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EXHIBIT 10.5
July 5, 2000
Mr. Douglas G. DelGrosso
5763 Algonquin Court
Troy, MI 48098
Dear Doug:
Lear Corporation (the "Company") considers it essential to its best
interest and the best interests of its stockholders to foster the continuous
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 and that certain of its executives are not practically disabled from
discharging their duties upon a 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 July 1, 2000
("Effective Date") and the term of this Agreement shall at all times be three
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 three years, until the date three years after written notice
is provided by either the Company or the Executive that this Agreement is not to
be further extended or until the date the Executive reaches his or her normal
retirement date under the Company's retirement plan for salaried employees then
in effect, whichever shall first occur (the "Term"). There shall be no renewal
of the Term after the Date of Termination.
2. TERMS OF EMPLOYMENT. During the Term, you agree to be a full-time
employee of the Company serving in the position of Senior Vice President - North
American and South American Operations of the Company and to devote
substantially all of your working time and attention to the business and affairs
of the Company and, to the extent necessary, to discharge the
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responsibilities associated with your position as Senior Vice President - North
American and South American Operations of the Company, to use your best efforts
to perform faithfully and efficiently such responsibilities. In addition, you
agree to serve in such other capacities or offices to which you may be assigned,
appointed or elected from time to time by the Board. 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 who 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.
3. COMPENSATION.
(i) As compensation for your services, under this Agreement, you shall
be entitled to receive an initial base salary of $480,000 per annum, 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.
(ii) In addition to compensation provided for in Subsection (i) of this
Section 3, the Company agrees (A) to provide the same or comparable benefits
with respect to any compensation or benefit plan in which you participate as of
the Effective Date which is material to your total compensation, unless an
equitable arrangement (embodied in an ongoing substitute or alternative plan)
has been made with respect to such plan; and (B) to maintain your ability to
participate therein (or in such substitute or alternative plan) on a basis not
materially less favorable, both in terms of the opportunities provided and the
level of your participation relative to other participants, than exists on the
Effective Date.
(iii) The Company shall reimburse you for all reasonable travel,
entertainment and other business expenses incurred by you in the performance of
your responsibilities under this Agreement promptly upon receipt of written
substantiation of such expenses. You shall also be paid all additional amounts
necessary to discharge all federal and state tax liabilities incurred by you
that are attributable to all deemed compensation arising as a consequence of
your personal use of property owned or leased by the Company, excepting only
your personal use of any Company aircraft, including federal and state taxes
assessed against such additional compensation.
(iv) You shall be entitled to perquisites available to other officers
of the Company, and shall be entitled to four (4) weeks of vacation per year.
4. TERMINATION OF EMPLOYMENT. Your employment may be terminated as set
forth herein. If your employment should terminate during the Term, your
entitlement to benefits shall be determined in accordance with Section 5 hereof.
(i) NOTICE. Your employment may be terminated by either the Company or
you by giving a Notice of Termination, as defined in Subsection (vii) of this
Section 4.
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(ii) DISABILITY. If, as a result of your incapacity due to physical or
mental illness, you become permanently disabled and begin actually to receive
disability benefits pursuant to the Lear Corporation's Salary Continuation Plan,
the Lear Corporation's Long Term Disability (LTD) Plan for Salaried Employees,
the Lear Corporation Executive Disability Insurance Plan or any successor
thereto, your employment may be terminated for "Disability".
(iii) CAUSE. Termination of your employment for "Cause" shall mean
termination upon:
(A) an act of fraud, embezzlement or theft by you in connection with
your duties or in the course of your employment with the Company;
(B) your intentional wrongful damage to the property of the Company;
(C) your intentional wrongful disclosure of secret processes or
confidential information of the Company;
(D) your intentional breach of Section 10 or Section 11 hereof while
you remain in the employ of the Company;
(E) an act of Sexual Harassment (as defined below);
(F) an act of Gross Misconduct (as defined below);
(G) discrimination on the basis of race, color, religion or national
origin; or
(H) a felony conviction for a crime involving moral turpitude.
