<PAGE>   1
 
                            SCHEDULE 14A INFORMATION
          PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
                              EXCHANGE ACT OF 1934
 
     Filed by the registrant /X/
 
     Filed by a party other than the registrant / /
 
     Check the appropriate box:
 
   
     / / Preliminary proxy statement
    
 
     / / Confidential, for Use of the Commission Only
        (as permitted by Rule 14a-6(e)(2))
 
   
     /X/ Definitive proxy statement
    
 
     / / Definitive additional materials
 
     / / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
                            LEAR SEATING CORPORATION
- --------------------------------------------------------------------------------
                (Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
    (Name of Person(s) Filing Proxy Statement, if other than the Registrant)
 
Payment of filing fee (Check the appropriate box):
 
     /X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
 
     / / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
 
     / / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
 
     (1) Title of each class of securities to which transaction applies:
 
- --------------------------------------------------------------------------------
 
     (2) Aggregate number of securities to which transaction applies:
 
- --------------------------------------------------------------------------------
 
     (3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
 
- --------------------------------------------------------------------------------
 
     (4) Proposed maximum aggregate value of transaction:
 
- --------------------------------------------------------------------------------
 
     (5) Total fee paid:
 
- --------------------------------------------------------------------------------
 
     / / Fee paid previously with preliminary materials.
 
- --------------------------------------------------------------------------------
 
     / / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
 
     (1) Amount previously paid:
 
- --------------------------------------------------------------------------------
 
     (2) Form, schedule or registration statement no.:
 
- --------------------------------------------------------------------------------
 
     (3) Filing party:
 
- --------------------------------------------------------------------------------
 
     (4) Date filed:
 
- --------------------------------------------------------------------------------

<PAGE>   2
 
   
                            LEAR SEATING CORPORATION
    
 
                               ------------------
 

                    NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
                                  MAY 9, 1996
 
                               ------------------
 
     The Annual Meeting of Stockholders (the "Meeting") of Lear Seating
Corporation ("Lear" or the "Company") will be held at The Management Education
Center, Michigan State University, 811 West Square Lake Road, Troy, Michigan
48098 on Thursday, May 9, 1996, at 10:00 a.m., Eastern Time, for the following
purposes:
 
        1. To elect four directors to hold office until the 1999 Annual Meeting
           of Stockholders;
 
        2. To approve the proposed amendment to the Company's Restated
           Certificate of Incorporation which would change the name of the
           Company to "Lear Corporation";
 
        3. To approve the Lear 1996 Stock Option Plan;
 
        4. To ratify the appointment of Arthur Andersen LLP as independent
           auditors of the Company for the 1996 fiscal year; and
 
        5. To transact such other business as may properly come before the
           meeting or any adjournment or postponement thereof.
 
     The foregoing items are fully discussed in the Proxy Statement accompanying
this Notice of Annual Meeting. A copy of the Company's Annual Report to
Stockholders is also enclosed.
 
     The close of business on March 18, 1996 has been fixed as the record date
for the Meeting. Only stockholders of record at that time are entitled to notice
of and to vote at the Meeting and any adjournment or postponement thereof.
 
     In accordance with Delaware law, a list of Lear stockholders entitled to
vote at the Meeting will be available for examination at the offices of the
Company, 21557 Telegraph Road, Southfield, Michigan for ten days prior to the
Meeting, between the hours of 9:00 a.m. and 5:00 p.m., and at the Meeting.
 
     All stockholders are cordially invited to attend the Meeting. However, to
assure your representation at the Meeting, the Board of Directors of Lear urges
you to date, execute and return promptly the enclosed proxy to give voting
instructions with respect to your shares of common stock. The return of the
proxy will not affect your right to vote in person if you do attend the Meeting.
 
                                          Joseph F. McCarthy
                                          Vice President, Secretary
                                          and General Counsel
 
   
M
arch 27, 1996
    

<PAGE>   3
 
                               TABLE OF CONTENTS
 

<TABLE>
<S>                                                                                       <C>
INTRODUCTION...........................................................................     1
RECORD DATE, OUTSTANDING SHARES AND REQUIRED VOTE......................................     2
  Record Date and Outstanding Shares...................................................     2
  Required Vote........................................................................     2
ELECTION OF DIRECTORS (PROPOSAL NO. 1).................................................     2
MANAGEMENT.............................................................................     4
  Directors and Executive Officers.....................................................     4
  Security Ownership of Certain Beneficial Owners and Management.......................     7

  Compliance with Section 16(a) of the Securities and Exchange Act of 1934.............     8
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES......................................     9
EXECUTIVE COMPENSATION.................................................................    10
  Summary Compensation Table...........................................................    10
  Options Received In Last Fiscal Year.................................................    11
  Pension Plan and Benefits............................................................    11
  Supplemental Executive Retirement Plan...............................................    14
  AIHI Non-Qualified Pension Plan......................................................    14
  401(k) Savings Plan..................................................................    15
  1988 Stock Option Plan...............................................................    15
  1992 Stock Option Plan...............................................................    15
  1994 Stock Option Plan...............................................................    15
  AIHI 1992 Key Employee Stock Option Plan.............................................    16
  Employment and Other Agreements......................................................    16
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION............................    18
REPORT OF COMPENSATION COMMITTEE.......................................................    18
  Executive Compensation Policy........................................................    18
  Base Salary..........................................................................    18
  Annual Incentives....................................................................    19
  Long-Term Incentives.................................................................    20
  Chief Executive Officer Compensation.................................................    20
  Tax Treatment of Executive Compensation..............................................    21
PERFORMANCE GRAPH......................................................................    22
CERTAIN TRANSACTIONS...................................................................    23
  Acquisition of Automotive Industries Holding, Inc....................................    23
  Public Offering......................................................................    23
  Credit Agreement.....................................................................    23
  Stockholders and Registration Rights Agreement.......................................    23
  Management Equity Participation......................................................    24
APPROVAL OF AMENDMENT TO RESTATED CERTIFICATE OF INCORPORATION TO CHANGE CORPORATE NAME

  (PROPOSAL NO. 2).....................................................................    24
APPROVAL OF THE 1996 STOCK OPTION PLAN (PROPOSAL NO. 3)................................    25
  Eligibility/Terms of Options.........................................................    25
  Administration.......................................................................    26
  Tax Implications.....................................................................    27
  Options to be Granted Under the 1996 Stock Option Plan...............................    27
R
ATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
 
 (PROPOSAL NO. 4).....................................................................    28
</TABLE>


<PAGE>   4
 
   
                            LEAR SEATING CORPORATION
    
 
                              21557 TELEGRAPH ROAD
                           SOUTHFIELD, MICHIGAN 48034
                               ------------------
 
                                PROXY STATEMENT
                               ------------------
 
                                  INTRODUCTION
 
   
     This proxy statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Lear Seating Corporation ("Lear" or the
"Company") for use in voting at the Annual Meeting of Stockholders (the
"Meeting") to be held at The Management Education Center, Michigan State
University, 811 West Square Lake Road, Troy, Michigan 48098 on Thursday, May 9,
1996, at 10:00 a.m. Eastern Time, and at any postponement or adjournment
thereof, for the purposes set forth in the attached Notice of Annual Meeting.
This proxy statement, the attached Notice of Annual Meeting and the enclosed
proxy are being sent to stockholders on or about March 27, 1996.
    
 
     The Board of Directors does not intend to bring any matters before the
Meeting except those indicated in the Notice of Annual Meeting and does not know
of any matter which anyone else proposes to present for action at the Meeting.
If any other matters properly come before the Meeting, however, the persons
named in the enclosed proxy, or their duly constituted substitutes acting at the
Meeting, will be authorized to vote or otherwise act thereon in accordance with
their judgment on such matters.
 
     If proxies are properly dated, executed and returned, the shares they
represent will be voted at the Meeting in accordance with the instructions of
the stockholder. If no specific instructions are given, the shares will be voted
FOR the election of the nominees for director set forth herein, FOR the approval
of the amendment to the Company's Restated Certificate of Incorporation to
change the name of the Company to "Lear Corporation," FOR the approval of the
Lear 1996 Stock Option Plan (the "Option Plan") and FOR the ratification of the
appointment of Arthur Andersen LLP as independent auditors for the Company in
1996.
 
     A stockholder giving a proxy has the power to revoke it at any time prior
to its exercise by voting in person at the Meeting, by giving written notice to
the Secretary of the Company prior to the Meeting, or by giving a later dated
proxy. Attendance at the Meeting will not automatically revoke a proxy, but a
stockholder in attendance may request a ballot and vote in person, thereby
revoking a previously granted proxy.
 
     The solicitation of proxies from the stockholders is being made by the
Board of Directors and management of the Company, and the cost of solicitation,
including the cost of preparing and mailing the Proxy Statement, Proxy, Notice
of Annual Meeting and Annual Report to Stockholders is being paid for by the
Company. Proxies also may be solicited personally and by telephone by certain
officers and employees of the Company. In addition, Georgeson & Company, Inc.
has been retained for solicitation of all brokers and nominees at a cost of
approximately $5,000, plus customary out of pocket expenses. In addition, the
Company will request banks, brokers and other custodian nominees and fiduciaries
to supply proxy material to the beneficial owners of the Company's common stock,
par value $.01 per share ("Common Stock") of whom they have knowledge, and may
reimburse them for their expenses in so doing.
 
                                        1

<PAGE>   5
 
               RECORD DATE, OUTSTANDING SHARES AND REQUIRED VOTE
 
RECORD DATE AND OUTSTANDING SHARES
 
   
     At the close of business on March 18, 1996, the record date fixed for the
determination of stockholders entitled to notice of and to vote at the Meeting,
there were outstanding 56,586,408 shares of the Company's Common Stock, the only
class of voting securities outstanding. All record holders of Common Stock as of
the close of business on March 18, 1996 shall be entitled to vote. The presence
at the Meeting, in person or by proxy, of a majority of shares entitled to vote
shall constitute a quorum. Abstentions and broker non-votes shall be counted for
purposes of determining whether a quorum is present. Each share of Common Stock
is entitled to one vote, without cumulation, on each matter to be voted upon at
the Meeting.
    
 
REQUIRED VOTE
 
     Directors shall be elected by a plurality of the votes cast by the holders
of the Company's Common Stock. "Plurality" means that the four individuals who
receive the largest number of the votes of shares present in person or
represented by proxy at the Meeting and entitled to vote, shall be elected as
directors. Consequently, any shares not voted (whether by abstention, broker
non-vote or otherwise) have no impact in the election of directors except to the
extent that the failure to vote for an individual results in another individual
receiving a larger number of votes.
 
     The approval of the proposal to amend the Restated Certificate of
Incorporation to change the name of the Company will become effective upon the
affirmative vote of the majority of outstanding shares entitled to vote. Any
shares not voted (whether by abstention, broker non-vote or otherwise) have the
effect of a negative vote.
 
     The approval of the Option Plan and the ratification of the appointment of
the Company's independent auditors will become effective upon the affirmative
vote of the majority of shares present in person or represented by proxy at the
Meeting and entitled to vote. Any shares not voted (whether by abstention,
broker non-vote or otherwise) with respect to the Option Plan and the
appointment of independent auditors will have no effect on the outcome of the
vote.
 
     Under the rules of the New York Stock Exchange, brokers who hold shares in
street name have the authority to vote on certain routine matters on which they
have not received instructions from beneficial owners. Brokers holding shares of
Common Stock in street name who do not receive instructions from beneficial
owners by the date specified in the statement accompanying this proxy material
are entitled to vote on the election of directors, the proposed amendment to the
Restated Certificate of Incorporation, the Option Plan and the ratification of
the appointment of independent auditors.
 
                             ELECTION OF DIRECTORS
 
 
                               (PROPOSAL NO. 1)
 
     The Company has a classified Board of Directors consisting of three
classes. At each annual meeting of stockholders, directors are elected for a
full term of three years to succeed those directors whose terms are expiring.
 
     At the Meeting, the stockholders will elect four directors to hold office,
subject to the provisions of the Company's by-laws, until the Annual Meeting of
Stockholders in 1999 and until their successors shall have been duly elected and
qualified. In accordance with Delaware law and the Company's by-laws, Lear's
Board of Directors has nominated Robert E. Rossiter, James H. Vandenberghe,
Robert W. Shower and Alan H. Washkowitz to stand for election to the Board of
Directors. Unless contrary instructions are given, the shares represented by the
enclosed proxy will be voted FOR the election of Messrs. Rossiter, Vandenberghe,
Shower and Washkowitz, the nominees set forth below. Proxies cannot be voted for
a greater number of directors than the number of nominees named.
 
                                        2

<PAGE>   6
 
     Messrs. Rossiter, Vandenberghe, Shower and Washkowitz have consented to
being named in this proxy statement and to serve if elected. However, if any
nominee at the time of his election is unable or unwilling to serve or is
otherwise unavailable for election and, as a result, another nominee is
designated by the Board of Directors, the persons named in the enclosed proxy,
or their substitutes, will have discretion and authority to vote or refrain from
voting for such nominee in accordance with their judgment.
 
     The nominees for election as director, together with certain information
about them, are set forth below.
 

<TABLE>
<CAPTION>
                                                  DIRECTOR
                    NAME                  AGE      SINCE                   POSITION
        -----------------------------     ---     --------      -------------------------------
        <S>                               <C>     <C>           <C>
        Robert E. Rossiter...........     50        1988        President, Chief Operating
                                                                Officer and Director
        James H. Vandenberghe........     46        1995        Executive Vice President, Chief
                                                                Financial Officer and Director
        Robert W. Shower.............     58        1993        Director
        Alan H. Washkowitz...........     55        1994        Director
</TABLE>

 
     Robert E. Rossiter. Mr. Rossiter became President of the Company in 1984
and a director and the Chief Operating Officer of the Company in 1988. He joined
Lear Siegler, Inc. ("LSI") in 1971 in the Material Control Department of the
Automotive Division, then joined the Metal Products Division of LSI as
Production Control Manager, and subsequently moved into sales and sales
management. In 1979, he joined the General Seating Division as Vice President of
Sales and worked in that position, as well as Vice President of Operations,
until 1984.
 
     James H. Vandenberghe. Mr. Vandenberghe is Executive Vice President, Chief
Financial Officer and a director of the Company. He was appointed Executive Vice
President of the Company in 1993 and became a director in November 1995. Mr.
Vandenberghe also served as a director of the Company from 1988 until the merger
of Lear Holdings Corporation ("Holdings"), Lear's former parent, into Lear (the
"Holdings Merger"), which occurred in 1993. Mr. Vandenberghe previously served
as Senior Vice President -- Finance, Secretary and Chief Financial Officer of
the Company since 1988. He joined the Automotive Division of LSI in 1973 as a
financial analyst and was promoted to positions at the Metal Products Division
and the Automotive Group office, and in 1978 was named the Vice President --
Finance for the Plastic Division. In 1983, Mr. Vandenberghe was appointed Vice
President -- Finance for the General Seating Division. Prior to 1988, Mr.
Vandenberghe had been responsible for project management, United States
operations, and international operations of the Company.
 
     Robert W. Shower. Mr. Shower became a director of the Company on December
31, 1993, upon consummation of the Holdings Merger. From November 1991 until the
Holdings Merger, Mr. Shower was a Director of Holdings. Mr. Shower was appointed
Senior Vice President and Chief Financial Officer of Seagull Energy Corporation
in March 1992, elected a director in May 1992 and named Executive Vice President
in 1994. Prior thereto, he served as Senior Vice President of Finance and Chief
Financial Officer at AmeriServ in 1990 and 1991 and as a Managing Director of
Corporate Finance with Lehman Brothers Inc. from 1986 to 1990. From 1964 to
1986, Mr. Shower served in a variety of financial executive positions with The
Williams Companies, where he was a member of the Board of Directors and
Executive Vice President of Finance and Administration from 1977 to 1986. Mr.
Shower also serves as a director of Highlands Insurance Group, Inc.
 
     Alan H. Washkowitz. Mr. Washkowitz became a director of the Company in
1994. Mr. Washkowitz has been a Managing Director of Lehman Brothers Inc. or its
predecessors since 1978. Mr. Washkowitz also serves as a director of K & F
Industries, Inc., Illinois Central Corporation and McBrides, Ltd.
 
                                 RECOMMENDATION
 
 
              THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE
                ELECTION OF EACH OF ITS NOMINEES TO SERVE ON THE
                         COMPANY'S BOARD OF DIRECTORS.
 
                                        3

<PAGE>   7
 
                                   MANAGEMENT
 
DIRECTORS AND EXECUTIVE OFFICERS
 
     The following table sets forth the names, ages and positions with the
Company of the Company's directors and executive officers.
 

<TABLE>
<CAPTION>
               NAME                   AGE                         POSITION
- -----------------------------------   ---    ---------------------------------------------------
<S>                                   <C>    <C>
Kenneth L. Way(a)..................   56     Chairman of the Board and Chief Executive Officer
Robert E. Rossiter.................   50     President, Chief Operating Officer and Director
James H. Vandenberghe..............   46     Executive Vice President, Chief Financial Officer
                                             and Director
James A. Hollars...................   51     Senior Vice President and President -- BMW Division
Roger Alan Jackson.................   49     Senior Vice President -- Human Resources and
                                             Corporate Relations
Frederick F. Sommer................   52     Senior Vice President and President -- Automotive
                                             Industries Division
Gerald G. Harris...................   62     Vice President and President -- GM Division
Richard N. Hodgson.................   48     Vice President and President -- Components Division
Terrence E. O'Rourke...............   49     Vice President and President -- Ford Division
Joseph F. McCarthy.................   52     Vice President, Secretary and General Counsel
Donald J. Stebbins.................   38     Vice President, Treasurer and Assistant Secretary
Gian Andrea Botta(b)...............   42     Director
Eliot M. Fried(a)..................   63     Director
Jeffrey P. Hughes(b)...............   55     Director
Larry W. McCurdy(a)................   60     Director
Robert W. Shower...................   58     Director
David P. Spalding(b)...............   41     Director
James A. Stern(b)..................   45     Director
Alan H. Washkowitz.................   55     Director
</TABLE>

 
- -------------------------
(a) Term as a director expires in 1998.
 
