<PAGE>   1
 
                                  SCHEDULE 14A
                                 (RULE 14A-101)
                    INFORMATION REQUIRED IN PROXY STATEMENT
                            SCHEDULE 14A INFORMATION
          PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
                     EXCHANGE ACT OF 1934 (AMENDMENT NO.  )
 
     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 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] No fee required.
 
     [ ] 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 CORPORATION
 
                               ------------------
 

                    NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
                                  MAY 14, 1998
 
                               ------------------
 
     The Annual Meeting of Stockholders (the "Meeting") of Lear Corporation
("Lear" or the "Company") will be held at the Automotive Hall of Fame, 21400
Oakwood Boulevard, Dearborn, Michigan 48121, on Thursday, May 14, 1998, at 10:00
a.m., for the following purposes:
 
        1. To elect three directors to hold office until the 2001 Annual Meeting
           of Stockholders;
 
        2. To ratify the appointment of Arthur Andersen LLP as independent
           auditors of the Company for the 1998 fiscal year; and
 
        3. 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 16, 1998 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
 
Southfield, Michigan
M
arch 20, 1998

<PAGE>   3
 
                               TABLE OF CONTENTS
 

<TABLE>
<CAPTION>
                                                                PAGE
                                                                ----
<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 AND DIRECTORS....................................      4
  Directors and Executive Officers..........................      4
  Security Ownership of Certain Beneficial Owners and
     Management.............................................      7
  Section 16(a) Beneficial Ownership Reporting Compliance...      8
  Meetings of the Board of Directors and Committees.........      8
  Compensation of Directors.................................      9
EXECUTIVE COMPENSATION......................................     10
  Summary Compensation Table................................     10
  Option Grants and Exercises and Long-Term Incentive Awards
     in Last Fiscal Year....................................     11
  Pension Plan and Benefits.................................     12
  Qualified Pension Plan....................................     12
  Pension Equalization Plan.................................     13
  Retirement Savings Plan...................................     14
  1988 Stock Option Plan....................................     14
  1992 Stock Option Plan....................................     15
  1994 Stock Option Plan....................................     15
  1996 Stock Option Plan....................................     15
  Long-Term Stock Incentive Plan............................     15
  Employment and Other Agreements...........................     16
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER
  PARTICIPATION.............................................     17
COMPENSATION COMMITTEE REPORT...............................     17
  Introduction..............................................     17
  Executive Compensation Policy.............................     17
  Base Salary...............................................     17
  Annual Incentives.........................................     18
  Long-Term Incentives......................................     18
  Management Stock Ownership Requirements...................     18
  Stock Options.............................................     19
  Performance Share Awards..................................     19
  Management Stock Purchase Program.........................     19
  Retirement Savings Plan...................................     19
  Executive Supplemental Savings Plan.......................     20
  Estate Preservation Plan..................................     20
  Chief Executive Officer Compensation......................     20
  Tax Treatment of Executive Compensation...................     21
PERFORMANCE GRAPH...........................................     22
CERTAIN TRANSACTIONS........................................     23
  Lehman Equity Offering....................................     23
  Credit Agreement..........................................     23
  Management Equity Participation...........................     23
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS

  (PROPOSAL NO. 2)..........................................     23
STOCKHOLDER PROPOSALS FOR 1999 ANNUAL MEETING OF
  STOCKHOLDERS..............................................     24
OTHER MATTERS...............................................     24
</TABLE>


<PAGE>   4
 
                                LEAR 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 Corporation ("Lear" or the "Company")
for use in voting at the Annual Meeting of Stockholders (the "Meeting") to be
held at the Automotive Hall of Fame, 21400 Oakwood Boulevard, Dearborn, Michigan
48121, on Thursday, May 14, 1998, at 10:00 a.m., 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 20, 1998.
 
     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 and FOR the
ratification of the appointment of Arthur Andersen LLP as independent auditors
for the Company in the 1998 fiscal year.
 
     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, Corporate Investor
Communications, Inc. has been retained for solicitation of all brokers and
nominees at a cost of approximately $4,000, plus customary fees and 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 16, 1998, the record date fixed for the
determination of stockholders entitled to notice of and to vote at the Meeting,
there were outstanding 67,020,912 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 16, 1998 shall be entitled to one vote per share.
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 three 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 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 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 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 three directors to hold office,
subject to the provisions of the Company's by-laws, until the Annual Meeting of
Stockholders in 2001 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, upon the recommendation of Lear's Nominating Committee, has
nominated Kenneth L. Way, Larry W. McCurdy and Roy E. Parrott 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. Way, McCurdy and Parrott, the nominees set forth below. Proxies cannot
be voted for a greater number of directors than the number of nominees named.
 
     Messrs. Way, McCurdy and Parrott 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.
 
                                        2

<PAGE>   6
 
     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>
Kenneth L. Way......................    58         1988        Chairman of the Board and
                                                               Chief Executive Officer
Larry W. McCurdy....................    62         1988        Director
Roy E. Parrott......................    57         1997        Director
</TABLE>

 
     Kenneth L. Way. Mr. Way is Chairman of the Board and Chief Executive
Officer of the Company, a position he has held since 1988. Prior to this, he
served as Corporate Vice President, Automotive Group of Lear Siegler, Inc.
("LSI") since October 1984. During the previous six years, Mr. Way was President
of LSI's General Seating Division. Prior to this, he was President of LSI's
Metal Products Division in Detroit for three years. Other positions held by Mr.
Way during his 31 years at Lear 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 Comerica, Inc. and R.P. Scherer
Corporation.
 
     Larry W. McCurdy. Mr. McCurdy became a director of the Company in 1988. Mr.
McCurdy is Chairman of the Board of Directors, President and Chief Executive
Officer of Echlin, Inc. ("Echlin"), a worldwide manufacturer of motor vehicle
parts, a position he has held since March 1997. Prior to this, Mr. McCurdy was
Executive Vice President, Operations of Cooper Industries, Inc., a diversified
manufacturing company, from April 1994 to March 1997, President and Chief
Executive Officer of Moog Automotive, Inc., since November 1985 and President
and Chief Operating Officer of Echlin since August 1983, after serving as Vice
President of Finance from February 1983. Mr. McCurdy also serves as a director
of Mohawk Industries, Inc. and Breed Technologies, Inc.
 
     Roy E. Parrott. Mr. Parrott, who has been a director of the Company since
February 1997, has been President and a director of Simpson Industries Inc.
since 1989, Chief Executive Officer of Simpson Industries Inc. since 1994 and
Chairman of Simpson Industries Inc. since November 1997. From 1989 to November
1997, Mr. Parrott was president of Simpson Industries Inc. Simpson Industries
Inc. designs, engineers and manufacturers precision machined components, used
primarily in automobile, light truck and diesel engines.
 
                                 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 AND DIRECTORS
 
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. Each executive
officer is elected annually by the Board of Directors of the Company and serves
at the pleasure of the Board of Directors and the Chief Executive Officer.
 

<TABLE>
<CAPTION>
                   NAME                     AGE                        POSITION
                   ----                     ---                        --------
<S>                                         <C>   <C>
Gian Andrea Botta(b)......................  44    Director
Douglas G. DelGrosso......................  36    Vice President and President -- GM Division
Irma B. Elder(b)..........................  67    Director
Charles E. Fisher.........................  44    Vice President and President -- Chrysler Division
Gerald G. Harris..........................  64    Senior Vice President -- Latin American Operations
James A. Hollars..........................  53    Senior Vice President -- Premium Car Division
Roger A. Jackson..........................  51    Senior Vice President -- Human Resources
Daniel A. Jannette........................  55    Vice President and President -- Technology Division
Robert G. Lawrie..........................  53    Senior Vice President -- Global Mergers and
                                                  Acquisitions
Raymond F. Lowry..........................  52    Vice President and Treasurer
Joseph F. McCarthy........................  54    Vice President, Secretary and General Counsel
Larry W. McCurdy..........................  62    Director
Terrence E. O'Rourke......................  51    Senior Vice President -- Ford and Chrysler
                                                  Divisions
Roy E. Parrott............................  57    Director
Frank J. Preston..........................  55    Senior Vice President -- Interior Systems Group
Robert E. Rossiter(a).....................  52    President and Chief Operating Officer --
                                                  International Operations and Director
Robert W. Shower(a).......................  60    Director
David P. Spalding(b)......................  43    Director
Donald J. Stebbins........................  40    Senior Vice President and Chief Financial Officer
James A. Stern(b).........................  47    Director
James H. Vandenberghe(a)..................  48    President and Chief Operating Officer -- North
                                                  American Operations and Director
Kenneth L. Way............................  58    Chairman of the Board and Chief Executive Officer
</TABLE>

 
- -------------------------
(a) Term as a director expires in 1999.
 
(b) Term as a director expires in 2000.
 
