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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 10, 1997

REGISTRATION NO. 333-
================================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------

FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------------

LEAR CORPORATION
(Exact name of Registrant as specified in its charter)

DELAWARE 13-3386776
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)

21557 TELEGRAPH ROAD
SOUTHFIELD, MICHIGAN 48086-5008
(248) 746-1500
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)

JOSEPH F. MCCARTHY
21557 TELEGRAPH ROAD
SOUTHFIELD, MICHIGAN 48086-5008
(248) 746-1500
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
---------------------------

Copies to:

John L. MacCarthy John D. Lobrano
Winston & Strawn Simpson Thacher & Bartlett
35 West Wacker Drive 425 Lexington Avenue
Chicago, Illinois 60601 New York, New York 10017
(312) 558-5600 (212) 455-2000

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

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as
practicable after the registration statement becomes effective.

If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
---------------------------

CALCULATION OF REGISTRATION FEE

==============================================================================================================================
TITLE OF EACH CLASS OF NUMBER OF PROPOSED MAXIMUM PROPOSED MAXIMUM
SECURITIES TO BE SHARES TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
REGISTERED REGISTERED(1) SHARE(2) PRICE(2) REGISTRATION FEE

- ------------------------------------------------------------------------------------------------------------------------------
Common Stock, $0.01 par value.......... 10,284,854 $37.25 $383,110,811.50 $116,094.19
==============================================================================================================================

(1) Includes 1,284,854 shares to cover the Underwriters' over-allotment options.
(2) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(c) on the basis of the average of the high and low prices
reported on the New York Stock Exchange Composite Tape on June 9, 1997.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
================================================================================
2

EXPLANATORY NOTE

This Registration Statement covers the registration of 10,284,854 shares
(including 1,284,854 shares which may be purchased upon the exercise of the
Underwriters' over-allotment options) of Common Stock, $0.01 par value per
share, of Lear Corporation for sale in underwritten public offerings (the
"Offerings") in the United States and Canada (the "U.S. Offering") and outside
the United States and Canada (the "International Offering"). The complete
Prospectus relating to the U.S. Offering (the "U.S. Prospectus") follows
immediately after this Explanatory Note. Following the U.S. Prospectus is an
alternate cover page and alternate back cover page for the Prospectus to be used
in the International Offering (the "International Prospectus" and, together with
the U.S. Prospectus, the "Prospectuses"). Otherwise, the International
Prospectus will be identical to the U.S. Prospectus.
3

Information contained herein is subject to completion or amendment. A
Registration Statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor
may offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws
of any such State.

Subject to Completion, dated June 10, 1997
PROSPECTUS
9,000,000 Shares

Lear Logo

COMMON STOCK
---------------------------

Of the 9,000,000 shares of Common Stock, $0.01 par value per share ("Common
Stock"), of Lear Corporation ("Lear" or the "Company") being offered hereby,
7,200,000 shares are being offered initially in the United States and Canada by
the U.S. Underwriters (the "U.S. Offering") and 1,800,000 shares are being
offered initially outside the United States and Canada by the International
Managers (the "International Offering" and, together with the U.S. Offering, the
"Offerings"). The public offering price and underwriting discounts and
commissions per share are identical for both Offerings. See "Underwriting." All
of the shares being offered hereby are being offered by certain stockholders of
the Company (the "Selling Stockholders"). See "Selling Stockholders." The
Company will not receive any of the proceeds from the sale of Common Stock.

The Company's Common Stock is listed on the New York Stock Exchange under
the symbol "LEA." On June 9, 1997, the reported last sale price of the Common
Stock on the New York Stock Exchange Composite Tape was $37 1/4 per share.
---------------------------

SEE "RISK FACTORS" COMMENCING ON PAGE 9 HEREIN FOR CERTAIN FACTORS THAT
SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.
---------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

==================================================================================================================
Discounts and Proceeds to
Price to Underwriting Selling
Public Commissions(1) Stockholders(2)
- ------------------------------------------------------------------------------------------------------------------

Per Share.............................. $ $ $
- ------------------------------------------------------------------------------------------------------------------
Total(3)............................... $ $ $
==================================================================================================================

(1) Lear and the Selling Stockholders have agreed to indemnify the U.S.
Underwriters, the International Managers and certain other persons against
certain liabilities, including liabilities under the Securities Act of 1933,
as amended. See "Underwriting."
(2) Before deducting expenses payable by Lear estimated at $ .
(3) The Selling Stockholders have granted the U.S. Underwriters and the
International Managers 30-day options to purchase up to an aggregate of
1,284,854 shares of Common Stock on the same terms and conditions as set
forth above solely to cover over-allotments, if any. If such options are
exercised in full, the total Price to Public, Underwriting Discounts and
Commissions and Proceeds to Selling Stockholders will be $ ,
$ and $ , respectively. See "Underwriting."
---------------------------

The shares of Common Stock offered by this Prospectus are offered by the
U.S. Underwriters subject to prior sale, to withdrawal, cancellation or
modification of the offer without notice, to delivery to and acceptance by the
U.S. Underwriters and to certain further conditions. It is expected that
delivery of certificates for shares will be made at the offices of Lehman
Brothers Inc., New York, New York, on or about , 1997.
---------------------------

LEHMAN BROTHERS
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
MORGAN STANLEY DEAN WITTER
SALOMON BROTHERS INC
SCHRODER WERTHEIM & CO.
, 1997
4
[INSIDE FRONT COVER]

Global Solutions for automotive interiors.

[Lear Corporation Logo]

Innovation * Design and Engineering * Research and Development * Computer-aided
Manufacturing and Design * Product and Process Diversity

[a picture of two Lear technicians with an automotive interior and a car seat;
a picture of a Lear technician placing two crash test dummies on a High-G sled;
a picture of an automobile inside of a Lear noise and vibration test room; and
a picture of two Lear technicians working on a crash test dummy]

The following caption appears below the pictures described in the preceding
paragraph:

Lear provides leading edge technology for today's automotive
manufacturers from our worldwide network of product engineering and
technology centers

[a picture of an automobile containing Lear products on a street in Brazil; a
picture of a Lear engineer at a CAD/CAM terminal; a picture of a mini-van seat
system; a picture of a door panel and a CAD/CAM terminal exhibiting the door
panel, and a picture of a Lear worker making final preparations on a seat
system]

The following caption appears below the pictures described in the preceding
paragraph:

Lear can duplicate its processes and its quality, delivering interior
systems and components in the global automotive market, managing programs from
concept and design straight through to sequenced delivery of parts.
5

CERTAIN PERSONS PARTICIPATING IN THE OFFERINGS MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK. SUCH
TRANSACTIONS MAY INCLUDE THE PURCHASE OF SHARES OF COMMON STOCK PRIOR TO THE
PRICING OF THE OFFERINGS FOR THE PURPOSE OF MAINTAINING THE PRICE OF THE COMMON
STOCK AND THE PURCHASE OF SHARES OF COMMON STOCK FOLLOWING THE PRICING OF THE
OFFERINGS TO COVER A SYNDICATE SHORT POSITION IN THE COMMON STOCK OR FOR THE
PURPOSE OF MAINTAINING THE PRICE OF THE COMMON STOCK. FOR A DESCRIPTION OF THESE
ACTIVITIES, SEE "UNDERWRITING."
-------------------------

AVAILABLE INFORMATION

The Company is subject to the informational reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files periodic reports and other information with the
Securities and Exchange Commission (the "Commission"). The registration
statement ("Registration Statement") (which term encompasses any amendments
thereto) and the exhibits thereto filed by the Company with the Commission, as
well as the reports and other information filed by the Company with the
Commission, may be inspected at the public reference facilities maintained by
the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and are also available for inspection and copying at the
regional offices of the Commission located at 7 World Trade Center, Suite 1300,
New York, New York 10048, and Citicorp Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661, and at the New York Stock Exchange located at 20
Broad Street, New York, New York 10005. Copies of such material may also be
obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. In addition, the
Commission maintains a Web site at http://www.sec.gov that contains periodic
reports and other information regarding registrants, like the Company, that file
electronically with the Commission.

The Company has filed with the Commission a Registration Statement under
the Securities Act of 1933, as amended (the "Securities Act"), with respect to
the shares of Common Stock offered hereby. This Prospectus, which is part of the
Registration Statement, does not contain all the information set forth in the
Registration Statement and the exhibits and schedules thereto, to which
reference is hereby made. Statements made in this Prospectus as to the contents
of any contract, agreement or other document referred to are not necessarily
complete. With respect to each such contract, agreement or other document filed
as an exhibit to the Registration Statement or to a document incorporated by
reference herein, reference is hereby made to the exhibit for a more complete
description of the matter involved and each such statement shall be deemed
qualified in its entirety by such reference.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents filed by the Company with the Commission are
incorporated in this Prospectus by reference and made a part hereof:

(a) the Company's Annual Report on Form 10-K for the year ended December 31,
1996;

(b) the Company's Quarterly Report on Form 10-Q for the quarter ended March 29,
1997;

(d) the Company's Current Report on Form 8-K dated June 6, 1997;

(e) the audited consolidated financial statements of Masland Corporation and the
notes thereto included on pages 2 through 22 of the Company's Current Report
on Form 8-K dated June 27, 1996; and

(f) the Company's Registration Statement on Form 8-A filed on April 1, 1994, as
amended by Amendment No. 1 on Form 8-A/A filed on April 5, 1994.

All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the Offerings shall be deemed to be incorporated by reference
in this Prospectus and to be a part hereof from the date of filing such
documents. Any statement contained herein or in a document incorporated or
deemed to be incorporated herein by reference shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained in any subsequently filed document which is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.

The Company will provide, without charge, to each person to whom a copy of
this Prospectus is delivered, on the written or oral request of such person, a
copy of any or all of the documents incorporated herein by reference (other than
exhibits thereto, unless such exhibits are specifically incorporated by
reference into the information that this Prospectus incorporates). Written or
telephone requests for such copies should be directed to the Company's principal
office: Lear Corporation, 21557 Telegraph Road, P.O. Box 5008, Southfield,
Michigan 48086-5008, Attention: Director of Investor Relations and Business
Planning (telephone: (800) 413-5327).

2
6

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information and consolidated financial statements appearing elsewhere or
incorporated by reference in this Prospectus. As used in this Prospectus, unless
the context otherwise requires, the "Company" or "Lear" refers to Lear
Corporation and its consolidated subsidiaries. A significant portion of the
Company's operations are conducted through wholly-owned subsidiaries of Lear
Corporation.

THE COMPANY

GENERAL

Lear is one of the largest independent suppliers of automotive interior
products to the estimated $45 billion global automotive interior market and one
of the ten largest independent automotive suppliers in the world. The Company
has experienced substantial growth in market presence and profitability over the
last five years as a result of both internal growth and acquisitions. The
Company's sales have grown from approximately $1.4 billion for the year ended
June 30, 1992 to over $6.2 billion for the year ended December 31, 1996, a
compound annual growth rate of 39%. In addition, the Company's operating income
has grown from approximately $56.8 million for the year ended June 30, 1992 to
approximately $375.8 million for the year ended December 31, 1996, a compound
annual growth rate of 51%. The Company's present customers include 26 original
equipment manufacturers ("OEMs"), the most significant of which are Ford,
General Motors, Fiat, Chrysler, Volvo, Saab, Volkswagen, Audi and BMW. As of
April 30, 1997, the Company employed over 45,000 people in 22 countries and
operated 149 manufacturing, technology, product engineering and administration
facilities.

Lear is a leading supplier of automotive interiors with in-house
capabilities in all five principal automotive interior segments: seat systems;
floor and acoustic systems; door panels; instrument panels; and headliners. In
addition, Lear is able to offer its customers design, engineering and project
management support for the entire automotive interior. Management believes that
the ability to offer automotive interior "one-stop-shopping" provides Lear with
a competitive advantage as OEMs continue to reduce their supplier base and
demand improved quality and enhanced technology. In addition, the Company's
broad array of product and process offerings enables it to provide each customer
with products tailored to its particular automotive interior needs.

STRATEGY

The Company's principal objective is to expand its position as one of the
leading independent suppliers of automotive interior systems in the world. To
this end, the Company's strategy is to capitalize on three significant trends in
the automotive industry: (i) the outsourcing of automotive components and
systems by OEMs; (ii) the increased emphasis on the automotive interior by OEMs
as they seek to differentiate their vehicles in the marketplace; and (iii) the
consolidation and globalization of the OEMs' supply base. Outsourcing of
interior components and systems has increased in response to competitive
pressures on OEMs to improve quality and reduce capital needs, costs of labor,
overhead and inventory. Management believes that these trends will result in
OEMs outsourcing a greater percentage of automotive interior systems, including
the outsourcing of complete automotive interiors. Management believes that the
criteria for selection of
3
7

automotive interior suppliers include not only cost, quality and responsiveness,
but will increasingly include certain full-service capabilities including
design, engineering and project management support. Lear intends to build on its
full-service capabilities, strong customer relationships and worldwide presence
in order to increase its share of the global automotive interior market.

Elements of the Company's strategy include:

- Enhance its Relationships with OEMs. The Company's management has
developed strong relationships with its 26 OEM customers which allow Lear
to identify business opportunities and customer needs in the early stages
of vehicle design. Lear maintains "Customer Focused Divisions" for each of
its major customers. This organizational structure consists of several
dedicated groups, each of which is focused on serving the needs of a single
customer and supporting that customer's programs and product development.
This customer-oriented structure has helped Lear develop and maintain an
excellent reputation with OEMs for timely delivery and customer service and
for providing world class quality at competitive prices.

- Penetrate Emerging Markets. Geographic expansion will continue to be
an important element of the Company's growth strategy. In 1996, more than
two-thirds of total worldwide vehicle production occurred outside of the
United States and Canada. Emerging markets such as South America and the
Asia/Pacific Rim region present strong global growth opportunities as
demand for automotive vehicles has been increasing dramatically in these
areas. For example, from 1991 through 1996, sales of light vehicles in
China have increased nearly 500%, while sales in Brazil have increased over
70%. Industry analysts forecast continued strong increases in light vehicle
sales in these and certain other emerging markets. As a result of Lear's
strong customer relationships and worldwide presence, management believes
that the Company is well-positioned to expand with OEMs in emerging
markets.

- Capitalize on New Outsourcing Opportunities. The door panel,
instrument panel and headliner segments of the automotive interior market
contain no dominant independent supplier and are in the early stages of the
outsourcing and/or consolidation process. These segments constituted over
20% of the total estimated $45 billion global automotive interior market in
1996. The Company believes that the same competitive pressures that have
contributed to the rapid expansion of its seat systems business in North
America since 1983 will continue to encourage OEMs to outsource more of
their door, instrument panel and headliner system and component
requirements. In addition, management believes that as the outsourcing of
these systems accelerates and OEMs continue their worldwide expansion and
seek ways to improve vehicle quality and reduce costs, OEMs will
increasingly look to independent suppliers such as Lear to fill the role of
"Systems Integrator" to manage the design, purchasing and supply of the
total automotive interior. Lear's full-service capabilities make it
well-positioned to perform this role.

- Invest in Product Technology and Design Capability. Lear has made
substantial investments in product technology and product design capability
to support its products. The Company maintains five technology centers and
twenty customer dedicated product engineering centers where it designs and
develops new products and conducts extensive product testing. The Company
also has state-of-the-art acoustics testing, instrumentation and data
analysis capabilities. Lear's investments in research and development are
consumer-driven and customer-focused. The Company conducts extensive
analysis and testing of consumer responses to automotive interior styling
and innovations. Because OEMs increasingly view the vehicle interior as a
major selling point to their customers, the focus of Lear's research and
development efforts is to identify new interior features that make vehicles
safer, more comfortable and attractive to consumers. The development of
these products has been, and management believes will continue to be, an
important element in the Company's future growth. For automotive vehicles
manufactured in North America, Lear's total content per vehicle has
increased from $94 per vehicle in the fiscal year ended June 30, 1992 to
$292 per vehicle in the fiscal year ended December 31, 1996. For automotive
vehicles manufactured in Western Europe, Lear's total content per vehicle
has increased from $19 per vehicle in the fiscal year ended June 30, 1992
to $109 per vehicle in the fiscal year ended December 31, 1996.
4
8

- Utilize Worldwide JIT Facility Network. Beginning in the 1980s, Lear
established facilities, most of which were, and still are, dedicated to a
single customer, that allowed it to receive components from its suppliers
on a just-in-time ("JIT") basis and deliver seat systems to its customers
on a sequential JIT basis. This process minimizes inventories and fixed
costs for both the Company and its customers and enables the Company to
deliver products in as little as 90 minutes notice. In many cases, by
carefully managing floor space and overall efficiency, Lear can move the
final assembly and sequencing of other interior systems and components from
centrally located facilities to its existing JIT facilities. Management
believes that the efficient utilization of the Company's JIT facilities
located around the world is an important aspect of Lear's global growth
strategy and, together with the Company's system integration skills,
provides Lear with a significant competitive advantage in terms of
delivering total interior systems to OEMs.

- Grow Through Strategic Acquisitions. Strategic acquisitions have
been, and management believes will continue to be, an important element in
the Company's worldwide growth and in its efforts to capitalize on
automotive industry trends. The Company seeks acquisitions which strengthen
Lear's relationships with OEMs, complement Lear's existing products and
process capabilities and provide Lear with growth opportunities in new
markets. The Company's recent acquisitions have expanded its OEM customer
base and worldwide presence and have enhanced its relationships with
existing customers. The Company's most recent acquisitions have also
expanded Lear's manufacturing capabilities to allow the Company to produce
all five automotive interior systems. In 1996, after giving pro forma
effect to the Masland Acquisition (described below), the Company's Tier I
sales of non-seating systems and components would have been approximately
$2.1 billion, or approximately 34% of the Company's total pro forma sales.

ACQUISITIONS

On May 26, 1997, Lear entered into a definitive agreement to acquire
certain equity and partnership interests in Keiper Car Seating GmbH & Co. and
certain of its subsidiaries and affiliates (collectively, "Keiper") for DM 400
million (approximately $235 million) (the "Keiper Acquisition"). In connection
with the Keiper Acquisition, Lear will also pay or assume outstanding
indebtedness of Keiper, which is anticipated to be approximately $28 million.
Keiper is a leading supplier of automotive vehicle seat systems on a JIT basis
for markets in Europe, Brazil and South Africa, with unaudited sales for the
year ended December 31, 1996 of approximately $615 million. Management believes
that the Keiper Acquisition will strengthen Lear's core seat system business,
expand Lear's presence in Europe, Brazil and South Africa and strengthen Lear's
relationships with Mercedes Benz, Audi, Volkswagen and Porsche. The Keiper
Acquisition, which is subject to clearance by the Antitrust Commission of the
European Union, is expected to close in the third quarter of 1997. However,
there can be no assurances that the Keiper Acquisition will be consummated.

On June 5, 1997, the Company acquired the stock of Dunlop Cox Limited
("Dunlop Cox") for approximately $60 million (the "Dunlop Cox Acquisition").
Dunlop Cox, based in Nottingham, England, provides Lear with the ability to
design and manufacture manual and electronically-powered automotive seat
adjusters. For the year ended December 31, 1996, Dunlop Cox had sales of
approximately $39 million.

Prior to August 1995, Lear primarily produced seat systems and components.
Since then, the Company has made three major acquisitions which have provided it
with significant capabilities in the other four systems comprising a total
automotive interior. In August 1995, Lear acquired Automotive Industries
Holding, Inc. ("AI") which gave Lear a strong presence in the door panel and
headliner segments of the automotive interior market (the "AI Acquisition"). In
June 1996 and December 1996, respectively, Lear acquired Masland Corporation
("Masland"), a leading designer and manufacturer of floor and acoustic systems
in North America (the "Masland Acquisition"), and Borealis Industrier AB
("Borealis"), a European manufacturer of instrument panels, door panels and
various other automotive interior components (the "Borealis Acquisition"). In
addition to broadening its product lines, the acquisitions of Borealis, Masland
and AI have expanded the Company's customer base, strengthened its relationships
with existing customers and enhanced its technological expertise.
5
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In addition to the Dunlop Cox, Borealis, Masland and AI Acquisitions, Lear
has completed five significant strategic acquisitions since 1990. In December
1994, the Company acquired the primary automotive seat systems supplier to Fiat
and certain related businesses (the "Fiat Seat Business" or the "FSB"),
establishing Lear as one of the leading independent suppliers of automotive seat
systems in Europe (the "FSB Acquisition"). In 1993, the Company significantly
expanded its operations in North America by purchasing certain portions of the
North American seat cover and seat systems business (the "NAB") of Ford (the
"NAB Acquisition"). In 1991 and 1992, the Company acquired the seat systems
businesses of Saab in Sweden and Finland and of Volvo in Sweden. In addition to
broadening the Company's geographic coverage, these acquisitions have expanded
the Company's customer base and solidified relationships with existing
customers.

The Company's principal executive offices are located at 21557 Telegraph
Road, Southfield, Michigan 48086-5008. Its telephone number at that location is
(248) 746-1500.

THE OFFERING

Common Stock offered by the Selling
Stockholders:
U.S. Offering................................. 8,230,000 shares(1)
International Offering........................ 2,054,854 shares(1)
Total...................................... 10,284,854 shares(1)
----------
NYSE Symbol..................................... LEA

- -------------------------
(1) Assumes that the Underwriters' over-allotment options are exercised in full.

RISK FACTORS

Investment in the Company's Common Stock involves certain risks discussed
under "Risk Factors" that should be considered by prospective investors.
6
10

SUMMARY FINANCIAL DATA OF THE COMPANY

The following summary consolidated financial data were derived from the
consolidated financial statements of the Company. The consolidated financial
statements of the Company for each of the years ended December 31, 1996, 1995
and 1994 have been audited by Arthur Andersen LLP. The consolidated financial
statements of the Company for the three months ended March 29, 1997 and March
30, 1996 are unaudited; however, in the Company's opinion, they reflect all
adjustments, consisting only of normal recurring items, necessary for a fair
presentation of the financial position and results of operations for such
periods. The results for the three months ended March 29, 1997 are not
necessarily indicative of the results to be expected for the full year. The
summary financial data below should be read in conjunction with the other
financial data of the Company included in this Prospectus, the consolidated
financial statements of the Company and the notes thereto incorporated by
reference in this Prospectus and "Management's Discussion and Analysis of
Financial Condition and Results of Operations of the Company."

LEAR CORPORATION

AS OF OR FOR THE
THREE MONTHS ENDED AS OF OR FOR THE YEAR ENDED
----------------------- ---------------------------------------------
MARCH 29, MARCH 30, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1996 1996 1995 1994
--------- --------- ------------ ------------ ------------
(DOLLARS IN MILLIONS, EXCEPT PER SHARE AND CONTENT PER VEHICLE DATA)

OPERATING DATA:
Net sales.............................. $1,724.0 $1,405.8 $6,249.1 $4,714.4 $3,147.5
Operating income....................... 102.1 70.0 375.8 244.8 169.6
Interest expense(1).................... 27.2 24.4 102.8 75.5 46.7
Net income(2).......................... 41.9 25.8 151.9 91.6 59.8
Net income per share(2)................ .62 .43 2.38 1.74 1.26
BALANCE SHEET DATA:
Total assets........................... $3,860.4 $3,122.2 $3,816.8 $3,061.3 $1,715.1
Long-term debt......................... 1,001.6 1,033.3 1,054.8 1,038.0 418.7
Stockholders' equity................... 1,036.2 612.5 1,018.7 580.0 213.6
OTHER DATA:
EBITDA(3).............................. $ 145.6 $ 103.2 $ 518.1 $ 336.8 $ 225.7
Depreciation and amortization.......... 43.5 33.2 142.3 92.0 56.1
Capital expenditures................... 32.6 33.7 153.8 110.7 103.1
North American content per
vehicle(4)........................... 312 274 292 227 169
Western European content per
vehicle(5)........................... 106 98 109 92 44

- -------------------------
(1) Interest expense includes non-cash charges for amortization of deferred
financing fees of approximately $0.9 million, $0.8 million, $3.4 million,
$2.7 million and $2.4 million for the three months ended March 29, 1997 and
March 30, 1996, and for the years ended December 31, 1996, 1995 and 1994,
respectively.

(2) After extraordinary charges of $2.6 million ($.05 per share) for the year
ended December 31, 1995 relating to the early extinguishment of debt.

(3) "EBITDA" is operating income plus depreciation and amortization. EBITDA does
not represent and should not be considered as an alternative to net income
or cash flow from operations as determined by generally accepted accounting
principles.

(4) "North American content per vehicle" is the Company's net automotive sales
in North America divided by total North American vehicle production. "North
American vehicle production" comprises car and light truck production in the
United States, Canada and Mexico estimated by the Company from industry
sources.

(5) "Western European content per vehicle" is the Company's net automotive sales
in Western Europe divided by total Western European vehicle production.
"Western European vehicle production" comprises car and light truck
production in Western Europe estimated by the Company from industry sources.
7
11

SUMMARY PRO FORMA UNAUDITED CONSOLIDATED FINANCIAL DATA

The following summary pro forma unaudited consolidated financial data were
derived from and should be read in conjunction with the pro forma unaudited
consolidated financial data included elsewhere in this Prospectus. The following
summary pro forma unaudited consolidated operating data and other data of the
Company for the year ended December 31, 1996 were prepared to illustrate the
estimated effects of (i) the Masland Acquisition (including the refinancing of
certain debt of Masland), (ii) the public offering of Common Stock by the
Company and the application of the net proceeds therefrom in July 1996 (the
"1996 Stock Offering"), (iii) the public offering of the Company's 9 1/2%
Subordinated Notes due 2006 (the "9 1/2% Notes") and the application of the
proceeds therefrom in July 1996 (the "1996 Note Offering") and (iv) the
completion of the Company's Amended and Restated Credit and Guarantee Agreement
(the "Credit Agreement") and other credit agreement financings in 1996
(collectively, the "Credit Agreement Financings") (collectively, the "Pro Forma
Transactions"), as if the Pro Forma Transactions had occurred on January 1,
1996. The following summary pro forma unaudited consolidated financial data do
not purport to represent (i) the actual results of operations of the Company had
the Pro Forma Transactions occurred on the dates assumed or (ii) the results to
be expected in the future.

FOR THE YEAR ENDED
DECEMBER 31, 1996
------------------
(DOLLARS IN MILLIONS,
EXCEPT PER SHARE AND
CONTENT PER VEHICLE DATA)

OPERATING DATA:
Net sales................................................. $6,510.8
Operating income.......................................... 394.6
Interest expense(1)....................................... 113.5
Net income................................................ 153.9
Net income per share...................................... 2.27
OTHER DATA:
EBITDA(2)................................................. $ 548.3
Depreciation and amortization............................. 153.7
Capital expenditures...................................... 169.8
North American content per vehicle(3)..................... 309
Western European content per vehicle(4)................... 109

- -------------------------
(1) Interest expense includes non-cash charges for amortization of deferred
financing fees of approximately $3.4 million.

(2) "EBITDA" is operating income plus depreciation and amortization. EBITDA does
not represent and should not be considered as an alternative to net income
or cash flow from operations as determined by generally accepted accounting
principles.

(3) "North American content per vehicle" is the Company's pro forma net
automotive sales in North America divided by total North American vehicle
production. "North American vehicle production" comprises car and light
truck production in the United States, Canada and Mexico estimated by the
Company from industry sources.

(4) "Western European content per vehicle" is the Company's pro forma net
automotive sales in Western Europe divided by total Western European vehicle
production. "Western European vehicle production" comprises car and light
truck production in Western Europe estimated by the Company from industry
sources.
8
12

RISK FACTORS

A potential investor should consider carefully all of the information
contained in this Prospectus before deciding whether to purchase the Common
Stock offered hereby and, in particular, should consider the following:

NATURE OF AUTOMOTIVE INDUSTRY

The Company's principal operations are directly related to domestic and
foreign automotive vehicle production. Automotive sales and production are
cyclical and can be affected by the strength of a country's general economy. In
addition, automotive production and sales can be affected by labor relations
issues (including strikes and other work stoppages), regulatory requirements,
trade agreements and other factors. A decline in automotive sales and production
could result in a decline in the Company's results of operations or financial
condition.

RELIANCE ON MAJOR CUSTOMERS AND SELECTED CAR MODELS

Two of the Company's customers, Ford and General Motors, accounted for
approximately 32% and 30%, respectively, of the Company's net sales during 1996.
Although the Company has purchase orders from many of its customers, such
purchase orders generally provide for supplying the customers' annual
requirements for a particular model or assembly plant, renewable on a
year-to-year basis, rather than for manufacturing a specific quantity of
products. In addition, certain of the Company's manufacturing and assembly
plants are dedicated to a single customer's automotive assembly plant. The
customer's decision to close any such plant would require the Company to obtain
alternate supply agreements, relocate existing business to such facility or
close such facility. To date, neither model discontinuances nor plant closings
have had a material adverse effect on the Company because of the breadth of the
Company's product lines and the ability of the Company to relocate its
facilities with minimal capital expenditures. There can be no assurances that
the Company's loss of business with respect to either a particular automobile
model or a particular assembly plant would not have a material adverse effect on
the Company's results of operations or financial condition in the future.

There is substantial and continuing pressure from the major OEMs to reduce
costs, including costs associated with outside suppliers such as the Company.
Management believes that the Company's ability to develop new products and to
control its own costs, many of which are variable, will allow the Company to
remain competitive. However, there can be no assurance that the Company will be
able to improve or maintain its gross margins.

FOREIGN EXCHANGE RISK

As a result of Lear's continued global expansion, a significant portion of
the Company's revenues, expenses and net assets are denominated in currencies
other than U.S. dollars. Changes in exchange rates therefore may have a
significant effect on the Company's results of operations and financial
condition.

ANTI-TAKEOVER PROVISIONS

Certain provisions of the Company's Restated Certificate of Incorporation
and by-laws, as well as provisions of the Delaware General Corporation Law, may
have the effect of delaying, deterring or preventing transactions involving a
change of control of the Company, including transactions in which stockholders
might otherwise receive a substantial premium for their shares over then current
market prices, and may limit the ability of stockholders to approve transactions
that they may deem to be in their best interests. For example, under the
Restated Certificate of Incorporation, the Board of Directors is authorized to
issue one or more classes of preferred stock having such designations, rights
and preferences as may be determined by the Board of Directors. In addition, the
Board of Directors is divided into three classes, each having a term of three
years, with the term of one class expiring each year. A director may be removed
from office only for cause. These provisions could delay the replacement of a
majority of the Board of Directors and have the effect of making changes in the
Board of Directors more difficult than if such provisions were not in place.
Further, Section 203 of the Delaware General Corporation Law restricts certain
business combinations with any "interested

9
13

stockholder" as defined in such law. Certain current stockholders of the Company
are not, by virtue of their current holdings, deemed to be "interested
stockholders" under this statute. This statute also may delay, deter or prevent
a change of control of the Company. See "Description of Capital Stock" for
additional information regarding these and certain other anti-takeover
provisions adopted by the Company.

CAUTIONARY STATEMENTS FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS
OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This Prospectus contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. When used in this
document, the words "anticipate," "believe," "estimate," and "expect" and
similar expressions are generally intended to identify forward-looking
statements. Prospective investors are cautioned that any forward-looking
statements, including statements regarding the intent, belief, or current
expectations of the Company or its management, are not guarantees of future
performance and involve risks and uncertainties, and that actual results may
differ materially from those in the forward-looking statements as a result of
various factors including, but not limited to, (i) general economic conditions
in the markets in which the Company operates, (ii) fluctuations in worldwide or
regional automobile and light truck production, (iii) labor disputes involving
the Company or its significant customers, (iv) changes in practices and/or
policies of the Company's significant customers toward outsourcing automotive
components and systems, (v) other risks detailed from time to time in the
Company's Securities and Exchange Commission filings and (vi) those items
identified under "Risk Factors." The Company does not intend to update these
forward-looking statements.

COMMON STOCK PRICE RANGE AND DIVIDENDS

The Common Stock is listed for trading on the New York Stock Exchange under
the symbol "LEA." The following table sets forth the high and low sale prices of
the Common Stock as reported on the New York Stock Exchange for the periods
indicated:

HIGH LOW
---- ---

1995:
First Quarter............................................. $20 7/8 $16 5/8
Second Quarter............................................ 24 1/4 17 7/8
Third Quarter............................................. 31 1/8 23
Fourth Quarter............................................ 32 1/2 26 1/4
1996:
First Quarter............................................. $34 $25 1/4
Second Quarter............................................ 39 1/4 27 1/2
Third Quarter............................................. 39 7/8 29 7/8
Fourth Quarter............................................ 38 7/8 31 3/4
1997:
First Quarter............................................. $39 7/8 $33 3/8
Second Quarter (through June 9, 1997)..................... 38 5/8 33 1/4

The reported last sale price of the Common Stock on the New York Stock
Exchange Composite Tape as of a recent date is set forth on the cover page of
this Prospectus.

As of May 28, 1997, there were 332 holders of record of the outstanding
Common Stock and the Company estimates that, at such date, there were
approximately 15,400 beneficial holders.

The Company to date has not paid dividends on its Common Stock. Any future
payment of dividends is subject to the discretion of the Company's Board of
Directors, which may consider the Company's earnings and financial condition and
such other factors as it deems relevant. In addition, the Credit Agreement and
the Indentures governing Lear's 11 1/4% Senior Subordinated Notes due 2000 (the
"Senior Subordinated Notes"), 8 1/4% Subordinated Notes due 2002 (the
"Subordinated Notes") and the 9 1/2% Notes presently contain certain
restrictions on the Company's ability to pay dividends. The Company does not
currently intend to pay cash dividends.

10
14

PRO FORMA FINANCIAL DATA

The following pro forma unaudited consolidated statement of income of the
Company for the year ended December 31, 1996 was prepared to illustrate the
estimated effects of (i) the Masland Acquisition (including the refinancing of
certain debt of Masland), (ii) the 1996 Stock Offering, (iii) the 1996 Note
Offering and (iv) Credit Agreement Financings (collectively, the "Pro Forma
Transactions"), as if the Pro Forma Transactions had occurred on January 1,
1996.

The Pro Forma Statement does not purport to represent (i) the actual
results of operations of the Company had the Pro Forma Transactions occurred on
the date assumed or (ii) the results to be expected in the future.

The pro forma adjustments are based upon available information and upon
certain assumptions that management believes are reasonable. The Pro Forma
Statement and accompanying notes should be read in conjunction with the
historical financial statements of the Company and Masland, including the notes
thereto, and the other financial information pertaining to the Company and
Masland, including the information included elsewhere or incorporated by
reference in this Prospectus.

PRO FORMA UNAUDITED CONSOLIDATED STATEMENT OF INCOME

YEAR ENDED DECEMBER 31, 1996

OPERATING AND
LEAR MASLAND FINANCING
HISTORICAL HISTORICAL(1) ADJUSTMENTS PRO FORMA
---------- ------------- ------------- ---------
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)

Net sales....................................... $6,249.1 $263.7 $ (2.0)(2) $6,510.8
Cost of sales................................... 5,629.4 211.6 (2.0)(2) 5,839.0
-------- ------ ------ --------
Gross profit.................................... 619.7 52.1 -- 671.8
Selling, general and administrative expenses.... 210.3 29.2 -- 239.5
Amortization.................................... 33.6 1.2 2.9 (3) 37.7
-------- ------ ------ --------
Operating income................................ 375.8 21.7 (2.9) 394.6
Interest expense................................ 102.8 2.2 8.5 (4) 113.5
Other expense, net.............................. 19.6 1.2 -- 20.8
-------- ------ ------ --------
Income before income taxes...................... 253.4 18.3 (11.4) 260.3
Income taxes.................................... 101.5 7.9 (3.0)(5) 106.4
-------- ------ ------ --------
Net income...................................... $ 151.9 $ 10.4 $ (8.4) $ 153.9
======== ====== ====== ========
Net income per share............................ $ 2.38 $ 2.27
Weighted average shares outstanding (in
millions)..................................... 63.8 4.0 (6) 67.8
EBITDA(7)....................................... $ 518.1 $ 548.3
======== ========

- -------------------------
(1) The Masland historical information reflects Masland historical unaudited
results of operations for the period from January 1, 1996 through June 27,
1996, the date on which the Company acquired 97% of Masland's common stock.
The results from Masland's operations for the period subsequent to June 27,
1996 are included in the historical results of the Company.

(2) Reflects the elimination of net sales from Masland to the Company from
January 1, 1996 through June 27, 1996.

11
15

(3) The adjustment to amortization represents the following:

YEAR ENDED
DECEMBER 31, 1996
-----------------
(DOLLARS IN MILLIONS)

Amortization of goodwill from the Masland Acquisition....... $ 4.1
Elimination of the historical goodwill amortization of
Masland................................................... (1.2)
------
$ 2.9
======

(4) Reflects interest expense changes as follows:

YEAR ENDED
DECEMBER 31, 1996
-----------------
(DOLLARS IN MILLIONS)

Reduction in interest due to application of the net proceeds
from the 1996 Stock Offering.............................. $(8.8)
Reduction in interest due to application of the net proceeds
from the 1996 Note Offering............................... (7.1)
Interest on borrowings to finance the Masland Acquisition... 15.7
Elimination of interest on Masland debt refinanced.......... (2.2)
Interest on the 9 1/2% Notes from January 1, 1996 through
July 11, 1996............................................. 10.1
Other changes in interest expense, commitment fees and
amortization of deferred finance fees due to the 1996
Stock Offering, the 1996 Note Offering and the Credit
Agreement Financings...................................... .8
------
$ 8.5
======

(5) Reflects the income tax effects of the operating and financing adjustments.

(6) The adjustment to weighted average shares outstanding represents the
following:

YEAR ENDED
DECEMBER 31, 1996
-----------------
(SHARES IN MILLIONS)

Effect of the issuance of 7.5 million shares pursuant to the
1996 Stock Offering....................................... 3.9
Conversion of certain Masland stock options into Lear stock
options in connection with the Masland Acquisition........ .1
-----
4.0
=====

(7) "EBITDA" is operating income plus depreciation and amortization. EBITDA does
not represent and should not be considered as an alternative to net income
or cash flow from operations as determined by generally accepted accounting
principles.

12
16

SELECTED FINANCIAL DATA OF THE COMPANY

The following income statement and balance sheet data were derived from the
consolidated financial statements of the Company. The consolidated financial
statements of the Company for each of the fiscal years ended December 31, 1996,
1995, 1994 and 1993 and June 30, 1993 and 1992 have been audited by Arthur
Andersen LLP. Effective December 31, 1993, the Company changed its fiscal year
end from June 30 to December 31. The consolidated financial statements of the
Company for the three months ended March 29, 1997 and March 30, 1996 are
unaudited; however, in the Company's opinion, they reflect all adjustments,
consisting only of normal recurring items, necessary for a fair presentation of
the financial position and results of operations for such periods. The results
for the three months ended March 29, 1997 are not necessarily indicative of the
results to be expected for the full year. The selected financial data below
should be read in conjunction with the consolidated financial statements of the
Company and the notes thereto incorporated by reference in this Prospectus and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations of the Company."

AS OF OR FOR THE
THREE MONTHS ENDED AS OF OR FOR THE YEAR ENDED
--------------------- -------------------------------------------------------------------------------
MARCH 29, MARCH 30, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, JUNE 30, JUNE 30,
1997 1996 1996 1995 1994 1993 1993 1992
--------- --------- ------------ ------------ ------------ ------------ -------- --------
(DOLLARS IN MILLIONS, EXCEPT PER SHARE AND CONTENT PER VEHICLE DATA)

OPERATING DATA:
Net sales........... $1,724.0 $1,405.8 $6,249.1 $4,714.4 $3,147.5 $1,950.3 $1,756.5 $1,422.7
Gross profit........ 177.9 120.6 619.7 403.1 263.6 170.2 152.5 115.6
Selling, general and
administrative
expenses.......... 66.1 43.3 210.3 139.0 82.6 62.7 61.9 50.1
Incentive stock and
other compensation
expense(1)........ -- -- -- -- -- 18.0 -- --
Amortization........ 9.7 7.3 33.6 19.3 11.4 9.9 9.5 8.7
-------- -------- -------- -------- -------- -------- -------- --------
Operating income.... 102.1 70.0 375.8 244.8 169.6 79.6 81.1 56.8
Interest
expense(2)........ 27.2 24.4 102.8 75.5 46.7 45.6 47.8 55.2
Other expense,
net(3)............ 5.5 3.1 19.6 12.0 8.1 9.2 5.4 5.8
-------- -------- -------- -------- -------- -------- -------- --------
Income (loss) before
income taxes and
extraordinary
items............. 69.4 42.5 253.4 157.3 114.8 24.8 27.9 (4.2)
Income taxes........ 27.5 16.7 101.5 63.1 55.0 26.9 17.8 12.9
-------- -------- -------- -------- -------- -------- -------- --------
Net income (loss)
before
extraordinary
items............. 41.9 25.8 151.9 94.2 59.8 (2.1) 10.1 (17.1)
Extraordinary
items(4).......... -- -- -- 2.6 -- 11.7 -- 5.1
-------- -------- -------- -------- -------- -------- -------- --------
Net income (loss)... $ 41.9 $ 25.8 $ 151.9 $ 91.6 $ 59.8 $ (13.8) $ 10.1 $ (22.2)
======== ======== ======== ======== ======== ======== ======== ========
Net income (loss)
per share before
extraordinary
items(5).......... $ .62 $ .43 $ 2.38 $ 1.79 $ 1.26 $ (.06) $ .25 $ (.62)
Net income (loss)
per share(5)...... $ .62 $ .43 $ 2.38 $ 1.74 $ 1.26 $ (.39) $ .25 $ (.80)
Weighted average
shares outstanding
(in
millions)(5)...... 68.0 60.0 63.8 52.6 47.6 35.5 40.0 27.8
BALANCE SHEET DATA:
Current assets...... $1,426.2 $1,257.9 $1,347.4 $1,207.2 $ 818.3 $ 433.6 $ 325.2 $ 282.9
Total assets........ 3,860.4 3,122.2 3,816.8 3,061.3 1,715.1 1,114.3 820.2 799.9
Current
liabilities....... 1,584.9 1,306.0 1,499.3 1,276.0 981.2 505.8 375.0 344.2
Long-term debt...... 1,001.6 1,033.0 1,054.8 1,038.0 418.7 498.3 321.1 348.3
Stockholders'
equity............ 1,036.2 612.5 1,018.7 580.0 213.6 43.2 75.1 49.4
OTHER DATA:
EBITDA(6)........... $ 145.6 $ 103.2 $ 518.1 $ 336.8 $ 225.7 $ 122.2 $ 121.8 $ 91.8
Capital
expenditures...... $ 32.6 $ 33.7 $ 153.8 $ 110.7 $ 103.1 $ 45.9 $ 31.6 $ 27.9
Number of
facilities(7)..... 149 116 148 107 79 61 48 45
North American
content per
vehicle(8)........ $ 312 $ 274 $ 292 $ 227 $ 169 $ 112 $ 98 $ 94
Western European
content per
vehicle(9)........ $ 106 $ 98 $ 109 $ 92 $ 44 $ 34 $ 26 $ 19

- -------------------------
(1) Includes a one-time charge of $18.0 million, of which $14.5 million was
non-cash, for the year ended December 31, 1993 for incentive stock and other
compensation expense.
(2) Interest expense includes non-cash charges for amortization of deferred
financing fees of approximately $0.9 million, $0.8 million, $3.4 million,
$2.7 million, $2.4 million, $2.6 million, $3.0 million and $3.2 million for
the three months ended March 29, 1997 and March 30, 1996, and for the years
ended December 31, 1996, 1995, 1994 and 1993, and the fiscal years ended
June 30, 1993 and 1992, respectively.
(3) Consists of foreign currency exchange gain or loss, minority interests in
consolidated subsidiaries, equity in net income of affiliates, state and
local taxes and other expense.
(4) The extraordinary items resulted from the prepayment of debt.
(5) Weighted average shares outstanding and net income (loss) per share are
calculated on a fully-diluted basis.
(6) "EBITDA" is operating income plus depreciation and amortization. EBITDA does
not represent and should not be considered as an alternative to net income
or cash flows from operations as determined by generally accepted accounting
principles.
(7) Includes facilities operated by the Company's less than majority-owned
affiliates and facilities under construction.
(8) "North American content per vehicle" is the Company's net automotive sales
in North America divided by total North American vehicle production. "North
American vehicle production" comprises car and light truck production in the
United States, Canada and Mexico estimated by the Company from industry
sources.
(9) "Western European content per vehicle" is the Company's net automotive sales
in Western Europe divided by total Western European vehicle production.
"Western European vehicle production" comprises car and light truck
production in Western Europe estimated by the Company from industry sources.

13
17

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS OF THE COMPANY

RESULTS OF OPERATIONS

Lear's sales have grown rapidly, both internally and through acquisitions,
from approximately $3.1 billion in the year ended December 31, 1994 to
approximately $6.2 billion in the year ended December 31, 1996. Net income over
the same period increased from $59.8 million to $151.9 million. The Company's
principal operations are directly affected by worldwide automotive vehicle
production. Automotive production can be affected by factors such as the
country's general economy, labor relation issues, regulatory requirements, trade
agreements, and other factors. Labor relations issues at one of the Company's
major customers had a negative impact on the results of operations of the
Company for the year ended December 31, 1996 and labor relations issues at two
of the Company's major customers will have a negative impact on the results of
operations of the Company for the three months ended June 28, 1997.

The following chart shows operating results of the Company by principal
geographic area:

GEOGRAPHIC OPERATING RESULTS

THREE MONTHS ENDED YEAR ENDED
---------------------- --------------------------------------------
MARCH 29, MARCH 30, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1996 1996 1995 1994
--------- --------- ------------ ------------ ------------
(DOLLARS IN MILLIONS)

NET SALES:
United States and Canada............. $1,161.6 $ 916.6 $4,058.0 $3,108.0 $2,378.7
Europe............................... 415.1 382.9 1,621.8 1,325.4 572.5
Mexico and other..................... 147.3 106.3 569.3 281.0 196.3
-------- -------- -------- -------- --------
Net sales.......................... $1,724.0 $1,405.8 $6,249.1 $4,714.4 $3,147.5
======== ======== ======== ======== ========
OPERATING INCOME:
United States and Canada............. $ 87.1 $ 56.7 $ 302.6 $ 204.8 $ 155.6
Europe............................... 6.9 9.4 49.2 26.5 4.4
Mexico and other..................... 8.1 3.9 24.0 13.5 9.6
-------- -------- -------- -------- --------
Operating income................... $ 102.1 $ 70.0 $ 375.8 $ 244.8 $ 169.6
======== ======== ======== ======== ========

Three Months Ended March 29, 1997 Compared With Three Months Ended March 30,
1996

Net sales of $1,724.0 million in the quarter ended March 29, 1997 surpassed
the first quarter of 1996 by $318.2 million or 22.6%. Net sales in the first
quarter of 1997 benefited from the June 1996 Masland Acquisition and the
December 1996 Borealis Acquisition, which collectively accounted for $207.6
million of the increase from the first quarter of 1996. Further contributing to
the overall increase in sales was new business introduced globally within the
past year and the incremental volume and content on mature programs in North
America and South America.

Net sales in the United States and Canada of $1,161.6 million in the first
quarter of 1997 exceeded net sales in the first quarter of 1996 by $245.0
million or 26.7%. Sales in the quarter ended March 29, 1997 benefited from the
contribution of $149.3 million in sales from the Masland Acquisition,
introduction within the past twelve months of new Ford and Chrysler truck
programs and vehicle production increases by domestic automotive manufacturers
on certain established programs.

Net sales in Europe of $415.1 million increased by $32.2 million or 8.4% in
the first quarter of 1997 as compared to net sales in the first quarter of 1996.
Sales in the quarter ended March 29, 1997 benefited from $47.7 million in sales
from the Borealis Acquisition. Partially offsetting the increase in sales were
unfavorable exchange rate fluctuations in Germany and Sweden and a modest
downturn on industry build schedules for carryover programs.

14
18

Net sales of $147.3 million for the first quarter of 1997 in the Company's
remaining geographic regions, consisting of Mexico, South America, the
Asia/Pacific Rim region and South Africa surpassed net sales for the first
quarter of 1996 by $41.0 million or 38.6%. Sales in the quarter ended March 29,
1997 benefited from increased Fiat and Volkswagen programs in South America and
$10.6 million in sales from a Masland operation in Mexico. Partially offsetting
the increase in sales was reduced market demand for existing General Motors
truck and Ford passenger car programs in Mexico.

Gross profit (net sales less cost of sales) and gross margin (gross profit
as a percentage of net sales) were $177.9 million and 10.3% for the first
quarter of 1997 as compared to $120.6 million and 8.6% in the comparable period
of 1996. Gross profit improvement in the quarter ended March 29, 1997 reflected
the contribution of the Masland and Borealis Acquisitions coupled with the
benefits derived from the overall growth in new and ongoing programs.

Selling, general and administrative expenses as a percentage of net sales
increased to 3.8% in the first quarter of 1997 as compared to 3.1% in the first
quarter of 1996. These expenditures increased in the first quarter of 1997 in
comparison to the comparable period of the prior year due to the inclusion of
Masland and Borealis operating expenses as well as support expenses associated
with established and potential business opportunities.

Operating income and operating margin were $102.1 million and 5.9% for the
first quarter of 1997 as compared to $70.0 million and 5.0% for the first
quarter of 1996. For the quarter ended March 29, 1997, operating income
benefited from the Masland Acquisition, increased market demand and content on
car and light truck programs in the United States and Canada and improved
performances at certain South America and Asia/Pacific Rim operations. Partially
offsetting the increase in operating income were design, development and
administrative expenses, program expenses for recently opened facilities in
South America and the Asia/Pacific Rim region and the integration of the
Company's interior trim operations in Europe. Non-cash depreciation and
amortization charges were $43.5 million and $33.2 million for the first quarter
of 1997 and 1996, respectively. For the quarter ended March 29, 1997, interest
expense increased over the first quarter of 1996 by $2.8 million, largely as a
result of interest incurred on additional debt utilized to finance the Masland
and Borealis Acquisitions.

Other expenses for the first quarter of 1997, which include state and local
taxes, foreign exchange, minority interests in consolidated subsidiaries, equity
in net income of affiliates and other non-operating expenses, increased in
comparison to the first quarter of the prior year as increases in the provisions
for minority interest and state and local taxes more than offset foreign
exchange gains.

Net income for the first quarter of 1997 was $41.9 million, or $.62 per
share, as compared to $25.8 million, or $.43 per share, in the first quarter of
1996. The provision for income taxes in the current quarter was $27.5 million,
or an effective tax rate of 39.6% as compared to $16.7 million, or an effective
tax rate of 39.3% in the previous year. Earnings per share increased in the
first quarter of 1997 by 44.2% despite an increase in the weighted average
number of shares outstanding of approximately 8.0 million shares.

Year Ended December 31, 1996 Compared With Year Ended December 31, 1995

Net sales of $6,249.1 million in the year ended December 31, 1996
represented the fifteenth consecutive year of record sales and exceeded sales of
$4,714.4 million in the year ended December 31, 1995 by $1,534.7 million, or
32.6%. Net sales in 1996, as compared to the prior year, benefited from the full
year contribution of the AI Acquisition completed in August 1995 and the partial
year contribution of the Masland Acquisition in June 1996, respectively, which
collectively accounted for $836.3 million of the increase. Further contributing
to the overall increase in sales was new business introduced globally within the
past year and incremental volume and content on mature programs.

Gross profit and gross margin improved to $619.7 million and 9.9% in 1996
as compared to $403.1 million and 8.6% in 1995. Gross profit in 1996 reflects
the contribution of the AI and Masland Acquisitions coupled with the benefits
derived from increased revenues from new and ongoing programs. Also contributing
to the increase in gross profit was a decrease in start-up expenses from $32.1
million in 1995 to $18.0 million in 1996.

15
19

Partially offsetting the increase in gross profit was the cumulative impact of
the General Motors work stoppages in the first and fourth quarters of 1996 and
downtime associated with a Chrysler model changeover.

Selling, general and administrative expenses, including research and
development, as a percentage of net sales increased to 3.4% in the year ended
December 31, 1996 as compared to 2.9% a year earlier. In comparison to the prior
year, the increase in actual expenditures in 1996 was due to the inclusion of
Masland and AI operating expenses as well as increased research and development
and administrative support expenses associated with the expansion of domestic
and international business.

Operating income and operating margin were $375.8 million and 6.0% in the
year ended December 31, 1996 as compared to $244.8 million and 5.2% in the
previous year. For 1996, operating income benefited from the incremental
operating income generated from acquisitions along with increased revenue from
domestic and foreign automotive manufacturers on new and mature programs.
Partially offsetting the increase in operating income were design, development
and administrative expenses at North American and European Technical Centers,
Chrysler's downtime for model changeover and the adverse impact of the General
Motors work stoppages. Non-cash depreciation and amortization charges were
$142.3 million and $92.0 million for the years ended December 31, 1996 and 1995,
respectively.

For the year ended December 31, 1996, interest expense increased by $27.3
million to $102.8 million as compared to the corresponding period in the prior
year. The increase in interest expense was largely the result of interest
incurred on additional debt utilized to finance the Masland and AI Acquisitions.

Other expenses for the year ended December 31, 1996, which include state
and local taxes, foreign exchange, minority interests in consolidated
subsidiaries, equity in net income of affiliates and other non-operating
expenses, increased to $19.6 million in 1996 as compared to $12.0 million in
1995 as the effect of higher sales volumes on state and local taxes and the
provision for minority interest expense from the Company's joint ventures more
than offset favorable foreign exchange related to the Company's North American
and European operations.

Net income in 1996 was $151.9 million, or $2.38 per share, as compared to
$91.6 million, or $1.74 per share in 1995. The increase in net income was due to
the Masland Acquisition, a full year activity from the AI Acquisition, new
business awarded, cost reduction programs and increased production levels on
existing programs. The provision for income taxes in the current year was $101.5
million, or an effective tax rate of 40.1%, as compared to $63.1 million and
40.1% in the previous year. Net income in 1995 reflects an extraordinary loss of
$2.6 million related to the early retirement of debt. Earnings per share
increased in 1996 by 36.8% despite an increase in the weighted average number of
shares outstanding of approximately 11.1 million shares.

United States and Canadian Operations

Net sales in the United States and Canada were $4,058.0 million and
$3,108.0 million in the years ended December 31, 1996 and 1995, respectively.
Sales in 1996 benefited from the contribution of $708.4 million in incremental
sales from the AI and Masland Acquisitions, new passenger car and truck programs
introduced during 1996 and modest vehicle production increases by domestic
automotive manufacturers on carryover programs. Partially offsetting the
increase in sales was the impact of the General Motors work stoppages and
downtime associated with a Chrysler model changeover.

Operating income and operating margin were $302.6 million and 7.5% in 1996
as compared to $204.8 million and 6.6% in 1995. The increase in operating income
was largely the result of the benefits derived from the acquisitions of AI and
Masland as well as the overall growth in domestic vehicle sales, including
production of new business vehicle sales. Partially offsetting the increase in
operating income were reduced utilization at General Motors and Chrysler
facilities and higher engineering and administrative expenses necessary to
support established and new business opportunities.

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European Operations

Net sales in Europe increased by 22.4% to $1,621.8 million in the year
ended December 31, 1996 as compared to $1,325.4 million in the year ended
December 31, 1995. Sales in 1996 benefited from increased market demand on
existing passenger car and light truck programs in Italy, Germany and Austria
and the full year contribution of the AI Acquisition.

Operating income and operating margin were $49.2 million and 3.0% in 1996
as compared to $26.5 million and 2.0% in 1995. Operating income in 1996
benefited from incremental volume on carryover seat and seat component programs,
the contribution of the AI Acquisition and improved operating performance at
certain of the Company's facilities in England and Germany.

Mexico and Other Operations

Net sales of $569.3 million in 1996 in the Company's remaining geographic
regions, consisting of Mexico, South America, the Asia/Pacific Rim region and
South Africa, increased by $288.3 million, or 102.6%, from $281.0 million in the
comparable period in 1995. Sales in the year ended December 31, 1996 benefited
from new business operations in South America, the Asia/Pacific Rim region, and
South Africa which accounted for $214.7 million of the increase, higher
production build schedules for General Motors and Chrysler programs in Mexico
and sales of $22.3 million from a Masland operation in Mexico.

