Delaware (State of incorporation) |
38-3519512 (I.R.S. employer Identification number) |
|
One Village Center Drive, Van
Buren Township, Michigan (Address of principal executive offices) |
48111 (Zip code) |
1
2
Three-Months
Ended |
||||||||
March 31 | ||||||||
2007 | 2006 | |||||||
(Dollars in Millions, Except Per Share Data) | ||||||||
Net sales
|
||||||||
Products
|
$ | 2,797 | $ | 2,816 | ||||
Services
|
130 | 145 | ||||||
2,927 | 2,961 | |||||||
Cost of sales
|
||||||||
Products
|
2,688 | 2,573 | ||||||
Services
|
128 | 144 | ||||||
2,816 | 2,717 | |||||||
Gross margin
|
111 | 244 | ||||||
Selling, general and
administrative expenses
|
170 | 168 | ||||||
Asset impairments
|
50 | | ||||||
Restructuring expenses
|
31 | 9 | ||||||
Reimbursement from Escrow Account
|
41 | 9 | ||||||
Operating (loss)
income
|
(99 | ) | 76 | |||||
Interest expense
|
49 | 47 | ||||||
Interest income
|
9 | 8 | ||||||
Equity in net income of
non-consolidated affiliates
|
9 | 7 | ||||||
(Loss) income before taxes,
minority interests and change in accounting
|
(130 | ) | 44 | |||||
Provision for income taxes
|
17 | 30 | ||||||
Minority interests in consolidated
subsidiaries
|
6 | 7 | ||||||
Net (loss) income before
cumulative effect of change in accounting
|
(153 | ) | 7 | |||||
Cumulative effect of change in
accounting, net of tax
|
| (4 | ) | |||||
Net (loss) income
|
$ | (153 | ) | $ | 3 | |||
Per Share
Data:
|
||||||||
Basic and diluted (loss) earnings
per share before cumulative effect of change
in accounting |
$ | (1.19 | ) | $ | 0.05 | |||
Cumulative effect of change in
accounting, net of tax
|
| (0.03 | ) | |||||
Basic and diluted (loss) earnings
per share
|
$ | (1.19 | ) | $ | 0.02 | |||
3
(Unaudited) |
||||||||
March 31 |
December 31 |
|||||||
2007 | 2006 | |||||||
(Dollars in Millions) | ||||||||
ASSETS
|
||||||||
Cash and equivalents
|
$ | 872 | $ | 1,057 | ||||
Accounts receivable, net
|
1,302 | 1,245 | ||||||
Interests in accounts receivable
transferred
|
574 | 482 | ||||||
Inventories, net
|
518 | 520 | ||||||
Other current assets
|
288 | 261 | ||||||
Total current assets
|
3,554 | 3,565 | ||||||
Equity in net assets of
non-consolidated affiliates
|
234 | 224 | ||||||
Property and equipment, net
|
2,826 | 3,034 | ||||||
Other non-current assets
|
222 | 115 | ||||||
Total assets
|
$ | 6,836 | $ | 6,938 | ||||
LIABILITIES AND
SHAREHOLDERS DEFICIT
|
||||||||
Short-term debt, including current
portion of long-term debt
|
$ | 104 | $ | 100 | ||||
Accounts payable
|
1,890 | 1,825 | ||||||
Accrued employee liabilities
|
305 | 337 | ||||||
Other current liabilities
|
322 | 306 | ||||||
Total current
liabilities
|
2,621 | 2,568 | ||||||
Long-term debt
|
2,125 | 2,128 | ||||||
Employee benefits, including
pensions
|
724 | 924 | ||||||
Postretirement benefits other than
pensions
|
645 | 747 | ||||||
Deferred income taxes
|
193 | 170 | ||||||
Other non-current liabilities
|
371 | 318 | ||||||
Minority interests in consolidated
subsidiaries
|
263 | 271 | ||||||
Shareholders deficit
|
||||||||
Preferred stock (par value $1.00,
50 million shares authorized, none outstanding)
|
| | ||||||
Common stock (par value $1.00,
500 million shares authorized, 131 million shares
issued, 129 million and 129 million shares
outstanding, respectively)
|
131 | 131 | ||||||
Stock warrants
|
127 | 127 | ||||||
Additional paid-in capital
|
3,402 | 3,398 | ||||||
Accumulated deficit
|
(3,794 | ) | (3,606 | ) | ||||
Accumulated other comprehensive
income (loss)
|
46 | (216 | ) | |||||
Other
|
(18 | ) | (22 | ) | ||||
Total shareholders
deficit
|
(106 | ) | (188 | ) | ||||
Total liabilities and
shareholders deficit
|
$ | 6,836 | $ | 6,938 | ||||
4
Three-Months
Ended |
||||||||
March 31 | ||||||||
2007 | 2006 | |||||||
(Dollars in Millions) | ||||||||
Operating activities
|
||||||||
Net (loss) income
|
$ | (153 | ) | $ | 3 | |||
Adjustments to reconcile net
(loss) income to net cash provided from operating activities:
|
||||||||
Depreciation and amortization
|
121 | 102 | ||||||
Asset impairments
|
50 | | ||||||
Postretirement benefit relief
|
| (23 | ) | |||||
Equity in net income of
non-consolidated affiliates, net of dividends remitted
|
(9 | ) | (7 | ) | ||||
Non-cash tax items
|
(8 | ) | (1 | ) | ||||
Other non-cash items
|
8 | | ||||||
Change in receivables sold
|
(41 | ) | (53 | ) | ||||
Changes in assets and liabilities:
|
||||||||
Accounts receivable and retained
interests
|
(105 | ) | 31 | |||||
Escrow receivable
|
14 | 24 | ||||||
Inventories
|
(23 | ) | 1 | |||||
Accounts payable
|
63 | (99 | ) | |||||
Postretirement benefits other than
pensions
|
(9 | ) | 1 | |||||
Income taxes deferred and payable,
net
|
10 | | ||||||
Other assets and liabilities
|
(49 | ) | (11 | ) | ||||
Net cash used by operating
activities
|
(131 | ) | (32 | ) | ||||
Investing activities
|
||||||||
Capital expenditures
|
(64 | ) | (85 | ) | ||||
Proceeds from sales of assets
|
7 | 7 | ||||||
Net cash used by investing
activities
|
(57 | ) | (78 | ) | ||||
Financing activities
|
||||||||
Short-term debt, net
|
2 | (270 | ) | |||||
Proceeds from debt, net of
issuance costs
|
1 | 371 | ||||||
Principal payments on debt
|
(4 | ) | (7 | ) | ||||
Other, including book overdrafts
|
2 | 21 | ||||||
Net cash provided from financing
activities
|
1 | 115 | ||||||
Effect of exchange rate changes on
cash
|
2 | 11 | ||||||
Net (decrease) increase in cash
