Lear Announces Measures to Enhance and Protect Shareholder Value
3 March 2000
Lear Corporation Announces Measures to Enhance and Protect Shareholder Value
SOUTHFIELD, Mich., March 2 -- The Board of Directors of Lear
Corporation yesterday approved a share repurchase program and
declared a dividend distribution of one Preferred Share Purchase Right on each
outstanding share of its common stock.
The share repurchase authorization, which extends for a 24-month period,
allows the discretionary repurchase of up to 6.7 million shares.
"Consistent with our overall goal to enhance long-term shareholder value,
this repurchase program is a very effective way to return value to our
shareholders," Kenneth L. Way, Lear Corporation Chairman and Chief Executive
Officer, stated. "This decision by the board demonstrates our confidence in
the Company's future and our commitment to our shareholders."
The Company said it plans to purchase shares from time to time in the open
market or through privately negotiated transactions. The extent to which the
Company repurchases its shares and the timing of such purchases will depend
upon prevailing market conditions, alternative uses of capital and other
factors. The Company anticipates that it will fund the program primarily
through the sale of non-core assets.
"The Preferred Share Purchase Rights are designed to assure that all of
our stockholders receive fair and equal treatment in the event of any proposed
takeover of the Company and to guard against abusive tactics to gain control
of Lear Corporation without paying all of our stockholders a reasonable
premium for that control," Way said. "The Preferred Share Purchase Rights are
not being adopted in response to any specific takeover threat."
The Preferred Share Purchase Rights are intended to enable all Lear
stockholders to realize the long-term value of their investment in the
Company. The Preferred Share Purchase Rights will not prevent a takeover, but
should encourage anyone seeking to acquire the Company to negotiate with the
Board prior to attempting a takeover.
The Preferred Share Purchase Rights will be exercisable only if a person
or group acquires 20% or more of Lear Corporation's common stock or announces
a tender offer the consummation of which would result in ownership by a person
or group of 20% or more of the common stock. Each Preferred Share Purchase
Right will entitle stockholders to buy one one-thousandth of a share of a new
series of junior participating preferred stock at an exercise price of $125.
If a person or group acquires 20% or more of Lear Corporation's
outstanding common stock, each Preferred Share Purchase Right will entitle its
holder (other than such person or group) to purchase, at the Preferred Share
Purchase Right's then-current exercise price, a number of Lear Corporation's
common shares having a market value of twice such price. In addition, if Lear
Corporation is acquired in a merger or other business combination transaction
after a person has acquired 20% or more of the Company's outstanding common
stock, each Preferred Share Purchase Right will entitle its holder to
purchase, at the Preferred Share Purchase Right's then-current exercise price,
a number of the acquiring company's common shares having a market value of
twice such price. The acquiring person or group will not be entitled to
exercise these Rights.
Prior to the acquisition by a person or group of beneficial ownership of
20% or more of the Company's common stock, the Preferred Share Purchase Rights
are redeemable for one cent per right at the option of the Board of Directors.
The Board of Directors is also authorized to reduce the 20% thresholds
referred to above to not less than 10%.
The dividend distribution will be made on March 17, 2000, payable to
stockholders of record on that date, and is not taxable to stockholders. The
Preferred Share Purchase Rights will expire on March 1, 2010.
A Fortune 200 Company, Lear Corporation is one of the world's largest
automotive suppliers, with 1999 sales of $12.4 billion. The Company's world-
class products are designed, engineered and manufactured by more than 120,000
employees in over 300 facilities located in 33 countries. Information about
Lear and its products is available on the Internet at http://www.lear.com .
This news release contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. Actual results may
differ materially from the anticipated results as a result of certain risks
and uncertainties, including but not limited to general economic conditions in
the markets in which Lear operates, fluctuations in the production of vehicles
for which the Company is a supplier, labor disputes involving the Company or
its significant customers, risks associated with conducting business in
foreign countries and other risks detailed from time to time in the Company's
Securities and Exchange Commission filings.