awards:
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Equity
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Plan
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Market or
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Incentive
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Awards:
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Payout
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||||||||||||||||||||||||||||||||||
Plan
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Market
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Number of
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Value of
|
|||||||||||||||||||||||||||||||||
Awards:
|
Number
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Value of
|
Unearned
|
Unearned
|
||||||||||||||||||||||||||||||||
Number of
|
Number of
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Number of
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of Shares
|
Shares or
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Shares,
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Shares, Units
|
||||||||||||||||||||||||||||||
Securities
|
Securities
|
Securities
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or Units
|
Units of
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Units or
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or Other
|
||||||||||||||||||||||||||||||
Underlying
|
Underlying
|
Underlying
|
of Stock
|
Stock that
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Other
|
Rights that
|
||||||||||||||||||||||||||||||
Unexercised
|
Unexercised
|
Unexercised
|
Option
|
that
|
have
|
Rights that
|
have not
|
|||||||||||||||||||||||||||||
Options
|
Options
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Unearned
|
Exercise
|
Option
|
have not
|
not Vested
|
have not
|
Vested
|
||||||||||||||||||||||||||||
(#)
|
(#)
|
Options
|
Price
|
Expiration
|
Vested
|
(1)
|
Vested
|
(1)
|
||||||||||||||||||||||||||||
Name
|
Exercisable
|
Unexercisable
|
(#)
|
($)
|
Date
|
(#)
|
($)
|
(#)
|
($)
|
|||||||||||||||||||||||||||
(a)
|
(b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | |||||||||||||||||||||||||||
Robert E. Rossiter
|
45,000 | 0 | $ | 54.22 | 5/12/2008 | 190,272 | (4) | $ | 5,618,732 | 14,236 | (5) | $ | 420,389 | |||||||||||||||||||||||
81,250 | 0 | $ | 35.93 | 5/3/2011 | ||||||||||||||||||||||||||||||||
125,000 | 0 | $ | 41.83 | 6/14/2012 | ||||||||||||||||||||||||||||||||
50,625 | 101,250 | (2) | $ | 27.74 | 11/10/2012 | |||||||||||||||||||||||||||||||
0 | 70,875 | (3) | $ | 31.32 | 11/9/2013 | |||||||||||||||||||||||||||||||
James H. Vandenberghe
|
40,000 | 0 | $ | 54.22 | 5/12/2008 | 113,272 | (6) | $ | 3,344,922 | 5,986 | (7) | $ | 176,767 | |||||||||||||||||||||||
50,000 | 0 | $ | 39.00 | 3/19/2009 | ||||||||||||||||||||||||||||||||
75,000 | 0 | $ | 41.83 | 6/14/2012 | ||||||||||||||||||||||||||||||||
28,125 | 56,250 | (2) | $ | 27.74 | 11/10/2012 | |||||||||||||||||||||||||||||||
0 | 39,375 | (3) | $ | 31.32 | 11/9/2013 | |||||||||||||||||||||||||||||||
David C. Wajsgras
|
0 | 0 | $ | 41.83 | 3/10/2006 | 0 | $ | 0 | 0 | $ | 0 | |||||||||||||||||||||||||
0 | 0 | $ | 27.74 | 3/10/2006 | ||||||||||||||||||||||||||||||||
Douglas G. DelGrosso
|
20,000 | 0 | $ | 54.22 | 5/12/2008 | 77,339 | (8) | $ | 2,283,821 | 5,523 | (9) | $ | 163,094 | |||||||||||||||||||||||
30,000 | 0 | $ | 39.00 | 3/19/2009 | ||||||||||||||||||||||||||||||||
32,500 | 0 | $ | 35.93 | 5/3/2011 | ||||||||||||||||||||||||||||||||
50,000 | 0 | $ | 41.83 | 6/14/2012 | ||||||||||||||||||||||||||||||||
28,125 | 56,250 | (2) | $ | 27.74 | 11/10/2012 | |||||||||||||||||||||||||||||||
0 | 39,375 | (3) | $ | 31.32 | 11/9/2013 | |||||||||||||||||||||||||||||||
Daniel A. Ninivaggi
|
13,500 | 27,000 | (2) | $ | 27.74 | 11/10/2012 | 32,533 | (10) | $ | 960,699 | 3,122 | (11) | $ | 92,193 | ||||||||||||||||||||||
0 | 30,450 | (3) | $ | 31.32 | 11/9/2013 | |||||||||||||||||||||||||||||||
Raymond E. Scott
|
4,000 | 0 | $ | 54.22 | 5/12/2008 | 36,992 | (12) | $ | 1,092,374 | 2,844 | (13) | $ | 83,983 | |||||||||||||||||||||||
25,000 | 0 | $ | 41.83 | 6/14/2012 | ||||||||||||||||||||||||||||||||
13,500 | 27,000 | (2) | $ | 27.74 | 11/10/2012 | |||||||||||||||||||||||||||||||
0 | 18,900 | (3) | $ | 31.32 | 11/9/2013 |
(1) | Total values calculated by multiplying total number of shares or units by the market price of Company stock at the close of the last trading day in 2006, which was $29.53 per share. | |
(2) | Stock appreciation rights, one-half of which vest on November 10, 2007 and one-half of which vest on November 10, 2008. | |
(3) | Stock appreciation rights which vest on November 9, 2009. | |
(4) | Represents 42,651 restricted stock units granted under the Management Stock Purchase Plan that vest on March 14, 2007; 24,014 restricted stock units granted under the Management Stock Purchase Plan that vest on March 14, 2008; 15,606 restricted stock units granted under the Management Stock Purchase Plan that vest on March 14, 2009; 22,500 restricted stock units granted under the Long-Term Stock Incentive Plan that vest on November 13, 2008; 45,000 restricted stock units granted under the Long-Term Stock Incentive Plan, half of which vest on November 11, 2007 and the other half of which vest on November 11, 2009; 16,875 restricted stock units granted under the Long-Term Stock Incentive Plan, half of which vest on November 10, 2007 and the other half of which vest on November 10, 2009; 23,626 restricted stock units granted under the Long-Term Stock Incentive Plan, half of which vest on November 9, 2008 and the other half of which vest on November 9, |
141
2010. In addition, Mr. Rossiter is entitled to receive two years vesting acceleration of his restricted stock units upon his retirement because he is over age 55 with ten years of service. | ||
(5) | Represents 4,525 performance shares awarded under the Long-Term Stock Incentive Plan at threshold for the 2005 to 2007 performance period and 9,711 performance shares awarded under the Long-Term Stock Incentive Plan at threshold for the 2006 to 2008 performance period. Does not include performance shares for the 2004 to 2006 performance period, which expired without payment. | |
(6) | Represents 22,526 restricted stock units granted under the Management Stock Purchase Plan that vest on March 14, 2007; 17,582 restricted stock units granted under the Management Stock Purchase Plan that vest on March 14, 2008; 13,123 restricted stock units granted under the Management Stock Purchase Plan that vest on March 14, 2009; 12,540 restricted stock units granted under the Long-Term Stock Incentive Plan that vest on November 13, 2008; 25,000 restricted stock units granted under the Long-Term Stock Incentive Plan, half of which vest on November 11, 2007 and the other half of which vest on November 11, 2009; 9,375 restricted stock units granted under the Long-Term Stock Incentive Plan, half of which vest on November 10, 2007 and the other half of which vest on November 10, 2009; 13,126 restricted stock units granted under the Long-Term Stock Incentive Plan, half of which vest on November 9, 2008 and the other half of which vest on November 9, 2010. In addition, Mr. Vandenberghe is entitled to receive two years vesting acceleration of his restricted stock units upon his retirement because he is over age 55 with ten years of service. | |
(7) | Represents 1,903 performance shares awarded under the Long-Term Stock Incentive Plan at threshold for the 2005 to 2007 performance period and 4,083 performance shares awarded under the Long-Term Stock Incentive Plan at threshold for the 2006 to 2008 performance period. Does not include performance shares for the 2004 to 2006 performance period, which expired without payment. | |
(8) | Represents 7,425 restricted stock units granted under the Management Stock Purchase Plan that vest on March 14, 2007; 3,804 restricted stock units granted under the Management Stock Purchase Plan that vest on March 14, 2008; 11,488 restricted stock units granted under the Management Stock Purchase Plan that vest on March 14, 2009; 9,000 restricted stock units granted under the Long-Term Stock Incentive Plan that vest on November 13, 2008; 18,000 restricted stock units granted under the Long-Term Stock Incentive Plan, half of which vest on November 11, 2007 and the other half of which vest on November 11, 2009; 9,375 restricted stock units granted under the Long-Term Stock Incentive Plan, half of which vest on November 10, 2007 and the other half of which vest on November 10, 2009; 5,121 restricted stock units granted under the Long-Term Stock Incentive Plan that vested on January 3, 2007; 13,126 restricted stock units granted under the Long-Term Stock Incentive Plan, half of which vest on November 9, 2008 and the other half of which vest on November 9, 2010. | |
(9) | Represents 1,440 performance shares awarded under the Long-Term Stock Incentive Plan at threshold for the 2005 to 2007 performance period and 4,083 performance shares awarded under the Long-Term Stock Incentive Plan at threshold for the 2006 to 2008 performance period. Does not include performance shares for the 2004 to 2006 performance period, which expired without payment. | |
(10) | Represents 101 restricted stock units granted under the Management Stock Purchase Plan that vest on March 14, 2007; 1,379 restricted stock units granted under the Management Stock Purchase Plan that vest on March 14, 2008; 1,103 restricted stock units granted under the Management Stock Purchase Plan that vest on March 14, 2009; 5,100 restricted stock units granted under the Long-Term Stock Incentive Plan that vest on November 13, 2008; 10,200 restricted stock units granted under the Long-Term Stock Incentive Plan, half of which vest on November 11, 2007 and the other half of which vest on November 11, 2009; 4,500 restricted stock units granted under the Long-Term Stock Incentive Plan, half of which vest on November 10, 2007 and the other half of which vest on November 10, 2009; 10,150 restricted stock units granted under the Long-Term Stock Incentive Plan, half of which vest on November 9, 2008 and the other half of which vest on November 9, 2010. | |
(11) | Represents 915 performance shares awarded under the Long-Term Stock Incentive Plan at threshold for the 2005 to 2007 performance period and 2,207 performance shares awarded under the Long-Term Stock Incentive Plan at threshold for the 2006 to 2008 performance period. Does not include performance shares for the 2004 to 2006 performance period, which expired without payment. |
142
(12) | Represents 5,615 restricted stock units granted under the Management Stock Purchase Plan that vest on March 14, 2007; 4,486 restricted stock units granted under the Management Stock Purchase Plan that vest on March 14, 2008; 2,031 restricted stock units granted under the Management Stock Purchase Plan that vest on March 14, 2009; 4,560 restricted stock units granted under the Long-Term Stock Incentive Plan that vest on November 13, 2008; 9,500 restricted stock units granted under the Long-Term Stock Incentive Plan, half of which vest on November 11, 2007 and the other half of which vest on November 11, 2009; 4,500 restricted stock units granted under the Long-Term Stock Incentive Plan, half of which vest on November 10, 2007 and the other half of which vest on November 10, 2009; 6,300 restricted stock units granted under the Long-Term Stock Incentive Plan, half of which vest on November 9, 2008 and the other half of which vest on November 9, 2010. | |
(13) | Represents 813 performance shares awarded under the Long-Term Stock Incentive Plan at threshold for the 2005 to 2007 performance period and 2,031 performance shares awarded under the Long-Term Stock Incentive Plan at threshold for the 2006 to 2008 performance period. Does not include performance shares for the 2004 to 2006 performance period, which expired without payment. |
Stock Awards | ||||||||||||||||
Option Awards |
Number of
|
|||||||||||||||
Number of Shares
|
Value
|
Shares Acquired
|
Value
|
|||||||||||||
Acquired on
|
Realized on
|
on Vesting
|
Realized on
|
|||||||||||||
Exercise
|
Exercise
|
(1)
|
Vesting
|
|||||||||||||
Name
|
(#)
|
($)
|
(#)
|
($)
|
||||||||||||
(a)
|
(b) | (c) | (d) | (e) | ||||||||||||
Robert E. Rossiter
|
| | 48,119 | (2) | $ | 780,986 | ||||||||||
22,500 | (3) | $ | 744,750 | |||||||||||||
James H. Vandenberghe
|
| | 11,548 | (2) | $ | 187,437 | ||||||||||
12,540 | (3) | $ | 415,074 | |||||||||||||
David C. Wajsgras
|
| | 8,512 | (4) | $ | 154,067 | ||||||||||
11,233 | (4) | $ | 203,317 | |||||||||||||
10,589 | (4) | $ | 191,661 | |||||||||||||
427 | (5) | $ | 10,405 | |||||||||||||
Douglas G. DelGrosso
|
| | 6,587 | (2) | $ | 106,919 | ||||||||||
9,000 | (3) | $ | 297,900 | |||||||||||||
Daniel A. Ninivaggi
|
| | 5,100 | (3) | $ | 168,810 | ||||||||||
9,578 | (6) | $ | 300,000 | |||||||||||||
Raymond E. Scott
|
| | 1,184 | (2) | $ | 19,223 | ||||||||||
4,560 | (3) | $ | 150,936 |
(1) | Excludes performance shares for the 2004 to 2006 performance period, which expired without payment. | |
(2) | Vesting of restricted stock units under the Management Stock Purchase Plan on March 14, 2006. | |
(3) | Vesting of a portion of the restricted stock units granted under the Long-Term Stock Incentive Plan on November 13, 2003. | |
(4) | Early payout of restricted stock units granted under the 2003 (8,512 shares), 2004 (11,233 shares) and 2005 (10,589 shares) Management Stock Purchase Plan based on the price of Company common stock on March 10, 2006. Amounts were distributed after the six-month holding period required by section 409A of the Internal Revenue Code. | |
(5) | Amount of supplemental restricted stock unit award granted on January 3, 2006, based on pro-rata vesting. | |
(6) | Number of shares of restricted stock that were fully vested when granted on November 9, 2006. |
143
Number
|
||||||||||||||
of Years
|
Present Value of
|
|||||||||||||
Credited
|
Accumulated Benefit
|
Payments During
|
||||||||||||
Plan
|
Service
|
(1)
|
Last Fiscal Year
|
|||||||||||
Name
|
Name(s)
|
(#)
|
($)
|
($)
|
||||||||||
(a)
|
(b) | (c) | (d) | (e) | ||||||||||
Robert E. Rossiter
|
Pension Plan (tax-qualified plan) | 35.3 | (2) | $ | 579,371 | $ | 0 | |||||||
Pension Equalization Program | 35.3 | (2) | $ | 5,079,645 | $ | 0 | ||||||||
Executive Supplemental Savings Plan | 35.3 | (2) | $ | 4,355,004 | $ | 0 | ||||||||
James H. Vandenberghe
|
Pension Plan (tax-qualified plan) | 33.8 | $ | 536,674 | $ | 0 | ||||||||
Pension Equalization Program | 33.8 | $ | 2,875,332 | $ | 0 | |||||||||
Executive Supplemental Savings Plan | 33.8 | $ | 2,044,499 | $ | 0 | |||||||||
David C. Wajsgras(3)
|
Pension Plan (tax-qualified plan) | 6.6 | $ | 63,523 | $ | 0 | ||||||||
Pension Equalization Program | 6.6 | $ | 0 | $ | 0 | |||||||||
Executive Supplemental Savings Plan | 6.6 | $ | 0 | $ | 0 | |||||||||
Douglas G. DelGrosso
|
