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EXHIBIT 10.17
LEAR
SEATING CORPORATION
Mr. Donald J. Stebbins
Vice President and Treasurer
Lear Seating Corporation
21557 Telegraph Road
Southfield, MI 48034
Lear Seating 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 Company 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. In
order to induce you to remain in the employ of the Company, the Company agrees
that you shall receive, upon the terms and conditions set forth herein, the
benefits set forth in this letter agreement ("Agreement") during the term
hereof.
1. Term of Agreement. This Agreement shall commence as of the
effective date indicated herein and shall continue in effect until the second
anniversary of such date (the "Term"). The Term may be extended pursuant to
paragraph 12, hereafter.
2. Terms of Employment. During the Term, you agree to be a full-time
employee of the Company serving in the position of Vice President and Treasurer
of the Company and to devote substatially all of your working time and
attention to the business and affairs of the Company and, to the extent
necessary to discharge the responsibilities associated with your
responsibilities as Vice President and Treasurer 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 a base salary of 150,000 per
annum, to be paid in accordance with existing payroll practices of the Company.
Increases in your base salary, if any, shall be determined by, and in the
discretion of, the Board of Directors. In additon, you shall be a participant
in the Management Incentive Compensation Plan (MICP) and receive an annual
incentive compensation
21557 TELEGRAPH ROAD * SOUTHFIELD, MICHIGAN 48034 * (313) 746-1500
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LEAR SEATING CORPORATION
bonus ("Bonus") to be determined from time to time by the Board of Directors of
the Company in accordance with the existing practices of the Company.
(ii) 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.
(iii) You shall be entitled to perquisites and paid vacations
consistent with the practices in effect on the date hereof. A summary of such
benefits now in effect and which may be changed from time to time, is attached
hereto and incorporated herein, by reference. Also attached and incorporated
herein by reference is a list of specific benefits particular to this
Agreement.
4. Termination of Employment. Your employment may be terminated by
either the Company or you by giving a Notice of Termination, as defined in
Subsection (iv) of this Section 4. If your employment should terminate during
the Term, your entitlement to benefits shall be determined in accordance with
Section 5 hereof.
(i) Disability. If, as a result of your incapacity due to physical
or mental illness, you are, or are reasonably likely to become, unable to
perform your duties hereunder for more than six consecutive months aggregate
during any twelve month period, your employment may be terminated for
"Disability".
(ii) Cause. Termination of your employment for "Cause" shall mean
termination upon (A) the willful and continued failure by you to substantially
perform your duties with the Company in your established position on a
full-time basis (other than any such failure resulting from your Disability),
(B) the engaging by you in conduct which is significantly injurious to the
Company, monetarily or otherwise, (C) your conviction of a crime involving
moral turpitude, (D) your abuse of illegal drugs or other controlled substances
or your habitual intoxication, or (E) the breach of any of your material
obligations hereunder. For purposes of this Subsection, no act or failure to
act, on your part shall be deemed "willful" unless knowingly 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.
(iii) Good Reason. For purposes of this Agreement, "Good Reason"
shall mean the occurrence, without your express written consent, of any of the
following circumstances unless such circumstances are fully corrected prior to
the Date of Termination specified in the Notice of Termination, as such terms
are defined in Subsections (v) and (iv) of this Section 4, respectively, given
in respect thereof:
(A) The assignment to you of any duties inconsistent with your
status as an executive officer of the Company, your physical
relocation on a permanent basis to an area outside of the
metropolitan Detroit area, a
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substantial adverse alteration in the nature or status of your
responsibilites from those in effect immediately prior to such
assignment of duties, your removal from any office
specified in Section 2 hereof or the transfer of any of your
responsibilites to one or more other persons;
(B) Any reduction by the Company in your base salary as in
effect from time to time, except for across-the-board
salary reductions similarly affecting all executive officers of
the Company;
(C) The failure by the Company to pay or provide to you within
seven (7) days 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 of any applicable arrangement or policy or
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;
(D) Except in the case of across-the-board reductions or
eliminations similarly affecting all executive officers of the
Company, the failure by the Company to (I) continue in effect
any compensation plan in which you participate which is material
to your total compensation, including but not limited to the
Company's plans currently in effect or hereafter adopted, and
any plans adopted in substitution therefore, 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; or
(E) The failure of the Company to obtain a satisfactory
agreement from any successor to assume and agree to perform this
Agreement, as contemplated in Section 7 hereof.
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.
(iv) 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 8 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.
