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EXHIBIT 10.28
LEAR SEATING CORPORATION
PENSION EQUALIZATION PROGRAM
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TABLE OF CONTENTS
PAGE
Preamble . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Purpose of Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Vesting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Pension Supplement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Supplemental Preretirement Death Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Supplemental Post Retirement Death Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Time Of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Form of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Income Tax Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Social Security/Medicare Payroll Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Income Tax Withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ERISA Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Employment Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Plan Administrator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Incompetent Persons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
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PAGE
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Amendment/Termination of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Plan Survives Change in Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Claims Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Execution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
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1. PREAMBLE
An investor group purchased Lear Siegler Seating
Corporation on September 30, 1988 from Lear Seating
Diversified Holdings Corporation. Lear Siegler Seating
Corporation was subsequently renamed Lear Seating
Corporation. At the time of the purchase, certain highly
paid employees of Lear Siegler Seating Corporation were
covered by a nonqualified deferred compensation plan known
as the Supplemental Pension Plan for Officers of Lear
Siegler, Inc.
Following this purchase, the board of directors of Lear
Seating Corporation voted not to continue the Supplemental
Pension Plan For Officers Of Lear Siegler, Inc. as that
plan applied to its employees. In accordance with section
6.2 of the Supplemental Pension Plan For Officers Of Lear
Siegler, Inc., the board of directors voted to terminate
that plan with respect to employees of Lear Seating
Corporation and its subsidiaries. As a result of this
plan termination, the rights of all employees (with the
sole exception of Kenneth Way) under that plan were
completely extinguished.
Effective January 1, 1995, Lear Seating Corporation
established the Lear Seating Corporation Pension
Equalization Program. This Plan
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is not a successor to the Supplemental Pension Plan For
Officers Of Lear Siegler, Inc. The rights of employees
under this Plan are determined without regard to that
plan.
2. PURPOSE OF PLAN
The Qualified Pension Plan is designed to provide a
certain level of retirement income for employees of Lear
Seating. However, the Qualified Pension Plan is subject
to certain rules in the Internal Revenue Code that
restrict the level of retirement income that can be
provided to certain higher paid employees under that plan.
The purpose of the Plan is to supplement the pensions of
higher paid employees under the Qualified Pension Plan to
the extent these pensions are subject to these legal
restrictions, thereby providing these employees with a
level of retirement income comparable to that of other
employees. The board of directors believes that these
pension supplements are necessary in order to recruit and
retain senior executives.
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3. ELIGIBILITY
An employee of Lear Seating is eligible for a benefit
under the Plan if the employee satisfies all the
requirements described in this section.
(a) RETIREMENT AFTER 1994 The employee must separate
from service with Lear Seating after December 31,
1994, after completing 20 years of service and
after satisfying the requirements for early,
normal or disability retirement under the
Qualified Pension Plan.
(b) PARTICIPANT IN QUALIFIED PENSION Plan The
employee must have a vested right to an accrued
benefit under the Qualified Pension Plan.
(c) MEMBER OF TOP HAT GROUP The employee must be a
highly compensated employee or member of
management whose annual compensation exceeds
$150,000 and who belongs to the "top hat group"
as defined in the Employee Retirement Income
Security Act of 1974.
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(d) DESIGNATED BY BOARD OF DIRECTORS The employee
must be designated by the Compensation Committee
of the Board of Directors of Lear Seating as
eligible for the Plan.
4. VESTING
An employee has a vested right to a benefit under the Plan
as provided in this section. If an employee separates
from service with Lear Seating before vesting, the
employee forfeits any right to a benefit under the Plan.
(a) 20 YEARS OF SERVICE An employee has a vested
right to a benefit under the Plan as of the date
the employee completes 20 years of service with
Lear Seating or Lear Siegler, Inc. Years of
service are calculated in the same manner as
under the Qualified Pension Plan.