Pension Plan (tax-qualified plan) | 22.7 | $ | 200,015 | $ | 0 | ||||||||
Pension Equalization Program | 22.7 | $ | 676,167 | $ | 0 | |||||||||
Executive Supplemental Savings Plan | 22.7 | $ | 359,733 | $ | 0 | |||||||||
Daniel A. Ninivaggi(4)
|
Pension Plan (tax-qualified plan) | 3.3 | $ | 24,669 | $ | 0 | ||||||||
Pension Equalization Program | 3.3 | $ | 51,779 | $ | 0 | |||||||||
Executive Supplemental Savings Plan | 3.3 | $ | 7,341 | $ | 0 | |||||||||
Raymond E. Scott(5)
|
Pension Plan (tax-qualified plan) | 18.2 | $ | 132,593 | $ | 0 | ||||||||
Pension Equalization Program | 18.2 | $ | 121,620 | $ | 0 | |||||||||
Executive Supplemental Savings Plan | 18.2 | $ | 100,134 | $ | 0 |
(1) | The benefit under the Pension Plan for each Named Executive Officer is based on post-commencement valuation mortality and commencement of benefits at age 65. The assumed discount rate applicable to a September 30, 2006 measurement is 6.00%. | |
(2) | Credited service is limited to 35 years for all purposes under the Pension Plan, the Pension Equalization Program and the Executive Supplemental Savings Plan Pension Make-up Account. | |
(3) | Mr. Wajsgras was not vested in the Pension Equalization Program at the time of his termination of employment. In addition, he was not vested in the Executive Supplemental Savings Plan Pension Make-up Account at the time of his termination of employment, since all of such benefits were attributable to compensation in excess of the Internal Revenue Code compensation limits, and such benefits generally vest after a participant has either (i) attained age 55 and has 10 years of vesting service, attained age 65, or becomes eligible for disability retirement under the Pension Plan, or (ii) attained 20 years of vesting service. | |
(4) | Mr. Ninivaggi was not vested in his Pension Plan benefits because he has less than five years of service. In addition, he was not vested in any of the Pension Equalization Program or Executive Supplemental Savings Plan Pension Make-up Account benefits he has accrued to date, since all of such benefits were attributable to compensation in excess of the Internal Revenue Code compensation limits, and such benefits generally vest after a participant has either (i) attained age 55 and has 10 years of vesting service, attained age 65, or becomes eligible for disability retirement under the Pension Plan, or (ii) attained 20 years of vesting service. | |
(5) | Mr. Scott is fully vested in his Pension Plan benefits. However, he is not vested in the Pension Equalization Program or the Executive Supplemental Savings Plan Pension Make-up Account, since all of such benefits were attributable to compensation in excess of the Internal Revenue Code compensation limits, and such benefits generally vest after a participant has either (i) attained age 55 and has 10 years of vesting service, attained age 65, or becomes eligible for disability retirement under the Pension Plan, or (ii) attained 20 years of vesting service. |
144
| (a) 1.10% times final average annual earnings times years of credited service before 1997 (to a maximum of 35 years), plus (b) 1.00% times final average annual earnings times years of credited service after 1996 (with a maximum of 35 years reduced by years of credited service before 1997), plus (c) 0.65% times final average annual earnings in excess of covered compensation (as defined in I.R.S. Notice 89-70) times years of credited service (with a maximum of 35 years); and | |
| $360.00 times years of credited service. |
145
Executive
|
Registrant
|
|||||||||||||||||||
Contributions
|
Contributions
|
Aggregate
|
Aggregate
|
Aggregate
|
||||||||||||||||
in Last FY
|
in Last FY
|
Earnings
|
Withdrawals/
|
Balance at
|
||||||||||||||||
(1)
|
(2)
|
in Last FY
|
Distributions
|
Last FYE
|
||||||||||||||||
($)
|
($)
|
($)
|
($)
|
($)
|
||||||||||||||||
Name (a)
|
(b) | (c) | (d) | (e) | (f) | |||||||||||||||
Robert E. Rossiter
|
$ | 38,500 | $ | 8,250 | $ | 59,881 | $ | 0 | $ | 1,481,542 | ||||||||||
James H. Vandenberghe
|
$ | 32,375 | $ | 7,812 | $ | 48,089 | $ | 0 | $ | 1,191,283 | ||||||||||
David C. Wajsgras
|
$ | 10,400 | $ | 0 | $ | 10,667 | $ | 117,999 | $ | 158,676 | ||||||||||
Douglas G. DelGrosso
|
$ | 100,500 | $ | 4,938 | $ | 41,916 | $ | 0 | $ | 1,076,678 | ||||||||||
Daniel A. Ninivaggi
|
$ | 0 | $ | 2,375 | $ | 1,773 | $ | 0 | $ | 44,503 | ||||||||||
Raymond E. Scott
|
$ | 0 | $ | 0 | $ | 6,384 | $ | 0 | $ | 155,202 |
(1) | Amounts are included in columns (c), (d) or (g), as applicable, of the Summary Compensation Table. | |
(2) | Amounts are included in column (j) of the Summary Compensation Table. |
146
Accelerated
|
||||||||||||||||||||||||
Continuation of
|
Vesting or
|
|||||||||||||||||||||||
Pension Vesting
|
Medical/Welfare
|
Payout of
|
Excise
|
|||||||||||||||||||||
Cash Severance
|
Enhancement
|
Benefits
|
Equity
|
Tax
|
Total
|
|||||||||||||||||||
(Base & Bonus)
|
(Present Value)
|
(Present Value)
|
Awards
|
Gross-Up
|
Termination
|
|||||||||||||||||||
(2)
|
(3)
|
(4)
|
(5)
|
(6)
|
Benefits
|
|||||||||||||||||||
Named Executive Officer (1)
|
($) | ($) | ($) | ($) | ($) | ($) | ||||||||||||||||||
Robert E. Rossiter
|
||||||||||||||||||||||||
Involuntary
Termination (or for Good Reason) With Change in Control
|
$ | 5,212,000 | $ | 0 | $ | 3,606,935 | $ | 6,284,192 | $ | 0 | $ | 15,103,127 | ||||||||||||
Involuntary
Termination (or for Good Reason)
|
$ | 5,212,000 | $ | 0 | $ | 42,646 | $ | 6,181,098 | N/A | $ | 11,435,744 | |||||||||||||
Retirement(7)
|
$ | 0 | $ | 0 | $ | 0 | $ | 5,021,784 | N/A | $ | 5,021,784 | |||||||||||||
Voluntary Termination
(or for Cause)
|
$ | 0 | $ | 0 | $ | 0 | $ | 2,384,212 | (8) | N/A | $ | 2,384,212 | ||||||||||||
Disability
|
$ | 2,200,000 | $ | 0 | $ | 0 | $ | 6,284,192 | N/A | $ | 8,484,192 | |||||||||||||
Death
|
$ | 0 | $ | 0 | $ | 0 | $ | 6,284,192 | N/A | $ | 6,284,192 | |||||||||||||
James H. Vandenberghe
|
||||||||||||||||||||||||
Involuntary
Termination (or for Good Reason) With Change in Control
|
$ | 3,476,480 | $ | 0 | $ | 1,271,613 | $ | 3,666,965 | $ | 0 | $ | 8,415,058 | ||||||||||||
Involuntary
Termination (or for Good Reason)
|
$ | 3,476,480 | $ | 0 | $ | 35,686 | $ | 3,581,071 | N/A | $ | 7,093,237 | |||||||||||||
Retirement(7)
|
$ | 0 | $ | 0 | $ | 0 | $ | 2,965,627 | N/A | $ | 2,965,627 | |||||||||||||
Voluntary Termination
(or for Cause)
|
$ | 0 | $ | 0 | $ | 0 | $ | 1,509,467 | (8) | N/A | $ | 1,509,467 | ||||||||||||
Disability
|
$ | 1,850,000 | $ | 0 | $ | 0 | $ | 3,666,965 | N/A | $ | 5,516,965 | |||||||||||||
Death
|
$ | 0 | $ | 0 | $ | 0 | $ | 3,666,965 | N/A | $ | 3,666,965 | |||||||||||||
Douglas G. DelGrosso
|
||||||||||||||||||||||||
Involuntary
Termination (or for Good Reason) With Change in Control
|
$ | 2,934,320 | $ | 0 | $ | 651,858 | $ | 2,389,947 | $ | 0 | $ | 5,976,125 | ||||||||||||
Involuntary
Termination (or for Good Reason)
|
$ | 2,934,320 | $ | 0 | $ | 16,404 | $ | 2,145,070 | N/A | $ | 5,095,794 | |||||||||||||
Retirement(7)
|
N/A | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||||
Voluntary Termination
(or for Cause)
|
$ | 0 | $ | 0 | $ | 0 | $ | 590,907 | (8) | N/A | $ | 590,907 | ||||||||||||
Disability
|
$ | 1,850,000 | $ | 0 | $ | 0 | $ | 2,389,947 | N/A | $ | 4,239,947 | |||||||||||||
Death
|
$ | 0 | $ | 0 | $ | 0 | $ | 2,389,947 | N/A | $ | 2,389,947 |
147
Accelerated
|
||||||||||||||||||||||||
Continuation of
|
Vesting or
|
|||||||||||||||||||||||
Pension Vesting
|
Medical/Welfare
|
Payout of
|
Excise
|
|||||||||||||||||||||
Cash Severance
|
Enhancement
|
Benefits
|
Equity
|
Tax
|
Total
|
|||||||||||||||||||
(Base & Bonus)
|
(Present Value)
|
(Present Value)
|
Awards
|
Gross-Up
|
Termination
|
|||||||||||||||||||
(2)
|
(3)
|
(4)
|
(5)
|
(6)
|
Benefits
|
|||||||||||||||||||
Named Executive Officer (1)
|
($) | ($) | ($) | ($) | ($) | ($) | ||||||||||||||||||
Daniel A. Ninivaggi
|
||||||||||||||||||||||||
Involuntary
Termination (or for Good Reason) With Change in Control
|
$ | 1,846,780 | $ | 14,751 | $ | 15,611 | $ | 1,090,215 | $ | 843,862 | $ | 3,811,219 | ||||||||||||
Involuntary
Termination (or for Good Reason)
|
$ | 1,846,780 | $ | 0 | $ | 15,611 | $ | 969,736 | N/A | $ | 2,832,127 | |||||||||||||
Retirement(7)
|
N/A | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||||
Voluntary Termination
(or for Cause)
|
$ | 0 | $ | 0 | $ | 0 | $ | 70,100 | (8) | N/A | $ | 70,100 | ||||||||||||
Disability
|
$ | 1,400,000 | $ | 0 | $ | 0 | $ | 1,090,215 | N/A | $ | 2,490,215 | |||||||||||||
Death
|
$ | 0 | $ | 0 | $ | 0 | $ | 1,090,215 | N/A | $ | 1,090,215 | |||||||||||||
Raymond E. Scott
|
||||||||||||||||||||||||
Involuntary
Termination (or for Good Reason) With Change in Control
|
$ | 1,396,580 | $ | 219,067 | $ | 15,611 | $ | 1,229,267 | $ | 0 | $ | 2,860,525 | ||||||||||||
Involuntary
Termination (or for Good Reason)
|
$ | 1,396,580 | $ | 0 | $ | 15,611 | $ | 1,132,420 | N/A | $ | 2,544,611 | |||||||||||||
Retirement(7)
|
N/A | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||||
Voluntary Termination
(or for Cause)
|
$ | 0 | $ | 0 | $ | 0 | $ | 356,325 | (8) | N/A | $ | 356,325 | ||||||||||||
Disability
|
$ | 1,000,000 | $ | 0 | $ | 0 | $ | 1,229,267 | N/A | $ | 2,229,267 | |||||||||||||
Death
|
$ | 0 | $ | 272,474 | $ | 0 | $ | 1,229,267 | N/A | $ | 1,501,741 |
(1) | Mr. Wajsgras is excluded from this chart because he resigned from the Company effective March 10, 2006. Mr. Wajsgrass resignation was a voluntary termination under his employment agreement so he did not receive cash severance, pension enhancement, continuation of medical and welfare benefits, accelerated vesting of equity awards or any other severance benefits. After his termination, Mr. Wajsgras was entitled to a payout of shares and cash with a total value of $588,980 from the Management Stock Purchase Plan, which represented the amounts he deferred into the plan, as adjusted for stock price fluctuations, and his dividend equivalent account. | |
(2) | Cash severance is paid in semi-monthly installments, without interest, through the severance period (which is generally two years), except that the installments otherwise payable in the first six months are paid in a lump sum on the date that is six months after the date of termination, to the extent required by Section 409A of the Internal Revenue Code. In addition to the amounts shown in the table, the executive will receive any accrued salary, bonus (including a prorated bonus based on actual performance in the event of death or termination without cause or for good reason or, in the event of termination upon disability, a full bonus for the year based on actual performance) and all other amounts to which he is entitled under the terms of any compensation or benefit plans of the Company upon termination for any reason. | |
(3) | Additional vesting credit is given during the severance period. Since Messrs. Rossiter, Vandenberghe and DelGrosso are fully vested in their pension benefits, the vesting credit only affects Mr. Ninivaggis and Mr. Scotts pension benefits. | |
(4) | Consists of continuation of health insurance, life insurance premium and imputed income amounts. Also includes the required payments to fund the guaranteed coverage under the Estate Preservation Plan, where applicable, which is as follows: Mr. Rossiter, $3,564,289; Mr. Vandenberghe, $1,235,927; and Mr. DelGrosso, $635,454. Messrs. Ninivaggi and Scott do not participate in the Estate Preservation Plan. |
148
(5) | Represents (i) accelerated vesting of stock appreciation rights (aggregate difference between the grant price and the December 29, 2006 closing price of the Companys common stock), restricted stock units, and performance shares, and (ii) accelerated payout of Management Stock Purchase Plan accounts (restricted stock units credited based on salary and bonus deferrals). Payments under any of the plans of the Company that are determined to be deferred compensation subject to Section 409A of the Internal Revenue Code are delayed by six months to the extent required by such provision. Accelerated portions of the restricted stock units and performance shares are valued based on the December 29, 2006 closing price of the Companys common stock. | |
(6) | The Company has agreed to reimburse each executive for any excise taxes he is subject to under Section 280G of the Internal Revenue Code upon a change in control, as well as any income and excise taxes payable by the executive as a result of any reimbursements for the Section 280G excise taxes. | |
(7) | The Company does not provide for enhanced early retirement benefits under its pension programs. As of December 31, 2006 only Mr. Rossiter and Mr. Vandenberghe are retirement-eligible. | |
(8) | Amounts attributable to the return of amounts deferred by the executive under the Management Stock Purchase Plan, as adjusted by the terms of the plan. |
| Stock options and stock appreciation rights become immediately exercisable and remain so throughout their entire term. | |
| Restrictions on restricted stock units lapse. | |
| A pro rata number of performance shares and performance units vest and pay out as of the date of the change in control. The amount is determined based on the length of time in the performance period that elapsed prior to the effective date of the change in control, assuming achievement of all relevant performance objectives at target levels. If the Compensation Committee determines that actual achievements are higher than target at the time of the change in control, the prorated payouts will be increased by extrapolating actual performance to the end of the performance period. |
149
150
151
152
| comply with confidentiality, non-competition and non-solicitation covenants during employment; | |
| comply with non-competition and non-solicitation covenants for one year after the date of termination (extended to two years in the case of termination upon disability, termination by the Company without cause or by the executive for good reason); | |
| in order to receive severance payments due under the employment agreement, sign a general release relating to his employment (applies only in the case of termination upon disability, termination by the Company without cause or by the executive for good reason); | |
| return data and materials relating to the business of the Company in his possession; | |
| make himself reasonably available to the Company to respond to periodic requests for information regarding the Company or his employment; and | |
| cooperate with litigation matters or investigations as the Company deems necessary. |
153
Fees Earned or
|
||||||||||||||||
Paid in Cash
|
Stock Awards
|
Options Awards
|
Total
|
|||||||||||||
Name
|
($)(1)(2) | ($)(2)(3) | ($)(2)(3) | ($) | ||||||||||||
Anne K. Bingaman*
|
$ | 34,500 | $ | (20,417 | ) | | $ | 14,083 | ||||||||
David E. Fry
|
$ | 64,500 | $ | 77,917 | $ | 13,549 | $ | 155,966 | ||||||||
Vincent J. Intrieri**
|
$ | 12,750 | | | $ | 12,750 | ||||||||||
Conrad L. Mallett, Jr.