(b) Term as a director expires in 1997.
 
     Set forth below is a description of the business experience of each
director and executive officer of the Company other than Messrs. Rossiter,
Vandenberghe, Shower and Washkowitz, whose biographies are set out in the
section entitled "Election of Directors."
 
   
     Kenneth L. Way. Mr. Way was elected to and has held the position of
Chairman of the Board and Chief Executive Officer of the Company since 1988.
Prior to this time he served as Corporate Vice President, Automotive Group for
LSI since October 1984. During the previous six years, Mr. Way was President of
LSI's General Seating Division. Before this position, he was President of LSI's
Metal Products Division in Detroit for three years. Other positions held by Mr.
Way during his 30 years with LSI include Manufacturing Manager of the Metal
Products Division and Manager of Production Control for the Automotive Division
in Detroit. Mr. Way also serves as a director of Hayes Wheels International,
Inc.
    
 
     James A. Hollars. Mr. Hollars is Senior Vice President and President -- BMW
Division of the Company. He was appointed to this position in November 1995.
Previously he served as Senior Vice President and President -- International
Operations since November 1994. Prior to serving in that position, he was Senior
Vice President -- International Operations of the Company since 1993. He was
previously promoted to Vice President -- International upon the sale of LSI's
Power Equipment Division to Lucas Industries in 1988. Mr. Hollars joined LSI's
Metal Products Division in 1973 as the Manufacturing Manager and later served as
Vice President -- Manufacturing for its No-Sag Spring Division. In 1979, he was
named President of the Foam Products Division and was subsequently promoted to
President at the Anchorlok Division in 1985 and the Power Equipment Division in
1986.
 
                                        4

<PAGE>   8
 
     Roger Alan Jackson. Mr. Jackson was elected as Senior Vice President --
Human Resources and Corporate Relations in October 1995. Previously he served as
Vice President -- Human Resources for Allen Bradley, a wholly-owned subsidiary
of Rockwell International. Mr. Jackson was employed by Rockwell International or
its subsidiaries from December 1977 to September 1995.
 
     Frederick F. Sommer. Mr. Sommer was elected Senior Vice President and
President -- Automotive Industries Division of the Company in August 1995.
Previously he served as President of Automotive Industries Holding, Inc.
("AIHI") since November 1991 and Chief Executive Officer of AIHI since May 1994.
From March 1992 to May 1994, Mr. Sommer served as Chief Operating Officer of
AIHI. Mr. Sommer also served as Executive Vice President of AIHI from October
1990 until November 1991. Prior thereto, he served as Vice President --
Manufacturing and Purchasing of the U.S. subsidiary of Nissan from January 1987
to October 1990.
 
     Gerald G. Harris. Mr. Harris is Vice President and President -- GM Division
of the Company. He was promoted to this position in November 1994. Prior to
serving in this position, he was Vice President and General Manager -- GM
Operations since March 1994. Previously, Mr. Harris served as Director -- Ford
Business Unit from March 1992 to March 1994, Director of Sales from August 1990
to March 1992 and Sales Manager from January 1989 to August 1990. Mr. Harris has
held a variety of managerial positions with the Company and LSI since 1962.
 
     Richard N. Hodgson. Mr. Hodgson is Vice President and President --
Components Division of the Company. He was promoted to this position in November
1994. Prior to serving in this position, he was Vice President -- Component
Operations since April 1993. Previously he served as Plant Manager for Lear's
subsidiary, Lear Seating Canada Ltd., from 1982.
 
     Terrence E. O'Rourke. Mr. O'Rourke is Vice President and President -- Ford
Division of the Company. He was promoted to this position in November 1995.
Previously he served as Vice President and President -- Chrysler Division since
November 1994. Prior to serving in this position, he was Director -- Strategic
Planning since October 1994. Prior to joining Lear, Mr. O'Rourke was employed by
Ford Motor Company as Supply Manager -- Climate Control Department from 1992 and
Procurement Operations Manager from 1988.
 
     Joseph F. McCarthy. Mr. McCarthy was elected Vice President, Secretary and
General Counsel of Lear in April 1994. Prior to joining Lear, Mr. McCarthy
served as Vice President -- Legal and Secretary for both Hayes Wheels
International, Inc. and Kelsey-Hayes Company. Prior to joining Hayes Wheels
International, Inc. and Kelsey-Hayes Company, Mr. McCarthy was a partner in the
law firm of Kreckman & McCarthy from 1973 to 1983.
 
     Donald J. Stebbins. Mr. Stebbins is Vice President, Treasurer and Assistant
Secretary of the Company. He joined the Company in June 1992 from Bankers Trust
Company, New York, where he was a Vice President for four years. Prior to his
tenure at Bankers Trust Company, Mr. Stebbins held positions at Citibank, N.A.
and The First National Bank of Chicago.
 
     Gian Andrea Botta. Mr. Botta became a director of the Company on December
31, 1993, upon consummation of the Holdings Merger. Prior to the Holdings
Merger, Mr. Botta was a director of Holdings since 1993. Mr. Botta has been
President of EXOR America Inc., an affiliate of FIMA Finance Management Inc.
("FIMA"), since February 1994 and previously was President of IFINT-USA Inc., an
affiliate of FIMA, since 1993 and was Vice President of Acquisitions of
IFINT-USA Inc. for more than five years prior thereto. Mr. Botta also serves as
a director of ICF Kaiser International, Inc., Constitution Re Inc. and Western
Industries Inc., and as a trustee of Corporate Property Investors.
 
     Eliot M. Fried. Mr. Fried became a director of the Company on December 31,
1993, upon consummation of the Holdings Merger. From September 1991 until the
Holdings Merger, Mr. Fried was a Director of Holdings. He has been a Managing
Director of Lehman Brothers Inc. for more than five years. Mr. Fried is a
director of Bridgeport Machines, Inc., Energy Ventures, Inc., Sun Distributors,
L.P., Vernitron Corporation and Walter Industries, Inc.
 
                                        5

<PAGE>   9
 
     Jeffrey P. Hughes. Mr. Hughes became a director of the Company in September
1991. Mr. Hughes left Lehman Brothers Inc. to become Vice Chairman of The
Cypress Group L.L.C. ("The Cypress Group"), a private investment company, in
1994. Prior to this time, he was a Managing Director of Lehman Brothers Inc. for
more than five years.
 
   
     Larry W. McCurdy. Mr. McCurdy became a director of the Company in 1988. Mr.
McCurdy was named Executive Vice President, Operations of Cooper Industries,
Inc. in April 1994. Prior to this time, Mr. McCurdy was the President and Chief
Executive Officer of Moog Automotive, Inc. since November 1985, and prior
thereto President and Chief Operating Officer of Echlin, Inc. ("Echlin"), since
August 1983, after serving as Vice President of Finance from February 1983.
Prior to joining Echlin, he served in various managerial positions with Tenneco,
Inc. He was formerly Chairman of the Board of Directors of the Motor and
Equipment Manufacturing Association. Mr. McCurdy also serves as a director of
Mohawk Industries, Inc., Breed Technologies, Inc. and as a trustee of Millikin
University.
    
 
     David P. Spalding. Mr. Spalding became a director of the Company in
September 1991. Mr. Spalding left Lehman Brothers Inc. to become Vice Chairman
of The Cypress Group in 1994. Prior to this time, he was Managing Director of
Lehman Brothers Inc. from February 1991. Previously, he held the position of
Senior Vice President of Lehman Brothers Inc. from September 1988 to February
1991. From April 1987 to September 1988, he was Senior Vice President of General
Electric Capital Corporation Corporate Finance Group, Inc. Prior to 1987 he was
a Vice President of The First National Bank of Chicago. Mr. Spalding is also a
director of Parisian, Inc.
 
     James A. Stern. Mr. Stern became a director of the Company on December 31,
1993, upon consummation of the Holdings Merger. From September 1991 until the
Holdings Merger, Mr. Stern was a director of Holdings. Mr. Stern left Lehman
Brothers Inc. to become Chairman of The Cypress Group in 1994. Prior to this
time, he was a Managing Director of Lehman Brothers Inc. for more than five
years. He is also a director of K&F Industries Inc., Infinity Broadcasting
Corporation, R.P. Scherer Corporation and Noel Group, Inc.
 
     Directors who are not employees of the Company, Lehman Brothers Inc. or The
Cypress Group receive a fee of $20,000 per annum plus $1,000 for each meeting of
the Board of Directors or any committee thereof that they attend. Directors are
also reimbursed for their expenses incurred in attending meetings.
 
                                        6

<PAGE>   10
 

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 
     The following table sets forth, as of the close of business on March 18,
1996 (except as set forth below), certain information with respect to the
beneficial ownership of Common Stock by (i) each director of the Company, (ii)
the Chief Executive Officer and the four other most highly compensated executive
officers of Lear whose compensation exceeded $100,000 in the Company's last
completed fiscal year (collectively, the "named executive officers"), (iii) all
executive officers and directors as a group and (iv) each stockholder who is
known to the Company to be the beneficial owner, as defined in Rule 13d-3 under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), of more
than 5% of the outstanding Common Stock. Each of the persons listed below has
sole voting and investment power with respect to such shares, unless otherwise
indicated.
 

<TABLE>
<CAPTION>
 
                                                              NUMBER OF SHARES           PERCENTAGE
                                                               OF COMMON STOCK            OF COMMON
                                                              OWNED BENEFICIALLY            STOCK
                                                              ------------------         ------------
<S>                                                           <C>                        <C>
Lehman Funds(1).............................................      16,471,224                29.1%
FMR Corp.(2)................................................       6,970,400                 12.3
The TCW Group, Inc.(3)......................................       5,319,288                  9.4
FIMA Finance Management Inc.(4).............................       3,497,544                  6.2
Kenneth L. Way(5)(6)........................................         453,749(7)                 *
Robert E. Rossiter(5)(6)....................................         266,671(8)                 *
James H. Vandenberghe(5)(6).................................         171,451(9)                 *
Frederick F. Sommer(6)......................................          14,997(10)                *
James A. Hollars(6).........................................         210,243(11)                *
Robert W. Shower(5).........................................           5,000                    *
Larry W. McCurdy(5).........................................           2,000                    *
Total Executive Officers and Directors as a group (19
  individuals)..............................................       1,192,363(12)              2.1
</TABLE>

 
- -------------------------
  *  Less than 1%
 
 (1) These shares of Common Stock are held by four merchant banking partnerships
     affiliated with Lehman Brothers Holdings Inc. (collectively, the "Lehman
     Funds"). The number of shares beneficially owned by the Lehman Funds
     includes 5,916,258 shares of Common Stock owned by Lehman Brothers Merchant
     Banking Portfolio Partnership L.P. and 4,021,298 shares of Common Stock
     owned by Lehman Brothers Capital Partners II, L.P. (each located at Three
     World Financial Center, New York, New York 10285) and 1,626,544 shares of
     Common Stock owned by Lehman Brothers Offshore Investment Partnership L.P.
     and 4,907,124 shares of Common Stock owned by Lehman Brothers Offshore
     Investment Partnership -- Japan L.P. (each located at Clarendon House,
     Church Street, Hamilton HMCX, Bermuda). Lehman Brothers Merchant Banking
     Partners Inc. and Lehman Brothers II Investment Inc. are the general
     partners of Lehman Brothers Merchant Banking Portfolio Partnership L.P. and
     Lehman Brothers Capital Partners II, L.P., respectively, and Lehman
     Brothers Offshore Partners Ltd. is the general partner of Lehman Brothers
     Offshore Investment Partnership L.P. Each such general partner may be
     deemed to own beneficially the shares directly owned by the entity of which
     it is the general partner. Each such general partner is an indirect
     wholly-owned subsidiary of Lehman Brothers Group Inc., which is a
     wholly-owned subsidiary of Lehman Brothers Holdings Inc. Each of the
     partnerships may be deemed to share with Lehman Brothers Merchant Banking
     Partners Inc. the power to vote and the power to dispose of shares owned by
     such partnership. The address of Lehman Brothers Merchant Banking Partners
     Inc. is Three World Financial Center, New York, New York 10285.
 
 (2) The Company has been informed by FMR Corp. in a report dated December 11,
     1995 on Schedule 13G, as amended by Amendment No. 1 thereto on February 14,
     1996, that the number of shares owned by FMR Corp. include (i) 6,763,800
     shares of Common Stock owned by Fidelity Management & Research Company
     ("Fidelity"), a wholly-owned subsidiary of FMR Corp. and an investment
     advisor registered under Section 203 of the Investment Company Act of 1940
     and (ii) 206,600 shares of Common Stock
 
                                        7

<PAGE>   11
 
     owned by Fidelity Management Trust Company ("Fidelity Bank"), a
     wholly-owned subsidiary of FMR Corp. and a bank as defined in Section
     3(a)(6) of the Exchange Act. FMR Corp. and Edward C. Johnson 3d, Chairman
     of FMR Corp. each has sole power to dispose of the 6,763,800 shares of
     Common Stock owned by Fidelity and the 206,600 shares of Common Stock owned
     by Fidelity Bank and the sole power to vote or to direct the voting of
     77,000 shares of Common Stock owned by Fidelity Bank. The Board of Trustees
     of Fidelity has the sole power to vote or direct the voting of the
     6,763,800 shares of Common Stock owned by Fidelity. The address of FMR
     Corp., Fidelity and Fidelity Bank is 82 Devonshiare Street, Boston,
     Massachusetts 02109.
 
 (3) The Company has been informed by The TCW Group, Inc. in a report dated as
     of February 12, 1996 on Schedule 13G that the shares beneficially owned by
     The TCW Group, Inc. are held by the following subsidiaries of The TCW
     Group, Inc.: Trust Company of the West; TCW Asset Management Company; and
     TCW Funds Management, Inc. The address of The TCW Group, Inc. is 865
     Figueroa Street, Los Angeles, CA 90017. In addition, Robert Day may be
     deemed to control The TCW Group, Inc. Consequently, Robert Day may be
     deemed to beneficially own the shares owned by The TCW Group, Inc. The
     address of Robert Day is 200 Park Avenue, Suite 2200, New York, New York
     10166.
 
 (4) FIMA Finance Management Inc. is a wholly-owned subsidiary of EXOR Group
     S.A. ("EXOR Group") (formerly IFINT S.A.). EXOR Group, a Luxembourg
     corporation, is the international investment holding company of IFI S.p.A.,
     the parent company of the Agnelli Group. The address of FIMA is Wickam's
     Cay, Road Town, Tortola, British Virgin Islands.
 
 (5) The individual is a director of the Company.
 
 (6) The individual is a named executive officer of the Company.
 
 (7) Includes 268,025 shares of Common Stock issuable under currently
     exercisable options.
 
 (8) Includes 160,741 shares of Common Stock issuable under currently
     exercisable options.
 
 (9) Includes 99,088 shares of Common Stock issuable under currently exercisable
     options.
 
(10) Consists of 14,997 shares of Common Stock issuable under currently
     exercisable options.
 
(11) Includes 147,543 shares of Common Stock issuable under currently
     exercisable options.
 
(12) The number of shares includes 725,406 shares of Common Stock issuable under
     currently exercisable options, but excludes 627,000 shares of Common Stock
     issuable upon exercise of options granted pursuant to the 1992 Stock Option
     Plan and 197,000 shares of Common Stock issuable upon exercise of options
     granted pursuant to the 1994 Stock Option Plan. See "Certain Transactions
     -- Management Equity Participation" below.
- ------------------------
 

COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES AND EXCHANGE ACT OF 1934
 
     Section 16(a) of the Exchange Act requires the Company's executive officers
and directors and persons who beneficially own more than ten percent of a
registered class of the Company's equity securities (collectively, the
"reporting persons") to file reports of ownership and changes in ownership with
the Securities and Exchange Commission and to furnish the Company with copies of
these reports. Based on the Company's review of the copies of these reports
received by it, and written representations received from reporting persons with
respect to the filing of Form 5, the Company believes that all filings required
to be made by the reporting persons for the fiscal year ended December 31, 1995
were made on a timely basis.
 
                                        8

<PAGE>   12
 
 
              MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES
 
     The Board of Directors has established permanent Audit, Compensation and
Executive committees. The membership of each of these committees is determined
from time to time by the Board of Directors and, to date, only non-management
directors have served on the Audit Committee and the Compensation Committee. The
Audit Committee, which held two meetings during 1995, consists of Messrs. Shower
and McCurdy, with Mr. Shower serving as Chairman. The Compensation Committee,
which held two meetings during 1995, consists of Messrs. Spalding, Hughes and
McCurdy, with Mr. Spalding serving as Chairman. The Executive Committee, which
held no meetings during 1995, consists of Messrs. Stern, Spalding, Hughes, Way
and Rossiter, with Mr. Stern serving as Chairman.
 
     The responsibilities of the Audit Committee are: (i) to participate with
management of the Company in selecting and recommending to the Board of
Directors the independent auditors to be retained to conduct the annual audit of
the Company; (ii) to review with management and auditors annually the proposed
scope of the independent audit; (iii) to review the non-audit services performed
by the independent auditors to ensure that performance of such services does not
impair the independence of the auditors; (iv) to review with management the
periodic examinations made by regulatory authorities and any replies required in
connection with such examinations; (v) to review with management at least
annually the role and scope of the work performed by the Company's internal
auditors; (vi) to review the periodic summary reports of audits performed by the
internal auditors; and (vii) to advise the Board of Directors on any
developments which the Audit Committee believes should be considered by the
Board of Directors.
 
     The Compensation Committee reviews and approves salaries, bonuses and other
benefits relating to compensation of the executive officers of the Company and
administers the Company's stock option plans. The Compensation Committee also
approves the Company's compensation policies and compensation programs.
 
