(Mark One) | ||
þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the fiscal year ended December 31, 2007 . | ||
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period from to . |
Delaware
(State or other jurisdiction of incorporation or organization) |
13-3386776
(I.R.S. Employer Identification No.) |
|
21557 Telegraph Road, Southfield, MI
(Address of principal executive offices) |
48033
(Zip code) |
Title of Each Class
|
Name of Each Exchange on Which Registered
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Common Stock, par value $0.01 per share
|
New York Stock Exchange |
Large accelerated
filer
þ
|
Accelerated filer o |
Non-accelerated
filer
o
(Do not check if a smaller reporting company) |
Smaller reporting company o |
(1) | Certain information is incorporated by reference, as indicated below, to the registrants Notice of Annual Meeting of Stockholders and Proxy Statement for its Annual Meeting of Stockholders to be held on May 8, 2008 (the Proxy Statement). | |
(2) | A portion of the information required is incorporated by reference to the Proxy Statement sections entitled Election of Directors, and Directors and Beneficial Ownership. | |
(3) | Incorporated by reference to the Proxy Statement sections entitled Directors and Beneficial Ownership Director Compensation, Compensation Discussion and Analysis, Executive Compensation, Compensation Committee Interlocks and Insider Participation and Compensation Committee Report. | |
(4) | A portion of the information required is incorporated by reference to the Proxy Statement section entitled Directors and Beneficial Ownership Security Ownership of Certain Beneficial Owners and Management. | |
(5) | Incorporated by reference to the Proxy Statement sections entitled Certain Relationships and Related-Party Transactions and Directors and Beneficial Ownership Independence of Directors. | |
(6) | Incorporated by reference to the Proxy Statement section entitled Fees of Independent Accountants. |
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Leverage Core Product Lines.
In response to
the recent industry trend away from total interior integration,
we are taking a product-focused approach to managing our
business. We have exited the interior business and are focusing
on seat and electrical and electronic systems and select
components 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 key components such as seat
structures and mechanisms, trim covers, seat foam and other
selected products. By incorporating these key components into
our fully-assembled seat systems, we are able to provide the
highest quality product at
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the lowest total cost. In our electrical and electronic segment,
we believe that by leveraging our expertise in electrical and
electronic architectures and product technology, we can grow our
market share in core products such as wire harnesses, terminals
and connectors, junction boxes, body control modules and
wireless systems. Building upon our smart junction box
technologies and capabilities will allow us to provide these
electrical distribution systems and electronic components at a
lower cost and with superior functionality.
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 electrical and electronic
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
Car2U
tm
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
feature, and infotainment features such as integrated family
entertainment systems. We are also seeking to develop new
products in our electrical and electronic segment to address the
rapidly growing hybrid vehicle market. By leveraging our core
competency in electrical and electronic architectures, as well
as key technology partnerships, we are investing in technologies
to provide solutions for our customers in integrating the high
voltage electrical architectures found in hybrid and other low
emission powertrains. 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 anticipate 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. In recognition of our efforts, we continue
to receive recognition from our customers and other industry
sources. These include, for 2007, Supplier of the Year from
General Motors, World Excellence Awards from Ford Motor Company
and Superior Supplier Diversity from Toyota. 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:
In order to address
unfavorable industry conditions, we began to implement
consolidation, facility realignment and census actions in the
second quarter of 2005. These actions are part of a
comprehensive restructuring strategy 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 organizational
structure and reposition our business for improved long-term
profitability. Since undertaking the restructuring program, we
have closed or initiated the closure of 19 manufacturing
facilities and 10 administrative/engineering facilities, with a
cumulative net headcount reduction of approximately
7,000 employees. Through December 31, 2007, we have
incurred pretax costs of approximately $386 million in
connection with the restructuring actions.
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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 100 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. Approximately 40% of our components currently come
from low-cost countries, and our target is to increase this
percentage to 60% 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 electrical and electronic
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 eighteen joint ventures throughout
Asia. Additionally, we plan 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 through seating and electrical business
with Nissan and Hyundai. 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.
2007
2006
2005
76
%
65
%
65
%
20
17
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4
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18
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
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bolsters and leg supports. We also produce components that
comprise the seat assemblies, such as seat structures and
mechanisms, cut and sewn seat trim covers, headrests and seat
foam.
Electrical and Electronic.
The electrical and
electronic segment consists of the manufacture, assembly and
supply of electrical and electronic systems and components for
the vehicle. With the increase in the number of electrical and
electronically-controlled functions and features on the vehicle,
there is increasing focus on improving the functionality of the
vehicles electrical and electronic architecture. We are
able to provide our customers with engineering and design
solutions and manufactured components, systems and modules that
optimally integrate the electrical distribution system of
wiring, terminals and connectors, junction boxes and electronic
modules within the overall architecture of a vehicle. This
integration can reduce the overall system cost and weight and
improve reliability and packaging by reducing the number of
terminals, connectors and wires normally required to manage the
vehicles electrical power and signal distribution. 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 and Body Control
Modules.
Smart junction boxes are junction boxes
with integrated electronic functionality often contained in
other body control modules. Smart junction boxes eliminate
interconnections, increase overall system reliability and can
help reduce the number of electronic modules on a vehicle.
Certain vehicles may have two or three smart junction boxes
linked as a multiplexed buss line. Body control modules control
various interior comfort and convenience features. These body
control modules may consolidate multiple functions into a single
module or focus on a specific function or part of the car
interior, such as the integrated seat adjuster module or the
integrated door module. 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.
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
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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. Automotive manufacturers are
required to have tire pressure monitoring systems on all new
vehicles sold in the United States for model year 2008.
Specialty Electronics.
Our lighting control
module integrates electronic control logic and diagnostics with
the headlamp switch. Entertainment products include sound
systems, in-vehicle television tuner modules and floor-, seat-
or center console-mounted Media Console with a
flip-up
screen that provides DVD and video game viewing for back-seat
passengers.
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 adjacent to or
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.
Electrical and Electronic.
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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Chrysler
Daimler
Dongfeng
First Autoworks
Ford
GAZ
Honda
Hyundai
Isuzu
Mazda
Mitsubishi
Nissan
PSA
Renault
Subaru
Toyota
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., Faurecia and Toyota Boshoku
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.
Electrical and Electronic.
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 and Leoni. The
automotive electronic products industry remains highly
fragmented. Participants in this segment include Alps, Bosch,
Cherry, Delphi, Denso, Kostal, Methode, Niles, Omron,
Continental, TRW, Tokai Rika, Valeo, Visteon and others.
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ITEM 1A
RISK
FACTORS
A
decline in the production levels of our major customers could
reduce our sales and harm our profitability.
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The
financial distress of our major customers and within the supply
base could significantly affect our operating
performance.
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.
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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.
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.
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Adverse
developments affecting one or more of our major suppliers could
harm our profitability.
We
have substantial indebtedness, which could restrict our business
activities.
make it more difficult for us to satisfy our obligations under
our indebtedness;
limit our ability to borrow money for working capital, capital
expenditures, debt service requirements or other corporate
purposes;
require us to dedicate a substantial portion of our cash flow to
payments on our indebtedness, which would reduce the amount of
cash flow available to fund working capital, capital
expenditures, product development and other corporate
requirements;
increase our vulnerability to general adverse economic and
industry conditions;
limit our ability to respond to business opportunities; and
subject us to financial and other restrictive covenants, which,
if we fail to comply with these covenants and our failure is not
waived or cured, could result in an event of default under our
indebtedness.
Our
failure to execute our strategic objectives would negatively
impact our business.
A
significant product liability lawsuit, warranty claim or product
recall involving us or one of our major customers could harm our
profitability.
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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.
ITEM 1B
UNRESOLVED
STAFF COMMENTS
ITEM 2
PROPERTIES
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Escobar, BA (S)
Pacheco, BA (E)
Austria
Graz (S)
Koeflach (S)
Belgium
Genk (S)
Brazil
Betim (S)
Caçapava (A/T)
Camaçari (S)
Gravatai (S)
São Paulo (A/T)
Canada
Ajax, ON (S)
Kitchener, ON (S)
St. Thomas, ON (S)
Whitby, ON (S)
Windsor,
ON (S)
China
Beijing (A/T)
Changchun (S)
Chongqing (S)
Ningbo (S)
Shanghai (S, A/T)
Shenyang (S)
Wuhan (E)
Wuhu (S)
Czech Republic
Kolin (S)
Vyskov (E)
France
Cergy (S)
Feignies (S)
Guipry (S)
Hordain (E)
Lagny-Le-Sec (S)
Offranville (S)
Rueil-Malmaison
(A/T)
Velizy-Villacoublay (A/T)
Allershausen-
Leonhardsbuch (A/T)
Bersenbrueck (E)
Besigheim (S)
Boeblingen (A/T)
Bremen (S)
Eisenach (S)
Garching-Hochbrueck
(A/T)
Ginsheim-Gustavsburg
(S, A/T)
Kranzberg (A/T)
Kronach (E)
Munich (A/T)
Quakenbrueck (S)
Remscheid (E)
Rietberg (S)
Saarlouis (E)
Wackersdorf (S)
Wismar (E)
Wolfsburg (A/T)
Honduras
Naco (E)
San Pedro Sula (E)
Hungary
Gödöllö (E)
Gyöngyös (E)
Györ (S)
Mór (S)
India
Chennai (S)
Halol (S)
Nasik (S)
New Delhi (A/T)
Pune (A/T)
Thane (A/T)
Italy
Caivano, NA (S)
Cassino, FR (S)
Grugliasco, TO (S)
Melfi, PZ (S)
Pozzo dAdda, MI (S)
Termini Imerese,
PA
(S)
Atsugi-shi (A/T)
Hiroshima (A/T)
Tokyo (A/T)
Toyota City (A/T)
Utsunomiya (A/T)
Mexico
Chihuahua, CH (E)
Cuautlancingo, PU (S)
Hermosillo, SO (S)
Juarez, CH (S, E, A/T)
Mexico City, DF (S)
Monclova (S)
Piedras Negras, CO (S)
Ramos Arizpe, CO (S)
Saltillo, CO (S)
San Luis Potosi, SL (S)
Silao, GO (S)
Morocco
Tangier (E)
Netherlands
Weesp (A/T)
Philippines
LapuLapu City (E, A/T)
Poland
Jaroslaw (S)
Mielec (E)
Tychy (S)
Portugal
Palmela (S)
Romania
Pitesti (A/T)
Russia
Nizhny Novgorod (S)
Singapore
Wisma Atria (A/T)
Slovakia
Presov (S)
Senec
(S)
East London (S)
Port Elizabeth (S)
Rosslyn (S)
South Korea
ChenAn (S)
Gyeongju (S)
Seoul (A/T)
Spain
Almussafes (E)
Avila (E)
Epila (S)
Logrono (S)
Roquetes (E)
Valdemoro (S)
Valls (E)
Sweden
Gothenburg (S)
Trollhattan (S)
Thailand
Bangkok (A/T)
Mueang Nakhon
Ratchasima
(S)
Rayong (S)
Tunisia
Bir El Bey (E)
Turkey
Bostanci-Istanbul (E)
Gemlik (S)
United Kingdom
Coventry (S, A/T)
Nottingham (S)
Sunderland (S)
Arlington, TX (S)
Berne, IN (S)
Bridgeton, MO (S)
Brownstown, MI (S)
Columbia City, IN (S)
Columbus, OH (E)
Dearborn, MI (A/T)
Duncan, SC (S)
El Paso, TX (E)
Farwell, MI (S)
Fenton, MI (S)
Hammond, IN (S)
Hebron, OH (S)
Highland Park, MI (S)
Janesville, WI (S)
Liberty, MO (S)
Lordstown, OH (S)
Louisville, KY (S)
Mason, MI (S)
Montgomery, AL (S)
Morristown, TN (S)
Newark, DE (S)
Plymouth, IN (E)
Rochester Hills, MI (S)
Romulus, MI (S)
Roscommon, MI (S)
Selma, AL (S)
Southfield, MI (A/T)
Tampa, FL (E)
Taylor, MI (E)
Traverse City, MI (E)
Troy, MI (A/T)
Walker, MI (S)
Wentzville, MO (S)
Zanesville, OH (E)
Venezuela
Valencia (S)
(1)
Legend
S Seating
E Electrical and
electronic
A/T Administrative/
technical
ITEM 3
LEGAL
PROCEEDINGS
17
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ITEM 4
SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS
49
Senior Vice President and President, European Operations
49
Vice President and Treasurer
50
Vice President, Corporate Controller and Chief Compliance Officer
61
Senior Vice President, Human Resources
53
Senior Vice President, General Counsel and Corporate Secretary
43
Executive Vice President , Strategic and Corporate Planning and
Chief Administrative Officer
62
Chairman, Chief Executive Officer and President
52
Senior Vice President and President, Global Seating Systems
42
Senior Vice President and President, Global Electrical and
Electronic Systems
47
Senior Vice President and Chief Financial Officer
58
Vice Chairman
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.
Wendy L. Foss
Ms. Foss is our Vice President, Corporate Controller and
Chief Compliance Officer, a position she has held since November
2007. Previously, she served as our Vice President, Audit
Services and Chief Compliance Officer since September 2007, our
Vice President, Finance and Administration and Corporate
Secretary since May 2007 and our Vice President, Finance
and Administration and Deputy Corporate Secretary since
September 2006. Prior to this, Ms. Foss served as our Vice
President, Accounting and Assistant Corporate Controller since
July 2006 and our Assistant Corporate Controller since June
2003. Ms. Foss has also held several financial management
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positions at Lear since joining Lear as part of Lears
acquisition of United Technologies Automotive (UTA).
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.
Terrence B. Larkin
Mr. Larkin is our Senior Vice President, General Counsel
and Corporate Secretary, a position he has held since January
2008. Prior to joining Lear, Mr. Larkin was a partner since
1986 of Bodman LLP, a Detroit-based law firm. Mr. Larkin
served on the executive committee of Bodman LLP and was the
chairman of it business law practice group.
Mr. Larkins practice was focused on general
corporate, commercial transactions and mergers and acquisitions.
Daniel A. Ninivaggi
Mr. Ninivaggi is our Executive Vice President, Strategic
and Corporate Planning, a position he has held since January
2008. Mr. Ninivaggi has served as our Executive Vice
President since August 2006, our Senior Vice President since
June 2004 and our Vice President since joining Lear in July
2003. Mr. Ninivaggi has also served as our Chief
Administrative Officer since September 2007, our General Counsel
from July 2003 until January 2008 and our Corporate Secretary
from July 2003 until May 2007 and from September 2007 until
January 2008. 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, Chief Executive Officer and
President, a position he has held since August 2007.
Mr. Rossiter has served as our Chairman since January 2003,
our Chief Executive Officer since October 2000, our President
since August 2007 and from 1984 until December 2002 and 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.
Louis R. Salvatore
Mr. Salvatore is our Senior Vice President and President,
Global Seating Systems, a position he has held since February
2008. Previously, he served as our Senior Vice President and
President Global Asian Operations/Customers since
August 2005, our President Ford,
Electrical/Electronics and Interior Divisions since July 2004,
our President Global Ford Division since July 2000
and our President DaimlerChrysler Division since
December 1998. Prior to joining Lear, Mr. Salvatore worked with
Ford Motor Company for fourteen years and held various
increasingly senior positions within Fords manufacturing,
finance, engineering and purchasing activities.
Raymond E. Scott
Mr. Scott is our Senior Vice President and President,
Global Electrical and Electronic Systems, a position he has held
since February 2008. Previously, he served as our Senior Vice
President and President, North American Seating Systems Group
since August 2006, our Senior Vice President and President,
North American Customer Group
23
Table of Contents
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 and Chief
Financial Officer, a position he has held since October 2007.
Previously, he served as our Senior Vice President, Finance and
Chief Accounting Officer, since August 2006, 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 UTA, 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 served as our Chief Financial
Officer from March 2006 until October 2007.
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.
ITEM 5
MARKET
FOR THE COMPANYS COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Price Range of
Common Stock
Cash Dividend
High
Low
per Share
$
36.36
$
27.37
$
$
40.58
$
27.45
$
$
37.76
$
35.61
$
$
40.62
$
27.79
$
Price Range of
Common Stock
Cash Dividend
High
Low
per Share
$
34.01
$
20.70
$
$
24.41
$
18.30
$
$
28.00
$
16.24
$
$
29.73
$
16.01
$
0.25
24
Table of Contents
Total Number
of Shares
Maximum
Purchased
Number of Shares
Average
as Part of Publicly
that May yet
Total Number of
Price Paid
Announced
be Purchased
Shares Purchased
per Share
Program
Under the Program
1,500,000
154,258
$
28.18
*
154,258
1,345,742
154,258
$
28.18
*
154,258
1,345,742
*
Excludes commissions of $0.03 per share.
25
Table of Contents
12/31/02
12/31/03
12/31/04
12/31/05
12/31/06
12/31/07
$
100.00
$
184.89
$
186.33
$
89.97
$
94.15
$
88.19
$
100.00
$
128.36
$
142.14
$
149.01
$
172.27
$
181.72
$
100.00
$
148.14
$
164.99
$
164.90
$
185.81
$
226.19
(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. Prior to 2006, our previous Peer Group
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 have each filed for
bankruptcy and, as a result, were removed from the current Peer
Group. As of December 31, 2002, these four companies had
approximately $6.9 billion in combined stock market
capitalization.
26
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ITEM 6
SELECTED
FINANCIAL DATA
2007(1)
2006(2)
2005(3)
2004
2003
(In millions (4))
$
15,995.0
$
17,838.9
$
17,089.2
$
16,960.0
$
15,746.7
1,148.5
927.7
736.0
1,402.1
1,346.4
574.7
646.7
630.6
633.7
573.6
2.9
1,012.8
10.7
636.0
199.2
209.8
183.2
165.5
186.6
40.7
85.7
38.0
38.6
51.8
323.2
(653.4
)
(1,128.6
)
564.3
534.4
89.9
54.9
194.3
128.0
153.7
25.6
18.3
7.2
16.7
8.8
(33.8
)
(16.2
)
51.4
(2.6
)
(8.6
)
241.5
(710.4
)
(1,381.5
)
422.2
380.5
2.9
$
241.5
$
(707.5
)
$
(1,381.5
)
$
422.2
$
380.5
$
3.14
$
(10.31
)
$
(20.57
)
$
6.18
$
5.71
$
3.09
$
(10.31
)
$
(20.57
)
$
5.77
$
5.31
76,826,765
68,607,262
67,166,668
68,278,858
66,689,757
78,214,248
68,607,262
67,166,668
74,727,263
73,346,568
$
$
0.25
$
1.00
$
0.80
$
0.20
$
3,718.0
$
3,890.3
$
3,846.4
$
4,372.0
$
3,375.4
7,800.4
7,850.5
8,288.4
9,944.4
8,571.0
3,603.9
3,887.3
4,106.7
4,647.9
3,582.1
2,344.6
2,434.5
2,243.1
1,866.9
2,057.2
1,090.7
602.0
1,111.0
2,730.1
2,257.5
$
466.9
$
285.3
$
560.8
$
675.9
$
586.3
(340.0
)
(312.2
)
(541.6
)
(472.5
)
(346.8
)
(49.8
)
277.4
(347.0
)
166.1
(158.6
)
202.2
347.6
568.4
429.0
375.6
2.4
x
3.7
x
3.4
x
91,455
104,276
115,113
110,083
111,022
$
484
$
645
$
586
$
588
$
593
15.0
15.2
15.8
15.7
15.9
$
344
$
338
$
350
$
355
$
312
20.0
19.0
18.7
18.7
18.1
27
Table of Contents
(1)
Results include $20.7 million of charges related to the
divestiture of our interior business, $181.8 million of
restructuring and related manufacturing inefficiency charges
(including $16.8 million of fixed asset impairment
charges), $36.4 million of a curtailment gain related to
the freeze of the U.S. salaried pension plan, $34.9 million
of merger transaction costs, $3.9 million of losses related
to the acquisition of the minority interest in an affiliate and
$24.8 million of net tax benefits related to changes in
valuation allowances in several foreign jurisdictions, tax rates
and various other tax items.
(2)
Results include $636.0 million of charges related to the
divestiture of our 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.
(3)
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.
(4)
Except per share data, weighted average shares outstanding,
ratio of earnings to fixed charges, employees as of year end and
content per vehicle information.
(5)
Includes non-income related 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.
(6)
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.
(7)
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.
(8)
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.
(9)
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 2006 has been updated to reflect actual
production levels.
(10)
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 2006
has been updated to reflect actual production levels.
(11)
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.
(12)
European vehicle production includes car and light
truck production in Austria, Belgium, Bosnia, Czech Republic,
Finland, France, Germany, Hungary, Italy, Netherlands, Poland,
Portugal, Romania, Serbia, Slovakia, Slovenia, Spain, Sweden,
Turkey, Ukraine and United Kingdom as provided by CSM Worldwide.
28
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ITEM 7
MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
29
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30
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31
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32
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33
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2007
2006
2005
$
21
$
636
$
3
1,013
10
82
182
100
104
(36
)
35
48
4
(27
)
47
(25
)
(20
)
(18
)
300
2007
2006
2005
$
12,206.1
76.3
%
$
11,624.8
65.2
%
$
11,035.0
64.6
%
3,100.0
19.4
2,996.9
16.8
2,956.6
17.3
688.9
4.3
3,217.2
18.0
3,097.6
18.1
15,995.0
100.0
17,838.9
100.0
17,089.2
100.0
1,148.5
7.2
927.7
5.2
736.0
4.3
574.7
3.6
646.7
3.6
630.6
3.7
2.9
1,012.8
5.9
10.7
0.1
636.0
3.5
199.2
1.2
209.8
1.2
183.2
1.1
40.7
0.3
85.7
0.5
38.0
0.2
89.9
0.6
54.9
0.3
194.3
1.2
(33.8
)
(0.2
)
(16.2
)
51.4
0.3
25.6
0.1
18.3
0.1
7.2
241.5
1.5
(707.5
)
(4.0
)
(1,381.5
)
(8.1
)
34
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35
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36
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2007
2006
$
12,206.1
$
11,624.8
758.7
604.0
6.2
%
5.2
%
(1)
See definition above.
2007
2006
$
3,100.0
$
2,996.9
40.8
102.5
1.3
%
3.4
%
(1)
See definition above.
2007
2006
$
688.9
$
3,217.2
8.2
(183.8
)
1.2
%
(5.7
)%
(1)
See definition above.
37
Table of Contents
2007
2006
$
$
(233.9
)
(241.7
)
N/A
N/A
(1)
See definition above.
38
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39
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2006
2005
$
11,624.8
$
11,035.0
604.0
323.3
5.2
%
2.9
%
(1)
See definition above.
2006
2005
$
2,996.9
$
2,956.6
102.5
180.0
3.4
%
6.1
%
(1)
See definition above.
40
Table of Contents
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.
41
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42
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43
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December 31, 2007
$
1,853.3
601.3
$
2,454.6
44
Table of Contents
Year Ended
December 31, 2007
$
990.6
(296.9
)
(181.2
)
(20.7
)
(41.5
)
(73.3
)
1.4
(55.2
)
$
323.2
$
181.2
0.8
8.8
8.4
$
199.2
Table of Contents
2008
2009
2010
2011
2012
Thereafter
Total
$
96.1
$
53.2
$
10.4
$
8.1
$
968.2
$
1,304.7
$
2,440.7
166.2
160.9
158.9
158.5
120.1
281.5
1,046.1
86.0
70.7
53.1
40.3
32.0
75.9
358.0
$
348.3
$
284.8
$
222.4
$
206.9
$
1,120.3
$
1,662.1
$
3,844.8
46
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47
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Standard & Poors
Moodys
Ratings Services
Investors Service
BB−
B2
B+
B2
B−
B3
Negative
Stable
48
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49
Table of Contents
50
Table of Contents
51
Table of Contents
52
Table of Contents
53
Table of Contents
54
Table of Contents
55
Table of Contents
56
Table of Contents
57
Table of Contents
58
Table of Contents
59
Table of Contents
60
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;
changes in our current vehicle production estimates;
fluctuations in the production of vehicles for which we are a
supplier;
the loss of business with respect to, or the lack of commercial
success of, a vehicle model for which we are a significant
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, timing and success of restructuring 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;
the cost and availability of raw materials and energy;
our ability to mitigate any increases in raw material, energy
and commodity costs;
the outcome of legal or regulatory proceedings to which we are
or may become a party;
unanticipated changes in cash flow, including our ability to
align our vendor payment terms with those of our customers;
our ability to access capital markets on commercially reasonable
terms; and
other risks, described in Item 1A, Risk
Factors, and from time to time in our other SEC filings.
