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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended JULY 1, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________________ to ______________________.
COMMISSION FILE NUMBER: 1-11311
LEAR SEATING CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 13-3386776
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
21557 TELEGRAPH ROAD, SOUTHFIELD, MI 48034
(Address of principal executive offices) (zip code)
(810) 746-1500
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to the
filing requirements for the past 90 days. Yes X No
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Approximate number of shares of Common Stock, $0.01 par value per share,
outstanding at July 29, 1995: 46,171,522
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LEAR SEATING CORPORATION
FORM 10-Q
FOR THE QUARTER ENDED JULY 1, 1995
INDEX
Part I - Financial Information: Page No.
------------------------------- --------
Item 1 - Consolidated Financial Statements
Introduction to the Consolidated Financial Statements 3
Consolidated Balance Sheets - July 1, 1995 and
December 31, 1994 4
Consolidated Statements of Income - Three and Six Month Periods
ended July 1, 1995 and July 2, 1994 5
Consolidated Statements of Cash Flows - Six Month
Periods ended July 1, 1995 and July 2, 1994 6
Notes to Consolidated Financial Statements 7
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations 12
Part II - Other Information:
- -----------------------------
Item 6 - Exhibits and Reports on Form 8-K 18
Signatures 19
Exhibit Index 20
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LEAR SEATING CORPORATION
PART I - FINANCIAL INFORMATION
ITEM 1 - CONSOLIDATED FINANCIAL STATEMENTS
INTRODUCTION TO THE CONSOLIDATED FINANCIAL STATEMENTS
The condensed consolidated financial statements of Lear Seating Corporation and
subsidiaries ("the company") (Note 1) have been prepared by Lear Seating
Corporation, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations. The Company believes that the
disclosures are adequate to make the information presented not misleading when
read in conjunction with the financial statements and the notes thereto
included in the Company's Annual Report on Form 10-K as filed with the
Securities and Exchange Commission for the period ended December 31, 1994.
The financial information presented reflects all adjustments (consisting only
of normal recurring adjustments) which are, in the opinion of management,
necessary for a fair statement of the results of operations and financial
position for the interim periods presented. These results are not
necessarily indicative of a full year's results of operations.
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LEAR SEATING CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN MILLIONS, EXCEPT SHARE DATA)
July 1, December 31,
1995 1994
---- ----
(Unaudited)
ASSETS
------
CURRENT ASSETS:
Cash and cash equivalents $ 53.0 $ 32.0
Accounts receivable 700.2 579.8
Inventories 111.0 126.6
Unbilled customer tooling 54.3 53.5
Other 40.6 26.4
--------- -----------
959.1 818.3
-------- ---------
PROPERTY, PLANT AND EQUIPMENT:
Land 37.5 36.6
Buildings and improvements 154.5 141.1
Machinery and equipment 353.3 326.8
-------- ---------
545.3 504.5
Less-Accumulated depreciation (181.4) (150.3)
-------- --------
363.9 354.2
-------- ---------
OTHER ASSETS:
Goodwill, net 494.4 499.5
Deferred financing fees and other 37.7 43.1
--------- ---------
532.1 542.6
-------- --------
$ 1,855.1 $ 1,715.1
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Short-term borrowings $ 19.2 $ 84.1
Cash overdrafts 55.2 27.6
Accounts payable 766.0 656.7
Accrued liabilities 199.5 210.9
Current portion of long-term debt 1.7 1.9
--------- ----------
1,041.6 981.2
--------- --------
LONG-TERM LIABILITIES:
Deferred national income taxes 24.3 25.3
Long-term debt 460.1 418.7
Other 82.6 76.3
-------- ---------
567.0 520.3
------- --------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value, 150,000,000 authorized at July 1,
1995 and December 31, 1994; 46,142,594 issued at July 1, 1995
and 46,088,278 issued at December 31, 1994 .5 .5
Additional paid-in capital 274.4 274.3
Notes receivable from sale of common stock (1.0) (1.0)
Less- Common stock held in treasury, 10,230 shares at
July 1, 1995 and December 31, 1994 , at cost (.1) (.1)
Retained deficit (3.6) (49.4)
Minimum pension liability adjustment (5.8) (5.8)
Cumulative translation adjustment (17.9) (4.9)
-------- --------
246.5 213.6
-------- --------
$ 1,855.1 $ 1,715.1
======= =======
The accompanying notes are an integral part of these balance sheets.
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LEAR SEATING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(IN MILLIONS, EXCEPT PER SHARE DATA)
Three Months Ended Six Months Ended
------------------ ----------------
July 1, July 2, July 1, July 2,
1995 1994 1995 1994
---- ---- ---- ----
(Unaudited) (Unaudited)
Net sales $ 1,142.6 $ 822.1 $ 2,186.1 $ 1,508.9
Cost of sales 1,047.8 743.5 2,014.7 1,380.3
Selling, general and administrative expenses 24.3 21.4 50.1 38.3
Amortization of goodwill 3.3 2.9 6.4 5.7
-------- -------- -------- --------
Operating income 67.2 54.3 114.9 84.6
Interest expense 14.3 11.0 28.5 25.0
Other expense, net 3.7 2.1 5.8 4.6
-------- -------- -------- --------
Income before provision for
national income taxes 49.2 41.2 80.6 55.0
Provision for national income taxes 20.3 20.1 34.7 27.3
-------- -------- -------- --------
Net income $ 28.9 $ 21.1 $ 45.9 $ 27.7
======== ======= ======= ========
Net income per common share:
Primary $ .58 $ .43 $ .93 $ .61
===== ===== ===== =====
Fully diluted $ .58 $ .43 $ .92 $ .61
===== ===== ===== =====
The accompanying notes are an integral part of these statements.