Operating income and operating margin were $24.0 million and 4.2% in 1996
as compared to $13.5 million and 4.8% in 1995. Operating income in 1996
increased primarily due to the benefits derived from the growth in sales
activity, including the production of new business operations and the
acquisition of Masland. Partially offsetting the increase in operating income
were facility and preproduction costs for recently opened facilities in
Argentina, India and Venezuela.

Year Ended December 31, 1995 Compared With Year Ended December 31, 1994

Net sales of $4,714.4 million in the year ended December 31, 1995 increased
by $1,566.9 million or 49.8% over net sales for the year ended December 31,
1994. Net sales in 1995 benefited from the acquisitions of AI on August 17, 1995
and the Fiat Seat Business on December 15, 1994 which together accounted for
$795.3 million of the increase. Further contributing to the growth in sales were
incremental volumes on new seating programs in North America and increased
production in Europe.

Gross profit and gross margin were $403.1 million and 8.6% in 1995 as
compared to $263.6 million and 8.4% in 1994. Gross profit in 1995 benefited from
the overall increase in North American and European sales activity, including
the acquisitions of AI and FSB, and production of certain new seat programs in
the United States and Mexico. Partially offsetting the increase in gross profit
were new program start-up expenses of $32.1 million versus $23.1 million in
1994, and costs associated with new business opportunities in Asia/Pacific Rim,
South America and South Africa.

Selling, general and administrative expenses, including research and
development, as a percentage of net sales increased to 2.9% in 1995 as compared
to 2.6% in the previous year. Actual expenditures in 1995 increased in
comparison to the prior year primarily due to the inclusion of AI and FSB
engineering and administrative expenses in 1995. In addition, research and
development costs increased at the United States and European customer focused
technical centers in support of existing and potential business opportunities.

Operating income and operating margin were $244.8 million and 5.2% in the
year ended December 31, 1995 as compared to $169.6 million and 5.4% in the year
ended December 31, 1994. The increase in operating income was primarily due to
increased volumes on new and existing light truck seating programs, improved
performance of the Company's European operations and the incremental operating
income derived from acquisitions. Partially offsetting the increase in operating
income and contributing to the decline in operating margins were design and
development costs associated with the expansion of business and program start-up
expenses for new seat programs. Also contributing to the decline in operating
margin were the increased sales in Europe caused by the FSB which had lower
margins. Non-cash depreciation and amortization charges were $92.0 million and
$56.1 million for the years ended December 31, 1995 and 1994, respectively.

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Interest expense in the year ended December 31, 1995 increased in
comparison to prior year as a result of interest incurred on additional debt
utilized to finance the AI and FSB Acquisitions as well as higher interest rates
in 1995 under the Company's prior senior credit facilities.

Other expenses in 1995 increased in comparison to the prior year as foreign
exchange losses incurred at the Company's North American and European
operations, along with increased state and local taxes associated with the AI
Acquisition, more than offset income derived from joint ventures accounted for
under the equity method.

Net income for the year ended December 31, 1995 was $91.6 million, or $1.74
per share, as compared to $59.8 million, or $1.26 per share in the year ended
December 31, 1994. The provision for income taxes in fiscal 1995 was $63.1
million, or an effective tax rate of 40.1%, versus $55.0 million and 47.9% for
the previous year. The decrease in rate is largely the result of changes in
operating performance and related income levels among the various tax
jurisdictions. Earnings per share increased in 1995 by 38.1% despite an increase
in the number of shares outstanding and an extraordinary loss of $2.6 million
($.05 per share) for the early retirement of debt.

United States and Canadian Operations

Net sales in the United States and Canada were $3,108.0 million and
$2,378.7 million in the years ended December 31, 1995 and 1994, respectively.
Sales in 1995 benefited from new Ford and General Motors passenger car programs,
the contribution of $248.1 million in sales from the AI Acquisition and
incremental volume on light truck seating for previously existing programs.

Operating income and operating margin were $204.8 million and 6.6% in 1995
as compared to $155.6 million and 6.5% in 1994. Operating income in 1995
increased primarily due to increased volumes at certain of the Company's car and
light-truck seating facilities, the benefits derived from the AI Acquisition and
increased productivity and cost reduction programs at existing seat and seat
component facilities. Partially offsetting this increase in operating margin
were engineering and administrative support expenses along with preproduction
costs at new business operations.

European Operations

Net sales in Europe were $1,325.4 million in the year ended December 31,
1995 and $572.5 million in the year ended December 31, 1994. Sales in 1995
benefited from $547.2 million in sales from the FSB and AI acquisitions,
incremental volume on existing programs in Sweden and England and favorable
exchange rate fluctuations in Germany and Sweden.

Operating income and operating margin were $26.5 million and 2.0% in 1995
as compared to $4.4 million and 0.8% in 1994. Operating income in 1995 benefited
from incremental volume on mature Scandinavian and German seat programs and the
benefits derived from the FSB and AI Acquisitions. Partially offsetting the
increase in operating income were engineering, preproduction and facility costs
associated with the start-up of a new seat program in Germany.

Mexico and Other Operations

Net sales of $281.0 million in 1995 in the Company's remaining geographic
regions, consisting of Mexico, Asia/Pacific Rim, South Africa and South America
increased by $84.7 million or 43.1% as compared to $196.3 million in the
comparable period in the prior year. Sales in the year ended December 31, 1995
benefited from the overall growth in Mexican sales activity, including the
production of new General Motors and Ford passenger car and truck seat programs.
Further contributing to the increase in sales was the addition of new business
operations in Australia, South Africa, Brazil and Argentina.

Operating income and operating margin were $13.5 million and 4.8% in the
year ended December 31, 1995 and $9.6 million and 4.9% in the previous year. The
increase in operating income was largely the result of the benefits derived from
increased market demand for new and ongoing seat programs in Mexico. Partially

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offsetting the increase in operating income were engineering and preproduction
costs for recently opened manufacturing facilities in Asia/Pacific Rim, South
Africa and South America.

LIQUIDITY AND FINANCIAL CONDITION

The Company's Credit Agreement is a $1.8 billion multicurrency revolving
credit facility with a syndicate of financial institutions. The Credit Agreement
matures on September 30, 2001 and borrowings thereunder may be used for general
corporate purposes. The Credit Agreement is guaranteed by certain of the
Company's significant domestic subsidiaries and secured by a pledge of the
capital stock of certain of the Company's domestic and foreign subsidiaries.
Generally, United States dollar loans under the Credit Agreement bear interest,
at the election of the Company, at a floating rate equal to (i) the higher of a
specified bank's prime rate and the federal funds rate plus 0.5% or (ii) the
Eurodollar rate plus 0.275% to 0.625%, depending on the level of the Company's
coverage ratio (as specified in the Credit Agreement). Foreign currency
borrowings under the Credit Agreement may be made at floating interest rates set
forth in the Credit Agreement. In addition, at the Company's option, the Company
may incur United States dollar loans under competitive advance facilities and
foreign currency loans under alternative currency facilities at interest rates
to be agreed upon at the time of such loans. The Company also pays a facility
fee on the total $1.8 billion commitment equal to 0.15% to 0.25% per annum,
depending on the level of the Company's coverage ratio (as specified in the
Credit Agreement). As of March 29, 1997, the Company had $450.3 million
outstanding under the Credit Agreement, and an additional $38.5 million was
committed under outstanding letters of credit, resulting in approximately $1.3
billion unused and available. The Company used borrowings under the Credit
Agreement to finance the Dunlop Cox Acquisition and intends to use new
borrowings under the Credit Agreement to finance the Keiper Acquisition.

In addition to debt outstanding under the Credit Agreement, as of March 29,
1997, the Company had an additional $571.5 million of debt, primarily consisting
of $470.0 million of subordinated debentures due between 2000 and 2006. On May
30, 1997, the Company gave notice to the Trustee for holders of the Senior
Subordinated Notes, pursuant to which the Company has stated its intention to
redeem, at 100% of principal amount, all $125.0 million outstanding of the
Senior Subordinated Notes on July 15, 1997 (the "Redemption"). The Company
intends to use new borrowings under the Credit Agreement to fund the Redemption.

As of March 29, 1997 the Company had $16.3 million of cash and cash
equivalents. The Company's scheduled principal payments, including the
Redemption, on long-term debt are $133.0 million, $49.4 million, $6.6 million,
$5.8 million and $452.0 million in the remainder of 1997, 1998, 1999, 2000 and
2001, respectively.

The Company believes that cash flows from operations and available credit
facilities will be sufficient to meet its debt service obligations, projected
capital expenditures and working capital requirements for the foreseeable
future.

As a result of its continued global expansion, the amount of the Company's
revenues and expenses denominated in currencies other than the U.S. Dollar
continues to increase. The Company closely monitors its exposure to currency
fluctuations and, where cost justified, adopts strategies to reduce this
exposure.

The Credit Agreement, the Senior Subordinated Notes, the Subordinated Notes
and the 9 1/2% Notes impose various restrictions and covenants on the Company,
including, among other things, financial covenants relating to the maintenance
of minimum net worth and interest coverage ratios, maximum leverage ratio, as
well as restrictions on indebtedness, guarantees, acquisitions, capital
expenditures, investments, loans, liens, dividends and other restricted payments
and assets sales. Such restrictions could limit the Company's ability to respond
to market conditions, to provide for unanticipated capital investments or to
take advantage of business opportunities.

CAPITAL EXPENDITURES

During the year ended December 31, 1996, the Company's capital expenditures
aggregated approximately $153.8 million, of which approximately $49.9 million
was related to the addition of new facilities and

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other expenditures for new programs, $22.0 million was related to replacement
programs, and the remainder was spent for increased capacity and cost reduction
at existing facilities and continuing maintenance requirements. For the years
ended December 31, 1995 and 1994, capital expenditures of the Company were
$110.7 million and $103.1 million, respectively. For 1997, the Company
anticipates capital expenditures of approximately $185.0 million.

ENVIRONMENTAL MATTERS

The Company is subject to local, state, federal and foreign laws,
regulations and ordinances (i) which govern activities or operations that may
have adverse environmental effects and (ii) that impose liability for the costs
of cleaning up certain damages resulting from sites of past spills, disposal or
other releases of hazardous substances. The Company's policy is to comply with
all applicable environmental laws and maintain procedures to promote compliance.
However, the Company has been, and in the future may become, the subject of
formal or informal enforcement actions or procedures. The Company currently is
engaged in the cleanup of hazardous substances at certain sites owned, leased or
operated by the Company, including soil and groundwater cleanup at its facility
in Mendon, Michigan. Management believes that the Company will not incur
compliance costs or cleanup costs at its facilities with known contamination
that would have a material adverse effect on the Company's consolidated
financial position or future results of operations.

The Company has been identified as a potentially responsible party ("PRP")
under the Comprehensive Environmental Response, Compensation and Liability Act
of 1980, as amended ("CERCLA" or "Superfund"), for the cleanup of contamination
from hazardous substances at two Superfund sites where liability has not been
substantially resolved. Management believes that the Company is, or may be,
responsible for less than one percent, if any, of the total costs at the two
Superfund sites. The Company has also been identified as a PRP at two additional
sites where liability has not been substantially resolved, as well as at several
other sites (including Superfund sites) at which no significant liability issues
known to the Company remain open at this time. In addition, the Company is one
of a number of defendants in a state court action brought by a group of
plaintiffs in Texas who have claimed various impacts from a Texas landfill to
which the Company and others allegedly sent waste. The Company's expected
liability, if any, at these additional sites is not material.

INFLATION AND ACCOUNTING POLICIES

Lear's contracts with its major customers generally provide for an annual
productivity price reduction and provide for the recovery of increases in
material and labor costs in some contracts. Cost reduction through design
changes, increased productivity and similar programs with the Company's
suppliers generally have offset changes in selling prices. The Company's cost
structure is comprised of a high percentage of variable costs. The Company
believes that this structure provides it with additional flexibility during
economic cycles.

During 1995, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 121, "Recognition of
Impairment of Long-lived Assets", which specifies when and how impairment of
virtually all long-lived assets should be measured and recorded. In general, the
statement requires that whenever circumstances raise doubt about the
recoverability of long-lived assets, the Company should analyze the future cash
flows expected from such assets to determine if impairment exists. This
statement was adopted prospectively on January 1, 1996, and no such impairment
was recognized during 1996.

Also during 1995, the FASB issued SFAS No. 123, "Accounting for Stock-Based
Compensation", which was adopted by the Company in 1996 and requires that stock
compensation, including compensation in the form of stock options, be calculated
using a measure of fair value, compared with intrinsic value required under
current accounting principles. The new method may be either reflected in the
financial statements or disclosed in the notes to the statements. The Company
has adopted the statement by disclosing the effects of the fair value method in
Note 16 to its 1996 financial statements.

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BUSINESS OF THE COMPANY

GENERAL

Lear is one of the largest independent suppliers of automotive interior
systems in the estimated $45 billion global automotive interior systems market
and one of the ten largest independent automotive suppliers in the world. The
Company has experienced substantial growth in market presence and profitability
over the last five years as a result of both internal growth and acquisitions.
The Company's sales have grown from approximately $1.4 billion for the year
ended June 30, 1992 to over $6.2 billion for the year ended December 31, 1996, a
compound annual growth rate of 39%. In addition, the Company's operating income
has grown from $56.8 million for the year ended June 30, 1992 to $375.8 million
for the year ended December 31, 1996, a compound annual growth rate of 51%. The
Company's present customers include 26 OEMs, the most significant of which are
Ford, General Motors, Fiat, Chrysler, Volvo, Saab, Volkswagen and BMW. As of
April 30, 1997, the Company employed over 45,000 people in 22 countries and
operated 149 manufacturing, technology, product engineering and administration
facilities.

Lear is a leading supplier of automotive interiors with in-house
capabilities in all five principal automotive interior segments: seat systems;
floor and acoustic systems; door panels; instrument panels; and headliners. In
addition, as one of the leading independent global suppliers of interior systems
and components to OEMs, Lear is able to offer its customers design, engineering
and project management support for the entire automotive interior. Management
believes that the ability to offer automotive interior "one-stop-shopping"
provides Lear with a competitive advantage as OEMs continue to reduce their
supplier base and demand improved quality and enhanced technology. In addition,
the Company's broad array of products and process offerings enables it to
provide each customer with products tailored to its particular needs.

Lear is focused on delivering high quality automotive interior systems and
components to its customers on a global basis. Due to the opportunity for
significant cost savings and improved product quality and consistency, OEMs have
increasingly required their suppliers to manufacture automotive interior systems
and components in multiple geographic markets. In recent years, the Company has
aggressively expanded its operations in Western Europe and emerging markets in
Eastern Europe, South America, South Africa and the Asia/Pacific Rim region,
giving it the capability to provide its products on a global basis to its OEM
customers. For example, in 1996, Lear entered into a joint venture to supply
seat systems in Thailand to a joint venture between Ford and Mazda. In 1996,
Lear also announced its entry into the Chinese market with a joint venture to
supply seat systems and interior trim components for Isuzu trucks and Ford
transit vans. In addition, during 1996 Lear was awarded a contract to supply
seat and interior trim systems in Argentina for Ford's Ranger program and began
its production of seat systems for the Palio (Fiat's world car) in Brazil. Since
late 1995, the Company has also established joint ventures in Brazil and
Argentina and has opened facilities in South Africa, India, Indonesia, Australia
and Venezuela. As a result of the Company's efforts to expand its worldwide
operations, the Company's sales outside the United States and Canada have grown
from $0.4 billion, or 29.7% of the Company's total sales, for the year ended
June 30, 1992 to $2.2 billion, or 35.1% of the Company's total sales, for the
year ended December 31, 1996.

In 1996, after giving pro forma effect to the Masland Acquisition, Lear was
one of the leading independent suppliers to the estimated $45 billion global
automotive interior market, with a 13% share. In addition, after giving pro
forma effect to the Masland Acquisition, the Company in 1996 held a leading 37%
share of the estimated $7.9 billion North American seat systems market and a 37%
share of the estimated $1.4 billion North American floor and acoustic systems
market. In 1996, the Company was also a leading independent supplier to the
estimated $7.2 billion Western European seat systems market, with a 17% share.
After consummation of the Keiper Acquisition, Lear will have a leading 23% share
of the Western European seat systems market. The door panel, headliner and
instrument panel segments of the automotive interior market contain no dominant
independent supplier and are in the early stages of the outsourcing and/or
consolidation process. The Company believes that the same competitive pressures
that contributed to the rapid expansion of its seat systems business in North
America since 1983 will continue to encourage OEMs in the North American and
European markets to outsource more of their door panel, headliner and instrument
panel requirements.

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The Company is the successor to a manufacturer of automotive steel
components founded in 1917 that served as a supplier to General Motors and Ford
from its inception. As a result of the expansion of the Company's business from
automotive seat systems to products for a vehicle's complete interior, the
Company changed its name to "Lear Corporation" from "Lear Seating Corporation"
effective May 9, 1996.

STRATEGY

Lear's business objective is to expand its position as one of the leading
independent suppliers of automotive interior systems in the world. Lear intends
to build on its full-service capabilities, strong customer relationships and
worldwide presence to increase its share of the global automotive interior
market. To achieve this objective, the Company will continue to pursue a
strategy based upon the following elements:

- Enhance its Strong Relationships with OEMs. The Company's management
has developed strong relationships with its 26 OEM customers which allow
Lear to identify business opportunities and anticipate customer needs in
the early stages of vehicle design. Management believes that working
closely with OEMs in the early stages of designing and engineering vehicle
interior systems gives it a competitive advantage in securing new business.
Lear maintains "Customer Focused Divisions" for each of its major
customers. This organizational structure consists of several dedicated
groups, each of which is focused on serving the needs of a single customer
and supporting that customer's programs and product development. Each
division can provide all the interior systems and components the customer
needs, allowing that customer's purchasing agents, engineers and designers
to have a single point of contact. Lear maintains an excellent reputation
with OEMs for timely delivery and customer service and for providing world
class quality at competitive prices. As a result of the Company's service
and performance record, many of the Company's facilities have won awards
from OEMs with which they do business.

- Penetrate Emerging Markets. Geographic expansion will continue to be
an important element of the Company's growth strategy. In 1996, more than
two-thirds of total worldwide vehicle production occurred outside the
United States and Canada. Emerging markets such as South America and the
Asia/Pacific Rim region present strong global growth opportunities as
demand for automotive vehicles has been increasing dramatically in these
areas. For example, from 1991 through 1996, sales of light vehicles in
China have increased nearly 500%, while sales in Brazil have increased over
70%. It is anticipated that population and per capita income in China,
Brazil and other emerging markets will continue to increase. Industry
analysts forecast that these underlying trends will result in continued
strong increases in light vehicle sales in these and certain other emerging
markets. As a result of Lear's strong customer relationships and worldwide
presence, management believes that the Company is well positioned to expand
with OEMs in emerging markets.

- Capitalize on New Outsourcing Opportunities. The door panel,
instrument panel and headliner segments of the automotive interior market
contain no dominant independent supplier and are in the early stages of the
outsourcing and/or consolidation process. These segments constituted over
20% of the total estimated $45 billion global automotive interior market in
1996. The Company believes that the same competitive pressures that
contributed to the rapid expansion of its seat systems business in North
America since 1983 will continue to encourage customers to outsource more
of their door, instrument panel and headliner system and component
requirements. In addition, management believes that as the outsourcing of
these systems accelerates and OEMs continue their worldwide expansion and
seek ways to improve vehicle quality and reduce costs, OEMs will
increasingly look to independent suppliers such as Lear, to fill the role
of "Systems Integrator" to manage the design, purchasing and supply of the
total automotive interior. Lear's full-service capabilities make it
well-positioned to perform this role.

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testing of consumer responses to automotive interior styling and
innovations. Because OEMs increasingly view the vehicle interior as a major
selling point to their customers, the focus of Lear's research and
development efforts is to identify new interior features that make vehicles
safer, more comfortable and attractive to consumers. For example, in 1996
Lear developed a One-Step(TM) door which consolidates all of the door's
internal mechanisms including glass, window regulators and latches,
providing customers with a higher quality door at a lower price. In
addition, Lear has developed a lightweight, adjustable seat with built in
lateral accelerometers that automatically adjust the side bolsters to
provide passengers with additional support during sharp turns. In 1996, the
Company also developed a "Mobile Office" unit, specially designed to fit
across the vehicle's width, that contains customized containers for
portable computers, fax machines, hanging files and other items. The
development of these and similar products has been, and management believes
will continue to be, an important element in the Company's future growth.
For automotive vehicles manufactured in North America, Lear's total content
per vehicle has increased from $94 per vehicle in the fiscal year ended
June 30, 1992 to $292 per vehicle in the fiscal year ended December 31,
1996. For automotive vehicles manufactured in Western Europe, Lear's total
content per vehicle has increased from $19 per vehicle in the fiscal year
ended June 30, 1992 to $109 per vehicle in the fiscal year ended December
31, 1996.

- Grow Through Strategic Acquisitions. Strategic acquisitions have
been, and management believes will continue to be, an important element in
the Company's worldwide growth and in its efforts to capitalize on the
outsourcing and supplier consolidation trends. The Company seeks
acquisitions which strengthen Lear's relationships with OEMs, complement
Lear's existing products and process capabilities and provide Lear with
growth opportunities in new markets. The Company's recent acquisitions have
expanded its OEM customer base and worldwide presence and have enhanced its
relationships with existing customers. The Borealis, Masland and AI
Acquisitions also provide the Company with a substantial presence in the
non-seating segments of the automobile and light truck interior market. The
Company believes that these markets hold significant growth potential. In
1996, after giving pro forma effect to the Masland Acquisition, the
Company's Tier I sales of non-seating systems and components would have
been approximately $2.1 billion, or approximately 34% of the Company's
total pro forma sales. The Company will continue to consider strategic
acquisitions that provide opportunities to enhance its market position,
expand its global presence, increase its product offerings, improve its
technological capabilities or enhance customer relationships.

ACQUISITIONS

To supplement its internal growth and implement its business strategy, the
Company has made several strategic acquisitions since 1990. The following is a
summary of recent major acquisitions:

Keiper Acquisition

On May 26, 1997, the Company entered into a definitive agreement to acquire
certain equity and partnership interests in Keiper for DM 400 million
(approximately $235 million). In connection with the Keiper Acquisition, Lear
will also pay or assume outstanding indebtedness of Keiper anticipated to be
approximately $28 million. Keiper is a leading supplier of automotive vehicle
seat systems on a JIT basis for

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markets in Europe, Brazil and South Africa, and had 1996 sales of approximately
$615 million. Management believes that the Keiper Acquisition will strengthen
Lear's core seat system business, expand Lear's presence in Europe, Brazil and
South Africa and strengthen Lear's relationships with Mercedes Benz, Audi,
Volkswagen and Porsche. The Keiper Acquisition, which is subject to clearance by
the Antitrust Commission of the European Union, is expected to close in the
third quarter of 1997. However, there can be no assurances that the Keiper
Acquisition will be consummated.

Dunlop Cox Acquisition

On June 5, 1997, the Company acquired the stock of Dunlop Cox for
approximately $60 million. Dunlop Cox, based in Nottingham, England, provides
Lear with the ability to design and manufacture manual and
electronically-powered automotive seat adjusters. For the year ended December
31, 1996, Dunlop Cox had sales of approximately $39 million.

Borealis Acquisition

In December 1996, the Company acquired all of the issued and outstanding
shares of common stock of Borealis, a leading Western European supplier of
instrument panels, door panels and other automotive components. The Borealis
Acquisition provided the Company with the technology to manufacture instrument
panels, giving the Company the ability to produce complete interior systems.
Borealis also produces door panels, climate systems, exterior trim and various
components for the Western European automotive, light truck and heavy truck
industries. In addition, the Borealis Acquisition increased the Company's
presence in the Western European market and strengthened its relationships with
Volvo, Saab and Scania. The aggregate purchase price for the Borealis
Acquisition was approximately $91.1 million.

Masland Acquisition

On July 1, 1996, the Company completed the acquisition of all of the issued
and outstanding shares of common stock of Masland for an aggregate purchase
price of $475.7 million. The Masland Acquisition gave Lear manufacturing
capabilities to produce floor and acoustic systems. In 1996, after giving pro
forma effect to the Masland Acquisition, Lear held a 37% share of the estimated
$1.4 billion North American floor and acoustics systems market. As a result of
the Masland Acquisition, Lear also became a major supplier of interior and
luggage trim component and other acoustical products which are designed to
minimize noise, vibration and harshness for passenger cars and light trucks. The
Masland Acquisition also provided Lear with access to certain leading-edge
technology. Its 33,000 square foot Technology Center in Plymouth, Michigan
provides full service acoustics testing, design, product engineering, systems
integration and program management.

AI Acquisition

In August 1995, the Company acquired all of the issued and outstanding
shares of common stock of AI, a leading designer and manufacturer of high
quality interior systems and blow molded plastic parts to automobile and light
truck manufacturers. Prior to the AI Acquisition, Lear had participated
primarily in the seat system segment of the interior market, which comprises
approximately 50% of the total combined worldwide interior market. By providing
the Company with substantial manufacturing capabilities in door panels and
headliners, the AI Acquisition made Lear one of the largest independent Tier I
suppliers of automotive interior systems in the North American and Western
European light vehicle interior market. The aggregate purchase price for the AI
Acquisition was $881.3 million.

FSB Acquisition

On December 15, 1994, the Company, through its wholly-owned subsidiary,
Lear Seating Italia Holdings, S.r.L., acquired the primary automotive seat
systems supplier to Fiat and certain related businesses (the "Fiat Seat
Business" or the "FSB"). Lear and Fiat also entered into a long-term supply
agreement for Lear to produce all outsourced automotive seat systems for Fiat
and affiliated companies worldwide. The

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acquisition of the Fiat Seat Business not only established Lear as a market
leader in automotive seat systems in Europe, but, combined with its position in
North America, made Lear one of the largest automotive seat systems
manufacturers in the world. In addition, it gave the Company access to rapidly
expanding markets in South America and has resulted in the formation of new
joint ventures which are supplying automotive seat systems to Fiat or its
affiliates in Brazil and Argentina.

NAB Acquisition

On November 1, 1993, Lear significantly strengthened its position in the
North American automotive seating market by purchasing the North American seat
cover and seat systems business (the "NAB") of Ford Motor Company. The NAB
consists of an integrated United States and Mexican operation which produces
seat covers for approximately 80% of Ford's North American vehicle production
(as well as for several independent suppliers) and manufactures seat systems for
certain Ford models. Prior to the NAB Acquisition, the Company outsourced a
significant portion of its seat cover requirements. The expansion of the
Company's seat cover business has provided Lear with better control over the
costs and quality of one of the critical components of a seat system. In
addition, by virtue of the NAB Acquisition, the Company was able to enhance its
relationship with one of its largest OEM customers, entering into a five year
supply agreement with Ford, which expires in November 1998, covering models for
which the NAB had produced seat covers and seat systems at the time of the
acquisition. The Company also assumed during the term of the supply agreement
primary engineering responsibility for a substantial portion of Ford's car
models, providing Lear with greater involvement in the planning and design of
seat systems and related products for future light vehicle models.

Scandinavian Acquisitions

In 1991 and 1992, the Company acquired the seat systems businesses of Saab
in Sweden and Finland and of Volvo in Sweden. In connection with each of these
acquisitions, the Company entered into supply relationships with the respective
OEMs.

PRODUCTS

Lear's products have evolved from the Company's many years of manufacturing
experience in the automotive seat frame market where it has been a supplier to
General Motors and Ford since its inception in 1917. The seat frame has
structural and safety requirements which make it the basis for overall seat
design and was the logical first step to the Company's emergence as a premier
supplier of entire seat systems and seat components. With the acquisitions of
Borealis, Masland and AI, the Company has expanded its product offerings and can
now manufacture and supply its customers with complete interiors, including
floor systems, door panels, instrument panels and headliners. The Company also
produces a variety of blow molded products and other automotive components such
as fluid reservoirs, fuel tank shields, exterior airdams, front grille
assemblies, engine covers, battery trays/covers and insulators. Lear believes
that as OEMs continue to seek ways to improve vehicle quality while
simultaneously reducing the costs of the various vehicle components, they will
increasingly look to suppliers such as Lear with the capability to test, design,
engineer and deliver products for a complete vehicle interior. In addition, with
the Borealis, Masland and AI Acquisitions, the Company believes that it has
significant cross-selling opportunities across its customer base as well as its
vehicle platforms and is well-positioned to expand its position as one of the
leading independent suppliers of automotive interior systems and components in
the world.

The following is the approximate composition by product category of the
Company's net sales in the year ended December 31, 1996, after giving pro forma
effect to the Masland Acquisition: seat systems, $4.4 billion; floor and
acoustic systems, $0.5 billion; door panels, $0.3 billion; headliners, $0.1
billion; and other component products, $1.2 billion.

- Seat Systems. The seat systems business consists of the manufacture,
assembly and supply of vehicle seating requirements. Seat systems typically
represent approximately 50% of the cost of the total automotive interior. The
Company produces seat systems for automobiles and light trucks that are fully
finished and ready

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to be installed in a vehicle. Seat systems are fully assembled seats, designed
to achieve maximum passenger comfort by adding a wide range of manual and power
features such as lumbar supports, cushion and back bolsters and leg and thigh
supports.

As a result of its product technology and product design strengths, the
Company has been a leader in producing convenience features and safety
improvements into its seat designs. For example, in 1996, Lear developed
automatically adjusting seats that provide passengers additional support during
sharp turns. In addition, Lear has recently introduced a newly designed,
integrated restraint seat system that increases occupant comfort and
convenience. Licensed exclusively to Lear, this patented seating concept uses a
special ultra high-strength steel tower, a blow-molded seat back frame and a
split-frame design to improve occupant comfort and convenience. Other recent
product ideas include newly developed fabric seat heaters, a "Sound Seat," which
has a high output bass speaker built into the back seat, and a Code-Alarm(TM)
integrated seat, which includes a security device that automatically moves the
back of the driver seat against the steering wheel to deter theft.

Lear's position as a market leader in seat systems is largely attributable
to seating programs on new vehicle models launched in the past five years. The
Company is currently working with customers in the development of a number of
seat systems products to be introduced by automotive manufacturers in the next
six years.

- Floor and Acoustic Systems. Floor systems consist both of carpet and
vinyl products, molded to fit precisely the front and rear passenger
compartments of cars and trucks, and accessory mats. While carpet floors are
used predominately in passenger cars and trucks, vinyl floors, because of their
better wear and washability characteristics, are used primarily in commercial
and fleet vehicles. The Company is one of the largest independent suppliers of
vinyl automotive floor systems in North America, and one of the only suppliers
of both carpet and vinyl automotive floor systems. With the Masland Acquisition,
the Company acquired Maslite(TM), a recently developed material that is 40%
lighter than vinyl, which has replaced vinyl accessory mats on selected
applications.

The automotive floor system is multi-purpose. Its performance is based on
the correct selection of materials to achieve an attractive, quiet, comfortable
and durable interior compartment. Automotive carpet requirements are more
stringent than the requirements for carpet used in homes and offices. For
example, automotive carpet must provide higher resistance to fading and improved
resistance to wear despite being lighter in weight than carpet found in homes
and offices. Masland's significant experience has enabled the Company to meet
these specialized needs. Carpet floor systems generally consist of tufted carpet
to which a specifically engineered thermoplastic backcoating has been added.
This backcoating, when heated, enables the Company to mold the carpet to fit
precisely the interior of the vehicle. Additional insulation materials are added
to provide noise, vibration and harshness resistance. Floor systems are complex
products which are based on sophisticated designs and use specialized design
materials to achieve the desired visual, acoustic and heat management
requirements in the automotive interior.

Lear's primary acoustic product, after floor systems, is the dash
insulator. The dash insulator attaches to the vehicle's sheet metal firewall,
separating the passenger compartment from the engine compartment, and is the
primary component for preventing engine noise and heat from entering the
passenger compartment. The Company's ability to produce both the dash insulator
and the floor system enables it to accelerate the design process and supply an
integrated system. The Company believes that OEMs, recognizing the cost and
quality advantages of producing the dash insulator and the floor system as an
integrated system, will increasingly seek suppliers to coordinate the design,
development and manufacture of the entire floor and acoustic system.

In 1996, after giving pro forma effect to the Masland Acquisition, the
Company held a 37% share in the estimated $1.4 billion North American floor and
acoustic systems market. In addition, the Company participates in the European
floor system market through its joint venture with Sommer-Allibert S.A.

- Door Panels. Door panels consist of several component parts that are
attached to a base molded substrate by various methods. Specific components
include vinyl or cloth-covered appliques, armrests, radio speaker grilles, map
pocket compartments, carpet and sound-reducing insulation. Upon assembly, each

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component must fit precisely, with a minimum of misalignment or gap, and must
match the color of the base substrate. In 1996, Lear introduced the One-Step(TM)
door, an innovative door system concept which consolidates all of the door's
internal mechanisms, including glass, window regulators and latches, providing
customers with a higher quality product at a lower price. Assembly of the
One-Step(TM) door involves combining an injection molded plastic door panel with
all major mechanical components and an interior trim cover, into a single system
which can be shipped to OEMs fully assembled, tested and ready to install.
Management believes that the One-Step(TM) door, while not yet in production,
offers Lear significant opportunities to capture a major share of the estimated
$8 billion modular door market.

In 1996, among independent automotive interior suppliers, the Company held
a leading 14% share of the estimated $1.6 billion North American door panel
market. Management believes that this leadership position has been achieved by
offering OEMs the widest variety of manufacturing processes for door panel
production. In Western Europe, the Company held a small position in the door
panel market. These markets contain no dominant supplier and are just beginning
to experience the outsourcing and consolidation trends that have characterized
the seat systems market since the 1980's. With its global scope, technological
expertise and established customer relationships, Lear believes that it is
well-positioned to benefit from these positive industry dynamics.

- Instrument Panels. The instrument panel is a complex system of foil
coverings, foams, plastics and metals designed to house various components and
act as a safety device for the vehicle occupants. Specific components of the
instrument panel include the heating, venting and air conditioning (HVA/C)
module, air distribution ducts, air vents, cross car structure, glove
compartment assemblies, electrical components, wiring harness, radio system, and
passenger airbag units. As the primary occupant focal point of the vehicle
interior, the instrument panel are designed to be aesthetically pleasing while
also serving as the structural carrier of various components.

Safety issues surrounding air bag technologies are currently a significant
focus of the instrument panel segment. Management believes that Lear will
continue to increase its presence in this area through its research and
development efforts, resulting in innovations such as the introduction of cost
effective, integrated, seamless airbag covers, which increase occupant safety.
Future trends in the instrument panel segment will continue to focus on safety
with the introduction of low-mounted airbags as knee restraint components.

Cost, weight and part minimization are also key elements in instrument
panel development for the next generation of vehicle systems. Lear's goals are
to meet future OEM requirements by increasing the integration level of
instrument panel components, and by incorporating additional safety features on
the primary carrier. Currently, the majority of instrument panel components are
assembled at the assembly plant by the OEM. By utilizing its years of JIT
assembly experience of complex automotive interior systems, management believes
Lear has the ability to capitalize on the OEMs' trend toward outsourcing of
complete instrument panel systems and to increase its share of the worldwide
instrument panel market.

- Headliners. The Company designs and manufactures headliners, which
consist of the headliner substrate, covering material, visors, overhead
consoles, grab handles, coat hooks, lighting, wiring and insulators. As with
door panels, upon assembly, each headliner component must fit precisely and must
match the color of the base substrate. With its sophisticated design and
engineering capabilities, the Company believes it is able to supply headliners
with enhanced quality and lower costs than OEMs could achieve internally.

OEMs are increasingly requiring independent suppliers, such as Lear to
produce integrated overhead systems. In 1997, Lear introduced an advanced
overhead system which incorporates HVA/C ducting, an occupant position detection
system, CD changer, trim inflatable tubular structure side air bags and surround
sound speakers into a single integrated overhead system. The Company believes
that as this and other products move from the design stage to the production
stage over the next several years, Lear will have significant opportunities to
increase its share of the headliner market.

The headliner market is highly fragmented, with no dominant independent
supplier. As OEMs continue to seek ways to improve vehicle quality and
simultaneously reduce costs, the Company believes that headliners

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will increasingly be outsourced to suppliers such as Lear, providing the Company
with significant growth opportunities.

- Component Products. In addition to the interior systems and other
products described above, the Company is able to supply a variety of interior
trim, blow molded plastic parts and other automotive components.

Lear produces seat covers for integration into its own seat systems and for
delivery to external customers. The Company's major external customers for seat
covers are other independent seat systems suppliers as well as the OEMs. The
Company is currently producing approximately 80% of the seat covers for Ford's
North American vehicles. The expansion of the Company's seat cover business
gives the Company better control over the costs and quality of one of the
critical components of a seat system. Typically, seat covers comprise
approximately 30% of the aggregate cost of a seat system.

Lear produces steel and aluminum seat frames for passenger cars and light
trucks. Seat frames are primarily manufactured using precision stamped, tubular
steel and aluminum components joined together by highly automated,
state-of-the-art welding and assembly techniques. The manufacture of seat frames
must meet strict customer and government specified safety standards. The
Company's seat frames are either delivered to its own plants, where they become
part of a complete seat system that is sold to the OEM customer or are delivered
to other independent seating suppliers for use in the manufacture of assembled
seating systems.

The Company also produces a variety of interior trim products, such as
pillars, cowl panels, scuff plates, trunk liners, quarter panels and spare tire
covers, as well as blow molded plastic products, such as fluid reservoirs, vapor
canisters and duct systems. In contrast to interior trim products, blow molded
products require little assembly. However, the manufacturing process for such
parts demands considerable expertise in order to consistently produce
high-quality products. Blow molded parts are produced by extruding a shaped
parison or tube of plastic material and then clamping a mold around the parison.
High pressure air is introduced into the tube causing the hot plastic to take
the shape of the surrounding mold. The part is removed from the mold after
cooling and is finished by trimming, drilling and other operations.

MANUFACTURING

All of the Company's manufacturing facilities use JIT manufacturing
techniques. Most of the Company's seating related products and many of the
Company's other interior products are delivered to the OEMs on a JIT basis. The
JIT concept, first broadly utilized by Japanese automotive manufacturers, is the
cornerstone of the Company's manufacturing and supply strategy. This strategy
involves many of the principles of the Japanese system, but was adapted for
compatibility with the greater volume requirements and geographic distances of
the North American market. The Company first developed JIT operations in the
early 1980's at its seat frame manufacturing plants in Morristown, Tennessee and
Kitchener, Ontario, Canada. These plants had previously operated under
traditional manufacturing practices, resulting in relatively low inventory
turnover rates, significant scrap and rework, a high level of indirect labor
costs and long production set-up times. As a result of JIT manufacturing
techniques, the Company has been able to consolidate plants, increase capacity
and significantly increase inventory turnover, quality and productivity.

The JIT principles first developed at Lear's seat frame plants were next
applied to the Company's growing seat systems business and have now evolved into
sequential parts delivery principles. The Company's seating plants are typically
no more than 30 minutes or 20 miles from its customers' assembly plants and are
able to manufacture seats for delivery to the customers' facilities in as little
as 90 minutes. Orders for the Company's seats are received on a weekly basis,
pursuant to blanket purchase orders for annual requirements. These orders detail
the customers' needs for the following week. In addition, constant computer and
other communication connections are maintained between personnel at the
Company's plants and personnel at the customers' plants to keep production
current with the customers' demand.

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As the Company expands its product line to include total automotive
interiors, it is also expanding its JIT facility network. The Company's strategy
is to leverage its JIT seat system facilities by moving the final assembly and
sequencing of other interior components from its centrally located facilities to
its JIT facilities.

A description of the Company's manufacturing processes for its product
segments is set forth below.

- Seat Systems. Seat assembly techniques fall into two major categories,
traditional assembly methods (in which fabric is affixed to a frame using
Velcro, wire or other material) and more advanced bonding processes. The
Company's principal bonding technique involves its patented SureBond(TM) and
DryBond(TM) processes, in which fabric is affixed to the underlying foam padding
using adhesives. The SureBond(TM) and DryBond(TM) processes have several major
advantages when compared to traditional methods, including design flexibility,
increased quality and lower cost. The SureBond(TM) and DryBond(TM) processes,
unlike alternative bonding processes, result in a more comfortable seat in which
air can circulate freely. The SureBond(TM) and DryBond(TM) processes, moreover,
are reversible, so that seat covers that are improperly installed can be removed
and repositioned properly with minimal materials cost. In addition, the
SureBond(TM) and DryBond(TM) processes are not capital intensive when compared
to competing bonding technologies. Approximately one-fourth of the Company's
seats are manufactured using the SureBond(TM) and DryBond(TM) processes.

The seat assembly process begins with pulling the requisite components from
inventory. Inventory at each plant is kept at a minimum, with each component's
requirement monitored on a daily basis. This allows the plant to minimize
production space, but also requires precise forecasts of the day's output. Seats
are assembled in modules, then tested and packaged for shipment. The Company
operates a specially designed trailer fleet that accommodates the off-loading of
vehicle seats at the customers' assembly plants.

The Company obtains steel, aluminum and foam chemicals used in its seat
systems from several producers under various supply arrangements. These
materials are readily available. Leather, fabric and certain purchased
components are generally purchased from various suppliers under contractual
arrangements usually lasting no longer than one year. Some of the purchased
components are obtained through the Company's own customers.

- Floor and Acoustic Systems. The Company produces carpet at its plant in
Carlisle, Pennsylvania. Smaller "focused" facilities are dedicated to specific
groups of customers and are strategically located near their production
facilities. This proximity improves responsiveness to its customers and speeds
product delivery to customer assembly lines, which is done on a JIT basis. The
Company's manufacturing operations are complemented by its research and
development efforts, which have led to the development of a number of
proprietary products, such as its EcoPlus(TM) recycling process as well as
Maslite(TM), a lightweight proprietary material used in the production of
accessory mats.

- Door Panels/Headliners. The Company uses numerous molding, bonding,
trimming and finishing manufacturing processes. The wide variety of
manufacturing processes helps to satisfy a broad range of customers' different
cost and functionality specifications. The Company's ability and experience in
producing interior products for such a vast array of applications enhances its
ability to provide total interior solutions to OEMs globally. The Company is
beginning to employ many of the same JIT principles used at the Company's seat
facilities.

The core technologies used in the Company's interior trim systems include
injection molding, low-pressure injection molding, rotational molding and
urethane foaming, compression molding of Wood-Stock(TM) (a proprietary process
that combines polypropylene and wood flour), glass reinforced urethane and a
proprietary headliner process. One element of Lear's strategy is to focus on
more complex, value-added products such as door panels and armrests. The Company
delivers these integrated systems at attractive prices to the customer because
certain services such as design and engineering and sub-assembly are provided
more cost efficiently by the Company. The principal purchased components for
interior trim systems are polyethylene and polypropylene resins which are
generally purchased under long-term agreements and are available from multiple
suppliers. Lear is continuing to develop recycling methods in light of future
environmental requirements and conditions in order to maintain its competitive
edge in this segment.

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The combined pressures of cost reduction and fuel economy enhancement have
caused automotive manufacturers to concentrate their efforts on developing and
employing lower cost, lighter materials. As a result, plastic content in cars
and light trucks has grown significantly. Increasingly, automotive content
requires large plastic injection molded assemblies for both the interior and
exterior. Plastics are now commonly used in such nonstructural components as
interior and exterior trim, door panels, instrument panels, grilles, bumpers,
duct systems, taillights and fluid reservoirs. For interior trim applications,
substitution of plastics for other materials is largely complete, and little
growth through substitution is expected. However, further advances in injection
molding technologies are improving the performance and appearance of parts
molded in reinforced thermoplastics.

- Instrument Panels. Lear's in-house process capabilities for producing
instrument panels include injection molding, vacuum forming, and other various
finishing methods. Lear's foil and foam capabilities, whereby molded vinyl is
bonded to a plastic substrate using an expandable foam, are used throughout the
world. One of Lear's current development projects is an instrument panel concept
for trucks produced with low pressure injection molding which management
believes will be in production by the beginning of 1998. Lear is continuing to
develop recycling methods in light of future environmental requirements and
conditions in order to reduce costs and increase its presence in this segment.
The wide variety of available manufacturing processes helps Lear to continue to
meet customer cost and functionality specifications.

CUSTOMERS

Lear serves the worldwide automobile and light truck market, which produces
approximately 50 million vehicles annually. The Company's OEM customers
currently include Ford, General Motors, Fiat, Chrysler, Volvo, Saab, Opel,
Jaguar, Volkswagen, Audi, BMW, Rover, Honda USA, Daimler (Mercedes) Benz,
Mitsubishi, Mazda, Toyota, Subaru, Nissan, Isuzu, Peugeot, Porsche, Renault,
Suzuki, Hyundai and Daewoo. During the year ended December 31, 1996, Ford and
General Motors, the two largest automobile and light truck manufacturers in the
world, accounted for approximately 32% and 30%, respectively, of the Company's
net sales. For additional information regarding customers, foreign and domestic
operations and sales, see Note 18, "Geographic Segment Data," to the 1996
consolidated financial statements of the Company incorporated by reference in
this Prospectus.

In the past six years, in the course of retooling and reconfiguring plants
for new models and model changeovers, certain OEMs have eliminated the
production of seat systems and other interior systems and components from
certain of their facilities, thereby committing themselves to purchasing these
items from outside suppliers. During this period, the Company became a supplier
of these products for a significant number of new models, many on a JIT basis.

The purchase of seat systems and other interior systems and components from
full-service independent suppliers like Lear has allowed the Company's customers
to realize a competitive advantage as a result of (i) a reduction in labor costs
since suppliers like the Company generally enjoy lower direct labor and benefit
rates, (ii) the elimination of working capital and personnel costs associated
with the production of interior systems by the OEM, (iii) a reduction in net
overhead expenses and capital investment due to the availability of significant
floor space for the expansion of other OEM manufacturing operations and (iv) a
reduction in transaction costs by utilizing a limited number of sophisticated
system suppliers instead of numerous individual component suppliers. In
addition, the Company offers improved quality and on-going cost reductions to
its customers through continuous, Company-initiated design improvements. The
Company believes that such cost reductions will lead OEMs to outsource an
increasing portion of their automotive interior requirements in the future and
provide the Company with significant growth opportunities.

The Company's sales of value-added assemblies and component systems have
increased as a result of the decision by many OEMs to reduce their internal
engineering and design resources. In recent years, the Company has significantly
increased its capacity to provide complete engineering and design services to
support its product line. Because assembled parts such as door panels, floor and
acoustic systems, armrests and consoles need to be designed at an early stage in
the development of new vehicles or model revisions, the Company is increasingly
given the opportunity to participate earlier in the product planning process.
This has

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resulted in opportunities to add value by furnishing engineering and design
services and managing the sub-assembly process for the manufacturer, as well as
providing the broader range of parts that are required for the assembly.

Lear maintains "Customer Focused Divisions" for each of the Company's major
customers. This organizational structure consists of several dedicated groups,
each of which is focused on serving the needs of a single customer and
supporting that customer's programs and product development. Each division is
capable of providing whatever interior component the customer needs, thereby
providing that customer's purchasing agents, engineers and designers with a
single point of contact for their total automotive interior needs.

The Company receives blanket purchase orders from its customers that
normally cover annual requirements for products to be supplied for a particular
vehicle model. Such supply relationships typically extend over the life of the
model, which is generally four to seven years, and do not require the purchase
by the customer of any minimum number of products. Although such purchase orders
may be terminated at any time, the Company does not believe that any of its
customers have terminated a material purchase order prior to the end of the life
of a model. The primary risk to the Company is that an OEM will produce fewer
units of a model than anticipated. In order to reduce its reliance on any one
model, the Company produces interior systems and components for a broad
cross-section of both new and more established models.

The Company's sales for the year ended December 31, 1996 were comprised of
the following vehicle categories: 42% light truck; 23% mid-size; 17% compact;
10% luxury/sport; and 8% full-size. The following table presents an overview of
the major vehicle models for which the Company, or its affiliates, produces
automotive interior systems or components and the locations of such production:

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NORTH AMERICA
BMW: FORD (CONT): GENERAL MOTORS (CONT): GENERAL MOTORS/SUZUKI:
Z3 Ford Explorer Chevrolet Corvette Geo Metro
Z3 Coupe Ford F-Series Chevrolet Express Geo Tracker
Ford Ghia Chevrolet Kodiak Suzuki Sidekick
CHRYSLER: Ford Mustang Chevrolet Lumina Suzuki Swift
Chrysler Cirrus Ford Probe Chevrolet Malibu
Chrysler Concorde Ford Ranger Chevrolet Monte Carolo HONDA:
Chrysler LHS Ford Taurus Chevrolet S 10 Accord
Chrysler Sebring Ford Thunderbird Chevrolet Suburban Acura CL
Chrysler Sebring Convertible Ford Windstar Chevrolet Swing Civic
Chrysler Town & Country Lincoln Continental Chevrolet Tahoe Passport
Dodge Avenger Lincoln Mark VIII Chevrolet Venture
Dodge Caravan Lincoln Town Car Geo Prizm MAZDA:
Dodge Dakota Mercury Cougar GMC Jimmy MX-6
Dodge Intrepid Mercury Grand Marquis GMC Safari Pickup
Dodge Neon Mercury Mountaineer GMC Savana 626
Dodge Ram Mercury Mystique GMC Sierra
Dodge Ram Van Mercury Sable GMC Sonoma MITSUBISHI:
Dodge Ram Wagon Mercury Tracer GMC Suburban Eclipse
Dodge Ramcharger Mercury Villager GMC Top-Kick Galant
Dodge Stratus GMC Yukon
Dodge Viper GENERAL MOTORS: Oldsmobile Achieva NISSAN:
Eagle Talon Buick Century Oldsmobile Aurora Altima
Eagle Vision Buick LeSabre Oldsmobile Bravada Pickup
Jeep Cherokee Buick Park Avenue Oldsmobile Cutlass Quest
Jeep Grand Cherokee Buick Regal Oldsmobile Cutlass Supreme Sentra
Jeep Wrangler Buick Riviera Oldsmobile Silhouette
Plymouth Breeze Buick Skylark Oldsmobile 88 SUBARU/ISUZU:
Plymouth Neon Cadillac Catera Pontiac Bonneville Isuzu Rodeo
Plymouth Voyager Cadillac DeVille/Concours Pontiac Firebird Subaru Legacy
Cadillac Eldorado/Seville Pontiac Grand Am
FORD: Chevrolet Astro Pontiac Grand Prix TOYOTA:
Ford Aerostar Chevrolet Blazer Pontiac Sunfire Avalon
Ford Contour Chevrolet C/K Pontiac Transport Camry
Ford Crown Victoria Chevrolet Camaro Saturn Corolla
Ford Econoline Chevrolet Cavalier Saturn EV1 Tacoma
Ford Escort
Ford Expedition VOLKSWAGEN:
Cabrio
Golf
GPA Minivan
Jetta
EUROPE
ALFA ROMEO: FIAT (CONT): MERCEDES: ROVER (CONT):
Coupe Ducato C Class 100
Spider Marea E Class 200
145 Panda S Class 400
146 Punto 600
155 OPEL: 800
164 FORD: Astra
Escort Corsa SAAB:
AUDI: Fiesta Omega 900
A3 Mondeo Sintra 9000
A4 Scorpio Vectra
A6 TOYOTA:
A8 HONDA: PORSCHE: Carina
Honda Accord Boxster Corolla
BMW: Honda Civic 911
3 Series VOLKSWAGEN:
5 Series JAGUAR: RENAULT: Golf
XJ Series Cabrio Passat
CHRYSLER: XK8 Transit
Eurostar ROVER: T4-Multivan
LANCIA: Defender Viento
FIAT: Dedra Discovery
Barchetta Delta MGF VOLVO:
Bravo/Brava Kappa Mini Series 800
Coupe Y Range Rover Series 900
Croma

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OTHER REGIONS

BMW (SOUTH AFRICA): FORD (SOUTH AMERICA): GENERAL MOTORS (S. SEAT (SOUTH AMERICA):
3 Series Ford Ranger AMERICA): Cordoba
Chevrolet C/K
DAEWOO (POLAND): GENERAL MOTORS VOLVO (THAILAND):
Tico (AUSTRALIA): HYUNDAI (KOREA): 800 Series
Berlina Grandeur 900 Series
FIAT (POLAND): Calais
500 Caprice OPEL (INDIA): VOLKSWAGEN (S. AMERICA):
Uno Executive Astra Combi
Statesman Gol
FIAT (SOUTH AMERICA): PEUGEOT (SOUTH AMERICA): Saveiro
Bravo/Brava GENERAL MOTORS 306
Duna (INDONESIA): 405
Fiorino S-10 Blazer 504
Palio
Spazio
Tempra
Tipo
Uno

Because of the economic benefits inherent in outsourcing to suppliers such
as Lear and the costs associated with reversing a decision to purchase seat
systems and other interior systems and components from an outside supplier, the
Company believes that automotive manufacturers' commitment to purchasing seating
and other interior systems and components from outside suppliers, particularly
on a JIT basis, will increase. However, under the contracts currently in effect
in the United States and Canada between each of General Motors, Ford and
Chrysler with the United Auto Workers ("UAW") and the Canadian Auto Workers
("CAW"), in order for any of such manufacturers to obtain from external sources
components that it currently produces, it must first notify the UAW or the CAW
of such intention. If the UAW or the CAW objects to the proposed outsourcing,
some agreement will have to be reached between the UAW or the CAW and the OEM.
Factors that will normally be taken into account by the UAW, the CAW and the OEM
include whether the proposed new supplier is technologically more advanced than
the OEM, whether the new supplier is unionized, whether cost benefits exist and
whether the OEM will be able to reassign union members whose jobs are being
displaced to other jobs within the same factories. As part of its long-term
agreement with General Motors, the Company operates its Rochester Hills,
Michigan, Wentzville, Missouri and Lordstown, Ohio facilities with General
Motors' employees and reimburses General Motors for the wages of such employees
on the basis of the Company's employee wage structure. The Company enters into
these arrangements to enhance its relationship with its customers.

General Motors has experienced work stoppages during 1996 and 1997,
primarily relating to the outsourcing of automotive components. Chrysler has
also experienced a work stoppage in 1997, primarily relating to the outsourcing
of automotive components. These work stoppages halted the production of certain
vehicle models and adversely affected the Company's operations.

The Company's contracts with its major customers generally provide for an
annual productivity price reduction and, in some cases, provide for the recovery
of increases in material and labor costs. Cost reduction through design changes,
increased productivity and similar productivity price reduction programs with
the Company's suppliers have generally offset changes in selling prices. The
Company's cost structure is comprised of a high percentage of variable costs.
The Company believes that this structure provides it with additional flexibility
during economic cycles.

MARKETING AND SALES

Lear markets its products by maintaining strong customer relationships,
which have been developed over its 80-year history through extensive technical
and product development capabilities, reliable delivery of high quality
products, strong customer service, innovative new products and a competitive
cost structure. Close personal communications with automotive manufacturers are
an integral part of the Company's marketing strategy. Recognizing this, the
Company is organized into independent divisions, each with the ability to focus
on its customers and programs and each having complete responsibility for the
product, from design to

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installation. By moving the decision-making process closer to the customer, and
by instilling a philosophy of "cooperative autonomy," the Company is more
responsive to, and has strengthened its relationships with, its customers. OEMs
have generally continued to reduce the number of their suppliers as part of a
strategy of purchasing interior systems rather than individual components. This
process favors suppliers like Lear with established ties to OEMs and the
demonstrated ability to adapt to the new competitive environment in the
automotive industry.

