Exhibit 10.3

 

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                      March 3, 2006

 

Mr. Matthew Simoncini
[home address]

Dear Matt:

                Lear Corporation (the “Company”) considers it essential to its
best interest and the best interests of its stockholders to foster the continued
employment of key management personnel.

                The Board of Directors of the Company (the “Board”) 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. The Board recognizes that, as is
the case with many publicly-held companies, the possibility of a Change in
Control (as that term is hereafter defined) exists. The Company wishes to assure
itself of both present and future continuity of management in the event of any
Change in Control. In order to induce you to remain in the employ of the
Company, and in consideration of your agreement to the termination of any
existing employment contract you may have with the Company or any predecessor,
the Company agrees that you shall receive, upon the terms and conditions set
forth herein, the compensation and benefits set forth in this letter agreement
(“Agreement”) during the Term hereof.

                1.             Term of Agreement.  This Agreement shall commence
as of February 24, 2006 (“Effective Date”). The initial term of this Agreement
shall be two (2) years from the Effective Date. The term of this Agreement shall
at all times be two (2) years, that is, the term of this Agreement shall be
automatically extended each day for an additional day such that this Agreement
shall continually have an unexpired term of two (2) years, until the date two
(2) years after written notice is provided by either the Company or the
Executive that this Agreement is not to be further extended (a “Notice of
Non-Renewal”), the date set forth in a Notice of Termination provided pursuant
to Section 4, the date of the Executive’s death, or the date the Executive
reaches his or her normal retirement date under the Lear Corporation Pension
Plan or its successor, whichever shall first occur (the initial term as so
extended is referred to herein as the “Term”).

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                2.             Terms of Employment.  During the Term, you agree
to be a full-time employee of the Company serving initially in the position of
Vice President of Global Finance* of the Company. You agree to devote
substantially all of your working time and attention to the business and affairs
of the Company, to discharge the responsibilities associated with your position
with the Company, and to use your best efforts to perform faithfully and
efficiently such responsibilities. In addition, you agree to serve in such other
or different capacities or offices to which you may be assigned, appointed or
elected from time to time by the Company. 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 that 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 or violate the terms of the Company’s
Code of Business Ethics and Conduct, the Company’s Corporate Governance
Guidelines, or other policies applicable to the Company’s executives generally,
as those policies may be amended from time to time by the Company.

                3.             Compensation.

                (a)           As compensation for your services, under this
Agreement, you shall be entitled during the Term to receive an initial base
salary the annualized amount of which shall be $400,000.00**, to be paid in
accordance with existing payroll practices for executives of the Company.
Increases in your base salary, if any, shall be as approved by the Compensation
Committee of the Board. In addition, you shall be eligible to receive an annual
incentive compensation bonus (“Bonus”) to be approved from time to time by the
Compensation Committee of the Board.

                (b)           During the Term, you shall be eligible for
participation in the welfare, retirement, perquisite and fringe benefit, and
other benefit plans, practices, policies and programs, as may be in effect from
time to time, for senior executives of the Company generally.

                (c)           During the Term, you shall be eligible for prompt
reimbursement for business expenses reasonably incurred by you in accordance
with the Company’s policies, as may be in effect from time to time, for its
senior executives generally.

                4.             Termination of Employment.  

                (a)           Notice. You or the Company may terminate the
employment relationship by giving a Notice of Non-Renewal, as described in
Section 1. Alternatively, the employment relationship may be terminated by the
Company with or without Cause, by the Company for Incapacity, or by you with or
without Good Reason, all as defined below, by giving a Notice of Termination.
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. All notices under this Section 4(a) shall be
given in accordance with the requirements of Section 9.

 

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* Senior Vice President and Chief Financial Officer as of October 1, 2007.

** Current base salary was $500,000 as of October 1, 2007.

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                (b)           Incapacity.  If the Company reasonably determines
that you are unable at any time to perform the duties of your position because
of a serious illness, injury, impairment, or physical or mental condition and
you are not eligible for or have exhausted all leave to which you may be
entitled under the Family and Medical Leave Act (“FMLA”) or, if more generous,
other applicable state or local law, the Company may terminate your employment
for “Incapacity”. In addition, at any time that you are on a leave of absence,
the Company may temporarily reassign the duties of your position to one or more
other executives without creating a basis for your Good Reason resignation,
provided that the Company restores such duties to you upon your return to work.

