<PAGE> 1
AS FILED WITH THE COMMISSION ON SEPTEMBER 1, 1998
REGISTRATION NO. 333-________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------------
LEAR CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 13-3386776
------------------------------ ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
21557 Telegraph Road
Southfield, Michigan 48034
-------------------- -----
(Address of principal executive offices) (zip code)
Lear Corporation Personal Savings Plan For Delphi Hourly-Rate Employees
(Full title of the Plan)
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Joseph F. McCarthy
Vice President, Secretary and General Counsel
Lear Corporation
21557 Telegraph Road
Southfield, Michigan 48034
--------------------------
(Name and address of agent for service)
(810) 746-1500
------------------------------------------------------------
(Telephone number, including area code, of agent for service)
This Registration Statement shall become effective immediately upon filing with
the Securities and Exchange Commission, and sales of the registered securities
to participants in the 401(k) plan listed above will be effected pursuant to
purchases in the open market.
CALCULATION OF REGISTRATION FEE
-------------------------------------------------------------------
<TABLE>
<CAPTION>
====================================================================================================================================
TITLE OF SECURITIES AMOUNT TO BE PROPOSED MAXIMUM OFFERING PROPOSED MAXIMUM AGGREGATE AMOUNT OF
TO BE REGISTERED (1) REGISTERED (1) PRICE PER SHARE (2) OFFERING PRICE (2) REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value 65,000 shares $45.50 $2,957,500 $872.47
====================================================================================================================================
</TABLE>
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933,
this Registration Statement also covers an indeterminate amount of
interests to be offered or sold pursuant to the employee benefit plan
described herein.
(2) Estimated solely for purposes of calculating the registration fee
pursuant to Rule 457(h) on the basis of the average high and low prices
reported for shares of the Common Stock on the New York Stock Exchange
Composite Tape on August 28, 1998 which was $45.00.
<PAGE> 2
PART I.
INFORMATION REQUIRED IN SECTION 10(A) PROSPECTUS
The document(s) containing the information specified in Part I of Form
S-8 will be sent or given to participating employees as specified by Rule
428(b)(1) of the Securities Act of 1933, as amended (the "Securities Act").
These documents and the documents incorporated by reference into this
Registration Statement pursuant to Item 3 of Part II of this Registration
Statement, taken together, constitute a prospectus that meets the requirements
of Section 10(a) of the Securities Act.
PART II
INFORMATION REQUIRED IN THIS REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
Lear Corporation (the "Company") and the Lear Corporation Personal
Savings Plan For Delphi Hourly-Rate Employees (the "Plan") hereby incorporate
the following documents herein by reference:
(a) The Company's Annual Report on Form 10-K for year ended December
31, 1997;
(b) The Company's Quarterly Report on Form 10-Q for the quarter ended
March 28, 1998;
(c) The Company's Quarterly Report on Form 10-Q for the quarter ended
June 27, 1998;
(d) The Company's Current Report on Form 8-K dated June 30, 1998;
(e) The Company's Current Report on Form 8-K dated August 26, 1998;
(f) All other reports filed by the Company and the Plan pursuant to
Sections 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), on or after December 31, 1995; and
(g) The description of the Company's Common Stock, $.01 par value,
contained in the Company's registration statement on Form 8-A, as amended by
Amendment No. 1 on Form 8-A/A filed on April 5, 1994, including any subsequent
amendment or any report or other filing with the Securities and Exchange
Commission (the "SEC") updating such description.
In addition, all documents subsequently filed by the Company and the
Plan pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after
the date of this Registration Statement and prior to the filing of a
post-effective amendment to this Registration Statement which indicates that all
securities offered hereby have been sold or which deregisters all such
securities then remaining unsold shall be deemed to be incorporated herein by
reference and to be a part hereof from the date of filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Registration
Statement.
ITEM 4. DESCRIPTION OF SECURITIES
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
None.
<PAGE> 3
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company is a Delaware corporation. Reference is made to Section 145
of the Delaware General Corporation Law, as amended (the "GCL"), which provides
that a corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by or in the right of such corporation), by reason of the fact that
such person is or was a director, officer, employee or agent of the corporation,
or is or was serving at its request in such capacity of another corporation or
business organization against expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by such
person in connection with such action, suit or proceeding if such person acted
in good faith and in a manner such person reasonably believed to be in or not
opposed to the best interest of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe that such
person's conduct was unlawful. A Delaware corporation may indemnify officers and
directors in any action by or in the right of a corporation under the same
conditions, except that no indemnification is permitted without judicial
approval if the officer or director is adjudged to be liable to the corporation.
Where an officer or director is successful on the merits or otherwise in the
defense of any action referred to above, the corporation must indemnify him
against the expenses (including attorneys' fees) that such officer or director
actually and reasonably incurred.
Reference is also made to Section 102(b)(7) of the GCL, which permits a
corporation to provide in its certificate of incorporation that a director of
the corporation shall not be personally liable to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the GCL or (iv) for any transaction from which the director
derived an improper personal benefit.
The certificate of incorporation of the Company provides for the
elimination of personal liability of a director for breach of fiduciary duty as
permitted by Section 102(b)(7) of the GCL and the by-laws of the Company provide
that the Company shall indemnify its directors and officers to the full extent
permitted by Section 145 of the GCL.
The Company has directors and officers liability insurance that insures
the directors and officers of the Company against certain liabilities.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not Applicable.
ITEM 8. EXHIBITS
A list of exhibits is set forth on the Index to Exhibits.
The Company hereby undertakes that it will submit or has submitted the
Plan and any amendment thereto to the Internal Revenue Service ("IRS") in a
timely manner and has made or will make all changes required by the IRS in order
to qualify the Plan under Section 401 of the Internal Revenue Code of 1986, as
amended.
<PAGE> 4
ITEM 9. UNDERTAKINGS
(a) The undersigned Company hereby undertakes:
(1) To file, during any period in which offers or sales are
being made of the securities registered hereby, a post-effective
amendment to this Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of this Registration
Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in this
Registration Statement;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in this Registration Statement or any material change to such
information in this Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) of this
section do not apply if the registration statement is on Form S-3, Form
S-8 or Form F-3, and the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed with or furnished to the SEC by the Company pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated
by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The undersigned Company hereby further undertakes that, for
purposes of determining any liability under the Securities Act, each filing of
the Company's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of the annual report of the
employee benefit plan pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in this Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Company pursuant to the foregoing provisions, or otherwise, the Company
has been advised that in the opinion of the SEC such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Company of expenses incurred or paid
by a director, officer or controlling person of the Company in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
Company will, unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Act, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Southfield, Michigan on the 31st day of August,
1998.
LEAR CORPORATION
By: /s/ Kenneth L. Way
--------------------------------
Kenneth L. Way
Chairman of the Board and
Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Kenneth L. Way, Robert E. Rossiter and
James H. Vandenberghe and each of them (with full power to each of them to act
alone), his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto and other documents in connection therewith, with the SEC,
granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
said attorneys-in-fact and agents, or any of them, or their substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
Signature Title Date
/s/ Kenneth L. Way Chairman of the Board and August 31, 1998
- ---------------------------- Chief Executive Officer
Kenneth L. Way (Principal Executive Officer)
/s/ Robert E. Rossiter Director, President and Chief August 31, 1998
- ---------------------------- Operating Officer --
Robert E. Rossiter International Operations
/s/ James H. Vandenberghe Director, President and Chief August 31, 1998
- ---------------------------- Operating Officer -- North
James H. Vandenberghe American Operations
/s/ Donald J. Stebbins Senior Vice President and August 31, 1998
- ---------------------------- Chief Financial Officer
Donald J. Stebbins (Principal Financial and
Principal Accounting Officer)
/s/ Gian Andrea Botta Director August 31, 1998
- ----------------------------
Gian Andrea Botta
/s/ Irma B. Elder Director August 31, 1998
- ----------------------------
Irma B. Elder
/s/ Larry W. McCurdy Director August 31, 1998
- ----------------------------
Larry W. McCurdy
/s/ Roy E. Parrott Director August 31, 1998
- ----------------------------
Roy E. Parrott
<PAGE> 6
/s/ Robert W. Shower Director August 31, 1998
- ----------------------------
Robert W. Shower
/s/ David P. Spalding Director August 31, 1998
- ----------------------------
David P. Spalding
/s/ James A. Stern Director August 31, 1998
- ----------------------------
James A. Stern
Pursuant to the requirements of the Securities Act of 1933, as
amended, the undersigned (or other persons who administer the Plan) have duly
caused this Registration Statement to be signed on their behalf by the
undersigned, thereunto duly authorized in the City of Southfield, Michigan on
August , 1998.