The Company's sales are originated almost entirely by its sales staff. This
marketing effort is augmented by design and manufacturing engineers who work
closely with OEMs from the preliminary design to the manufacture and supply of
interior systems or components. Manufacturers have increasingly looked to
suppliers like the Company to assume responsibility for introducing product
innovation, shortening the development cycle of new models, decreasing tooling
investment and labor costs, reducing the number of costly design changes in the
early phases of production and improving interior comfort and functionality.
Once the Company is engaged to develop the design for the interior system or
component of a specific vehicle model, it is also generally engaged to supply
these items when the vehicle goes into production. The Company has devoted
substantial resources toward improving its engineering and technical
capabilities and developing technology centers in the United States and in
Europe. The Company has also developed full-scope engineering capabilities,
including all aspects of safety and functional testing, acoustics testing and
comfort assessment. In addition, the Company has established numerous
engineering sites in close proximity to its OEM customers to enhance customer
relationships and design activity. Finally, the Company has implemented a
program of dedicated teams consisting of interior trim and seat system personnel
who are able to meet all of a customer's interior needs. These teams provide a
single interface for Lear's customers and help avoid duplication of sales and
engineering efforts.

TECHNOLOGY

The Company conducts advanced product design development at its technology
centers in Southfield, Michigan, Plymouth, Michigan, Ebersberg, Germany,
Middlemarch, England and Turin, Italy and at 20 worldwide product engineering
centers. At these centers, the Company tests its products to determine
compliance with applicable safety standards, the products' quality and
durability, response to environmental conditions and user wear and tear. The
Company also has state-of-the-art acoustics testing, instrumentation and data
analysis capabilities.

The Company believes that in order to effectively develop total interior
systems, it is necessary to integrate the research, design, development and
styling of all interior subsystems. Accordingly, during 1997, the Company began
consolidating its North American technology centers at its world headquarters in
Southfield, Michigan.

The Company has dedicated, and will continue to dedicate, resources to
research and development to maintain its position as a leading technology
developer in the automotive interior industry. Research and development costs
incurred in connection with the development of new products and manufacturing
methods, to the extent not recoverable from the customer, are charged to
selling, general and administrative expenses as incurred. Such costs amounted to
approximately $70.0 million, $53.3 million and $21.9 million for the years ended
December 31, 1996, 1995 and 1994, respectively. Engineering expenses related to
current production are charged to cost of sales as incurred and amounted to
$21.4 million, $14.1 million and $8.9 million for the years ended December 31,
1996, 1995 and 1994, respectively.

In the past, the Company has developed a number of designs for innovative
seat features which it has patented, including ergonomic features such as
adjustable lumbar supports and bolster systems and adjustable thigh supports. In
addition, the Company incorporates many convenience, comfort and safety features
into its seat designs, including storage armrests, rear seat fold down panels,
integrated restraint systems (belt systems integrated into seats), side impact
air bags and child restraint seats. The Company continually invests in its CAE
and CAD/CAM systems. Recent enhancements to these systems include customer
telecommunications and direct interface with customer CAD systems.

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38

Lear uses its patented SureBond(TM) process (the patent for which expires
in approximately 7 years) in bonding seat cover materials to the foam pads used
in certain of its seats. The SureBond(TM) process is used to bond a pre-shaped
cover to the underlying foam to minimize the need for sewing and to achieve new
seating shapes, such as concave shapes, which were previously difficult to
manufacture. The Company has recently improved this process through the
development of its patented DryBond(TM) process which allows for the bonding of
vinyl and leather to seat cushions and seat backs. This process further
increases manufacturing efficiency, provides longer work cycles for automotive
seats and yields more design flexibility for automotive interior components.

The Company has virtually all technologies and manufacturing processes
available for interior trim and under-the-hood applications. The manufacturing
processes include, among other things, high and low pressure injection molding,
vacuum forming, blow molding, soft foam molding, heat staking, water jet
cutting, vibration welding, ultrasonic welding, and robotic painting. This wide
range of capabilities allows the Company to assist its customers in selecting
the technologies that are the most cost effective for each application. Combined
with its design and engineering capabilities and its state-of-the-art technology
and engineering centers, the Company provides comprehensive support to its OEM
customers from product development to production.

The Company owns one of the few proprietary-design dynamometers capable of
precision acoustics testing of front, rear and four-wheel drive vehicles.
Together with its custom-designed reverberation room, computer-controlled data
acquisition and analysis capabilities provide precisely controlled laboratory
testing conditions for sophisticated interior and exterior noise, vibration and
harshness (NVH) testing of parts, materials and systems, including powertrain,
exhaust and suspension components. The Company also owns a 29% interest in
Precision Fabrics Group, Inc. ("PFG"), which has patented a process to sew and
fold an ultralight fabric into airbags which are 60% lighter than airbags
currently used in the automotive industry. As this new airbag can fit into a
shirt pocket when folded, it is adaptable to side restraint systems (door panels
and seats) as well as headliners.

The Company holds a number of mechanical and design patents covering its
products and has numerous applications for patents currently pending. In
addition, the Company holds several trademarks relating to various manufacturing
processes. The Company also licenses its technology to a number of seating
manufacturers. Additionally, the Company continues to identify and implement new
technologies for use in the design and development of its products.

JOINT VENTURES AND MINORITY INTERESTS

The Company currently has 15 joint ventures and minority-owned affiliates
located in 10 countries. The Company pursues attractive joint ventures in order
to assist its entry into new markets, facilitate the exchange of technical
information, expand its product offerings, and broaden its customer base. In
1996, the Company expanded its presence in the Asia/Pacific Rim region with a
joint venture with NHK Spring Co., Ltd. to supply seat systems in Thailand to a
joint venture between Ford and Mazda. In addition, Lear entered a joint venture
with Jiangling Motors Co., Ltd. to supply seat systems and interior trim
components in China for Isuzu trucks and Ford transit vans. In addition, several
of the Company's recent acquisitions, including Masland and AI, have provided
the Company with strategic joint ventures. With the Masland Acquisition, Lear
acquired interests in PFG and Sommer Masland (U.K.) Ltd. Sommer Masland helped
to expand Masland's geographical presence in Europe and strengthened its
relationship with several existing customers, including Nissan, Peugeot and
Saab. The AI Acquisition included a 40% interest in Industrias Automotrices
Summa, S.A. de C.V. (Mexico), as well as a 33% interest in Guildford Kast
Plastifol Ltd. (U.K.), both of which produce interior trim parts for
automobiles. In addition, the Keiper Acquisition would provide the Company with
interests in joint ventures in Mexico and the United States.

COMPETITION

The Company is a leading independent supplier automotive interior products
with manufacturing capabilities in all five principal automotive interior
segments: seat systems; floor and acoustic systems; door panels; instrument
panels; and headliners. Within each segment, the Company competes with a variety
of

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39

independent suppliers and OEM in-house operations. Set forth below is a summary
of the Company's primary independent competitors.

- Seat Systems. Lear is one of the two primary suppliers in the outsourced
North American seat systems market. The Company's main independent competitors
are Johnson Controls, Inc. and Magna International, Inc. The Company's major
independent competitors in Western Europe, besides Johnson Controls, Inc., are
Bertrand Faure (headquartered in France) and prior to the consummation of the
Keiper Acquisition, Keiper (headquartered in Germany).

- Floor and Acoustic Systems. Lear is one of the largest of the three
primary independent suppliers in the outsourced North American floor and
acoustic systems market. The Company's primary competitors are Collins & Aikman
Corp. Automotive Division, a division of Collins & Aikman Corporation and the
Magee Carpet Company. The Company's major competitors in Western Europe include
H.P. Chemie Pelzer, GmbH, Rieter Automotive, BTR Fatati, Ltd. and Johann Borgers
GmbH and Co.

- Other Interior Systems and Components. The market for outsourced
headliners, door panels and instrument panels is highly fragmented. The
Company's major independent competitors in these segments include Johnson
Controls, Inc., Davidson Interior Trim (a division of Textron, Inc.), UT
Automotive (a subsidiary of United Technologies, Inc.), The Becker Group and a
large number of smaller operations.

SEASONALITY

Lear's principal operations are directly related to the automotive
industry. Consequently, the Company may experience seasonal fluctuation to the
extent automotive vehicle production slows, such as in the summer months when
plants close for model year changeovers and vacation. Historically, the
Company's sales and operating profit have been the strongest in the second and
fourth calendar quarters. Net sales for the year ended December 31, 1996 by
calendar quarter were distributed as follows: first quarter, 22%; second
quarter, 26%; third quarter, 24%; and fourth quarter, 28%. See Note 19,
"Quarterly Financial Data," of the notes to the Company's 1996 consolidated
financial statements incorporated by reference in this Prospectus.

EMPLOYEES

As of April 30, 1997, the Company employed approximately 19,200 persons in
the United States and Canada, 14,300 in Mexico, 9,700 in Europe and 1,900 in
other regions of the world. Of these, about 7,000 were salaried employees and
the balance were paid on an hourly basis. Approximately 23,000 of the Company's
employees are members of unions. In addition, the Keiper Acquisition would
provide the Company with over 2,000 additional employees. The Company has
collective bargaining agreements with several unions including: the UAW; the
CAW; the Textile Workers of Canada; the International Brotherhood of Teamsters,
Chauffeurs, Warehousemen, and Helpers of America; the International Association
of Machinists and Aerospace Workers; and the AFL-CIO. Each of the Company's
unionized facilities in the United States and Canada has a separate contract
with the union which represents the workers employed there, with each such
contract having an expiration date independent of the Company's other labor
contracts. The majority of the Company's European and Mexican employees are
members of industrial trade union organizations and confederations within their
respective countries. The majority of these organizations and confederations
operate under national contracts which are not specific to any one employer. The
Company has experienced some labor disputes at its plants, none of which has
significantly disrupted production or had a materially adverse effect on its
operations. The Company has been able to resolve all such labor disputes and
believes its relations with its employees are generally good.

In addition, as part of its long-term agreements with General Motors, the
Company currently operates three facilities with an aggregate of approximately
1,000 General Motors' employees and reimburses General Motors for the wages of
such employees on the basis of the Company's wage structure.

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40

LITIGATION

The Company is involved in certain legal actions and claims arising in the
ordinary course of business. Management of the Company does not believe that any
of the litigation in which the Company is currently engaged, either individually
or in the aggregate, will have a material effect on the Company's consolidated
financial position or future results of operations.

The Company is subject to various laws, regulations and ordinances which
govern activities such as discharges to the air and water, as well as handling
and disposal practices for solid and hazardous wastes, and which impose costs
and damages associated with spills, disposal or other releases of hazardous
substances. The Company believes that it is in substantial compliance with such
requirements. Management does not believe that it will incur compliance costs
pursuant to such requirements that would have a material adverse effect on the
Company's consolidated financial position or future results of operations. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations of the Company -- Environmental Matters."

The Company has been identified as a potentially responsible party ("PRP")
under the Comprehensive Environmental Response, Compensation, and Liability Act
of 1980, as amended ("CERCLA" or "Superfund"), for the cleanup of contamination
from hazardous substances at two Superfund sites where liability has not been
substantially resolved. Management believes that the Company is, or may be,
responsible for less than one percent, if any, of the total costs at the two
Superfund sites. The Company has also been identified as a PRP at three
additional sites where liability has not been substantially resolved, as well as
at several other sites (including Superfund sites) at which no significant
liability issues known to the Company remain open at this time. In addition, the
Company is one of a number of defendants in a state court action brought by a
group of plaintiffs in Texas who have claimed various impacts from a Texas
landfill to which the Company and others allegedly sent waste. The Company's
expected liability, if any, at these additional sites is not material. The
Company has set aside reserves which management believes are adequate to cover
any such liabilities. Management believes that such matters will not result in
liabilities that will have a material adverse effect on the Company's
consolidated financial position or future results of operations.

PROPERTIES

As of April 30, 1997, the Company's operations are conducted through 149
facilities, some of which are used for multiple purposes, including 129
manufacturing facilities, 20 product engineering centers and 5 technology
centers, in 22 countries employing over 45,000 people worldwide. In addition,
the Keiper Acquisition would provide the Company with 10 additional facilities.
The Company's world headquarters are located in Southfield, Michigan.

No facility is materially underutilized. Of the 149 existing facilities
(which include facilities owned by the Company's less than majority-owned
affiliates), 77 are owned and 72 are leased with expiration dates ranging from
1997 through 2005. Management believes substantially all of the Company's
property and equipment is in good condition and that it has sufficient capacity
to meet its current and expected manufacturing and distribution needs. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations of the Company -- Capital Expenditures."

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The following table presents the locations of the Company's facilities:

ARGENTINA GERMANY POLAND UNITED STATES (CONTINUED)
Buenos Aires Ebersberg Myslowice Fair Haven, MI
Cordoba Eisenach Tychy Fenton, MI
Gustavsburg Frankfort, IN
AUSTRALIA Munich SOUTH AFRICA Fremont, OH
Adelaide Plattling Brits Greencastle, IN
Brooklyn Quakenbruck Hammond, IN
Rietberg SPAIN Huron, OH
AUSTRIA Wackersdorf Pamplona Janesville, WI
Koflach Kansas City, MO
INDIA SWEDEN Lebanon, VA
BRAZIL Gujarat Arendal Lebanon, OH
Belo Horizonte Bengtsfors Lewistown, PA
Sao Paolo INDONESIA Fargelanda Lorain, OH
Jakarta Gnosjo Lordstown, OH
CANADA Goteberg Louisville, KY
Ajax ITALY Ljungby Luray, VA
Kitchener Bruino Tanumshede Madisonville, KY
Maple Caivano Tidaholm Manteca, CA
Mississauga Cassino Trollhattan Marlette, MI
Oakville Grugliasco Marshall, MI
St. Thomas Melfi THAILAND Melvindale, MI
Whitby Orbassano Bangkok Mendon, MI
Woodstock Pozzilli Khorat Mequon, WI
Termini Imerese Midland, TX
CHINA TURKEY Morristown, TN
Wanchai MEXICO Bursa Newark, DE
Cuautitlan Novi, MI
CZECH REPUBLIC Hermosillo UNITED STATES Pontiac, MI
Prestice Juarez Allen Park, MI Plymouth, MI
Naucalpan Arlington, TX Rochester Hills, MI
ENGLAND Puebla Atlanta, GA Romulus, MI
Colne Ramos Arizpe Auburn Hills, MI Sheboygan, WI
Coventry Saltillo Bowling Green, OH Southfield, MI
Dunton Silao Bridgeton, MO Strasburg, VA
Lancashire Tlahuac Carlisle, PA Sidney, OH
Middlemarch Toluca Clawson, MI Troy, MI
Nottingham Covington, VA Warren, MI
Tipton Dearborn, MI Wentzville, MO
Washington Detroit, MI West Chicago, IL
Duncan, SC Winchester, VA
FRANCE El Paso, TX
Meaux VENEZUELA
Paris Valencia

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MANAGEMENT

Set forth below is certain information concerning the executive officers of
the Company.

YEARS WITH
THE COMPANY,
PREDECESSOR OR
NAME AGE POSITION ACQUIRED COMPANY
---- --- -------- ----------------

Kenneth L. Way................. 57 Chairman of the Board and Chief Executive 31
Officer
Robert E. Rossiter............. 51 President and Chief Operating Officer -- 26
International Operations and Director of the
Company
James H. Vandenberghe.......... 47 President and Chief Operating Officer -- 24
North American Operations and Director of
the Company
Gerald G. Harris............... 63 Senior Vice President and Group Vice 35
President -- GM Division and Latin American
Operations of the Company
Terrence E. O'Rourke........... 50 Senior Vice President and Group Vice 2
President -- Ford and Chrysler Divisions of
the Company
Frank J. Preston............... 54 Senior Vice President and Group Vice 3
President -- Interior Systems Group
James A. Hollars............... 52 Senior Vice President and President -- BMW 24
Division of the Company
Roger A. Jackson............... 50 Senior Vice President -- Human Resources 2
Robert G. Lawrie............... 52 Senior Vice President -- Global Mergers, 1
Acquisitions and Strategic Alliances
Donald J. Stebbins............. 39 Senior Vice President, Chief Financial 5
Officer and Treasurer of the Company
Joseph F. McCarthy............. 53 Vice President, Secretary and General 3
Counsel of the Company
Charles E. Fisher.............. 43 Vice President and President -- Chrysler 12
Division
Douglas G. Del Grosso.......... 35 Vice President and President -- GM Division 13
Daniel A. Jannette............. 54 Vice President and President -- Technology 10
Division

Set forth below is a description of the business experience of each
executive officer of the Company.

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 Hayes Wheels International,
Inc., Comerica, Inc. and R.P. Scherer Corporation.

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 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.

James H. Vandenberghe. Mr. Vandenberghe is President and Chief Operating
Officer -- North American Operations of the Company, a position he has held
since April 1997, and he has been a Director since 1995. He served as Executive
Vice President of the Company from 1993 to April 1997 and Chief

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43

Financial Officer from 1988 to April 1997. Mr. Vandenberghe also served as a
director of the Company from 1988 until the merger of Lear Holdings Corporation
("Holdings"), Lear's former parent, into Lear. Mr. Vandenberghe also served as
Senior Vice President -- Finance and Secretary of the Company from 1988 to 1993.

Gerald G. Harris. Mr. Harris is Senior Vice President and Group Vice
President -- GM Division and 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.

Terrence E. O'Rourke. Mr. O'Rourke is Senior Vice President and Group Vice
President -- Ford and Chrysler Divisions of the Company, a position 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 -- Ford Division of the Company from November 1995 until July 1996,
Vice President and President -- Chrysler Division of the Company since November
1994 and Director -- Strategic Planning since October 1994. Prior to joining
Lear, Mr. O'Rourke was employed by Ford Motor Company as Supply Manager --
Climate Control Department from 1992 and Procurement Operations Manager from
1988.

Frank J. Preston. Dr. Preston is Senior Vice President and Group Vice
President -- Interior System Group of the Company, a position he has held since
July 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 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, most recently President of Textron Automotive Interiors.

James A. Hollars. Mr. Hollars is Senior Vice President and President -- BMW
Division of the Company. He was appointed to this position in November 1995.
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
its subsidiaries from December 1977 to September 1995.

Robert G. Lawrie. Mr. Lawrie is Senior Vice President -- Global Mergers,
Acquisitions and Strategic Alliances, 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 July 1992. Prior to
his tenure with Magna International, Inc., Mr. Lawrie was an International
Consultant to Consolidated Hydro Inc., an operator of hydroelectric plants, in
1992. 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.

Donald J. Stebbins. Mr. Stebbins is Senior Vice President, Chief Financial
Officer and Treasurer of the Company, a position he has held since April 1997.
Prior to serving in this position, he was Vice President, Treasurer and
Assistant Secretary of the Company since 1992. Previously he was with Bankers
Trust Company, New York where he was a Vice President for four years. Prior to
his tenure at Bankers Trust Company, he held positions at Citibank, N.A. and The
First National Bank of Chicago.

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44

Joseph F. McCarthy. Mr. McCarthy is Vice President, Secretary and General
Counsel of the Company, a position he has held since April 1994. Prior to
joining the Company, 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.

Douglas G. DelGrosso. Douglas 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 13 years with
the Company include Vice President -- Operations for the GM Division and Group
Engineering Manager.

Charles E. Fisher. Charles E. 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 include Director of Purchasing, Vice President of Global Purchasing and
Vice President of Marketing and Sales.

Daniel A. Jannette. Daniel A. Jannette is Vice President -- Technology of
the Company, a position he has held since August 1995. Prior to joining Lear in
August 1995, Mr. Jannette served as Vice President of AI since August 1993 and
President of FIBERCRAFT/DESCon since 1987.

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45

SELLING STOCKHOLDERS

The following table and accompanying footnotes set forth certain
information regarding beneficial ownership of the Company's Common Stock by the
Selling Stockholders as of May 28, 1997 prior to the Offerings and as adjusted
to reflect the sale of the shares of Common Stock by the Selling Stockholders in
the Offerings:

PRIOR TO OFFERINGS AFTER OFFERINGS(3)
------------------------------------- -------------------------------------
NUMBER OF SHARES SHARES OF NUMBER OF SHARES
OF COMMON STOCK PERCENTAGE OF COMMON STOCK OF COMMON STOCK PERCENTAGE OF
OWNED BENEFICIALLY COMMON STOCK(2) BEING OFFERED(3) OWNED BENEFICIALLY COMMON STOCK
------------------ --------------- ---------------- ------------------ -------------

Lehman Funds(1)......... 10,284,854 15.6% 10,284,854 0 0%

- -------------------------
(1) The number of shares beneficially owned by the Lehman Funds includes
3,694,191 shares of Common Stock owned by Lehman Brothers Merchant Banking
Portfolio Partnership L.P. and 2,510,953 shares of Common Stock owned by
Lehman Brothers Capital Partners II, L.P. (each located at Three World
Financial Center, New York, New York 10285); 1,015,636 shares of Common
Stock owned by Lehman Brothers Offshore Investment Partnership L.P. and
3,064,074 shares of Common Stock owned by Lehman Brothers Offshore
Investment Partnership-Japan L.P. (each located at Clarendon House, Church
Street, Hamilton HMCX, Bermuda). LB I Group Inc. and Lehman Brothers
Holdings Inc. are the general partners of Lehman Brothers Merchant Banking
Portfolio Partnership L.P. and Lehman Brothers Capital Partners II, L.P.,
respectively, and Lehman Brothers Offshore Partners Ltd. is the general
partner of Lehman Brothers Offshore Investment Partnership-Japan L.P. and
Lehman Brothers Offshore Investment Partnership L.P. Each such general
partner may be deemed to own beneficially the shares directly owned by the
entity of which it is the general partner. LB I Group Inc. and Lehman
Brothers Offshore Partners Ltd. are wholly-owned subsidiaries of Lehman
Brothers Holdings Inc. Each of the partnerships may be deemed to share with
Lehman Brothers Holdings Inc. the power to vote and the power to dispose of
the shares owned by such partnership. The address of Lehman Brothers
Holdings Inc. is Three World Financial Center, New York, New York 10285.

(2) Assumes that none of the options granted pursuant to the Company's stock
option plans, pursuant to which a maximum of 3,680,121 shares of Common
Stock are issuable, are exercised.

(3) The Lehman Funds have collectively granted to the Underwriters options to
purchase up to an aggregate of 1,284,854 shares of Common Stock, exercisable
solely to cover over-allotments. See "Underwriting." The data set forth in
the table assumes that the Underwriters' over-allotment options are
exercised in full.

In 1991, the Lehman Funds acquired an aggregate of 22,874,940 shares of
Common Stock from the Company and certain other stockholders (the "1991 Common
Stock Acquisition"). In 1992, the Lehman Funds acquired an additional 3,999,996
shares of Common Stock from the Company (the "1992 Common Stock Acquisition").
In connection with the 1991 Common Stock Acquisition, the 1992 Common Stock
Acquisition, the offering of the Senior Subordinated Notes, the NAB Acquisition,
the offering of the Subordinated Notes, the initial public offering of the
Company's Common Stock in April 1994, the AI Acquisition, the 1995 Stock
Offering and the 1996 Stock Offering, Lehman Brothers, an affiliate of the
Lehman Funds, has received, and in connection with the Offerings will receive,
compensation from the Company comprising underwriting fees, discounts and
commissions and financial advisory fees. In addition, Lehman Commercial Paper
Inc., an affiliate of the Lehman Funds, has from time to time been a lender
under the Company's credit facilities and has received customary fees in such
capacity.

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DESCRIPTION OF CAPITAL STOCK

The authorized capital stock of the Company consists of 150,000,000 shares
of Common Stock, par value $0.01 per share, and 15,000,000 shares of preferred
stock, par value $0.01 per share ("Preferred Stock").

COMMON STOCK

As of May 28, 1997, there were 66,075,270 shares of Common Stock
outstanding. Holders of Common Stock are entitled to one vote per share on all
matters to be voted upon by the stockholders. Cumulative voting is not
permitted. Subject to preferences of any Preferred Stock that may be issued in
the future, the holders of Common Stock are entitled to receive such dividends
as may be declared by the Board of Directors. The Company is currently
restricted under the terms of the Credit Agreement and the Indentures governing
the Senior Subordinated Notes, the Subordinated Notes and the 9 1/2% Notes, from
paying dividends to holders of Common Stock. In the event of a liquidation,
dissolution or winding up of the Company, and subject to preferences of any
Preferred Stock that may be issued in the future, the Common Stock is entitled
to receive pro rata all of the assets of the Company available for distribution
to its stockholders. There are no redemption or sinking fund provisions
applicable to the Common Stock. All outstanding shares of Common Stock are fully
paid and non-assessable, and the shares of Common Stock to be outstanding upon
the closing of the Offerings will be fully paid and non-assessable.

PREFERRED STOCK

The Board of Directors has the authority to issue up to 15,000,000 shares
of Preferred Stock in one or more series and to fix the rights, preferences,
privileges and restrictions thereof, including dividend rights, dividend rates,
conversion rates, voting rights, terms of redemption, redemption prices,
liquidation preferences and the number of shares constituting any series or the
designation of such series, which may be superior to those of the Common Stock,
without further vote or action by the stockholders. Although it presently has no
intention to do so, the Board of Directors, without stockholder approval, can
issue Preferred Stock with rights that could adversely affect the Common Stock.
The issuance of Preferred Stock may have the effect of delaying, deferring or
preventing a change in control of the Company. There will be no shares of
Preferred Stock outstanding upon the closing of the Offerings and the Company
has no present plans to issue any Preferred Stock.

STOCKHOLDERS AND REGISTRATION RIGHTS AGREEMENT

The Lehman Funds, FIMA Finance Management Inc. ("FIMA") and certain current
and former officers and employees of the Company are parties to the Amended and
Restated Stockholders and Registration Rights Agreement dated September 27,
1991, as amended (the "Stockholders Agreement"), which contains certain
restrictions on the transfer of Common Stock held by those stockholders and
grants such stockholders certain registration rights. Assuming exercise of the
Underwriters' over-allotment options in full, upon consummation of the
Offerings, the Lehman Funds will no longer be a shareholder of the Company and
therefore, no longer a party to the Stockholders Agreement.

CERTAIN PROVISIONS OF THE RESTATED CERTIFICATE OF INCORPORATION AND BY-LAWS

The by-laws of the Company provide that the Company shall indemnify each
officer and director of the Company to the fullest extent permitted by
applicable law. The Restated Certificate of Incorporation also provides that, to
the fullest extent permitted by the Delaware General Corporation Law, the
directors of the Company shall be indemnified by the Company and shall not be
liable to the Company or its stockholders for monetary damages for breach of
fiduciary duty as a director.

Certain provisions of the Company's Restated Certificate of Incorporation
and by-laws may have the effect of preventing, discouraging or delaying any
change in control of the Company and may maintain the incumbency of the Board of
Directors and management. The authorization of undesignated Preferred Stock will
make it possible for the Board of Directors to issue Preferred Stock with voting
or other rights or preferences that could impede the success of any attempt to
change control of the Company. The Company's

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Restated Certificate of Incorporation provides that the Board of Directors of
the Company will be divided into three classes serving staggered three-year
terms. Directors can be removed from office only for Cause (as defined below)
and only by the affirmative vote of the holders of a majority of the
then-outstanding shares of capital stock entitled to vote generally in an
election of directors. Vacancies on the Board of Directors may be filled only by
the remaining directors and not by the stockholders. "Cause" is defined as the
willful and continuous failure substantially to perform one's duties to the
Company or the willful engaging in gross misconduct materially and demonstrably
injurious to the Company.

The by-laws provide that special meetings of stockholders may be called by
the chairman, the president, any vice president, the secretary or any assistant
secretary of the Company and must be called by any such officer at the request
in writing of a majority of the Board of Directors or at the request in writing
of stockholders owning at least a majority of the capital stock of the Company
issued and outstanding and entitled to vote. The by-laws establish an advance
notice procedure for the nomination, other than by or at the direction of the
Board of Directors, of candidates for election as directors as well as for other
stockholder proposals to be considered at annual meetings of stockholders. In
general, notice of intent to nominate a director must be received by the
secretary of the Company not less than 60 nor more than 90 days prior to the
date of the annual meeting, and must contain certain specified information
concerning the person to be nominated. Notice of intent to raise business at
such meeting must be received by the secretary of the Company not less than 120
nor more than 150 days prior to the first anniversary of the date of the
Company's consent solicitation or proxy statement released in connection with
the previous year's meeting.

DELAWARE ANTI-TAKEOVER LAW

The Company is subject to the provisions of Section 203 of the Delaware
General Corporation Law (the "Anti-Takeover Law") regulating corporate
takeovers. The Anti-Takeover Law prevents certain Delaware corporations,
including those whose securities are listed on the New York Stock Exchange, from
engaging, under certain circumstances, in a "business combination" (which
includes a merger or sale of more than 10% of the corporation's assets) with any
"interested stockholder" (a stockholder who acquired 15% or more of a
corporation's outstanding voting stock without the prior approval of the
corporation's board of directors) for three years following the date that such
stockholder became an "interested stockholder." The current stockholders of the
Company may not, by virtue of their current holdings, be deemed to be
"interested stockholders" under this statute. A Delaware corporation may "opt
out" of the Anti-Takeover Law with an express provision in its original
certificate of incorporation or an express provision in its certificate of
incorporation or bylaws resulting from a stockholders' amendment approved by at
least a majority of the outstanding voting shares. The Company has not "opted
out" of the provisions of the Anti-Takeover Law.

TRANSFER AGENT AND REGISTRAR

The Transfer Agent and Registrar for the Company's Common Stock is The Bank
of New York, located in New York, New York.

LISTING

The Common Stock is listed on the New York Stock Exchange under the symbol
LEA.

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CERTAIN UNITED STATES FEDERAL TAX CONSIDERATIONS FOR
NON-U.S. HOLDERS OF COMMON STOCK

The following is a general discussion of certain U.S. federal income and
estate tax consequences of the ownership and disposition of Common Stock by a
holder that is not a "U.S. person" (a "non-U.S. holder"). A "U.S. person" is a
person or entity that, for U.S. federal income tax purposes, is a citizen or
resident of the United States, a corporation or partnership created or organized
in the United States or under the laws of the United States or of any political
subdivision thereof, an estate whose income is includible in gross income for
U.S. federal income tax purposes regardless of its source or a trust subject to
the supervision of a court within the United States and the control of a United
States fiduciary as described in Section 7701(a)(30) of the Internal Revenue
Code of 1986, as amended (the "Code"). An individual will be deemed to be a
resident of the United States for U.S. federal income tax purposes if: (1) such
individual is a lawful permanent resident of the United States at any time
during the taxable year; (2) such individual makes an election to be treated as
a resident pursuant to the provisions of the Code; or (3) such individual is
present in the United States for an aggregate of 183 days or more during the
calendar year. In addition, an individual will be presumed to be a resident of
the United States for U.S. federal income tax purposes if such individual is
present in the United States on at least 31 days in the current calendar year
and for an aggregate of 183 days during the three-year period ending with the
current calendar year (counting, for such purposes all of the days present in
the United States during the current year, one-third of the days present during
the immediately preceding year and one-sixth of the days present during the
second preceding year). This presumption of residence may be rebutted if an
individual is present in the United States for fewer than 183 days during the
current year and it is established that such individual has a "tax home" in a
foreign country and a "closer connection" to such foreign country than to the
United States, with such terms being defined in the Code. Furthermore, the
determination of residence under the Code may be rebutted by application of an
applicable tax treaty or convention between the United States and an appropriate
foreign country that may also treat such individual as a tax resident of such
country. A special definition of U.S. resident applies for U.S. federal estate
tax purposes. Resident aliens are subject to U.S. federal tax as if they were
U.S. citizens.

This discussion is based on Code and administrative and judicial
interpretations as of the date hereof, all of which may be changed either
retroactively or prospectively. This discussion does not address all the aspects
of U.S. federal income and estate taxation that may be relevant to non-U.S.
holders in light of their particular circumstances, nor does it address tax
consequences under the laws of any U.S. state, municipality or other taxing
jurisdiction or under the laws of any jurisdiction other than the United States.

Prospective holders should consult their own tax advisors about the
particular U.S. federal tax consequences to them of holding and disposing of
Common Stock, as well as any tax consequences that may arise under the laws of
any state, local or foreign taxing jurisdiction.

DIVIDENDS

In the event that dividends are paid to a non-U.S. holder, such dividends
will be subject to United States federal withholding tax at a 30% rate or such
lower rate as may be specified by an applicable income tax treaty. Under current
U.S. Treasury regulations, dividends paid to an address outside the United
States are presumed to be paid to a resident of the country of address (unless
the payor has knowledge to the contrary) for purposes of the withholding tax.
Under the current interpretation of U.S. Treasury regulations, the same
presumption generally applies to determine the applicability of a reduced rate
of withholding under a U.S. tax treaty (the "address system"). Thus, non-U.S.
holders receiving dividends at addresses outside the United States generally are
not yet required to file tax forms to obtain the benefit of an applicable treaty
rate. If there is excess withholding on a person eligible for a treaty benefit,
the person can file for a refund with the U.S. Internal Revenue Service (the
"IRS").

Under U.S. Treasury regulations which were recently proposed and which have
not yet been put into effect, the address system for claiming treaty benefits
would be eliminated for payments made after December 31, 1997. Rather, to claim
the benefits of a tax treaty pursuant to these proposed regulations, a

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non-U.S. holder of Common Stock would have to file certain forms attesting to
the holder's eligibility to claim treaty benefits.

Generally, upon the filing of a Form 4224 with the Company, there is no
withholding tax on dividends that are effectively connected with the non-U.S.
holder's conduct of a trade or business within the United States. Instead, the
effectively connected dividends are subject to the U.S. federal income tax on
net income applicable to U.S. persons. Effectively connected dividends received
by a foreign corporation may be subject to an additional "branch profits tax" at
a 30% rate (or a lower rate under an applicable income tax treaty) when such
dividends are deemed repatriated from the United States.

GAIN ON DISPOSITION OF COMMON STOCK

A non-U.S. holder generally will not be subject to U.S. federal income tax
in respect of gain recognized on a disposition of Common Stock unless (i) the
gain is effectively connected with the conduct of a trade or business of the
non-U.S. holder (or of a partnership that holds the Common Stock in which the
non-U.S. holder is a member) in the United States, (ii) in the case of a
non-U.S. holder who is an individual and holds the Common Stock as a capital
asset (or is a member in a partnership that holds the Common Stock as a capital
asset), such holder is present in the United States for 183 or more days in the
taxable year of the disposition and either (x) has a "tax home" in the United
States (as specially defined for U.S. federal income tax purposes) or (y)
maintains an office or other fixed place of business in the United States and
the income from the sale of the stock is attributable to such office or other
fixed place of business, (iii) the non-U.S. holder is subject to tax pursuant to
the provisions of U.S. tax law applicable to certain U.S. expatriates or (iv)
the Company is or has been a "U.S. real property holding corporation" for
federal income tax purposes. The Company is not currently, has not been and does
not anticipate becoming a "U.S. real property holding corporation" for U.S.
federal income tax purposes.

INFORMATION REPORTING AND BACKUP WITHHOLDING TAX

The Company must report annually to the IRS and to each non-U.S. holder the
amount of dividends paid to, and the tax withheld with respect to such holder,
regardless of whether tax was actually withheld. That information may also be
made available to the tax authorities of the country in which the non-U.S.
holder resides.

United States federal backup withholding (which generally is withholding
imposed at the rate of 31% on certain payments to persons not otherwise exempt
who fail to furnish certain identifying information to the IRS) will generally
not apply to dividends paid to a non-U.S. holder that are subject to withholding
at the 30% rate (or would be so subject but for a reduced rate under an
applicable treaty). In addition, the payor of dividends may rely on the payee's
foreign address in determining that the payee is exempt from backup withholding,
unless the payor has knowledge that the payee is a U.S. person. However, U.S.
Treasury regulations that were recently proposed would, if adopted in their
present form, eliminate this address system and require a payee to furnish
certain documentation to the payor so as to be able to claim such exemption from
backup withholding.

The backup withholding and information reporting requirements also apply to
the gross proceeds paid to a non-U.S. holder upon the disposition of Common
Stock by or through a U.S. office of a U.S. or foreign broker, unless the holder
certifies to the broker under penalty of perjury as to its name, address and
status as a non-U.S. holder or the holder otherwise establishes an exemption.
Information reporting requirements (but not backup withholding) will apply to a
payment of the proceeds of a disposition of Common Stock by or through a foreign
office of (i) a U.S. broker, (ii) a foreign broker 50% or more of whose gross
income for certain periods is effectively connected with the conduct of a trade
or business in the United States or (iii) a foreign broker that is a "controlled
foreign corporation" for U.S. federal income tax purposes, unless the broker has
documentary evidence in its records that the holder is a non-U.S. holder and
certain other conditions are met, or the holder otherwise establishes an
exemption. Neither backup withholding nor information reporting will generally
apply to a payment of the proceeds of a disposition of Common Stock by or
through a foreign office of a foreign broker not subject to the preceding
sentence.

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Any amounts withheld under the backup withholding rules will be refunded or
credited against the non-U.S. holder's United States federal income tax
liability, provided that required information is furnished to the IRS.

The backup withholding and information reporting rules are currently under
review by the Treasury Department, and their application to the Common Stock is
subject to change.

FEDERAL ESTATE TAXES

Common Stock owned or treated as owned by an individual who is neither a
citizen nor a resident of the United States for federal estate tax purposes at
the date of death will be included in such individual's estate for U.S. federal
estate tax purposes and may be subject to U.S. federal estate tax unless an
applicable estate tax treaty provides otherwise. Estates of nonresident aliens
are generally allowed a statutory credit for U.S. estate tax purposes. Estate
tax treaties may permit a larger credit. A special definition of U.S. resident
applies for U.S. federal estate purposes.

UNDERWRITING

Under the terms of, and subject to the conditions contained in, the U.S.
Underwriting Agreement, the form of which is filed as an exhibit to the
Registration Statement, the underwriters named below (the "U.S. Underwriters"),
for whom Lehman Brothers Inc., Donaldson, Lufkin & Jenrette Securities
Corporation, Morgan Stanley & Co. Incorporated, Salomon Brothers Inc and
Schroder Wertheim & Co. Incorporated are acting as representatives (the
"Representatives"), have severally agreed to purchase from the Selling
Stockholders, and the Selling Stockholders have agreed to sell to each U.S.
Underwriter, the aggregate number of shares of Common Stock set forth opposite
the name of each such U.S. Underwriter below:

NUMBER OF
U.S. UNDERWRITERS SHARES
----------------- ---------

Lehman Brothers Inc.........................................
Donaldson, Lufkin & Jenrette Securities Corporation.........
Morgan Stanley & Co. Incorporated...........................
Salomon Brothers Inc........................................
Schroder Wertheim & Co. Incorporated........................
----------
Total................................................
==========

Under the terms of, and subject to the conditions contained in, the
International Underwriting Agreement, the form of which is filed as an exhibit
to the Registration Statement, the managers named below of the concurrent
offering of the Common Stock outside the United States and Canada (the
"International Managers" and together with the U.S. Underwriters, the
"Underwriters"), for whom Lehman Brothers International (Europe), Donaldson,
Lufkin & Jenrette Securities Corporation, Morgan Stanley & Co. International
Limited, Salomon Brothers International Limited and J. Henry Schroder & Co.
Limited are acting as lead managers (the "Lead Managers"), have severally agreed
to purchase from the Selling Stockholders, and the Selling Stockholders have
agreed to sell to each International Manager, the aggregate number of shares of
Common Stock set forth opposite the name of each such International Manager
below:

NUMBER OF
INTERNATIONAL MANAGERS SHARES
---------------------- ---------

Lehman Brothers International (Europe)......................
Donaldson, Lufkin & Jenrette Securities Corporation.........
Morgan Stanley & Co. International Limited..................
Salomon Brothers International Limited......................
J. Henry Schroder & Co. Limited.............................
----------
Total................................................
==========

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The U.S. Underwriting Agreement and the International Underwriting
Agreement (collectively, the "Underwriting Agreements") provide that the
obligations of the U.S. Underwriters and the International Managers to purchase
shares of Common Stock are subject to certain conditions, and that if any of the
foregoing shares of Common Stock are purchased by the U.S. Underwriters pursuant
to the U.S. Underwriting Agreement or by the International Managers pursuant to
the International Underwriting Agreement, all the shares of Common Stock agreed
to be purchased by either the U.S. Underwriters or the International Managers,
as the case may be, pursuant to the respective Underwriting Agreements must be
so purchased. The offering price and underwriting discounts and commissions for
the U.S. Offering and the International Offering are identical. The closing of
the U.S. Offering is a condition to the closing of the International Offering,
and the closing of the International Offering is a condition to the closing of
the U.S. Offering.

The Company has been advised that the U.S. Underwriters and the
International Managers propose to offer the shares of Common Stock directly to
the public at the public offering price set forth on the cover page of this
Prospectus, and to certain selected dealers (who may include the U.S.
Underwriters and the International Managers) at such public offering price less
a selling concession not in excess of $ per share. The selected dealers may
reallow a concession not in excess of $ per share to certain brokers and
dealers. After the public offering, the public offering price, the concession to
select dealers and reallowance may be changed by the U.S. Underwriters and the
International Managers.

The Company and the Selling Stockholders have agreed to indemnify the U.S.
Underwriters and the International Managers against certain liabilities,
including liabilities under the Securities Act, and to contribute to payments
that the U.S. Underwriters and the International Managers may be required to
make in respect thereof.

The Selling Stockholders have granted to the U.S. Underwriters and the
International Managers an option to purchase up to an aggregate of 1,030,000 and
254,854 additional shares of Common Stock, respectively, exercisable solely to
cover over-allotments, at the offering price to the public less the underwriting
discounts and commissions shown on the cover page of this Prospectus. All of the
shares of Common Stock sold upon any exercise of this over-allotment option will
be sold by the Selling Stockholders. Such option may be exercised at any time
until 30 days after the date of the U.S. Underwriting Agreement and the
International Underwriting Agreement, respectively. To the extent that the
option is exercised, each U.S. Underwriter or International Manager, as the case
may be, will be committed, subject to certain conditions, to purchase a number
of the additional shares of Common Stock proportionate to such U.S.
Underwriter's or International Manager's initial commitment as indicated in the
preceding tables.

The Company has agreed that it will not, for a period of 90 days from the
date of this Prospectus, directly or indirectly, offer, sell or otherwise
dispose of any shares of Common Stock or any securities convertible into or
exchangeable or exercisable for any such shares without the prior written
consent of Lehman Brothers Inc. and Lehman Brothers International (Europe),
subject to certain exceptions (including the issuance of shares as consideration
in acquisitions). In addition, each of the executive officers named herein and
FIMA has agreed that it will not, for a period of 60 days from the date of this
Prospectus, directly or indirectly, offer, sell or otherwise dispose of any
shares of Common Stock or any securities convertible or exchangeable for any
such shares without the prior written consent of Lehman Brothers Inc. and Lehman
Brothers International (Europe), subject to certain exceptions.

The U.S. Underwriters and the International Managers have entered into an
Agreement Between U.S. Underwriters and International Managers pursuant to which
each U.S. Underwriter has agreed that, as part of the distribution of the shares
of Common Stock offered in the U.S. Offering, (i) it is not purchasing any such
shares for the account of anyone other than a U.S. Person (as defined below) and
(ii) it has not offered or sold, and will not offer, sell, resell or deliver,
directly or indirectly, any of such shares or distribute any prospectus relating
to the U.S. Offering outside the United States or Canada or to anyone other than
a U.S. Person. In addition, pursuant to such agreement each International
Manager has agreed that, as part of the distribution of the shares of Common
Stock offered in the International Offering, (i) it is not purchasing any such
shares for the account of a U.S. Person and (ii) it has not offered or sold, and
will not offer, sell, resell or deliver, directly or indirectly, any of such
shares or distribute any prospectus relating to the International

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Offering in the United States or Canada or to any U.S. Person. Each
International Manager has also agreed that it will offer to sell shares only in
compliance with all relevant requirements of any applicable laws.

The foregoing limitations do not apply to stabilization transactions or to
certain other transactions specified in the Underwriting Agreements and the
Agreement Between U.S. Underwriters and International Managers, including (i)
certain purchases and sales between the U.S. Underwriters and the International
Managers, (ii) certain offers, sales, resales, deliveries or distributions to or
through investment advisors or other persons exercising investment discretion,
(iii) purchases, offers or sales by a U.S. Underwriter who is also acting as an
International Manager or by an International Manager who is also acting as a
U.S. Underwriter and (iv) other transactions specifically approved by the
Representatives and the Lead Managers. As used herein, (a) the term "United
States" means the United States of America (including the District of Columbia)
and its territories, its possessions and other areas subject to its
jurisdiction, and (b) the term "U.S. Person" means any resident or national of
the United States or Canada or its provinces, any corporation, partnership or
other entity created or organized in or under the laws of the United States or
Canada or its provinces, or any estate or trust the income of which is subject
to United States or Canadian income taxation regardless of the source of its
income (other than the foreign branch of any U.S. Person), and includes any
United States or Canadian branch of a person other than a U.S. Person.

Each International Manager has represented and agreed that (i) it has not
offered or sold and prior to the date six months after the date of issue of the
shares of Common Stock will not offer or sell any shares of Common Stock to
persons in the United Kingdom except to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their businesses or otherwise in
circumstances which have not resulted and will not result in an offer to the
public in the United Kingdom within the meaning of the Public Offers of
Securities Regulations 1995; (ii) it has complied and will comply with all
applicable provisions of the Financial Services Act 1986 (the "1986 Act") with
respect to anything done by it in relation to the shares of Common Stock in,
from or otherwise involving the United Kingdom; and (iii) it has only issued or
passed on, and will only issue and pass on to any person in the United Kingdom,
any investment advertisement (within the meaning of the 1986 Act) relating to
the shares of Common Stock if that person falls within Article 11(3) of the
Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order 1995.

The shares of Common Stock may not be offered or sold directly or
indirectly in Hong Kong by means of this document or any other offering material
or document other than to persons whose ordinary business it is to buy or sell
shares or debentures, whether as principal or as agent. Unless permitted to do
so by the securities laws of Hong Kong, no person may issue or cause to be
issued in Hong Kong this document or any amendment or supplement thereto or any
other information, advertisement or document relating to the shares of Common
Stock other than with respect to shares of Common Stock intended to be disposed
of to persons outside Hong Kong or to persons whose business involves the
acquisition, disposal or holding of securities, whether as principal or as
agent.

The shares of Common Stock have not been registered under the Securities
and Exchange Law of Japan and are not being offered and may not be offered or
sold directly or indirectly in Japan or to residents of Japan, except pursuant
to applicable Japanese laws and regulations.

No action has been taken or will be taken in any jurisdiction by the
Company or the International Managers that would permit a public offering of the
shares offered pursuant to the Offerings in any jurisdiction where action for
that purpose is required, other than the United States and Canada and its
provinces. Persons into whose possession this Prospectus comes are required by
the Company and the International Managers to inform themselves about and to
observe any restrictions as to the offering of the shares offered pursuant to
the Offerings and the distribution of this Prospectus.

Purchasers of the shares of Common Stock offered hereby may be required to
pay stamp taxes and other charges in accordance with the laws and practices of
the country of purchase in addition to the offering price set forth on the cover
page hereof.

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Prior to the Offerings, the Lehman Funds, each an affiliate of Lehman
Brothers and Lehman Brothers International (Europe), beneficially own, in the
aggregate, approximately 15.6% of the outstanding Common Stock of the Company
(assuming no outstanding Options are exercised). Therefore, the underwriting
arrangements for the Offerings will comply with the requirements of Conduct Rule
2720 (formerly Schedule E) to the Bylaws of the National Association of
Securities Dealers, Inc. ("NASD") regarding an NASD member firm's participation
in distributing its affiliate's securities. In accordance with Conduct Rule
2720, the Underwriters will not make sales of shares of Common Stock offered
hereby to customers' discretionary accounts without the prior specific written
approval of such customers.

The Lehman Funds will receive the proceeds from the Offerings. One of the
eleven members of Lear's Board of Directors is presently employed by Lehman
Brothers. Lehman Brothers has from time to time provided investment banking,
financial advisory and other services to the Company, for which services it has
received fees.

Until the distribution of the Common Stock is completed, rules of the
Commission may limit the ability of the U.S. Underwriters and International
Managers to bid for and purchase shares of Common Stock. As an exception to
these rules, the Representatives are permitted to engage in certain transactions
that stabilize the price of the Common Stock. Such transactions may consist of
bids or purchases for the purpose of pegging, fixing or maintaining the price of
the Common Stock.

If the U.S. Underwriters and International Managers create a short position
in the Common Stock in connection with the Offerings, (i.e., if they sell more
shares of Common Stock than are set forth on the cover page of this Prospectus),
the Representatives may reduce that short position by purchasing Common Stock in
the open market.

In general, purchases of a security for the purpose of stabilization or to
reduce a syndicate short position could cause the price of the security to be
higher than it might be in the absence of such purchases.

Neither the Company nor any of the U.S. Underwriters or International
Managers makes any representation or prediction as to the direction or magnitude
of any effect that the transactions described above may have on the price of the
Common Stock. In addition, neither the Company nor any of the U.S. Underwriters
or International Managers makes any representation that the Representatives will
engage in such transactions or that such transactions, once commenced, will not
be discontinued without notice.

LEGAL MATTERS

The validity of the issuance of shares of Common Stock offered hereby will
be passed upon for the Company by Winston & Strawn, Chicago, Illinois. Certain
legal matters in connection with the Offerings will be passed upon for the U.S.
Underwriters and the International Managers by Simpson Thacher & Bartlett (a
partnership which includes professional corporations), New York, New York.
Simpson Thacher & Bartlett has performed, and continues to perform, services for
the Lehman Funds from time to time.

EXPERTS

The audited financial statements and schedule of the Company incorporated
by reference into this Prospectus have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their reports with respect
thereto, and are included herein in reliance upon authority of said firm as
experts in giving said reports.

The audited historical consolidated financial statements of Masland
Corporation as of June 30, 1995 and July 1, 1994 and for each of the three years
in the period ended June 30, 1995 included on pages 2 through 22 of the
Company's Form 8-K dated June 27, 1996, which is incorporated herein by
reference, have been so incorporated in reliance on the report of Price
Waterhouse LLP, independent accountants, given on the authority of said firm as
experts in auditing and accounting.

50
54
[INSIDE BACK COVER]

[Lear Corporation Logo]

Lear Corporation is one of the world's largest independent suppliers of
automotive interior systems - with over 45,000 quality-dedicated,
customer-focused people operating in 149 facilities in 22 countries around the
globe.

[A picture of an automobile depicting the automotive products which Lear
produces]

INTERIOR SYSTEMS AND COMPONENTS

SEAT SYSTEMS
Armrest Assemblies
Armrest Cup Holders
Armrest Frames
Back of Seat Trim Panels
Center Seat Console Assemblies
Child Seat Frames
Formed Wire Spring Assemblies
Headrest Assemblies
Headrest Frames
Integrated Child Seat Systems
Integrated Restraint Seat Systems
Package Trays
Back Frames
Cushion Frames
Hinge Assemblies
Latch Assemblies
Molded Foam Pads
Riser Assemblies
Side Shields
Switch Covers
Trim Covers
Side Impact Seat Systems
Sinuous Wire Spring Assemblies
Speciality Sport Seat Systems
Storage Armrest Assemblies
Under Seat Storage Systems
Wire Support Mat Assemblies

DOOR AND INTERIOR TRIM SYSTEMS
Acoustical Sound Absorption Systems
Applique Assemblies
Armrest Assemblies
Armrest Handles
Bezels and Door Switch Plates
Cab Panel Trim
Carpeted Map Pocket Appliques
Cowl Panel Trim
Cowl Panels
Cup Holders
Door Map Pocket Assemblies
Door Trim Assemblies
Door Trim Panels
Energy Absorption Systems
HVAC Assemblies
Lift Gate Lower Panels
Lift Gate Trim
Map Pocket Trim
Modular Door Panel Systems
Pull Cups/Handles
Quarter Trim Assemblies
Quarter Trim Panels
Scuff Plates
Seatbelt Retractor Covers
Speaker Grilles
Storage Systems

FLOOR AND ACOUSTIC SYSTEMS
Accessory Mats
Acoustic Seals/Patches
Acoustical Sound Absorption Systems
Back Panels
Carpeted Floor Systems
CD Changer Covers
Cowl Side Insulators
Dampers
Dash Doublers
Dash Insulators
Decklid Trim
Engine Side Dash Absorbers
Engine Side Hood Absorbers
Expandable Foam Baffles
Luggage Compartment Trim
Luggage Floor Trim
Spare Tire Covers
Structural Load Floors
Trunk Trim Panels
Vinyl/Maslite Floor Systems
Wheelhouse Trim
Wheelwell Insulators

INSTRUMENT PANEL SYSTEMS
Ash Tray Assemblies
Center Floor Consoles
Console Armrests
Console Cup Holders
Console Storage Compartments
Defrosterducts
Glove Box Compartments
HVAC Airducts
HVAC Airvents
HVAC Control Panels
Instrument Panels Control Knobs
Instrument Panel Substrates
Instrument Panels
Knee Bolsters
Upper Pads

OVERHEAD SYSTEMS
Acoustical Sound Absorption Systems
Assist Handles
Coat Hooks
Headliners
Modular Headliner Assemblies
Overhead Console Assemblies
Overhead Storage Systems
Pillar Trim
Sun Visor Retainers
Sun Visors

UNDERHOOD AND FUNCTIONAL COMPONENTS
A/C Accumulator Brackets
Air Distribution Systems
Air Filter Housings
Air Induction Ducts
Battery Trays
Coolant Reservoirs
Engine Covers
Exterior Air Dams
Fan Shrouds
Fender Liners
Front Grille Assemblies
Innershields
Roll Goods - Barrier Materials
Roll Goods - Needle-punched Carpet
Roll Goods - PVC
Roll Goods - Tufted Carpet
Spoilers
Vapor Canisters
Windshield Washer Reservoirs

======================================================

NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS,
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY OF THE U.S. UNDERWRITERS.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OF ANY SECURITIES OTHER THAN THOSE
TO WHICH IT RELATES OR AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY,
TO ANY PERSON IN ANY JURISDICTION WHERE SUCH AN OFFER OR SOLICITATION WOULD BE
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION
CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.

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

TABLE OF CONTENTS

Page
----

Available Information................. 2
Incorporation of Certain Documents by
Reference........................... 2
Prospectus Summary.................... 3
Risk Factors.......................... 9
Cautionary Statements for Purposes of
the "Safe Harbor" Provisions of the
Private Securities Litigation Reform
Act of 1995......................... 10
Common Stock Price Range and
Dividends........................... 10
Pro Forma Financial Data.............. 11
Selected Financial Data of the
Company............................. 13
Management's Discussion and Analysis
of Financial Condition and Results
of Operations of the Company........ 14
Business of the Company............... 21
Management............................ 39
Selling Stockholders.................. 42
Description of Capital Stock.......... 43
Certain United States Federal Tax
Considerations for Non-U.S. Holders
of Common Stock..................... 45
Underwriting.......................... 47
Legal Matters......................... 50
Experts............................... 50

======================================================
======================================================

9,000,000 SHARES

LEAR LOGO

COMMON STOCK

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

PROSPECTUS
, 1997

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

LEHMAN BROTHERS
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
MORGAN STANLEY DEAN WITTER
SALOMON BROTHERS INC
SCHRODER WERTHEIM & CO.

======================================================
56

[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]

Subject to Completion, dated June 10, 1997
PROSPECTUS
9,000,000 Shares

Lear Logo

COMMON STOCK
---------------------------

Of the 9,000,000 shares of Common Stock, $0.01 par value per share ("Common
Stock") of Lear Corporation ("Lear" or the "Company") being offered hereby
7,200,000 shares are being offered initially outside the United States and
Canada by the International Managers (the "International Offering") and
1,800,000 shares are being offered initially in the United States and Canada by
the U.S. Underwriters (the "U.S. Offering" and, together with the International
Offering, the "Offerings"). The public offering price and underwriting discounts
and commissions per share are identical for both Offerings. See "Underwriting."
All shares being offered hereby are being offered by certain stockholders of the
Company (the "Selling Stockholders"). See "Selling Stockholders." The Company
will not receive any of the proceeds from the sale of Common Stock by the
Selling Stockholders.

