LEAR CORP - Lear Corporation Pension Equalization Program, as amended through August 15, 2003 (incorporated by reference to Exhibit 10.37 to the Companys Annual Report on Form 10-K for the year ended December 31, 2004).

See All of This Company's Exhibits

EX-10.37
6
k91926exv10w37.txt
EXHIBIT 10.37 PENSION EQUALIZATION PROGRAM

EXHIBIT 10.37

LEAR CORPORATION

PENSION EQUALIZATION PROGRAM

AMENDED AND RESTATED
NOVEMBER 1996

EFFECTIVE JANUARY 1, 1997

As amended through August 15, 2003

TABLE OF CONTENT

PAGE
----

Preamble.............................................................................. 1

Purpose of Plan....................................................................... 1

Amendment of Plan Effective January 1, 1997........................................... 2

Eligibility........................................................................... 2

Vesting............................................................................... 3

Pension Supplement.................................................................... 4

Supplemental Preretirement Death Benefit.............................................. 5

Supplemental Post Retirement Death Benefit............................................ 6

Time of Payment....................................................................... 6

Form of Payment....................................................................... 6

Income Tax Treatment.................................................................. 8

Social Security/Medicare Payroll Taxes................................................ 8

Income Tax Withholding................................................................ 9

Funding............................................................................... 9

ERISA Status.......................................................................... 9

Assignment............................................................................ 9

Employment Rights..................................................................... 10

Plan Administrator.................................................................... 10

Incompetent Persons................................................................... 10

Expenses.............................................................................. 10

Amendment/Termination of the Plan..................................................... 11

-ii-

Plan Survives Change in Control....................................................... 11

Governing Law......................................................................... 11

Construction.......................................................................... 11

Claims Procedure...................................................................... 12

Definitions........................................................................... 15

-iii-

1. PREAMBLE

An investor group purchased Lear Siegler Seating Corporation on September
30, 1988 from Lear Diversified Holdings Corporation. Lear Siegler Seating
Corporation was subsequently renamed Lear Corporation. At the time of the
purchase, certain highly paid employees of Lear Siegler Seating
Corporation were covered by a nonqualified deferred compensation plan
known as the Supplemental Pension Plan for Officers of Lear Siegler, Inc.

Following this purchase, the board of directors of Lear Corporation voted
not to continue the Supplemental Pension Plan For Officers Of Lear
Siegler, Inc. as that plan applied to its employees. In accordance with
section 6.2 of the Supplemental Pension Plan For Officers Of Lear Siegler,
Inc., the board of directors voted to terminate that plan with respect to
employees of Lear Corporation and its subsidiaries. As a result of this
plan termination, the rights of all employees (with the sole exception of
Kenneth Way) under that plan were completely extinguished.

Effective January 1, 1995, Lear Corporation established the Lear
Corporation Pension Equalization Program. This Plan is not a successor to
the Supplemental Pension Plan For Officers Of Lear Siegler, Inc. The
rights of employees under this Plan are determined without regard to that
plan.

2. PURPOSE OF PLAN

The Qualified Pension Plan is designed to provide a certain level of
retirement income for employees of Lear and any affiliated company
participating in the Lear Corporation Pension Plan. However, the Qualified
Pension Plan is subject to certain rules in the

-1-

Internal Revenue Code that restrict the level of retirement income that
can be provided to certain higher paid employees under that plan. The
purpose of the Plan is to supplement the pensions of higher paid employees
under the Qualified Pension Plan to the extent these pensions are subject
to these legal restrictions, thereby providing these employees with a
level of retirement income comparable to that of other employees. The
board of directors believes that these pension supplements are necessary
in order to recruit and retain senior executives.

The Plan shall encompass all pension provisions of any employment
agreement effective January 1, 1999, with regard to any such agreement
which exists as of that date and any future employment agreement, as
approved by the Compensation Committee of the board of directors of Lear
Corporation or its delegate.

