Document:

exv10w2

 

Exhibit 10.2

LEAR CORPORATION

LONG-TERM STOCK INCENTIVE PLAN

FORM OF PERFORMANCE SHARE AWARD AGREEMENT

     PERFORMANCE SHARE AWARD AGREEMENT (the “Agreement”) dated as of                           , 2005, between Lear
Corporation (the “Company”) and the individual whose name appears on the signature page hereof (the
“Participant”), who is a key employee of the Company or an Affiliate. Any term capitalized herein,
but not defined, shall have the meaning set forth in the Lear Corporation Long-Term Stock Incentive
Plan (the “Plan”).

     1. GRANT. In accordance with the terms of the Plan, the Company hereby grants to the Participant a
Performance Share Award subject to the terms and conditions set forth herein.

     2. PERFORMANCE PERIOD. The Performance Period for this Award shall be the three-year period
commencing on January 1, 2005 and ending on December 31, 2007.

     3. PERFORMANCE MEASURES. There shall be two performance measures, Relative Return to Shareholders
and Return on Invested Capital, as both are defined below.

        a. Relative Return to Shareholders: This performance measure ranks the “Return to
Shareholders” (as defined below) for the Company over the Performance Period in relation to the
Return to Shareholders for the “Peer Group” (as defined below).

           i. “Return to Shareholders” for each respective company shall mean the quotient of (I) the sum
of (a) the average closing price, as reported on the exchange where the stock of the relevant
company is traded, for the five consecutive trading days preceding January 1, 2008 and (b) the
dividends declared during the period commencing on January 1, 2005 and ending on December 31, 2007,
divided by (II) the average closing price, as reported on the exchange where the stock of the
relevant company is traded, for the five consecutive trading days preceding January 1, 2005.

           ii. “Peer Group” shall mean ArvinMeritor, Dana Corp., Delphi, Eaton Corp., Johnson Controls,
Inc., Magna International, Inc., and Visteon.

        b. Return on Invested Capital: This performance measure is the compounded improvement on the
Company’s return on Invested Capital as reported to its shareholders for 2005, 2006, 2007 fiscal
years or as otherwise approved by the Compensation Committee.

     4. PERFORMANCE GOALS.

        a. Relative Return to Shareholders:

 

 

           i. Threshold: The Company is ranked above the 42nd percentile.

           ii. Target: The Company is ranked above the 57th percentile.

           iii. Superior: The Company is ranked above the 85th percentile.

        b. Return on Invested Capital:

           i. Threshold: 3%* per year average improvement

           ii. Target: 5% per year average improvement

           iii. Superior: 7% per year average improvement

     * If threshold payout is not achieved by meeting the 3% compounded annual growth, an
opportunity exists to earn threshold payout if the percentage change in ROIC when compared to the
Peer Group is above the 57th percentile.

     5. PERFORMANCE SHARES.

        a. The number of Performance Shares earned by a Participant with respect to each performance
measure during the Performance Period shall be determined under the following chart:

	 	 	 	 	 	 	 	 
	Performance At	Performance Shares	 
	 	Relative Return to Shareholders	 	 	Return on Invested Capital	 
	Threshold
	                    	 	 	                    	 
	Target
	                    	 	 	                    	 
	Superior
	                    	 	 	                    	 

        b. In the event that the Company’s actual performance does not meet threshold for that
performance measure, Performance Shares shall not be earned with respect to that performance
measure.

        c. If the Company’s actual performance for a performance measure is between “threshold” and
“target,” the Performance Shares earned shall equal the Performance Shares for threshold plus the
number of Performance Shares determined under the following formula:

	 	 	 	 	 
	(TAS – TS)

	x
	AP – TP	 
	

	 	 	 	 
	

	 	 	TAP – TP	 

     TAS = The Performance Shares for target.

 

 

     TS = The Performance Shares for threshold.

     AP = The Company’s actual performance.

     TP = The threshold performance goal.