|
$ | 72,000 | $ | 77,917 | $ | 13,549 | $ | 163,466 | ||||||||
Larry W. McCurdy
|
$ | 114,000 | $ | 77,917 | $ | 13,549 | $ | 205,466 | ||||||||
Roy E. Parrott
|
$ | 58,500 | $ | 77,917 | $ | 13,549 | $ | 149,966 | ||||||||
David P. Spalding
|
$ | 83,500 | $ | 77,917 | $ | 13,549 | $ | 174,966 | ||||||||
James A. Stern
|
$ | 89,500 | $ | 77,917 | $ | 13,549 | $ | 180,966 | ||||||||
Henry D.G. Wallace
|
$ | 70,500 | $ | 77,917 | | $ | 148,417 | |||||||||
Richard F. Wallman
|
$ | 82,500 | $ | 77,917 | $ | 13,549 | $ | 173,966 |
* | Ms. Bingaman resigned from the Board effective May 31, 2006. | |
** | Mr. Intrieri was elected to the Board on November 9, 2006. | |
(1) | Includes cash retainer fees and meeting attendance fees, each as discussed in more detail below. Dollar amounts are comprised as follows: |
Annual
|
Aggregate
|
|||||||
Retainer Fee
|
Meeting Fees
|
|||||||
Name
|
($) | ($) | ||||||
Anne K. Bingaman
|
22,500 | 12,000 | ||||||
David E. Fry
|
45,000 | 19,500 | ||||||
Vincent J. Intrieri
|
11,250 | 1,500 | ||||||
Conrad L. Mallett, Jr.
|
45,000 | 27,000 | ||||||
Larry W. McCurdy
|
75,000 | 39,000 | ||||||
Roy E. Parrott
|
45,000 | 13,500 | ||||||
David P. Spalding
|
55,000 | 28,500 | ||||||
James A. Stern
|
55,000 | 34,500 | ||||||
Henry D.G. Wallace
|
45,000 | 25,500 | ||||||
Richard F. Wallman
|
45,000 | 37,500 |
(2) | Non-employee directors may elect to defer portions of their cash retainer and meeting fees into deferred stock units or an interest bearing account under the Outside Directors Compensation Plan. The following directors elected to defer the following percentages of their cash retainer and meeting fees earned in 2006: Dr. Fry 50% of retainer into deferred stock units; Mr. Mallett 50% of retainer into deferred stock units and 50% of retainer into interest account; and Messrs. McCurdy, Spalding and Stern 100% of retainer and meeting fees into deferred stock units. |
154
Aggregate
|
Deferred
|
Stock
|
||||||||||
Name
|
Restricted Units | Stock Units | Options | |||||||||
Anne K. Bingaman
|
| | | |||||||||
David E. Fry
|
4,645 | 2,036 | 4,000 | |||||||||
Vincent J. Intrieri
|
| | | |||||||||
Conrad L. Mallett, Jr.
|
4,645 | 2,873 | 4,000 | |||||||||
Larry W. McCurdy
|
4,645 | 14,422 | 10,250 | |||||||||
Roy E. Parrott
|
4,645 | | 6,500 | |||||||||
David P. Spalding
|
4,645 | 10,569 | 10,250 | |||||||||
James A. Stern
|
4,645 | 12,801 | 10,250 | |||||||||
Henry D.G. Wallace
|
4,659 | 564 | | |||||||||
Richard F. Wallman
|
4,645 | | 2,000 |
(3) | For the restricted unit and stock option grants, the value shown is what is recognized (for current and prior grants) for financial statement reporting purposes with respect to the Companys 2006 financial statements in accordance with FAS 123(R). The grant date fair value of the January 31, 2006 restricted unit grant to the directors (other than to Mr. Intrieri) was $90,000. Mr. Intrieri, who became a director on November 9, 2006, did not receive a grant of restricted units in 2006. No stock options were granted in 2006. The value reported in the table for stock options represents the applicable portion of the 2004 option grants which was expensed in 2006. The amount for Ms. Bingaman reflects the reversal of the compensation costs of awards that were previously expensed by the Company which she forfeited upon her resignation. See Note 11 of the Companys financial statements for 2006 for the assumptions made in determining FAS 123(R) values. |
155
| credited to a notional account and bear interest at an annual rate equal to the prime rate (as defined in the Outside Directors Compensation Plan); or | |
| credited to a stock unit account. |
| the date elected by such director; | |
| the date the director ceases to be a director; or | |
| the date a change of control (as defined in the Outside Directors Compensation Plan) occurs. |
| the compensation committee of another entity in which one of the executive officers of such entity served on our Compensation Committee; | |
| the board of directors of another entity, one of whose executive officers served on our Compensation Committee; or | |
| the compensation committee of another entity in which one of the executive officers of such entity served as a member of our Board. |
156
ITEM 12 | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
Number of Securities
|
||||||||||||
Number of Securities
|
Available for Future
|
|||||||||||
to be Issued Upon
|
Weighted Average
|
Issuance under Equity
|
||||||||||
Exercise of
|
Exercise Price of
|
Compensation Plans
|
||||||||||
Outstanding Options,
|
Outstanding Options,
|
(Excluding Securities
|
||||||||||
Equity Compensation Plan Information
|
Warrants and Rights
|
Warrants and Rights
|
Reflected in Column (a))
|
|||||||||
As of December 31, 2006
|
(a) | (b) | (c) | |||||||||
Equity compensation plans approved
by security holders(1)
|
6,676,639 | (2) | $ | 28.78 | (3) | 2,689,575 | ||||||
Equity compensation plans not
approved by security holders
|
| | | |||||||||
Total
|
6,676,639 | $ | 28.78 | 2,689,575 | ||||||||
(1) | Includes the 1994 Stock Option Plan, the 1996 Stock Option Plan and the Long-Term Stock Incentive Plan. | |
(2) | Includes 2,790,305 of outstanding options, 1,751,854 of outstanding stock-settled stock appreciation rights, 1,964,571 of outstanding restricted stock units and 169,909 of outstanding performance shares. Does not include 463,748 of outstanding cash-settled stock appreciation rights. | |
(3) | Reflects outstanding options at a weighted average exercise price of $40.70, outstanding stock-settled stock appreciation rights at a weighted average exercise price of $28.99, outstanding restricted stock units at a weighted average price of $14.15 and outstanding performance shares at a weighted average price of zero. |
157
Number of Shares
|
Percentage of
|
|||||||||||
of Common Stock
|
Common Stock
|
Number of
|
||||||||||
Owned Beneficially | Owned Beneficially | Stock Units Owned(25) | ||||||||||
Carl C. Icahn and affiliated
companies(1)
|
11,994,943 | 15.77 | % | N/A | ||||||||
Wellington Management Company,
LLP(2)
|
6,911,080 | 10.26 | % | N/A | ||||||||
Pzena Investment Management, LLC(3)
|
6,775,279 | 10.05 | % | N/A | ||||||||
Merrill Lynch & Co.,
Inc.(4)
|
6,431,917 | 9.50 | % | N/A | ||||||||
Vanguard Windsor Funds(5)
|
6,170,100 | 9.16 | % | N/A | ||||||||
Barclays Global Investors, NA and
other Barclays entities(6)
|
3,736,934 | 5.55 | % | N/A | ||||||||
Brandes Group(7)
|
3,529,048 | 5.24 | % | N/A | ||||||||
Legg Mason Opportunity Trust(8)
|
3,500,000 | 5.19 | % | N/A | ||||||||
Robert E. Rossiter(9)(10)
|
359,765 | (12) | * | 190,272 | ||||||||
James H. Vandenberghe(9)(10)
|
236,998 | (13) | * | 113,272 | ||||||||
David C. Wajsgras(10)(11)
|
202 | * | 0 | |||||||||
Douglas G. DelGrosso(10)
|
171,077 | (14) | * | 72,218 | ||||||||
Daniel A. Ninivaggi(10)
|
16,607 | (15) | * | 32,533 | ||||||||
Raymond E. Scott(10)
|
37,754 | (16) | * | 36,992 | ||||||||
David E. Fry(9)
|
5,103 | (17) | * | 9,508 | ||||||||
Vincent J. Intrieri(9)
|
0 | * | 2,992 | |||||||||
Conrad L. Mallett(9)
|
4,475 | (18) | * | 9,477 | ||||||||
Larry W. McCurdy(9)
|
12,250 | (19) | * | 22,681 | ||||||||
Roy E. Parrott(9)
|
9,730 | (20) | * | 6,128 | ||||||||
David P. Spalding(9)
|
16,250 | (21) | * | 18,185 | ||||||||
James A. Stern(9)
|
16,650 | (22) | * | 20,823 | ||||||||
Henry D.G. Wallace(9)
|
1,000 | * | 7,884 | |||||||||
Richard F. Wallman(9)
|
3,500 | (23) | * | 6,749 | ||||||||
Total Executive Officers and
Directors as a Group (19 individuals)
|
945,176 | (24) | 1.23 | % | 656,352 | (26) |
* | Less than 1% | |
(1) | We have been informed by Carl C. Icahn, High River Limited Partnership (High River), Hopper Investments LLC (Hopper), Koala Holding LLC (Koala), Barberry Corp. (Barberry), Icahn Partners Master Fund LP (Icahn Master), Icahn Offshore LP (Icahn Offshore), CCI Offshore Corp. (CCI Offshore), Icahn Partners LP (Icahn Partners), Icahn Onshore LP (Icahn Onshore) and CCI Onshore Corp. (CCI Onshore)(collectively, the Reporting Persons) in a report on Schedule 13D dated October 17, 2006, as amended, that (a) they may be deemed to beneficially own 11,994,943 shares and (b): (i) High River has sole voting power and sole dispositive power with regard to 659,860 shares and each of Hopper, Barberry and Mr. Icahn (A) has shared voting power and shared dispositive power with regard to such shares and (B) disclaims beneficial ownership of such shares for all other purposes; (ii) Koala has sole voting power and sole dispositive power with regard to 1,739,130 shares and each of Barberry and Mr. Icahn (A) has shared voting power and shared dispositive power with regard to such shares and (B) disclaims beneficial ownership of such shares for all other purposes; (iii) Icahn Master has sole voting power and sole dispositive power with regard to 5,526,235 shares and each of Icahn Offshore, CCI Offshore and Mr. Icahn (A) has shared voting |
158
power and shared dispositive power with regard to such shares and (B) disclaims beneficial ownership of such shares for all other purposes; and (iv) Icahn Partners has sole voting power and sole dispositive power with regard to 4,069,718 shares and each of Icahn Onshore, CCI Onshore and Mr. Icahn (A) has shared voting power and shared dispositive power with regard to such shares and (B) disclaims beneficial ownership of such shares for all other purposes. Barberry is the sole member of Koala and Hopper, which is the general partner of High River. CCI Offshore is the general partner of Icahn Offshore, which is the general partner of Icahn Master. CCI Onshore is the general partner of Icahn Onshore, which is the general partner of Icahn Partners. Each of Barberry, CCI Offshore and CCI Onshore is 100 percent owned by Mr. Icahn. As a result, Mr. Icahn is in a position indirectly to determine the investment and voting decisions made by each of the Reporting Persons. The principal business address of each of High River, Hopper, Koala, Barberry, Icahn Offshore, CCI Offshore, Icahn Partners, Icahn Onshore and CCI Onshore is White Plains Plaza, 445 Hamilton Avenue Suite 1210, White Plains, NY 10601. The principal business address of Icahn Master is c/o Walkers SPV Limited, P.O. Box 908GT, 87 Mary Street, George Town, Grand Cayman, Cayman Islands. The principal business address of Mr. Icahn is c/o Icahn Associates Corp., 767 Fifth Avenue, 47 th Floor, New York, New York 10153. | ||
(2) | We have been informed by Wellington Management Company, LLP (Wellington) in an amended report on Schedule 13G dated February 14, 2007, that (a) Wellington is an investment advisor and (b) Wellington has sole voting power over no shares, shared voting power over 306,750 shares, sole dispositive power over no shares and shared dispositive power over 6,911,080 shares. The principal business address of Wellington is 75 State Street, Boston, Massachusetts 02109. | |
(3) | We have been informed by Pzena Investment Management, LLC (PIM), in an amended report on Schedule 13D dated February 13, 2007, and a Form 4 filed on February 16, 2007, that (a) PIM is a registered investment advisor and (b) PIM exercises sole voting power over 5,204,734 shares, shared voting power over no shares, sole dispositive power over 6,776,279 shares and shared dispositive power over no shares. The principal business address of PIM is 120 W. 45th St., 20th Floor, New York, New York 10036. | |
