EXHIBIT 10.36
LEAR CORPORATION
EXECUTIVE SUPPLEMENTAL SAVINGS PLAN
Amended and Restated January 1, 2002
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FOREWORD
Effective as of January 1, 1997, Lear Corporation adopted the Lear Corporation
Executive Supplemental Savings Plan (the "Plan") for the benefit of certain of
its key executives. Effective as of January 1, 2002, except as otherwise
provided, Lear Corporation has again amended and restated the Plan to reflect
permitted changes that may be made to deferred compensation elections.
The purposes of the Plan are (a) to permit certain key executives to elect to
defer payment of a portion of current compensation until a later year, and (b)
to provide participants and their beneficiaries under the Lear Corporation
Salaried Pension Plan (the "Pension Plan"), the Lear Corporation Salaried
Retirement Savings Plan (the "Savings Plan") and the Lear Corporation Pension
Equalization Program (the "SERP") with the amount of retirement income that is
not provided under the Pension Plan, Savings Plan or SERP by reason of the
participant having elected to defer compensation under this Plan or under
Section 8.2 of the Lear Corporation Long Term Stock Incentive Plan.
It is intended that the Plan be an unfunded deferred compensation plan for "a
select group of management or highly compensated employees," as that term is
used in the Employee Retirement Income Security Act of 1974, as amended.
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SECTION ONE
Definitions
1.1 Except to the extent otherwise indicated herein, and except to the extent
otherwise inappropriate in the context, the definitions contained in the
Pension Plan and Savings Plan are applicable under the Plan.
1.2 "Actuarial Equivalent" means, with respect to any specified annuity or
benefit, another annuity or benefit, commencing at a different date and/or
payable in a different form than the specified annuity or benefit, but
which has the same present value as the specified annuity or benefit, when
measured using the Applicable Interest Rate and Applicable Mortality Table
as specified in the Pension Plan.
1.3 "Benefits Committee" means the Benefits Committee of the Corporation, as
appointed by the Board of Directors.
1.4 "Board of Directors" means the Board of Directors of the Corporation.
1.5 "Code" means the Internal Revenue Code of 1986, as amended. Any reference
to any Code Section shall also mean any successor provision thereto.
1.6 "Corporation" means Lear Corporation and any successor to such corporation
by merger, purchase or otherwise.
1.7 "Deferred Account" means the bookkeeping account established under Section
3.1 established on behalf of a participant, and includes any deemed
earnings credited thereon.
1.8 "Deferred Compensation" means the amount of a Key Executive's compensation
that such Key Executive has deferred until a later year pursuant to an
election under Section 2.2 of this Plan.
1.9 "Key Executive" means an executive employed by the Corporation who is
entitled to participate in the Plan under Section 2.1.
1.10 "Long Term Stock Incentive Plan" means the Lear Corporation Long Term
Stock Incentive Plan.
1.11 "Management Stock Purchase Program" or "MSPP" means the election to defer
compensation for purposes of purchase of Company stock in accordance with
Section 8.2 of the Lear Corporation Long Term Stock Incentive Plan.
1.12 "Pension Plan" means the Lear Corporation Pension Plan.
1.13 "Pension Make-up Amount" means the pension benefits established under
Section 3.2 on behalf of a participant.
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1.14 "Plan" means the Lear Corporation Executive Supplemental Savings Plan as
from time to time in effect.
1.15 "Savings Plan" means the Lear Corporation Salaried Retirement Savings
Plan. For 1997, Savings Plan shall also include the Masland Associates
Security Plan.
1.16 "Savings Make-up Account" means the bookkeeping account established under
Section 3.3 established on behalf of a participant, and includes any
deemed earnings credited thereon.
1.17 "SERP" means the Lear Corporation Pension Equalization Program.