and equivalents
|
(185 | ) | 16 | |||||
Cash and equivalents at
beginning of year
|
1,057 | 865 | ||||||
Cash and equivalents at end of
period
|
$ | 872 | $ | 881 | ||||
5
Three-Months
Ended |
||||||||
March 31 | ||||||||
2007 | 2006 | |||||||
(Dollars in Millions) | ||||||||
Product sales
|
$ | 1,182 | $ | 1,339 | ||||
Services revenues
|
$ | 130 | $ | 145 |
March 31 |
December 31 |
|||||||
2007 | 2006 | |||||||
(Dollars in Millions) | ||||||||
Accounts receivable, net
|
$ | 384 | $ | 348 | ||||
Postretirement employee benefits
|
$ | 122 | $ | 127 |
6
7
NOTE 3. | Asset Impairments |
8
NOTE 3. | Asset Impairments (Continued) |
March 31, 2007 | ||||
(Dollars in Millions) | ||||
Assets Held for Sale
|
||||
Other Current Assets:
|
||||
Inventories, net
|
$ | 28 | ||
Other Non-Current Assets:
|
||||
Net property, after asset
impairment charges
|
104 | |||
$ | 132 | |||
Liabilities Associated with
Assets Held for Sale
|
||||
Other Current Liabilities:
|
||||
Accrued employee liabilities
|
$ | 10 | ||
Other Non-Current Liabilities:
|
||||
Employee benefits, including
pensions
|
41 | |||
$ | 51 | |||
9
NOTE 4. | Restructuring Activities |
Three-Months
Ended |
Inception
through |
|||||||
March 31, 2007 | March 31, 2007 | |||||||
(Dollars in Millions) | ||||||||
Beginning escrow account available
|
$ | 319 | $ | 400 | ||||
Add: Investment earnings
|
4 | 25 | ||||||
Deduct: Disbursements for
restructuring costs
|
(55 | ) | (157 | ) | ||||
Ending escrow account available
|
$ | 268 | $ | 268 | ||||
Interiors | Climate | Electronics | Other | Total | ||||||||||||||||
(Dollars in Millions) | ||||||||||||||||||||
December 31, 2006
|
$ | 18 | $ | 21 | $ | 2 | $ | 12 | $ | 53 | ||||||||||
Expenses
|
| | 6 | 25 | 31 | |||||||||||||||
Utilization
|
(5 | ) | (3 | ) | (1 | ) | (13 | ) | (22 | ) | ||||||||||
March 31, 2007
|
$ | 13 | $ | 18 | $ | 7 | $ | 24 | $ | 62 | ||||||||||
10
NOTE 4. | Restructuring Activities (Continued) |
| The Company recorded an estimate of employee severance and termination benefit costs of approximately $18 million for the probable payment of such post-employment benefit costs in connection with the multi-year improvement plan. |
| Approximately $6 million of employee severance and termination benefit costs for approximately 85 hourly employees and 15 salaried employees related to the exit of brake manufacturing operations at a European Other facility. |
| Approximately $4 million in employee severance and termination benefit costs related to the Companys previously announced plan to reduce its salaried workforce in higher cost countries. These costs are associated with approximately 100 salaried employees. |
NOTE 5. | Stock-Based Compensation |
| Approximately 2 million stock options, 3 million stock appreciation rights (SARs) and 1 million restricted stock units (RSUs) under the 2004 Visteon Incentive Compensation Plan. As of March 31, 2007, there were approximately 7 million shares of common stock available for grant under this plan. |
| Approximately 50,000 restricted stock awards under the Visteon Corporation Employees Equity Incentive Plan. As of March 31, 2007, there were approximately 1 million shares of common stock available for grant under this plan. |
11
NOTE 5. | Stock-Based Compensation (Continued) |
Three-Months
Ended |
||||||||
March 31, 2007 | ||||||||
SARS | Stock Options | |||||||
Expected term (in years)
|
3 | 4-6 | ||||||
Risk-free interest rate
|
4.54 | % | 4.55%-4.57% | |||||
Expected volatility
|
59.0 | % | 59.0 | % | ||||
Expected dividend yield
|
0.0 | % | 0.0 | % |
NOTE 6. | Asset Securitization |
12
NOTE 6. | Asset Securitization (Continued) |
Three-Months
Ended |
||||
March 31, 2007 | ||||
(Dollars in Millions) | ||||
Beginning balance
|
$ | 482 | ||
Receivables transferred
|
1,024 | |||
Proceeds from new securitizations
|
(41 | ) | ||
Proceeds from collections
reinvested in securitization
|
(141 | ) | ||
Cash flows received on interests
retained
|
(750 | ) | ||
Ending balance
|
$ | 574 | ||
NOTE 7. | Inventories |
March 31 |
December 31 |
|||||||
2007 | 2006 | |||||||
(Dollars in Millions) | ||||||||
Raw materials
|
$ | 159 | $ | 154 | ||||
Work-in-process
|
246 | 266 | ||||||
Finished products
|
173 | 157 | ||||||
578 | 577 | |||||||
Valuation reserves
|
(60 | ) | (57 | ) | ||||
$ | 518 | $ | 520 | |||||
NOTE 8. | Other Assets |
March 31 |
December 31 |
|||||||
2007 | 2006 | |||||||
(Dollars in Millions) | ||||||||
Recoverable taxes
|
$ | 102 | $ | 95 | ||||
Current deferred tax assets
|
48 | 47 | ||||||
Escrow receivable
|
41 | 55 | ||||||
Prepaid assets
|
31 | 22 | ||||||
Assets held for sale
|
28 | | ||||||
Customer deposits
|
25 | 23 | ||||||
Other
|
13 | 19 | ||||||
$ | 288 | $ | 261 | |||||
13
NOTE 8. | Other Assets (Continued) |
March 31 |
December 31 |
|||||||
2007 | 2006 | |||||||
(Dollars in Millions) | ||||||||
Assets held for sale
|
$ | 104 | $ | | ||||
Non-current deferred tax assets
|
49 | 45 | ||||||
Unamortized debt costs and other
intangible assets
|
33 | 35 | ||||||
Notes receivable
|
12 | 13 | ||||||
Other
|
24 | 22 | ||||||
$ | 222 | $ | 115 | |||||
NOTE 9. | Non-Consolidated Affiliates |
Net Sales | Gross Margin | Net Income | ||||||||||||||||||||||
2007 | 2006 | 2007 | 2006 | 2007 | 2006 | |||||||||||||||||||
(Dollars in Millions) | ||||||||||||||||||||||||
Yanfeng Visteon Automotive Trim
Systems Co., Ltd.