     The Executive Committee, during intervals of the meetings of the Board of
Directors, may exercise certain powers of the Board of Directors in the general
supervision and control of the business and affairs of the Company.
 
     The Company's Board of Directors met seven times during fiscal 1995. Two
directors participated in fewer than 75% of the total number of meetings of the
Board of Directors. Messrs. Fried and Washkowitz each attended 57% of the
meetings of the Board of Directors.
 
                                        9

<PAGE>   13
 

                             EXECUTIVE COMPENSATION
 
SUMMARY COMPENSATION TABLE
 
     The following table sets forth annual and long-term compensation for the
named executive officers in the fiscal year ended December 31, 1995, as well as
certain other compensation information for the named executive officers during
the fiscal periods indicated.
 
                           SUMMARY COMPENSATION TABLE
 

<TABLE>
<CAPTION>
                                                                                           LONG-TERM COMPENSATION(6)
                                                                                ------------------------------------------------
                                                                                        AWARDS
                                           ANNUAL COMPENSATION                  -----------------------          PAYOUTS
                             ------------------------------------------------   RESTRICTED   SECURITIES   ----------------------
                                                                 OTHER ANNUAL     STOCK      UNDERLYING    LTIP      ALL OTHER
          NAME AND                                    BONUS      COMPENSATION     AWARDS      OPTIONS/    PAYOUTS   COMPENSATION
    PRINCIPAL POSITIONS      PERIOD(1)   SALARY($)     ($)           ($)           (#)        SARS(#)       ($)         ($)
- ---------------------------- ---------   ---------   --------    ------------   ----------   ----------   -------   ------------
<S>                          <C>         <C>         <C>         <C>            <C>          <C>          <C>       <C>
Kenneth L. Way..............    1995     $585,000    $900,000(2)                                                      $ 24,642(7)
  Chairman of the Board and     1994      502,000     830,000(2)                               46,000                   18,128(7)
  Chief Executive Officer       1993      475,000     462,500(3)   $830,000(5)                                           9,750(7)

Robert E. Rossiter..........    1995      420,000     625,000(2)                                                        14,080(8)
  President, Chief Operating    1994      365,000     585,000(2)                               27,000                   21,163(8)
  Officer and Director          1993      345,000     335,000(3)    830,000(5)                                           4,714(8)

James H. Vandenberghe.......    1995      304,000     450,000(2)                                                        12,851(9)
  Executive Vice President,     1994      261,000     375,000(2)                               18,000                   10,865(9)
  Chief Financial Officer       1993      238,333     215,000(3)    277,000(5)                                           2,539(9)
    and
  Director

Frederick F. Sommer.........    1995      131,256     525,000(4)
  Senior Vice President and     1994
  President -- Automotive       1993
  Industries Division

James A. Hollars............    1995      230,000     125,000(2)                                                        13,176(10)
  Senior Vice President and     1994      230,000     150,000(2)                               14,000                   10,726(10)
  President -- BMW Division     1993      216,500     130,500(3)    277,000(5)                                           3,323(10)
</TABLE>

 
- -------------------------
 (1) The Company changed its fiscal year end from June 30 to December 31,
     effective December 31, 1994. For purposes of comparison, the information
     presented in the above table is for the calendar years ended December 31,
     1995, 1994 and 1993.
 
 (2) Pursuant to the Company's Senior Executive Incentive Compensation Plan, the
     Company awards annual bonuses to its executive officers based on the
     attainment of financial and nonfinancial objectives. All bonuses were
     earned pursuant to the Senior Executive Incentive Compensation Plan, except
     that Messrs. Way, Rossiter and Vandenberghe received additional bonuses for
     1995 of $150,000, $100,000 and $50,000, respectively and for 1994 of
     $300,000, $200,000 and $103,000, respectively. Such additional bonuses were
     based on criteria similar to that considered under the Senior Executive
     Incentive Compensation Plan. For a description of the Senior Executive
     Incentive Compensation Plan and the criteria used for the determination of
     awards, see "Compensation Committee Report -- Annual Incentives."
 
 (3) This amount includes bonuses awarded pursuant to the Senior Executive
     Compensation Plan for the six months ended December 31, 1993 and 50% of the
     bonus awarded pursuant to the Senior Executive Compensation Plan for the
     Company's fiscal year ended June 30, 1993.
 
 (4) This amount includes $175,000 awarded pursuant to the Company's Senior
     Executive Incentive Compensation Plan and a $350,000 payment in connection
     with the Company's acquisition of AIHI. See "Compensation Committee Report
     -- Annual Incentives" and "Certain Transactions -- Acquisition of
     Automotive Industries Holding, Inc."
 
 (5) Consists of one-time payments for past services.
 
 (6) The Company does not have restricted stock award plans or long-term
     incentive plans and has not granted stock appreciation rights ("SARs").
 
 (7) Represents: 401(k) plan matching contributions of $1,150 for each of 1995,
     1994 and 1993, respectively; life insurance premiums paid by the Company of
     $14,215, $8,798 and $8,600 for 1995, 1994 and 1993, respectively; and
     payments of $9,277 and $8,180 for expenses related to financial planning in
     1995 and 1994, respectively.
 
 (8) Represents: 401(k) plan matching contributions of $1,150 for each of 1995,
     1994 and 1993, respectively; life insurance premiums paid by the Company of
     $3,653, $3,653 and $3,564 for 1995, 1994 and 1993, respectively; and
     payments of $9,277 and $16,360 for expenses related to financial planning
     in 1995 and 1994, respectively.
 
 (9) Represents: 401(k) plan matching contributions of $1,150 for each of 1995,
     1994 and 1993, respectively; life insurance premiums paid by the Company of
     $2,424, $1,535 and $1,389 for 1995, 1994 and 1993, respectively; and
     payment of $9,277 and $8,180 for expenses related to financial planning in
     1995 and 1994, respectively.
 
(10) Represents 401(k) plan matching contributions of $1,150 for each of 1995,
     1994 and 1993, respectively; life insurance premiums paid by the Company of
     $3,521, $2,306 and $2,173 for 1995, 1994 and 1993, respectively; and
     payment of $8,505 and $7,270 for expenses related to financial planning in
     1995 and 1994, respectively.
 
                                       10

<PAGE>   14
 
OPTIONS RECEIVED IN LAST FISCAL YEAR
 
     The following table provides information, with respect to the named
executive officers of the Company, concerning the receipt of options during the
fiscal year ended December 31, 1995, and the potential value of unexercised
options on an aggregated basis.
 
                    OPTIONS RECEIVED IN THE LAST FISCAL YEAR
 

<TABLE>
<CAPTION>
                                                                                          POTENTIAL REALIZABLE
                                                                                                  VALUE
                                                                                            AT ASSUMED ANNUAL
                                 NUMBER OF                                                        RATES
                                 SECURITIES     % OF TOTAL                                   OF STOCK PRICE
                                 UNDERLYING      OPTIONS                                      APPRECIATION
                                  OPTIONS      RECEIVED BY     EXERCISE                      FOR OPTION TERM
                                  RECEIVED     EMPLOYEES IN      PRICE      EXPIRATION    ---------------------
             NAME                  (#)(1)      FISCAL YEAR     ($/SHARE)       DATE        5%($)        10%($)
- ------------------------------   ----------    ------------    ---------    ----------    --------     --------
<S>                              <C>           <C>             <C>          <C>           <C>          <C>
Kenneth L. Way................         --            --              --             --          --           --
Robert E. Rossiter............         --            --              --             --          --           --
James H. Vandenberghe.........         --            --              --             --          --           --
Frederick F. Sommer...........     14,997           5.2%        $ 23.12       8-8-2004    $328,152     $709,572
James A. Hollars..............         --            --              --             --          --           --
</TABLE>

 
- -------------------------
(1) Those options were originally granted by AIHI under its 1992 Key Employee
    Stock Option Plan and were converted into the right to purchase Lear Common
    Stock in connection with the AIHI acquisition. For a discussion of the terms
    of the options received, see "Executive Compensation -- AIHI 1992 Key
    Employee Stock Option Plan" below.
 
    The following table provides information, with respect to the named
executive officers, concerning the exercise or settlement of stock options
during the fiscal year ended December 31, 1995, and unexercised stock options
held as of December 31, 1995.
 
                AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
                       AND FISCAL YEAR-END OPTION VALUES
 

<TABLE>
<CAPTION>
                                                               NUMBER OF UNEXERCISED        VALUE OF UNEXERCISED
                                                                    OPTIONS AT              IN-THE-MONEY OPTIONS
                              SHARES ACQUIRED     VALUE          DECEMBER 31, 1995         AT DECEMBER 31, 1995(1)
                                ON EXERCISE      REALIZED    -------------------------    -------------------------
           NAME                     (#)            ($)       EXERCISABLE/UNEXERCISABLE    EXERCISABLE/UNEXERCISABLE
- ---------------------------   ---------------    --------    -------------------------    -------------------------
<S>                           <C>                <C>         <C>                          <C>
Kenneth L. Way.............         --              --            388,245/227,500          $  10,758,269/$4,997,000
Robert E. Rossiter.........         --              --            232,947/142,500              6,454,961/ 3,136,500
James H. Vandenberghe......         --              --            147,543/103,800              4,088,417/ 2,302,200
Frederick F. Sommer........         --              --             14,997/      0                88,182/          0
James A. Hollars...........         --              --            147,543/ 80,000              4,088,417/ 1,395,000
</TABLE>

 
- -------------------------
(1) Based on a closing price of $29.00 per share on December 29, 1995 as
    reported by the New York Stock Exchange.
 
PENSION PLAN AND BENEFITS
 
    The named executive officers (as well as other employees of Lear), other
than Frederick F. Sommer, participate in the Lear Seating Corporation Pension
Plan (the "Pension Plan"). The Pension Plan is a qualified pension plan under
the Internal Revenue Code of 1986, as amended (the "Code"), which is integrated
with Social Security benefits. Any active employee of Lear who was a participant
in the Lear Siegler Diversified Holding Corp. Pension Plan on September 29,
1988, is eligible to participate, and each other eligible employee (certain
non-union employees not covered by another pension plan or hourly 401(k) plan
and certain union employees) becomes a participant on the July 1st or January
1st following completion of one year of service. The benefits are funded by
employer contributions that are determined under accepted actuarial principals
and applicable United States federal tax laws.
 
                                       11

<PAGE>   15
 
     The Pension Plan contains four sets of benefit provisions: the Lear
provisions, the Fabricated Products Operations ("FPO") provisions, the Progress
Pattern provisions and the FAVESA provisions. The Lear provisions are the
principal provisions of the Pension Plan (see below). The FPO and Progress
Pattern provisions are grandfathering provisions carried forward from the Lear
Siegler Diversified Holdings Corp. Pension Plan, and apply to those participants
who were covered by such provisions of that plan. The FAVESA provisions are
grandfathering provisions carried forward from the Ford General Retirement Plan,
and apply to those participants who were covered by such provisions when Lear
purchased from Ford Motor Company its North American seat cover and seat systems
business. All named executive officers, other than Frederick F. Sommer, are
covered by either the Lear or FPO provisions.
 
     Under the Lear provisions, pension benefits are based on a participant's
"final average earnings," which is the average compensation for the highest five
consecutive calendar year earnings of the last 15 years of employment.
Compensation includes all cash compensation reported for federal income tax
purposes excluding sales incentive bonuses. Assuming retirement at age 65, the
annual retirement benefit (based on a life annuity) is equal to the greater of:
 
          a. 1.10% times final average earnings times years of credited service
     (to a maximum of 30 years) plus 0.65% times final average earnings in
     excess of covered compensation times credited service (to a maximum of 30
     years), or
 
          b. $177.00 times years of credited service.
 
     Covered compensation is a 35 year average of the Social Security Taxable
Wage Base as defined in I.R.S. Notice 89-70.
 
     Participants who are former FPO employees (as of December 31, 1985), or are
former employees of Progress Pattern Corporation (as of November 30, 1984), are
eligible to have their pension determined through the application of a floor
provision, which guarantees a minimum pension benefit. Pension benefits will be
calculated in two ways, using first the new Pension Plan formula, and then using
the floor provision. If the pension benefits are greater by applying the floor
provision, then the participants will receive benefits under the floor
provision.
 
     Assuming retirement at age 65, by applying the floor provision the benefit
will be:
 
          a. 0.8% times final average earnings times years of credit service
     plus
 
          b. 0.65% times final average earnings in excess of $10,000 times years
     of credited service (to a maximum of 35 years).
 
     Participants formerly covered by the Progress Pattern provisions were
covered by the FPO provisions on and after October 1, 1989.
 
     The benefits under the Pension Plan become vested if a participant was
fully vested in the Lear Siegler Diversified Holdings Corp. Pension Plan, or
upon the attainment of five years of combined vesting service under the Lear
Siegler Diversified Holdings Corp. Pension Plan, and the Pension Plan, or under
completion of five years of service.
 
                                       12

<PAGE>   16
 
     The following table indicates estimated annual benefits payable upon normal
retirement at age 65, based on a life annuity for various compensation levels
and years of service classification, under the Lear provisions.
 
                               PENSION PLAN TABLE
 

<TABLE>
<CAPTION>
                                                                       YEARS OF SERVICE*
                                        COVERED       ---------------------------------------------------
ANNUAL COMPENSATION                   COMPENSATION      10         15         20         25         30
- -----------------------------------   ------------    -------    -------    -------    -------    -------
<S>                                   <C>             <C>        <C>        <C>        <C>        <C>
$200,000...........................     $ 61,200      $22,272    $33,408    $44,544    $55,680    $66,816
 250,000...........................       61,200       22,272     33,408     44,544     55,680     66,816
 300,000...........................       61,200       22,272     33,408     44,544     55,680     66,816
 350,000...........................       61,200       22,272     33,408     44,544     55,680     66,816
 400,000...........................       61,200       22,272     33,408     44,544     55,680     66,816
 450,000...........................       61,200       22,272     33,408     44,544     55,680     66,816
 500,000...........................       61,200       22,272     33,408     44,544     55,680     66,816
</TABLE>

 
- -------------------------
* The maximum annual retirement benefit under the Pension Plan for 1995 is
  $120,000 and the maximum annual compensation which can be considered in the
  determination of average compensation for 1995 is $150,000.
 
     The following table indicates estimated annual benefits payable upon normal
retirement at age 65, based on a life annuity for various compensation levels
and years of service classifications under FPO provisions:
 
                               PENSION PLAN TABLE
 

<TABLE>
<CAPTION>
                                                                   YEARS OF SERVICE*
                                                  ---------------------------------------------------
ANNUAL COMPENSATION                                 10         15         20         25         30
- -----------------------------------------------   -------    -------    -------    -------    -------
<S>                                               <C>        <C>        <C>        <C>        <C>
$200,000.......................................   $21,100    $31,650    $42,200    $52,750    $63,300
 250,000.......................................    21,100     31,650     42,200     52,750     63,300
 300,000.......................................    21,100     31,650     42,200     52,750     63,300
 350,000.......................................    21,100     31,650     42,200     52,750     63,300
 400,000.......................................    21,100     31,650     42,200     52,750     63,300
 450,000.......................................    21,100     31,650     42,200     52,750     63,300
 500,000.......................................    21,100     31,650     42,200     52,750     63,300
</TABLE>

 
- -------------------------
* The maximum annual retirement benefit under the Pension Plan for 1995 is
  $120,000 and the maximum annual compensation which can be considered in the
  determination of average compensation for 1995 is $150,000.
 
     Kenneth L. Way and James A. Hollars are covered by the Lear provisions, and
Robert E. Rossiter and James H. Vandenberghe are covered by the FPO provisions.
At age 65, it is estimated that Kenneth L. Way will have 15 years of service
with Lear, Robert E. Rossiter will have 21 years of service with Lear, James H.
Vandenberghe will have 25 years of service with Lear and James A. Hollars will
have 20 years of service with Lear. The average annual compensation for
participants covered by the Lear provisions is substantially similar to the
compensation reported in the Summary Compensation Table. The compensation
covered under the Pension Plan for the fiscal year ended December 31, 1995 was
$150,000 for each of Messrs. Way, Rossiter, Vandenberghe and Hollars.
 
     The Pension Plan grants credit for all years of pension service with Lear
Siegler Diversified Holdings Corp. and with Lear, and offsets the retirement
benefit payable by the Lear Siegler Diversified Holdings Corp. Pension Plan
against the benefit payable by the Pension Plan. The Pension Plan is not subject
to reductions for social security benefits.
 
                                       13

<PAGE>   17
 
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
 
     Lear established a Supplemental Executive Retirement Plan (the
"Supplemental Executive Retirement Plan") on January 1, 1995 as part of a
Pension Equalization Program. Lear's Pension Plan is subject to rules in the
Code that restrict the level of retirement income that can be provided to highly
paid executives under the Pension Plan. The purpose of the Supplemental
Executive Retirement Plan is to supplement the pensions of highly paid
executives under the Pension Plan in order to provide them with a relative level
of retirement income comparable to that of other employees. The benefits under
the Supplemental Executive Retirement Plan are equal to the difference between
the executive's actual vested accrued pension benefit under the Pension Plan and
the benefit under the Pension Plan the executive would have accrued under the
Pension Plan if pension limits on qualified pension plans were disregarded.
Highly compensated executives, whose pensions under the Pension Plan have been
reduced due to limitations on tax qualified pension plans, are eligible to
participate in the Supplemental Executive Retirement Plan. Each of Messrs. Way,
Rossiter, Vandenberghe and Hollars participates in the Supplemental Executive
Retirement Plan.
 