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SECTION TWO
Participation and Deferral Election
2.1 Eligibility
Participation in the Plan shall be limited to employees of the Corporation
who are designated by the Senior Vice President of Human Resources of the
Corporation and approved for participation in the Plan by the Benefits
Committee. For purposes of participation as of January 1, 1997, this
includes all Vice Presidents of the Corporation and its domestic
subsidiaries, as well as all employees earning base pay of at least the
"Base Salary Threshhold" as of November 15, 1996. As of November 15, 1996,
the Base Salary Threshhold is $125,000.
If first employed after November 15, 1996, an employee shall be eligible
to participate as of the first of the month following one full calendar
month of employment if he or she is a Vice President of the Corporation
and its domestic subsidiaries, or his or her base salary as of date of
employment is at least five sixths of the annual limit (as of such date of
employment) under Code Section 401(a)(17), rounded to the nearest dollar,
subject to approval of the Senior Vice President of Human Resources of the
Corporation.
For years beginning January 1, 2001 and thereafter, an employee shall be
eligible to participate as of the first of the month following one full
calendar month of employment if he or she is a Vice President of the
Corporation and its domestic subsidiaries, or his or her base salary as of
date of employment is at least five sixths of the annual limit (as of such
date of employment) under Code Section 401(a)(17), rounded to the nearest
dollar, subject to approval of the Senior Vice President of Human
Resources of the Corporation. An employee will automatically be eligible
to participate if he or she is designated as an Eligible Employee for the
MSPP for the coinciding Plan Year, even if that person is not otherwise
eligible for this Plan in accordance with this paragraph.
As of each November 15, the Base Salary Threshhold shall be redetermined
as five sixths of the annual limit (as of such November 15) under Code
Section 401(a)(17), rounded to the nearest dollar. Employees who have
never participated under the Plan but who are Vice Presidents of the
Corporation and its domestic subsidiaries, or earning base pay of at least
the "Base Salary Threshhold" shall be eligible to participate as of the
following January 1.
Employees who elect to participate in the Plan shall continue to be
eligible to participate in the Plan in future years, notwithstanding their
base salary as of a November 15 falling below the Base Salary Threshhold
for employees who have never participated in the Plan.
2.2 Deferral Election
Elections of Deferred Compensation shall be made only by Key Executives
and shall be on forms furnished by the Benefits Committee. A Deferred
Compensation election shall
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apply only to compensation (as defined below) for the particular year
specified in the election. Key Executives shall specify the percentage of
such compensation to be deferred under the election, which percentage may
not exceed the maximum rate of Employee Tax-deferred Contributions
permitted under the Savings Plan for the year. For purposes of the
preceding sentence, the term "compensation" means base pay plus short-term
incentive bonuses as paid prior to reduction for (a) his or her Deferred
Compensation election under this Plan, (b) pre-tax contributions under the
Savings Plan and (c) any pre-tax contributions toward health care under
Code Section 125, which is in excess of Limited Compensation. "Limited
Compensation" is the smaller of (A) the limit on pensionable compensation
specified by Code Section 401(a)(17) (including adjustments for changes in
the cost of living as prescribed by the Code), or (B) compensation earned
prior to the time the employee reaches the limit on Employee Tax-deferred
Contributions specified by Code Section 402(g) (including adjustments for
changes in the cost of living as prescribed by the Code).
Except as provided in the following paragraph, a Deferred Compensation
election with respect to compensation for a particular calendar year (i)
must be made before January 1 of such calendar year (or prior to
participation in the Plan if the Key Executive becomes eligible to
participate during the calendar year), (ii) must specify (from the
available alternatives) the date such Deferred Compensation is to be paid
(or commence to be paid) and, if such date is at termination of
employment, the number of installments (not to exceed 10 years) in which
such Deferred Compensation is to be paid, and (iii) once made, cannot be
changed or revoked.
Effective with elections with respect to deferrals of compensation for
calendar years beginning with 2003, Key Executives may change their
elections made in prior years with regard to the payment date and number
of installments, under the following conditions:
a. such re-election shall be made on forms furnished by the Benefit
Committee;
b. such re-election shall be made from the available alternate dates
and forms in effect at the time of such re-election; and
c. such re-election shall only take effect if the Key Executive
terminates employment on or after the second January 1 following
such re-election, with the latest effective election or re-election
on file determining the date and form of distribution if the Key
Executive terminates employment prior to such second January 1
following the re-election.