LEAR CORPORATION PERSONAL SAVINGS PLAN FOR
DELPHI HOURLY-RATE EMPLOYEES
By: Lear Corporation as Plan Administrator
By: /s/ Michael Miller
-----------------------------------------
Name: Michael Miller
Title: Secretary, Employee Benefits Committee
<PAGE> 7
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
------- -----------
4.1 Form of certificate for the Company's Common Stock,
par value $.01 per share (filed as Exhibit 4.5 to the
Company's Registration Statement on Form S-8 (No.
33-55783) and incorporated herein by reference)
4.2 Lear Corporation Personal Savings Plan For Delphi
Hourly-Rate Employees
23.1 Consent of Arthur Andersen LLP
24.1 Powers of Attorney (included on the signature page hereof)
<PAGE> 1
EXHIBIT 4.2
THE LEAR CORPORATION
PERSONAL SAVINGS PLAN FOR
DELPHI HOURLY-RATE EMPLOYEES
<PAGE> 2
TABLE OF CONTENTS
ARTICLE I
ESTABLISHMENT OF PERSONAL SAVINGS PLAN....................................... 5
1.01 Establishment of Plan...................................... 5
1.02 Effective Date of Plan..................................... 5
1.03 Governmental Rulings....................................... 5
ARTICLE II
DEFINITION OF TERMS.......................................................... 6
2.01 "Account".................................................. 6
2.02 "Administrator"............................................ 6
2.03 "After-Tax Assets"......................................... 6
2.04 "After-Tax Savings"........................................ 6
2.05 "Business Day"............................................. 6
2.06 "Code"..................................................... 7
2.07 "Committee"................................................ 7
2.08 "Compensation"............................................. 7
2.09 "Corporation".............................................. 7
2.10 "Current Market Value"..................................... 7
2.11 "Date of Valuation"........................................ 8
2.12 "Deferred Assets".......................................... 8
2.13 "Deferred Savings"......................................... 8
2.14 "Delphi Operations"........................................ 8
2.15 "Distributee".............................................. 8
2.16 "Effective Date of Investment Option Election"............. 9
2.17 "Effective Date of Loan"................................... 9
2.18 "Effective Date of Termination"............................ 9
2.19 "Effective Date of Transfer of Assets"..................... 9
2.20 "Effective Date of Withdrawal"............................. 9
2.21 "Eligible Rollover Distribution".......................... 10
2.22 "Eligible Weekly Earnings"................................ 10
2.23 "Employee"................................................ 11
2.24 "Financial Hardship"...................................... 11
2.25 "Fund".................................................... 13
2.26 "GM"...................................................... 13
2.27 "GM Plan"................................................. 13
2.28 "Highly Compensated Employees"............................ 13
2.29 "Leased Employees"........................................ 14
2.30 "Named Fiduciary"......................................... 15
2.31 "Normal Retirement Age"................................... 15
2.32 "Participant"............................................. 15
2.33 "Plan".................................................... 15
2.34 "Plan Year"............................................... 15
2.35 "Prime Rate".............................................. 16
2.36 "Seniority"............................................... 16
2.37 "Total and Permanent Disability".......................... 16
2.38 "Transferred Employee".................................... 16
2.39 "Trustee"................................................. 16
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<PAGE> 3
ARTICLE III
ELIGIBILITY........................................................ 17
3.01 Eligibility............................................... 17
ARTICLE IV
CASH OR DEFERRED ARRANGEMENT....................................... 17
4.01 Cash or Deferred Arrangement.............................. 17
4.02 Transfer of Assets to or Receipt of Assets from
Other Qualified Plans ................................... 19
4.03 Rollovers................................................. 20
4.04 CASH OR DEFERRED ARRANGEMENT LIMITATION................... 21
ARTICLE V
AFTER-TAX SAVINGS.................................................. 24
5.01 AFTER-TAX SAVINGS......................................... 24
5.02 Transfer of Assets to or Receipt of Assets from Other
Qualified Plans........................................... 25
5.03 AFTER-TAX CONTRIBUTION LIMITATION......................... 25
5.04 SPECIAL RULES............................................. 27
5.05 LIMITATION ON MULTIPLE USE................................ 28
ARTICLE VI
INVESTMENT OF PARTICIPANT'S SAVINGS................................ 29
6.01 Investment Options........................................ 30
6.02 Vesting................................................... 32
6.03 Withdrawals............................................... 32
6.04 Distribution of Assets.................................... 34
6.05 Form of Distribution...................................... 37
6.06 Loans..................................................... 38
ARTICLE VII
TRUST FUND......................................................... 42
7.01 Contributions to the Trustee.............................. 42
7.02 Investment Options........................................ 42
ARTICLE VIII
OTHER PROVISIONS................................................... 43
8.01 Non-Assignability......................................... 43
8.02 Designation of Beneficiaries in Event of Death............ 43
8.03 Merger or Consolidation................................... 45
8.04 Limitations on Contributions and Benefits................. 45
8.05 Deferred Savings Limitation............................... 47
8.06 Provisions to Comply With Section 416 of the Code......... 48
8.07 Investment Decisions...................................... 48
8.08 Special Provisions Regarding Veterans..................... 49
8.09 Prohibition on Reversion.................................. 50
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<PAGE> 4
ARTICLE IX
ADMINISTRATION..................................................... 51
9.01 Administrative Responsibility............................. 51
9.02 Records................................................... 51
9.03 Administrative Expenses................................... 52
9.04 Participant Statements.................................... 52
9.05 Incapacity................................................ 52
9.06 Notice of Claim Denial.................................... 53
9.07 Confidential Information.................................. 53
ARTICLE X
AMENDMENT, MODIFICATION,
SUSPENSION, OR TERMINATION......................................... 54
10.01 Amendment, Modification, Suspension, or Termination....... 54
10.02 Distribution Upon Plan Termination........................ 54
10.03 Distribution Upon Sale of Subsidiary or Corporation
Assets ................................................... 55
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<PAGE> 5
THE LEAR CORPORATION PERSONAL SAVINGS PLAN
FOR DELPHI HOURLY-RATE EMPLOYEES
ARTICLE I
ESTABLISHMENT OF PERSONAL SAVINGS PLAN
1.01 Establishment of Plan
Lear Corporation hereby establishes The Lear Corporation Personal
Savings Plan for Delphi Hourly-Rate Employees (hereinafter referred to
as the Plan), as set forth herein.
1.02 Effective Date of Plan
The Plan shall become effective on the "Closing Date" (as defined in
the General Motors Corporation and Lear Corporation Master Agreement
relating to the sale and purchase of the worldwide seating business
operated by The Delphi Interior & Lighting Systems Division of General
Motors Corporation's Delphi Automotive Systems Business Sector (the
"GM/Lear Agreement") (hereinafter referred to as the Effective Date).
1.03 Governmental Rulings
This Plan is conditioned upon approval by the Internal Revenue Service
in accordance with Sections 401 and 501(a) of the Code, or any section
of the Code which amends, supersedes, or supplements said sections.
ARTICLE II
DEFINITION OF TERMS
The following definitions will apply to all words and phrases capitalized in the
text which follows.
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<PAGE> 6
2.01 "Account"
Account means the assets credited to a Participant in the trust fund
established under the Plan.
2.02 "Administrator"
Administrator means Lear Corporation or its delegate.
2.03 "After-Tax Assets"
After-Tax Assets means the units and/or shares of the Funds purchased
with After-Tax Savings and dividends and earnings thereon.
2.04 "After-Tax Savings"
After-Tax Savings means amounts contributed to the trust fund by the
Corporation as elected by a Participant in accordance with Section
5.01.
2.05 "Business Day"
Business Day means a day the New York Stock Exchange is open for
business. If the New York Stock Exchange is closed as a result of a
holiday, weekend, or at the end of a Business Day, normally 4:00 p.m.
Eastern Time, then the Effective Date will be the next following
Business Day.
2.06 "Code"
The term "Code" means the Internal Revenue Code of 1986, as amended.
2.07 "Committee"
Committee means the Lear Corporation Employee Benefits
Committee.