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LEAR SEATING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN MILLIONS)
Six Months Six Months
Ended Ended
July 1, 1995 July 2, 1994
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 45.9 $ 27.7
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of goodwill 37.1 26.9
Amortization of deferred financing fees 1.2 1.2
Deferred national income taxes (1.0) (.8)
Other, net 9.3 5.7
Change in working capital items (52.2) (52.5)
---------- ----------
Net cash provided by operating activities 40.3 8.2
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant and equipment (42.6) (35.0)
Other, net .9 4.5
---------- ----------
Net cash used by investing activities (41.7) (30.5)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Change in long-term debt, net 41.3 (114.6)
Short-term borrowings, net (61.6) (3.2)
Increase (decrease) in cash overdrafts 26.9 27.9
Proceeds from sale of common stock, net -- 103.7
Other, net .1 --
---------- ----------
Net cash provided by financing activities 6.7 13.8
---------- ----------
Effect of foreign currency translation 15.7 .6
---------- ----------
NET CHANGE IN CASH AND CASH EQUIVALENTS 21.0 (7.9)
---------- ----------
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 32.0 55.0
---------- ----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 53.0 $ 47.1
---------- ----------
CHANGES IN WORKING CAPITAL
Accounts receivable $ (149.9) $ (125.9)
Inventories 2.8 4.9
Accounts payable 124.5 56.4
Accrued liabilities and other (29.6) 12.1
---------- ----------
$ (52.2) $ (52.5)
---------- ---------
SUPPLEMENTARY DISCLOSURE:
Cash paid for interest $ 12.3 $ 16.1
---------- ---------
Cash paid for income taxes $ 22.2 $ 13.4
---------- ---------
The accompanying notes are an integral part of these statements.
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LEAR SEATING CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(1) BASIS OF PRESENTATION
The consolidated financial statements include the accounts of Lear
Seating Corporation, a Delaware corporation, and its wholly-owned and
majority-owned subsidiaries. Investments in less than majority-owned
businesses are generally accounted for under the equity method.
A 33-for-1 split of the Company's common stock was effective as of the
Company's initial public offering in April, 1994. All references to the
numbers of shares of common stock, stock options, warrants and income (loss)
per share in the accompanying consolidated financial statements and notes
thereto have been adjusted to give effect to the split.
(2) ACQUISITION OF AUTOMOTIVE INDUSTRIES
On July 16, 1995, the Company, AIHI Acquisition Corp., a wholly-owned
subsidiary of the Company ("Acquisition Corp."), and Automotive Industries
Holding, Inc. ("AIH") entered into an Agreement and Plan of Merger (the "Merger
Agreement") pursuant to which Acquisition Corp. has made an offer to purchase
all the issued and outstanding shares of common stock of AIH (including shares
subject to options) for a purchase price of $33.50 per share. The aggregate
purchase price for the acquisition of AIH (the "AIH Acquisition") will be
approximately $926.4 million, including the assumption of $282.3 million of
AIH's existing indebtedness and $18.4 million in fees and expenses. Funds for
the purchase of AIH are expected to be provided by borrowings under the New
Credit Agreement, as described in Note 3.
AIH is a leading designer and manufacturer of high quality interior
trim systems and blow molded products principally for North American and
European automobile and light truck manufacturers. AIH's interior trim
products include complete door panel assemblies, seatbacks and inserts,
armrests, consoles and headliners. Blow molded products include windshield
wiper reservoirs, fuel tank shields and radiator coolant overflow reservoirs.
In 1994, AIH had revenues of approximately $512.8 million and operating income
of $63.9 million.
Consummation of the AIH Acquisition is subject to certain conditions,
including the tender of the majority of Automotive Industries' outstanding
shares, the expiration or termination of any applicable waiting periods under
Federal Antitrust laws, the Company obtaining sufficient financing for the AIH
acquisition under the New Credit Agreement as described in Note 3, and other
customary conditions.
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LEAR SEATING CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(3) NEW CREDIT AGREEMENT
In connection with the AIH Acquisition, the Company expects to enter
into a $1.5 billion secured revolving credit agreement to be established with
Chemical Bank and a syndicate of financial institutions (the "New Credit
Agreement"). Borrowings under the New Credit Agreement will be used to finance
the purchase of AIH, refinance a portion of the existing indebtedness of AIH,
refinance the Company's existing $500 million credit facility (the "Prior
Credit Facility"), and for general corporate purposes.
Borrowings under the New Credit Agreement will bear interest, at the
election of the Company, at a floating rate equal to (i) the higher of Chemical
Bank's prime rate and the federal funds rate plus .5% or (ii) the Eurodollar
rate (as defined in the New Credit Agreement) plus a borrowing margin of .5% to
1.0%. The New Credit Agreement will be guaranteed by all of the Company's
direct and indirect wholly-owned domestic subsidiaries. The applicable
borrowing margin will be determined based on the satisfaction of specified
ratios by the Company. Amounts available to be drawn under the New Credit
Agreement will be reduced by an aggregate amount of $650 million during the
term of the New Credit Agreement, which would mature on September 30, 2001.
Definitive documentation of the New Credit Agreement will contain
covenants similar to those contained in the Prior Credit Facility, as modified
to reflect the acquisition of AIH. Such covenants include, among other things,
the maintenance of certain financial ratios as well as restrictions on
indebtedness, guarantees, acquisitions, capital expenditures, investments,
dividends and other stock payments, asset sales and issuances of common stock.
Under the New Credit Agreement, dividends are limited to $2.5 million per
quarter assuming no other events of default had occurred.
As the Company's obligations under the New Credit Agreement will bear
interest at fluctuating rates, increases in interest rates on such obligations
could adversely affect the Company's results of operations and financial
condition. Under the proposed New Credit Agreement, the Company will be
permitted to convert variable rate interest obligations up to an aggregate of
$500 million into fixed interest rate agreements.
(4) ACQUISITION OF FIAT SEAT BUSINESS
On December 15, 1994, the Company purchased from Gilardini S.p.A., an
Italian Corporation, all of the outstanding common stock of Sepi S.p.A., an
Italian Corporation, all of the outstanding common stock of Sepi Poland
S.p. Z.o.o. and a 35% interest in a Turkish joint venture (collectively, the
"Fiat Seat Business," or "FSB"). FSB is engaged in the design and
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LEAR SEATING CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
manufacture of automotive seating, with its principal customers being Fiat
S.p.A. and its affiliates ("Fiat"). In connection with this transaction, the
Company and Fiat entered into a long-term supply agreement for certain products
produced by FSB.
This acquisition was accounted for as a purchase, and accordingly, the
operating results of the FSB have been included in the accompanying financial
statements since the date of the acquisition. Because the Company consolidates
the FSB on a one month lag, the results of operations for the quarter and
year-to-date ended July 1, 1995 include only the results of operations of
FSB from the acquisition date to the end of May 1995.