     Set forth below is a description of the business experience of each
director and executive officer of the Company other than Messrs. McCurdy,
Parrott and Way, whose biographies are set out in the section entitled "Election
of Directors."
 
     Gian Andrea Botta. Mr. Botta became a director of the Company on December
31, 1993, upon the merger of Lear Holdings Corporation ("Holdings"), Lear's
former parent, into Lear, which occurred in 1993 (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., the international investment
holding company of IFI, S.p.A. and the sole owner of all the issued and
outstanding capital stock of FIMA Finance Management Inc. ("FIMA"), since
February 1994. Previously, Mr. Botta was President of IFINT-USA Inc., the
predecessor 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 Constitution Re Inc., Western Industries Inc., Riverwood
International Corporation and Rockefeller Center Properties, Inc.
 
     Douglas G. DelGrosso. Mr. DelGrosso is Vice President and President -- GM
Division of the Company, a position he has held since May 1997. Previously, he
was Vice President and President -- Chrysler Division of the Company since
December 1995. Other positions held by Mr. DelGrosso during his 14 years with
the Company include Vice President -- Operations for the GM Division and Group
Engineering Manager.
 
                                        4

<PAGE>   8
 
     Irma B. Elder. Ms. Elder, who has been a director of the Company since
February 1997, has owned and operated various Detroit area automobile
dealerships since 1983. Businesses presently owned and operated by Ms. Elder had
gross revenues of over $350 million in 1997. In addition, Ms. Elder serves on
the Board of Directors of the Federal Reserve Bank of Chicago (Detroit Branch).
Ms. Elder is also a board member of the Detroit Chamber of Commerce and a member
of the Michigan Hispanic Chamber of Commerce.
 
     Charles E. Fisher. Mr. Fisher is Vice President and President -- Chrysler
Division of the Company, a position he has held since May 1997. Mr. Fisher
joined Lear in 1985 as Sales Manager. Positions previously held by Mr. Fisher at
Lear include Director of Purchasing, Vice President of Global Purchasing and
Vice President of Marketing and Sales.
 
     Gerald G. Harris. Mr. Harris is Senior Vice President -- Latin American
Operations of the Company, a position he has held since May 1997. Previously,
Mr. Harris served as Senior Vice President and President -- GM Division of the
Company from July 1996 until May 1997 and Vice President and President -- GM
Division from November 1994 to July 1996. 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. Prior to 1989, Mr. Harris held various managerial positions with the
Company.
 
     James A. Hollars. Mr. Hollars is Senior Vice President -- Premium Car
Division of the Company. He was appointed to this position in November 1995.
Prior to serving in this position, he was Senior Vice President and President --
International Operations of the Company since November 1994. Previously, he
served as Senior Vice President -- International Operations of the Company since
1993 and Vice President -- International since the sale of LSI's Power Equipment
Division to Lucas Industries in 1988. Mr. Hollars has held a variety of
managerial positions with the Company and LSI since 1973.
 
     Roger A. Jackson. Mr. Jackson is Senior Vice President -- Human Resources,
a position he has held since 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
one of its subsidiaries from December 1977 to September 1995.
 
     Daniel A. Jannette. Mr. Jannette is Vice President and President --
Technology Division of the Company, a position he has held since May 1997 and
was Vice President -- Technology Division since August 1995. Prior to joining
Lear in August 1995, Mr. Jannette served as Vice President of Automotive
Industries, Inc. since August 1993 and President of Fibercraft/DESCon
Engineering, Inc. since 1987.
 
     Robert G. Lawrie. Mr. Lawrie is Senior Vice President -- Global Mergers and
Acquisitions, a position he has held since June 1996. Prior to joining the
Company, Mr. Lawrie served as Vice President and Special Counsel to the Chairman
of Magna International Inc. since December 1992. Prior to joining Magna
International Inc., Mr. Lawrie was a consultant to Consolidated Hydro Inc., an
operator of hydroelectric plants. From 1991 to July 1993, Mr. Lawrie was Senior
Vice President, General Counsel and Secretary of Abitibi-Price Inc., an
international paper manufacturer. From 1988 to 1991, Mr. Lawrie was the managing
partner of the Los Angeles office of Broad Schulz Larson & Wineberg, a law firm.
 
     Raymond F. Lowry, III. Raymond F. Lowry, III is Vice President and
Treasurer of the Company, a position which he has held since July 1997. Prior to
joining Lear, Mr. Lowry was employed by Dana Corporation for 24 years, most
recently as Director Treasury Operations and Finance.
 
     Joseph F. McCarthy. Mr. McCarthy is Vice President, Secretary and General
Counsel of the Company, a position that he has held since 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.
 
     Terrence E. O'Rourke. Mr. O'Rourke is Senior Vice President -- Ford and
Chrysler Divisions of the Company, a position which he has held since May 1997.
Previously, he served as Senior Vice President and President -- Ford Division of
the Company from July 1996 until May 1997, Vice President and President --
Chrysler Division of the Company since November 1994 and Director -- Strategic
Planning since October
 
                                        5

<PAGE>   9
 
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.
 
     Frank J. Preston. Dr. Preston is Senior Vice President -- Interior Systems
Group of the Company, a position which he has held since August 1996.
Previously, Dr. Preston served as Senior Vice President and President -- Masland
Division of the Company since the consummation of Lear's acquisition of Masland
Corporation ("Masland") in June 1996. Prior to the Masland acquisition, he
served as President of Masland since January 1995 and Chief Executive Officer of
Masland since January 1996. During 1995, Dr. Preston also served as Chief
Operating Officer of Masland. Prior to joining Masland, Dr. Preston held various
positions with Textron, Inc., a diversified manufacturing company, most recently
President of Textron Automotive Interiors.
 
     Robert E. Rossiter. Mr. Rossiter is President and Chief Operating Officer
- -- International Operations of the Company, a position he has held since April
1997, and he has been a director of the Company since 1988. Mr. Rossiter served
as President of the Company from 1984 until April 1997 and as Chief Operating
Officer of the Company from 1988 to April 1997. He joined 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.
 
     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. Mr. Shower retired from his positions with Seagull Energy Corporation,
an oil and gas exploration and production company, in April 1996. Mr. Shower
serves as a director of Highlands Insurance Group, Inc., Breed Technologies,
Inc., Edge Petroleum Corporation and Nuevo Energy Company.
 
     David P. Spalding. Mr. Spalding became a director of the Company in
September 1991. Mr. Spalding has been a Vice Chairman of The Cypress Group
L.L.C. (the "Cypress Group") since 1994. Prior to this time, he was a Managing
Director of Lehman Brothers Inc. since 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 AMTROL, Inc., Williams Scotsman, Inc. and Frank's
Nursery & Crafts, Inc.
 
     Donald J. Stebbins. Mr. Stebbins is Senior Vice President and Chief
Financial Officer of the Company, a position which he has held since April 1997.
Prior to serving in this position, he was Vice President and Treasurer of the
Company since 1992. Previously, he was with Bankers Trust Company, New York
where he was a Vice President. Prior to his tenure at Bankers Trust Company, Mr.
Stebbins held positions at Citibank, N.A. and The First National Bank of
Chicago.
 
     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 is Chairman of
The Cypress Group, a position he has held since 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 R.P. Scherer Corporation, Noel Group, Inc., Cinemark U.S.A., Inc.,
AMTROL, Inc., The Multicare Companies, Inc. and Frank's Nursery & Crafts, Inc.
 
     James H. Vandenberghe. Mr. Vandenberghe is President and Chief Operating
Officer -- North American Operations of the Company, a position which he has
held since April 1997, and he has been a director of the Company since 1995. He
served as Executive Vice President of the Company from 1993 to April 1997 and
Chief Financial Officer from 1988 to April 1997. Mr. Vandenberghe also served as
a director of the Company from 1988 until the Holdings Merger. Mr. Vandenberghe
also served as Senior Vice President -- Finance and Secretary of the Company
from 1988 to 1993.
 