(v) Date of Termination, Etc. "Date of Termination" shall mean (A)
if your
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employment is terminated for Disability pursuant to Subsection (i) of this
Section 4, thirty (30) days after Notice of Termination is given (provided that
you shall not have returned to the full-time performance of your duties during
such thirty (30) day period), (B) if your employment is terminated by reason of
your death, the date of your death, (C) if 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 (iii)
of this Section 4), the date of termination shall be no less than ninety (90)
days from the date such notice of termination is given.
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 benefits:
(i) If your employment is terminated for Disability, you shall
receive until the end of the Term all compensation payable to you under the
Company's disability and medical plans and programs, as in effect on the date
of such 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 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 that the terms of such
programs in effect as of the date hereof.
(ii) If your employment shall be terminated (A) by the Company for
Cause, or (B) by you other than for Good Reason, 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, plus all other amounts to which you are
entitled under any compensation or benefit plans of the Company at the time
such payments are due, and the Company shall have no further obligations to you
under this Agreement. Provided, however, that if your employment is terminated
by your voluntary resignation without Good Reason, you shall be compensated per
this Paragraph 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 full base salary through the Date of Termination and for a period of 12
whole calendar months
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thereafter plus, if the Date of Termination shall no 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, 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, 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 measurement period occurring
prior to the Date of Termination, at the time such payments are
due, except as otherwise provided below;
(B) In lieu of any further salary payments to you for periods
subsequent to the Date of Termination, the company shall pay
to you your full base salary at the rate in effect immediately
prior to 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), payable periodically in
accordance with past payroll practices, until the end of the
Term, or for a period of twelve (12) months, whichever is
greater.
(C) In lieu of any further Bonus payments to you for periods
subsequent to the Date of Termination, the Company shall pay to
you a Bonus payable in each August following the Date of
Termination in respect of the previous plan fiscal year equal
to the quotient obtained by aggregating the Bonuses received by
you in respect of the two plan fiscal years ending prior to
the Date of Termination (the "Bonus Period") and dividing such
sum by two. Such Bonus shall be paid in respect of each plan
fiscal year or portion thereof ending after the date of
Termination until the end of the Term, and shall be prorated
for partial years, if any, including without limitation the
portion of the calendar year occurring after the Date of
Termination and the final plan fiscal year in respect of which
any such August Bonus is payable pursuant to this Section 5(iv)
(C). For calculation purposes, such Bonus shall not be less
than $30,000.000.
(D) Until the end of the Term, you will continue to
participate in all
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other compensation and benefit plans (including perquisites)
in which you were participating immediately prior to the time
Notice of Termination is given, or comparable plans substituted
therefor; provided, however, that if you are ineligible, (e.g.,
by operation of law or the terms of the applicable plan to
continue to participate in any such plan) the Company will
provide you with a comparable level of compensation or benefits;
(E) The Company shall also pay to you all reasonable legal
fees and expenses incurred by you in contesting or disputing
any such termination or in seeking to obtain or enforce any
right or benefit provided by this Agreement if such termination
is determined by the arbitrator to have been for Good Reason
or other than for Cause or Disability; and
(F) If you should die after the Date of Termination and prior
to the end of the period of payment provided for in paragraphs
(B), (C), and (D) hereof, the Company shall pay your estate or
your designated beneficiary any amounts that are or become
payable pursuant to any of such paragraphs until the end of the
Term.
(v) You shall be required to mitigate the amount of any payment
provided for in subsection (iv) of this Section 5 by seeking other comparable
employment, taking into consideration the provisions of Section 9 of this
Agreement, and the amount of any payment provided for in this Section 5 shall
be reduced by any compensation earned by your during the remainder of the Term
as the result of your employment by another employer, or offset against any
amount owed by you to the Company or as otherwise receivable by you pursuant to
Subsection 5(iv)(D) shall be reduced to the extent a comparable benefit of the
same type was made available to you during the applicable period of benefit
continuation set forth in such Subsection, and any such benefit actually
received by you shall be reported to the Company.
(vi) In addition to all other amounts payable to you under this
Section 5, you shall be entitled to receive all benefits payable to you
pursuant to the terms of any plan or agreement of the company relating to
retirement benefits.
6. Travel. You shall be required to travel to the extent
necessary for the performance of your responsibilities under this Agreement.
7. 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
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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 herein before defined and any successor to
its business and/or assets as aforesaid which assumes and agrees to perform
this Agreement by operatin of law, or otherwise.
8. Notices. For the purpose of this Agreement, notices and all
other communications provided for in the Agreement shall be in writing and
shall be deemed to have been duly given when delivered or mailed by United
States registered mail, return receipt requested, postage prepaid, addressed to
the respective addresses set forth on the first page of this Agreement,
provided that all notices to the Company shall be directed to the attention of
the Secretary of the Company, or to such other address as either party may have
furnished to the other in writing in accordance herewith, except that notice of
change of address shall be effective only upon receipt.