|
$ | 190 | $ | 156 | $ | 31 | $ | 27 | $ | 13 | $ | 11 | ||||||||||||
All other
|
154 | 132 | 19 | 13 | 4 | 3 | ||||||||||||||||||
$ | 344 | $ | 288 | $ | 50 | $ | 40 | $ | 17 | $ | 14 | |||||||||||||
14
NOTE 10. | Property and Equipment |
March 31 |
December 31 |
|||||||
2007 | 2006 | |||||||
(Dollars in Millions) | ||||||||
Land
|
$ | 112 | $ | 112 | ||||
Buildings and improvements
|
1,123 | 1,221 | ||||||
Machinery, equipment and other
|
3,731 | 4,065 | ||||||
Construction in progress
|
130 | 125 | ||||||
Total property and equipment
|
5,096 | 5,523 | ||||||
Accumulated depreciation
|
(2,423 | ) | (2,653 | ) | ||||
2,673 | 2,870 | |||||||
Product tooling, net of
amortization
|
153 | 164 | ||||||
Property and equipment, net
|
$ | 2,826 | $ | 3,034 | ||||
Three-Months
Ended |
||||||||
March 31 | ||||||||
2007 | 2006 | |||||||
(Dollars in Millions) | ||||||||
Depreciation
|
$ | 109 | $ | 88 | ||||
Amortization
|
12 | 14 | ||||||
$ | 121 | $ | 102 | |||||
NOTE 11. | Other Liabilities |
March 31 |
December 31 |
|||||||
2007 | 2006 | |||||||
(Dollars in Millions) | ||||||||
Restructuring reserves
|
$ | 62 | $ | 53 | ||||
Product warranty and recall
|
54 | 53 | ||||||
Income taxes payable
|
37 | 23 | ||||||
Interest
|
32 | 53 | ||||||
Value added taxes payable
|
23 | 17 | ||||||
Liabilities associated with assets
held for sale
|
10 | | ||||||
Deferred income taxes
|
7 | 8 | ||||||
Legal and environmental
|
6 | 7 | ||||||
Other accrued liabilities
|
91 | 92 | ||||||
$ | 322 | $ | 306 | |||||
15
NOTE 11. | Other Liabilities (Continued) |
March 31 |
December 31 |
|||||||
2007 | 2006 | |||||||
(Dollars in Millions) | ||||||||
Non-income tax liabilities
|
$ | 95 | $ | 106 | ||||
Product warranty and recall
|
53 | 52 | ||||||
Deferred income
|
53 | 50 | ||||||
Liabilities associated with assets
held for sale
|
41 | | ||||||
Other
|
129 | 110 | ||||||
$ | 371 | $ | 318 | |||||
NOTE 12. | Debt |
March 31 |
December 31 |
|||||||
2007 | 2006 | |||||||
(Dollars in Millions) | ||||||||
Short-term debt
|
||||||||
Current portion of long-term debt
|
$ | 31 | $ | 31 | ||||
Other short-term
|
73 | 69 | ||||||
Total short-term debt
|
104 | 100 | ||||||
Long-term debt
|
||||||||
8.25% notes due
August 1, 2010
|
550 | 550 | ||||||
Seven-year term loan due
June 13, 2013
|
1,000 | 1,000 | ||||||
7.00% notes due
March 10, 2014
|
440 | 439 | ||||||
Other
|
135 | 139 | ||||||
Total long-term debt
|
2,125 | 2,128 | ||||||
Total debt
|
$ | 2,229 | $ | 2,228 | ||||
NOTE 13. | Employee Retirement Benefits |
16
NOTE 13. | Employee Retirement Benefits (Continued) |
Retirement Plans |
Health Care and
Life |
|||||||||||||||||||||||
U.S. Plans | Non-U.S. Plans | Insurance Benefits | ||||||||||||||||||||||
2007 | 2006 | 2007 | 2006 | 2007 | 2006 | |||||||||||||||||||
(Dollars in Millions) | ||||||||||||||||||||||||
Service cost
|
$ | 7 | $ | 16 | $ | 8 | $ | 9 | $ | 2 | $ | 4 | ||||||||||||
Interest cost
|
18 | 19 | 19 | 17 | 8 | 11 | ||||||||||||||||||
Expected return on plan assets
|
(19 | ) | (18 | ) | (14 | ) | (13 | ) | | | ||||||||||||||
Amortization of:
|
||||||||||||||||||||||||
Plan amendments
|
1 | 2 | 1 | 1 | (11 | ) | (13 | ) | ||||||||||||||||
Actuarial losses and other
|
| 1 | 3 | 5 | 4 | 7 | ||||||||||||||||||
Settlements
|
| | 17 | | | | ||||||||||||||||||
Curtailments
|
10 | | | (1 | ) | (6 | ) | | ||||||||||||||||
Visteon sponsored plan net
periodic benefit costs
|
17 | 20 | 34 | 18 | (3 | ) | 9 | |||||||||||||||||
Expense for Visteon-assigned
Ford-UAW and certain salaried employees
|
| (3 | ) | | | (1 | ) | (25 | ) | |||||||||||||||
Net periodic benefits costs,
excluding restructuring
|
$ | 17 | $ | 17 | $ | 34 | $ | 18 | $ | (4 | ) | $ | (16 | ) | ||||||||||
Special termination benefits
|
2 | | | | | | ||||||||||||||||||
Total employee retirement benefit
related restructuring costs
|
$ | 2 | $ | | $ | | $ | | $ | | $ | | ||||||||||||
17
NOTE 13. | Employee Retirement Benefits (Continued) |
18
NOTE 14. | Income Taxes |
19
NOTE 14. | Income Taxes (Continued) |
NOTE 15. | Comprehensive Income (Loss) |
Three-Months
Ended |
||||||||
March 31 | ||||||||
2007 | 2006 | |||||||
(Dollars in Millions) | ||||||||
Net (loss) income
|
$ | (153 | ) | $ | 3 | |||
Pension and other postretirement
benefit adjustments
|
64 | | ||||||
Change in foreign currency
translation adjustments
|
11 | 36 | ||||||
Other
|
(3 | ) | (4 | ) | ||||
$ | (81 | ) | $ | 35 | ||||
March 31 |
December 31 |
|||||||
2007 | 2006 | |||||||
(Dollars in Millions) | ||||||||
Foreign currency translation
adjustments
|
$ | 176 | $ | 166 | ||||
Pension and other postretirement
benefit adjustments, net of tax
|
(123 | ) | (378 | ) | ||||
Realized and unrealized losses on
derivatives and other
|
(7 | ) | (4 | ) | ||||
$ | 46 | $ | (216 | ) | ||||
20
NOTE 16. | (Loss) Earnings Per Share |
Three-Months
Ended |
||||||||
March 31 | ||||||||
2007 | 2006 | |||||||
(Dollars in Millions) | ||||||||
Numerator:
|
||||||||
Net (loss) income before
cumulative effect of change in accounting
|
$ | (153 | ) | $ | 7 | |||
Cumulative effect of change in
accounting, net of tax
|
| (4 | ) | |||||
Net (loss) income
|
$ | (153 | ) | $ | 3 | |||
Denominator:
|
||||||||
Average common stock outstanding
|
129.0 | 128.3 | ||||||
Less: Average restricted stock
outstanding
|
(0.1 | ) | (1.2 | ) | ||||
Basic shares
|
128.9 | 127.1 | ||||||
Net dilutive effect of restricted
stock
|
| 0.1 | ||||||
Diluted shares
|
128.9 | 127.2 | ||||||
(Loss) earnings per share:
|
||||||||
Basic and diluted (loss) earnings
per share before cumulative effect of change in accounting
|
$ | (1.19 | ) | $ | 0.05 | |||
Cumulative effect of change in
accounting
|
| (0.03 | ) | |||||
Basic and diluted (loss) earnings
per share
|
$ | (1.19 | ) | $ | 0.02 | |||
NOTE 17. | Commitments and Contingencies |
21
NOTE 17. | Commitments and Contingencies (Continued) |
22
NOTE 17. | Commitments and Contingencies (Continued) |
Product Warranty and Recall | ||||||||
2007 | 2006 | |||||||
(Dollars in Millions) | ||||||||
Beginning balance, December 31
|
$ | 105 | $ | 148 | ||||
Accruals for products shipped
|
12 | 11 | ||||||
Changes in estimates
|
1 | 8 | ||||||
Settlements
|
(11 | ) | (7 | ) | ||||
Ending balance, March 31
|