                                        6

<PAGE>   10
 

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 
     The following table sets forth, as of the close of business on March 16,
1998 (except as set forth below), certain information with respect to the
beneficial ownership of Common Stock by (i) each director of the Company who
owns Common Stock; (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 five percent 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
                                                                 OF COMMON STOCK      PERCENTAGE OF
                                                                OWNED BENEFICIALLY    COMMON STOCK
                                                                ------------------    -------------
<S>                                                             <C>                   <C>
Goldman, Sachs & Co. and The Goldman Sachs Group, L.P.(1)...        3,663,480           5.5%
Kenneth L. Way(2)(3)........................................          413,224(4)         *
Robert E. Rossiter(2)(3)....................................          180,930(5)         *
James H. Vandenberghe(2)(3).................................          175,463(6)         *
Frank J. Preston(3).........................................           24,760(7)         *
Robert W. Shower(2).........................................           15,125(8)         *
Larry W. McCurdy(2).........................................           12,000(8)         *
Terence E. O'Rourke(3)......................................           12,000(9)         *
James A. Stern(2)...........................................            1,400(10)        *
David P. Spalding(2)........................................            1,000            *
Irma B. Elder(2)............................................              600            *
Roy E. Parrott(2)...........................................              126            *
Total Executive Officers and Directors as a group (22
  individuals)..............................................        1,179,451(11)       1.8
</TABLE>

 
- -------------------------
  *  Less than 1%
 
 (1) The Company has been informed by Goldman, Sachs & Co. and The Goldman Sachs
     Group, L.P. in a joint report on Schedule 13G dated February 17, 1998, that
     (a) The Goldman Sachs Group, L.P. is a Parent Holding Company that has
     obtained beneficial ownership of the Company's Common Stock through its
     subsidiary Goldman, Sachs & Co., a registered broker dealer and investment
     adviser, (b) Goldman, Sachs & Co. and The Goldman Sachs Group, P.L. share
     investment power over 3,663,480 shares and voting power over 3,462,680
     shares, and (c) neither Goldman, Sachs & Co. nor The Goldman Sachs Group,
     L.P. exercise sole voting or dispositive powers over any of these shares.
     The address of Goldman, Sachs & Co. and The Goldman Sachs Group, L.P. is 85
     Broad Street, New York, New York 10004.
 
 (2) The individual is a director of the Company.
 
 (3) The individual is a named executive officer of the Company.
 
 (4) Includes 227,500 shares of Common Stock issuable under currently
     exercisable options.
 
 (5) Includes 77,000 shares of Common Stock issuable under currently exercisable
     options.
 
 (6) Includes 103,800 shares of Common Stock issuable under currently
     exercisable options.
 
 (7) Consists of 24,760 shares of Common Stock issuable under currently
     exercisable options.
 
 (8) Includes 10,000 shares of Common Stock issuable under currently exercisable
     options.
 
 (9) Includes 11,000 shares of Common Stock issuable under currently exercisable
     options.
 
(10) Includes 400 shares of Common Stock held by Mr. Stern's spouse as custodian
     for two children under the Uniform Gifts to Minors Act of New York. Mr.
     Stern disclaims beneficial ownership of these shares.
 
(11) Includes 722,753 shares of Common Stock issuable under currently
     exercisable options.
 
                                        7

<PAGE>   11
 

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
 
     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, 1997
were made on a timely basis with two exceptions. The September 1997 acquisition
of indirect ownership of 400 shares of Common Stock for Mr. Stern's minor
children in two transactions was inadvertently reported in November 1997 and the
grant of options to purchase 12,000 shares of Common Stock to Mr. Harris in May
1997 was inadvertently reported in March 1998.
 
M
EETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES
 
     The Board of Directors has established permanent Audit, Compensation,
Nominating 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 three meetings during 1997, consists of
Messrs. Shower and McCurdy and Ms. Elder, with Mr. Shower 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, which held two meetings during 1997, currently
consists of Messrs. McCurdy and Parrott, with Mr. McCurdy serving as Chairman.
Mr. Spalding resigned his position on the Compensation Committee on February 28,
1997 but remains a director of the Company. The Compensation Committee reviews
and approves salaries, bonuses and other benefits relating to compensation of
the executive officers of the Company and approves awards under the Company's
Long-Term Incentive Plan and stock option plans.
 
     The Nominating Committee, which held one meeting in 1997, consists of
Messrs. Stern, Rossiter and Botta, with Mr. Stern serving as Chairman. The
Nominating Committee has responsibility and authority to recommend to the Board
of Directors: (i) nominees for election to the Board of Directors; (ii)
candidates for membership on the various committees of the Board of Directors;
and (iii) in the event of a vacancy in the office of Chief Executive Officer of
the Company, a successor Chief Executive Officer. The Nominating Committee will
consider recommendations for director nominees made by stockholders of the
Company. Such recommendations shall be made in writing to the Company's
Secretary prior to December 31, 1998, and shall state the name, age, address,
principal occupation, background and qualifications of the person recommended.
 
     The Executive Committee, which held no meetings in 1997, consists of
Messrs. Way, Rossiter, Stern and Spalding, with Mr. Stern serving as Chairman.
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 matters
acted on by the Executive Committee are typically of a routine nature. Thus, the
Executive Committee meets infrequently.
 
                                        8

<PAGE>   12
 
     The Company's Board of Directors met five times during 1997. Each director
participated in at least 75% of the total number of meetings of the Board of
Directors and the committees on which he or she serves.
 

COMPENSATION OF DIRECTORS
 
     During 1997, directors who were not employees of the Company ("Outside
Directors") received a per annum fee (the "Annual Retainer") paid in four equal
quarterly payments. From January 1, 1997 until June 30, 1997, the Annual
Retainer paid to Outside Directors was $20,000 payable in cash. Effective as of
July 1, 1997, the Annual Retainer was increased to $24,000. Each Outside
Director who chaired a committee of the Board of Directors received a $2,000 fee
for such service. In addition, Outside Directors received a fee of $1,000 for
each meeting of the Board of Directors that they attended and for each committee
meeting they attended which was not held on the same day as a meeting of the
Board of Directors. Such directors were also reimbursed for their expenses
incurred in attending meetings. Effective as of July 1, 1997, one-half of the
Annual Retainer is payable in shares of Common Stock and the remaining one-half,
at the election of each Outside Director, in either cash or shares of Common
Stock.
 
     An Outside Director may elect to defer receipt of all or part of his or her
Annual Retainer. At the Outside Director's election, amounts deferred will be
(a) credited with interest at an annual rate equal to the prime rate plus one
percent, or (b) accounted for as if invested in shares of Common Stock. Amounts
deferred are paid to the Outside Director as of the earlier of (i) the date
elected by such director, (ii) the date the director ceases to be a director, or
(iii) the date a change of control occurs. The Company has implemented stock
ownership guidelines for Outside Directors, pursuant to which Outside Directors
are required, within five years, to have stock ownership levels equal to three
times the Annual Retainer. Outside Directors who have not made substantial
progress (as determined by the Board of Directors) towards this goal after two
years will have all of their Annual Retainer delivered in shares of Common
Stock.
 
     In addition, each Outside Director received an option to purchase 1,250
shares of Common Stock at a price equal to the fair market value of the Common
Stock on the date of grant. In 1997, option grants to Outside Directors were
made on May 25 at an exercise price of $37.00. The options granted to Outside
Directors expire in ten years and generally vest in three years regardless of an
Outside Director's continued service. Outside Directors will be eligible to
receive option grants in the future as partial compensation for their services.
Directors who are also employees of the Company receive no additional
compensation for their services as a director except reimbursement of expenses
incurred in attending meetings of the Board of Directors or meetings of
committees 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, 1997, 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
                                                                          ----------------------------------------
                                            ANNUAL COMPENSATION                            AWARDS
                                      --------------------------------    ----------------------------------------    ALL OTHER
              NAME AND                                        BONUS(1)    RESTRICTED STOCK   SECURITIES UNDERLYING   COMPENSATION
        PRINCIPAL POSITIONS           PERIOD   SALARY($)        ($)         AWARDS(2)($)        OPTIONS/SARS(#)          ($)
        -------------------           ------   ---------      --------    ----------------   ---------------------   ------------
<S>                                   <C>      <C>            <C>         <C>                <C>                     <C>
Kenneth L. Way......................   1997    $783,750       $669,708(5)     $209,309              23,000             $113,826(6)
  Chairman of the Board and            1996     750,000        615,000(5)      192,192              23,000               32,400(6)
  Chief Executive Officer              1995     585,000        900,000(5)           --                  --               24,642(6)

Robert E. Rossiter..................   1997    $554,250       $475,114(5)     $148,480              20,000             $158,762(7)
  President, Chief Operating Officer   1996     525,000        378,000(5)      118,131              16,000               14,531(7)
    -- International Operations and    1995     420,000        625,000(5)           --                  --               14,080(7)
    Director                                                                                                                      

James H. Vandenberghe...............   1997    $437,500       $308,003(5)     $207,287              18,000             $ 54,166(8)
  President, Chief Operating Officer   1996     400,000        256,000(5)       79,989              14,000               12,490(8)
    -- North American Operations and   1995     304,000        450,000(5)           --                  --               12,851(8)
    Director                                                                                                                      

Terrence E. O'Rourke................   1997    $275,000       $169,453(5)     $ 74,985              12,000             $ 25,524(9)
  Senior Vice President -- Ford        1996     249,996        186,875(5)       49,998              11,000                6,449(9)
  and Chrysler Divisions               1995     175,000        150,000(5)           --                  --                5,886(9)

Frank J. Preston....................   1997    $247,500(3)    $160,617(5)     $120,414              12,000             $ 12,003(10)
  Senior Vice President -- Interior    1996    $137,500(4)     115,500(5)       61,893                  --                1,910(10)
  Systems Group                        1995          --             --              --                  --                   --
</TABLE>

 
- -------------------------
 (1) Because the Management Stock Purchase Program, as part of the Long-Term
     Stock Incentive Plan, was subject to stockholder approval in 1997, bonuses
     earned in 1996 were reported in a gross amount in the 1997 Proxy Statement
     even though named executive officers had made deferral elections pursuant
     to the Management Stock Purchase Program. Because stockholders approved the
     Management Stock Purchase Program in 1997, bonuses earned in 1996 are now
     reported net of the deferred amount. Bonuses earned in 1997 are reported
     net of deferred amount. For a description of the gross bonuses earned in
     1997 by each named executive officer, see "Compensation Committee Report --
     Annual Incentives."
 