(4) | We have been informed by Merrill Lynch & Co., Inc. (ML) and Merrill Lynch Financial Markets, Inc. (MLFM) in a report on Schedule 13G dated February 14, 2007, as amended, that (a) they are a registered broker dealer and (b) ML disclaims beneficial ownership of all shares held by MLFM and both ML and MLFM disclaim sole voting power, disclaim shared voting power, disclaim sole dispositive power and disclaim shared dispositive power. The principal business address of ML and MLFM is 4 World Financial Center, 250 Vessey St., New York, New York 10080. | |
(5) | We have been informed by Vanguard Windsor Funds Vanguard Windsor Fund 51-0082711 (Vanguard) in an amended report on Schedule 13G dated February 13, 2007, that (a) Vanguard is a registered investment company under Section 8 of the Investment Company Act of 1940 and (b) Vanguard exercises sole voting power over 6,170,100 shares, shared voting power over no shares, sole dispositive power over no shares and shared dispositive power over no shares. The principal business address of Vanguard is 100 Vanguard Blvd., Malvern, Pennsylvania 19355. | |
(6) | We have been informed by Barclays Global Investors, NA (Investors NA), Barclays Global Fund Advisors (Fund), Barclays Global Investors, Ltd. (Investors Ltd), Barclays Global Investors Japan Trust and Banking Company Limited (Japan Trust) and Barclays Global Investors Japan Limited (Japan Limited) in a report on Schedule 13G dated January 23, 2007 that (a) each of Investors NA, Investors Ltd and Japan Trust is a bank and each of Fund and Japan Limited is an investment adviser and (b) they have sole voting power over 3,443,034 shares, shared voting power over no shares, sole dispositive power over 3,736,934 shares and shared dispositive power over no shares. The principal business address of Investors NA and Fund is 45 Freemont Street, San Francisco, California 94105. The principal business address of Investors Ltd is 1 Royal Mint Court, London, EC3N 4HH. The principal business address of Japan Trust and Japan Limited is Ebisu Prime Square Tower, 8 th Floor, 1-1-39 Hiroo Shibuya-Ku, Tokyo 150-0012 Japan. | |
(7) | We have been informed by Brandes Investment Partners, L.P., Brandes Investment Partners, Inc., Brandes Worldwide Holdings, L.P., Charles H. Brandes, Glenn R. Carlson and Jeffrey A. Busby (collectively, the Reporting Persons) in a report on Schedule 13G dated February 14, 2007, that (a) they report as a group pursuant to Rule 13d-1(b)(1)(ii)(J) under the Securities Exchange Act of 1934 and (b) they exercise sole voting |
159
power over no shares, shared voting power over 2,622,936 shares, sole dispositive power over no shares and shared dispositive power over 3,529,048 shares. The principal business address of the Reporting Persons is 11988 El Camino Real, Suite 500, San Diego, California 92130. | ||
(8) | We have been informed by LMM LLC and Legg Mason Opportunity Trust (collectively, Legg Mason) in a report on Schedule 13G dated February 15, 2007, that they exercise sole voting power over no shares, shared voting power over 3,500,000 shares, sole dispositive power over no shares and shared dispositive power over 3,500,000 shares. The principal business address of Legg Mason is 100 Light Street, Baltimore, Maryland 21202. | |
(9) | The individual is a director. | |
(10) | The individual is a Named Executive Officer. | |
(11) | Mr. Wajsgras resigned as our Executive Vice President and Chief Financial Officer effective March 10, 2006. | |
(12) | Includes 251,250 shares of common stock issuable under options and 13,852 shares of common stock issuable under stock-settled stock appreciation rights currently exercisable or exercisable within 60 days of the date specified above. Also includes 45,000 shares of common stock held by a grantor retained annuity trust. | |
(13) | Includes 165,000 shares of common stock issuable under options and 7,695 shares of common stock issuable under stock-settled stock appreciation rights currently exercisable or exercisable within 60 days of the date specified above. | |
(14) | Includes 132,500 shares of common stock issuable under options and 7,695 shares of common stock issuable under stock-settled stock appreciation rights currently exercisable or exercisable within 60 days of the date specified above. Also includes 19,713 shares of common stock held in Mr. DelGrossos wifes revocable trust. | |
(15) | Includes 3,694 shares of common stock issuable under stock-settled stock appreciation rights currently exercisable or exercisable within 60 days of the date specified above. | |
(16) | Includes 29,000 shares of common stock issuable under options and 3,694 shares of common stock issuable under stock-settled stock appreciation rights currently exercisable or exercisable within 60 days of the date specified above. | |
(17) | Includes 4,000 shares of common stock issuable under options currently exercisable or exercisable within 60 days of the date specified above. | |
(18) | Includes 4,000 shares of common stock issuable under options currently exercisable or exercisable within 60 days of the date specified above. | |
(19) | Includes 10,250 shares of common stock issuable under options currently exercisable or exercisable within 60 days of the date specified above. | |
(20) | Includes 6,500 shares of common stock issuable under options currently exercisable or exercisable within 60 days of the date specified above. | |
(21) | Includes 10,250 shares of common stock issuable under options currently exercisable or exercisable within 60 days of the date specified above. | |
(22) | Includes 10,250 shares of common stock issuable under options currently exercisable or exercisable within 60 days of the date specified above. Also, includes 2,400 shares of common stock held in a revocable trust for the benefit of Mr. Sterns children. Mr. Stern disclaims beneficial ownership of these shares. | |
(23) | Includes 2,000 shares of common stock issuable under options currently exercisable or exercisable within 60 days of the date specified above. | |
(24) | Includes 722,200 shares of common stock issuable under options and 43,059 shares of common stock issuable under stock-settled stock appreciation rights currently exercisable or exercisable within 60 days of the date specified above. | |
(25) | Includes the restricted stock units owned by our executive officers and the restricted units and deferred stock units owned by our non-employee directors. These restricted stock units, restricted units and deferred stock units are subject to all the economic risks of stock ownership but may not be voted or sold and, therefore, ownership of such units is not deemed to constitute beneficial ownership of common stock. In addition, the |
160
restricted stock units and restricted units are subject to vesting provisions as set forth in the respective grant agreements. | ||
(26) | Consists of 551,925 restricted stock units owned by our executive officers in the aggregate, 37,811 restricted units owned by our non-employee directors in the aggregate and 66,616 deferred stock units owned by our non-employee directors in the aggregate. |
ITEM 13 |
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE |
161
162
163
164
Fiscal Year Ended December 31, | ||||||||
2006 | 2005 | |||||||
Audit fees(1)
|
$ | 9,832,000 | $ | 8,639,000 | ||||
Audit-related fees(2)
|
763,000 | 202,000 | ||||||
Tax fees(3)
|
1,978,000 | 1,828,000 | ||||||
All other fees
|
| |
(1) | Audit fees include services related to the annual audit of our consolidated financial statements, the audit of our internal controls over financial reporting, the reviews of our quarterly reports on Form 10-Q, international statutory audits, services related to the divestiture of our interior business and other services that are normally provided by the independent accountants in connection with our regulatory filings. | |
(2) | Audit-related fees include services related to the audits of U.S. and Canadian employee benefit plans and audit procedures on the North American interior business financial statements. | |
(3) | Tax fees include services related to tax compliance, tax advice and tax planning. |
165
3. | The exhibits listed on the Index to Exhibits on pages 168 through 173 are filed with this Form 10-K or incorporated by reference as set forth below. |
(b) | The exhibits listed on the Index to Exhibits on pages 168 through 173 are filed with this Form 10-K or incorporated by reference as set forth below. |
(c) | Additional Financial Statement Schedules |
166
By:
Larry W. McCurdy
a Director
Roy E. Parrott
a Director
Matthew J. Simoncini
David P. Spalding
a Director
James A. Stern
a Director
Henry D.G. Wallace
a Director
Richard F. Wallman
a Director
167
Table of Contents
169
170
171
172
173
Exhibit
2
.1
Agreement and Plan of Merger,
dated February 9, 2007, by and among AREP Car Holdings
Corp., AREP Car Acquisition Corp. and Lear Corporation
(incorporated by reference to Exhibit 2.1 to the
Companys Current Report on
Form 8-K/A
dated February 9, 2007).
2
.2
Voting Agreement, dated
February 9, 2007, by an among Lear Corporation, Icahn
Partners LP, Icahn Partners Master Fund LP, Koala Holding
LLC and High River Limited Partnership (incorporated by
reference to Exhibit 2.2 to the Companys Current
Report on
Form 8-K/A
dated February 9, 2007).
2
.3
Guaranty of Payment, dated
February 9, 2007, by American Real Estate Partners, L.P. in
favor of Lear Corporation (incorporated by reference to
Exhibit 2.3 to the Companys Current Report on
Form 8-K/A
dated February 9, 2007).
2
.4
Amendment No. 1 to Employment
Agreement, dated February 9, 2007, between Lear Corporation
and Douglas G. DelGrosso (incorporated by reference to
Exhibit 2.4 to the Companys Current Report on
Form 8-K/A
dated February 9, 2007).
2
.5
Amendment No. 1 to Employment
Agreement, dated February 9, 2007, between Lear Corporation
and Robert E. Rossiter (incorporated by reference to
Exhibit 2.5 to the Companys Current Report on
Form 8-K/A
dated February 9, 2007).
2
.6
Amendment No. 1 to Employment
Agreement, dated February 9, 2007, between Lear Corporation
and James H. Vandenberghe (incorporated by reference to
Exhibit 2.6 to the Companys Current Report on
Form 8-K/A
dated February 9, 2007).
3
.1
Restated Certificate of
Incorporation of the Company (incorporated by reference to
Exhibit 3.1 to the Companys Quarterly Report on
Form 10-Q
for the quarter ended March 30, 1996).
3
.2
Amended and Restated By-laws of
the Company (incorporated by reference to Exhibit 3.2 to
the Companys Current Report on
Form 8-K
dated August 8, 2002).
3
.3
Certificate of Incorporation of
Lear Operations Corporation (incorporated by reference to
Exhibit 3.3 to the Companys Registration Statement on
Form S-4
filed on June 22, 1999).
3
.4
By-laws of Lear Operations
Corporation (incorporated by reference to Exhibit 3.4 to
the Companys Registration Statement on
Form S-4
filed on June 22, 1999).
3
.5
Certificate of Incorporation of
Lear Corporation EEDS and Interiors (incorporated by reference
to Exhibit 3.7 to the Companys Registration Statement
on
Form S-4/A
filed on June 6, 2001).
3
.6
By-laws of Lear Corporation EEDS
and Interiors (incorporated by reference to Exhibit 3.8 to
the Companys Registration Statement on
Form S-4/A
filed on June 6, 2001).
3
.7
Certificate of Incorporation of
Lear Seating Holdings Corp. #50 (incorporated by reference
to Exhibit 3.9 to the Companys Registration Statement
on
Form S-4/A
filed on June 6, 2001).
3
.8
By-laws of Lear Seating Holdings
Corp. #50 (incorporated by reference to Exhibit 3.10
to the Companys Registration Statement on
Form S-4/A
filed on June 6, 2001).
3
.9
Certificate of Incorporation of
Lear Automotive Dearborn, Inc., as amended (incorporated by
reference to Exhibit 3.1 to the Companys Quarterly
Report on
Form 10-Q
for the quarter ended April 1, 2006).