61
ITEM 8
CONSOLIDATED
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Page
63
65
66
67
68
69
124
62
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63
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64
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65
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For the Year Ended December 31,
2007
2006
2005
(In millions, except per share data)
$
15,995.0
$
17,838.9
$
17,089.2
14,846.5
16,911.2
16,353.2
574.7
646.7
630.6
2.9
1,012.8
10.7
636.0
199.2
209.8
183.2
40.7
85.7
38.0
323.2
(653.4
)
(1,128.6
)
89.9
54.9
194.3
25.6
18.3
7.2
(33.8
)
(16.2
)
51.4
241.5
(710.4
)
(1,381.5
)
2.9
$
241.5
$
(707.5
)
$
(1,381.5
)
$
3.14
$
(10.35
)
$
(20.57
)
0.04
$
3.14
$
(10.31
)
$
(20.57
)
$
3.09
$
(10.35
)
$
(20.57
)
0.04
$
3.09
$
(10.31
)
$
(20.57
)
66
Table of Contents
December 31,
2007
2006
2005
(In millions, except share data)
$
0.7
$
0.7
$
0.7
0.1
$
0.8
$
0.7
$
0.7
$
1,338.1
$
1,108.6
$
1,064.4
199.2
12.5
22.7
30.7
43.8
(0.4
)
0.4
$
1,373.3
$
1,338.1
$
1,108.6
$
(210.2
)
$
(225.5
)
$
(204.1
)
20.1
(4.4
)
15.3
(25.4
)
4.0
$
(194.5
)
$
(210.2
)
$
(225.5
)
$
(362.5
)
$
361.8
$
1,810.5
241.5
(707.5
)
(1,381.5
)
4.5
(16.8
)
(67.2
)
$
(116.5
)
$
(362.5
)
$
361.8
$
(264.2
)
$
(115.0
)
$
(72.6
)
104.1
17.4
(42.4
)
(166.6
)
$
(160.1
)
$
(264.2
)
$
(115.0
)
$
14.7
$
9.0
$
17.4
(20.2
)
5.7
(8.4
)
$
(5.5
)
$
14.7
$
9.0
$
3.9
$
(86.8
)
$
65.6
116.1
90.7
(152.4
)
$
120.0
$
3.9
$
(86.8
)
$
81.5
$
58.2
$
48.2
(8.3
)
23.3
10.0
$
73.2
$
81.5
$
58.2
$
27.6
$
(164.1
)
$
(134.6
)
$
1,090.7
$
602.0
$
1,111.0
$
241.5
$
(707.5
)
$
(1,381.5
)
104.1
17.4
(42.4
)
(20.2
)
5.7
(8.4
)
116.1
90.7
(152.4
)
(8.3
)
23.3
10.0
$
433.2
$
(570.4
)
$
(1,574.7
)
67
Table of Contents
For the Year Ended December 31,
2007
2006
2005
(In millions)
$
241.5
$
(707.5
)
$
(1,381.5
)
(2.9
)
2.9
1,012.8
10.7
636.0
16.8
15.8
97.4
(43.9
)
(55.0
)
44.7
(33.8
)
(16.2
)
51.4
296.9
392.2
393.4
47.1
194.9
(112.5
)
(67.3
)
(110.1
)
9.7
(168.9
)
(178.0
)
411.1
167.8
113.2
34.3
466.9
285.3
560.8
(202.2
)
(347.6
)
(568.4
)
(33.4
)
(30.5
)
(11.8
)
(100.9
)
(16.2
)
10.0
82.1
33.3
(13.5
)
5.3
(340.0
)
(312.2
)
(541.6
)
900.0
(2.9
)
(1,356.9
)
(600.0
)
(6.0
)
597.0
400.0
(21.5
)
(36.5
)
(32.7
)
(10.2
)
(11.8
)
(23.8
)
199.2
(16.8
)
(67.2
)
7.6
0.2
4.7
(4.4
)
(25.4
)
(12.4
)
3.0
(3.3
)
0.7
(49.8
)
277.4
(347.0
)
21.5
54.9
(59.8
)
98.6
305.4
(387.6
)
502.7
197.3
584.9
$
601.3
$
502.7
$
197.3
$
78.9
$
153.2
$
(250.3
)
(6.9
)
29.4
(76.9
)
(125.9
)
(358.9
)
298.1
(13.4
)
66.2
38.8
$
(67.3
)
$
(110.1
)
$
9.7
$
207.1
$
218.5
$
172.6
$
107.1
$
84.8
$
112.7
68
Table of Contents
(1)
Basis of
Presentation
(2)
Summary
of Significant Accounting Policies
2007
2006
$
463.9
$
439.9
37.5
35.6
104.1
106.0
$
605.5
$
581.5
69
Table of Contents
2007
2006
$
73.0
$
87.7
94.5
116.2
$
167.5
$
203.9
20 to 40 years
5 to 15 years
70
Table of Contents
2007
2006
$
138.8
$
133.5
619.9
559.1
2,055.2
2,081.3
6.9
12.0
2,820.8
2,785.9
(1,428.1
)
(1,314.2
)
$
1,392.7
$
1,471.7
71
Table of Contents
Electrical and
Seating
Electronic
Interior
Total
$
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
36.8
20.5
57.3
$
1,097.5
$
956.5
$
$
2,054.0
Weighted Average
Gross Carrying
Accumulated
Net Carrying
Useful Life
Value
Amortization
Value
(Years)
$
2.8
$
(1.0
)
$
1.8
10.0
24.6
(12.1
)
12.5
7.8
32.0
(6.9
)
25.1
19.2
$
59.4
$
(20.0
)
$
39.4
15.2
Weighted Average
Gross 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
72
Table of Contents
73
Table of Contents
2007
2006
2005
$
47.0
$
101.3
$
41.8
(6.3
)
(15.6
)
(3.8
)
$
40.7
$
85.7
$
38.0
74
Table of Contents
2005
$
(1,381.5
)
14.7
(18.1
)
$
(1,384.9
)
$
(20.57
)
$
(20.62
)
2007
2006
2005
$
241.5
$
(707.5
)
$
(1,381.5
)
2007
2006
2005
76,826,765
68,607,262
67,166,668
1,387,483
78,214,248
68,607,262
67,166,668
75
Table of Contents
2007
2006
2005
1,805,530
2,790,305
2,983,405
$
35.93 - $55.33
$
22.12 - $55.33
$
22.12 - $55.33
1,964,571
2,234,122
169,909
123,672
1,301,922
1,751,854
1,215,046
(3)
Merger
Agreement
76
Table of Contents
(4)
Divestiture
of Interior Business
77
Table of Contents
December 31,
2006
$
19.2
284.5
69.2
54.9
$
427.8
$
323.7
79.8
2.2
405.7
19.6
28.9
48.5
$
454.2
78
Table of Contents
(5)
Sale of
Common Stock
(6)
Restructuring
79
Table of Contents
Accrual as of
Utilization
Accrual as of
December 31, 2006
Charges
Cash
Non-Cash
December 31, 2007
$
36.4
$
115.5
$
(83.2
)
$
$
68.7
16.8
(16.8
)
3.4
6.0
(3.5
)
5.9
11.7
(11.7
)
$
39.8
$
150.0
$
(98.4
)
$
(16.8
)
$
74.6
Accrual as of
Utilization
Accrual as of
December 31, 2005
Charges
Cash
Non-Cash
December 31, 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
80
Table of Contents
Utilization
Accrual as of
Charges
Cash
Non-Cash
December 31, 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
(7)
Investments
in Affiliates and Other Related Party Transactions
2007
2006
2005
60
%
60
%
60
%
60
60
60
55
55
55
55
55
51
51
51
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
41
41
50
50
49
49
46
40
40
40
39
39
39
39
39
39
35
35
35
34
33
19
50
21
81
Table of Contents
2007
2006
$
1,564.6
$
580.1
898.7
317.2
1,184.5
610.0
399.7
12.9
2007
2006
2005
$
4,738.0
$
956.8
$
1,248.4
317.3
50.7
56.1
135.2
16.3
0.9
104.9
11.5
(4.2
)
2007
2006
2005
$
82.4
$
35.8
$
144.9
250.1
51.1
224.9
8.8
13.2
16.0
8.6
0.6
13.5
1.6
5.3
(1)
Includes $2.5 million, $4.0 million and
$4.3 million in 2007, 2006 and 2005, respectively, paid to
CB Richard Ellis (formerly Trammell Crow Company in
2005) for real estate brokerage, as well as property and
project management services; includes $5.3 million,
$6.6 million and $7.0 million in 2007, 2006 and 2005,
respectively, paid to Analysts International, Sequoia Services
Group for the purchase of computer equipment and for
computer-related services; includes $0.5 million,
$0.5 million and $0.4 million in 2007, 2006 and 2005,
respectively, paid to Elite Support Management Group, L.L.C. for
the provision of information technology temporary support
personnel; includes $0.5 million, $1.4 million and
$1.9 million in 2007, 2006 and 2005, 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, Chief Executive Officer and President.
In addition, Elite Support Management was partially owned by a
relative of the Companys Chairman, Chief Executive Officer
and President in 2007. 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.
82
Table of Contents
83
Table of Contents
(8)
Short-Term
Borrowings
84
Table of Contents
(9)
Long-Term
Debt
December 31,
2007
2006
Long-Term
Weighted Average
Long-Term
Weighted Average
Debt
Interest Rate
Debt
Interest Rate
$
991.0
7.619
%
$
997.0
7.49
%
300.0
8.50
%
300.0
8.50
%
600.0
8.75
%
600.0
8.75
%
399.4
5.635
%
399.3
5.635
%
0.8
4.75
%
3.6
4.75
%
81.0
8.125
%
73.3
8.125
%
41.4
8.11
%
41.4
8.11
%
27.1
7.04
%
45.5
7.06
%
2,440.7
2,460.1
(96.1
)
(25.6
)
$
2,344.6
$
2,434.5
Borrowings
Repayments
$
1,134.8
$
1,140.8
11,978.2
11,381.2
8,942.4
8,542.4
85
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
%
86
Table of Contents
87
Table of Contents
December 31,
2007
$
1,853.3
601.3
$
2,454.6
Year Ended
December 31,
$
990.6
(296.9
)
(181.2
)
(20.7
)
(41.5
)
(73.3
)
1.4
(55.2
)
$
323.2
$
181.2
0.8
8.8
8.4
$
199.2
88
Table of Contents
Maturities
$
96.1
53.2
10.4
8.1
968.2
89
Table of Contents
(10)
Income
Taxes
2007
2006
2005
$
(5.7
)
$
(785.3
)
$
(1,520.8
)
328.9
131.9
392.2
$
323.2
$
(653.4
)
$
(1,128.6
)
$
20.5
$
30.6
$
(12.9
)
(1.6
)
65.3
20.5
29.0
52.4
113.3
79.3
162.5
(43.9
)
(53.4
)
(20.6
)
69.4
25.9
141.9
$
89.9
$
54.9
$
194.3
2007
2006
2005
$
113.1
$
(228.7
)
$
(395.0
)
16.7
10.2
(34.0
)
(64.2
)
259.4
275.2
(3.2
)
(11.4
)
(22.6
)
1.0
354.4
(0.7
)
(6.7
)
(22.8
)
28.2
31.1
39.1
$
89.9
$
54.9
$
194.3
90
Table of Contents
2007
2006
$
623.5
$
451.1
192.2
140.1
85.9
113.5
122.5
66.7
41.1
12.0
19.6
44.0
84.0
11.9
15.3
19.6
102.2
13.6
8.2
0.4
0.2
1,125.6
1,042.0
(769.4
)
(843.9
)
$
356.2
$
198.1
$
(108.1
)
$
(14.7
)
(124.3
)
(106.4
)
(1.0
)
$
(233.4
)
$
(121.1
)
$
122.8
$
77.0
91
Table of Contents
2007
2006
$
108.8
$
83.3
131.2
110.5
(13.0
)
(20.8
)
(104.2
)
(96.0
)
$
122.8
$
77.0
92
Table of Contents
$
120.0
9.6
6.0
(3.5
)
(1.9
)
5.6
$
135.8
(11)
Pension
and Other Postretirement Benefit Plans
93
Table of Contents
Pension
Other Postretirement
2007
2006
2007
2006
$
860.9
$
788.3
$
267.9
$
265.5
26.2
50.3
10.6
12.7
44.9
44.2
15.0
15.0
20.3
3.5
0.3
(41.3
)
(30.5
)
(13.1
)
(16.3
)
(33.5
)
(24.9
)
(10.4
)
(9.1
)
(60.0
)
(4.6
)
(20.9
)
5.9
1.7
1.2
0.4
22.5
64.0
10.4
23.3
(0.3
)
$
887.4
$
860.9
$
273.9
$
267.9
Pension
Other Postretirement
2007
2006
2007
2006
$
573.6
$
474.2
$
$
66.5
42.7
69.6
69.5
10.4
9.1
(33.5
)
(24.9
)
(10.4
)
(9.1
)
11.5
52.1
0.6
$
728.3
$
573.6
$
$
$
(159.1
)
$
(287.3
)
$
(273.9
)
$
(267.9
)
29.6
11.9
2.3
2.1
$
(129.5
)
$
(275.4
)
$
(271.6
)
$
(265.8
)
$
32.9
$
$
$
(14.1
)
(4.9
)
(11.1
)
(10.0
)
(148.3
)
(270.5
)
(260.5
)
(255.8
)
94
Table of Contents
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
Other
Pension
Postretirement
$
49.9
$
10.9
61.1
13.1
15.7
(3.7
)
(20.3
)
(0.3
)
(0.1
)
2.5
(15.1
)
(9.6
)
$
91.2
$
12.9
95
Table of Contents
Other
Pension
Postretirement
$
0.6
$
3.7
0.8
5.0
(3.6
)
$
5.6
$
0.9
Pension
Other Postretirement
2007
2006
2007
2006
$
(47.9
)
$
(150.1
)
$
(76.5
)
$
(91.8
)
0.1
(6.3
)
(7.8
)
(58.8
)
(47.9
)
29.4
33.3
$
(106.7
)
$
(197.9
)
$
(53.4
)
$
(66.3
)
Pension
Other Postretirement
2007
2006
2005
2007
2006
2005
$
26.2
$
50.3
$
41.0
$
10.6
$
12.7
$
11.7
44.9
44.2
37.6
15.0
15.0
13.5
(46.7
)
(39.4
)
(30.2
)
3.0
7.1
3.0
4.7
5.8
3.6
(0.2
)
(0.1
)
(0.2
)
0.9
1.0
1.1
4.9
5.4
5.4
(3.6
)
(3.7
)
(3.1
)
1.0
5.9
1.7
1.1
0.4
0.3
(0.8
)
0.9
0.5
(13.5
)
1.4
$
37.2
$
70.1
$
58.1
$
15.2
$
31.2
$
28.5
96
Table of Contents
Other
Pension
Postretirement
2007
2006
2007
2006
6.25
%
6.00
%
6.10
%
5.90
%
5.40
%
5.00
%
5.60
%
5.30
%
N/A
3.75
%
N/A
N/A
4.00
%
4.00
%
N/A
N/A
Pension
Other Postretirement
2007
2006
2005
2007
2006
2005
6.00
%
5.75
%
6.00
%
5.90
%
5.70
%
6.00
%
5.00
%
5.00
%
6.00
%
5.30
%
5.30
%
6.50
%
8.25
%
8.25
%
7.75
%
N/A
N/A
N/A
6.90
%
6.90
%
7.00
%
N/A
N/A
N/A
N/A
3.75
%
3.00
%
N/A
N/A
N/A
3.90
%
3.90
%
3.25
%
N/A
N/A
N/A
97
Table of Contents
2007
2006
70
%
69
%
58
%
58
%
28
%
28
%
37
%
36
%
2
%
3
%
5
%
6
%
98
Table of Contents
Other
Pension
Postretirement
$
54.6
$11.1
37.3
11.9
38.3
12.8
39.8
13.3
38.9
14.1
201.0
81.3
(12)
Stock-Based
Compensation
Stock Options
Price Range
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
(690,675
)
$
22.12 - $55.33
(228,400
)
$
22.12 - $39.00
1,871,230
99
Table of Contents
$
22.12 - 27.25
$
35.93 - 39.83
$
41.83 - 42.32
$
54.22 - 55.33
65,700
499,305
1,052,575
255,650
2.15
2.54
4.42
0.64
$
22.50
$
37.25
$
41.83
$
54.22
100
Table of Contents
Stock Appreciation
Restricted Stock
Performance
Rights(1)
Units
Shares(2)
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
685,179
468,823
104,928
(48,149
)
(68,705
)
(16,812
)
(209,209
)
(732,702
)
2,179,675
1,631,987
258,025
(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.
Stock Appreciation
Weighed Average Grant
Rights
Date Fair Value
1,390,998
$
11.11
685,179
13.80
(374,357
)
9.30
(33,078
)
12.31
1,668,742
12.59
101
Table of Contents
(13)
Commitments
and Contingencies
102
Table of Contents
$
32.4
17.5
(12.4
)
3.4
40.9
12.5
(14.2
)
1.5
$
40.7
103
Table of Contents
104
Table of Contents
105
Table of Contents
106
Table of Contents
$
86.0
70.7
53.1
40.3
32.0
75.9
$
358.0
(14)
Segment
Reporting
107
Table of Contents
2007
Electrical
and Electronic
Interior
Other
Consolidated
$
12,206.1
$
3,100.0
$
688.9
$
$
15,995.0
758.7
40.8
8.2
(233.9
)
573.8
169.7
110.3
2.3
14.6
296.9
114.9
80.3
1.2
5.8
202.2
4,292.6
2,241.8
1,266.0
7,800.4
2006
Electrical
Seating
and Electronic
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
4,040.1
2,214.4
515.3
1,080.7
7,850.5
2005
Electrical
Seating
and Electronic
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
(1)
See definition above.
108
Table of Contents
2007
2006
2005
$
807.7
$
522.7
$
312.2
(233.9
)
(241.7
)
(206.8
)
573.8
281.0
105.4
2.9
1,012.8
10.7
636.0
199.2
209.8
183.2
40.7
85.7
38.0
$
323.2
$
(653.4
)
$
(1,128.6
)
109
Table of Contents
2007
2006
2005
$
4,526.8
$
6,624.3
$
6,252.2
1,148.8
1,375.3
1,374.1
2,336.9
2,034.3
2,123.4
1,542.8
1,789.5
1,595.6
6,439.7
6,015.5
5,743.9
$
15,995.0
$
17,838.9
$
17,089.2
2007
2006
$
406.6
$
472.6
42.4
51.5
175.4
161.3
184.1
168.2
584.2
618.1
$
1,392.7
$
1,471.7
2007
2006
2005
28.8
%
31.9
%
28.3
%
20.6
22.6
24.7
N/A
10.3
11.4
9.9
7.4
7.6
(1)
In 2007, Chrysler was divested by Daimler.
(15)
Financial
Instruments
110
Table of Contents
2007
2006
2005
$
$
(150.0
)
$
150.0
3,509.8
4,476.2
4,288.1
4.8
6.1
5.3
111
Table of Contents
112
Table of Contents
(16)
Quarterly
Financial Data (Unaudited)
Thirteen Weeks Ended
March 31,
June 30,
September 29,
December 31,
2007
2007
2007
2007
(In millions except per share data)
$
4,406.1
$
4,155.3
$
3,574.6
$
3,859.0
310.9
337.6
267.3
232.7
25.6
(0.7
)
(17.1
)
2.9
49.9
123.6
41.0
27.0
0.65
1.61
0.53
0.35
0.64
1.58
0.52
0.34
113
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
)
(17)
Accounting
Pronouncements
Table of Contents
115
Table of Contents
(18)
Supplemental
Guarantor Condensed Consolidating Financial Statements
116
Table of Contents
Table of Contents
For the Year Ended December 31, 2007
Non-
Parent
Guarantors
Guarantors
Eliminations
Consolidated
(In millions)
$
963.2
$
5,004.7
$
14,150.3
$
(4,123.2
)
$
15,995.0
970.1
4,819.3
13,180.3
(4,123.2
)
14,846.5
195.4
29.7
349.6
574.7
(31.8
)
28.1
14.4
10.7
99.1
112.3
(12.2
)
199.2
(160.8
)
30.0
130.8
10.0
39.3
(8.6
)
40.7
(118.8
)
(54.0
)
496.0
323.2
20.7
1.5
67.7
89.9
0.8
24.8
25.6
(7.2
)
(1.5
)
(25.1
)
(33.8
)
(373.8
)
(158.0
)
531.8
$
241.5
$
103.2
$
428.6
$
(531.8
)
$
241.5
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
(80.9
)
(412.7
)
(710.4
)
(302.1
)
(110.6
)
412.7
(710.4
)
2.9
2.9
$
(707.5
)
$
(302.1
)
$
(110.6
)
$
412.7
$
(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
(190.8
)
(821.5
)
$
(1,381.5
)
$
(1,071.9
)
$
250.4
$
821.5
$
(1,381.5
)
Table of Contents
For the Year Ended December 31, 2007
Non-
Parent
Guarantors
Guarantors
Eliminations
Consolidated
(In millions)
$
(202.0
)
$
27.3
$
641.6
$
$
466.9
(12.8
)
(32.0
)
(157.4
)
(202.2
)
(9.3
)
(24.1
)
(33.4
)
(34.4
)
(12.9
)
(53.6
)
(100.9
)
2.4
2.0
5.6
10.0
(13.5
)
(13.5
)
(44.8
)
(52.2
)
(243.0
)
(340.0
)
(2.9
)
(2.9
)
(6.0
)
(6.0
)
1.3
(22.8
)
(21.5
)
2.1
(12.3
)
(10.2
)
244.0
27.9
(271.9
)
7.6
7.6
(4.4
)
(4.4
)
1.3
(1.6
)
(12.1
)
(12.4
)
240.9
28.4
(319.1
)
(49.8
)
(1.4
)
22.9
21.5
(5.9
)
2.1
102.4
98.6
195.8
4.0
302.9
502.7
$
189.9
$
6.1
$
405.3
$
$
601.3
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
)
(3.7
)
(4.7
)
(7.8
)
(16.2
)
2.3
27.2
52.6
82.1
(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
2007
2006
$
991.0
$
997.0
1,422.6
1,417.6
4.4
4.6
2,418.0
2,419.2
(87.0
)
(6.0
)
$
2,331.0
$
2,413.2
Maturities
$
87.0
47.4
6.0
6.0
967.0
123
Table of Contents
Balance
Balance
as of Beginning
Other
as of End
of Year
Additions
Retirements
Changes
of Year
(In millions)
$
14.9
$
8.7
$
(6.1
)
$
(0.6
)
$
16.9
87.1
18.9
(27.2
)
4.6
83.4
41.9
150.0
(117.3
)
74.6
843.9
65.2
(165.3
)
25.6
769.4
$
987.8
$
242.8
$
(315.9
)
$
29.6
$
944.3
$
20.4
$
7.7
$
(12.2
)
$
(1.0
)
$
14.9
85.7
28.4
(23.3
)
(3.7
)
87.1
25.5
92.3
(75.9
)
41.9
478.3
364.6
(28.4
)
29.4
843.9
$
609.9
$
493.0
$
(139.8
)
$
24.7
$
987.8
$
26.7
$
12.5
$
(15.8
)
$
(3.0
)
$
20.4
86.4
33.8
(23.3
)
(11.2
)
85.7
20.9
86.8
(80.3
)
(1.9
)
25.5
277.7
276.3
(44.5
)
(31.2
)
478.3
$
411.7
$
409.4
$
(163.9
)
$
(47.3
)
$
609.9
124
Table of Contents
ITEM 9
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
ITEM 9A
CONTROLS
AND PROCEDURES
ITEM 9B
OTHER
INFORMATION
ITEM 10
DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
125
Table of Contents
ITEM 11
EXECUTIVE
COMPENSATION
ITEM 12
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
Number of Securities
Available for Future
Number of Securities to be
Weighted Average
Issuance Under Equity
Issued Upon Exercise of
Exercise Price of
Compensation Plans
Outstanding Options,
Outstanding Options,
(Excluding Securities
warrants and Rights
Warrants and Rights
Reflected in Column (a))
(a)
(b)
(c)
5,940,917
(2)
$
27.23
(3)
2,640,910
5,940,917
$
27.23
2,640,910
(1)
Includes the 1996 Stock Option Plan and the Long-Term Stock
Incentive Plan.
(2)
Includes 1,871,230 of outstanding options, 2,179,675 of
outstanding stock-settled stock appreciation rights, 1,631,987
of outstanding restricted stock units and 258,025 of outstanding
performance shares. Does not include 470,153 of outstanding
cash-settled stock appreciation rights.
(3)
Reflects outstanding options at a weighted average exercise
price of $41.62, outstanding stock-settled stock appreciation
rights at a weighted average exercise price of $30.61,
outstanding restricted stock units at a weighted average price
of $10.51 and outstanding performance shares at a weighted
average price of zero.
126
Table of Contents
ITEM 13
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
ITEM 14
PRINCIPAL
ACCOUNTANT FEES AND SERVICES
ITEM 15
EXHIBITS AND
FINANCIAL STATEMENT SCHEDULE
127
Table of Contents
By:
Chief Executive Officer and President and a Director
(Principal Executive Officer)
a Director
Vice Chairman
a Director
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer
and Principal Accounting Officer)
a Director
a Director
a Director
a Director
a Director
a Director
a Director
128
Table of Contents
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).
2
.7
Amendment No. 1, dated July 9, 2007, to the 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
dated July 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
Certificate of Amendment to Amended and Restated Certificate of
Incorporation of Lear Corporation, dated July 17, 2007
(incorporated by reference to Exhibit 3.1 to the
Companys Current Report on
Form 8-K
dated July 16, 2007).
3
.3
By-laws of Lear Corporation, amended as of November 14,
2007 (incorporated by reference to Exhibit 3.1 to the
Companys Current Report on
Form 8-K
dated November 14, 2007).
3
.4
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
.5
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
.6
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
.7
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
.8
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
.9
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
.10
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
.11
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
.12
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).
129
Table of Contents
Exhibit
3
.13
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
.14
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
.15
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
.16
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).
3
.17
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
.18
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
.19
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).
Table of Contents
Exhibit
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).
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).
