Item 1.01.
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Entry into a Material Definitive Agreement
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Underwriting Agreement
On August 14, 2017, Lear Corporation (the Company) entered into an underwriting agreement (the Underwriting Agreement) with
Barclays Capital Inc., Citigroup Global Markets Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representatives of the several underwriters (the Underwriters), relating to the issuance and sale by the Company of
$750 million in aggregate principal amount of 3.800% senior notes due 2027 (the Notes). The Notes were issued at 99.294% of par, resulting in a yield to maturity of 3.885%. The Notes were offered and sold pursuant to the Companys
automatic shelf registration statement on Form S-3 filed with the Securities and Exchange Commission on August 10, 2017 (Registration No. 333-219855).
The net proceeds of the offering were $738.5 million, after deducting the underwriting discount and estimated offering expenses. The Company intends to use
approximately $521.1 million of the net proceeds of the offering to redeem the outstanding $500.0 million aggregate principal amount of the Companys 4.75% senior notes due 2023 (the 2023 Notes) at a price equal to 100% of the
principal amount of such 2023 Notes plus accrued and unpaid interest and a make-whole premium. The remaining net proceeds will be used to repay amounts outstanding under the Companys revolving credit facility and for general
corporate purposes.
The Underwriting Agreement includes customary representations, warranties and covenants by the Company. It also provides for
customary indemnification by the Company and the Underwriters against certain liabilities and customary contribution provisions in respect of those liabilities.
Certain of the Underwriters and their affiliates have engaged in, and may in the future engage in, securities trading, commercial banking, investment banking,
investment management, investment research, principal investment, hedging, financing, brokerage and advisory services for the Company from time to time.
The Underwriting Agreement is filed as Exhibit 1.1 hereto and incorporated herein by reference. The above description of the material terms of the
Underwriting Agreement is not complete and is qualified in its entirety by reference to Exhibit 1.1.
Indenture
On August 17, 2017, the Company completed its offering of the Notes. The Company issued the Notes pursuant to an Indenture, dated August 17, 2017
(the Base Indenture), between the Company and U.S. Bank National Association, as trustee (the Trustee), as supplemented by a First Supplemental Indenture, dated August 17, 2017 (the Supplemental Indenture,
and together with the Base Indenture, the Indenture), between the Company and the Trustee.
The Indenture provides, among other things, that
the Notes will be senior unsecured obligations of the Company. Interest is payable on the Notes on March 15 and September 15 of each year, beginning March 15, 2018. The Notes will mature on September 15, 2027.
Prior to June 15, 2027, the Company may at its option redeem the Notes, in whole or in part, at a redemption price equal to 100% of the principal amount
of the Notes plus the applicable premium, if any, as of, and accrued and unpaid interest to, but not including, the redemption date. On or after June 15, 2027, the Company may at its option redeem the Notes, at any time, in whole or in part, on
not less than 15 nor more than 60 days prior notice, at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest on the notes to be redeemed to, but not including, the redemption
date.
Subject to certain limitations, in the event of a change of control of the Company and a related ratings decline, the Company will be required to
make an offer to repurchase the Notes at a purchase price equal to 101% of the principal amount of the Notes, plus accrued and unpaid interest to, but not including, the purchase date.
The Indenture contains restrictive covenants that, among other things, limit the ability of the Company to create or permit liens and consolidate or merge or
sell all or substantially all of the Companys assets. The foregoing limitations are subject to exceptions as set forth in the Supplemental Indenture.
The Indenture provides for customary events of default that include, among other things (subject in certain cases to customary grace and cure periods):
(i) non-payment of principal or interest, (ii) breach of certain covenants contained in the Indenture or the Notes, (iii) failure to pay certain other indebtedness within the applicable grace period or the acceleration of any such
indebtedness by the holders thereof because of a default prior to maturity if the total amount of such indebtedness
unpaid or accelerated exceeds $200 million or its foreign currency equivalent and (iv) certain events of bankruptcy or insolvency. Generally, if an event of default occurs (subject to
certain exceptions), the Trustee or the holders of at least 25% in aggregate principal amount of the then outstanding Notes may declare all of the Notes to be due and payable.
The Base Indenture and the Supplemental Indenture are filed as Exhibits 4.1 and 4.2, respectively, hereto and are incorporated herein by reference. The above
description of the material terms of the Indenture is not complete and is qualified in its entirety by reference to Exhibits 4.1 and 4.2.