Assuming the acquisition had taken place as of the beginning of the
quarter and year-to-date ending July 2, 1994, the consolidated pro forma
results of operations of the Company for the first quarter and first half of
1994 would have been as follows, after giving effect to certain pro forma
adjustments, (Unaudited: in millions, except per share data):
Three Months Ended Six Months Ended
July 2, 1994 July 2, 1994
------------ ------------
Net sales $ 945.9 $ 1,739.1
Net income 15.6 16.7
Net income per share .32 .37
(5) INVENTORIES
Inventories are stated at the lower of cost or market. Cost is
principally determined by using the first-in, first-out method. Finished goods
and work-in-process inventories include material, labor and manufacturing
overhead costs.
Inventories are comprised of the following (in millions):
July 1, December 31,
1995 1994
---- ----
Raw materials $ 70.8 $ 93.4
Work-in-process 13.5 13.9
Finished goods 26.7 19.3
------ ------
$ 111.0 $ 126.6
===== =====
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LEAR SEATING CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(6) LONG-TERM DEBT
Long term debt is comprised of the following (in millions):
July 1, December 31,
1995 1994
---- ----
Domestic revolving credit loan $ 160.0 $ 121.9
German term loan 7.3 7.1
Industrial Revenue Bonds 19.0 19.0
Loans from Governmental Agencies 5.5 2.6
------- -------
191.8 150.6
Less- Current portion (1.7) (1.9)
------- -------
190.1 148.7
------- -------
Subordinated Debt:
8 1/4% Subordinated Notes 145.0 145.0
11 1/4% Senior Subordinated Notes 125.0 125.0
------- -------
270.0 270.0
------- -------
$ 460.1 $ 418.7
======= =======
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LEAR SEATING CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(7) POST-RETIREMENT BENEFITS FOR FOREIGN PLANS
On January 1, 1995, the Company adopted Statement of Financial Accounting
Standards No. 106, "Employers' Accounting for Post-Retirement Benefits" for its
foreign plans. The Company adopted this statement for its domestic plans in
July, 1993. This standard requires that the expected cost of post-retirement
benefits be charged to expense during the years in which the employees render
service to the Company. The adoption of this statement for the Company's
foreign plans did not have a material effect on the Company's financial
position or results of operations.
(8) COMMON SHARES OUTSTANDING
The weighted average number of shares of common stock after giving effect
to the split of the Company's common stock (Note 1) is as follows for the
periods presented:
Three Months Ended Six Months Ended
------------------ ----------------
July 1, 1995 July 2, 1994 July 1, 1995 July 2, 1994
------------ ------------ ------------ ------------
Primary 49,537,489 49,058,681 49,536,813 45,479,223
Fully Diluted 49,635,199 49,070,015 49,634,592 45,589,431
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ITEM 2 - MANAGEMENTS' DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
THREE MONTHS ENDED JULY 1, 1995 VS. THREE MONTHS ENDED JULY 2, 1994.
Net sales of $1,142.6 million in the second quarter of 1995 exceeded
the second quarter of 1994 by $320.5 million or 39.0%. Sales as compared to
prior year benefited from the acquisition of the Fiat Seat Business in December
1994, new business in the United States and Europe and increased automotive
production on carryover seat programs in North America and Europe.
Net sales in the United States of $502.0 million increased in the
quarter ended July 1, 1995 as compared to the second quarter of the prior year
by $2.5 million. Sales in the current quarter benefited from new Ford and
General Motors passenger car and Ford truck programs as vehicle build schedules
reflect a modest downturn on existing seat programs. Partially offsetting the
overall increase in sales was the relocation of a passenger car program to
Canada.
Net sales in Canada of $230.7 million in the second quarter of 1995
surpassed the comparable period in the prior year by $98.2 million or 74.1%.
Sales in the quarter ended July 1, 1995 benefited from the attainment of
targeted production levels for a General Motors replacement passenger car
program, incremental volume on mature General Motors and Ford truck programs
and the relocation of a Ford passenger car program.
Net sales in Europe of $348.5 million in the current quarter exceeded
the second quarter of the prior year by $210.6 million or 152.7%. Sales in the
second quarter of 1995 benefited from the contribution of $133.6 million
in sales from the FSB, new business in England, additional volume on existing
programs in Sweden and Germany and favorable exchange rate fluctuations in
Germany and Sweden.
Net sales in Mexico of $61.4 million increased in the second quarter
of 1995 as compared to the second quarter of 1994 by $9.2 million or 17.6%
largely as a result of new Ford and General Motors passenger car and Chrysler
truck programs.
Gross profit (net sales less cost of sales) and gross margin (gross
profit as a percentage of net sales) were $94.8 million and 8.3% for the second
quarter of 1995 as compared to $78.6 million and 9.6% for the second quarter of
previous year. Gross profit for the second quarter of 1995 benefited from the
overall growth in domestic and foreign sales activity, including the production
of certain new business programs in the United States and productivity
improvement programs. Partially offsetting the increase in gross profit were
engineering and pre-production expenses for the balance of new facilities in
the United States and costs associated with new business opportunities in the
Asian Pacific region.
Selling, general and administrative expenses as a percentage of net
sales declined from 2.6% in the second quarter of 1994 to 2.1% in the current
year quarter. Actual expenditures for the second quarter of 1995 increased in
comparison to the prior year due to the acquisition of
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FSB, engineering and support expenses associated with the expansion of business
and expenses related to the pursuit of new business opportunities.
Operating income and operating margin were $67.2 million and 5.9% for
the quarter ended July 1, 1995 as compared to $54.3 million and 6.6% a year
earlier. The increase in operating income was primarily due to the benefits
derived from increased market demand for new and ongoing seat programs in North
America and Europe; partially offset by increased engineering and administrative
support expenses, pre-production and facility costs for new seat programs to be
introduced in the United States and Asian Pacific region within the next twelve
months and operating losses associated with the integration of FSB into the
Company's operations. Non-cash depreciation and amortization charges were
$18.7 million and $13.8 million for the second quarter of 1995 and 1994,
respectively.
During the three months ended July 1, 1995, interest expense increased
by $3.3 million over the prior year to $14.3 million. The increase is due
primarily to interest incurred on the additional debt used to finance the FSB
acquisition as well as due to slightly higher rates in the current period under
the Company's credit facility.
Other expenses for the quarter, which include state and local taxes,
foreign exchange gains and losses, equity of non-consolidated affiliates and
other non-operating expenses, increased $1.6 million over the comparable period
last year. This increase was due to foreign exchange losses incurred with
respect to the Company's Canadian, Italian and German operations.