3. AMENDMENT OF PLAN EFFECTIVE JANUARY 1, 1997

Section 21 Amendment/Termination of the Plan gives the Board of Directors
the authority to amend the Plan. In order to better fulfill the purpose of
the Plan the Board of Directors approved an amendment to Section 10 Form
of Payment effective January 1, 1997 to permit alternative payment options
for those eligible employees who satisfy Section 10 as amended.

4. ELIGIBILITY

An employee of Lear and any affiliated company participating in the Lear
Corporation Pension Plan is eligible for a benefit under the Plan if the
employee satisfies all the requirements described in this section.

-2-

(a) RETIREMENT AFTER 1994 The employee must separate from service with
Lear or any such affiliated company, as indicated in Section 4,
after December 31, 1994, after completing 20 years of service or
after satisfying the requirements for early, normal or disability
retirement under the Qualified Pension Plan.

(b) PARTICIPANT IN QUALIFIED PENSION PLAN The employee must have a
vested right to an accrued benefit under the Qualified Pension Plan.

(c) MEMBER OF TOP HAT GROUP The employee must be a highly compensated
employee or member of management who belongs to the "top hat group"
within the meaning of the Employee Retirement Income Security Act of
1974.

(d) DESIGNATED BY BOARD OF DIRECTORS The employee must have had
compensation as recognized under the Qualified Pension Plan which
exceeded the limits under Internal Revenue Code Section 401(a)(17)
for at least three calendar years.

5. VESTING

An employee has a vested right to a benefit under the Plan as provided in
this section. If an employee separates from service with Lear or any such
affiliated company, as indicated in Section 4, before vesting, the
employee forfeits any right to a benefit under the Plan.

(a) 20 YEARS OF SERVICE An employee has a vested right to a benefit
under the Plan as of the date the employee completes 20 years of
service with Lear, Lear Siegler, Inc. any affiliated company
participating in the Lear Corporation Pension Plan, or

-3-

any combination thereof. Years of service are calculated in the same
manner as under the Qualified Pension Plan.

(b) ELIGIBILITY FOR RETIREMENT An employee with less than 20 years of
service has a vested right to a benefit under the Plan as of the
date the employee satisfies the requirements for early, normal or
disability retirement under the Qualified Pension Plan, except that
the employee has not separated from service with Lear or any such
affiliated company, as indicated in Section 4.

(c) CRIMINAL MISCONDUCT An employee who is vested forfeits any right to
a benefit under the Plan if Lear terminates the employee because of
fraud, embezzlement, misappropriation or other criminal misconduct
involving moral turpitude committed in connection with employment
with Lear or any such affiliated company, as indicated in Section 4.

6. PENSION SUPPLEMENT

An employee's benefit under the Plan is a pension supplement equal to the
difference between the employee's actual vested accrued pension benefit
under the Qualified Pension Plan and the pension benefit the employee
would have accrued under the Qualified Pension Plan (ignoring all
subsections under Section 4.01 other than subsection (a) of Section 4.01
of the Qualified Pension Plan) if the Qualified Pension Limits were
disregarded.

-4-

7. SUPPLEMENTAL PRERETIREMENT DEATH BENEFIT

A supplemental preretirement death benefit is paid to a surviving spouse
who is eligible for a preretirement surviving spouse benefit under the
Qualified Pension Plan. This death benefit is paid only if, upon the death
of the employee, the following requirements have been met:

(a) death occurs subsequent to the employee becoming eligible for,
effective January 1, 2003, vesting as determined under the Qualified
Pension Plan. An employee has a vested right to a benefit under the
Qualified Pension Plan as of the date the employee completes 5 years
of service with Lear, Lear Siegler, Inc. any affiliated company
participating in the Lear Corporation Pension Plan, or any
combination thereof. Years of service are calculated in the same
manner as under the Qualified Pension Plan. Prior to January 1,
2003, the requirement was that death occurred subsequent to the
employee becoming eligible for Plan participation pursuant to
Section 4,

(b) death occurs subsequent to December 31, 1994,

(d) death occurs while the employee is actively employed by Lear or any
such affiliated company, as indicated in Section 4.

