EXHIBIT 10.2
LEAR CORPORATION
LONG-TERM STOCK INCENTIVE PLAN
2005 RESTRICTED STOCK UNIT TERMS AND CONDITIONS
1. Definitions. Any term capitalized herein but not defined will
have the meaning set forth in the Plan.
2. Grant and Vesting of Restricted Stock Units.
(a) As of the Grant Date specified in the letter that accompanies
this document, the Employee will be credited with the number of Restricted Stock
Units set forth in the letter that accompanies this document. Each Restricted
Stock Unit is a notional amount that represents one unvested share of Common
Stock, $0.01 par value, of the Company (the "Common Stock"). Each Restricted
Stock Unit constitutes the right, subject to the terms and conditions of the
Plan and this document, to distribution of a Share if and when the Restricted
Stock Unit vests. If the Employee's employment with the Company and all of its
Affiliates terminates before the date that all of the Restricted Stock Units
vest, his or her right to receive the Shares underlying unvested Restricted
Stock Units will be only as provided in Section 4.
(b) One-half of the Restricted Stock Units will vest on the second
anniversary of the Grant Date, and the remaining half will vest on the fourth
anniversary of the Grant Date. Notwithstanding anything contained herein to the
contrary, the right (whether or not vested) of an Employee to receive Shares
underlying a Restricted Stock Unit will be forfeited (and the Company will have
the right to recover any Shares already received by the Employee) if the
Committee determines, in its sole discretion, that (i) the Employee has entered
into a business or employment relationship that is detrimentally competitive
with the Company or substantially injurious to the Company's financial
interests; (ii) the Employee has been discharged from employment with the
Company or an Affiliate for Cause; or (iii) the Employee has performed acts of
willful malfeasance or gross negligence in a matter of material importance to
the Company or an Affiliate.
3. Rights as a Stockholder.
(a) Unless and until a Restricted Stock Unit has vested and the
Share underlying it has been distributed to the Employee, the Employee will not
be entitled to vote that Share.
(b) If the Company declares a cash dividend on its common stock,
then, on the payment date of the dividend, the Employee will be credited with
dividend equivalents equal to the amount of cash dividend per share multiplied
by the number of Restricted Stock Units credited to the Employee through the
record date. The dollar amount credited to an Employee under the preceding
sentence will be credited to an account ("Account") established for the Employee
for bookkeeping purposes only on the books of the Company. The amounts credited
to the Account will be credited as of the last day of each month with interest,
compounded monthly, until the amount credited to the Account is paid to the
Employee. The rate of interest credited under the previous sentence will be the
prime rate of interest as reported by the Midwest edition of the Wall Street
Journal for the second business day of each quarter on an annual basis. The
balance in the Account will be subject to the same terms regarding vesting and
forfeiture as the Employee's Restricted Stock Units awarded under the
accompanying letter and this document, and will be paid in cash in a single sum
at the time that the Shares associated with the Employee's Restricted Stock
Units are delivered (or forfeited at the time that the Employee's Restricted
Stock Units are forfeited).
4. Termination of Employment. Subject to the forfeiture provisions
of clause 2(b) above, an Employee's right to receive the Shares underlying his
or her Restricted Stock Units after termination of his or her employment will be
only as follows:
(a) End of Service. If the Employee experiences an End of Service
Date, the Employee will be entitled to receive the Shares underlying any
Restricted Stock Units that have then vested. In addition, the Employee will be
entitled to receive the Shares underlying the number of Restricted Stock Units,
if any, that have not yet vested but would have vested under Section 2 if the
Employee's End of Service Date had been 24 months following his actual End of
Service Date. The Employee will forfeit the right to receive Shares underlying
any Restricted Stock Units that have not yet vested or would not have vested in
the next 24 months as described in the preceding sentence. The Employee's "End
of Service Date" is the date of his or her retirement after attaining age 55 and
completing ten years of service (as defined in the Lear Corporation Pension
Plan, regardless of whether the Employee participates in such plan).
(b) Disability or Death. If an Employee's employment with the
Company and all of its Affiliates terminates due to Disability (as determined by
the Company or its agent) or death, the Employee or the Employee's beneficiary
under the Plan will be entitled to receive the Shares underlying all of the
Restricted Stock Units, including both those that have already vested and those
that have not yet vested under Section 2 above.
(c) Other Termination of Employment. If an Employee's employment
with the Company and all Affiliates terminates due to any reason other than
those provided in clauses 4(a) or (b), the Employee or his or her estate (in the
event of his or her death after termination) will forfeit the right to receive
Shares underlying any Restricted Stock Units that have not yet vested, but will
be entitled to receive Shares underlying any Restricted Stock Units that, at
that time, will have become vested.
5. Timing and Form of Payment. Except as provided in this Section or
in clause 2(b) or Section 4, once a Restricted Stock Unit vests, the Employee
will be entitled to receive a Share in its place. Delivery of the Share will be
made as soon as administratively feasible after its associated Restricted Stock
Unit vests or at the later date elected by the Employee under Section 6. Shares
will be credited to an account established for the benefit of the Employee with
the Company's administrative agent. The Employee will have full legal and
beneficial ownership with respect to the Shares at that time.
