EXHIBIT 10.41
LEAR CORPORATION
LONG-TERM STOCK INCENTIVE PLAN
2006 MANAGEMENT STOCK PURCHASE PLAN (US)
TERMS AND CONDITIONS
1. Deferral Election.
Any Eligible Employee selected by the Committee may irrevocably elect to
defer (a) any whole percentage up to 90% of the Base Salary payable to him or
her for the pay periods ending after December 31, 2005 and before January 1,
2007, and/or (b) any whole percentage up to 100% of the bonus payable to him or
her under the Company's Senior Executive Incentive Compensation Plan or
Management Incentive Compensation Plan in the first quarter of 2006 by properly
filing with the Committee a written notice to that effect ("Deferral Election")
on the form furnished by the Committee and in accordance with such other
requirements as may be established by the Committee. An Eligible Employee who
makes a Deferral Election shall be a Participant.
"Base Salary" means a Participant's annual base salary rate on January 1,
2006 from the Company or an Affiliate, including any elective contributions of
the Participant that are not includable in his gross income under Code Sections
125 or 401(k), and before taking into account his or her Deferral Election.
2. Restricted Stock Units.
(a) In consideration for the Participant's Deferral Election, the
Participant shall be credited as of March 15, 2006 with Restricted
Stock Units at a discounted price ("Discount Rate") as provided in
the following table:
Total dollar amount of Participant's Deferral Election, Applicable Discount Rate:
expressed as a percentage of the Participant's Base Salary:
15% or less 20%
Over 15% and up to 100% 30%
Over 100% 20%
(b) The total number of Restricted Stock Units credited to a Participant
under the Plan will be determined according to the following
calculation:
(i) the dollar amount of the Participant's Deferral Election that
does not exceed 15% of the Participant's base salary, divided
by the product of (A) the average Fair Market Value over the
last five business days in 2005 (December 23, 27, 28, 29 and
30) (the "Average FMV") multiplied by (B) 80%; plus
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(ii) the dollar amount of the Participant's Deferral Election over
15% and up to 100% of the Participant's base salary, divided
by the product of (A) the Average FMV multiplied by (B) 70%;
plus
(iii) the dollar amount of the Participant's Deferral Election over
100% of the Participant's base salary, divided by the product
of (A) the Average FMV multiplied by (B) 80%.
(c) The total number of Restricted Stock Units determined in Section
2(b) will be credited to the Participant in the form of Salary
Restricted Stock Units and/or Bonus Restricted Stock Units. The
number of Salary Restricted Stock Units credited shall be the same
proportion of the total Restricted Stock Units as the amount of base
salary deferred in the Participant's Deferral Election is of the
total amount deferred in the Participant's Deferral Election. The
number of Bonus Restricted Stock Units credited shall be the same
proportion of the total Restricted Stock Units as the amount of
bonus deferred in the Participant's Deferral Election is of the
total amount deferred in the Participant's Deferral Election.
3. Restriction Period.
The Restriction Period under this 2006 Management Stock Purchase Plan (US)
(the "Agreement") shall be the three-year period commencing on March 15, 2006
and ending on March 14, 2009.
4. Dividend Equivalents.
If the Company declares a cash dividend on Shares, the Participant shall
be credited with dividend equivalents as of the payment date for the dividend
equal to the amount of the cash dividend per Share multiplied by the Restricted
Stock Units credited to the Participant under Section 2(b) as of the record
date. Dividend equivalents shall be credited to a notional account established
for the Participant ("Dividend Equivalent Account"). Interest shall be credited
to the Participant's Dividend Equivalent Account, compounded monthly, until
payment of such account to the Participant. The rate of such interest shall 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.
