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LEAR CORPORATION
LONG-TERM STOCK INCENTIVE PLAN
FORM OF PERFORMANCE UNIT AWARD
AGREEMENT
PERFORMANCE
UNIT AWARD AGREEMENT (the “Agreement”) dated as of ___,
between Lear Corporation (the “Company”) and the
individual whose name appears on the signature page hereof (the
“Participant”), who is a key employee of the Company or
an Affiliate. Any term capitalized herein, but not defined, shall
have the meaning set forth in the Lear Corporation Long-Term Stock
Incentive Plan (the “Plan”).
1.
GRANT. In accordance with the terms of the Plan, the Company hereby
grants to the Participant a Performance Unit Award subject to the
terms and conditions set forth herein. Each Performance Unit shall
have a notional value of $30.00, provided, however, that no amounts
will be paid or payable hereunder unless the Participant earns
Performance Units pursuant to Section 5 hereof.
2.
PERFORMANCE PERIOD. The Performance Period for this Award shall be
the three-year period commencing on January 1, 2007 and ending
on December 31, 2009.
3.
PERFORMANCE MEASURE. There shall be one performance measure,
Earnings Growth, as defined below.
“Earnings
Growth” shall mean the compounded annual growth rate of the
Company’s annual operating income during the 3-year
Performance Period. Operating income shall mean the Company’s
pretax income excluding the North American Interior business,
interest expense, impairments, restructurings and other special
items such as, among others: investment gains and losses;
extraordinary, unusual or non-recurring items; gains or losses on
the sale of assets; effects of changes in accounting principles or
the application thereof; asset impairment charges; acquisitions,
divestitures, or financing activities; recapitalizations, including
stock splits and dividends; expenses for restructuring or
productivity initiatives; and other non-operating items.
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i.
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Threshold: 5% per year average
growth
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ii.
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Target: 10% per year average
growth
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iii.
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Superior: 15% per year average
growth
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a. The
number of Performance Units earned by a Participant with respect to
the performance measure during the Performance Period shall be
determined under the following chart:
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Number of
Performance
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Performance At
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Units
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Earnings Growth
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b. In
the event that the Company’s actual performance does not meet
threshold for that performance measure, Performance Units shall not
be earned with respect to that performance measure.
c. If
the Company’s actual performance for a performance measure is
between “threshold” and “target,” the
Performance Units earned shall equal the Performance Units for
threshold plus the number of Performance Units determined under the
following formula:
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The Performance
Units for target.
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The Performance
Units for threshold.
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The
Company’s actual performance.
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The threshold
performance goal.
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The target
performance goal.
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d. If
the Company’s actual performance for a performance measure is
between “target” and “superior,” the
Performance Units earned shall equal the Performance Units for
target plus the number of Performance Units determined under the
following formula:
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The Performance
Units for superior.
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The Performance
Units for target.
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The
Company’s actual performance.
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The target
performance goal.
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The superior
performance goal.
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e. If
the Company’s actual performance for performance measure
exceeds “superior,” the Performance Units earned shall
equal the Performance Units for superior.
6.
TIMING AND FORM OF PAYOUT. Except as hereinafter provided, after
the end of the Performance Period, the Participant shall be
entitled to receive a dollar amount equal to the product of
(i) the value per Performance Unit of $30 multiplied by
(ii) his or her total number of Performance Units determined
under Section
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