9. Noncompetition. (i) Until the Date of Termination, you
agree not to enter into competitive endeavors and not to undertake any
commercial activity which is contrary to the best interests of the Company or
its affiliates, including becoming an employee, owner (except for passive
investments of not more than one percent of the outstanding shares of, or any
other equity interest in, any company or entitiy listed or traded on a national
securities exchange or in an over-the-counter securities market), officer, agent
or director of any firm or person which either directly competes with a line or
lines of business of the Company accounting for ten percent (10%) or more of the
Company's gross sales, revenues or earnings before taxes or derives ten percent
(10%) or more of such firm's or person's gross sales, revenues or earnings
before taxes from a line or lines of business which directly compete with the
Company. Notwithstanding any provision of this Agreement to the contrary, you
agree that your breach of the provisions of this Section 9(i) shall permit the
Company to terminate your employment for Cause.
(ii) If you are terminated for Cause, until the later of one year
after the Date of Termination and during any period that you continue to be
paid your salary (including any other payments in lieu of salary) pursuant to
Section 5 hereof and for one year thereafter, or if you resign or are terminated
other than for Cause, until the later of the Date of Termination and during any
period that you continue to be paid your salary (including any other payment in
lieu of salary) pursuant to Section 5 hereof, you agree not to become an
employee, owner (except for passive investment of not more than one percent of
the outstanding shares of, or any other equity interest in, any company or
entity listed or traded on a national securities exchange or in an
over-the-counter securities market), officer, agent or director of any firm or
person which directly competes with a business of the Company producing any
class of products accounting for ten percent (10%) or more of the Company's
gross sales,
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revenues or earning before taxes. During the period of payment provided in
Section 5 hereof, you will be available, consistent with other responsibilities
that you may then have, to answer questions and provide advice to the Company.
Notwithstanding anything in this Agreement to the contrary, you agree that,
from and after any breach by you of the provisions of this Section 9(ii), the
Company shall cease to have any obligations to make payments to you under this
Agreement.
(iii) If you are terminated for Cause, until the later of one year
after the Date of Termination and during any period that you continue to be
paid your salary (including any other payments in lieu of salary) pursuant to
Section 5 hereof and for one year thereafter, or if you resign or are terminated
other than for Cause, until the later of the Date of Termination and during any
period that you continue to be paid your salary (including any other payment in
lieu of salary) pursuant to Section 5 hereof, 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.
(iv) You acknowledge and agree that damages for breach of the
covenant not to compete in this Section 9 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 11 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, 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.
10. Confidentiality. (i) You shall not knowingly 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, 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 of 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.
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(ii) Any ideas, processes, characters, productions, schemes, titles,
names, formats, adaptations, plots, slogans, catchwords, incidents, treatment,
and dialogue which you may conceive, create, organize, prepare or produce
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) Notwithstanding anything in this Agreement to the contrary,
you agree that from and after any breach by you of the provisions of this
Section 10 during any period of payment provided in Section 5 hereof, the
Company shall cease to have any obligations to make payments to you under this
Agereement.
11. Arbitration. (i) Except as contemplated by Section 9 (iii),
Section 9 (iv), and Section 11 (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 11(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 use consent to be available for a hearing at such time.
(iii) Judgement 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.
(iv) The Company shall bear all expenses of the arbitrator incurred
in any arbitration hereunder. The Company agrees to pay your reasonable and
documented legal fees and expenses in connection with any arbitration hereunder
if you prevail in full or in substantial part.
12. Extension of Term. The term of this Agreement shall be
automatically extended for a period of one year on each anniversary of the
effective date of this
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Agreement.
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.
16. Payments Net of Taxes. Any payments provided for herein which are
subject to Federal, State or local tax or other withholding requirements, shall
have such amounts withheld prior to payment.
17. Survival of Obligations. The obligations of the Company under
Section 5 and your obligations under Sections 9 and 10 hereof shall survive the
expiration of the Term of this Agreement.
18. Capacity of Parties. The parties hereto warrant that they have
the capacity and authority to execute this Agreement.
19. Validity. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of the Agreement, which shall remain in full force and effect.
20. 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.
21. Entire Agreement. This Agreement and any attachments hereto,
contain the entire agreement by the parties with respect to the matters covered
herein and supersedes 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
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set forth in this Agreement.
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 June 1, 1992
Sincerely,
LEAR SEATING CORPORATION
BY: /s/ KENNETH L. WAY
Kenneth L. Way
Chairman
Agreed to this 1st day of June, 1992.
/s/ DONALD J. STEBBINS