and the determination by the Directors of the Company as hereafter provided that
any such act shall have been materially harmful to the Company. For purposes of
this Agreement, "Sexual Harassment" shall mean unwelcome sexual advances,
requests for sexual favors, and other verbal or physical conduct of a sexual
nature, based on the totality of the circumstances, such as the nature of the
sexual advances and the context in which the alleged incidents occurred, when
(1) submission to such conduct is made either explicitly or implicitly a term or
condition of an individual's employment, (2) submission to or rejection of such
conduct by an individual is used as the basis of employment decisions affecting
such individual, or (3) such conduct has the purpose or effect of unreasonably
interfering with an individual's work performance or creating an intimidating,
hostile, or offensive working environment. For purposes of this Agreement,
"Gross Misconduct" shall mean a willful or negligent act or omission, which is
contrary to established policies or practices of the Company and which has or
will have a material and adverse impact on the business or reputation of the
Company, or on the business of the Company's customers or suppliers as such
relate to the Company. For purposes of this Agreement, no act, or failure to
act, on your part shall be deemed for "Cause" unless done, or omitted to be
done, by you not in good faith and without reasonable belief that your action or
omission was in the best interest of the Company. Notwithstanding the foregoing,
you shall not be deemed to have been terminated for
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"Cause" hereunder unless and until there shall have been delivered to you a copy
of a resolution duly adopted by the affirmative vote of a majority of the
Directors then in office at a meeting of the Directors called and held for such
purpose (after reasonable notice to you and an opportunity for you, together
with your counsel, to be heard before the Directors), finding that, in the good
faith opinion of the Directors, you have committed an act set forth above in
this Section 4(iii) and specifying the particulars thereof in detail. Nothing
herein shall limit your right or your beneficiaries' right to contest the
validity or propriety of any such determination.
(iv) GOOD REASON. For purposes of this Agreement, "Good Reason" shall
mean the occurrence, without your express written consent, of any of the
following circumstances or events unless such circumstances or events are fully
corrected prior to the Date of Termination specified in the Notice of
Termination, as such terms are defined in Subsections (viii) and (vii) of this
Section 4, respectively, given in respect thereof:
(A) 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 similarly affecting all
executive officers of the Company;
(B) the failure by the Company to pay or provide to you within seven
(7) days of receipt by the Company of your written demand 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;
(C) except in the case of across-the-board reductions, deferrals or
eliminations similarly affecting all executive officers of the Company,
the failure by the Company to (i) continue in effect any compensation
or benefit plan in which you participate which is material to your
total compensation and benefits, including but not limited to the
Company's plans currently in effect or hereafter adopted, and any plans
adopted in substitution therefor, or (ii) continue to provide you with
benefits substantially similar, in 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;
(D) the failure to elect, reelect or otherwise maintain you in the
office or position in the Company which you held immediately prior to
such failure, or your removal as a Director of the Company (or any
successor thereof) if you shall have been a Director of the Company;
(E) there has been an adverse change in your responsibilities, position
(including substantial change in status, reporting relationships or
working conditions), authority or duties, which situation is not
remedied within ten (10) calendar days after receipt by the Company of
written notice from you of such change; or
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(F) without limiting, the generality or effect of the foregoing, any
material breach of this Agreement by the Company.
Your continued employment with the Company shall not constitute consent to, or a
waiver of rights with respect to, any circumstance constituting Good Reason
hereunder.
