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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
| (Mark One) | ||
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
| For the fiscal year ended December 31, 2006. | ||
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o |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
| For the transition period from to . |
Commission file number: 1-11311
LEAR CORPORATION
(Exact name of registrant as specified in its charter)
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Delaware |
13-3386776 | |
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(State or other jurisdiction of |
(I.R.S.
Employer Identification No.) |
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| 21557 Telegraph Road, Southfield, MI |
48033 | |
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(Address of principal executive offices) |
(Zip code) |
Registrants telephone number, including area code:
(248) 447-1500
Securities registered pursuant to Section 12(b) of the Act:
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Title of Each Class |
Name of Each Exchange on Which Registered |
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Common Stock, par value $0.01 per share |
New York Stock Exchange |
Securities registered pursuant to Section 12(g) of the Act:
None
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Excerpt from Compensation Discussion and Analysis:
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Health, Welfare and Certain Other Benefits
To remain competitive in the market for a high caliber management team, Lear provides its executive officers, including our Chief Executive Officer, with health and welfare benefits. The Estate Preservation Plan, in which certain of our senior executives participate, provides the beneficiaries of a participant with death benefits which may be used to pay estate taxes on inherited common stock. In addition, in the past we had provided certain perquisites, including financial counseling services, reimbursement of country club membership dues, the use of a company automobile and limited personal use of the corporate aircraft. In certain instances, the Company had also provided tax gross-up payments for the imputed income associated with such perquisites. Beginning in 2006 for our Named Executive Officers, we transitioned from the provision of individual perquisites toward the provision to each executive of an aggregate perquisite allowance. This gives the executives freedom to choose the form of benefit and eliminates our cost of administering the perquisites program. We also permit limited personal use of the company aircraft by our most senior executives. For additional information regarding perquisites, please see Executive Compensation Summary Compensation Table beginning on page 135 and footnote (6) to the Summary Compensation Table.
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EXECUTIVE COMPENSATION
The following table shows information concerning the annual compensation for services to the Company in all capacities of the Chief Executive Officer, Chief Financial Officer and the other most highly compensated executive officers of the Company (our Named Executive Officers) during the last completed fiscal year.
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| Incentive |
Nonqualified |
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Deferred |
All Other |
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Option |
Compen- |
Compensation |
Compen- |
Total |
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| Salary |
Bonus |
Awards |
Awards |
sation |
Earnings |
sation |
Compensation |
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| (1) |
(1), (2) |
(3) |
(4) |
(1), (2) |
(5) |
(6) |
(7) |
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| Name and Principal |
Year |
($) |
($) |
($) |
($) |
($) |
($) |
($) |
($) |
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Position (a) |
(b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | |||||||||||||||||||||||||||
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Robert E. Rossiter, |
2006 | $ | 1,100,000 | $ | 132,000 | $ | 2,540,097 | $ | 944,106 | $ | 693,000 | $ | 697,329 | $ | 192,344 | (8) | $ | 6,298,876 | ||||||||||||||||||
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Chairman and Chief |
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James H. Vandenberghe, |
2006 | $ | 925,000 | $ | 74,000 | $ | 1,417,369 | $ | 524,503 | $ | 388,500 | $ | 416,243 | $ | 93,658 | $ | 3,839,273 | |||||||||||||||||||
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Vice Chairman and Chief |
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David C. Wajsgras, |
2006 | $ | 130,000 | $ | 0 | $ | (639,537 | ) | $ | (57,791 | ) | $ | 0 | $ | 0 | (10) | $ | 11,243 | (11) | $ | (556,085 | ) | ||||||||||||||
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Former Executive Vice President and Chief Financial Officer(9) |
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Douglas G. DelGrosso, |
2006 | $ | 770,000 | $ | 74,000 | $ | 1,013,164 | $ | 466,709 | $ | 388,500 | $ | 82,210 | $ | 0 | (12) | $ | 2,794,583 | ||||||||||||||||||
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President and Chief |
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Daniel A. Ninivaggi, |
2006 | $ | 572,917 | $ | 169,850 | $ | 863,627 | $ | 232,497 | $ | 150,150 | $ | 30,089 | $ | 57,716 | $ | 2,076,846 | |||||||||||||||||||
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Executive Vice President, Secretary and General Counsel |
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Raymond E. Scott, |
2006 | $ | 453,958 | $ | 22,560 | $ | 455,591 | $ | 224,021 | $ | 118,440 | $ | 28,082 | $ | 139,700 | (13) | $ | 1,442,352 | ||||||||||||||||||
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Senior Vice President and President, North American Seating Systems Group |
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(1) Under the Management Stock Purchase Plan, Named Executive Officers elected to defer portions of their 2006 salaries and bonuses. Salaries and bonuses are reported without giving effect to any amount deferred under that plan. The Named Executive Officers deferred the following amounts of their total salary and bonus earned in 2006: Mr. Rossiter, $577,500; Mr. Vandenberghe, $416,250; Mr. DelGrosso, $215,625; Mr. Ninivaggi, $153,000; and Mr. Scott, $141,000. Amounts deferred under the Management Stock Purchase Plan are used to purchase restricted stock units at a discount to the fair market value of our common stock. The respective amounts charged as an expense to the Company in 2006 for this premium portion is reflected in the stock awards column. Messrs. DelGrosso and Scott have deferred receipt of supplemental restricted stock unit awards into the Management Stock Purchase Plan in the amounts of $144,896 and $46,042, respectively. For further information regarding the Management Stock Purchase Plan, see Compensation Discussion and Analysis above and the Grants of Plan-Based Awards table (including footnote (4) thereto) beginning on page 138.