The shares of Common Stock offered by this Prospectus are offered by the
International Managers subject to prior sale, to withdrawal, cancellation or
modification of the offer without notice, to delivery to and acceptance by the
International Managers and to certain further conditions. It is expected that
delivery of certificates for shares will be made at the offices of Lehman
Brothers Inc., New York, New York, on or about , 1997.
---------------------------

LEHMAN BROTHERS
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION

MORGAN STANLEY DEAN WITTER
SALOMON BROTHERS INTERNATIONAL LIMITED
SCHRODERS
, 1997
57

[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]

======================================================

NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS,
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY OF THE INTERNATIONAL
MANAGERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OF ANY SECURITIES OTHER
THAN THOSE TO WHICH IT RELATES OR AN OFFER TO SELL, OR A SOLICITATION OF AN
OFFER TO BUY, TO ANY PERSON IN ANY JURISDICTION WHERE SUCH AN OFFER OR
SOLICITATION WOULD BE UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT
THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE
DATE HEREOF.

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

TABLE OF CONTENTS

Page
----

Available Information.................. 2
Incorporation of Certain Documents by
Reference............................ 2
Prospectus Summary..................... 3
Risk Factors........................... 9
Cautionary Statements for Purposes of
the "Safe Harbor" Provisions of the
Private Securities Litigation Reform
Act of 1995.......................... 10
Common Stock Price Range and
Dividends............................ 10
Pro Forma Financial Data............... 11
Selected Financial Data of the
Company.............................. 13
Management's Discussion and Analysis of
Financial Condition and Results of
Operations of the Company............ 14
Business of the Company................ 21
Management............................. 39
Selling Stockholders................... 42
Description of Capital Stock........... 43
Certain United States Federal Tax
Considerations for Non-U.S. Holders
of Common Stock...................... 45
Underwriting........................... 47
Legal Matters.......................... 50
Experts................................ 50

======================================================
======================================================

9,000,000 SHARES

[LEAR LOGO]

COMMON STOCK
---------------------------

PROSPECTUS
, 1997

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

LEHMAN BROTHERS
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
MORGAN STANLEY DEAN WITTER
SALOMON BROTHERS
INTERNATIONAL LIMITED

SCHRODERS

======================================================
58

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth all fees and expenses payable by the
Registrant in connection with the issuance and distribution of the securities
being registered hereby (other than underwriting discounts and commissions). All
of such expenses, except the SEC filing fee and the NASD filing fee, are
estimated.

SEC filing fee.............................................. $116,484
NASD filing fee............................................. 30,500
Legal fees and expenses.....................................
Accounting fees and expenses................................
Printing and engraving......................................
Miscellaneous...............................................
--------
Total.................................................. $
========

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Registrant is a Delaware corporation. Reference is made to Section 145
of the Delaware General Corporation Law, as amended (the "GCL"), which provides
that a corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by or in the right of such corporation), by reason of the fact that
such person is or was a director, officer, employee or agent of the corporation,
or is or was serving at its request in such capacity of another corporation or
business organization against expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by such
person in connection with such action, suit or proceeding if such person acted
in good faith and in a manner such person reasonably believed to be in or not
opposed to the best interest of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe that such
person's conduct was unlawful. A Delaware corporation may indemnify officers and
directors in an action by or in the right of a corporation under the same
conditions, except that no indemnification is permitted without judicial
approval if the officer or director is adjudged to be liable to the corporation.
Where an officer or director is successful on the merits or otherwise in the
defense of any action referred to above, the corporation must indemnify him
against the expenses (including attorneys' fees) that such officer or director
actually and reasonably incurred.

Reference is also made to Section 102(b)(7) of the GCL, which permits a
corporation to provide in its certificate of incorporation that a director of
the corporation shall not be personally liable to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the GCL or (iv) for any transaction from which the director
derived an improper personal benefit.

The certificate of incorporation of the Registrant provides for the
elimination of personal liability of a director for breach of fiduciary duty as
permitted by Section 102(b)(7) of the GCL and the by-laws of the Registrant
provide that the Registrant shall indemnify its directors and officers to the
full extent permitted by Section 145 of the GCL.

The Registrant has directors and officers liability insurance that insures
the directors and officers of the Registrants against certain liabilities. In
addition, Lehman Brothers Inc. has agreed to indemnify Alan Washkowitz, a
director of the Registrant and an officer of Lehman Brothers Inc., in connection
with his service as directors of the Registrant.

II-1
59

The Underwriting Agreements provide for indemnification by each of the U.S.
Underwriters and each of the International Managers, as the case may be, of
directors and officers of Lear against certain liabilities, including
liabilities under the Securities Act of 1933, under certain circumstances.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

A list of exhibits is set forth on the Index to Exhibits.

ITEM 17. UNDERTAKINGS

1. Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by them is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.

2. The undersigned Registrant hereby undertakes that:

(a) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act of 1933 shall be deemed to be part
of this registration statement as of the time it was declared effective.

(b) For purposes of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein and this offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.

(c) For purposes of determining any liability under the Securities Act
of 1933, each filing of the Registrants' annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in this registration statement shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.

II-2
60

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the undersigned
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Southfield, State of Michigan on June 10, 1997.

LEAR SEATING CORPORATION

By: /s/ KENNETH L. WAY
------------------------------------
Kenneth L. Way
Chairman of the Board and
Chief Executive Officer

Each person whose signature appears below hereby severally constitutes and
appoints Kenneth L. Way, Robert E. Rossiter and James H. Vandenberghe, and each
of them singly, his or her true and lawful attorneys-in-fact and agents, with
full power of substitution and resubstitution, to sign for him or her and in his
or her name, place and stead in any and all capacities indicated below, the
Registration Statement on Form S-3 filed herewith, and any and all pre-effective
and post-effective amendments to said Registration Statement (including any
related registration statement filed under Rule 462), and to file the same, with
all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary fully to all intents and purposes as
he or she might or could do in person thereby ratifying and confirming all that
said attorneys-in-fact and agents or any of them, or their or his or her
substitute, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.

NAME TITLE DATE
- --------------------------------------------- ---------------------------------- -------------

/s/ KENNETH L. WAY Chairman of the Board and Chief June 10, 1997
- --------------------------------------------- Executive Officer
Kenneth L. Way (Principal Executive Officer)

/s/ ROBERT E. ROSSITER President and Chief Operating June 10, 1997
- --------------------------------------------- Officer -- International
Robert E. Rossiter Operations and Director

/s/ JAMES H. VANDENBERGHE President and Chief Operating June 10, 1997
- --------------------------------------------- Officer -- North American
James H. Vandenberghe Operations and Director

/s/ DONALD J. STEBBINS Senior Vice President, Chief June 10, 1997
- --------------------------------------------- Financial Officer and Treasurer
Donald J. Stebbins (Principal Financial and Principal
Accounting Officer)

/s/ LARRY W. MCCURDY Director June 10, 1997
- ---------------------------------------------
Larry W. McCurdy

II-3
61

/s/ GIAN ANDREA BOTTA Director June 10, 1997
- ---------------------------------------------
Gian Andrea Botta

/s/ IRMA B. ELDER Director June 10, 1997
- ---------------------------------------------
Irma B. Elder

/s/ ROY E. PARROTT Director June 10, 1997
- ---------------------------------------------
Roy E. Parrott

/s/ ROBERT W. SHOWER Director June 10, 1997
- ---------------------------------------------
Robert W. Shower

/s/ DAVID P. SPALDING Director June 10, 1997
- ---------------------------------------------
David P. Spalding

/s/ JAMES A. STERN Director June 10, 1997
- ---------------------------------------------
James A. Stern

/s/ ALAN H. WASHKOWITZ Director June 10, 1997
- ---------------------------------------------
Alan H. Washkowitz

II-4
62

INDEX TO EXHIBITS

EXHIBIT NUMBER EXHIBIT
- -------------- -------

1.1 -- Form of U.S. Underwriting Agreement.
1.2 -- Form of International Underwriting Agreement.
5.1 -- Opinion of Winston & Strawn, special counsel to Lear.
23.1 -- Consent of Arthur Andersen LLP.
23.2 -- Consent of Price Waterhouse LLP, with respect to the Masland
Financial Statements.
23.3 -- Consent of Winston & Strawn (included in Exhibit 5.1).
24.1 -- Powers of Attorney (included on signature page hereof).
99.1 -- Purchase Agreement dated as of May 26, 1997, among Keiper
GmbH & Co., Putsch GmbH & Co. KG, Keiper Recaro GmbH, Keiper
Car Seating Verwaltungs GmbH, Lear Corporation GmbH & Co.
and the Company.
99.2* -- Interim Financial Statements of Masland Corporation for the
period ended June 27, 1996.

- -------------------------
* To be filed by Amendment.

   1


                                                                STB DRAFT 6/6/97

                                                                     EXHIBIT 1.1


                                7,200,000 Shares

                                LEAR CORPORATION

                                  Common Stock

                          U.S. Underwriting Agreement


                                                            ______________, 1997


Lehman Brothers Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
Morgan Stanley & Co. Incorporated
Salomon Brothers Inc
Schroder Wertheim & Co. Incorporated
As Representatives for each of
  the several U.S. Underwriters
  named in Schedule I hereto,
  c/o LEHMAN BROTHERS INC.
Three World Financial Center
New York, New York 10285

Dear Sirs:

                 Lehman Brothers Merchant Banking Portfolio Partnership L.P.,
Lehman Brothers Capital Partners II, L.P., Lehman Brothers Offshore Investment
Partnership L.P. and Lehman Brothers Offshore Investment Partnership - Japan
L.P. (each a "Selling Stockholder" and collectively the "Selling Stockholders")
propose to sell to the several U.S. Underwriters named in Schedule I hereto
(the "U.S. Underwriters") an aggregate of 7,200,00 shares (the "Firm Shares")
of Common Stock, $.01 par value (the "Common Stock"), of Lear Corporation, a
Delaware corporation (the "Company").  In addition, for the sole purpose of
covering over-allotments in connection with the sale of the Firm Shares, the
Selling Stockholders propose to grant to the U.S. Underwriters an option to
purchase up to an aggregate of 1,030,000 additional shares (the "Option
Shares") of Common Stock.  The Firm Shares and any Option Shares purchased
pursuant to this Agreement are herein called the "Shares".

                 It is understood that the Company and the Selling Stockholders
are concurrently entering into an International Underwriting Agreement dated
the date hereof (the "International Underwriting Agreement"), providing for the
sale by the Selling Stockholders of an aggregate of 1,800,000 shares (the
"International Firm Shares") of Common Stock through arrangements
   2

                                                                             2

with certain underwriters outside the United States and Canada (the
"International Managers"), for whom Lehman Brothers International (Europe),
Donaldson, Lufkin & Jenrette Securities Corporation, Morgan Stanley & Co.
International Limited, Salomon Brothers International Limited and J.  Henry
Schroder & Co. Limited are acting as lead managers (the "Lead Managers").  In
addition, for the sole purpose of covering over-allotments in connection with
the sale of the International U.S. Firm Shares, the Selling Stockholders
propose to grant to the International Managers an option to purchase up to an
aggregate of 254,854 additional shares (the "International Option Shares") of
Common Stock.  The International Firm Shares and the International Option
Shares which may be offered by the International Managers pursuant to the
International Underwriting Agreement are herein called the "International
Shares"; the International Shares and the Shares, collectively, are herein
called the "Underwritten Shares".  As specified in Section 3, the respective
closings under this Agreement and the International Underwriting Agreement are
hereby expressly made conditional on one another.

                 The Company and the Selling Stockholders also understand that
the U.S. Underwriters and the International Managers have entered into an
agreement (the "Agreement Between U.S. Underwriters and International
Managers") contemplating the coordination of certain transactions between the
U.S. Underwriters and the International Managers and that, pursuant thereto and
subject to the conditions set forth therein, the U.S. Underwriters may purchase
from the International Managers a portion of the International Shares or sell
to the International Managers a portion of the Shares.  The Company and the
Selling Stockholders understand that any such purchases and sales between the
U.S.  Underwriters and the International Managers shall be governed by the
Agreement Between U.S. Underwriters and International Managers and shall not be
governed by the terms of this Agreement or the International Underwriting
Agreement.

                 This is to confirm the agreement concerning the purchase of
the Shares from the Selling Stockholders by the U.S. Underwriters and certain
related agreements among the Company, the Selling Stockholders and the U.S.
Underwriters.

                 The following terms as used in this Agreement shall have the
following meanings:

                 "Act" shall mean the Securities Act of 1933, as amended.

                 "Business Day" shall mean any day on which the New York Stock
Exchange is open for trading.

                 "Commission" shall mean the Securities and Exchange
Commission.

                 "Effective Date" shall mean the date of the Effective Time.

                 "Effective Time" shall mean the date and the time as of which
the Registration Statement, or the most recent post-effective amendment
thereto, if any, was declared effective by the Commission (or, if the Company
will next file with the Commission an amendment to the Registration Statement
as contemplated by clause (i) of the first paragraph of Section 1, the date and
time as of which the Registration Statement shall be declared effective).
   3

                                                                               3




                 "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.

                 "Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto.

                 "International Prospectus" shall mean a Prospectus relating to
the International Shares which are to be offered and sold outside the United
States to persons other than U.S. Persons.

                 "Preliminary Prospectuses" shall mean each prospectus included
in the Registration Statement, or any amendment thereof, before the Effective
Date, each prospectus filed with the Commission by the Company with the consent
of the Representatives pursuant to Rule 424(a) and each prospectus included in
the Registration Statement at the Effective Time that omits Rule 430A
Information.

                 "Prospectuses" shall mean the forms of prospectuses relating
to the Underwritten Shares, as first filed pursuant to Rule 424(b) after the
Execution Time or, if no filing pursuant to Rule 424(b) is required, the forms
of final prospectuses included in the Registration Statement at the Effective
Time.

                 "Registration Statement" shall mean the registration statement
referred to above, as amended at the Effective Time, including any documents
incorporated by reference therein and all exhibits thereto.  Such term shall
include any Rule 430A Information deemed to be included therein at the
Effective Time as provided by Rule 430A.

                 "Rule 424" and "Rule 430A" shall refer to such rules under the
Act.

                 "Rule 430A Information" shall mean information with respect to
the Underwritten Shares and the offering thereof permitted to be omitted from
the Registration Statement when it becomes effective pursuant to Rule 430A.

                 "Rules and Regulations" shall mean the rules and regulations
in effect at any relevant time adopted by the Commission under the Act or the
Exchange Act.

                 "Subsidiary" and "Significant Subsidiary" shall have the
meanings assigned in Rule 405 of the Rules and Regulations.  As used in
reference to the Company, "subsidiary" shall mean a Subsidiary of the Company.

                 "U.S. Person" shall mean any resident or national of the
United States or Canada and its provinces, any corporation, partnership or
other entity created or organized in or under the laws of the United States or
Canada and its provinces or any estate or trust the income of which is subject
to United States or Canadian income taxation regardless of the source of its
income (other than the foreign branch of any U.S. Person), and includes any
United States or Canadian branch of a person other than a U.S. Person; and
"United States" shall mean the United States of America (including the states
thereof and the District of Columbia) and its territories, its possessions and
other areas subject to its jurisdiction.
   4

                                                                               4




                 "U.S. Preliminary Prospectus" shall mean a Preliminary
Prospectus relating to the Shares which are to be offered and sold in the
United States or Canada and its provinces or to U.S. Persons.

                 "U.S. Prospectus" shall mean a Prospectus relating to the
Shares which are to be offered and sold in the United States or Canada and its
provinces or to U.S. Persons.

                 Reference made herein to any Preliminary Prospectus or to the
Prospectus shall be deemed to refer to and include any documents incorporated
by reference therein (including all exhibits thereto) pursuant to Item 12 of
Form S-3 under the Securities Act, as of the date of such Preliminary
Prospectus or the Prospectus and any reference to any amendment or supplement
to any Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include any document filed under the Exchange Act after the date of such
Preliminary Prospectus or the Prospectus and incorporated by reference in such
Preliminary Prospectus or the Prospectus.

                 1.  Representations and Warranties of the Company.  The
Company represents, warrants and agrees that:

                 (a)  A registration statement on Form S-3 (File No.
333-_______) with respect to the Underwritten Shares has been prepared by the
Company in conformity with the requirements of the Act and the Rules and
Regulations thereunder and has been filed with the Commission under the Act.
Copies of such registration statement as amended to date have been delivered by
the Company to you as the Representatives of the U.S. Underwriters.  The
Company will next file with the Commission one of the following:  (i) prior to
effectiveness of such registration statement, a further amendment to such
registration statement, including forms of final prospectuses or (ii) after
effectiveness of such registration statement, final prospectuses in accordance
with Rules 430A and 424(b)(1) or (4).

                 (b)  On the Effective Date, the Registration Statement did or
will, and when the Prospectuses are first filed (if required) in accordance
with Rule 424(b) and on each Closing Date (as defined in Section 4) the
Prospectuses (and any supplements thereto) will, comply in all material
respects with the applicable requirements of the Act and the Rules and
Regulations.  The Company has included in the Registration Statement, as
amended at the Effective Date, all information required by the Act and the
Rules and Regulations thereunder to be included in the Prospectuses with
respect to the Underwritten Shares and the offering thereof, and the
Prospectuses, when filed with the Commission, did or will contain all Rule 430A
Information, together with all other such required information, with respect to
the Underwritten Shares and the offering thereof and, except to the extent the
Representatives shall agree in writing to a modification, shall be in all
substantive respects in the form furnished to you prior to the Execution Time
or, to the extent not completed at the Execution Time, shall contain only such
specific additional information and other changes (beyond that contained in the
latest Preliminary Prospectuses) as the Company has advised you, prior to the
Execution Time, will be included or made therein.  The Commission has not
issued any stop order preventing or suspending the use of any Preliminary
Prospectus or the Prospectuses or the effectiveness of the Registration
Statement, and no proceeding for any such purpose has been initiated or
threatened by the Commission.
   5

                                                                               5




                 (c)  On the Effective Date, the Registration Statement did not
or will not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein not misleading; and, on the Effective Date, the
Prospectuses did not or will not, and on the date of any filing pursuant to
Rule 424(b) and on each Closing Date, the Prospectuses (together with any
supplements thereto) will not, include any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided that the Company makes no representation or warranty as to
information contained in or omitted from the Registration Statement or the
Prospectuses in reliance upon, and in conformity with, written information
furnished to the Company by you or any Selling Stockholder, or by any U.S.
Underwriter through you, specifically for inclusion therein.

                 (d)  The documents incorporated by reference in the
Prospectuses, when they were filed with the Commission (or upon amendment
thereof by other documents included in such incorporated documents), conformed
in all material respects to the requirements of the Act or Exchange Act, as
applicable, and the Rules and Regulations thereunder, and such documents were
timely filed as required thereby and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; and any further
documents so filed and incorporated by reference in the Prospectuses, when such
documents become effective or are filed with Commission will conform in all
material respects to the requirements of the Act or the Exchange Act, as
applicable, and the Rules and Regulations thereunder, and will be timely filed
as required thereby and will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading.

                 (e)  Neither the Commission nor, to the knowledge of the
Company, the "blue sky" or securities authority of any jurisdiction has issued
an order (a "Stop Order") suspending the effectiveness of the Registration
Statement, preventing or suspending the use of any Preliminary Prospectuses,
the Prospectuses, the Registration Statement, or any amendment or supplement
thereto, refusing to permit the effectiveness of the Registration Statement, or
suspending the registration or qualification of the Underwritten Shares, nor,
to the knowledge of the Company, has any of such authorities instituted or
threatened to institute any proceeding with respect to a Stop Order in any
jurisdiction in which the Underwritten Shares are sold.

                 (f)  Each of the Company and its subsidiaries is a corporation
duly organized, validly existing, and in good standing under the laws of its
jurisdiction of incorporation, with full power and authority, and all necessary
consents, authorizations, approvals, orders, licenses, certificates, and
permits of and from, all Federal, state, local, and other governmental and
foreign authorities, to own, lease, license, and use its properties and assets
and to carry on its business in the manner described in the Prospectuses except
where such failure will not have a material adverse effect on the Company and
its subsidiaries taken as a whole.  Except as described in the Registration
Statement and Prospectuses, each such consent, authorization, approval, order,
license, certificate and permit is valid and in full force and effect, and
there is no proceeding pending, or to the knowledge of the Company, threatened,
which might lead to the revocation, termination, suspension or nonrenewal of
any such consent, authorization, approval, order,
   6

                                                                               6



license, certificate or permit.  Each of the Company and its subsidiaries is
duly qualified to do business and is in good standing in every jurisdiction in
which its ownership, leasing, licensing, or use of property and assets or the
conduct of its business makes such qualification necessary, except in those
jurisdictions where failure to qualify or to be in good standing would not have
a material adverse effect on the Company and its subsidiaries taken as a whole.

                 (g)  The Company has an authorized capitalization as set forth
in the Registration Statement.  Except as described or otherwise disclosed in
the Prospectuses, each outstanding share of Common Stock and each outstanding
share of capital stock of the Company's subsidiaries is duly authorized,
validly issued, fully paid and nonassessable, has not been issued and is not
owned or held in violation of any preemptive rights of stockholders, and, in
the case of the Company's subsidiaries, is owned of record and beneficially by
the Company (except for directors' qualifying shares), or its subsidiaries free
and clear of all liens, security interests, pledges, charges, encumbrances,
stockholders' agreements and voting trusts.  The Company's capital stock
conform to the statements in relation thereto contained in the Prospectuses.
There is no commitment, plan or arrangement to issue, and no outstanding
option, warrant or other right calling for the issuance of, any share of
capital stock of the Company or the Company's subsidiaries to any person or any
security or other instrument which by its terms is convertible into,
exercisable for, or exchangeable for capital stock of the Company or the
Company's subsidiaries, except as described or otherwise disclosed in the
Prospectuses.  There is outstanding no security or other instrument which by
its terms is convertible into or exchangeable for capital stock of the Company
or any of their subsidiaries, except as described or otherwise disclosed in the
Prospectuses.

                 (h)  Other than as described in the Prospectuses, there are no
contracts, agreements or understandings between the Company and any person
granting such person the right to require the Company to file a registration
statement under the Act with respect to any securities of the Company owned or
to be owned by such person or to require the Company to include such securities
in the securities registered pursuant to the Registration Statement or in any
securities being registered pursuant to any other registration statement filed
by the Company under the Act, other than rights that have been duly and validly
waived.

                 (i)  Neither the Company nor any of its subsidiaries has
sustained, since the date of the Company's Report on Form 10-K for the year
ended December 31, 1996, any material loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order or
decree, otherwise than as set forth or contemplated in the Prospectuses; and,
since such date, there has not been any change in the capital stock of the
Company (other than in respect of shares of Common Stock issued upon the
exercise of management options) or any material change in long-term debt of the
Company or any of its subsidiaries or any material adverse change, or any
development involving a prospective material adverse change, in or affecting
the general affairs, management, financial position, shareholders' equity or
results of operations of the Company and its subsidiaries, otherwise than as
set forth or contemplated in the Prospectuses.

                 (j)  Neither the Company nor any of its subsidiaries is now or
is expected by the Company or its subsidiaries to be in violation or breach of,
or in default with respect to, any
   7

                                                                               7



provision of any contract, agreement, instrument, lease, or license to which
the Company or any of its subsidiaries is a party, the effect of which would
materially adversely affect the financial condition, results of operations,
business, assets, liabilities or prospects of the Company and its subsidiaries
taken as a whole.  Each such material contract, agreement, instrument, lease or
license (i) is in full force, (ii) assuming the correctness of (iii) below, is
the legal, valid, and binding obligation of the Company or its subsidiaries and
is enforceable as to the Company or its subsidiaries, as the case may be, in
accordance with its terms, except that enforceability thereof may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization or similar laws
affecting the enforcement of creditors' rights generally and by general equity
principles and (iii) to the Company's knowledge, is the legal, valid and
binding obligation of the other parties thereto and is enforceable as to each
of them in accordance with its terms, except that enforceability thereof may be
limited by bankruptcy, insolvency, fraudulent conveyance, reorganization or
similar laws affecting the enforcement of creditors' rights generally and by
general equity principles.  Each of the Company and its subsidiaries enjoys
peaceful and undisturbed possession under all leases and licenses of real
property under which it is operating except where such failure could not
reasonably be expected to have a material adverse effect on the Company and its
subsidiaries taken as a whole.

                 (k)  The Underwritten Shares have been duly and validly
authorized and are validly issued, fully paid and nonassessable; the
Underwritten Shares conform to the description of the Common Stock in the
Prospectuses; and the Underwritten Shares have been listed on the New York
Stock Exchange.

                 (l)  The execution, delivery and performance of this Agreement
and the International Underwriting Agreement and the consummation of the
transactions contemplated hereby and thereby, the issuance and sale of the
Shares, will not conflict with or result in a breach or violation in any
material respect of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries is bound or to which
any of the property or assets of the Company or any of its subsidiaries is
subject, nor will such actions result in any violation in any material respect
of the provisions of the Certificate of Incorporation or the By-laws, in each
case as amended, of the Company or any of its subsidiaries or any statute or
any order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Company or any of its subsidiaries or any of their
properties or assets; and no consent, approval, authorization, order,
registration, filing or qualification of or with any court or governmental
agency or body is required for the issue and sale of the Underwritten Shares or
the consummation of the other transactions contemplated by this Agreement or
the International Underwriting Agreement, except the registration under the Act
of the Underwritten Shares, and such consents, approvals, authorizations,
registrations, filings or qualifications as may be required under state
securities or Blue Sky laws or as may be required by the laws of any country
other than the United States in connection with the purchase and distribution
of the Underwritten Shares by the U.S. Underwriters and the International
Managers.

                 (m)  The Company will not, during the period of 90 days after
the date hereof except pursuant to this Agreement or the U.S.  Underwriting
Agreement or as contemplated by
   8

                                                                               8



the Prospectuses, offer, sell or otherwise dispose of any Common Stock or
securities convertible into or exchangeable or exercisable for such Common
Stock of the Company, directly or indirectly, without the prior written consent
of Lehman Brothers International (Europe); provided, however, that (i) the
Company may issue and sell Common Stock pursuant to any employee stock option
plan, stock ownership plan or dividend reinvestment plan of the Company in
effect at the Effective Time, (ii) the Company may issue Common Stock issuable
upon the conversion of securities or the exercise of warrants outstanding at
the Effective Time and (iii) the Company may issue Common Stock as
consideration in connection with the acquisition by the Company of new
businesses.

                 (n)  Except as may otherwise be disclosed in or contemplated
by the Prospectuses, since the date as of which information is given in the
Prospectuses, (i) the Company has not declared or paid any dividend or made any
distribution on its capital stock, (ii) the Company has not issued or granted
any securities and (iii) neither the Company nor any of its subsidiaries have
entered into any transaction or incurred any liability or obligation,
contingent or otherwise, other than in the ordinary course of business.

                 (o)  Any contract, agreement, instrument, lease or license
required to be described in the Registration Statement or the Prospectuses has
been properly described therein, and any contract, agreement, instrument, lease
or license required to be filed as an exhibit to the Registration Statement has
been filed with the Commission as an exhibit to or has been incorporated as an
exhibit by reference into the Registration Statement.

                 (p)  There is no labor strike or work stoppage or lockout
actually pending, imminent or threatened against the Company or any of its
subsidiaries which would have a material adverse effect on the consolidated
financial condition, results of operations, business, assets, liabilities or
prospects of the Company and its subsidiaries taken as a whole.

                 (q)  Except as set forth in the Registration Statement and the
Prospectuses and except as would not materially and adversely affect the
consolidated financial position, stockholders' equity, results of operations,
business or prospects of the Company and its subsidiaries taken as a whole, (i)
the Company is not in violation of any applicable Federal, state, local or
foreign environmental law or any applicable order of any governmental authority
with respect thereto; (ii) the Company is not in violation of or subject to any
existing, or pending or, to the Company's knowledge, threatened action, suit,
investigation, inquiry or proceeding by any governmental authority nor is the
Company subject to any remedial obligations under any applicable Federal,
state, local or foreign environmental law; (iii) the Company and its
subsidiaries are in compliance with all permits or similar authorizations, if
any, required to be obtained or filed in connection with their operations
including, without limitation, emissions, discharges, treatment, storage,
disposal or release of a Hazardous Material into the environment except where
any noncompliance could not reasonably be expected to have a material adverse
effect on the operations of the Company and its subsidiaries; and (iv) to the
knowledge of the Company and its subsidiaries, after appropriate inquiry, no
Hazardous Materials have been disposed of or released by the Company or its
subsidiaries on or to the Company's or its
   9

                                                                               9



subsidiaries' property, except in accordance with applicable environmental
laws.  The term "Hazardous Material" means any oil (including petroleum
products, crude oil and any fraction thereof), chemical, contaminant,
pollutant, solid or hazardous waste, or Hazardous Substance (as defined in
Section 101(14) of the Comprehensive Environmental Response, Compensation and
Liability Act and regulations thereunder), that is regulated as toxic or
hazardous to human health or the environment under any Federal, state, local or
foreign environmental law.

                 (r)  Except with respect to taxable periods commencing before
the taxable period ended June 30, 1991, as to which no representation is made,
the Company has filed all Federal, state, local and foreign income and
franchise tax returns required to be filed through the date hereof and has paid
all taxes shown to be due with respect to the taxable periods covered by such
returns, and no tax deficiency has been assessed, nor does the Company have any
knowledge of any tax deficiency which, individually or in the aggregate, if
determined adversely to the Company or any of its subsidiaries, could
reasonably be expected to have a material adverse effect on the consolidated
financial condition, results of operations, business, assets, liabilities or
prospects of the Company and its subsidiaries taken as a whole.

                 (s)  Neither the Company nor any of its subsidiaries, nor any
director, officer, agent, employee or other person associated with or acting on
behalf of the Company or any of its subsidiaries, has used any corporate funds
for any unlawful contribution, gift, entertainment or other unlawful expense
relating to political activity; made any direct or indirect unlawful payment to
any foreign or domestic government official or employee from corporate funds;
violated or is in violation of any provision of the Foreign Corrupt Practices
Act of 1977; or made any bribe, rebate, payoff, influence payment, kickback or
other unlawful payment.

                 (t)  The financial statements (including the related notes and
supporting schedules) incorporated by reference in the Prospectuses present
fairly the financial condition and results of operations of the entities
purported to be shown thereby, at the dates and for the periods indicated, and
have been prepared in conformity with applicable generally accepted accounting
principles applied on a consistent basis throughout the periods involved.

                 (u)  Arthur Andersen LLP, who have certified certain financial
statements of the Company, and Price Waterhouse LLP, who have certified certain
financial statements of Masland (as defined in the Prospectuses), and whose
reports are incorporated by reference in the Prospectus, are independent public
accountants as required by the Act and the Rules and Regulations.

                 (v)  There is no litigation or governmental proceeding pending
or, to the knowledge of the Company or any of its subsidiaries, threatened
against the Company or any of its subsidiaries which could reasonably be
expected to result in any material adverse change in the consolidated financial
condition, results of operations, business, assets, liabilities or prospects of
the Company or any of its subsidiaries or which affects the transactions
contemplated by this Agreement and the Prospectuses or which is required to be
disclosed in the Registration Statement and the Prospectuses, which is not
disclosed and correctly summarized therein.
   10

                                                                              10




                 (w)  The filing of the Registration Statement has been duly
authorized by the Company.

                 (x)  Each of the Company and its subsidiaries holds good and
marketable title to, or valid and enforceable leasehold interests in, all items
of real and personal property which are material to the business of the Company
and its subsidiaries taken as a whole, free and clear of any lien, claim,
encumbrance, preemptive rights or any other claim of any other third party
which are reasonably expected to materially interfere with the conduct of the
business of the Company and its subsidiaries taken as a whole.  The Company and
its subsidiaries are in material compliance with all applicable laws, rules and
regulations, except where such failure to comply would not have a material
adverse effect on the Company and its subsidiaries taken as a whole.

                 (y)  The Company has not taken, and agrees that it will not
take, directly or indirectly, any action that could reasonably be expected to
cause or result in stabilization or manipulation of the price of any security
to facilitate the sale or resale of the Shares.

                 2.  Representations, Warranties and Agreements of the Selling
Stockholders.  Each Selling Stockholder, severally and not jointly, represents,
warrants and agrees as to itself that:

                 (a)  Such Selling Stockholder has, and immediately prior to
the First Closing Date (as defined in Section 4) such Selling Stockholder will
have, good and valid title to the Underwritten Shares to be sold by such
Selling Stockholder hereunder as set forth in Schedule II hereto and under the
International Underwriting Agreement on such date, free and clear of all liens,
encumbrances, equities or claims; and upon delivery of such Underwritten Shares
and payment therefor pursuant hereto and thereto, good and valid title to such
Underwritten Shares, free and clear of all liens, encumbrances, equities or
claims, will pass to the several U.S. Underwriters and the International
Managers.

                 (b)  Such Selling Stockholder has duly and irrevocably
executed and delivered powers of attorney (each, a "Power of Attorney")
appointing one or more other persons, as attorneys- in-fact, with full power of
substitution, and with full authority (exercisable by any one or more of them)
to execute and deliver this Agreement and the International Underwriting
Agreement and to take such other action as may be necessary or desirable to
carry out the provisions hereof or thereof on behalf of such Selling
Stockholder.

                 (c)  Such Selling Stockholder has full right, power and
authority to enter into and perform under this Agreement, the International
Underwriting Agreement and the Power of Attorney; the execution, delivery and
performance of this Agreement, the International Underwriting Agreement and the
Power of Attorney by such Selling Stockholder and the consummation by such
Selling Stockholder of the transactions contemplated hereby and thereby will
not conflict with or result in a breach or violation in any material respect of
any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which such Selling Stockholder is a party or by which such
Selling Stockholder is bound or to which any of the property or assets of such
Selling Stockholder is subject, nor will such actions result in any violation
in any material respect of the provisions of the Certificate of Incorporation
or the By-laws or comparable instruments, as
   11

                                                                              11



applicable, or any partnership agreement of such Selling Stockholder or any
statute or any order, rule or regulation of any court or governmental agency or
body having jurisdiction over such Selling Stockholder or the property or
assets of such Selling Stockholder; and no consent, approval, authorization,
order, filing or registration of or with, any court or governmental agency or
body is required for the execution, delivery and performance of this Agreement,
the International Underwriting Agreement or the Power of Attorney by such
Selling Stockholder and the consummation by such Selling Stockholder of the
transactions contemplated hereby and thereby, except the registration under the
Act of the Underwritten Shares, filings pursuant to Sections 13 and 16 of the
Exchange Act, and such consents, approvals, authorizations, registrations,
filings or qualifications as may be required under state securities or Blue Sky
laws or as may be required by the laws of any country other than the United
States in connection with the purchase and distribution of the Shares by the
U.S. Underwriters.

                 (d)  To the extent that any statements or omissions made in
the Registration Statement, any Preliminary Prospectuses, the Prospectuses or
any amendment or supplement thereto are made in reliance upon and in conformity
with written information concerning such Selling Stockholder furnished to the
Company by such Selling Stockholder specifically for use therein, such
Preliminary Prospectuses did, and the Registration Statement did or will, and
the Prospectuses and any amendments or supplements to the Registration
Statement or the Prospectuses will, when they become effective or are filed
with the Commission, as the case may be, not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.

                 3.  Purchase of the Shares by the U.S. Underwriters.  (a)
Subject to the terms and conditions and upon the basis of the representations
and warranties herein set forth, each of the Selling Stockholders, severally
and not jointly, agrees to sell that number of Firm Shares set forth opposite
such Selling Stockholder's name in Schedule II hereto, to the U.S.
Underwriters, and each of the U.S.  Underwriters agrees, severally and not
jointly, to purchase, at a price of $_____ per Share, the number of Firm Shares
set forth opposite such U.S. Underwriter's name in Schedule I hereto.  Each
U.S. Underwriter shall be obligated to purchase from the Selling Stockholders
that number of the Firm Shares which represents the same proportion of the
number of the Firm Shares to be sold by the Selling Stockholders as the number
of the Firm Shares set forth opposite the name of such U.S. Underwriter in
Schedule I represents of the total number of the Firm Shares to be purchased by
all of the Underwriters pursuant to this Agreement.  The respective purchase
obligations of the U.S. Underwriters with respect to the Firm Shares shall be
rounded among the U.S. Underwriters to avoid fractional shares, as the
Representatives may determine.  The U.S.  Underwriters agree to offer the Firm
Shares to the public as set forth in the U.S. Prospectus.  Each U.S.
Underwriter agrees that, except to the extent permitted by the Agreement
Between U.S. Underwriters and International Managers, it will not offer any of
the Shares outside the United States and Canada.

                 The obligations of the Selling Stockholders to sell any
Shares, and the obligations of the U.S. Underwriters to purchase the Shares,
are subject to the closing of the sale and purchase of the International Firm
Shares pursuant to the International Underwriting Agreement.
   12

                                                                              12




                 (b)  Subject to the terms and conditions of this Agreement,
the Selling Stockholders hereby grant to the U.S. Underwriters an option to
purchase from the Selling Stockholders solely for the purpose of covering
over-allotments in the sale of Firm Shares, up to 1,030,000 shares of the
Option Shares for a period of 30 days from the date hereof at the purchase
price per Share set forth above.  Option Shares shall be purchased from the
Selling Stockholders for the accounts of the U.S. Underwriters, severally and
not jointly, in proportion to the number of Firm Shares set forth opposite such
U.S. Underwriter's name in Schedule I hereto, except that the respective
purchase obligations of each U.S.  Underwriter shall be adjusted by the
Representatives so that no U.S. Underwriter shall be obligated to purchase
Option Shares other than in 100-share quantities.  Option Shares shall be sold
by the Selling Stockholders in proportion to the number of Firm Shares set
forth opposite such Selling Stockholder's name in Schedule II hereto, rounded
among the Selling Stockholders to avoid fractional shares.

                 4.  Delivery of and Payment for Shares.  Delivery of
certificates for the Firm Shares, and certificates for the Option Shares, if
the option to purchase the same is exercised on or before the third Business
Day prior to the First Closing Date, shall be made at the offices of Lehman
Brothers Inc., Three World Financial Center, Attn:  _____________, New York,
New York 10285 (or such other place as mutually may be agreed upon), at 10:00
A.M., New York City time, on the third full Business Day following the date of
this Agreement if this Agreement is executed before 4:30 p.m. New York time, or
on the fourth full Business Day following the date of this Agreement if this
Agreement is executed after 4:30 p.m. New York time or on such later date as
shall be determined by you and the Selling Stockholders (the "First Closing
Date").

                 The option to purchase Option Shares granted in Section 3
hereof may be exercised during the term specified therein by written notice to
each of the Selling Stockholders from the Representatives.  Such notice shall
set forth the aggregate number of Option Shares as to which the option is being
exercised and the time and date, not earlier than either the First Closing Date
or the second Business Day after the date on which the option shall have been
exercised nor later than the third Business Day after the date of such
exercise, as determined by the Representatives, when the Option Shares are to
be delivered (the "Option Closing Date").  Delivery and payment for such Option
Shares shall be made at the offices set forth above for delivery and payment of
the Firm Shares.  (The First Closing Date and the Option Closing Date are
herein individually referred to as a "Closing Date" and collectively referred
to as the "Closing Dates".)

                 Delivery of certificates for the Shares shall be made by or on
behalf of the Selling Stockholders to you, for the respective accounts of the
U.S. Underwriters, against payment of the purchase price therefor by certified
or official bank checks payable in New York Clearing House (next day) funds to
the order of each of the Selling Stockholders.  The certificates for the Shares
shall be registered in such names and denominations as you shall have requested
at least two full Business Days prior to the applicable Closing Date, and shall
be made available for checking and packaging in New York, New York, or such
other location as may be designated by you at least one full Business Day prior
to such Closing Date.  Time shall be of the essence, and delivery of
certificates for the Shares at the time and place specified in this Agreement
is a further condition to the obligations of each U.S. Underwriter.
   13

                                                                              13




                 5.  Covenants.  The Company agrees with each U.S. Underwriter
that:

                 (a)  The Company shall use its best efforts to cause the
Registration Statement, if not effective at the Execution Time, and any
amendments thereto to become effective.  The Company shall advise you promptly
of the filing of any amendment to the Registration Statement or any supplement
to any Prospectus and, upon notification from the Commission that the
Registration Statement or any such amendment has become effective, shall so
advise you promptly (in writing, if requested).  If the Registration Statement
has become or becomes effective pursuant to Rule 430A, or filing of any
Prospectus is otherwise required under Rule 424(b), the Company will cause such
Prospectus, properly completed, and any supplement thereto to be filed with the
Commission pursuant to the applicable paragraph of Rule 424(b) in the manner
and within the time period prescribed and will provide evidence satisfactory to
the Representatives of such timely filing.  The Company shall notify you
promptly of any request by the Commission for any amendment of or supplement to
the Registration Statement or any Prospectus or for additional information; the
Company shall prepare and file with the Commission, promptly upon your request,
any amendments or supplements to the Registration Statement or the U.S.
Prospectus which, in your reasonable opinion, may be necessary or advisable in
connection with the distribution of the Shares; and the Company shall not file
any amendment or supplement to the Registration Statement or the U.S.
Prospectus, which filing is not consented to by you after reasonable notice
thereof.  The Company shall advise you promptly of the issuance by the
Commission or any state or other governmental or regulatory body of any stop
order or other order suspending the effectiveness of the Registration
Statement, suspending or preventing the use of any Preliminary Prospectus or
Prospectus or suspending the qualification of the Shares for offering or sale
in any jurisdiction, or of the institution of any proceedings for any such
purpose; and the Company shall use its best efforts to prevent the issuance of
any stop order or other such order and, should a stop order or other such order
be issued, to obtain as soon as possible the lifting thereof.

                 (b)  The Company shall furnish to Lehman Brothers Inc. and to
counsel for the U.S. Underwriters a signed copy of the Registration Statement
as originally filed and each amendment thereto filed with the Commission,
including all consents and exhibits filed therewith, and shall furnish to the
U.S. Underwriters such number of conformed copies of the Registration
Statement, as originally filed and each amendment thereto (excluding exhibits
other than this Agreement), any Preliminary Prospectus, the U.S. Prospectus and
all amendments and supplements to any of such documents, in each case as soon
as available and in such quantities as the Representatives may from time to
time reasonably request.

                 (c)  Within the time during which the Prospectuses relating to
the Underwritten Shares are required to be delivered under the Act, the Company
shall comply with all requirements imposed upon it by the Act, the Exchange Act
and the Rules and Regulations so far as is necessary to permit the continuance
of sales of or dealings in the Underwritten Shares as contemplated by the
provisions hereof and by the Prospectuses.  If during such period any event
occurs as a result of which the U.S. Prospectus as then amended or supplemented
would include an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances then existing, not misleading, or if during such period it is
necessary to amend the Registration Statement or supplement the U.S.
   14

                                                                              14



Prospectus to comply with the Act or the Exchange Act or the Rules and
Regulations, the Company shall promptly notify you and, subject to the
penultimate sentence of paragraph (a) of this Section 5, shall amend the
Registration Statement or supplement the U.S. Prospectus or file such document
(at the expense of the Company) so as to correct such statement or omission or
to effect such compliance.

                 (d)  The Company shall take or cause to be taken all necessary
action and furnish to whomever you may direct such information as may be
required in qualifying the Shares (and any International Shares that may be
sold to the U.S. Underwriters by the International Managers) for offer and sale
under the state securities or Blue Sky laws of such jurisdictions as you shall
designate and to continue such qualifications in effect for as long as may be
necessary for the distribution of the Shares (and such International Shares);
except that in no event shall the Company be obligated in connection therewith
to qualify as a foreign corporation or to execute a general consent to service
of process.

                 (e)  The Company shall furnish to you, on or prior to the date
of this Agreement, a letter or letters, in form and substance reasonably
satisfactory to counsel for the U.S. Underwriters, pursuant to which each
executive officer of the Company identified in the Prospectuses who owns any
shares of Common Stock at the Execution Time shall agree not to offer for sale,
sell or otherwise dispose of any shares of Common Stock of any securities
convertible or exchangeable or exercisable for such Common Stock during the 60
days following the date of the Effective Time except with prior written consent
of Lehman Brothers Inc.

                 (f)  Whether or not the transactions contemplated in this
Agreement are consummated, the costs incident to the preparation, printing and
filing under the Act of the Registration Statement and any amendments and
exhibits thereto; the costs of distributing the Registration Statement as
originally filed and each amendment and post-effective amendment thereof
(including exhibits), any Preliminary Prospectus, each Prospectus and any
amendment or supplement to each Prospectus, all as provided in this Agreement,
the filing fee of the NASD; the reasonable fees and expenses of qualifying the
Shares under the securities laws of the several jurisdictions as provided in
this paragraph and of preparing and printing a Blue Sky Memorandum and a
memorandum concerning the legality of the Shares as an investment, if any
(including reasonable fees and expenses of counsel to the U.S. Underwriters in
connection therewith); the cost of printing certificates; the cost and charges
of any transfer agent or registrar; and all other costs and expenses incident
to the performance of the obligations of the Company hereunder for which
provision is not otherwise made in this Section.  It is understood, however,
that, except as provided in this Section, Section 8 and Section 10 hereof, each
Selling Stockholder shall pay all its own costs and expenses, including the
fees of its counsel and stock transfer taxes.  Except as provided in this
Section, Section 8 and in Section 10, the Underwriters shall pay their own
costs and expenses, including the fees and expenses of their counsel, any
transfer taxes on the Shares which they may sell and the expenses of
advertising any offering of the Shares made by the U.S. Underwriters.

                 (g)  The Company shall, on or prior to each Closing Date, take
such action as shall be necessary to comply with the rules and regulations of
the New York Stock Exchange with respect to the Shares to be purchased on such
date by the U.S. Underwriters.
   15

                                                                              15




                 (h)  During a period of five years from the Effective Date,
the Company shall, upon written request, furnish to the Representatives copies
of all reports or other communications furnished to shareholders and copies of
any reports or financial statements furnished to or filed with the Commission,
the New York Stock Exchange or any other national securities exchange on which
any class of securities of the Company shall be listed.

                 (i)  As soon as practicable after the Effective Date of the
Registration Statement, the Company shall make generally available to its
security holders and to deliver to the U.S. Underwriters an earnings statement
of the Company, conforming with the requirements of Section 11(a) and Rule 158
of the Act, covering a period of at least 12 months beginning after the
Effective Date.

                 6.  Further Agreement of the Selling Stockholders.  Each
Selling Stockholder, severally and not jointly, agrees to deliver to the
Representatives prior to the First Closing Date a properly completed and
executed United States Treasury Department Form W-9.

                 7.  Conditions of U.S. Underwriters' Obligations.  The
respective obligations of the several U.S. Underwriters hereunder are subject
to the accuracy, when made and as of each Closing Date, of the representations
and warranties of the Company and the Selling Stockholders contained herein, to
the performance by the Company and the Selling Stockholders of their respective
obligations hereunder and to each of the following additional terms and
conditions:

                 (a)  The Registration Statement and any post-effective
amendment thereto has become effective under the Act; if the Registration
Statement has not become effective prior to the Execution Time, unless the U.S.
Underwriters agree in writing to a later time, the Registration Statement will
become effective not later than (i) 6:00 P.M. New York City time on the date of
determination of the public offering price, if such determination occurred at
or prior to 3:00 P.M. New York City time on such date or (ii) 2:00 P.M. on the
business day following the day on which the public offering price was
determined, if such determination occurred after 3:00 P.M. New York City time
on such date; if required under Rule 424(b), the Prospectuses shall have been
timely filed with the Commission in accordance with Section 5(a) hereof, not
later than the Commission's close of business on the second business day
following the execution and delivery of this Agreement or, if applicable, such
earlier time as may be required by Rule 430(A)(a)(3); no Stop Order shall have
been issued and prior to that time no proceeding for that purpose shall have
been initiated or threatened by the Commission; any request of the Commission
for inclusion of additional information in the Registration Statement or the
Prospectuses or otherwise shall have been complied with; and the Company shall
not have filed with the Commission any amendment or supplement to the
Registration Statement or the Prospectuses without the consent of the
Underwriters.  If the Company has elected to rely upon Rule 430A of the Act,
the price of the Shares and any price-related information previously omitted
from the effective Registration Statement pursuant to such Rule 430A shall have
been transmitted to the Commission for filing pursuant to Rule 424(b) of the
Act within the prescribed time period, and prior to the applicable Closing Date
the Company shall have provided evidence satisfactory to the U.S. Underwriters
of such timely filing, or a post-effective amendment providing such information
shall have been prepared, filed and declared effective in accordance with the
requirements of Rule 430A of the Act.
   16

                                                                              16



                 (b)  No U.S. Underwriter or International Manager shall have
discovered after the date hereof and disclosed to the Company on or prior to
such applicable Closing Date that the Registration Statement or the
Prospectuses or any amendment or supplement thereto contains an untrue
statement of a fact which, in the opinion of Simpson Thacher & Bartlett,
counsel for the U.S. Underwriters, is material or omits to state a fact which,
in the opinion of such counsel, is material and is required to be stated
therein or is necessary to make the statements therein not misleading.

                 (c)  All corporate proceedings and other legal matters
incident to the authorization, form and validity of this Agreement, the
Underwritten Shares, the Registration Statement and the Prospectuses, and all
other legal matters relating to this Agreement and the transactions
contemplated hereby, shall be reasonably satisfactory in all respects to
Simpson Thacher & Bartlett, counsel for the U.S.  Underwriters, and the Company
shall have furnished to such counsel all documents and information that they
may reasonably request to enable them to pass upon such matters.

                 (d)  On each Closing Date, Winston & Strawn, as special
counsel to the Company, shall have furnished to the U.S. Underwriters their
written opinion addressed to the U.S. Underwriters and dated such Closing Date
in form and substance reasonably satisfactory to the U.S.  Underwriters and
their counsel (with customary qualifications and assumptions agreed to by
counsel for the U.S. Underwriters) to the effect that:

                      (i)   the Company and each of its Significant
         Subsidiaries have been duly incorporated and are validly existing and
         in good standing under the laws of their respective jurisdictions of
         incorporation, are duly qualified to do business and are in good
         standing as foreign corporations in each jurisdiction in which their
         respective ownership or lease of property or the conduct of their
         respective businesses, requires such qualification, except where the
         failure to be so qualified and in good standing would not have a
         material adverse effect on the Company and its subsidiaries taken as a
         whole; and have all corporate power and authority necessary to own or
         hold their respective properties and to conduct the business in which
         they are engaged as described in the Prospectus;

                      (ii)  this Agreement and the International Underwriting
         Agreement have been duly authorized, executed, and delivered by the
         Company, are legally valid and binding obligations of the Company, and
         are enforceable against the Company in accordance with their terms,
         except to the extent that rights to indemnity or contribution
         hereunder and thereunder may be limited by Federal or state securities
         laws or the public policy underlying such laws may limit the right to
         indemnity and contribution thereunder; no consent, authorization,
         approval, order, license, certificate, or permit of or from, or
         declaration or filing with, any Federal, state, local or other
         governmental authority or any court or other tribunal is required by
         the Company for the execution, delivery, or performance of this
         Agreement or the International Underwriting Agreement by the Company
         (except filings under the Act and filings with the New York Stock
         Exchange which have been made and consents, authorizations, permits,
         orders and other matters
   17

                                                                              17



         required by the National Association of Securities Dealers or under
         Blue Sky or state securities laws as to which such counsel need
         express no opinion);

                    (iii)   the Underwritten Shares conform to the description
         of the Common Stock in the Prospectuses; and the Underwritten Shares
         have been listed on the New York Stock Exchange;

                      (iv)   The statements contained in the Prospectuses under
         the caption "Certain United States Federal Tax Considerations for
         Non-U.S. Holders of Common Stock", insofar as they describe federal
         statutes, rules and regulations, constitute a fair summary thereof;

                      (v)   the Registration Statement was declared effective
         under the Act as of the date and time specified in such opinion, no
         Stop Order has been issued and, to the knowledge of such counsel, no
         proceeding for that purpose is pending or threatened by the
         Commission;

                      (vi)  the Registration Statement and the Prospectuses and
         any further amendments or supplements thereto made by the Company
         prior to each Closing Date (other than the financial statements and
         related schedules therein and other financial and statistical
         information included in or excluded from the Registration Statement or
         the Prospectuses, as to which such counsel need express no opinion)
         comply as to form in all material respects with the requirements of
         the Act and the Rules and Regulations and the documents incorporated
         by reference therein (other than any financial statements, related
         schedules and other financial and statistical information included
         therein or excluded therefrom), at the time they were filed with the
         Commission, complied as to form in all material respects with the
         Exchange Act and the applicable Rules and Regulations (except as
         aforesaid).

                 Notwithstanding the foregoing, the opinion set forth in the
first clause of paragraph (ii) may be subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws now or hereafter in effect relating to creditors' rights generally and to
court decisions with respect thereto and to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law); and no opinion need be expressed as to the availability of
equitable remedies for any breach of any such agreement.

                 In rendering such opinion, such counsel may (i) state that
their opinion is limited to matters governed by the Federal laws of the United
States of America (to the extent specifically referred to therein), the laws of
the State of New York and the General Corporation Law of the State of Delaware;
and (ii) rely (to the extent such counsel deems proper and specifies in their
opinion), as to matters involving the application of the laws of jurisdictions
other than the State of New York or the United States or the General
Corporation Law of the State of Delaware upon opinions (dated the applicable
Closing Date, addressed to the U.S. Underwriters and in form reasonably
satisfactory to the U.S. Underwriters with signed or conformed copies for each
of the U.S. Underwriters) of counsel acceptable to Simpson Thacher & Bartlett.
Such counsel shall also have furnished to the U.S. Underwriters a written
statement, addressed to the U.S. Underwriters and dated the applicable Closing
Date, in form and substance reasonably satisfactory to the U.S. Underwriters,
to the effect that such counsel participated in conferences with officers and
representatives of the Company, Arthur Andersen LLP, the U.S. Underwriters and
Simpson Thacher
   18

                                                                              18



& Bartlett in connection with the preparation of the Registration Statement,
and based on the foregoing and without assuming responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or making any independent check or verification thereof
(relying as to factual matters upon the statements of officers and other
representatives of the Company, the Selling Stockholders and others), no facts
have come to the attention of such counsel which lead them to believe that (I)
the Registration Statement, as of the Effective Date, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein not
misleading (other than the information omitted therefrom in reliance on Rule
430A), or (II) each of the Prospectuses as amended or supplemented, as of each
Closing Date, contains any untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they
were made, not misleading, except that such counsel need not express an opinion
or belief as to any financial statements, schedules, and other financial or
statistical information included in or excluded from the Registration Statement
or the Prospectuses.