3
.10
Bylaws of Lear Automotive
Dearborn, Inc. (incorporated by reference to Exhibit 3.1 to
the Companys Quarterly Report on
Form 10-Q
for the quarter ended April 1, 2006).
3
.11
Certificate of Incorporation of
Lear Corporation (Germany) Ltd. (incorporated by reference to
Exhibit 3.13 to the Companys Annual Report on
Form 10-K
for the year ended December 31, 2005).
3
.12
Certificate of Amendment of
Certificate of Incorporation of Lear Corporation (Germany) Ltd.
(incorporated by reference to Exhibit 3.14 to the
Companys Annual Report on
Form 10-K
for the year ended December 31, 2005).
3
.13
Amended and Restated By-laws of
Lear Corporation (Germany) Ltd. (incorporated by reference to
Exhibit 3.15 to the Companys Annual Report on
Form 10-K
for the year ended December 31, 2005).
3
.14
Deed of Transformation of Lear
Automotive (EEDS) Spain S.L. (Unofficial English Translation)
(incorporated by reference to Exhibit 3.17 to the
Companys Registration Statement on
Form S-3
filed on May 8, 2002).
3
.15
By-laws of Lear Automotive (EEDS)
Spain S.L. (Unofficial English Translation) (incorporated by
reference to Exhibit 3.18 to the Companys
Registration Statement on
Form S-3
filed on May 8, 2002).
168
Table of Contents
Exhibit
3
.16
Articles of Incorporation of Lear
Corporation Mexico, S.A. de C.V. (Unofficial English
Translation) (incorporated by reference to Exhibit 3.19 to
the Companys Registration Statement on
Form S-3
filed on March 28, 2002).
3
.17
By-laws of Lear Corporation
Mexico, S.A. de C.V. (Unofficial English Translation)
(incorporated by reference to Exhibit 3.20 to the
Companys Registration Statement on
Form S-3
filed on March 28, 2002).
3
.18
By-laws of Lear Corporation
Mexico, S. de R.L. de C.V., showing the change of Lear
Corporation Mexico, S.A. de C.V. from a corporation to a limited
liability, variable capital partnership (Unofficial English
Translation) (incorporated by reference to Exhibit 3.18 to
the Companys Registration Statement on
Form S-4
filed on December 8, 2006).
4
.1
Indenture dated as of May 15,
1999, by and among Lear Corporation as Issuer, the Guarantors
party thereto from time to time and the Bank of New York as
Trustee (incorporated by reference to Exhibit 10.8 to the
Companys Quarterly Report on
Form 10-Q
for the quarter ended April 3, 1999).
4
.2
Supplemental Indenture No. 1
to Indenture dated as of May 15, 1999, by and among Lear
Corporation as Issuer, the Guarantors party thereto from time to
time and the Bank of New York as Trustee (incorporated by
reference to Exhibit 4.1 to the Companys Quarterly
Report on
Form 10-Q
for the quarter ended July 1, 2000).
4
.3
Supplemental Indenture No. 2
to Indenture dated as of May 15, 1999, by and among Lear
Corporation as Issuer, the Guarantors party thereto from time to
time and the Bank of New York as Trustee (incorporated by
reference to Exhibit 4.3 to the Companys Annual
Report on
Form 10-K
for the year ended December 31, 2001).
4
.4
Supplemental Indenture No. 3
to Indenture dated as of May 15, 1999, by and among Lear
Corporation as Issuer, the Guarantors party thereto from time to
time and the Bank of New York as Trustee (incorporated by
reference to Exhibit 4.4 to the Companys Annual
Report on
Form 10-K
for the year ended December 31, 2001).
4
.5
Supplemental Indenture No. 4
to Indenture dated as of May 15, 1999, by and among Lear
Corporation as Issuer, the Guarantors party thereto from time to
time and the Bank of New York Trust Company, N.A. (as successor
to The Bank of New York), as Trustee (incorporated by reference
to Exhibit 10.1 to the Companys Current Report on
Form 8-K
dated December 15, 2005).
4
.6
Indenture dated as of
March 20, 2001, by and among Lear Corporation as Issuer,
the Guarantors party thereto from time to time and the Bank of
New York as Trustee, relating to the
8
1
/
8
% Senior
Notes due 2008, including the form of exchange note attached
thereto (incorporated by reference to Exhibit 4.5 to the
Companys Registration Statement on
Form S-4
filed on April 23, 2001).
4
.7
Supplemental Indenture No. 1
to Indenture dated as of March 20, 2001, by and among Lear
Corporation as Issuer, the Guarantors party thereto from time to
time and the Bank of New York as Trustee (incorporated by
reference to Exhibit 4.6 to the Companys Annual
Report on
Form 10-K
for the year ended December 31, 2001).
4
.8
Supplemental Indenture No. 2
to Indenture dated as of March 20, 2001, by and among Lear
Corporation as Issuer, the Guarantors party thereto from time to
time and the Bank of New York as Trustee (incorporated by
reference to Exhibit 4.7 to the Companys Annual
Report on
Form 10-K
for the year ended December 31, 2001).
4
.9
Supplemental Indenture No. 3
to Indenture dated as of March 20, 2001, by and among Lear
Corporation as Issuer, the Guarantors party thereto from time to
time and the Bank of New York as Trustee (incorporated by
reference to Exhibit 10.2 to the Companys Current
Report on
Form 8-K
dated December 15, 2005).
4
.10
Indenture dated as of
February 20, 2002, by and among Lear Corporation as Issuer,
the Guarantors party thereto from time to time and the Bank of
New York as Trustee (incorporated by reference to
Exhibit 4.8 to the Companys Annual Report on
Form 10-K
for the year ended December 31, 2001).
4
.11
Supplemental Indenture No. 1
to Indenture dated as of February 20, 2002, by and among
Lear Corporation as Issuer, the Guarantors party thereto from
time to time and the Bank of New York as Trustee (incorporated
by reference to Exhibit 4.1 to the Companys Current
Report on
Form 8-K
dated August 26, 2004).
Table of Contents
Exhibit
4
.12
Supplemental Indenture No. 2
to Indenture dated as of February 20, 2002, by and among
Lear Corporation as Issuer, the Guarantors party thereto from
time to time and The Bank of New York Trust Company, N.A. (as
successor to The Bank of New York), as Trustee (incorporated by
reference to Exhibit 10.3 to the Companys Current
Report on
Form 8-K
dated December 15, 2005).
4
.13
Indenture dated as of
August 3, 2004, by and among Lear Corporation as Issuer,
the Guarantors party thereto from time to time and The Bank of
New York Trust Company, N.A., as Trustee (incorporated by
reference to Exhibit 4.1 to the Companys Current
Report on
Form 8-K
dated August 3, 2004).
4
.14
Supplemental Indenture No. 1
to Indenture dated as of August 3, 2004, by and among Lear
Corporation as Issuer, the Guarantors party thereto from time to
time and The Bank of New York Trust Company, N.A. (as successor
to BNY Midwest Trust Company, N.A.), as Trustee (incorporated by
reference to Exhibit 10.4 to the Companys Current
Report on
Form 8-K
dated December 15, 2005).
4
.15
Supplemental Indenture No. 5
to Indenture dated as of May 15, 1999, among Lear
Corporation, the Guarantors set forth therein and The Bank of
New York Trust Company, N.A. (as successor to The Bank of New
York), as trustee (incorporated by reference to
Exhibit 10.2 to the Companys Current Report of
Form 8-K
dated April 25, 2006).
4
.16
Supplemental Indenture No. 4
to Indenture dated as of March 20, 2001, among Lear
Corporation, the Guarantors set forth therein and the Bank of
New York, as trustee (incorporated by reference to
Exhibit 10.3 to the Companys Current Report on
Form 8-K
dated April 25, 2006).
4
.17
Supplemental Indenture No. 3
to Indenture dated as of February 20, 2002, among Lear
Corporation, the Guarantors set forth therein and The Bank of
New York Trust Company, N.A. (as successor to The Bank of New
York), as trustee (incorporated by reference to
Exhibit 10.4 to the Companys Current Report on
Form 8-K
dated April 25, 2006).
4
.18
Supplemental Indenture No. 4
to Indenture dated as of February 20, 2002, among Lear
Corporation, the Guarantors set forth therein and The Bank of
New York Trust Company, N.A. (as successor to The Bank of New
York), as trustee (incorporated by reference to
Exhibit 10.1 to the Companys Current Report on
Form 8-K
dated June 14, 2006).
4
.19
Supplemental Indenture No. 2
to Indenture dated as of August 3, 2004, among Lear
Corporation, the Guarantors set forth therein and The Bank of
New York Trust Company, N.A. (as successor to BNY Midwest Trust
Company, N.A.), as trustee (incorporated by reference to
Exhibit 10.5 to the Companys Current Report on
Form 8-K
dated April 25, 2006).
4
.20
Indenture dated as of
November 24, 2006, by and among Lear Corporation, certain
Subsidiary Guarantors (as defined therein) and The Bank of New
York Trust Company, N.A., as Trustee (incorporated by reference
to Exhibit 4.1 to the Companys Current Report on
Form 8-K
dated November 24, 2006).
10
.1
Amended and Restated Credit and
Guarantee Agreement, dated as of April 25, 2006, among the
Company, Lear Canada, each Foreign Subsidiary Borrower (as
defined therein), the Lenders party thereto, Bank of America,
N.A., as syndication agent, Citibank, N.A. and Deutsche Bank
Securities Inc., as documentation agents, The Bank of Nova
Scotia, as documentation agent and Canadian administrative
agent, the other Agents named therein and JPMorgan Chase Bank,
N.A., as general administrative agent (incorporated by reference
to Exhibit 10.1 to the Companys Current Report on
Form 8-K
dated April 25, 2006).
10
.2*
Employment Agreement, dated
March 15, 2005, between the Company and Robert E. Rossiter
(incorporated by reference to Exhibit 10.1 to the
Companys Current Report on
Form 8-K
dated March 15, 2005).
10
.3*
Employment Agreement, dated
March 15, 2005, between the Company and James H.
Vandenberghe (incorporated by reference to Exhibit 10.2 to
the Companys Current Report on
Form 8-K
dated March 15, 2005).
10
.4*
Employment Agreement, dated
March 15, 2005, between the Company and Douglas G.
DelGrosso (incorporated by reference to Exhibit 10.3 to the
Companys Current Report on
Form 8-K
dated March 15, 2005).
10
.5*
Employment Agreement, dated
March 15, 2005, between the Company and Daniel A. Ninivaggi
(incorporated by reference to Exhibit 10.6 to the
Companys Current Report on
Form 8-K
dated March 15, 2005).
Table of Contents
Exhibit
10
.6*
Employment Agreement, dated
March 15, 2005, between the Company and Roger A. Jackson
(incorporated by reference to Exhibit 10.7 to the
Companys Current Report on
Form 8-K
dated March 15, 2005).
10
.7*
Employment Agreement, dated as of
March 15, 2005, between the Company and Raymond E. Scott
(incorporated by reference to Exhibit 10.6 to the
Companys Quarterly Report on
Form 10-Q
for the quarter ended October 1, 2005).
**10
.8*
Employment Agreement, dated as of
March 15, 2005, between the Company and James M.
Brackenbury.
10
.9*
Lears 1994 Stock Option Plan
(incorporated by reference to Exhibit 10.27 to the
Companys Transition Report on
Form 10-K
filed on March 31, 1994).
10
.10*
Lear Corporation 1996 Stock Option
Plan, as amended and restated (incorporated by reference to
Exhibit 10.1 to the Companys Quarterly Report on
Form 10-Q
for the quarter ended June 28, 1997).
10
.11*
Lear Corporation Long-Term Stock
Incentive Plan, as amended and restated, Conformed Copy through
Fourth Amendment (incorporated by reference to Exhibit 4.1
of Post-Effective Amendment No. 3 to the Companys
Registration Statement on
Form S-8
filed on November 3, 2006).
**10
.12*
Fifth Amendment to the Lear
Corporation Long-Term Stock Incentive Plan, effective
November 1, 2006.
10
.13*
Form of the Long-Term Stock
Incentive Plan 2002 Nontransferable Nonqualified Stock Option
Terms and Conditions (incorporated by reference to
Exhibit 10.12 to the Companys Annual Report on
Form 10-K
for the year ended December 31, 2003).
10
.14*
Lear Corporation Outside Directors
Compensation Plan, effective January 1, 2005 (incorporated
by reference to Exhibit 10.1 to the Companys Current
Report on
Form 8-K
dated December 7, 2004).
**10
.15*
First Amendment to the Lear
Corporation Outside Directors Compensation Plan, effective
November 1, 2006.
10
.16*
Form of the Long-Term Stock
Incentive Plan 2003 Director Nonqualified, Nontransferable
Stock Option Terms and Conditions (incorporated by reference to
Exhibit 10.14 to the Companys Annual Report on
Form 10-K
for the year ended December 31, 2003).
10
.17*
Form of the Long-Term Stock
Incentive Plan 2003 Restricted Stock Unit Terms and Conditions
for Management (incorporated by reference to Exhibit 10.15
to the Companys Annual Report on
Form 10-K
for the year ended December 31, 2003).
10
.18*
Form of the Long-Term Stock
Incentive Plan 2003 Deferral and Restricted Stock Unit
Agreement MSPP (U.S.) (incorporated by reference to
Exhibit 10.16 to the Companys Annual Report on
Form 10-K
for the year ended December 31, 2003).
10
.19*
Form of the Long-Term Stock
Incentive Plan 2003 Deferral and Restricted Stock Unit
Agreement MSPP
(Non-U.S.)
(incorporated by reference to Exhibit 10.17 to the
Companys Annual Report on
Form 10-K
for the year ended December 31, 2003).
10
.20*
Form of the Lear Corporation 1996
Stock Option Plan Stock Option Agreement (incorporated by
reference to Exhibit 10.30 to the Companys Annual
Report on
Form 10-K
for the year ended December 31, 1997).
10
.21*
Lear Corporation 1994 Stock Option
Plan, Second Amendment effective January 1, 1996
(incorporated by reference to Exhibit 10.28 to the
Companys Annual Report on
Form 10-K
for the year ended December 31, 1998).