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<PAGE> 7
2.08 "Compensation"
Compensation means the total amount paid by the Corporation to the
Employee with respect to hourly-rate employment during any Plan Year as
evidenced by Internal Revenue Service Form W-2 or its equivalent, plus
amounts not currently includable in income by reason of Sections 125
and/or 402(e)(3) of the Code.
2.09 "Corporation"
Corporation means Lear Corporation.
2.10 "Current Market Value"
Current Market Value means
(a) for Income Fund, Equity Index Fund, and the Balanced Fund, the
fair market value of the units reported by the Trustee, and
(b) for assets attributable to the Mutual Funds, the fair market
value of the units reported by the Mutual Fund company.
2.11 "Date of Valuation"
Date of Valuation means the end of a Business Day, normally 4:00 p.m.
Eastern Time, that a Participant initiates an investment option
election, withdrawal, transfer of assets, settlement upon termination
of employment, or loan, and such date shall be the Effective Date of
Investment Option Election, Effective Date of Withdrawal, Effective
Date of Transfer of Assets, Effective Date of Termination, or Effective
Date of Loan, whichever applies.
2.12 "Deferred Assets"
- 7 -
<PAGE> 8
Deferred Assets means the units and/or shares of the Funds purchased
with Deferred Savings and dividends and earnings thereon.
2.13 "Deferred Savings"
Deferred Savings means amounts contributed to the trust fund by the
Corporation as elected by a Participant in accordance with Sections
4.01 and 4.02.
2.14 "Delphi Operations"
Delphi Operations means the operations of the Corporation acquired from
GM pursuant to the GM/Lear Agreement.
2.15 "Distributee"
Distributee means an Employee or former Employee of the Corporation to
whom assets are to be distributed. Additionally, the surviving spouse
of the Employee or former Employee or alternate payee to whom assets
are to be distributed under a Qualified Domestic Relations Order, as
defined in Section 414(p) of the Code, are Distributees with regard to
their interest.
2.16 "Effective Date of Investment Option Election"
Effective Date of Investment Option Election means the Business Day on
which appropriate direction to the Trustee is received by the party
designated by the Administrator for an investment option change.
2.17 "Effective Date of Loan"
Effective Date of Loan means the Business Day on which appropriate
direction to the Trustee is received by the party designated by the
Administrator for a loan.
- 8 -
<PAGE> 9
2.18 "Effective Date of Termination"
Effective Date of Termination means the Business Day on which
termination of employment with the Corporation occurs.
2.19 "Effective Date of Transfer of Assets"
Effective Date of Transfer of Assets means the Business Day on which
appropriate direction to the Trustee is received by the party
designated by the Administrator for a transfer of assets.
2.20 "Effective Date of Withdrawal"
Effective Date of Withdrawal means the Business Day on which
appropriate direction to the Trustee is received by the party
designated by the Administrator for a withdrawal.
2.21 "Eligible Rollover Distribution"
Eligible Rollover Distribution means any distribution consisting of all
or any portion of the Account of the Distributee, except that an
Eligible Rollover Distribution does not include:
(i) any distribution to the extent such distribution is
required under Section 401(a)(9) of the Code;
(ii) the portion of any distribution that is not includable
in gross income; and
(iii) substantially equal installment payments that are payable
for ten or more years.
2.22 "Eligible Weekly Earnings"
Eligible Weekly Earnings means base pay plus any Cost-of-Living
Allowance received by a Participant from the
- 9 -
<PAGE> 10
Corporation with respect to hourly-rate employment during a calendar
week and any Performance Bonus Payment (as defined in the Collective
Bargaining Agreement) made to a Participant during the Plan Year. The
term Eligible Weekly Earnings shall include any pay received for
overtime hours, night shift, seven-day premiums, and suggestion awards.
Eligible Weekly Earnings shall not include any other special payments,
fees, or allowances, and in no event may exceed $150,000 per year (or
as may be adjusted by the Secretary of the Treasury of the United
States).
2.23 "Employee"
Employee means
(a) any person regularly employed in the United States at the
Delphi Operations on an hourly-rate basis, including:
(1) hourly-rate persons employed on a full-time basis;
and
(2) part-time hourly-rate employees.
(b) the term Employee shall not include employees of any directly
or indirectly wholly-owned or substantially wholly-owned
subsidiary of the Corporation acquired or formed by the
Corporation, except as approved by the Committee.
(c) the term "Employee" shall not include employees represented by
a labor organization which has not signed an agreement making
the Plan applicable to such employees.
- 10 -
<PAGE> 11
(d) the term "Employee" shall not include Leased Employees as
defined under Article II, Section 2.27.
2.24 "Financial Hardship"
Financial Hardship means a reason given by a Participant when applying
for a withdrawal before age 59-1/2 which indicates the withdrawal is
(1) necessary to meet immediate and heavy financial needs of the
Participant, (2) for an amount required to meet the immediate financial
need created by the hardship, and (3) for an amount that is not
reasonably available from other resources of the Participant. The
amount of such withdrawal may be increased to include any amounts
necessary to pay reasonably anticipated income taxes and penalties
resulting from the early withdrawal. The reason must be permitted under
existing Internal Revenue Service regulations and rulings and must be
acceptable to the Named Fiduciary or its delegate for one of the
following reasons:
(a) purchase or construction of the Participant's principal
residence;
(b) payment of expenses to prevent foreclosure on the
Participant's principal residence or to prevent eviction from
the Participant's principal residence;
(c) payment of tuition for the next 12 months of post-secondary
education for a Participant, a Participant's spouse, or a
Participant's dependent;
(d) payment of medical expenses previously incurred or necessary
to obtain medical care for a Participant, a Participant's
spouse, or a Participant's dependent; or
- 11 -
<PAGE> 12
(e) any other reason acceptable under published Internal Revenue
Service regulations and rulings.
2.25 "Fund"
Fund shall mean any investment fund or mutual fund offered as an
investment option under the Plan.
2.26 "GM"
GM means General Motors Corporation.
2.27 "GM Plan"
GM Plan means the General Motors Personal Savings Plan for Hourly Rate
Employees in the United States.
2.28 "Highly Compensated Employees"
For purposes of this Plan, the term Highly Compensated Employees means
Highly Compensated active Employees and Highly Compensated former
Employees. For purposes of this Section, the determination year shall
be the calendar year, and the look-back year shall be the 12-month
period immediately preceding the determination year. A Highly
Compensated active Employee includes any Employee who performs service
for the Corporation during the determination year and who, during the
look-back year:
(a) (1) received compensation from the Corporation in
excess of $80,000.00 (as adjusted under the Code)
and, if the Corporation elects, was a member of the
top-paid group (top 20% ranked on the basis of
compensation) for such year, or
- 12 -
<PAGE> 13
(2) was a 5% owner of the Corporation at any time during
the year or the preceding year.
(b) A Highly Compensated former Employee includes any Employee who
separated from service prior to the determination year,
performs no service for the Corporation during the
determination year, and was a Highly Compensated active
Employee for either the separation year or any determination
year ending on or after the Employee's 55th birthday.
(c) The determination of who is a Highly Compensated Employee,
including the determinations of the number and identity of
Employees in the top-paid group, will be made in accordance
with Section 414(q) of the Code and regulations thereunder.
2.29 "Leased Employees"
Leased Employee means any person who, pursuant to an agreement between
the Corporation and any leasing organization, has performed services
for the Corporation on a substantially full-time basis for a period of
at least one year, and such services are performed under the primary
direction or control of the Corporation. Contributions or benefits
provided a Leased Employee by the leasing organization which are
attributable to services performed for the Corporation shall be treated
as provided by the Corporation. Leased Employee shall also include a
"leased employee" as defined under Section 414(n) of the Code. A Leased
Employee shall not be considered an employee of the Corporation if such
employee is covered by the safe harbor requirements of Section
414(n)(5) of the Code.
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<PAGE> 14
2.30 "Named Fiduciary"
Named Fiduciary means the Committee except as set forth in Sections
8.07 and 9.01.
2.31 "Normal Retirement Age"
Normal Retirement Age means the attainment of age 65 by the
Participant.
2.32 "Participant"
Participant means an Employee, or former Employee, who has an Account
under this Plan.
2.33 "Plan"
Plan means The Lear Corporation Personal Savings Plan for
Delphi Hourly-Rate Employees.
2.34 "Plan Year"
Plan Year means the 12-month period beginning on January 1 and ending
on December 31. For 1998, there shall be a short Plan Year beginning on
the Effective Date and ending on December 31, 1998.