In the case of an employee who is eligible under Section 2.1 as of one
month following his or her date of employment, any Deferred Compensation
election must be made within 30 days of employment, and it will apply to
compensation earned from date of eligibility for the Savings Plan through
the end of that calendar year.
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2.3 Deferral Suspension
If a Key Executive makes a withdrawal of his or her 401(k) contributions
under the Savings Plan and thereby becomes subject to a suspension of
contributions under the Savings Plan, his or her Deferred Compensation
under this Plan shall also be suspended for the same period required under
the Savings Plan.
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SECTION THREE
Accounts
3.1 Deferred Account
The aggregate of the amounts of Deferred Compensation and deemed earnings
on such amounts shall be paid to the participant or his or her
beneficiary, as applicable, from the general assets of the Corporation in
accordance with this Plan and related election forms. Deemed earnings with
respect to Deferred Compensation shall be credited monthly at the monthly
compound equivalent of the Prime Rate plus 1% in effect at the beginning
of each calendar quarter. Effective January 1, 1998, the interest rate
will be credited at the Prime Rate in effect at the beginning of each
calendar quarter. The Prime Rate shall be the prime rate as published in
the Wall Street Journal Midwest edition showing such rate in effect as of
the first business day of each calendar quarter. A bookkeeping account
shall be maintained for each affected participant to record the amount of
such Deferred Compensation and deemed earnings thereon. Participants are
always 100 percent vested in their Deferred Accounts.
The Plan Administrator may also maintain separate bookkeeping accounts for
Deferred Compensation for each participant for each calendar year plus
deemed earnings with respect to such Deferred Compensation, to facilitate
calculation upon distribution.
3.2 Pension Make-up Amount
A bookkeeping account shall be established on behalf of each participant
in the Plan which, at any time, shall yield a benefit equal to the benefit
as of such date that would have accrued under the Pension Plan and/or the
SERP had the participant not elected to defer compensation under Section
2.2 of this Plan and not elected to defer compensation under the MSPP.
A participant shall be vested in his or her Pension Make-up Amount after
three years of Service (as defined in the Pension Plan).
3.3 Savings Make-up Account
A bookkeeping account shall be established on behalf of each participant
in the Plan, which shall be credited with the excess, if any, of (i) the
amount of employer matching contributions which 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 (ii) actual employer matching
contributions under the Savings Plan. The Savings Make-up Account shall be
credited monthly with deemed investment earnings at the monthly compound
equivalent of the Prime Rate plus 1% in effect at the beginning of each
calendar quarter. Effective January 1, 1998, the interest rate will be
credited at the Prime Rate in effect at the beginning of each calendar
quarter. The Prime Rate shall be the prime rate as published in the Wall
Street Journal
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Midwest edition showing such rate in effect as of the first business day
of each calendar quarter. A participant is vested in his or her Savings
Make-up Account after three years of Service (as defined in the Pension
Plan).
3.4 MSPP Make-up Account
A bookkeeping account shall be established on behalf of each participant
in the Plan, which shall be credited with the excess, if any, of (i) the
amount of employer matching contributions which would have been made on
behalf of a participant had the participant's deferred compensation under
the MSPP 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), up to, but not
exceeding the rate at which the participant contributed to the Savings
Plan for such year, over (ii) actual employer matching contributions under
the Savings Plan. The MSPP Make-up Account shall be credited monthly with
deemed investment earnings at the monthly compound equivalent of the Prime
Rate plus 1% in effect at the beginning of each calendar quarter.
Effective January 1, 1998, the interest rate will be credited at the Prime
Rate in effect at the beginning of each calendar quarter. The Prime Rate
shall be the prime rate as published in the Wall Street Journal Midwest
edition showing such rate in effect as of the first business day of each
calendar quarter. A participant is vested in his or her MSPP Makeup
Account after three years of Service (as defined in the Pension Plan).
