UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 5, 2008
LEAR CORPORATION
(Exact name of registrant as specified in its charter)
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| Delaware
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1-11311
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13-3386776 |
| (State or other jurisdiction incorporation)
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(Commission File Number)
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(IRS Employer Identification Number) |
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| 21557 Telegraph Road, Southfield, MI
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48033 |
| (Address of principal of executive offices)
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(Zip Code) |
(248) 447-1500
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
TABLE OF CONTENTS
Section 5 — Corporate Governance and Management
Item 5.02 – Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(e) On November 5, 2008, the Compensation Committee (the “Committee”) of the Board of Directors of
Lear Corporation (“Lear” or the “Company”) approved the 2009 terms and conditions (“2009 Terms”)
for the Lear Corporation Management Stock Purchase Plan (“MSPP”), which is maintained under the
Lear Corporation Long-Term Stock Incentive Plan (“LTSIP”). Under the 2009 Terms, executives will
be able to defer up to 5% of their 2009 salary into (i) restricted stock units (“RSUs”) that track
the value of Lear common stock and generally vest and pay out in shares of common stock at the end
of a three-year vesting period, (ii) a cash-settled stock appreciation right (“SAR”) that generally
vests at the end of a three-year period and is exercisable for two years thereafter (or vests on an
accelerated basis, but no earlier than the first anniversary of the grant date, if Lear’s stock
price equals or exceeds 150% of the grant price for 10 consecutive trading days), and/or (iii) a
notional cash account that accrues interest (“Notional Cash Account”) during a three-year period.
These three deferral alternatives will be available, provided that the average closing price of
Lear’s common stock during the last five trading days of 2008 is equal to or greater than $10 per
share. A minimum of 50% of a participant’s deferral must be in RSUs, and the remaining 50% may be
in SARs or the Notional Cash Account in increments of 25%. However, if the average closing price
of Lear’s common stock during the last five trading days of 2008 is less than $10 per share, the
Notional Cash Account will be the only deferral alternative. The remainder of the 2009 Terms are
substantially consistent with those of the MSPP previously disclosed by Lear. The foregoing
summary of the 2009 Terms is qualified in its entirety by reference to the full text of the 2009
Terms, which is attached hereto as Exhibit 10.1 and incorporated by reference herein.
On November 5, 2008, the Committee also approved an amendment (“ESSP Amendment”) to the
Executive Supplemental Savings Plan (“ESSP”) that effectively terminates certain portions of the
plan. The ESSP allows for participants to defer base salary and/or bonus amounts.
The Company has historically made matching contributions to participants based on these elective
deferrals as well as deferrals under the MSPP. As of October 31, 2008, there were 184 participants
in the ESSP.
The ESSP Amendment (i) terminates future elective deferrals of salary and bonus as well as
company matching contributions, (ii) voids deferral elections made in 2007 with respect to bonuses
payable in 2009, and (iii) provides for the distribution of participants’ balances of all elective
deferrals and company matching contributions in a lump sum. Participants with balances of less
than $50,000 will receive a distribution in January 2009. Each participant with a balance
exceeding $50,000 will receive a distribution in January 2010 unless such participant agrees to a 10%
reduction in the amount to which such participant would otherwise be entitled, in which case such participant
will receive a distribution in January 2009. The foregoing summary of the ESSP Amendment is
qualified in its entirety by reference to the full text of the ESSP Amendment, which is attached
hereto as Exhibit 10.2 and incorporated by reference herein. Approximate balances under the ESSP
as of October 31, 2008 for certain of Lear’s executive officers, including the named executive officers, were as follows: Robert E. Rossiter, Chairman, Chief Executive Officer and President -
$970,456; Daniel A. Ninivaggi, Executive Vice President — $29,909; Raymond E. Scott, Senior Vice
President and President, Global Electrical and Electronic Systems — $186,462; Louis R. Salvatore,
Senior Vice President and President, Global Seating Systems — $150,520; Matthew J. Simoncini,
Senior Vice President and Chief Financial Officer — $72,126; James M. Brackenbury, Senior Vice
President and President, European Seating Operations – $87,403; and James H. Vandenberghe, Former Vice
Chairman — $683,271.
On November 6, 2008, the Committee approved awards consisting of stock-settled stock
appreciation rights (“Stock –settled SARs”) to certain executive officers. The Stock-settled SARs
have a grant price of $1.69 and a term expiring on May 1, 2012. The Stock-settled SARs generally
become exercisable in two equal installments on May 1, 2009 and May 1, 2010. The amount scheduled
to become exercisable on May 1, 2010 may become exercisable on an accelerated basis as of the date
that is the later of (i) the end of the first 10-consecutive trading day period beginning after the
grant throughout which Lear’s closing stock price has equaled or exceeded an amount representing an
increase of 100% from the grant price, or (ii) May 1, 2009. Other terms of the Stock-settled SARs
are substantially consistent with the terms of SARs previously disclosed by Lear. Recipients of the
Stock-settled SAR grants included the following persons
with respect to the following number of shares of Lear’s stock: Robert E. Rossiter – 125,000;
Daniel A. Ninivaggi – 80,000; Raymond E. Scott – 65,000; Louis R. Salvatore – 65,000; Matthew J.
Simoncini – 65,000; and James M. Brackenbury – 40,000. The foregoing summary of the SARs is
qualified in its entirety by reference to the full text of the Stock-settled SAR Terms and
Conditions, which is attached hereto as Exhibit 10.3 and incorporated by reference herein.