2.35 "Prime Rate"
Prime Rate means the interest rate reported as the "Prime Rate" in the
Eastern Edition of the Wall Street Journal in its general guide to
money rates.
2.36 "Seniority"
Seniority as used in the Plan means the Employee must complete
90 days of employment with the Corporation. In the case of a
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<PAGE> 15
Transferred Employee, employment with GM as of the day before the day
the Employee becomes a Transferred Employee will count when determining
such Employee's Seniority.
2.37 "Total and Permanent Disability"
Total and Permanent Disability means the Employee is currently eligible
for a benefit under The Lear Corporation Delphi Hourly-Rate Employees
Pension Plan because of total and permanent disability or would be
eligible for such a benefit except the Employee does not have ten years
of service.
2.38 "Transferred Employee"
Transferred Employee means an individual who is a "Transferred
Employee" with the meaning of the GM/Lear Agreement.
2.39 "Trustee"
Trustee means the outside organization or organizations appointed by
the Named Fiduciary, or its delegate, to hold, invest, and distribute
the assets of the Plan.
ARTICLE III
ELIGIBILITY
3.01 Eligibility
An Employee is eligible to participate and accumulate savings under the
Plan on the first day of the first pay period next following the
attainment of Seniority.
A previously eligible Employee who resumes active employment following
a termination of employment will be eligible to participate
immediately.
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<PAGE> 16
ARTICLE IV
CASH OR DEFERRED ARRANGEMENT
4.01 Cash or Deferred Arrangement
(a) In lieu of receipt of Eligible Weekly Earnings to which
an Employee is entitled, such Employee may elect, by
providing appropriate direction to the party designated
by the Administrator, to have the Corporation contribute
to the Plan, on a weekly basis, an equivalent amount in
accordance with this qualified cash or deferred
arrangement as provided for under Section 401(k) of the
Code. Such contributions must be whole percentages of the
Employee's Eligible Weekly Earnings and may not be at a
rate of less than 1% nor more than 25% of the Employee's
Eligible Weekly Earnings. Such contributions shall be
allocated to the Employee's Account and shall be vested
immediately. The Employee's Compensation shall be
reduced by the full amount of any such Corporation
contribution. The Employee may elect, by providing
appropriate direction to the party designated by the
Administrator, to change the amount of such Corporation
contributions or to have such contributions suspended at
any time.
(b) Any change in the rate of payroll deduction authorized by an
Employee in accordance with subsection (a) of this Section
4.01 will become effective not later than the first day of the
second pay period next following the date on which such
authorization is received by the party designated by the
Administrator.
(c) In addition to the contributions as provided for in subsection
(a) of this Section 4.01, an Employee eligible
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<PAGE> 17
to receive a payment from The Lear Corporation Profit Sharing
Plan for Delphi Hourly-Rate Employees may elect to have the
Corporation contribute to the Employee's Account as Deferred
Savings an amount up to 100%, in multiples of 1%, of the
amount of such payment, provided such Employee has not
terminated employment prior to such contribution. Such
election shall be made at such time and in such manner as the
Administrator shall determine and will remain continuously in
effect until changed by the Employee. If appropriate direction
is not received by the party designated by the Administrator
from an Employee on or before the date established by the
Administrator for submission of such election with respect to
a payment, such amount shall be paid to the Employee.
(d) The Corporation may limit the amount of contributions to the
trust pursuant to subsections (a) and (c) of this Section 4.01
if necessary to comply with Sections 4.04, 8.04, and 8.05 of
the Plan.
4.02 Transfer of Assets to or Receipt of
Assets from Other Qualified Plans
The Administrator may direct the Trustee to accept all of an Employee's
funds transferred from a similar qualified plan, and may direct the
Trustee to transfer all of a Participant's funds to a similar qualified
plan, provided such other qualified plan (1) is maintained by an
employer which is a member of a controlled group of corporations of
which the Employee's current employer is a member, and (2) permits such
transfers. Any funds so transferred shall be in cash, accompanied by
written instructions from the Trustee setting forth the Employee for
whose benefit such assets are being
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<PAGE> 18
transferred, and identifying the source of such accumulated funds.
Funds transferred from other plans which otherwise would be subject to
federal income taxation will be designated as Deferred Savings. No such
transfer may be executed until all outstanding loan amounts have been
repaid.
Notwithstanding the foregoing, the Plan may not receive a transfer from
another qualified plan if such other plan provides, or at any time had
provided, benefits through alternative forms of distribution, including
annuities, which are not available under this Plan.
4.03 Rollovers
(a) An Employee may make a rollover contribution, as
permitted under Section 402(c) of the Code, into an
option or options selected by such Employee in an amount
not exceeding the total amount of taxable proceeds
distributed by a similar qualified plan maintained by a
former employer. The rollover contribution must be made
by the Employee (a) within 60 days following the receipt
of such distribution from the former employer's plan, or
(b) as a direct trustee-to-trustee transfer from the
former employer's plan as permitted under
Section 401(a)(31) of the Code.
Notwithstanding the foregoing, the Plan may not receive a
transfer from another qualified plan if such other plan
provides, or at any time had provided, benefits through
alternative forms of distribution, including annuities, which
are not available under this Plan.
(b) An Employee who receives an Eligible Rollover Distribution may
elect to have the Trustee transfer
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<PAGE> 19
directly to an IRA of the Employee, or to another employer's
plan in which the Employee is a participant, all or part of
the assets included in the distribution. The Employee shall
designate the IRA or other employer's plan to which assets are
to be transferred, and the transfer shall be made subject to
acceptance by the transferee plan or IRA. Any such direct
transfer shall be subject to Section 401(a)(31) of the Code.
4.04 CASH OR DEFERRED ARRANGEMENT LIMITATION
(a) The Deferred Savings percentage by the eligible Highly
Compensated Employees under the Plan for a Plan Year must meet
one of the following tests:
(i) The actual Deferred Savings percentage of the
eligible Highly Compensated Employees is not more
than 1.25 times the actual Deferred Savings
percentage of all other eligible Employees; or
(ii) The actual Deferred Savings percentage of the
eligible Highly Compensated Employees is not more
than two percentage points more than the actual
Deferred Savings percentage for all other eligible
Employees and is not more than 2.0 times (or, such
lesser amount as the Secretary of the Treasury
shall prescribe) the actual Deferred Savings
percentage of all other eligible Employees.
(b) The actual Deferred Savings percentage for the eligible Highly
Compensated Employees and all other eligible Employees for a
Plan Year is the average of the ratios (calculated separately
for each eligible Employee) of the:
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<PAGE> 20
(i) Amount of Deferred Savings actually paid over to the
Plan trust not later than two and one-half months
after the Plan Year on behalf of such eligible
Employee for the Plan Year to:
(ii) The eligible Employee's Compensation for such Plan
Year.
(c) The amount of Deferred Savings for a Highly Compensated
Employee that exceeds the percentage limitations of
subsection (a) of this Section 4.04 shall be distributed
to the Participant no later than two and one-half months
following the end of the Plan Year. The amount of any
such distribution shall be determined under a reasonable
method selected by the Administrator under applicable tax
regulations and will include any earnings attributable to
the excess Deferred Savings.
(d) Special Rules
(i) in the event that this Plan satisfies the
requirements of Sections 401(k), 401(a)(4), or
410(b) of the Code only if aggregated with one or
more other plans, or if one or more other plans
satisfy the requirements of such sections of the
Code only if aggregated with this Plan, then this
Section 4.04 shall be applied by determining the
actual Deferred Savings percentage of eligible
Employees as if all such plans were a single plan.
(ii) The actual Deferred Savings percentage for any
Participant who is a Highly Compensated Employee
for the Plan Year, and who is eligible to
participate in two or more arrangements described
in Section 401(k) of the Code that are maintained
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<PAGE> 21
by the Corporation, shall be determined by treating
all such plans as a single plan. Notwithstanding
the foregoing, certain plans shall be treated as
separate if mandatorily disaggregated under
regulations under Section 401(k) of the Code.
(iii) In the event the limits of Section 4.04 are
exceeded, then the actual Deferral Savings
percentage of Highly Compensated Employees will be
reduced (beginning with such Highly Compensated
Employee whose contributions are the highest)
until the limits are not exceeded. The amount by
which each Highly Compensated Employee's Deferred
Savings is reduced shall be treated as an excess
contribution. The actual Deferred Savings
percentage of the Highly Compensated Employees is
determined after any corrections are made. Excess
contributions shall be treated as Annual
Additions.