                 (e)  On each Closing Date, Joseph F. McCarthy, General Counsel
to the Company, or Michael O'Shea, corporate counsel to the Company, shall have
furnished to the U.S. Underwriters his written opinion addressed to the U.S.
Underwriters and dated such Closing Date in form and substance reasonably
satisfactory to the U.S. Underwriters (with customary qualifications and
assumptions agreed to by counsel for the U.S. Underwriters) to the effect that:

                      (i)   the Company and each of its Significant
         Subsidiaries have been duly incorporated and are validly existing and
         in good standing under the laws of their respective jurisdictions of
         incorporation, are duly qualified to do business and are in good
         standing as foreign corporations in each jurisdiction in which their
         respective ownership or lease of property or the conduct of their
         respective businesses, requires such qualification, except where the
         failure to be so qualified and in good standing would not have a
         material adverse effect on the Company and its subsidiaries taken as a
         whole; and have all corporate power and authority necessary to own or
         hold their respective properties and to conduct the business in which
         they are engaged as described in the Prospectuses;

                      (ii)  the Company has an authorized capitalization as set
         forth in the Prospectuses, and all of the issued shares of capital
         stock of the Company (including, without limitation, all of the
         Underwritten Shares) have been duly and validly authorized and issued,
         are fully paid and nonassessable and conform to the description
         thereof contained in the Prospectuses; and all of the issued shares of
         capital stock of each subsidiary of the Company owned directly or
         indirectly by the Company have been duly and validly authorized and
         issued and are fully paid, nonassessable and (except for directors'
         qualifying shares) owned directly or indirectly by the Company, free
         and clear
   19

                                                                              19




         of all liens, encumbrances, equities or claims, except as described in
         the Prospectuses; to the best of such counsel's knowledge after due
         inquiry and investigation, there is no commitment, plan, or
         arrangement to issue, and no outstanding option, warrant, or other
         right calling for the issuance of, any share of capital stock of the
         Company or of the Company's subsidiaries to any person other than the
         Company, or any security or other instrument which by its terms is
         convertible into, exercisable for, or exchangeable for capital stock
         of the Company or of the Company's subsidiaries, except as may be
         described in the Prospectuses or has been disclosed to the U.S.
         Underwriters;

                     (iii)   the Underwritten Shares have been listed on the New
         York Stock Exchange;

                      (iv)   there is no litigation, arbitration, claim,
         governmental or other proceeding or investigation pending or, to the
         best of such counsel's knowledge after due inquiry and investigation,
         threatened to which the Company or any of its subsidiaries is a party
         or to which any of their respective operations, businesses or assets
         is the subject which could reasonably be expected to have a material
         adverse effect upon the consolidated financial position, stockholders'
         equity, results of operations, business or prospects of the Company
         and its subsidiaries taken as a whole; neither the Company nor any of
         its subsidiaries is in violation of, or in default with respect to,
         any law, rule, regulation, order, judgment, or decree, except as may
         be described in the Prospectuses or such as in the aggregate do not
         have a significant likelihood of having a material adverse effect upon
         the consolidated financial position, stockholders' equity, results of
         operations, business or prospects of the Company and its subsidiaries
         taken as a whole;

                      (v)    neither the Company nor any of its subsidiaries is
         now in violation or breach of, or in default with respect to, any
         material provision of any contract, agreement, instrument, lease or
         license, which is material to the Company and its subsidiaries taken
         as a whole;

                      (vi)   neither the Company nor any of its subsidiaries is
         in violation or breach of, or in default with respect to, any term of
         its Certificate of Incorporation or By-laws;
             
                      (vii)  the execution, delivery and performance of this
         Agreement and the International Underwriting Agreement and the sale of
         the Shares as contemplated hereby and thereby will not conflict with
         or result in a breach or violation in any material respect of any of
         the terms and provisions of, or constitute a default under, any
         material contract, agreement, instrument, lease, or license known to
         such counsel, or violate or result in a breach of any term of the
         articles of incorporation (or other charter document) or by-laws of
         the Company or any of its subsidiaries, or violate, result in a breach
         of, or conflict with in any material respect any law or statute, rule,
         or regulation, or any order, judgment, or decree known to such
         counsel, that is binding on the Company or any of its subsidiaries or
         to which any of their respective operations, businesses or assets are
         subject; no consent, authorization, approval, order, license,
         certificate or permit of or from, or declaration or filing with any
         Federal, state, local or other governmental authority or any court or
         other tribunal is required by the Company for the execution, delivery
         or
   20

                                                                              20




         performance of this Agreement and the International Underwriting
         Agreement or for the sale of the Shares as contemplated hereby and
         thereby (except filings under the Act which have been made and
         consents, authorization, permits, orders and other matters required
         under Blue Sky or State securities laws or as may be required by the
         laws of any country other than the United States as to which such
         counsel need express no opinion);

                   (viii)   any contract, agreement, instrument, lease or
         license required to be described in the Registration Statement or the
         Prospectuses has been properly described therein; any contract,
         agreement, instrument, lease, or license required to be filed as an
         exhibit to the Registration Statement has been filed with the
         Commission as an exhibit to the Registration Statement or incorporated
         therein by reference;

                      (ix)  insofar as statements in the Prospectuses purport
         to summarize the status of litigation or the provisions of laws,
         rules, regulations, orders, judgments, decrees, contracts, agreements,
         instruments, leases, or licenses, such statements have been prepared
         or reviewed by such counsel and accurately reflect, in all material
         respects, the status of such litigation and provisions purported to be
         summarized and are correct in all material respects; and

                      (x)   there are no preemptive or other rights to
         subscribe for or to purchase, nor any restriction upon the voting or
         transfer of, any Underwritten Shares pursuant to the Company's
         Certificate of Incorporation or By-laws, in each case as amended, or
         any agreement or other instrument; and no holders of securities of the
         Company have rights to the registration thereof under the Registration
         Statement except as set forth in the Prospectuses or, if any such
         holders have such rights, such holders have waived such rights;

                 Notwithstanding the foregoing, the opinion set forth in the
first clause of paragraph (vii) may be subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws now or hereafter in effect relating to creditors' rights generally and to
court decisions with respect thereto and to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law); and no opinion need be expressed as to the availability of
equitable remedies for any breach of any such agreement.

                 In rendering such opinion, such counsel may (i) state that his
opinion is limited to matters governed by the Federal laws of the United States
of America to the extent specifically referred to therein, the laws of the
State of Michigan and the General Corporation Law of the State of Delaware; and
(ii) rely (to the extent such counsel deems proper and specifies in his
opinion), as to foreign matters involving the application of the laws of
jurisdictions other than the State of Michigan or the United States or the
corporate law of the State of Delaware upon opinions (dated each Closing Date,
addressed to the U.S. Underwriters and in form reasonably satisfactory to the
U.S.  Underwriters with signed or conformed copies for each of the U.S.
Underwriters) of counsel acceptable to Simpson Thacher & Bartlett.
   21

                                                                              21




                 (f)  On the First Closing Date, there shall have been
furnished to you the opinion of counsel for each of the Selling Stockholders
(addressed to the Underwriters), dated the Closing Date in form and substance
reasonably satisfactory to the Underwriters to the effect that:

                      (i)   such Selling Stockholder has full right, power and
         authority to enter into this Agreement and to perform its obligations
         hereunder;

                      (ii)  this Agreement has been duly authorized, executed
         and delivered by or on behalf of such Selling Stockholder; and

                      (iii)   the execution, delivery and performance of this
         Agreement by such Selling Stockholder and the consummation by such
         Selling Stockholder of the transactions contemplated hereby will not
         conflict with or result in a breach or violation in any material
         respect of any of the terms or provisions of, or constitute a default
         under, any material indenture, mortgage, deed of trust, loan agreement
         or other agreement or instrument known to such counsel to which such
         Selling Stockholder is a party or by which such Selling Stockholder is
         bound or to which any of the property or assets of such selling
         Stockholder is subject, nor will such actions result in any violation
         in any material respect of the provisions of the partnership agreement
         (if any) of such Selling Stockholder or any statute or any order, rule
         or regulation known to such counsel of any court or governmental
         agency having jurisdiction over such Selling Stockholder or the
         property or assets of such Selling Stockholder; and no consent,
         approval, authorization or order of, or filing or registration with,
         any such court or governmental agency is required for the execution,
         delivery and performance of this Agreement by such Selling Stockholder
         and the consummation by such Selling Stockholder of the transactions
         contemplated hereby, except the registration under the Act of the
         Shares, such consents, approvals, authorizations, registrations,
         filings or qualifications as may be required under state securities or
         Blue Sky laws in connection with the purchase and distribution of the
         shares by the Underwriters or as may be required by the laws of any
         country other than the United States, and amendments to filings made
         under the Exchange Act.

                 (g)  The Company shall have furnished to the Underwriters on
each Closing Date a certificate, dated such Closing Date, of its President or a
Vice President and its Chief Financial Officer or Treasurer stating that:

                      (i)   the representations, warranties and agreements of
         the Company in Section 1 herein are true and correct as of such
         Closing Date; the Company has complied with all its agreements
         contained herein; and the conditions set forth in Paragraph 7(a) have
         been fulfilled; and

                      (ii)  they have carefully examined the Registration
         Statement and the Prospectuses and, in their opinion, (A) as of the
         Effective Time of the Registration Statement, the Registration
         Statement did not include any untrue statement of a material fact and
         did not omit to state a material fact required to be stated therein or
         necessary to make the statements therein not misleading, (B) as of its
         date, each of the Prospectuses, as amended or supplemented, did not
         include any untrue statement of a material fact or
   22

                                                                              22









          omit to state a material fact necessary in order to make the
          statements therein, in light of the circumstances under which they
          were made, not misleading and (C) since the Effective Date of the
          Registration Statement or the date of each Prospectus, as the case may
          be, no event has occurred which should have been set forth in a
          supplement to or amendment of each Prospectus which has not been set
          forth in such a supplement or amendment.

                 (h)  At the Effective Time and on each Closing Date, the
Company shall have furnished to the U.S. Underwriters a letter of Arthur
Andersen LLP addressed to the Underwriters and dated such Closing Date and in
form and substance satisfactory to the U.S. Underwriters confirming that they
are independent public accountants within the meaning of the Act and are in
compliance with the applicable requirements relating to the qualification of
accountants under Rule 2-01 of Regulation S-X of the Commission, and stating,
as of the date of such letter (or, with respect to matters involving changes or
developments since the respective dates as of which specified financial
information is given in the U.S. Prospectus, as of a date not more than five
days prior to the date of such letter), the conclusions and findings of such
firm with respect to the financial information and other matters covered by its
letter delivered to the U.S. Underwriters concurrently with the execution of
this Agreement and confirming in all material respects the conclusions and
findings set forth in such prior letter.

                 (i)  The NASD, upon review of the terms of the public offering
of the Underwritten Shares, shall not have objected to the participation by any
of the U.S. Underwriters in such offering or asserted any violation of the
By-Laws of the NASD.

                 (j)  Neither the Company nor any of its subsidiaries (1) shall
have sustained since the date of the latest audited financial statements
included in the U.S. Prospectus any loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by insurance,
or from any labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the U.S. Prospectus or (2) since
such date there shall not have been any change in the capital stock or
long-term debt of the Company or any of its subsidiaries or any change, or any
development involving a prospective change, in or affecting the general
affairs, management, financial position, stockholders' equity or result of
operations of the Company and its subsidiaries, otherwise than as set forth or
contemplated in the U.S. Prospectus, the effect of which, in any such case
described in clause (1) or (2) of this subparagraph, is, in the reasonable
judgment of the U.S. Underwriters, so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Shares on the terms and in the manner contemplated in the U.S.
Prospectus.

                 (k)  The Shares to be purchased on such Closing Date by the
U.S. Underwriters shall be listed on the New York Stock Exchange.

                 (l)  Each Selling Stockholder (or one or more
attorneys-in-fact on behalf of the Selling Stockholder) shall have furnished to
the Representatives on each Closing Date a certificate, dated such Closing
Date, signed by, or on behalf of, such Selling Stockholder (or the Custodian or
one or more attorneys-in-fact) stating that the representations, warranties and
agreements of such Selling Stockholder contained herein are true and correct as
of such Closing
   23

                                                                              23



Date and that such Selling Stockholder has complied with all agreements
contained herein to be performed by such Selling Stockholder at or prior to
such Closing Date.

                 All such opinions, certificates, letters and documents
mentioned above or elsewhere in this Agreement shall be deemed to be in
compliance with the provisions hereof only if they are reasonably satisfactory
to you and Simpson Thacher & Bartlett, counsel for the U.S.  Underwriters, and
the Company shall furnish to you conformed copies thereof in such quantities as
you reasonably request.

                 8.  Indemnification and Contribution.  (a)  The Company agrees
to indemnify and hold harmless each U.S. Underwriter and Selling Stockholder
against any loss, claim, damage or liability (or any action in respect
thereof), including without limitation, any legal or other expenses reasonably
incurred by any U.S. Underwriter or Selling Stockholder in connection with
defending or investigating any such action or claim, joint or several, to which
such U.S. Underwriter or such Selling Stockholder may become subject, under the
Act or otherwise, insofar as such loss, claim, damage or liability (or action
in respect thereof) arises out of or is based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement, any Preliminary Prospectus, any Prospectus or the Registration
Statement or any Prospectus as amended or supplemented or in any Blue Sky
application or other document executed by the Company specifically for that
purpose or based upon written information furnished by the Company filed in any
state or other jurisdiction in order to qualify any of or all the Shares under
the securities laws thereof (any such application, document or information
being hereinafter referred to as a "Blue Sky Application"), or (ii) the
omission or alleged omission to state in the Registration Statement, any
Preliminary Prospectus, any Prospectus or the Registration Statement or any
Prospectus as amended or supplemented or in any Blue Sky Application a material
fact required to be stated therein or necessary to make the statements therein
not misleading; and shall reimburse each U.S. Underwriter or Selling
Stockholder promptly after receipt of invoices from such U.S. Underwriter or
Selling Stockholder for any legal or other expenses as reasonably incurred by
such U.S.  Underwriter or Selling Stockholder in connection with investigating,
preparing to defend or defending against or appearing as a third-party witness
in connection with any such loss, claim, damage, liability or action,
notwithstanding the possibility that payments for such expenses might later be
held to be improper, in which case such payments shall be promptly refunded;
provided, further, that the Company shall not be liable pursuant to this
Section 8(a) with respect to any untrue statement or alleged untrue statement
or omission or alleged omission in any Preliminary Prospectus which is
corrected in a Prospectus if the person asserting such loss, claim, damage or
liability purchased Shares from a U.S. Underwriter but was not sent or given a
copy of a Prospectus at or prior to the written confirmation of the sale of
such Shares to such person; and provided, however, that the Company shall not
be liable (x) under this paragraph 8(a) in any such case to the extent, but
only to the extent, that any such loss, claim, damage, liability or action
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in reliance upon and in conformity with
written information furnished to the Company through the Representatives by or
on behalf of any U.S. Underwriter or from any Selling Stockholder specifically
for use in the preparation of the Registration Statement, any Preliminary
Prospectus, any Prospectus or the Registration Statement or any Prospectus as
amended or supplemented, or any Blue Sky Application.
   24

                                                                              24




                 (b)  Each Selling Stockholder severally, but not jointly,
shall indemnify and hold harmless the Company and each U.S.  Underwriter
against any loss, claim, damage or liability (or any action in respect thereof)
to which the Company or such U.S. Underwriter may become subject, under the Act
or otherwise, insofar as such loss, claim, damage or liability (or action in
respect thereof) arises out of or is based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement, any Preliminary Prospectus, any Prospectus or the Registration
Statement or any Prospectus as amended or supplemented or in any Blue Sky
Application, or (ii) the omission or alleged omission to state in the
Registration Statement, any Preliminary Prospectus any Prospectus or the
Registration Statement or any Prospectus, as amended or supplemented, or in any
Blue Sky Application a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading and shall reimburse the Company or such U.S.
Underwriter promptly after receipt of invoices from the Company or such U.S.
Underwriter for any legal or other expenses as reasonably incurred by the
Company or such U.S. Underwriter in connection with investigating, preparing to
defend or defending against or appearing as a third-party witness in connection
with any such loss, claim, damage, liability or action notwithstanding the
possibility that payments for such expenses might later be held to be improper,
in which case such payments shall be promptly refunded; provided, however, that
such indemnification or reimbursement shall be available in each such case to
the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in reliance upon and
in conformity with written information concerning such Selling Stockholder
furnished to the Company or such U.S. Underwriter by or on behalf of such
Selling Stockholder specifically for use in the preparation thereof; provided,
further, that no Selling Stockholder shall be liable pursuant to this Section
8(b) with respect to any untrue statement or alleged untrue statement or
omission or alleged omission in any Preliminary Prospectus which is corrected
in a Prospectus if the person asserting such loss, claim, damage or liability
purchased Shares from a U.S. Underwriter but was not sent or given a copy of a
Prospectus at or prior to the written confirmation of the sale of such Shares
to such person; and provided, further, that the aggregate amount of all such
indemnification or reimbursement payable by any Selling Stockholder pursuant to
this Agreement and Section 8(b) of the International Underwriting Agreement
shall in no case exceed the net proceeds to such Selling Stockholder from the
sale of Underwritten Shares.

                 (c)  Each U.S. Underwriter severally, but not jointly, shall
indemnify and hold harmless the Company and each Selling Stockholder against
any loss, claim, damage or liability (or any action in respect thereof) to
which the Company or any Selling Stockholder may become subject, under the Act
or otherwise, insofar as such loss, claim, damage or liability (or action in
respect thereof) arises out of or is based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement, any Preliminary Prospectus, any Prospectus or the Registration
Statement or any Prospectus as amended or supplemented, or in any Blue Sky
Application, or (ii) the omission or alleged omission to state in the
Registration Statement, any Preliminary Prospectus, any Prospectus or the
Registration Statement or any Prospectus as amended or supplemented, or in any
Blue Sky Application a material fact required to be stated therein or necessary
to make the statements therein not misleading and shall reimburse the Company
or such Selling Stockholder promptly after receipt of invoices from the Company
or such Selling Stockholder for any legal or other expenses as reasonably
incurred by
   25

                                                                              25



the Company or such Selling Stockholder in connection with investigating,
preparing to defend or defending against or appearing as a third-party witness
in connection with any such loss, claim, damage, liability or action
notwithstanding the possibility that payments for such expenses might later be
held to be improper, in which case such payments shall be promptly refunded;
provided, however, that such indemnification or reimbursement shall be
available in each such case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with written information furnished
to the Company or such Selling Stockholder through you by or on behalf of such
U.S. Underwriter specifically for use in the preparation thereof.

                 (d)  Promptly after receipt by any indemnified party under
subsection (a), (b) or (c) above of notice of any claim or the commencement of
any action, the indemnified party shall, if a claim in respect thereof is to be
made against the indemnifying party under such subsection, notify the
indemnifying party in writing of the claim or the commencement of that action;
provided, however, that the failure so to notify the indemnifying party shall
not relieve it from any liability which it may have under this Section 8 except
to the extent it has been prejudiced in any material respect by such failure or
from any liability which it may have to an indemnified party otherwise than
under this Section 8.  If any such claim or action shall be brought against any
indemnified party and it shall notify the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it wishes, jointly with any other similarly notified indemnifying party,
to assume the defense thereof with counsel reasonably satisfactory to the
indemnified party.  After notice from the indemnifying party to the indemnified
party of its election to assume the defense of such claim or action, the
indemnifying party shall not be liable to the indemnified party under such
subsection for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than reasonable
costs of investigation; except that any indemnified party shall have the right
to employ its own counsel to represent it if, in the reasonable judgment of
such indemnified party (based on advice of counsel), it is advisable for such
indemnified party to be represented by separate counsel because there may be
legal defenses available to it or other indemnified parties that are
inconsistent with those available to the indemnifying party, and in that event
the fees and expenses of such separate counsel shall be paid by the
indemnifying party.

                 (e)  If the indemnification provided for in this Section 8 is
unavailable to hold harmless an indemnified party under subsection (a), (b) or
(c) above, then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of the losses, claims, damages or liabilities referred to in
subsection (a), (b) or (c) above (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company, the Selling Stockholders
and the U.S.  Underwriters from the offering of the Shares or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company, the
Selling Stockholders and the U.S. Underwriters in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, or actions in respect thereof, as well as any other relevant
equitable considerations.  The relative benefits received by the Company and
the Selling Stockholders, on the one hand, and the U.S. Underwriters, on the
other hand, shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Shares (after
   26

                                                                              26



underwriting discounts and commissions but before deducting other expenses)
received by the Selling Stockholders bear to the total underwriting discounts
and commissions received by the U.S. Underwriters, in each case as set forth in
the table on the cover page of the U.S. Prospectus (with the estimated expenses
allocated pro rata among the Shares and the International Shares).  Relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Company, the Selling Stockholders or the U.S. Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission.  The Company, the Selling
Stockholders and the U.S. Underwriters agree that it would not be just and
equitable if contributions pursuant to this subsection (e) were to be
determined by pro rata allocation (even if the U.S. Underwriters were treated
as one entity for such purpose) or by any other method of allocation which does
not take into account the equitable considerations referred to in the first
sentence of this subsection (e).  The amount paid by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to in the first sentence of this subsection (e) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating, preparing to defend or
defending against any action or claim which is the subject of this subsection
(e).  Notwithstanding the provisions of this subsection (e), (i) no U.S.
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Shares underwritten by it and distributed
to the public were offered to the public exceeds the amount of any damages
which writer has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission and (ii)
notwithstanding the provisions of this subsection (e), no Selling Stockholder
shall be required to contribute any amount in excess of the amount by which the
amount of net proceeds received by such Selling Stockholder from the sale by
such Selling Stockholder of its portion of the Shares pursuant to this
Agreement exceeds the amount of any damages such Selling Stockholder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission.  No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.  The U.S. Underwriters' obligations in this subsection (e)
to contribute are several in proportion to their respective underwriting
obligations and not joint.  Each party entitled to contribution agrees that
upon the service of a summons or other initial legal process upon it in any
action instituted against it in respect of which contribution may be sought, it
shall promptly give written notice of such service to the party or parties from
whom contribution may be sought, but the omission so to notify such party or
parties of any such service shall not relieve the party from whom contribution
may be sought for any obligation it may have hereunder or otherwise (except as
specifically provided in subsection (d) hereof).

                 (f)  The obligations of the Company and the Selling
Stockholders under this Section 8 shall be in addition to any liability which
the Company and the Selling Stockholders may otherwise have, and shall extend,
upon the same terms and conditions, to each person, if any, who controls the
Company, any Selling Stockholder or any U.S. Underwriter within the meaning of
the Act; and the obligations of the U.S.  Underwriters under this Section 8
shall be in addition to any liability that the respective U.S. Underwriters may
otherwise have, and shall extend, upon the same terms and conditions, to each
director of the Company (including any
   27

                                                                              27



person who, with his or her consent, is named in the Registration Statement as
about to become a director of the Company) or any Selling Stockholder, to each
officer of the Company who has signed the Registration Statement and to each
person, if any, who controls the Company or a Selling Stockholder within the
meaning of the Act.

                 9.  Substitution of U.S. Underwriters.  If, on either Closing
Date, any U.S. Underwriter defaults in the performance of its obligations under
this Agreement, the remaining non-defaulting U.S. Underwriters shall be
obligated to purchase the Shares which the defaulting U.S. Underwriter agreed
but failed to purchase on such Closing Date in the respective proportions which
the number of Firm Shares set opposite the name of each remaining
non-defaulting U.S. Underwriter in Schedule 1 hereto bears to the total number
of Firm Shares set opposite the names of all the remaining non-defaulting U.S.
Underwriters in Schedule 1 hereto; provided, however, that the remaining
non-defaulting U.S.  Underwriters shall not be obligated to purchase any of the
Shares on such Closing Date if the total number of Shares which the defaulting
U.S.  Underwriter or U.S. Underwriters agreed but failed to purchase on such
date exceeds 9.09% of the total number of Shares to be purchased on such
Closing Date, and any remaining non-defaulting U.S. Underwriter shall not be
obligated to purchase more than 110% of the number of Shares which it agreed to
purchase on such Closing Date pursuant to the terms of Section 3.  If the
foregoing maximums are exceeded, the remaining non-defaulting U.S.
Underwriters, or those other underwriters satisfactory to the Representatives
who so agree, shall have the right, but shall not be obligated, to purchase, in
such proportion as may be agreed upon among them, all the Shares to be
purchased on such Closing Date.  If the remaining non-defaulting U.S.
Underwriters or other underwriters satisfactory to the Representatives do not
elect to purchase the Shares which the defaulting U.S. Underwriter or U.S.
Underwriters agreed but failed to purchase on such Closing Date, this Agreement
(or, with respect to the Option Closing Date, the obligation of the U.S.
Underwriters to purchase, and of the Company to sell, the Option Shares) shall
terminate without liability on the part of any non-defaulting U.S. Underwriter
or the Company or the Selling Stockholders, except that the Company will
continue to be liable for the payment of expenses to the extent set forth in
Sections 5(f) and 10.  As used in this Agreement, the term "U.S.  Underwriter"
includes, for all purposes of this Agreement unless the context requires
otherwise, any party not listed in Schedule 1 hereto who, pursuant to this
Section 9, purchases Firm Shares which a defaulting U.S. Underwriter agreed but
failed to purchase.

                 Nothing contained herein shall relieve a defaulting U.S.
Underwriter of any liability it may have to the Company and the Selling
Stockholders for damages caused by its default.  If other underwriters are
obligated or agree to purchase the Shares of a defaulting or withdrawing U.S.
Underwriter, either the Representatives, the Company or the Selling
Stockholders may postpone the Closing Date for up to seven full Business Days
in order to effect any changes that in the opinion of counsel for the U.S.
Underwriters, the Company or the Selling Stockholders may be necessary in the
Registration Statement, the Prospectus or in any other document or arrangement.

                 10.  Effective Date and Termination.  (a)  This Agreement
shall become effective at 11:00 A.M., New York City time, on the first full
Business Day following the date hereof, or at such earlier time after the
Registration Statement becomes effective as you shall first release the Firm
Shares for sale to the public.  You shall notify the Company immediately after
you have
   28

                                                                              28



taken any action which causes this Agreement to become effective.  For purposes
of this Agreement, the release of the public offering of the Firm Shares for
sale to the public shall be deemed to have been made when you release, by
telecopy or otherwise, firm offers of the Firm Shares to securities dealers or
release for publication a newspaper advertisement relating to the Firm Shares,
whichever occurs first.

                 (b)  From the date of this Agreement until the First Closing
Date, this Agreement may be terminated by you in your absolute discretion by
giving notice as hereinafter provided to the Company and the Selling
Stockholders, if (i) the Company shall have failed, refused or been unable, at
or prior to such Closing Date, to perform any agreement on its part to be
performed hereunder, (ii) any other condition to the obligations of the U.S.
Underwriters hereunder (other than the conditions set forth in Section 7(i)
hereof) is not fulfilled, (iii) there occurs any change, or any development
involving a prospective change, in or affecting the financial condition of the
Company or its subsidiaries, which in your judgment, materially impairs the
investment quality of the Shares; (iv) there is any downgrading in the rating
of any debt securities of the Company by any "nationally recognized statistical
rating organization" (as defined for purposes of Rule 436(g) under the Act or
Rule 15c3-1 under the Exchange Act), or any public announcement that any such
organization has under surveillance or review its rating of any debt securities
of the Company (other than an announcement with positive implications of a
possible upgrading, and no implication of a possible downgrading, of such
rating), (v) trading in securities generally on the New York Stock Exchange
shall have been suspended or materially limited, or minimum prices shall have
been established on such exchange by the Commission, or by such exchange or
other regulatory body or governmental authority having jurisdiction, (vi) any
banking moratorium shall have been declared by Federal or New York governmental
authorities, (vii) there is an outbreak or escalation of hostilities involving
the United States on or after the date hereof, or the United States is or
becomes engaged in hostilities which result in the declaration of a national
emergency or war, the effect of which, in your judgment, makes it inadvisable
or impractical to proceed with the completion of the sale of or any payment for
the Shares on the terms and in the manner contemplated in the Prospectuses, or
(viii) there shall have been such a material adverse change in general
economic, political or financial conditions (or the effect of international
conditions on the financial markets in the United States shall be such), in
your judgment, as to make it inadvisable or impractical to proceed with the
delivery of the Shares.  Any termination of this Agreement pursuant to this
Section 10 shall be without liability on the part of the Company, any Selling
Stockholder or any U.S. Underwriter, except as otherwise provided in Section
5(f), Section 8 and Section 10 of this Agreement.

                 Any notice referred to above may be given at the address
specified in Section 12 hereof in writing or by telecopier, telex or telephone,
and if by telecopier, telex or telephone, shall be immediately confirmed in
writing.

                 If notice shall have been given pursuant to this Section 10
preventing this Agreement from becoming effective or if the U.S.  Underwriters
shall decline to purchase the Shares for any reason permitted under this
Agreement, the Company shall reimburse the U.S.  Underwriters for the
reasonable fees and expenses of their counsel and for such other out-of-pocket
expenses as shall have been incurred by them in connection with this Agreement
   29

                                                                              29



and the proposed purchase of the Shares, and upon demand the Company shall pay
the full amount thereof to the U.S. Underwriters.

                 11.  Survival of Certain Provisions.  The agreements contained
in Section 8 hereof and the representations, warranties and agreements of the
Company contained in Sections 1 and 5 hereof and the Selling Stockholder
contained in Sections 2 and 6 hereof shall survive the delivery of the Shares
to the U.S. Underwriters hereunder and shall remain in full force and effect,
regardless of any termination or cancellation of this Agreement or any
investigation made by or on behalf of any indemnified party.

                 12.  Notices.  Except as otherwise provided in the Agreement,
(a) whenever notice is required by the provisions of this Agreement to be given
to the Company, such notice shall be in writing or by telecopy addressed to the
Company at the address of the Company set forth in the Registration Statement,
Attention:  James H. Vandenberghe; (b) whenever notice is required by the
provisions of this agreement to be given to the Selling Stockholders, such
notice shall be in writing or by telecopy addressed to Three World Financial
Center (18th Floor), New York, New York 10285, Attention:  Alan Washkowitz; and
(c) whenever notice is required by the provisions of this Agreement to be given
to the several U.S. Underwriters, such notice shall be in writing or by
telecopy addressed to you, in care of Lehman Brothers Inc., Three World
Financial Center, New York, New York 10285, Attention:  Syndicate Department.

                 13.  Information Furnished by U.S. Underwriters.  The U.S.
Underwriters severally confirm that the statements set forth in the last
paragraph of the cover page with respect to the public offering of the Shares
and under the caption "Underwriting" in any Preliminary Prospectus and in the
Prospectuses are correct and constitute the written information furnished by or
on behalf of any U.S. Underwriter referred to in paragraph (c) of Section 1
hereof and in paragraphs (a) and (c) of Section 8 hereof.

                 14.  Information Furnished by Selling Stockholders.  Each of
the Selling Stockholders severally confirm that the statements with respect to
such Selling Stockholder set forth under the caption "Selling Stockholders" in
any Preliminary Prospectus and in the Prospectuses are correct and constitute
the only written information furnished by or on behalf of the Selling
Stockholder pursuant to Section 8(b) hereof.

                 15.  Parties.  This Agreement shall inure to the benefit of
and binding upon the several U.S. Underwriters, the Company, the Selling
Stockholders and their respective successors.  This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons, except that
(a) the representations, warranties, indemnities and agreements of the Company
and the Selling Stockholders contained in this Agreement shall also be deemed
to be for the benefit of the person or persons, if any, who control any U.S.
Underwriter within the meaning of Section 15 of the Act and for the benefit of
any International Manager (and controlling persons thereof) who offers or sells
any Shares in accordance with the terms of the Agreement Between U.S.
Underwriters and International Managers and (b) the indemnity agreement of the
U.S. Underwriters contained in Section 8 hereof shall be deemed to be for the
benefit of directors of the Company, officers of the Company who signed the
Registration Statement, any person controlling the Company within the meaning
of Section 15 of the Act, the
   30

                                                                              30



directors of each Selling Stockholder, the officers of each Selling Stockholder
and any person controlling any Selling Stockholder with the meaning of Section
15 of the Act.  Nothing in this Agreement shall be construed to give any
person, other than the persons referred to in this paragraph, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision contained herein.

                 16.  Compliance with Conduct Rule 2720 of NASD By-Laws.  Each
U.S. Underwriter agrees, severally and not jointly, that in accordance with
Conduct Rule 2720 of the By-Laws of the NASD, a transaction in Shares issued by
the Company shall not be executed by such U.S.  Underwriter in a discretionary
account without the prior specific written approval of the customer.

                 17.  Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without respect
to choice of law principles thereof.

                 18.  Counterparts.  This Agreement may be signed in one or
more counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.

                 If the foregoing correctly sets forth the agreement among the
Company, the Selling Stockholders and the U.S. Underwriters, please indicate
your acceptance in the space provided for that purpose below.

                                     Very truly yours,

                                     LEAR CORPORATION


                                      By:
                                                ----------------------

                                                 Name:
                                                 Title:


                                     LEHMAN BROTHERS MERCHANT BANKING
                                        PORTFOLIO PARTNERSHIP L.P., as Selling
                                        Stockholder


                                        By:     LBI Group, Inc.

                                        By:     ----------------------
                                                 Name:
                                                 Title:
   31

                                                                              31





                           LEHMAN BROTHERS CAPITAL PARTNERS II, L.P., as 
                             Selling Stockholder


                                  By: Lehman Brothers Holdings Inc.
                                     
                                  By:
                                      -----------------------------
                                         Name:
                                         Title:


                           LEHMAN BROTHERS OFFSHORE INVESTMENT
                             PARTNERSHIP L.P., as Selling Stockholder


                                  By: Lehman Brothers Offshore Partners Ltd

                                  By:
                                      ------------------------------
                                         Name:             
                                         Title:


                           LEHMAN BROTHERS OFFSHORE INVESTMENT
                             PARTNERSHIP - JAPAN L.P., as Selling Stockholder

                                  By: Lehman Brothers Offshore Partners Ltd.

                                  By:
                                      ------------------------------
                                         Name:
                                         Title:
   32

                                                                              32




Accepted:

LEHMAN BROTHERS INC.
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
MORGAN STANLEY CO. INCORPORATED
SALOMON BROTHERS INC
SCHRODER WERTHEIM & CO. INCORPORATED
For themselves and as Representatives
   for each of the several U.S. Underwriters
   named in Schedule I hereto


By:              LEHMAN BROTHERS INC.

                 By:      _____________________________
                          Name:
                          Title:
   33

                                   SCHEDULE I

            U.S. Underwriting Agreement dated _______________, 1997




                                                           Number of Firm
                                                           Shares to be
U.S. Underwriter                                           Purchased
- ----------------                                           --------------
                                                        
 Lehman Brothers Inc.

 Donaldson, Lufkin & Jenrette Securities Corporation

 Morgan Stanley & Co. Incorporated

 Salomon Brothers Inc

 Schroder Wertheim & Co. Incorporated




 
   34

                                  SCHEDULE II

           U.S. Underwriting Agreement dated _________________, 1997





                                                              Number of Firm
Selling Stockholder                                           Shares to be Sold
- -------------------                                           -----------------
                                                           
 Lehman Brothers Merchant Banking Portfolio Partnership 
    L.P.

 Lehman Brothers Capital Partners II, L.P.

 Lehman Brothers Offshore Investment Partnership L.P

 Lehman Brothers Offshore Investment Partnership-Japan 
    L.P

   1

                                                                STB DRAFT 6/6/97


                                                                EXHIBIT 1.2
                                                                

                                1,800,000 Shares

                                LEAR CORPORATION

                                  Common Stock

                      International Underwriting Agreement

                                                         _________________, 1997


Lehman Brothers International (Europe)
Donaldson, Lufkin & Jenrette Securities Corporation
Morgan Stanley & Co. International Limited
Salomon Brothers International Limited
J. Henry Schroder & Co. Limited
As Lead Managers for each of
  the several International Managers
  named in Schedule I hereto,
  c/o LEHMAN BROTHERS INTERNATIONAL (EUROPE)
  One Broadgate
  London EC2M 7HA
  ENGLAND

Dear Sirs:

          Lehman Brothers Merchant Banking Portfolio Partnership L.P., Lehman
Brothers Capital Partners II, L.P., Lehman Brothers Offshore Investment
Partnership L.P. and Lehman Brothers Offshore Investment Partnership - Japan
L.P. (each a "Selling Stockholder" and collectively the "Selling Stockholders")
propose to sell to the several International Managers named in Schedule I hereto
(the "International Managers") an aggregate of 1,800,000 shares (the "Firm
Shares") of Common Stock, $.01 par value (the "Common Stock"), of Lear
Corporation, a Delaware corporation (the "Company").  In addition, for the sole
purpose of covering over-allotments in connection with the sale of the Firm
Shares, the Selling Stockholders propose to grant to the International Managers
(as defined below) an option to purchase up to an aggregate of 254,854
additional shares (the "Option Shares") of Common Stock.  The Firm Shares and
any Option Shares purchased pursuant to this Agreement are herein called the
"Shares".

          It is understood that the Company and the Selling Stockholders are
concurrently entering into a U.S. Underwriting Agreement dated the date hereof
(the "U.S. Underwriting Agreement"), providing for the sale by the Company and
the Selling Stockholders of an aggregate of 7,200,000 shares (the "U.S. Firm
Shares") of Common Stock through arrangements with certain underwriters in the
United States and Canada (the "U.S.  Underwriters"), for whom
   2


                                                                           2

Lehman Brothers Inc., Donaldson, Lufkin & Jenrette Securities Corporation,
Morgan Stanley & Co. Incorporated, Salomon Brothers Inc and Schroder Wertheim &
Co. Incorporated are acting as representatives (the "Representatives").  In
addition, for the sole purpose of covering over-allotments in connection with
the sale of the U.S. Firm Shares, the Selling Stockholders propose to grant to
the U.S. Underwriters an option to purchase up to an aggregate of 1,030,000
additional shares (the "U.S. Option Shares") of Common Stock.  The U.S. Firm
Shares and the U.S.  Option Shares which may be offered by the U.S.
Underwriters pursuant to the U.S. Underwriting Agreement are herein called the
"U.S. Shares"; the U.S. Shares and the Shares, collectively, are herein called
the "Underwritten Shares".  As specified in Section 3, the respective closings
under this Agreement and the U.S. Underwriting Agreement are hereby expressly
made conditional on one another.

          The Company and the Selling Stockholders also understand that the U.S.
Underwriters and the International Managers have entered into an agreement (the
"Agreement Between U.S. Underwriters and International Managers") contemplating
the coordination of certain transactions between the U.S. Underwriters and the
International Managers and that, pursuant thereto and subject to the conditions
set forth therein, the U.S.  Underwriters may purchase from the International
Managers a portion of the Shares or sell to the International Managers a portion
of the U.S.  Shares.  The Company and the Selling Stockholders understand that
any such purchases and sales between the U.S. Underwriters and the International
Managers shall be governed by the Agreement Between U.S. Underwriters and
International Managers and shall not be governed by the terms of this Agreement
or the U.S. Underwriting Agreement.

          This is to confirm the agreement concerning the purchase of the Shares
from the Selling Stockholders by the International Managers and certain related
agreements among the Company, the Selling Stockholders and the International
Managers.

          The following terms as used in this Agreement shall have the following
meanings:

          "Act" shall mean the Securities Act of 1933, as amended.

          "Business Day" shall mean any day on which the New York Stock Exchange
is open for trading.

          "Commission" shall mean the Securities and Exchange Commission.

          "Effective Date" shall mean the date of the Effective Time.

          "Effective Time" shall mean the date and the time as of which the
Registration Statement, or the most recent post-effective amendment thereto, if
any, was declared effective by the Commission (or, if the Company will next file
with the Commission an amendment to the Registration Statement as contemplated
by clause (i) of the first paragraph of Section 1, the date and time as of which
the Registration Statement shall be declared effective).

          "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.





   3

                                                                               3




          "Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.

          "International Preliminary Prospectus" shall mean a Preliminary
Prospectus relating to the Shares which are to be offered and sold outside the
United States or Canada to persons other than U.S. Persons.

          "International Prospectus" shall mean a Prospectus relating to the
Shares which are to be offered and sold outside the United States or Canada to
persons other than U.S. Persons.

          "Preliminary Prospectuses" shall mean each prospectus included in the
Registration Statement, or any amendment thereof, before the Effective Date,
each prospectus filed with the Commission by the Company with the consent of the
Representatives pursuant to Rule 424(a) and each prospectus included in the
Registration Statement at the Effective Time that omits Rule 430A Information.

          "Prospectuses" shall mean the forms of prospectuses relating to the
Underwritten Shares, as first filed pursuant to Rule 424(b) after the Execution
Time or, if no filing pursuant to Rule 424(b) is required, the forms of final
prospectuses included in the Registration Statement at the Effective Time.

          "Registration Statement" shall mean the registration statement
referred to above, as amended at the Effective Time, including any documents
incorporated by reference therein and all exhibits thereto.  Such term shall
include any Rule 430A Information deemed to be included therein at the Effective
Time as provided by Rule 430A.

          "Rule 424" and "Rule 430A" shall refer to such rules under the Act.

          "Rule 430A Information" shall mean information with respect to the
Underwritten Shares and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.

          "Rules and Regulations" shall mean the rules and regulations in effect
at any relevant time adopted by the Commission under the Act or the Exchange
Act.

          "Subsidiary" and "Significant Subsidiary" shall have the meanings
assigned in Rule 405 of the Rules and Regulations.  As used in reference to the
Company, "subsidiary" shall mean a Subsidiary of the Company.

          "U.S. Person" shall mean any resident or national of the United States
or Canada and its provinces, any corporation, partnership or other entity
created or organized in or under the laws of the United States or Canada and its
provinces or any estate or trust the income of which is subject to United States
or Canadian income taxation regardless of the source of its income (other than
the foreign branch of any U.S. Person), and includes any United States or
Canadian branch of a person other than a U.S. Person; and "United States" shall
mean the United





   4

                                                                               4




States of America (including the states thereof and the District of Columbia)
and its territories, its possessions and other areas subject to its
jurisdiction.

          "U.S. Prospectus" shall mean a Prospectus relating to the U.S. Shares
which are to be offered and sold in the United States or Canada or to U.S.
Persons.

          Reference made herein to any Preliminary Prospectus or to the
Prospectus shall be deemed to refer to and include any documents incorporated by
reference therein (including all exhibits thereto) pursuant to Item 12 of Form
S-3 under the Securities Act, as of the date of such Preliminary Prospectus or
Prospectus and any reference to any amendment or supplement to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include any
document filed under the Exchange Act after the date of such Preliminary
Prospectus or the Prospectus and incorporated by reference in such Preliminary
Prospectus or Prospectus.

          1.  Representations and Warranties of the Company.  The Company
represents, warrants and agrees that:

          (a)  A registration statement on Form S-3 (File No. 333-_______) with
respect to the Underwritten Shares has been prepared by the Company in
conformity with the requirements of the Act and the Rules and Regulations
thereunder and has been filed with the Commission under the Act.  Copies of such
registration statement as amended to date have been delivered by the Company to
you as the Lead Managers of the International Managers.  The Company will next
file with the Commission one of the following:  (i) prior to effectiveness of
such registration statement, a further amendment to such registration statement,
including forms of final prospectuses or (ii) after effectiveness of such
registration statement, final prospectuses in accordance with Rules 430A and
424(b)(1) or (4).

          (b)  On the Effective Date, the Registration Statement did or will,
and when the Prospectuses are first filed (if required) in accordance with Rule
424(b) and on each Closing Date (as defined in Section 4) the Prospectuses (and
any supplements thereto) will, comply in all material respects with the
applicable requirements of the Act and the Rules and Regulations.  The Company
has included in the Registration Statement, as amended at the Effective Date,
all information required by the Act and the Rules and Regulations thereunder to
be included in the Prospectuses with respect to the Underwritten Shares and the
offering thereof, and the Prospectuses, when filed with the Commission, did or
will contain all Rule 430A Information, together with all other such required
information, with respect to the Underwritten Shares and the offering thereof
and, except to the extent the Lead Managers shall agree in writing to a
modification, shall be in all substantive respects in the form furnished to you
prior to the Execution Time or, to the extent not completed at the Execution
Time, shall contain only such specific additional information and other changes
(beyond that contained in the latest Preliminary Prospectuses) as the Company
has advised you, prior to the Execution Time, will be included or made therein.
The Commission has not issued any stop order preventing or suspending the use of
any Preliminary Prospectus or the Prospectuses or the effectiveness of the
Registration Statement, and no proceeding for any such purpose has been
initiated or threatened by the Commission.





   5

                                                                               5




          (c)  On the Effective Date, the Registration Statement did not or will
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein not misleading; and, on the Effective Date, the Prospectuses
did not or will not, and on the date of any filing pursuant to Rule 424(b) and
on each Closing Date, the Prospectuses (together with any supplements thereto)
will not, include any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading; provided that the
Company makes no representation or warranty as to information contained in or
omitted from the Registration Statement or the Prospectuses in reliance upon,
and in conformity with, written information furnished to the Company by you or
any Selling Stockholder, or by any International Manager through you,
specifically for inclusion therein.

          (d)  The documents incorporated by reference in the Prospectuses, when
they were filed with the Commission (or upon amendment thereof by other
documents included in such incorporated documents), conformed in all material
respects to the requirements of the Act or Exchange Act, as applicable, and the
Rules and Regulations thereunder, and such documents were timely filed as
required thereby and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; and any further documents so filed and
incorporated by reference in the Prospectuses, when such documents become
effective or are filed with Commission will conform in all material respects to
the requirements of the Act or the Exchange Act, as applicable, and the Rules
and Regulations thereunder, and will be timely filed as required thereby and
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading.

          (e)  Neither the Commission nor, to the knowledge of the Company, the
"blue sky" or securities authority of any jurisdiction has issued an order (a
"Stop Order") suspending the effectiveness of the Registration Statement,
preventing or suspending the use of any Preliminary Prospectuses, the
Prospectuses, the Registration Statement, or any amendment or supplement
thereto, refusing to permit the effectiveness of the Registration Statement, or
suspending the registration or qualification of the Underwritten Shares, nor, to
the knowledge of the Company, has any of such authorities instituted or
threatened to institute any proceeding with respect to a Stop Order in any
jurisdiction in which the Underwritten Shares are sold.

          (f)  Each of the Company and its subsidiaries is a corporation duly
organized, validly existing, and in good standing under the laws of its
jurisdiction of incorporation, with full power and authority, and all necessary
consents, authorizations, approvals, orders, licenses, certificates, and permits
of and from, all Federal, state, local, and other governmental and foreign
authorities, to own, lease, license, and use its properties and assets and to
carry on its business in the manner described in the Prospectuses except where
such failure will not have a material adverse effect on the Company and its
subsidiaries taken as a whole.  Except as described in the Registration
Statement and Prospectuses, each such consent, authorization, approval, order,
license, certificate and permit is valid and in full force and effect, and there
is no proceeding pending, or to the knowledge of the Company, threatened, which
might lead to the revocation, termination, suspension or nonrenewal of any such
consent, authorization, approval, order,





   6

                                                                               6




license, certificate or permit.  Each of the Company and its subsidiaries is
duly qualified to do business and is in good standing in every jurisdiction in
which its ownership, leasing, licensing, or use of property and assets or the
conduct of its business makes such qualification necessary, except in those
jurisdictions where failure to qualify or to be in good standing would not have
a material adverse effect on the Company and its subsidiaries taken as a whole.

          (g)  The Company has an authorized capitalization as set forth in the
Registration Statement.  Except as described or otherwise disclosed in the
Prospectuses, each outstanding share of Common Stock and each outstanding share
of capital stock of the Company's subsidiaries is duly authorized, validly
issued, fully paid and nonassessable, has not been issued and is not owned or
held in violation of any preemptive rights of shareholders, and, in the case of
the Company's subsidiaries, is owned of record and beneficially by the Company
(except for directors' qualifying shares), or its subsidiaries free and clear of
all liens, security interests, pledges, charges, encumbrances, shareholders'
agreements and voting trusts.  The Company's capital stock conform to the
statements in relation thereto contained in the Prospectuses.  There is no
commitment, plan or arrangement to issue, and no outstanding option, warrant or
other right calling for the issuance of, any share of capital stock of the
Company or the Company's subsidiaries to any person or any security or other
instrument which by its terms is convertible into, exercisable for, or
exchangeable for capital stock of the Company or the Company's subsidiaries,
except as described or otherwise disclosed in the Prospectuses.  There is
outstanding no security or other instrument which by its terms is convertible
into or exchangeable for capital stock of the Company or any of their
subsidiaries, except as described or otherwise disclosed in the Prospectuses.

          (h)  Other than as described in the Prospectuses, there are no
contracts, agreements or understandings between the Company and any person
granting such person the right to require the Company to file a registration
statement under the Act with respect to any securities of the Company owned or
to be owned by such person or to require the Company to include such securities
in the securities registered pursuant to the Registration Statement or in any
securities being registered pursuant to any other registration statement filed
by the Company under the Act, other than rights that have been duly and validly
waived.

          (i)  Neither the Company nor any of its subsidiaries has sustained,
since the date of the Company's Report on Form 10-K for the year ended December
31, 1996, any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectuses; and, since such date,
there has not been any change in the capital stock of the Company (other than in
respect of shares of Common Stock issued upon the exercise of management
options) or any material change in long-term debt of the Company or any of its
subsidiaries or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the general affairs,
management, financial position, shareholders' equity or results of operations of
the Company and its subsidiaries, otherwise than as set forth or contemplated in
the Prospectuses.

          (j)  Neither the Company nor any of its subsidiaries is now or is
expected by the Company or its subsidiaries to be in violation or breach of, or
in default with respect to, any





   7

                                                                               7



provision of any contract, agreement, instrument, lease, or license to which
the Company or any of its subsidiaries is a party, the effect of which would
materially adversely affect the financial condition, results of operations,
business, assets, liabilities or prospects of the Company and its subsidiaries
taken as a whole.  Each such material contract, agreement, instrument, lease or
license (i) is in full force, (ii) assuming the correctness of (iii) below, is
the legal, valid, and binding obligation of the Company or its subsidiaries and
is enforceable as to the Company or its subsidiaries, as the case may be, in
accordance with its terms, except that enforceability thereof may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization or similar laws
affecting the enforcement of creditors' rights generally and by general equity
principles and (iii) to the Company's knowledge, is the legal, valid and
binding obligation of the other parties thereto and is enforceable as to each
of them in accordance with its terms, except that enforceability thereof may be
limited by bankruptcy, insolvency, fraudulent conveyance, reorganization or
similar laws affecting the enforcement of creditors' rights generally and by
general equity principles.  Each of the Company and its subsidiaries enjoys
peaceful and undisturbed possession under all leases and licenses of real
property under which it is operating except where such failure could not
reasonably be expected to have a material adverse effect on the Company and its
subsidiaries taken as a whole.

          (k)  The Underwritten Shares have been duly and validly authorized and
issued and are fully paid and nonassessable; the Underwritten Shares conform to
the description of the Common Stock in the Prospectuses; and the Underwritten
Shares have been listed on the New York Stock Exchange.

          (l)  The execution, delivery and performance of this Agreement and the
U.S. Underwriting Agreement and the consummation of the transactions
contemplated hereby and thereby, the issuance and sale of the Shares, will not
conflict with or result in a breach or violation in any material respect of any
of the terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries is bound or to which any of the property or assets of
the Company or any of its subsidiaries is subject, nor will such actions result
in any violation in any material respect of the provisions of the Certificate of
Incorporation or the By-laws, in each case as amended, of the Company or any of
its subsidiaries or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their properties or assets; and no consent, approval,
authorization, order, registration, filing or qualification of or with any court
or governmental agency or body is required for the issue and sale of the
Underwritten Shares or the consummation of the other transactions contemplated
by this Agreement or the U.S. Underwriting Agreement, except the registration
under the Act of the Underwritten Shares, and such consents, approvals,
authorizations, registrations, filings or qualifications as may be required
under state securities or Blue Sky laws or as may be required by the laws of any
country other than the United States in connection with the purchase and
distribution of the Underwritten Shares by the U.S. Underwriters and the
International Managers.

          (m)  The Company will not, during the period of 90 days after the date
hereof except pursuant to this Agreement or the U.S. Underwriting Agreement or
as contemplated by





   8

                                                                               8




the Prospectuses, offer, sell or otherwise dispose of any Common Stock or
securities convertible into or exchangeable or exercisable for such Common
Stock of the Company, directly or indirectly, without the prior written consent
of Lehman Brothers International (Europe); provided, however, that (i) the
Company may issue and sell Common Stock pursuant to any employee stock option
plan, stock ownership plan or dividend reinvestment plan of the Company in
effect at the Effective Time, (ii) the Company may issue Common Stock issuable
upon the conversion of securities or the exercise of warrants outstanding at
the Effective Time and (iii) the Company may issue Common Stock as
consideration in connection with the acquisition by the Company of new
businesses.

          (n)  Except as may otherwise be disclosed in or contemplated by the
Prospectuses, since the date as of which information is given in the
Prospectuses, (i) the Company has not declared or paid any dividend or made any
distribution on its capital stock, (ii) the Company has not issued or granted
any securities and (iii) neither the Company nor any of its subsidiaries have
entered into any transaction or incurred any liability or obligation, contingent
or otherwise, other than in the ordinary course of business.

          (o)  Any contract, agreement, instrument, lease or license required to
be described in the Registration Statement or the Prospectuses has been properly
described therein, and any contract, agreement, instrument, lease or license
required to be filed as an exhibit to the Registration Statement has been filed
with the Commission as an exhibit to or has been incorporated as an exhibit by
reference in the Registration Statement.

          (p)  There is no labor strike or work stoppage or lockout actually
pending, imminent or threatened against the Company or any of its subsidiaries
which would have a material adverse effect on the consolidated financial
condition, results of operations, business, assets, liabilities or prospects of
the Company and its subsidiaries taken as a whole.

          (q)  Except as set forth in the Registration Statement and the
Prospectuses and except as would not materially and adversely affect the
consolidated financial position, shareholders' equity, results of operations,
business or prospects of the Company and its subsidiaries taken as a whole, (i)
the Company is not in violation of any applicable Federal, state, local or
foreign environmental law or any applicable order of any governmental authority
with respect thereto; (ii) the Company is not in violation of or subject to any
existing, or pending or, to the Company's knowledge, threatened action, suit,
investigation, inquiry or proceeding by any governmental authority nor is the
Company subject to any remedial obligations under any applicable Federal, state,
local or foreign environmental law; (iii) the Company and its subsidiaries are
in compliance with all permits or similar authorizations, if any, required to be
obtained or filed in connection with their operations including, without
limitation, emissions, discharges, treatment, storage, disposal or release of a
Hazardous Material into the environment except where any noncompliance could not
reasonably be expected to have a material adverse effect on the operations of
the Company and its subsidiaries; and (iv) to the knowledge of the Company and
its subsidiaries, after appropriate inquiry, no Hazardous Materials have been
disposed of or released by the Company or its subsidiaries on or to the
Company's or its





   9

                                                                               9




subsidiaries' property, except in accordance with applicable environmental
laws.  The term "Hazardous Material" means any oil (including petroleum
products, crude oil and any fraction thereof), chemical, contaminant,
pollutant, solid or hazardous waste, or Hazardous Substance (as defined in
Section 101(14) of the Comprehensive Environmental Response, Compensation and
Liability Act and regulations thereunder), that is regulated as toxic or
hazardous to human health or the environment under any Federal, state, local or
foreign environmental law.

          (r)  Except with respect to taxable periods commencing before the
taxable period ended June 30, 1991, as to which no representation is made, the
Company has filed all Federal, state, local and foreign income and franchise tax
returns required to be filed through the date hereof and has paid all taxes
shown to be due with respect to the taxable periods covered by such returns, and
no tax deficiency has been assessed, nor does the Company have any knowledge of
any tax deficiency which, individually or in the aggregate, if determined
adversely to the Company or any of its subsidiaries, could reasonably be
expected to have a material adverse effect on the consolidated financial
condition, results of operations, business, assets, liabilities or prospects of
the Company and its subsidiaries taken as a whole.

          (s)  Neither the Company nor any of its subsidiaries, nor any
director, officer, agent, employee or other person associated with or acting on
behalf of the Company or any of its subsidiaries, has used any corporate funds
for any unlawful contribution, gift, entertainment or other unlawful expense
relating to political activity; made any direct or indirect unlawful payment to
any foreign or domestic government official or employee from corporate funds;
violated or is in violation of any provision of the Foreign Corrupt Practices
Act of 1977; or made any bribe, rebate, payoff, influence payment, kickback or
other unlawful payment.

          (t)  The financial statements (including the related notes and
supporting schedules) incorporated by reference in the Prospectus present fairly
the financial condition and results of operations of the entities purported to
be shown thereby, at the dates and for the periods indicated, and have been
prepared in conformity with applicable generally accepted accounting principles
applied on a consistent basis throughout the periods involved.

          (u)  Arthur Andersen LLP, who have certified certain financial
statements of the Company, and Price Waterhouse LLP, who have certified certain
financial statements of Masland (as defined in the Prospectuses), and whose
reports are incorporated by reference in the Prospectus, are independent public
accountants as required by the Act and the Rules and Regulations.

          (v)  There is no litigation or governmental proceeding pending or, to
the knowledge of the Company or any of its subsidiaries, threatened against the
Company or any of its subsidiaries which could reasonably be expected to result
in any material adverse change in the consolidated financial condition, results
of operations, business, assets, liabilities or prospects of the Company or any
of its subsidiaries or which affects the transactions contemplated by this
Agreement and the Prospectuses or which is required to be disclosed in the
Registration Statement and the Prospectuses, which is not disclosed and
correctly summarized therein.





