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Exhibit 10.40
LEAR CORPORATION
LONG-TERM STOCK INCENTIVE PLAN
2006 RESTRICTED STOCK UNIT TERMS AND
CONDITIONS
1.
Definitions . Any term capitalized herein but not defined
will have the meaning set forth in the Plan.
2.
Grant and Vesting of Restricted Stock Units .
(a) As
of the Grant Date specified in the letter that accompanies this
document, the Employee will be credited with the number of
Restricted Stock Units set forth in the letter that accompanies
this document. Each Restricted Stock Unit is a notional amount that
represents one unvested share of Common Stock, $0.01 par value, of
the Company (the "Common Stock"). Each Restricted Stock Unit
constitutes the right, subject to the terms and conditions of the
Plan and this document, to distribution of a Share if and when the
Restricted Stock Unit vests. If the Employee’s employment
with the Company and all of its Affiliates terminates before the
date that all of the Restricted Stock Units vest, his or her right
to receive the Shares underlying unvested Restricted Stock Units
will be only as provided in Section 4.
(b) One-half
of the Restricted Stock Units will vest on the second anniversary
of the Grant Date, and the remaining half will vest on the fourth
anniversary of the Grant Date. Notwithstanding anything contained
herein to the contrary, the right of an Employee to receive Shares
underlying a Restricted Stock Unit will be forfeited if the
Committee determines, in its sole discretion, that (i) the
Employee has entered into a business or employment relationship
that is detrimentally competitive with the Company or substantially
injurious to the Company’s financial interests; (ii) the
Employee has been discharged from employment with the Company or an
Affiliate for Cause; or (iii) the Employee has performed acts
of willful malfeasance or gross negligence in a matter of material
importance to the Company or an Affiliate.
3.
Rights as a Stockholder .
(a) Unless
and until a Restricted Stock Unit has vested and the Share
underlying it has been distributed to the Employee, the Employee
will not be entitled to vote that Share.
(b) If
the Company declares a cash dividend on its common stock, then, on
the payment date of the dividend, the Employee will be credited
with dividend equivalents equal to the amount of cash dividend per
share multiplied by the number of Restricted Stock Units credited
to the Employee through the record date. The dollar amount credited
to an Employee under the preceding sentence will be credited to an
account ("Account") established for the Employee for bookkeeping
purposes only on the books of the Company. The amounts credited to
the Account will be credited as of the last day of each month with
interest, compounded monthly, until the amount credited to the
Account is paid to the Employee. The rate of interest
credited under the previous sentence will be the prime rate of
interest as reported by the Midwest edition of the Wall Street
Journal for the second business day of each quarter on an annual
basis. The balance in the Account will be subject to the same terms
regarding vesting and forfeiture as the Employee’s Restricted
Stock Units awarded under the accompanying letter and this
document, and will be paid in cash in a single sum at the time that
the Shares associated with the Employee’s Restricted Stock
Units are delivered (or forfeited at the time that the
Employee’s Restricted Stock Units are forfeited).
4.
Termination of Employment . Subject to the forfeiture
provisions of clause 2(b) above, an Employee’s right to
receive the Shares underlying his or her Restricted Stock Units
after termination of his or her employment will be only as
follows:
(a)
End of Service . If the Employee experiences an End of
Service Date, the Employee will be entitled to receive the Shares
underlying any Restricted Stock Units that have then vested. In
addition, the Employee will be entitled to receive the Shares
underlying the number of Restricted Stock Units, if any, that have
not yet vested but would have vested under Section 2 if the
Employee’s End of Service Date had been 24 months
following his actual End of Service Date. The Employee will forfeit
the right to receive Shares underlying any Restricted Stock Units
that have not yet vested or would not have vested in the next
24 months as described in the preceding sentence. The
Employee’s "End of Service Date" is the date of his or her
retirement after attaining age 55 and completing ten years of
service (as defined in the Lear Corporation Pension Plan,
regardless of whether the Employee participates in such plan).
(b)
Disability or Death . If an Employee’s employment with
the Company and all Affiliates terminates due to Disability or
death, the Employee or the Employee’s beneficiary under the
Plan will be entitled to receive the Shares underlying all of the
Restricted Stock Units, including both those that have already
vested and those that have not yet vested under Section 2
above.
(c)
Other Termination of Employment . If an Employee’s
employment with the Company and all Affi
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