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<PAGE> 22
ARTICLE V
AFTER-TAX SAVINGS
5.01 AFTER-TAX SAVINGS
(a) In lieu of all or part of the contributions an Employee may
authorize in accordance with Section 4.01, an Employee may
elect to contribute an equivalent amount to the Plan on an
after-tax basis. Such contributions shall be allocated to the
Employee's Account and shall be vested immediately.
The Employee may elect, by providing appropriate direction to
the party designated by the Administrator, to change the
amount of such contributions or to have such contributions
suspended at any time.
(b) Any change in the rate of payroll deduction authorized by an
Employee in accordance with subsection (a) of this Section
5.01 will become effective not later than the first day of the
second pay period next following the date on which such
authorization is received by the party designated by the
Administrator.
(c) The Corporation may limit the amount of contributions to the
trust pursuant to subsection (a) of this Section 5.01 if
necessary to comply with Sections 5.03, 5.05, and 8.04 of the
Plan.
5.02 Transfer of Assets to or Receipt
of Assets from Other Qualified Plans
The Administrator may direct the Trustee to accept all of an Employee's
funds transferred from a similar qualified plan,
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<PAGE> 23
and may direct the Trustee to transfer all of a Participant's funds to
a similar qualified plan, provided such other qualified plan (1) is
maintained by an employer which is a member of a controlled group of
corporations of which the Employee's current employer is a member, and
(2) permits such transfers. Any funds so transferred shall be in cash,
accompanied by written instructions from the Trustee setting forth the
Employee for whose benefit such assets are being transferred, and
identifying the source of such accumulated funds. Funds transferred
from other plans which otherwise would not be subject to federal income
taxation will be designated as After-Tax Savings. No such transfer may
be executed until all outstanding loan amounts have been repaid.
Notwithstanding the foregoing, the Plan may not receive a transfer from
another qualified plan if such other plan provides, or at any time had
provided, benefits through alternative forms of distribution, including
annuities, which are not available under this Plan.
5.03 AFTER-TAX CONTRIBUTION LIMITATION
(a) The After-Tax Savings percentage by the eligible Highly
Compensated Employees under the Plan for a Plan Year must meet
one of the following tests:
(i) The actual After-Tax Savings percentage of the
eligible Highly Compensated Employees is not more
than 1.25 times the actual After-Tax Savings
percentage of all other eligible Employees; or
(ii) The actual After-Tax Savings percentage of the
eligible Highly Compensated Employees is not more
than two percentage points more than the actual
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<PAGE> 24
After-Tax Savings percentage for all other eligible
Employees and is not more than 2.0 times (or, such
lesser amount as the Secretary of the Treasury
shall prescribe) the actual After-Tax Savings
percentage of all other eligible Employees.
(b) The actual After-Tax Savings percentage for the eligible
Highly Compensated Employees and all other eligible Employees
for a Plan Year is the average of the ratios (calculated
separately for each eligible Employee) of the:
(i) Amount of After-Tax Savings actually paid over to
the Plan trust on behalf of such eligible Employee
for the Plan Year to:
(ii) The eligible Employee's Compensation for
such Plan Year.
(c) The amount of After-Tax Savings for a Highly Compensated
Employee that exceeds the percentage limitations of
subsection (a) of this Section 5.03 shall be distributed
to the Participant no later than two and one-half months
following the end of the Plan Year. The amount of any
such distribution shall be determined under a reasonable
method selected by the Administrator under applicable tax
regulations and will include any earnings attributable to
the excess After-Tax Savings.
5.04 SPECIAL RULES
(a) In the event that this after-tax portion of the Plan
satisfies the requirements of Sections 401(m), 401(a)(4),
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<PAGE> 25
or 410(b) of the Code only if aggregated with one or more
other plans, or if one or more other plans satisfy the
requirements of such sections of the Code only if aggregated
with this after-tax portion of the Plan, then Section 5.02
shall be applied by determining the actual After-Tax Savings
percentage of eligible Employees as if all such plans were a
single plan.
(b) The actual After-Tax Savings percentage for any
Participant who is a Highly Compensated Employee for the
Plan Year, and who is eligible to participate in two or
more arrangements described in Section 401(m) of the Code
that are maintained by the Corporation, shall be
determined by treating all such plans as a single plan.
Notwithstanding the foregoing, certain plans shall be
treated as separate if mandatorily disaggregated under
regulations under Section 401(m) of the Code.
(c) In the event the limits of Section 5.03 are exceeded,
then the actual After-Tax Savings percentage of Highly
Compensated Employees will be reduced (beginning with
such Highly Compensated Employee whose contributions are
the highest) until the limits are not exceeded. The
amount by which each Highly Compensated Employee's After-
Tax Savings is reduced shall be treated as an excess
aggregate contribution. The actual After-Tax Savings
percentage of the Highly Compensated Employees is
determined after any corrections are made. Excess
aggregate contributions shall be treated as Annual
Additions.
5.05 LIMITATION ON MULTIPLE USE
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<PAGE> 26
The following provisions apply to prevent the multiple use of the
limits set forth in subsections 4.04(a)(ii) and 5.03(a)(ii). To
determine if multiple use exists, the Administrator shall calculate the
greater of:
(a) 125% of the greater of the actual Deferred Savings percentage
or the actual After-Tax Savings percentage for the non-Highly
Compensated Employee (non-HCE) group; plus
(b) the lesser of:
(i) Two percentage points plus the lesser of the actual
Deferred Savings percentage or the actual After-Tax
Savings percentage of the non-HCE group; or
(ii) 200% of the lesser of the actual Deferred Savings
percentage or the actual After-Tax Savings
percentage of the non-HCE group.
or
(c) Subparagraphs (a) and (b) above where "lesser" is substituted
for "greater" and "greater" is substituted for "lesser."
If this amount is less than the sum of the Actual Deferred
Savings percentage plus the Actual After-Tax Savings
percentage of the Highly Compensated Employee group, then
multiple use exists. If multiple use exists, then the actual
After-Tax Savings percentage will be reduced by refunding and
then the actual Deferred Savings percentage will be reduced by
refunding (each beginning
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<PAGE> 27
with such Employees with the highest amount of contributions)
so that multiple use does not exist.
ARTICLE VI
INVESTMENT OF PARTICIPANT'S SAVINGS
6.01 Investment Options
(a) Amounts contributed to the trust fund on behalf of
Participants pursuant to subsections (a) and (c) of Section
4.01 and subsection (a) of Section 5.01 shall be invested in
the Funds, in increments of 10%, as may be elected by the
Participant.
(b) A Participant's initial investment election shall remain in
effect until changed by the Participant.
A Participant's investment election may be changed on any
Business Day by providing appropriate direction to the party
designated by the Administrator. Any change in the
Participant's investment election shall be effective as of the
Effective Date of Investment Option Election.
(c) Amounts contributed to the trust fund on behalf of a
Participant as provided in subsection (c) of Section 4.01
and Sections 4.02 and 5.02 shall be invested in the same
investment option(s) as elected by the Participant
pursuant to subsection (a) of this Section 6.01;
provided, however, that if contributions are not being
made to the trust fund on behalf of such Participant
pursuant to subsections (a) of Sections 4.01 and 5.01,
the Participant will be required, prior to the
contribution or transfer of amounts pursuant to
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<PAGE> 28
subsection (c) of Section 4.01 and Sections 4.02 and
5.02, to make an election regarding the investment of
such amount.
(d) A Participant may, by giving appropriate direction to the
party designated by the Administrator, transfer assets being
held in such Participant's Account from one investment option
to another investment option, as follows:
(i) A transfer of assets may include all or any part of
such assets in an investment option.
(ii) A Participant may elect a transfer of assets on any
Business Day.
(iii) Any election to transfer assets shall be
irrevocable, normally as of 4:00 p.m. Eastern Time,
on the Business Day such election is received by
the party designated by the Administrator.
(iv) Any appropriate election to transfer assets shall
be processed as of the Effective Date of Transfer
of Assets.
(v) Where excessive trading can undermine any of the
Funds or exceed the available liquidity for any
such Fund, the Corporation reserves the right to
modify or suspend transfer and withdrawal
privileges on any of the Funds, at any time, upon
notice to Participants.