   10

                                                                              10




          (w)  The filing of the Registration Statement has been duly authorized
by the Company.

          (x)  Each of the Company and its subsidiaries holds good and
marketable title to, or valid and enforceable leasehold interests in, all items
of real and personal property which are material to the business of the Company
and its subsidiaries taken as a whole, free and clear of any lien, claim,
encumbrance, preemptive rights or any other claim of any other third party which
could reasonably be expected to materially interfere with the conduct of the
business of the Company and its subsidiaries taken as a whole.  The Company and
its subsidiaries are in material compliance with all applicable laws, rules and
regulations, except where such failure to comply would not have a material
adverse effect on the Company and its subsidiaries taken as a whole.

          (y)  The Company has not taken, and agrees that it will not take,
directly or indirectly, any action that could reasonably be expected to cause or
result in stabilization or manipulation of the price of any security to
facilitate the sale or resale of the Shares.

          2.  Representations, Warranties and Agreements of the Selling
Stockholders. Each Selling Stockholder, severally and not jointly, represents,
warrants and agrees as to itself that:

          (a)  Such Selling Stockholder has, and immediately prior to the First
Closing Date (as defined in Section 4) such Selling Stockholder will have, good
and valid title to the Underwritten Shares to be sold by such Selling
Stockholder hereunder as set forth in Schedule II hereto and under the U.S.
Underwriting Agreement on such date, free and clear of all liens, encumbrances,
equities or claims; and upon delivery of such Underwritten Shares and payment
therefor pursuant hereto and thereto, good and valid title to such Underwritten
Shares, free and clear of all liens, encumbrances, equities or claims, will pass
to the several U.S. Underwriters and the International Managers.

          (b)  Such Selling Stockholder has duly and irrevocably executed and
delivered powers of attorney (each, a "Power of Attorney") appointing one or
more other persons as attorneys-in-fact, with full power of substitution, and
with full authority (exercisable by any one or more of them) to execute and
deliver this Agreement and the U.S. Underwriting Agreement and to take such
other action as may be necessary or desirable to carry out the provisions hereof
or thereof on behalf of such Selling Stockholder.

          (c)  Such Selling Stockholder has full right, power and authority to
enter into and perform under this Agreement, the U.S. Underwriting Agreement and
the Power of Attorney; the execution, delivery and performance of this
Agreement, the U.S. Underwriting Agreement and the Power of Attorney by such
Selling Stockholder and the consummation by such Selling Stockholder of the
transactions contemplated hereby and thereby will not conflict with or result in
a breach or violation in any material respect of any of the terms or provisions
of, or constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which such Selling Stockholder is
a party or by which the Selling Stockholder is bound or to which any of the
property or assets of such Selling Stockholder is subject, nor will such actions
result in any violation in any material respect of the provisions of the
Certificate of Incorporation or the By-laws or comparable instruments, as
applicable, or any partnership





   11

                                                                              11




agreement of such Selling Stockholder or any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over
such Selling Stockholder or the property or assets of such Selling Stockholder;
and no consent, approval, authorization, order, filing or registration of or
with, any court or governmental agency or body is required for the execution,
delivery and performance of this Agreement, the U.S. Underwriting Agreement or
the Power of Attorney by such Selling Stockholder and the consummation by such
Selling Stockholder of the transactions contemplated hereby and thereby, except
the registration under the Act of the Underwritten Shares, filings pursuant to
Sections 13 and 16 of the Exchange Act, and such consents, approvals,
authorizations, registrations, filings or qualifications as may be required
under state securities or Blue Sky laws or as may be required by the laws of
any country other than the United States in connection with the purchase and
distribution of the Shares by the International Managers.

          (d)  To the extent that any statements or omissions made in the
Registration Statement, any Preliminary Prospectuses, the Prospectuses or any
amendment or supplement thereto are made in reliance upon and in conformity with
written information concerning such Selling Stockholder furnished to the Company
by such Selling Stockholder specifically for use therein, such Preliminary
Prospectuses did, and the Registration Statement did or will, and the
Prospectuses and any amendments or supplements to the Registration Statement or
the Prospectuses will, when they become effective or are filed with the
Commission, as the case may be, not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.

          3.  Purchase of the Shares by the International Managers.   (a)
Subject to the terms and conditions and upon the basis of the representations
and warranties herein set forth, each of the Selling Stockholders, severally and
not jointly, agrees to sell that number of Firm Shares set forth opposite such
Selling Stockholder's name in Schedule II hereto, to the International Managers
and each of the International Managers agrees, severally and not jointly, to
purchase, at a price of $_______ per Share, the number of Firm Shares set forth
opposite such International Manager's name in Schedule I hereto.  Each
International Manager shall be obligated to purchase from the Selling
Stockholders that number of the Firm Shares which represents the same proportion
of the number of the Firm Shares to be sold by the Selling Stockholders as the
number of the Firm Shares set forth opposite the name of such International
Manager in Schedule I represents of the total number of the Firm Shares to be
purchased by all of the International Managers pursuant to this Agreement.  The
respective purchase obligations of the International Managers with respect to
the Firm Shares shall be rounded among the International Managers to avoid
fractional shares, as the Lead Managers may determine.  The International
Managers agree to offer the Firm Shares to the public as set forth in the
International Prospectus.  Each International Manager agrees that, except to the
extent permitted by the Agreement Between U.S. Underwriters and International
Managers, it will not offer any of the Shares inside the United States and
Canada.

          The obligations of the Selling Stockholders to sell any Shares, and
the obligations of the International Managers to purchase the Shares, are
subject to the closing of the sale and purchase of the U.S. Firm Shares pursuant
to the U.S. Underwriting Agreement.





   12

                                                                              12




          (b)  Subject to the terms and conditions of this Agreement, the
Selling Stockholders hereby grant to the International Managers an option to
purchase from the Selling Stockholders, solely for the purpose of covering
over-allotments in the sale of Firm Shares, up to 254,854 shares of the Option
Shares for a period of 30 days from the date hereof at the purchase price per
Share set forth above.  Option Shares shall be purchased from the Selling
Stockholders for the accounts of the International Managers, severally and not
jointly, in proportion to the number of Firm Shares set forth opposite such
International Manager's name in Schedule I hereto, except that the respective
purchase obligations of each International Manager shall be adjusted by the Lead
Managers so that no International Manager shall be obligated to purchase Option
Shares other than in 100-share quantities.  Option Shares shall be sold by the
Selling Stockholders in proportion to the number of Firm Shares set forth
opposite such Selling Stockholder's name in Schedule II hereto, rounded among
the Selling Stockholders to avoid fractional shares.

          4.  Delivery of and Payment for Shares.  Delivery of certificates for
the Firm Shares, and certificates for the Option Shares, if the option to
purchase the same is exercised on or before the third Business Day prior to the
First Closing Date, shall be made at the offices of Lehman Brothers Inc., Three
World Financial Center, Attention:  ___________________, New York, New York
10285 (or such other place as mutually may be agreed upon), at 10:00 A.M., New
York City time, on the third full Business Day following the date of this
Agreement if this Agreement is executed before 4:30 p.m. New York time, or on
the fourth full Business Day following the date of this Agreement if this
Agreement is executed after 4:30 p.m. New York time or on such later date as
shall be determined by you and the Selling Stockholders (the "First Closing
Date").

          The option to purchase Option Shares granted in Section 3 hereof may
be exercised during the term specified therein by written notice to each of the
Selling Stockholders from the Lead Managers.  Such notice shall set forth the
aggregate number of Option Shares as to which the option is being exercised and
the time and date, not earlier than either the First Closing Date or the second
Business Day after the date on which the option shall have been exercised nor
later than the third Business Day after the date of such exercise, as determined
by the Lead Managers, when the Option Shares are to be delivered (the "Option
Closing Date").  Delivery and payment for such Option Shares shall be made at
the offices set forth above for delivery and payment of the Firm Shares.  (The
First Closing Date and the Option Closing Date are herein individually referred
to as a "Closing Date" and collectively referred to as the "Closing Dates".)

          Delivery of certificates for the Shares shall be made by or on behalf
of the Selling Stockholders to you, for the respective accounts of the
International Managers, against payment of the purchase price therefor by
certified or official bank checks payable in New York Clearing House (next day)
funds to the order of each of the Selling Stockholders.  The certificates for
the Shares shall be registered in such names and denominations as you shall have
requested at least two full Business Days prior to the applicable Closing Date,
and shall be made available for checking and packaging in New York, New York, or
such other location as may be designated by you at least one full Business Day
prior to such Closing Date.  Time shall be of the essence,





   13

                                                                              13




and delivery of certificates for the Shares at the time and place specified in
this Agreement is a further condition to the obligations of each International
Manager.

          5.  Covenants.  The Company agrees with each International Manager
that:

          (a)  The Company shall use its best efforts to cause the Registration
Statement, if not effective at the Execution Time, and any amendments thereto to
become effective.  The Company shall advise you promptly of the filing of any
amendment to the Registration Statement or any supplement to any Prospectus and,
upon notification from the Commission that the Registration Statement or any
such amendment has become effective, shall so advise you promptly (in writing,
if requested).  If the Registration Statement has become or becomes effective
pursuant to Rule 430A, or filing of any Prospectus is otherwise required under
Rule 424(b), the Company will cause such Prospectus, properly completed, and any
supplement thereto to be filed with the Commission pursuant to the applicable
paragraph of Rule 424(b) in the manner and within the time period prescribed and
will provide evidence satisfactory to the Representatives of such timely filing.
The Company shall notify you promptly of any request by the Commission for any
amendment of or supplement to the Registration Statement or any Prospectus or
for additional information; the Company shall prepare and file with the
Commission, promptly upon your request, any amendments or supplements to the
Registration Statement or the International Prospectus which, in your reasonable
opinion, may be necessary or advisable in connection with the distribution of
the Shares; and the Company shall not file any amendment or supplement to the
Registration Statement or the International Prospectus, which filing is not
consented to by you after reasonable notice thereof.  The Company shall advise
you promptly of the issuance by the Commission or any state or other
governmental or regulatory body of any stop order or other order suspending the
effectiveness of the Registration Statement, suspending or preventing the use of
any Preliminary Prospectus or Prospectus or suspending the qualification of the
Shares for offering or sale in any jurisdiction, or of the institution of any
proceedings for any such purpose; and the Company shall use its best efforts to
prevent the issuance of any stop order or other such order and, should a stop
order or other such order be issued, to obtain as soon as possible the lifting
thereof.

          (b)  The Company shall furnish to Lehman Brothers International
(Europe) and to counsel for the International Managers a signed copy of the
Registration Statement as originally filed and each amendment thereto filed with
the Commission, including all consents and exhibits filed therewith, and shall
furnish to the International Managers such number of conformed copies of the
Registration Statement, as originally filed and each amendment thereto
(excluding exhibits other than this Agreement), any Preliminary Prospectus, the
International Prospectus and all amendments and supplements to any of such
documents, in each case as soon as available and in such quantities as the Lead
Managers may from time to time reasonably request.

          (c)  Within the time during which the Prospectuses relating to the
Underwritten Shares are required to be delivered under the Act, the Company
shall comply with all requirements imposed upon it by the Act, the Exchange Act
and the Rules and Regulations so far as is necessary to permit the continuance
of sales of or dealings in the Underwritten Shares as contemplated by the
provisions hereof and by the Prospectuses.  If during such period any





   14

                                                                              14




event occurs as a result of which the International Prospectus as then amended
or supplemented would include an untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances then existing, not misleading, or if during such period it is
necessary to amend the Registration Statement or supplement the International
Prospectus to comply with the Act or the Exchange Act or the Rules and
Regulations, the Company shall promptly notify you and, subject to the
penultimate sentence of paragraph (a) of this Section 5, shall amend the
Registration Statement or supplement the International Prospectus or file such
document (at the expense of the Company) so as to correct such statement or
omission or to effect such compliance.

          (d)  The Company shall take or cause to be taken all necessary action
and furnish to whomever you may direct such information as may be required in
qualifying the Shares (and any U.S. Shares that may be sold to the International
Managers by the U.S. Underwriters) for offer and sale under the state securities
or Blue Sky laws of such jurisdictions as you shall designate and to continue
such qualifications in effect for as long as may be necessary for the
distribution of the Shares (and such International Shares); except that in no
event shall the Company be obligated in connection therewith to qualify as a
foreign corporation or to execute a general consent to service of process.

          (e)  The Company shall furnish to you, on or prior to the date of this
Agreement, a letter or letters, in form and substance reasonably satisfactory to
counsel for the International Managers, pursuant to which each executive officer
of the Company identified in the Prospectuses who owns any shares of Common
Stock at the Execution Time shall agree not to offer for sale, sell or otherwise
dispose of any shares of Common Stock of any securities convertible or
exchangeable or exercisable for such Common Stock during the 60 days following
the date of the Effective Time except with prior written consent of Lehman
Brothers International (Europe).

          (f)  Whether or not the transactions contemplated in this Agreement
are consummated, the costs incident to the preparation, printing and filing
under the Act of the Registration Statement and any amendments and exhibits
thereto; the costs of distributing the Registration Statement as originally
filed and each amendment and post-effective amendment thereof (including
exhibits), any Preliminary Prospectus, each Prospectus and any amendment or
supplement to each Prospectus, all as provided in this Agreement, the filing fee
of the NASD; the reasonable fees and expenses of qualifying the Shares under the
securities laws of the several jurisdictions as provided in this paragraph and
of preparing and printing a Blue Sky Memorandum and a memorandum concerning the
legality of the Shares as an investment, if any (including reasonable fees and
expenses of counsel to the International Managers in connection therewith); the
cost of printing certificates; the cost and charges of any transfer agent or
registrar; and all other costs and expenses incident to the performance of the
obligations of the Company hereunder for which provision is not otherwise made
in this Section.  It is understood, however, that, except as provided in this
Section, Section 8 and Section 10 hereof, each Selling Stockholder shall pay all
its own costs and expenses, including the fees of its counsel and stock transfer
taxes.





   15

                                                                              15




          (g)  The Company shall, on or prior to each Closing Date, take such
action as shall be necessary to comply with the rules and regulations of the New
York Stock Exchange with respect to the Shares to be purchased on such date by
the International Managers.

          (h)  During a period of five years from the Effective Date, the
Company shall, upon written request, furnish to the Lead Managers copies of all
reports or other communications furnished to shareholders and copies of any
reports or financial statements furnished to or filed with the Commission, the
New York Stock Exchange or any other national securities exchange on which any
class of securities of the Company shall be listed.

          (i)  As soon as practicable after the Effective Date of the
Registration Statement, the Company shall make generally available to its
security holders and to deliver to the International Managers an earnings
statement of the Company, conforming with the requirements of Section 11(a) and
Rule 158 of the Act, covering a period of at least 12 months beginning after the
Effective Date.

          6.  Further Agreement of the Selling Stockholders.  Each Selling
Stockholder, severally and not jointly, agrees to deliver to the Representatives
prior to the First Closing Date a properly completed and executed United States
Treasury Department Form W-9.

          7.  Conditions of International Managers' Obligations.  The respective
obligations of the several International Managers hereunder are subject to the
accuracy, when made and as of each Closing Date, of the representations and
warranties of the Company and the Selling Stockholders contained herein, to the
performance by the Company and the Selling Stockholder of their respective
obligations hereunder and to each of the following additional terms and
conditions:

          (a)  The Registration Statement and any post-effective amendment
thereto has become effective under the Act; if the Registration Statement has
not become effective prior to the Execution Time, unless the International
Managers agree in writing to a later time, the Registration Statement will
become effective not later than (i) 6:00 P.M. New York City time on the date of
determination of the public offering price, if such determination occurred at or
prior to 3:00 P.M. New York City time on such date or (ii) 2:00 P.M. on the
business day following the day on which the public offering price was
determined, if such determination occurred after 3:00 P.M. New York City time on
such date; if required under Rule 424(b), the Prospectuses shall have been
timely filed with the Commission in accordance with Section 5(a) hereof, not
later than the Commission's close of business on the second business day
following the execution and delivery of this Agreement or, if applicable, such
earlier time as may be required by Rule 430(A)(a)(3); no Stop Order shall have
been issued and prior to that time no proceeding for that purpose shall have
been initiated or threatened by the Commission; any request of the Commission
for inclusion of additional information in the Registration Statement or the
Prospectuses or otherwise shall have been complied with; and the Company shall
not have filed with the Commission any amendment or supplement to the
Registration Statement or the Prospectuses without the consent of the
Underwriters.  If the Company has elected to rely upon Rule 430A of the Act, the
price of the Shares and any price-related information previously omitted from
the effective Registration Statement pursuant to such Rule 430A shall have been





   16

                                                                              16




transmitted to the Commission for filing pursuant to Rule 424(b) of the Act
within the prescribed time period, and prior to the applicable Closing Date the
Company shall have provided evidence satisfactory to the International Managers
of such timely filing, or a post-effective amendment providing such information
shall have been prepared, filed and declared effective in accordance with the
requirements of Rule 430A of the Act.

          (b)  No U.S. Underwriter or International Manager shall have
discovered after the date hereof and disclosed to the Company on or prior to
such applicable Closing Date that the Registration Statement or the Prospectuses
or any amendment or supplement thereto contains an untrue statement of a fact
which, in the opinion of Simpson Thacher & Bartlett, counsel for the
International Managers, is material or omits to state a fact which, in the
opinion of such counsel, is material and is required to be stated therein or is
necessary to make the statements therein not misleading.

          (c)  All corporate proceedings and other legal matters incident to the
authorization, form and validity of this Agreement, the Underwritten Shares, the
Registration Statement and the Prospectuses, and all other legal matters
relating to this Agreement and the transactions contemplated hereby, shall be
reasonably satisfactory in all respects to Simpson Thacher & Bartlett, counsel
for the International Managers, and the Company shall have furnished to such
counsel all documents and information that they may reasonably request to enable
them to pass upon such matters.

          (d)  On each Closing Date, Winston & Strawn, as special counsel to the
Company, shall have furnished to the International Managers their written
opinion addressed to the International Managers and dated such Closing Date in
form and substance reasonably satisfactory to the International Managers (with
customary qualifications and assumptions agreed to by counsel for the
International Managers) to the effect that:


               (i)   the Company and each of its Significant Subsidiaries have
     been duly incorporated and are validly existing and in good standing under
     the laws of their respective jurisdictions of incorporation, are duly
     qualified to do business and are in good standing as foreign corporations
     in each jurisdiction in which their respective ownership or lease of
     property or the conduct of their respective businesses, requires such
     qualification, except where the failure to be so qualified and in good
     standing would not have a material adverse effect on the Company and its
     subsidiaries taken as a whole; and have all corporate power and authority
     necessary to own or hold their respective properties and to conduct the
     business in which they are engaged as described in the Prospectus;


               (ii)  this Agreement and the U.S. Underwriting Agreement have
     been duly authorized, executed, and delivered by the Company, are legally
     valid and binding obligations of the Company, and are enforceable against
     the Company in accordance with their terms, except to the extent that
     rights to indemnity or contribution hereunder and thereunder may be limited
     by Federal or state securities laws or the public policy underlying such
     laws may limit the right to indemnity and contribution thereunder; no
     consent, authorization, approval, order, license, certificate, or permit of
     or from, or





   17

                                                                              17




     declaration or filing with, any Federal, state, local or other governmental
     authority or any court or other tribunal is required by the Company for the
     execution, delivery, or performance of this Agreement or the U.S.
     Underwriting Agreement by the Company (except filings under the Act and
     filings with the New York Stock Exchange which have been made and consents,
     authorizations, permits, orders and other matters required by the National
     Association of Securities Dealers or under Blue Sky or state securities
     laws as to which such counsel need express no opinion);


               (iii)  the Underwritten Shares conform to the description of the
     Common Stock in the Prospectuses; and the Underwritten Shares have been
     listed on the New York Stock Exchange;


               (iv)   The statements contained in the Prospectuses under the
     caption "Certain United States Federal Tax Considerations for Non-U.S.
     Holders of Common Stock", insofar as they describe federal statutes, rules
     and regulations, constitute a fair summary thereof;


               (v)   the Registration Statement was declared effective under the
     Act as of the date and time specified in such opinion, no Stop Order has
     been issued and, to the knowledge of such counsel, no proceeding for that
     purpose is pending or threatened by the Commission;


               (vi)  the Registration Statement and the Prospectuses and any
     further amendments or supplements thereto made by the Company prior to each
     Closing Date (other than the financial statements and related schedules
     therein and other financial and statistical information included in or
     excluded from the Registration Statement or the Prospectuses, as to which
     such counsel need express no opinion) comply as to form in all material
     respects with the requirements of the Act and the Rules and Regulations and
     the documents incorporated by reference therein (other than any financial
     statements, related schedules and other financial and statistical
     information included therein or excluded therefrom), at the time they were
     filed with the Commission, complied as to form in all material respects
     with the Exchange Act and the applicable Rules and Regulations (except as
     aforesaid).

          Notwithstanding the foregoing, the opinion set forth in the first
clause of paragraph (ii) may be subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws now or
hereafter in effect relating to creditors' rights generally and to court
decisions with respect thereto and to general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or at
law); and no opinion need be expressed as to the availability of equitable
remedies for any breach of any such agreement.

          In rendering such opinion, such counsel may (i) state that their
opinion is limited to matters governed by the Federal laws of the United States
of America (to the extent specifically referred to therein), the laws of the
State of New York and General Corporation Law of the State of Delaware; and (ii)
rely (to the extent such counsel deems proper and specifies in





   18

                                                                              18




their opinion), as to matters involving the application of the laws of
jurisdictions other than the State of New York or the United States or the
General Corporation Law of the State of Delaware upon opinions (dated the
applicable Closing Date, addressed to the International Managers and in form
reasonably satisfactory to the International Managers with signed or conformed
copies for each of the International Managers) of counsel acceptable to Simpson
Thacher & Bartlett.  Such counsel shall also have furnished to the
International Managers a written statement, addressed to the International
Managers and dated the applicable Closing Date, in form and substance
reasonably satisfactory to the International Managers, to the effect that such
counsel participated in conferences with officers and representatives of the
Company, Arthur Andersen LLP, the International Managers and Simpson Thacher &
Bartlett in connection with the preparation of the Registration Statement, and
based on the foregoing and without assuming responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or making any independent check or verification thereof (relying as
to factual matters upon the statements of officers and other representatives of
the Company, the Selling Stockholders and others), no facts have come to the
attention of such counsel which lead them to believe that (I) the Registration
Statement, as of the Effective Date, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein not misleading (other than
the information omitted therefrom in reliance on Rule 430A), or (II) each of
the Prospectuses as amended or supplemented, as of each Closing Date, contains
any untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except that such counsel need not express an opinion or belief as
to any financial statements, schedules and other financial or statistical
information included in or excluded from the Registration Statement or the
Prospectuses.

          (e)  On each Closing Date, Joseph F. McCarthy, General Counsel to the
Company, or Michael O'Shea, corporate counsel to the Company, shall have
furnished to the International Managers his written opinion addressed to the
International Managers and dated such Closing Date in form and substance
reasonably satisfactory to the International Managers (with customary
qualifications and assumptions agreed to by counsel for the International
Managers) to the effect that:


               (i)  the Company and each of its Significant Subsidiaries have
     been duly incorporated and are validly existing and in good standing under
     the laws of their respective jurisdictions of incorporation, are duly
     qualified to do business and are in good standing as foreign corporations
     in each jurisdiction in which their respective ownership or lease of
     property or the conduct of their respective businesses, requires such
     qualification, except where the failure to be so qualified and in good
     standing would not have a material adverse effect on the Company and its
     subsidiaries taken as a whole; and have all corporate power and authority
     necessary to own or hold their respective properties and to conduct the
     business in which they are engaged as described in the Prospectuses;


               (ii)  the Company has an authorized capitalization as set forth
     in the Prospectuses, and all of the issued shares of capital stock of the
     Company (including,





   19

                                                                              19




     without limitation, all of the Underwritten Shares) have been duly and
     validly authorized and issued, are fully paid and nonassessable and conform
     to the description thereof contained in the Prospectuses; and all of the
     issued shares of capital stock of each subsidiary of the Company owned
     directly or indirectly by the Company have been duly and validly authorized
     and issued and are fully paid, nonassessable and (except for directors'
     qualifying shares) owned directly or indirectly by the Company, free and
     clear of all liens, encumbrances, equities or claims, except as described
     in the Prospectuses; to the best of such counsel's knowledge after due
     inquiry and investigation, there is no commitment, plan, or arrangement to
     issue, and no outstanding option, warrant, or other right calling for the
     issuance of, any share of capital stock of the Company or of the Company's
     subsidiaries to any person other than the Company, or any security or other
     instrument which by its terms is convertible into, exercisable for, or
     exchangeable for capital stock of the Company or of the Company's
     subsidiaries, except as may be described in the Prospectuses or has been
     disclosed to the International Managers;


               (iii)  the Underwritten Shares have been listed on the New York
     Stock Exchange;


               (iv)  there is no litigation, arbitration, claim, governmental or
     other proceeding or investigation pending or, to the best of such counsel's
     knowledge after due inquiry and investigation, threatened to which the
     Company or any of its subsidiaries is a party or to which any of their
     respective operations, businesses or assets is the subject which could
     reasonably be expected to have a material adverse effect upon the
     consolidated financial position, shareholders, equity, results of
     operations, business or prospects of the Company and its subsidiaries taken
     as a whole; neither the Company nor any of its subsidiaries is in violation
     of, or in default with respect to, any law, rule, regulation, order,
     judgment, or decree, except as may be described in the Prospectuses or such
     as in the aggregate do not have a significant likelihood of having a
     material adverse effect upon the consolidated financial position,
     shareholders' equity, results of operations, business or prospects of the
     Company and its subsidiaries taken as a whole;


               (v)  neither the Company nor any of its subsidiaries is now in
     violation or breach of, or in default with respect to, any material
     provision of any contract, agreement, instrument, lease or license, which
     is material to the Company and its subsidiaries taken as a whole;


               (vi)  neither the Company nor any of its subsidiaries is in
     violation or breach of, or in default with respect to, any term of its
     Certificate of Incorporation or By-laws;


               (vii)  the execution, delivery and performance of this Agreement
     and the U.S. Underwriting Agreement and the sale of the Underwritten Shares
     as contemplated hereby and thereby will not conflict with or result in a
     breach or violation in any material respect of any of the terms and
     provisions of, or constitute a default under, any material contract,
     agreement, instrument, lease, or license known to such counsel, or violate
     or result in a breach of any term of the articles of incorporation (or
     other charter document) or by-laws of the Company or any of its
     subsidiaries, or violate, result in a breach of, or conflict in





   20

                                                                              20




     any material respect with any law or statute, rule, or regulation, or any
     order, judgment, or decree known to such counsel, that is binding on the
     Company or any of its subsidiaries or to which any of their respective
     operations, businesses or assets are subject; no consent, authorization,
     approval, order, license, certificate or permit of or from, or declaration
     or filing with any Federal, state, local or other governmental authority or
     any court or other tribunal is required by the Company for the execution,
     delivery or performance of this Agreement and the U.S. Underwriting
     Agreement or for the sale of the Underwritten Shares contemplated hereby
     and thereby (except filings under the Act which have been made and
     consents, authorization, permits, orders and other matters required under
     Blue Sky or State securities laws or as may be required by the laws of any
     country other than the United States as to which such counsel need express
     no opinion);


               (viii)   any contract, agreement, instrument, lease or license
     required to be described in the Registration Statement or the Prospectuses
     has been properly described therein; any contract, agreement, instrument,
     lease, or license required to be filed as an exhibit to the Registration
     Statement has been filed with the Commission as an exhibit to the
     Registration Statement or incorporated therein by reference;


               (ix)  insofar as statements in the Prospectuses purport to
     summarize the status of litigation or the provisions of laws, rules,
     regulations, orders, judgments, decrees, contracts, agreements,
     instruments, leases, or licenses, such statements have been prepared or
     reviewed by such counsel and accurately reflect, in all material respects,
     the status of such litigation and provisions purported to be summarized and
     are correct in all material respects; and


               (x)  there are no preemptive or other rights to subscribe for or
     to purchase, nor any restriction upon the voting or transfer of, any
     Underwritten Shares pursuant to the Company's Certificate of Incorporation
     or By-laws, in each case as amended, or any agreement or other instrument;
     and no holders of securities of the Company have rights to the registration
     thereof under the Registration Statement except as set forth in the
     Prospectuses or, if any such holders have such rights, such holders have
     waived such rights;

          Notwithstanding the foregoing, the opinion set forth in the first
clause of paragraph (vii) may be subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws now or
hereafter in effect relating to creditors' rights generally and to court
decisions with respect thereto and to general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or at
law); and no opinion need be expressed as to the availability of equitable
remedies for any breach of any such agreement.

          In rendering such opinion, such counsel may (i) state that his opinion
is limited to matters governed by the Federal laws of the United States of
America to the extent specifically referred to therein, the laws of the State of
Michigan and General Corporation Law of the State of Delaware; and (ii) rely (to
the extent such counsel deems proper and specifies in his opinion), as to
foreign matters involving the application of the laws of jurisdictions other
than the State





   21

                                                                              21




of Michigan or the United States or the corporate law of the State of Delaware
upon opinions (dated each Closing Date, addressed to the International Managers
and in form reasonably satisfactory to the International Managers with signed
or conformed copies for each of the International Managers) of counsel
acceptable to Simpson Thacher & Bartlett.

          (f)  On the First Closing Date, there shall have been furnished to you
the opinion of counsel for each of the Selling Stockholders (addressed to the
Underwriters), dated the Closing Date in form and substance reasonably
satisfactory to the Underwriters to the effect that:


               (i)  such Selling Stockholder has full right, power and authority
     to enter into this Agreement and to perform its obligations hereunder;


               (ii)   this Agreement has been duly authorized, executed and
     delivered by or on behalf of such Selling Stockholder; and


               (iii)  the execution, delivery and performance of this Agreement
     by such Selling Stockholder and the consummation by such Selling
     Stockholder of the transactions contemplated hereby will not conflict with
     or result in a breach or violation in any material respect of any of the
     terms or provisions of, or constitute a default under, any material
     indenture, mortgage, deed of trust, loan agreement or other agreement or
     instrument known to such counsel to which such Selling Stockholder is a
     party or by which such Selling Stockholder is bound or to which any of the
     property or assets of such Selling Stockholder is subject, nor will such
     actions result in any violation in any material respect of the provisions
     of the partnership agreement of such Selling Stockholder or any statute or
     any order, rule or regulation known to such counsel of any court or
     governmental agency having jurisdiction over such Selling Stockholder or
     the property or assets of such Selling Stockholder; and no consent,
     approval, authorization or order of, or filing or registration with, any
     such court or governmental agency is required for the execution, delivery
     and performance of this Agreement by such Selling Stockholder and the
     consummation by such Selling Stockholder of the transactions contemplated
     hereby, except the registration under the Act of the Shares, such consents
     approvals, authorizations, registrations, filings or qualifications as may
     be required under state securities or Blue Sky laws in connection with the
     purchase and distribution of the shares by the Underwriters or as may be
     required by the laws of any country other than the United States, and
     amendments to filings made under the Exchange Act.

          (g)  The Company shall have furnished to the International Managers on
each Closing Date a certificate, dated such Closing Date, of its President or a
Vice President and its Chief Financial Officer or Treasurer stating that:


               (i)   they have carefully examined the Registration Statement and
     the Prospectuses and, in their opinion, in each case to the extent
     information provided in the Registration Statement or Prospectus relates to
     (A) as of the Effective Time of the Registration Statement, the
     Registration Statement did not include any untrue statement of a material
     fact and did not omit to state a material fact required to be stated
     therein or necessary to make the statements therein not misleading, (B) as
     of its date, each of the





   22

                                                                              22




     Prospectuses, as amended or supplemented, did not include any untrue
     statement of a material fact or omit to state a material fact necessary in
     order to make the statements therein, in light of the circumstances under
     which they were made, not misleading and (C) since the Effective Date of
     the Registration Statement or the date of each Prospectus, as the case may
     be, no event has occurred which should have been set forth in a supplement
     to or amendment of each Prospectus which has not been set forth in such a
     supplement or amendment.

          (h)  At the Effective Time and on each Closing Date, the Company shall
have furnished to the International Managers a letter of Arthur Andersen LLP
addressed to the International Managers and dated such Closing Date and in form
and substance satisfactory to the International Managers confirming that they
are independent public accountants within the meaning of the Act and are in
compliance with the applicable requirements relating to the qualification of
accountants under Rule 2-01 of Regulation S-X of the Commission, and stating, as
of the date of such letter (or, with respect to matters involving changes or
developments since the respective dates as of which specified financial
information is given in the International Prospectus, as of a date not more than
five days prior to the date of such letter), the conclusions and findings of
such firm with respect to the financial information and other matters covered by
its letter delivered to the International Managers concurrently with the
execution of this Agreement and confirming in all material respects the
conclusions and findings set forth in such prior letter.

          (i)  The NASD upon review of the terms of the public offering of the
Underwritten Shares, shall not have objected to the participation by any of the
International Managers in such offering or asserted any violation of the By-Laws
of the NASD.

          (j)  Neither the Company nor any of its Significant Subsidiaries (1)
shall have sustained since the date of the latest audited financial statements
included in the International Prospectus any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or court or governmental action, order
or decree, otherwise than as set forth or contemplated in the International
Prospectus or (2) since such date there shall not have been any change in the
capital stock or long-term debt of the Company or any of its subsidiaries or any
change, or any development involving a prospective change, in or affecting the
general affairs, management, financial position, shareholders' equity or result
of operations of the Company and its subsidiaries, otherwise than as set forth
or contemplated in the International Prospectus the effect of which, in any such
case described in clause (1) or (2) of this subparagraph, is, in the reasonable
judgment of the International Managers, so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Shares on the terms and in the manner contemplated in the International
Prospectus.

          (k)  The Shares to be purchased on such Closing Date by the
International Managers shall be listed on the New York Stock Exchange.

          (l)  Each Selling Stockholder (or one or more attorneys-in-fact on
behalf of such Selling Stockholder) shall have furnished to the Lead Managers on
each Closing Date a





   23

                                                                              23




certificate, dated such Closing Date, signed by, or on behalf of, such Selling
Stockholder (or one or more attorneys-in-fact) stating that the
representations, warranties and agreements of such Selling Stockholder
contained herein are true and correct as of such Closing Date and that such
Selling Stockholder has complied with all agreements contained herein to be
performed by such Selling Stockholder at or prior to such Closing Date.

          All such opinions, certificates, letters and documents mentioned above
or elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are reasonably satisfactory to you and Simpson
Thacher & Bartlett, counsel for the International Managers, and the Company
shall furnish to you conformed copies thereof in such quantities as you
reasonably request.

          8.  Indemnification and Contribution.  (a)  The Company agrees to
indemnify and hold harmless each International Manager and Selling Stockholder
against any loss, claim, damage or liability (or any action in respect thereof),
including without limitation, any legal or other expenses reasonably incurred by
any International Manager or Selling Stockholder in connection with defending or
investigating any such action or claim, joint or several, to which such
International Manager or Selling Stockholder may become subject, under the Act
or otherwise, insofar as such loss, claim, damage or liability (or action in
respect thereof) arises out of or is based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement, any Preliminary Prospectus, any Prospectus or the Registration
Statement or any Prospectus as amended or supplemented or in any Blue Sky
application or other document executed by the Company specifically for that
purpose or based upon written information furnished by the Company filed in any
state or other jurisdiction in order to qualify any of or all the Shares under
the securities laws thereof (any such application, document or information being
hereinafter referred to as a "Blue Sky Application"), or (ii) the omission or
alleged omission to state in the Registration Statement, any Preliminary
Prospectus, any Prospectus or the Registration Statement or any Prospectus as
amended or supplemented or in any Blue Sky Application a material fact required
to be stated therein or necessary to make the statements therein not misleading;
and shall reimburse each International Manager and Selling Stockholder promptly
after receipt of invoices from such International Manager or Selling Stockholder
for any legal or other expenses as reasonably incurred by such International
Manager or Selling Stockholder in connection with investigating, preparing to
defend or defending against or appearing as a third-party witness in connection
with any such loss, claim, damage, liability or action, notwithstanding the
possibility that payments for such expenses might later be held to be improper,
in which case such payments shall be promptly refunded; provided, further, that
the Company shall not be liable pursuant to this Section 8(a) with respect to
any untrue statement or alleged untrue statement or omission or alleged omission
in any Preliminary Prospectus which is corrected in a Prospectus if the person
asserting such loss, claim, damage or liability purchased Shares from an
International Manager but was not sent or given a copy of a Prospectus at or
prior to the written confirmation of the sale of such Shares to such person; and
provided, that the Company shall not be liable (x) under this paragraph 8(a) in
any such case to the extent, but only to the extent, that any such loss, claim,
damage, liability or action arises out of or is based upon an untrue statement
or alleged untrue statement or omission or alleged omission made in reliance
upon and in conformity with written information furnished to the Company through
the Representatives by or on behalf of any International Manager or Selling
Stockholder specifically





   24

                                                                              24




for use in the preparation of the Registration Statement, any Preliminary
Prospectus, any Prospectus or the Registration Statement or any Prospectus as
amended or supplemented, or any Blue Sky Application.

          (b)  Each Selling Stockholder severally, but not jointly, shall
indemnify and hold harmless the Company and each International Manager against
any loss, claim, damage or liability (or any action in respect thereof) to which
the Company or such International Manager may become subject, under the Act or
otherwise, insofar as such loss, claim, damage or liability (or action in
respect thereof) arises out of or is based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement, any Preliminary Prospectus, any Prospectus or the Registration
Statement or any Prospectus as amended or supplemented or in any Blue Sky
Application, or (ii) the omission or alleged omission to state in the
Registration Statement, any Preliminary Prospectus, any Prospectus or the
Registration Statement or any Prospectus as amended or supplemented, or in any
Blue Sky Application a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading and shall reimburse the Company or such
International Manager promptly after receipt of invoices from the Company or
such International Manager for any legal or other expenses as reasonably
incurred by the Company or such International Manager in connection with
investigating, preparing to defend or defending against or appearing as a
third-party witness in connection with any such loss, claim, damage, liability
or action notwithstanding the possibility that payments for such expenses might
later be held to be improper, in which case such payments shall be promptly
refunded; provided, however, that such indemnification or reimbursement shall be
available in each such case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission was
made in reliance upon and in conformity with written information concerning such
Selling Stockholder furnished to the Company or such International Manager by or
on behalf of such Selling Stockholder specifically for use in the preparation
thereof; provided, further, that the Selling Stockholder shall be liable
pursuant to this Section 8(b) with respect to any untrue statement or alleged
untrue statement or omission or alleged omission in any Preliminary Prospectus
which is corrected in a Prospectus if the person asserting such loss, claim,
damage or liability purchased Shares from an International Manager but was not
sent or given a copy of a Prospectus at or prior to the written confirmation of
the sale of such Shares to such person; and provided, further, that the
aggregate amount of all such indemnification or reimbursement payable by any
Selling Stockholder pursuant to this Agreement and Section 8(b) of the U.S.
Underwriting Agreement shall in no case exceed the net proceeds to such Selling
Stockholder from the sale of the Underwritten Shares.

          (c)  Each International Manager severally, but not jointly, shall
indemnify and hold harmless the Company and each Selling Stockholder against any
loss, claim, damage or liability (or any action in respect thereof) to which the
Company or any Selling Stockholder may become subject, under the Act or
otherwise, insofar as such loss, claim, damage or liability (or action in
respect thereof) arises out of or is based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement, any Preliminary Prospectus, any Prospectus or the Registration
Statement or any Prospectus as amended or supplemented, or in any Blue Sky
Application, or (ii) the omission or alleged omission to state in the
Registration Statement, any Preliminary Prospectus, any Prospectus or the
Registration Statement or any





   25

                                                                              25




Prospectus as amended or supplemented, or in any Blue Sky Application a
material fact required to be stated therein or necessary to make the statements
therein not misleading and shall reimburse the Company or such Selling
Stockholder promptly after receipt of invoices from the Company or such Selling
Stockholder for any legal or other expenses as reasonably incurred by the
Company or such Selling Stockholder in connection with investigating, preparing
to defend or defending against or appearing as a third-party witness in
connection with any such loss, claim, damage, liability or action
notwithstanding the possibility that payments for such expenses might later be
held to be improper, in which case such payments shall be promptly refunded;
provided, however, that such indemnification or reimbursement shall be
available in each such case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with written information furnished
to the Company or such Selling Stockholder through you by or on behalf of such
International Manager specifically for use in the preparation thereof.

          (d)  Promptly after receipt by any indemnified party under subsection
(a) (b) or (c) above of notice of any claim or the commencement of any action,
the indemnified party shall, if a claim in respect thereof is to be made against
the indemnifying party under such subsection, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure so to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 8 except to the extent it has
been prejudiced in any material respect by such failure or from any liability
which it may have to an indemnified party otherwise than under this Section 8.
If any such claim or action shall be brought against any indemnified party and
it shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party.  After notice
from the indemnifying party to the indemnified party of its election to assume
the defense of such claim or action, the indemnifying party shall not be liable
to the indemnified party under such subsection for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; except that any
indemnified party shall have the right to employ its own counsel to represent it
if, in the reasonable judgment of such indemnified party (based on advice of
counsel), it is advisable for such indemnified party to be represented by
separate counsel because there may be legal defenses available to it or other
indemnified parties that are inconsistent with those available to the
indemnifying party, and in that event the fees and expenses of such separate
counsel shall be paid by the indemnifying party.

          (e)  If the indemnification provided for in this Section 8 is
unavailable to hold harmless an indemnified party under subsection (a), (b) or
(c) above, then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of the losses, claims, damages or liabilities referred to in
subsection (a), (b) or (c) above (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company, the Selling Stockholders
and the International Managers from the offering of the Shares or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company, the
Selling Stockholders and the International Managers in connection with the
statements or omissions that resulted in





   26

                                                                              26




such losses, claims, damages or liabilities, or actions in respect thereof, as
well as any other relevant equitable considerations.  The relative benefits
received by the Company and the Selling Stockholders, on the one hand, and the
International Managers, on the other hand, shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Shares (after
underwriting discounts and commissions but before deducting other expenses)
received by the Selling Stockholders bear to the total underwriting discounts
and commissions received by the International Managers, in each case as set
forth in the table on the cover page of the International Prospectus (with the
estimated expenses allocated pro rata among the Shares and the U.S. Shares).
Relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Company, the Selling Stockholders or the International Managers and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission.  The Company, the Selling
Stockholders and the International Managers agree that it would not be just and
equitable if contributions pursuant to this subsection (e) were to be
determined by pro rata allocation (even if the International Managers were
treated as one entity for such purpose) or by any other method of allocation
which does not take into account the equitable considerations referred to in
the first sentence of this subsection (e).  The amount paid by an indemnified
party as a result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to in the first sentence of this subsection (e) shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating, preparing to defend or
defending against any action or claim which is the subject of this subsection
(e).  Notwithstanding the provisions of this subsection (e), (i) no
International Manager shall be required to contribute any amount in excess of
the amount by which the total price at which the Shares underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such International Manager has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission and (ii) notwithstanding the provisions of this subsection (e), no
Selling Stockholder shall be required to contribute any amount in excess of the
amount by which the amount of net proceeds received by such Selling Stockholder
from the sale by such Selling Stockholder of its portion of the Shares pursuant
to this Agreement exceeds the amount of any damages such Selling Stockholder
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission.  No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.  The International Managers' obligations in this subsection
(e) to contribute are several in proportion to their respective underwriting
obligations and not joint.  Each party entitled to contribution agrees that
upon the service of a summons or other initial legal process upon it in any
action instituted against it in respect of which contribution may be sought, it
shall promptly give written notice of such service to the party or parties from
whom contribution may be sought, but the omission so to notify such party or
parties of any such service shall not relieve the party from whom contribution
may be sought for any obligation it may have hereunder or otherwise (except as
specifically provided in subsection (d) hereof).

          (f)  The obligations of the Company and the Selling Stockholders under
this Section 8 shall be in addition to any liability which the Company and the
Selling Stockholders may otherwise have, and shall extend, upon the same terms
and conditions, to each person, if





   27

                                                                              27




any, who controls the Selling Stockholder or any International Manager within
the meaning of the Act; and the obligations of the International Managers and
the Selling Stockholders under this Section 8 shall be in addition to any
liability that the respective International Managers and the Selling
Stockholders may otherwise have, and shall extend, upon the same terms and
conditions, to each director of the Company (including any person who, with his
or her consent, is named in the Registration Statement as about to become a
director of the Company) or any Selling Stockholder, to each officer of the
Company who has signed the Registration Statement and to each person, if any,
who controls the Company or any Selling Stockholder within the meaning of the
Act.

          9.  Substitution of International Managers.  If, on either Closing
Date, any International Manager defaults in the performance of its obligations
under this Agreement, the remaining non-defaulting International Managers shall
be obligated to purchase the Shares which the defaulting International Manager
agreed but failed to purchase on such Closing Date in the respective proportions
which the number of Firm Shares set opposite the name of each remaining
non-defaulting International Manager in Schedule 1 hereto bears to the total
number of Firm Shares set opposite the names of all the remaining non-defaulting
International Managers in Schedule 1 hereto; provided, however, that the
remaining non-defaulting International Managers shall not be obligated to
purchase any of the Shares on such Closing Date if the total number of Shares
which the defaulting International Manager or International Managers agreed but
failed to purchase on such date exceeds 9.09% of the total number of Shares to
be purchased on such Closing Date, and any remaining non-defaulting
International Manager shall not be obligated to purchase more than 110% of the
number of Shares which it agreed to purchase on such Closing Date pursuant to
the terms of Section 3.  If the foregoing maximums are exceeded, the remaining
non-defaulting International Managers, or those other underwriters satisfactory
to the Lead Managers who so agree, shall have the right, but shall not be
obligated, to purchase, in such proportion as may be agreed upon among them, all
the Shares to be purchased on such Closing Date.  If the remaining International
Managers or other underwriters satisfactory to the Lead Managers do not elect to
purchase the Shares which the defaulting International Manager or International
Managers agreed but failed to purchase on such Closing Date, this Agreement (or,
with respect to the Option Closing Date, the obligation of the International
Managers to purchase, and of the Company to sell, the Option Shares) shall
terminate without liability on the part of any non-defaulting International
Manager or the Company or the Selling Stockholders, except that the Company will
continue to be liable for the payment of expenses to the extent set forth in
Sections 5(f) and 10.  As used in this Agreement, the term "International
Manager" includes, for all purposes of this Agreement unless the context
requires otherwise, any party not listed in Schedule 1 hereto who, pursuant to
this Section 9, purchases Firm Shares which a defaulting International Manager
agreed but failed to purchase.

          Nothing contained herein shall relieve a defaulting International
Manager of any liability it may have to the Company and the Selling Stockholders
for damages caused by its default.  If other underwriters are obligated or agree
to purchase the Shares of a defaulting or withdrawing International Manager,
either the Lead Managers, the Company or the Selling Stockholders may postpone
the Closing Date for up to seven full Business Days in order to effect any
changes that in the opinion of counsel for the International Managers, the
Company or the





   28

                                                                              28




Selling Stockholders may be necessary in the Registration Statement, the
Prospectus or in any other document or arrangement.

          10.  Effective Date and Termination.   (a)  This Agreement shall
become effective at 11:00 A.M., New York City time, on the first full Business
Day following the date hereof, or at such earlier time after the Registration
Statement becomes effective as you shall first release the Firm Shares for sale
to the public.  You shall notify the Company immediately after you have taken
any action which causes this Agreement to become effective.  For purposes of
this Agreement, the release of the public offering of the Firm Shares for sale
to the public shall be deemed to have been made when you release, by telecopy or
otherwise, firm offers of the Firm Shares to securities dealers or release for
publication a newspaper advertisement relating to the Firm Shares, whichever
occurs first.

          (b)  From the date of this Agreement until the First Closing Date,
this Agreement may be terminated by you in your absolute discretion by giving
notice as hereinafter provided to the Company and the Selling Stockholders, if
(i) the Company shall have failed, refused or been unable, at or prior to such
Closing Date, to perform any agreement on its part to be performed hereunder;
(ii) any other condition to the obligations of the International Managers
hereunder (other than the conditions set forth in Section 7(i) hereof) is not
fulfilled; (iii) there occurs any change, or any development involving a
prospective change, in or affecting the financial condition of the Company or
its subsidiaries, which in your judgment, materially impairs the investment
quality of the Shares; (iv) there is any downgrading in the rating of any debt
securities of the Company by any nationally recognized statistical rating
organization (as defined for purposes of Rule 436(g) under the Act or Rule
15c3-1 under the Exchange Act), or any public announcement that any such
organization has under surveillance or review its rating of any debt securities
of the Company (other than an announcement with positive implications of a
possible upgrading, and no implication of a possible downgrading, of such
rating); (v) trading in securities generally on the New York Stock Exchange
shall have been suspended or materially limited, or minimum prices shall have
been established on such exchange by the Commission, or by such exchange or
other regulatory body or governmental authority having jurisdiction; (vi) any
banking moratorium shall have been declared by Federal or New York governmental
authorities; (vii) there is an outbreak or escalation of hostilities involving
the United States on or after the date hereof, or the United States is or
becomes engaged in hostilities which result in the declaration of a national
emergency or war, the effect of which, in your judgment, makes it inadvisable or
impractical to proceed with the completion of the sale of or any payment for the
Shares on the terms and in the manner contemplated in the Prospectuses; or
(viii) there shall have been such a material adverse change in general economic,
political or financial conditions (or the effect of international conditions on
the financial markets in the United States shall be such), in your judgment, as
to make it inadvisable or impractical to proceed with the delivery of the
Shares.  Any termination of this Agreement pursuant to this Section 10 shall be
without liability on the part of the Company, any Selling Stockholder or any
International Manager, except as otherwise provided in Section 5(f), Section 8
and Section 10 of this Agreement.





   29

                                                                              29




          Any notice referred to above may be given at the address specified in
Section 12 hereof in writing or by telecopier, telex or telephone, and if by
telecopier, telex or telephone, shall be immediately confirmed in writing.

          If notice shall have been given pursuant to this Section 10 preventing
this Agreement from becoming effective, or if the International Managers shall
decline to purchase the Shares for any reason permitted under this Agreement,
the Company shall reimburse the International Managers for the reasonable fees
and expenses of their counsel and for such other out-of-pocket expenses as shall
have been incurred by them in connection with this Agreement and the proposed
purchase of the Shares, and upon demand the Company shall pay the full amount
thereof to the International Managers.

          11.  Survival of Certain Provisions.  The agreements contained in
Section 8 hereof and the representations, warranties and agreements of the
Company contained in Sections 1 and 5 hereof and the Selling Stockholder
contained in Sections 2 and 6 hereof shall survive the delivery of the Shares to
the International Managers hereunder and shall remain in full force and effect,
regardless of any termination or cancellation of this Agreement or any
investigation made by or on behalf of any indemnified party.

          12.  Notices.  Except as otherwise provided in the Agreement, (a)
whenever notice is required by the provisions of this Agreement to be given to
the Company, such notice shall be in writing or by telecopy addressed to the
Company at the address of the Company set forth in the Registration Statement,
Attention: James H. Vandenberghe; (b) whenever notice is required by the
provisions of this Agreement to be given to the Selling Stockholders, such
notice shall be in writing or by telecopy addressed to Three World Financial
Center (18th Floor), New York, NY, Attention: Alan Washkowitz; and (c) whenever
notice is required by provisions of this Agreement to be given to the several
International Managers, such notice shall be in writing or by telecopy addressed
to you, in care of Lehman Brothers International (Europe), One Broadgate, London
EC2M 7HA, England.

          13.  Information Furnished by U.S. Underwriters.  The International
Managers severally confirm that the statements set forth in the last paragraph
of the cover page with respect to the public offering of the Shares and under
the caption "Underwriting" in any Preliminary Prospectus and in the Prospectuses
are correct and constitute the written information furnished by or on behalf of
any International Manager referred to in paragraph (c) of Section 1 hereof and
in paragraphs (a) and (c) of Section 8 hereof.

          14.  Information Furnished by Selling Stockholders.  Each the Selling
Stockholders severally confirm that the statements with respect to such Selling
Stockholder set forth under the caption "Selling Stockholders" in any
Preliminary Prospectus and in the Prospectuses are correct and constitute the
only written information furnished by or on behalf of such Selling Stockholder
pursuant to Section 8(b) hereof.

          15.  Parties.  This Agreement shall inure to the benefit of and
binding upon the several International Managers, the Company, the Selling
Stockholders and their respective successors.  This Agreement and the terms and
provisions hereof are for the sole benefit of only





   30

                                                                              30




those persons, except that (a) the representations, warranties, indemnities and
agreements of the Company and the Selling Stockholder contained in this
Agreement shall also be deemed to be for the benefit of the person or persons,
if any, who control any International Manager within the meaning of Section 15
of the Act and for the benefit of any U.S. Underwriter (and controlling persons
thereof) who offers or sells any Shares in accordance with the terms of the
Agreement Between U.S. Underwriters and International Managers and (b) the
indemnity agreement of the International Managers contained in Section 8 hereof
shall be deemed to be for the benefit of directors of the Company, officers of
the Company who signed the Registration Statement, any person controlling the
Company within the meaning of Section 15 of the Act, directors of each Selling
Stockholder, officers of each Selling Stockholder and any person controlling
any Selling Stockholder within the meaning of Section 15 of the Act.  Nothing
in this Agreement shall be construed to give any person, other than the persons
referred to in this paragraph, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein.

          16.  Compliance with Conduct Rule 2720 of NASD By-laws.  Each
International Manager agrees, severally and not jointly, that in accordance with
Conduct Rule 2720 of the By-laws of the NASD, a transaction in Shares issued by
the Company shall not be executed by such International Manager in a
discretionary account without the prior specific written approval of the
customer.

          17.  Governing Law.  This Agreement shall be governed by and construed
in accordance with the laws of the State of New York, without respect to choice
of law principles thereof.

          18.  Counterparts.  This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.





   31

                                                                              31




          If the foregoing correctly sets forth the agreement among the Company,
the Selling Stockholders and the International Managers, please indicate your
acceptance in the space provided for that purpose below.

                               Very truly yours,

                               LEAR CORPORATION

                                By:

                                    -----------------------
                                    Name:
                                    Title:

                               LEHMAN BROTHERS MERCHANT BANKING
                                PORTFOLIO PARTNERSHIP L.P., as
                                Selling Stockholder


                                By:  LBI Group, Inc.
                                By:
                                
                                    -----------------------   
                                    Name:
                                    Title:

                               LEHMAN BROTHERS CAPITAL
                                PARTNERS II, L.P., as Selling
                                Stockholder

                                By:  Lehman Brothers Holdings, Inc.

                                By: 
                                   -----------------------    
                                    Name:
                                    Title:

                               LEHMAN BROTHERS OFFSHORE INVESTMENT
                                PARTNERSHIP L.P., as Selling
                                Stockholder

                                By:  Lehman Brothers Offshore Partners
                                       Ltd.

                                By: 
                                   -----------------------    
                                     Name:
                                     Title:





   32

                                                                              32




                                       LEHMAN BROTHERS OFFSHORE INVESTMENT
                                        PARTNERSHIP - JAPAN L.P., as Selling
                                        Stockholder

                                        By:  Lehman Brothers Offshore Partners
                                              Ltd.