(v) CHANGE IN CONTROL. Notwithstanding, anything contained in this
Agreement to the contrary, if a Constructive Termination (as defined in Section
4(vi)) shall have occurred after a Change in Control shall have occurred, you
may terminate employment with the Company during the 30 day period immediately
following the first anniversary of the occurrence of such Change in Control,
with the right to severance compensation as provided in Section 5(iv) hereof
and, if applicable, Section 6 hereof. For purposes of this Agreement, a "Change
in Control" shall have occurred if at any time during the Term any of the
following events shall occur:
(A) the Company is merged or consolidated or reorganized into or with
another corporation or other legal person or entity and as a result of
such merger, consolidation or reorganization less than 51% of the
combined voting power of the then outstanding securities of such
corporation or person immediately after such transaction is held in the
aggregate by the holders of the then outstanding securities entitled to
vote generally in the election of Directors ("Voting Stock") of the
Company immediately prior to such transaction;
(B) the Company sells or otherwise transfers all or substantially all
of its assets to any other corporation or other legal person or entity
if less than 51% of the combined voting power of the then outstanding
Voting Stock of such corporation or person immediately after such sale
or transfer is held in the aggregate by the holders of Voting Stock of
the Company immediately prior to such sale or transfer;
(C) there is a report filed on Schedule 13D or Schedule 14D-1 (or any
successor schedule, form or report), each as promulgated pursuant to
the Securities Exchange Act of 1934 (the "Exchange Act"), disclosing
that any person (as the term "person" is used in Section 13(d)(3) or
Section 14(d)(2) of the Exchange Act) has become the beneficial owner
(as the term "beneficial owner" is defined under Rule 13d-3 or any
successor rule or regulation promulgated under the Exchange Act) of
securities representing 20% or more of the then outstanding Voting
Stock of the Company;
(D) the Company shall file a report or proxy statement with the
Securities and Exchange Commission pursuant to the Exchange Act
disclosing in response to Item 1 of Form 8-K-thereunder or Item 6(e) of
Schedule 14A thereunder (or any successor schedule, form or report or
item therein) that a change in control of the Company has or may have
occurred or will or may occur in the future pursuant to any then
existing, contract or transaction; or
(E) during any period of two consecutive years, individuals who at the
beginning of any such period constitute the Directors of the Company
cease for any reason to constitute
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at least a majority thereof unless the election, or the nomination for
election by the Company's shareholders, of each Director of the Company
first elected during such period was approved by a vote of at least
two-thirds of the Directors of the Company then still in office who
were Directors of the Company at the beginning, of any such period.
Notwithstanding the foregoing provisions of Sections 4(v)(A) and 4(v)(B) hereof,
a Change in Control shall not be deemed to have occurred under Section 4(v)(A)
or 4(v)(B) if: (i) the Chairman and CEO, President and COO, and Vice Chairman
(i.e., the top three executive officers) of the Company shall hold officer
positions of substantially equivalent responsibility and authority with the
corporation surviving such merger, consolidation, or reorganization, or the
entity acquiring such assets (the "Acquiror"); and (ii) not less than 40% of the
members of the Board of Directors or other governing body of the Acquiror shall
have been directors of the Company during the 90 day period immediately
preceding such merger, consolidation, reorganization or acquisition of assets.
Notwithstanding the foregoing provisions of Section 4(v)(C) and 4(v)(D) hereof,
a Change in Control shall not be deemed to have occurred for purposes of this
Agreement solely because (a) the Company, (b) an entity in which the Company
directly or indirectly beneficially owns more than 50% of the voting securities
or (c) any Company-sponsored employee stock ownership plan or any other employee
benefit plan of the Company, or any entity holding shares of Voting Stock for or
pursuant to the terms of any such plan, either files or becomes obligated to
file a report or a proxy statement under or in response to Schedule 13D,
Schedule 14D-1, Item I of Form 8-K or Item 6(e) of Schedule 14A (or any
successor schedule, form or report or item therein) under the Exchange Act,
disclosing beneficial ownership by it of shares of Voting Stock of the Company,
whether in excess of 20% or otherwise, or because the Company reports that a
change in control of the Company has or may have occurred or will or may occur
in the future by reason of such beneficial ownership by the entities described
in clauses (a), (b) and (c) of this paragraph.
(vi) CONSTRUCTIVE TERMINATION. For purposes of this Agreement,
"Constructive Termination" shall mean the occurrence, without your express
written consent, of any of the following circumstances or events unless such
circumstances or events are fully corrected prior to the Date of Termination
specified in the Notice of Termination, as such terms are defined in Subsections
(viii) and (vii) of this Section 4, respectively, given in respect thereof:
(A) any reduction, other than across-the-board 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;
(B) the failure by the Company to pay or provide to you within seven
(7) days of receipt by the Company of your written demand any amounts
of base salary or Bonus or any benefits which are due, owing and
payable to you pursuant to the terms hereof, or to pay to you any
portion of an installment of deferred compensation due under any
deferred compensation program of the Company;
(C) the failure by the Company to (i) continue in effect any
compensation or benefit plan in which you participate which is material
to your total compensation and benefits,
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including but not limited to the Company's plans currently in effect or
hereafter adopted, and any plans adopted in substitution therefor, or
(ii) continue to provide you with benefits substantially similar, in
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;
(D) the failure to elect, reelect or otherwise maintain you in the
office or substantially same position in the Company which you held
immediately prior to such failure, or your removal as a Director of the
Company (or any successor thereof) if you shall have been a Director of
the Company;
(E) there has been an adverse change in your responsibilities, position
(including substantial change in status, reporting relationships or
working conditions), authority or duties, which situation is not
remedied within ten (10) calendar days after receipt by the Company of
written notice from you of such change;
(F) the requirement by the Company that you change your principal
location of work to any location which is in excess of 50 miles from
your principal location of work immediately prior to such relocation,
or a material increase in your travel away from your office in the
course of discharging your responsibilities or duties hereunder,
without, in either case, your prior written consent; or
(G) without limiting, the generality or effect of the foregoing, any
material breach of this Agreement by the Company.