10
.22*
Lear Corporation 1994 Stock Option
Plan, Third Amendment effective March 14, 1997
(incorporated by reference to Exhibit 10.29 to the
Companys Annual Report on
Form 10-K
for the year ended December 31, 1998).
10
.23
Stock Purchase Agreement dated as
of March 16, 1999, by and between Nevada Bond Investment
Corp. II and Lear Corporation (incorporated by reference to
Exhibit 99.1 to the Companys Current Report on
Form 8-K
dated March 16, 1999).
10
.24
Stock Purchase Agreement dated as
of May 7, 1999, between Lear Corporation and Johnson
Electric Holdings Limited (incorporated by reference to
Exhibit 10.1 to the Companys Current Report on
Form 8-K
dated May 7, 1999).
Table of Contents
Exhibit
10
.25
Registration Rights Agreement
dated as of November 24, 2006, among Lear Corporation,
certain Subsidiary Guarantors (as defined therein) and Citigroup
Global Markets Inc. (incorporated by reference to
Exhibit 10.1 to the Companys Current Report on
Form 8-K
dated November 24, 2006).
10
.26*
Lear Corporation Executive
Supplemental Savings Plan, as amended and restated (incorporated
by reference to Exhibit 10.2 to the Companys Current
Report on
Form 8-K
dated May 4, 2005).
10
.27*
First Amendment to the Lear
Corporation Executive Supplemental Savings Plan, dated as of
November 10, 2005 (incorporated by reference to
Exhibit 10.48 to the Companys Annual Report on
Form 10-K
for the year ended December 31, 2005).
**10
.28*
Second Amendment to the Lear
Corporation Executive Supplemental Savings Plan, dated as of
December 21, 2006.
10
.29*
2005 Management Stock Purchase
Plan (U.S.) Terms and Conditions (incorporated by reference to
Exhibit 10.32 to the Companys Annual Report on
Form 10-K
for the year ended December 31, 2004).
10
.30*
2005 Management Stock Purchase
Plan
(Non-U.S.)
Terms and Conditions (incorporated by reference to
Exhibit 10.33 to the Companys Annual Report on
Form 10-K
for the year ended December 31, 2004).
10
.31*
2006 Management Stock Purchase
Plan (U.S.) Terms and Conditions (incorporated by reference to
Exhibit 10.41 to the Companys Annual Report on
Form 10-K
for the year ended December 31, 2005).
10
.32*
2006 Management Stock Purchase
Plan
(Non-U.S.)
Terms and Conditions (incorporated by reference to
Exhibit 10.42 to the Companys Annual Report on
Form 10-K
for the year ended December 31, 2005).
**10
.33*
2007 Management Stock Purchase
Plan (U.S.) Terms and Conditions.
**10
.34*
2007 Management Stock Purchase
Plan
(Non-U.S.)
Terms and Conditions.
10
.35*
Form of Performance Share Award
Agreement for the three-year period ending December 31,
2007 (incorporated by reference to Exhibit 10.2 to the
Companys Current Report on
Form 8-K
dated February 10, 2005).
10
.36
Purchase Agreement dated as of
July 29, 2004, by and among Lear Corporation as Issuer, the
Guarantors party thereto and the Purchasers (as defined therein)
(incorporated by reference to Exhibit 10.1 to the
Companys Quarterly Report on
Form 10-Q
for the quarter ended October 2, 2004).
10
.37
Registration Rights Agreement
dated as of August 3, 2004, by and among Lear Corporation
as Issuer, the Guarantors party thereto and the Initial
Purchasers (as defined therein) (incorporated by reference to
Exhibit 10.2 to the Companys Quarterly Report on
Form 10-Q
for the quarter ended October 2, 2004).
10
.38
Purchase and Transfer Agreement
dated as of April 5, 2004, among Lear Corporation Holding
GmbH, Lear Corporation GmbH & Co. KG and the Sellers
named therein (incorporated by reference to Exhibit 10.1 to
the Companys Quarterly Report on
Form 10-Q
for the quarter ended April 3, 2004).
10
.39*
Long-Term Stock Incentive Plan
2005 Restricted Stock Unit Terms and Conditions (incorporated by
reference to Exhibit 10.2 to the Companys Quarterly
Report on
Form 10-Q
for the quarter ended October 1, 2005).
**10
.40*
Long-Term Stock Incentive Plan
2006 Restricted Stock Unit Terms and Conditions
10
.41*
Long-Term Stock Incentive Plan
2005 Stock Appreciation Rights Terms and Conditions
(incorporated by reference to Exhibit 10.3 to the
Companys Quarterly Report on
Form 10-Q
for the quarter ended October 1, 2005).
**10
.42*
Long-Term Stock Incentive Plan
2006 Stock Appreciation Rights Terms and Conditions.
10
.43*
Lear Corporation Estate
Preservation Plan (incorporated by reference to
Exhibit 10.35 to the Companys Annual Report on
Form 10-K
for the year ended December 31, 2004).
10
.44*
Lear Corporation Pension
Equalization Program, as amended through August 15, 2003
(incorporated by reference to Exhibit 10.37 to the
Companys Annual Report on
Form 10-K
for the year ended December 31, 2004).
**10
.45*
First Amendment to the Lear
Corporation Pension Equalization Program, dated as of
December 21, 2006.
10
.46*
Lear Corporation Annual Incentive
Compensation Plan (incorporated by reference to
Exhibit 10.1 to the Companys Current Report on
Form 8-K
dated February 10, 2005).
**10
.47
Form of Amended and Restated
Indemnity Agreement between the Company and each of its
directors.
Table of Contents
Exhibit
10
.48*
Form of the Long-Term Stock
Incentive Plan 2004 Restricted Stock Unit Terms &
Conditions for Management (incorporated by reference to
Exhibit 10.1 to the Companys Current Report on
Form 8-K
dated November 12, 2004).
10
.49
Sale and Purchase Agreement dated
as of July 20, 2006, by and among the Company, Lear East
European Operations S.a.r.l., Lear Holdings (Hungary) Kft, Lear
Corporation GmbH, Lear Corporation Sweden AB, Lear Corporation
Poland Sp.zo.o., International Automotive Components Group LLC,
International Automotive Components Group SARL, International
Automotive Components Group Limited, International Automotive
Components Group GmbH and International Automotive Components
Group AB (incorporated by reference to Exhibit 10.1 to the
Companys Current Report on
Form 8-K
dated July 20, 2006).
10
.50
Stock Purchase Agreement dated as
of October 17, 2006, among the Company, Icahn Partners LP,
Icahn Partners Master Fund LP and Koala Holding LLC
(incorporated by reference to Exhibit 10.1 to the
Companys Current Report on
Form 8-K
dated October 17, 2006).
10
.51*
Form of Performance Share Award
Agreement under the Lear Corporation Long-Term Stock Incentive
Plan (incorporated by reference to Exhibit 10.1 to the
Companys Current Report on
Form 8-K
dated March 23, 2006).
10
.52*
Restricted Stock Award Agreement
dated as of November 9, 2006, by and between the Company
and Daniel A. Ninivaggi (incorporated by reference to
Exhibit 10.1 to the Companys Current Report on
Form 8-K
dated November 9, 2006).
10
.53*
Form of Cash-Settled Performance
Unit Award Agreement under the Lear Corporation Long-Term Stock
Incentive Plan for the
2007-2009
Performance Period (incorporated by reference to
Exhibit 10.1 to the Companys Current Report on
Form 8-K
dated February 8, 2007).
10
.54
Asset Purchase Agreement dated as
of November 30, 2006, by and among Lear Corporation,
International Automotive Components Group North America, Inc.,
WL Ross & Co. LLC, Franklin Mutual Advisers, LLC and
International Automotive Components Group North America, LLC.
(incorporated by reference to Exhibit 10.1 to the
Companys Current Report on
Form 8-K
dated November 30, 2006).
10
.55
Form of Limited Liability Company
Agreement of International Automotive Components Group North
America, LLC. (incorporated by reference to Exhibit 10.2 to
the Companys Current Report on
Form 8-K
dated November 30, 2006).
**11
.1
Computation of net income per
share.
**12
.1
Computation of ratios of earnings
to fixed charges.
**21
.1
List of subsidiaries of the
Company.
**23
.1
Consent of Ernst & Young
LLP.
**31
.1
Rule 13a-14(a)/15d-14(a)
Certification of Principal Executive Officer.
**31
.2
Rule 13a-14(a)/15d-14(a)
Certification of Principal Financial Officer.
**32
.1
Certification by Chief Executive
Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
**32
.2
Certification by Chief Financial
Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
*
Compensatory plan or arrangement.
**
Filed herewith.
* | Effective September 16, 2006. |
* | Effective September 16, 2006. |
2
3
4
5
6
(A) | the aggregate base salary (at the highest rate in effect at any time during the Term) which you would have received pursuant to this Agreement for the Severance Period had your employment with the Company continued for such period, and | ||
(B) | the aggregate Bonus (based upon the highest annual Bonus that you received with respect to any calendar year during the two years immediately preceding the calendar year in which the Termination Date occurred, or, in the event that the Termination Date occurs prior to the first anniversary of the Effective Date, then based upon the highest annual Bonus that you received with respect to any calendar year during the three years immediately preceding the calendar year in which the Termination Date occurred) which you would have received pursuant to this Agreement for the Severance Period, had your employment with the Company continued for such period. |
7
8
9
10
11
12
13
14
15
16
17
Sincerely, | ||||
|
||||
LEAR CORPORATION | ||||
|
||||
By:
|
/s/ Roger A. Jackson
|
|||
|
||||
Agreed to this 15th day of March, 2005 | ||||
|
||||
/s/ James M. Brackenbury | ||||
James M. Brackenbury |
18
1. | Notwithstanding anything in the Plan to the contrary, effective as of January 1, 2007, all benefits under Section 3.2 of the Plan are frozen in amount and no future benefits shall accrue under Section 3.2 of the Plan. | |
2. | Vesting under Section 3.2 shall continue beyond 2006. | |
3. | Except to the extent hereby amended, this Plan shall remain in full force and effect. |
/s/ Roger Jackson
|
||
Senior Vice President Human Resources
|
(a) | In consideration for the Participants Deferral Election, the Participant shall be credited as of March 15, 2007 with Restricted Stock Units at a discounted price (the Discount Rate) as provided in the following table: |
(b) | The total number of Restricted Stock Units credited to a Participant under the Plan will be determined according to the following calculation: |
(i) | the dollar amount of the Participants Deferral Election that does not exceed 15% of the Participants Base Salary, divided by the product of (A) the average closing Fair Market Value over the last five trading days in 2006 (December 22, 26, 27, 28, and 29) (the Average FMV) multiplied by (B) 80%; plus | ||
(ii) | the dollar amount of the Participants Deferral Election over 15% and up to 100% of the Participants Base Salary, divided by the product of (A) the Average FMV multiplied by (B) 70%; plus | ||
(iii) | the dollar amount of the Participants Deferral Election over 100% of the Participants Base Salary, divided by the product of (A) the Average FMV multiplied by (B) 80%. |
(c) | The total number of Restricted Stock Units determined in Section 2(b) will be credited to the Participant in the form of Salary Restricted Stock Units and/or Bonus Restricted Stock Units. The number of Salary Restricted Stock Units credited shall be the same proportion of the total Restricted Stock Units as the amount of Base Salary deferred in the Participants Deferral Election is of the total amount deferred in the Participants Deferral Election. The number of Bonus Restricted Stock Units credited shall be the same proportion of the total Restricted Stock Units as the amount of bonus deferred in the Participants Deferral Election is of the total amount deferred in the Participants Deferral Election. |
2
(a) | Before March 15, 2007 . | ||
A Participant who ceases to be an employee prior to March 15, 2007 by reason of death, End of Service or Disability shall be terminated from the Plan, and his or her Deferral Election shall be cancelled. Any Base Salary and/or bonus earned but not paid due to the Participants Deferral Election shall be paid to the Participant (or in the case of the Participants death, the Participants beneficiary) in cash as soon as administratively feasible after his or her termination of employment. | |||
(b) | After March 14, 2007 but Before January 1, 2008 . | ||
If the Participant ceases to be an employee after March 14, 2007 but prior to January 1, 2008 by reason of death, End of Service, or Disability, the Participant (or in the case of the Participants death, the Participants beneficiary) shall be entitled to receive a number of Shares equal to the sum of (i) and (ii): |
(i) | the number of Salary Restricted Stock Units credited to the Participant under Section 2(c) multiplied by a fraction, the numerator of which is the number of pay periods for which there was a Base Salary deduction in the period beginning on January 1, 2007 and ending on the date the Participant ceases to be an employee and the denominator of which is 24; and | ||
(ii) | the number of Bonus Restricted Stock Units credited to the Participant under Section 2(c). |
(c) | After December 31, 2007 . | ||
If the Participant ceases to be an employee after December 31, 2007 but prior to the end of the Restriction Period by reason of death, End of Service or Disability, the Participant (or in the case of the Participants death, the Participants beneficiary) shall be entitled to receive a number of Shares equal to the number of Restricted Stock Units credited to the Participant under Section 2(b) and a cash payment equal to the Participants Dividend Equivalent Account under Section 4. | |||
(d) | Beneficiary . | ||
Any distribution made with respect to a Participant who has died shall be paid to the beneficiary designated by the Participant pursuant to Article 11 of the Plan to receive the Participants Shares and any cash payment under this Agreement. If the Participants beneficiary predeceases the Participant or no beneficiary has been designated, distribution of the Participants Shares and any cash payment shall be made to the Participants surviving spouse and if none, to the Participants estate. |