     The following table indicates estimated supplemental annual benefits
payable upon normal retirement at age 65 based on a life annuity for various
compensation levels and years of service classifications under the Supplemental
Executive Retirement Plan provisions:
 
                               PENSION PLAN TABLE
 

<TABLE>
<CAPTION>
                                                                     YEARS OF SERVICE
                                   COVERED       --------------------------------------------------------
     ANNUAL COMPENSATION         COMPENSATION       10          15          20          25          30
- ------------------------------   ------------    --------    --------    --------    --------    --------
<S>                                <C>           <C>         <C>         <C>         <C>         <C>
$ 300,000.....................     $ 61,200      $ 26,250    $ 39,375    $ 52,500    $ 65,625    $ 78,750
   400,000....................       61,200        43,750      65,625      87,500     109,375     131,250
   500,000....................       61,200        61,250      91,875     122,500     153,125     183,750
   600,000....................       61,200        78,750     118,125     157,500     196,875     236,250
   700,000....................       61,200        96,250     144,375     192,500     240,625     288,750
   800,000....................       61,200       113,750     170,625     227,500     284,375     341,250
   900,000....................       61,200       131,250     196,875     262,500     328,125     393,750
 1,000,000....................       61,200       148,750     223,125     297,500     371,875     446,250
</TABLE>

 
AIHI NON-QUALIFIED PENSION PROGRAM
 
     Mr. Sommer participates in a non-qualified pension program (the "Program")
for AIHI's highly compensated employees which provides for contributions to
annuity contracts on behalf of each such employee. AIHI's semi-annual
contributions are equal to each employee's total earnings (excluding prior
contributions by AIHI pursuant to the Program) for the previous six-month period
multiplied by the applicable contribution percentage. The applicable
contribution percentage is the percentage of each employee's total earnings
necessary to fund an annuity contract that provides the monthly pension benefit,
payable as a single life annuity commencing at age sixty-five, that would have
been payable to such employee had such employee (i) accrued such benefit under
the normal retirement benefit formula of the Automotive Industries, Inc. Defined
Benefit Plan in effect on December 31, 1988 and (ii) remained employed with AIHI
until attaining age sixty-five, and assuming that such employee received annual
compensation increases equal to five and one-half percent beginning on the later
of January 1, 1991 or January 1 of the first year that such employee is first
eligible to participate in the Program.
 
     Each employee participating in the Program may elect to make voluntary
contributions to such employee's annuity contract at any time. AIHI's
contributions and voluntary contributions are fully vested at all times. The
employee is the owner of the annuity contract, directs the investments of all
contributions of the annuity contract, is responsible for all payment of
expenses charged the annuity account and may withdraw funds from the annuity
contract at any time. Each employee will continue to participate in the Program
until the earlier of such employee's death, retirement or termination of
employment with AIHI. AIHI has reserved
 
                                       14

<PAGE>   18
 
the right to amend (retroactively, if it chooses) or terminate the Program in
whole or in part without the consent of any employee or beneficiary, except that
no amendment will affect the contributions already made to the annuity contracts
of any employee.
 
401(K) SAVINGS PLAN
 
     Lear adopted a plan effective February 1, 1989 pursuant to Section 401(k)
of the Internal Revenue Code (the "401(k) Plan") for non-union employees who
have completed a three month period of service and attained the age of
twenty-one. Under the 401(k) Plan, each eligible employee may elect to defer a
portion of his or her salary each year. The portion deferred will be paid by the
Company to the trustee under the 401(k) Plan. Lear makes a matching contribution
to the plan each month on behalf of each participant in an amount equal to 50%
of such participant's salary deferral contributions which are not in excess of
4% of such participant's compensation, provided however, that the matching
contribution for a participant in any year may not exceed $1,150. Matching
contributions become vested under the 401(k) Plan at a rate of 20% for each full
year of service. For the year ended December 31, 1995, each of Messrs. Way,
Rossiter, Vandenberghe and Hollars received the maximum matching contribution
under the 401(k) Plan of $1,150.
 
1988 STOCK OPTION PLAN
 
   
     Under stock options agreements, each dated September 29, 1988, as amended
(collectively, the "1988 Stock Option Plan"), the Company had outstanding, as of
March 18, 1996, options to purchase 1,526,086 shares of Common Stock, which are
held by certain current or former management personnel. All of these outstanding
options are fully vested and are exercisable at $1.29 per share. No additional
options may be granted under the 1988 Stock Option Plan.
    
 
1992 STOCK OPTION PLAN
 
     The Company has adopted the 1992 Stock Option Plan, as amended (the "1992
Stock Option Plan"), pursuant to which management employees are eligible to
receive awards of stock options. The 1992 Stock Option Plan is administered by
the Compensation Committee of the Company's Board of Directors (the
"Compensation Committee"). Subject to the terms of the 1992 Stock Option Plan,
the Compensation Committee selects the management employees eligible to receive
awards under the 1992 Stock Option Plan, determines the size of the awards
granted thereunder, and administers and interprets the plan.
 
   
     Under the 1992 Stock Option Plan the Company may grant options to purchase
1,914,000 shares of Common Stock. As of March 18, 1996, the Company had
outstanding options to purchase 1,886,500 shares of Common Stock, all of which
are held by certain current or former management personnel. All of these
outstanding options are fully vested and generally become exercisable at $5 per
share as of September 28, 1996. However, if an option holder's employment with
the Company terminates prior to September 28, 1996, other than by reason of
retirement, death or disability, such holder's options will not become
exercisable until September 1, 2001. Options held by a person retiring prior to
September 28, 1996 will become exercisable on the earlier of two years from the
date of retirement or September 28, 1996. If an option holder's employment
terminates due to death or disability prior to September 28, 1996, such holder's
options will become exercisable on September 28, 1996 and remain so for 90 days
thereafter.
    
 
1994 STOCK OPTION PLAN
 
     The Company has adopted the 1994 Stock Option Plan (the "1994 Stock Option
Plan"), pursuant to which eligible directors, officers and employees of the
Company and other individuals who are primarily responsible for the management
and success of the Company are entitled to receive awards of options. Each
option granted pursuant to the 1994 Stock Option Plan is designated at the time
of grant as either an "incentive stock option" or as a "non-qualified stock
option."
 
     The 1994 Stock Option Plan is administered by the Compensation Committee.
Subject to the terms of the 1994 Stock Option Plan, the Compensation Committee
determines who among those eligible will be granted options, the time or times
at which options will be granted, the number of shares to be subject to
 
                                       15

<PAGE>   19
 
options, the duration of options, any conditions to the exercise of options, and
the manner in and price at which options may be exercised.
 
     Any key employee shall be eligible to receive incentive stock options or
non-qualified stock options granted under the 1994 Stock Option Plan. Any
employee, any director of the Company, whether or not an employee, and any other
individual who in the judgment of the Compensation Committee performs valuable
and important services for the Company shall be eligible to receive
non-qualified stock options.
 
     The exercise price of each option issued under the 1994 Stock Option Plan
is determined by the Compensation Committee, provided that in the case of
incentive stock options the exercise price may not be less than 100% of the
grant date fair market value of the shares of Common Stock covered by such
options. If any incentive stock option is granted to an employee who owns more
than 10% of the total combined voting power of all classes of the Company's
outstanding capital stock, then the exercise price thereof may not be less than
110% of the grant date fair market value of the Common Stock covered by such
option.
 
     Options granted under the 1994 Stock Option Plan may not be transferred
other than by will or the laws of descent and distribution and, during the
lifetime of the option holder, may be exercised solely by such option holder.
The aggregate fair market value (determined at time the option is granted) of
the shares as to which an employee may first exercise incentive stock options in
any one calendar year may not exceed $100,000. The Compensation Committee may
impose any other conditions to exercise it deems appropriate.
 
   
     Under the 1994 Stock Option Plan, the Company may grant options with
respect to a total of 625,000 shares of Common Stock. As of March 18, 1996, the
Company had outstanding options to purchase 513,250 shares of Common Stock under
the 1994 Stock Option Plan. The exercise price of these options ranges from
$15.50 per share to $30.25 per share. Options granted under the 1994 Stock
Option Plan vest and become exercisable at various times, the earliest of which
is April 6, 1997.
    
 
AIHI 1992 KEY EMPLOYEE STOCK OPTION PLAN
 
   
     In connection with the AIHI acquisition, Lear provided holders of options
("AIHI Options") to purchase shares of AIHI common stock under the AIHI 1992 Key
Employee Stock Option Plan the right to convert their AIHI Options into options
to purchase shares of Lear's Common Stock on terms that had substantially the
same value as the AIHI Options. Holders of AIHI Options elected to convert their
AIHI Option into options to purchase 217,027 shares of Common Stock. All of
these options are fully vested and exercisable at prices ranging from $14.06 to
$23.12 per share of Common Stock.
    
 
EMPLOYMENT AND OTHER AGREEMENTS
 
     Lear has entered into employment agreements with the named executive
officers listed in the Summary Compensation Table. Each of Messrs. Way, Rossiter
and Vandenberghe has entered into a four-year employment agreement dated March
20, 1995. Each employment agreement is renewable for one additional year on the
second anniversary of the agreement and each anniversary thereafter. Mr. Hollars
has entered into a two-year employment agreement dated as of March 20, 1995,
which is renewable for one additional year on the first anniversary of the
agreement and each anniversary thereafter. The employment agreements of Messrs.
Way, Rossiter, Vandenberghe and Hollars provide for an annual base salary which
is currently $750,000, $525,000, $400,000 and $230,000 respectively, and may be
increased at the discretion of the Compensation Committee. In addition, under
the terms of their respective employment agreements, each of Messrs. Way,
Rossiter, Vandenberghe and Hollars are eligible for an annual incentive
compensation bonus at the discretion of the Compensation Committee.
 
     Each employment agreement provides that: (i) upon the death of the
employee, Lear will pay to his estate or designated beneficiary his full base
salary for an additional 12 months; (ii) upon termination for disability, the
employee will receive all compensation payable under Lear's disability and
medical plans and programs plus an additional payment from Lear so that the
aggregate amount of salary continuation from all sources equals his base salary
through the remaining term of the agreement; and (iii) upon termination by the
employee for good reason or by the Company without cause, the employee will
receive his full base salary to
 
                                       16

<PAGE>   20
 
the end of the term of the agreement. If the employment agreement is terminated
for cause (as defined in such employment agreement), the employee is only
entitled to receive unpaid salary and benefits, if any, accrued through the
effective date of the employee's termination.
 
     In connection with the Company's acquisition of AIHI, the Company
indirectly assumed an employment agreement between Frederick F. Sommer and a
wholly-owned subsidiary of AIHI. Mr. Sommer's employment agreement expires on
July 12, 1998 and provides for an annual base salary of $350,000, which may be
increased at the discretion of the Compensation Committee. Mr. Sommer's
employment agreement provides that if Mr. Sommer is terminated without good
cause (as defined in Mr. Sommer's employment agreement) or if he resigns for
good reason (as defined in Mr. Sommer's employment agreement), he shall be
entitled to receive his base salary and medical and related fringe benefits
through July 12, 1998. If Mr. Sommer is terminated for good cause or if he
resigns without good reason, Mr. Sommer shall be entitled to receive his base
salary through the date of his termination.
 
                                       17

<PAGE>   21
 
                       COMPENSATION COMMITTEE INTERLOCKS
 
                          AND INSIDER PARTICIPATION
 
     The Company's compensation policies are determined and executive officer
compensation decisions are made by the Compensation Committee. The Compensation
Committee is composed of three non-employee directors: Messrs. Hughes, McCurdy
and Spalding. Messrs. Hughes and Spalding are principals of The Cypress Group,
which is a party to a consulting agreement with Lehman Brothers Inc., an
affiliate of the Lehman Funds, pursuant to which it consults with Lehman
Brothers Inc. with respect to the management of the Lehman Funds' equity
investment in Lear. As of March 18, 1995, the Lehman Funds beneficially own
approximately 29.1% of the Common Stock of the Company (assuming no outstanding
options are exercised).
 
     During the fiscal year ended December 31, 1995, the Compensation Committee
authorized the remuneration plans for senior management. In addition, the
Compensation Committee exercised administrative power with respect to the
Company's compensation plans. The Board of Directors has not rejected or
modified any action taken by the Compensation Committee.
 
     No member of the Compensation Committee was, during the fiscal year ended
December 31, 1995, an officer, former officer or employee of the Company or any
of its subsidiaries. No executive officer of the Company served as a member of
(i) the compensation committee of another entity in which one of the executive
officers of such entity served on the Compensation Committee, (ii) the Board of
Directors of another entity, one of whose executive officers served on the
Compensation Committee or (iii) the compensation committee of another entity in
which one of the executive officers of such entity served as a member of the
Company's Board of Directors.
 
     Lehman Brothers Inc., an affiliate of the Lehman Funds, acted as an
underwriter in connection with the Company's public offering of its Common
Stock, which was consummated on September 20, 1995, and provided financial and
other advisory services in its capacity as dealer manager in connection with the
acquisition of AIHI, which was consummated on August 17, 1995. The Cypress Group
also provided financial and other advisory services in connection with the
acquisition of AIHI. In addition, Lehman Commercial Paper Inc. ("Lehman
Commercial Paper"), an affiliate of the Lehman Funds, is a managing agent and a
lender under the Company's Credit Agreement dated as of August 17, 1995, as
amended.
 
                        REPORT OF COMPENSATION COMMITTEE
 
     NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN ANY OF THE COMPANY'S
PREVIOUS OR FUTURE FILINGS UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES
EXCHANGE ACT OF 1934 THAT MIGHT INCORPORATE THIS PROXY STATEMENT OR FUTURE
FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION, IN WHOLE OR IN PART, THE
FOLLOWING REPORT OF COMPENSATION COMMITTEE AND THE PERFORMANCE GRAPH WHICH
FOLLOWS SHALL NOT BE DEEMED TO BE INCORPORATED BY REFERENCE INTO ANY SUCH
FILINGS.
 
EXECUTIVE COMPENSATION POLICY
 
     The Compensation Committee is responsible for the determination of salaries
and other entitlements for the executive officers of the Company as well as all
of the Company's compensation programs and policies. The Compensation Committee
endeavors to ensure that the compensation programs for executive officers of the
Company are effective in attracting and retaining key executives responsible for
the success of the Company and are administered in an appropriate fashion for
the long term interests of the Company and its stockholders. To this end, the
Compensation Committee relies on a three-pronged approach to executive
compensation: base salary; annual incentives; and long-term incentives. A
discussion of each of these aspects of executive compensation follows.
 
BASE SALARY
 
     Base salaries for the Company's executive officers are established at
levels considered appropriate in light of the duties and scope of
responsibilities of each officer's position. In this regard, the Compensation
Committee considers the compensation practices and corporate financial
performance of similarly situated
 
                                       18

<PAGE>   22
 
companies based on research provided by independent consultants, although it
does not target a specific percentile range within such group. The Compensation
Committee focuses primarily on total annual compensation, including incentive
awards, rather than base salary alone as the appropriate measure of executive
officer performance and contribution.
 
     The initial base salaries of each Messrs. Way, Rossiter, Vandenberghe and
Hollars for the Company's last completed fiscal year were established pursuant
to employment agreements entered into on March 20, 1995. In October 1995, the
Compensation Committee increased the base salaries for Messrs. Way, Rossiter and
Vandenberghe pursuant to the terms of their respective employment agreements
from $530,000 to $750,000, from $385,000 to $525,000 and from $272,000 to
$400,000, respectively. These increases were principally based upon each of Mr.
Way's, Rossiter's and Vandenberghe's contribution towards (i) the record
profitability of the Company in a changing and increasingly competitive
environment for automotive suppliers, (ii) the successful integration into the
Company of the seat systems business of Fiat S.p.A., which was acquired in
December 1994, (iii) the acquisition of AIHI, (iv) the completion of a $1.5
billion credit facility on favorable terms, (v) the successful public offering
of shares of Common Stock in September 1995 and (vi) the significant increase in
the market price of the Common Stock, as well as a review of compensation of
executive officers of other companies of comparable size and profitability based
upon a report prepared by an independent consultant. The base salary for Mr.
Sommer was established pursuant to an employment agreement dated July 12, 1995
between Mr. Sommer and a wholly-owned subsidiary of AIHI. Lear indirectly
assumed this employment agreement upon consummation of the AIHI acquisition.
 
ANNUAL INCENTIVES
 
     The Company's executive officers participate in the Company's Senior
Executive Incentive Compensation Plan or Management Incentive Compensation Plan.
Pursuant to such plans, the Company makes annual incentive awards designed to
reward past financial performance and the achievement of non-financial goals
considered important to the Company's future. Awards are made in February or
March of each year for performance in the previous year.
 
     The Senior Executive Incentive Compensation Plan provides for the
assignment of target annual awards expressed as a percentage of a participant's
annual salary, and the actual award, unless modified by the Compensation
Committee, varies from 0% to 160% of the target award opportunity based on
attainment of financial and nonfinancial objectives. The financial criteria,
representing 60% of the bonus potential, are based on achievement of a targeted
level of operating income and cash flow for the overall Company based on an
approved operating budget. An overall average threshold is calculated, based on
the ratio that the actual operating income and actual cash flow bear to the
budget operating income and the budget cash flow. No payments are made unless
85% of that threshold is attained, and a maximum attainment is set at 120% of
that threshold. The nonfinancial criteria, representing 40% of the bonus
potential, are based on the achievement of specific individual objectives. Among
the objectives considered by the Compensation Committee in 1995 were the
expansion and integration of the Company's operations, the development of a
long-term global marketing strategy, the implementation of cost reduction
programs, the continued improvement in the quality of the Company's products and
the further strengthening of customer relationships. Participants in the Senior
Executive Incentive Compensation Plan were selected from executives who were in
positions to materially influence the annual financial results of Lear in the
targeted areas.
 