     TAP = The target performance goal.

        d. If the Company’s actual performance for a performance measure is between “target” and
“superior,” the Performance Shares earned shall equal the Performance Shares for target plus the
number of Performance Shares determined under the following formula:

	 	 	 	 	 
	(SS – TAS)

	x
	AP – TAP	 
	

	 	 	 	 
	

	 	 	SP – TAP	 

     SS = The Performance Shares for superior.

     TAS = The Performance Shares for target.

     AP = The Company’s actual performance.

     TAP = The target performance goal.

     SP = The superior performance goal.

        e. If the Company’s actual performance for performance measure exceeds “superior,” the
Performance Shares earned shall equal the Performance Shares for superior.

     6. TIMING AND FORM OF PAYOUT. Except as hereinafter provided, after the end of the Performance
Period, the Participant shall be entitled to receive a number of shares of the Company’s common
stock, par value $.01 per share (“Common Stock”), equal to his total number of Performance Shares
determined under Section 5. Delivery of such shares of Common Stock shall be made as soon as
administratively feasible after the Committee certifies the actual performance of the Company
during the Performance Period. Notwithstanding the foregoing, any delivery of shares of Common
Stock under this Section may be irrevocably deferred by the Participant with the Committee’s
consent; provided, that the Participant’s election to defer occurs prior to the expiration of the
second year of the Performance Period. Notwithstanding anything herein to the contrary, the
Committee may defer delivery of any shares of Common Stock to the Participant under this Section if
the delivery of such shares of Common Stock would constitute compensation to the Participant that
is not deductible by the Company or an Affiliate due to the application of Code Section 162(m);
provided, that such shares of Common Stock deferred pursuant to this sentence shall be delivered to
the Participant on or

 

 

before the January 15 of the first year in which the Participant is no longer a “covered employee”
of the Company (within the meaning of Code Section 162(m)) following the end of the Performance
Period or, if later, the deferred delivery date elected by the Participant in accordance with the
preceding sentence.

     7. TERMINATION OF EMPLOYMENT DUE TO DEATH, RETIREMENT, OR DISABILITY. If a Participant ceases to
be an employee prior to the end of the Performance Period by reason of death, retirement or
disability, the Participant (or in the case of the Participant’s death, the Participant’s
beneficiary) shall be entitled to receive shares of Common Stock equal to the number of shares of
Common Stock the Participant would have been entitled to under Section 6 if he or she had remained
employed until the last day of the Performance Period multiplied by a fraction, the numerator of
which shall be the number of full calendar months during the period of January 1, 2005 through the
date of the Participant’s employment terminated and the denominator of which shall be thirty-six.
The delivery of such shares of Common Stock shall be made as soon as administratively feasible
after the end of the Performance Period, whether or not the Participant had elected under Section 6
above to defer receipt of Common Stock deliverable under this Award.

           Any distribution made with respect to a Participant who has died shall be paid to the
beneficiary designated by the Participant pursuant to Article 11 of the Plan to receive the
Participant’s shares of Common Stock under this Award. If the Participant’s beneficiary predeceases
the Participant or no beneficiary has been properly designated, distribution of the Participant’s
shares of Common Stock under this Award shall be made to the Participant’s surviving spouse and if
none, to the Participant’s estate.

     8. TERMINATION OF EMPLOYMENT FOR ANY OTHER REASON. Except as provided in Section 7, the Participant
must be an employee of the Company and/or an Affiliate continuously from the date of this Award
until the last day of the Performance Period to be entitled to receive any shares of Common Stock
with respect to any Performance Shares he may have earned hereunder.

     9. ASSIGNMENT AND TRANSFERS. The rights and interests of the Participant under this Award may not
be assigned, encumbered or transferred except, in the event of the death of the Participant, by
will or the laws of descent and distribution.

     10. WITHHOLDING TAX. The Company and any Affiliate shall have the right to retain shares of Common
Stock that are distributable to the Participant hereunder to the extent necessary to satisfy the
minimum required withholding taxes, whether federal, state or local, triggered by the distribution
of shares of Common Stock under this Award.

     11. NO LIMITATION ON RIGHTS OF THE COMPANY. The grant of this Award shall not in any way affect
the right or power of the Company to make adjustments, reclassification, or changes in its capital
or business structure, or to merge, consolidate, dissolve, liquidate, sell or transfer all or any
part of its business or assets.