3
(e) | End of Service . | ||
An employees End of Service means his or her retirement after attaining age 55 and completing ten years of service (as defined in the Lear Corporation Pension Plan, regardless of whether the employee participates in such plan). |
(a) | Before March 15, 2007 . | ||
A Participant whose employment involuntarily terminates other than for Cause or for any reason described in Section 6 prior to March 15, 2007 shall be terminated from the Plan, and his or her Deferral Election shall be cancelled. Any Base Salary and/or bonus earned but not paid due to the Participants Deferral Election shall be paid to the Participant in cash as soon as administratively feasible after his or her termination of employment. | |||
(b) | After March 14, 2007 but Before January 1, 2008 . | ||
A Participant whose employment involuntarily terminates other than for Cause or for any reason described in Section 6 after March 14, 2007 but prior to January 1, 2008 shall be entitled to receive a number of Shares equal to the sum of (i), (ii), (iii) and (iv): |
(i) | the number of Salary Restricted Stock Units credited to the Participant under Section 2(c) multiplied by a fraction, the numerator of which is the number of pay periods for which there was a Base Salary deduction in the period beginning on January 1, 2007 and ending on the date the Participant ceases to be an employee, and the denominator of which is 24, multiplied by a fraction, the numerator of which is the number of full months in the period beginning on March 15, 2007 and ending on the date the Participant ceases to be an employee (the Elapsed Months), and the denominator of which is 36; and | ||
(ii) | the number of Bonus Restricted Stock Units credited to the Participant under Section 2(c) multiplied by a fraction, the numerator of which is the Elapsed Months, and the denominator of which is 36; and | ||
(iii) | the lesser of: |
(A) | the quotient of (i) the total amount of Base Salary deferred in the Participants Deferral Election multiplied by a fraction, the numerator of which is the number of pay periods for which there was a Base Salary deduction in the period beginning on January 1, |
4
2007 and ending on the date the Participant ceases to be an employee, and the denominator of which is 24, multiplied by a fraction, the numerator of which is 36 minus the Elapsed Months, and the denominator of which is 36, divided by (ii) the Fair Market Value of a Share on the date the Participant ceases to be an employee, or | |||
(B) | the number of Salary Restricted Units determined under Section 2(c) multiplied by a fraction, the numerator of which is the number of pay periods for which there was a Base Salary deduction in the period beginning on January 1, 2007 and ending on the date the Participant ceases to be an employee, and the denominator of which is 24, multiplied by a fraction, the numerator of which is 36 minus the Elapsed Months, and the denominator of which is 36; and |
(iv) | the lesser of: |
(A) | the quotient of (i) the amount of bonus deferred in the Participants Deferral Election multiplied by a fraction, the numerator of which is 36 minus the Elapsed Months, and the denominator of which is 36, divided by (ii) the Fair Market Value of a Share on the date the Participant ceases to be an employee, or | ||
(B) | the number of Bonus Restricted Stock Units determined under Section 2(c) multiplied by a fraction, the numerator of which is 36 minus the Elapsed Months, and the denominator of which is 36. |
(c) | After December 31, 2007 . | ||
A Participant whose employment involuntarily terminates other than for Cause or for any reason described in Section 6 after December 31, 2007 but prior to the end of the Restriction Period shall be entitled to receive a number of Shares equal to the sum of (i) and (ii): |
(i) | the number of the Restricted Stock Units credited to the Participant under Section 2(b) multiplied by a fraction, the numerator of which is the Elapsed Months, and the denominator of which is 36, and | ||
(ii) | the lesser of: |
(A) | the quotient of (i) the total amount deferred in the Participants Deferral Election multiplied by a fraction, the numerator of which is 36 minus the Elapsed Months, and the denominator of which is 36, divided by (ii) the Fair Market Value of a Share on the date the Participant ceases to be an employee, or | ||
(B) | the number of Restricted Stock Units determined under Section 2(b) multiplied by a fraction, the numerator of which is 36 minus the Elapsed Months, and the denominator of which is 36. |
5
(a) | Before March 15, 2007 . | ||
A Participant whose employment terminates for any reason other than those described in Sections 6 and 7 prior to March 15, 2007 shall be terminated from the Plan, and his or her Deferral Election shall be cancelled. Any Base Salary and/or bonus earned but not paid due to the Participants Deferral Election shall be paid to the Participant in cash as soon as administratively feasible after his or her termination of employment. | |||
(b) | After March 14, 2007 But Before January 1, 2008 . | ||
A Participant whose employment terminates for any reason other than those described in Sections 6 and 7 after March 14, 2007 but prior to January 1, 2008 shall be entitled to receive a number of Shares equal to the sum of (i) and (ii): |
(i) | the lesser of: |
(A) | the quotient of (i) the amount of Base Salary the Participant elected to defer in the Participants Deferral Election multiplied by a fraction, the numerator of which is the number of pay periods for which there was a Base Salary deduction in the period from January 1, 2007 to the date the Participant ceases to be an employee, and the denominator of which is 24, divided by (ii) the Fair Market Value of a Share on the date the Participant ceases to be an employee, or | ||
(B) | the number of Salary Restricted Stock Units credited to the Participant under Section 2(c) multiplied by a fraction, the numerator of which is the number of pay periods for which there was a Base Salary deduction in the period from January 1, 2007 to the date the Participant ceases to be an employee, and the denominator of which is 24; and |
(ii) | the lesser of: |
(A) | the amount of bonus deferred in the Participants Deferral Election divided by the Fair Market Value of a Share on the date the Participant ceases to be an employee, or | ||
(B) | the number of Bonus Restricted Stock Units credited to the Participant under Section 2(c). |
(c) | After December 31, 2007 . | ||
A Participant whose employment terminates for any reason other than those described in Sections 6 and 7 after December 31, 2007 but prior to the end of the Restriction Period shall be entitled to receive a number of Shares equal to the lesser of: the total amount deferred in the Participants Deferral Election divided by the Fair Market Value of a Share on the date the Participant ceases to be an employee; or (ii) the number of Restricted Stock Units credited to the Participant under Section 2(b). |
6
7
8
(a) | In consideration for the Participants Deferral Election, the Participant shall be credited as of March 15, 2007, with Restricted Stock Units at a discounted price (the Discount Rate) as provided in the following table: |
(b) | The total number of Restricted Stock Units credited to a Participant under the Plan will be determined according to the following calculation: |
(i) | the dollar amount of the Participants Deferral Election that does not exceed 15% of the Participants base salary, divided by the product of (A) the average closing Fair Market Value over the last five trading days in 2006 (December 22, 26, 27, 28 and 29) (the Average FMV) multiplied by (B) 80%; plus | ||
(ii) | the dollar amount of the Participants Deferral Election over 15% and up to 100% of the Participants base salary, divided by the product of (A) the Average FMV multiplied by (B) 70%; plus |
(iii) | the dollar amount of the Participants Deferral Election over 100% of the Participants base salary, divided by the product of (A) the Average FMV multiplied by (B) 80%. |
(a) | Before March 15, 2007 . | ||
A Participant who ceases to be an employee prior to March 15, 2007, by reason of death, End of Service or Disability shall be terminated from the Plan, and his or her Deferral Election shall be cancelled. | |||
(b) | After March 14, 2007 but Before January 1, 2008 . | ||
If the Participant ceases to be an employee after March 14, 2007, but prior to January 1, 2008, by reason of death, End of Service or Disability, the Participant (or in the case of the Participants death, the Participants beneficiary) shall be entitled to receive a number of Shares equal to the number of Restricted Stock Units credited to the Participant under Section 2(b). |
2
(c) | After December 31, 2007 . | ||
If the Participant ceases to be an employee after December 31, 2007, but prior to the end of the Restriction Period by reason of death, End of Service, or Disability, the Participant (or in the case of the Participants death, the Participants beneficiary) shall be entitled to receive a number of Shares equal to the number of Restricted Stock Units credited to the Participant under Section 2(b) and a cash payment equal to the Participants Dividend Equivalent Account under Section 4. | |||
(d) | Beneficiary . | ||
Any distribution made with respect to a Participant who has died shall be paid to the beneficiary designated by the Participant pursuant to Article 11 of the Plan to receive the Participants Shares and any cash payment under this Agreement. If the Participants beneficiary predeceases the Participant or no beneficiary has been designated, distribution of the Participants Shares and any cash payment shall be made to the Participants surviving spouse and, if none, to the Participants estate. | |||
(e) | End of Service . | ||
An employees End of Service means his or her retirement after attaining age 55 and completing ten years of service (as defined in the Lear Corporation Pension Plan, regardless of whether the employee participates in such plan). |
(a) | Before March 15, 2007 . | ||
A Participant whose employment involuntarily terminates other than for Cause or for any reason described in Section 6 prior to March 15, 2007, shall be terminated from the Plan, and his or her Deferral Election shall be cancelled. | |||
(b) | After March 14, 2007 but Before January 1, 2008 . | ||
A Participant whose employment involuntarily terminates other than for Cause or for any reason described in Section 6 after March 14, 2007, but prior to January 1, 2008, shall be entitled to receive a number of Shares equal to the sum of (i) and (ii): |
(i) | the number of Restricted Stock Units credited to the Participant under Section 2(b) multiplied by a fraction, the numerator of which is the Elapsed Months, and the denominator of which is 36; and | ||
(ii) | the lesser of: |
(A) | the quotient of (i) the amount of bonus deferred in the Participants Deferral Election multiplied by a fraction, the numerator of which is 36 minus the Elapsed Months, and the denominator of which is 36, divided by (ii) the Fair Market Value of a Share on the date the Participant ceases to be an employee, or |
3
(B) | the number of Restricted Stock Units determined under Section 2(b) multiplied by a fraction, the numerator of which is 36 minus the Elapsed Months, and the denominator of which is 36. |
(c) | After December 31, 2007 . | ||
A Participant whose employment involuntarily terminates other than for Cause or for any reason described in Section 6 after December 31, 2007, but prior to the end of the Restriction Period shall be entitled to receive a number of Shares equal to the sum of (i) and (ii): |
(i) | the number of the Restricted Stock Units credited to the Participant under Section 2(b) multiplied by a fraction, the numerator of which is the Elapsed Months, and the denominator of which is 36, and | ||
(ii) | the lesser of: |
(A) | the quotient of (i) the total amount deferred in the Participants Deferral Election multiplied by a fraction, the numerator of which is 36 minus the Elapsed Months, and the denominator of which is 36, divided by (ii) the Fair Market Value of a Share on the date the Participant ceases to be an employee, or | ||
(B) | the number of Restricted Stock Units determined under Section 2(b) multiplied by a fraction, the numerator of which is 36 minus the Elapsed Months, and the denominator of which is 36. |
(a) | Before March 15, 2007 . | ||
A Participant whose employment terminates for any reason other than those described in Sections 6 and 7 prior to March 15, 2007, shall be terminated from the Plan, and his or her Deferral Election shall be cancelled. | |||
(b) | After March 14, 2007 But Before January 1, 2008 . | ||
A Participant whose employment terminates for any reason other than those described in Sections 6 and 7 after March 14, 2007, but prior to January 1, 2008, shall be entitled to receive a number of Shares equal to: |
(i) | the lesser of: |
(A) | the amount of bonus deferred in the Participants Deferral Election divided by the Fair Market Value of a Share on the date the Participant ceases to be an employee, or | ||
(B) | the number of Restricted Stock Units credited to the Participant under Section 2(b). |
4
(c) | After December 31, 2007 . | ||
A Participant whose employment terminates for any reason other than those described in Sections 6 and 7 after December 31, 2007, but prior to the end of the Restriction Period shall be entitled to receive a number of Shares equal to the lesser of: the total amount deferred in the Participants Deferral Election divided by the Fair Market Value of a Share on the date the Participant ceases to be an employee; or (ii) the number of Restricted Stock Units credited to the Participant under Section 2(b). |