 (2) Pursuant to elections made under the Management Stock Purchase Plan
     relating to compensation earned in the year ending December 31, 1997,
     Messrs. Way, Rossiter, Vandenberghe, O'Rourke and Preston received
     restricted stock units of 3,933, 2,790, 3,895, 1,409 and 2,498,
     respectively. Under the Management Stock Purchase Program, Mr. Way
     currently holds 8,860 restricted stock units outstanding with an aggregate
     value of $420,850, Mr. Rossiter currently holds 5,819 restricted stock
     units outstanding with an aggregate value of $276,403, Mr. Vandenberghe
     currently holds 5,947 restricted stock units outstanding with an aggregate
     value of $282,483, Mr. O'Rourke currently holds 2,691 restricted stock
     units outstanding with an aggregate value of $127,823 and Mr. Preston
     currently holds 4,085 restricted stock units outstanding with an aggregate
     value of $194,038. The value of restricted stock units is based on a
     closing price of Common Stock of $47.50 on December 31, 1997, as reported
     by the New York Stock Exchange. If the Company pays any dividends on its
     common stock, dividend equivalents will accrue on restricted stock units.
     For a description of the Management Stock Purchase Program and the
     determination of awards, see "Compensation Committee Report -- Long-Term
     Incentives."
 
 (3) Amount shown is net of an election to defer 10% of salary pursuant to the
     Management Stock Purchase Plan. The deferred amount is reflected in the
     Restricted Stock Awards column.
 
 (4) Represents Mr. Preston's base salary from July 1996, when Mr. Preston began
     his employment with the Company, through December 31, 1996.
 
 (5) Pursuant to the Company's Senior Executive Incentive Compensation Plan, the
     Company awards annual bonuses to its executive officers based on the
     attainment of specified financial 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. 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."
 
 (6) Represents: matching contributions under the Executive Supplemental Savings
     Plan of $69,625 for 1997; 401(k) plan matching contributions of $8,000 for
     1997 and $1,150 for each of 1996 and 1995; life insurance premiums paid by
     the Company of $24,175, $24,175 and $14,215 in 1997, 1996 and 1995,
     respectively; and payments of $12,026, $7,075 and $9,277 for expenses
     related to financial planning in 1997, 1996 and 1995, respectively.
 
 (7) Represents: matching contributions under the Executive Supplemental Savings
     Plan of $43,338 for 1997; 401(k) plan matching contributions of $8,000 for
     1997 and $1,150 for each of 1996 and 1995; life insurance premiums paid by
     the Company of $6,303, $6,306 and $3,653 in 1997, 1996 and 1995,
     respectively; payments of $12,026, $7,075 and $9,277 for expenses related
     to financial planning in 1997, 1996 and 1995, respectively; and $89,095 in
     expenses incurred in connection with Mr. Rossiter's acceptance of an
     overseas assignment and assumed by the Company.
 
 (8) Represents: matching contributions under the Executive Supplemental Savings
     Plan of $29,875 for 1997; 401(k) plan matching contributions of $8,000 for
     1997 and $1,150 for each of 1996 and 1995; life insurance premiums paid by
     the Company of $4,265, $4,265 and $2,424 in 1997, 1996 and 1995,
     respectively; and payments of $12,026, $7,075 and $9,277 for expenses
     related to financial planning in 1997, 1996 and 1995, respectively.
 
 (9) Represents: matching contributions under the Executive Supplemental Savings
     Plan of $8,547 for 1997; 401(k) plan matching contributions of $4,000 for
     1997 and $1,150 for 1996; life insurance premiums paid by the Company of
     $1,950, $1,174 and $1,761 in 1997, 1996 and 1995, respectively; and
     payments of $11,027, $4,125 and $4,125 for expenses related to financial
     planning in 1997, 1996 and 1995, respectively.
 
(10) Represents: matching contributions under the Executive Supplemental Savings
     Plan of $2,703 for 1997; 401(k) plan matching contributions of $3,759 and
     $1,475 for 1997 and 1996, respectively; life insurance premiums paid by the
     Company of $1,681 and $435 for 1997 and 1996, respectively; and a payment
     of $4,376 for expenses related to financial planning in 1997.
 
                                       10

<PAGE>   14
 
OPTION GRANTS AND EXERCISES AND LONG-TERM INCENTIVE AWARDS IN LAST FISCAL YEAR
 
     The following table provides information, with respect to the named
executive officers of the Company, concerning the grant of options during the
fiscal year ended December 31, 1997, and the potential value of unexercised
options on an aggregated basis.
 
                     OPTION GRANTS IN THE LAST FISCAL YEAR
 

<TABLE>
<CAPTION>
                                                                                          POTENTIAL REALIZABLE VALUE
                                 NUMBER OF                                                 AT ASSUMED ANNUAL RATES
                                 SECURITIES     % OF TOTAL                                      OF STOCK PRICE
                                 UNDERLYING      OPTIONS                                         APPRECIATION
                                  OPTIONS       GRANTED TO     EXERCISE                        FOR OPTION TERM
                                  GRANTED      EMPLOYEES IN      PRICE      EXPIRATION    --------------------------
            NAME                   (#)(1)      FISCAL YEAR     ($/SHARE)       DATE         5%($)          10%($)
            ----                 ----------    ------------    ---------    ----------      -----          ------
<S>                              <C>           <C>             <C>          <C>           <C>           <C>
Kenneth L. Way...............      23,000          4.2%         $37.25       5/5/2007      $538,805      $1,365,439
Robert E. Rossiter...........      20,000          3.7          $37.25       5/5/2007       468,526       1,187,338
James H. Vandenberghe........      18,000          3.3          $37.25       5/5/2007       421,674       1,068,604
Terrence E. O'Rourke.........      12,000          2.2          $37.25       5/5/2007       281,116         712,403
Frank J. Preston.............      12,000          2.2          $37.25       5/5/2007       281,116         712,403
</TABLE>

 
- -------------------------
(1) For a discussion of the terms of the options granted, see "Executive
    Compensation -- 1996 Stock Option Plan" below.
 
     The following table provides information, with respect to the named
executive officers, concerning the exercise of stock options during the fiscal
year ended December 31, 1997, and unexercised stock options held as of December
31, 1997.
 
                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, 1997         AT DECEMBER 31, 1997(1)
                               ON EXERCISE       REALIZED     -------------------------    -------------------------
          NAME                     (#)             ($)        EXERCISABLE/UNEXERCISABLE    EXERCISABLE/UNEXERCISABLE
          ----               ---------------     --------     -------------------------    -------------------------
<S>                          <C>                <C>           <C>                          <C>
Kenneth L. Way...........        138,025        $6,171,098         227,500/46,000             $9,185,750/569,250
Robert E. Rossiter.......        135,241         5,803,620          77,000/36,000              2,939,000/437,000
James H. Vandenberghe....         49,088         2,194,724         103,800/32,000              4,222,500/387,500
Terence E. O'Rourke......             --                --          11,000/23,000                306,625/282,500
Frank J. Preston.........         33,072           748,117          24,760/49,143                543,977/939,032
</TABLE>

 
- -------------------------
(1) Based on a closing price of $47.50 per share on December 31, 1997 as
    reported by the New York Stock Exchange.
 
                                       11

<PAGE>   15
 
     The following table provides information, with respect to the named
executive officers, concerning the grants of performance share awards under the
Long-Term Incentive Plan.
 
