1 As filed with the Commission on July 2, 1997 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 11-K (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] For the period ended January 2, 1997 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] For the transition period from to . ---------------- ------------- Commission File No: 1-11311 A. Full title of the plan and the address of the plan, if different from that of the issuer named below: Lear Corporation 401(k) Plan for Hourly Associates of the Duncan Plant B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: LEAR CORPORATION 21557 TELEGRAPH ROAD SOUTHFIELD, MICHIGAN 48086-5008 2 SUMMARY TABLE OF CONTENTS Page
2Lear Corporation 401(k) Plan for Hourly Associates of the Duncan Plant Audited Financial Statements 4 Signatures 14 Exhibits Consent of Arthur Andersen LLP 3 REQUIRED INFORMATION The Lear Corporation 401(k) Plan for Hourly Associates of the Duncan Plant (the "Plan") is subject to the Employee Retirement Income Security Act of 1974 ("ERISA"). Therefore, in lieu of the requirements of Items 1-3 of Form 11-K, the financial statements of the Plan for the fiscal year ended December 31, 1996 and for the period from December 31, 1996 to January 2, 1997, the date on which it was merged out of existence, which have been prepared in accordance with the financial reporting requirements of ERISA, as listed in the Summary Table of Contents. The consent of Arthur Andersen LLP attached hereto as an Exhibit is a part hereof. 3 4 LEAR CORPORATION 401(K) PLAN FOR HOURLY ASSOCIATES OF THE DUNCAN PLANT FINANCIAL STATEMENTS AS OF JANUARY 2, 1997 AND DECEMBER 31, 1996 TOGETHER WITH AUDITORS' REPORT 4 5 Report of Independent Public Accountants To the Plan Administrator of the Lear Corporation 401(k) Plan for Hourly Associates of the Duncan Plant: We have audited the accompanying statements of assets available for benefits of LEAR CORPORATION 401(K) PLAN FOR HOURLY ASSOCIATES OF THE DUNCAN PLANT as of January 2, 1997 and December 31, 1996, and the related statements of changes in assets available for benefits for the period ended January 2, 1997 and the year ended December 31, 1996. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the assets available for benefits of the Plan as of January 2, 1997 and December 31, 1996, and the changes in assets available for benefits for the period ended January 2, 1997 and the year ended December 31, 1996 in conformity with generally accepted accounting principles. /s/ Arthur Andersen LLP Detroit, Michigan, June 30, 1997. 5 6 LEAR CORPORATION 401(k) PLAN FOR HOURLY ASSOCIATES OF THE DUNCAN PLANT INDEX TO FINANCIAL STATEMENTS AND SCHEDULES Statements of Assets Available for Benefits as of January 2, 1997 and December 31, 1996 Statements of Changes in Assets Available for Benefits for the Period Ended January 2, 1997 and the Year Ended December 31, 1996 Notes to Financial Statements 6 7 LEAR CORPORATION 401(k) PLAN FOR HOURLY ASSOCIATES OF THE DUNCAN PLANT STATEMENTS OF ASSETS AVAILABLE FOR BENEFITS AS OF JANUARY 2, 1997 AND DECEMBER 31, 1996 The accompanying notes are an integral part of these statements. 7
Fund Information - ------------------------------------------------------------------------------------------------------------------------------ Participant Directed - ------------------------------------------------------------------------------------------------------------------------------ January 2, 1997 ------------------------------------------------------------------------ Money Investment Common Bond Equity Market Contract Stock Fund Fund Fund Trust Fund Fund Total ---------- ---------- ---------- ---------- ---------- ---------- ASSETS: Cash $ - $ - $ - $ - $ - $ - Investments- Common Stock Fund - 0 units and 509 units as of January 2, 1997 and December 31, 1996, respectively. - - - - - - ---- ---- ---- ---- ---- ---- Total investments - - - - - - Contributions receivable - - - - - - ---- ---- ---- ---- ---- ---- ASSETS AVAILABLE FOR BENEFITS $ - $ - $ - $ - $ - $ - ==== ==== ==== ==== ==== ==== Fund Information - ------------------------------------------------------------------------------------------------------------------------------ Participant Directed - ------------------------------------------------------------------------------------------------------------------------------ December 31, 1996 ------------------------------------------------------------------------ Money Investment Common Bond Equity Market Contract Stock Fund Fund Fund Trust Fund Fund Total -------- ---------- ---------- ---------- ---------- ----------- ASSETS: Cash $8,547 $22,288 $ 9,065 $ 5,686 $ 320 $45,906 Investments- Common Stock Fund - 0 units and 509 units as of January 2, 1997 and December 31, 1996, respectively. - - - - 17,370 17,370 ------ ------- ------- ------- ------- ------- Total investments - - - - 17,370 17,370 Contributions receivable 24 107 1,628 1,024 228 3,011 ------ ------- ------- ------- ------- ------- ASSETS AVAILABLE FOR BENEFITS $8,571 $22,395 $10,693 $ 6,710 $17,918 $66,287 ====== ======= ======= ======= ======= ======= 8 LEAR CORPORATION 401(k) PLAN FOR HOURLY ASSOCIATES OF THE DUNCAN PLANT STATEMENTS OF CHANGES IN ASSETS AVAILABLE FOR BENEFITS FOR THE PERIOD ENDED JANUARY 2, 1997 AND THE YEAR ENDED DECEMBER 31, 1996 The accompanying notes are an integral part of these statements. 8
Fund Information ---------------------------------------------------------------------- Participant Directed ---------------------------------------------------------------------- January 2, 1997 ---------------------------------------------------------------------- Money Investment Common Bond Equity Market Contract Stock Fund Fund Fund Trust Fund Fund Total ---------- ---------- ---------- ---------- ---------- ---------- INVESTMENT INCOME: Interest and dividend income $ - $ - $ - $ - $ - $ - Net unrealized appreciation in value of investments - - - - - - Realized gain (loss) on sale of investments - - - - - - ------ ------- ------- ------ ------- ------- Net investment income - - - - - - CONTRIBUTIONS: Employee contributions - - - - - - Employer contributions - - - - - - ------ ------- ------- ------ ------- ------- Total contributions - - - - - - BENEFIT DISTRIBUTIONS - - - - - - FORFEITURES - - - - - - TRANSFERS (Note 1) (8,571) (22,395) (10,693) (6,710) (17,918) (66,287) ------ ------- ------- ------ ------- ------- Net increase (decrease) (8,571) (22,395) (10,693) (6,710) (17,918) (66,287) ASSETS AVAILABLE FOR BENEFITS, beginning of period 8,571 22,395 10,693 6,710 17,918 66,287 ------ ------- ------- ------ ------- ------- ASSETS AVAILABLE FOR BENEFITS, end of period $ - $ - $ - $ - $ - $ - ====== ======= ======= ====== ======= ======= Fund Information ---------------------------------------------------------------------- Participant Directed ---------------------------------------------------------------------- December 31, 1996 ---------------------------------------------------------------------- Money Investment Common Bond Equity Market Contract Stock Fund Fund Fund Trust Fund Fund Total ---------- ---------- ---------- ---------- ---------- ---------- INVESTMENT INCOME: Interest and dividend income $ 418 $ 1,350 $ 251 $ 197 $ 22 $ 2,238 Net unrealized appreciation in value of investments - - - - 199 199 Realized gain (loss) on sale of investments (119) 1,495 - - 26 1,402 ------ ------- ------- ------ ------- ------- Net investment income 299 2,845 251 197 247 3,839 CONTRIBUTIONS: Employee contributions 5,072 11,995 5,586 3,949 11,529 38,131 Employer contributions 1,616 3,715 2,499 1,741 3,468 13,039 ------ ------- ------- ------ ------- ------- Total contributions 6,688 15,710 8,085 5,690 14,997 51,170 BENEFIT DISTRIBUTIONS (41) (199) (365) (154) (873) (1,632) FORFEITURES (24) (352) 955 (290) (289) - TRANSFERS (Note 1) - - - - - - ------ ------- ------- ------ ------- ------- Net increase 6,922 18,004 8,926 5,443 14,082 53,377 ASSETS AVAILABLE FOR BENEFITS, beginning of period 1,649 4,391 1,767 1,267 3,836 12,910 ------ ------- ------- ------ ------- ------- ASSETS AVAILABLE FOR BENEFITS, end of period $8,571 $22,395 $10,693 $6,710 $17,918 $66,287 ====== ======= ======= ====== ======= ======= 9 LEAR CORPORATION 401(k) PLAN FOR HOURLY ASSOCIATES OF THE DUNCAN PLANT NOTES TO FINANCIAL STATEMENTS (1) PLAN MERGER Effective January 1, 1997, the Lear Corporation 401(k) Plan for Hourly Associates at the Duncan Plant (the Plan) was merged into the Lear Corporation Hourly Retirement Savings plan (the Surviving Plan). Benefits to participants of the Plan are unaffected by the merger, as all benefits earned up to the effective date of the merger are carried over. The Plan assets were transferred to the Surviving Plan on January 2, 1997. Thus, the Statement of Assets Available for Benefits as of this date reflects no assets or liabilities. (2) PLAN DESCRIPTION The following description of the Plan provides only general information. Participants should refer to the Plan agreement for a more complete description of the Plan's provisions. Eligibility All hourly employees of the Duncan Plant who have completed one year of service are eligible to participate in the Plan effective on the first day of the quarter following completion of the Plan's eligibility requirements. Contributions Contributions to the Plan are made as follows: Employee Contributions - Participants may elect to defer from 1% to 15% of their compensation each Plan year, subject to Plan limitations. The amount of compensation participants elect to defer through payroll deductions is contributed to the Plan by the Company on their behalf. Employer Contributions - The Company makes contributions on behalf of each eligible employee. The contribution formula is based on the number of hours worked by the individual. Effective January 1, 1997 the Employer contribution will be made in Lear Corporation (the Sponsor) common stock. 9 10 LEAR CORPORATION 401(k) PLAN FOR HOURLY ASSOCIATES OF THE DUNCAN PLANT NOTES TO FINANCIAL STATEMENTS (Continued) Administration The Plan administrator is responsible for general administration of the Plan for the exclusive benefit of Plan participants and their beneficiaries, subject to the specific terms of the Plan agreement. Assets of the Plan and related investments are administered by the Plan's trustee. Effective January 1, 1997, the Plan changed its trustee from Delaware Charter Guarantee and Trust Company to Wachovia Bank of North Carolina (the Trustee). It is the Trustees' responsibility to invest Plan assets and to distribute benefits to participants. Investment Options The Plan agreement provides for five investment options: Bond Fund - Fixed Income Securities Fund consisting of investments in a diversified portfolio of long-term, investment grade bonds. Equity Fund - Windsor II Fund consisting primarily of investments in common stocks that, in the opinion of the Fund's investment advisor, are undervalued in the marketplace. Money Market Fund - Money Market Fund consisting of investments in short-term securities such as certificates of deposit, bankers' acceptances, commercial paper, and U.S. Government securities. Investment Contract - Investment Contract Trust Fund consisting primarily Trust Fund of investments in investment contracts issued by high-quality insurance companies and banks, and in similar types of fixed income investments. Common Stock Fund - Common Stock Fund consisting of investment in the common stock of Lear Corporation purchased in the open market. 10 11 LEAR CORPORATION 401(k) PLAN FOR HOURLY ASSOCIATES OF THE DUNCAN PLANT NOTES TO FINANCIAL STATEMENTS (Continued) Each plan participant may elect, from the various options provided in the Plan agreement, the percentage allocation of both employer and employee contributions among the funds. Allocation of Earnings and Losses The earnings and losses on Plan investments are allocated on a pro rata basis to the elective accounts of the individual participants. Vesting of Benefits Participants are immediately 100% vested in their contributions and earnings thereon regardless of length of service. Participants become 100% vested in employer contributions and earnings thereon after three years of service or