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As filed with the Commission on July 2, 1997
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the period ended January 2, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to .
---------------- -------------
Commission File No: 1-11311
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
Lear Corporation 401(k) Plan for Hourly Associates of the Duncan Plant
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
LEAR CORPORATION
21557 TELEGRAPH ROAD
SOUTHFIELD, MICHIGAN 48086-5008
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SUMMARY TABLE OF CONTENTS
<TABLE>
Page
<S> <C>
Lear Corporation 401(k) Plan for Hourly Associates of the Duncan Plant Audited Financial Statements 4
Signatures 14
Exhibits
Consent of Arthur Andersen LLP
</TABLE>
2
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REQUIRED INFORMATION
The Lear Corporation 401(k) Plan for Hourly Associates of the Duncan Plant
(the "Plan") is subject to the Employee Retirement Income Security Act of 1974
("ERISA"). Therefore, in lieu of the requirements of Items 1-3 of Form 11-K,
the financial statements of the Plan for the fiscal year ended December 31,
1996 and for the period from December 31, 1996 to January 2, 1997, the date on
which it was merged out of existence, which have been prepared in accordance
with the financial reporting requirements of ERISA, as listed in the Summary
Table of Contents. The consent of Arthur Andersen LLP attached hereto as an
Exhibit is a part hereof.
3
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LEAR CORPORATION
401(K) PLAN
FOR HOURLY ASSOCIATES OF THE DUNCAN PLANT
FINANCIAL STATEMENTS AS OF JANUARY 2, 1997 AND DECEMBER 31, 1996
TOGETHER WITH AUDITORS' REPORT
4
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Report of Independent Public Accountants
To the Plan Administrator of the
Lear Corporation 401(k) Plan
for Hourly Associates of the Duncan Plant:
We have audited the accompanying statements of assets available for benefits of
LEAR CORPORATION 401(K) PLAN FOR HOURLY ASSOCIATES OF THE DUNCAN PLANT as of
January 2, 1997 and December 31, 1996, and the related statements of changes in
assets available for benefits for the period ended January 2, 1997 and the year
ended December 31, 1996. These financial statements are the responsibility of
the Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the assets available for benefits of the Plan as of
January 2, 1997 and December 31, 1996, and the changes in assets available for
benefits for the period ended January 2, 1997 and the year ended December 31,
1996 in conformity with generally accepted accounting principles.
/s/ Arthur Andersen LLP
Detroit, Michigan,
June 30, 1997.
5
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LEAR CORPORATION
401(k) PLAN
FOR HOURLY ASSOCIATES OF THE DUNCAN PLANT
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
Statements of Assets Available for Benefits as of January 2, 1997 and December
31, 1996
Statements of Changes in Assets Available for Benefits for the Period Ended
January 2, 1997 and the Year Ended December 31, 1996
Notes to Financial Statements
6
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LEAR CORPORATION
401(k) PLAN
FOR HOURLY ASSOCIATES OF THE DUNCAN PLANT
STATEMENTS OF ASSETS AVAILABLE FOR BENEFITS
AS OF JANUARY 2, 1997 AND DECEMBER 31, 1996
<TABLE>
<CAPTION>
Fund Information
- ------------------------------------------------------------------------------------------------------------------------------
Participant Directed
- ------------------------------------------------------------------------------------------------------------------------------
January 2, 1997
------------------------------------------------------------------------
Money Investment Common
Bond Equity Market Contract Stock
Fund Fund Fund Trust Fund Fund Total
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Cash $ - $ - $ - $ - $ - $ -
Investments-
Common Stock Fund - 0 units and 509 units
as of January 2, 1997 and December 31, 1996,
respectively. - - - - - -
---- ---- ---- ---- ---- ----
Total investments - - - - - -
Contributions receivable - - - - - -
---- ---- ---- ---- ---- ----
ASSETS AVAILABLE FOR BENEFITS $ - $ - $ - $ - $ - $ -
==== ==== ==== ==== ==== ====
<CAPTION>
Fund Information
- ------------------------------------------------------------------------------------------------------------------------------
Participant Directed
- ------------------------------------------------------------------------------------------------------------------------------
December 31, 1996
------------------------------------------------------------------------
Money Investment Common
Bond Equity Market Contract Stock
Fund Fund Fund Trust Fund Fund Total
-------- ---------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Cash $8,547 $22,288 $ 9,065 $ 5,686 $ 320 $45,906
Investments-
Common Stock Fund - 0 units and 509 units
as of January 2, 1997 and December 31, 1996,
respectively. - - - - 17,370 17,370
------ ------- ------- ------- ------- -------
Total investments - - - - 17,370 17,370
Contributions receivable 24 107 1,628 1,024 228 3,011
------ ------- ------- ------- ------- -------
ASSETS AVAILABLE FOR BENEFITS $8,571 $22,395 $10,693 $ 6,710 $17,918 $66,287
====== ======= ======= ======= ======= =======
</TABLE>
The accompanying notes are an integral part of these statements.