5. Timing and Form of Payout.
Except as provided in Sections 6, 7 or 8, after the end of the Restriction
Period, the Participant shall be entitled to receive a number of Shares equal to
the number of Restricted Stock Units credited to the Participant under Section
2(b) and a cash payment equal to the amount credited to the Participant's
Dividend Equivalent Account under Section 4. Delivery of such Shares shall be
made as soon as administratively feasible after the end of the Restriction
Period or such later date as may have been elected by the Participant under
Section 9. Delivery of the cash payment of any amount credited to the
Participant's Dividend Equivalent Account shall be made as soon as
administratively feasible after the end of the Restriction Period.
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6. Termination of Employment Due to Death, End of Service or Disability.
(a) Before March 15, 2006.
A Participant who ceases to be an employee prior to March 15, 2006
by reason of death, End of Service or Disability shall be terminated
from the Plan, and his Deferral Election shall be cancelled. Any
base salary earned but not paid due to the Participant's Deferral
Election shall be paid to the Participant (or in the case of the
Participant's death, the Participant's beneficiary) in cash as soon
as administratively feasible after his termination of employment.
(b) After March 14, 2006 but Before January 1, 2007.
If the Participant ceases to be an employee after March 14, 2006 but
prior to January 1, 2007 by reason of death, End of Service or
Disability, the Participant (or in the case of the Participant's
death, the Participant's beneficiary) shall be entitled to receive a
number of Shares equal to the sum of (i) and (ii):
(i) the number of Salary Restricted Stock Units credited to the Participant
under Section 2(c) multiplied by a fraction, the numerator of which is the
number of full pay periods in the period beginning on January 1, 2006 and ending
on the date the Participant ceases to be an employee and the denominator of
which is 24; and
(ii) the number of Bonus Restricted Stock Units credited to the Participant
under Section 2(c).
(c) After December 31, 2006.
If the Participant ceases to be an employee after December 31, 2006
but prior to the end of the Restriction Period by reason of death,
End of Service or Disability, the Participant (or in the case of the
Participant's death, the Participant's beneficiary) shall be
entitled to receive a number of Shares equal to the number of
Restricted Stock Units credited to the Participant under Section
2(b) and a cash payment equal to the Participant's Dividend
Equivalent Account under Section 4.
(d) Beneficiary.
Any distribution made with respect to a Participant who has died
shall be paid to the beneficiary designated by the Participant
pursuant to Article 11 of the Plan to receive the Participant's
Shares and any cash payment under this Agreement. If the
Participant's beneficiary predeceases the Participant or no
beneficiary has been designated, distribution of the Participant's
Shares and any cash payment shall be made to the Participant's
surviving spouse and if none, to the Participant's estate.
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(e) End of Service.
An employee's "End of Service" means 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).
7. Involuntary Termination Other Than For Cause.
(a) Before March 15, 2006.
A Participant whose employment involuntarily terminates other than
for Cause or for any reason described in Section 6 prior to March
15, 2006 shall be terminated from the Plan, and his Deferral
Election shall be cancelled. Any base salary earned but not paid due
to the Participant's Deferral Election shall be paid to the
Participant in cash as soon as administratively feasible after his
termination of employment.
(b) After March 14, 2006 but Before January 1, 2007.