5
6
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-4-
1. | Notwithstanding anything in the Plan to the contrary, effective as of January 1, 2007, all benefits under the Plan are frozen in amount and no future benefits shall accrue under the Plan. |
2. | Vesting under Section 5 shall continue beyond 2006. |
/s/ Roger Jackson
|
||
Senior Vice President Human Resources
|
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LEAR CORPORATION | ||||||
|
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|
By: | |||||
|
||||||
Daniel A. Ninivaggi | ||||||
Executive Vice President, Secretary and General Counsel | ||||||
|
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INDEMNITEE | ||||||
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Name: | ||||||
Title: | ||||||
Address: |
For the Year Ended | For the Year Ended | For the Year Ended | For the Year Ended | For the Year Ended | ||||||||||||||||||||||||||||||||||||
December 31, 2006 | December 31, 2005 | December 31, 2004 | December 31, 2003 | December 31, 2002 | ||||||||||||||||||||||||||||||||||||
Basic | Diluted | Basic | Diluted | Basic | Diluted | Basic | Diluted | Basic | Diluted | |||||||||||||||||||||||||||||||
Income (loss) before cumulative effect of a
change in accounting principle
|
$ | (710.4 | ) | $ | (710.4 | ) | $ | (1,381.5 | ) | $ | (1,381.5 | ) | $ | 422.2 | $ | 422.2 | $ | 380.5 | $ | 380.5 | $ | 311.5 | $ | 311.5 | ||||||||||||||||
After-tax interest expense on convertible debt
|
| | | | | 9.3 | | 9.0 | | 7.4 | ||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||
Income (loss) before cumulative effect of a
change in accounting principle,
for diluted net income (loss) per share
|
(710.4 | ) | (710.4 | ) | (1,381.5 | ) | (1,381.5 | ) | 422.2 | 431.5 | 380.5 | 389.5 | 311.5 | 318.9 | ||||||||||||||||||||||||||
Cumulative effect of a change in
accounting principle, net of tax
|
2.9 | 2.9 | | | | | | | (298.5 | ) | (298.5 | ) | ||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||
Net income (loss), for diluted net income (loss) per share
|
$ | (707.5 | ) | $ | (707.5 | ) | $ | (1,381.5 | ) | $ | (1,381.5 | ) | $ | 422.2 | $ | 431.5 | $ | 380.5 | $ | 389.5 | $ | 13.0 | $ | 20.4 | ||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||
Weighted average shares:
|
||||||||||||||||||||||||||||||||||||||||
Common shares outstanding
|
68,607,262 | 68,607,262 | 67,166,668 | 67,166,668 | 68,278,858 | 68,278,858 | 66,689,757 | 66,689,757 | 65,365,218 | 65,365,218 | ||||||||||||||||||||||||||||||
Exercise of stock options (1)
|
| | | | | 1,635,349 | | 1,843,755 | | 1,691,921 | ||||||||||||||||||||||||||||||
Exercise of warrants (2)
|
| | | | | | | | | | ||||||||||||||||||||||||||||||
Shares issuable upon conversion of
convertible debt (3)
|
| | | | | 4,813,056 | | 4,813,056 | | 4,232,852 | ||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||
Common and equivalent shares outstanding
|
68,607,262 | 68,607,262 | 67,166,668 | 67,166,668 | 68,278,858 | 74,727,263 | 66,689,757 | 73,346,568 | 65,365,218 | 71,289,991 | ||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||
Per common and equivalent share:
|
||||||||||||||||||||||||||||||||||||||||
Income (loss) before cumulative effect
of a change in accounting principle
|
$ | (10.35 | ) | $ | (10.35 | ) | $ | (20.57 | ) | $ | (20.57 | ) | $ | 6.18 | $ | 5.77 | $ | 5.71 | $ | 5.31 | $ | 4.77 | $ | 4.47 | ||||||||||||||||
Cumulative effect of a change in
accounting principle
|
0.04 | 0.04 | | | | | | | (4.57 | ) | (4.18 | ) | ||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||
Net income (loss)
|
$ | (10.31 | ) | $ | (10.31 | ) | $ | (20.57 | ) | $ | (20.57 | ) | $ | 6.18 | $ | 5.77 | $ | 5.71 | $ | 5.31 | $ | 0.20 | $ | 0.29 | ||||||||||||||||
|
(1) | Amount represents the number of common shares issued assuming exercise of stock options outstanding, reduced by the number of shares which could have been purchased with the proceeds from the exercise of such options. | |
(2) | Amount represents the number of common shares issued assuming exercise of warrants outstanding. | |
(3) | Amount represents the number of common shares issued assuming the conversion of convertible debt outstanding. |
Year Ended December 31, | ||||||||||||||||||||
2006 | 2005 | 2004 | 2003 | 2002 | ||||||||||||||||
Income (loss) before provision for income taxes,
minority interests in consolidated subsidiaries,
equity in net (income) loss of affiliates and
cumulative effect of a change in accounting principle
|
$ | (653.4 | ) | $ | (1,128.6 | ) | $ | 564.3 | $ | 534.4 | $ | 480.5 | ||||||||
Fixed charges
|
254.4 | 228.6 | 207.2 | 226.4 | 249.3 | |||||||||||||||
Distributed income of affiliates
|
1.6 | 5.3 | 3.2 | 8.7 | 5.9 | |||||||||||||||
|
||||||||||||||||||||
Earnings
|
$ | (397.4 | ) | $ | (894.7 | ) | $ | 774.7 | $ | 769.5 | $ | 735.7 | ||||||||
|
||||||||||||||||||||
|
||||||||||||||||||||
Interest expense
|
$ | 209.8 | $ | 183.2 | $ | 165.5 | $ | 186.6 | $ | 210.5 | ||||||||||
Portion of lease expense representative of interest
|
44.6 | 45.4 | 41.7 | 39.8 | 38.8 | |||||||||||||||
|
||||||||||||||||||||
Fixed charges
|
$ | 254.4 | $ | 228.6 | $ | 207.2 | $ | 226.4 | $ | 249.3 | ||||||||||
|
||||||||||||||||||||
|
||||||||||||||||||||
Ratio of Earnings to Fixed Charges
(1)
|
| | 3.7 | 3.4 | 3.0 | |||||||||||||||
|
||||||||||||||||||||
Fixed Charges in Excess of Earnings
|
$ | 651.8 | $ | 1,123.3 | $ | | $ | | $ | |
(1) | Earnings in 2006 and 2005 were not sufficient to cover fixed charges by $651.8 million and $1,123.3 million, respectively. Accordingly, such ratios are not presented. |
Lear Automotive (EEDS) Spain S.L. (Spain)
Lear Automotive (EEDS) Tunisia S.A. (Tunisia)
Lear Automotive France, SAS (France)
Lear Automotive India Private Limited (India)
Lear Automotive Interiors (Pty.) Ltd. (South Africa)
Lear Automotive Manufacturing, L.L.C. (Delaware)
Lear Automotive Morocco SAS (Morocco)
Lear Automotive Services
(Netherlands) B.V. French Branch
Lear Automotive Services (Netherlands) B.V. (Netherlands)
Lear Automotive Services (Netherlands) B.V. Philippines
Lear Brits (SA) (Pty.) Ltd. (South Africa)
Lear Canada (Ontario)
Lear Canada Investments Ltd. (Alberta)
Lear Canada (Sweden) ULC (Nova Scotia)
Lear Car Seating do Brasil Industria e Comercio de Interiores
Lear Corporation Asientos, S.L. (Spain)
Lear Corporation Austria GmbH (Austria)
Lear Corporation Belgium CVA (Belgium)
Lear Corporation Beteiligungs GmbH (Germany)
Lear Corporation Birmingham Pension Trustees Limited (UK)
Lear Corporation Canada, Ltd. (Alberta)
Lear Corporation Changchun Automotive Interior Systems Co.,
Lear Corporation China Ltd. (Mauritius) (82.5%)
Lear Corporation Coventry Pension Trustees Limited (UK)
Lear Corporation EEDS and Interiors (Delaware)
Lear Corporation Electrical and Electronics GmbH & Co. KG
Lear Corporation Electrical and Electronics (Michigan)
Lear Corporation Electrical and Electronics Sp. z o.o. (Poland)
Lear Corporation Electrical and Electronics s.r.o.
Lear Corporation France SAS (France)
Lear Corporation (Germany) Ltd. (Delaware)
Lear Corporation Global Development, Inc. (Delaware)
Lear Corporation GmbH (Germany)
Lear Corporation Halewood Pension Trustees Limited (UK)
Lear Corporation Holdings Spain S.L. (Spain)
Lear Corporation Honduras, S. de R.L. (Honduras)
Lear Corporation Hungary Automotive Manufacturing Kft.
Lear Corporation Interior Components (Pty.) Ltd. (South Africa)
Lear Corporation ISG Pension Trustees Limited (UK)
Lear Corporation Italia S.r.l. (Italy)
Lear Corporation Japan K.K. (Japan)
Lear Corporation (Mauritius) Limited (Mauritius)
Lear Corporation Mendon (Delaware)
Lear Corporation Mexico, S. de R.L. de C.V. (Mexico)
Lear Corporation North West (Pty.) Ltd. (South Africa)
Lear Corporation (Nottingham) Limited (UK)
Lear Corporation Pension Scheme Trustees Limited (UK)
Lear Corporation Poland II Sp. z o.o. (Poland)
Lear Corporation Poland Sp. z o.o. (Poland)
|
Lear Operations Corporation (Delaware) (2) | |
Lear Corporation Portugal Componentes Para Automoveis, S.A.
|
Lear Otomotiv Sanayi ve Ticaret Ltd. Sirketi (Turkey) | |
(Portugal)
|
Lear Rosslyn (Pty.) Ltd. (South Africa) | |
Lear Corporation Romania S.r.L. (Romania)
|
Lear Seating Holdings Corp. # 50 (Delaware) | |
Lear Corporation Seating France Feignies SAS (France)
|
Lear Seating Holdings Corp. # 50 Shanghai Representative Office | |
Lear Corporation Seating France Lagny SAS (France)
|
(China)
|
|
Lear Corporation Seating France SAS (France)
|
Lear Seating (Thailand) Corp. Ltd. (Thailand) (97.88%) | |
Lear Corporation Seating Slovakia s.r.o. (Slovak Republic)
|
Lear Sewing (Pty.) Ltd. (South Africa) | |
Lear Corporation (Shanghai) Limited (China)
|
Lear Shurlok Electronics (Proprietary) Limited (South Africa) | |
Lear Corporation Silao S.A. de C.V. (Mexico)
|
(51%)
|
|
Lear Corporation Spain S.L. (Spain)
|
Lear South Africa Limited (Cayman Islands) | |
Lear Corporation (SSD) Ltd. (UK)
|
Lear South American Holdings Corporation (Delaware) | |
Lear Corporation SSD Nottingham Pension Trustees Limited
|
Lear Teknik Oto Yan Sanayi Ltd. Sirket (Turkey) | |
(UK)
|
Lear Trim L.P. (Delaware) | |
Lear Corporation Sweden AB (Sweden)
|
Lear Trim Oto Yan Sanayi Limited Sirketi (Turkey) | |
Lear Corporation UK Holdings Limited (UK)
|
Lear UK Acquisition Limited (UK) | |
Lear Corporation UK Interior Systems Limited (UK)
|
Lear UK ISM Limited (UK) | |
Lear Corporation (UK) Limited (UK)
|
Lear West European Operations GmbH (Luxembourg) | |
Lear Corporation Verwaltungs GmbH (Germany)
|
Markol Otomotiv Yan Sanayi VE Ticaret A.S. (Turkey) (35%) | |
Lear de Venezuela C.A. (Venezuela)
|
Martur Sunger ve Koltuk Tesisleri Ticaret A.S. (Turkey) (35%) | |
Lear do Brasil Industria e Comercio de Interiores Automotivos
|
Mawlaw 569 Limited (UK) | |
Ltda. (Brazil)
|
Nanjing Lear Xindi Automotive Interiors Systems Co., Ltd. | |
Lear Dongfeng Automotive Seating Co., Ltd. (China) (50%)
|
(China)
(50%)
|
|
Lear East European Operations GmbH (Luxembourg)
|
OOO Lear (Russia) | |
Lear East European Operations, Luxembourg, Swiss Branch,
|
Pendulum, LLC (Alabama) (49%) | |
Kusnacht (Luxembourg)
|
Renosol Seating, LLC (Michigan) (49%) | |
Lear EEDS Holdings, L.L.C. (Delaware)
|
Renosol Seating Properties, LLC (Alabama) (49%) | |
Lear Electrical Systems de Mexico, S. de R.L. de C.V. (Mexico)
|
Renosol Systems, LLC (Michigan) (49%) | |
Lear European Holding S.L. (Spain)
|
Reyes-Amtex Automotive, LLC (Texas) (24.5%) | |
Lear European Operations Corporation (Delaware)
|
Reyes Automotive Group, LLC (Texas) (49%) | |
Lear Financial Services (Luxembourg) GmbH (Luxembourg)
|
RL Holdings, LLC (Michigan) (49%) | |
Lear Financial Services (Netherlands) B.V. (Netherlands)
|
Shanghai Lear Automobile Interior Trim Co., Ltd. (China) | |
Lear Furukawa Corporation (Delaware) (80%)
|
(45.375%)
|
|
Lear Gebaudemanagement GmbH & Co. KG (Germany)
|
Shanghai Lear Automotive Systems Co., Ltd. (China) | |
Lear Holdings (Hungary) Kft. (Hungary)
|
Shanghai Lear STEC Automotive Parts Co., Ltd. (China) (55%) | |
Lear Holdings, L.L.C. (Delaware)
|
Shanghai Songjiang Lear Automotive Carpet & Accoustics Co. | |
Lear Holdings, S. de R.L. de C.V. (Mexico)
|
Ltd. (China) (41.25%)
|
|
Lear Interiors Canada Holdings, Inc. (Delaware)
|
Shenyang Lear Automotive Seating and Interior Systems Co., Ltd. | |
Lear Interiors Mexico Holdings, Inc. (Delaware)
|
(China) (60%)
|
|
Lear Investments Company, L.L.C. (Delaware)
|
Societe Offransvillaise de Technologie SAS (France) | |
Lear Korea Yuhan Hoesa (Korea)
|
Strapur SA (Argentina) (5%) | |
Lear-Kyungshin Sales and Engineering LLC (Delaware) (60%)
|
Tacle Guangzhou Automotive Seat Co., Ltd. (China) (20%) | |
Lear (Luxembourg) GmbH (Luxembourg)
|
Tacle Seating UK Limited (UK) (51%) | |
Lear Mexicana, S. de R.L. de C.V. (Mexico)
|
TACLE Seating USA, LLC (49%) | |
Lear Mexican Holdings Corporation (Delaware)
|
Total Interior Systems America, LLC (Indiana) (39%) | |
Lear Mexican Holdings, L.L.C. (Delaware)
|
UPM S.r.L. (Italy) (39%) | |
Lear Mexican Seating Corporation (Delaware)
|
Wuhan Lear-DFM Auto Electric Company, Limited (China) | |
Lear Mexican Trim Operations S. de R.L. de C.V. (Mexico)
|
(75%)
|
|
Lear North Atlantic Operations Corporation (Delaware)
|
Wuhan Lear-Yunhe Automotive Interior System Co., Ltd. | |
Lear Offranville SARL (France)
|
(China) (50%)
|
(1) | All subsidiaries are wholly owned unless otherwise indicated. | |
(2) | Lear Operations Corporation also conducts business under the names Lear Corporation, Lear Corporation of Georgia, Lear Corporation of Kentucky and Lear Corporation of Ohio. |
1. | I have reviewed this annual report on Form 10-K of Lear Corporation; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
(c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
(d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: February 26, 2007 | By: | /s/ Robert E. Rossiter | ||
Robert E. Rossiter | ||||
Chairman and Chief Executive Officer | ||||
1. | I have reviewed this annual report on Form 10-K of Lear Corporation; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
(c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
(d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: February 26, 2007 | By: | /s/ James H. Vandenberghe | ||
James H. Vandenberghe | ||||
Vice Chairman and Chief Financial Officer | ||||
1. | The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and | ||
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: February 26, 2007 | Signed: | /s/ Robert E. Rossiter | ||
Robert E. Rossiter | ||||
Chief Executive Officer | ||||
1. | The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and | ||
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: February 26, 2007 | Signed: | /s/ James H. Vandenberghe | ||
James H. Vandenberghe | ||||
Chief Financial Officer | ||||