| Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
(b), (c) and (e)
On June 25, 2019, Terrence B. Larkin tendered written notice to the Board of Directors (the “Board”) of Lear Corporation (the “Company”) that he has determined to resign as Executive Vice President, Business Development, General Counsel and Corporate Secretary of the Company, effective July 31, 2019. Thereafter, Mr. Larkin will continue to serve as anon-executive employee of the Company, in a transition and advisory role, until his retirement from the Company on January 3, 2020. The Board has appointed Harry A. Kemp to serve as Mr. Larkin’s replacement in the role of Senior Vice President, General Counsel and Corporate Secretary of the Company, effective August 1, 2019.
Mr. Kemp, age 43, currently serves as Vice President and Corporate Counsel of the Company, a position he has held since January 1, 2019. Previously, he served in other positions at the Company, including as Vice President and Divisional Counsel of Lear’s Seating Division since September 1, 2016 and Vice President and Divisional Counsel of Lear’sE-Systems Division from December 1, 2009 until September 1, 2016.
There are no family relationships between Mr. Kemp and any of the directors and executive officers of the Company, nor are there transactions in which Mr. Kemp has an interest requiring disclosure under Item 404(a) of RegulationS-K. Except for the Kemp Agreement (as defined below), there are no arrangements or understandings between Mr. Kemp and the Company, its officers or directors, or, to the Company’s knowledge, any other person, pursuant to which Mr. Kemp was selected as an officer of the Company.
In connection with Mr. Kemp’s appointment as Senior Vice President, General Counsel and Corporate Secretary of the Company, on June 25, 2019, the Company entered into an Employment Agreement with Mr. Kemp, effective August 1, 2019 (the “Kemp Agreement”).
Pursuant to the Kemp Agreement, Mr. Kemp will serve as the Company’s Senior Vice President, General Counsel and Corporate Secretary. Mr. Kemp will receive an initial annual base salary of $500,000 and will be eligible to participate in the Company’s Annual Incentive Plan and 2019 Long-Term Stock Incentive Plan (the “2019 LTSIP”). In connection with his appointment as Senior Vice President, General Counsel and Corporate Secretary of the Company, the Compensation Committee of the Board approved grants of restricted stock units and performance shares with an aggregate grant date value equal to approximately $310,417 to Mr. Kemp under the 2019 LTSIP, effective as of August 1, 2019, representingpro-rata awards for 2019 based on his appointment date.
Pursuant to the Kemp Agreement, in the event that Mr. Kemp’s employment is terminated by the Company other than for “cause” or “incapacity” or by Mr. Kemp for “good reason” (as such terms are defined in the Kemp Agreement), or due to Mr. Kemp’s death, Mr. Kemp will become entitled to receive a severance package comprised of two times the sum of Mr. Kemp’s annual base salary and target bonus, 24 months of continued health coverage, full vesting of time-vested 2019 LTSIP awards andpro-rata vesting of performance-based 2019 LTSIP awards (based on actual performance). In addition, the Kemp Agreement contains restrictive covenants relating tonon-competition, confidential information, andnon-solicitation of the Company’s employees and customers.
In connection with the transition, the Company and Mr. Larkin entered into a Second Amended and Restated Employment Agreement (the “Larkin Agreement”), effective July 31, 2019. Under the Larkin Agreement, Mr. Larkin will serve as anon-executive employee of the Company in a consulting and advisory role, from the effective date thereof through Mr. Larkin’s retirement from the Company on January 3, 2020 (or his earlier termination in accordance with the Larkin Agreement) (the “Term”). During the Term, Mr. Larkin will assist with the leadership transition as reasonably requested by Raymond E. Scott, President and Chief Executive Officer of the Company, and Mr. Kemp. In exchange for providing such transition services during the Term, Mr. Larkin will receive a base salary of $10,000 per month, continue to participate in the Company’s employee benefit plans, as in effect from time to time, and be eligible to receive a cash performance bonus solely with respect to the seven months in the 2019 performance year during which he will serve as Executive Vice President, Business Development, General Counsel and Corporate Secretary of the Company (determined based on Mr. Larkin’s base salary in effect during those seven months). The Larkin Agreement otherwise contains terms substantially similar to those of Mr. Larkin’s employment agreement in effect prior to the amendment and restatement except that, in the event that Mr. Larkin’s employment terminates for any reason during the Term, Mr. Larkin will not be entitled to receive any cash severance benefits.
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