Table of Contents
Exhibit
10
.2*
Employment Agreement, dated November 15, 2007, between the
Company and Robert E. Rossiter (incorporated by reference to
Exhibit 10.2 to the Companys Current Report on
Form 8-K
dated November 14, 2007).
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*
Consulting Agreement, dated as of November 15, 2007,
between the Company and James H. Vandenberghe (incorporated by
reference to Exhibit 10.3 to the Companys Current
Report on
Form 8-K
dated November 14, 2007).
10
.5*
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
.6*
Separation Agreement, dated October 3, 2007, between the
Company and Douglas G. DelGrosso (incorporated by reference to
Exhibit 10.1 to the Companys Current Report on
Form 8-K
dated October 1, 2007).
10
.7*
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).
10
.8*
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
.9*
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
.10*
Employment Agreement, dated as of March 15, 2005, between
the Company and James M. Brackenbury (incorporated by reference
to Exhibit 10.8 to the Companys Annual Report on
Form 10-K
for the year ended December 31, 2006).
10
.11*
Employment Agreement, dated March 3, 2006, between the
Company and Matthew J. Simoncini (incorporated by reference to
Exhibit 10.3 to the Companys Quarterly Report on
Form 10-Q
for the quarter ended September 29, 2007).
**10
.12*
Employment Agreement, dated as of March 15, 2005, between
the Company and Louis R. Salvatore.
**10
.13*
Employment Agreement, effective as of January 1, 2008,
between the Company and Terrence B. Larkin.
10
.14*
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
.15*
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
.16*
Fifth Amendment to the Lear Corporation Long-Term Stock
Incentive Plan, effective November 1, 2006 (incorporated by
reference to Exhibit 10.12 to the Companys Annual
Report on
Form 10-K
for the year ended December 31, 2006).
10
.17*
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
.18*
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
.19*
First Amendment to the Lear Corporation Outside Directors
Compensation Plan, effective November 1, 2006 (incorporated
by reference to Exhibit 10.15 to the Companys Annual
Report on
Form 10-K
for the year ended December 31, 2006).
Table of Contents
Exhibit
10
.20*
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
.21*
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
.22*
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
.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).
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 (incorporated
by reference to Exhibit 10.28 to the Companys Annual
Report on
Form 10-K
for the year ended December 31, 2006).
**10
.29*
Third Amendment to the Lear Corporation Executive Supplemental
Savings Plan, dated as of May 9, 2007.
10
.30*
Fourth Amendment to the Lear Corporation Executive Supplemental
Savings Plan, effective as of December 18, 2007
(incorporated by reference to Exhibit 10.2 to the
Companys Current Report on
Form 8-K
dated December 18, 2007).
10
.31*
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
.32*
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
.33*
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
.34*
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
.35*
2007 Management Stock Purchase Plan (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, 2006).
10
.36*
2007 Management Stock Purchase Plan
(Non-U.S.)
Terms and Conditions (incorporated by reference to
Exhibit 10.34 to the Companys Annual Report on
Form 10-K
for the year ended December 31, 2006).
**10
.37*
2008 Management Stock Purchase Plan (U.S.) Terms and Conditions.
**10
.38*
2008 Management Stock Purchase Plan
(Non-U.S.)
Terms and Conditions.
Table of Contents
Exhibit
10
.39*
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
.40*
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
.41*
Long-Term Stock Incentive Plan 2006 Restricted Stock Unit Terms
and Conditions (incorporated by reference to Exhibit 10.40
to the Companys Annual Report on
Form 10-K
for the year ended December 31, 2006).
**10
.42*
Long-Term Stock Incentive Plan 2007 Restricted Stock Unit Terms
and Conditions.
10
.43*
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
.44*
Long-Term Stock Incentive Plan 2006 and 2007 Stock Appreciation
Rights 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, 2006).
**10
.45*
Long-Term Stock Incentive Plan Restricted Stock Unit Terms and
Conditions for James H. Vandenberghe.
10
.46*
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
.47*
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
.48*
First Amendment to the Lear Corporation Pension Equalization
Program, dated as of December 21, 2006 (incorporated by
reference to Exhibit 10.45 to the Companys Annual
Report on
Form 10-K
for the year ended December 31, 2006).
**10
.49*
Second Amendment to the Lear Corporation Pension Equalization
Program, dated as of May 9, 2007.
10
.50*
Third Amendment to the Lear Corporation Pension Equalization
Program, effective as of December 18, 2007 (incorporated by
reference to Exhibit 10.1 to the Companys Current
Report on
Form 8-K
dated December 18, 2007).
10
.51*
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
.52
Form of Amended and Restated Indemnity Agreement between the
Company and each of its directors (incorporated by reference to
Exhibit 10.47 to the Companys Annual Report on
Form 10-K
for the year ended December 31, 2006).
10
.53*
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 11, 2004).
10
.54
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
.55
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
.56*
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).
Table of Contents
Exhibit
10
.57*
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
.58*
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
.59*
Form of Cash-Settled Performance Unit Award Agreement under the
Lear Corporation Long-Term Stock Incentive Plan for the
2008-2010
Performance Period (incorporated by reference to
Exhibit 10.1 to the Companys Current Report on
Form 8-K
dated November 14, 2007).
10
.60
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
.61
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).
10
.62
Limited Liability Company Agreement of International Automotive
Components Group North America, LLC dated as of March 31,
2007 (incorporated by reference to Exhibit 10.1 to the
Companys Current Report on
Form 8-K
dated March 31, 2007).
10
.63
Amendment No. 1 to the Asset Purchase Agreement dated as of
March 31, 2007, 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 10.2 to the
Companys Current Report on
Form 8-K
dated March 31, 2007).
10
.64
Amendment No. 1, dated July 9, 2007, to the Stock
Purchase Agreement, dated October 17, 2006, among Lear
Corporation, Icahn Partners LP, Icahn Master Fund LP and
Koala Holding LLC (incorporated by reference to
Exhibit 10.1 to the Companys Current Report on
Form 8-K
dated July 9, 2007).
10
.65
Registration Rights Agreement, dated as of July 9, 2007, by
and among Lear Corporation and AREP Car Holdings Corp.
(incorporated by reference to Exhibit 10.2 to the
Companys Current Report on
Form 8-K
dated July 9, 2007).
10
.66
Amended and Restated Limited Liability Company Agreement of
International Automotive Components Group North America, LLC,
dated as of October 11, 2007 (incorporated by reference to
Exhibit 10.1 to the Companys Current Report on
Form 8-K
dated October 11, 2007).
** 10
.67*
Form of Performance Share Award Agreement for the three-year
period ending December 31, 2009.
** 10
.68*
Fifth Amendment to the Lear Corporation Executive Supplemental
Savings Plan, dated as February 14, 2008.
** 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.
Table of Contents
Exhibit
*
Compensatory plan or arrangement.
**
Filed herewith.
136
(LEAR CORPORATION LOGO)
Exhibit 10.12
March 15, 2005
Mr. Louis Salvatore
[home address]
Dear Lou:
Lear Corporation (the "Company") considers it essential to its best interest and the best interests of its stockholders to foster the continued employment of key management personnel.
The Board of Directors of the Company (the "Board") has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of members of the Company's management, including yourself, to their assigned duties. The Board recognizes that, as is the case with many publicly-held companies, the possibility of a Change in Control (as that term is hereafter defined) exists. The Company wishes to assure itself of both present and future continuity of management in the event of any Change in Control. In order to induce you to remain in the employ of the Company, and in consideration of your agreement to the termination of any existing employment contract you may have with the Company or any predecessor, the Company agrees that you shall receive, upon the terms and conditions set forth herein, the compensation and benefits set forth in this letter agreement ("Agreement") during the Term hereof.
1. TERM OF AGREEMENT AND REPLACEMENT OF PRIOR LETTER AGREEMENT. This Agreement shall commence as of March 15, 2005 ("Effective Date"). The initial term of this Agreement shall be three (3) years from the Effective Date. Commencing on the first anniversary of the Effective Date, the term of this Agreement shall at all times be two (2) years, that is, the term of this Agreement shall be automatically extended each day for an additional day such that this Agreement shall continually have an unexpired term of two (2) years, until the date two (2) years after written notice is provided by either the Company or the Executive that this Agreement is not to be further extended (a "Notice of Non-Renewal"), the date set forth in a Notice of Termination provided pursuant to Section 4, the date of the Executive's death, or the date the Executive reaches his or her normal retirement date under the Lear Corporation Pension Plan or its successor, whichever shall first occur (the initial term as so extended is referred to herein as the "Term"). This Agreement replaces the prior letter agreement ("Prior Agreement") between the Company and you, dated July 5, 2000. The Prior Agreement shall terminate upon execution of
Mr. Louis Salvatore
March 15, 2005
this Agreement. In consideration of the termination of the Prior Agreement, the Company is continuing your employment on the terms set forth in this Agreement, will pay you $5,000 in cash upon the execution of this Agreement and is providing you other good and valid consideration by entering into this Agreement, the receipt and sufficiency of which consideration you hereby acknowledge by executing this Agreement.
2. TERMS OF EMPLOYMENT. During the Term, you agree to be a full-time employee of the Company serving initially in the position of President, Ford Interiors and Electronics Division of the Company*. You agree to devote substantially all of your working time and attention to the business and affairs of the Company, to discharge the responsibilities associated with your position with the Company, and to use your best efforts to perform faithfully and efficiently such responsibilities. In addition, you agree to serve in such other or different capacities or offices to which you may be assigned, appointed or elected from time to time by the Company. Nothing herein shall prohibit you from devoting your time to civic and community activities, serving as a member of the Board of Directors of other corporations that do not compete with the Company, or managing personal investments, as long as the foregoing do not interfere with the performance of your duties hereunder or violate the terms of the Company's Code of Business Ethics and Conduct, the Company's Corporate Governance Guidelines, or other policies applicable to the Company's executives generally, as those policies may be amended from time to time by the Company.
3. COMPENSATION.
(a) As compensation for your services, under this Agreement, you shall be entitled during the Term to receive an initial base salary the annualized amount of which shall be $445,000**, to be paid in accordance with existing payroll practices for executives of the Company. Increases in your base salary, if any, shall be as approved by the Compensation Committee of the Board. In addition, you shall be eligible to receive an annual incentive compensation bonus ("Bonus") to be approved from time to time by the Compensation Committee of the Board.
(b) During the Term, you shall be eligible for participation in the welfare, retirement, perquisite and fringe benefit, and other benefit plans, practices, policies and programs, as may be in effect from time to time, for senior executives of the Company generally.
(c) During the Term, you shall be eligible for prompt reimbursement for business expenses reasonably incurred by you in accordance with the Company's policies, as may be in effect from time to time, for its senior executives generally.
4. TERMINATION OF EMPLOYMENT.
* President, Global Seating Systems as of February 11, 2008.
** Current base salary was $625,000 as of February 15, 2008.
Mr. Louis Salvatore
March 15, 2005
relationship may be terminated by the Company with or without Cause, by the
Company for Incapacity, or by you with or without Good Reason, all as defined
below, by giving a Notice of Termination. For purposes of this Agreement, a
"Notice of Termination" shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon, if any, and shall set forth
in reasonable detail the facts and circumstances claimed to provide a basis for
termination of your employment under the provision so indicated. All notices
under this Section 4(a) shall be given in accordance with the requirements of
Section 9.
(b) INCAPACITY. If the Company reasonably determines that you are unable at any time to perform the duties of your position because of a serious illness, injury, impairment, or physical or mental condition and you are not eligible for or have exhausted all leave to which you may be entitled under the Family and Medical Leave Act ("FMLA") or, if more generous, other applicable state or local law, the Company may terminate your employment for "Incapacity". In addition, at any time that you are on a leave of absence, the Company may temporarily reassign the duties of your position to one or more other executives without creating a basis for your Good Reason resignation, provided that the Company restores such duties to you upon your return to work.
(c) CAUSE. Termination of your employment for "Cause" shall mean termination upon:
(i) an act of fraud, embezzlement or theft by you in connection with your duties or in the course of your employment with the Company;
(ii) your material breach of any provision of this Agreement, provided that in those instances in which your material breach is capable of being cured, you have failed to cure within a thirty (30) day period after notice from the Company;
(iii) an act or omission, which is (x) willful or grossly negligent, (y) contrary to established policies or practices of the Company, and (z) materially harmful to the business or reputation of the Company, or to the business of the Company's customers or suppliers as such relate to the Company; or
(iv) a plea of nolo contendere to, or conviction for, a felony.
(d) GOOD REASON. For purposes of this Agreement, "Good Reason" shall mean the occurrence of any of the following circumstances or events:
(i) any reduction by the Company in your base salary or adverse change in the manner of computing your Bonus, as in effect from time to time, except for across-the-board salary reductions or changes to the manner of computing bonuses similarly affecting all executive officers of the Company subject to Section 16(b) of the Securities Exchange Act of 1934, as determined by the Board ("executive officers");
Mr. Louis Salvatore
March 15, 2005
(ii) the failure by the Company to pay or provide to you any amounts of base salary or Bonus or any benefits which are due, owing and payable to you pursuant to the terms hereof, except pursuant to an across-the-board compensation deferral similarly affecting all executive officers, or to pay to you any portion of an installment of deferred compensation due under any deferred compensation program of the Company;
(iii) except in the case of across-the-board reductions, deferrals, eliminations, or plan modifications similarly affecting all executive officers, the failure by the Company to continue to provide you with benefits substantially similar in the aggregate to the Company's life insurance, medical, dental, health, accident or disability plans in which you are participating at the date of this Agreement;
(iv) without limiting the generality or effect of the foregoing, any material breach of this Agreement by the Company.
However, the language in Sections 4(d)(i) through (iii) concerning reductions, changes, deferrals, eliminations, or plan modifications similarly affecting all executive officers of the Company shall not be applicable to circumstances or events occurring in anticipation of, or within one year after, a Change in Control, as defined in Section 4(e). In addition, upon a Change in Control, you shall have the right to resign for Good Reason if your principal place of employment is transferred to a location fifty (50) or more miles from its location immediately preceding the transfer.
Notwithstanding anything else herein, Good Reason shall not exist if, with
regard to the circumstances or events relied upon in your Notice of Termination:
(x) you failed to provide a Notice of Termination to the Company within sixty
(60) days of the date you knew or should have known of such circumstances or
events, (y) the circumstances or events are fully corrected by the Company prior
to the Date of Termination, or (z) you give your express written consent to the
circumstances or events.
(e) CHANGE IN CONTROL. For purposes of this Agreement, a "Change in Control" of the Company shall be deemed to have occurred as of the first day any one or more of the following paragraphs is satisfied:
(i) any Person as that term is used in Section 13(d)(3) or Section 14(d)(2) of the Securities Exchange Act of 1934 (the "Exchange Act") (other than the Company or a trustee or other fiduciary holding securities under an employee benefit plan of the Company, or a corporation owned directly or indirectly by the shareholders of the Company in substantially the same proportions as their ownership of stock of the Company) becomes the Beneficial Owner, as that term is defined in Rule 13d-3 of the General Rules and Regulations under the Exchange Act, directly or indirectly, of securities of the Company, representing more than twenty percent of the combined voting power of the Company's then outstanding securities.
Mr. Louis Salvatore
March 15, 2005
(ii) during any period of twenty-six consecutive months beginning on or after the Effective Date, individuals who at the beginning of the period constituted the Board cease for any reason (other than death, disability or voluntary retirement) to constitute a majority of the Board. For this purpose, any new Director whose election by the Board, or nomination for election by the Company's shareholders, was approved by a vote of at least two-thirds of the Directors then still in office, and who either were Directors at the beginning of the period or whose election or nomination for election was so approved, will be deemed to have been a Director at the beginning of any twenty-six month period under consideration.
(iii) the shareholders of the Company approve: (A) a plan of complete
liquidation or dissolution of the Company; or (B) an agreement for the
sale or disposition of all or substantially all the Company's assets; or
(C) a merger, consolidation or reorganization of the Company with or
involving any other corporation, other than a merger, consolidation or
reorganization that would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least eighty percent of the combined voting power of
the voting securities of the Company (or such surviving entity)
outstanding immediately after such merger, consolidation, or
reorganization.
(f) DATE OF TERMINATION. "Date of Termination" shall mean
(i) if your employment is terminated by reason of your death, the date of your death;
(ii) if your employment is terminated by the Company for any reason other than because of your death, the date specified in the Notice of Termination (which shall not be prior to the date of the notice);
(iii) if your employment is terminated by you for any reason, the Date of Termination shall be not less than thirty (30) nor more than sixty (60) days from the date such Notice of Termination is given, or such earlier date after the date such Notice of Termination is given as may be identified by the Company.
Unless the Company instructs you not to do so, you shall continue to perform services as provided in this Agreement through the Date of Termination.
(g) EMPLOYEE BENEFITS. A termination by the Company pursuant to Section
4(c) hereof or by you pursuant to Section 4(d) hereof shall not affect any
rights which you may have pursuant to any other agreement, policy, plan, program
or arrangement of the Company providing employee benefits, which rights shall be
governed by the terms thereof and by Section 5; provided, however, that if you
shall have received or shall be receiving benefits under Section 5(a), (c), or
(d) hereof and, if applicable, Section 6 hereof, you shall not be entitled to
receive benefits under any other policy, plan, program or arrangement of the
Company providing severance compensation to which you would otherwise be
entitled.
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March 15, 2005
5. COMPENSATION UPON TERMINATION. Upon your termination of employment, you shall receive:
(a) If your employment shall be terminated by the Company for Incapacity,
(i) for the period from the Date of Termination until the end of the calendar
year in which such termination occurs, you shall receive all compensation
payable to you under the Company's disability and medical plans and programs, as
in effect on the Date of Termination, plus an additional payment from the
Company (if necessary) such that the aggregate amount received by you from all
sources equals your base salary, at the rate in effect on the Date of
Termination, plus any Bonus and all other amounts to which you would have been
entitled under any compensation or benefit plans of the Company had your
employment continued until the end of the calendar year, (ii) for the period
from the end of the calendar year in which such termination occurs until two (2)
years from the Date of Termination (the "Payment End Date"), you shall receive
all compensation payable to you under the Company's disability and medical plans
and programs, as in effect on the Date of Termination, plus an additional
payment from the Company (if necessary) such that the aggregate amount received
by you from all sources equals your base salary at the rate in effect on the
Date of Termination, and (iii) for purposes of outstanding awards and amounts
owing or accrued as described in Section 5(d)(iii) of this Agreement, your
employment shall be deemed to have been terminated due to your Disability (as
that term is defined in the plans, programs, or arrangements described in
Section 5(d)(iii) of this Agreement). After the Payment End Date, your benefits
shall be determined under the Company's retirement, insurance and other
compensation programs then in effect in accordance with the terms of such
programs. The additional payments by the Company described in this Section 5(a)
shall be conditioned upon the execution by you or a representative with legal
authority to act on your behalf of a general release relating to your employment
in form and substance reasonably acceptable to the Company.
(b) If your employment shall be terminated (i) by the Company for Cause or by a Notice of Non-Renewal, or (ii) by you other than for Good Reason, the Company shall pay you your base salary through the Date of Termination, at the rate in effect at the time Notice of Termination is given, plus all other amounts to which you are fully vested and irrevocably entitled under any compensation or benefit plans of the Company as of the Date of Termination, and the Company shall have no further obligations in any respect whatsoever for payment of compensation or benefits to you under this Agreement. Provided, however, that if your employment is terminated by you other than for Good Reason, you shall be compensated under this Section 5(b) only to the extent that you actively performed your assigned responsibilities through the Date of Termination. In addition, you acknowledge that a termination of employment described in this Section 5(b) shall not be considered an End of Service Date for any and all outstanding stock options to which you are a party, except to the extent it would otherwise qualify as a Retirement thereunder.
(c) If your employment shall be terminated by reason of your death, the Company shall pay your estate or designated beneficiary (as designated by you by written notice to the Company, which designation shall remain in effect for the remainder of the Term and any extensions thereof until revoked or a new beneficiary is designated, in either case by written notice to the Company)
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your base salary through the Date of Termination, plus a Bonus prorated for the portion of the Bonus measurement period occurring prior to the date of your death, plus all other amounts to which you are entitled under any compensation or benefit plans of the Company at the date of your death, including, but not limited to, all life insurance proceeds payable on your death to which your estate or beneficiaries are otherwise entitled in accordance with the terms thereof, and the Company shall have no further obligation to you, your beneficiaries or your estate under this Agreement.
(d) If your employment shall be terminated (a) by the Company, except for a termination by the Company for Cause or Incapacity or by a Notice of Non-Renewal (or due to your death), or (b) by you for Good Reason, then you shall be entitled to the benefits provided below:
(i) The Company shall pay you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given (or, if greater, at the rate in effect at any time within 90 days prior to the time Notice of Termination is given), plus all other amounts to which you are entitled under any compensation or benefit plans of the Company, including, without limitation, a Bonus prorated for the portion of the Bonus measurement period occurring prior to the Date of Termination, at the time such payments are due, except as otherwise provided below.
(ii) Conditioned upon your execution of a general release relating to your employment in form and substance reasonably acceptable to the Company, the Company shall pay or cause to be paid to you, in lieu of any further payments to you for the portion of the Term subsequent to the Termination Date an amount (the "Severance Payment"), which shall be equal to the sum of:
(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.
The Severance Payment shall be paid over a period of one (1) year (the "Severance Period") in the following manner: an amount equal to fifty percent (50%) of the value of the Severance Payment, or, if the Severance Period is adjusted per Section 10(e), then an
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amount equal to twenty-five percent (25%) of the value of the Severance Payment, paid in a lump sum as soon as administratively practicable after your Termination Date; and an amount equal to the remaining fifty percent (50%) or seventy-five percent (75%), as applicable, paid in equal semi-monthly installments, without interest, beginning six (6) months after the Termination Date and continuing through the end of the Severance Period. Notwithstanding the foregoing, in the event that the Termination Date occurs prior to the first anniversary of the Effective Date, the Severance Period will be increased by one year.
(iii) All outstanding awards, and all amounts owing or accrued, on the
Date of Termination under the Lear Corporation Long-Term Stock Incentive
Plan ("LTSIP"), the Lear Corporation Management Stock Purchase Plan
("MSPP"), the Lear Corporation Executive Supplemental Savings Plan
("ESSP") and the Lear Corporation Pension Equalization Program ("PEP"),
and any other compensation or equity-based plan, program or arrangement of
the Company in which you participated (including, following a Change in
Control, any additional accruals provided thereunder due to a Change in
Control) will be paid to you under the terms and conditions of such plans,
programs and arrangements (and the award agreements and other documents
thereunder), as modified by this Section 5(d)(iii). Your awards and
amounts owing or accrued that vest based on the passage of time and/or
continued service (and not based primarily upon the satisfaction of
performance measures, as described below) will vest as scheduled during
the Severance Period as if you had remained employed; to the extent such
awards and amounts owing or accrued have not vested by the end of your
Severance Period, they will become vested and nonforfeitable on a pro rata
basis determined by multiplying the unvested awards and amounts by a
fraction, the numerator of which is the number of full months that elapsed
from the grant date to the end of your Severance Period, as adjusted by
Section 10(e), and the denominator of which is the number of full months
in the total vesting period. Your vested stock options shall be
exercisable (A) prior to a Change in Control, for thirteen months
following your Date of Termination (but not later than the date on which
the stock options would otherwise expire if you remained employed by the
Company), and (B) following a Change in Control, throughout their entire
term. In the case of those awards and amounts owing or accrued which would
otherwise have become vested and nonforfeitable primarily upon the
satisfaction of performance measures set forth in the relevant award
agreement, plan, program or arrangement, you shall be paid in stock as
soon as administratively feasible after the end of the relevant
performance period (or such earlier period as the other participants in
such award agreement, plan, program or arrangement are eligible to be paid
out), a pro rata amount (if and to the extent all relevant performance
objectives are actually achieved at target levels), based on a fraction,
the numerator of which is the number of full months that elapsed from the
grant date to your Date of Termination and the denominator of which is the
number of full months in the relevant performance period.
You and the Company acknowledge that references in this Section 5(d)(iii) to the PEP, the MSPP, the ESSP, and the LTSIP, shall be deemed to be references to such plans as
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March 15, 2005
amended or restated from time to time and to any similar plan of the
Company that supplements or supersedes any such plans. In addition, you
and the Company acknowledge that references in this Section 5 to any
Section of the Code shall be deemed to be references to such Section as
amended from time to time or to any successor thereto.
(iv) The Company shall arrange to provide to you, your dependents, and beneficiaries, for the Severance Period, benefits provided under any "welfare benefit plan" of the Company (as the term "welfare benefit plan" is defined in Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended) ("Welfare Benefits"). If and to the extent that any such Welfare Benefits shall not or cannot be paid or provided under any policy, plan, program or arrangement of the Company (A) solely due to the fact that you are no longer an officer or employee of the Company or did not continue as an officer or employee of the Company during the remainder of the Term or (B) as a result of the amendment or termination of any plan providing for Welfare Benefits, the Company shall then itself pay or provide for the payment of such Welfare Benefits to you, your dependents and beneficiaries. Without otherwise limiting the purposes or effect of the no mitigation obligation in Section 5(h) hereof, Welfare Benefits payable to you (including your dependents and beneficiaries) pursuant to this Section 5(d)(iv) shall be reduced to the extent comparable welfare benefits are actually received by you (including your dependents and beneficiaries) from another employer during such period, and any such benefits actually received by you shall be reported by you to the Company.