     The Management Incentive Compensation Plan provides for the assignment of
target annual awards expressed as a percentage of a participant's annual salary,
and the actual award will vary from 0% to 140% of the target award opportunity
based on attainment of financial and nonfinancial objectives. The financial
criteria, representing 50% of the bonus potential, are based on achievement of a
targeted level of operating income and cash flow for the overall Company based
on an approved operating budget. An overall average threshold is calculated,
based on the ratio that the actual operating income and actual cash flow bear to
the budget operating income and the budget cash flow. No payments are made
unless 85% of that threshold is attained, and a maximum attainment is set at
120% of that threshold. The nonfinancial criteria, representing 50% of the bonus
potential, are based on the achievement of specific individual objectives. The
objectives considered by the Compensation Committee in 1995 were similar to
those under the Senior Executive
 
                                       19

<PAGE>   23
 
Incentive Compensation Plan, although specific objectives were more narrowly
tailored to reflect each participant's corporate responsibilities. Participants
in the Management Incentive Plan were selected from managers who were in
positions to materially influence the annual financial results of Lear in the
targeted areas.
 
     In addition to awards under the Senior Executive Incentive Compensation
Plan and the Management Incentive Compensation Plan, the Compensation Committee
awarded additional bonuses to certain senior executives based upon the financial
and nonfinancial criteria considered under the Senior Executive Incentive
Compensation Plan and other factors including their respective contributions
towards (i) the record profitability of the Company in a changing and
increasingly competitive environment for automotive suppliers, (ii) the
successful integration into the Company of the seat systems business of Fiat
S.p.A., which was acquired in December 1994, (iii) the acquisition of AIHI, (iv)
the completion of a $1.5 billion credit facility on favorable terms, (v) the
successful public offering of Common Stock in September 1995 and (vi) the
significant increase in the market price of the Common Stock.
 
LONG-TERM INCENTIVES
 
     Long-term incentives are primarily provided through the grant of stock
options. The Company has no long-term incentive plan and has granted no stock
appreciation rights. The primary objective of the stock option grants is to
align the interests of the executive officers with those of the stockholders. In
addition, the stock option grants give Lear a significant advantage in
attracting and retaining talented employees, officers and directors, and provide
an incentive to selected key employees, officers and directors of Lear and its
subsidiaries who, in the judgment of the Compensation Committee, have
substantial responsibility in the continued success of the Company.
 
     The Compensation Committee periodically reviews the option holdings and
other compensation of the Company's executive officers to ensure that the
executive officers are being adequately and appropriately compensated in a
manner consistent with the best interests of the Company and its stockholders.
No named executive officer received stock options in 1995, other than Mr.
Sommer, who, in connection with the AIHI acquisition, converted 12,500 of his
AIHI Options into options to receive 14,997 shares of Lear's Common Stock.
 
     Executive officers, other than Frederick F. Sommer, are also eligible to
participate in the Company's 401(k) Plan. Under the 401(k) Plan, the Company
makes a matching contribution for each participant equal to 50% of the
participant's contribution, up to $1,150 for each participant. The Company's
matching contributions vest over a five-year period.
 
CHIEF EXECUTIVE OFFICER COMPENSATION
 
     During the fiscal year ended December 31, 1995, the compensation of Kenneth
L. Way, Chairman and Chief Executive Officer of the Company, was established
pursuant to an employment agreement entered into in March 1995 and adjusted in
October 1995. Under the terms of this agreement, Mr. Way received salary
compensation of $585,000 in the last fiscal year and was eligible to participate
in the Company's Senior Executive Incentive Compensation Plan, pursuant to which
he was awarded $750,000 for services performed in 1995. In addition, the
Compensation Committee awarded Mr. Way an additional bonus of $150,000. Mr.
Way's award under the Senior Executive Incentive Compensation Plan was based on
the financial and non-financial criteria considered under the Senior Executive
Incentive Compensation Plan. In determining to increase Mr. Way's base salary
and awarding his additional bonus, the Compensation Committee considered Mr.
Way's leadership and contributions towards (i) the record profitability of the
Company in a changing and increasingly competitive environment for automotive
suppliers, (ii) the successful integration into the Company of the seat systems
business of Fiat S.p.A., which was acquired in December 1994, (iii) the
acquisition of AIHI, (iv) the completion of a $1.5 billion credit facility on
favorable terms, (v) the successful public offering of shares of Common Stock in
September 1995 and (vi) the significant increase in the market price of the
Common Stock, as well as a review of compensation of executive officers of other
companies of comparable size and profitability based upon a report prepared by
an independent consultant.
 
                                       20

<PAGE>   24
 
TAX TREATMENT OF EXECUTIVE COMPENSATION
 
     To the extent readily determinable and as one of the factors in its
consideration of compensation matters, the Compensation Committee considers the
anticipated tax treatment to the Company and to the executives of various
payments and benefits. Some types of compensation payments and their
deductibility depend on the time of vesting or exercise of previously granted
rights (for example, the amount of compensation attributable to the exercise of
non-qualified stock options generally will depend upon the spread between the
fair market value of the shares purchased on the date of exercise and the
exercise price). In addition, for taxable years beginning on or after January 1,
1994, Section 162(m) of the Code generally limits to $1 million per person the
Company's federal income tax deduction for compensation paid in any year to its
Chief Executive Officer and each of its four other highest paid executive
officers to the extent such compensation is not "performance-based"
compensation. Under certain circumstances, compensation paid to an executive
officer of the Company could exceed the qualifying compensation limit for
deductibility under Section 162(m) of the Code. The Compensation Committee will
consider ways to preserve the deductibility of compensation payments and
benefits in light of the limitation on deductibility under Section 162(m) of the
Code, while retaining the discretion necessary to insure executive officers are
compensated in a manner consistent with the best interests of the Company and
its stockholders.
 
     This report is submitted by David P. Spalding, Jeffrey P. Hughes and Larry
W. McCurdy, being all of the members of the Compensation Committee.
 
                          David P. Spalding, Chairman
                               Jeffrey P. Hughes
                                Larry W. McCurdy
 
                                       21

<PAGE>   25
 
                               PERFORMANCE GRAPH
 
     The following graph compares the cumulative total stockholder return from
April 6, 1994, the date of the Company's initial public offering, through
December 31, 1995 of the Company, the S&P Industrials and a peer group of
companies selected by the Company for purposes of the comparison and more fully
described below (the "Peer Group"). Dividend reinvestment has been assumed, and,
with respect to the companies in the Peer Group, the returns of each such
company have been weighted to reflect relative stock market capitalization. The
graph assumes an investment of $100 on April 6, 1994 in each of the Common
Stock, the stocks comprising the S&P Industrials and the stocks comprising the
Peer Group.
 

<TABLE>
<CAPTION>
      Measurement Period         LEAR SEATING       S&P IN-
    (Fiscal Year Covered)         CORPORATION      DUSTRIALS      PEER GROUP*
<S>                              <C>             <C>             <C>
April 6, 1994                           100.00          100.00          100.00
June 30, 1994                           118.58           99.75           89.19
September 30, 1994                      118.58          106.54           85.76
December 31, 1994                       127.46          107.06           83.26
March 31, 1995                          116.16          117.31           84.43
June 30, 1995                           147.62          128.50           93.87
September 30, 1995                      189.57          136.52           92.06
December 31, 1995                       187.15          144.13           92.49
</TABLE>

 
- -------------------------
 
* The Company does not believe that there is a single published industry or line
  of business index that is appropriate for comparing stockholder return. The
  Peer Group selected by the Company is made up of representative independent
  automobile suppliers whose common stock is traded on domestic stock exchanges.
  The Peer Group includes Arvin Industries, Inc., Borg-Warner Automotive, Inc.,
  Breed Technologies, Inc., Dana Corp., Donnelly Corp., Douglas & Lomason Co.,
  Eaton Corp., Excel Industries, Inc., Hayes Wheels International, Inc., Johnson
  Controls, Inc., Magna International, Inc.-C1A, Mascotech, Inc., Masland Corp.,
  Simpson Industries, Inc., Standard Products Co., and Superior Industries
  International. The Class A common stock of AIHI ("AIHI Common Stock"), which
  was included in the Peer Group in the Company's 1995 proxy statement, is not
  included in the Peer Group since the AIHI Common Stock ceased to be publicly
  traded when Lear acquired all of the issued and outstanding AIHI Common Stock
  in August 1995.
 
                                       22

<PAGE>   26
 

                              CERTAIN TRANSACTIONS
 
ACQUISITION OF AUTOMOTIVE INDUSTRIES HOLDING, INC.
 
     On August 17, 1995 the Company consummated the acquisition of AIHI for an
aggregate purchase price of approximately $926.4 million (including the
assumption of $282.3 million of AIHI's existing indebtedness and the payment of
fees and expenses in connection with the acquisition). Lehman Brothers Inc.
served as dealer manager for the acquisition and received fees of $4.75 million
for financial and other services provided in such capacity. Fifty percent of
this amount was paid by Lehman Brothers Inc. to Cypress Advisors L.P., an
affiliate of The Cypress Group, for services provided in connection with the
AIHI acquisition. In addition, the Company reimbursed Lehman Brothers Inc. for
its out-of-pocket expenses, including the reasonable fees and expenses of its
counsel, incurred in its capacity as dealer manager for the AIHI acquisition.
Alan H. Washkowitz and Eliot M. Fried are directors of the Company and Managing
Directors of Lehman Brothers Inc. Jeffrey P. Hughes, David P. Spalding and James
A. Stern are directors of the Company and controlling members of The Cypress
Group.
 
     Prior to Lear's acquisition of AIHI, AIHI had 722,040 AIHI Options
outstanding that were granted by AIHI pursuant to its 1992 Key Employee Stock
Option Plan. Upon consummation of the AIHI acquisition, Lear cancelled 530,840
AIHI Options for a per share price equal to the difference between the $33.50
purchase price that Lear paid for AIHI's common stock and the exercise price of
each AIHI Option. In connection therewith, Lear paid $474,375 to Frederick F.
Sommer in exchange for the cancellation of 40,000 of Mr. Sommer's AIHI Options.
In addition, Lear gave certain holders of AIHI Options the right to convert
their AIHI Options into the right to receive shares of Lear's Common Stock. The
exercise price and the number of shares of Lear's Common Stock were determined
by a formula designed to provide holders of AIHI Options substantially the same
value as their AIHI Options. Pursuant to such formula, Mr. Sommer converted
12,500 AIHI Options into the right to purchase 14,997 shares of Lear's Common
Stock at an exercise price of $23.12 per share.
 
     Prior to Lear's acquisition of AIHI, certain executives of AIHI entered
into employment agreements with a wholly-owned subsidiary of AIHI pursuant to
which each executive had the right to receive a payment in the event of a change
in control of AIHI. Upon consummation of Lear's acquisition of AIHI, Mr. Sommer
received a payment of $350,000 and agreed to continue serving as chief executive
officer of AIHI and as an executive officer of Lear.
 
P
UBLIC OFFERING
 
     The Company consummated an underwritten public offering of its Common Stock
on September 20, 1995, pursuant to which 10,000,000 shares of Common Stock were
issued and sold by the Company, 9,487,500 shares of Common Stock were sold by
the Lehman Funds and 2,012,500 shares of Common Stock were sold by FIMA. Lehman
Brothers Inc. served as managing underwriter for the offering and received
underwriting fees of approximately $3,949,582 in such capacity.
 
CREDIT AGREEMENT
 
     On August 17, 1995, the Company entered into a $1.5 billion revolving
credit facility (the "Credit Agreement") with a syndicate of lenders for which
Chemical Bank served as administrative agent. Lehman Commercial Paper is a
managing agent and a lender under the Credit Agreement for which it received and
will continue to receive its proportionate share of payments made by the Company
under the Credit Agreement. In addition, Lehman Commercial Paper was also a
managing agent and lender under the Company's previous revolving credit
facility, which was terminated upon consummation of the Credit Agreement.
 
STOCKHOLDERS AND REGISTRATION RIGHTS AGREEMENT
 
     The Company is a party to the Amended and Restated Stockholders and
Registration Rights Agreement, dated as of September 27, 1991, as amended (the
"Stockholders and Registration Rights Agreement"),
 
                                       23

<PAGE>   27
 
among the Company, the Lehman Funds, FIMA and certain management investors (the
"Management Investors"). The Stockholders and Registration Rights Agreement
contains certain restrictions upon transfers of common stock owned by parties
thereto and provides, among other things, that the Lehman Funds, FIMA and, to a
limited extent after September 27, 1996, the Management Investors will have the
right to include their shares of Common Stock in sales in a transaction or
series of related transactions to a single third party by the Lehman Funds and
FIMA until September 27, 2001. In addition, the Stockholders and Registration
Rights Agreement places significant restrictions on the Management Investors'
rights to transfer their shares to a third party prior to September 27, 1996 and
includes certain registration rights.
 
MANAGEMENT EQUITY PARTICIPATION
 
     Certain current and former officers of the Company entered into a
Management Subscription Agreement with the Company dated as of September 29,
1988 (collectively, the "Management Equity Agreement") pursuant to which certain
current and former officers purchased Common Stock at $3.03 per share for
consideration consisting of cash and/or recourse or non-recourse promissory
notes (the "Management Notes"). As of December 31, 1995, the outstanding balance
of the Management Notes of each of Messrs. Way and Rossiter was approximately
$545,000 and the outstanding balance of the Management Notes of each of Messrs.
Vandenberghe and Hollars was approximately $181,700. Each of the Management
Notes, including accrued interest, matures on January 25, 1997 and bears
interest at a rate of 4.46% per annum.
 
     In addition, pursuant to the 1988 Stock Option Plan, as of March 18, 1996,
the Company had outstanding options to purchase 1,526,086 shares of Common
Stock. All of these outstanding options are fully vested and are exercisable for
$1.29 per share of Common Stock.
 
     Under the 1992 Stock Option Plan, the Company has outstanding options to
purchase 1,886,500 shares of Common Stock as of March 18, 1996. All of these
options are fully vested and generally become exercisable at $5 per share of
Common Stock as of September 28, 1996. In 1995, options with respect to 22,000
shares of Common Stock were awarded under the 1992 Stock Option Plan, none of
which were awarded to named executive officers.
 
     Under the 1994 Stock Option Plan, options with respect to 498,750 shares of
Common Stock were awarded in connection with the Company's initial public
offering (the "IPO") of Common Stock in April 1994 at an exercise price of
$15.50 per share, the public offering price in the IPO. In 1995, options with
respect to 36,000 shares of Common Stock were awarded under the 1994 Stock
Option Plan, none of which were granted to named executive officers, at exercise
prices ranging from $19.625 to $30.25 per share of Common Stock.
 
   
     Under the AIHI 1992 Key Employee Stock Option Plan, as of March 18, 1996,
the Company had outstanding options to purchase 217,027 shares of Common Stock.
All of these options are fully vested and exercisable at prices ranging from
$14.06 to $23.12 per share of Common Stock.
    
 
                APPROVAL OF AMENDMENT TO RESTATED CERTIFICATE OF
                     INCORPORATION TO CHANGE CORPORATE NAME
 

                                (PROPOSAL NO. 2)
 
     On January 31, 1996, the Board of Directors adopted, subject to stockholder
approval, an amendment to the Company's Restated Certificate of Incorporation to
change the name of the Company to "Lear Corporation." A copy of the proposed
amendment is attached hereto as Exhibit A.
 
     The current name of the Company is "Lear Seating Corporation," which the
Company adopted in 1990 when the Company's principal products consisted of
finished automobile and light truck seat systems, seat frames, seat covers and
other seat components. Since that time there has been a significant trend in the
automotive industry towards outsourcing of automotive components and systems by
original equipment manufacturers. The Company has capitalized on this trend by
expanding its manufacturing operations and
 
                                       24

<PAGE>   28
 
completing strategic acquisitions of other automotive interior suppliers.
Currently the Company is the largest independent Tier I supplier of automobile
and light truck interior systems to the North American and European markets. The
new name, Lear Corporation, is being recommended because it better reflects the
wider range and diversity of automotive interior components and systems
presently provided by the Company while retaining the goodwill associated with
the Lear name.
 
     If the proposed amendment to the Company's Restated Certificate of
Incorporation is authorized by the stockholders, the name change will become
effective when the certificate of amendment is filed with the Secretary of State
of Delaware in accordance with Delaware law.
 
     If the proposed name change becomes effective, the validity and
transferability of certificates representing shares of Common Stock would not be
affected, and the Company's stockholders will not be required to surrender or
exchange any certificates presently held by them. However, stockholders of the
Company desiring to exchange Lear Seating Corporation stock certificates for
Lear Corporation stock certificates may do so by mailing their Lear Seating
Corporation stock certificates with an appropriate written request to the
Corporation's transfer agent, at the following address: The Bank of New York,
Receive and Deliver Department, Eleven West, P.O. Box 11002, Church Street
Station, New York, New York 10286.
 
                                 RECOMMENDATION
 
 
        THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE
                  PROPOSED AMENDMENT OF THE COMPANY'S RESTATED
                         CERTIFICATE OF INCORPORATION.
 
                     APPROVAL OF THE 1996 STOCK OPTION PLAN
 

                                (PROPOSAL NO. 3)
 
     The Compensation Committee has adopted and the Board of Directors of the
Company has ratified the Option Plan and directed that the Option Plan be
submitted to the stockholders for their approval at the Meeting. The Option Plan
will become effective upon the approval by the holders of a majority of the
shares of Common Stock represented and entitled to vote at the Meeting. The
purpose of the Option Plan is to advance the interests of the Company and its
subsidiaries by encouraging and enabling the acquisition of a financial interest
in the Company by key employees, officers and directors of the Company and its
subsidiaries, and consultants and advisors who provide certain substantial and
important services to the Company through grants of stock options ("Options").
The Option Plan will be administered by the Compensation Committee or another
committee appointed by the Board of Directors (the "Committee"). The following
summary description of the Option Plan is qualified in its entirety by reference
to the full text of the Option Plan attached hereto as Exhibit B.
 
ELIGIBILITY/TERMS OF OPTIONS
 
     The total number of shares of Common Stock that may be issued under the
Option Plan pursuant to Options granted is 1,000,000 shares. No person will be
granted Options to acquire more than 100,000 shares originally authorized for
issuance under the Option Plan.
 
     Options may be granted to key employees, officers, directors, and
consultants and advisors who, as determined by the Committee, provide
substantial and important services to the Company. The substantial and important
services performed by a consultant or advisor who is granted an Option may not
include services in connection with the offer or sale of securities in a capital
raising transaction.
 