                (c)           Cause.  Termination of your employment for “Cause”
shall mean termination upon:

 

  (i)            an act of fraud, embezzlement or theft by you in connection
with your duties or in the course of your employment with the Company;    
(ii)           your material breach of any provision of this Agreement, provided
that in those instances in which your material breach is capable of being cured,
you have failed to cure within a thirty (30) day period after notice from the
Company;     (iii)          an act or omission, which is (x) willful or grossly
negligent, (y) contrary to established policies or practices of the Company, and
(z) materially harmful to the business or reputation of the Company, or to the
business of the Company’s customers or suppliers as such relate to the Company;
or     (iv)          a plea of nolo contendere to, or conviction for, a felony.

 

                (d)          Good Reason.  For purposes of this Agreement, “Good
Reason” shall mean the occurrence of any of the following circumstances or
events:

 

  (i)            any reduction by the Company in your base salary or adverse
change in the manner of computing your Bonus, as in effect from time to time,
except for across-the-board salary reductions or changes to the manner of
computing bonuses similarly affecting all executive officers of the Company
subject to Section 16(b) of the Securities Exchange Act of 1934, as determined
by the Board (“executive officers”);     (ii)           the failure by the
Company to pay or provide to you any amounts of base salary or Bonus or any
benefits which are due, owing and payable to you 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;     (iii)          except in the case of across-the-board reductions,
deferrals, eliminations, or plan modifications similarly affecting all executive
officers, the failure by the Company to continue to provide you with benefits
substantially similar in the 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; 

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  (iv)          without limiting the generality or effect of the foregoing, any
material breach of this Agreement by the Company.

 

However, the language in Sections 4(d)(i) through (iii) concerning reductions,
changes, deferrals, eliminations, or plan modifications similarly affecting all
executive officers of the Company shall not be applicable to circumstances or
events occurring in anticipation of, or within one year after, a Change in
Control, as defined in Section 4(e). In addition, upon a Change in Control, you
shall have the right to resign for Good Reason if your principal place of
employment is transferred to a location fifty (50) or more miles from its
location immediately preceding the transfer.

Notwithstanding anything else herein, Good Reason shall not exist if, with
regard to the circumstances or events relied upon in your Notice of Termination:
(x) you failed to provide a Notice of Termination to the Company within sixty
(60) days of the date you knew or should have known of such circumstances or
events, (y) the circumstances or events are fully corrected by the Company prior
to the Date of Termination, or (z) you give your express written consent to the
circumstances or events.

                (e)           Change in Control.  For purposes of this
Agreement, a “Change in Control” of the Company shall be deemed to have occurred
as of the first day any one or more of the following paragraphs is satisfied:

 

  (i)            any Person as that term is used in Section 13(d)(3) or Section
14(d)(2) of the Securities Exchange Act of 1934 (the “Exchange Act”) (other than
the Company or a trustee or other fiduciary holding securities under an employee
benefit plan of the Company, or a corporation owned directly or indirectly by
the shareholders of the Company in substantially the same proportions as their
ownership of stock of the Company) becomes the Beneficial Owner, as that term is
defined in Rule 13d-3 of the General Rules and Regulations under the Exchange
Act, directly or indirectly, of securities of the Company, representing more
than twenty percent of the combined voting power of the Company’s then
outstanding securities.     (ii)           during any period of twenty-six (26)
consecutive months beginning on or after the Effective Date, individuals who at
the beginning of the period constituted the Board cease for any reason (other
than death, disability or voluntary retirement) to constitute a majority of the
Board. For this purpose, any new Director whose election by the Board, or
nomination for election by the Company’s shareholders, was approved by a vote of
at least two-thirds of the Directors then still in office, and who either were
Directors at the beginning of the period or whose election or nomination for
election was so approved, will be deemed to have been a Director at the
beginning of any twenty-six month period under consideration.    
(iii)          the shareholders of the Company approve: (A) a plan of complete
liquidation or dissolution of the Company; or (B) an agreement for the sale or
disposition of all or substantially all the Company’s assets; or (C) a merger,
consolidation or reorganization of

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  the Company with or involving any other corporation, other than a merger,
consolidation or reorganization that would result in the voting securities of
the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of
the surviving entity) at least eighty percent of the combined voting power of
the voting securities of the Company (or such surviving entity) outstanding
immediately after such merger, consolidation, or reorganization.

 

                (f)           Date of Termination.  “Date of Termination” shall
mean

 

  (i)            if your employment is terminated by reason of your death, the
date of your death;     (ii)           if your employment is terminated by the
Company for any reason other than because of your death, the date specified in
the Notice of Termination (which shall not be prior to the date of the notice);
    (iii)          if your employment is terminated by you for any reason, the
Date of Termination shall be not less than thirty (30) nor more than sixty (60)
days from the date such Notice of Termination is given, or such earlier date
after the date such Notice of Termination is given as may be identified by the
Company.

 

Unless the Company instructs you not to do so, you shall continue to perform
services as provided in this Agreement through the Date of Termination.