    LONG-TERM INCENTIVE PLAN -- PERFORMANCE SHARE AWARDS IN LAST FISCAL YEAR
 

<TABLE>
<CAPTION>
                                                                ESTIMATED FUTURE PAYOUTS UNDER NON-STOCK
                                           PERFORMANCE OR                 PRICE-BASED PLANS(1)
                                         OTHER PERIOD UNTIL     -----------------------------------------
                                            MATURATION OR        THRESHOLD       TARGET         MAXIMUM
                NAME                           PAYOUT               (#)            (#)            (#)
                ----                     -------------------    -----------    -----------    -----------
<S>                                      <C>                    <C>            <C>            <C>
Kenneth L. Way.......................      1/1/97-12/31/99      1,399/1,399    2,799/2,798    4,197/4,197
Robert E. Rossiter...................      1/1/97-12/31/99         980/ 980    1,959/1,959    2,938/2,938
James H. Vandenberghe................      1/1/97-12/31/99         746/ 746    1,493/1,492    2,238/2,238
Terrence E. O'Rourke.................      1/1/97-12/31/99         513/ 513    1,026/1,026    1,539/1,539
Frank J. Preston.....................      1/1/97-12/31/99         513/ 513    1,026/1,026    1,539/1,539
</TABLE>

 
- -------------------------
(1) Represents performance share awards under the Company's Long-Term Stock
    Incentive Plan. See "Executive Compensation -- Long-Term Stock Incentive
    Plan." The first number represents the number of shares under the
    performance share awards that a named executive officer may receive based
    upon the cumulative net income performance criteria and the second number
    represents the number of shares under the performance share award that a
    named executive officer may receive based upon the relative return to
    shareholders performance criteria.
 
PENSION PLAN AND BENEFITS
 
Qualified Pension Plan
 
     The named executive officers (as well as other employees of Lear)
participate in the Lear 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 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
principles and applicable United States federal tax laws.
 
     The Pension Plan contains seven sets of benefit provisions: the Lear
provisions, the Fabricated Products Operations ("FPO") provisions, the Progress
Pattern provisions, the FAVESA provisions, the Automotive Industries ("AI")
provisions, the Fairhaven Industries provision and the ITT Automotive
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. The AI
provisions are grandfathering provisions carried forward from the Automotive
Industries, Inc. Salaried Defined Benefit Plan, and apply to those participants
who were covered by such provisions when Lear purchased AI. All named executive
officers 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 of the participant's compensation
for the highest five consecutive calendar year earnings of the last 15 years of
employment. Compensation includes (a) all cash compensation reported for federal
income tax purposes other than long term incentive bonuses and (b) any elective
contributions that are not includable in
 
                                       12

<PAGE>   16
 
gross income under Code Sections 125 or 401(k). The annual retirement benefit
(payable as a life annuity at age 65) is equal to the greater of:
 
        a. the sum of 1.10% times final average earnings times years of credited
           service before 1997 (to a maximum of 30 years) plus 1.00% times final
           average earnings times years of credited service after 1996 (with a
           maximum of 30 years reduced by years of credited service before 1997)
           plus 0.65% times final average earnings in excess of covered
           compensation (as defined in I.R.S. Notice 89-70) times years of
           credited service after 1996 (with a maximum of 30 years); or
 
        b. $360.00 times years of credited service.
 
     The amendment to the Pension Plan included grandfathering provisions
retaining the 1.10% formula for five years. These grandfathering provisions
apply to any active employee of the Company on January 1, 1997 who was age 50 or
above. Such a participant will earn benefits under the new formula (as described
above) for years of credited service after 2001.
 
     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 Lear formula, and then using the floor
provision. If the floor provides a greater benefit, then the participants will
receive benefits under the floor provision.
 
     The floor provision benefit (payable as a life annuity at age 65) will be:
 
        a. 0.8% times final average earnings times years of credited 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 who were employed at the Masland division became eligible
under the Pension Plan on April 1, 1997. Such participants received years of
service but not years of credited service for their service with Masland before
April 1, 1997.
 
     The benefits under the Pension Plan become vested if (a) a participant was
fully vested in the Lear Siegler Diversified Holdings Corp. Pension Plan, (b) a
participant has at least five years of combined vesting service under the Lear
Siegler Diversified Holdings Corp. Pension Plan, and the Pension Plan, or (c) a
participant completes five or more years of service.
 
Pension Equalization Plan
 
     In addition to the Pension Plan, Lear established the Lear Corporation
Pension Equalization Plan (the "Pension Equalization Plan"). Lear's Pension Plan
is subject to rules in the Code that restrict the level of retirement income
that can be provided to, and the amount of compensation that can be considered
for, highly paid executives under the Pension Plan. The purpose of the Pension
Equalization Plan is to supplement the benefits under the Pension Plan of
selected highly paid executives in order to provide them with a relative level
of retirement income comparable to that of other employees. The benefits under
the Pension Equalization 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 Lear
provisions if the Code limits on the amount of compensation that can be
considered and the total amount of benefits that can be provided under qualified
pension plans were disregarded. Highly compensated executives selected by the
Compensation Committee and other executives whose compensation exceeds the Code
limits for at least three years are eligible to participate in the Pension
Equalization Plan. Each of Messrs. Way, Rossiter, Vandenberghe, O'Rourke and
Preston participates in the Pension Equalization Plan.
 
     Mr. Preston's employment agreement provides for additional years of
credited service for purposes of calculating his pension benefits.
 
                                       13

<PAGE>   17
 
     The following table indicates estimated total annual benefits payable as a
single life annuity beginning at age 65 for various compensation levels and
years of service under the Pension Plan and the Pension Equalization Plan.
Generally, annual compensation used for pension formula purposes includes
salary, annual bonus and 80% of the Restricted Stock Awards reported in the
Summary Compensation Table.
 
                                 PENSION TABLE
 

<TABLE>
<CAPTION>
                                                                                  YEARS OF SERVICE
                                                COVERED       --------------------------------------------------------
ANNUAL COMPENSATION                          COMPENSATION*      10          15          20          25          30
- -------------------                          -------------      --          --          --          --          --
<S>                   <C>                    <C>              <C>        <C>         <C>         <C>         <C>
  $500,000            ...................       $43,488       $83,673    $126,010    $168,347    $210,683     $253,020
   600,000            ...................        43,488       100,973     152,060     203,147     254,233      305,320
   700,000            ...................        43,488       118,273     178,110     237,947     297,783      357,620
   800,000            ...................        43,488       135,573     204,160     272,747     341,333      409,920
   900,000            ...................        43,488       152,873     230,210     307,547     384,883      462,220
 1,000,000            ...................        43,488       170,173     256,260     342,347     428,433      514,520
 1,200,000            ...................        43,488       204,733     308,360     411,947     515,533      619,120
 1,400,000            ...................        43,488       239,373     360,460     481,547     602,633      723,720
 1,600,000            ...................        43,488       273,973     412,560     551,147     689,733      828,320
 1,800,000            ...................        43,488       308,573     464,660     620,747     776,833      932,920
 2,000,000            ...................        43,488       343,173     516,760     690,347     863,933    1,037,520
 2,200,000            ...................        43,488       377,773     568,860     759,947     951,033    1,142,120
</TABLE>

 
- -------------------------
* Indicates the covered compensation for Mr. Way who has the lowest covered
  compensation of all the named executive officers. The covered compensation for
  the other named executive officers will be a higher amount and their number of
  years at the 1.10% formula will be less than Mr. Way, resulting in a slightly
  lower payout amount for comparable compensation levels and years of service.
  Such differences are not expected to be material.
 
     The plans grant credit for all years of pension service with Lear Siegler
Diversified Holdings Corp. and with Lear, and offset the retirement benefit
payable by the Lear Siegler Diversified Holdings Corp. Pension Plan against the
benefit payable by the plans. At age 65, it is estimated that under the plans
Messrs. Way, Rossiter and Vandenberghe will have 30 years of service, Mr.
O'Rourke will have 17 years of service and Mr. Preston will have 27 years of
service.
 
RETIREMENT SAVINGS PLAN
 
     Lear has established a plan pursuant to Section 401(k) of the Code (the
"Retirement Savings Plan") for non-union salaried employees who have completed
one month of service. Under the Retirement Savings Plan, each eligible employee
may elect to defer, on a pre-tax basis, a portion of his or her salary each
year. The portion deferred will be paid by the Company to the trustee of the
Retirement Savings Plan. Under the Retirement Savings Plan, the Company makes a
matching contribution which is invested in shares of Common Stock. The Company
match percentage for each participant varies from 50% to 100%, depending on the
number of years of service with the Company. Matching contributions become
vested under the Retirement Savings Plan at a rate of 20% for each full year of
service. For the year ended December 31, 1997, the matching contribution for
each named executive officer was: Mr. Way, $8,000; Mr. Rossiter, $8,000; Mr.
Vandenberghe, $8,000; Mr. O'Rourke, $4,000; and Mr. Preston, $3,759.
 
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 1, 1998, options to purchase 74,447 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.
 
                                       14

<PAGE>   18
 
1992 STOCK OPTION PLAN
 
     The Company has adopted the 1992 Stock Option Plan, as amended (the "1992
Stock Option Plan"), which is administered by the Compensation Committee. Under
the 1992 Stock Option Plan, as of March 1, 1998, the Company had outstanding
options to purchase 755,615 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 are exercisable at $5 per share. No additional options may
be granted under the 1992 Stock Option Plan.
 