$ | 107 | $ | 160 | ||||
23
NOTE 17. | Commitments and Contingencies (Continued) |
NOTE 18. | Segment Information |
24
NOTE 18. | Segment Information (Continued) |
| Climate: The Companys Climate product group includes facilities that primarily manufacture air handling modules, powertrain cooling modules, climate controls, heat exchangers, compressors, fluid transport, and engine induction systems. |
| Electronics: The Companys Electronics product group includes facilities that primarily manufacture audio systems, infotainment systems, driver information systems, powertrain and feature control modules, electronic climate controls and lighting. |
| Interiors: The Companys Interior product group includes facilities that primarily manufacture instrument panels, cockpit modules, door trim and floor consoles. |
| Other: The Companys Other product group includes facilities that primarily manufacture fuel products, chassis products, powertrain products, alternators and starters, as well as parts sold and distributed to the automotive aftermarket. |
| Services: The Companys Services operations supply leased personnel and transition services as required by certain agreements entered into by the Company with ACH as a part of the ACH Transactions. Pursuant to the Master Services Agreement and the Salaried Employee Lease Agreement the Company, agreed to provide ACH with certain information technology, personnel and other services to enable ACH to conduct its business. Services to ACH are provided at a rate approximately equal to the Companys cost until such time the services are no longer required by ACH or the expiration of the related agreement. |
25
NOTE 18. | Segment Information (Continued) |
Net Sales |
||||||||||||||||||||||||||||||||
Three-Months |
Gross Margin |
Property and |
||||||||||||||||||||||||||||||
Ended |
Three-Months
Ended |
Inventories, net | Equipment, net | |||||||||||||||||||||||||||||
March 31 | March 31 |
March 31 |
December 31 |
March 31 |
December 31 |
|||||||||||||||||||||||||||
2007 | 2006 | 2007 | 2006 | 2007 | 2006 | 2007 | 2006 | |||||||||||||||||||||||||
(Dollars in Millions) | ||||||||||||||||||||||||||||||||
Climate
|
$ | 822 | $ | 799 | $ | 40 | $ | 54 | $ | 185 | $ | 161 | $ | 930 | $ | 962 | ||||||||||||||||
Electronics
|
872 | 881 | 61 | 105 | 144 | 135 | 780 | 796 | ||||||||||||||||||||||||
Interiors
|
769 | 754 | 4 | 24 | 61 | 62 | 487 | 478 | ||||||||||||||||||||||||
Other
|
515 | 571 | 21 | 37 | 128 | 162 | 105 | 259 | ||||||||||||||||||||||||
Eliminations
|
(181 | ) | (189 | ) | | | | | | | ||||||||||||||||||||||
Total product
|
2,797 | 2,816 | 126 | 220 | 518 | 520 | 2,302 | 2,495 | ||||||||||||||||||||||||
Services
|
130 | 145 | 2 | 1 | | | | | ||||||||||||||||||||||||
Total segment
|
2,927 | 2,961 | 128 | 221 | 518 | 520 | 2,302 | 2,495 | ||||||||||||||||||||||||
Reconciling Item
|
||||||||||||||||||||||||||||||||
Corporate
|
| | (17 | ) | 23 | | | 524 | 539 | |||||||||||||||||||||||
Total consolidated
|
$ | 2,927 | $ | 2,961 | $ | 111 | $ | 244 | $ | 518 | $ | 520 | $ | 2,826 | $ | 3,034 | ||||||||||||||||
NOTE 19. | Subsequent Events |
26
ITEM 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
| Total product sales were $2.8 billion, of which non-Ford customers accounted for approximately 58% |
| Product gross margin of approximately 4%, down from approximately 9% for the same period of 2006 |
| SG&A of $170 million compared to $168 million for the same period in 2006 |
| Asset impairments of $50 million recorded during the three-months ended March 31, 2007 |
| Net loss of $153 million or $1.19 per diluted shares, compared to net income of $3 million or $0.02 per diluted share for the same period in 2006 |
| Cash of $872 compared with $1,057 million as of 2006 year-end |
| Cash used by operating activities of $131 million, compared to cash used by operating activities of $32 million for the same period in 2006 |
| Capital expenditures of $64 million, lower than the same period of 2006 by $21 million |
27
28
| During the three-months ended March 31, 2007, the Company reached an agreement with an electronic circuit board manufacturer, whereby a large portion of the Companys printed circuit boards produced in Latin America will be outsourced. The migration of the production and purchasing to the contract manufacturer will take place over the next 18 to 24 months. This agreement will allow for increased focus on the Companys value added electronics and is expected to generate future cost savings by leveraging the scale of the contract manufacturer. |
| During the three-months ended March 31, 2007, the Company completed its previously announced salaried census reduction initiative. Through this initiative, the Company reduced its salaried headcount by about 900 positions. Charges related to this action were $23 million and the expected savings are in excess of $65 million. |
| In March 2007, the Company announced that it had reached an agreement to sell certain chassis operations, including plants in Dueren and Wuelfrath, Germany, Prazska, Poland, and certain assets located in Sao Paulo, Brazil. Sales from these facilities in 2006 were about $600 million, approximately 80% of which were to Ford. The sale of the European businesses closed on April 30, 2007 and the sale of the Brazil assets is expected to close during the fourth quarter of 2007. This transaction represents a significant accomplishment in addressing the Companys non-core operations and allowing for additional focus on remaining non-core and underperforming facilities and the performance of core operations. |
| In April 2007, the Company closed its Chicago facility in response to customer sourcing actions. This facility had approximately $300 million of sales in 2006. |
29
Sales | Gross Margin | |||||||||||||||||||||||
2007 | 2006 | Change | 2007 | 2006 | Change | |||||||||||||||||||
(Dollars in Millions) | ||||||||||||||||||||||||
Climate
|
$ | 822 | $ | 799 | $ | 23 | $ | 40 | $ | 54 | $ | (14 | ) | |||||||||||
Electronics
|
872 | 881 | (9 | ) | 61 | 105 | (44 | ) | ||||||||||||||||
Interiors
|
769 | 754 | 15 | 4 | 24 | (20 | ) | |||||||||||||||||
Other
|
515 | 571 | (56 | ) | 21 | 37 | (16 | ) | ||||||||||||||||