                (g)           Employee Benefits.  A termination by the Company
pursuant to Section 4(c) hereof or by you pursuant to Section 4(d) hereof shall
not affect any rights which you may have pursuant to any other agreement,
policy, plan, program or arrangement of the Company providing employee benefits,
which rights shall be governed by the terms thereof and by Section 5; provided,
however, that if you shall have received or shall be receiving benefits under
Section 5(a), (c), or (d) hereof and, if applicable, Section 6 hereof, you shall
not be entitled to receive benefits under any other policy, plan, program or
arrangement of the Company providing severance compensation to which you would
otherwise be entitled.

                5.             Compensation Upon Termination.  Upon your
termination of employment, you shall receive:

                (a)           If your employment shall be terminated by the
Company for Incapacity, (i) for the period from the Date of Termination until
the end of the calendar year in which such termination occurs, you shall receive
all compensation payable to you under the Company’s disability and medical plans
and programs, as in effect on the Date of Termination, plus an additional
payment from the Company (if necessary) such that the aggregate amount received
by you from all sources equals your base salary, at the rate in effect on the
Date of Termination, plus any Bonus and all other amounts to which you would
have been entitled under any compensation or benefit plans of the Company had
your employment continued until the end of the calendar year, (ii) for the
period from the end of the calendar year in which such termination occurs until
two (2) years from the Date of Termination (the “Payment End Date”), you shall
receive all compensation payable to you

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under the Company’s disability and medical plans and programs, as in effect on
the Date of Termination, plus an additional payment from the Company (if
necessary) such that the aggregate amount received by you from all sources
equals your base salary at the rate in effect on the Date of Termination, and
(iii) for purposes of outstanding awards and amounts owing or accrued as
described in Section 5(d)(iii) of this Agreement, your employment shall be
deemed to have been terminated due to your Disability (as that term is defined
in the plans, programs, or arrangements described in Section 5(d)(iii) of this
Agreement). After the Payment End Date, 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. The additional payments by
the Company described in this Section 5(a) shall be conditioned upon the
execution by you or a representative with legal authority to act on your behalf
of a general release relating to your employment in form and substance
reasonably acceptable to the Company.

                (b)           If your employment shall be terminated (i) by the
Company for Cause or by a Notice of Non-Renewal, or (ii) by you other than for
Good Reason, the Company shall pay you your 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 fully vested and irrevocably entitled
under any compensation or benefit plans of the Company as of the Date of
Termination, and the Company shall have no further obligations in any respect
whatsoever for payment of compensation or benefits to you under this Agreement.
Provided, however, that if your employment is terminated by you other than for
Good Reason, you shall be compensated under this Section 5(b) only to the extent
that you actively performed your assigned responsibilities through the Date of
Termination. In addition, you acknowledge that a termination of employment
described in this Section 5(b) shall not be considered an End of Service Date
for any and all outstanding stock options to which you are a party, except to
the extent it would otherwise qualify as a Retirement thereunder.

                (c)           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 base salary through the Date of Termination, plus a Bonus
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,
including, but not limited to, all life insurance proceeds payable on your death
to which your estate or beneficiaries are otherwise entitled in accordance with
the terms thereof, and the Company shall have no further obligation to you, your
beneficiaries or your estate under this Agreement.

                (d)           If your employment shall be terminated (a) by the
Company, except for a termination by the Company for Cause or Incapacity or by a
Notice of Non-Renewal (or due to your death), or (b) by you for Good Reason,
then you shall be entitled to the benefits provided below:

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  (i)            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 at any time within 90 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, a Bonus prorated for the portion of the Bonus measurement
period occurring prior to the Date of Termination, at the time such payments are
due, except as otherwise provided below.     (ii)           Conditioned upon
your execution of a general release relating to your employment in form and
substance reasonably acceptable to the Company, the Company shall pay or cause
to be paid to you, in lieu of any further payments to you for the portion of the
Term subsequent to the Termination Date an amount (the “Severance Payment”),
which shall be equal to the sum of:  

(A)       the aggregate base salary (at the highest rate in effect at any time
during the Term) which you would have received pursuant to this Agreement for
the Severance Period had your employment with the Company continued for such
period, and   (B)       the aggregate Bonus (based upon the highest annual Bonus
that you received with respect to any calendar year during the two years
immediately preceding the calendar year in which the Termination Date occurred,
or, in the event that the Termination Date occurs prior to the first anniversary
of the Effective Date, then based upon the highest annual Bonus that you
received with respect to any calendar year during the three years immediately
preceding the calendar year in which the Termination Date occurred) which you
would have received pursuant to this Agreement for the Severance Period, had
your employment with the Company continued for such period.  