     12. PLAN AND AGREEMENT NOT A CONTRACT OF EMPLOYMENT.

 

 

Neither the Plan nor this Agreement is a contract of employment, and no terms of employment of the
Participant shall be affected in any way by the Plan, this Agreement or related instruments except
as specifically provided therein. Neither the establishment of the Plan nor this Agreement shall
be construed as conferring any legal rights upon the Participant for a continuation of employment,
nor shall it interfere with the right of the Company or any Affiliate to discharge the Participant
and to treat him or her without regard to the effect that such treatment might have upon him or her
as a Participant.

     13. PARTICIPANT TO HAVE NO RIGHTS AS A STOCKHOLDER. The Participant shall not have any rights as a
stockholder with respect to any shares of Common Stock subject to this Award prior to the date on
which he or she is recorded as the holder of such shares of Common Stock on the records of the
Company.

     14. NOTICE. Any notice or other communication required or permitted hereunder shall be in writing
and shall be delivered personally, or sent by certified, registered or express mail, postage
prepaid. Any such notice shall be deemed given when so delivered personally or, if mailed, three
days after the date of deposit in the United States mail, in the case of the Company to 21557
Telegraph Road, Southfield, Michigan, 48034, Attention: General Counsel and, in the case of the
Participant, to its address set forth on the signature page hereto or, in each case, to such other
address as may be designated in a notice given in accordance with this Section.

     15. GOVERNING LAW. This Agreement shall be construed and enforced in accordance with, and governed
by, the laws of the State of Michigan, determined without regard to its conflict of law rules.

     16. PLAN DOCUMENT CONTROLS. The rights herein granted are in all respects subject to the provisions
set forth in the Plan to the same extent and with the same effect as if set forth fully herein. In
the event that the terms of this Agreement conflict with the terms of the Plan document, the Plan
document shall control.

 

 

     IN WITNESS WHEREOF, the Company and the Participant have duly executed this Agreement as of
the date first written above.

	 	 	 	 	 
	 
	 	LEAR CORPORATION
	 
	 	 	 	 
	

	 	By:	 	 
	 
	 	

	 
	 	Roger A. Jackson
	 
	 	 	 	 
	 
	 	Its: Senior Vice President, Human Resources
	 
	 	 	 	 
	 
	 	

	 
	 	[Participant’s Signature]
	 
	 	 	 	 
	 
	 	Participant’s Name and Address for notices hereunder<PAGE>

                                                                    EXHIBIT 10.1

                        VISTEON EXECUTIVE SEVERANCE PLAN

                           EFFECTIVE FEBRUARY 9, 2005

<PAGE>

                        VISTEON EXECUTIVE SEVERANCE PLAN

                               ARTICLE I. PURPOSE

            Section 1.01. Purpose Statement.

            Visteon Corporation (the "Company") has developed the Visteon
Executive Severance Plan (the "Plan") to provide severance benefits to eligible
officers and executives of the Company and its affiliates whose employment with
the Company or affiliate is involuntarily terminated under certain
circumstances. The Plan is an expression of the Company's present policy with
respect to severance benefits for Executives who meet the eligibility
requirements set forth herein; it is not a part of any contract of employment.
It is intended to comply with ERISA and all other relevant laws.

                                       1
<PAGE>

                            ARTICLE II. DEFINITIONS

            Section 2.01. Definitions.

            The following words and phrases, when used in this document, shall
have the following meanings, unless the context clearly indicates otherwise:

            (a) "Base Salary" means Executive's annual base rate of pay in
effect at his or her Termination Date, excluding bonuses, one-time payments,
incentives, and other awards that are not regularly paid throughout the year.
The Plan Administrator's determination of the Executive's Base Salary shall be
final and conclusive.

            (b) "Company" means Visteon Corporation, or any successor thereto.

            (c) "Elected Officer" means an officer of the Company elected by the
Board of Directors of the Company who is on enrolled on the U.S. payroll of the
Company or a subsidiary of the Company.

            (d) "ERISA" means the Employee Retirement Income Security Act of
1974, and the rulings and regulations promulgated thereunder, all as amended and
in effect from time to time.