Net income for the second quarter of 1995 was $28.9 million, or $.58
per share on a fully diluted basis compared to $21.1 million, or $.43 per share
in the prior year second quarter. The provision for income taxes was $20.3
million, or an effective rate of 41.3%, for the current year quarter, versus
$20.1 million, or an effective rate of 48.8%, in the prior year second quarter.
The decline in the effective tax rate from the prior year is primarily due to
improvement in the Company's North American and Mexican operations in 1995
which are at lower effective tax rates. Per share earnings increased by 35%
as compared to the prior year quarter, despite 500,000 more shares outstanding
on a fully diluted basis.
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SIX MONTHS ENDED JULY 1, 1995 vs. SIX MONTHS ENDED JULY 2, 1994.
Net sales increased by 44.9% to $2,186.1 million in the first six
months of 1995 as compared to $1,508.9 million in the first six months of 1994.
Sales for the six month period ended July 1, 1995 benefited from incremental
volume on mature seating programs in North America and Europe, new business in
the United States and Europe and the FSB Acquisition in December 1994. For the
first six months of 1995, the FSB accounted for 9.9% of the Company's net
sales.
Gross profit and gross margin were $171.4 million and 7.8% for the six
month period ended July 1, 1995 as compared to $128.6 and 8.5% for the
comparable period in the prior year. Gross profit in the first six months of
1995 surpassed prior year due to increased production volumes on passenger car
and truck seat programs by domestic and foreign automotive manufacturers. The
increase in gross profit was offset by new program start-up expenses in North
America, low margins at the FSB, increased engineering costs and pre-production
and facility expenses associated with new foreign ventures.
Selling, general and administrative expenses for the six months ended
July 1, 1995 decreased as a percentage of net sales to 2.3% from 2.5% in the
comparable period in the prior year. The increase in actual expenditures from
$38.3 million to $50.1 million was largely the result of the acquisition of
FSB, administration support expenses and design and development costs
associated with the expansion of business and expenses related to new business
opportunities.
Operating income and operating margin were $114.9 million and 5.3% for
the first six months of 1995 as compared to $84.6 million and 5.6% for the
first six months of 1994. The growth in operating income was primarily due to
incremental volume on new and mature seat programs in the United States, Canada
and Europe and improved performance in Mexico. Partially offsetting the
increase in operating income were increased engineering and support expenses,
costs associated with recently opened facilities in North America and losses
related to the FSB's operations. Non-cash depreciation and amortization
charges were $37.1 million and $26.9 million for the first half of the current
and prior years, respectively.
During the six month period ended July 1, 1995, interest expense
increased to $28.5 million as compared to $25.0 million a year earlier. The
increase is primarily due to the additional debt incurred to finance the FSB
acquisition in addition to slightly higher interest rates under the Prior
Credit Facility.
Primarily as a result of foreign currency exchange fluctuations, other
expense, including state and local taxes, foreign exchange, minority interests
and equity in income of affiliates, increased in comparison to the prior
period.
During the six months ended July 1, 1995, the provision for income
taxes was $34.7 million or 43.1% of pre-tax income as compared to $27.3 million
or 49.6% of pre-tax income in the six month period ended July 2, 1994. The
decrease in rate compared to the previous period is due primarily to changes in
operating performance and related income levels among the various tax
jurisdictions.
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LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities increased to $40.3 million
during the six months ended July 1, 1995 compared to $8.2 million during the
comparable period in 1994, primarily due to higher earnings in 1995. Net
income adjusted for non-cash depreciation and goodwill amortization was $83.0
million for the six months ended July 1, 1995 as compared to $54.6 million for
the same period in 1994. Cash flow provided by earnings was partially offset
by the net change in working capital.
The net change in working capital resulted in a net use of $52.2 and
$52.5 million for the six months ended July 1, 1995 and July 2, 1994
respectively. This use of working capital was the result of the increase in
accounts receivable ($149.4 million in 1995 compared to $125.9 million in 1994)
caused by a 33% increase in net sales over the last six months of 1994 offset
by the associated increase in accounts payable and cash overdrafts combined
($151.4 million compared to $84.3 million for the same period in 1994).
As of July 1, 1995, the Company had $215.1 million outstanding under
the Prior Credit Facility ($55.1 million of which would have been outstanding
under letters of credit), resulting in approximately $284.9 million unused and
available. As of July 1, 1995, the Company had net cash and cash equivalents
of $53.0 million. Of the $160.0 million of borrowings actually outstanding
(excluding letters of credit) under the Credit Agreement as of July 1,
1995, $156.1 million related to the FSB Acquisition.
In addition to its debt service obligations, the Company requires
liquidity for capital expenditures and working capital needs. In the six
months ended July 1, 1995, the Company incurred $42.6 million in capital
expenditures, largely due to ramp up of a significant number of new programs
scheduled for launch in the second half of 1995. The Company anticipates
spending a total of $135.0 million for capital expenditures for all of 1995.
The Company believes that cash flows from operations, together with
amounts available under the New Credit Agreement will be sufficient to meet its
debt service obligations, projected capital expenditures and working capital
requirements.
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LEAR SEATING CORPORATION
PART II - OTHER INFORMATION
ITEM 4 - Submission of matters to a vote of Security Holders
(a) The Annual Meeting of Stockholders of Lear Seating Corporation was
held on May 5, 1995. At the meeting, the following matters were submitted to a
vote of the stockholders of Lear Seating Corporation.
(1) The election of three directors to hold office until the
1998 Annual Meeting of Stockholders. The vote with respect to
each nominee was as follows:
Nominee For Withheld
------- --- --------
Kenneth L. Way 44,446,541 332,818
Larry W. McCurdy 43,718,537 1,060,822
Eliot M. Fried 44,448,197 331,162
(2) The appointment of the firm of Arthur Andersen LLP as
independent auditors of Lear Seating Corporation for the
year ending December 31, 1995.
For Against Abstain
--- ------- -------
44,764,230 7,499 7,630
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
No exhibits or reports on Form 8-K were filed during the quarter ended
July 1, 1995.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused the report to be signed on its behalf by the
undersigned thereunto duly authorized.