The supplemental preretirement death benefit is equal to the difference
between the actual preretirement surviving spouse benefit under the
Qualified Pension Plan and the

-5-

preretirement surviving spouse benefit that would be available under the
Qualified Pension Plan (ignoring all subsections under Section 4.01 other
than subsection (a) of Section 4.01 of the Qualified Pension Plan) if the
Qualified Pension Limits were disregarded.

8. SUPPLEMENTAL POST RETIREMENT DEATH BENEFIT

A supplemental post retirement death benefit is paid to any individual who
is a surviving spouse of an employee who is eligible for the Plan and who
is eligible for a survivor's benefit under the Qualified Pension Plan. The
supplemental post retirement death benefit is equal to the difference
between the actual survivor's benefit under the Qualified Pension Plan and
the survivor's benefit that would be available under the Qualified Pension
Plan (ignoring all subsections under Section 4.01 other than subsection
(a) of Section 4.01 of the Qualified Pension Plan) if the Qualified
Pension Limits were disregarded.

9. TIME OF PAYMENT

An individual's benefit under the Plan is paid at the same time as the
individual's benefit is paid under the Qualified Pension Plan. However, an
employee electing to retire before age 65 under the Qualified Pension Plan
must provide Lear with written notice of such election at least 6 months
prior to such retirement date.

10. FORM OF PAYMENT

(a) NORMAL FORM OF PAYMENT An individual's benefit under the Plan is
paid in the same form as the individual's benefit under the
Qualified Pension Plan. However, Lear may, in its discretion, elect
to pay any benefit under the Plan in a single lump

-6-

sum that is the actuarial equivalent of the benefit. To the extent a
lump sum is payable from this Plan, the actuarial equivalence for
such lump sum shall be determined in accordance with Exhibit A, item
(c) of the Qualified Pension Plan.

(b) AGE 62 OR 16B OFFICER OPTION An employee who satisfies the
requirements of paragraphs (1) and (2) below may elect a single lump
sum payment or an installment payment option in lieu of the Normal
Form of Payment.

(1) ELECTION REQUIREMENT An election of the lump sum option or the
installment payment option shall not be effective if
termination of employment occurs before the end of the first
full calendar year beginning after the election is made,
except if termination occurs by reason of death.

(2) ELIGIBILITY REQUIREMENT Eligibility to elect either of these
forms of payment shall be limited to employees who will be at
least age 62 and have 10 years of Service (as defined in the
Qualified Pension Plan) when benefits are to be paid, and (i)
if the employee is restricted in stock ownership trades under
Section 166 of the Security Exchange Commission Regulations,
have approval of the Compensation Committee of the Board of
Directors, or (ii) if the employee is not restricted in stock
ownership trades under Section 16b of the Security Exchange
Commission Regulations, have approval of the Chief Executive
Officer of the Corporation.

-7-

(3) LUMP SUM PAYMENT The lump sum payment option is determined in
accordance with the rules outlined under Normal Form of
Payment of this Section 10.

(4) INSTALLMENT PAYMENT Under this option the employee will
receive a series of identical annual payments with the first
payment beginning on the first of the month following
retirement and each subsequent payment payable on the annual
anniversary of the first payment. The employee will elect the
number of annual payments payable at the time of the election
of this option. In no event may the number of annual payments
exceed 20. The annual payment will be determined by dividing
the Lump Sum Payment that would be payable under paragraph (3)
by an interest only annuity factor. The interest only annuity
factor will be determined using the interest rate required in
the determination of the Lump Sum Payment option.

11. INCOME TAX TREATMENT

This Plan is intended to be a nonqualified plan of deferred compensation
under which the benefits are not subject to income tax until the year
actually paid to employees.

12. SOCIAL SECURITY/MEDICARE PAYROLL TAXES

Benefits under the Plan are wages for purposes of social security and
Medicare payroll taxes. Benefits are subject to payroll taxes in the year
employees accrue the right to the benefit or, if later, vest in the
benefits.