(v) Your right to acquire any shares of the Company's capital stock under any and all outstanding stock options, or other rights previously granted to you under any equity-based plans of the Company shall be governed by the express terms of such plans and the applicable agreements thereunder, except as provided in Section 5(a), 5(b), or 5(d)(iii) of this Agreement.
(e) Any Bonus that is payable to you with respect to a period that is less than a full calendar year (a "partial calendar year") shall be prorated by multiplying (i) the Bonus that would have been payable to you with respect to the entire calendar year had your employment with the Company continued until the end of such year by (ii) a fraction, the numerator of which equals the number of days in the partial calendar year and the denominator of which equals 365.
(f) Unless your Date of Termination occurs within one year after a Change in Control, the Company, if permitted by law, may set-off or counterclaim losses, fines or damages in respect of any claim, debt or obligation against any payment to or benefit for you provided for in this Agreement.
(g) Without limiting your rights at law or in equity, if the Company fails to make any payment or provide any benefit required to be made or provided hereunder within thirty (30) days of the date it is due, the Company will pay interest on the amount or value thereof at an annualized rate of interest equal to the "prime rate" as quoted from time to time during the relevant period in
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March 15, 2005
The Wall Street Journal, plus three percent. Such interest will be payable as it accrues on demand. Any change in such prime rate will be effective on and as of the date of such change.
(h) The Company acknowledges that its severance pay plans and policies applicable in general to its salaried employees do not provide for mitigation, offset or reduction of any severance payment received thereunder. Accordingly, the parties hereto expressly agree that the payment of the severance compensation by the Company to you in accordance with the terms of this Agreement shall be liquidated damages and that you shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise, nor shall any profits, income, earnings or other benefits from any source whatsoever create any mitigation, offset, reduction or any other obligation on the part of you hereunder or otherwise, except as expressly provided in this Section 5.
6. CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.
(a) Anything in this Agreement to the contrary notwithstanding, in the event that it shall be determined (as hereafter provided) that any payment (or benefit provided) by the Company to or for your benefit, whether paid or payable pursuant to the terms of this Agreement or otherwise (a "Payment"), would be subject to the excise tax imposed by Section 4999 (or any successor thereto) of the Code, and any interest or penalties with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereafter collectively referred to as the "Excise Tax"), then you shall be entitled to receive an additional payment or payments (collectively, a "Gross-Up Payment"), including without limitation any Gross-Up Payment made with respect to the Excise Tax, if any, attributable to (i) any incentive stock option, as defined by Section 422 of the Code ("ISO"), or (ii) any stock appreciation or similar right, whether or not limited, granted in tandem with any ISO. The Gross-Up Payment shall be in an amount such that, after payment by you of the Excise Tax, plus any additional taxes, penalties and interest, and any further Excise Taxes imposed upon the Gross-Up Payment, you retain, after payment of all such taxes and Excise Taxes, an amount of the Gross-Up Payment equal to the Payment that you would have received if no Excise Taxes had been imposed upon the Payment and no additional taxes, penalties, and interest or further Excise Taxes had been imposed upon the Gross-Up Payment.
(b) Subject to the provisions of Section 6(e) hereof, all determinations required to be made under this Section 6, including whether an Excise Tax is payable by you and the amount of such Excise Tax and whether a Gross-Up Payment is required and the amount of such Gross-Up Payment, shall be made by a nationally recognized firm of certified public accountants (the "Accounting Firm") selected by you in your sole discretion, other than the Company's independent auditing firm, to the extent prohibited by applicable Public Company Accounting Oversight Board rules. You shall direct the Accounting Firm to submit its determination and detailed supporting calculations to both the Company and you within 30 calendar days after the Termination Date. If the Accounting Firm determines that any Excise Tax is payable by you, the Company shall pay the required Gross-Up Payment to you within five (5) business days after receipt of the aforesaid determination and calculations. If the Accounting Firm determines that no Excise Tax is payable by you, it shall, at the same time as it makes such determination, furnish you with an opinion that
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March 15, 2005
you do not owe any Excise Tax on your Federal income tax return. Any
determination by the Accounting Firm as to the amount of the Gross-Up Payment to
be paid by the Company within such 30 calendar day period shall be binding upon
the Company and you. As a result of the uncertainty in the application of
Section 4999 (or any successor thereto) of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is possible that Gross-Up
Payments which will not have been made by the Company should have been made
("Underpayment"), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its remedies pursuant to
Section 6(e) hereof and you thereafter are required to make a payment of any
Excise Tax, you shall direct the Accounting Firm to determine the amount of the
Underpayment that has occurred and to submit its determination and detailed
supporting calculations to both the Company and you as promptly as possible. Any
such Underpayment shall be promptly paid by the Company to or for your benefit
within three calendar days after receipt of such determination and calculations.
(c) The Company and you shall each cooperate with the Accounting Firm in connection with the preparation and issuance of the determination provided for in Section 6(b) hereof. Such cooperation shall include without limitation providing the Accounting Firm access to and copies of any books, records and documents in the possession of the Company or you, as the case may be, that are reasonably requested by the Accounting Firm.
(d) The fees and expenses of the Accounting Firm for its services in connection with the determinations and calculations provided for in Section 6(b) hereof shall initially be paid by you. The Company shall reimburse you for your payment of such costs and expenses within five (5) business days after receipt from you of a statement therefor and evidence of your payment thereof.
(e) You shall notify the Company in writing, of any claim by the Internal Revenue Service (the "IRS") that, if successful, would require the payment by the Company of a Gross-Up Payment. Such notification shall be given as soon as practicable but no later than 10 business days after you receive notice of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. You shall not pay such claim prior to the earlier of (x) the expiration of the 30 calendar day period following the date on which you give such notice to the Company or (y) the date that any payment of taxes with respect to such claim is due. If the Company notifies you in writing prior to the expiration of such period that it desires to contest such claim, you shall:
(i) give the Company any information reasonably requested by the Company relating, to such claim;
(ii) take such action in connection with contesting such claim as the Company shall reasonably request in writing, from time to time, including without limitation accepting legal representation with respect to such claim by an attorney reasonably selected by the Company;
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(iii) cooperate with the Company in good faith in order effectively to contest such claim; and
(iv) permit the Company to participate in any proceedings relating to such claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold you harmless, on an after-tax
basis, for any Excise Tax or income tax, including interest and penalties with
respect thereto, imposed as a result of such representation and payment of costs
and expenses. Without limitation on the foregoing provisions of this Section
6(e), the Company shall, provided that such control does not have a material
adverse affect on your individual income tax with respect to matters unrelated
to the contest of the Excise Tax, control all proceedings taken in connection
with such contest and, at its sole option, may, provided that such pursuit or
foregoing does not have a material adverse affect on your individual income tax
with respect to matters unrelated to the contest of the Excise Tax, pursue or
forego any and all administrative appeals, proceedings, hearings and conference
with the IRS in respect of such claim (but, you may participate therein at your
own cost and expense) and may, at its sole option, provided that such payment,
suit, contest or prosecution does not have a material adverse affect on your
individual income tax with respect to matters unrelated to the contest of the
Excise Tax, either direct you to pay the tax claimed and sue for a refund or
contest the claim in any permissible manner, and you agree to prosecute such
contest to a determination before any administrative tribunal, in a court of
initial jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs you to pay the tax
claimed and sue for a refund, the Company shall advance the amount of such
payment to you on an interest-free basis and shall indemnify and hold you
harmless, on an after-tax basis, from any Excise Tax or income tax, including
interest or penalties with respect thereto, imposed with respect to such advance
or with respect to any imputed income with respect to such advance; and further
provided that any extension of the statute of limitations relating to payment of
taxes for your taxable year with respect to which the contested amount is
claimed to be due is limited solely to such contested amount. Furthermore, the
Company's control of such contest shall be limited to issues with respect to
which a Gross Up Payment would be payable hereunder, and you shall be entitled
to settle or contest, as the case may be, any other issue raised by the IRS.
(f) If, after the receipt by you of an amount advanced by the Company
pursuant to Section 6(e) hereof, you receive any refund with respect to such
claim, you shall (subject to the Company's complying with the requirements of
Section 6(e) hereof) promptly pay to the Company the amount of such refund
(together with any interest paid or credited thereon after any taxes applicable
thereto). If, after the receipt by you of an amount advanced by the Company
pursuant to Section 6(e) hereof, a determination is made that you shall not be
entitled to any refund with respect to such claim and the Company does not
notify you in writing of its intent to contest such denial or refund prior to
the expiration of 30 calendar days after such determination, then such advance
shall be forgiven and shall not be required to be repaid and the amount of such
advance shall offset, to the extent thereof, the amount of Gross-Up Payment
required to be paid.
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March 15, 2005
7. TRAVEL. You shall be required to travel to the extent necessary for the performance of your responsibilities under this Agreement.
8. SUCCESSORS; BINDING AGREEMENT. The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all the business and/or assets of the Company, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place, and will assign its rights and obligations hereunder to such successor. Failure of the Company to make such an assignment and to obtain such assumption and agreement prior to the effectiveness of any such succession, unless you agree otherwise in writing with the Company or the successor, shall entitle you to compensation from the Company in the same amount and on the same terms as you would be entitled to hereunder if you terminate your employment for Good Reason and the date on which any such succession becomes effective shall be deemed your Date of Termination. As used in this Agreement, "Company" shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise. This Agreement shall inure to the benefit of and be enforceable by your personal or legal representatives, executors, administrators, successors, heirs, distributees and/or legatees. This Agreement is personal in nature and neither of the parties hereto shall, without the consent of the other, assign, transfer or delegate this Agreement or any rights or obligations hereunder except as expressly provided in this Section 8. Without limiting the generality of the foregoing, your right to receive payments hereunder shall not be assignable or transferable, whether by pledge, creation of a security interest or otherwise, other than by a transfer by your will or by the laws of descent and distribution and, in the event of any attempted assignment or transfer contrary to this Section 8, the Company shall have no liability to pay to the purported assignee or transferee any amount so attempted to be assigned or transferred. The Company and you recognize that each party will have no adequate remedy at law for any material breach by the other of any of the agreements contained herein and, in the event of any such breach, the Company and you hereby agree and consent that the other shall be entitled to a decree of specific performance, mandamus or other appropriate remedy to enforce performance of this Agreement.
9. NOTICES. For the purpose of this Agreement, notices and all other communications provided for in this Agreement shall be in writing, and shall be deemed to have been duly given when delivered by hand, or mailed by United States certified mail, return receipt requested, postage prepaid, or sent by Federal Express or similar overnight courier service, addressed to the respective addresses set forth on the first page of this Agreement, or sent by facsimile with confirmation of receipt to the respective facsimile numbers set forth on the first page of this Agreement, provided that all notices to the Company shall be directed to the attention of the Secretary of the Company (or, if you are the Secretary at the time such notice is to be given, to the Chairman of the Company's Board of Directors), or to such other address or facsimile number as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address or facsimile number shall be effective only upon receipt.
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10. NONCOMPETITION.
(a) Until the Date of Termination, you agree not to engage in any Competitive Activity. For purposes of this Agreement, the term "Competitive Activity" shall mean your participation as an employee or consultant, without the written consent of the CEO or the Board or any authorized committee thereof, in the management of any business enterprise anywhere in the world if such enterprise engages in competition with any product or service of the Company (including without limitation any enterprise that is a supplier to an original equipment automotive vehicle manufacturer) or is planning to engage in such competition. "Competitive Activity" shall not include the mere ownership of, and exercise of rights appurtenant to, securities of a publicly-traded company representing 5% or less of the total voting power and 5% or less of the total value of such an enterprise. You agree that the Company is a global business and that it is appropriate for this Section 10 to apply to Competitive Activity conducted anywhere in the world.
(b) You agree not to engage directly or indirectly in any Competitive
Activity (i) until one (1) year after the Date of Termination if you are
terminated by the Company for Cause, as a result of a Notice of Non-Renewal from
the Company, or you terminate your employment for other than Good Reason, or
(ii) until two (2) years after the Date of Termination in all other
circumstances.
(c) You shall not directly or indirectly, either on your own account or with or for anyone else, solicit or attempt to solicit any of the Company's customers, solicit or attempt to solicit for any business endeavor or hire or attempt to hire any employee of the Company, or otherwise divert or attempt to divert from the Company any business whatsoever or interfere with any business relationship between the Company and any other person, (i) until one (1) year after the Date of Termination if you are terminated by the Company for Cause, as a result of a Notice of Non-Renewal from the Company, or you terminate your employment for other than Good Reason, or (ii) until two (2) years after the Date of Termination in all other circumstances.
(d) You acknowledge and agree that damages in the event of a breach or threatened breach of the covenants in this Section 10 will be difficult to determine and will not afford a full and adequate remedy, and therefore agree that the Company, in addition to seeking actual damages pursuant to Section 10 hereof, may seek specific enforcement of the covenant not to compete in any court of competent jurisdiction, including, without limitation, by the issuance of a temporary or permanent injunction, without the necessity of a bond. You and the Company agree that the provisions of this covenant not to compete are reasonable. However, should any court or arbitrator determine that any provision of this covenant not to compete is unreasonable, either in period of time, geographical area, or otherwise, the parties agree that this covenant not to compete should be interpreted and enforced to the maximum extent which such court or arbitrator deems reasonable.
(e) As additional compensation for the covenants contained in Sections 10(b) and 10(c), and only if you execute a general release in form and substance reasonably acceptable to the Company acknowledging, among other things, your obligations under this Agreement, the
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Company shall increase the Severance Period for purposes of Section 5(d) from one (1) year to two (2) years.
11. CONFIDENTIALITY AND COOPERATION.
(a) You shall not knowingly use, disclose or reveal to any unauthorized person, during or after the Term, any trade secret or other confidential information relating to the Company or any of its affiliates, or any of their respective businesses or principals, such as, without limitation, dealers' or distributor's lists, information regarding personnel and manufacturing processes, marketing and sales plans, pricing or cost information, and all other such information; and you confirm that such information is the exclusive property of the Company and its affiliates. Upon termination of your employment, you agree to return to the Company on demand by the Company all memoranda, books, papers, letters and other data, and all copies thereof or therefrom, in any way relating to the business of the Company and its affiliates, whether made by you or otherwise in your possession.
(b) Any design, engineering methods, techniques, discoveries, inventions (whether patentable or not), formulae, formulations, technical and product specifications, bill of materials, equipment descriptions, plans, layouts, drawings, computer programs, assembly, quality control, installation and operating procedures, operating manuals, strategic, technical or marketing information, designs, data, secret knowledge, know-how and all other information of a confidential nature prepared or produced during the period of your employment and which ideas, processes, and other materials or information relate to any of the businesses of the Company, shall be owned by the Company and its affiliates whether or not you should in fact execute an assignment thereof or other instrument or document which may be reasonably necessary to protect and secure such rights to the Company.
(c) Following the termination of your employment, you agree to make yourself reasonably available to the Company to respond to periodic requests for information relating to the Company or your employment which may be within your knowledge. You further agree to cooperate fully with the Company in connection with any and all existing or future depositions, litigation, or investigations brought by or against the Company, any entity related to the Company, or any of its (their) agents, officers, directors or employees, whether administrative, civil or criminal in nature, in which and to the extent the Company deems your cooperation necessary. In the event that you are subpoenaed in connection with any litigation or investigation, you will immediately notify the Company. You shall not receive any additional compensation, other than reimbursement for reasonable costs and expenses incurred by you, in complying with the terms of this Section 11(c).
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12. ARBITRATION.
(a) Except as contemplated by Section 10(d) or Section 12(c) hereof, any dispute or controversy arising under or in connection with this Agreement that cannot be mutually resolved by the parties to this Agreement and their respective advisors and representatives shall be settled exclusively by arbitration in Southfield, Michigan, before one arbitrator of exemplary qualifications and stature, who shall be selected jointly by an individual to be designated by the Company and an individual to be selected by you, or if such two individuals cannot agree on the selection of the arbitrator, who shall be selected pursuant to the procedures of the American Arbitration Association.
(b) The parties agree to use their best efforts to cause (i) the two individuals set forth in the preceding Section 12(a), or, if applicable, the American Arbitration Association, to appoint the arbitrator within 30 days of the date that a party hereto notifies the other party that a dispute or controversy exists that necessitates the appointment of an arbitrator, and (ii) any arbitration hearing to be held within 30 days of the date of selection of the arbitrator, and, as a condition to his or her selection, such arbitrator must consent to be available for a hearing, at such time.
(c) Judgment may be entered on the arbitrator's award in any court having jurisdiction, provided that you shall be entitled to seek specific performance of your right to be paid and to participate in benefit programs during the pendency of any dispute or controversy arising under or in connection with this Agreement. The Company and you hereby agree that the arbitrator shall be empowered to enter an equitable decree mandating specific performance of the terms of this Agreement. If any dispute under this Section 12 shall be pending, you shall continue to receive at a minimum the base salary which you were receiving immediately prior to the act or omission which forms the basis for the dispute. At the close of the arbitration, such continued base salary payments may be offset against any damages awarded to you or may be recovered from you if its determined that you were not entitled to the continued payment of base salary under the other provisions of this Agreement.
13. MODIFICATIONS. No provision of this Agreement may be modified, amended, waived or discharged unless such modification, amendment, waiver or discharge is agreed to in writing and signed by both you and such officer of the Company as may be specifically designated by the Board.
14. NO IMPLIED WAIVERS. Failure of either party at any time to require performance by the other party of any provision hereof shall in no way affect the full right to require such performance at any time thereafter. Waiver by either party of a breach of any obligation hereunder shall not constitute a waiver of any succeeding breach of the same obligation. Failure of either party to exercise any of its rights provided herein shall not constitute a waiver of such right.
Mr. Louis Salvatore
March 15, 2005
15. GOVERNING LAW. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Michigan without giving effect to any conflicts of laws rules.
16. PAYMENTS NET OF TAXES. Except as otherwise provided in Section 6 herein, any payments provided for herein which are subject to Federal, State local or other governmental tax or other withholding requirements or obligations, shall have such amounts withheld prior to payment, and the Company shall be considered to have fully satisfied its obligation hereunder by making such payments to you net of and after deduction for all applicable withholding obligations.
17. CAPACITY OF PARTIES. The parties hereto warrant that they have the capacity and authority to execute this Agreement.
18. VALIDITY. The invalidity or unenforceability of any provision of this Agreement shall not, at the option of the party for whose benefit such provision was intended, affect the validity or enforceability of any other provision of the Agreement, which shall remain in full force and effect.
19. COUNTERPARTS. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.
20. ENTIRE AGREEMENT. This Agreement and any attachments hereto, contain the entire agreement by the parties with respect to the matters covered herein and supersede any prior agreement (including, but not limited to the Prior Agreement and any other prior employment agreement(s)), condition, practice, custom, usage and obligation with respect to such matters insofar as any such prior agreement, condition, practice, custom, usage or obligation might have given rise to any enforceable right. No agreements, understandings or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement.
21. LEGAL FEES AND EXPENSES. It is the intent of the Company that you not be required to incur the expenses associated with the enforcement of your rights under this Agreement by litigation or other legal action because the cost and expense thereof would substantially detract from the benefits intended to be extended to you hereunder. Accordingly, the Company shall pay or cause to be paid and be solely responsible for any and all reasonable attorneys' and related fees and expenses incurred by you (i) as a result of the Company's failure to perform this Agreement or any provision hereof or (ii) as a result of the Company unreasonably or maliciously contesting the validity or enforceability of this Agreement or any provision hereof as aforesaid.
22. CODE SECTION 409A. Notwithstanding any provision in this Agreement to
the contrary, if your employment is terminated as described in Section 5(d) and
Section 409A(a)(2)(B)(i) of the Code applies to all or any portion of your
Severance Payment and you are a "specified employee" thereunder, then the
Company shall pay the portion of your Severance
Mr. Louis Salvatore
March 15, 2005
Payment that is subject to such Section of the Code no earlier than six (6) months after your Termination Date or such other date as would be permissible under the Code. If your employment is terminated as described in Section 5(d) and Section 409A(a)(2)(B)(i) of the Code does not apply to any portion of your Severance Payment or you are not a "specified employee" thereunder, then the Company shall pay your Severance Payment as described in Section 5(d).
If this letter sets forth our agreement on the subject matter hereof, kindly sign and return to the Company the enclosed copy of this letter which will then constitute our agreement on this subject, effective on March 15, 2005 ("Effective Date").
Sincerely,
LEAR CORPORATION
By: /s/ Roger A. Jackson __________________________________________ Roger A. Jackson |
Agreed to this 15th day of March, 2005
/s/ Louis Salvatore __________________________________________________ Louis Salvatore |
Exhibit 10.13
[LEAR CORPORATION LOGO]
October 15, 2007
Terrence B. Larkin, Esquire
[home address]
Dear Terry:
Lear Corporation (the "Company") considers it essential to its best interest and the best interests of its stockholders to foster the continued employment of key management personnel.
The Board of Directors of the Company (the "Board") has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of members of the Company's management, including yourself, to their assigned duties. The Board recognizes that, as is the case with many publicly-held companies, the possibility of a Change in Control (as that term is hereafter defined) exists. The Company wishes to assure itself of both present and future continuity of management in the event of any Change in Control. In order to induce you to remain in the employ of the Company, and in consideration of your agreement to the termination of any existing employment contract you may have with the Company or any predecessor, the Company agrees that you shall receive, upon the terms and conditions set forth herein, the compensation and benefits set forth in this letter agreement ("Agreement") during the Term hereof.
1. TERM OF AGREEMENT. This Agreement shall commence as of January 1, 2008
("Effective Date"). The initial term of this Agreement shall be two (2) years
from the Effective Date. The term of this Agreement shall at all times be two
(2) years, that is, the term of this Agreement shall be automatically extended
each day for an additional day such that this Agreement shall continually have
an unexpired term of two (2) years, until the date two (2) years after written
notice is provided by either the Company or the Executive that this Agreement is
not to be further extended (a "Notice of Non-Renewal"), the date set forth in a
Notice of Termination provided pursuant to Section 4, the date of the
Executive's death, or the date the Executive reaches his or her normal
retirement date under the Lear Corporation Pension Plan or its successor,
whichever shall first occur (the initial term as so extended is referred to
herein as the "Term").
2. TERMS OF EMPLOYMENT. During the Term, you agree to be a full-time employee of the Company serving initially in the position of Senior Vice President, General Counsel and Corporate Secretary of the Company. You agree to devote substantially all of your working time and attention to the business and affairs of the Company, to discharge the responsibilities associated with your position with the Company, and to use your best efforts to perform faithfully and efficiently such responsibilities. In addition, you agree to serve in such other or different capacities or offices to which you may be assigned, appointed or elected from time to time by the Company. Nothing herein shall prohibit you from devoting your time to civic and community activities, serving as a member of the Board of Directors of other corporations that do not compete with the Company, or managing personal investments, as long as the foregoing do not
Mr. Terrence B. Larkin, Esquire
October 15, 2007
interfere with the performance of your duties hereunder or violate the terms of the Company's Code of Business Ethics and Conduct, the Company's Corporate Governance Guidelines, or other policies applicable to the Company's executives generally, as those policies may be amended from time to time by the Company.
3. COMPENSATION.
(a) As compensation for your services, under this Agreement, you shall be entitled during the Term to receive an initial base salary the annualized amount of which shall be $500,000.00, to be paid in accordance with existing payroll practices for executives of the Company. Increases in your base salary, if any, shall be as approved by the Compensation Committee of the Board. In addition, you shall be eligible to receive an annual incentive compensation bonus ("Bonus") to be approved from time to time by the Compensation Committee of the Board.
(b) During the Term, you shall be eligible for participation in the welfare, retirement, perquisite and fringe benefit, and other benefit plans, practices, policies and programs, as may be in effect from time to time, for senior executives of the Company generally.
(c) During the Term, you shall be eligible for prompt reimbursement for business expenses reasonably incurred by you in accordance with the Company's policies, as may be in effect from time to time, for its senior executives generally.
4. TERMINATION OF EMPLOYMENT.
(a) NOTICE. You or the Company may terminate the employment relationship by giving a Notice of Non-Renewal, as described in Section 1. Alternatively, the employment relationship may be terminated by the Company with or without Cause, by the Company for Incapacity, or by you with or without Good Reason, all as defined below, by giving a Notice of Termination. For purposes of this Agreement, a "Notice of Termination" shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon, if any, and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of your employment under the provision so indicated. All notices under this Section 4(a) shall be given in accordance with the requirements of Section 9.
(b) INCAPACITY. If the Company reasonably determines that you are unable at any time to perform the duties of your position because of a serious illness, injury, impairment, or physical or mental condition and you are not eligible for or have exhausted all leave to which you may be entitled under the Family and Medical Leave Act ("FMLA") or, if more generous, other applicable state or local law, the Company may terminate your employment for "Incapacity". In addition, at any time that you are on a leave of absence, the Company may temporarily reassign the duties of your position to one or more other executives without creating a basis for your Good Reason resignation, provided that the Company restores such duties to you upon your return to work.
(c) CAUSE. Termination of your employment for "Cause" shall mean termination upon:
(i) an act of fraud, embezzlement or theft by you in connection with your duties or in the course of your employment with the Company;
(ii) your material breach of any provision of this Agreement, provided that in those instances in which your material breach is capable of being cured, you have failed to cure within a thirty (30) day period after notice from the Company;
Mr. Terrence B. Larkin, Esquire
October 15, 2007
(iii) an act or omission, which is (x) willful or grossly negligent,
(y) contrary to established policies or practices of the Company,
and (z) materially harmful to the business or reputation of the
Company, or to the business of the Company's customers or suppliers
as such relate to the Company; or
(iv) a plea of nolo contendere to, or conviction for, a felony.