LEAR SEATING CORPORATION
Dated: August 4, 1995 By: /s/ James H. Vandenberghe
------------------------------
James H. Vandenberghe
Executive Vice President
Chief Financial Officer
17
18
LEAR SEATING CORPORATION
FORM 10 -Q
EXHIBIT INDEX
FOR THE QUARTER ENDED JULY 1, 1995
EXHIBIT
NUMBER EXHIBIT
------- -------
10.1 Amendment No. 1 dated as of June 30, 1995 to
Second Amended and Restated Credit Agreement among
Lear, Chemical Bank as administrative agent, and
Bankers Trust Company, The Bank of Nova Scotia,
Citicorp USA, Inc., and Lehman Commercial Paper,
Inc., as managing agents, filed herewith.
10.2 Amendment to Stock Option Agreement dated as of
March 2, 1995 between Lear and Kenneth L. Way,
filed herewith.
10.3 Amendment to Stock Option Agreement dated as of
March 2, 1995 between Lear and Robert E. Rossiter,
filed herewith.
10.4 Amendment to Stock Option Agreement dated as of
March 2, 1995 between Lear and James H.
Vandenberghe, filed herewith.
10.5 Amendment to Stock Option Agreement dated as of
March 2, 1995 between Lear and Randal T. Murphy,
filed herewith.
10.6 Amendment to Stock Option Agreement dated as of
March 2, 1995 between Lear and James A. Hollars,
filed herewith.
27. Financial Data Schedule for the Quarter Ended July
1, 1995, filed herewith.
1
EXHIBIT 10.1
FIRST AMENDMENT
FIRST AMENDMENT, dated as of June 16, 1995 (this "Amendment"), to the
Second Amended and Restated Credit Agreement, dated as of November 29, 1994 (as
amended, supplemented or otherwise modified, the "Credit Agreement"), among
Lear Seating Corporation, a Delaware corporation (the "Borrower"), the several
financial institutions parties thereto (the "Banks"), Chemical Bank, as
administrative agent for the Banks (in such capacity, the "Agent"), and Bankers
Trust Company, The Bank of Nova Scotia, Citicorp USA, Inc. and Lehman
Commercial Paper Inc., as Managing Agents.
W I T N E S S E T H :
WHEREAS, pursuant to the Credit Agreement, the Banks have agreed to
make, and have made, extensions of credit to the Borrower; and
WHEREAS, the Borrower has requested, and upon this Amendment becoming
effective, the Banks have agreed, that certain provisions of the Credit
Agreement be amended in the manner provided for in this Amendment;
NOW, THEREFORE, in consideration of the premises and mutual agreements
contained herein, and for other good and valuable consideration, the
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:
1. Defined Terms. Unless otherwise defined herein, terms defined in the
Credit Agreement and used herein shall have the meanings given to them in the
Credit Agreement.
2. Amendments to Credit Agreement. (a) Subsection 8.8 of the Credit
Agreement is hereby amended by deleting the amount "100,000,000" in the table
contained therein and adding in lieu thereof the amount "120,000,000".
(b) Subsection 8.9 of the Credit Agreement is hereby amended by (i)
deleting the last proviso contained in paragraph (d) thereof in its entirety
and adding in lieu there of the following new proviso:
"provided, still further, that notwithstanding any provision in this
paragraph (d) to the contrary, the Borrower and its Subsidiaries shall not
be obligated to pledge any shares of capital stock of any Foreign
Subsidiary organized under the laws of Australia, Indonesia, South Africa,
Argentina, Brazil or Thailand;";
2
2
(ii) deleting the word "and" contained in paragraph (n) thereof; (iii) deleting
the period contained in paragraph (o) thereof and adding in lieu thereof the
word "; and"; and (iv) adding the following new paragraph (p):
"(p) other loans, advances or other investments up to an aggregate
amount not to exceed $5,000,000."
3. Consent. The Banks hereby consent to the combination of Lear Seating
GmbH, Lear Seating GmbH & Co. Kg. and NS Drahtfedern GmbH.
4. Conditions to Effectiveness. This Amendment shall become effective on
the date (the "Amendment Effective Date") on which the Borrower, the Agent and
the Required Banks shall have executed and delivered to the Agent this
Amendment and the parties to the Subsidiary Guarantee shall have executed the
Acknowledgment and Consent in the form annexed hereto.
5. Representations and Warranties. The representations and warranties
made by the Borrower in the Loan Documents are true and correct in all material
respects on and as of the Amendment Effective Date, before and after giving
effect to the effectiveness of this Amendment, as if made on and as of the
Amendment Effective Date, except to the extent such representations and
warranties expressly relate to an earlier date.
6. Payment of Expenses. The Borrower agrees to pay or reimburse the Agent
for all of its out-of-pocket costs and reasonable expenses incurred in
connection with this Amendment and any other documents prepared in connection
herewith and the transactions contemplated hereby, including, without
limitation, the reasonable fees and disbursements of counsel to the Agent.
7. No Other Amendments; Confirmation. Except as expressly amended,
modified and supplemented hereby, the provisions of the Credit Agreement and
the Notes are and shall remain in full force and effect.
3
3
8. Governing Law; Counterparts. (a) This Amendment and the rights and
obligations of the parties hereto shall be governed by, and construed and
interpreted in accordance with, the laws of the State of New York.
(b) This Amendment may be executed by one or more of the parties to this
Amendment on any number of separate counterparts, and all of said counterparts
taken together shall be deemed to constitute one and the same instrument. A
set of the copies of this Amendment signed by all the parties shall be lodged
with the Borrower and the Agent. This Amendment may be delivered by facsimile
transmission of the relevant signature pages hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their respective proper andy duly authorized
officers as of the day and year first above written.
LEAR SEATING CORPORATION
By: /s/ Donald J. Stebbins
----------------------
Title:
CHEMICAL BANK, as Agent and as a
Bank
By:
----------------------
Title:
BANKERS TRUST COMPANY, as a
Managing Agent and as a Bank
By:
----------------------
Title:
THE BANK OF NOVA SCOTIA, as a
Managing Agent and as a Bank
By:
----------------------
Title:
4
4
CITICORP USA, INC., as a
Managing Agent and as a Bank
By: __________________________
Title:
LEHMAN COMMERCIAL PAPER INC., as
a Managing Agent and as a Bank
By: __________________________
Title:
THE FIRST NATIONAL BANK OF
BOSTON
By: __________________________
Title:
THE BANK OF NEW YORK
By: __________________________
Title:
THE MITSUBISHI TRUST &
BANKING CORPORATION
By: __________________________
Title:
THE NIPPON CREDIT BANK, LTD.
By: __________________________
Title:
SHAWMUT BANK CONNECTICUT, N.A.