  The Severance Payment shall be paid over a period of one (1) year (the
“Severance Period”) in the following manner: an amount equal to fifty percent
(50%) of the value of the Severance Payment, or, if the Severance Period is
adjusted per Section 10(e), then an amount equal to twenty-five percent (25%) of
the value of the Severance Payment, paid in a lump sum as soon as
administratively practicable after your Termination Date; and an amount equal to
the remaining fifty percent (50%) or seventy-five percent (75%), as applicable,
paid in equal semi-monthly installments, without interest, beginning six (6)
months after the Termination Date and continuing through the end of the
Severance Period. Notwithstanding the foregoing, in the event that the
Termination Date occurs prior to the first anniversary of the Effective Date,
the Severance Period will be increased by one year.      (iii)          All
outstanding awards, and all amounts owing or accrued, on the Date of Termination
under the Lear Corporation Long-Term Stock Incentive Plan (“LTSIP”), the Lear
Corporation Management Stock Purchase Plan (“MSPP”), the Lear Corporation
Executive Supplemental Savings Plan (“ESSP”) and the Lear Corporation Pension
Equalization Program (“PEP”), and any other compensation or equity-based plan,
program

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  or arrangement of the Company in which you participated (including, following
a Change in Control, any additional accruals provided thereunder due to a Change
in Control) will be paid to you under the terms and conditions of such plans,
programs and arrangements (and the award agreements and other documents
thereunder), as modified by this Section 5(d)(iii). Your awards and amounts
owing or accrued that vest based on the passage of time and/or continued service
(and not based primarily upon the satisfaction of performance measures, as
described below) will vest as scheduled during the Severance Period as if you
had remained employed; to the extent such awards and amounts owing or accrued,
other than those stock options held by you on the Effective Date, have not
vested by the end of your Severance Period, they will become vested and
nonforfeitable on a pro rata basis determined by multiplying the unvested awards
and amounts by a fraction, the numerator of which is the number of full months
that elapsed from the grant date to the end of your Severance Period, as
adjusted by Section 10(e), and the denominator of which is the number of full
months in the total vesting period. Your vested stock options shall be
exercisable (A) prior to a Change in Control, for thirteen months following your
Date of Termination (but not later than the date on which the stock options
would otherwise expire if you remained employed by the Company), and (B)
following a Change in Control, throughout their entire term. In the case of
those awards and amounts owing or accrued which would otherwise have become
vested and nonforfeitable primarily upon the satisfaction of performance
measures set forth in the relevant award agreement, plan, program or
arrangement, you shall be paid in stock as soon as administratively feasible
after the end of the relevant performance period (or such earlier period as the
other participants in such award agreement, plan, program or arrangement are
eligible to be paid out), a pro rata amount (if and to the extent all relevant
performance objectives are actually achieved at target levels), based on a
fraction, the numerator of which is the number of full months that elapsed from
the grant date to your Date of Termination and the denominator of which is the
number of full months in the relevant performance period.     You and the
Company acknowledge that references in this Section 5(d)(iii) to the PEP, the
MSPP, the ESSP, and the LTSIP, shall be deemed to be references to such plans as
amended or restated from time to time and to any similar plan of the Company
that supplements or supersedes any such plans. In addition, you and the Company
acknowledge that references in this Section 5 to any Section of the Code shall
be deemed to be references to such Section as amended from time to time or to
any successor thereto.     (iv)          The Company shall arrange to provide to
you, your dependents, and beneficiaries, for the Severance Period, benefits
provided under any “welfare benefit plan” of the Company (as the term “welfare
benefit plan” is defined in Section 3(1) of the Employee Retirement Income
Security Act of 1974, as amended) (“Welfare Benefits”). If and to the extent
that any such Welfare Benefits shall not or cannot be paid or provided under any
policy, plan, program or arrangement of the Company (A) solely due to the fact
that you are no longer an officer or employee of the Company or did not continue
as an officer or employee of the Company during the remainder of the Term or (B)
as a result of the amendment or termination of any plan providing for Welfare
Benefits, the Company shall then itself pay or provide for the payment of such
Welfare Benefits to you, your dependents

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  and beneficiaries. Without otherwise limiting the purposes or effect of the no
mitigation obligation in Section 5(h) hereof, Welfare Benefits payable to you
(including your dependents and beneficiaries) pursuant to this Section 5(d)(iv)
shall be reduced to the extent comparable welfare benefits are actually received
by you (including your dependents and beneficiaries) from another employer
during such period, and any such benefits actually received by you shall be
reported by you to the Company.     (v)           Your right to acquire any
shares of the Company’s capital stock under any and all outstanding stock
options, or other rights previously granted to you under any equity-based plans
of the Company shall be governed by the express terms of such plans and the
applicable agreements thereunder, except as provided in Section 5(a), 5(b), or
5(d)(iii) of this Agreement.