Your continued employment with the Company shall not constitute consent to, or a
waiver of rights with respect to, any circumstance constituting Constructive
Termination hereunder.
(vii) NOTICE OF TERMINATION. Any termination of your employment by the
Company or by you shall be communicated by written Notice of Termination to the
other party hereto in accordance with Section 9 hereof. 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.
(viii) DATE OF TERMINATION. "Date of Termination" shall mean
(A) if your employment is terminated for Disability pursuant to
Subsection (ii) of this Section 4, the date on which you are considered
disabled pursuant to the Lear Corporation's Salary Continuation Plan,
the Lear Corporation's Long Term Disability (LTD) Plan for Salaried
Employees, the Lear Corporation Executive Disability Insurance Plan or
any successor thereto;
(B) if your employment is terminated by reason of your death, the date
of your death;
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(C) if your employment is terminated by you for Good Reason or by
either party for any other reason (other than Disability, death, or
your voluntary resignation without Good Reason), the date specified in
the Notice of Termination (which, in the case of a termination by you
for Good Reason, shall not be less than thirty (30) nor more than sixty
(60) days from the date such Notice of Termination is given); and
(D) if your employment is terminated by your voluntary resignation
without Good Reason (as defined in Subsection (iv) of this Section 4),
the Date of Termination shall be forty-five (45) 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.
(ix) EMPLOYEE BENEFITS. A termination by the Company pursuant to
Section 4(ii) hereof or by you pursuant to Section 4(iv) or Section 4(v) 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; provided, however, that if
you shall have received or shall be receiving benefits under Section 5 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. If
this Agreement or your employment is terminated under circumstances in which you
are not entitled to any payments under Section 5 hereof, you shall have no
further obligation or liability to the Company hereunder with respect to your
prior or any future employment by the Company.
5. COMPENSATION UPON TERMINATION OR DURING DISABILITY. Upon termination
of your employment with the Company during the Term, you shall be entitled to
the following compensation and benefits:
(i) If your employment is terminated for Disability, (a) 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 in the nature of salary continuation
from all sources equals your base salary, at the rate in effect on the Date of
Termination, plus any Bonus earned and all other amounts to which you are
entitled under any compensation or benefit plans of the Company, prorated for
the portion of the Bonus, compensation or benefit measurement period occurring
prior to the Date of Termination, and (b) for the period from the end of the
calendar year in which such termination occurs until the end of the Term, 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 in the nature of salary continuation from all sources
equals your base salary at the rate in effect on the Date of Termination. After
the end of the Term, your benefits shall be determined under the Company's
retirement, insurance and
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other compensation programs then in effect in accordance with the terms of such
programs, provided that such terms shall not be less advantageous to you than
the terms of such programs in effect as of the Effective Date.
(ii) If your employment shall be terminated (a) by the Company for
Cause, or (b) by you other than for Good Reason or a Constructive Termination
after a Change in Control, the Company shall pay you your base salary
proportionately allocated on a pro-rata basis 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 your voluntary resignation
without Good Reason, you shall be compensated under this Subsection 5(ii) only
to the extent that you actively performed your assigned responsibilities through
the Date of Termination.
(iii) 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 proportionately allocated on a pro-rata basis through the Date of
Termination and for a period of 12 whole calendar months thereafter plus, if the
Date of Termination shall not occur on the first day of a calendar month, the
balance of the month in which the Date of Termination occurs, at the rate in
effect at the time of your death, plus any Bonus earned, 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.