Eliminations
|
(181 | ) | (189 | ) | 8 | | | | ||||||||||||||||
Total product
|
2,797 | 2,816 | (19 | ) | 126 | 220 | (94 | ) | ||||||||||||||||
Services
|
130 | 145 | (15 | ) | 2 | 1 | 1 | |||||||||||||||||
Total segment
|
2,927 | 2,961 | (34 | ) | 128 | 221 | (93 | ) | ||||||||||||||||
Reconciling Item
|
||||||||||||||||||||||||
Corporate
|
| | | (17 | ) | 23 | (40 | ) | ||||||||||||||||
Total consolidated
|
$ | 2,927 | $ | 2,961 | $ | (34 | ) | $ | 111 | $ | 244 | $ | (133 | ) | ||||||||||
30
31
| The Company recorded an estimate of employee severance and termination benefit costs of approximately $18 million for the probable payment of such post-employment benefit costs in connection with the multi-year improvement plan. |
32
| Approximately $6 million of employee severance and termination benefit costs for approximately 85 hourly employees and 15 salary employees related to the exit of brake manufacturing operations at a European Other facility. |
| Approximately $4 million in employee severance and termination benefit costs related to the Companys previously announced plan to reduce its salaried workforce in higher cost countries. These costs are associated with approximately 100 salaried employees. |
33
34
35
36
Three Months
Ended |
||||
March 31, 2007 | ||||
(Dollars in Millions) | ||||
Beginning balance
|
$ | 482 | ||
Receivables transferred
|
1,024 | |||
Proceeds from new securitizations
|
(41 | ) | ||
Proceeds from collections
reinvested in securitization
|
(141 | ) | ||
Cash flows received on interests
retained
|
(750 | ) | ||
Ending balance
|
$ | 574 | ||
37
| Visteons ability to satisfy its future capital and liquidity requirements; Visteons ability to access the credit and capital markets at the times and in the amounts needed and on terms acceptable to Visteon, which is influenced by Visteons credit ratings (which have declined in the past and could decline further in the future); Visteons ability to comply with covenants applicable to it; and the continuation of acceptable supplier payment terms. |
| Visteons ability to satisfy its pension and other postemployment benefit obligations, and to retire outstanding debt and satisfy other contractual commitments, all at the levels and times planned by management. |
| Visteons ability to access funds generated by its foreign subsidiaries and joint ventures on a timely and cost effective basis. |
| Changes in the operations (including products, product planning and part sourcing), financial condition, results of operations or market share of Visteons customers, particularly its largest customer, Ford. |
| Changes in vehicle production volume of Visteons customers in the markets where we operate, and in particular changes in Fords North American and European vehicle production volumes and platform mix. |
| Visteons ability to profitably win new business from customers other than Ford and to maintain current business with, and win future business from, Ford, and, Visteons ability to realize expected sales and profits from new business. |
38
| Increases in commodity costs or disruptions in the supply of commodities, including steel, resins, aluminum, copper, fuel and natural gas. |
| Visteons ability to generate cost savings to offset or exceed agreed upon price reductions or price reductions to win additional business and, in general, improve its operating performance; to achieve the benefits of its restructuring actions; and to recover engineering and tooling costs. |
| Visteons ability to compete favorably with automotive parts suppliers with lower cost structures and greater ability to rationalize operations; and to exit non-performing businesses on satisfactory terms, particularly due to limited flexibility under existing labor agreements. |
| Restrictions in labor contracts with unions that restrict Visteons ability to close plants, divest unprofitable, noncompetitive businesses, change local work rules and practices at a number of facilities and implement cost-saving measures. |
| The costs and timing of facility closures or dispositions, business or product realignments, or similar restructuring actions, including potential impairment or other charges related to the implementation of these actions or other adverse industry conditions and contingent liabilities. |
| Significant changes in the competitive environment in the major markets where Visteon procures materials, components or supplies or where its products are manufactured, distributed or sold. |
| Legal and administrative proceedings, investigations and claims, including shareholder class actions, SEC inquiries, product liability, warranty, environmental and safety claims, and any recalls of products manufactured or sold by Visteon. |
| Changes in economic conditions, currency exchange rates, changes in foreign laws, regulations or trade policies or political stability in foreign countries where Visteon procures materials, components or supplies or where its products are manufactured, distributed or sold. |
| Shortages of materials or interruptions in transportation systems, labor strikes, work stoppages or other interruptions to or difficulties in the employment of labor in the major markets where Visteon purchases materials, components or supplies to manufacture its products or where its products are manufactured, distributed or sold. |
| Changes in laws, regulations, policies or other activities of governments, agencies and similar organizations, domestic and foreign, that may tax or otherwise increase the cost of, or otherwise affect, the manufacture, licensing, distribution, sale, ownership or use of Visteons products or assets. |
| Possible terrorist attacks or acts of war, which could exacerbate other risks such as slowed vehicle production, interruptions in the transportation system, or fuel prices and supply. |
| The cyclical and seasonal nature of the automotive industry. |
| Visteons ability to comply with environmental, safety and other regulations applicable to it and any increase in the requirements, responsibilities and associated expenses and expenditures of these regulations. |