 

                (e)           Any Bonus that is payable to you with respect to a
period that is less than a full calendar year (a “partial calendar year”) shall
be prorated by multiplying (i) the Bonus that would have been payable to you
with respect to the entire calendar year had your employment with the Company
continued until the end of such year by (ii) a fraction, the numerator of which
equals the number of days in the partial calendar year and the denominator of
which equals 365.

                (f)            Unless your Date of Termination occurs within one
year after a Change in Control, the Company, if permitted by law, may set-off or
counterclaim losses, fines or damages in respect of any claim, debt or
obligation against any payment to or benefit for you provided for in this
Agreement.

                (g)           Without limiting your rights at law or in equity,
if the Company fails to make any payment or provide any benefit required to be
made or provided hereunder within thirty (30) days of the date it is due, the
Company will pay interest on the amount or value thereof at an annualized rate
of interest equal to the “prime rate” as quoted from time to time during the
relevant period in The Wall Street Journal, plus three percent. Such interest
will be payable as it accrues on demand. Any change in such prime rate will be
effective on and as of the date of such change.

                (h)           The Company acknowledges that its severance pay
plans and policies applicable in general to its salaried employees do not
provide for mitigation, offset or reduction of any severance payment received
thereunder. Accordingly, the parties hereto expressly agree that the payment of
the severance compensation by the Company to you in accordance with the terms of
this Agreement shall be liquidated damages and that you shall not be required to
mitigate the amount of any payment provided for in this Agreement by seeking
other employment or otherwise, nor shall any profits, income, earnings or other
benefits from any source whatsoever create any mitigation, offset, reduction or
any other obligation on the part of you hereunder or otherwise, except as
expressly provided in this Section 5.

                6.             Certain Additional Payments by the Company.

                (a)           Anything in this Agreement to the contrary
notwithstanding, in the event that it shall be determined (as hereafter
provided) that any payment (or benefit provided) by the Company

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to or for your benefit, whether paid or payable pursuant to the terms of this
Agreement or otherwise (a “Payment”), would be subject to the excise tax imposed
by Section 4999 (or any successor thereto) of the Code, and any interest or
penalties with respect to such excise tax (such excise tax, together with any
such interest and penalties, are hereafter collectively referred to as the
“Excise Tax”), then you shall be entitled to receive an additional payment or
payments (collectively, a “Gross-Up Payment”), including without limitation any
Gross-Up Payment made with respect to the Excise Tax, if any, attributable to
(i) any incentive stock option, as defined by Section 422 of the Code (“ISO”),
or (ii) any stock appreciation or similar right, whether or not limited, granted
in tandem with any ISO. The Gross-Up Payment shall be in an amount such that,
after payment by you of the Excise Tax, plus any additional taxes, penalties and
interest, and any further Excise Taxes imposed upon the Gross-Up Payment, you
retain, after payment of all such taxes and Excise Taxes, an amount of the
Gross-Up Payment equal to the Payment that you would have received if no Excise
Taxes had been imposed upon the Payment and no additional taxes, penalties, and
interest or further Excise Taxes had been imposed upon the Gross-Up Payment.

                (b)           Subject to the provisions of Section 6(e) hereof,
all determinations required to be made under this Section 6, including whether
an Excise Tax is payable by you and the amount of such Excise Tax and whether a
Gross-Up Payment is required and the amount of such Gross-Up Payment, shall be
made by a nationally recognized firm of certified public accountants (the
“Accounting Firm”) selected by you in your sole discretion, other than the
Company’s independent auditing firm, to the extent prohibited by applicable
Public Company Accounting Oversight Board rules. You shall direct the Accounting
Firm to submit its determination and detailed supporting calculations to both
the Company and you within thirty (30) calendar days after the Termination Date.
If the Accounting Firm determines that any Excise Tax is payable by you, the
Company shall pay the required Gross-Up Payment to you within five (5) business
days after receipt of the aforesaid determination and calculations. If the
Accounting Firm determines that no Excise Tax is payable by you, it shall, at
the same time as it makes such determination, furnish you with an opinion that
you do not owe any Excise Tax on your Federal income tax return. Any
determination by the Accounting Firm as to the amount of the Gross-Up Payment to
be paid by the Company within such thirty (30) calendar day period shall be
binding upon the Company and you. As a result of the uncertainty in the
application of Section 4999 (or any successor thereto) of the Code at the time
of the initial determination by the Accounting Firm hereunder, it is possible
that Gross-Up Payments which will not have been made by the Company should have
been made (“Underpayment”), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its remedies pursuant to
Section 6(e) hereof and you thereafter are required to make a payment of any
Excise Tax, you shall direct the Accounting Firm to determine the amount of the
Underpayment that has occurred and to submit its determination and detailed
supporting calculations to both the Company and you as promptly as possible. Any
such Underpayment shall be promptly paid by the Company to or for your benefit
within three calendar days after receipt of such determination and calculations.