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<PAGE> 29
6.02 Vesting
Each Participant shall be fully vested in the assets credited to the
Participant's Account, and no portion of such Account shall be subject
to forfeiture.
6.03 Withdrawals
(a) A Participant may, by providing appropriate direction to the
party designated by the Administrator, withdraw assets in such
Participant's Account subject to the following provisions:
(1) Prior to receiving a withdrawal of Deferred Assets, a
Participant must withdraw all available After-Tax
Assets including any earnings thereon.
(2) Deferred Assets may be withdrawn from the
Participant's Account, subject to the provisions
outlined in subsection (a) of this Section 6.03, at
any time after attaining age 59-1/2, or prior to age
59-1/2 because of termination of employment, death,
Total and Permanent Disability, or Financial
Hardship. Prior to receiving a withdrawal for
Financial Hardship, a Participant previously must
have taken all available asset distributions,
withdrawals, and loans under all applicable plans
maintained by the Corporation. The amount that may be
withdrawn for a Financial Hardship shall be limited
to the lesser of:
(i) the total amount of Deferred Savings in the
Participant's Account as of the Effective
Date of Withdrawal; or
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<PAGE> 30
(ii) the amount required to meet the Financial
Hardship, including any amounts necessary to
pay reasonably anticipated income taxes and
penalties resulting from the early
withdrawal.
(b) A Participant who has an outstanding loan(s) in accordance
with Section 6.06 shall be permitted to make a withdrawal in
accordance with subsection (a) of this Section 6.03.
(c) A Participant who withdraws any Deferred Assets for
Financial Hardship in accordance with subsection (a) of
this Section 6.03 (1) will be suspended from accumulating
further savings under this Plan, and all applicable plans
maintained by the Corporation, for a period of 12 months
immediately following such withdrawal, and (2) shall have
such Participant's annual Deferred Savings limited, for
the Plan Year next following the year in which the
hardship withdrawal was made, to $9,500 (or as may be
adjusted by the Secretary of the Treasury of the United
States) minus the amount of any Deferred Savings made
during the year in which the hardship occurred.
A Transferred Employee who had a withdrawal of Deferred Assets
for Financial Hardship under the GM Plan in the 12 month or
period preceeding the day on which such Employee becomes a
Transferred Employee will be suspended from accumulating
savings under this Plan for a period immediately following the
date such Employee becomes a Transferred Employee equal to 12
months reduced by the period savings were suspended under the
GM Plan as of the day before the Effective Date.
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<PAGE> 31
(d) Any election to withdraw assets shall be irrevocable, normally
as of 4:00 p.m. Eastern Time, on the Business Day such
election is received by the party designated by the
Administrator.
(e) The Date of Valuation on any appropriate election to withdraw
assets, pursuant to this Section 6.03, shall be the Effective
Date of Withdrawal.
6.04 Distribution of Assets
(a) Settlement Upon Termination of Employment
(i) If a Participant terminates employment and (1) on
the Effective Date of Termination the value of the
Participant's assets is not, and was not at the time
of any prior distribution, greater than $3,500, or
(2) the Participant has not made an election to
defer continuously the distribution of assets
pursuant to subsection (a)(ii) of this Section 6.04,
settlement of all of the assets in the Participant's
Account will be made and distributed upon the
earlier of (1) the Participant's request for a
settlement, or (2) the later of 60 days following
the month in which (A) the Participant's termination
of employment with the Corporation occurs, or (B)
the Participant attains age 65. The Date of
Valuation shall be the Effective Date of Withdrawal.
(ii) If a Participant terminates employment and on the
Effective Date of Termination the value of the
Participant's assets exceeds (or at the time of any
prior distribution exceeded) $3,500, such
Participant may elect, by providing appropriate
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<PAGE> 32
direction to the party designated by the
Administrator, to (1) receive installment payments,
(2) receive partial withdrawals, (3) receive a total
settlement, or (4) defer continuously the
distribution of assets in such Participant's
Account. The Date of Valuation for any such
installment payment, partial withdrawal, or total
settlement shall be the Date of Withdrawal.
With regard to installment payments, a Participant may elect
to receive such payments each calendar month, calendar
quarter, semi-annual, or on an annual basis.
Installment payments must be in whole dollar amounts with $100
established as the monthly minimum amount. A Participant may
change or discontinue installment payments at any time by
providing appropriate direction to the party designated by the
Administrator.
If a terminated Participant does not request a total
settlement prior to attaining age 70-1/2, distribution of
assets in the Participant's Account will begin not later than
April 1 of the calendar year following the calendar year in
which the Participant attains age 70-1/2 and shall be made
annually thereafter in accordance with Section 401(a)(9) of
the Code and the regulations thereunder, including the minimum
distribution incidental benefit requirement of Section
1.401(a)(9)-2 of the Proposed Income Tax Regulations.
(b) Attainment of Age 70-1/2
(i) If a Participant attains age 70-1/2, and such
Participant has not terminated employment, a
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<PAGE> 33
distribution of the Participant's assets will be
made upon termination of employment pursuant to
Section 6.04(a).
(ii) All distributions required under this subsection
shall be determined and made in accordance with
Section 401 (a)(9) of the Code and the regulations
thereunder, including the minimum distribution
incidental benefit requirement of Section
1.401(a)(9)-2 of the Proposed Income Tax
Regulations.
(c) Undeliverable Assets
In the event a distribution to a Participant or the
Participant's beneficiary cannot be made pursuant to
subsections (a) and (b) of this Section 6.04 and Section 8.02
because the identity or location of such Participant or
beneficiary cannot be determined after reasonable efforts, and
if the Participant's settlement remains undistributed for a
period of one year from the Date of Valuation, the
Administrator may direct that the settlement assets and
earnings on such assets be returned to the trust fund and
liquidated. All liability for payment thereof shall thereupon
terminate; provided, however, in the event the identity or
location of the Participant or beneficiary is determined
subsequently, the value of the assets at the Date of Valuation
shall be paid from the Plan to such person in a single sum.
Any assets so liquidated shall be (1) paid to the Participant
or beneficiary when the identity or location is determined, or
(2) applied to reduce reasonable expenses of administering the
Plan.
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<PAGE> 34
6.05 Form of Distribution
All distributions from the Plan will be paid out in cash. In the event
of the death of a Participant and upon receipt of all information
necessary to determine the beneficiary or beneficiaries, a settlement
of all assets in the deceased Participant's account shall be made to
the beneficiary or beneficiaries designated pursuant to Section 8.02.
6.06 Loans
(a) Subject to such rules as the Administrator may prescribe, a
Participant, including a former Employee, may borrow from
assets in such Participant's Account one time each calendar
year, for any reason, an amount (when added to the outstanding
balance of all other Plan loans) not more than the lesser of:
(1) $50,000 less the highest aggregate outstanding loan
balance over the 12-month period preceding the
Participant's application for loan; or
(2) one-half of the Current Market Value of all assets
in the Participant's Account.
For purposes of the above limitation, all loans from all
plans maintained by the Corporation [or its subsidiaries
in accordance with Section 414(b), (c), or (m) of the
Code] shall be aggregated.
(b) Loans shall be granted in whole dollar amounts with one
thousand dollars ($1,000) established as the minimum amount of
any loan.
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<PAGE> 35
(c) Loans shall be granted for a minimum period of 12 months, with
additional increments of 12 months as the Participant may
elect, to a maximum of five years (ten years in the event the
loan is for the purchase or construction of the Participant's
principal residence), provided a Participant may not elect a
term which will result in repayments of less than $10 per pay
period.
(d) Loans shall bear a rate of interest equal to the Prime Rate
prevailing as of the last Business Day of the quarter
immediately preceding the date the Participant gives
appropriate direction for a loan to the party designated by
the Administrator.
The interest rate shall remain the same throughout the term of
the loan.
(e) For purposes of this Section 6.06, the Current Market Value of
a Participant's assets shall be determined on the Effective
Date of Loan.
(f) Each loan shall be evidenced by a written Participant Loan
Agreement that specifies:
(1) the amount of the loan;
(2) the term of the loan; and
(3) the repayment schedule, showing payments to be made
in a level amount which will fully amortize the loan
over its duration.
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<PAGE> 36
By endorsing and either cashing or depositing the check
representing the loan, a Participant shall acknowledge
receipt of the Participant Loan Agreement and agree to the
terms and conditions contained therein.