1994 STOCK OPTION PLAN
 
     The Company has adopted the 1994 Stock Option Plan, as amended (the "1994
Stock Option Plan"), which is administered by the Compensation Committee. Under
the 1994 Stock Option Plan, as of March 1, 1998, the Company had outstanding
options to purchase 426,450 shares of Common Stock. The exercise price of these
options ranges from $15.50 per share to $42.75 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.
 
1996 STOCK OPTION PLAN
 
     The Company has adopted the 1996 Stock Option Plan, as amended (the "1996
Stock Option Plan") which is administered by the Compensation Committee. Under
the 1996 Stock Option Plan, as of March 1, 1998, the Company had outstanding
options to purchase 993,250 shares of Common Stock. The exercise prices of these
options range from $33.00 per share to $37.25 per share. Outstanding options
that were granted under the 1996 Stock Option Plan vest and become exercisable
in either May 1999 or May 2000.
 
LONG-TERM STOCK INCENTIVE PLAN
 
     The Company has adopted the Long-Term Stock Incentive Plan (the "Long-Term
Incentive Plan"). The Long-Term Incentive Plan permits the grant of nonqualified
stock options, incentive stock options, stock appreciation rights (SARs),
restricted stock, restricted units, performance shares and performance units to
officers and other key employees of the Company and its subsidiaries who are
selected by the Compensation Committee to participate in the Long-Term Incentive
Plan. The Long-Term Incentive Plan also permits the grant of nonqualified stock
options to nonemployee directors who are selected to receive such a grant.
 
     The Long-Term Incentive Plan is administered by the Compensation Committee.
Subject to the terms of the Long-Term Incentive Plan, the Compensation Committee
will select employees to participate in the Long-Term Incentive Plan, determine
the sizes and types of awards, determine the terms and conditions of awards in a
manner consistent with the Long-Term Incentive Plan, construe and interpret the
Long-Term Incentive Plan and any agreement or instrument entered into under the
Long-Term Incentive Plan, and amend the terms and conditions of any outstanding
award to the extent such terms and conditions are within the discretion of the
Compensation Committee as provided in the Long-Term Incentive Plan. However, the
Long-Term Incentive Plan contains an express provision which prevents the
Compensation Committee from lowering the exercise price of any outstanding
option or from accepting the surrender of outstanding options and granting new
options in substitution therefore without the approval of the holders of a
majority of the outstanding voting stock of the Company.
 
     Under the Long-Term Incentive Plan, up to 2,200,000 shares of Common Stock
may be issued or transferred to participants under the Long-Term Incentive Plan.
No more than 700,000 shares of Common Stock, however, will be issued or
delivered to participants under awards of restricted units and performance
shares. The maximum aggregate number of shares of Common Stock and common stock
equivalent units that may be granted during any fiscal year of the Company to
any one participant under the Long-Term Incentive Plan, regardless of the type
of awards, will be 50,000 shares of Common Stock. This limit will apply
regardless of whether such compensation is paid in shares of Common Stock or in
cash.
 
     In 1997, each selected participant received performance share awards
pursuant to the Long-Term Incentive Plan using a pre-established awards formula
based upon (i) cumulative net income over the three year period beginning
January 1, 1997 and ending December 31, 1999 (the "Performance Period") and (ii)
return to Company's shareholders over the Performance Period as compared to its
peer group of representative independent automotive suppliers. For a participant
to receive Common Stock under the Plan for performance share awards based on the
cumulative net income performance criteria, cumulative net
 
                                       15

<PAGE>   19
 
income over the Performance Period must exceed the minimum level established by
the Compensation Committee. Participants will receive additional shares of
Common Stock to the extent cumulative net income exceeds the minimum level, up
to the maximum target performance level. For a participant to receive Common
Stock under the Plan for performance share awards based on the relative return
to shareholders performance criteria, the relative return to shareholders must
exceed the minimum level established by the Compensation Committee. Participants
will receive additional shares of Common Stock to the extent that relative
return to shareholders exceeds the minimum level, up to the maximum target
performance level.
 
     In 1997, each selected executive officer was permitted to elect to defer a
portion of his or her base salary during 1998 and annual incentive bonuses based
on the executive officer's performance in 1997 and awarded during the first
quarter of 1998 under the Senior Executive Incentive Plan. This feature of the
Long-Term Incentive Plan is known as the Management Stock Purchase Program. In
consideration for the deferral of their salary and/or incentive bonus, an
officer who elects such deferral ("Deferral Participant") receives an amount of
restricted stock units under the Long Term Incentive Plan equal to the amount
deferred increased by 25% of such amount and divided by the fair market value of
the shares of Common Stock on the date the annual incentive bonuses are paid.
Generally, after March 31, 2001, a Deferral Participant is entitled to receive a
number of shares of Common Stock equal to the number of restricted stock units
held by such Deferral Participant and a cash payment equal to the amount of
dividends, if any, that would have been paid to such Deferral Participant if
such Deferral Participant held shares of Common Stock rather than restricted
stock units.
 
     Under the Long-Term Incentive Plan, as of March 16, 1998, the Company had
outstanding performance share awards convertible into a maximum of 99,287 shares
of Common Stock and outstanding restricted stock units convertible into 35,004
shares of Common Stock. No stock options, SARs or shares of restricted stock
have been awarded under the Long-Term Incentive Plan.
 
EMPLOYMENT AND OTHER AGREEMENTS
 
     Lear has entered into employment agreements with each of 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. Mr. Preston has entered into a four-year employment
agreement dated May 19, 1996. Each four-year employment agreement is renewable
for one additional year on the second anniversary of the agreement and each
anniversary thereafter. Mr. O'Rourke has entered into a two-year employment
agreement dated as of March 20, 1995 which was renewed for one additional year
on the first anniversary of the agreement and may be renewed on each anniversary
thereafter. The employment agreements of Messrs. Way, Rossiter, Vandenberghe,
O'Rourke and Preston provide for an annual base salary which, as of March 16,
1998, is $795,000, $564,000, $450,000, $300,000 and $300,000 respectively, and
may be increased at the discretion of the Compensation Committee. Mr. Preston
elected to defer 10% of his 1997 salary pursuant to an election made under the
Management Stock Purchase Plan. In addition, under the terms of their respective
employment agreements, each of Messrs. Way, Rossiter, Vandenberghe, O'Rourke and
Preston 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, a bonus each year which equals the average of the
bonuses paid the employee the prior two fiscal years and continued participation
in compensation and benefit plans until 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.
 
                                       16

<PAGE>   20
 
                       COMPENSATION COMMITTEE INTERLOCKS
 
                          AND INSIDER PARTICIPATION
 
     No member of the Compensation Committee was, during the fiscal year ended
December 31, 1997, 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.
 
                         COMPENSATION COMMITTEE REPORT
 
     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 AND THE PERFORMANCE GRAPH WHICH FOLLOWS SHALL NOT BE DEEMED TO
BE INCORPORATED BY REFERENCE INTO ANY SUCH FILINGS.
 
INTRODUCTION
 
     The Company's compensation policies are determined and executive officer
compensation decisions are made by the Compensation Committee. In 1997, Messrs.
McCurdy and Spalding initially served on the Compensation Committee. Mr.
Spalding resigned from the Compensation Committee on February 28, 1997 and was
replaced by Mr. Parrott. The Compensation Committee is currently composed of two
non-employee directors: Messrs. McCurdy and Parrott.
 
     During the fiscal year ended December 31, 1997, 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.
 
EXECUTIVE COMPENSATION POLICY
 
     The Compensation Committee determines the salaries and other entitlements
of the executive officers of the Company and designs all of the Company's
compensation programs and policies. The objectives of the Company's compensation
policies are to optimize the profitability and growth of the Company, to link
the interests of the Company's management with those of the Company's
stockholders, to provide the Company's management with incentive for excellence
in individual performance, to promote teamwork among the Company's managers and
to give the Company an advantage in attracting and retaining officers, key
employees and directors. The Compensation Committee targets total remuneration
(i.e., base salary, annual incentives and long-term incentives) of its senior
executives at the 75th percentile of the Company's peer group in return for
comparable performance. A discussion of each component 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 companies based on research provided by
independent consultants. The Compensation Committee focuses primarily on total
compensation, including incentive awards, rather than base salary alone as the
appropriate measure of executive officer remuneration.
 
     The base salaries of Messrs. Way, Rossiter and Vandenberghe were
established pursuant to employment agreements entered into in 1995. Under those
employment agreements, as of March 16, 1998, Mr. Way's base
 
                                       17

<PAGE>   21
 
salary is $795,000, Mr. Rossiter's base salary is $564,000, Mr. Vandenberghe's
base salary is $450,000, Mr. O'Rourke's base salary is $300,000 and Mr.
Preston's base salary is $300,000.
 
ANNUAL INCENTIVES
 
     The Company's executive officers participate in the Company's Senior
Executive Incentive Compensation Plan (the "Senior Executive Incentive Plan").
Pursuant to this plan, the Company makes annual incentive awards designed to
reward past financial performance and the achievement of goals considered
important to the Company's future. Awards are made in February or March of each
year based on the performance achieved in the previous year.
 