By: __________________________
Title:
5
5
ABN AMRO BANK N.V.
By: __________________________
Title:
By: __________________________
Title:
CIBC INC.
By: __________________________
Title:
COMERICA BANK
By: __________________________
Title:
CAISSE NATIONALE DE CREDIT
AGRICOLE
By: __________________________
Title:
CREDIT LYONNAIS CHICAGO BRANCH
By: __________________________
Title:
CREDIT LYONNAIS CAYMAN
ISLAND BRANCH
By: __________________________
Title:
THE FUJI BANK, LIMITED
By: __________________________
Title:
6
6
NATIONAL BANK OF CANADA
By: __________________________
Title:
By: __________________________
Title:
NBD BANK, N.A.
By: __________________________
Title:
BANQUE PARIBAS
By: __________________________
Title:
By: __________________________
Title:
SOCIETE GENERALE
By: __________________________
Title:
CREDITANSTALT-BANKVEREIN
By: __________________________
Title:
By: __________________________
Title:
7
7
GIRO CREDIT BANK AG DER
SPARKASSEN, GRAND CAYMAN ISLAND
BRANCH
By: __________________________
Title:
By: __________________________
Title:
BANK ONE, MILWAUKEE, NA
By: __________________________
Title:
THE INDUSTRIAL BANK OF JAPAN, LTD.
By: __________________________
Title:
THE YASUDA TRUST AND BANKING
COMPANY, LIMITED
By: __________________________
Title:
DRESDNER BANK AG, CHICAGO AND GRAND
CAYMAN BRANCHES
By: __________________________
Title:
By: __________________________
Title:
ISTITUTO BANCARIO SAN PAOLO DI
TORINO S.p.A.
By: __________________________
Title:
8
ACKNOWLEDGEMENT AND CONSENT
Each of the undersigned corporations as guarantors under the Second
Amended and Restated Subsidiary and Affiliate Guarantee, dated as of November
29, 1994, made by the undersigned corporations in favor of the Agent hereby (a)
consents to the transactions contemplated by this Amendment and (b)
acknowledges and agrees that the guarantees contained in such Amended and
Restated Subsidiary and Affiliate Guarantee (and all collateral security
therefor) are, and shall remain, in full force and effect after giving effect
to this Amendment and all prior modifications to the Credit Agreement.
LS ACQUISITION CORP. NO. 14
By: __________________________
Title:
LEAR SEATING HOLDINGS CORP.
NO. 50
By: __________________________
Title:
PROGRESS PATTERN CORP.
By: __________________________
Title:
LEAR PLASTICS CORP.
By: __________________________
Title:
LS ACQUISITION COPORATION
NO. 24
By: __________________________
Title:
9
2
FAIR HAVEN INDUSTRIES, INC.
By: _______________________
Title:
1
Exhibit 10.2
AMENDMENT TO STOCK OPTION AGREEMENT
AMENDMENT TO STOCK OPTION AGREEMENT, dated as of March 2, 1995
(this "Amendment"), between Lear Seating Corporation, a Delaware corporation
(the "Company"), and the party whose name appears on the signature page hereof,
an employee of the Company (the "Employee").
WHEREAS, the Company and the Employee are parties to that
certain Stock Option Agreement dated as of September 29, 1988 (the "Stock
Option Agreement"), pursuant to which the Employee was granted options
("Options") to purchase 165,000 shares of Common Stock, $.01 par value per
share, of the Company;
WHEREAS, the Company and the Employee desire to amend the
Stock Option Agreement on the terms and subject to the conditions set forth
herein.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants contained herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged the
parties hereto agree as follows:
SECTION 1. Amendment to Section 9. Section 9 of the Stock
Option Agreement shall be amended to add the following sentence to the end
thereof:
"Notwithstanding the foregoing, the Employee may grant to the
Company a security interest in the Option or in any portion
thereof to secure the Employee's obligations under that
certain Amended and Restated Secured Promissory Note dated
March 2, 1995 (the "Amended and Restated Note")."
SECTION 2. Performance by the Company of the Employee's
Rights. The Option Agreement is amended to add a new Section 16 thereto, to
read as follows:
"16. Notwithstanding anything to the contrary
contained in this Agreement, upon the occurrence and during
the continuation of an event of default under the Amended and
Restated Note, the Company may, to the extent expressly
authorized under the Amended and Restated Note, exercise all
rights of the Employee with respect to the Option or any
portion thereof, including the right to exercise the Option in
accordance with the terms of this Agreement. In such event,
the Company shall be subject to the same limitations and
restrictions as apply to the Employee hereunder."
2
SECTION 3. Effectiveness; Miscellaneous. (a) This Amendment
shall become effective as of the date first set forth above.
(b) This Amendment constitutes the entire
agreement and understanding of the parties with respect to the subject matter
hereof and supersedes any and all prior agreements and understandings, oral or
written, relating to the subject matter hereof.
(c) Section headings used herein are for
convenience of reference only and are not to affect the construction of, or to
be taken into consideration in interpreting, this Amendment.
(d) Each reference to a party hereto shall be
deemed to include its successors and assigns, all of whom shall be bound by
this Amendment and to whose benefit the provisions of this Amendment shall
inure.
(e) This Amendment may be executed in any number
of counterparts, each of which shall be an original but all of which, when
taken together, shall constitute but one instrument.
(f) Except as specifically amended or modified
hereby, the Option Agreement shall continue in full force and effect in
accordance with the provisions thereof. As used therein, the terms
"Agreement", "herein", "hereunder", "hereinafter", "hereto", "hereof" and words
of similar import shall, unless the context otherwise requires, refer to the
Agreement as amended hereby.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Amendment to be signed individually or by its duly authorized officer, as the
case may be, as of the day and year first above written.
LEAR SEATING CORPORATION
By: /s/ Joseph F. McCarthy
----------------------------
Name: Joseph F. McCarthy
Title: Vice President,
Secretary and
General Counsel
/s/ Kenneth L. Way
----------------------------
Kenneth L. Way
1
Exhibit 10.3
AMENDMENT TO STOCK OPTION AGREEMENT
AMENDMENT TO STOCK OPTION AGREEMENT, dated as of March 2, 1995
(this "Amendment"), between Lear Seating Corporation, a Delaware corporation
(the "Company"), and the party whose name appears on the signature page hereof,
an employee of the Company (the "Employee").