| Visteons ability to protect its intellectual property rights, and to respond to changes in technology and technological risks and to claims by others that Visteon infringes their intellectual property rights. |
| Visteons ability to provide various employee and transition services to Automotive Components Holdings, LLC in accordance with the terms of existing agreements between the parties, as well as Visteons ability to recover the costs of such services. |
| Visteons ability to quickly and adequately remediate control deficiencies in its internal control over financial reporting. |
| Other factors, risks and uncertainties detailed from time to time in Visteons Securities and Exchange Commission filings. |
39
40
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
41
42
ITEM 4. | CONTROLS AND PROCEDURES |
43
ITEM 1. | LEGAL PROCEEDINGS |
ITEM 6. | EXHIBITS |
44
By: |
/s/ WILLIAM
G. QUIGLEY III
|
45
Exhibit |
||
Number
|
Exhibit
Name
|
|
3.1
|
Amended and Restated Certificate of Incorporation of Visteon Corporation (Visteon) is incorporated herein by reference to Exhibit 3.1 to the Quarterly Report on Form 10-Q of Visteon dated July 24, 2000. | |
3.2
|
Amended and Restated By-laws of Visteon as in effect on the date hereof is incorporated herein by reference to Exhibit 3.2 to the Quarterly Report on Form 10-Q of Visteon dated November 14, 2001. | |
4.1
|
Amended and Restated Indenture dated as of March 10, 2004 between Visteon and J.P. Morgan Trust Company, as Trustee, is incorporated herein by reference to Exhibit 4.01 to the Current Report on Form 8-K of Visteon dated March 3, 2004 (filed as of March 19, 2004). | |
4.2
|
Supplemental Indenture dated as of March 10, 2004 between Visteon and J.P. Morgan Trust Company, as Trustee, is incorporated herein by reference to Exhibit 4.02 to the Current Report on Form 8-K of Visteon dated March 3, 2004 (filed as of March 19, 2004). | |
4.3
|
Form of Common Stock Certificate of Visteon is incorporated herein by reference to Exhibit 4.1 to Amendment No. 1 to the Registration Statement on Form 10 of Visteon dated May 19, 2000. | |
4.4
|
Form of Warrant Certificate of Visteon is incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K of Visteon dated September 16, 2005. | |
4.5
|
Form of Stockholder Agreement, dated as of October 1, 2005, between Visteon and Ford Motor Company (Ford) is incorporated herein by reference to Exhibit 4.2 to the Current Report on Form 8-K of Visteon dated September 16, 2005. | |
4.6
|
Term sheet dated July 31, 2000 establishing the terms of Visteons 8.25% Notes due August 1, 2010, is incorporated herein by reference to Exhibit 4.2 to the Current Report on Form 8-K of Visteon dated August 16, 2000. | |
10.1
|
Master Transfer Agreement dated as of March 30, 2000 between Visteon and Ford is incorporated herein by reference to Exhibit 10.2 to the Registration Statement on Form S-1 of Visteon dated June 2, 2000 (File No. 333-38388). | |
10.2
|
Master Separation Agreement dated as of June 1, 2000 between Visteon and Ford is incorporated herein by reference to Exhibit 10.4 to Amendment No. 1 to the Registration Statement on Form S-1 of Visteon dated June 6, 2000 (File No. 333-38388). | |
10.3
|
Amended and Restated Employee Transition Agreement dated as of April 1, 2000, as amended and restated as of December 19, 2003, between Visteon and Ford is incorporated herein by reference to Exhibit 10.7 to the Annual Report on Form 10-K of Visteon for the period ended December 31, 2003. | |
10.3.1
|
Amendment Number Two, effective as of October 1, 2005, to Amended and Restated Employee Transition Agreement, dated as of April 1, 2000 and restated as of December 19, 2003, between Visteon and Ford is incorporated herein by reference to Exhibit 10.15 to the Current Report on Form 8-K of Visteon dated October 6, 2005. | |
10.4
|
Tax Sharing Agreement dated as of June 1, 2000 between Visteon and Ford is incorporated herein by reference to Exhibit 10.8 to the Registration Statement on Form S-1 of Visteon dated June 2, 2000 (File No. 333-38388). | |
10.5
|
Visteon Corporation 2004 Incentive Plan, as amended and restated, is incorporated herein by reference to Appendix C to the Proxy Statement of Visteon dated March 30, 2006.* | |
10.5.1
|
Form of Terms and Conditions of Nonqualified Stock Options.* | |
10.5.2
|
Form of Terms and Conditions of Restricted Stock Grants.* | |
10.5.3
|
Form of Terms and Conditions of Restricted Stock Units.* | |
10.5.4
|
Form of Terms and Conditions of Stock Appreciation Rights.* |
46
Exhibit |
||
Number
|
Exhibit
Name
|
|
10.6
|
Form of Revised Change in Control Agreement is incorporated herein by reference to Exhibit 10.10 to the Annual Report on Form 10-K of Visteon for the period ended December 31, 2000.* | |
10.6.1
|
Form of Amendment to Revised Change in Control Agreement constituting Exhibit 10.6 hereto is incorporated herein by reference to Exhibit 10.6.1 to the Annual Report on Form 10-K of Visteon for the period ended December 31, 2006.* | |
10.6.2
|
Schedule identifying substantially identical agreements to Revised Change in Control Agreement constituting Exhibit 10.6 and Amendment to Revised Change of Control Agreement constituting Exhibit 10.6.1 hereto entered into by Visteon with Messrs. Johnston, Stebbins, Palmer, Donofrio, and Quigley and Ms. Stephenson, is incorporated herein by reference to Exhibit 10.6.2 to the Annual Report on Form 10-K of Visteon for the period ended December 31, 2006.* | |
10.7
|
Visteon Corporation Deferred Compensation Plan for Non-Employee Directors, as amended, is incorporated herein by reference to Exhibit 10.14 to the Annual Report on Form 10-K of Visteon for the period ended December 31, 2003.* | |
10.7.1
|
Amendments to the Visteon Corporation Deferred Compensation Plan for Non-Employee Directors, effective as of December 14, 2005 is incorporated herein by reference to Exhibit 10.14.1 to the Annual Report on Form 10-K of Visteon for the period ended December 31, 2005.* | |
10.8
|
Visteon Corporation Restricted Stock Plan for Non-Employee Directors, as amended, is incorporated herein by reference to Exhibit 10.15 to the Annual Report on Form 10-K of Visteon for the period ended December 31, 2003.* | |
10.8.1
|