(d) GOOD REASON. For purposes of this Agreement, "Good Reason" shall mean the occurrence of any of the following circumstances or events:
(i) any reduction by the Company in your base salary or adverse change in the manner of computing your Bonus, as in effect from time to time, except for across-the-board salary reductions or changes to the manner of computing bonuses similarly affecting all executive officers of the Company subject to Section 16(b) of the Securities Exchange Act of 1934, as determined by the Board ("executive officers");
(ii) the failure by the Company to pay or provide to you any amounts of base salary or Bonus or any benefits which are due, owing and payable to you pursuant to the terms hereof, except pursuant to an across-the-board compensation deferral similarly affecting all executive officers, or to pay to you any portion of an installment of deferred compensation due under any deferred compensation program of the Company;
(iii) except in the case of across-the-board reductions, deferrals, eliminations, or plan modifications similarly affecting all executive officers, the failure by the Company to continue to provide you with benefits substantially similar in the aggregate to the Company's life insurance, medical, dental, health, accident or disability plans in which you are participating at the date of this Agreement;
(iv) except on a temporary basis as described in Section 4(b), a material adverse change in your responsibilities, position, reporting relationships, authority or duties. For purposes of clarification, you agree that it will not be a material adverse change for the Company to reassign you to a position with at least substantially similar responsibilities and authority; or
(v) without limiting the generality or effect of the foregoing, any material breach of this Agreement by the Company.
However, the language in Sections 4(d)(i) through (iii) concerning reductions, changes, deferrals, eliminations, or plan modifications similarly affecting all executive officers of the Company shall not be applicable to circumstances or events occurring in anticipation of, or within one year after, a Change in Control, as defined in Section 4(e). In addition, upon a Change in Control, you shall have the right to resign for Good Reason if your principal place of employment is transferred to a location fifty (50) or more miles from its location immediately preceding the transfer.
Notwithstanding anything else herein, Good Reason shall not exist if, with regard to the circumstances or events relied upon in your Notice of Termination: (x) you failed to provide a Notice of Termination to the Company within sixty (60) days of the date you knew or should have known of such circumstances or events, (y) the circumstances or events are fully corrected by the Company prior to the Date of Termination, or (z) you give your express written consent to the circumstances or events.
Mr. Terrence B. Larkin, Esquire
October 15, 2007
(e) CHANGE IN CONTROL. For purposes of this Agreement, a "Change in Control" of the Company shall be deemed to have occurred as of the first day any one or more of the following paragraphs is satisfied:
(i) any Person as that term is used in Section 13(d)(3) or Section 14(d)(2) of the Securities Exchange Act of 1934 (the "Exchange Act") (other than the Company or a trustee or other fiduciary holding securities under an employee benefit plan of the Company, or a corporation owned directly or indirectly by the shareholders of the Company in substantially the same proportions as their ownership of stock of the Company) becomes the Beneficial Owner, as that term is defined in Rule 13d-3 of the General Rules and Regulations under the Exchange Act, directly or indirectly, of securities of the Company, representing more than twenty-five percent of the combined voting power of the Company's then outstanding securities.
(ii) during any period of twenty-six (26) consecutive months beginning on or after the Effective Date, individuals who at the beginning of the period constituted the Board cease for any reason (other than death, disability or voluntary retirement) to constitute a majority of the Board. For this purpose, any new Director whose election by the Board, or nomination for election by the Company's shareholders, was approved by a vote of at least two-thirds of the Directors then still in office, and who either were Directors at the beginning of the period or whose election or nomination for election was so approved, will be deemed to have been a Director at the beginning of any twenty-six month period under consideration.
(iii) the shareholders of the Company approve: (A) a plan of complete liquidation or dissolution of the Company; or (B) an agreement for the sale or disposition of all or substantially all the Company's assets; or (C) a merger, consolidation or reorganization of the Company with or involving any other corporation, other than a merger, consolidation or reorganization that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least seventy-five percent of the combined voting power of the voting securities of the Company (or such surviving entity) outstanding immediately after such merger, consolidation, or reorganization.
(f) DATE OF TERMINATION. "Date of Termination" shall mean:
(i) if your employment is terminated by reason of your death, the date of your death;
(ii) if your employment is terminated by the Company for any reason other than because of your death, the date specified in the Notice of Termination (which shall not be prior to the date of the notice);
(iii) if your employment is terminated by you for any reason, the Date of Termination shall be not less than thirty (30) nor more than sixty (60) days from the date such Notice of Termination is given, or such earlier date after the date such Notice of Termination is given as may be identified by the Company.
Unless the Company instructs you not to do so, you shall continue to perform services as provided in this Agreement through the Date of Termination.
(g) EMPLOYEE BENEFITS. A termination by the Company pursuant to Section 4(c) hereof or by you pursuant to Section 4(d) hereof shall not affect any rights which you may have pursuant to any other agreement, policy, plan, program or arrangement of the Company providing employee
Mr. Terrence B. Larkin, Esquire
October 15, 2007
benefits, which rights shall be governed by the terms thereof and by
Section 5; provided, however, that if you shall have received or shall be
receiving benefits under Section 5(a), (c), or (d) hereof and, if
applicable, Section 6 hereof, you shall not be entitled to receive
benefits under any other policy, plan, program or arrangement of the
Company providing severance compensation to which you would otherwise be
entitled.
5. COMPENSATION UPON TERMINATION. Upon your termination of employment, you shall receive:
(a) If your employment shall be terminated by the Company for Incapacity,
(i) for the period from the Date of Termination until the end of the
calendar year in which such termination occurs, you shall receive all
compensation payable to you under the Company's disability and medical
plans and programs, as in effect on the Date of Termination, plus an
additional payment from the Company (if necessary) such that the aggregate
amount received by you from all sources equals your base salary, at the
rate in effect on the Date of Termination, plus any Bonus and all other
amounts to which you would have been entitled under any compensation or
benefit plans of the Company had your employment continued until the end
of the calendar year, (ii) for the period from the end of the calendar
year in which such termination occurs until two (2) years from the Date of
Termination (the "Payment End Date"), you shall receive all compensation
payable to you under the Company's disability and medical plans and
programs, as in effect on the Date of Termination, plus an additional
payment from the Company (if necessary) such that the aggregate amount
received by you from all sources equals your base salary at the rate in
effect on the Date of Termination, and (iii) for purposes of outstanding
awards and amounts owing or accrued as described in Section 5(d)(iii) of
this Agreement, your employment shall be deemed to have been terminated
due to your Disability (as that term is defined in the plans, programs, or
arrangements described in Section 5(d)(iii) of this Agreement). After the
Payment End Date, your benefits shall be determined under the Company's
retirement, insurance and other compensation programs then in effect in
accordance with the terms of such programs. The additional payments by the
Company described in this Section 5(a) shall be conditioned upon the
execution by you or a representative with legal authority to act on your
behalf of a general release relating to your employment in form and
substance reasonably acceptable to the Company.
(b) If your employment shall be terminated (i) by the Company for Cause or
by a Notice of Non-Renewal, or (ii) by you other than for Good Reason, the
Company shall pay you your base salary through the Date of Termination, at
the rate in effect at the time Notice of Termination is given, plus all
other amounts to which you are fully vested and irrevocably entitled under
any compensation or benefit plans of the Company as of the Date of
Termination, and the Company shall have no further obligations in any
respect whatsoever for payment of compensation or benefits to you under
this Agreement. Provided, however, that if your employment is terminated
by you other than for Good Reason, you shall be compensated under this
Section 5(b) only to the extent that you actively performed your assigned
responsibilities through the Date of Termination. In addition, you
acknowledge that a termination of employment described in this Section
5(b) shall not be considered an End of Service Date for any and all
outstanding awards under the Lear Corporation Long-Term Stock Incentive
Plan ("LTSIP") to which you are a party, except to the extent it would
otherwise qualify as a Retirement thereunder.
(c) If your employment shall be terminated by reason of your death, the Company shall pay your estate or designated beneficiary (as designated by you by written notice to the Company, which designation shall remain in effect for the remainder of the Term and any extensions thereof until revoked or a new beneficiary is designated, in either case by written notice to the Company) your base salary through the Date of Termination, plus a Bonus prorated for the portion of the Bonus measurement period occurring prior to the date of your death, plus all other amounts to which you are entitled under any compensation or benefit plans of the Company at the date of your death, including, but not limited to, all life insurance proceeds payable on your death to
Mr. Terrence B. Larkin, Esquire
October 15, 2007
which your estate or beneficiaries are otherwise entitled in accordance with the terms thereof, and the Company shall have no further obligation to you, your beneficiaries or your estate under this Agreement.
(d) If your employment shall be terminated (a) by the Company, except for a termination by the Company for Cause or Incapacity or by a Notice of Non-Renewal (or due to your death), or (b) by you for Good Reason, then you shall be entitled to the benefits provided below:
(i) The Company shall pay you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given (or, if greater, at the rate in effect at any time within 90 days prior to the time Notice of Termination is given), plus all other amounts to which you are entitled under any compensation or benefit plans of the Company, including, without limitation, a Bonus prorated for the portion of the Bonus measurement period occurring prior to the Date of Termination, at the time such payments are due, except as otherwise provided below.
(ii) Conditioned upon your execution of a general release relating to your employment in form and substance reasonably acceptable to the Company, the Company shall pay or cause to be paid to you, in lieu of any further payments to you for the portion of the Term subsequent to the Date of Termination an amount (the "Severance Payment"), which shall be equal to the sum of:
(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 Date of Termination occurred) which you would have received pursuant to this Agreement for the Severance Period, had your employment with the Company continued for such period.
The Severance Payment shall be paid over a period of one (1) year (the "Severance Period") in the following manner: an amount equal to fifty percent (50%) of the value of the Severance Payment, or, if the Severance Period is adjusted per Section 10(e), then an amount equal to twenty-five percent (25%) of the value of the Severance Payment, paid in a lump sum as soon as administratively practicable after the date that is six (6) months after your Date of Termination; and an amount equal to the remaining fifty percent (50%) or seventy-five percent (75%), as applicable, paid in equal semi-monthly installments, without interest, beginning six (6) months after the Date of Termination and continuing through the end of the Severance Period.
(iii) All outstanding awards, and all amounts owing or accrued, on the Date of Termination under the LTSIP, the Lear Corporation Management Stock Purchase Plan ("MSPP"), the Lear Corporation Executive Supplemental Savings Plan ("ESSP") and the Lear Corporation Pension Equalization Program ("PEP"), and any other compensation or equity-based plan, program or arrangement of the Company in which you participated (including, following a Change in Control, any additional accruals provided thereunder due to a Change in Control) will be paid to you under the terms and conditions of such plans, programs and arrangements (and the award agreements and other documents thereunder), as modified by this Section 5(d)(iii). Your awards and amounts owing or accrued that vest based on the passage of time and/or continued service (and not based
Mr. Terrence B. Larkin, Esquire
October 15, 2007
primarily upon the satisfaction of performance measures, as
described below) will vest in full as of the Date of Termination if
they would have vested during the Severance Period, had you remained
employed by the Company during that period; to the extent such
awards and amounts owing or accrued would not have vested by the end
of your Severance Period, had you remained employed by the Company
during that period, they will become vested and nonforfeitable as of
the Date of Termination on a pro rata basis determined by
multiplying the unvested awards and amounts by a fraction, the
numerator of which is the number of full months that elapsed from
the grant date to the end of your Severance Period, as adjusted by
Section 10(e), and the denominator of which is the number of full
months in the total vesting period. Your vested stock options and
stock appreciation rights shall be exercisable (A) prior to a Change
in Control, for thirteen months following your Date of Termination
(but not later than the date on which the stock options would
otherwise expire if you remained employed by the Company), and (B)
following a Change in Control, throughout their entire term. In the
case of those awards and amounts owing or accrued which would
otherwise have become vested and nonforfeitable primarily upon the
satisfaction of performance measures set forth in the relevant award
agreement, plan, program or arrangement, you shall be paid (in stock
or cash, as provided under the terms of the agreement) as soon as
administratively feasible after the end of the relevant performance
period (or such earlier period as the other participants in such
award agreement, plan, program or arrangement are eligible to be
paid out), a pro rata amount (if and to the extent all relevant
performance objectives are actually achieved at target levels),
based on a fraction, the numerator of which is the number of full
months that elapsed from the grant date to your Date of Termination
and the denominator of which is the number of full months in the
relevant performance period.
You and the Company acknowledge that references in this Section 5(d)(iii) to the PEP, the MSPP, the ESSP, and the LTSIP, shall be deemed to be references to such plans as amended or restated from time to time and to any similar plan of the Company that supplements or supersedes any such plans. In addition, you and the Company acknowledge that references in this Section 5 to any Section of the Code shall be deemed to be references to such Section as amended from time to time or to any successor thereto.
(iv) The Company shall arrange to provide to you, your dependents, and beneficiaries, for the Severance Period, benefits provided under any "welfare benefit plan" of the Company (as the term "welfare benefit plan" is defined in Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended) ("Welfare Benefits"). If and to the extent that any such Welfare Benefits shall not or cannot be paid or provided under any policy, plan, program or arrangement of the Company (A) solely due to the fact that you are no longer an officer or employee of the Company or did not continue as an officer or employee of the Company during the remainder of the Term or (B) as a result of the amendment or termination of any plan providing for Welfare Benefits, the Company shall then itself pay or provide for the payment of such Welfare Benefits to you, your dependents and beneficiaries. Without otherwise limiting the purposes or effect of the no mitigation obligation in Section 5(h) hereof, Welfare Benefits payable to you (including your dependents and beneficiaries) pursuant to this Section 5(d)(iv) shall be reduced to the extent comparable welfare benefits are actually received by you (including your dependents and beneficiaries) from another employer during such period, and any such benefits actually received by you shall be reported by you to the Company.
(v) Your right to acquire any shares of the Company's capital stock under any and all outstanding stock options, or other rights previously granted to you under any equity-based plans of the Company shall be governed by the express terms of such plans and
Mr. Terrence B. Larkin, Esquire
October 15, 2007
the applicable agreements thereunder, except as provided in Section
5(a), 5(b), or 5(d)(iii) of this Agreement.
(e) Any Bonus that is payable to you with respect to a period that is less than a full calendar year (a "partial calendar year") shall be prorated by multiplying (i) the Bonus that would have been payable to you with respect to the entire calendar year had your employment with the Company continued until the end of such year by (ii) a fraction, the numerator of which equals the number of days in the partial calendar year and the denominator of which equals 365.
(f) Unless your Date of Termination occurs within one year after a Change in Control, the Company, if permitted by law, may set-off or counterclaim losses, fines or damages in respect of any claim, debt or obligation against any payment to or benefit for you provided for in this Agreement.
(g) Without limiting your rights at law or in equity, if the Company fails to make any payment or provide any benefit required to be made or provided hereunder within thirty (30) days of the date it is due, the Company will pay interest on the amount or value thereof at an annualized rate of interest equal to the "prime rate" as quoted from time to time during the relevant period in The Wall Street Journal, plus three percent. Such interest will be payable as it accrues on demand. Any change in such prime rate will be effective on and as of the date of such change.
(h) The Company acknowledges that its severance pay plans and policies
applicable in general to its salaried employees do not provide for
mitigation, offset or reduction of any severance payment received
thereunder. Accordingly, the parties hereto expressly agree that the
payment of the severance compensation by the Company to you in accordance
with the terms of this Agreement shall be liquidated damages and that you
shall not be required to mitigate the amount of any payment provided for
in this Agreement by seeking other employment or otherwise, nor shall any
profits, income, earnings or other benefits from any source whatsoever
create any mitigation, offset, reduction or any other obligation on the
part of you hereunder or otherwise, except as expressly provided in this
Section 5.
6. CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.
(a) Anything in this Agreement to the contrary notwithstanding, in the event that it shall be determined (as hereafter provided) that any payment (or benefit provided) by the Company to or for your benefit, whether paid or payable pursuant to the terms of this Agreement or otherwise (a "Payment"), would be subject to the excise tax imposed by Section 4999 (or any successor thereto) of the Code, and any interest or penalties with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereafter collectively referred to as the "Excise Tax"), then you shall be entitled to receive an additional payment or payments (collectively, a "Gross-Up Payment"), including without limitation any Gross-Up Payment made with respect to the Excise Tax, if any, attributable to (i) any incentive stock option, as defined by Section 422 of the Code ("ISO"), or (ii) any stock appreciation or similar right, whether or not limited, granted in tandem with any ISO. The Gross-Up Payment shall be in an amount such that, after payment by you of the Excise Tax, plus any additional taxes, penalties and interest, and any further Excise Taxes imposed upon the Gross-Up Payment, you retain, after payment of all such taxes and Excise Taxes, an amount of the Gross-Up Payment equal to the Payment that you would have received if no Excise Taxes had been imposed upon the Payment and no additional taxes, penalties, and interest or further Excise Taxes had been imposed upon the Gross-Up Payment.
(b) Subject to the provisions of Section 6(e) hereof, all determinations required to be made under this Section 6, including whether an Excise Tax is payable by you and the amount of such
Mr. Terrence B. Larkin, Esquire
October 15, 2007
Excise Tax and whether a Gross-Up Payment is required and the amount of
such Gross-Up Payment, shall be made by a nationally recognized firm of
certified public accountants (the "Accounting Firm") selected by you in
your sole discretion, other than the Company's independent auditing firm,
to the extent prohibited by applicable Public Company Accounting Oversight
Board rules. You shall direct the Accounting Firm to submit its
determination and detailed supporting calculations to both the Company and
you within thirty (30) calendar days after the Date of Termination. If the
Accounting Firm determines that any Excise Tax is payable by you, the
Company shall pay the required Gross-Up Payment to you within five (5)
business days after receipt of the aforesaid determination and
calculations. If the Accounting Firm determines that no Excise Tax is
payable by you, it shall, at the same time as it makes such determination,
furnish you with an opinion that you do not owe any Excise Tax on your
Federal income tax return. Any determination by the Accounting Firm as to
the amount of the Gross-Up Payment to be paid by the Company within such
thirty (30) calendar day period shall be binding upon the Company and you.
As a result of the uncertainty in the application of Section 4999 (or any
successor thereto) of the Code at the time of the initial determination by
the Accounting Firm hereunder, it is possible that Gross-Up Payments which
will not have been made by the Company should have been made
("Underpayment"), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its remedies pursuant to
Section 6(e) hereof and you thereafter are required to make a payment of
any Excise Tax, you shall direct the Accounting Firm to determine the
amount of the Underpayment that has occurred and to submit its
determination and detailed supporting calculations to both the Company and
you as promptly as possible. Any such Underpayment shall be promptly paid
by the Company to or for your benefit within three calendar days after
receipt of such determination and calculations.
(c) The Company and you shall each cooperate with the Accounting Firm in connection with the preparation and issuance of the determination provided for in Section 6(b) hereof. Such cooperation shall include without limitation providing the Accounting Firm access to and copies of any books, records and documents in the possession of the Company or you, as the case may be, that are reasonably requested by the Accounting Firm.
(d) The fees and expenses of the Accounting Firm for its services in
connection with the determinations and calculations provided for in
Section 6(b) hereof shall initially be paid by you. The Company shall
reimburse you for your payment of such costs and expenses within five (5)
business days after receipt from you of a statement therefor and evidence
of your payment thereof.
(e) You shall notify the Company in writing, of any claim by the Internal Revenue Service (the "IRS") that, if successful, would require the payment by the Company of a Gross-Up Payment. Such notification shall be given as soon as practicable but no later than ten (10) business days after you receive notice of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. You shall not pay such claim prior to the earlier of (x) the expiration of the thirty (30) calendar day period following the date on which you give such notice to the Company or (y) the date that any payment of taxes with respect to such claim is due. If the Company notifies you in writing prior to the expiration of such period that it desires to contest such claim, you shall:
(i) give the Company any information reasonably requested by the Company relating, to such claim;
(ii) take such action in connection with contesting such claim as the Company shall reasonably request in writing, from time to time, including without limitation accepting legal representation with respect to such claim by an attorney reasonably selected by the Company;
Mr. Terrence B. Larkin, Esquire
October 15, 2007
(iii) cooperate with the Company in good faith in order effectively to contest such claim; and
(iv) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold you harmless, on an after-tax basis, for any Excise Tax or income tax, including interest and penalties with respect thereto, imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 6(e), the Company shall, provided that such control does not have a material adverse affect on your individual income tax with respect to matters unrelated to the contest of the Excise Tax, control all proceedings taken in connection with such contest and, at its sole option, may, provided that such pursuit or foregoing does not have a material adverse affect on your individual income tax with respect to matters unrelated to the contest of the Excise Tax, pursue or forego any and all administrative appeals, proceedings, hearings and conference with the IRS in respect of such claim (but, you may participate therein at your own cost and expense) and may, at its sole option, provided that such payment, suit, contest or prosecution does not have a material adverse affect on your individual income tax with respect to matters unrelated to the contest of the Excise Tax, either direct you to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and you agree to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided, however, that if the Company directs you to pay the tax claimed and sue for a refund, the Company shall advance the amount of such payment to you on an interest-free basis and shall indemnify and hold you harmless, on an after-tax basis, from any Excise Tax or income tax, including interest or penalties with respect thereto, imposed with respect to such advance or with respect to any imputed income with respect to such advance; and further provided that any extension of the statute of limitations relating to payment of taxes for your taxable year with respect to which the contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company's control of such contest shall be limited to issues with respect to which a Gross Up Payment would be payable hereunder, and you shall be entitled to settle or contest, as the case may be, any other issue raised by the IRS.
(f) If, after the receipt by you of an amount advanced by the Company pursuant to Section 6(e) hereof, you receive any refund with respect to such claim, you shall (subject to the Company's complying with the requirements of Section 6(e) hereof) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after any taxes applicable thereto). If, after the receipt by you of an amount advanced by the Company pursuant to Section 6(e) hereof, a determination is made that you shall not be entitled to any refund with respect to such claim and the Company does not notify you in writing of its intent to contest such denial or refund prior to the expiration of thirty (30) calendar days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.
7. TRAVEL. You shall be required to travel to the extent necessary for the performance of your responsibilities under this Agreement.
8. SUCCESSORS; BINDING AGREEMENT. The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all the business and/or assets of the Company, to expressly assume and agree to perform this Agreement in the same manner
Mr. Terrence B. Larkin, Esquire
October 15, 2007
and to the same extent that the Company would be required to perform it if no
such succession had taken place, and will assign its rights and obligations
hereunder to such successor. Failure of the Company to make such an assignment
and to obtain such assumption and agreement prior to the effectiveness of any
such succession, unless you agree otherwise in writing with the Company or the
successor, shall entitle you to compensation from the Company in the same amount
and on the same terms as you would be entitled to hereunder if you terminate
your employment for Good Reason and the date on which any such succession
becomes effective shall be deemed your Date of Termination. As used in this
Agreement, "Company" shall mean the Company as hereinbefore defined and any
successor to its business and/or assets as aforesaid which assumes and agrees to
perform this Agreement by operation of law, or otherwise. This Agreement shall
inure to the benefit of and be enforceable by your personal or legal
representatives, executors, administrators, successors, heirs, distributees
and/or legatees. This Agreement is personal in nature and neither of the parties
hereto shall, without the consent of the other, assign, transfer or delegate
this Agreement or any rights or obligations hereunder except as expressly
provided in this Section 8. Without limiting the generality of the foregoing,
your right to receive payments hereunder shall not be assignable or
transferable, whether by pledge, creation of a security interest or otherwise,
other than by a transfer by your will or by the laws of descent and distribution
and, in the event of any attempted assignment or transfer contrary to this
Section 8, the Company shall have no liability to pay to the purported assignee
or transferee any amount so attempted to be assigned or transferred. The Company
and you recognize that each party will have no adequate remedy at law for any
material breach by the other of any of the agreements contained herein and, in
the event of any such breach, the Company and you hereby agree and consent that
the other shall be entitled to a decree of specific performance, mandamus or
other appropriate remedy to enforce performance of this Agreement.
9. NOTICES. For the purpose of this Agreement, notices and all other communications provided for in this Agreement shall be in writing, and shall be deemed to have been duly given when delivered by hand, or mailed by United States certified mail, return receipt requested, postage prepaid, or sent by Federal Express or similar overnight courier service, addressed to the respective addresses set forth on the first page of this Agreement, or sent by facsimile with confirmation of receipt to the respective facsimile numbers set forth on the first page of this Agreement, provided that all notices to the Company shall be directed to the attention of the Secretary of the Company (or, if you are the Secretary at the time such notice is to be given, to the Chairman of the Company's Board of Directors), or to such other address or facsimile number as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address or facsimile number shall be effective only upon receipt.
10. NONCOMPETITION.
(a) Until the Date of Termination, you agree not to engage in any Competitive Activity. For purposes of this Agreement, the term "Competitive Activity" shall mean your participation as an employee or consultant, without the written consent of the CEO or the Board or any authorized committee thereof, in the management of any business enterprise anywhere in the world if such enterprise is a "Significant Customer" of any product or service of the Company or engages in competition with any product or service of the Company (including without limitation any enterprise that is a supplier to an original equipment automotive vehicle manufacturer) or is planning to engage in such competition. For purposes of this Agreement, the term "Significant Customer" shall mean any customer who represents in excess of 5% of the Company's sales in any of the three calendar years prior to the date of determination. "Competitive Activity" shall not include the mere ownership of, and exercise of rights appurtenant to, securities of a publicly-traded company representing 5% or less of the total voting power and 5% or less of the total value of such an enterprise. You agree that the Company is a global business and that it is appropriate for this Section 10 to apply to Competitive Activity conducted anywhere in the world.