            (e) "Executive" shall mean an Elected Officer or Executive Leader.

            (f) "Executive Leader" means an employee who is classified as an
Executive Leader by the Company and enrolled on the U.S. payroll of the Company
or a subsidiary of the Company.

            (g) "Plan Administrator" means the Organization and Compensation
Committee of the Board of Directors of the Company.

            (h) "Release" means a release and waiver of claims (including, if
applicable, claims under the Age Discrimination in Employment Act of 1967, as
amended) that is in such form as the Plan Administrator may prescribe and that
an Executive executes for the benefit of

                                       2
<PAGE>

the Company, Visteon Systems, LLC, their respective affiliates, and their
respective officers, directors, employees, agents, predecessors, successors and
assigns.

            (i) "Termination Date" is the date on which an Executive's
employment with the Company, Visteon Systems, LLC and their respective
affiliates terminates.

                                       3
<PAGE>

                    ARTICLE III. AWARD OF SEVERANCE BENEFITS

            Section 3.01. Award of Severance Pay.

            Except as provided in Section 3.02 below, an Executive is eligible
for a Basic Severance Benefit under Section 4.01, and may qualify for an
Enhanced Severance Benefit under Section 4.02, if the Executive's employment
with the Company or a subsidiary of the Company is involuntarily terminated by
the Company or by a subsidiary of the Company. The Plan Administrator shall have
final and exclusive discretion to determine whether an Executive's termination
of employment is involuntary.

            Section 3.02. Exclusions.

            The Plan Administrator shall not grant severance benefits to an
Executive in any of the following situations:

            (a) The Executive voluntarily retires or resigns from employment;

            (b) The Executive's position is eliminated and the Executive is
offered another position which the Executive declines (unless the Plan
Administrator has specifically authorized severance benefits in accordance with
the discretion granted to the Plan Administrator under Section 3.01 above);

            (c) The Executive is terminated, replaced, laid off or placed on
leave for reasons related to absenteeism or inappropriate conduct;

            (d) The Executive is terminated or separated for not returning, in a
timely manner, from an approved leave of absence;

            (e) The Executive's employment ends or is terminated because the
Executive is physically or otherwise unable to perform the essential functions
of his or her position, with or without any applicable reasonable accommodation;

            (f) The Executive's employment terminates while receiving or seeking
(or in connection with a condition or situation with respect to which the
Executive has indicated an

                                       4
<PAGE>

intention to or is otherwise likely to seek) payments or benefits under a
program, policy, plan or a law that provides payments or benefits to an
Executive unable to work because of illness, injury or disability;

            (g) The Executive is eligible to receive pay-in-lieu of notice,
severance pay, termination pay or any other form of separation pay under any
law;

            (h) The Executive is terminated in connection with the sale by the
Company, or a subsidiary or affiliate of the Company, of all or part of a
division, plant, facility, operation, product line or other unit, or the
outsourcing of functions to a third party vendor, where the Executive is offered
employment with the purchaser, vendor or other transferee with a starting date
within ninety (90) days of the Executive's Termination Date;

            (i) The Executive's employment is governed by an employment contract
(in which case, the employment contract, and not this Plan, shall govern the
severance benefits, if any, to be provided to the Executive); or

            (j) The Executive is eligible for benefits under any other severance
plan, exit incentive plan, or reduction in force plan offered by the Company or
a subsidiary or affiliate of the Company.

                                       5
<PAGE>

                    ARTICLE IV. AMOUNT OF SEVERANCE BENEFIT

            Section 4.01. Basic Severance Benefit.

            The Basic Severance Benefit for any Executive who becomes so
entitled shall be an amount equal to four (4) weeks of Base Salary. Payment will
be in a lump sum cash payment, after withholding of applicable income and
payroll taxes and other authorized withholdings. In addition, the Executive will
be eligible for the benefits described in Section 4.04 (a), (d) and (e).

            Section 4.02. Enhanced Severance Benefit.