(iv) If your employment shall be terminated (a) by the Company other
than for Cause or Disability or (b) by you for Good Reason or because of
Constructive Termination after a Change in Control, then you shall be entitled
to the benefits provided below:
(A) 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 30 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, any Bonus earned, 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.
(B) 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, excluding any amounts payable under Section 5(iv)(D)
hereof, and excluding your rights at law or in
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equity (other than rights to damages for termination of your employment
or this Agreement), a payment, which shall be made either (i) if
mutually agreed to by you (or your estate or other representative) and
the Company as of the Date of Termination, in a lump sum within five
business days after the Termination Date in an amount equal to the
present value of the Severance Payment (as defined below), using a
discount rate equal to the applicable interest rate promulgated by the
Internal Revenue Service ("IRS") under Section 4l7(e)(3) of the
Internal Revenue Code of 1986, as amended ("Code") for the third month
preceding the month in which the Termination Date occurs, and if the
IRS ceases to promulgate such interest rates, the last such interest
rate so promulgated, or (ii) in the absence of such an agreement, in
installments, without interest (with exceptions for any amounts imputed
or otherwise deemed or recharacterized as interest under the Code) in
thirty-six (36) equal monthly installments with each such monthly
installment payment equal to 1/36th of the aggregate amount of the
Severance Payment. The "Severance Payment" shall be equal to the sum
of:
(i) 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 two years, had your employment
with the Company continued for such period; plus
(ii) the aggregate Bonus (based upon the highest annual Bonus
that you received with respect to any calendar year during,
the three calendar years immediately preceding the calendar
year in which the Termination Date occurred) which you would
have received pursuant to this Agreement for two years, had
your employment with the Company continued for such period;
plus
(iii) the cash value of all benefits that would be payable to
you under the Company Pension Equalization Plan ("PEP"), the
Company Management Stock Purchase Plan ("MSPP"), the Company
Executive Supplemental Savings Plan ("ESSP"), and the Company
Long-Term Stock Incentive Plan ("LTSIP") (the PEP, MSPP, ESSP
and LTSIP are collectively referred to herein as the "Plans"),
(based upon the highest annual aggregate rate that you
received benefits under each of the Plans with respect to any
calendar year during the three calendar years immediately
preceding the calendar year in which the Termination Date
occurs) pursuant to this Agreement for two years, had your
employment with the Company continued for such period, other
than Plan benefits providing base salary, Bonus and the
benefits to be provided pursuant to Section 5(iv)(D) hereof.
You and the Company acknowledge that references in this Section
5(iv)(B) 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; provided that any amendment during the Term that
reduces benefits under the PEP, the MSPP, the ESSP, or the LTSIP (or
any similar plan of the Company that supplements or supersedes any of
such plans) in any way (including without limitation by reducing, the
rate of benefit accruals or contribution levels under. any of such
plans, or by changing, the basis upon which actuarial equivalents are
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determined under any such plans) shall be disregarded for purposes of
this Section 5(iv)(B). 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.
(C) The Company shall pay all legal fees and expenses incurred by you
as a result of such termination (including without limitation all such
fees and expenses, if any, incurred in seeking to obtain or enforce any
right or benefit provided by this Agreement in accordance with Section
21 hereof).
(D) The Company shall arrange to provide to you, for the remainder of
the Term, 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,
which you were receiving or entitled to receive during the Term
("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 (i) 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 (ii) 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(viii) hereof,
Welfare Benefits payable to you (including your dependents and
beneficiaries) pursuant to this Section 5(iv)(D) shall be reduced to
the extent comparable 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.
(E) 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 stock option, stock purchase, stock
appreciation, or similar equity-based plans of the Company shall expire
as of the Date of Termination and be null, void, and of no further
force or effect, except (i) to the extent the express terms of such
stock option, stock purchase, stock appreciation, or similar
equity-based plans provide for vesting or other manner of continuation
after the Date of Termination, or (ii) on such terms and conditions as
mutually agreed to by you and the Company as of the Date of
Termination.
(v) 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.
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(vi) 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.
(vii) 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 on a timely basis, 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.