                (c)           The Company and you shall each cooperate with the
Accounting Firm in connection with the preparation and issuance of the
determination provided for in Section 6(b) hereof. Such cooperation shall
include without limitation providing the Accounting Firm access to

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and copies of any books, records and documents in the possession of the Company
or you, as the case may be, that are reasonably requested by the Accounting
Firm.

                (d)           The fees and expenses of the Accounting Firm for
its services in connection with the determinations and calculations provided for
in Section 6(b) hereof shall initially be paid by you. The Company shall
reimburse you for your payment of such costs and expenses within five (5)
business days after receipt from you of a statement therefor and evidence of
your payment thereof.

                (e)           You shall notify the Company in writing, of any
claim by the Internal Revenue Service (the “IRS”) that, if successful, would
require the payment by the Company of a Gross-Up Payment. Such notification
shall be given as soon as practicable but no later than ten (10) business days
after you receive notice of such claim and shall apprise the Company of the
nature of such claim and the date on which such claim is requested to be paid.
You shall not pay such claim prior to the earlier of (x) the expiration of the
thirty (30) calendar day period following the date on which you give such notice
to the Company or (y) the date that any payment of taxes with respect to such
claim is due. If the Company notifies you in writing prior to the expiration of
such period that it desires to contest such claim, you shall:

 

                  (i)            give the Company any information reasonably
requested by the Company relating, to such claim;    
                (ii)           take such action in connection with contesting
such claim as the Company shall reasonably request in writing, from time to
time, including without limitation accepting legal representation with respect
to such claim by an attorney reasonably selected by the Company;    
                (iii)          cooperate with the Company in good faith in order
effectively to contest such claim; and                     (iv)          permit
the Company to participate in any proceedings relating to such claim;

 

provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold you harmless, on an after-tax
basis, for any Excise Tax or income tax, including interest and penalties with
respect thereto, imposed as a result of such representation and payment of costs
and expenses. Without limitation on the foregoing provisions of this Section
6(e), the Company shall, provided that such control does not have a material
adverse affect on your individual income tax with respect to matters unrelated
to the contest of the Excise Tax, control all proceedings taken in connection
with such contest and, at its sole option, may, provided that such pursuit or
foregoing does not have a material adverse affect on your individual income tax
with respect to matters unrelated to the contest of the Excise Tax, pursue or
forego any and all administrative appeals, proceedings, hearings and conference
with the IRS in respect of such claim (but, you may participate therein at your
own cost and expense) and may, at its sole option, provided that such payment,
suit, contest or prosecution does not have a material adverse affect on your
individual

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March 3, 2006
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income tax with respect to matters unrelated to the contest of the Excise Tax,
either direct you to pay the tax claimed and sue for a refund or contest the
claim in any permissible manner, and you agree to prosecute such contest to a
determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs you to pay the tax
claimed and sue for a refund, the Company shall advance the amount of such
payment to you on an interest-free basis and shall indemnify and hold you
harmless, on an after-tax basis, from any Excise Tax or income tax, including
interest or penalties with respect thereto, imposed with respect to such advance
or with respect to any imputed income with respect to such advance; and further
provided that any extension of the statute of limitations relating to payment of
taxes for your taxable year with respect to which the contested amount is
claimed to be due is limited solely to such contested amount. Furthermore, the
Company’s control of such contest shall be limited to issues with respect to
which a Gross Up Payment would be payable hereunder, and you shall be entitled
to settle or contest, as the case may be, any other issue raised by the IRS.

                (f)            If, after the receipt by you of an amount
advanced by the Company pursuant to Section 6(e) hereof, you receive any refund
with respect to such claim, you shall (subject to the Company’s complying with
the requirements of Section 6(e) hereof) promptly pay to the Company the amount
of such refund (together with any interest paid or credited thereon after any
taxes applicable thereto). If, after the receipt by you of an amount advanced by
the Company pursuant to Section 6(e) hereof, a determination is made that you
shall not be entitled to any refund with respect to such claim and the Company
does not notify you in writing of its intent to contest such denial or refund
prior to the expiration of thirty (30) calendar days after such determination,
then such advance shall be forgiven and shall not be required to be repaid and
the amount of such advance shall offset, to the extent thereof, the amount of
Gross-Up Payment required to be paid.

                7.             Travel.  You shall be required to travel to the
extent necessary for the performance of your responsibilities under this
Agreement.