A Participant whose employment involuntarily terminates other than
for Cause or for any reason described in Section 6 after March 14,
2006 but prior to January 1, 2007 shall be entitled to receive a
number of Shares equal to the sum of (i), (ii), (iii) and (iv):
(i) the number of Salary Restricted Stock Units credited to the
Participant under Section 2(c) multiplied by a fraction, the
numerator of which is the number of full pay periods in the
period beginning on January 1, 2006 and ending on the date the
Participant ceases to be an employee, and the denominator of
which is 24, multiplied by a fraction, the numerator of which
is the number of full months in the period beginning on March
15, 2006 and ending on the date the Participant ceases to be
an employee (the "Elapsed Months"), and the denominator of
which is 36; and
(ii) the number of Bonus Restricted Stock Units credited to the
Participant under Section 2(c) multiplied by a fraction, the
numerator of which is the Elapsed Months, and the denominator
of which is 36; and
(iii) the lesser of:
(A) the quotient of (i) the total amount of base salary
deferred in the Participant's Deferral Election
multiplied by a fraction, the numerator of which is the
number of full pay periods in the period beginning on
January 1, 2006 and ending on the date the Participant
ceases to be an employee, and the denominator of which
is 24, multiplied by a fraction, the numerator of which
is 36 minus the Elapsed Months, and the denominator of
which is 36, divided by (ii) the Fair Market Value of a
Share on the date the Participant ceases to be an
employee, or
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(B) the number of Salary Restricted Units determined under
Section 2(c) multiplied by a fraction, the numerator of
which is the number of full pay periods in the period
beginning on January 1, 2006 and ending on the date the
Participant ceases to be an employee, and the
denominator of which is 24, multiplied by a fraction,
the numerator of which is 36 minus the Elapsed Months,
and the denominator of which is 36; and
(iv) the lesser of:
(A) the quotient of (i) the amount of bonus deferred in the
Participant's Deferral Election multiplied by a
fraction, the numerator of which is 36 minus the Elapsed
Months, and the denominator of which is 36, divided by
(ii) the Fair Market Value of a Share on the date the
Participant ceases to be an employee, or
(B) the number of Bonus Restricted Stock Units determined
under Section 2(c) multiplied by a fraction, the
numerator of which is 36 minus the Elapsed Months, and
the denominator of which is 36.
(c) After December 31, 2006.
A Participant whose employment involuntarily terminates other than
for cause or for any reason described in Section 6 after December
31, 2006 but prior to the end of the Restriction Period shall be
entitled to receive a number of Shares equal to the sum of (i) and
(ii):
(i) the number of the Restricted Stock Units credited to the
Participant under Section 2(b) multiplied by a fraction, the numerator of which
is the Elapsed Months, and the denominator of which is 36, and
(ii) the lesser of:
(A) the quotient of (i) the total amount deferred in the
Participant's Deferral Election multiplied by a
fraction, the numerator of which is 36 minus the Elapsed
Months, and the denominator of which is 36, divided by
(ii) the Fair Market Value of a Share on the date the
Participant ceases to be an employee, or
(B) the number of Restricted Stock Units determined under
Section 2(b) multiplied by a fraction, the numerator of
which is 36 minus the Elapsed Months, and the
denominator of which is 36.
8. Termination of Employment for Any Other Reason.
(a) Before March 15, 2006.
A Participant whose employment terminates for any reason other than
those described in Sections 6 and 7 prior to March 15, 2006 shall be
terminated from
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the Plan, and his Deferral Election shall be cancelled. Any base
salary earned but not paid due to the Participant's Deferral
Election shall be paid to the Participant in cash as soon as
administratively feasible after his termination of employment.
(b) After March 14, 2006 But Before January 1, 2007.
A Participant whose employment terminates for any reason other than
those described in Sections 6 and 7 after March 14, 2006 but prior
to January 1, 2007 shall be entitled to receive a number of Shares
equal to the sum of (i) and (ii):
(i) the lesser of:
(A) the quotient of (i) the amount of base salary the
Participant elected to defer in the Participant's
Deferral Election multiplied by a fraction, the
numerator of which is the number of full pay periods in
the period from January 1, 2006 to the date the
Participant ceases to be an employee, and the
denominator of which is 24, divided by (ii) the Fair
Market Value of a Share on the date the Participant
ceases to be an employee, or
(B) the number of Salary Restricted Stock Units credited to
the Participant under Section 2(c) multiplied by a
fraction, the numerator of which is the number of full
pay periods in the period from January 1, 2006 to the
date the Participant ceases to be an employee, and the
denominator of which is 24; and
(ii) the lesser of:
(A) the amount of bonus deferred in the Participant's Deferral
Election divided by the Fair Market Value of a Share on the
date the Participant ceases to be an employee, or
(B) the number of Bonus Restricted Stock Units credited to the
Participant under Section 2(c).