            (a) In any case in which the Plan Administrator has authorized the
payment of severance benefits and the Executive provides a Release in a form
acceptable to the Company, then in lieu of the Basic Severance Benefit described
in Section 4.01, the Executive shall receive an Enhanced Severance Benefit. The
Enhanced Severance Benefit is an amount equal to one (1) year of Base Salary.

            (b) The Enhanced Severance Benefit is paid as a lump sum cash
payment, after withholding of applicable income and payroll taxes and other
authorized withholdings. In addition, the Executive will be eligible for the
benefits described in Section 4.04.

            Section 4.03. Reduction of Benefits.

            Benefits under Sections 4.01 or 4.02 will be reduced by the amount
of any unpaid obligations that the Executive owes to the Company, a subsidiary
or affiliate of the Company.

            Section 4.04. Other Continued Benefits.

            (a) An Executive who is eligible to receive Basic Severance Benefits
or Enhanced Severance Benefits and who, on the Executive's Termination Date, was
covered under the group medical and/or dental programs is eligible to continue
such group medical and/or dental coverage in accordance with the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA"). If the
Executive elects to continue medical and dental coverage in accordance with
COBRA and the Executive is entitled to the Enhanced Severance Benefit under
Section 4.02 the Company will pay, on the Executive's behalf, the COBRA premium

                                       6
<PAGE>

contribution for twelve (12) months (after which, the Executive may continue at
his/her sole expense in accordance with the requirements of COBRA). Company
contributions will cease after twelve (12) months or when the Executive becomes
covered under another plan, whichever is earlier.

            (b) The Company will provide professional career transition services
to assist terminated Executives entitled to the Enhanced Severance Benefit in
the preparation for and execution of their job search, which services may
include career counseling, assessment of interests and skills, development of
job search tools such as resumes and cover letters, preparation of a job
discovery strategy, and interview skills coaching. The nature and scope of the
career transition services, and the providers through which such services will
be offered, will be determined by the Plan Administrator in its sole discretion.
The Company will pay for these services for six (6) months or until the
Executive becomes employed, whichever is earlier.

            (c) An Executive entitled to the Enhanced Severance Benefit shall
receive the unexpended after tax value of his or her Flex-Perqs account

            (d) An Executive's outstanding awards under the Visteon Corporation
2004 Incentive Plan shall be governed by the terms and conditions of each award
or grant, and not by the terms of this Plan.

            (e) An Executive who is eligible to receive retirement benefits
under a retirement plan maintained by the Company or a subsidiary may apply for
and commence retirement benefits in accordance with the terms of the applicable
retirement plan. Retirement benefits are not governed by the terms of this Plan.

                                       7
<PAGE>

                         ARTICLE V. PAYMENT OF BENEFITS

            Section 5.01. Payment of Benefits.

            Payment of an Executive's severance benefits under Article IV shall
be made as soon as practicable following the date on which the Executive has
satisfied all of the requirements for receiving a severance benefit (including,
if applicable, the Executive's execution of a Release and the expiration of any
revocation period that is provided in accordance with applicable law or such
policies as may from time to time be adopted by the Plan Administrator). All
payments shall be subject to income tax withholding and other appropriate
deductions.

                                       8
<PAGE>

                          ARTICLE VI. CLAIMS PROCEDURE

            Section 6.01. Claims Procedure.

            (a) Claim for Benefits. Any Executive who believes he or she is
entitled to benefits under the Plan in an amount greater than the amount
received may file, or have his or her duly authorized representative file, a
claim with the Plan Administrator. Any such claim shall be filed in writing
stating the nature of the claim, and the facts supporting the claim, the amount
claimed and the name and address of the claimant. The Plan Administrator shall
consider the claim and answer in writing stating whether the claim is granted or
denied. The written decision shall be within 90 days of receipt of the claim by
the Plan Administrator (or 180 days if additional time is needed and the
claimant is notified of the extension, the reason therefor and the expected date
of determination prior to commencement of the extension). If the claim is denied
in whole or in part, the Executive shall be furnished with a written notice of
such denial containing (i) the specific reasons for the denial, (ii) a specific
reference to the Plan provisions on which the denial is based, (iii) an
explanation of the Plan's appeal procedures set forth in subsection (b) below,
(iv) a description of any additional material or information which is necessary
for the claimant to submit or perfect an appeal of his or her claim and (v) an
explanation of the Executive's right to bring suit under ERISA following an
adverse determination upon appeal.