WHEREAS, the Company and the Employee are parties to that
certain Stock Option Agreement dated as of September 29, 1988 (the "Stock
Option Agreement"), pursuant to which the Employee was granted options
("Options") to purchase 99,000 shares of Common Stock, $.01 par value per
share, of the Company;
WHEREAS, the Company and the Employee desire to amend the
Stock Option Agreement on the terms and subject to the conditions set forth
herein.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants contained herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged the
parties hereto agree as follows:
SECTION 1. Amendment to Section 9. Section 9 of the Stock
Option Agreement shall be amended to add the following sentence to the end
thereof:
"Notwithstanding the foregoing, the Employee may grant to the
Company a security interest in the Option or in any portion
thereof to secure the Employee's obligations under that
certain Amended and Restated Secured Promissory Note dated
March 2, 1995 (the "Amended and Restated Note")."
SECTION 2. Performance by the Company of the Employee's
Rights. The Option Agreement is amended to add a new Section 16 thereto, to
read as follows:
"16. Notwithstanding anything to the contrary
contained in this Agreement, upon the occurrence and during
the continuation of an event of default under the Amended and
Restated Note, the Company may, to the extent expressly
authorized under the Amended and Restated Note, exercise all
rights of the Employee with respect to the Option or any
portion thereof, including the right to exercise the Option in
accordance with the
2
terms of this Agreement. In such event, the Company shall be
subject to the same limitations and restrictions as apply to
the Employee hereunder."
SECTION 3. Effectiveness; Miscellaneous. (a) This Amendment
shall become effective as of the date first set forth above.
(b) This Amendment constitutes the entire
agreement and understanding of the parties with respect to the subject matter
hereof and supersedes any and all prior agreements and understandings, oral or
written, relating to the subject matter hereof.
(c) Section headings used herein are for
convenience of reference only and are not to affect the construction of, or to
be taken into consideration in interpreting, this Amendment.
(d) Each reference to a party hereto shall be
deemed to include its successors and assigns, all of whom shall be bound by
this Amendment and to whose benefit the provisions of this Amendment shall
inure.
(e) This Amendment may be executed in any number
of counterparts, each of which shall be an original but all of which, when
taken together, shall constitute but one instrument.
(f) Except as specifically amended or modified
hereby, the Option Agreement shall continue in full force and effect in
accordance with the provisions thereof. As used therein, the terms
"Agreement", "herein", "hereunder", "hereinafter", "hereto", "hereof" and words
of similar import shall, unless the context otherwise requires, refer to the
Agreement as amended hereby.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Amendment to be signed individually or by its duly authorized officer, as the
case may be, as of the day and year first above written.
LEAR SEATING CORPORATION
By: /s/ Joseph F. McCarthy
----------------------------
Name: Joseph F. McCarthy
Title: Vice President, Secretary and
General Counsel
/s/ Robert E. Rossiter
--------------------------------
Robert E. Rossiter
1
EXHIBIT 10.4
AMENDMENT TO STOCK OPTION AGREEMENT
AMENDMENT TO STOCK OPTION AGREEMENT, dated as of March 2, 1995
(this "Amendment"), between Lear Seating Corporation, a Delaware corporation
(the "Company"), and the party whose name appears on the signature page hereof,
an employee of the Company (the "Employee").
WHEREAS, the Company and the Employee are parties to that
certain Stock Option Agreement dated as of September 29, 1988 (the "Stock
Option Agreement"), pursuant to which the Employee was granted options
("Options") to purchase 62,700 shares of Common Stock, $.01 par value per
share, of the Company;
WHEREAS, the Company and the Employee desire to amend the
Stock Option Agreement on the terms and subject to the conditions set forth
herein.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants contained herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged the
parties hereto agree as follows:
SECTION 1. Amendment to Section 9. Section 9 of the Stock
Option Agreement shall be amended to add the following sentence to the end
thereof:
"Notwithstanding the foregoing, the Employee may grant to the
Company a security interest in the Option or in any portion
thereof to secure the Employee's obligations under that
certain Amended and Restated Secured Promissory Note dated
March 2, 1995 (the "Amended and Restated Note")."
SECTION 2. Performance by the Company of the Employee's
Rights. The Option Agreement is amended to add a new Section 16 thereto, to
read as follows:
"16. Notwithstanding anything to the contrary
contained in this Agreement, upon the occurrence and during
the continuation of an event of default under the Amended and
Restated Note, the Company may, to the extent expressly
authorized under the Amended and Restated Note, exercise all
rights of the Employee with respect to the Option or any
portion thereof, including the right to exercise the Option in
accordance with the
2
terms of this Agreement. In such event, the Company shall be
subject to the same limitations and restrictions as apply to
the Employee hereunder."
SECTION 3. Effectiveness; Miscellaneous. (a) This Amendment
shall become effective as of the date first set forth above.
(b) This Amendment constitutes the entire
agreement and understanding of the parties with respect to the subject matter
hereof and supersedes any and all prior agreements and understandings, oral or
written, relating to the subject matter hereof.
(c) Section headings used herein are for
convenience of reference only and are not to affect the construction of, or to
be taken into consideration in interpreting, this Amendment.
(d) Each reference to a party hereto shall be
deemed to include its successors and assigns, all of whom shall be bound by
this Amendment and to whose benefit the provisions of this Amendment shall
inure.
(e) This Amendment may be executed in any number
of counterparts, each of which shall be an original but all of which, when
taken together, shall constitute but one instrument.
(f) Except as specifically amended or modified
hereby, the Option Agreement shall continue in full force and effect in
accordance with the provisions thereof. As used therein, the terms
"Agreement", "herein", "hereunder", "hereinafter", "hereto", "hereof" and words
of similar import shall, unless the context otherwise requires, refer to the
Agreement as amended hereby.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Amendment to be signed individually or by its duly authorized officer, as the
case may be, as of the day and year first above written.
LEAR SEATING CORPORATION
By: /s/ Joseph F. McCarthy
----------------------------
Name: Joseph F. McCarthy
Title: Vice President,
Secretary and
General Counsel
/s/ James H. Vandenberghe
-------------------------------
James H. Vandenberghe
1
EXHIBIT 10.5
AMENDMENT TO STOCK OPTION AGREEMENT
AMENDMENT TO STOCK OPTION AGREEMENT, dated as of March 2, 1995
(this "Amendment"), between Lear Seating Corporation, a Delaware corporation
(the "Company"), and the party whose name appears on the signature page hereof,
an employee of the Company (the "Employee").