Amendments to the Visteon Corporation Restricted Stock Plan for Non-Employee Directors, effective as of January 1, 2005 is incorporated herein by reference to Exhibit 10.15.1 to the Annual Report on Form 10-K of Visteon for the period ended December 31, 2005.* | |
10.8.2
|
Amendment to the Visteon Corporation Restricted Stock Plan for Non-Employee Directors, effective as of May 10, 2006, is incorporated herein by reference to Exhibit 10.3 to the Current Report on Form 8-K of Visteon dated May 12, 2006.* | |
10.9
|
Visteon Corporation Deferred Compensation Plan, as amended, is incorporated herein by reference to Exhibit 10.16 to the Annual Report on Form 10-K of Visteon for the period ended December 31, 2002.* | |
10.9.1
|
Amendments to the Visteon Corporation Deferred Compensation Plan, effective as of December 23, 2005 is incorporated herein by reference to Exhibit 10.16.1 to the Annual Report on Form 10-K of Visteon for the period ended December 31, 2005.* | |
10.10
|
Employment Agreement dated as of December 7, 2004 between Visteon and William G. Quigley III is incorporated herein by reference to Exhibit 10.17 to the Annual Report on Form 10-K of Visteon for the period ended December 31, 2005.* | |
10.11
|
Visteon Corporation Pension Parity Plan, as amended through February 9, 2005, is incorporated herein by reference to Exhibit 10.4 to the Current Report on Form 8-K of Visteon dated February 15, 2005.* | |
10.11.1
|
Amendments to the Visteon Corporation Pension Parity Plan, effective as of January 1, 2005 is incorporated herein by reference to Exhibit 10.18.1 to the Annual Report on Form 10-K of Visteon for the period ended December 31, 2005.* | |
10.12
|
Visteon Corporation Supplemental Executive Retirement Plan, as amended through February 9, 2005, is incorporated herein by reference to Exhibit 10.2 to the Current Report on Form 8-K of Visteon dated February 15, 2005.* |
47
Exhibit |
||
Number
|
Exhibit
Name
|
|
10.12.1
|
Amendments to the Visteon Corporation Supplemental Executive Retirement Plan, effective as of January 1, 2005 is incorporated herein by reference to Exhibit 10.19.1 to the Annual Report on Form 10-K of Visteon for the period ended December 31, 2005.* | |
10.12.2
|
Amendments to the Visteon Corporation Supplemental Executive Retirement Plan, effective as of June 30, 2006, is incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K of Visteon dated June 19, 2006.* | |
10.13
|
Amended and Restated Employment Agreement, effective as of March 1, 2007, between Visteon and Michael F. Johnston is incorporated herein by reference to Exhibit 10.13 to the Annual Report on Form 10-K of Visteon for the period ended December 31, 2006.* | |
10.14
|
Service Agreement dated as of November 1, 2001 between Visteon International Business Development, Inc., a wholly-owned subsidiary of Visteon, and Dr. Heinz Pfannschmidt is incorporated herein by reference to Exhibit 10.21 to the Annual Report on Form 10-K of Visteon for the period ended December 31, 2002.* | |
10.15
|
Visteon Corporation Executive Separation Allowance Plan, as amended through February 9, 2005, is incorporated herein by reference to Exhibit 10.3 to the Current Report on Form 8-K of Visteon dated February 15, 2005.* | |
10.15.1
|
Amendments to the Visteon Corporation Executive Separation Allowance Plan, effective as of January 1, 2005 is incorporated herein by reference to Exhibit 10.22.1 to the Annual Report on Form 10-K of Visteon for the period ended December 31, 2005.* | |
10.16
|
Trust Agreement dated as of February 7, 2003 between Visteon and The Northern Trust Company establishing a grantor trust for purposes of paying amounts to certain directors and executive officers under the plans constituting Exhibits 10.6, 10.6.1, 10.7, 10.7.1, 10.9, 10.9.1, 10.11, 10.11.1, 10.12, 10.12.1, 10.12.2, 10.15 and 10.15.1 hereto is incorporated herein by reference to Exhibit 10.23 to the Annual Report on Form 10-K of Visteon for the period ended December 31, 2002.* | |
10.17
|
Credit Agreement, dated as of August 14, 2006, among Visteon, certain subsidiaries of Visteon, the several banks and other financial institutions or entities from time to time party thereto, Bank of America, NA, Sumitomo Mitsui Banking Corporation, New York, and Wachovia Capital Finance Corporation (Central), as co-documentation agents, Citicorp USA, Inc., as syndication agent, and JPMorgan Chase Bank, N.A., as administrative agent, is incorporated herein by reference to Exhibit 10.17 to the Quarterly Report on Form 10-Q of Visteon dated November 7, 2006. | |
10.17.1
|
First Amendment to Credit Agreement and Consent, dated as of November 27, 2006, to the Credit Agreement, dated as of August 14, 2006, among Visteon, certain subsidiaries of Visteon, the several banks and other financial institutions or entities from time to time party thereto, Bank of America, NA, Sumitomo Mitsui Banking Corporation, New York, and Wachovia Capital Finance Corporation (Central), as co-documentation agents, Citicorp USA, Inc., as syndication agent, and JPMorgan Chase Bank, N.A., as administrative agent, is incorporated herein by reference to Exhibit 10.3 to the Current Report on Form 8-K of Visteon dated December 1, 2006. | |
10.17.2
|
Second Amendment to Credit Agreement and Consent, dated as of April 10, 2007, to the Credit Agreement, dated as of August 14, 2006, among Visteon, certain subsidiaries of Visteon, the several banks and other financial institutions or entities from time to time party thereto, Bank of America, NA, Sumitomo Mitsui Banking Corporation, New York, and Wachovia Capital Finance Corporation (Central), as co-documentation agents, Citicorp USA, Inc., as syndication agent, and JPMorgan Chase Bank, N.A., as administrative agent, is incorporated herein by reference to Exhibit 10.3 to the Current Report on Form 8-K of Visteon dated April 16, 2007. |
48
Exhibit |
||
Number
|
Exhibit
Name
|
|
10.18
|
Amended and Restated Credit Agreement, dated as of April 10, 2007, among Visteon, the several banks and other financial institutions or entities from time to time party thereto, Credit Suisse Securities (USA) LLC and Sumitomo Mitsui Banking Corporation, as co-documentation agents, Citicorp USA, Inc., as syndication agent, and JPMorgan Chase Bank, N.A., as administrative agent, is incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K of Visteon dated April 16, 2007. | |