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SECTION FOUR
Payment of Benefits
4.1 Event of Payment
The vested account balances of all of a participant's Accounts are payable
as hereinafter provided. No withdrawals, including loans, may be allowed
from the Plan for any reason while the participant is still employed by
the Corporation; however, reemployment of a participant shall not suspend
the payment of any benefits hereunder.
4.2 Payment of Deferred Account
Payment of benefits from a participant's Deferred Account shall be made in
accordance with deferred compensation agreements made at the time the
participant elected to defer compensation. A separate deferred
compensation agreement shall govern each year's Deferred Compensation and
deemed earnings on such Deferred Compensation attributable to any year.
The terms of these deferred compensation agreements dealing with the
timing and form of payment may be changed from year to year by the
Benefits Committee, but once an election is made by a participant as to
the timing and form of a distribution from the Deferred Account with
respect to a particular year, such election is irrevocable, except as
provided in Section 2.2.
4.3 Payment of Savings Make-up Account
Distributions from the Savings Make-up Account shall be made in the same
form and at the same time as benefit payments made under the Savings Plan.
Effective for terminations of employment on and after January 1, 2001,
distributions from the Savings Make-up Account shall be made in the same
form and at the same time as payments made in accordance with a
participant's latest effective deferral election; however in no event
shall payment of benefits in the form of a single lump sum be made prior
to the January 1 following the date of the participant's termination of
employment. A participant's latest deferral election becomes effective as
of the January 1 following the date of such election, or such later date
as may apply to newly-hired participants.
4.4 Payment of MSPP Make-up Account
Distributions from the MSPP Make-up Account shall be made in the same form
and at the same time as benefit payments made under the Savings Plan.
Effective for terminations of employment on and after January 1, 2001,
distributions from the MSPP Make-up Account shall be made in the same form
and at the same time as payments made in accordance with a participant's
latest effective deferral election; however in no event shall payment of
benefits in the form of a single lump sum be made prior to the January 1
following the date of the participant's termination of employment.
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A participant's latest deferral election becomes effective as of the
January 1 following the date of such election, or such later date as may
apply to newly-hired participants.
4.5 Payment of Pension Make-up Amount
Except as provided in Section 4.6 below, distributions of the Pension
Make-up Amount shall be made in the same form and at the same time as
benefit payments made under the Pension Plan. To the extent a lump sum is
payable from this Plan in accordance with this Section 4.5, the Actuarial
Equivalence for such lump sum shall be determined in accordance with
Exhibit A, item (c) of the Pension Plan.
4.6 Other Distributions of Pension Make-up Amount
(a) If the aggregate value of a participant's Pension Make-up Amount
(determined in accordance with Actuarial Equivalence as determined
under the Pension Plan) is less than $10,000, the participant or his
or her beneficiary shall receive benefits under this Plan in the
form of a single lump sum as soon as practicable after termination
of employment, without regard to distribution elections made under
the Pension Plan.
(b) Notwithstanding Section 4.5 or subparagraph (a) of this Section, if
an active participant is eligible to elect and so elects, the
participant may receive the present value (as hereinafter defined)
of the Pension Make-up Amount paid in a lump sum upon termination of
employment.
(i) Such election shall not be effective if termination of
employment occurs before the end of the first full calendar
year beginning after the election is made, except if
termination occurs by reason of death.
(ii) Eligibility to elect this form of benefit shall be limited to
employees who will be at least age 62 and have 10 years of
Service (as defined in the Pension Plan) when benefits are to
be paid, and (A) if the employee is restricted in stock
ownership trades under Section 16b of the Security Exchange
Commission Regulations, have approval of the Compensation
Committee of the Board of Directors, or (B) if the employee is
not restricted in stock ownership trades under Section 16b of
the Security Exchange Commission Regulations, have approval of
the Chief Executive Officer of the Corporation.