upon retirement, total and permanent disability or death. Plan Forfeitures Forfeitures of participants' nonvested portion of employer contributions, as determined in accordance with the Plan provisions, are available to reduce future employer contributions. Distribution of Benefits Distribution of benefits is made upon the occurrence of any one of the following: Normal retirement of the participant at age 65; Deferred retirement of the participant beyond age 65; In-service withdrawal of the participant after age 59 1/2; Total and permanent disability of the participant; Death of the participant; or Termination of employment. 11 12 LEAR CORPORATION 401(k) PLAN FOR HOURLY ASSOCIATES OF THE DUNCAN PLANT NOTES TO FINANCIAL STATEMENTS (Continued) Benefits payable upon normal, deferred retirement or in-service withdrawal, total and permanent disability or death are made in either a lump sum or an annuity. Benefits due upon termination of employment are based on vested amounts in the participants' accounts and are made in either a lump sum or an annuity. A terminated participant will receive the distribution within one year after termination of employment. Priorities Upon Termination of the Plan In the event of complete discontinuance of employer contributions or if the Plan is totally or partially terminated, the accounts of the participants affected by such actions shall thereupon become 100% vested and nonforfeitable. The Company currently has no intention to terminate the Surviving Plan. Loans to Participants Loans to participants are not permitted under the Plan. Hardship Withdrawals No amounts may be withdrawn from a salary deferral account before a participant terminates employment with the Company or attains the age of fifty-nine and one-half, except by reason of financial hardship. All requests for hardship withdrawals require the consent of the Plan administrator. (2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting Accounting records are maintained by the Trustee on the accrual basis of accounting. Investments Investment transactions are recorded on the trade date basis. Investments owned are reflected in the Statements of Assets Available for Benefits at current value. Current value, which is equivalent to market value, is the unit valuation of the security at yearend. Realized gains and losses on sales of investments and unrealized appreciation and depreciation in the value of investments are computed based on the difference between the market value of Plan assets at the beginning of the Plan year, or at the time of purchase if acquired during the year, and the market value of investments when sold or at Plan yearend. 12 13 LEAR CORPORATION 401(k) PLAN FOR HOURLY ASSOCIATES OF THE DUNCAN PLANT NOTES TO FINANCIAL STATEMENTS (Continued) All investments, except for Lear Common Stock, were liquidated at December 31, 1996 in preparation for the change in the custodian of the Plan effective on January 1, 1997 from Vanguard Group to Wachovia Bank of North Carolina. Expenses All direct costs and expenses incurred in connection with the Plan are paid by the Company. (3) TAX STATUS The Plan has not requested a tax determination letter. However, the Plan administrator and the Plan's tax counsel believe that the Plan is currently designed and being operated in compliance with the applicable requirements of the Internal Revenue Code. Therefore, no provision for income taxes has been included in the Plan's financial statements. 13 14 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized in the City of Southfield, Michigan on July 2, 1997. LEAR CORPORATION 401(K) PLAN FOR HOURLY ASSOCIATES OF THE DUNCAN PLANT By: Lear Corporation, as Plan Administrator By: /s/ Roger A. Jackson ------------------------ Name: Roger A. Jackson Title: Senior Vice President - Human Resources 14
1 Exhibit 23.1 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation of our report included in this Form 11-K, into the Company's previously filed Registration Statement File No. 33-62209. /s/ ARTHUR ANDERSEN LLP Detroit, Michigan June 30, 1997