(viii) The Company hereby acknowledges that it will be difficult, and
may be impossible, for you to find reasonably comparable employment following
the Termination Date. In addition, 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.
(i) Anything in this Agreement to the contrary notwithstanding, in the
event that it shall be determined (as hereafter provided) that any payment 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 or further Excise Taxes had been imposed upon the Gross-Up Payment.
(ii) Subject to the provisions of Section 6(v) 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
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Payment, shall be made by a nationally recognized firm of certified public
accountants (the "Accounting Firm") selected by you in your sole discretion. 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 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(v) 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.
(iii) 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(ii) 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.
(iv) The fees and expenses of the Accounting Firm for its services in
connection with the determinations and calculations provided for in Section
6(ii) 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.
(v) You shall notify the Company in writing, of any claim by 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 (A)
the expiration of the 30 calendar day period following the date on which you
give such notice to the Company or (B) 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;
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(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;
(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(v), 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.
(vi) If, after the receipt by you of an amount advanced by the Company
pursuant to Section 6(v) hereof, you receive any refund with respect to such
claim, you shall (subject to the Company's complying with the requirements of
Section 6(v) 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
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pursuant to Section 6(v) 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.
7. TRAVEL. Except to the extent that you are permitted to terminate
your employment for Constructive Termination after a Change in Control as
provided in Section 4(v), 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, by agreement in
form and substance satisfactory to you, 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. Failure of the Company to obtain such assumption and agreement prior to
the effectiveness of any such succession 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, except that for
purposes of implementing, the foregoing, the date on which any such succession
becomes effective shall be deemed the 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
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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.
(i) 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, without the written consent of an
officer of the Company of higher rank and standing than yourself (and if there
is no such person then by the Chairman of the Board of Directors), in the
management of any business enterprise if such enterprise engages in substantial
and direct competition with the Company (including without limitation any
supplier to an original equipment automotive vehicle manufacturer) and such
enterprise's sales of any product or service competitive with any product or
service of the Company amounted to 25% of such enterprise's net sales for its
most recently completed fiscal year and if the Company's net sales of said
product or service amounted to 25% of the Company's net sales for its most
recently completed fiscal year. "Competitive Activity" shall not include (i) the
mere ownership of securities in any enterprise and exercise of rights
appurtenant thereto or (ii) participation in management of any enterprise or
business operation thereof other than in connection with the competitive
operation of such enterprise.
(ii) You agree not to engage in any Competitive Activity (A) until one
(1) year after the Date of Termination if you are terminated for Cause or you
terminate your employment for other than Good Reason or Constructive Termination
after a Change in Control, or (B) until three (3) years after the Date of
Termination if you are terminated by the Company other than for Cause or you
terminate your employment for Good Reason or Constructive Termination after a
Change in Control.
(iii) You shall not directly or indirectly, either on your own account
or with or for anyone else, (A) solicit or attempt to solicit any of the
Company's customers (B) solicit or attempt to solicit for any business endeavor
any employee of the Company or (C) 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, (a) until one (1) year after the Date
of Termination if you are terminated for Cause or you terminate your employment
for other than Good Reason or Constructive Termination after a Change in
Control, or (b) until three (3) years after the Date of Termination if you are
terminated other than for Cause or you terminate your employment for Good Reason
or Constructive Termination after a Change in Control.
(iv) You acknowledge and agree that damages for 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,
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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.