(b) You agree not to engage directly or indirectly in any Competitive Activity (i) until one (1) year after the Date of Termination if you are terminated by the Company for Cause, as a result of
Mr. Terrence B. Larkin, Esquire
October 15, 2007
a Notice of Non-Renewal from the Company, or you terminate your employment for other than Good Reason, or (ii) until two (2) years after the Date of Termination in all other circumstances.
(c) You shall not directly or indirectly, either on your own account or with or for anyone else, solicit or attempt to solicit any of the Company's customers, solicit or attempt to solicit for any business endeavor or hire or attempt to hire any employee of the Company, or otherwise divert or attempt to divert from the Company any business whatsoever or interfere with any business relationship between the Company and any other person, (i) until one (1) year after the Date of Termination if you are terminated by the Company for Cause, as a result of a Notice of Non-Renewal from the Company, or you terminate your employment for other than Good Reason, or (ii) until two (2) years after the Date of Termination in all other circumstances.
(d) You acknowledge and agree that damages in the event of a breach or
threatened breach of the covenants in this Section 10 will be difficult to
determine and will not afford a full and adequate remedy, and therefore
agree that the Company, in addition to seeking actual damages pursuant to
Section 10 hereof, may seek specific enforcement of the covenant not to
compete in any court of competent jurisdiction, including, without
limitation, by the issuance of a temporary or permanent injunction,
without the necessity of a bond. You and the Company agree that the
provisions of this covenant not to compete are reasonable. However, should
any court or arbitrator determine that any provision of this covenant not
to compete is unreasonable, either in period of time, geographical area,
or otherwise, the parties agree that this covenant not to compete should
be interpreted and enforced to the maximum extent which such court or
arbitrator deems reasonable.
(e) As additional compensation for the covenants contained in Sections
10(b) and 10(c), and only if you execute a general release in form and
substance reasonably acceptable to the Company acknowledging, among other
things, your obligations under this Agreement, the Company shall increase
the Severance Period for purposes of Section 5(d) from one (1) year to two
(2) years.
11. CONFIDENTIALITY AND COOPERATION.
(a) You shall not knowingly use, disclose or reveal to any unauthorized person, during or after the Term, any trade secret or other confidential information relating to the Company or any of its affiliates, or any of their respective businesses or principals, such as, without limitation, dealers' or distributor's lists, information regarding personnel and manufacturing processes, marketing and sales plans, pricing or cost information, and all other such information; and you confirm that such information is the exclusive property of the Company and its affiliates. Upon termination of your employment, you agree to return to the Company on demand by the Company all memoranda, books, papers, letters and other data, and all copies thereof or therefrom, in any way relating to the business of the Company and its affiliates, whether made by you or otherwise in your possession.
(b) Any design, engineering methods, techniques, discoveries, inventions (whether patentable or not), formulae, formulations, technical and product specifications, bill of materials, equipment descriptions, plans, layouts, drawings, computer programs, assembly, quality control, installation and operating procedures, operating manuals, strategic, technical or marketing information, designs, data, secret knowledge, know-how and all other information of a confidential nature prepared or produced during the period of your employment and which ideas, processes, and other materials or information relate to any of the businesses of the Company, shall be owned by the Company and its affiliates whether or not you should in fact execute an assignment thereof or other instrument or document which may be reasonably necessary to protect and secure such rights to the Company.
Mr. Terrence B. Larkin, Esquire
October 15, 2007
(c) Following the termination of your employment, you agree to make yourself reasonably available to the Company to respond to periodic requests for information relating to the Company or your employment which may be within your knowledge. You further agree to cooperate fully with the Company in connection with any and all existing or future depositions, litigation, or investigations brought by or against the Company, any entity related to the Company, or any of its (their) agents, officers, directors or employees, whether administrative, civil or criminal in nature, in which and to the extent the Company deems your cooperation necessary. In the event that you are subpoenaed in connection with any litigation or investigation, you will immediately notify the Company. You shall not receive any additional compensation, other than reimbursement for reasonable costs and expenses incurred by you, in complying with the terms of this Section 11(c).
12. ARBITRATION.
(a) Except as contemplated by Section 10(d) or Section 12(c) hereof, any dispute or controversy arising under or in connection with this Agreement that cannot be mutually resolved by the parties to this Agreement and their respective advisors and representatives shall be settled exclusively by arbitration in Southfield, Michigan, before one arbitrator of exemplary qualifications and stature, who shall be selected jointly by an individual to be designated by the Company and an individual to be selected by you, or if such two individuals cannot agree on the selection of the arbitrator, who shall be selected pursuant to the procedures of the American Arbitration Association.
(b) The parties agree to use their best efforts to cause (i) the two
individuals set forth in the preceding Section 12(a), or, if applicable,
the American Arbitration Association, to appoint the arbitrator within
thirty (30) days of the date that a party hereto notifies the other party
that a dispute or controversy exists that necessitates the appointment of
an arbitrator, and (ii) any arbitration hearing to be held within thirty
(30) days of the date of selection of the arbitrator, and, as a condition
to his or her selection, such arbitrator must consent to be available for
a hearing, at such time.
(c) Judgment may be entered on the arbitrator's award in any court having jurisdiction, provided that you shall be entitled to seek specific performance of your right to be paid and to participate in benefit programs during the pendency of any dispute or controversy arising under or in connection with this Agreement. The Company and you hereby agree that the arbitrator shall be empowered to enter an equitable decree mandating specific performance of the terms of this Agreement. If any dispute under this Section 12 shall be pending, you shall continue to receive at a minimum the base salary which you were receiving immediately prior to the act or omission which forms the basis for the dispute. At the close of the arbitration, such continued base salary payments may be offset against any damages awarded to you or may be recovered from you if its determined that you were not entitled to the continued payment of base salary under the other provisions of this Agreement.
13. MODIFICATIONS. No provision of this Agreement may be modified, amended, waived or discharged unless such modification, amendment, waiver or discharge is agreed to in writing and signed by both you and such officer of the Company as may be specifically designated by the Board.
14. NO IMPLIED WAIVERS. Failure of either party at any time to require performance by the other party of any provision hereof shall in no way affect the full right to require such performance at any time thereafter. Waiver by either party of a breach of any obligation hereunder shall not constitute a waiver of any succeeding breach of the same obligation. Failure of either party to exercise any of its rights provided herein shall not constitute a waiver of such right.
Mr. Terrence B. Larkin, Esquire
October 15, 2007
15. GOVERNING LAW. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Michigan without giving effect to any conflicts of laws rules.
16. PAYMENTS NET OF TAXES. Except as otherwise provided in Section 6 herein, any payments provided for herein which are subject to Federal, State local or other governmental tax or other withholding requirements or obligations, shall have such amounts withheld prior to payment, and the Company shall be considered to have fully satisfied its obligation hereunder by making such payments to you net of and after deduction for all applicable withholding obligations.
17. CAPACITY OF PARTIES. The parties hereto warrant that they have the capacity and authority to execute this Agreement.
18. VALIDITY. The invalidity or unenforceability of any provision of this Agreement shall not, at the option of the party for whose benefit such provision was intended, affect the validity or enforceability of any other provision of the Agreement, which shall remain in full force and effect.
19. COUNTERPARTS. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.
20. ENTIRE AGREEMENT. This Agreement contains the entire agreement by the parties with respect to the matters covered herein and supersede any prior agreement (including, but not limited to, prior employment agreement(s)), condition, practice, custom, usage and obligation with respect to such matters insofar as any such prior agreement, condition, practice, custom, usage or obligation might have given rise to any enforceable right. No agreements, understandings or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement.
21. LEGAL FEES AND EXPENSES. It is the intent of the Company that you not be required to incur the expenses associated with the enforcement of your rights under this Agreement by litigation or other legal action because the cost and expense thereof would substantially detract from the benefits intended to be extended to you hereunder. Accordingly, the Company shall pay or cause to be paid and be solely responsible for any and all reasonable attorneys' and related fees and expenses incurred by you (i) as a result of the Company's failure to perform this Agreement or any provision hereof or (ii) as a result of the Company unreasonably or maliciously contesting the validity or enforceability of this Agreement or any provision hereof as aforesaid.
22. CODE SECTION 409A. Notwithstanding any provision in this Agreement to the
contrary, if your employment is terminated as described in Section 5(d) and
Section 409A(a)(2)(B)(i) of the Code applies to all or any portion of your
Severance Payment and you are a "specified employee" thereunder, then the
Company shall pay the portion of your Severance Payment that is subject to such
Section of the Code no earlier than six (6) months after your Date of
Termination or such other date as would be permissible under the Code. If your
employment is terminated as described in Section 5(d) and Section
409A(a)(2)(B)(i) of the Code does not apply to any portion of your Severance
Payment or you are not a "specified employee" thereunder, then the Company shall
pay your Severance Payment as described in Section 5(d).
Mr. Terrence B. Larkin, Esquire
October 15, 2007
If this letter sets forth our agreement on the subject matter hereof, kindly sign and return to the Company the enclosed copy of this letter which will then constitute our agreement on this subject, effective on January 1, 2008 ("Effective Date").
Sincerely,
LEAR CORPORATION
By: /s/ Roger A. Jackson ---------------------------------------- Roger A. Jackson |
Agreed to this 2nd day of January, 2007
/s/ Terrence B. Larkin --------------------------------------------- Terrence B. Larkin |
Exhibit 10.29
THIRD AMENDMENT
TO THE
LEAR CORPORATION EXECUTIVE SUPPLEMENTAL SAVINGS PLAN
(AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 2004)
THIS AMENDMENT to the Lear Corporation Executive Supplemental Savings Plan (the "Plan") is made by the undersigned pursuant to authority delegated by the Compensation Committee of the Board of Directors of Lear Corporation, effective as of the IAC Closing Date (as defined herein);
WITNESSETH THAT:
1. Section One of the Plan shall be amended by inserting the following four new subsections and by renumbering existing subsections 1.9 through 1.19 accordingly:
"1.9 'IAC' means International Automotive Components Group North America, Inc., a Delaware corporation.
1.10 'IAC Agreement' means the Asset Purchase Agreement dated as of November 30, 2006 by and among the Corporation, IAC, International Automotive Components Group North America, LLC, a Delaware limited liability company, WL Ross & Co. LLC, a Delaware limited liability company, and Franklin Mutual Advisers, LLC, as amended.
1.11 'IAC Closing Date' means the closing date of the transactions contemplated by the IAC Agreement.
1.12 'IAC Participant' means any participant who was employed by the Corporation immediately prior to the IAC Closing Date and who becomes employed by IAC immediately after the IAC Closing Date."
2. Section Three of the Plan shall be amended by adding at the end thereof the following new Section 3.5, to read in its entirety as follows:
"3.5 Vesting for IAC Participants. Solely for purposes of vesting under the foregoing Sections 3.2(b), each IAC Participant shall be treated as if his age is five years greater than his actual age and as if he has an additional five Years of Service (as defined in the Pension Plan)."
3. Except to the extent hereby amended, the Plan shall remain in full force and effect.
IN WITNESS WHEREOF, this Amendment to the Plan is adopted on the 9th day of May, 2007.
LEAR CORPORATION
By: /s/ Roger Alan Jackson ---------------------------------------- Roger Alan Jackson Senior Vice President - Human Resources |
EXHIBIT 10.37
LEAR CORPORATION
LONG-TERM STOCK INCENTIVE PLAN
2008 MANAGEMENT STOCK PURCHASE PLAN (U.S.)
TERMS AND CONDITIONS
1. Deferral Election.
Any Eligible Employee selected by the Committee (a) may irrevocably elect to defer any whole percentage up to 90% of the Base Salary payable to him or her for the pay periods ending after December 31, 2007 and before January 1, 2009, by electronically submitting an online election to that effect, and/or (b) may have irrevocably elected to defer a whole percentage up to 100% of the bonus payable to him or her under the Company's Senior Executive Incentive Compensation Plan or Management Incentive Compensation Plan in the first quarter of 2008, by having electronically submitted an online election to that effect in 2006.
"Base Salary" means a Participant's annual base salary rate on January 1, 2008 from the Company or an Affiliate, including any elective contributions of the Participant that are not includable in his or her gross income under Code Sections 125 or 401(k), and before taking into account his or her Deferral Election under the MSPP.
"Participant" means an Eligible Employee who makes a Deferral Election.
2. Restricted Stock Units.
(a) In consideration for the Participant's Deferral Election, the Participant shall be credited as of March 15, 2008 with Restricted Stock Units at a discounted price (the "Discount Rate") as provided in the following table:
Total dollar amount of Participant's Deferral Election, expressed as a Applicable Discount Rate: percentage of the Participant's Base Salary as of January 1, 2008: ---------------------------------------------------------------------- -------------------------- 15% or less 20% Over 15% and up to 100% 30% Over 100% 20% |
(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 Participant's Deferral Election that does not exceed 15% of the Participant's Base Salary, divided by the product of (A) the average closing Fair Market Value over the last five trading days
in 2007 (December 24, 26, 27, 28 and 31) (the "Average FMV") multiplied by (B) 80%; plus
(ii) the dollar amount of the Participant's Deferral Election over 15% and up to 100% of the Participant's Base Salary, divided by the product of (A) the Average FMV multiplied by (B) 70%; plus
(iii) the dollar amount of the Participant's Deferral Election over 100% of the Participant's 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 Participant's Deferral Election is of the total amount deferred in the Participant's 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 Participant's Deferral Election is of the total amount deferred in the Participant's Deferral Election.
3. Restriction Period.
The Restriction Period under this Agreement shall be the three-year period commencing on March 15, 2008 and ending on March 14, 2011.
4. Dividend Equivalents.
If the Company declares a cash dividend on Shares, the Participant shall be credited with dividend equivalents as of the payment date for the dividend equal to the amount of the cash dividend per Share multiplied by the Restricted Stock Units credited to the Participant under Section 2(b) as of the record date. Dividend equivalents shall be credited to a notional account established for the Participant (the "Dividend Equivalent Account"). Interest shall be credited to the Participant's Dividend Equivalent Account, compounded monthly, until payment of such account to the Participant. The rate of such interest shall be the Prime Rate of interest as reported by the Midwest edition of The Wall Street Journal on the second business day of each calendar quarter.
5. Timing and Form of Payout.
Except as provided in Sections 6, 7 or 8, after the end of the Restriction Period, the Participant 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 amount credited to the Participant's Dividend Equivalent Account under Section 4. Delivery of such Shares shall be made as soon as administratively feasible after the end of the Restriction Period. Delivery of the cash payment of any amount credited to the Participant's Dividend Equivalent Account shall be made on or about the date the Restricted Stock Units are distributed to the Participant.
6. Termination of Employment Due to Death, End of Service or Disability.
(a) Before March 15, 2008.
A Participant who ceases to be an employee prior to March 15, 2008 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 Participant's Deferral Election shall be paid to the Participant (or in the case of the Participant's death, the Participant's beneficiary) in cash as soon as administratively feasible after his or her termination of employment.
(b) After March 14, 2008 but Before January 1, 2009.
If the Participant ceases to be an employee after March 14, 2008 but prior to January 1, 2009 by reason of death, End of Service, or Disability, the Participant (or in the case of the Participant's death, the Participant's 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, 2008 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, 2008.
If the Participant ceases to be an employee after December 31, 2008 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 Participant's death, the Participant's 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 Participant's 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 Participant's Shares and any cash payment under this Agreement. If the Participant's beneficiary predeceases the Participant or no beneficiary has been
designated, distribution of the Participant's Shares and any cash payment shall be made to the Participant's surviving spouse or, if none, to the Participant's estate.
(e) End of Service.
An employee's "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).
7. Involuntary Termination Other Than For Cause.
(a) Before March 15, 2008.
A Participant whose employment involuntarily terminates other than for Cause or for any reason described in Section 6 prior to March 15, 2008 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 Participant's 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, 2008 but Before January 1, 2009.
A Participant whose employment involuntarily terminates other than for Cause or for any reason described in Section 6 after March 14, 2008 but prior to January 1, 2009 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, 2008 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, 2008 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 Participant's 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, 2008 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, 2008 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
Participant's 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, 2008.
A Participant whose employment involuntarily terminates other than for Cause or for any reason described in Section 6 after December 31, 2008 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
Participant's 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.
8. Termination of Employment for Any Other Reason.
(a) Before March 15, 2008.
A Participant whose employment terminates for any reason other than those described in Sections 6 and 7 prior to March 15, 2008 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 Participant's 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, 2008 But Before January 1, 2009.
A Participant whose employment terminates for any reason other than those described in Sections 6 and 7 after March 14, 2008 but prior to January 1, 2009 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 Participant's 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, 2008 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, 2008 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 Participant's 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, 2008.
A Participant whose employment terminates for any reason other than those described in Sections 6 and 7 after December 31, 2008 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 Participant's 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).
9. Employment After a Change in Control.
In accordance with the terms of the Plan, upon the occurrence of a Change
in Control, a Participant shall receive a distribution of a number of Shares
equal to the number of Restricted Stock Units credited to him or her under
Section 2(b) and a cash payment equal to the amount, if
any, credited to the Participant's Dividend Equivalent Account under Section 4, as soon as practicable thereafter. The Participant's Base Salary deduction for the remainder of the year shall be accelerated and such amount shall be deducted from the Restricted Stock Unit distribution and/or cash payment.
10. Assignment and Transfers.
The rights and interests of the Participant hereunder may not be assigned, encumbered or transferred except, in the event of the death of the Participant, by will or the laws of descent and distribution.
11. Withholding Tax.
The Company and any Affiliate shall have the right to retain Shares that are distributable to the Participant hereunder to the extent necessary to satisfy any withholding taxes, whether federal, state or local, triggered by the distribution of Shares under this Agreement.
12. No Limitation on Rights of the Company.
The grant hereunder shall not in any way affect the right or power of the Company to make adjustments, reclassification, or changes in its capital or business structure, or to merge, consolidate, dissolve, liquidate, sell or transfer all or any part of its business or assets.
13. Plan, Terms and Conditions, and Deferral Election Not a Contract of Employment.
Neither the Plan, the Terms and Conditions, nor the Deferral Election is a contract of employment, and no terms of employment of the Participant shall be affected in any way by the Plan, the Terms and Conditions, the Deferral Election or related instruments, except as specifically provided therein. Neither the establishment of the Plan, the Terms and Conditions, nor the Deferral Election shall be construed as conferring any legal rights upon the Participant for a continuation of employment, nor shall they interfere with the right of the Company or any Affiliate to discharge the Participant and to treat the Participant without regard to the effect that such treatment might have upon the Participant as a Participant.
14. Participant to Not Have Rights as a Stockholder.
The Participant shall not have rights as a stockholder with respect to any Shares subject to the Deferral Election prior to the date on which he or she is recorded as the holder of such Shares on the records of the Company.
15. Notice.
Any notice or other communication required or permitted hereunder shall be in writing and shall be delivered personally, or sent by certified, registered or express mail, postage prepaid. Any such notice shall be deemed given when so delivered personally or, if mailed, three days after the date of deposit in the United States mail, in the case of the Company to 21557 Telegraph Road, Southfield, Michigan, 48034, Attention: General Counsel and, in the case of the Participant, to his or her address set forth in the Deferral Election or, in each case, to such other address as may be designated in a notice given in accordance with this Section.
16. Governing Law.
This Agreement shall be construed and enforced in accordance with, and governed by, the laws of the State of Michigan, determined without regard to its conflict of law rules.
17. Plan Document Controls.
Any term capitalized herein but not defined shall have the meaning set forth in the Lear Corporation Long-Term Stock Incentive Plan (the "Plan"). Participants may obtain a copy of the Plan document upon request. These Terms and Conditions are intended to generally summarize the provisions of the MSPP. They do not alter the terms of the Plan document. The rights herein granted are in all respects subject to the provisions set forth in the Plan to the same extent and with the same effect as if set forth fully herein. In the event that the terms set forth herein conflict with the terms of the Plan document, the Plan document shall control.
EXHIBIT 10.38
LEAR CORPORATION
LONG-TERM STOCK INCENTIVE PLAN
2008 MANAGEMENT STOCK PURCHASE PLAN (NON-U.S.)
TERMS AND CONDITIONS
1. Deferral Election.
Any Eligible Employee selected by the Committee may irrevocably elect to defer any whole percentage up to 100% of the bonus payable to him or her under the Company's Senior Executive Incentive Compensation Plan or Management Incentive Compensation Plan in the first quarter of 2008 by electronically submitting an online election to that effect (a "Deferral Election") on the appropriate screen following these Terms and Conditions. An Eligible Employee who makes a Deferral Election shall be a "Participant."
2. Restricted Stock Units.
(a) In consideration for the Participant's Deferral Election, the Participant shall be credited as of March 15, 2008, with Restricted Stock Units at a discounted price (the "Discount Rate") as provided in the following table:
Total dollar amount of Participant's Deferral Election, expressed as a percentage of the Participant's base salary as of January 1, 2008: Applicable Discount Rate: ---------------------------------------------------------------------- ------------------------- 15% or less 20% Over 15% and up to 100% 30% Over 100% 20% |
(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 Participant's Deferral Election that does not exceed 15% of the Participant's base salary, divided by the product of (A) the average closing Fair Market Value over the last five trading days in 2007 (December 24, 26, 27, 28 and 31) (the "Average FMV") multiplied by (B) 80%; plus
(ii) the dollar amount of the Participant's Deferral Election over 15% and up to 100% of the Participant's base salary, divided by the product of (A) the Average FMV multiplied by (B) 70%; plus
(iii) the dollar amount of the Participant's Deferral Election over 100% of the Participant's base salary, divided by the product of (A) the Average FMV multiplied by (B) 80%.
3. Restriction Period.
The Restriction Period under this Agreement shall be the three-year period commencing on March 15, 2008, and ending on March 14, 2011.
4. Dividend Equivalents.
If the Company declares a cash dividend on Shares, the Participant shall be credited with dividend equivalents as of the payment date for the dividend equal to the amount of the cash dividend per Share multiplied by the Restricted Stock Units credited to the Participant under Section 2(b) as of the record date. Dividend equivalents shall be credited to a notional account established for the Participant (the "Dividend Equivalent Account"). Interest shall be credited to the Participant's Dividend Equivalent Account, compounded monthly, until payment of such account to the Participant. The rate of such interest shall be the Prime Rate of interest as reported by the Midwest edition of The Wall Street Journal on the second business day of each calendar quarter.
5. Timing and Form of Payout.
Except as provided in Sections 6, 7 or 8, after the end of the Restriction Period, the Participant 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 amount credited to the Participant's Dividend Equivalent Account under Section 4. Delivery of such Shares shall be made as soon as administratively feasible after the end of the Restriction Period. Delivery of the cash payment of any amount credited to the Participant's Dividend Equivalent Account shall be made on or about the date the Restricted Stock Units are distributed to the Participant.
6. Termination of Employment Due to Death, End of Service or Disability.
(a) Before March 15, 2008.
A Participant who ceases to be an employee prior to March 15, 2008, 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 bonus earned but not paid due to the Participant's Deferral Election shall be paid to the Participant (or in the case of the Participant's death, the Participant's beneficiary) in cash as soon as administratively feasible after his or her termination of employment.
(b) After March 14, 2008 but Before January 1, 2009.
If the Participant ceases to be an employee after March 14, 2008, but prior to January 1, 2009, by reason of death, End of Service or Disability, the Participant (or in the case of the Participant's death, the Participant's 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).
(c) After December 31, 2008.
If the Participant ceases to be an employee after December 31, 2008, 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 Participant's death, the Participant's 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 Participant's 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 Participant's Shares and any cash payment under this Agreement. If the Participant's beneficiary predeceases the Participant or no beneficiary has been designated, distribution of the Participant's Shares and any cash payment shall be made to the Participant's surviving spouse or, if none, to the Participant's estate.
(e) End of Service.
An employee's "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).
7. Involuntary Termination Other Than For Cause.
(a) Before March 15, 2008.
A Participant whose employment involuntarily terminates other than for Cause or for any reason described in Section 6 prior to March 15, 2008, shall be terminated from the Plan, and his or her Deferral Election shall be cancelled. Any bonus earned but not paid due to the Participant's 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, 2008 but Before January 1, 2009.
A Participant whose employment involuntarily terminates other than for Cause or for any reason described in Section 6 after March 14, 2008, but prior to January 1, 2009, 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
Participant's 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.
(c) After December 31, 2008.
A Participant whose employment involuntarily terminates other than for Cause or for any reason described in Section 6 after December 31, 2008, 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
Participant's 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.
8. Termination of Employment for Any Other Reason.
(a) Before March 15, 2008.
A Participant whose employment terminates for any reason other than those described in Sections 6 and 7 prior to March 15, 2008, shall be terminated from the Plan, and his or her Deferral Election shall be cancelled. Any bonus earned but not paid due to the Participant's 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, 2008 But Before January 1, 2009.
A Participant whose employment terminates for any reason other than those described in Sections 6 and 7 after March 14, 2008, but prior to January 1, 2009, shall be entitled to receive a number of Shares equal to:
(i) the lesser of:
(A) the amount of bonus deferred in the Participant's 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).
(c) After December 31, 2008.
A Participant whose employment terminates for any reason other than those described in Sections 6 and 7 after December 31, 2008, 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 Participant's 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).