                8.             Successors; Binding Agreement.  The Company will
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, and will assign its rights and
obligations hereunder to such successor. Failure of the Company to make such an
assignment and to obtain such assumption and agreement prior to the
effectiveness of any such succession, unless you agree otherwise in writing with
the Company or the successor, 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 and the date on which any such
succession becomes effective shall be deemed your Date of Termination. As used
in this Agreement, “Company” shall mean the Company as hereinbefore defined and
any successor to its business and/or assets as aforesaid which assumes and
agrees to perform this Agreement by operation of law, or otherwise. This
Agreement shall inure to the benefit of and be enforceable by your personal or
legal representatives, executors, administrators, successors, heirs,
distributees and/or legatees. This Agreement is personal in nature and neither
of the parties hereto shall, without the consent of

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March 3, 2006
Page 13 of 18

the other, assign, transfer or delegate this Agreement or any rights or
obligations hereunder except as expressly provided in this Section 8. Without
limiting the generality of the foregoing, your right to receive payments
hereunder shall not be assignable or transferable, whether by pledge, creation
of a security interest or otherwise, other than by a transfer by your will or by
the laws of descent and distribution and, in the event of any attempted
assignment or transfer contrary to this Section 8, the Company shall have no
liability to pay to the purported assignee or transferee any amount so attempted
to be assigned or transferred. The Company and you recognize that each party
will have no adequate remedy at law for any material breach by the other of any
of the agreements contained herein and, in the event of any such breach, the
Company and you hereby agree and consent that the other shall be entitled to a
decree of specific performance, mandamus or other appropriate remedy to enforce
performance of this Agreement.

                9.             Notices.  For the purpose of this Agreement,
notices and all other communications provided for in this Agreement shall be in
writing, and shall be deemed to have been duly given when delivered by hand, or
mailed by United States certified mail, return receipt requested, postage
prepaid, or sent by Federal Express or similar overnight courier service,
addressed to the respective addresses set forth on the first page of this
Agreement, or sent by facsimile with confirmation of receipt to the respective
facsimile numbers 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, if you are the Secretary at the time such notice is to be
given, to the Chairman of the Company’s Board of Directors), or to such other
address or facsimile number as either party may have furnished to the other in
writing in accordance herewith, except that notice of change of address or
facsimile number shall be effective only upon receipt.

                10.           Noncompetition.

                (a)           Until the Date of Termination, you agree not to
engage in any Competitive Activity. For purposes of this Agreement, the term
“Competitive Activity” shall mean your participation as an employee or
consultant, without the written consent of the CEO or the Board or any
authorized committee thereof, in the management of any business enterprise
anywhere in the world if such enterprise engages in competition with any product
or service of the Company (including without limitation any enterprise that is a
supplier to an original equipment automotive vehicle manufacturer) or is
planning to engage in such competition. “Competitive Activity” shall not include
the mere ownership of, and exercise of rights appurtenant to, securities of a
publicly-traded company representing 5% or less of the total voting power and 5%
or less of the total value of such an enterprise. You agree that the Company is
a global business and that it is appropriate for this Section 10 to apply to
Competitive Activity conducted anywhere in the world.

                (b)           You agree not to engage directly or indirectly in
any Competitive Activity (i) until one (1) year after the Date of Termination if
you are terminated by the Company for Cause, as a result of a Notice of
Non-Renewal from the Company, or you terminate your employment for other than
Good Reason, or (ii) until two (2) years after the Date of Termination in all
other circumstances.

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March 3, 2006
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                (c)           You shall not directly or indirectly, either on
your own account or with or for anyone else, solicit or attempt to solicit any
of the Company’s customers, solicit or attempt to solicit for any business
endeavor or hire or attempt to hire any employee of the Company, or 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, (i) until one (1) year after the Date of Termination if you are
terminated by the Company for Cause, as a result of a Notice of Non-Renewal from
the Company, or you terminate your employment for other than Good Reason, or
(ii) until two (2) years after the Date of Termination in all other
circumstances.

                (d)           You acknowledge and agree that damages in the
event of a breach or threatened breach of the covenants in this Section 10 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 10 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.

                (e)           As additional compensation for the covenants
contained in Sections 10(b) and 10(c), and only if you execute a general release
in form and substance reasonably acceptable to the Company acknowledging, among
other things, your obligations under this Agreement, the Company shall increase
the Severance Period for purposes of Section 5(d) from one (1) year to two (2)
years.

                11.           Confidentiality and Cooperation.

                (a)           You shall not knowingly use, 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, marketing and sales plans, pricing or cost information,
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 by 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.