-8-

13. INCOME TAX WITHHOLDING

Lear shall deduct from all payments under the Plan the amount of federal
and state income taxes it is required to withhold.

14. FUNDING

The Plan is not funded. The liability for benefits under the Plan consists
of an entry in Lear's financial records. Payments to employees and
beneficiaries are made in cash from Lear's general assets. In the event
Lear seeks protection under the federal bankruptcy laws, all persons are
unsecured general creditors of Lear with respect to benefits derived from
the Plan. Lear may in its discretion fund its liabilities with respect to
the Plan through a Rabbi Trust.

15. ERISA STATUS

The Plan is an unfunded promise to pay deferred compensation. It is not
intended to comply with section 401(a) of the Internal Revenue Code.
Participation in the Plan is limited to a select group of management and
highly compensated employees and the Plan is intended to qualify for the
top hat exemptions contained in sections 201(2), 301(a)(3) and 401(a)(1)
of the Employee Retirement Income Security Act of 1974.

16. ASSIGNMENT

Except to the extent required by law, Lear will not recognize any
assignment, pledge, collateralization or attachment of benefits under the
Plan.

-9-

17. EMPLOYMENT RIGHTS

The Plan is not an employment contract and it creates no right in any
person to continue employment with Lear or any such affiliated company, as
indicated in Section 4, for any length of time.

18. PLAN ADMINISTRATOR

The Employee Benefits Committee of Lear is the plan administrator. Lear
has the authority to do all things necessary to administer the Plan,
including construing its language and determining eligibility for
benefits. Lear has the authority to equitably adjust employees' rights
under the Plan or the amount of an employee's benefit. Lear may adopt any
rules necessary to administer the Plan which are not inconsistent with its
terms. The board of directors may delegate the authority to administer the
Plan.

19. INCOMPETENT PERSONS

If Lear finds that any person entitled to a benefit under the Plan is
unable to manage his or her affairs because of legal incompetence, Lear,
in its discretion, may pay the benefit due to such person to an individual
deemed by Lear to be responsible for the maintenance of such person. Any
such payment constitutes a complete discharge of Lear's liability under
the Plan.

20. EXPENSES

Lear is responsible for the cost of administering the Plan.

-10-

21. AMENDMENT/TERMINATION OF THE PLAN

Lear may amend or terminate the Plan by resolution of its board of
directors or any duly authorized committee of the board at any time. An
amendment or plan termination cannot reduce or eliminate the benefits
employees have accrued under the Plan as of the date of the amendment is
executed or the date the Plan is terminated.

22. PLAN SURVIVES CHANGE IN CONTROL

The obligations of Lear under the Plan are binding on any organization
succeeding to substantially all the assets and/or business of Lear by sale
or otherwise. Lear is obligated under the Plan to make appropriate
provision for the preservation of employees' rights under any agreement or
plan which it may enter into or that effects a merger, consolidation,
reorganization, reincorporation, change of name or transfer of company
assets.

23. GOVERNING LAW

The validity and construction of the Plan is governed by the laws of the
State of Michigan, without giving effect to the principles of conflicts of
law.

24. CONSTRUCTION

The following principles apply to the construction of the Plan.

(a) The plan administrator shall, in its discretion, construe the
language of the Plan and resolve all questions concerning the
administration and the interpretation of the Plan document.

-11-

(b) In the event any provision of the Plan is declared invalid, in whole
or in part, by any legal authority, the remaining provisions of the
Plan are unaffected and remain in full force and effect

(c) A provision of the Plan which is invalid in any jurisdiction remains
in effect and is enforceable in all jurisdictions in which the
provision is valid.

(d) Lear may, in its discretion, construe a provision of the Plan which
is declared to be invalid in such a manner that it is valid.

25. CLAIMS PROCEDURE

The claims procedure set forth in this paragraph is the exclusive method
of resolving disputes that arise under the Plan.

(a) Written Claim Any claim that a person makes under the Plan must be
in writing. All claims must be submitted to Lear within six months
of the date on which the claimant contends he or she first had a
right to receive a benefit under the Plan.