(iii) Present value shall mean the lump sum Actuarial Equivalent as
defined under Exhibit A, item (c) of the Pension Plan.
(iv) The benefit calculation shall be made based on the immediate
benefit, reduced as in accordance with the terms of the
Pension Plan.
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(v) If a participant becomes disabled, as defined in the Pension
Plan, termination of employment shall be deemed to occur upon
cessation of benefit accruals under the Pension Plan.
(c) Notwithstanding Section 4.5 or subparagraph (a) of this Section, if
an active participant is eligible to elect and so elects, the
participant may receive the Pension Make-up Amount paid in a series
of annual installments, as elected by the participant and not to
exceed 20 years, commencing as of the first of the month coincident
with or next following termination of employment and payable as of
each anniversary thereafter.
(i) Such election shall not be effective if termination of
employment occurs before the end of the first full calendar
year beginning after the election is made, except if
termination occurs by reason of death.
(ii) Eligibility to elect this form of benefit shall be limited to
employees who will be at least age 62 and have 10 years of
Service (as defined in the Pension Plan) when benefits are to
be paid, and (A) if the employee is restricted in stock
ownership trades under Section 16b of the Security Exchange
Commission Regulations, have approval of the Compensation
Committee of the Board of Directors, or (B) if the employee is
not restricted in stock ownership trades under Section 16b of
the Security Exchange Commission Regulations, have approval of
the Chief Executive Officer of the Corporation.
(iii) The amount of each annual installment shall mean the Actuarial
Equivalent, using interest only, of the lump sum as defined
under subsection 4.6(b). The interest rate for purposes of
converting the lump sum into the level installments shall be
the interest rate used to determine the lump sum. Interest on
the unpaid portion shall be credited monthly with deemed
investment earnings at the monthly compound equivalent of the
Prime Rate plus 1% in effect at the beginning of each calendar
quarter. Effective January 1, 1998, the interest rate will be
credited at the Prime Rate in effect at the beginning of each
calendar quarter. The Prime Rate shall be the prime rate as
published in the Wall Street Journal Midwest edition showing
such rate in effect as of the first business day of each
calendar quarter. To the extent that the remaining unpaid
balance as of each anniversary date is different from the
scheduled amount based on the previous anniversary date
calculation, the annual installment for that year shall be
adjusted to reflect such difference.
(iv) If a participant becomes disabled, as defined in the Pension
Plan, termination of employment shall be deemed to occur upon
cessation of benefit accruals under the Pension Plan.
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(v) If a participant in receipt of such annual installments dies,
the unpaid balance in the participant's account shall be paid
in a lump sum to the participant's beneficiary for purposes of
the Pension Make-up Amount.
4.7 Beneficiaries
The participant's beneficiary under this Plan with respect to his or her
participant Deferred Account shall be the person or persons designated as
beneficiary by the participant by filing with the Benefits Committee a
written beneficiary designation on a form provided by, and acceptable to,
such Benefits Committee. In the event the participant does not make an
effective designation of a beneficiary with respect to his or her
participant deferred account, the participant's beneficiary with respect
to his or her participant deferred account shall be the beneficiary of
such participant's beneficiary under the Savings Plan.
The participant's beneficiary under this Plan with respect to his or her
Pension Make-up Amount shall be the person who is entitled to benefit
payments under the Pension Plan because of the death of the participant.
The participant's beneficiary under this Plan with respect to his or her
Savings Make-up Account shall be the person who is entitled to benefit
payments under the Savings because of the death of the participant.
The participant's beneficiary under this Plan with respect to his or her
participant MSPP Make-up Account shall be the person or persons designated
as beneficiary by the participant by filing with the Benefits Committee a
written beneficiary designation on a form provided by, and acceptable to,
such Benefits Committee. In the event the participant does not make an
effective designation of a beneficiary with respect to his or her
participant deferred account, the participant's beneficiary with respect
to his or her MSPP Make-up Account shall be the beneficiary of such
participant's beneficiary under the Savings Plan.