                (b)           Any design, engineering methods, techniques,
discoveries, inventions (whether patentable or not), formulae, formulations,
technical and product specifications, bill of materials, equipment descriptions,
plans, layouts, drawings, computer programs, assembly, quality control,
installation and operating procedures, operating manuals, strategic, technical
or marketing information, designs, data, secret knowledge, know-how and all
other information of a confidential nature prepared or produced during the
period of your employment and which ideas, processes,

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March 3, 2006
Page 15 of 18

and other materials or information 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.

                (c)           Following the termination of your employment, you
agree to make yourself reasonably available to the Company to respond to
periodic requests for information relating to the Company or your employment
which may be within your knowledge. You further agree to cooperate fully with
the Company in connection with any and all existing or future depositions,
litigation, or investigations brought by or against the Company, any entity
related to the Company, or any of its (their) agents, officers, directors or
employees, whether administrative, civil or criminal in nature, in which and to
the extent the Company deems your cooperation necessary. In the event that you
are subpoenaed in connection with any litigation or investigation, you will
immediately notify the Company. You shall not receive any additional
compensation, other than reimbursement for reasonable costs and expenses
incurred by you, in complying with the terms of this Section 11(c).

                12.           Arbitration.

                (a)           Except as contemplated by Section 10(d) or Section
12(c) 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.

                (b)           The parties agree to use their best efforts to
cause (i) the two individuals set forth in the preceding Section 12(a), or, if
applicable, the American Arbitration Association, to appoint the arbitrator
within thirty (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 (ii) any arbitration hearing to be held within thirty (30) days
of the date of selection of the arbitrator, and, as a condition to his or her
selection, such arbitrator must consent to be available for a hearing, at such
time.

                (c)           Judgment 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. If any dispute under this Section 12
shall be pending, you shall continue to receive at a minimum the base salary
which you were receiving immediately prior to the act or omission which forms
the basis for the dispute. At the close of the arbitration, such continued base
salary payments may be offset against any damages awarded to you or may be
recovered from you if its

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March 3, 2006
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determined that you were not entitled to the continued payment of base salary
under the other provisions of this 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 without giving effect to any conflicts of laws rules.

                16.           Payments Net of Taxes.  Except as otherwise
provided in Section 6 herein, any payments provided for herein which are subject
to Federal, State local or other governmental tax or other withholding
requirements or obligations, shall have such amounts withheld prior to payment,
and the Company shall be considered to have fully satisfied its obligation
hereunder by making such payments to you net of and after deduction for all
applicable withholding obligations.

                17.           Capacity of Parties.  The parties hereto warrant
that they have the capacity and authority to execute this Agreement.

                18.           Validity.  The invalidity or unenforceability of
any provision of this Agreement shall not, at the option of the party for whose
benefit such provision was intended, affect the validity or enforceability of
any other provision of the Agreement, which shall remain in full force and
effect.

                19.           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.

                20.           Entire Agreement.  This Agreement and any
attachments hereto, contain the entire agreement by the parties with respect to
the matters covered herein and supersede any prior agreement (including, but not
limited to, prior employment agreement(s)), 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 set forth in this Agreement.

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March 3, 2006
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                21.           Legal Fees and Expenses.  It is the intent of the
Company that you not be required to incur the expenses associated with the
enforcement of your rights under this Agreement by litigation or other legal
action because the cost and expense thereof would substantially detract from the
benefits intended to be extended to you hereunder. Accordingly, the Company
shall pay or cause to be paid and be solely responsible for any and all
reasonable attorneys’ and related fees and expenses incurred by you (i) as a
result of the Company’s failure to perform this Agreement or any provision
hereof or (ii) as a result of the Company unreasonably or maliciously contesting
the validity or enforceability of this Agreement or any provision hereof as
aforesaid.

                22.           Code Section 409A. Notwithstanding any provision
in this Agreement to the contrary, if your employment is terminated as described
in Section 5(d) and Section 409A(a)(2)(B)(i) of the Code applies to all or any
portion of your Severance Payment and you are a “specified employee” thereunder,
then the Company shall pay the portion of your Severance Payment that is subject
to such Section of the Code no earlier than six (6) months after your
Termination Date or such other date as would be permissible under the Code. If
your employment is terminated as described in Section 5(d) and Section
409A(a)(2)(B)(i) of the Code does not apply to any portion of your Severance
Payment or you are not a “specified employee” thereunder, then the Company shall
pay your Severance Payment as described in Section 5(d).

[Signature Page Follows]

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March 3, 2006
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                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 February
24, 2006 (“Effective Date”).

Sincerely,

LEAR CORPORATION

    

By: /s/ Roger A. Jackson  

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  Roger A. Jackson        Agreed to this 4th day of March, 2006        /s/
Matthew Simoncini

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Matthew Simoncini

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