                                        By:
                                              -----------------------
                                              Name:  
                                              Title:


Accepted:

LEHMAN BROTHERS INTERNATIONAL (EUROPE)
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
MORGAN STANLEY & CO. INTERNATIONAL LIMITED
SALOMON BROTHERS INTERNATIONAL LIMITED
J. HENRY SCHRODER & CO. LIMITED
For themselves and as Lead Managers
  for each of the several International Managers
  named in Schedule I hereto


By:  LEHMAN BROTHERS INTERNATIONAL (EUROPE)


      By:
        ------------------- 
        Name:
        Title:





   33


                                   SCHEDULE I

       International Underwriting Agreement dated ________________, 1997




                                                                                      Number of Firm
                                                                                       Shares to be
  International Managers                                                                 Purchased  
  ----------------------                                                              --------------
                                                                                     
  Lehman Brothers International (Europe)

  Donaldson, Lufkin & Jenrette Securities Corporation

  Morgan Stanley & Co. International Limited

  Salomon Brothers International Limited

  J. Henry Schroder & Co. Limited







   34

                                  SCHEDULE II

          International Underwriting Agreement dated ___________, 1997




                                                                       Number of Firm
  Selling Stockholder                                                Shares to be Sold
  -------------------                                                -----------------
                                                                     
  Lehman Brothers Merchant Banking Portfolio Partnership
  L.P.

  Lehman Brothers Capital Partners II, L.P.

  Lehman Brothers Offshore Investment Partnership L.P.

  Lehman Brothers Offshore Investment Partnership-Japan
  L.P.

   1
 
                        [Letterhead of Winston & Strawn]
 
                                                                     EXHIBIT 5.1
 
                                  June 9, 1997
 
Lear Corporation
21557 Telegraph Road
Southfield, Michigan 48086-5008
 
Re: Registration Statement on Form S-3 of Lear Corporation (the "Registration
Statement")
 
Ladies and Gentlemen:
 
     We have acted as special counsel to Lear Corporation, a Delaware
corporation (the "Company"), in connection with the registration on Form S-3 of
the offer and sale of up to 10,284,854 shares of Common Stock, par value $.01
per share (the "Common Stock"), of the Company by certain selling stockholders
(the "Selling Stockholders").
 
     This opinion is delivered in accordance with the requirements of Item
601(b)(5) of Regulation S-K under the Securities Act of 1933, as amended (the
"Act").
 
     In connection with this opinion, we have examined and are familiar with an
original or copies, certified or otherwise identified to our satisfaction, of
(i) the Registration Statement relating to the Common Stock, as filed with the
Securities and Exchange Commission (the "Commission") on June 9, 1997; (ii) the
Amended and Restated Certificate of Incorporation of the Company, as currently
in effect; (iii) the Amended and Restated By-laws of the Company, as currently
in effect; and (iv) resolutions of the Board of Directors of the Company
relating to, among other things, the filing of the Registration Statement. We
have also examined such other documents and records as we have deemed necessary
or appropriate as a basis for the opinion set forth below.
 
     In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
and records submitted to us as certified or photostatic copies and the
authenticity of the originals of such latter documents. As to any facts material
to this opinion which we did not independently establish or verify, we have
relied upon oral or written statements and representations of officers and other
representatives of the Company and others.
 
     Based upon and subject to the foregoing, we are of the opinion that the
shares of Common Stock covered by the Registration Statement are, and, when sold
by the Selling Stockholders as described in the Registration Statement, will be,
legally issued, fully paid and non-assessable.
 
     We hereby consent to the reference to our firm under the heading "Legal
Matters" in the prospectuses included in the Registration Statement and to the
filing of this opinion with the Commission as an exhibit to the Registration
Statement. In giving such consent, we do not concede that we are experts within
the meaning of the Act or the rules and regulations thereunder or that this
consent is required by Section 7 of the Act.
 
                                          Very truly yours,
 
                                          /s/ Winston & Strawn
                                          WINSTON & STRAWN
 
                                        2

   1
 
                                                                    EXHIBIT 23.1
 
                   CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
 
     As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement of our report dated February 4, 1997
included in Lear Corporation's Form 10-K for the year ended December 31, 1996,
and to all references to our firm included in this registration statement.
 
                                          /s/ Arthur Andersen LLP
                                          ARTHUR ANDERSEN LLP
 
Detroit, Michigan
June 5, 1997

   1
 
                                                                    EXHIBIT 23.2
 
                       CONSENT OF INDEPENDENT ACCOUNTANTS
 
     We hereby consent to the incorporation by reference in the Prospectus
constituting part of the Registration Statement on Form S-3 dated June 10, 1997
of Lear Corporation (formerly known as Lear Seating Corporation) of our report
dated August 8, 1995, relating to the consolidated financial statements of
Masland Corporation as of June 30, 1995 and July 1, 1994 and for the three years
in the period ended June 30, 1995, which appears on page 3 of Lear Corporation's
Form 8-K dated June 27, 1996. We also consent to the reference to us under the
heading "Experts" in the Form S-3 of Lear Corporation dated June 10, 1997.
 
/s/ PRICE WATERHOUSE LLP
- --------------------------------------
PRICE WATERHOUSE LLP
 
Philadelphia, Pennsylvania
June 9, 1997

   1

                                                               EXHIBIT 99.1

                               PURCHASE AGREEMENT

                                    between

1.      KEIPER GmbH & Co., Remscheid, registered in the commercial register of
        the local court in Remscheid under HR A 424,

                                                - hereinafter "KRC" -

2.      Putsch GmbH & Co. KG, Rockenhausen, registered in the commercial
        register of the local court of Kaiserslautern for Rockenhausen under HR
        A 1206, 

                                                - hereinafter "PKG" -

3.      KEIPER RECARO GmbH, Kaiserslautern, registered in the commercial
        register of the local court of Kaiserslautern under HR B 1388


                                                - hereinafter "KRG" -

4.      KEIPER Car Seating Verwaltungs-GmbH, Remscheid,
        registered in the commercial register of the local court
        of Remscheid under HR B 2024

                                                - hereinafter "KV";

                                                (KRC, PKG, KRG and KV are
                                                hereinafter collectively
                                                referred to as "Sellers" or
                                                individually as "Seller")


5.      KEIPER Car Seating GmbH & Co., Bremen, registered in the commercial
        register of the local court of Bremen under HR A 21337


                                                - hereinafter "KCS" -

6.      LEAR Corporation GmbH & Co. Kommanditgesellschaft,
        Ginsheim-Gustavsburg, registered in the commercial
        register of the local court of GroB-Gerau under HR A
        3091


                                          - hereinafter the "Purchaser" -

7.      LEAR Corporation, with its principle place of business
        at 21557 Telegraph Road, Southfield, Michigan 48034


                                                - hereinafter "LEAR" -
   2
                                    -2-


        Preamble


        (A)   KV is the sole general partner (Komplementar) and KRC is the sole
        limited partner (Kommanditist) of KCS, a limited partnership under
        German law which is registered in the commercial register of the local
        court (Amtsgericht) of Bremen under HR A 21337.

        (B)   KCS was founded on December 20, 1996. By virtue of a contribution
        agreement (Einbringungsvertrag) which was also entered into on 
        December 20, 1996 KRC contributed to KCS with effect as of January 1, 
        1997 KRC'S business of developing, producing and distributing complete
        vehicle seats for the just-in-time production under the trademark 
        "KEIPER" or under other trademarks (the "Just-in-Time Business"). In 
        addition, also effective as of January 1, 1997 KRC contributed (i) to
        a limited partnership named RECARO GmbH & Co., Kirchheim, its business 
        of developing, designing, producing and manufacturing seats under the 
        trademark "RECARO" and (ii) to a limited partnership named RECARO 
        Aircraft Seating GmbH & Co., Schwabisch Hall, its business named 
        AIRCOMFORT in which air passenger seats are developed, produced and
        distributed. The business remaining within KRC is the business of 
        developing, producing and distributing hardware components; further, 
        via its so-called technical centre (Technisches Zentrum) in 
        Kaiserslatern KRC continues to develop but not to produce and/or 
        distribute vehicle seats after the Closing subject to the limitations 
        set forth in this Agreement. 

        (C)  The Purchaser is a limited partnership under German law and is 
        engaged in the business of developing, producing and distributing 
        complete vehicle seats and other parts for the automotive industry.

        LEAR, a corporation organised under the laws of Delaware, is the 
        ultimate parent company of the Purchaser.

        (D)  Sellers desire to sell to Purchaser in accordance with the terms 
        and conditions of this Agreement their respective interests in KCS and
        the shares and/or interests in certain other companies.


        Therefore, the parties enter into the following agreement:



    
   3
                                     -3-


                                  ARTICLE 1
                              OWNERSHIP OF KCS


        1.1     KCS has a total capital (Kommanditkapital) in the amount of DM
                33,000,000 which is held by KRC.  The nominal value of KRC's
                interest in KCS in the amount of DM 33,000,000 is credited to
                the capital account (Kapitalkonto) kept by KCS as a fixed
                account (Festkonto).  KV does not hold any interest in the
                capital of KCS.

        1.2     An amount of DM 25,000,000 is registered in the commercial
                register as the maximum amount of KRC's personal liability as
                limited partner of KCS (Hafteinlage).

                                  ARTICLE 2
                       PARTICIPATIONS HELD BY KCS AND
                       OTHER PARTICIPATIONS TO BE SOLD


        2.1     KCS holds or will hold as of the Closing Date or, in the event
                that a transfer must be registered, will have taken all actions
                necessary for the registration of ownership of the following
                participations which are all part of the sale pursuant to this
                Agreement:

                2.1.1   all issued and outstanding shares in KEIPER RECARO
                        Hungary KFT, Mester Utca 2, 8060 Mor, Hungary, ("KCS
                        Hungary") which has a fully paid in share capital of DM
                        3,337,122; on December 31, 1996 such share capital was
                        increased by an amount of DM 174,780, which capital
                        increase has been filed with the commercial register for
                        registration, but has not yet been registered; KRC has
                        subscribed to and has fully paid in the nominal value of
                        all newly issued shares;

                2.1.2   65% of all issued and outstanding shares in KEIPER Car
                        Seating Italia S.p.A., Via Cristoforo Colombo 21, 20060
                        Pozzo d'Adda, Italy, ("KCS Italy") which has a fully
                        paid in share capital of Lire 4,000,000,000 divided into
                        80,000 shares with a nominal value of Lira 50,000 per
                        share; the other shareholder being Mr. A. Brizzolara,
                        Via Borgonuova 10, Milan, holding 28,000 shares or 35%
                        of all outstanding shares;

                2.1.3   51% of all issued and outstanding shares or 102 shares
                        in KRC TRIM PRODUCTS (PTY) LTD, Greenfields, P.O. Box
                        5003, 5208 East London, 

   4

                                     -4-

                        South Africa, ("KCS TRIM") which has an authorized share
                        capital of Rand 1,000, of which 200 shares with a
                        nominal value of Rand 1 per share have been issued; the
                        other shareholder being Dorbyl Automotive Products, a
                        division of Dorbyl Ltd., Bedfordview, South Africa,
                        holding 98 shares or 49% of all issued and outstanding
                        shares;

                2.1.4   51% of all issued and outstanding shares or 102 shares
                        in KRC SEWING COMPANY (PTY) LTD, Greenfields, P.O. Box
                        5402, 5208 East London, South Africa, ("KCS SEWING")
                        which has an authorized share capital of Rand 1,000, of
                        which 200 shares with a nominal value of Rand 1 per
                        share have been issued; the other shareholder being
                        Automotive Leather Company (PTY) LTD, 53 Hendrik van Eck
                        St., Rosslyn Pretoria, South Africa, holding 98 shares
                        or 49% of all issued and outstanding shares.

        2.2     PKG holds the following participations which are also part of
                the sale pursuant to this Agreement:

                 2.2.1   All shares in RR LEDER Verwaltungs GmbH,
                         Kaiserslautern, a company with limited liability
                         registered in the commercial register of the local
                         court (Amtsgericht) of Kaiserslautern under HR B 2817
                         and having a fully paid in share capital of DM 50.000
                         ("RR-Leder GmbH");

                2.2.2   100% of the capital (Kommanditkapital) in the amount of
                        DM 4,500,000 of RR LEDER GmbH & Co., Kaiserslautern, a
                        limited partnership which is registered in the
                        commercial register of the local court (Amtsgericht) of
                        Kaiserslautern under HR A 2294 ("RR-Leder").  The sole
                        general partner of such limited partnership without an 
                        interest in the capital is RR LEDER Verwaltungs GmbH.

        2.3     KRG holds 15% of all issued and outstanding shares in Johnson
                Controls Automotive Mexico, Tlaxala, Mexico (hereinafter "JCA
                Mexico"), the other shareholder being Johnson Controls Holding
                Company, Inc. Plymouth, Michigan, USA.  The shares held by KRG
                in JCA Mexico are subject of the sale pursuant to this
                Agreement.

        2.4     The following participations which are held by subsidiaries of
                KRC will also be part of the sale pursuant to this Agreement:


   5

                                     -5-


                2.4.1   the interest in EURO American Seating, LLC, Wilmington,
                        USA, ("EAS") which is held by KEIPER RECARO Enterprises
                        Inc., Clawson, USA ("KRE"); the other shareholder in EAS
                        is Magna-Lomason Corporation, USA ("MLC");

                2.4.2   100% of all issued and outstanding shares in KEIPER CAR
                        SEATING do Brasil LTDA, Cacapava, Brazil, held by KEIPER
                        RECARO do Brazil LTDA, Sao Paulo, Brazil ("KRB") which
                        company has a fully paid in share capital of RS
                        2.341.000 ("KCS Brazil").

        2.5     The entities stated in Section 2.1, 2.2, and 2.4.2 are
                hereinafter collectively referred to as the "Subsidiaries".  The
                shares and interests held by KRE in EAS and by KRB in KCS Brazil
                in accordance with Section 2.4 are hereinafter collectively
                referred to as the "Subsidiary Shares".

                                  ARTICLE 3
                          SALE OF INTERESTS IN KCS


        3.1     In accordance with the provisions set forth in this Agreement
                KRC and KV hereby sell to Purchaser and Purchaser hereby
                purchases the partnership interests of KRC and KV in KCS as
                described in Article I together with all partners' accounts
                (Gesellschafterkonten) with all amounts credited to the capital
                account and the transaction account (Verrechnungskonto) as of
                the Closing Date (the "Sold Interests").  The sale and purchase
                in accordance with this Section 3.1 shall include all rights
                for the issuance of the new shares and to the new shares in KCS
                Hungary arising from the increase of the share capital which is
                referred to in Section 2.1.1.

        3.2     The Sold Interests will be transferred to Purchaser at the
                Closing Date in accordance with the transfer agreement which is
                attached to this Agreement in draft form as Annex 8.3.1.

                                  ARTICLE 4
                        SALE OF OTHER PARTICIPATIONS

        4.1     In accordance with the provisions set forth in this Agreement
                PKG hereby sells to Purchaser and Purchaser hereby purchases the
                share in RR-Leder GmbH including all dividend rights accruing
                thereon through the Closing Date and a partnership interest with
                anominal value of DM 4,500,000 equal to 100% of the capital in
                RR-Leder

   6

                                      -6-

                including 100% of the amounts  booked to the partners' accounts
                (Gesellschafterkonten).  The interests will be transferred in
                accordance with the transfer agreement which is attached to this
                Agreement in draft form as Annex 8.3.3.1.

        4.2     In accordance with the provisions set forth in this Agreement
                KRG hereby sells to Purchaser and Purchaser hereby purchases
                the shares in JCA Mexico referred to in Section 2.3 including
                all dividend rights accruing through the Closing Date.  The
                shares will be transferred as set forth in Section 8.3.4.

        4.3     In accordance with the provisions set forth in this Agreement
                Sellers hereby sell and Purchaser hereby purchases the
                Subsidiary Shares including all dividend rights accruing through
                the Closing Date.  As regards EAS the sale shall include any
                rights KRE may have for the transfer of MLC's interest in EAS
                against payment of the purchase price payable therefor. Sellers
                shall procure that the respective owner of the Subsidiary Shares
                will take at the Closing (as defined in Section 8.1)
                all actions which are required by the owner in order to  
                transfer the Subsidiary Shares to Purchaser or its nominee in 
                accordance with all requirements of applicable laws.

                                  ARTICLE 5
                  PROFIT AND LOSSES FOR THE BUSINESS YEAR 1997

        The consolidated profits and losses for the business year 1997 will be
        allocated between Sellers and Purchaser on the basis of the Final Pro
        Forma Consolidated Profit and Loss Statement and the Final Pro Forma
        Consolidated Closing Balance Sheet as defined in Section 9.7 only by
        adjusting the Purchase Price as provided for in Section 9.9 - 9.11.
        Sellers shall not be entitled to withdraw (entnehmen) any monies from
        KCS or the Subsidiaries and undertake to ensure that no dividend or any
        other distribution of profits or assets is declared between the
        execution of this Agreement and the Closing Date.

                                  ARTICLE 6
                                REAL PROPERTY


        6.1     PKG is the owner of the following real property (hereinafter the
                "Real Property"):

                6.1.1   The court of Besigheim, land register of Besigheim, 
                        folio 9260, map of Ottmars-
   7
                                    - 7 -


                heim 4811, lot No. 586/31, Ferdinand-Porsche-StraBe 2, building
                and land, size 28,798 square metres (the "Besigheim Property").

                The land register shows the following encumbrances for the
                Besigheim Property:

                Section II      easement for the benefit of the Zweckverband
                                Industriegebiet Besigheim, Besigheim, granting
                                the right to obtain a de-watering pipe.

                Section III

                Current No. 1   mortgage in the amount of DM 1,000,000 plus 16%
                                interest per annum and single supplementary 
                                payment in the amount of 2% for the benefit of
                                Allianz-Versicherungs Aktiengesellschaft, 
                                Munich

                Current No. 2   mortgage over DM 4,000,000 plus 16% interest per
                                annum and a single supplementary payment in the
                                amount of 2% for the benefit of 
                                Allianz-Versicherungs Aktiengesellschaft, 
                                Munich, ranking equally with the mortgage 
                                referred to under current No. 1

                Current No. 3   mortgage over DM 1,000,000 plus 15% interest per
                                annum for the benefit of Dresdner Bank
                                Aktiengesellschaft, Remscheid branch

                Current No. 4   mortgage over DM 4,000,000 plus 15% interest per
                                annum for the benefit of Dresdner Bank
                                Aktiengesellschaft, Remscheid branch

   8
                                   - 8 -



6.1.2     Local Court Bremen, land register of Vorstadt 
                    R 270, folio 2087, lot 275




Current         Lot           Description        Size in
Number         Number                            square
                                                 metres
- --------------------------------------------------------
                                       

  8           53/134         Holzweide 5,        56,000
                             industrial
                             land

              53/269         Bruchweide 3,       22,834
                             building and
                             land/commer-
                             cial and in-
                             dustrial

              53/295         Bruchweide 3,          471
                             building and
                             land/commer-
                             cial and in-
                             dustrial

                                                       (the "Bremen Property")

The land register shows the following encumbrances for the Bremen Property:

Section II:     No encumbrances

Section III:

 Current No. 1  mortgage over DM 1,000,000 plus 16% interest 
                p.a. and a single supplementary payment in the
                amount of 2% for the benefit of Allianz Versicherungs-
                Aktiengesellschaft, Munich

 Current No. 2  mortgage over DM 6,000,000 plus 16% interest p.a. and
                a single supplementary payment in the amount of 2% for 
                the benefit of Allianz Versicherungs-Aktienge-
                sellschaft, Munich

 Current No. 3  mortgage over DM 1,000,000 plus 16% interest for 
                benefit of IKB Deutsche Industriebank Aktiengesellschaft,
                Dusseldorf and Berlin

                

   9
                                    - 9 -

         Current No 4     mortgage over DM 2,000,000 plus 16% interest
                          for the IKB Deutsche Industriebank
                          Aktiengesellschaft, Dusseldorf and Berlin

        6.2     PKG and Purchaser hereby agree that the Real Property shall be
                sold by PKG to Purchaser together with all fixtures
                (Zubehor).  PKG does not warrant the exact size of the Real
                Property.

                The encumbrances in Section III of the land registers
                where the Real Property is registered shall not be taken over
                by the Purchaser.  For the purpose of having these encumbrances
                deleted PKG shall provide Purchaser on the Closing Date (as
                defined in Section 8.1) with a certified declaration from the
                respective creditor in respect of each mortgage stating that
                the relevant mortgage shall be deleted (cf. Section 8.3.6)
                (notariell beglaubigte Loschungsbewilligungen)

        6.3     PKG and Purchaser will enter on the Closing Date into a
                separate transfer agreement (Auflassung) in which PKG
                and Purchaser will agree upon the transfer of title to the Real
                Property sold in accordance with this Article 6.

        6.4     PKG grants and PKG and Purchaser apply for the registration of
                priority notices (Auflassungsvormerkungen) with respect
                to the Bremen and the Besigheim Property for the purpose of
                securing Purchaser's claim to have title to the Real Property
                transferred to it.  The priority notice shall have in each case
                the next rank after the encumbrances referred to in Section
                6.1.1 and 6.1.2 or a better rank.

                Purchaser grants in advance the deletion (Loschung) of
                the priority notices which will be registered for its benefit
                in the land register of the Besigheim Property and the Bremen
                Property and applies for the registration of such deletion
                provided, however, that the notary may file the application for
                deletion with the land register only if PKG demands such
                deletion because of the termination of this Agreement and
                Purchaser has not moved for and obtained a preliminary
                injunction against PKG's demand within a period of six weeks
                after he was properly notified by the notary of such demand and
                has evidenced to the notary the granting of such preliminary
                injunction.


   10
                                      -10-




6.5     To the extent, applications to the land register have been made jointly
        by PKG and Purchaser, they shall be deemed to have been made 
        independent from each other.

        The notary is instructed to obtain all governmental and other approvals
        and permits and declarations required under statutory law which will 
        be useful in the context of implementing the sale of the Real Property
        including, without limitation, the approvals, declaration or negative 
        certifications provided in the Construction Act (Baugesetzbuch) and in
        the Law on the Transfer of Real Estate (Grundstucksverkehrsgesetz) and
        to receive service of such approvals or, as the case may be, the 
        refusal to grant such approval, negative declarations or negative 
        certifications with effect for PKG and the Purchaser.  PKG and
        Purchaser grant power of attorney to the notary to represent them in 
        the land register proceedings, in particular they authorise the notary
        to waive any rights to appeal against decisions of the land registry 
        and to file registrations with the land register in the name of one or
        both.


6.6     PKG and Purchaser hereby irrevocably authorise the notarial clerks
        Peter Volk and Jurgen Jungst, both having their main business address at
        Kaiserstr 66, 60329 Frankfurt am Main, each of them acting alone
        by waiving the restriction set forth in Section 181 of the German
        Civil Code (Burgerliches Gesetzbuch) to make and to receive all
        statements required for the implementation of the sale of the Real
        Property as well as for any supplements and corrections of the provision
        in this Agreement regarding the sale of the Real Property.  Supplements,
        however, to the extent that they affect the internal legal relationship
        between PKG and Purchasers only be made if the notary has been
        instructed accordingly by PKG and Purchaser.  The proxies are authorised
        to grant sub-power of attorney.

6.7     Attached hereto as Annex 6 is a German translation of Section 6.1 - 6.6
        to be filed with the land registers for the purpose of having the 
        priority notices (Auflassungsvormerkungen) referred to in Section 6.4
        registered.  The Parties hereby agree that the German translation 
        shall be binding upon them and that in case of any conflict between   
        this English version of Article 6 and the German translation thereof 
        the German translation shall prevail. 
   11
                                     -11-

                                   Article 7
                                 Purchase Price



        7.1     Amount of the Purchase Price

                The purchase price payable by Purchaser for the Sold Interests,
                the interests in RR-Leder, the shares in RR-Leder GmbH,
                the Subsidiary Shares, the shares in JCA Mexico and for the
                Real Property sold in accordance with Article 6 shall amount
                to DM 400,000,000 (in words: Deutsche Mark four hundred
                million) in total (hereinafter the "Purchase Price").  The
                Purchase Price may be increased or decreased in accordance with
                Section 9.9.  The Purchase Price after such adjustment will be
                hereinafter referred to as the "Adjusted Purchase Price".

                LEAR agrees to be jointly and severally liable for the payment
                of the Purchase Price, as adjusted in accordance with Section 
                9.9.

        7.2     Allocation of Purchase Price

                The Purchase Price payable pursuant to Section 7.1 will be
                allocated as follows:

                7.2.1   DM 312,873,214.69 to the sale of the Sold Interest by
                        KRC;

                7.2.2   DM 1 to the sale of the Sold Interest by KV;

                7.2.3   DM 66,784.31 to the sale of the shares in RR-LEDER GmbH
                        sold by PKG;

                7.2.4   DM 5,000,000 to the sale of the interest in RR-Leder
                        sold by PKG;

                7.2.5   DM 6,000,000 to the sale of the interest in EAS;

                7.2.6   DM 32,500,000 to the sale of the shares in KCS Brazil;

                7.2.7   DM 3,060,000 to the sale of the shares in JCA Mexico
                        sold by KRG;

                7.2.8   DM 40,500,000 to the Real Property.

                When the Purchase Price will be adjusted pursuant to
                Section 9.9, the above amounts will be adjusted in
                accordance with the Final Financial Statements.
   12


                                     -12-



        7.3     Maturity / Payment of the Purchase Price

        7.3.1           The Purchase Price shall become due and payable as 
                follows:

                (i)     an amount of DM 355,000,000 (in words:  Deutsche Mark
                three hundred and fifty-five million) at the Closing Date;

                (ii)    an amount of DM 22,500,000 (in words:  Deutsche Mark
                twenty-two million five hundred thousand) one year after the
                Closing Date;

                (iii)   an amount of further DM 22,500,000 (in words:  Deutsche
                Mark twenty-two million five hundred thousand) two years after
                the Closing Date.



        7.3.2           The Purchase Price shall be paid as follows:

                (i)     an amount of DM 32,500,000 (in words:  Deutsche Mark
                thirty-two million five hundred thousand) to KRB's account at
                Dresdner Bank Lateinamerika, Rua Verbo Divino 1488, Sao Paulo,
                bank no. 210, account-no. 0021930004, bank code (Agencia) 0940,
                as such part of the Purchase Price which is allocable to KCS 
                Brazil in accordance with Section 7.2.6.;

                (ii)    an amount of DM 6,000,000 (in words: Deutsche Mark six
                million) to KRE's account at National Bank of Detroit, 611
                Woodward, Detroit, MI  48226, account-no.  0685223, routing no.
                072000326, swift-code:  NBDDUS33xxx, as such part of the
                Purchase Price which is allocable to EAS in accordance with
                Section 7.2.5.

                (iii)   the remaining part of the Purchase Price to PKG's
                account at Deutsche Bank Filiale Remscheid, account-no.
                573104702, bank code 340 700 93,

                unless PKG notifies Purchaser in accordance with Section 23.6
                that the Purchase Price shall be paid in total or in part to a
                different bank account stated in the notice.  Purchaser will be
                discharged in full from its obligation to pay the Purchase
                Price once the Purchase Price has been credited to the
                aforementioned accounts.  Purchaser is not responsible for the
                allocation of the Purchase Price among Sellers.

        7.3.3           Purchaser shall deliver to Sellers at Closing two notes
                (Wechsel) in proper form each over an amount of DM 22,500,000
                (in words:  Deutsche Mark twenty-two million five hundred
                thousand) issued by Purchaser and                 
   13
                                     -13-



                signed on the front by LEAR (cf. Art. 31 (3) of the
                German Code on Notes - Wechselgesetz) which are due and payable
                at the order of Sellers on the due dates which are specified
                under Section 7.3.1 (ii) and (iii) (the "Notes").  The Notes
                must be honoured in accordance with normal market conditions as
                eligible paper (diskontfahiger Wechsel) by any major credit
                institution in Germany.  For the avoidance of doubt it is
                hereby expressly agreed that the Notes shall not affect
                Purchaser's obligation to pay the Purchase Price as provided in
                Section 7.1 through Section 7.3.2 (Zahlung erfullungshalber). 
                However, Purchaser and LEAR shall only be obliged to pay the
                instalments of the Purchase Price referred to under Section
                7.3.1 (ii) and (iii) against return of the Notes.

        7.4     No set-off

                Purchaser shall not be entitled to exercise any
                right of retention or set-off against Sellers' claim for
                payment of the Purchase Price, unless the legal basis and the
                amount of any counter-claim which Purchaser intends to
                set-off against Sellers' claim for payment of the Purchase
                Price are not disputed by Sellers.


                                  ARTICLE 8

                                   CLOSING


        8.1     Closing Date / Closing

                After the date on which the conditions set forth in
                Section 8.2 below have been satisfied and Sellers and
                Purchaser hereto are informed thereof they will meet at the
                offices of Hengeler Mueller Weitzel Wirtz, Bockenheimer
                Landstr. 51-53, Frankfurt am Main (or at any other place agreed
                between Sellers and Purchaser after this Agreement has been
                signed), to close the transactions contemplated in this
                Agreement (the "Closing").  The Closing shall take place within
                a period of 10 Banking Days after the date referred to in the
                preceding sentence on a date (the "Closing Date") specified by
                Sellers by giving Purchaser at least five Banking Days' prior
                written notice, but in no event prior to July 5, 1997. 
                "Banking Day" shall mean a day on which banks at the place
                where the Closing will take place are open during regular
                business hours.


   14
                                     -14-



        8.2     Conditions to Closing

                8.2.1   Closing shall not take place before the sale and 
                        transfer of the Sold Interests has been
                        declared to be or is deemed to be in compliance with
                        the rules set forth in the EU Merger Control Regulation
                        No. 4064/89 (the "Regulation") by the Commission of the
                        European Union (the "Commission").  If the Commission
                        issues its declaration of compliance subject to certain
                        modifications as set forth in Article 8 of the
                        Regulation the condition to Closing stated in this
                        Section 8.2 shall be deemed to be satisfied only if
                        (i) Sellers and Purchaser agree that the modifications
                        imposed by the Commission shall be implemented in order
                        to proceed with the Closing, or (ii) Sellers agree to
                        fully indemnify Purchaser against any financial
                        disadvantages arising from the implementation of such
                        modifications.  Should none of the alternatives
                        referred to  in (i)  or (ii) be applicable, Section
                        8.4.2 shall apply mutatis mutandis.


                        If the Commission issues its declaration of compliance 
                        with respect to the sale and transfer of the
                        Sold Interests, but requires with respect to Article 16
                        of this Agreement an exemption from or a negative
                        certificate with respect to Article 85 of the EEC
                        Treaty, the Parties shall nevertheless proceed with the
                        Closing without amending any other provisions of this
                        Agreement including Article 7 (Purchase Price).  If
                        Article 16 is deemed to be inconsistent with Article 85
                        of the EEC Treaty, Sellers and Purchaser shall in good
                        faith negotiate a valid and enforceable provision in
                        accordance with the principles laid down in
                        Section 23.7 second sentence.

                8.2.2   Closing shall only take place if

                        (i)     the representations and warranties stated in
                                Section 10.1.1 and - limited, however,
                                to circumstances warranted in respect of KCS -
                                the representations and warranties set forth in
                                Section 10.1.2, Section 10.1.3 with Section
                                1.1 and Section 10.1.4 are true and correct;

                        (ii)    neither KCS's plant in Besigheim nor its plant
                                in Bremen has been fully destroyed


   15
                                     -15-


                                by an act of God, e.g. fire or explosion.
                                
        8.3     Actions on Closing Date

                On the Closing Date Sellers and Purchaser shall take the
                following actions.  All actions are deemed to take place 
                simultaneously.

                8.3.1   KRC, KV and Purchaser sign a transfer agreement
                        regarding the transfer of the Sold Interests
                        substantially in the form attached hereto as Annex
                        8.3.1.;

                8.3.2   KRC and KV deliver to Purchaser (i) an application to
                        the commercial register of the local court in
                        Bremen substantially in the form attached hereto as
                        Annex 8.3.2 for the registration of Purchaser as the
                        legal successor of KRC and KV into the Sold Interests
                        such application being duly executed by KRC and KV in
                        notarial form and (ii) a letter undersigned by KRC and
                        KV in which they irrevocably instruct the notary who
                        has certified the signatures under the application or 
                        any other notary denominated by Purchaser to submit the
                        application to the commercial register of KCS;

                8.3.3   PKG and Purchaser or its nominee have notarized a
                        transfer agreement regarding the transfer of
                        the share in RR-Leder GmbH and the partnership interest
                        in RR-Leder substantially in the form attached hereto
                        as Annex 8.3.3.1, and PKG and RR-Leder GmbH deliver to
                        Purchaser (i) an application to the commercial register
                        of the local court in Kaiserslautern substantially
                        in the form attached hereto as Annex 8.3.3.2 for the
                        registration of Purchaser as the legal successor of PKG
                        into the partnership interest sold in accordance with
                        Section 4.1 such application being duly executed by PKG
                        an RR-Leder GmbH in notarial form and (ii) a letter
                        undersigned by PKG and RR-Leder GmbH in which they
                        irrevocably instruct the notary who has certified the
                        signatures under the application or any other notary
                        denominated by Purchaser to submit the application to
                        the commercial register of RR-Leder;

   16
                                     -16-



                8.3.4   KRG hands over to Purchaser or its nominee the share
                        certificates representing the shares in JCA
                        Mexico sold in accordance with this Agreement and takes
                        all actions which Purchaser reasonably asks Sellers to
                        take in order to transfer title thereto to Purchaser;

                8.3.5   the respective owners of the Subsidiary Shares take all
                        actions required by the respective owner in
                        order to transfer the Subsidiary Shares to Purchaser or
                        its nominee in accordance with all requirements of
                        applicable laws;

                8.3.6   PKG and Purchaser sign and have notarized a transfer
                        agreement regarding the transfer of the Real
                        Property sold in accordance with Article 6
                        substantially in the form attached hereto as Annex
                        8.3.6;

                        PKG provides Purchaser with a certified declaration
                        (notariell beglaubigte Loschungsbewilligung)
                        from the respective creditor in respect of each
                        mortgage which is provided in Section III of the land
                        registers where the Real Property is registered stating
                        that the relevant mortgage shall be deleted or,
                        alternatively PKG provides Purchaser with a bank
                        guarantee from a bank of national standing which can be
                        called if and to the extent any mortgages listed in
                        Section 6.1.1 and Section 6.1.2 are foreclosed;

                8.3.7   Purchaser pays an amount equal to the aggregate amount
                        of all loans granted through the Closing Date
                        by KEIPER RECARO Verwaltungsgesellschaft mbH,
                        Kaiserslaugtern, ("KRV") to KCS, by PKG to RR Leder and
                        by KRE to EAS as stated in Annex 8.3.7 hereto plus
                        interest accrued thereon in accordance with the loan
                        agreements between the respective Seller and borrower. 
                        Purchaser shall pay such amount so that it will be
                        credited in full as at the Closing Date to the German
                        bank account stated in Section 7.3.2.  To the extent
                        any amounts payable by Purchaser hereunder in respect
                        of loans granted by KRV to KCS cannot be finally
                        determined as of the Closing Date for bookkeeping or
                        similar reasons such amounts will not be paid as of the
                        Closing Date but as soon as Sellers can finally



   17
                                    -17-


                        determine such amounts and prove them to Purchaser.

                8.3.8   Purchaser shall take all actions necessary to substitute
                        the security which KRC and PKG have granted to secure
                        loans taken out by Subsidiaries prior to the date when
                        this Agreement is notarized with effect from the
                        Closing Date or, if the respective lender does not
                        consent to such substitution, repay to the respective
                        lender the full amount of the loans not assumed plus
                        interest accrued thereon; a list of such loans is
                        attached to this Agreement as Annex 8.3.8;

                8.3.9   Purchase pays the first instalment of the Purchase
                        Price as provided in Section 7.3.1 (i) so that the full
                        amount of DM 355,000,000 (in words: Deutsche Mark three
                        hundred and fifty-five million) is credited as of
                        the Closing Date to the bank accounts stated in Section
                        7.3.2 (i) through (iii).

                        In the event that the priority notices referred to in
                        Section 6.4 and/or the necessary approvals,
                        certifications or negative notifications provided 
                        for in the Construction Act (Baugesetzbuch) and in 
                        the Law on the Transfer of Real Estate 
                        (Grundstuckverkehrsgesetz) should not have been
                        obtained by the Closing Date, Purchaser and PKG already
                        hereby instruct the recording notary to open a notarial
                        escrow account (Notaranderkonto) and Purchaser shall
                        pay the portion of the Purchase Price allocated to the
                        Real Property in accordance with Section 7.2.8 to such
                        escrow account so that the full amount of such portion
                        is credited as of the Closing Date to that account.  In
                        respect of such event Purchaser and PKG already hereby
                        irrevocably instruct the recording notary to pay the
                        portion of the Purchase Price credited to the notarial
                        escrow account including all interest accrued thereon
                        to PKG as soon as the priority notices referred to in
                        Section 6.4 have been registered and the aforementioned
                        approvals, certifications or negative certifications
                        have been obtained.  The costs arising in connection
                        with the opening and maintaining the notarial escrow    
                        account shall be borne by Purchaser.
   18
                                     -18-



        8.10     Purchaser delivers to Sellers the Notes duly executed by 
                 Purchaser and LEAR as provided in Section 7.3.3.

8.4              Best Efforts / Withdrawal from Contract

        8.4.1    Sellers and Purchaser will use their best efforts to have the
                 condition to Closing stated in Section 8.2.1 satisfied as 
                 soon as practicable after the date of this Agreement. If, 
                 however, this condition to Closing should not have been 
                 satisfied by November 3, 1997 or earlier or if the competent 
                 authority prohibits the acquisition of the Sold Interests 
                 Sellers shall have the right to withdraw (zurucktreten) from 
                 this Agreement. Sellers may only jointly exercise the 
                 aforementioned right by notifying Purchaser accordingly. If 
                 Sellers withdraw from this Agreement they shall not be liable
                 to Purchaser for any damages or for the fulfilment of any 
                 other obligations under this Agreement or in connection 
                 therewith irrespective of the legal basis on which any claim 
                 of Purchaser is based.

        8.4.2    Purchaser shall have the right to withdraw from this Agreement
                 if the competent antitrust authority prohibits the acquisition
                 of the Sold Interests for reasons other than those described
                 in Section 8.2.1., 2nd paragraph, or if the conditions 
                 described in Section 8.2.2 have occurred; unless Purchaser has
                 failed to use its best efforts to have the condition to 
                 Closing stated in Section 8.2.1 satisfied, Purchaser shall 
                 not be liable to Sellers for any damage or for the fulfilment 
                 of any other obligations under this Agreement or in 
                 connection therewith irrespective of the legal basis of 
                 Sellers' claim.


                                  ARTICLE 9
                            FINANCIAL STATEMENTS

9.1             Sellers undertake to deliver to Purchaser within ten weeks 
                after the Closing Date:

                A balance sheet for KCS as of January 1, 1997 ( the "KCS Opening
                Balance Sheet") and for each of the Subsidiaries (collectively
                the "Subsidiaries' Balance Sheets" and individually a 
                "Subsidiary Balance Sheet") all as of 
   19
                                     -19-


                December 31, 1996.  The KCS Opening Balance Sheet shall be in
                accordance with the generally accepted accounting principles
                (Grundsatze ordnungsgemaser Buchfuhrung - "German GAAP") under
                the German Commercial Code (HGB) as consistently applied for KRC
                as the former owner of the Just-in-Time Business. The
                Subsidiaries' Balance Sheets shall be in accordance with the
                accounting principles which are generally accepted under the
                jurisdiction of the respective Subsidiary as consistently
                applied by such Subsidiary. Consistent application shall mean
                that similar circumstances have been accounted for in the same
                manner as in the balance sheet as of December 31, 1995.  For the
                avoidance of doubt the correct application of the aforesaid
                accounting principles shall not be over-ruled by principles of
                consistency.

                Sellers further undertake to conduct a physical inventory
                (Vorratsvermogen) count and prepare and to have their auditors
                audit within a period of 10 weeks after the Closing Date;

                (i)     A pro forma balance sheet on a consolidated basis
                        including KCS and the Subsidiaries as of January 1, 1997
                        (the "Pro Forma Consolidated Opening Balance Sheet");

                (ii)    a pro forma consolidated balance sheet including KCS and
                        the Subsidiaries as of the Closing Date (the "Pro Forma
                        Consolidated Closing Balance Sheet") together with a pro
                        forma consolidated profit and loss statement for the
                        period between January 1, 1997 and the Closing Date (the
                        "Pro Forma Consolidated Profit and Loss Statement").

                The two aforementioned balance sheets shall hereinafter be
                collectively referred to as the "Consolidated Balance Sheets".
                The parties agree that consolidation shall be carried out in
                accordance with the pro forma consolidation and the evaluation
                principles which are set forth in Annex 9.1 to this Agreement
                and in accordance with German GAAP as specified by Annex 9.1.
                The neutral auditor which may be appointed in accordance with
                Section 9.5 shall also be bound by such principles. Sellers'
                auditors and the neutral auditor shall only audit whether the
                Consolidated Balance Sheets and the Pro Forma Consolidated
                Profit and Loss Statement were prepared in accordance with this
                Section 9.1 and Annex 9.1 hereto.  For the avoidance of doubt,
                the Real Property shall not be included in the consolidation.

                Moreover, Sellers undertake to deliver to Purchaser within ten
                weeks after the Closing Date a statement
   20
                                     -20-




        showing the pro forma net debt of KCS and of the Subsidiaries on a
        consolidated basis (the "Pro Forma Consolidated Net Debt") as
        of January 1, 1997 (the "Pro Forma Consolidated Net Debt Statement"). 
        The Pro Forma Consolidated Net Debt shall be equal to the consolidated
        amount of all bank debt (Verbindlichkeiten gegenuber Kreditinstituten),
        promissory notes (Eigenwechsel) and of all inter company debt of KCS
        and the Subsidiaries including interest accrued thereon to be paid-off
        at the Closing by Purchaser in accordance with Section 8.3.7 minus the
        consolidated amount of all cash and cash equivalents in the meaning of
        Section 266 (2) B.IV of the German Commercial Code (HGB), all as shown
        in the Pro Forma Consolidated Opening Balance Sheet.

The KCS Opening Balance Sheet, the Subsidiaries' Balance Sheets, the
Consolidated Balance Sheets, Pro Forma Consolidated Profit and Loss Statement
and the Pro Forma Consolidated Net Debt Statement shall hereinafter be
collectively referred to as the "Financial Statements".

9.2     Purchaser undertakes to give Sellers and the auditors of Sellers all
        assistance necessary to prepare and to audit the Financial Statements, 
        respectively.

9.3     Purchaser is entitled to have its own auditors audit the Financial
        Statements and review the working papers of Sellers' auditors
        in the presence of Sellers' auditors.  Purchaser's auditors shall
        attend the physical inventory count referred to in Section 9.1.  Within
        six weeks after Purchaser has received the Financial Statements
        Purchaser's auditors may raise objections against the Financial
        Statements by stating that any of the Financial Statements were not set
        up in accordance with Section 9.1 including Annex 9.1.  Any objection
        by Purchaser's auditors shall only be deemed valid and to be raised in
        time if Sellers are notified thereof in accordance with Section 23.6
        within the aforementioned period and if the notification specifies any
        item of any Financial Statement as to which the objection is raised and
        the amount by which the assessment of Purchaser's auditors deviates
        from the amount for the particular item which is stated on the
        respective Financial Statement.

9.4     If Purchaser raises objections in accordance with Section 9.3 and if
        Purchaser and Sellers do not agree on the merit of the objections 
        within a period of two weeks after Sellers have been notified of  
        Purchaser's objections, the outstanding issues will be decided with

   21
                                     -21-



        binding effect for both parties by a neutral auditor to be appointed
        in accordance with Section 9.5.

9.5     Within a period of further two weeks after Purchaser and Sellers have
        failed to reach agreement on Purchaser's objections in accordance 
        with Section 9.4 the parties will appoint a neutral auditor. 
        If the Parties cannot agree on the appointment of a neutral auditor
        within the aforementioned period each party may apply for the
        appointment of a neutral auditor by the Institut der  Wirtschaftsprufer
        e.V. in Dusseldorf; the Institut der Wirtschaftsprufer e.V. in
        Dusseldorf shall select as neutral auditor only an audit firm of
        international reputation with offices in the jurisdiction where KCS and
        the Subsidiaries are registered.

9.6     The neutral auditor appointed in accordance with Section 9.5 shall audit
        the specific items against which Purchaser has raised objections in 
        accordance with Section 9.3 and shall determine the amount 
        attributable to the relevant disputed item provided, however,
        that the amount fixed by the neutral auditor in respect of any such
        item must be in the range of the deviating opinions of Purchaser and
        Sellers.  The neutral auditor shall not take any decision before the
        Parties have been given the opportunity to present their views in
        writing.  In any event, however, the neutral auditor shall render a
        written report including its decision within a period of six weeks after
        it has been appointed.  The neutral auditor shall act as arbitrary
        (Schiedsgutachter) and its decisions shall be binding upon both
        Parties.  The costs of the neutral auditor shall be borne by the
        parties in accordance with Section 91 et seq. of the German Code of
        Civil Procedure (ZPO).

9.7     If Purchaser does not raise any objections in accordance with Section
        9.3 the Financial Statements will be binding upon all Parties.  If 
        Purchaser raises objections in accordance with Section 9.3 the
        Financial Statements as adjusted by mutual agreement between the Parties
        or by the neutral auditor will be binding upon both Parties.

        As soon as the Financial Statements have become binding upon
        both parties they shall become the "Final Financial Statements" and,
        further, the Pro Forma Consolidated Opening Balance Sheet shall become
        the "Final Pro Forma Opening Consolidated Balance Sheet", the Pro Forma
        Consolidated Closing Balance Sheet shall become the "Final Pro Forma
        Consolidated Closing Balance Sheet" and the Pro Forma Consolidated
        Profit and Loss Statement appertaining thereto the "Final Pro Forma
        Consolidated Profit and Loss Statement", the KCS Opening Balance



   22
                                      -22-


                Sheet shall become the "Final KCS Opening Balance Sheet", the
                Subsidiaries' Balance Sheet shall become the "Final
                Subsidiaries' Balance Sheet", and the Net Debt Statement shall
                become the "Final Net Debt Statement" within the meaning of this
                Agreement.

        9.8     For the purposes of the Financial Statements circumstances
                which already existed on the Closing Date but become known
                thereafter (valuation enlightening circumstances -
                wertaufhellende Tatsachen) shall be taken into account by the
                Parties and their auditors as well as by the neutral auditor in
                accordance with German GAAP.  However, valuation enlightening
                circumstances becoming known after the period during which
                Purchaser may have raised objections in accordance with Section
                9.3 may only be taken into account by the neutral auditor to the
                extent the valuation enlightening circumstance affects the
                valuation of any items which are subject to the neutral
                auditor's review in accordance with Section 9.6 and refer to
                circumstances which are not under the control of Sellers or
                Purchaser.

        9.9     The Purchase Price will be adjusted in accordance with the 
                following provisions:

                9.9.1    If the Final Pro Forma Consolidated Profit and Loss 
                         Statement and the Final Pro Forma Consolidated Closing
                         Balance Sheet show a profit (JahresuberschuB - within
                         the meaning of Sections 275(2), 307(2), 266(3) German
                         Commercial Code - HGB) for the period between the
                         balance sheet date of the Final Consolidated Opening
                         Balance Sheet (i.e. January 1, 1997) and the Closing
                         Date, the Purchase Price will be increased by an amount
                         equal to the profit after deduction of such portion of
                         the profit which is allocable to minority shareholders
                         or partners.

                9.9.2    If the Final Pro Forma Consolidated Closing Profit
                         and Loss Statement and the Final Pro Forma
                         Consolidated Closing Balance Sheet show a loss
                         (Jahresfehlbetrag within the meaning of Sections
                         275(2), 307(2), 266(3) German Commercial Code - HGB)
                         the Purchase Price will be decreased by such amount
                         after deduction of such portion of the loss which is
                         allocable to minority shareholders or partners.


        9.10    If the Purchase Price is increased in accordance with Section
                9.9.1, the balance between the Purchase Price
   23
                                      -23-

          and the Adjusted Purchase Price will become due and payable to PKG's
          account specified in Section 7.3.2(iii) five Banking Days after the
          date on which the Pro Forma Consolidated Closing Balance Sheet has
          become the Final Pro Forma Consolidated Closing Balance Sheet in
          accordance with Section 9.7.

 9.11     If the Purchase Price is decreased in accordance with Section
          9.9.2, Sellers shall pay within five Banking Days the amount by which
          the Purchase Price exceeds the Adjusted Purchase Price to an account
          specified by Purchaser after the date on which Purchaser notified 
          Sellers of such account in accordance with Section 23.6.

                                   ARTICLE 10
                         REPRESENTATIONS AND WARRANTIES

          Each of the Sellers hereby gives the following warranties (Garantien)
          to Purchaser and represents that the statements set forth below are
          true and correct as of the date when this Agreement is executed and,
          unless expressly provided otherwise in this Article 10, as of the
          Closing Date:

        10.1  Organizational Matters

                10.1.1     Sellers have all necessary authority to enter into 
                           this Agreement and implement the transactions 
                           contemplated herein.

                10.1.2     KCS, the Subsidiaries, JCA Mexico and EAS are legal
                           entities duly organized and validly existing under 
                           the laws of their respective jurisdiction.

                10.1.3     Subject to Annex 10.1.3 the statements set forth in
                           Article 1 and 2 are correct. It is, however, 
                           understood between the parties that KRG's 
                           shareholding in JCA Mexico may be diluted or 
                           reduced before the Closing Date below 15% if KRG 
                           does not participate in a  capital increase or in 
                           an additional financing of capital investments
                           approved by the Board of Directors of JCA Mexico. 
                           Any such dilution or reduction of the shareholding 
                           shall not be deemed to constitute a breach of this 
                           warranty.

                10.1.4     KCS, the Subsidiaries, JCA Mexico and EAS are 
                           qualified to transact business in all locations in
                           which they transact business and have the power to
                           carry on their business as now being conducted. 
   24




                                     -24-




                10.1.5  Subject to Annex 10.1.5 the Sold Interests, as well
                        as the shares in the Subsidiaries, JCA Mexico and EAS
                        which are sold by Sellers in accordance with this
                        Agreement are fully paid in and have not been repaid and
                        no obligation to repay exists.   

                10.1.6  KCS and the Subsidiaries are not a party to any
                        joint-venture agreements or silent partnership
                        agreements nor to a contract between business
                        enterprises within the meaning of Sections 291 and 292
                        Stock Corporation Act or similar agreements, including
                        but not limited to control agreements, agreements to
                        transfer profits, profit pool agreements, agreements to
                        transfer a portion of profit, company lease agreements
                        and operational leases except as set forth in Annex
                        10.1.6.

                10.1.7  Except as set forth in Annex 10.1.7 KCS and the
                        Subsidiaries do not directly or indirectly own or hold
                        any shares or interests in any companies other than the
                        Subsidiaries.

                10.1.8  In respect of JCA Mexico, except as provided in the
                        stock purchase agreement dated February 8, 1996, there
                        are no obligations being transferred to Purchaser
                        regarding the shares in this company other than those
                        provided under applicable law.

        10.2    Contributions by KRC

                KRC made a contribution (Einlage) to KCS the value of which
                exceeds the amount which is registered for KRC in the commercial
                register as the maximum amount for which they can be held
                personally liable (cf. Section 1.2).  The contributions made by
                KRC have not been repaid or withdrawn (entnommen) in total or in
                part and no obligation to repay exists.

        10.3    Ownership

                10.3.1  Each of the Sellers is the sole owner of the respective
                        Sold Interest sold by it in accordance with Section 3.1,
                        and the Sold Interests together constitute all interests
                        in KCS.  The Sold Interests are freely transferable and
                        not subject to any option or preemptive rights, liens or
                        encumbrances or any other rights
   25
                                    -25-


                        restricting the transfer or the ownership of
                        the Sold Interests.

                10.3.2  KCS is the owner of the shares and interests referred
                        to in Section 2.1.  Unless provided otherwise in Annex
                        10.3.2, such shares and interests are freely
                        transferable and are not subject to any option or
                        pre-emptive rights, liens, encumbrances or any other
                        rights restricting the transfer or the ownership of
                        such shares and interests.

                10.3.3  The respective Seller is the sole owner of the shares
                        and interests sold by it in accordance with Section 4.1
                        or, as the case may be, Section 4.2.  Unless provided
                        otherwise in Annex 10.3.3., the shares are freely       
                        transferable and are not subject to any option
                        or pre-emptive rights, liens or encumbrances and are
                        free of any other rights or claims of third parties.

                10.3.4  The respective company which shall transfer the
                        Subsidiary Shares at Closing in accordance with Section
                        4.3 is the sole owner of the respective shares.  Unless
                        provided otherwise in Annex 10.3.4, the Subsidiary
                        Shares are freely transferable and are not subject to
                        any option or pre-emptive rights, liens or encumbrances
                        and are free of any other rights or claims of third
                        parties.

                10.3.5  Unless provided otherwise in Annex 10.3.5, to the
                        extent KCS or the respective Subsidiary has not
                        disposed of its assets in the ordinary course of
                        business since January 1, 1997, KCS and the
                        Subsidiaries are the sole owner of all assets and
                        rights shown in the Contribution Balance Sheet
                        (Einbringungsbilanz) as of January 1, 1997 prepared in
                        connection with the transfer of the Just-in-Time
                        Business by KRC to KCS and audited by Sellers' auditors
                        (the "Contribution Balance Sheet") and in the
                        Subsidiaries' Balance Sheets, respectively.  Such
                        assets and rights are not subject to any rights of      
                        third parties with the exception of statutory landlord
                        liens (Vermieterpfandrechte), bankers' liens resulting
                        from general banking conditions (AGB-Pfandrecht der
                        Banken) and retention of title (Eigentumsvorbehalt)
                        imposed by suppliers within the ordinary course of
                        business or with respect to 
   26
                                      -26-

                        Subsidiaries similar rights and are adequate and
                        sufficient for the continuing conduct of the business 
                        as now conducted by KCS and the Subsidiaries.

        10.4    Fixed Assets (Sachanlagen)/Inventory                       
                (Vorratsvermogen)/Accounts Receivable (Forderungen)

                10.4.1  The fixed assets owned or leased by KCS and the
                        Subsidiaries have been properly maintained and are in
                        good condition taking into account ordinary wear and
                        tear.

                10.4.2  The quality of the inventory of KCS and the Subsidiaries
                        complies with the usual quality of the products which
                        are traded in the market in which KCS or the respective
                        Subsidiary does business except for any obsolete item of
                        the inventory which has been written off or written down
                        in accordance with the principles set forth in Annex
                        9.1.

                10.4.3  Unless provided otherwise in Annex 10.4.3, all notes and
                        accounts receivable recorded on the Final Pro Forma
                        Consolidated Closing Balance Sheet (i) are bona fide
                        claims against debtors for sales or other charges and
                        (ii), to the Sellers' best knowledge, they are not
                        subject to any valid defences, set-offs, or
                        counterclaims, except to the extent of the reserves
                        therefor recorded on the Final Pro Forma Consolidated
                        Closing Balance Sheet.

        10.5    Real Property

                Sections 6.1.1 and 6.1.2 accurately reflect all encumbrances
                existing in respect of the Real Property which are to be
                registered in the land register in section (Abteilung) II and
                III.  There are no duties payable for the development of the
                Real Property (ErschlieBungsbeitrage) which are due for payment
                and no works have been carried out which entitle any authority
                to impose any such duties upon the owner of the Real Property.

        10.6    Financial Situation

                10.6.1  Equity of KCS and Subsidiaries as of December 31, 1996/
                        January 1, 1997

                        The Final KCS Opening Balance Sheet and the Final
                        Subsidiaries' Balance Sheets will show
   27
                                     -27-



        equity (as defined in accordance with applicable law) at least in the
        following amounts:





        Subsidiary              total equity            equity held by Sellers
                                                          ("Sellers' Equity
                                                                Amount")        
                                                                    
        KCS             DM              33,000,000              33,000,000      (100%)
        KCS Hungary     DM               3,444,709               3,444,709      (100%)
        KCS Italy       Lira         7,539,104,906           4,900,418,188.9     (65%)
        KCS Trim        Rand             5,684,355               2,899,021.1     (51%)
        KCS Sewing      Rand             2,232,299               1,138,472.4     (51%)
        RR Leder        DM               1,163,479               1,163,479      (100%)
        KCS Brazil      R$               3,170,670               3,170,670      (100%)




10.6.2  Consolidated Net Debt
        
        The consolidated net debt as of the Closing Date calculated in
        accordance with Section 9.1 will not exceed the amount set forth in
        Annex 10.6.2 due to transactions outside the ordinary course of
        business.