9. Employment After a Change in Control.
In accordance with the terms of the Plan, upon the occurrence of a Change in Control (as defined in the Plan), a Participant shall receive a distribution of a number of Shares equal to the number of Restricted Stock Units credited to him or her under Section 2(b) and a cash payment equal to the amount, if any, credited to the Participant's Dividend Equivalent Account under Section 4, as soon as practicable thereafter.
10. Assignment and Transfers.
The rights and interests of the Participant hereunder may not be assigned, encumbered or transferred except, in the event of the death of the Participant, by will or the laws of descent and distribution.
11. Withholding Tax.
The Company and any Affiliate shall have the right to retain Shares that are distributable to the Participant hereunder to the extent necessary to satisfy any withholding taxes, whether federal, state or local, triggered by the distribution of Shares under this Agreement.
12. No Limitation on Rights of the Company.
The grant hereunder shall not in any way affect the right or power of the Company to make adjustments, reclassification, or changes in its capital or business structure, or to merge, consolidate, dissolve, liquidate, sell or transfer all or any part of its business or assets.
13. Plan, Terms and Conditions, and Deferral Election Not a Contract of Employment.
Neither the Plan, the Terms and Conditions, nor the Deferral Election is a contract of employment, and no terms of employment of the Participant shall be affected in any way by the Plan, the Terms and Conditions, the Deferral Election or related instruments, except as specifically provided therein. Neither the establishment of the Plan, the Terms and Conditions, nor the Deferral Election shall be construed as conferring any legal rights upon the Participant for a continuation of employment, nor shall they interfere with the right of the Company or any Affiliate to discharge the Participant and to treat the Participant without regard to the effect that such treatment might have upon the Participant as a Participant.
14. Participant to Not Have Rights as a Stockholder.
The Participant shall not have rights as a stockholder with respect to any Shares subject to the Deferral Election prior to the date on which he or she is recorded as the holder of such Shares on the records of the Company.
15. Notice.
Any notice or other communication required or permitted hereunder shall be in writing and shall be delivered personally, or sent by certified, registered or express mail, postage prepaid. Any such notice shall be deemed given when so delivered personally or, if mailed, three days after the date of deposit in the United States mail, in the case of the Company to 21557 Telegraph Road, Southfield, Michigan, 48034, Attention: General Counsel and, in the case of the Participant, to his or her address set forth in the Deferral Election or, in each case, to such other address as may be designated in a notice given in accordance with this Section.
16. Governing Law.
This Agreement shall be construed and enforced in accordance with, and governed by, the laws of the State of Michigan, determined without regard to its conflict of law rules.
17. Plan Document Controls.
Any term capitalized herein but not defined shall have the meaning set forth in the Lear Corporation Long-Term Stock Incentive Plan (the "Plan"). Participants may obtain a copy of the Plan document upon request. These Terms and Conditions are intended to generally summarize the provisions of the MSPP. They do not alter the terms of the Plan document. The rights herein granted are in all respects subject to the provisions set forth in the Plan to the same extent and with the same effect as if set forth fully herein. In the event that the terms set forth herein conflict with the terms of the Plan document, the Plan document shall control.
EXHIBIT 10.42
LEAR CORPORATION
LONG-TERM STOCK INCENTIVE PLAN
2007 RESTRICTED STOCK UNIT TERMS AND CONDITIONS
1. Definitions. Any term capitalized herein but not defined will have the meaning set forth in the Plan.
2. Grant and Vesting of Restricted Stock Units.
(a) As of the Grant Date specified in the letter that accompanies this document, the Employee will be credited with the number of Restricted Stock Units set forth in the letter that accompanies this document. Each Restricted Stock Unit is a notional amount that represents one unvested share of Common Stock, $0.01 par value, of the Company (the "Common Stock"). Each Restricted Stock Unit constitutes the right, subject to the terms and conditions of the Plan and this document, to distribution of a Share if and when the Restricted Stock Unit vests. If the Employee's employment with the Company and all of its Affiliates terminates before the date that all of the Restricted Stock Units vest, his or her right to receive the Shares underlying unvested Restricted Stock Units will be only as provided in Section 4.
(b) One-half of the Restricted Stock Units will vest on the second anniversary of the Grant Date, and the remaining half will vest on the fourth anniversary of the Grant Date. Notwithstanding anything contained herein to the contrary, the right of an Employee to receive Shares underlying a Restricted Stock Unit will be forfeited if the Committee determines, in its sole discretion, that (i) the Employee has entered into a business or employment relationship that is detrimentally competitive with the Company or substantially injurious to the Company's financial interests; (ii) the Employee has been discharged from employment with the Company or an Affiliate for Cause; or (iii) the Employee has performed acts of willful malfeasance or gross negligence in a matter of material importance to the Company or an Affiliate.
3. Rights as a Stockholder.
(a) Unless and until a Restricted Stock Unit has vested and the Share underlying it has been distributed to the Employee, the Employee will not be entitled to vote that Share.
(b) If the Company declares a cash dividend on its common stock, then, on the payment date of the dividend, the Employee will be credited with dividend equivalents equal to the amount of cash dividend per share multiplied by the number of Restricted Stock Units credited to the Employee through the record date. The dollar amount credited to an Employee under the preceding sentence will be credited to an account ("Account") established for the Employee for bookkeeping purposes only on the books of the Company. The amounts credited to the Account will be credited as of the last day of each month with interest, compounded monthly, until the amount credited to the Account is paid to the Employee. The rate of interest
credited under the previous sentence will be the prime rate of interest as reported by the Midwest edition of the Wall Street Journal for the second business day of each quarter on an annual basis. The balance in the Account will be subject to the same terms regarding vesting and forfeiture as the Employee's Restricted Stock Units awarded under the accompanying letter and this document, and will be paid in cash in a single sum at the time that the Shares associated with the Employee's Restricted Stock Units are delivered (or forfeited at the time that the Employee's Restricted Stock Units are forfeited).
4. Termination of Employment. Subject to the forfeiture provisions of clause 2(b) above, an Employee's right to receive the Shares underlying his or her Restricted Stock Units after termination of his or her employment will be only as follows:
(a) End of Service. If the Employee experiences an End of Service Date, the Employee will be entitled to receive the Shares underlying any Restricted Stock Units that have then vested. In addition, the Employee will be entitled to receive the Shares underlying the number of Restricted Stock Units, if any, that have not yet vested but would have vested under Section 2 if the Employee's End of Service Date had been 24 months following his actual End of Service Date. The Employee will forfeit the right to receive Shares underlying any Restricted Stock Units that have not yet vested or would not have vested in the next 24 months as described in the preceding sentence. The Employee's "End of Service Date" is the date of 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).
(b) Disability or Death. If an Employee's employment with the Company and all Affiliates terminates due to Disability or death, the Employee or the Employee's beneficiary under the Plan will be entitled to receive the Shares underlying all of the Restricted Stock Units, including both those that have already vested and those that have not yet vested under Section 2 above.
(c) Other Termination of Employment. If an Employee's employment with the Company and all Affiliates terminates due to any reason other than those provided in clauses 4(a) or (b), the Employee or his or her estate (in the event of his or her death after termination) will forfeit the right to receive Shares underlying any Restricted Stock Units that have not yet vested, but will be entitled to receive Shares underlying any Restricted Stock Units that, at that time, will have become vested.
5. Timing and Form of Payment. Except as provided in this Section or in clause 2(b) or Section 4, once a Restricted Stock Unit vests, the Employee will be entitled to receive a Share in its place. Delivery of the Share will be made as soon as administratively feasible after its associated Restricted Stock Unit vests. Shares will be credited to an account established for the benefit of the Employee with the Company's administrative agent. The Employee will have full legal and beneficial ownership with respect to the Shares at that time.
6. [reserved]
7. Assignment and Transfers. The Employee may not assign, encumber or transfer any of his or her rights and interests under the Award described in this document, except, in the event of his or her death, by will or the laws of descent and distribution.
8. Withholding Tax. The Company and any Affiliate will have the right to retain Shares or cash that are distributable to the Employee hereunder to the extent necessary to satisfy any withholding taxes, whether federal or state, triggered by the distribution of Shares or cash pursuant to the Award reflected in this document.
9. Securities Law Requirements.
(a) The Restricted Stock Units are subject to the further requirement that, if at any time the Committee determines in its discretion that the listing or qualification of the Shares subject to the Restricted Stock Units under any securities exchange requirements or under any applicable law, or the consent or approval of any governmental regulatory body, is necessary as a condition of, or in connection with, the issuance of Shares under it, then Shares will not be issued under the Restricted Stock Units, unless the necessary listing, qualification, consent or approval has been effected or obtained free of any conditions not acceptable to the Committee.
(b) No person who acquires Shares pursuant to the Award reflected in this document may, during any period of time that person is an affiliate of the Company (within the meaning of the rules and regulations of the Securities and Exchange Commission under the Securities Act of 1933 (the "1933 Act")) sell the Shares, unless the offer and sale is made pursuant to (i) an effective registration statement under the 1933 Act, which is current and includes the Shares to be sold, or (ii) an appropriate exemption from the registration requirements of the 1933 Act, such as that set forth in Rule 144 promulgated under the 1933 Act. With respect to individuals subject to Section 16 of the Exchange Act, transactions under this Award are intended to comply with all applicable conditions of Rule 16b-3, or its successors under the Exchange Act. To the extent any provision of the Award or action by the Committee fails to so comply, the Committee may determine, to the extent permitted by law, that the provision or action will be null and void.
10. No Limitation on Rights of the Company. The grant of the Award described in this document will not in any way affect the right or power of the Company to make adjustments, reclassification or changes in its capital or business structure, or to merge, consolidate, dissolve, liquidate, sell or transfer all or any part of its business or assets.
11. Plan, Restricted Stock Units and Award Not a Contract of Employment. Neither the Plan, the Restricted Stock Units nor any other right or interest that is part of the Award reflected in this document is a contract of employment, and no terms of employment of the Employee will be affected in any way by the Plan, the Restricted Stock Units, the Award, this document or related instruments, except as specifically provided therein. Neither the establishment of the Plan nor the Award will be construed as conferring any legal rights upon the Employee for a continuation of employment, nor will it interfere with the right of the Company or any Affiliate to discharge the Employee and to treat him or her without regard to the effect that treatment might have upon him or her as an Employee.
12. Employee to Have No Rights as a Stockholder. Except as provided in Section 3 above, the Employee will have no rights as a stockholder with respect to any Shares subject to the Restricted Stock Units prior to the date on which he or she is recorded as the holder of those Shares on the records of the Company.
13. Notice. Any notice or other communication required or permitted
hereunder must be in writing and must be delivered personally, or sent by
certified, registered or express mail, postage prepaid. Any such notice will be
deemed given when so delivered personally or, if mailed, three days after the
date of deposit in the United States mail, in the case of the Company to 21557
Telegraph Road, P. O. Box 5008, Southfield, Michigan, 48086-5008, Attention:
General Counsel and, in the case of the Employee, to the last known address of
the Employee in the Company's records.
14. Governing Law. This document and the Award will be construed and enforced in accordance with, and governed by, the laws of the State of Michigan, determined without regard to its conflict of law rules.
15. Plan Document Controls. The rights granted under this Restricted Stock Unit document are in all respects subject to the provisions of the Plan to the same extent and with the same effect as if they were set forth fully therein. If the terms of this document or the Award conflict with the terms of the Plan document, the Plan document will control.
EXHIBIT 10.45
LEAR CORPORATION
LONG-TERM STOCK INCENTIVE PLAN
2007 RESTRICTED STOCK UNIT TERMS AND CONDITIONS (VANDENBERGHE)
1. Definitions. Any term capitalized herein but not defined will have the meaning set forth in the Plan.
2. Grant and Vesting of Restricted Stock Units.
(a) As of the Grant Date specified in the letter that accompanies this document, the Employee will be credited with the number of Restricted Stock Units set forth in the letter that accompanies this document. Each Restricted Stock Unit is a notional amount that represents one unvested share of Common Stock, $0.01 par value, of the Company (the "Common Stock"). Each Restricted Stock Unit constitutes the right, subject to the terms and conditions of the Plan and this document, to distribution of a Share if and when the Restricted Stock Unit vests. If the Employee's employment with the Company and all of its Affiliates terminates before the date that all of the Restricted Stock Units vest, his or her right to receive the Shares underlying unvested Restricted Stock Units will be only as provided in Section 4.
(b) The Restricted Stock Units will vest in their entirety on the second anniversary of the Grant Date. Notwithstanding anything contained herein to the contrary, the right of an Employee to receive Shares underlying a Restricted Stock Unit will be forfeited if the Committee determines, in its sole discretion, that (i) the Employee has entered into a business or employment relationship that is detrimentally competitive with the Company or substantially injurious to the Company's financial interests; (ii) the Employee has been discharged from employment with the Company or an Affiliate for Cause; or (iii) the Employee has performed acts of willful malfeasance or gross negligence in a matter of material importance to the Company or an Affiliate.
3. Rights as a Stockholder.
(a) Unless and until a Restricted Stock Unit has vested and the Share underlying it has been distributed to the Employee, the Employee will not be entitled to vote that Share.
(b) If the Company declares a cash dividend on its common stock, then, on the payment date of the dividend, the Employee will be credited with dividend equivalents equal to the amount of cash dividend per share multiplied by the number of Restricted Stock Units credited to the Employee through the record date. The dollar amount credited to an Employee under the preceding sentence will be credited to an account ("Account") established for the Employee for bookkeeping purposes only on the books of the Company. The amounts credited to the Account will be credited as of the last day of each month with interest, compounded monthly, until the amount credited to the Account is paid to the Employee. The rate of interest
credited under the previous sentence will be the prime rate of interest as reported by the Midwest edition of the Wall Street Journal for the second business day of each quarter on an annual basis. The balance in the Account will be subject to the same terms regarding vesting and forfeiture as the Employee's Restricted Stock Units awarded under the accompanying letter and this document, and will be paid in cash in a single sum at the time that the Shares associated with the Employee's Restricted Stock Units are delivered (or forfeited at the time that the Employee's Restricted Stock Units are forfeited).
4. Termination of Employment. Subject to the forfeiture provisions of clause 2(b) above, an Employee's right to receive the Shares underlying his or her Restricted Stock Units after termination of his or her employment will be only as follows:
(a) End of Service. If the Employee experiences an End of Service Date, the Employee will be entitled to receive the Shares underlying any Restricted Stock Units that have then vested. In addition, the Employee will be entitled to receive the Shares underlying the number of Restricted Stock Units, if any, that have not yet vested but would have vested under Section 2 if the Employee's End of Service Date had been 24 months following his actual End of Service Date. The Employee will forfeit the right to receive Shares underlying any Restricted Stock Units that have not yet vested or would not have vested in the next 24 months as described in the preceding sentence. The Employee's "End of Service Date" is the date of 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).
(b) Disability or Death. If an Employee's employment with the Company and all Affiliates terminates due to Disability or death, the Employee or the Employee's beneficiary under the Plan will be entitled to receive the Shares underlying all of the Restricted Stock Units, including both those that have already vested and those that have not yet vested under Section 2 above.
(c) Other Termination of Employment. If an Employee's employment with the Company and all Affiliates terminates due to any reason other than those provided in clauses 4(a) or (b), the Employee or his or her estate (in the event of his or her death after termination) will forfeit the right to receive Shares underlying any Restricted Stock Units that have not yet vested, but will be entitled to receive Shares underlying any Restricted Stock Units that, at that time, will have become vested.
5. Timing and Form of Payment. Except as provided in this Section or in clause 2(b) or Section 4, once a Restricted Stock Unit vests, the Employee will be entitled to receive a Share in its place. Delivery of the Share will be made as soon as administratively feasible after its associated Restricted Stock Unit vests. Shares will be credited to an account established for the benefit of the Employee with the Company's administrative agent. The Employee will have full legal and beneficial ownership with respect to the Shares at that time.
6. [reserved]
7. Assignment and Transfers. The Employee may not assign, encumber or transfer any of his or her rights and interests under the Award described in this document, except, in the event of his or her death, by will or the laws of descent and distribution.
8. Withholding Tax. The Company and any Affiliate will have the right to retain Shares or cash that are distributable to the Employee hereunder to the extent necessary to satisfy any withholding taxes, whether federal or state, triggered by the distribution of Shares or cash pursuant to the Award reflected in this document.
9. Securities Law Requirements.
(a) The Restricted Stock Units are subject to the further requirement that, if at any time the Committee determines in its discretion that the listing or qualification of the Shares subject to the Restricted Stock Units under any securities exchange requirements or under any applicable law, or the consent or approval of any governmental regulatory body, is necessary as a condition of, or in connection with, the issuance of Shares under it, then Shares will not be issued under the Restricted Stock Units, unless the necessary listing, qualification, consent or approval has been effected or obtained free of any conditions not acceptable to the Committee.
(b) No person who acquires Shares pursuant to the Award reflected in this document may, during any period of time that person is an affiliate of the Company (within the meaning of the rules and regulations of the Securities and Exchange Commission under the Securities Act of 1933 (the "1933 Act")) sell the Shares, unless the offer and sale is made pursuant to (i) an effective registration statement under the 1933 Act, which is current and includes the Shares to be sold, or (ii) an appropriate exemption from the registration requirements of the 1933 Act, such as that set forth in Rule 144 promulgated under the 1933 Act. With respect to individuals subject to Section 16 of the Exchange Act, transactions under this Award are intended to comply with all applicable conditions of Rule 16b-3, or its successors under the Exchange Act. To the extent any provision of the Award or action by the Committee fails to so comply, the Committee may determine, to the extent permitted by law, that the provision or action will be null and void.
10. No Limitation on Rights of the Company. The grant of the Award described in this document will not in any way affect the right or power of the Company to make adjustments, reclassification or changes in its capital or business structure, or to merge, consolidate, dissolve, liquidate, sell or transfer all or any part of its business or assets.
11. Plan, Restricted Stock Units and Award Not a Contract of Employment. Neither the Plan, the Restricted Stock Units nor any other right or interest that is part of the Award reflected in this document is a contract of employment, and no terms of employment of the Employee will be affected in any way by the Plan, the Restricted Stock Units, the Award, this document or related instruments, except as specifically provided therein. Neither the establishment of the Plan nor the Award will be construed as conferring any legal rights upon the Employee for a continuation of employment, nor will it interfere with the right of the Company or any Affiliate to discharge the Employee and to treat him or her without regard to the effect that treatment might have upon him or her as an Employee.
12. Employee to Have No Rights as a Stockholder. Except as provided in Section 3 above, the Employee will have no rights as a stockholder with respect to any Shares subject to the Restricted Stock Units prior to the date on which he or she is recorded as the holder of those Shares on the records of the Company.
13. Notice. Any notice or other communication required or permitted
hereunder must be in writing and must be delivered personally, or sent by
certified, registered or express mail, postage prepaid. Any such notice will be
deemed given when so delivered personally or, if mailed, three days after the
date of deposit in the United States mail, in the case of the Company to 21557
Telegraph Road, P. O. Box 5008, Southfield, Michigan, 48086-5008, Attention:
General Counsel and, in the case of the Employee, to the last known address of
the Employee in the Company's records.
14. Governing Law. This document and the Award will be construed and enforced in accordance with, and governed by, the laws of the State of Michigan, determined without regard to its conflict of law rules.
15. Plan Document Controls. The rights granted under this Restricted Stock Unit document are in all respects subject to the provisions of the Plan to the same extent and with the same effect as if they were set forth fully therein. If the terms of this document or the Award conflict with the terms of the Plan document, the Plan document will control.
Exhibit 10.49
SECOND AMENDMENT TO THE
LEAR CORPORATION
PENSION EQUALIZATION PROGRAM
(AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 1997)
THIS AMENDMENT to the Lear Corporation Pension Equalization Program (the "Plan") is made by the undersigned pursuant to authority delegated by the Compensation Committee of the Board of Directors of Lear Corporation, effective as of the IAC Closing Date (as defined herein);
WITNESSETH THAT:
1. Section 26 of the Plan shall be amended by inserting the following four new subsections and by renumbering existing subsections (a) through (d) accordingly:
"(a) IAC - International Automotive Components Group North America, Inc., a Delaware corporation.
(b) IAC AGREEMENT - the Asset Purchase Agreement dated as of November 30, 2006 by and among the Corporation, IAC, International Automotive Components Group North America, LLC, a Delaware limited liability company, WL Ross & Co. LLC, a Delaware limited liability company, and Franklin Mutual Advisers, LLC, as amended.
(c) IAC CLOSING DATE - the closing date of the transactions contemplated by the IAC Agreement.
(d) IAC PARTICIPANT - an employee who was employed by the Corporation immediately prior to the IAC Closing Date and who becomes employed by IAC immediately after the IAC Closing Date."
2. Section 5 is amended by adding at the end thereof the following new Subsection (d), to read in its entirety as follows:
"(d) IAC TRANSACTION Solely for purposes of vesting under Sections 5(a) and 5(b), above, each IAC Participant shall be treated as if his age is five years greater than his actual age and as if he has an additional five years of service (as defined in the Qualified Pension Plan)."
3. Except to the extent hereby amended, the Plan shall remain in full force and effect.
IN WITNESS WHEREOF, this Amendment to the Plan is adopted on the 9th day of May, 2007.
LEAR CORPORATION
By: /s/ Roger Alan Jackson -------------------------------------------- Roger Alan Jackson Senior Vice President - Human Resources |
Second Amendment to Pension Equalization Program - Page 2
EXHIBIT 10.67
LEAR CORPORATION
LONG-TERM STOCK INCENTIVE PLAN
FORM OF PERFORMANCE SHARE AWARD AGREEMENT
PERFORMANCE SHARE AWARD AGREEMENT (the "Agreement") dated as of _______ __, 2007, between Lear Corporation (the "Company") and the individual whose name appears on the signature page hereof (the "Participant"), who is a key employee of the Company or an Affiliate. Any term capitalized herein, but not defined, shall have the meaning set forth in the Lear Corporation Long-Term Stock Incentive Plan (the "Plan").
1. GRANT. In accordance with the terms of the Plan, the Company hereby grants to the Participant a Performance Share Award subject to the terms and conditions set forth herein.
2. PERFORMANCE PERIOD. The Performance Period for this Award shall be the three-year period commencing on January 1, 2007 and ending on December 31, 2009.
3. PERFORMANCE MEASURES. There shall be two performance measures, Relative Return to Shareholders and Return on Invested Capital, as both are defined below.
a. Relative Return to Shareholders: This performance measure ranks the "Return to Shareholders" (as defined below) for the Company over the Performance Period in relation to the Return to Shareholders for the "S&P 500 Companies" (as defined below).
i. "Return to Shareholders" for each respective company shall mean the quotient of (I) the sum of (a) the average closing price, as reported on the exchange where the stock of the relevant company is traded, for the five consecutive trading days preceding January 1, 2010 and (b) the dividends declared during the period commencing on January 1, 2007 and ending on December 31, 2009, divided by (II) the average closing price, as reported on the exchange where the stock of the relevant company is traded, for the five consecutive trading days preceding January 1, 2007.
ii. "S&P 500 Companies" shall mean the corporations comprising the Standard & Poor's S&P 500 Index as of the end of the respective periods for which performance is to be measured pursuant to the terms of the Agreement.
b. Return on Invested Capital: This performance measure is the compounded improvement on the Company's return on invested capital as reported to its shareholders for 2007, 2008, 2009 fiscal years or as otherwise approved by the Compensation Committee.
4. PERFORMANCE GOALS.
a. Relative Return to Shareholders:
i. Threshold: The Company is ranked above the 42nd percentile of S&P 500 Companies when comparing the Company's Return to Shareholders to the Return to Shareholders of the S&P 500 Companies during the relevant period.
ii. Target: The Company is ranked above the 57th percentile of S&P 500 Companies when comparing the Company's Return to Shareholders to the Return to Shareholders of the S&P 500 Companies during the relevant period.
iii. Superior: The Company is ranked above the 85th percentile of S&P 500 Companies when comparing the Company's Return to Shareholders to the Return to Shareholders of the S&P 500 Companies during the relevant period.
b. Return on Invested Capital:
i. Threshold: 3% per year average improvement
ii. Target: 5% per year average improvement
iii. Superior: 7% per year average improvement
5. PERFORMANCE SHARES.
a. The number of Performance Shares earned by a Participant with respect to each performance measure during the Performance Period shall be determined under the following chart:
PERFORMANCE SHARES
PERFORMANCE AT Relative Return to Shareholders Return on Invested Capital --------------- ------------------------------- -------------------------- Threshold ________ ________ Target ________ ________ Superior ________ ________ |
b. In the event that the Company's actual performance does not meet threshold for that performance measure, Performance Shares shall not be earned with respect to that performance measure.
c. If the Company's actual performance for a performance measure is
between "threshold" and "target," the Performance Shares earned shall equal the Performance Shares for threshold plus the number of Performance Shares determined under the following formula:
TAS = The Performance Shares for target. TS = The Performance Shares for threshold. AP = The Company's actual performance. TP = The threshold performance goal. TAP = The target performance goal. |
d. If the Company's actual performance for a performance measure is between "target" and "superior," the Performance Shares earned shall equal the Performance Shares for target plus the number of Performance Shares determined under the following formula:
SS = The Performance Shares for superior. TAS = The Performance Shares for target. AP = The Company's actual performance. TAP = The target performance goal. SP = The superior performance goal. |
e. If the Company's actual performance for performance measure exceeds "superior," the Performance Shares earned shall equal the Performance Shares for superior.
f. As an alternative to the calculation of the amount of Performance Shares earned pursuant to Section 4 and Sections 5(a) through 5(e) above and in order for the potential Performance Share Award to be "banked" on a year-by-year basis, Participant shall earn an amount of Performance Shares equal to the total of Performance Shares earned in each of the three calendar years of the Performance Period as if the Company's actual performance had
been measured at the end of each such year with one-third (1/3) of the Performance Shares being earned if, and to the extent that, the respective Performance Goal has been met for such year (with such calculations and goals herein applied as if each separate calendar year were a Performance Period). This Section 5(f) shall operate and Performance Shares will be earned hereunder if and only if the Participant would earn more Performance Shares as a result hereof than otherwise earned pursuant to this Agreement.