(b) Denial of Claim Where Lear denies a claim, in whole or in part, it
must furnish the claimant with a written notice of the denial
setting forth the following information, in a manner calculated to
be understood by the claimant.

(1) A statement of the specific reasons for the denial of the
claim.

(2) References to the specific provisions of the Plan on which the
denial is based.

-12-

(3) A description of any additional material or information
necessary to perfect the claim with an explanation of why such
material or information is necessary.

(4) An explanation of the claims review procedure with a statement
that the claimant must request review of the decision denying
the claim within 90 days following the date on which such
notice was received by the claimant.

The written notice of denial must be mailed to the claimant within
90 days following the date on which the claim was received by Lear.
If special circumstances require an extension of time for processing
a claim, the written notice may be mailed to the claimant not more
than 180 days following the date on which the claim was received by
Lear. Within the initial 90 day period, the claimant must be
notified in writing of the extension, of the special circumstances
requiring the extension and of the date by which the claimant will
be furnished with written notice of the decision concerning the
claim.

(c) REVIEW OF DENIAL The claimant may request review of the denial of a
claim. A request for review must be mailed to Lear within 90 days of
the date on which the written notice of denial is received by the
claimant and must set forth the following information.

(1) The date on which the notice of denial of the claim was
received by the claimant.

(2) The specific portions of the denial of the claim that the
claimant disputes.

-13-

(3) A statement by the claimant setting forth the basis upon which
the claimant believes Lear should reverse the denial of the
claim for benefits under the Plan.

(4) Written material (included as exhibits) that the claimant
desires Lear to examine.

(d) Decision on Review Lear must afford the claimant an opportunity to
review documents pertinent to the claim and must conduct a full and
fair review of the claim and its denial. Lear's decision on review
must be furnished to the claimant in writing in a manner calculated
to be understood by the claimant. The decision must include a
statement of the reasons for the decision with references to the
specific provisions of the Plan upon which the decision is based.
The decision on review must be mailed to the claimant within 90 days
following the date on which the request for review is received by
Lear. If special circumstances require an extension of time to
consider a request for review, Lear's written review of the claim
may be mailed to the claimant not more than 180 days after Lear
received the request for review. Within the initial 90 day period.
Lear must notify the claimant in writing of the extension, the
special circumstances requiring the extension and of the date by
which the claimant will be furnished with written notice of the
decision reviewing the claim.

(e) TRANSMISSION OF DOCUMENTS All written documents required by these
claim procedures must be sent by first-class certified mail (return
receipt requested)

-14-

through the United States Postal Service. The date on which any
document is mailed is determined by the postmark affixed to the
document by the United States Postal Service. The date on which any
document is received is determined by the date on the signed receipt
for certified mail. Notices to a claimant must be mailed to the
claimants last known address. Notices to Lear must be mailed to:

Vice President of Human Resources
Lear Corporation
21557 Telegraph Road
Southfield, Michigan 48034

26. DEFINITIONS

(a) LEAR Lear Corporation.

(b) PLAN The Lear Corporation Pension Equalization Program.

(c) QUALIFIED PENSION LIMITS The qualified pension limits are the
restriction on compensation that can be taken into account under tax
qualified pension plans in section 401(a)(17) of the Internal
Revenue Code and the annual limit on pensions that can accrue under
tax qualified pension plans in section 415 of the Internal Revenue
Code. Such amounts are adjusted from time to time by the
Commissioner of Internal Revenue to reflect increases in the cost of
living.

(d) QUALIFIED PENSION PLAN The Lear Corporation Pension Plan.

-15-

EXECUTION

WHEREFORE, Lear Corporation has executed the Plan on the 15th day of
August 2003.

LEAR CORPORATION

By /s/ Roger A. Jackson
----------------------------------

Its Senior Vice President, Human Resources
---------------------------------------

ATTEST:

/s/ Karen M. Rosbury
-------------------------------

-16-