(2) The total annual incentive bonus for 2006 is divided between columns (d) and (g). The amount shown in column (g) was earned based on the pre-established criteria approved by the Compensation Committee. The amount shown in column (d) is the discretionary portion of the annual incentive bonus that was approved by the Compensation Committee based on a variety of qualitative factors.(3) Represents the compensation costs of restricted stock units, restricted stock and performance shares for financial reporting purposes for the year under FAS 123(R). See Note 11 of the Companys financial statements for 2006 for the assumptions made in determining FAS 123(R)values. For retirement eligible grantees, the first half of the grant is expensed in the year of the grant and the second half is expensed over two
135
years. There can be no assurance that the FAS 123(R) value will ever be realized. The amount for Mr. Wajsgras reflects the net result of reversing a portion of the compensation costs of awards that were previously expensed by the Company which he forfeited upon his resignation.
(4) Represents the compensation costs of stock-settled stock appreciation rights for financial reporting purposes for the year under FAS 123(R). See Note 11 of the Companys financial statements for 2006 for the assumptions made in determining FAS 123(R) values. For retirement eligible grantees, the entire amount is expensed in one year. There can be no assurance that the FAS 123(R) value will ever be realized. The amount for Mr. Wajsgras reflects the net result of reversing a portion of the compensation costs of awards that were previously expensed by the Company which he forfeited upon his resignation.(5) Represents the aggregate change in actuarial present value of the executives accumulated benefit under all defined benefit and actuarial pension plans (including supplemental plans) from the pension plan measurement date used for financial statement reporting purposes with respect to the prior fiscal years audited financial statements to the respective measurement date for the covered fiscal year.
(6) The amount shown in column (i) reflects for each Named Executive Officer (with those amounts in each category in excess of $10,000 specifically noted):matching contributions allocated by the Company to each of the Named Executive Officers pursuant to the Retirement Savings Plan (described below) and the Executive Supplemental Savings Plan (fully described on page 146 under the heading Nonqualified Deferred Compensation);
imputed income with respect to life insurance coverage;life insurance premiums paid by the Company, including $12,128 in premiums for Mr. Rossiter and $12,720 in premiums for Mr. Vandenberghe; and
a perquisite allowance provided by the Company that is equal to the greater of 7.5% of the base salary rate as of December 31, 2006 and $42,000, which amounted to allowances as follows: Mr. Rossiter, $82,500; Mr. Vandenberghe, $69,375; Mr. DelGrosso, $69,375 (based on a salary rate of $925,000, which includes the value of a supplemental restricted stock unit grant awarded in January 2006); Mr. Ninivaggi, $52,500; and Mr. Scott, $42,000.(7) For each Named Executive Officer, the percentages of total compensation in 2006 that were attributable to base salary and total bonus (the amounts identified in columns (d) and (g)) were as follows: Mr. Rossiter, base salary 17.5%, bonus 13.1%; Mr. Vandenberghe, base salary 24.1%, bonus 12.0%; Mr. Wajsgras, base salary 92.0% (disregarding negative amounts in the Summary Compensation Table), bonus 0%; Mr. DelGrosso, base salary 27.6%, bonus 16.5%; Mr. Ninivaggi, base salary 27.6%, bonus 15.4%; Mr. Scott, base salary 31.5%, bonus 9.8%.
(8) In addition to the items noted in footnote 6 above, the amount in column (i) includes the aggregate incremental cost of $45,866 for personal use of the corporate aircraft, which was determined based on the variable cost to the Company of such use, and an associated tax gross-up of $33,822.(9) Mr. Wajsgras resigned as our Executive Vice President and Chief Financial Officer effective March 10, 2006.
(10) Mr. Wajsgrass aggregate pension value decreased by $182,082 as a result of his resignation prior to becoming fully vested in the Pension Equalization Program and the Executive Supplemental Savings Plan.(11) The amount in column (i) includes $10,719 relating to financial counseling services and country club membership dues.
(12) Mr. DelGrosso received the items noted in footnote 6 above, however, these amounts were more than offset by net tax reimbursements of $96,563 paid by Mr. DelGrosso to Lear related to his foreign assignment. The net tax reimbursements are comprised of taxes paid by Lear in the amount of $182,500, offset by tax equalization payments made by Mr. DelGrosso to Lear in the amount of $279,063.(13) Includes $56,643 relating to Mr. Scotts overseas assignment compensation (which primarily reflects tax equalization payments, reimbursement for foreign housing costs and certain associated tax gross-ups), $20,000 relating to country club membership fees and $13,529 for a tax gross-up relating to country club membership fees.
136
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