   
     In addition, each independent director shall receive each year on the date
of the first Board of Directors meeting following the Annual Meeting of
Stockholders, an Option for 1,250 shares of Common Stock with an exercise price
equal to the fair market value of the Common Stock on the date of grant. Such
Option will vest and become exercisable upon the earlier of the date of the
director's death or disability, or three years from the
    
 
                                       25

<PAGE>   29
 
date of grant. An independent director is any director who during his or her
entire term was not employed by Lehman Brothers Inc., The Cypress Group, FIMA,
or the Company or any of their respective affiliates.
 
     All Options will be granted with an exercise price of at least 100% of the
fair market value of Common Stock on the date of grant. If a tax qualified
option is issued to an employee who owns more than 10% of the total combined
voting power of all classes of the Company's outstanding capital stock, the
exercise price will be at least 110% of the fair market value of Common Stock on
the date of grant. Payment of the exercise price may be in cash, or, with the
prior approval and upon the conditions established by the Committee, by delivery
of shares of Common Stock owned by the optionee. Any withholding tax required to
be paid upon exercise of an Option, up to the minimum withholding requirement
for supplemental wages, will be satisfied with Common Shares subject to the
Option.
 
   
     The Committee has the authority to determine the duration of Options and
any conditions to the exercise of the Options. In no event, however, shall an
Option be exercised more than ten years after the date it is granted. Options
that had vested and were exercisable on the date an optionee retires will expire
no later than thirteen months from the date of such optionee's retirement and
all other Options of the optionee will be forfeited on the date the optionee
retires.
    
 
     Upon the death or disability of an optionee prior to termination of
employment, all outstanding Options held by such optionee will vest and become
exercisable. Such Options will expire no later than thirteen months after such
death or disability.
 
   
     If an optionee's employment with the Company and its subsidiaries is
terminated for any reason except retirement, death or disability, then such
optionee's Options that were vested and exercisable on his or her date of
termination will expire no later than 30 days after the date of such termination
of employment and any Options that were not vested and exercisable on the date
of such optionee's retirement will be forfeited on that date.
    
 
     The right of an optionee to exercise his or her outstanding Options shall
be forfeited if, in the opinion of the Committee: (i) the optionee enters into a
business or employment which is detrimentally competitive with the Company or
substantially injurious to the Company's financial interests; (ii) the optionee
is discharged from employment with the Company or a subsidiary for "Cause"; or
(iii) the optionee performs acts of willful malfeasance or gross negligence in a
matter of material importance to the Company or a subsidiary. Under the Option
Plan, "Cause" means cause as set forth in any unexpired employment or severance
agreement between the optionee and the Company and/or a subsidiary, and, in the
absence of any such agreement, means (i) the willful and continued failure of
the optionee to substantially perform his or her duties with or for the Company
or a subsidiary, (ii) the engaging by the optionee in conduct that is
significantly injurious to the Company or a subsidiary, monetarily or otherwise,
(iii) the optionee's conviction of a felony, (iv) the optionee's abuse of
illegal drugs or other controlled substances or (v) the optionee's habitual
intoxication.
 
ADMINISTRATION
 
     The Option Plan is to be administered by the Committee. The Committee will
determine the persons to whom and the times at which Options will be granted,
the number of shares to be subject to each Option, the duration of each Option,
the times within which the Option may be exercised, the exercise price of each
Option and the other conditions of the grant of an Option. The Committee also
has the sole discretion to interpret the provisions of the Option Plan. The
conditions of Options need not be the same with respect to each optionee or with
respect to each Option. Options granted pursuant to the Option Plan will be
transferable only by will or by the laws of descent and distribution.
 
     The Committee may amend, suspend or terminate the Option Plan at any time
without the approval of stockholders, except amendments to the Option Plan
which: (i) decrease the minimum exercise price for Options; (ii) extend the term
of the Option Plan beyond ten years; (iii) extend the maximum terms of the
Options granted thereunder beyond ten years; (iv) change the class of eligible
employees, officers, directors and other grantees; or (v) increase the aggregate
number of shares of Common Stock which may be issued
 
                                       26

<PAGE>   30
 
pursuant to the provisions of the Option Plan. Nevertheless, no such amendment,
suspension or termination will affect previously granted Options without the
optionee's consent.
 
TAX IMPLICATIONS
 
     An optionee who receives a grant of an Option that is qualified for tax
purposes will not recognize taxable income at the time of the grant of the
Option and the Company will not be entitled to a deduction at that time. Upon
the exercise of such an Option during employment, or within three months
thereafter, the optionee will not recognize any income and the Company will not
be entitled to a deduction. If any shares of Common Stock acquired upon the
exercise of such an Option are disposed of within two years of the date of grant
or within one year of the transfer of such shares to the optionee, the optionee
will recognize ordinary income in the year of disposition equal to the excess of
the fair market value of the shares at exercise over the exercise price. The
Company will be entitled to a deduction in the same amount as the ordinary
income recognized by the optionee.
 
     An optionee will not recognize any taxable income at the time of grant of a
nonqualified Option. Upon exercise of a nonqualified Option, the optionee will
recognize ordinary income for tax purposes measured by the excess of the fair
market value of the shares on such date over the exercise price. The Company
will be entitled to a deduction equal to the ordinary income recognized by the
optionee. The ordinary income recognized by an optionee who is also an employee
of the Company will be subject to tax withholding. Upon resale of shares of
Common Stock by the optionee, any difference between the sale price and the
exercise price, to the extent not recognized as ordinary income upon exercise as
provided above, will be treated as either short-term or long-term capital gain
or loss (depending on the holding period).
 
OPTIONS TO BE GRANTED UNDER THE 1996 STOCK OPTION PLAN
 
   
     If the Option Plan is approved by Lear's stockholders, Messrs. Shower and
McCurdy, the independent directors as defined in the Option Plan, will each
receive 1,250 Options on May 9, 1996 with an exercise price equal to the fair
market value of the Common Stock on that date. The closing prices of the Common
Stock on March 18, 1996 was $32.125 per share as reported by the New York Stock
Exchange. Additional awards under the Optional Plan may be made from time to
time by the Committee in its sole discretion.
    
 
                                 RECOMMENDATION
 
 
        THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE
                            1996 STOCK OPTION PLAN.
 
                                       27

<PAGE>   31
 
              RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
 

                                (PROPOSAL NO. 4)
 
     The Board of Directors, upon recommendation of the Audit Committee, has
appointed Arthur Andersen LLP as the Company's independent auditors for the
current year ending December 31, 1996. A proposal will be presented at the
Meeting to ratify the appointment of Arthur Andersen LLP as the Company's
independent auditors. If the stockholders fail to ratify such selection by the
affirmative vote of a majority of the shares present in person or represented by
proxy at the Meeting, other independent auditors will be considered by the Board
of Directors upon recommendation of the Audit Committee. The Company has been
advised that a representative of Arthur Andersen LLP will be present at the
Meeting, will be available to respond to appropriate questions, and will be
given an opportunity to make a statement if he or she so desires.
 
                                 RECOMMENDATION
 
 
      THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" RATIFICATION OF THE
           APPOINTMENT OF ARTHUR ANDERSEN LLP AS INDEPENDENT AUDITORS
                                FOR THE COMPANY.
 
        STOCKHOLDER'S PROPOSALS FOR 1997 ANNUAL MEETING OF STOCKHOLDERS
 
     Stockholder's proposals intended to be presented at the 1997 Annual Meeting
of Stockholders of the Company must be received by the Company no later than
November 25, 1996 for inclusion in the Company's proxy statement relating to the
1997 Annual Meeting of Stockholders.
 
                                 OTHER MATTERS
 
     The Company knows of no other matters to be submitted to the stockholders
at the Meeting. If any other matters properly come before the Meeting, it is the
intention of the persons named in the enclosed proxy to vote the shares they
represent in accordance with the judgments of the persons voting the proxies.
 
     The Company's Annual Report to Stockholders for the year ending December
31, 1995, was mailed to stockholders together with this Proxy Statement.
 
     UPON WRITTEN REQUEST BY ANY STOCKHOLDER ENTITLED TO VOTE AT THE MEETING,
THE COMPANY WILL FURNISH THAT PERSON WITHOUT CHARGE A COPY OF THE FORM 10-K
ANNUAL REPORT FOR 1995 WHICH IT FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, INCLUDING FINANCIAL STATEMENTS AND SCHEDULES. IF THE PERSON
REQUESTING THE REPORT WAS NOT A STOCKHOLDER OF RECORD ON MARCH 18, 1996, THE
REQUEST MUST CONTAIN A GOOD FAITH REPRESENTATION THAT THE PERSON MAKING THE
REQUEST WAS A BENEFICIAL OWNER OF COMPANY'S COMMON STOCK AT THE CLOSE OF
BUSINESS ON THAT DATE. REQUESTS SHOULD BE ADDRESSED TO JOSEPH F. MCCARTHY, LEAR
SEATING CORPORATION, 21557 TELEGRAPH ROAD, SOUTHFIELD, MICHIGAN 48034.
 
                                          BY ORDER OF THE BOARD OF DIRECTORS
 
                                          JOSEPH F. MCCARTHY SIGNATURE
                                          Joseph F. McCarthy
                                          Vice President, Secretary
                                          and General Counsel
 
                                       28

<PAGE>   32
 
                                   EXHIBIT A
 
                               PROPOSED AMENDMENT
                                     TO THE

                     RESTATED CERTIFICATE OF INCORPORATION
                                       OF
                            LEAR SEATING CORPORATION
 
     The present text of Article 1 of the Company's Restated Certificate of
Incorporation reads as follows:
 
                                   "ARTICLE 1
 
                        The name of the Corporation is:
 
                           LEAR SEATING CORPORATION".
 
     If Proposal No. 2 to amend the Company's Restated Certificate of
Incorporation is approved by the stockholders, Article 1 of the Company's
Restated Certificate of Incorporation will read in its entirety as follows:
 
                                   "ARTICLE 1
 
                        The name of the Corporation is:
 
                               LEAR CORPORATION".
 
                                       A-1

<PAGE>   33
 

                                   EXHIBIT B
 
                                LEAR CORPORATION
 
                             1996 STOCK OPTION PLAN
 
     1. Purpose. The purposes of the Lear Corporation 1996 Stock Option Plan
(the "Plan") are, in general, to give Lear Corporation (the "Company") a
significant advantage in retaining employees, officers and directors and to
provide an incentive to selected key employees, officers and Eligible Directors
(as defined in Section 6(a)) of the Company, its subsidiaries and any parent
("Affiliates"), within the meaning of Section 424(f) of the Internal Revenue
Code of 1986, as amended ("Code"), and consultants and advisors whom the
Committee (as defined in Section 3) determines provide substantial and important
services to the Company (as limited in Section 6(a)), to acquire a proprietary
interest in the Company, to continue as employees, officers and directors or in
their other capacities, and to increase their efforts on behalf of the Company.
 
     2. The Plan. Two types of stock options may be granted under the Plan:
incentive stock options as defined in Code Section 422 and the regulations
promulgated thereunder ("ISOs") and options that do not qualify as incentive
stock options ("NQSOs"). All options shall be exercisable to purchase shares of
common stock, $.01 par value (the "Common Stock"), of the Company. Collectively,
ISOs and NQSOs are referred to herein as "Options".
 
     Subject to Sections 3 and 6(a), ISOs may be awarded to key employees of the
Company and its Affiliates, including employees who are officers and Eligible
Directors (as defined in Section 6(a)), but shall not be awarded to Eligible
Directors (as defined in Section 6(a)) or others who are not employees.
 
     Subject to Sections 3 and 6(a), NQSOs may be awarded to employees, Eligible
Directors (as defined in Section 6(a)) and consultants and advisors whom the
Committee (as defined in Section 3) determines provide substantial and important
services to the Company (as limited in Section 6(a)).
 
     To the extent that any Option is not designated as an ISO, or even if so
designated it does not qualify as an ISO, it shall be treated as a NQSO.
 
     3. Administration. The Plan shall be administered by the Compensation
Committee of the Board of Directors of the Company or any other committee
appointed by the Board of Directors, which committee, for purposes of this Plan,
shall be treated as the Compensation Committee (the "Committee"). The Committee
shall act by a majority of its members at the time in office and eligible to
vote on any particular matter, and such action may be taken either by a vote at
a meeting or in writing without a meeting. Subject to the provisions of the
Plan, the Committee shall from time to time and at its discretion: (i) grant
Options; (ii) determine which key employees, officers and Eligible Directors (as
defined in Section 6(a)) and consultants and advisors performing substantial and
important services (as limited in Section 6(a)) may be granted such Options
under the Plan ("Grantees"); (iii) determine whether any Option shall be an ISO
or NQSO; (iv) determine the number of shares subject to each Option; (v)
determine the term of each Option granted under the Plan; (vi) determine the
date or dates on which the Option shall vest and become exercisable; (vii)
determine the exercise price of any Option; (viii) determine the fair market
value of the Common Stock subject to the Options; (ix) determine the terms of
any agreement pursuant to which Options are granted; (x) amend any such
agreement with the consent of the Grantee; and (xi) determine any other matters
specifically delegated to it under the Plan or necessary for the proper
administration of the Plan.
 
     The Committee shall also have the sole and complete authority and
discretion to interpret and construe the terms of the Plan, of any agreement
pursuant to which Options are granted, and of any Option. Such interpretation
and construction by the Committee shall be final, binding and conclusive upon
all persons including, without limitation, the Company, stockholders of the
Company, the Plan and all persons claiming an interest under the Plan.
Notwithstanding anything contained in this Section to the contrary, no term of
the Plan relating to ISOs shall be interpreted, nor shall any discretion or
authority of the Committee be exercised, so as to disqualify the Plan under Code
Section 422 or, without the consent of the Grantee, to disqualify any ISO held
by a Grantee under Code Section 422.
 
                                       B-1

<PAGE>   34
 
     No member of the Committee or any director, officer, employee or agent of
the Company shall be liable for any action, interpretation or construction made
in good faith with respect to the Plan or any Option granted hereunder.
 
     4. Effectiveness and Termination of Plan. This Plan shall terminate on the
earliest of:
 
          a. The tenth anniversary of the effective date of the Plan as
     determined under this Section 4;
 
          b. The date when all shares of the Common Stock reserved for issuance
     under the Plan shall have been acquired through exercise of Options granted
     under the Plan; or
 
          c. The date determined by the Company's Board of Directors or the
     Committee.
 
This Plan shall become effective as of the date this Plan is approved by the
stockholders. Any Option outstanding under the Plan when the Plan terminates
shall remain in effect in accordance with the respective terms and conditions of
the Option and the Plan.
 
     5. The Stock. The aggregate number of shares of Common Stock that may be
issued under the Plan shall be 1,000,000 shares; provided, however, that the
maximum number of shares of Common Stock available with respect to the Options
granted by the Committee to any one Grantee under the Plan shall not exceed
100,000. Such number of shares may be set aside out of the authorized but
unissued shares of Common Stock not reserved for any other purpose, or shares of
Common Stock held in or acquired for the treasury of the Company. If any Option
terminates or expires unexercised, in whole or in part, the shares thereby
released may again be made subject to Options granted hereunder.
 
     6. Grant, Terms and Conditions of Options. Options may be granted by the
Committee at any time and from time to time prior to the termination of the
Plan. Each Option granted under the Plan shall be evidenced by an agreement in
substantially the form attached hereto as Exhibit A. The terms and conditions of
such Option agreement need not be identical with respect to each Grantee. The
Committee shall set forth in each such agreement: (i) the exercise price of the
Option; (ii) the number of shares of Common Stock subject to, and the expiration
date of, the Option; (iii) the manner, time and rate of exercise or vesting of
the Option; and (iv) whether the Option is an ISO or NQSO. For purposes of this
Section, an Option shall be deemed granted on the date the Committee selects an
individual to be a Grantee, determines the number of shares to be issued
pursuant to such Option and specifies the terms and conditions of the Option.
Except as hereinafter provided, Options granted pursuant to the Plan shall be
subject to the following terms and conditions:
 
          a. Grantee. Subject to Section 2 hereof, the Grantees of any Options
     hereunder shall be such key employees, officers and Eligible Directors of
     the Company and its Affiliates, as determined by the Committee, and
     consultants and advisors whom the Committee determines provide substantial
     and important services to the Company. Notwithstanding the foregoing, the
     substantial and important services provided by a consultant or an advisor
     may not be in connection with the offer or sale of securities in a capital
     raising transaction. An "Eligible Director" is any director of the Company
     who is an employee of the Company or an Affiliate, or an Independent
     Director (as defined in Section 6(k)).
 
          b. Price and Exercise. The exercise price of the shares of Common
     Stock upon exercise of an Option shall be no less than the fair market
     value of the shares at the time of the grant of an Option. If an ISO is
     granted to an employee owning shares of the Company possessing more than
     10% of the total combined voting power of all classes of shares of the
     Company as defined in Code Section 422 ("10% Stockholder"), the exercise
     price shall be no less than 110% of the fair market value of the shares at
     the time of the grant of the ISO. The fair market value of the Common Stock
     shall be:
 
             (i) the closing price of publicly traded Common Stock on the
        national securities exchange on which the Common Stock is listed (if the
        Common Stock is so listed) or on the NASDAQ National Market System (if
        the Common Stock is regularly quoted on the NASDAQ National Market
        System);
 
             (ii) if not so listed or regularly quoted, the mean between the
        closing bid and asked prices of publicly traded Common Stock in the
        over-the-counter market; or
 
                                       B-2

<PAGE>   35
 
             (iii) if such bid and asked prices are not available, as reported
        by any nationally recognized quotation service selected by the Company
        or as determined by the Committee in a manner consistent with the
        provisions of the Code.
 