(g) Cash equal to the value of any loan granted shall be obtained
by liquidating assets in the Participant's Account from
investment options in which the Participant has assets, as the
Participant may elect.
(h) Repayment of a loan shall be through weekly payroll
deductions, except that if the Participant is not an
active Employee, such repayments shall be made through
monthly installment payments. Payments of principal and
interest shall be applied to reduce the outstanding
balance of a loan. Loan repayment amounts shall be
allocated to the Participant's Account in the same
investment option(s) as elected by the Participant
pursuant to subsection (a) of Section 6.01. A
Participant shall be entitled to prepay the total
outstanding loan balance or make partial prepayment at
any time without penalty.
(i) A Participant with an outstanding loan who is placed on layoff
shall be entitled to:
(1) make installment payments equivalent in value to
the payments deducted previously from the
Participant's paycheck; or
(2) suspend loan payments for a period of up to 12
months while on layoff, provided such period does
not extend beyond the maximum loan term,
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<PAGE> 37
(j) A Participant with an outstanding loan who is placed on a
disability leave of absence must make installment payments
substantially equal to the payments deducted previously from
the Participant's paycheck.
(k) No earnings shall accrue to the Participant's Account with
respect to the outstanding balance of any loan.
(l) In the event a Participant fails to make a required loan
payment and such failure continues beyond the last day of
the calendar quarter following the calendar quarter in
which the required payment was due, then the Participant
shall be irrevocably deemed to have received a
distribution of assets in an amount equal to the
remaining outstanding principal amount of and accrued
interest on the loan, calculated to the date of such
deemed distribution.
(m) A Participant (or beneficiary) who, prior to such
Participant's repayment of the total principal amount of and
accrued interest on a loan, requests or receives a settlement
of assets, shall be deemed to have elected a withdrawal,
pursuant to Section 6.03, equal to the principal amount of and
accrued interest on the loan as of the Effective Date of
Withdrawal.
(n) Any appropriate direction given to borrow assets shall be
irrevocable, normally as of 4:00 p.m. Eastern Time, on the
Business Day such election is received by the party designated
by the Administrator.
(o) A Participant may have no more than five loans outstanding at
any one time.
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ARTICLE VII
TRUST FUND
7.01 Contributions to the Trustee
(a) All Deferred and After-Tax Savings under this Plan will be
paid to the Trustee who shall invest all such amounts and
earnings thereon.
(b) Once the Deferred and After-Tax Savings are contributed to the
Trustee by the Corporation, the Corporation shall be relieved
of any further liability except as otherwise may be provided
by The Employee Retirement Income Security Act of 1974.
7.02 Investment Options
The Trustee is to invest in the Funds.
ARTICLE VIII
OTHER PROVISIONS
8.01 Non-Assignability
Except as otherwise may be provided by Section 6.06, no right or
interest of any Participant under this Plan or in the Participant's
Account shall be assignable or transferable, in whole or in part,
either directly or by operation of law or otherwise, including, without
limitation, by execution, levy, garnishment, attachment, pledge,
bankruptcy, or in any other manner, except (1) in accord with
provisions of a qualified domestic relations order as defined in IRC
Section 414(p),
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<PAGE> 39
(2) a Participant's voluntary assignment of an amount not in excess of
10% of a distribution from the Plan, and (3) further excluding
devolution by death or mental incompetency; no attempted assignment or
transfer thereof shall be effective; and no right or interest of any
Participant under this Plan shall be liable for, or subject to, any
obligation or liability of such Participant.
8.02 Designation of Beneficiaries in Event of Death
(a) A Participant may file with the party designated by the
Administrator a written designation of a beneficiary or
beneficiaries with respect to all or part of the assets in the
Account of the Participant.
For a married Participant who dies, the entire balance of the
Account shall be paid to the surviving spouse unless the
written designation of beneficiary designating a person(s)
other than the spouse with respect to part or all of the
assets in the Account of the Participant includes the written
consent of the spouse, witnessed by the Plan representative or
a notary public. The written designation of beneficiary filed
with the party designated by the Administrator may be changed
or revoked at any time by the action of the Participant and,
if necessary, the spouse. No designation or change of
beneficiary will be effective until it is determined to be in
order by the party designated by the Administrator, but when
so determined it will be effective retroactively to the date
of the instrument making the designation or change.
(b) In the event an unmarried Participant does not file a
written designation of beneficiaries, such a Participant
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<PAGE> 40
shall be deemed to have designated as beneficiary or
beneficiaries under this Plan the person or persons who
receive the Participant's life insurance proceeds under the
Corporation's Life and Disability Benefits Program for Delphi
Hourly Employees, unless such Participant shall have assigned
such life insurance, in which case the assets in the account
shall be paid to the assignee.
(c) A beneficiary or beneficiaries will receive, subject to
the provisions of Section 6.05, in the event of the
Participant's death, the assets in the Participant's
Account in accordance with the applicable designation. If
the Corporation shall be in doubt as to the right of any
beneficiary to receive any such assets, the Corporation
may deliver such assets to the estate of the Participant,
in which case the Corporation shall not have any further
liability to anyone.
8.03 Merger or Consolidation
In the event of any merger or consolidation with, or transfer of assets
or liabilities to, any other plan or program, each Participant in the
Plan would, if the Plan then terminated, receive the assets in each
such Participant's Account immediately after the merger, consolidation,
or transfer which are at least equal in value to the assets each such
Participant would have been entitled to receive immediately before the
merger, consolidation, or transfer, if the Plan had then terminated.
8.04 Limitations on Contributions and Benefits
(a) General Provisions
For purposes of this Section:
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<PAGE> 41
(i) The term "Limitation Year" shall mean the Plan
Year.
(ii) All defined benefit plans or programs of the
Corporation will be treated as one defined benefit
plan or program, and all defined contribution plans
or programs will be treated as one defined
contribution plan or program.
(iii) No contribution to this Plan may exceed the limits
provided under Section 404 of the Code for current
deductibility for income tax purposes.
(iv) Contributions made to the trust by the Corporation
pursuant to subsection (c) of Section 4.01 shall be
allocated to a Participant's Account within the
current Limitation Year.
(v) For purposes of this Section, the term
"Compensation" shall mean compensation as defined
under Section 415(c)(3) of the Code and the
regulations thereunder.
(vi) The term "Annual Additions" shall mean the sum, for
any Limitation Year, of Employee contributions,
Corporation contributions, and forfeitures allocated
to an Employee's account under all defined
contribution plans.
(b) In no event shall contributions or benefits under this Plan
exceed the limits of Section 415 of the Code and the
regulations thereunder.
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<PAGE> 42
(c) For any Employee who participates under this Plan and any
defined contribution plan or defined benefit plan of the
Corporation, the sum of such Employee's Annual Additions shall
not exceed the lesser of $30,000 (or such other amount
prescribed by the Secretary of the Treasury applicable to the
Limitation Year) or 25% of such Employee's Compensation for
any Limitation Year.
(d) Any amounts elected to be contributed by an Employee
pursuant to Section 5.01 of Article V which cannot be
contributed as a result of the application of subsection
(c) of this Article VIII shall be returned to the
Employee and, if necessary, any amounts elected to be
contributed by an Employee pursuant to subsections (a) or
(c) of Section 4.01 of Article IV which cannot be
contributed as a result of the application of subsection
(c) of this Article VIII shall be returned to the
Employee.
8.05 Deferred Savings Limitation
A Participant's annual Deferred Savings under this Plan and all similar
contributions to other plans maintained by the Corporation or any other
employer may not exceed $9,500 (as adjusted by the Secretary of the
Treasury). In the event a Participant identifies, in writing, before
March 2 following the end of the Plan Year an amount of Deferred
Savings as exceeding this limitation, as applied to this Plan and all
other plans in which such Employee participated, such amounts will be
refunded to the Participant no later than April 15 following the
receipt of such written notice from the Participant. In the event the
Administrator identifies an amount in excess of the limitation, the
Participant will be
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<PAGE> 43
deemed to have notified the Administrator, and such amount
will be refunded to the Participant.
8.06 Provisions to Comply With Section 416 of the Code
(a) In any Plan Year in which the Plan is considered a "Top-
Heavy Plan," as defined in Section 416 of the Code, the
requirements of Section 416 of the Code, and the regulations
thereunder, are applicable and must be satisfied.