(b) ELIGIBILITY FOR RETIREMENT An employee with less
than 20 years of service has a vested right to a
benefit under the Plan as of the date the
employee satisfies the requirements for early,
normal or disability retirement under the
Qualified
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Pension Plan, except that the employee has not
separated from service with Lear Seating.
(c) CRIMINAL MISCONDUCT An employee who has vested
forfeits any right to a benefit under the Plan if
Lear Seating terminates the employee because of
fraud, embezzlement, misappropriation or other
criminal misconduct involving moral turpitude
committed in connection with employment with Lear
Seating.
5. PENSION SUPPLEMENT
An employee's benefit under the Plan is a pension
supplement equal to the difference between the employee's
actual vested accrued pension benefit under the Qualified
Pension Plan and the pension benefit the employee would
have accrued under the Qualified Pension Plan if the
Qualified Pension Limits were disregarded.
6. SUPPLEMENTAL PRERETIREMENT DEATH BENEFIT
A supplemental preretirement death benefit is paid to a
surviving spouse who is eligible for a preretirement
surviving spouse benefit under the Qualified Pension Plan.
This death benefit is paid only if,
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upon the death of the employee, the following requirements
have been met:
(a) death occurs subsequent to the employee becoming
eligible for Plan participation pursuant to
Section 3,
(b) death occurs subsequent to December 31, 1994,
(c) death occurs prior to the employee's date of
retirement under the Qualified Pension Plan, and
(d) death occurs while the employee is actively
employed by Lear Seating.
The supplemental preretirement death benefit is equal to
the difference between the actual preretirement surviving
spouse benefit under the Qualified Pension Plan and the
preretirement surviving spouse benefit that would be
available under the Qualified Pension Plan if the
Qualified Pension Limits were disregarded.
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7. SUPPLEMENTAL POST RETIREMENT DEATH BENEFIT
A supplemental post retirement death benefit is paid to
any individual who is a surviving spouse of an employee
who is eligible for the Plan and who is eligible for a
survivor's benefit under the Qualified Pension Plan. The
supplemental post retirement death benefit is equal to the
difference between the actual survivor's benefit under the
Qualified Pension Plan and the survivor's benefit that
would be available under the Qualified Pension Plan if the
Qualified Pension Limits were disregarded.
8. TIME OF PAYMENT
An individual's benefit under the Plan is paid at the same
time as the individual's benefit is paid under the
Qualified Pension Plan. However, an employee electing to
retire before age 65 under the Qualified Pension Plan must
provide Lear Seating with written notice of such election
at least 18 months prior to such retirement date.
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9. FORM OF PAYMENT
An individual's benefit under the Plan is paid in the same
form as the individual's benefit under the Qualified
Pension Plan. However, Lear Seating may, in its
discretion, elect to pay any benefit under the Plan in a
single lump sum that is the actuarial equivalent of the
benefit. Actual equivalence is determined using the GAM
1983 mortality table (adjusted to reflect a 50% male and
50% female population) and the annual interest rate on
30-year Treasury securities for the month prior to the
month of distribution.
10. INCOME TAX TREATMENT
This Plan is intended to be a nonqualified plan of
deferred compensation under which the benefits are not
subject to income tax until the year actually paid to
employees.
11. SOCIAL SECURITY/MEDICARE PAYROLL TAXES
Benefits under the Plan are wages for purposes of social
security and medicare payroll taxes. Benefits are subject
to payroll taxes in the year employees accrue the right to
the benefit or, if later, vest in the benefits.
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12. INCOME TAX WITHHOLDING
Lear Seating shall deduct from all payments under the Plan
the amount of federal and state income taxes it is
required to withhold.
13. FUNDING
The Plan is not funded. The liability for benefits under
the Plan consists of an entry in Lear Seating's financial
records. Payments to employees and beneficiaries are made
in cash from Lear Seating's general assets. In the event
Lear Seating seeks protection under the federal bankruptcy
laws, all persons are unsecured general creditors of Lear
Seating with respect to benefits derived from the Plan.