          The notice of the exercise of any Option shall be accompanied by
     payment in full of the exercise price. Except as hereinafter provided, the
     exercise price shall be paid in United States dollars and in cash or by
     certified or cashier's check payable to the order of the Company at the
     time of purchase. At the discretion of the Committee, the exercise price,
     or any portion thereof, may be paid with: (i) Common Stock acquired through
     the exercise of an option granted by the Company which Common Stock has
     been held by the Grantee for at least one year, or any other Common Stock
     already owned by, and in the possession of, the Grantee; or (ii) any
     combination of cash, certified or cashier's check, and Common Stock meeting
     the requirements of clause (i) above. Any withholding tax, up to the
     minimum withholding requirement for supplemental wages, shall be paid with
     shares of Common Stock issuable to the Grantee upon exercise of the Option,
     with a fair market value equal to the minimum required withholding tax.
     Shares of Common Stock used to satisfy the exercise price of an Option
     and/or any required minimum withholding tax shall be valued at their fair
     market value as determined by the Committee as of the date of exercise.
 
          c. Vesting. Options shall vest in accordance with the schedule
     established for each Grantee; provided, however, that all Options awarded
     to a Grantee shall vest immediately upon said Grantee's death or disability
     as defined herein.
 
          d. Forfeiture. Notwithstanding anything contained herein to the
     contrary, the right (whether or not vested) of a Grantee to exercise his or
     her outstanding Options, if any, shall be forfeited if the Committee
     determines, in its sole discretion, that (i) the Grantee has entered into a
     business or employment which is detrimentally competitive with the Company
     or substantially injurious to the Company's financial interests; (ii) the
     Grantee has been discharged from employment with the Company or an
     Affiliate for Cause; or (iii) the Grantee performed acts of willful
     malfeasance or gross negligence in a matter of material importance to the
     Company or an Affiliate. For purposes of this Section 6(d), "Cause" shall
     have the meaning set forth in any unexpired employment or severance
     agreement between the Grantee and the Company and/or an Affiliate, and, in
     the absence of any such agreement, shall mean (i) the willful and continued
     failure of the Grantee to substantially perform his or her duties with or
     for the Company or an Affiliate, (ii) the engaging by the Grantee in
     conduct which is significantly injurious to the Company or an Affiliate,
     monetarily or otherwise, (iii) the Grantee's conviction of a felony, (iv)
     the Grantee's abuse of illegal drugs or other controlled substances or (v)
     the Grantee's habitual intoxication. For purposes of this Section 6(d),
     unless otherwise defined in the Grantee's employment or severance
     agreement, an act or omission is "willful" if such act or omission was
     knowingly done, or knowingly omitted to be done, by the Grantee not in good
     faith and without reasonable belief that such act or omission was in the
     best interest of the Company or an Affiliate.
 
          e. Additional Restrictions on Exercise of an ISO. The aggregate fair
     market value of Common Stock (determined at the time an ISO is granted)
     with respect to which an ISO is exercisable for the first time by a Grantee
     during any calendar year (under all incentive stock option plans, as
     defined in Code Section 422, of the Company and its Affiliates) shall not
     exceed $100,000. To the extent options are granted in excess of this
     limitation, they shall be treated as NQSOs.
 
          f. Duration of Options. Options may be granted for terms of up to but
     not exceeding ten years from the effective date the particular Option is
     granted. Notwithstanding the foregoing, ISOs granted to a 10% Stockholder
     may be for a term of up to but not exceeding five years from the effective
     date the particular ISO is granted.
 
          g. Termination of Employment. A Grantee's right to exercise an Option
     after the termination of his or her employment shall be only as follows:
 
             (i) Retirement. If the Grantee has a termination of employment by
        reason of retirement, he or she may within thirteen months following
        such termination (but not later than the date on which the
 
                                       B-3

<PAGE>   36
   
        Option would otherwise expire), exercise any Option that had vested and
        was exercisable on the date of his or her retirement. However, in the
        event of his or her death prior to the end of the thirteen-month period
        after his or her retirement, his or her estate shall have the right to
        exercise any Option that had vested and was exercisable on the date the
        Grantee retired within thirteen months following the Grantee's
        termination of employment (but not later than the date on which the
        Option would otherwise expire). If the Grantee has a termination of
        employment by reason of retirement, and if such termination of
        employment does not constitute a vesting event under an Option, such
        Grantee shall forfeit such Option to the extent that it was not vested
        and exercisable on the date of his or her termination of employment.
    
 
             (ii) Death. If a Grantee dies while employed by the Company or an
        Affiliate, the Option shall vest and become exercisable upon death and
        his or her estate shall have the right for a period of thirteen months
        following the date of such death (but not later than the date on which
        the Option would otherwise expire) to exercise the Option.
 
             (iii) Disability. If a Grantee has a termination of employment due
        to disability, as defined in Code Section 22(e)(3), the Option shall
        vest and become exercisable upon his or her termination of employment
        due to disability and he or she shall have the right for a period of
        thirteen months following the date of such termination of employment
        (but not later than the date on which the Option would otherwise expire)
        to exercise the Option.
 
   
             (iv) Other Reasons. Except as provided under Section 6(d) hereof,
        if a Grantee has a termination of employment due to any reason other
        than those provided above under "Retirement", "Death", or "Disability",
        the Grantee or his or her estate (in the event of his or her death after
        such termination) (a) may exercise any Option to the extent that it was
        vested and exercisable on the date of his or her termination of
        employment within the 30-day period following such termination (but not
        later than the date on which the Option would otherwise expire), and (b)
        shall forfeit any Option to the extent that it was not vested and
        exercisable on the date of his or her termination of employment.
    
 
             (v) Independent Directors. An Option received by an Independent
        Director shall vest and become exercisable solely in accordance with its
        terms.
 
           For purposes of this Section 6(g):
 
                (A) "Termination of employment" shall mean the termination of a
           Grantee's employment with the Company or an Affiliate. A Grantee
           employed by a subsidiary shall also be deemed to have a termination
           of employment if the subsidiary ceases to be an Affiliate of the
           Company, and the Grantee does not immediately thereafter become an
           employee of the Company or another Affiliate. A Grantee who is a
           consultant or advisor shall be considered to have terminated
           employment when substantial and important services, as determined by
           the Committee, are no longer provided to the Company by the Grantee.
 
                (B) "Retirement" shall mean termination of employment on or
           after attaining the age established by the Company as the normal
           retirement age in any unexpired employment agreement between the
           Grantee and the Company and/or an Affiliate, or, in the absence of
           such an agreement, the normal retirement age under the defined
           benefit tax-qualified retirement plan or, if none, the defined
           contribution tax-qualified retirement plan, sponsored by the Company
           or an Affiliate in which the Grantee participates.
 
                (C) A Grantee's "estate" shall mean his or her legal
           representatives upon his or her death or any person who acquires the
           right to exercise an Option by reason of the Grantee's death. The
           Committee may in its discretion require the transferee of a Grantee
           to supply it with written notice of the Grantee's death, a copy of
           the will or such other evidence as the Committee deems necessary to
           establish the validity of the transfer of an Option.
 
          h. Transferability of Option and Stock Acquired Upon Exercise of
     Option. Options shall be transferable only by will or the laws of descent
     and distribution. Options shall be exercisable during the Grantee's
     lifetime only by the Grantee, or by the guardian or legal representative of
     the Grantee. The
 
                                       B-4

<PAGE>   37
 
     Committee may, in its discretion, require a Grantee's guardian or legal
     representative to supply it with such evidence as the Committee deems
     necessary to establish the authority of the guardian or legal
     representative to exercise the Option on behalf of the Grantee. Except as
     limited by applicable securities laws and the provisions of Section 8
     hereof, shares of Common Stock acquired upon exercise of Options hereunder
     shall be freely transferable.
 
          i. Modifications, Extension and Renewal of Options. Subject to the
     terms and conditions and within the limitations of the Plan, the Committee
     may modify, extend or renew outstanding Options granted under the Plan, or
     accept the surrender of outstanding Options (to the extent not theretofore
     exercised) and grant new Options in substitution therefor (to the extent
     not theretofore exercised). The Committee shall not, however, modify any
     outstanding ISO so as to specify a lower exercise price. Notwithstanding
     the foregoing, no modification of an Option shall, without the consent of
     the Grantee, alter or impair any rights or obligations under any Option
     theretofore granted under the Plan or adversely affect the status of an ISO
     under Code Section 422.
 
          j. Other Terms and Conditions. Options may contain such other
     provisions, which shall not be inconsistent with any of the foregoing
     terms, as the Committee shall deem appropriate.
 
   
          k. Independent Directors Grants. An Option under the Plan for 1,250
     shares of Common Stock shall be granted each year to each person who is
     serving as an Independent Director on the date of the first Board of
     Directors meeting following the annual stockholders meeting. The exercise
     price for an Option granted under this Section shall be equal to the fair
     market value of the shares of Common Stock subject to the Option on the
     date of grant. Any Options granted to an Independent Director pursuant to
     this Section 6(k) shall vest and become exercisable, regardless of such
     Independent Director's continued service as a member of the Board of
     Directors of the Company, upon the earlier of (i) such Grantee's death or
     disability, as defined herein, or (ii) three years from the effective date
     of the grant. For purposes hereof, "Independent Directors" shall mean any
     member of the Company's Board of Directors who during his or her entire
     term as a director was not employed by Lehman Brothers Inc., The Cypress
     Group L.L.C., FIMA Finance Management Inc., or the Company or any of their
     respective affiliates.
    
 
     7. Adjustment for Changes in the Stock.
 
     a. In the event the shares of Common Stock, as presently constituted, shall
be changed into or exchanged for a different number or kind of shares of stock
or other securities of the Company or of another corporation (whether by reason
of merger, consolidation, recapitalization, reclassification, split, reverse
split, combination of shares, or otherwise) or if the number of such shares of
Common Stock shall be increased through the payment of a stock dividend, then
there shall be substituted for or added to each share of Common Stock
theretofore appropriated or thereafter subject or which may become subject to an
Option under this Plan, the number and kind of shares of stock or other
securities into which each outstanding share of Common Stock shall be so
changed, or for which each such share shall be exchanged, or to which each such
share shall be entitled, as the case may be. Outstanding Options shall also be
appropriately amended as to price and other terms as may be necessary to reflect
the foregoing events. In the event there shall be any other change in the number
or kind of the outstanding shares of the Common Stock, or of any stock or other
securities into which such Common Stock shall have been changed, or for which it
shall have been exchanged, then, if the Committee shall, in its sole discretion,
determine that such change equitably requires an adjustment in any Option
theretofore granted or which may be granted under the Plan, such adjustments
shall be made in accordance with such determination.
 
     b. Fractional shares resulting from any adjustment in Options pursuant to
Section 7 may be settled in cash or otherwise as the Committee shall determine.
Notice of any adjustment shall be given by the Company to each holder of an
Option which shall have been so adjusted and such adjustment (whether or not
such notice is given) shall be effective and binding for all purposes of the
Plan.
 
     8. Securities Law Requirements. If required by the Company, the notice of
exercise of an Option shall be accompanied by the Grantee's written
representation: (i) that the stock being acquired is purchased for investment
and not for resale or with a view to the distribution thereof; (ii)
acknowledging that such stock has not been registered under the Securities Act
of 1933, as amended (the "1933 Act"); and (iii) agreeing that such stock may not
be sold or transferred unless either there is an effective Registration
Statement for it under
 
                                       B-5

<PAGE>   38
 
the 1933 Act, or in the opinion of counsel for the Company, such sale or
transfer is not in violation of the 1933 Act.
 
     No Option granted pursuant to this Plan shall be exercisable in whole or in
part, nor shall the Company be obligated to sell any shares of Common Stock
subject to any such Option, if such exercise and sale may, in the opinion of
counsel for the Company, violate the 1933 Act (or other federal or state
statutes having similar requirements), as it may be in effect at that time.
 
     Each Option shall be subject to the further requirement that, if at any
time the Committee shall determine in its discretion that the listing or
qualification of the shares of Common Stock subject to such Option under any
securities exchange requirements or under any applicable law, or the consent or
approval of any governmental regulatory body, is necessary as a condition of, or
in connection with, the granting of such Option or the issuance of shares
thereunder, such Option may not be exercised in whole or in part, unless such
listing, qualification, consent or approval shall have been effected or obtained
free of any conditions not acceptable to the Committee.
 
     No person who acquires shares of Common Stock under the Plan may, during
any period of time that such person is an affiliate of the Company, within the
meaning of the rules and regulations of the Securities and Exchange Commission
under the 1933 Act, sell such shares of Common Stock, unless such offer and sale
is made pursuant to (i) an effective registration statement under the 1933 Act,
which is current and includes the shares to be sold, or (ii) an appropriate
exemption from the registration requirements of the 1933 Act, such as that set
forth in Rule 144 promulgated under the 1933 Act.
 
     With respect to individuals subject to Section 16 of the Securities and
Exchange Act of 1934, as amended (the "1934 Act"), transactions under this Plan
are intended to comply with all applicable conditions of Rule 16b-3, or its
successors under the 1934 Act. To the extent any provision of the Plan or action
by the Committee fails to so comply, the Committee may determine, to the extent
permitted by law, that such provision or action shall be null and void.
 
     9. Amendment of the Plan. The Committee may amend the Plan at any time;
provided, however, that approval of the holders of a majority of the outstanding
voting stock of the Company is required for amendments which:
 
          (i) decrease the minimum exercise price for Options;
 
          (ii) extend the term of the Plan beyond ten years;
 
          (iii) extend the maximum terms of the Options granted hereunder beyond
     ten years;
 
          (iv) change the class of eligible employees, officers, directors and
     other Grantees; or
 
          (v) increase the aggregate number of shares of Common Stock which may
     be issued pursuant to the provisions of the Plan.
 
     Notwithstanding the foregoing, the Board of Directors may, without the need
for stockholders' approval, amend the Plan in any respect necessary to qualify
ISOs as incentive stock options under Code Section 422.
 
     Notwithstanding the foregoing, Section 6(k) may only be amended once every
six months, unless the amendment is necessary to conform to changes in the Code,
or regulations thereunder.
 
     10. No Obligation to Exercise Option. The granting of an Option shall
impose no obligation upon the Grantee (or upon a transferee of a Grantee) to
exercise such Option.
 
     11. No Limitation on Rights of the Company. The grant of any Option shall
not in any way affect the right or power of the Company to make adjustments,
reclassification, or changes in its capital or business structure or to merge,
consolidate, dissolve, liquidate, sell or transfer all or any part of its
business or assets.
 
     12. Plan Not a Contract of Employment. The Plan is not a contract of
employment, and the terms of employment of any Grantee shall not be affected in
any way by the Plan or related instruments except as specifically provided
therein. The establishment of the Plan shall not be construed as conferring any
legal
 
                                       B-6

<PAGE>   39
 
rights upon any Grantee for a continuation of employment, nor shall it interfere
with the right of the Company or an Affiliate to discharge any Grantee and to
treat him or her without regard to the effect which such treatment might have
upon him or her as a Grantee.
 
     13. Expenses of the Plan. All of the expenses of the Plan shall be paid by
the Company.
 
     14. Effect Upon Other Compensation. Nothing contained herein shall prevent
the Company or any Affiliate from adopting other or additional compensation
arrangements for its employees or directors.
 
     15. Grantee to Have No Rights as a Stockholder. No Grantee of any Option
shall have any rights as a stockholder with respect to any shares subject to his
or her Option prior to the date on which he or she is recorded as the holder of
such shares on the records of the Company. No Grantee of any Option shall have
the rights of a stockholder until he or she has paid in full the exercise price.
 
     16. Notice. Notice to the Committee shall be deemed given if in writing,
and delivered personally or mailed to the Secretary of the Company at its
principal executive offices by certified, registered or express mail at the then
principal office of the Company.
 
     17. Governing Law. This Plan and all Option agreements entered into
pursuant thereto shall be construed and enforced in accordance with, and
governed by, the laws of the State of Delaware, determined without regard to its
conflicts of law rules.
 
                                       B-7

<PAGE>   40
 
                                   EXHIBIT A
 
                                LEAR CORPORATION
                             1996 STOCK OPTION PLAN
                             STOCK OPTION AGREEMENT
 
                                       A-1

<PAGE>   41
 
                                LEAR CORPORATION
 
                             1996 STOCK OPTION PLAN
               [NONQUALIFIED] [INCENTIVE] STOCK OPTION AGREEMENT
 
     STOCK OPTION AGREEMENT (the "Agreement"), dated as of               ,
between Lear Corporation, a Delaware corporation (the "Company"), and the
individual whose name appears on the signature page hereof (the "Grantee"), who
is a key employee, officer or an Eligible Director (as defined in Section 6(a)
of the Plan) of the Company or an Affiliate (as defined in Section 1 of the
Plan), or a consultant or advisor who the Committee (as defined in Section 3 of
the Plan) has determined provides substantial and important services (as limited
in Section 6(a) of the Plan) to the Company.
 
     In accordance with the terms of the Lear Corporation 1996 Stock Option Plan
(the "Plan"), the Company hereby grants to the Grantee [a nonqualified] [an
incentive] stock option (the "Option") to purchase all or any part of an
aggregate of        shares of common stock, $.01 par value per share ("Common
Stock"), of the Company.
 
     To evidence the Option and to set forth its terms and conditions, the
Company and the Grantee hereby agree as follows:
 
          1. Confirmation of Grant. The Company hereby evidences and confirms
     its grant of the Option to the Grantee on the date of this Agreement.
 
          2. Number of Shares. The Option shall be for an aggregate of
            shares of Common Stock.
 
          3. Exercise Price. The exercise price shall be $   per share of Common
     Stock for a total of $       .
 
          4. Medium and Time of Payment.
 
          (a) The exercise price shall be paid in United States dollars and in
     cash or by certified or cashier's check payable to the order of the Company
     at the time of purchase.
 