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LEAR CORPORATION
401(k) PLAN
FOR HOURLY ASSOCIATES OF THE DUNCAN PLANT
STATEMENTS OF CHANGES IN ASSETS AVAILABLE FOR BENEFITS
FOR THE PERIOD ENDED JANUARY 2, 1997 AND THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
Fund Information
----------------------------------------------------------------------
Participant Directed
----------------------------------------------------------------------
January 2, 1997
----------------------------------------------------------------------
Money Investment Common
Bond Equity Market Contract Stock
Fund Fund Fund Trust Fund Fund Total
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest and dividend income $ - $ - $ - $ - $ - $ -
Net unrealized appreciation in
value of investments - - - - - -
Realized gain (loss) on sale of investments - - - - - -
------ ------- ------- ------ ------- -------
Net investment income - - - - - -
CONTRIBUTIONS:
Employee contributions - - - - - -
Employer contributions - - - - - -
------ ------- ------- ------ ------- -------
Total contributions - - - - - -
BENEFIT DISTRIBUTIONS - - - - - -
FORFEITURES - - - - - -
TRANSFERS (Note 1) (8,571) (22,395) (10,693) (6,710) (17,918) (66,287)
------ ------- ------- ------ ------- -------
Net increase (decrease) (8,571) (22,395) (10,693) (6,710) (17,918) (66,287)
ASSETS AVAILABLE FOR BENEFITS, beginning of period 8,571 22,395 10,693 6,710 17,918 66,287
------ ------- ------- ------ ------- -------
ASSETS AVAILABLE FOR BENEFITS, end of period $ - $ - $ - $ - $ - $ -
====== ======= ======= ====== ======= =======
<CAPTION>
Fund Information
----------------------------------------------------------------------
Participant Directed
----------------------------------------------------------------------
December 31, 1996
----------------------------------------------------------------------
Money Investment Common
Bond Equity Market Contract Stock
Fund Fund Fund Trust Fund Fund Total
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest and dividend income $ 418 $ 1,350 $ 251 $ 197 $ 22 $ 2,238
Net unrealized appreciation in
value of investments - - - - 199 199
Realized gain (loss) on sale of investments (119) 1,495 - - 26 1,402
------ ------- ------- ------ ------- -------
Net investment income 299 2,845 251 197 247 3,839
CONTRIBUTIONS:
Employee contributions 5,072 11,995 5,586 3,949 11,529 38,131
Employer contributions 1,616 3,715 2,499 1,741 3,468 13,039
------ ------- ------- ------ ------- -------
Total contributions 6,688 15,710 8,085 5,690 14,997 51,170
BENEFIT DISTRIBUTIONS (41) (199) (365) (154) (873) (1,632)
FORFEITURES (24) (352) 955 (290) (289) -
TRANSFERS (Note 1) - - - - - -
------ ------- ------- ------ ------- -------
Net increase 6,922 18,004 8,926 5,443 14,082 53,377
ASSETS AVAILABLE FOR BENEFITS, beginning of period 1,649 4,391 1,767 1,267 3,836 12,910
------ ------- ------- ------ ------- -------
ASSETS AVAILABLE FOR BENEFITS, end of period $8,571 $22,395 $10,693 $6,710 $17,918 $66,287
====== ======= ======= ====== ======= =======
</TABLE>
The accompanying notes are an integral part of these statements.