            (b) Appeal. If an Executive wishes to appeal the denial of his or
her claim, the Executive or his or her duly authorized representative shall file
a written notice of appeal to the Plan Administrator within 90 days of receiving
notice of the claim denial. In order that the Plan Administrator may
expeditiously decide such appeal, the written notice of appeal should contain
(i) a statement of the ground(s) for the appeal, (ii) a specific reference to
the Plan provisions on which the appeal is based, (iii) a statement of the
arguments and authority (if any) supporting each ground for appeal, and (iv) any
other pertinent documents or comments which the appellant desires to submit in
support of the appeal. The Plan Administrator shall decide the appellant's
appeal within 60 days of its receipt of the appeal (or 120 days if additional
time is needed and the claimant is notified of the extension, the reason
therefore and the expected date of determination prior to commencement of the
extension). The Plan Administrator's written

                                       9
<PAGE>

decision shall contain the reasons for the decision and reference to the Plan
provisions on which the decision is based. If the claim is denied in whole or in
part, such written decision shall also include notification of the Executive's
right to bring suit for benefits under Section 502(a) of ERISA and the
claimant's right to obtain, upon request and free of charge, reasonable access
to and copies of all documents, records or other information relevant to the
claim for benefits.

            Section 6.02. Standard of Review.

            The Plan Administrator is vested with the discretionary authority
and control to determine eligibility for coverage and benefits and to construe
the terms of the Plan; any such determination or construction shall be final and
binding on all parties unless arbitrary or capricious. To the extent that the
Plan Administrator has appointed a delegate or delegates to administer the
claims procedure, any such determination or construction of the delegate shall
be final and binding on all parties to the same extent as if made by the Plan
Administrator.

            Section 6.03. Delegation to the Senior Vice President--Corporate
Relations.

            Subject to such limits as the Plan Administrator may from time to
time prescribe, the Company's Senior Vice President -- Corporate Relations may
exercise any of the authority and discretion granted to the Plan Administrator
hereunder, provided that the Senior Vice President -- Corporate Relations shall
not exercise any authority and responsibility with respect to non-ministerial
matters affecting the Senior Vice President -- Corporate Relations.

                                       10
<PAGE>

               ARTICLE VII. AMENDMENT AND TERMINATION OF THE PLAN

            Section 7.01. Right to Amend and Terminate the Plan.

            The Company reserves the right, by action of the Senior Vice
President -- Corporate Relations, to amend, modify or terminate the Plan at any
time, in its sole discretion, without prior notice to Executives; provided that
the Organization & Compensation Committee of the Board of Directors of the
Company shall have the exclusive authority to amend the Plan to expand
eligibility or increase benefits, and with respect to amendments that, if
adopted, would increase the benefits payable to the Senior Vice President --
Corporate Relations by more than a de minimis amount.

                                       11
<PAGE>

                     ARTICLE VIII. MISCELLANEOUS PROVISIONS

            Section 8.01. Non-Guarantee of Employment or Other Benefits.

            Neither the establishment of the Plan, nor any modification or
amendment hereof, nor the payment of any benefits hereunder shall be construed
as giving any person any legal or equitable right against the Company, a
subsidiary or affiliate of the Company, or the Plan Administrator, or the right
to payment of any benefits (other than those specifically provided herein), or
as giving any person the right to be retained in the service of the Company or a
subsidiary or affiliate of the Company.

            Section 8.02. Participant Rights Unsecured

            The right of an Executive to receive severance benefits hereunder
shall be an unsecured claim, and the Executive shall not have any rights in or
against any specific assets of the Company. The right of an Executive to payment
of benefits under this Plan shall not be subject to attachment or garnishment
(except as otherwise provided in the Plan) and may not be assigned, encumbered,
or transferred, except by will or the laws of descent and distribution. The
rights of an Executive under this Plan are exercisable during the Executive's
lifetime only by the Executive or the Executive's guardian or legal
representative.

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