(c) After December 31, 2006.
A Participant whose employment terminates for any reason other than
those described in Sections 6 and 7 after December 31, 2006 but
prior to the end of the Restriction Period shall be entitled to
receive a number of Shares equal to the lesser of: the total amount
deferred in the Participant's Deferral Election divided by the Fair
Market Value of a Share on the date the Participant ceases to be an
employee; or (ii) the number of Restricted Stock Units credited to
the Participant under Section 2(b).
9. Election to Defer Beyond Restriction Period.
The Participant may elect to defer delivery of any or all Shares due to
Participant hereunder to a date after the Restriction Period expires by properly
filing with the Committee a
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timely irrevocable deferral election that complies with Code Section 409A and
such other requirements as may be established by the Committee. In his or her
election to defer, the Participant 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 Participant defer delivery of a Share more than ten
years beyond the expiration of the Restriction Period under Section 3. If a
Participant terminates employment with the Company and all Affiliates for any
reason other than End of Service (i) after the Restriction Period expires and
(ii) before the calendar year specified in a deferral election, then 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 Participant dies while
employed with the Company or any Affiliate, any Shares remaining to be paid in
respect of this Agreement 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 9 will be delivered
on or about March 15 of the year to which they were deferred.
10. Assignment and Transfers.
The rights and interests of the Participant hereunder may not be assigned,
encumbered or transferred except, in the event of the death of the Participant,
by will or the laws of descent and distribution.
11. Withholding Tax.
The Company and any Affiliate shall have the right to retain Shares that
are distributable to the Participant hereunder to the extent necessary to
satisfy any withholding taxes, whether federal, state or local, triggered by the
distribution of Shares under this Agreement.
12. No Limitation on Rights of the Company.
The grant hereunder shall 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.
13. Plan, Terms and Conditions and Deferral Election Not a Contract of
Employment.
Neither the Plan, the Terms and Conditions, nor the Deferral Election is a
contract of employment, and no terms of employment of the Participant shall be
affected in any way by the Plan, the Terms and Conditions, the Deferral Election
or related instruments except as specifically provided therein. Neither the
establishment of the Plan, the Terms and Conditions, nor the Deferral Election
shall be construed as conferring any legal rights upon the Participant for a
continuation of employment, nor shall they interfere with the right of the
Company or any Affiliate to discharge the Participant and to treat Participant
without regard to the effect that such treatment might have upon Participant as
a Participant.
14. Participant to Not Have Rights as a Stockholder.
The Participant shall not have rights as a stockholder with respect to any
Shares subject to the Deferral Election prior to the date on which he or she is
recorded as the holder of such Shares on the records of the Company.
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15. Notice.
Any notice or other communication required or permitted hereunder shall be
in writing and shall be delivered personally, or sent by certified, registered
or express mail, postage prepaid. Any such notice shall 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,
Southfield, Michigan, 48034, Attention: General Counsel and, in the case of the
Participant, to its address set forth in the Deferral Election or, in each case,
to such other address as may be designated in a notice given in accordance with
this Section.
16. Governing Law.
This Agreement shall 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.
17. Plan Document Controls.
Any term capitalized herein but not defined shall have the meaning set
forth in the Lear Corporation Long-Term Stock Incentive Plan (the "Plan"). The
rights herein granted are in all respects subject to the provisions set forth in
the Plan to the same extent and with the same effect as if set forth fully
herein. In the event that the terms set forth herein conflict with the terms of
the Plan document, the Plan document shall control.
18. Code Section 409A
Notwithstanding any other provision herein, this Agreement is intended to
comply with Code Section 409A and shall at all times be interpreted and
administered in accordance with such intent. To the extent that any provision of
the Agreement violates Code Section 409A, such provision shall be automatically
reformed, if possible, to comply with Code Section 409A or stricken from the
Agreement.
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