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LEAR CORPORATION
401(k) PLAN
FOR HOURLY ASSOCIATES OF THE DUNCAN PLANT
NOTES TO FINANCIAL STATEMENTS
(1) PLAN MERGER
Effective January 1, 1997, the Lear Corporation 401(k) Plan for Hourly
Associates at the Duncan Plant (the Plan) was merged into the Lear
Corporation Hourly Retirement Savings plan (the Surviving Plan).
Benefits to participants of the Plan are unaffected by the merger,
as all benefits earned up to the effective date of the merger are
carried over.
The Plan assets were transferred to the Surviving Plan on January
2, 1997. Thus, the Statement of Assets Available for Benefits as of
this date reflects no assets or liabilities.
(2) PLAN DESCRIPTION
The following description of the Plan provides only general
information. Participants should refer to the Plan agreement for a
more complete description of the Plan's provisions.
Eligibility
All hourly employees of the Duncan Plant who have completed
one year of service are eligible to participate in the Plan
effective on the first day of the quarter following completion of
the Plan's eligibility requirements.
Contributions
Contributions to the Plan are made as follows:
Employee Contributions - Participants may elect to defer from 1% to
15% of their compensation each Plan year, subject to Plan
limitations. The amount of compensation participants elect to
defer through payroll deductions is contributed to the Plan by
the Company on their behalf.
Employer Contributions - The Company makes contributions on behalf of
each eligible employee. The contribution formula is based on
the number of hours worked by the individual. Effective January
1, 1997 the Employer contribution will be made in Lear
Corporation (the Sponsor) common stock.
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LEAR CORPORATION
401(k) PLAN
FOR HOURLY ASSOCIATES OF THE DUNCAN PLANT
NOTES TO FINANCIAL STATEMENTS
(Continued)
Administration
The Plan administrator is responsible for general
administration of the Plan for the exclusive benefit of Plan
participants and their beneficiaries, subject to the specific
terms of the Plan agreement. Assets of the Plan and related
investments are administered by the Plan's trustee. Effective
January 1, 1997, the Plan changed its trustee from Delaware
Charter Guarantee and Trust Company to Wachovia Bank of North
Carolina (the Trustee). It is the Trustees' responsibility to
invest Plan assets and to distribute benefits to participants.
Investment Options
The Plan agreement provides for five investment options:
Bond Fund - Fixed Income Securities Fund consisting of
investments in a diversified portfolio of
long-term, investment grade bonds.
Equity Fund - Windsor II Fund consisting primarily of investments
in common stocks that, in the opinion of the
Fund's investment advisor, are undervalued in the
marketplace.
Money Market
Fund - Money Market Fund consisting of investments in
short-term securities such as certificates of
deposit, bankers' acceptances, commercial paper,
and U.S. Government securities.
Investment
Contract - Investment Contract Trust Fund consisting primarily
Trust Fund of investments in investment contracts issued by
high-quality insurance companies and banks, and in
similar types of fixed income investments.
Common Stock
Fund - Common Stock Fund consisting of investment in the
common stock of Lear Corporation purchased in the
open market.
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LEAR CORPORATION
401(k) PLAN
FOR HOURLY ASSOCIATES OF THE DUNCAN PLANT
NOTES TO FINANCIAL STATEMENTS
(Continued)
Each plan participant may elect, from the various options
provided in the Plan agreement, the percentage allocation of both
employer and employee contributions among the funds.