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6. Election to Defer. The Employee may elect to defer delivery of
any or all Shares due to him or her under the Award described in this document
(and any balance in his Account under clause 3(b)) to a date beyond their
vesting date, by making a timely deferral election. In his or her election to
defer, the Employee may choose between deferral to a particular calendar year,
or to the year following his or her termination of employment, but in no event
may the Employee defer delivery of a Share more than ten years beyond the date
the Restricted Stock Unit underlying it is due to vest under Section 2 above. If
an Employee's employment with the Company and all Affiliates terminates for any
reason other than an End of Service Date before the calendar year specified in a
deferral election, he or she will be deemed to have elected to defer delivery to
the calendar year following his or her termination of employment. In addition,
if the Employee dies while employed with the Company or any Affiliate, any
Shares remaining to be paid in respect of this Award will be paid to his or her
beneficiary designated under the Plan as soon as practicable, regardless of any
outstanding election to defer. Shares whose receipt is deferred under this
Section 6 will be delivered on or about March 15 of the year to which they were
deferred. An election to defer will be considered timely only if it is filed at
least one year and one day in advance of the date the Restricted Stock Units
subject to the deferral will vest and the Employee remains employed by the
Company or an Affiliate for such period of a year and one day. Notwithstanding
anything in this Section 6 to the contrary, an election to defer hereunder shall
comply with the requirements of Section 409A of the Code or it will not be a
valid election.
7. Assignment and Transfers. The Employee may not assign, encumber
or transfer any of his or her rights and interests under the Award described in
this document, except, in the event of his or her death, by will or the laws of
descent and distribution.
8. Withholding Tax. The Company and any Affiliate will have the
right to retain Shares or cash that are distributable to the Employee hereunder
to the extent necessary to satisfy any withholding taxes, whether federal or
state, triggered by the distribution of Shares or cash pursuant to the Award
reflected in this document.
9. Securities Law Requirements.
(a) The Restricted Stock Units are subject to the further
requirement that, if at any time the Committee determines in its discretion that
the listing or qualification of the Shares subject to the Restricted Stock Units
under any securities exchange requirements or under any applicable law, or the
consent or approval of any governmental regulatory body, is necessary as a
condition of, or in connection with, the issuance of Shares under it, then
Shares will not be issued under the Restricted Stock Units, unless the necessary
listing, qualification, consent or approval has been effected or obtained free
of any conditions not acceptable to the Committee.
(b) No person who acquires Shares pursuant to the Award reflected in
this document may, during any period of time that person is an affiliate of the
Company (within the meaning of the rules and regulations of the Securities and
Exchange Commission under the Securities Act of 1933 (the "1933 Act")) sell the
Shares, unless the offer and sale is made pursuant to (i) an effective
registration statement under the 1933 Act, which is current and includes the
Shares to be sold, or (ii) an appropriate exemption from the registration
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requirements of the 1933 Act, such as that set forth in Rule 144 promulgated
under the 1933 Act. With respect to individuals subject to Section 16 of the
Exchange Act, transactions under this Award are intended to comply with all
applicable conditions of Rule 16b-3, or its successors under the Exchange Act.
To the extent any provision of the Award or action by the Committee fails to so
comply, the Committee may determine, to the extent permitted by law, that the
provision or action will be null and void.
10. No Limitation on Rights of the Company. The grant of the Award
described in this document will not in any way affect the right or power of the
Company to make adjustments, reclassification or changes in its capital or
business structure, or to merge, consolidate, dissolve, liquidate, sell or
transfer all or any part of its business or assets.
11. Plan, Restricted Stock Units and Award Not a Contract of
Employment. Neither the Plan, the Restricted Stock Units nor any other right or
interest that is part of the Award reflected in this document is a contract of
employment, and no terms of employment of the Employee will be affected in any
way by the Plan, the Restricted Stock Units, the Award, this document or related
instruments, except as specifically provided therein. Neither the establishment
of the Plan nor the Award will be construed as conferring any legal rights upon
the Employee for a continuation of employment, nor will it interfere with the
right of the Company or any Affiliate to discharge the Employee and to treat him
or her without regard to the effect that treatment might have upon him or her as
an Employee.
12. Employee to Have No Rights as a Stockholder. Except as provided
in Section 3 above, the Employee will have no rights as a stockholder with
respect to any Shares subject to the Restricted Stock Units prior to the date on
which he or she is recorded as the holder of those Shares on the records of the
Company.
13. Notice. Any notice or other communication required or permitted
hereunder must be in writing and must be delivered personally, or sent by
certified, registered or express mail, postage prepaid. Any such notice will be
deemed given when so delivered personally or, if mailed, three days after the
date of deposit in the United States mail, in the case of the Company to 21557
Telegraph Road, P. O. Box 5008, Southfield, Michigan, 48086-5008, Attention:
General Counsel and, in the case of the Employee, to the last known address of
the Employee in the Company's records.
14. Governing Law. This document and the Award will be construed and
enforced in accordance with, and governed by, the laws of the State of Michigan,
determined without regard to its conflict of law rules.
15. Plan Document Controls. The rights granted under this Restricted
Stock Unit document are in all respects subject to the provisions of the Plan to
the same extent and with the same effect as if they were set forth fully
therein. If the terms of this document or the Award conflict with the terms of
the Plan document, the Plan document will control.
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