4.8 Termination of the Pension Plan or Savings Plan
In the event that the Pension Plan is terminated, payments of the Pension
Make-up Amount which have not previously been paid shall continue to be
paid directly by the Corporation but only to the same extent and for the
same duration as that part of the payee's benefit from the Pension Plan,
which is directly related to such Pension Make-up Amount, is continued to
be provided by the assets of the Pension Plan.
In the event that the Savings Plan is terminated, Savings Make-up Accounts
and MSPP Make-up Accounts shall be paid directly by the Corporation in the
same manner as the distribution of the participant's accounts under the
Savings Plan.
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SECTION FIVE
Administration and General Provisions
5.1 Plan Administrator
The Benefits Committee shall be the "administrator" of the Plan within the
meaning of the Employee Retirement Income Security Act of 1974, as
amended.
5.2 Benefits Committee
The Benefits Committee shall be vested with the general administration of
the Plan. The Benefits Committee shall have the exclusive right to
interpret the Plan provisions and to exercise discretion where necessary
or appropriate in the interpretation and administration of the Plan and to
decide any and all matters arising thereunder or in connection with the
administration of the Plan. The decisions, actions and records of the
Benefits Committee shall be conclusive and binding upon the Corporation
and all persons having or claiming to have any right or interest in or
under the Plan.
The Benefits Committee may delegate to such officers, employees or
departments of the Corporation such authority, duties, and
responsibilities of the Benefits Committee as it, in its sole discretion,
considers necessary or appropriate for the proper and efficient operation
of the Plan, including, without limitation, (i) interpretation of the
plan, (ii) approval and payment of claims, and (iii) establishment of
procedures for administration of the Plan.
5.3 General Provisions
(a) The Corporation shall make no provision for the funding of any
benefits payable hereunder that (i) would cause the Plan to be a
funded plan for purposes of Code Section 404(a)(5), or Title I of
the Employee Retirement Income Security Act of 1974, as amended, or
(ii) would cause the Plan to be other than an "unfunded and
unsecured promise to pay money or other property in the future"
under Treasury Regulations section 1.83-3(e); and shall have no
obligation to make any arrangement for the accumulation of funds to
pay any amounts under this Plan. Subject to the restrictions of the
preceding sentence, the Corporation may establish a grantor trust
described in Treasury Regulations sections 1.677(a)(-l(d) and
accumulate funds therein to pay amounts under the Plan, provided
that the assets of the trust shall be required to satisfy the claims
of the Corporation's general creditors in the event of the
Corporation's bankruptcy or insolvency.
(b) In the event that the Corporation shall decide to establish an
advance accrual reserve on its books against the future expense of
the Plan, or to establish a grantor trust (which trust will conform
to the terms of the model trust described in Rev. Proc. 92-64) with
assets subject to the claims of creditors, such reserve or trust
shall not under any circumstances be deemed to be an asset of this
Plan but,
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at all times, shall remain a general asset of the Corporation,
subject to the claims of the Corporation's creditors.
(c) A person entitled to any amount under this Plan shall be a general
unsecured creditor of the Corporation with respect to such amount.
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SECTION SIX
Amendment and Termination
6.1 Amendment of the Plan
Subject to the provisions of Section 6.3, the Plan may be wholly or
partially amended or otherwise modified at any time by the Compensation
Committee of the Board of Directors.
6.2 Termination of the Plan
Subject to the provisions of Section 6.3, the Plan may be terminated at
any time by the Compensation Committee of the Board of Directors.
6.3 No Impairment of Benefits
Notwithstanding the provisions of Sections 6.1 and 6.2, no amendment to or
termination of the Plan shall impair any rights to benefits which have
accrued hereunder.
Adopted:
By: /s/ Roger A. Jackson
------------------------------------------
Name: Roger A. Jackson
Title: Senior Vice President, Human Resources
Date: May 15, 2002
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