Allocation of Earnings and Losses
The earnings and losses on Plan investments are allocated on
a pro rata basis to the elective accounts of the individual
participants.
Vesting of Benefits
Participants are immediately 100% vested in their contributions and
earnings thereon regardless of length of service. Participants
become 100% vested in employer contributions and earnings thereon
after three years of service or upon retirement, total and
permanent disability or death.
Plan Forfeitures
Forfeitures of participants' nonvested portion of employer
contributions, as determined in accordance with the Plan
provisions, are available to reduce future employer contributions.
Distribution of Benefits
Distribution of benefits is made upon the occurrence of any one of the
following:
Normal retirement of the participant at age 65;
Deferred retirement of the participant beyond age 65;
In-service withdrawal of the participant after age 59 1/2;
Total and permanent disability of the participant;
Death of the participant; or
Termination of employment.
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LEAR CORPORATION
401(k) PLAN
FOR HOURLY ASSOCIATES OF THE DUNCAN PLANT
NOTES TO FINANCIAL STATEMENTS
(Continued)
Benefits payable upon normal, deferred retirement or in-service
withdrawal, total and permanent disability or death are made in
either a lump sum or an annuity. Benefits due upon termination of
employment are based on vested amounts in the participants'
accounts and are made in either a lump sum or an annuity. A
terminated participant will receive the distribution within one
year after termination of employment.
Priorities Upon Termination of the Plan
In the event of complete discontinuance of employer
contributions or if the Plan is totally or partially terminated,
the accounts of the participants affected by such actions shall
thereupon become 100% vested and nonforfeitable. The Company
currently has no intention to terminate the Surviving Plan.
Loans to Participants
Loans to participants are not permitted under the Plan.
Hardship Withdrawals
No amounts may be withdrawn from a salary deferral account
before a participant terminates employment with the Company or
attains the age of fifty-nine and one-half, except by reason of
financial hardship. All requests for hardship withdrawals require
the consent of the Plan administrator.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
Accounting records are maintained by the Trustee on the accrual basis
of accounting.
Investments
Investment transactions are recorded on the trade date basis.
Investments owned are reflected in the Statements of Assets
Available for Benefits at current value. Current value, which is
equivalent to market value, is the unit valuation of the security
at yearend. Realized gains and losses on sales of investments and
unrealized appreciation and depreciation in the value of
investments are computed based on the difference between the market
value of Plan assets at the beginning of the Plan year, or at the
time of purchase if acquired during the year, and the market value
of investments when sold or at Plan yearend.
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LEAR CORPORATION
401(k) PLAN
FOR HOURLY ASSOCIATES OF THE DUNCAN PLANT
NOTES TO FINANCIAL STATEMENTS
(Continued)
All investments, except for Lear Common Stock, were
liquidated at December 31, 1996 in preparation for the change in
the custodian of the Plan effective on January 1, 1997 from
Vanguard Group to Wachovia Bank of North Carolina.
Expenses
All direct costs and expenses incurred in connection with the
Plan are paid by the Company.
(3) TAX STATUS
The Plan has not requested a tax determination letter. However,
the Plan administrator and the Plan's tax counsel believe that the
Plan is currently designed and being operated in compliance with the
applicable requirements of the Internal Revenue Code. Therefore, no
provision for income taxes has been included in the Plan's financial
statements.
13
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized in the City of Southfield, Michigan on July 2, 1997.
LEAR CORPORATION 401(K) PLAN FOR HOURLY ASSOCIATES OF THE DUNCAN PLANT
By: Lear Corporation, as Plan Administrator
By: /s/ Roger A. Jackson
------------------------
Name: Roger A. Jackson
Title: Senior Vice President - Human Resources
14
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Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of
our report included in this Form 11-K, into the Company's previously filed
Registration Statement File No. 33-62209.
/s/ ARTHUR ANDERSEN LLP
Detroit, Michigan
June 30, 1997