Lear Seating may in its discretion fund its liabilities
with respect to the Plan through a Rabbi Trust.
14. ERISA STATUS
The Plan is an unfunded promise to pay deferred
compensation. It is not intended to comply with section
401(a) of the Internal Revenue Code. Participation in the
Plan is limited to a select group of management and highly
compensated employees and the Plan is intended to qualify
for the top hat exemptions contained in sections
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201(2), 301(a)(3) and 401(a)(1) of the Employee Retirement
Income Security Act of 1974.
15. ASSIGNMENT
Except to the extent required by law, Lear Seating will
not recognize any assignment, pledge, collateralization or
attachment of benefits under the Plan.
16. EMPLOYMENT RIGHTS
The Plan is not an employment contract and it creates no
right in any person to continue employment with Lear
Seating for any length of time.
17. PLAN ADMINISTRATOR
The Employee Benefits Committee of Lear Seating is the
plan administrator. Lear Seating has the authority to do
all things necessary to administer the Plan, including
construing its language and determining eligibility for
benefits. Lear Seating has the authority to equitably
adjust employees' rights under the Plan or the amount of
an employee's benefit. Lear Seating may adopt any rules
necessary to administer the Plan which are not
inconsistent with its
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terms. The board of directors may delegate the authority
to administer the Plan.
18. INCOMPETENT PERSONS
If Lear Seating finds that any person entitled to a
benefit under the Plan is unable to manage his or her
affairs because of legal incompetence, Lear Seating, in
its discretion, may pay the benefit due to such person to
an individual deemed by Lear Seating to be responsible for
the maintenance of such person. Any such payment
constitutes a complete discharge of the Lear Seating's
liability under the Plan.
19. EXPENSES
Lear Seating is responsible for the cost of administering
the Plan.
20. AMENDMENT/TERMINATION OF THE PLAN
Lear Seating may amend or terminate the Plan by resolution
of its board of directors or any duly authorized committee
of the board at any time. An amendment or plan
termination cannot reduce or eliminate the benefits
employees have accrued under the Plan as of the date of
the amendment is executed or the date the Plan is
terminated.
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21. PLAN SURVIVES CHANGE IN CONTROL
The obligations of Lear Seating under the Plan are binding
on any organization succeeding to substantially all the
assets and/or business of Lear Seating by sale or
otherwise. Lear Seating is obligated under the Plan to
make appropriate provision for the preservation of
employees' rights under any agreement or plan which it may
enter into or that effects a merger, consolidation,
reorganization, reincorporation, change of name or
transfer of company assets.
22. GOVERNING LAW
The validity and construction of the Plan is governed by
the laws of the State of Michigan, without giving effect
to the principles of conflicts of law.
23. CONSTRUCTION
The following principles apply to the construction of the
Plan.
(a) The plan administrator shall, in its discretion,
construe the language of the Plan and resolve all
questions concerning the administration and the
interpretation of the Plan document.
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(b) In the event any provision of the Plan is
declared invalid, in whole or in part, by any
legal authority, the remaining provisions of the
Plan are unaffected and remain in full force and
effect.
(c) A provision of the Plan which is invalid in any
jurisdiction remains in effect and is enforceable
in all jurisdictions in which the provision is
valid.
(d) Lear Seating may, in its discretion, construe a
provision of the Plan which is declared to be
invalid in such a manner that it is valid.
24. CLAIMS PROCEDURE
The claims procedure set forth in this paragraph is the
exclusive method of resolving disputes that arise under
the Plan.
(a) Written Claim Any claim that a person makes
under the Plan must be in writing. All claims
must be submitted to Lear Seating within six
months of the date on which the claimant
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contends he or she first had a right to receive a benefit
under the Plan.