     The Senior Executive Incentive 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 the
target award opportunity based on attainment of financial objectives. The Annual
Incentive for each of Messrs. Way, Rossiter and Vandenberghe is based upon the
Company's earnings per share. 50% of the target awarded is based upon the
achievement of a target earnings per share. The other 50% of the target award is
based upon the achievement of a target growth in earnings per share over the
prior year. With respect to Messrs. O'Rourke and Preston, 50% of the Annual
Incentive is based on achievement of a targeted level of operating income for
that person's division based on an approved operating budget. Of the remaining
50% of the Annual Incentive bonus, 25% is based upon the achievement of a target
earnings per share and 25% is based upon the achievement of a target growth in
earnings per share. For the year ended December 31, 1997, Messrs. Way, Rossiter,
Vandenberghe, O'Rourke and Preston earned annual bonuses in the amount of
$837,135, $593,892, $473,850, $229,453 and $229,453, respectively. Each of
Messrs. Way, Rossiter, Vandenberghe, O'Rourke and Preston elected to defer 20%,
20%, 35%, 26.15% and 30%, respectively, of his 1997 annual cash bonus pursuant
to elections made under the Management Stock Purchase Program.
 
     In November 1997, the Compensation Committee awarded restricted property
valued at $1,500,000 to Mr. Rossiter. The restrictions on this property lapses
based upon the achievement of financial objectives specified under the Company's
Senior Executive Incentive Plan for the years ended December 31, 1997, December
31, 1998 and December 31, 1999. See "Compensation Committee Report -- Annual
Incentives." In February 1998, the restrictions on $593,892 of the property
lapsed due to the attainment of the specified financial objectives under the
Senior Executive Incentive Plan. The restrictions on additional property may
lapse based upon the Company's achievement of the targeted goals for the year
ended December 31, 1998 and December 31, 1999. Any property that remains subject
to restrictions on January 1, 2001 shall be forfeited by Mr. Rossiter.
 
LONG-TERM INCENTIVES
 
     The long-term incentive component of the Company's executive compensation
program is designed to provide selected senior officers with substantial at-risk
components and to align the interests of such senior officers with those of its
stockholders. To achieve these goals, the Compensation Committee has implemented
stock ownership guidelines for its senior officers, granted stock options and
performance share awards to selected senior officers and permitted its officers
to defer a portion of their base salary and annual incentive bonus in restricted
stock units in lieu of cash.
 
Management Stock Ownership Requirements
 
     The Compensation Committee also believes that it is important that the
Company's executive and corporate officers have an important stake in the future
of the Company. Accordingly, as of March 1, 1998, the Compensation Committee has
implemented stock ownership requirements for 20 senior officers. Stock ownership
levels to be achieved within five years range from one to five times base
salary. Shares of common stock owned and restricted stock units are counted in
satisfying these requirements. Unexercised stock options are not counted in
satisfying these requirements. Management personnel who have not made
substantial
 
                                       18

<PAGE>   22
 
progress towards these goals after three years will have up to 50% of their
annual incentives delivered in restricted stock units pursuant to the Management
Stock Purchase Program described below.
 
Stock Options
 
     Stock options granted under the Corporation's stock option plans, which
historically vest in three years from the date of grant, provide incentive for
officers by giving them a strong economic interest in remaining with the Company
and maximizing price appreciation of the Company's Common Stock. In May 1997,
each of the named executive officer received stock options pursuant to the 1996
Stock Option Plan. These options generally vest and become exercisable in May
2000 and have an exercise price of $37.25 per share.
 
Performance Share Awards
 
     Performance share awards ensure that selected senior officers have a
significant component of their compensation contingent upon the achievement of
specified financial performance goals over a three-year period. The performance
measures used to determine the level of payout under the performance share
awards may be chosen from one or more of the following: total stockholder return
(absolute or peer-group comparative); stock price (absolute or peer-group
comparative); cumulative net income (absolute or competitive growth rate
comparative); return on equity; return on capital; cash flow, including
operating cash flow, free cash flow, discounted cash flow return on investment
and cash flow in excess of capital; economic value added (income in excess of
capital costs); and market share. In 1997, the Compensation Committee granted
performance share awards under the Long-Term Incentive Plan with target
performance shares equal to 25% of the senior officer's base salary on January
1, 1998. The 1997 performance criteria for such performance share awards are the
Company's cumulative net income over a three-year period and the relative return
to stockholders compared to the Company's peer group of representative
independent automotive suppliers at the end of a three-year period. For a senior
officer to receive shares of Common Stock under the performance shares,
cumulative net income and/or relative return to stockholders must equal or
exceed the threshold goals. Additional shares of Common Stock under the
performance share awards may be earned if the Company has achieved the target or
maximum goals for cumulative net income and relative return to stockholders as
of the end of the performance period.
 
Management Stock Purchase Program
 
     In furtherance of its goal of aligning the interests of officers with those
of its stockholders, the Compensation Committee has permitted 20 senior officers
to participate in the Management Stock Purchase Program. The program is part of
the Long-Term Incentive Plan. Under this program, a selected officer can elect
to defer, a portion of his or her base salary for the year and annual incentive
bonuses based upon the officer's performance for the prior year and awarded
during the first quarter for the year under the Senior Executive Incentive Plan
or the Management Incentive Plan. In consideration for the deferral of their
salary and/or incentive bonus, Deferral Participants will receive an amount of
restricted stock units under the Long-Term Incentive Plan equal to the amount
deferred increased by 25% of such amount divided by the fair market value of the
shares of Common Stock on the date the annual incentive bonuses are paid.
Generally, a Deferral Participant must hold restricted stock units and remain
employed by the Company for at least three years, at which time such Deferral
Participant shall be entitled to receive a number of shares of Common Stock
equal to the number of restricted stock units held and a cash payment equal to
the amount of dividends, if any, that would have been earned by such Deferral
Participant if such Deferral Participant held shares of Common Stock rather than
restricted stock units. Pursuant to deferral elections made under the Management
Stock Purchase Program relating to compensation earned in the year ending
December 31, 1997, Messrs. Way, Rossiter, Vandenberghe, O'Rourke and Preston
received restricted stock units of 3,933, 2,790, 3,895, 1,409 and 2,498,
respectively.
 
RETIREMENT SAVINGS PLAN
 
     Effective January 1, 1997, the Company's Retirement Savings Plan was
amended to provide that the Company matching contribution for each participant
will be invested in shares of Common Stock. Each
 
                                       19

<PAGE>   23
 
participant who is at least age 57, however, may elect to diversify the employer
matching contributions. In addition, the Company match percentage for each
participant will be determined under the following chart and will apply to the
participant's contributions up to five percent of base salary:
 

<TABLE>
<CAPTION>
                                               MATCHING CONTRIBUTION
              YEARS OF SERVICE                      PERCENTAGE
              ----------------                 ---------------------
<S>                                            <C>
less than 5..................................            50%
more than 5 but less than 8..................            75%
8 or more....................................           100%
</TABLE>

 
EXECUTIVE SUPPLEMENTAL SAVINGS PLAN
 
     Effective January 1, 1997, the Compensation Committee adopted the Lear
Corporation Executive Supplemental Savings Plan (the "Supplemental Savings
Plan"). The purpose of the Supplemental Savings Plan is to provide participants
and their beneficiaries with retirement benefits that could not be earned under
the Retirement Savings Plan due to limits on the amount of pre-tax contributions
a participant can make to the Retirement Savings Plan and/or the amount of
compensation that can be recognized under the Retirement Savings Plan. In
addition, the Supplemental Savings Plan also provides retirement benefits that
would have been earned under the Retirement Savings Plan and/or the Pension Plan
if the participant had not elected to defer compensation under the Management
Stock Purchase Program (as described above). Selected senior officers are
eligible to participate in the Supplemental Savings Plan.
 
ESTATE PRESERVATION PLAN
 
     In November 1997, the Compensation Committee approved the Estate
Preservation Plan (the "EPP") for 15 senior executives of the Company each of
whom has a significant portion of his net worth invested in the Company's Common
Stock ("EPP Participant"). The EPP provides the beneficiaries of an EPP
Participant with funds to pay estate taxes on the Common Stock so the
beneficiaries are not forced to sell such stock. Under the EPP, the Company
purchases a life insurance policy on the joint lives of the EPP Participant and
his spouse (the "Policy"). The Company will own the Policy but will endorse a
portion of the Policy's proceeds to the EPP Participant's designated
beneficiaries. Each EPP Participant pays a portion of the Policy's annual
premium (until he reaches age 65) and the Company pays the remainder of the
annual premium. After age 65, the Company pays the entire annual premium and the
EPP Participant pays income taxes on the imputed income from the Policy. Upon
the later death of an EPP Participant or his spouse, the Company recovers the
present value of its premium payments from the tax-free insurance proceeds and
the EPP Participant's beneficiaries receive the remaining tax-free insurance
proceeds, which they can use to pay the estate taxes on the Common Stock.
 