          [(b) The exercise price or any portion thereof, may be paid with: (i)
     Common Stock acquired through the exercise of an option granted by the
     Company which Common Stock has been held by the Grantee for at least one
     year, or any other Common Stock already owned by, and in the possession of,
     the Grantee; or (ii) any combination of cash, certified or cashier's check,
     and Common Stock meeting the requirements of clause (i) above.(1)]
 
          (c) Any withholding tax, up to the minimum withholding requirement for
     supplemental wages, shall be paid with shares of Common Stock issuable to
     the Grantee upon exercise of the Option.
 
          (d) Shares of Common Stock used to satisfy [the exercise price of the
     Option and/or(2)] any minimum required withholding tax shall be valued at
     their fair market value as determined by the Committee as of the date of
     exercise.
 
          (e) Payment in full of the exercise price is required prior to the
     issuance of any shares of Common Stock pursuant to the Option.
 
          5. Term, Vesting and Exercise of the Option.
 
          (a) The Option shall expire ten years from the date of this Agreement.
 
- ---------------
 
1 Use this language if the Grantee may pay all or any portion of the exercise
  price with shares of Common Stock already owned by the Grantee.
 
2 Use this language if the Grantee may pay all or any portion of the exercise
  price with shares of Common Stock already owned by the Grantee.
 
                                       A-2

<PAGE>   42
          (b) The Option shall vest on the earlier of: (i)          3, or (ii)
     the Grantee's [retirement,4] death or disability, as defined herein.
 
          (c) The Option shall become exercisable on the earlier of:
     (i)          5, or (ii) the Grantee's [retirement,6] death or disability,
     as defined herein.
 
          (d) Notwithstanding anything contained herein to the contrary, the
     right (whether or not vested) of a Grantee to exercise the Option shall be
     forfeited if the Committee determines, in its sole discretion, that (i) the
     Grantee has entered into a business or employment which is detrimentally
     competitive with the Company or substantially injurious to the Company's
     financial interests; (ii) the Grantee has been discharged from employment
     with the Company or an Affiliate for Cause; or (iii) the Grantee performed
     acts of willful malfeasance or gross negligence in a matter of material
     importance to the Company or an Affiliate. For purposes of this Section,
     "Cause" shall have the meaning set forth in any unexpired employment or
     severance agreement between the Grantee and the Company and/or an
     Affiliate, and, in the absence of any such agreement, shall mean (i) the
     willful and continued failure of the Grantee to substantially perform his
     or her duties with or for the Company or an Affiliate, (ii) the engaging by
     the Grantee in conduct which is significantly injurious to the Company or
     an Affiliate, monetarily or otherwise, (iii) the Grantee's conviction of a
     felony, (iv) the Grantee's abuse of illegal drugs or other controlled
     substances or (v) the Grantee's habitual intoxication. For purposes of this
     Section, unless otherwise defined in the Grantee's employment or severance
     agreement, an act or omission is "willful" if such act or omission was
     knowingly done, or knowingly omitted to be done, by the Grantee not in good
     faith and without reasonable belief that such act or omission was in the
     best interest of the Company or an Affiliate.
 
          (e) The Option may be exercised by written notice to the Company
     indicating the number of shares of Common Stock being purchased. Such
     notice shall be signed by the Grantee and shall be accompanied by full
     payment of the exercise price. When the Option becomes vested and
     exercisable, it may be exercisable in whole at any time or in part from
     time to time as to any or all full shares of Common Stock under the Option.
     Notwithstanding the foregoing, the Option may not be exercised for fewer
     than 100 shares at any one time or fewer than all remaining shares if fewer
     than 100 shares of Common Stock may be purchased under the Option.
 
     6. Termination of Employment. A Grantee's right to exercise the Option
after termination of his or her employment shall be only as follows:
 
   
          (i) Retirement. If the Grantee has a termination of employment by
     reason of retirement, he or she may within thirteen months following such
     termination (but not later than the date on which the Option would
     otherwise expire), exercise any Option that had vested and was exercisable
     on the date of his or her retirement. However, in the event of his or her
     death prior to the end of the thirteen-month period after his or her
     retirement, his or her estate shall have the right to exercise any Option
     that had vested and was exercisable on the date the Grantee retired within
     thirteen months following the Grantee's termination of employment (but not
     later than the date on which the Option would otherwise expire). If the
     Grantee has a termination of employment by reason of retirement, and if
     such termination of employment does not constitute a vesting event under
     Section 5, the Grantee shall forfeit the Option to the extent it was not
     vested and exercisable on the date of his or her termination of employment.
    
 
- ---------------
 
3 For a grant to an Independent Director under Section 6(k) of the Plan, insert
  the date which is the third
  anniversary of the date of the Agreement.
 
4 Use this language if the Option will vest upon retirement.
 
5 For a grant to an Independent Director under Section 6(k) of the Plan, insert
  the date which is the third anniversary of the date of the Agreement.
 
6 Use this language if the Option will become exercisable upon retirement.
 
                                       A-3

<PAGE>   43
 
          (ii) Death. If a Grantee dies while employed by the Company or an
     Affiliate, the Option shall vest and become exercisable upon death and his
     or her estate shall have the right for a period of thirteen months
     following the date of such death (but not later than the date on which the
     Option would otherwise expire) to exercise the Option.
 
          (iii) Disability. If a Grantee has a termination of employment due to
     disability, as defined in Code Section 22(e)(3), the Option shall vest and
     become exercisable upon his or her termination of employment due to
     disability and he or she shall have the right for a period of thirteen
     months following the date of such termination of employment (but not later
     than the date on which the Option would otherwise expire) to exercise the
     Option.
 
   
          (iv) Other Reasons. Except as provided under Section 5(d) hereof, if a
     Grantee has a termination of employment is due to any reason other than
     those provided above under "Retirement", "Death", or "Disability", the
     Grantee or his or her estate (in the event of his or her death after such
     termination) (a) may exercise the Option to the extent that it was vested
     and exercisable on the date of his or her termination of employment within
     the 30-day period following such termination (but not later than the date
     on which the Option would otherwise expire) and (b) shall forfeit the
     Option to the extent that it was not vested and exercisable on the date of
     his or her termination of employment.
    
 
          (v) Independent Directors. An Option received by an Independent
     Director of the Company pursuant to Section 6(k) of the Plan shall vest and
     become exercisable in accordance with Section 5 hereof regardless of such
     Grantee's continued service as a member of the Board of Directors.
 
        For purposes of this Section:
 
             (i) "Termination of employment" shall mean the termination of a
        Grantee's employment with the Company or an Affiliate. A Grantee
        employed by a subsidiary shall also be deemed to have a termination of
        employment if the subsidiary ceases to be an Affiliate of the Company,
        and the Grantee does not immediately thereafter become an employee of
        the Company or another Affiliate. A Grantee who is a consultant or
        advisor shall be considered to have terminated employment when
        substantial and important services, as determined by the Committee, are
        no longer provided to the Company by the Grantee.
 
             (ii) "Retirement" shall mean termination of employment on or after
        attaining the age established by the Company as the normal retirement
        age in any unexpired employment agreement between the Grantee and the
        Company and/or an Affiliate, or, in the absence of such an agreement,
        the normal retirement age under the defined benefit tax-qualified
        retirement plan or, if none, the defined contribution tax-qualified
        retirement plan, sponsored by the Company or an Affiliate in which the
        Grantee participates.
 
             (iii) A Grantee's "estate" shall mean his or her legal
        representatives upon his or her death or any person who acquires the
        right to exercise the Option by reason of the Grantee's death. The
        Committee may in its discretion require the transferee of a Grantee to
        supply it with written notice of the Grantee's death, a copy of the will
        or such other evidence as the Committee deems necessary to establish the
        validity of the transfer of the Option.
 
     7. Transferability of Option and Stock Acquired Upon Exercise of
Option. The Option shall be transferable only by will or the laws of descent and
distribution and shall be exercisable during the Grantee's lifetime only by the
Grantee or by the guardian or legal representative of the Grantee. The Committee
may, in its discretion, require the Grantee's guardian or legal representative
to supply it with such evidence as the Committee deems necessary to establish
the authority of the guardian or legal representative to exercise the Option on
behalf of the Grantee. Except as limited by applicable securities laws and the
provisions of Section 8 hereof, shares of Common Stock acquired upon exercise of
the Option shall be freely transferable.
 
     8. Securities Law Requirements.
 
          (a) If required by the Company, the notice of exercise of the Option
     shall be accompanied by the Grantee's written representation: (i) that the
     stock being acquired is purchased for investment and not for
 
                                       A-4

<PAGE>   44
 
     resale or with a view to the distribution thereof; (ii) acknowledging that
     such stock has not been registered under the Securities Act of 1933, as
     amended (the "1933 Act"); and (iii) agreeing that such stock may not be
     sold or transferred unless either there is an effective Registration
     Statement for it under the 1933 Act, or in the opinion of counsel for the
     Company, such sale or transfer is not in violation of the 1933 Act.
 
          (b) This Option not shall be exercisable in whole or in part, nor
     shall the Company be obligated to sell any shares of Common Stock subject
     to such Option, if such exercise and sale may, in the opinion of counsel
     for the Company, violate the 1933 Act (or other federal or state statutes
     having similar requirements), as it may be in effect at that time.
 
          (c) The Option is subject to the further requirement that, if at any
     time the Committee shall determine in its discretion that the listing or
     qualification of the shares of Common Stock subject to such Option under
     any securities exchange requirements or under any applicable law, or the
     consent or approval of any governmental regulatory body, is necessary as a
     condition of, or in connection with, the granting of such Option or the
     issuance of shares thereunder, such Option may not be exercised in whole or
     in part, unless such listing, qualification, consent or approval shall have
     been effected or obtained free of any conditions not acceptable to the
     Committee.
 
          (d) No person who acquires shares of Common Stock pursuant to this
     Agreement may, during any period of time that such person is an affiliate
     of the Company, within the meaning of the rules and regulations of the
     Securities and Exchange Commission under the 1933 Act, sell such shares of
     Common Stock, unless such offer and sale is made pursuant to (i) an
     effective registration statement under the 1933 Act, which is current and
     includes the shares to be sold, or (ii) an appropriate exemption from the
     registration requirements of the 1933 Act, such as that set forth in Rule
     144 promulgated under the 1933 Act.
 
          (e) With respect to individuals subject to Section 16 of the
     Securities Exchange Act of 1934, as amended (the "1934 Act"), transactions
     under this Agreement are intended to comply with all applicable conditions
     of Rule 16b-3, or its successors under the 1934 Act. To the extent any
     provision of the Agreement or action by the Committee fails to so comply,
     the Committee may determine, to the extent permitted by law, that such
     provision or action shall be null and void.
 
     9. No Obligation to Exercise Option. The granting of the Option shall
impose no obligation upon the Grantee (or upon a transferee of a Grantee) to
exercise the Option.
 
     10. No Limitation on Rights of the Company. The grant of the Option shall
not in any way affect the right or power of the Company to make adjustments,
reclassification, or changes in its capital or business structure, or to merge,
consolidate, dissolve, liquidate, sell or transfer all or any part of its
business or assets.
 
     11. Plan and Agreement Not a Contract of Employment. Neither the Plan nor
this Agreement is a contract of employment, and no terms of employment of the
Grantee shall be affected in any way by the Plan, this Agreement or related
instruments except as specifically provided therein. Neither the establishment
of the Plan nor this Agreement shall be construed as conferring any legal rights
upon the Grantee for a continuation of employment, nor shall it interfere with
the right of the Company or any Affiliate to discharge the Grantee and to treat
him or her without regard to the effect that such treatment might have upon him
or her as the holder of the Option.
 
     12. Grantee to Have No Rights as a Stockholder. The Grantee shall not have
any rights as a stockholder with respect to any shares of Common Stock subject
to the Option prior to the date on which he or she is recorded as the holder of
such shares on the records of the Company. The Grantee shall not have the rights
of a stockholder until he or she has paid in full the exercise price.
 
     13. Notice. Any notice or other communication required or permitted
hereunder shall be in writing and shall be delivered personally, or sent by
certified, registered or express mail, postage prepaid. Any such notice shall be
deemed given when so delivered personally or, if mailed, three days after the
date of deposit in the United States mail, in the case of the Company to 21557
Telegraph Road, P. O. Box 5008, Southfield,
 
                                       A-5

<PAGE>   45
 
Michigan, 48086-5008, Attention: James H. Vandenberghe and, in the case of the
Grantee, to its address set forth on the signature page hereto or, in each case,
to such other address as may be designated in a notice given in accordance with
this Section.
 
     14. Governing Law. This Agreement shall be construed and enforced in
accordance with, and governed by, the laws of the State of Delaware, determined
without regard to its conflict of law rules.
 
     15. Plan Document Controls. The rights herein granted are in all respects
subject to the provisions set forth in the Plan to the same extent and with the
same effect as if set forth fully herein. In the event that the terms of this
Agreement conflict with the terms of the Plan document, the Plan document shall
control.
 
     IN WITNESS WHEREOF, the Company and the Grantee have duly executed this
Agreement as of the date first written above.
 
                                          LEAR CORPORATION
 
                                          By:
                                          --------------------------------------
 
                                          Its:
                                          --------------------------------------
 
                                          --------------------------------------
                                                  [Grantee's Signature]
 
                                          Grantee's Name and Address for notices
                                          hereunder:
 
                                          --------------------------------------
 
                                          --------------------------------------
 
                                          --------------------------------------
 
                                       A-6

<PAGE>   46
LEAR SEATING CORPORATION
       [LOGO]
Dear Stockholder:

The Annual Meeting of Stockholders (the "Meeting") of Lear Seating Corporation
(the "Company") will be held at 10:00 a.m. on Thursday, May 9, 1996 at The
Management Education Center, Michigan State University, 811 West Square Lake
Road, Troy, Michigan.

To be sure that your vote is counted, we urge you to complete and sign the
proxy/voting instruction card below, detach it from this letter and return it
in the postage paid envelope enclosed in this package.  The giving of such
proxy does not affect your right to vote in person if you attend the meeting. 
The prompt return of your signed proxy will aid the Company in reducing the
expense of additional proxy solicitation.

   
  In order to assist the Company in preparing for the Meeting PLEASE INDICATE
ON ITEM 5 ON THE PROXY WHETHER YOU CURRENTLY PLAN TO ATTEND THE MEETING.  
If you attend the Meeting in person, detach and bring this letter to the 
meeting as an admission ticket for you and your guests. 
    


March 27, 1996

                            DETACH PROXY CARD HERE


   

<TABLE>
<S><C>

1. Election of Directors    FOR all nominees   /  /       WITHHOLD AUTHORITY to vote   /  /          *EXCEPTIONS   /  /
                            listed below                  for all nominees listed below.

Nominees: Robert E. Rossiter, James H. Vandenberghe, Robert W. Shower
          and Alan H. Washkowitz.

*Exceptions ________________________________________________________________________________________________________
INSTRUCTIONS: To withhold authority to vote for any individual nominee, mark the "Exceptions" box and write that 
              nominee's name in the space provided.

2. To approve an amendment to the Company's Restated            4. To ratify the appointment of Arthur Andersen LLP 
   Certificate of Incorporation that would change the              as independent auditor for the Company for the 
   name of the Company to "Lear Corporation."                      fiscal year ending December 31, 1996.

   FOR /  /      AGAINST /  /       ABSTAIN /  /                   FOR /  /      AGAINST /  /       ABSTAIN /  /



                                                                5. Do you intend to attend the Meeting?
3. To approve the Company's 1996 Stock Option Plan.                YES  /  /       NO  /  /

   FOR /  /      AGAINST /  /       ABSTAIN /  /

In their discretion the Proxies are authorized to vote upon such
other matters as may properly come before the meeting or any                             Change of Address 
adjournment or postponement thereof.                                                     Mark Here   /  /

                                                                              Please sign this proxy and return it promptly
                                                                              whether or not you expect to attend the Meeting.
                                                                              You may nevertheless vote in person if you attend.
                                                                              Please sign exactly as your name appears herein.
                                                                              Give full title if an Attorney, Executor, 
                                                                              Aministrator, Trustee, Guardian, etc.  For an 
                                                                              account in the name of two or more persons, each
                                                                              should sign, or if one signs, he should attach
                                                                              evidence of his authority.

                                                                              Dated: ________________________________, 1996

                                                                              ______________________________________________
                                                                                           signature

                                                                              ______________________________________________
                                                                                           signature

                                                                              Votes must be indicated   /x/
(Please sign, date and return this proxy in the enclosed postage prepaid envelope.)

</TABLE>

    


<PAGE>   47
                               ADMISSION TICKET


                           LEAR SEATING CORPORATION


                        ANNUAL MEETING OF STOCKHOLDERS

                          MAY 9, 1996 AT 10:00 A.M.
                       THE MANAGEMENT EDUCATION CENTER
                          MICHIGAN STATE UNIVERSITY
                                TROY, MICHIGAN

                 ADMITS ONE STOCKHOLDER AND UP TO TWO GUESTS



LEAR SEATING CORPORATION                          PROXY/VOTING INSTRUCTION CARD
- -------------------------------------------------------------------------------

     This proxy is solicited on behalf of the Board of Directors of Lear
  Seating Corporation for the Annual Meeting of Stockholders on May 9, 1996 or
  any adjournment or postponement thereof (the "Meeting").

   
      The undersigned appoints Joseph F. McCarthy and Donald J. Stebbins and 
  each of them, with full power of substitution in each of them, the proxies
  of the undersigned, to vote for and on behalf of the undersigned all shares
  of Lear Seating Corporation Common Stock which the undersigned may be 
  entitled to vote on all matters properly coming before the Meeting, as set 
  forth in related Notice of Annual Meeting and Proxy Statement, both of which 
  have been received by the undersigned.
    

      This proxy, when properly executed, will be voted in the manner directed
  herein by the undersigned stockholder.  If no direction is given, this proxy
  will be voted FOR proposals 1, 2, 3 and 4.
      



                                                  LEAR SEATING CORPORATION
                                                  P.O. BOX 11520
                                                  NEW YORK, NY 10203-0520