(b) DENIAL OF CLAIM Where Lear Seating denies a
claim, in whole or in part, it must furnish the
claimant with a written notice of the denial
setting forth the following information, in a
manner calculated to be understood by the
claimant.
(1) A statement of the specific reasons for
the denial of the claim.
(2) References to the specific provisions of
the Plan on which the denial is based.
(3) A description of any additional material
or information necessary to perfect the
claim with an explanation of why such
material or information is necessary.
(4) An explanation of the claims review
procedure with a statement that the
claimant must request review of the
decision denying the claim within 90 days
following the
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date on which such notice was received by
the claimant.
The written notice of denial must be mailed to
the claimant within 90 days following the date on
which the claim was received by Lear Seating. If
special circumstances require an extension of
time for processing a claim, the written notice
may be mailed to the claimant not more than 180
days following the date on which the claim was
received by Lear Seating. Within the initial 90
day period, the claimant must be notified in
writing of the extension, of the special
circumstances requiring the extension and of the
date by which the claimant will be furnished with
written notice of the decision concerning the
claim.
(c) REVIEW OF DENIAL The claimant may request
review of the denial of a claim. A request for
review must be mailed to Lear Seating within 90
days of the date on which the written notice of
denial is received by the claimant and must set
forth the following information.
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(1) The date on which the notice of denial of
the claim was received by the claimant.
(2) The specific portions of the denial of
the claim that the claimant disputes.
(3) A statement by the claimant setting forth
the basis upon which the claimant
believes Lear Seating should reverse the
denial of the claim for benefits under
the Plan.
(4) Written material (included as exhibits)
that the claimant desires Lear Seating to
examine.
(d) DECISION ON REVIEW Lear Seating must afford the
claimant an opportunity to review documents
pertinent to the claim and must conduct a full
and fair review of the claim and its denial.
Lear Seating's decision on review must be
furnished to the claimant in writing in a manner
calculated to be understood by the claimant. The
decision must include a statement of the reasons
for the decision with references to the specific
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provisions of the Plan upon which the decision is
based. The decision on review must be mailed to
the claimant within 90 days following the date on
which the request for review is received by Lear
Seating. If special circumstances require an
extension of time to consider a request for
review, Lear Seating's written review of the
claim may be mailed to the claimant not more than
180 days after Lear Seating received the request
for review. Within the initial 90 day period,
Lear Seating must notify the claimant in writing
of the extension, the special circumstances
requiring the extension and of the date by which
the claimant will be furnished with written
notice of the decision reviewing the claim.
(e) TRANSMISSION OF DOCUMENTS All written documents
required by these claim procedures must be sent
by first-class certified mail (return receipt
requested) through the United States Postal
Service. The date on which any document is
mailed is determined by the postmark affixed to
the document by the United States Postal Service.
The date on which any document is received is
determined by the date on the signed receipt for
certified mail. Notices to a claimant must be
mailed
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to the claimant's last known address. Notices
to Lear Seating must be mailed to:
Vice President of Human Resources
Lear Seating Corporation
21557 Telegraph Road
Southfield, Michigan 48034
25. DEFINITIONS
(a) LEAR SEATING Lear Seating Corporation.
(b) PLAN The Lear Seating Corporation Pension
Equalization Program.
(c) QUALIFIED PENSION LIMITS The qualified pension
limits are the restriction on compensation that
can be taken into account under tax qualified
pension plans is in section 401(a)(17) of the
Internal Revenue Code and the annual dollar limit
on pensions that can accrue under tax qualified
pension plans is in section 415 of the Internal
Revenue Code. Such amounts are adjusted from
time to time by the Commissioner of Internal
Revenue to reflect increases in the cost of
living.
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(d) QUALIFIED PENSION PLAN The Lear Seating
Corporation Pension Plan.
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EXECUTION
WHEREFORE, Lear Seating Corporation has executed the Plan on the day of
__________________, 1995.
LEAR SEATING CORPORATION
By
Its
ATTEST:
__________________
END
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