6. TIMING AND FORM OF PAYOUT. Except as hereinafter provided, after
the end of the Performance Period, the Participant shall be entitled to receive
a number of shares of the Company's common stock, par value $.01 per share
("Common Stock"), equal to his total number of Performance Shares determined
under Section 5. Delivery of such shares of Common Stock shall be made as soon
as administratively feasible after the Committee certifies the actual
performance of the Company during the Performance Period. Notwithstanding
anything herein to the contrary, the Committee may, in compliance with and to
the extent permissible under Code Section 409A, defer delivery of any shares of
Common Stock to the Participant under this Section if the delivery of such
shares of Common Stock would constitute compensation to the Participant that is
not deductible by the Company or an Affiliate due to the application of Code
Section 162(m); provided, that such shares of Common Stock deferred pursuant to
this sentence shall be delivered to the Participant on or before the January 15
of the first year in which the Participant is no longer a "covered employee" of
the Company (within the meaning of Code Section 162(m)) following the end of the
Performance Period.
7. TERMINATION OF EMPLOYMENT DUE TO DEATH, RETIREMENT, OR DISABILITY. If a Participant ceases to be an employee prior to the end of the Performance Period by reason of death, an End of Service Date or disability, the Participant (or in the case of the Participant's death, the Participant's beneficiary) shall be entitled to receive shares of Common Stock equal to the number of shares of Common Stock the Participant would have been entitled to under Section 6 if he or she had remained employed until the last day of the Performance Period multiplied by a fraction, the numerator of which shall be the number of full calendar months during the period of January 1, 2007 through the date of the Participant's employment terminated and the denominator of which shall be thirty-six. The delivery of such shares of Common Stock shall be made as soon as administratively feasible after the end of the Performance Period. The Participant's "End of Service Date" is the date of 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 Participant participates in such plan).
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 Participant's shares of Common Stock under this Award. If the Participant's beneficiary predeceases the Participant or no beneficiary has been properly designated, distribution of the Participant's shares of Common Stock under this Award shall be made to the Participant's surviving spouse and if none, to the Participant's estate.
8. TERMINATION OF EMPLOYMENT FOR ANY OTHER REASON. Except as provided in Section 7, the Participant must be an employee of the Company and/or an Affiliate continuously from the date of this Award until the last day of the Performance Period to
be entitled to receive any shares of Common Stock with respect to any Performance Shares he may have earned hereunder.
9. ASSIGNMENT AND TRANSFERS. The rights and interests of the Participant under this Award may not be assigned, encumbered or transferred except, in the event of the death of the Participant, by will or the laws of descent and distribution.
10. WITHHOLDING TAX. The Company and any Affiliate shall have the right to retain shares of Common Stock that are distributable to the Participant hereunder to the extent necessary to satisfy the minimum required withholding taxes, whether federal, state or local, triggered by the distribution of shares of Common Stock under this Award.
11. NO LIMITATION ON RIGHTS OF THE COMPANY. The grant of this Award shall not in any way affect the right or power of the Company to make adjustments, reclassification, or changes in its capital or business structure, or to merge, consolidate, dissolve, liquidate, sell or transfer all or any part of its business or assets.
12. PLAN AND AGREEMENT NOT A CONTRACT OF EMPLOYMENT. Neither the Plan nor this Agreement is a contract of employment, and no terms of employment of the Participant shall be affected in any way by the Plan, this Agreement or related instruments except as specifically provided therein. Neither the establishment of the Plan nor this Agreement shall be construed as conferring any legal rights upon the Participant for a continuation of employment, nor shall it interfere with the right of the Company or any Affiliate to discharge the Participant and to treat him or her without regard to the effect that such treatment might have upon him or her as a Participant.
13. PARTICIPANT TO HAVE NO RIGHTS AS A STOCKHOLDER. The Participant shall not have any rights as a stockholder with respect to any shares of Common Stock subject to this Award prior to the date on which he or she is recorded as the holder of such shares of Common Stock on the records of the Company.
14. NOTICE. Any notice or other communication required or permitted hereunder shall be in writing and shall be delivered personally, or sent by certified, registered or express mail, postage prepaid. Any such notice shall be deemed given when so delivered personally or, if mailed, three days after the date of deposit in the United States mail, in the case of the Company to 21557 Telegraph Road, Southfield, Michigan, 48034, Attention: General Counsel and, in the case of the Participant, to its address set forth on the signature page hereto or, in each case, to such other address as may be designated in a notice given in accordance with this Section.
15. GOVERNING LAW. This Agreement shall be construed and enforced in accordance with, and governed by, the laws of the State of Michigan, determined without regard to its conflict of law rules.
16. PLAN DOCUMENT CONTROLS. The rights herein granted are in all respects subject to the provisions set forth in the Plan to the same extent and with the same effect
as if set forth fully herein. In the event that the terms of this Agreement conflict with the terms of the Plan document, the Plan document shall control.
[signature page follows]
IN WITNESS WHEREOF, the Company and the Participant have duly executed this Agreement as of the date first written above.
LEAR CORPORATION
Its: Senior Vice President, Human Resources
Participant's Name and Address for notices hereunder
EXHIBIT 10.68
FIFTH AMENDMENT TO THE
LEAR CORPORATION
EXECUTIVE SUPPLEMENTAL SAVINGS PLAN
THIS FIFTH AMENDMENT (this "Amendment") to the Lear Corporation Executive Supplemental Savings Plan (the "Plan") made by the undersigned pursuant to authority delegated by the Compensation Committee of the Board of Directors of Lear Corporation, a Delaware corporation (the "Company"), shall be effective as of January 1, 2007.
WITNESSETH THAT:
1. In the second sentence of the fourth paragraph of Section 2.1 of the Plan, the phrase "Sections 2.2 or 3.3(a)(i)" shall be substituted for the phrase "Sections 2.2 or 3.3."
2. Section 3.3 shall be amended to read in its entirety as follows:
"3.3 SAVINGS MAKE-UP ACCOUNT
(a) A bookkeeping account shall be established on behalf of each
participant in the Plan, which shall be credited with the
amounts described below in subsections (a)(i) through
(a)(iii):
(i) The excess, if any, of (A) the amount of company matching contributions (including both basic matching contributions and discretionary matching contributions) that would have been made on behalf of a participant had the participant's Deferred Compensation been contributed to the Savings Plan (without regard to any refunds of participant contributions required under the Code, or the effects of Code Sections 401(a)(17), 402(g) or 415), over (B) actual company matching contributions (including both basic matching contributions and discretionary matching contributions) made to the participant's account under the Savings Plan.
(ii) The excess, if any, of (A) the amount of pension savings
plan contributions that would have been made on behalf
of a participant (1) if the participant's Deferred
Compensation, as well as the participant's deferred
compensation under the MSPP, had both been included as
Compensation under the Savings Plan and (2) if Code
Sections 401(a)(17) and/or 415 did not apply to the
Savings Plan, over (B) actual pension savings plan
contributions made to the participant's account under
the Savings Plan. Notwithstanding anything contained in
Section 4 to the contrary, such amounts, plus any
earnings credited thereon, shall
be distributed in a lump sum in the calendar year following the year of the participant's termination of employment.
(iii) Interest, computed as described in Section 3.3(b) below, on the amount, if any, of additional pension savings plan contributions with respect to those participants for whom such contributions would otherwise have been made to the Savings Plan as of June 30, but instead were deferred and contributed to the Savings Plan or credited to this Plan as of December 31. Such amounts, plus any earnings credited thereon, shall be distributed at the same time and in the same manner as the amounts under subsection (a)(ii) above.
(b) The Savings Make-up Account shall be credited monthly at the monthly compound equivalent of the Average Interest Rate.
(c) A participant is vested in his or her Savings Make-up Account after three years of Service (as defined in the Savings Plan)."
3. In the first sentence of Section 3.4 of the Plan, the phrase "(including both basic matching contributions and discretionary matching contributions)" shall be inserted after both instances where the phrase "matching contributions" appears.
4. Except to the extent hereby amended, this Plan shall remain in full force and effect.
IN WITNESS WHEREOF, this Amendment to the Plan is adopted on the 14th day of February, 2008.
LEAR CORPORATION
By: /s/ Roger A. Jackson -------------------------- Roger A. Jackson Senior Vice President - Human Resources |
.
.
.
Exhibit 11.1
COMPUTATION OF NET INCOME PER SHARE
(IN MILLIONS, EXCEPT SHARE INFORMATION)
For the Year Ended For the Year Ended For the Year Ended December 31, 2007 December 31, 2006 December 31, 2005 ------------------------------ ------------------------------- ------------------------------- Basic Diluted Basic Diluted Basic Diluted -------------- -------------- -------------- -------------- -------------- -------------- Income (loss) before cumulative effect of a change in accounting principle $ 241.5 $ 241.5 $ (710.4) $ (710.4) $ (1,381.5) $ (1,381.5) After-tax interest expense on convertible debt - - - - - - -------------- -------------- -------------- -------------- -------------- -------------- Income (loss) before cumulative effect of a change in accounting principle, for diluted net income (loss) per share 241.5 241.5 (710.4) (710.4) (1,381.5) (1,381.5) Cumulative effect of a change in accounting principle, net of tax - - 2.9 2.9 - - -------------- -------------- -------------- -------------- -------------- -------------- Net income (loss), for diluted net income (loss) per share $ 241.5 $ 241.5 $ (707.5) $ (707.5) $ (1,381.5) $ (1,381.5) ============== ============== ============== ============== ============== ============== Weighted average shares: Common shares outstanding 76,826,765 76,826,765 68,607,262 68,607,262 67,166,668 67,166,668 Exercise of common stock equivalents (1) - 1,387,483 - - - - Exercise of warrants (2) - - - - - - Shares issuable upon conversion of convertible debt (3) - - - - - - -------------- -------------- -------------- -------------- -------------- -------------- Common and equivalent shares outstanding 76,826,765 78,214,248 68,607,262 68,607,262 67,166,668 67,166,668 ============== ============== ============== ============== ============== ============== Per common and equivalent share: Income (loss) before cumulative effect of a change in accounting principle $ 3.14 $ 3.09 $ (10.35) $ (10.35) $ (20.57) $ (20.57) Cumulative effect of a change in accounting principle - - 0.04 0.04 - - -------------- -------------- -------------- -------------- -------------- -------------- Net income (loss) $ 3.14 $ 3.09 $ (10.31) $ (10.31) $ (20.57) $ (20.57) ============== ============== ============== ============== ============== ============== For the Year Ended For the Year Ended December 31, 2004 December 31, 2003 ------------------------------ ------------------------------ Basic Diluted Basic Diluted -------------- -------------- -------------- -------------- Income (loss) before cumulative effect of a change in accounting principle $ 422.2 $ 422.2 $ 380.5 $ 380.5 After-tax interest expense on convertible debt - 9.3 - 9.0 -------------- -------------- -------------- -------------- Income (loss) before cumulative effect of a change in accounting principle, for diluted net income (loss) per share 422.2 431.5 380.5 389.5 Cumulative effect of a change in accounting principle, net of tax - - - - -------------- -------------- -------------- -------------- Net income (loss), for diluted net income (loss) per share $ 422.2 $ 431.5 $ 380.5 $ 389.5 ============== ============== ============== ============== Weighted average shares: Common shares outstanding 68,278,858 68,278,858 66,689,757 66,689,757 Exercise of common stock equivalents (1) - 1,635,349 - 1,843,755 Exercise of warrants (2) - - - - Shares issuable upon conversion of convertible debt (3) - 4,813,056 - 4,813,056 -------------- -------------- -------------- -------------- Common and equivalent shares outstanding 68,278,858 74,727,263 66,689,757 73,346,568 ============== ============== ============== ============== Per common and equivalent share: Income (loss) before cumulative effect of a change in accounting principle $ 6.18 $ 5.77 $ 5.71 $ 5.31 Cumulative effect of a change in accounting principle - - - - -------------- -------------- -------------- -------------- Net income (loss) $ 6.18 $ 5.77 $ 5.71 $ 5.31 ============== ============== ============== ============== |
(1) Amount represents the number of common shares issued assuming the exercise of dilutive common stock equivalents, including stock options, restricted stock units, performance units and stock appreciation rights, reduced by the number of shares which could have been purchased with the proceeds from the exercise of such common stock equivalents.
(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.
.
.
.
Exhibit 12.1
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
(IN MILLIONS, EXCEPT RATIO OF EARNINGS TO FIXED CHARGES)
Year Ended December 31, --------------------------------------------------------------------- 2007 2006 2005 2004 2003 ------------ ------------ ----------- ----------- ----------- Income (loss) before provision (benefit) for income taxes, minority interests in consolidated subsidiaries, equity in net (income) loss of afffiliates and cumulative effect of a change in accounting principle $ 323.2 $ (653.4) $ (1,128.6) $ 564.3 $ 534.4 Fixed charges 235.9 254.4 228.6 207.2 226.4 Distributed income of affiliates 7.3 1.6 5.3 3.2 8.7 ------------ ------------ ----------- ----------- ----------- Earnings $ 566.4 $ (397.4) $ (894.7) $ 774.7 $ 769.5 ============ ============ =========== =========== =========== Interest expense $ 199.2 $ 209.8 $ 183.2 $ 165.5 $ 186.6 Portion of lease expense representative of interest 36.7 44.6 45.4 41.7 39.8 ------------ ------------ ----------- ----------- ----------- Fixed charges $ 235.9 $ 254.4 $ 228.6 $ 207.2 $ 226.4 ============ ============ =========== =========== =========== Ratio of Earnings to Fixed Charges (1) 2.4 - - 3.7 3.4 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.
.
.
.
Exhibit 21.1
List of Subsidiaries of the Company (1)
Alfombras San Luis S.A. (Argentina) Lear Automotive Electronics and Electrical Products Asia Pacific Components Co., Ltd. (Thailand) (92%) (Shanghai) Co. Ltd. (China) Beijing BAI Lear Automotive Systems Co., Ltd. (China) (50%) Lear Automotive France, SAS (France) Beijing Lear Dymos Automotive Seating and Interior Co., Ltd. Lear Automotive India Private Limited (India) (China) (40%) Lear Automotive Manufacturing, L.L.C. (Delaware) Chongqing Lear Chang'an Automotive Interior Trim Co., Ltd. (China) Lear Automotive Morocco SAS (Morocco) (55%) Lear Automotive Services (Netherlands) B.V. (Netherlands) CL Automotive, LLC (Michigan) (49%) Lear Brits (SA) (Pty.) Ltd. (South Africa) Consorcio Industrial Mexicanos de Autopartes, S. de R.L. de C.V. Lear Canada (Canada) (Mexico) Lear Canada Investments Ltd. (Canada) Dong Kwang Lear Yuhan Hoesa (Korea) (50%) Lear Canada (Sweden) ULC (Canada) General Seating of Canada, Ltd. (Canada) (50%) Lear Car Seating do Brasil Industria e Comercio de General Seating of Thailand Corp. Ltd. (Thailand) (50%) Interiores Automotivos Ltda. (Brazil) GHW Engineering GmbH (Germany) Lear Changan (Chongqing) Automotive System Co. Ltd. (China) Grote & Hartmann Automotive de Mexico S.A. de C.V. (Mexico) (55%) Grote & Hartmann de Mexico S.A. de C.V. (Mexico) Lear Corporation Asientos, S.L. (Spain) Grote & Hartmann South Africa (Pty.) Ltd. (South Africa) Lear Corporation Austria GmbH (Austria) Hanil Lear India Private Limited (India) (50%) Lear Corporation Belgium CVA (Belgium) Honduras Electrical Distribution Systems S. de R.L. de C.V. Lear Corporation Beteiligungs GmbH (Germany) (Honduras) (60%) Lear Corporation Canada, Ltd. (Canada) IACG s.r.o. (Czech Republic) (33.56%) Lear Corporation Changchun Automotive Interior Systems Co., Industrias Cousin Freres, S.L. (Spain) (49.99%) Ltd. (China) Industrias Lear de Argentina SrL (Argentina) Lear Corporation China Ltd. (Mauritius) Integrated Manufacturing and Assembly, LLC (Michigan) (49%) Lear Corporation EEDS and Interiors (Delaware) International Automotive Components Group BVBA (Belgium) Lear Corporation Electrical and Electronics (Michigan) (33.56%) Lear Corporation Electrical and Electronics s.r.o. International Automotive Components Group BV (Netherlands) (Czech Republic) (33.56%) Lear Corporation France SAS (France) International Automotive Components Group GmbH (Germany) Lear Corporation (Germany) Ltd. (Delaware) (33.56%) Lear Corporation Global Development, Inc. (Delaware) International Automotive Components Group Limited (UK) (33.56%) Lear Corporation GmbH (Germany) International Automotive Components Group, LLC (Delaware) Lear Corporation Holdings Spain S.L. (Spain) (33.56%) Lear Corporation Honduras, S. de R.L. (Honduras) International Automotive Components Group S.a.r.L. (Luxembourg) Lear Corporation Hungary Automotive Manufacturing Kft. (33.56%) (Hungary) International Automotive Components Group Skara AB (Sweden) Lear Corporation Interior Components (Pty.) Ltd. (South (33.56%) Africa) International Automotive Components Group (Slovakia) s.r.o. (Slovak Lear Corporation Italia S.r.l. (Italy) Republic) (33.56%) Lear Corporation Japan K.K. (Japan) International Automotive Components Group SL (Spain) (33.56%) Lear Corporation (Mauritius) Limited (Mauritius) International Automotive Components Group Sp. z o.o. (Poland) Lear Corporation Mendon (Delaware) (33.56%) Lear Corporation Mexico, S. de R.L. de C.V. (Mexico) International Automotive Components Group SRO (Czech Republic) Lear Corporation (Nottingham) Limited (UK) (33.56%) Lear Corporation Pension Scheme Trustees Limited (UK) International Automotive Components Group s.r.o. Slovak Branch Lear Corporation Poland II Sp. z o.o. (Poland) (Czech Republic) (33.56%) Lear Corporation Poland Sp. z o.o. (Poland) Jiangxi Jiangling Lear Interior Systems Co. Ltd. (China) (50%) Lear Corporation Portugal -- Componentes Para Automoveis, John Cotton Plastics Limited (UK) S.A. (Portugal) Lear #50 Holdings, L.L.C. (Delaware) Lear Corporation Romania S.r.L. (Romania) Lear Argentine Holdings Corporation #2 (Delaware) Lear Corporation Seating France Feignies SAS (France) Lear ASC Corporation (Delaware) Lear Corporation Seating France Lagny SAS (France) Lear Asian OEM Technologies, L.L.C. (Delaware) Lear Corporation Seating France SAS (France) Lear Automotive Corporation Singapore Pte. Ltd. (Singapore) Lear Corporation Seating Slovakia s.r.o. (Slovak Republic) Lear Automotive Dearborn, Inc. (Delaware) Lear Corporation (Shanghai) Limited (China) Lear Automotive (EEDS) Almussafes Services S.A. (Spain) Lear Corporation Silao S de R.L. de C.V. (Mexico) Lear Automotive EEDS Honduras, S.A. (Honduras) Lear Automotive (EEDS) Spain S.L. (Spain) Lear Automotive (EEDS) Tunisia S.A. (Tunisia) |
Lear Corporation Spain S.L. (Spain) Lear West European Operations GmbH (Luxembourg) Lear Corporation (SSD) Ltd. (UK) Markol Otomotiv Yan Sanayi VE Ticaret A.S. (Turkey) (35%) Lear Corporation Sweden AB (Sweden) Martur Sunger ve Koltuk Tesisleri Ticaret A.S. (Turkey) (35%) Lear Corporation UK Holdings Limited (UK) Mawlaw 569 Limited (UK) Lear Corporation UK Interior Systems Limited (UK) Nanjing Lear Xindi Automotive Interiors Systems Co., Ltd. Lear Corporation (UK) Limited (UK) (China)(50%) Lear Corporation Ukraine Limited Liability Company (Ukraine) OOO Lear (Russia) Lear Corporation Verwaltungs GmbH (Germany) Pendulum, LLC (Alabama) Lear de Venezuela C.A. (Venezuela) Renosol Seating, LLC (Michigan) (49%) Lear do Brasil Industria e Comercio de Interiores Automotivos Renosol Seating Properties, LLC (Alabama) (49%) Ltda. (Brazil) Renosol Systems, LLC (Michigan) (49%) Lear Dongfeng Automotive Seating Co., Ltd. (China) (50%) Reyes Automotive Group, LLC (Texas) (49%) Lear East European Operations GmbH (Luxembourg) RL Holdings, LLC (Michigan) (49%) Lear East European Operations, Luxembourg, Swiss Branch, Shanghai Lear Automobile Interior Trim Co., Ltd. (China)(55%) Kusnacht (Luxembourg) Shanghai Lear Automotive Systems Co., Ltd. (China) Lear EEDS Holdings, L.L.C. (Delaware) Shanghai Lear STEC Automotive Parts Co., Ltd. (China) (55%) Lear Electrical Systems de Mexico, S. de R.L. de C.V. (Mexico) Shanghai Songjiang Lear Automotive Carpet & Accoustics Co. Ltd. Lear European Holding S.L. (Spain) (China) (50%) Lear European Operations Corporation (Delaware) Shenyang Lear Automotive Seating and Interior Systems Co., Ltd. Lear Financial Services (Luxembourg) GmbH (Luxembourg) (China) (60%) Lear Financial Services (Netherlands) B.V. (Netherlands) Societe Offransvillaise de Technologie SAS (France) Lear Furukawa Corporation (Delaware) (80%) Tacle Guangzhou Automotive Seat Co., Ltd. (China) (20%) Lear Holdings (Hungary) Kft. (Hungary) Tacle Seating UK Limited (UK) (51%) Lear Holdings, L.L.C. (Delaware) TACLE Seating USA, LLC (49%) Lear Holdings, S. de R.L. de C.V. (Mexico) Total Interior Systems -- America, LLC (Indiana) (39%) Lear Investments Company, L.L.C. (Delaware) TS Hi-Tech Seat Sdn. Bhd. (Malaysia) (46.15%) Lear Korea Yuhan Hoesa (Korea) UPM S.r.L. (Italy) (39%) Lear-Kyungshin Sales and Engineering LLC (Delaware) (60%) Wuhan Lear-DFM Auto Electric Company, Limited (China)(75%) Lear (Luxembourg) GmbH (Luxembourg) Wuhan Lear-Yunhe Automotive Interior System Co., Ltd. Lear Mexicana, S. de R.L. de C.V. (Mexico) (China) (50%) Lear Mexican Holdings Corporation (Delaware) Lear Mexican Holdings, L.L.C. (Delaware) Lear Mexican Seating Corporation (Delaware) Lear Mexican Trim Operations S. de R.L. de C.V. (Mexico) Lear North Atlantic Operations Corporation (Delaware) Lear North European Operations GmbH (Luxembourg) Lear Offranville SARL (France) Lear Operations Corporation (Delaware) Lear Otomotiv Sanayi ve Ticaret Ltd. Sirketi (Turkey) Lear Rosslyn (Pty.) Ltd. (South Africa) Lear Seating Holdings Corp. # 50 (Delaware) Lear Seating (Thailand) Corp. Ltd. (Thailand) (97.88%) Lear Sewing (Pty.) Ltd. (South Africa) Lear Shanghai Automotive Metals Co. Ltd. (China) Lear Shurlok Electronics (Proprietary) Limited (South Africa) (51%) Lear South Africa Limited (Cayman Islands) Lear South American Holdings Corporation (Delaware) Lear Trim L.P. (Delaware) Lear Trim Oto Yan Sanayi Limited Sirketi (Turkey) Lear UK Acquisition Limited (UK) Lear UK ISM Limited (UK) |
(1) All subsidiaries are wholly owned unless otherwise indicated.
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the Registration Statements (Form S-3 File Nos. 333-145001, 333-139218, 333-16341, 333-85144 and 333-85144-01 through -09; and Form S-8 File Nos. 33-55783, 33-57237, 33-61739, 333-03383, 333-06209, 333-16413, 333-16415, 333-28419, 333-59467, 333-62647, 333-78623, 333-94787, 333-94789, 333-61670, 333-108881, 333-108882, 333-108883, 333-138433, 333-138435 and 333-138436) of Lear Corporation and in the related Prospectus of our reports dated February 13, 2008, with respect to the consolidated financial statements and schedule of Lear Corporation and the effectiveness of internal control over financial reporting of Lear Corporation included in this Annual Report (Form 10-K) for the year ended December 31, 2007.
/s/ Ernst & Young LLP Detroit, Michigan February 13, 2008 |
By: |
/s/ Robert
E. Rossiter
|
By: |
/s/ Matthew
J. Simoncini
|
Signed: |
/s/ Robert
E. Rossiter
|
Signed: |
/s/ Matthew
J. Simoncini
|