        
10.6.3  Contribution Balance Sheet

        The Contribution Balance Sheet has been prepared in accordance
        with generally accepted accounting principles under the German 
        Commercial Code (Sections 238 et seq., 243 German Commercial 
        Code - HGB) as consistently applied for KRC as the former owner
        of the Just-in-Time Business and in accordance with the 
        evaluation principles set forth in Annex 9.1.


10.6.4  Subsidiaries' Balance Sheets

        The Subsidiaries' Balance Sheets have been prepared in
        accordance with generally accepted accounting principles in the
        respective jurisdiction as consistently applied for the 
        respective Subsidiary, i.e. similar circumstances have been 
        accounted for in the same manner as in the balance sheets as of
        December 31, 1995.  For purposes of preparing the Pro Forma 
        Consolidated Balance Sheets the Subsidiaries' Balance Sheets 
        will be adjusted in accordance  with the consolidation 
        principles set forth in Annex 9.1.




   28
                                     -28-

        10.6.5  Intercompany Finance

                As of the Closing Date KCS or any of the Subsidiaries is not
                liable for any obligations of Sellers or those corporations
                or entities affiliated with them within the meaning of Section  
                15 et seq. Stock Corporation Act (Aktiengesetz) (the
                "Affiliates" or individually "Affiliate") and KCS Brazil 
                neither borrows nor lends any money to KRB, or to AUTO 
                COMERCIO E INDUSTRIA ACIL LTDA.

10.7    Employees / Shop Agreements, Collective Bargaining
        Agreements / Pensions

        10.7.1  The employment contracts of all employees listed in Annex
                10.7.1 were transferred to KCS in connection with the
                contribution of the Just-in-Time Business from KRC to KCS. 
                Unless stated otherwise in Annex 10.7.1(A), no employee has
                objected to the assignment of his or her employment contract to
                KCS and except for the employees listed in Annex 10.7.1 there
                are no employees whose employment agreements have been
                transferred from KRC to KCS.

        10.7.2  Unless provided otherwise in Annex 10.7.2, KCS and the
                Subsidiaries have not made any pension promises to its
                employees and have neither with their employees nor with the
                works council (Betriebsrat) of KCS or KRC as the former owner
                of the Just-in-Time Business or any other body representing
                employees' interests entered into any agreements providing for
                profit sharing, Christmas gratification (Weihnachtsgeld),
                holiday contributions (Urlaubsgeld), severance payments or
                special remunerations (Sondervergutungen).  Moreover KCS and
                the Subsidiaries are not a party to a shop agreement
                (Betriebsvereinbarung) or a collective bargaining agreement
                (Tarifvertrag) which is not expressly listed in Annex 10.7.2. 
                To the best of Sellers' knowledge no working place guarantees
                have been given other than those given in the shop agreements
                or collective bargaining agreements listed in Annex 10.7.2.

                The pension reserves (Pensionsruckstellungen) shown in
                the Contribution Balance Sheet of KCS as of January 1, 1997
                have been properly made

   29

                                     -29-


                in accordance with Section 6a of the German Income Tax Code
                (Einkommensteuergesetz); notwithstanding the foregoing in 
                respect of pensions granted to the employees of KCS and any of
                the Subsidiaries KCS and the Subsidiaries have taken all
                actions required under any pension promise and applicable law.

10.8 Environmental Law

        10.8.1  The real property, plants and buildings owned by PKG, KCS, if
                any, and the Subsidiaries are free from and do not cause 
                Environmental Damage.  Environmental Damage shall mean any 
                pollution of or the condition of, air, ground, soil, ground-
                and surface-water and buildings which violates any provision
                of applicable private or public law or does not comply with
                legal requirements, taking into account local standards.

        10.8.2  None of KCS or the Subsidiaries have any actual or contingent
                liability with respect to clean up, remediation, removal or
                abatement of any facility into which any waste or by-product
                of such company has been directly or indirectly sent for 
                storage, disposal or recycling.

        10.8.3  The current business operations of KCS and the Subsidiaries
                have not resulted in the commencement of proceedings against
                KCS or KRC as its predecessor or any of the Subsidiaries for
                violation of any legal provisions in respect of environmental
                protection.  KCS and the Subsidiaries have taken adequate 
                measures to comply in all material respects with the legal
                provisions applicable to them in respect of environmental
                protection laws.

10.9    Compliance with Law

        KCS and the Subsidiaries do not materially violate any          
        administrative laws or regulations or rights of third parties           
        in a way which is likely to impair, taking into account local           
        standards, the ability to continue their respective business            
        as presently conducted.

10.10   Governmental Approvals, Licenses and Permits

        KCS and the Subsidiaries are in possession of all governmental
        approvals, licences and permits necessary for





   30
                                      -30-

          the operation of their respective business as it is currently
          conducted. These approvals, licences and permits are in full force and
          effect.  To the best of Sellers' knowledge the business of KCS and its
          Subsidiaries have been conducted in all material respects in
          compliance therewith.

    10.11 Product Liability

          All products manufactured and distributed by KCS and the Subsidiaries
          were manufactured in a way which does and will not result in product
          liability. Unless provided otherwise in Annex 10.11, third parties
          have not asserted or threatened to assert any claims based on a
          contractual or non-contractual product liability against KCS or
          Sellers as partners of KCS or any of the Subsidiaries, and to the best
          of Sellers' knowledge there are no circumstances which could lead to
          any such claims.

    10.12 Litigation

          Except for the lawsuits listed in Annex 10.12 and except for lawsuits
          with a value (Gegenstandswert) of less than DM 50,000 in any
          individual case and no more than DM 500,000 in the aggregate, neither
          KCS nor any of the Subsidiaries is as of the execution of this
          Agreement involved in court proceedings (including arbitration) either
          as plaintiff or defendant. Except for the proceedings listed in Annex
          10.12 Sellers are not aware of any pending administration proceedings
          or investigations of public authorities against KCS or any of the
          Subsidiaries.

    10.13 Intellectual Property Rights

          10.13.1   To the best of Sellers' knowledge, neither KCS nor any
                    of the Subsidiaries infringes any intellectual property
                    rights of third parties and, to the best of Sellers'
                    knowledge, there is no unauthorised use by any person of any
                    intellectual property rights or confidential information
                    owned or used by any of the Subsidiaries. However, KCS Italy
                    has infringed in the past the trademark "RECARO". Sellers
                    will ensure that Purchaser will not be held liable by
                    Sellers or any of their Affiliates for any such infringement
                    which has accrued prior to the Closing Date.

          10.13.2   Unless provided otherwise in Annex 10.13.2, the intellectual
                    property rights transferred 
   31
                                     -31-


                in accordance with Article 18 are sufficient for the continuing 
                conduct of the business as now conducted by KCS and its 
                Subsidiaries and there are no licenses including sub-licenses 
                granted to third parties with regard to these intellectual 
                property rights.
        
        

        10.13.3 The patents transferred in accordance with Section 18.1 by KRC
                are:

                (a)     validly existing and registered or applied for
                        registration as set forth in Annex 18.1.1 and 18.1.2 
                        hereto;

                (b)     owned by KRC which has full power to transfer or to
                        license them;

                (c)     to the best of Sellers' knowledge free of any legal
                        defects such as, e.g., the dependency on a patent owned
                        by a third party or a third party's right of prior use;

                (d)     to the best of Sellers' knowledge free of any technical
                        deficiencies of the inventions of which they are based;

                (e)     to the best of Sellers' knowledge free of any validly
                        existing patent protection obtained by a third party 
                        for any of the inventions on which they are based;

                (f)     to the best of Sellers' knowledge free of
                        dependencies, i.e. overlapping in the scope of 
                        protection, to other patents and patent applications 
                        which are presently owned by KRC and which are not to 
                        be transferred to KCS;

                (g)     to the best of Sellers' knowledge not infringed by any
                        third party.

        10.13.4 Annex 10.13.4 contains full details of all licenses and other
                agreements relating to intellectual property rights to which 
                KCS or any of the Subsidiaries is a party (whether as licensor
                or licensee) or which relate to any intellectual property right 
                owned by any of the Subsidiaries and those licenses and 
                agreements are in full force and effect and are, to the best of
                Sellers' knowledge, not in
                
   32
                                     -32-




                                jeopardy and sufficient for the continuing 
                                conduct of the business as now conducted by the
                                Subsidiaries.

                        10.13.5 The current projects which are listed in Annex
                                1 to the Framework Services Supply Agreement in
                                the Areas of Research and Development (Annex
                                19.2 to this Agreement):

                                (i) constitute to the best of Sellers'
                                knowledge all research and development programs
                                which are necessary to satisfy all current
                                commitments to customers;

                                (ii) are based upon contracts the performance
                                of which has already commenced or upon
                                contracts which have been awarded by a
                                customer;

                                (iii) have been negotiated at arm's length and
                                in accordance with customary industry practice;

                                (iv) have been performed and administered in a
                                prudent and diligent manner.


                        10.13.6 Nothing contained in the agreements mentioned
                                in Article 19 shall be construed in such a
                                manner as to override the warranties given in
                                this Article 10.13.

                10.14 INSURANCE

                      KRC, as the former owner of the Just-in-Time Business,
                      and the Subsidiaries have taken out insurance customary
                      in the business conducted by KCS or the Subsidiaries. 
                      KCS and the Subsidiaries have been included in the
                      existing insurance policies which are adequate to meet
                      the risks insured and are customary for the business
                      conducted by KCS.  The policies listed in Annex 10.14
                      which are material for the business of KCS and the
                      Subsidiaries are in full force and effect.

                10.15 Changes Since January 1, 1997

                      None of the following events have occurred since January
                      1, 1997 until Closing Date (except for events listed in
                      Annexes 10.15.1 to 10.15.6):



















   33
                                    -33-


                10.15.1 material adverse change in the financial situation
                        of KCS or the Subsidiaries;

                10.15.2 extraordinary damages or losses outside the ordinary
                        course of business which exceed DM 500,000 in any
                        individual case or DM 1,000,000 in the aggregate;

                10.15.3 subject to the reservation provided in Section 10.19,
                        2nd paragraph, extraordinary termination of a contract
                        having a material adverse effect on the business
                        or the financial situation of KCS or any of the
                        Subsidiaries;

                10.15.4 transactions outside the ordinary course of business,
                        in particular

                        (a)     KCS and each of the Subsidiaries have not paid
                                its creditors within the times agreed with them;

                        (b)     no asset of a value or price in excess of DM
                                500,000 has been acquired or disposed of or
                                agreed to be acquired or disposed of by
                                KCS or any of the Subsidiaries, and no contract
                                involving expenditure by KCS or any of the
                                Subsidiaries in excess of DM 500,000 annually
                                has been entered into by KCS or any of the
                                Subsidiaries;

                        (c)     no event has occurred which is likely to give
                                rise to a tax liability to KCS or any of the
                                Subsidiaries on deemed (as opposed to actual)
                                income, profits or gains or which results in
                                KCS or any of the Subsidiaries becoming
                                liable to pay or bear a tax liability directly
                                or primarily chargeable against or attributable
                                to another person disregarding events within
                                the ordinary course of business;

                        (d)     no event has occurred which would entitle any
                                third party (with or without the giving of
                                notice) to call for the repayment of    
                                indebtedness of KCS or any of the Subsidiaries
                                prior to its normal maturity date;
   34
                                    -34-



                        (e)     KCS or any of the Subsidiaries has suffered
                                any labor dispute and there are not pending or
                                threatened labor disputes, strikes or work
                                stoppages or slowdowns;

                10.15.5 No monies have been withdrawn (entnommen) from KCS or
                        RR-Leder.  No dividend or other distribution of profits
                        or assets has been declared, made or paid or
                        agreed to be declared, made or paid by any Subsidiary 
                        with respect to profits generated since January 1,
                        1997;

                10.15.6 KCS has not granted employees who have been hired 
                        since January 1, 1997 protection against termination in
                        excess of statutory law; further, any such newly hired
                        employees have not been granted a gross salary
                        (excluding social security contributions) in excess of
                        DM 100,000 (in words: Deutsche Mark one hundred
                        thousand).

        10.16   Taxes and Social Security Contributions

                KCS and the Subsidiaries have filed all necessary tax returns
                in time and have paid all Taxes assessed by the competent
                authorities in the past when due.  All social security
                contributions due and payable with respect to the period until
                the Closing Date have been paid or have been sufficiently
                provided for in the Final Financial Statements.  "Taxes" shall
                mean any direct and/or indirect charges by the governmental
                authorities and/or any direct or indirect fiscal and/or
                financial public burdens (i.e., Zolle, Steuern, Abgaben,
                Gebuhren) on the respective company's business, respective
                company's assets and respective company's income.

        10.17   Material Contracts

                Subject to Section 12.2 Annex 10.17 includes a complete and
                correct list of all customers with which KCS or the
                Subsidiaries have a customer relationship as of the date when
                this Agreement is notarized and, further, a list of all
                contracts with third parties other than customers and suppliers
                (the "Material Contracts") with an annual value of DM 500,000
                or an equivalent value in foreign currency or a total value of
                DM 1,000,000 or an equivalent value in foreign currency.  The
                total value of a contract with an indefinite term shall be
                determined under the assumption that the contract will be
                terminated with effect to the next possible date by giving
                notice in accordance with the terms and provi-
   35
                                     -35-


        sions of the relevant Material Contract.  To the extent any of the 
        Material Contracts have been concluded by KRC prior to January
        1, 1997, the respective Material Contract has been effectively
        transferred to KCS prior to the notarization of this Agreement.  All
        Material Contracts are in full force and effect.  No counterparty to a
        Material Contract has threatened as of the date when this Agreement is
        notarized to terminate the Material Contract and no customer has
        threatened as of the date when this Agreement is notarized to terminate
        the existing customer relationship.

10.18   No Brokers and Finders

        Except for Drueker & Co. whose fee shall be borne by Sellers in 
        accordance with Section 21.1 Sellers have not retained the services of
        any broker or finder in connection with the transactions contemplated
        herein.

10.19   No further Warranties

        Sellers do not give any explicit or implied warranty in respect of KCS,
        the Subsidiaries, EAS or JCA Mexico other than those given in Section 
        10.1 through Section 10.18.  Purchaser has been given the opportunity
        to inspect the business of KCS and the Subsidiaries, and the condition
        of the assets which are owned by KCS.

        For the avoidance of doubt nothing stated in Section 10.1 through 
        Section 10.18 or in any other provision of this Agreement shall be 
        construed to the effect that Sellers warrant the continuity of the 
        relationships of KCS and the Subsidiaries to any of its customers
        beyond the date when this Agreement is notarized.  Section 10.17 last 
        sentence shall remain unaffected.


                                  ARTICLE 11
                                   REMEDIES

11.1    Upon written demand of Purchaser, Sellers will hold Purchaser, subject
        to the limitations provided in this Agreement, harmless from any damage
        Purchaser suffers as a result of any incorrect or incomplete warranty
        given by Sellers in Article 10 of this Agreement.

11.2    In case of a demand by Purchaser in accordance with Section 11.1
        Sellers shall, at their option, either hold Purchaser harmless

        
   36
                                     -36-


                11.2.1  by way of restitution in kind, i.e. by establishing
                        the situation corresponding to the warranty or the
                        provision which was breached, provided, however, that
                        such restitution in kind does not interfere with the
                        ordinary conduct of the business of KCS or, as the
                        case may be, any Subsidiary, or

                11.2.2  by way of payment of damages.

                If Sellers elect to pay damages in accordance with Section 
                11.2.2 such damages shall be determined and calculated on the
                basis of the amount necessary to put Purchaser in the position 
                it would have been in had the warranty been correct and 
                complete.

                In case of a breach of Section 10.8.1 the amount necessary to
                remediate the Environmental Damage and in case of a breach of
                Section 10.8.2 the amount necessary to hold KCS or any of the
                Subsidiaries harmless against any liability referred to in such
                Section shall be payable as damages.  The aforementioned
                obligations of Sellers exist irrespective of whether or not any
                authority or other third party have required Purchaser to
                remediate the Environmental Damage or to take any actions which
                are described in Section 10.8.2.

                Purchaser may not claim from Sellers damages for lost profit
                (entgangener Gewinn).

                Damages will not be paid to the extent that Purchaser or any 
                of its Affiliates (including KCS or any of the Subsidiaries)
                is entitled to receive payment under an insurance policy or
                indemnification from third parties.  In addition, damages will
                not be paid to the extent any circumstances which may otherwise
                constitute a breach of a warranty are expressly reserved for or
                otherwise provided for in the Final Pro Forma Consolidated 
                Closing Balance Sheet, or to the extent they are not reserved
                for or otherwise provided for in the Final Pro Forma 
                Consolidated Closing Balance Sheet in accordance with the 
                principles set forth in Annex 9.1 if the lack of such reserve
                or provision has been unsuccessfully raised by the Purchaser as
                an objection in accordance with Section 9.3.

        11.3    Purchaser shall only be entitled to assert claims under this
                Article 11 if they exceed the amount of DM 50,000 in each
                individual case.  This de minimis exception does not apply to
                claims referring to the same breach of warranty which are less
                than DM 50,000 (in words: Deutsche Mark fifty thousand) in an
                individual case, but

   37
                                     -37-


                more than DM 50,000 in the aggregate provided that the
                circumstances on which any such claims are based are similar in
                nature. Purchaser shall furthermore only be entitled to assert
                claims once the aggregate amount of all claims asserted by
                Purchaser - de minimis claims of up to DM 50.000 only to be
                included in accordance with the foregoing provision - exceeds DM
                300.000 (in words:  Deutsche Mark three hundred thousand).  In
                this case all claims including de minimis claims may be asserted
                in full provided, however, that the maximum amount for which
                Sellers may be held liable under this Agreement amounts to 40%
                (in words: fourty percent) of the Purchase Price.

        11.4    In addition to Section 11.3 the following limitations apply to
                damages resulting from a breach of the warranties set forth in
                Section 10.6.1 and 10.6.2:

                11.4.1  Any amounts resulting from an excess or a shortfall of
                        the portion of the equity held by Sellers in KCS and/or
                        any of the Subsidiaries with respect to the Sellers'
                        Equity Amounts guaranteed in Section 10.6.1 shall be
                        converted into DM at the currency rates stated in Annex
                        11.4.1 ("Final exchange rates per 31.12.1996") and
                        subsequently set off against one another. If the
                        resulting net amount is positive, Purchaser shall not be
                        entitled to any damages, and Sellers shall not be
                        entitled to demand an increase of the Purchase Price.
                        If the net amount is negative, such amount shall be
                        payable as damages.  If Sellers claim damages under this
                        Section 11.4.1 the equity shown in the KCS Opening
                        Balance and/or the Subsidiaries' Balance Sheet and the
                        consolidated equity in the Pro Forma Consolidated
                        Opening Balance Sheet shall be adjusted accordingly for
                        the purposes of adjusting the Purchase Price as provided
                        for in Sections 9.9.1 and 9.9.2.

                11.4.2  In case of a breach of the warranty given in Section
                        10.6.2 Purchaser shall only be entitled to damages if it
                        is able to show that

                        (i)     it has suffered a damage within the meaning of
                                Section 249 German Civil Code et.seq., in
                                particular that the disadvantages or detriments
                                resulting from the increase in debt are not
                                offset by benefits resulting from the
                                acquisition of assets financed with such

   38

                                     -38-



                                additional debt (Vorteilsausgleichung);
                                and

                        (ii)    the damage resulting from such breach will not
                                be remedied under any other provisions of this
                                Agreement, in particular Section 9.9.2.

        11.5    Purchaser is aware that Johnson Controls Holdings, Inc. as the
                other shareholder in JCA Mexico (cf. Section 2.3) and the other
                shareholders in KCS Trim and in KCS Sewing may acquire the
                shares held by the respective Seller in such company by virtue
                of exercising the preemptive right provided for it in the
                respective agreement.  In case any of the shareholders in any
                of the aforementioned companies exercises its preemptive right
                and is entitled to exercise such preemptive right in accordance
                with applicable law, the damages which can be claimed by
                Purchaser against Sellers shall be equal and limited

                (i)     in respect of JCA Mexico to the amount of such part of
                        the Purchase Price which is allocated to the sale of
                        the shares in JCA Mexico in accordance with Section
                        7.2.7,

                (ii)    in respect of KCS Trim and in respect of KCS Sewing to
                        the amount which the other shareholders must pay in
                        connection with the exercise of the aforementioned
                        preemptive right pursuant to the relevant joint venture
                        agreement as of the date of the notarization of this
                        Agreement.

                Any amount owed by any of the shareholders in any of the
                aforementioned companies to KCS in connection with or as result
                of the exercise of the preemptive right shall be credited
                against the relevant aforementioned amount.

                Any damage suffered by Purchaser in connection with the above
                shall not be included into the calculation of the maximum
                amount for which Sellers may be held liable under this
                Agreement in accordance with Section 11.3, last sentence.

        11.6    If any competent antitrust authority interdicts the transfer of
                any of the Subsidiary Shares to Purchaser by a final and
                unappealable decision, the damages which Purchaser is entitled
                to claim shall be equal to and limited to the amount of the 
                Purchase Price allocated to such Subsidiary Shares in Section
                7.2.  Such damages shall not be included into the calculation
                of the maximum amount for which Sellers may be held liable     
   39
                                     -39-



                under this Agreement in accordance with Section 11.3, last 
                sentence.

                11.7    With respect to circumstances which are known to
                Purchaser at  the date on which this Agreement is notarized,
                all claims shall be excluded. The contents of all documents
                which were available for inspection in the data room of KCS in 
                Kaiserslautern as well as all documents passed on to Purchaser,
                its representatives and its advisors in form of a CD-Rom or 
                otherwise are deemed to be known to Purchaser. Purchaser was 
                given the opportunity to inspect such documents. The list of
                documents which were available for inspection in the data room
                and on the CD-Rom as well as a list of all other documents 
                which are deemed to be known to Purchaser are attached to  this
                Agreement as Annex 11.6.  In addition to the documents forming
                part of Annex 11.6, the two letters from Dorbyl Ltd. both dated
                May 9, 1997, the letter of Automotive Leather Company Rosslyn
                sent on May 5, 1997 (all of which letters were sent to Mr.
                Konstantinou) as well as the list of documents attached as
                Exhibit I to this agreement are deemed to be known by the
                purchaser.  At the date of execution of this Purchase Agreement 
                Purchaser is not aware of any matter or event which would give
                rise to a claim because of a breach of warranty or untrue 
                representation of Sellers.

        11.8    To the extent that representations and warranties are 
                qualified by reference to the best of Sellers' knowledge, 
                exclusively the Knowledge of Mr. Ulrich Putsch and G.
                Konstantinou, and the Knowledge of the following persons,
                however, limited to the area of competence specified in each
                case in the parenthesis shall be attributed to the respective
                Seller: Dr. Karl-Heinz Nattland (Finance), Dr. Volkmar Schneider
                (Legal and Insurance), A. Schwarz (KCS Hungary), H.-S. Bull
                (Personnel), H. Roschmann (Sourcing and Inventory), K. Ackermann
                (Distribution and Marketing), J. Walerowski
                (Controlling/Finance), KuBmann (Research and Development), J.
                Kratzmann (Plant Bremen), F. Duck (Plant Besigheim). "Knowledge"
                shall mean all circumstances which Sellers know or should have
                known after due inquiry.

        11.9    Sellers shall be jointly and severally liable for all claims 
                of Purchaser arising under this Agreement. Sellers can be held
                liable exclusively for breaches of any obligation, warranty or
                undertaking contained or given in this Agreement and, to the
                extent explicitly provided for in this Agreement, exclusively in
                accordance with the provisions of this Agreement. Any other
                claims in accordance with statutory law and claims based upon
                precontractual duties including, without limitation, claims for
                rescission (Wandelung), reduction of the Purchase Price
                (Miderung) as well as claims based on torts (unerlaubte
                Handlung) or precontractual liability (culpa in contrahendo) are
                excluded, unless
   40
                                      -40-


                they are based on wilful (vorsatzlich) misconduct of Sellers.

        11.10   The statute of limitations (Verjahrung) for claims under this
                Article 11 shall run as follows:

                11.10.1 claims for legal defects within the meaning of Section
                        434 German Civil Code (BGB) relating to the Sold
                        Interests shall be barred (verjahrt) 10 years from the
                        date of signing of this Agreement;

                11.10.2 claims with respect to a breach of the warranty stated
                        in Section 10.16 (Taxes and Social Security
                        Contributions) or based on the indemnity given in
                        Section 13.2 shall be barred after a period of six
                        months beginning with the date on which the relevant
                        assessment of Taxes becomes final and unappealable;

                11.10.3 claims with respect to a breach of the warranty stated
                        in Section 10.8 (Environmental Law) shall be barred six
                        months after the Closing Date;

                11.10.4 claims with respect to a breach of the warranty stated
                        in Section 10.11 (Product Liability) shall be barred
                        five years after the Closing Date;

                11.10.5 all other claims shall be barred on May 31, 1999;

                11.10.6 the statute of limitations shall be interrupted
                        (unterbrochen) or extended (gehemmt) in accordance with
                        the applicable provisions of German law.  If Purchaser
                        notifies Sellers in accordance with Section 23.6, the
                        statute of limitations applicable to the respective
                        claim in accordance with Sections 11.10.1 - 11.10.4
                        shall not continue to run until a period of six months
                        has expired beginning with the date when Sellers have
                        received the notification.


                                   ARTICLE 12
                     UNDERTAKINGS OF SELLERS AND PURCHASER

        12.1    Subject to applicable statutory and contractual provisions
                Sellers undertake to ensure that the businesses of
   41
                                     -41-

                KCS and of the Subsidiaries will be continued in the normal
                course of business during the period between the date when
                this Agreement is signed and the Closing Date, and that
                Purchaser has appropriate access to the management of KCS
                and the Subsidiaries during this period of time.

        12.2    Sellers undertake that, during the period between the date when
                the Agreement is signed and the Closing Date, without the prior
                consent of Purchaser which shall, however, not unreasonably be
                withheld:

                12.2.1  None of the Subsidiaries shall (i) declare any dividend
                        or make any distribution with respect to its capital
                        stock or (ii) sell, lease, transfer, encumber or
                        dispose of any of its properties or assets, otherwise
                        than in the ordinary course of business;

                12.2.2  neither KCS nor any Subsidiary shall enter into joint
                        venture, partnership or other similar agreements;

                12.2.3  neither KCS nor any Subsidiary shall (i) enter into an
                        agreement with a term of more than three years and with
                        a value of more than DM 1 Mio. or (ii) change, amend, 
                        terminate or otherwise modify any material contract 
                        with a value of more than DM 10 Mio.;

                12.2.4  neither the Sellers themselves nor KCS nor any of the
                        Subsidiaries shall take any action which would not
                        allow Sellers to make a representation set forth in
                        Article 10 at the Closing Date.

        12.3    Sellers undertake to have KRV transfer the employment contract
                of the person listed in Annex 12.3 to KCS with effect as from
                the Closing Date together with all rights and obligations
                outstanding thereunder as of the Closing Date; Purchaser hereby
                agrees to such transfer.

        12.4    Sellers undertake to submit to Purchaser on the Closing Date a
                status report specifying which of the subsidiaries referred to
                in Section 2.1.1 to 2.1.4 have been transferred to KCS and,
                with respect to those which have not yet been transferred,
                specifying the actions which still have to be taken.  Sellers 
                undertake to take all actions necessary to complete such
                transfers.

        12.5    Sellers and their Affiliates will not reclaim tools of which
                they are the owner but which were leased to KCS Italy by giving
                less than six months' notice to the end               
   42
                                      -42-

                of twelve months after the Closing Date, unless KCS Italy
                increases the prices charged to Sellers or any of their
                Affiliates for products manufactured with the help of such tools
                or unless KCS Italy repeatedly supplies to Sellers or their
                Affiliates products which do not meet the standards customary in
                the market.  In the event that the tools are still needed for
                the manufacturing of products sold by KCS Italy they may only be
                reclaimed if KCS Italy is offered the supply of the components
                which it used to manufacture with the help of the tools on terms
                and conditions then prevailing in the market.

        12.6    Purchaser undertakes to terminate the subcontract with RECARO
                GmbH & Co., Kirchheim, ("REC") regarding the manufacturing of
                the seats for the 986, 996 Porsche models in REC's plant in
                Kirchheim only with six months' notice and not effective prior
                to April 1, 1998.  During the term of the subcontract REC and
                KCS shall have reasonable access to all data and information
                which are relevant for the performance of the subcontract and
                are in the possession or known only to either of them.

        12.7    Purchaser undertakes neither to move the registered office of
                KCS from Bremen to Kaiserslautern nor to set up any office of a
                company or a division which has "KEIPER" in its name in
                Kaiserslautern or within 70 (seventy) kilometers of the city
                limits of Kaiserslautern for a period of five years beginning
                with the Closing Date provided, however, that

                12.7.1  Purchaser is granted a period of six months beginning
                        with the Closing Date to have KCS's employees currently
                        working in the technical center of KCS in Kaiserslautern
                        move to new office premises in Kaiserslautern if
                        Purchaser elects to set up an office under a name not
                        containing "KEIPER" in Kaiserslautern; 

                12.7.2  Purchaser is granted a period of one year beginning with
                        the Closing Date to have KCS's employees currently
                        working in the technical center of KCS in Kaiserslautern
                        move to new office premises if Purchaser elects to set
                        up an office under a name containing "KEIPER" in an area
                        more than 70 (seventy) kilometers off the city limits of
                        Kaiserslautern.

        12.8    Purchaser undertakes that either Purchaser itself or, as the
                case may be, its nominee assumes all rights and obligations
                under the stock purchase agreement with JCA Mexico.
   43
                                      -43-

        12.9    Purchaser undertakes to take all actions required or useful to
                have the name "RECARO" removed from the name of KCS Hungary and
                KCS Italy, unless such name change has already been effected as
                of the Closing Date.

        12.10   Purchaser undertakes to cause KCS and any of the Subsidiaries
                not to distribute without a licence any product under the
                trademark "RECARO" or "KEIPER" after the Closing Date, unless
                compliance with this undertaking would require the modification
                or substitution of any tools used in the production of KCS or
                any of the Subsidiaries in which case a grace period of six
                months will be granted.

        12.11   Purchaser shall grant Sellers and KRE free of charge for the
                time period until the Closing Date all reasonable support which
                is required to manage the business of EAS if such support is
                necessary and requested by Sellers.

        12.12   For a period of five years from the Closing Date KRC shall fill
                orders from KCS for the supply of products of the kind offered
                by KRC to its customers subject to KRC's production capacity for
                prices to be negotiated between KRC and KCS from time to time.
                However, KRC shall not arbitrarily (willkurlich) increase prices
                or arbitrarily refuse to supply any products ordered by KCS.

        12.13   Purchaser undertakes to procure insurance for product liability
                risks arising in respect of products manufactured after the
                Closing Date.  Sellers shall have the right to inspect
                Purchaser's insurance policy.  If Sellers should come to the
                conclusion that the insurance policy does not provide for
                sufficient protection in respect of products manufactured
                through the Closing Date Sellers and Purchaser shall
                cooperate in good faith enabling Sellers to take out insurance
                for such time period at their cost at a premium which is as low
                as reasonably possible; this includes the transfer of Sellers'
                existing insurance to Purchaser against reimbursement of
                premiums payable under the insurance policy transferred.
   44
                                     -44-

                                   ARTICLE 13
                          TAX AUDITS AND TAX INDEMNITY

        13.1    Sellers and their auditors are entitled to participate in tax
                audits of KCS and the Subsidiaries, to the extent that such tax
                audits refer to fiscal years through December 31, 1997.
                Purchaser will inform Sellers duly in advance of any tax audits
                of the aforementioned kind.  Purchaser shall assist Sellers in
                filing remedies (Einspruch) with the tax authorities or in
                filing an action against the tax authorities in the tax court
                (Finanzgericht) in respect of tax assessments (Steuerbescheide)
                referring to fiscal years through December 31, 1996 and the
                period thereafter until the Closing Date. Sellers will pay the
                costs and expenses accruing in connection with remedies and
                actions of the aforementioned kind.  Sellers shall make
                available to Purchaser all documents or information which
                Purchaser reasonably requires in order to file remedies with the
                tax authorities or to file an action against the tax authorities
                in the tax court in respect of tax assessments referring to
                periods after the Closing Date.

        
        13.2    In the event that Taxes including any interest or penalties
                become due for and payable by KCS or any Subsidiary for fiscal
                years through December 31, 1996 which have not been sufficiently
                provided for in the Final Subsidiaries' Balance Sheets and/or in
                the Final Pro Forma Consolidated Opening Balance Sheet Sellers
                shall indemnify KCS and the relevant Subsidiary therefor,
                however, where KCS does not hold 100% in any Subsidiary, limited
                to the percentage held by KCS; the same shall apply to any Taxes
                becoming due for and payable by KCS or any Subsidiary for the
                period from January 1, 1997 up to the Closing Date to the extent
                that such tax payment were not provided for in the Final Pro
                Forma Consolidated Closing Balance Sheet.

                        For the avoidance of doubt it is hereby agreed that the
                provisions of Section 11.3 shall not apply to claims under this
                Section 13.2.


                                   ARTICLE 14
                      INFORMATION, CONDUCT OF PROCEEDINGS,
                                ACCESS TO FILES

        14.1    Purchaser shall ensure that Sellers will be promptly and fully
                notified of any claim of Purchaser under this Agreement.  A
                failure to notify Sellers of such claim does not affect
                Purchaser's right to damages to the extent that the damage has
                not increased due to such
   45
                                     -45-



        failure.  Purchaser shall make available to Sellers copies of all 
        relevant documents which Sellers may reasonably request in order to 
        defend themselves against such claim.  Without Sellers' prior consent
        which shall not be unreasonably withheld Purchaser may not enter into
        a settlement (Vergleich), waiver (Verzicht) or acknowledgement
        (Anerkenntnis) as a result of which Purchaser would be entitled to 
        indemnification under Article 11.

14.2    Purchaser shall ensure that Sellers are granted in accordance with 
        their reasonable request access to all files, documents and information
        useful in the context of

        14.2.1  the defence against potential claims of Purchaser against 
                Sellers under this Agreement, or

        14.2.2  tax assessments against Sellers or any person or entity holding
                an interest in any of the Sellers, or

        14.2.3  other documents and information which are otherwise reasonably
                required by Sellers. 

                                  ARTICLE 15
                          INDEMNIFICATION IN CASE OF
                          PERSONAL LIABILITY OF KRC

15.1    Purchaser undertakes that it will not take any action which may result
        in a revival of personal liability of KRC for obligations of KCS
        pursuant to Section 172 (4) of the German Commercial Code (HGB).

15.2    Purchaser will indemnify and hold harmless KRC or its partners from
        and against any damage and any expenses (including legal costs and 
        expenses) which any of them may incur as a result of a personal
        liability which has arisen due to actions referred to in Section 15.1.

                                  ARTICLE 16
                           COVENANT NOT TO COMPETE

16.1    Basic Rule.  For a period of five (5) years commencing as of the
        Closing Date (the "Non-Compete Period"), Sellers and their Affiliates
        shall not compete, either directly or indirectly, with KCS, the
        Subsidiaries, EAS or any of their respective successors in the 
        rendering of research and development services for third parties, 
        production,

   46





                                     -46-



     and supply of complete seats for the original equipment of non-commercial
     vehicles (PKW) in the respective geographical markets in which the
     production and distribution activities of KCS, the Subsidiaries and EAS are
     conducted as of the Closing Date.  This basic rule shall not apply to the
     extent Section 16.2 through 16.7 provides for an exception.

16.2 Recaro Seats.  Sellers and their Affiliates shall be permitted to develop,
     produce and supply complete vehicle seats bearing exclusively the RECARO
     trademark or characterized by typical RECARO styling elements so that the
     end user identifies the seat as a RECARO seat (such seats hereinafter
     referred to as "RECARO Seats"), provided that such RECARO Seats are not
     used for Non-Qualifying Vehicles produced by original equipment
     manufacturers ("OEMs") for which Section 16.3 shall apply.  "Non-Qualifying
     Vehicles" shall mean all vehicle models and their respective first
     successor model (i) set forth in Annex 16.3.1 and, in addition thereto, 
     the BMW E53 (SVW), the Ford Mondeo, the SAAB 640 (9.5) and the Volvo
     P066 (C90) and P2X (VNS 90) for which Purchaser or any of its Affiliates
     (excluding KCS, the Subsidiaries, EAS and JCA Mexico) supplies or is
     contracted to supply as of the Closing Date standard seating equipment in
     the geographical markets of Western Europe (including, without limitation,
     the Czech Republic and Poland) and (ii) for which KCS or any of its
     Subsidiaries or EAS supplies or is contracted to supply as of the Closing
     Date standard seating equipment in the geographical markets in which the
     production and distribution activities of KCS, the Subsidiaries and EAS are
     conducted; the car models supplied by KCS as of the Closing Date are set
     forth in Annex 16.3.2.

16.3 Non-Qualifying Vehicles.  For each OEM, Sellers and their Affiliates
     shall be permitted to develop, produce and supply RECARO Seats for
     Non-Qualifying Vehicles up to an annual number equal to the Annual
     Allowance (as defined below) for such OEM.  If, during any 12 month period
     beginning on the Closing Date, Sellers or any of their Affiliates supply
     RECARO Seats for Non-Qualifying Vehicles in a number which exceeds the
     Annual Allowance for any OEM (the "Excess RECARO Seats"), Sellers jointly
     and severally shall pay Purchaser for each Excess RECARO Seat, an amount
     equal to 80% of the incremental profit on such Excess RECARO Seat that
     Sellers or any of their Affiliates are entitled to receive in accordance
     with the applicable supply contract for the Non-Qualifying Vehicle.  For
     the purposes of this paragraph, "incremental profit" is defined as Sellers'
     or their Affiliates' average earnings before taxes per RECARO Seat
     multiplied by the number of Excess RECARO Seats. 
   47

                                      -47-


        For each OEM (other than Porsche), the "Annual Allowance" shall be the  
        higher of (i) the number of RECARO Seats supplied by Sellers and their
        Affiliates (not including KCS, the Subsidiaries, EAS and JCA Mexico) 
        for Non-Qualifying Vehicles manufactured by such OEM during the last 
        12 months prior to the Closing Date and (ii) the number of RECARO 
        Seats for which Sellers or their Affiliates (not including KCS, the 
        Subsidiaries, EAS and JCA Mexico) have a contract to supply RECARO 
        Seats for Non-Qualifying Vehicles to be manufactured by such OEM 
        during the 12 months commencing on the Closing Date, provided that if 
        no specific amount of RECARO Seats is specified pursuant to a contract
        referred to in this clause (ii), then the Annual Allowance shall be     
        the number of RECARO Seats supplied under the relevant supply contract
        within twelve months following the Closing Date; the alternative 
        provided in (ii) shall, however, only be available to the extent it 
        does not lead to a supply of RECARO Seats for Non-Qualifying Vehicles 
        in respect of all OEMs which exceeds the total number of all RECARO 
        Seats supplied to all OEMs for Non-Qualifying Vehicles during the last
        12 months prior to the Closing Date by more than 20% (the "120% Rule"). 
        The Annual Allowance for Porsche shall be 4,000.  Sellers shall
        notify Purchaser on a quarterly basis of the number of RECARO Seats 
        supplied in accordance with Section 16.3 and shall have the burden of 
        proving that such sales are not in excess of the Annual Allowance. 
        Unless the 120% Rule provides otherwise, the Annual Allowance is 
        specific for each OEM and cannot be transferred among OEMs.

        RECARO Seats supplied as follows shall not count towards the Annual
        Allowance:

16.3.1          RECARO Seats supplied by Sellers or their Affiliates which have
                been manufactured by Purchaser or its Affiliates (including 
                KCS, the Subsidiaries, EAS and JCA Mexico) on behalf of 
                Sellers or their Affiliates; or

16.3.2          RECARO Seats supplied as optional seating equipment
                ("Sonderausstattung") provided, however, that none of the 
                following alternatives is applicable: (1) An OEM offers the 
                RECARO Seats as optional seating equipment together with other
                optional car equipment as part of a package at a reduced 
                price; (2) the number of cars of a certain car model sold
                by an OEM vehicle manufacturer with the optional seating 
                equipment exceeds during any period of six calendar months the
                number of cars of that certain car model sold with the 
                standard seating equipment; (3) an OEM offers a car model
                with a standard
   48

                                     -48-



                        equipment which includes RECARO Seats at a fixed price
                        and grants the customer the option to reduce the fixed
                        price by choosing a seating equipment which is cheaper
                        than the RECARO seats ("delete-option").


                After 42 months from Closing Date, Sellers and their Affiliates
                shall be entitled to develop, produce and supply an unlimited
                amount of RECARO Seats for the Non-Qualifying Vehicles set
                forth on Annex 16.2.1; the term of the Non-Compete Period
                provided in Section 16.1 shall be modified thereby.

        16.4    Hardware Seat Structures.  For the term of the Non-Compete
                Period, Sellers and their Affiliates shall not develop, produce
                or supply either directly or indirectly, hardware structures to
                be incorporated in non-commercial vehicle seats
                (Sitzstrukturen) which were specifically designed for
                non-commercial vehicle seats sold by KCS or its Subsidiaries or
                structures with similar features ("SEAT STRUCTURES") to
                competitors of KCS, its Subsidiaries or their respective
                successors, if such Seat Structures will be incorporated into
                seats to be offered or sold by that competitor to any OEM
                vehicle manufacturer for installation in the same vehicle model
                or its first successor model which constitutes the subject
                matter of a supply relationship already existing or agreed upon
                in a contract with KCS or its Subsidiaries as of the Closing
                Date of this Purchase Agreement (such supply relationship is
                hereinafter referred to as the "KCS CLOSING SUPPLY
                RELATIONSHIP") or, in the case of the first successor model, of
                a future supply relationship (such future supply relationship
                is hereinafter referred to as the "KCS SUCCESSOR SUPPLY
                RELATIONSHIP" or together with the KCS Closing Supply
                Relationship the "KCS SUPPLY RELATIONSHIP"), provided, however,
                that Sellers and their Affiliates may supply to competitors
                Seat Structures to be incorporated into seats of models,

                        (i)     with respect to which the KCS Supply
                                Relationship has been terminated or a notice of
                                termination has been given by the respective
                                OEM vehicle manufacturer; or

                        (ii)    which are manufactured at a production facility
                                of the respective OEM vehicle manufacturer
                                which is not the subject matter of a KCS Supply
                                Relationship.          
   49


                                      -49-

                Moreover, Sellers and their Affiliates as suppliers of Seat
                Structures agree, for the term of the Non-Compete Period, not to
                participate, either directly or indirectly, in the bidding of 
                any competitor of KCS, its Subsidiaries or any of their 
                respective successors for the supply of seats to an OEM vehicle
                manufacturer when such bid shall be submitted in competition for
                award of any KCS Successor Supply Relationship if KCS or any of
                its Subsidiaries is participating in such bidding.

                Sellers and their Affiliates shall not be bound by the
                restrictions of this Section 16.4 if they are specifically and 
                in writing requested by any OEM vehicle manufacturer which is a
                party to a KCS Supply Relationship and a customer of Sellers or
                any of their Affiliates

                        (i)     to supply Seat Structures for vehicle models
                                which are the subject matter of a KCS Supply
                                Relationship; or

                        (ii)    to participate in a bidding of any competitor
                                for a KCS Successor Supply Relationship.

                        (iii)   However, should Sellers or any of their
                                Affiliates so supply Seat Structures in
                                competition for any KCS Supply Relationship, it
                                will pay Purchaser 80% of the incremental profit
                                Sellers or any of their Affiliates receive in
                                accordance with the relevant supply contract.
                                The incremental profit shall be equal to
                                Sellers' or their Affiliates' average earnings
                                before taxes per Seat Structure supplied
                                multiplied by the Seat Structures supplied in
                                accordance with (i) and (ii) above.

                Nothing contained in this Section 16.4 shall prevent Sellers and
                their Affiliates from or limit them in supplying Seat Structures
                to the Sindelfingen plant of Daimler Benz at Sindelfingen,
                regardless of whether this plant is operated by Daimler Benz or
                by any other party.

        16.5    Research and Development.  Sellers and their Affiliates may
                develop vehicle seats for production, distribution and sale and
                may transfer or grant any rights, including but not limited to
                the grant of licenses to patents and know-how resulting from
                such research and development activities, provided that

                16.5.1  Sellers and their Affiliates shall not engage, either
                        directly or indirectly, in any development activities
                        with competitors of KCS, its
   50
                                     -50-


                Subsidiaries or any of their respective successors during the 
                Non-Compete Period, if the seat product in question is to be 
                installed in the models which constitute the subject matter of
                a KCS Supply Relationship.

        16.5.2  For the term of the Non-Compete Period, Sellers and their 
                Affiliates shall not, directly or indirectly, solicit
                offers for, nor shall they bid to provide any research and
                development services for competitors of KCS, its Subsidiaries or
                their respective successors, if the development services in
                question will be utilized for the purpose of competing for the
                award of the KCS Successor Supply Relationship.

        16.5.3  Sections 16.5.1 and 16.5.2 shall not apply if Sellers or any of
                their Affiliates are specifically and in writing requested by 
                any OEM which is party to a KCS Supply Relationship and a 
                customer of Sellers or any of their Affiliates

                (i)    to engage in development activities prohibited under 
                Section 16.5.1 or

                (ii)   to solicit offers or bid for contracts to provide 
                research and development services excluded under Section 16.5.2.

                (iii)  However, should Sellers or any of their Affiliates so 
                provide research and development services in competition for 
                any KCS Supply Relationship, they will pay Purchaser 80% of the
                incremental profit Sellers or any of their Affiliates receive
                in accordance with the relevant research and development 
                contract. The incremental profit shall be equal to Sellers' or
                their Affiliates' average earnings before taxes per research 
                and development contract entered into in accordance with (i) 
                and (ii) above.

    16.6    Notwithstanding the terms of this covenant not to compete, KRB may 
            continue to manufacture under the agreement attached as Annex 19.5
            the complete seats for the VW Santana, complete seats for the 
            Mercedes-Benz trucks and complete seats for the Fiat
            Tempra.
   51
                                      -51-


        16.7    It shall not constitute a violation of this covenant not to
                compete, if within the context of an acquisition of an
                undertaking or group of undertakings, a business is acquired by
                any of Sellers or any of their Affiliates which operates in the
                product and geographical market described in Section 16.1 above,
                provided, however, that (i) the gross sales of such acquired
                business in the last preceding fiscal year amounted to no more
                than 10% of the total gross sales of the undertaking or group of
                undertakings acquired, and (ii) during the term of the
                Non-Compete Period the gross sales deriving from all acquired
                businesses, including any internal expansion does not exceed DM
                25 million in the aggregate.

        16.8    During the Non-Compete Period,

                (i)   neither Sellers nor any of their Affiliates will solicit
                to hire any employee of Purchaser or its Affiliates, including
                any employee of KCS or any of the Subsidiaries without the
                express written consent of Purchaser;

                (ii)  neither Purchaser nor any of its Affiliates will solicit
                to hire any employee of Sellers or their Affiliates without the
                express written consent of Sellers.

        
                                   Article 17
                           Merger Control Proceedings

        17.1    The sale of the Sold Interests pursuant to Section 3.1 (the
                "Notified Transaction") is subject to a pre-merger notification
                to the Commission.  KV, KRC and Purchaser shall cooperate and
                provide each other with all necessary assistance to comply with
                this requirement.

        17.2    The notification shall be filed jointly by KV, KRC and
                Purchaser.  KRC and KV on the one hand and Purchaser on the
                other hand shall keep each other fully informed of all contacts
                which they may have with the Commission in the context of this
                transaction.


                                   Article 18
                          Intellectual Property Rights

        18.1    KRC hereby assigns and transfers the patents set forth in Annex
                18.1.1 and Annex 18.1.2 to KCS effective as of the Closing Date
                together with all patents granted to
   52
                                      -52-

                KRC or applied for by KRC in other jurisdictions which have the
                same subject matter as the patents set forth in Annex 18.1.1 and
                Annex 18.1.2.  The patents set forth in Annex 18.1.2 shall be
                licensed back to KRC in accordance with the Grant Back Licence
                Agreement attached as Annex 18.1.3.  KRC undertakes to take all
                actions necessary to have the patents registered in the name of
                KCS.  Purchaser shall bear the cost of such registration.

        18.2    KRC shall hand over to KCS the complete files of all transferred
                patents and/or patent application as well as all documents,
                certificates, grants and other papers relating to the
                transferred patents and all relevant correspondence and other
                vouchers including renewal certificates and the like relevant to
                the transferred patents promptly after the transfer of the
                patents has become effective.  KRC shall render KCS technical
                assistance to the extent to which such assistance is necessary
                in order to enable KCS to make proper use of the patents
                transferred in accordance with Section 18.1 above.  For such
                purpose, KRC shall make available, within a reasonable time
                frame and in a reasonable number, qualified personnel to KCS if
                so requested by KCS.  All costs arising in connection with the
                technical assistance shall be borne by KCS.

                                   ARTICLE 19
                              ANCILLARY AGREEMENTS

        Sellers undertake that prior to the Closing Date

        19.1    KRC and KCS sign the Grant Back Licence Agreement attached as
                Annex 18.1.3;

        19.2    KRC and KCS sign the Framework Services Supply Agreement in the
                Areas of Research and Development attached as Annex 19.2;

        19.3    KRB and KCS Brazil sign the Service Agreement attached as Annex
                19.4;

        19.4    KRB and KCS Brazil sign the Royalty Agreement attached as Annex
                19.5.

        19.5    KCS Brazil and AUTO COMERCIO E INDUSTRIA ACIL LTDA sign the
                Supply Agreement attached as Annex 19.6.

        Purchaser hereby irrevocably grants its consent to the signing of the
        aforementioned agreements.  The Agreements referred to in Section 19.3
        thru 19.5 shall be signed in the Portuguese language.  Prior to the
        notarization of this 
   53
                                      -53-

        Agreement, KRV and KCS signed a Service Agreement dated March 3, 1997
        providing that KRV shall render certain services specified therein to
        KCS which is attached as Annex 19.3.

                                   ARTICLE 20
                                   ASSIGNMENT

        Neither any of the Sellers nor Purchaser are entitled to transfer rights
        or obligations arising under this Agreement to a third party without the
        consent of the other contracting parties, except that Purchaser may
        assign this Agreement or any rights or obligations thereunder to any
        entity affiliated with it within the meaning of Article 15 German Stock
        Corporation Act (Aktiengest) provided that Purchaser shall continue to 
        be jointly and severally liable for any obligation under this Agreement
        after the assignment.

                                   ARTICLE 21
                                TAXES AND COSTS

        21.1    Each party shall bear its own costs and expenses which it incurs
                in connection with the preparation, execution and implementation
                of this Agreement including, without limitation, all fees and
                expenses of their respective advisers.

        21.2    Taxes on income, profits and capital gains which may be assessed
                against Sellers or the partners of PKG or Purchaser in
                connection with this Agreement shall be borne by the respective
                debtor in accordance with applicable tax laws.

        21.3    All other taxes and costs in connection with the preparation,
                execution and implementation of this Agreement including,
                without limitation, notarial fees, public registration fees and
                fees in connection with the clearance of the transactions
                contemplated herein with the competent antitrust authority as
                well as real property transfer tax  (Grunderwerbsteuer) and
                other transfer taxes, if any, shall be borne by Purchaser.

                                   ARTICLE 22
                                CONFIDENTIALITY

        22.1    The parties to this Agreement agree to keep confidential this
                Agreement or any provisions thereof and not to disclose it to
                third parties (including, without limitation, the press,
                customers, suppliers or other persons or companies in the
                market), except as far as they are
   54




                                     -54-



                obliged by law or applicable stock exchange regulations to
                disclose and give notice of the same to any governmental or
                administrative authority or otherwise.  They will use their
                best efforts even in such case to ensure that, notwithstanding
                such mandatory disclosure and notice, confidentiality shall be
                maintained to the maximum extent practicable.

        22.2    The parties to this Agreement will mutually agree upon the
                language of an official press release and additional
                information to be released to the press, customers and the
                business community relating to the transactions contemplated by
                this Agreement.

        22.3    Sellers agree to keep confidential and not to disclose to any
                third party any business, trade, or technical secret or other
                non public information concerning the business of KCS and the
                Subsidiaries or non public information concerning the Purchaser
                and its Affiliates made available to them prior to the Closing
                Date.


                                   ARTICLE 23
                                 MISCELLANEOUS

        23.1    This Agreement is subject to and shall be construed in
                accordance with the laws of the Federal Republic of Germany.

        23.2    All disputes other than those referred to in Article 9 arising
                under or in connection with this Agreement shall be finally
                decided by an arbitration tribunal.  For this parties shall
                execute on the Date when this Agreement is notarized a separate
                Arbitration Agreement.

        23.3    All amendments to this Agreement, including, without
                limitation, a change of this clause itself, must be made in
                writing and with the express reference to this Agreement,
                unless notarisation or any other form is required.

        23.4    Purchaser waives all rights and claims it might have against
                Drueker & Co. GmbH, Frankfurt am Main, or any of its officers or
                employees or Sellers' auditors' or legal counsel or other
                consultants who acted as advisors to Sellers (collectively
                referred to as the "Advisors") resulting from or in connection
                with the transactions contemplated by this Agreement except for
                claims based on wilful misconduct.  This waiver vests rights in
                the Advisors as third party beneficiaries ("Vertrag zugunsten
                Dritter" within the meaning of Section 328 German Civil Code).
   
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                                     -55-

        23.5    Save as provided for in Section 23.4 this Agreement shall not
                vest any rights in third parties.

        23.6    All notices and other communications hereunder shall be in
                writing and shall be deemed to have been duly given if 
                personally delivered, sent by facsimile transmission (with 
                delivery  confirmed and hard copy sent), sent by overnight 
                courier (with delivery confirmed) or mailed registered or
                certified mail, postage prepaid

              - if to Sellers, to:
                
                KEIPER RECARO Verwaltungsgesellschaft mit
                beschrankter Haftung 
                Managing Director Finance
                Dr.  Karl-Heinz Nattland
                Buchelstrasse 54 - 58
                42855 Remscheid

                Telefax:  02191 - 144 440

                with a required copy to:

                Hengeler Mueller Weitzel Wirtz
                Dr. Peter Weyland
                Bockenheimer LandstraBe 51
                60325 Frankfurt am Main
                Germany

                Telefax:  069-725773

                -       if to Purchaser or LEAR, to:

                LEAR Corporation GmbH & Co.  KG
                c/o LEAR Corporation
                Joseph F. McCarthy
                21557 Telegraph Road,
                Southfield, Michigan  48034

                Telefax:  001-810 746 1677


                with required copy to:

                Schurmane & Faylor
                Folian A. Faylor or
                Dr.  Werner Mielke, LL.M.
                Postfach 11 16 33
                Friedrich-Ebert-Anlage 2-14
                60325 Frankfurt am Main
   56
                                      -56-

                        Telefax:  069-741-1610
                        -----------------------

                        Winston & Strawn
                        Mr. John L. MacCarthy
                        35 West Wacker Drive
                        Chicago, Illinois 60601
                        USA

                        Telefax: 001-312-558-5700
                        -------------------------

                        or to such other addresses as may hereafter be 
                        furnished by any party to the other.

        23.7    If any of the provisions of this Agreement be or become invalid
                or unenforceable (nichtig oder unwirksam), all other provisions
                hereof shall remain in full force and effect.  The invalid or
                unenforceable provision shall be deemed to be automatically
                amended and replaced without the necessity of further action by
                the parties hereto by such valid and enforceable provision that
                shall accomplish as far as possible the commercial purpose and
                intent of the invalid or unenforceable provision.  The aforesaid
                shall apply mutatis mutandis should this Agreement be 
                incomplete.

                If any agreement entered into in connection with this Purchase
                Agreement including, without limitation, the ancillary
                agreements referred to in Article 19 be or become invalid or
                unenforceable in whole or in part, this Agreement shall remain
                in full force and effect.