WHEREAS, the Company and the Employee are parties to that
certain Stock Option Agreement dated as of September 29, 1988 (the "Stock
Option Agreement"), pursuant to which the Employee was granted options
("Options") to purchase 62,700 shares of Common Stock, $.01 par value per
share, of the Company;
WHEREAS, the Company and the Employee desire to amend the
Stock Option Agreement on the terms and subject to the conditions set forth
herein.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants contained herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged the
parties hereto agree as follows:
SECTION 1. Amendment to Section 9. Section 9 of the Stock
Option Agreement shall be amended to add the following sentence to the end
thereof:
"Notwithstanding the foregoing, the Employee may grant to the
Company a security interest in the Option or in any portion
thereof to secure the Employee's obligations under that
certain Amended and Restated Secured Promissory Note dated
March 2, 1995 (the "Amended and Restated Note")."
SECTION 2. Performance by the Company of the Employee's
Rights. The Option Agreement is amended to add a new Section 16 thereto, to
read as follows:
"16. Notwithstanding anything to the contrary
contained in this Agreement, upon the occurrence and during
the continuation of an event of default under the Amended and
Restated Note, the Company may, to the extent expressly
authorized under the Amended and Restated Note, exercise all
rights of the Employee with respect to the Option or any
portion thereof, including the right to exercise the Option in
accordance with the
2
terms of this Agreement. In such event, the Company shall be
subject to the same limitations and restrictions as apply to
the Employee hereunder."
SECTION 3. Effectiveness; Miscellaneous. (a) This Amendment
shall become effective as of the date first set forth above.
(b) This Amendment constitutes the entire
agreement and understanding of the parties with respect to the subject matter
hereof and supersedes any and all prior agreements and understandings, oral or
written, relating to the subject matter hereof.
(c) Section headings used herein are for
convenience of reference only and are not to affect the construction of, or to
be taken into consideration in interpreting, this Amendment.
(d) Each reference to a party hereto shall be
deemed to include its successors and assigns, all of whom shall be bound by
this Amendment and to whose benefit the provisions of this Amendment shall
inure.
(e) This Amendment may be executed in any number
of counterparts, each of which shall be an original but all of which, when
taken together, shall constitute but one instrument.
(f) Except as specifically amended or modified
hereby, the Option Agreement shall continue in full force and effect in
accordance with the provisions thereof. As used therein, the terms
"Agreement", "herein", "hereunder", "hereinafter", "hereto", "hereof" and words
of similar import shall, unless the context otherwise requires, refer to the
Agreement as amended hereby.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Amendment to be signed individually or by its duly authorized officer, as the
case may be, as of the day and year first above written.
LEAR SEATING CORPORATION
By: /s/ Joseph F. McCarthy
----------------------------
Name: Joseph F. McCarthy
Title: Vice President,
Secretary and
General Counsel
/s/ Randal T. Murphy
----------------------------
Randal T. Murphy
1
EXHIBIT 10.6
AMENDMENT TO STOCK OPTION AGREEMENT
AMENDMENT TO STOCK OPTION AGREEMENT, dated as of March 2, 1995
(this "Amendment"), between Lear Seating Corporation, a Delaware corporation
(the "Company"), and the party whose name appears on the signature page hereof,
an employee of the Company (the "Employee").
WHEREAS, the Company and the Employee are parties to that
certain Stock Option Agreement dated as of September 29, 1988 (the "Stock
Option Agreement"), pursuant to which the Employee was granted options
("Options") to purchase 62,700 shares of Common Stock, $.01 par value per
share, of the Company;
WHEREAS, the Company and the Employee desire to amend the
Stock Option Agreement on the terms and subject to the conditions set forth
herein.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants contained herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged the
parties hereto agree as follows:
SECTION 1. Amendment to Section 9. Section 9 of the Stock
Option Agreement shall be amended to add the following sentence to the end
thereof:
"Notwithstanding the foregoing, the Employee may grant to the
Company a security interest in the Option or in any portion
thereof to secure the Employee's obligations under that
certain Amended and Restated Secured Promissory Note dated
March 2, 1995 (the "Amended and Restated Note")."
SECTION 2. Performance by the Company of the Employee's
Rights. The Option Agreement is amended to add a new Section 16 thereto, to
read as follows:
"16. Notwithstanding anything to the contrary
contained in this Agreement, upon the occurrence and during
the continuation of an event of default under the Amended and
Restated Note, the Company may, to the extent expressly
authorized under the Amended and Restated Note, exercise all
rights of the Employee with respect to the Option or any
portion thereof, including the right to exercise the Option in
accordance with the
2
terms of this Agreement. In such event, the Company shall be
subject to the same limitations and restrictions as apply to
the Employee hereunder."
SECTION 3. Effectiveness; Miscellaneous. (a) This Amendment
shall become effective as of the date first set forth above.
(b) This Amendment constitutes the entire
agreement and understanding of the parties with respect to the subject matter
hereof and supersedes any and all prior agreements and understandings, oral or
written, relating to the subject matter hereof.
(c) Section headings used herein are for
convenience of reference only and are not to affect the construction of, or to
be taken into consideration in interpreting, this Amendment.
(d) Each reference to a party hereto shall be
deemed to include its successors and assigns, all of whom shall be bound by
this Amendment and to whose benefit the provisions of this Amendment shall
inure.
(e) This Amendment may be executed in any number
of counterparts, each of which shall be an original but all of which, when
taken together, shall constitute but one instrument.
(f) Except as specifically amended or modified
hereby, the Option Agreement shall continue in full force and effect in
accordance with the provisions thereof. As used therein, the terms
"Agreement", "herein", "hereunder", "hereinafter", "hereto", "hereof" and words
of similar import shall, unless the context otherwise requires, refer to the
Agreement as amended hereby.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Amendment to be signed individually or by its duly authorized officer, as the
case may be, as of the day and year first above written.
LEAR SEATING CORPORATION
By: /s/ Joseph F. McCarthy
----------------------------
Name: Joseph F. McCarthy
Title: Vice President,
Secretary and
General Counsel
/s/ James A. Hollars
----------------------------
James A. Hollars
5
1,000,000
6-MOS
DEC-31-1995
JAN-01-1995
JUL-01-1995
53
0
700
0
111
959
545
181
1855
1042
460
1
0
0
246
1855
2186
2186
2015
2015
61
0
29
81
35
46
0
0
0
46
.93
.92
