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 14, 2007
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 of 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 |
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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)) |
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 14, 2007, the Compensation Committee (the “Compensation Committee”) of the Board of
Directors of Lear Corporation (“Lear,” or the “Company”) approved awards consisting of restricted
stock units (“RSUs”), stock-settled stock appreciation rights (“SARs”) and cash-settled performance
units (“Performance Units”) under the Company’s Long-Term Stock Incentive Plan to certain officers
and key employees. These awards were generally structured such that recipients received 35% of the
total award value in the form of RSUs, 35% in SARs and the remaining 30% in Performance Units.
Robert E. Rossiter, the Company’s Chairman, Chief Executive Officer and President, received
29,874 RSUs, 89,625 SARs and a target Performance Unit award of $768,210, Daniel A. Ninivaggi,
Executive Vice President, General Counsel, Chief Administrative Officer and Corporate Secretary
received 12,088 RSUs, 36,264 SARs and a target Performance Unit award of $310,830, Matthew J.
Simoncini, Senior Vice President and Chief Financial Officer, received 10,188 RSUs, 30,561 SARs and
a target Performance Unit award of $261,960, and James H. Vandenberghe, Vice Chairman, received
15,250 RSUs. In addition, Raymond E. Scott, Senior Vice President and President — North American
Seating Systems, Louis R. Salvatore, Senior Vice President and President — Global Asian
Operations/Customers, and James M. Brackenbury, Senior Vice President and President — European
Operations, each received 9,076 RSUs, 27,225 SARs and a target Performance Unit award of $233,370.
One-half of the RSUs vest after two years, and one-half after four years (except for Mr.
Vandenberghe’s grant, which vests in its entirety after two
years or his earlier retirement, in accordance with standard RSU
terms and conditions); the SARs have a term of seven
years and vest on the third anniversary of the grant date. Payment of each Performance Unit award
is contingent on Lear attaining certain levels of the two equally-weighted performance measures of
earnings growth (5%, 10% and 15% per year average growth for threshold, target and superior
payouts, respectively) and improvement on return on invested capital (3%, 5% and 7% per year
average improvement for threshold, target and superior payouts, respectively) during the 2008 to
2010 performance period. Otherwise, the terms of the Performance Unit awards are materially
consistent with the terms of the performance unit awards for the 2007 to 2009 period. The
foregoing summary of the terms of the Performance Unit awards is qualified in its entirety by
reference to the full text of the form of Performance Unit award agreement, which is attached
hereto as Exhibit 10.1 and incorporated by reference herein. The terms of the RSU and SARs awards
are materially consistent with the terms of prior awards previously disclosed by the Company.
On November 14, 2007, the Compensation Committee approved performance share awards
(“Performance Shares”) to certain members of Lear’s management for the 2007 to 2009 performance
period. Mr. Rossiter received an award of 18,556 Performance Shares, Mr. Vandenberghe received
7,801 Performance Shares, Mr. Ninivaggi received 5,904 Performance Shares, Mr. Simoncini received
3,373 Performance Shares, Mr. Scott and Mr. Brackenbury each received 4,217 Performance Shares, and
Mr. Salvatore received 3,879 Performance Shares. The number of Performance Shares actually earned
will depend on the attainment of certain levels (threshold, target or superior) of the two
equally-weighted performance measures of improvement on return on invested capital and relative
return to shareholders compared to companies within the S&P 500 Index. The specific threshold,
target and superior levels of these performance measures are identical to, and the remainder of the
terms of the Performance Share awards are materially consistent with, those of the performance
share awards for the 2006-2008 that were previously disclosed by Lear.
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On November 14, 2007, the Compensation Committee also approved an increase of Mr. Simoncini’s
annual base salary from $500,000 to $575,000, effective
November 15, 2007, and his annual incentive compensation target from 60%
to 70% of his base salary, based on his recent promotion to
the position of chief financial officer.
On November 15, 2007, Lear entered into a new employment agreement (the “Employment
Agreement”) with Mr. Rossiter. The terms of the Employment Agreement are generally consistent with
the terms of his prior employment agreement except as described in this summary. The Employment
Agreement has a fixed term from November 15, 2007 to December 31, 2010. The term of the
Employment Agreement may be extended by one year by Lear before the end of the second year of the
Employment Agreement. Mr. Rossiter’s base salary has been increased to $1,250,000 with a target
bonus of no less than 150% of his base salary under Lear’s annual incentive compensation plan. The
termination provisions of the Employment Agreement are materially consistent with the terms of Mr.
Rossiter’s prior agreement, except that his severance benefit is reduced to one year’s salary and
bonus in the third year of the Agreement. The Agreement also modifies and extends Mr. Rossiter’s
non-competition obligations and contemplates that Mr. Rossiter will enter into a one-year
consulting agreement with Lear upon the termination of the Agreement. The foregoing summary is
qualified in its entirety by reference to the full text of the Employment Agreement, which is
attached hereto as Exhibit 10.2 and incorporated by reference herein.
On November 15, 2007, Lear entered into a consulting agreement (the “Consulting Agreement”)
with Mr. Vandenberghe, effective upon his expected retirement from Lear on May 31, 2008. Under the
terms of the Consulting Agreement, Mr. Vandenberghe will receive cash compensation of $700,000
during the one-year term of the Consulting Agreement and will provide transition, consulting and
other related services to Lear. The restrictive covenants in his existing employment agreement
will continue to apply until two years after the end of the consulting period. The foregoing
summary is qualified by reference to the full text of the Consulting Agreement, which is attached
hereto as Exhibit 10.3 and incorporated by reference herein.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
(a) On November 14, 2007, the Board of Directors of the Company amended Article V of the By-Laws of
the Company (the “By-Laws”), effective immediately, to authorize the issuance of uncertificated
shares and set forth the rights of holders of uncertificated shares of stock of the Company and the
procedures for the transfer of such uncertificated shares. The Company approved this amendment in
connection with its compliance with the New York Stock Exchange rule requiring that securities
listed on the exchange be eligible for a direct registration system by January 2008.
The foregoing description of the amendment of the By-Laws is qualified in its entirety
by reference to the full text of the By-Laws (as amended as of November 14, 2007) attached
hereto as Exhibit 3.1 and incorporated herein by reference.
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