(b) The definition of a "Top-Heavy Plan" set forth in Section
416(g) of the Code and the additional definitions set forth in
Section 416(i) of the Code are herein incorporated by
reference.
(c) If the Plan is determined to be a "Top-Heavy Plan" for a Plan
Year, the Corporation shall make contributions equal to three
percent of Compensation on behalf of each Participant who is
not a "key employee" under Section 416 of the Code.
8.07 Investment Decisions
Any Participant or beneficiary, who makes an investment election
permitted under the Plan or otherwise exercises control permitted under
the Plan over the assets in the account, shall be deemed the named
fiduciary under the Employee Retirement Income Security Act of 1974
(hereinafter referred to as ERISA), as amended, responsible for such
decisions to the extent that such designation is permissible under
applicable law and that the investment election or other exercise of
control is not protected by Section 404(c) of ERISA.
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<PAGE> 44
8.08 Special Provisions Regarding Veterans
(a) In the event an Employee is rehired following qualified
military service, as defined in the Uniformed Services
Employment and Re-Employment Rights Act, such Employee
will be entitled to have the Corporation make
contributions to the Plan from such Employee's current
earnings that shall be attributable to the period of time
contributions were not otherwise allowable due to
military service. Such contributions shall be in
addition to contributions otherwise permitted under
Sections 4.01 and 5.01, and shall be made as permitted
under this Section and Section 414(u) of the Code.
(b) Additional contributions permitted under this Section
shall be based on the amount of Eligible Weekly Earnings
and Profit Sharing Amount that the Employee would have
received from the Corporation (or, for a Transferred
Employee, from GM or the Corporation) but for the
military service, and such contributions shall be subject
to the Plan's (and, for a Transferred Employee, the GM
Plan's) terms and conditions in effect during the
applicable period of military service.
(c) Additional contributions made under this Section shall
not be taken into account in the current year, or the
year to which they are attributable to, for purposes of
calculating and applying any limitation or requirement
identified in Section 414(u)(1) of the Code. However, in
no event may such contributions, when added to actual
contributions previously made, exceed the amount of
contributions allowable under the applicable limits in
effect during the year of military service if the
Employee had continued to be employed by the Corporation.
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<PAGE> 45
(d) If an Employee covered by this Section has an outstanding
loan(s) during the period of qualified military service
covered by this Section, loan payments shall be suspended
during such period, and the time for repayment of such loan(s)
shall be extended for a period of time equal to the period of
qualified military service.
8.09 Prohibition on Reversion
The Plan shall be maintained and administered for the exclusive purpose
of providing benefits to Participants and beneficiaries and defraying
reasonable expenses. Except as provided herein, Plan funds may not
revert to the Corporation. All contributions to the Plan are
conditioned on their deductibility under Section 404 of the Code at the
time made. All or any part of a contribution for which a deduction is
not allowed may be returned to the Corporation within one year of the
date of disallowance. Further, in the event contributions are made due
to a mistake or an administration error, such contributions may be
returned to the Corporation within one year of the date of discovery of
such mistake or error.
ARTICLE IX
ADMINISTRATION
9.01 Administrative Responsibility
The Committee shall be the Named Fiduciary with respect to the Plan
except as set forth below and in Section 8.07. The Committee may
delegate authority to carry out such of its responsibilities as it
deems proper to the extent permitted by ERISA. Except as set forth in
Section 8.07, the Committee is the Named Fiduciary of this Plan for
purposes of investment of Plan assets. The Committee may delegate
authority to carry
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<PAGE> 46
out such of its responsibilities as it deems proper to the
extent permitted by ERISA.
Pursuant to authority delegated to it by the Named Fiduciary, the
Committee, or its delegate, shall have responsibility for the
day-to-day operation, management, and administration of the Plan,
including full power and authority to construe, interpret, and
administer this Plan and to pass upon and decide cases presenting
unusual circumstances in conformity with the objectives of the Plan and
under such rules as the Committee, or its delegate, may establish.
Decisions of the Committee, or its delegate, shall be final and binding
upon the Corporation and its employees.
9.02 Records
The Administrator shall provide for the maintenance of suitable records
to reflect the separate Account balance of each Participant's
contributions and any earnings thereon.
The Administrator shall make, or cause to be made, valuations of the
trust fund or market value at least annually.
9.03 Administrative Expenses
Administrative expenses of the Plan shall be paid from assets
liquidated pursuant to subsection (c) of Section 6.04. To the extent
such expenses are not thereby paid in full, such expenses will be paid
by the Corporation.
9.04 Participant Statements
Each Participant will be furnished a statement four times per year
showing the Current Market Value of the assets, including earnings,
credited to the Participant's Account.
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<PAGE> 47
9.05 Incapacity
If the Administrator deems any person incapable of receiving any
distribution to which such person is entitled under this Plan because
such person has not yet reached the age of majority, or because of
illness, infirmity, mental incompetency or other incapacity, it may
make payment, for the benefit or the account of such incapacitated
person, to any person selected by the Administrator, whose receipt
thereof shall be a complete settlement thereof. Such payments shall, to
the extent thereof, discharge all liability of the Corporation and each
other fiduciary with respect to this Plan.
9.06 Notice of Claim Denial
The Administrator will provide adequate notice, in writing, to any
Participant or beneficiary whose claim for benefits under the Plan has
been denied, setting forth the specific reasons for such denial.
The Participant or beneficiary will be given an opportunity for a full
and fair review by the Named Fiduciary, or its delegate, of the
decision denying the claim. The Participant or beneficiary will be
given 60 days from the date of the notice denying such claim within
which to request such review.
9.07 Confidential Information
The Administrator, or its delegate, shall be responsible for ensuring
that sufficient procedures are in place and followed to safeguard the
confidentiality (except to the extent necessary to comply with federal
laws or state laws not preempted by ERISA) of information relating to
the purchase, holding, and sale of securities, and the exercise of
voting, tender, and similar rights with respect to such securities by
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<PAGE> 48
Participants and beneficiaries. If deemed necessary by the
Administrator, due to potential for undue employer influence with
regard to exercise of shareholder rights, an independent party will be
appointed by the Administrator to carry out instructions of
Participants or beneficiaries relating to such rights.
ARTICLE X
AMENDMENT, MODIFICATION,
SUSPENSION, OR TERMINATION
10.01 Amendment, Modification,
Suspension, or Termination
The Corporation reserves the right, by and through its Board of
Directors, the Committee, or a delegate of either, to amend, modify,
suspend, or terminate the Plan, but any such action shall have no
retroactive effect which would prejudice the interests of the
Participants.
10.02 Distribution Upon Plan Termination
In the event of termination or partial termination of the Plan without
establishment of a successor plan, the Administrator may direct the
Trustee to:
(a) continue to administer the trust fund and pay Account balances
in accordance with Section 6.04 to Participants affected by
the termination of the Plan upon their termination of
employment, or to beneficiaries upon such a Participant's
death, until the trust fund has been liquidated; or
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<PAGE> 49
(b) distribute as soon as administratively feasible the assets
remaining in the trust fund in a lump sum to Participants and
beneficiaries in proportion to their respective Account
balances.
(c) In the event of termination, or partial termination, or a
complete discontinuance of contributions under the Plan, the
account balance of each affected Participant will be
non-forfeitable.
10.03 Distribution Upon Sale of
Subsidiary or Corporation Assets
Upon termination of employment of a Participant with the Corporation as
a result of the sale or disposition of (i) a Corporation subsidiary
which is the employer of such Participant or (ii) substantially all of
the assets used by the Corporation at the location where such
Participant is employed; and provided that immediately after the sale
or disposition the Corporation maintains an ownership interest in the
acquiring company, if any, of less than 15%; and further provided that
such Participant continues employment with the acquiring company; then
such Participant may elect to receive a settlement of all assets in the
Participant's Account at any time prior to attaining age 59-1/2,
subject to Article VI, Section 6.04, but only if the distribution is
made by the end of the second calendar year after the calendar year in
which the sale or disposition occurred.
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<PAGE> 50
Adopted on the _____ day of July, 1998.
LEAR CORPORATION
By_______________________________________
Michael Miller
Secretary, Employee Benefits Committee
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<PAGE> 1
EXHIBT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated January 30, 1998
included in Lear Corporation's Form 10-K for the year ended December 31, 1997,
and to all references to our firm included in this registration statement.
/s/ Arthur Andersen LLP
Detroit, Michigan Arthur Andersen LLP
August 27, 1998