CHIEF EXECUTIVE OFFICER COMPENSATION
 
     During the fiscal year ended December 31, 1997, the compensation of Kenneth
L. Way, Chairman of the Board and Chief Executive Officer of the Company, was
established pursuant to an employment agreement entered into in March of 1995
and adjusted in October of 1995. Under the terms of the agreement, Mr. Way
received salary compensation of $783,750 in the fiscal year ending December 31,
1997 and was eligible to participate in the Company's Senior Executive Incentive
Plan, the Long-Term Incentive Plan, the Company's stock option plans and the
Executive Supplemental Savings Plan. The Compensation Committee awarded Mr. Way
an annual bonus of $837,135 for services performed in 1997, which was based upon
the attainment of targeted earnings per share and targeted growth in earnings
per share pursuant to the Company's Senior Executive Incentive Plan. Mr. Way
elected to defer 20% of his annual cash bonus pursuant to an election made under
the Management Stock Purchase Program. In addition, in order to provide
substantial at-risk components and to align the interests of Mr. Way with those
of the Company's stockholders, the Compensation Committee granted Mr. Way (i)
options to purchase 23,000 shares of Common Stock under the 1996 Stock Option
Plan and (ii) performance share awards, the amount of which, if any, is
determined by the Company's cumulative net income and relative return to
shareholders over a three year period. See Executive Compensation -- Option
Grants and Long-Term Incentive Awards in Last Fiscal Year.
 
                                       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 the 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, Section 162(m) of the Code limits to one million dollars 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 Larry W. McCurdy and Roy E. Parrott, being all
of the members of the Compensation Committee.
 
                                          Larry W. McCurdy, Chairman
                                          Roy E. Parrott
 
                                       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, 1997 of the Company, the S&P 500 and a peer group of companies (the
"Peer Group")(1) selected by the Company for purposes of the comparison and more
fully described below. Dividend reinvestment has been assumed and the returns of
each company has 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 500 Index and the stocks comprising the
Peer Group.
 

<TABLE>
<CAPTION>
               Measurement Period                       LEAR                                PEER
             (Fiscal Year Covered)                  CORPORATION         S&P 500            GROUP
<S>                                               <C>               <C>               <C>
3/31/94                                                     100.00            100.00            100.00
6/30/94                                                     118.58             99.75             91.20
9/30/94                                                     118.58            106.54             90.28
12/31/94                                                    127.48            107.08             91.02
3/31/95                                                     116.18            117.31             97.05
6/30/95                                                     147.62            128.50            108.74
9/30/95                                                     189.57            136.52            110.14
12/31/95                                                    187.15            144.13            107.61
3/31/96                                                     210.55            152.94            118.64
6/30/96                                                     227.49            160.66            119.46
9/30/96                                                     212.97            164.88            123.08
12/31/96                                                    220.23            177.31            134.95
3/31/97                                                     215.39            182.00            132.88
6/30/97                                                     286.37            214.31            154.64
9/30/97                                                     317.83            228.68            180.15
12/31/97                                                    306.54            232.25            170.31
</TABLE>

 
- -------------------------
(1) 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 of comparable size and products whose
    common stock is traded on domestic stock exchanges. The Peer Group includes
    Arvin Industries, Inc., Borg-Warner Automotive, Inc., Breed Technologies,
    Inc., Collins & Aikman, Dana Corp., Detroit Diesel, Donnelly Corp., Eaton
    Corp., Excel Industries, Inc., Gentex, ITT Industries, Johnson Controls,
    Inc., Magna International, Inc., Mascotech, Inc., Simpson Industries, Inc.,
    Standard Products Co., Superior Industries International, Tower Automotive
    and Walbro.
 
                                       22

<PAGE>   26
 

                              CERTAIN TRANSACTIONS
 
LEHMAN EQUITY OFFERING
 
     Prior to June 30, 1997, four merchant banking partnerships affiliated with
Lehman Brothers Holding, Inc. (collectively, the "Lehman Funds") owned
10,284,854 shares of the Company's Common Stock which represented approximately
15.6% of the Common Stock. On June 30, 1997, the Lehman Funds sold all of their
shares of the Company's Common Stock (the "Secondary Offering"). Lehman Brothers
Inc. served as managing underwriter for the Secondary Offering. Pursuant to the
Amended and Restated Stockholders and Registration Rights Agreement dated
September 27, 1991, the Company incurred $460,416 in expenses as a result of the
Secondary Offering.
 
C
REDIT AGREEMENT
 
     The Company is party to revolving credit facilities dated December 20,
1996, as amended (the "Credit Agreement") with a syndicate of lenders for which
The Chase Manhattan Bank serves as administrative agent. Lehman Commercial Paper
Inc., which is affiliated with the Lehman Funds, is 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.
 
MANAGEMENT EQUITY PARTICIPATION
 
     Certain current and former officers of the Company, including Messrs.
Rossiter and Vandenberghe, 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"). The
Management Notes accrued interest at a rate of 4.46% per annum. On August 5,
1997, Messrs. Rossiter and Vandenberghe prepaid the outstanding principal
balances of their Management Notes of $584,873.03 and $194,910.57, respectively.
 
              RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
 

                                (PROPOSAL NO. 2)
 
     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, 1998. A proposal will be presented at the
Meeting to ratify the appointment of Arthur Andersen LLP as the Company's
independent auditors for the 1998 fiscal year. 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.
 
                                       23

<PAGE>   27
 
         STOCKHOLDER PROPOSALS FOR 1999 ANNUAL MEETING OF STOCKHOLDERS
 
     Stockholder proposals intended to be presented at the 1999 Annual Meeting
of Stockholders of the Company must be received by the Company no sooner than
October 21, 1998 or later than November 20, 1998 for inclusion in the Company's
proxy statement relating to the 1999 Annual Meeting of Stockholders. Stockholder
proposals should be addressed to Joseph F. McCarthy, Lear Corporation, 21557
Telegraph Road, P.O. Box 5008, Southfield, Michigan 48086-5008.
 
                                 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, 1997, 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 1997 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 16, 1998 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
CORPORATION, 21557 TELEGRAPH ROAD, P.O. BOX 5008, SOUTHFIELD, MICHIGAN
48086-5008.
 
                                          BY ORDER OF THE BOARD OF DIRECTORS
 
                                          /S/ JOSEPH F. MCCARTHY
                                          Joseph F. McCarthy
                                          Vice President, Secretary
                                          and General Counsel
 
                                       24

<PAGE>   28
                               ADMISSION TICKET

                               LEAR CORPORATION

                        ANNUAL MEETING OF STOCKHOLDERS

                          MAY 14, 1998 AT 10:00 A.M.
                         THE AUTOMOTIVE HALL OF FAME
                           21400 OAKWOOD BOULEVARD
                              DEARBORN, MICHIGAN

                 ADMITS ONE STOCKHOLDER AND UP TO TWO GUESTS






- --------------------------------------------------------------------------------

                               LEAR CORPORATION

                        PROXY/VOTING INSTRUCTION CARD

        This proxy is solicited on behalf of the Board of Directors of Lear
Corporation for the Annual Meeting of Stockholders on May 14, 1998 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 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 and 2.

                                        LEAR CORPORATION
                                        P.O. BOX 11211
                                        NEW YORK, N.Y. 10203-0211

<PAGE>   29
Dear Stockholder:

        The Annual Meeting of Stockholders (the "Meeting") of Lear Corporation
(the "Company") will be held at 10:00 a.m. on Thursday, May 14, 1998 at the
Automotive Hall of Fame, 21400 Oakwood Boulevard, Dearborn, 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 3 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 20, 1998


                            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: Kenneth L. Way, Larry W. McCurdy and Roy E. Parrott
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK THE "EXCEPTIONS" BOX AND WRITE THAT NOMINEE'S 
NAME IN THE SPACE PROVIDED BELOW.)
*Exceptions ________________________________________________________________________________________________________________________

2. To ratify the appointment of Arthur Andersen LLP as independent auditors          3. Do you plan to 
   of the Company for the fiscal year ending December 31, 1998.                         attend the Meeting?     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             
adjournment or postponement thereof.                                     

                                                                                                      Change of Address
                                                                                                      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, Administrator, 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:___________________________, 1998

                                                                                           _______________________________________  
                                                                                                           Signature

                                                                                           _______________________________________
                                                                                                           Signature
                                                                                           VOTES MUST BE INDICATED
                                                                                           (X) IN BLACK OR BLUE INK.     [X]

(PLEASE SIGN, DATE AND RETURN THIS PROXY IN THE ENCLOSED POSTAGE PREPAID ENVELOPE.)
</TABLE>