(v) As compensation for your covenants contained in Sections 10(ii)(B)
and 10(iii)(b), the Company shall pay or cause to be paid to you a payment,
which shall be made either (i) if mutually agreed to by you (or your estate or
other representative) and the Company as of the Date of Termination, in a lump
sum within five business days after the Termination Date in an amount equal to
the present value of the Noncompete Payment (as defined below), using a discount
rate equal to the applicable interest rate promulgated by the Internal Revenue
Service ("IRS") under Section 4l7(e)(3) of the Internal Revenue Code of 1986, as
amended ("Code") for the third month preceding the month in which the
Termination Date occurs, and if the IRS ceases to promulgate such interest
rates, the last such interest rate so promulgated, or (ii) in the absence of
such an agreement, in installments, without interest (with exceptions for any
amounts imputed or otherwise deemed or recharacterized as interest under the
Code) in thirty-six (36) equal monthly installments with each such monthly
installment payment equal to 1/36th of the aggregate amount of the Noncompete
Payment. The "Noncompete Payment" shall be equal to the sum of:
(i) 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 one year, had your employment with the Company continued
for such period; plus
(ii) the aggregate Bonus (based upon the highest annual Bonus that you
received with respect to any calendar year during, the three calendar
years immediately preceding the calendar year in which the Termination
Date occurred) which you would have received pursuant to this Agreement
for one year, had your employment with the Company continued for such
period plus
(iii) the cash value of all benefits that would be payable to you under
the Company Pension Equalization Plan ("PEP"), the Company Management
Stock Purchase Plan ("MSPP"), the Company Executive Supplemental
Savings Plan ("ESSP"), and the Company Long-Term Stock Incentive Plan
("LTSIP") (the PEP, MSPP, ESSP and LTSIP are collectively referred to
herein as the "Plans"), (based upon the highest annual aggregate rate
that you received benefits under each of the Plans with respect to any
calendar year during the three calendar years immediately preceding the
calendar year in which the Termination Date occurs) pursuant to this
Agreement for one year, had your employment with the Company continued
for such period, other than Plan benefits providing base salary, Bonus
and the benefits to be provided pursuant to Section 5(iv)(D) hereof.
You and the Company acknowledge that references in this Section 10(v) 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; provided that any
amendment during the Term that reduces benefits under the PEP, the
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MSPP, the ESSP, or the LTSIP (or any similar plan of the Company that
supplements or supersedes any of such plans) in any way (including without
limitation by reducing, the rate of benefit accruals or contribution levels
under. any of such plans, or by changing, the basis upon which actuarial
equivalents are determined under any such plans) shall be disregarded for
purposes of this Section 5(iv)(B). In addition, you and the Company acknowledge
that references in this Section 10 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.
11. CONFIDENTIALITY AND COOPERATION.
(i) 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, 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.
(ii) 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, etc. 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.
(iii) During the Term and for a period ending on the later of three (3)
years after the Date of Termination or at the conclusion of any dispute which
commences during the Term, you shall cooperate and comply with all reasonable
requests made by the Company in prosecuting or defending any claim with respect
to any litigation or arbitration or any pending or threatened litigation or
arbitration, involving any invention, patent, trademark, trade name, secret
process, or other intangible property in which the Company has, or reasonably
believes it has, proprietary rights in and which you had substantial involvement
in the development of during the Term of your employment. 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(iii).
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12. ARBITRATION.
(i) Except as contemplated by Section 10(iv) or Section 12 (iii)
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.
(ii) The parties agree to use their best efforts to cause (a) the two
individuals set forth in the preceding Section 12(i), 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 (b)
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.
(iii) 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,
the Executive shall continue to receive at a minimum the base salary which the
Executive was receiving immediately prior to the act or omission which forms the
basis for the dispute.
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.
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
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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 without limitation any prior
employment agreement), 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, if it should appear to you that the
Company has failed to comply with any of its obligations under this Agreement or
in the event that the Company or any other person takes any action to declare
the Agreement void or unenforceable or institutes any litigation designed to
deny, or to recover from you the benefits intended to be provided to you
hereunder, the Company irrevocably authorizes you from time to time to retain
counsel of your choice, at the expense of the Company as hereafter provided, to
represent you in connection with the initiation or defense of any litigation or
other legal action relating, thereto, whether by or against the Company or any
Director, officer, shareholder or other person affiliated with the Company, in
any jurisdiction. Notwithstanding any existing or prior attorney-client
relationship between the Company and any such counsel, the Company irrevocably
consents to your entering into an attorney-client relationship with such
counsel, and in that connection the Company and you agree that a confidential
relationship shall exist between you and such counsel. The Company shall pay or
cause to be paid and be solely responsible for any and all 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 or any person contesting the validity or enforceability of this
Agreement or any provision hereof as aforesaid.
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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 July 1, 2000
("Effective Date").
Sincerely,
LEAR CORPORATION
By: /s/ Joseph F. McCarthy
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Agreed to this 5th day of July, 2000
By: /s/ Douglas G. DelGrosso
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Douglas G. DelGrosso
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