10.18.1
|
Agreement to Amend and Restate, dated as of April 10, 2007, among Visteon, the several banks and other financial institutions or entities party to the Credit Agreement, dated as of June 13, 2006, Citicorp USA, Inc., as syndication agent, and JPMorgan Chase Bank, N.A., as administrative agent, is incorporated herein by reference to Exhibit 10.2 to the Current Report on Form 8-K of Visteon dated April 16, 2007. | |
10.19
|
Pension Plan Agreement effective as of November 1, 2001 between Visteon Holdings GmbH, a wholly-owned subsidiary of Visteon, and Dr. Heinz Pfannschmidt is incorporated herein by reference to Exhibit 10.27 to the Quarterly Report on Form 10-Q of Visteon dated May 7, 2003.* | |
10.20
|
Hourly Employee Conversion Agreement dated as of December 22, 2003 between Visteon and Ford is incorporated herein by reference to Exhibit 10.28 to the Annual Report on Form 10-K of Visteon for the period ended December 31, 2003. | |
10.21
|
Letter Agreement, effective as of May 23, 2005, between Visteon and Mr. Donald J. Stebbins is incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K of Visteon dated May 23, 2005.* | |
10.22
|
Visteon Corporation Non-Employee Director Stock Unit Plan is incorporated herein by reference to Appendix D to the Proxy Statement of Visteon dated March 30, 2006.* | |
10.23
|
Reserved. | |
10.24
|
Visteon Executive Severance Plan is incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K of Visteon dated February 15, 2005.* | |
10.25
|
Form of Executive Retiree Health Care Agreement is incorporated herein by reference to Exhibit 10.28 to the Current Report on Form 8-K of Visteon dated December 9, 2004.* | |
10.25.1
|
Schedule identifying substantially identical agreements to Executive Retiree Health Care Agreement constituting Exhibit 10.25 hereto entered into by Visteon with Messrs. Johnston, Stebbins and Palmer and Ms. D. Stephenson is incorporated herein by reference to Exhibit 10.25.1 to the Quarterly Report on Form 10-Q of Visteon dated August 8, 2006.* | |
10.26
|
Contribution Agreement, dated as of September 12, 2005, between Visteon and VHF Holdings, Inc. is incorporated herein by reference to Exhibit 10.2 to the Current Report on Form 8-K of Visteon dated September 16, 2005. | |
10.27
|
Visteon A Transaction Agreement, dated as of September 12, 2005, between Visteon and Ford is incorporated herein by reference to Exhibit 10.3 to the Current Report on Form 8-K of Visteon dated September 16, 2005. | |
10.28
|
Visteon B Purchase Agreement, dated as of September 12, 2005, between Visteon and Ford is incorporated herein by reference to Exhibit 10.4 to the Current Report on Form 8-K of Visteon dated September 16, 2005. | |
10.29
|
Escrow Agreement, dated as of October 1, 2005, among Visteon, Ford and Deutsche Bank Trust Company Americas, as escrow agent, is incorporated herein by reference to Exhibit 10.11 to the Current Report on Form 8-K of Visteon dated October 6, 2005. | |
10.30
|
Reimbursement Agreement, dated as of October 1, 2005, between Visteon and Ford is incorporated herein by reference to Exhibit 10.12 to the Current Report on Form 8-K of Visteon dated October 6, 2005. |
49
Exhibit |
||
Number
|
Exhibit
Name
|
|
10.31
|
Master Services Agreement, dated as of September 30, 2005, between Visteon and Automotive Components Holdings, LLC is incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K of Visteon dated October 6, 2005. | |
10.32
|
Visteon Hourly Employee Lease Agreement, effective as of October 1, 2005, between Visteon and Automotive Components Holdings, LLC is incorporated herein by reference to Exhibit 10.2 to the Current Report on Form 8-K of Visteon dated October 6, 2005. | |
10.33
|
Visteon Hourly Employee Conversion Agreement, dated effective as of October 1, 2005, between Visteon and Ford is incorporated herein by reference to Exhibit 10.9 to the Current Report on Form 8-K of Visteon dated October 6, 2005. | |
10.34
|
Visteon Salaried Employee Lease Agreement, effective as of October 1, 2005, between Visteon and Automotive Components Holdings, LLC is incorporated herein by reference to Exhibit 10.3 to the Current Report on Form 8-K of Visteon dated October 6, 2005. | |
10.34.1
|
Amendment to Salaried Employee Lease Agreement and Payment Acceleration Agreement, dated as of March 30, 2006, among Visteon, Ford Motor Company and Automotive Components Holdings, LLC is incorporated herein by reference to Exhibit 10.46.1 to the Quarterly Report on Form 10-Q of Visteon dated May 10, 2006. | |
10.35
|
Visteon Salaried Employee Lease Agreement (Rawsonville/Sterling), dated as of October 1, 2005, between Visteon and Ford is incorporated herein by reference to Exhibit 10.8 to the Current Report on Form 8-K of Visteon dated October 6, 2005. | |
10.36
|
Visteon Salaried Employee Transition Agreement, dated effective as of October 1, 2005, between Visteon and Ford is incorporated herein by reference to Exhibit 10.10 to the Current Report on Form 8-K of Visteon dated October 6, 2005. | |
10.36.1
|
Amendment Number One to Visteon Salaried Employee Transition Agreement, effective as of March 1, 2006, between Visteon and Ford is incorporated herein by reference to Exhibit 10.36.1 to the Quarterly Report on Form 10-Q of Visteon dated August 8, 2006. | |
10.37
|
Purchase and Supply Agreement, dated as of September 30, 2005, between Visteon (as seller) and Automotive Components Holdings, LLC (as buyer) is incorporated herein by reference to Exhibit 10.4 to the Current Report on Form 8-K of Visteon dated October 6, 2005. | |
10.38
|
Purchase and Supply Agreement, dated as of September 30, 2005, between Automotive Components Holdings, LLC (as seller) and Visteon (as buyer) is incorporated herein by reference to Exhibit 10.5 to the Current Report on Form 8-K of Visteon dated October 6, 2005. | |
10.39
|
Purchase and Supply Agreement, dated as of October 1, 2005, between Visteon (as seller) and Ford (as buyer) is incorporated herein by reference to Exhibit 10.13 to the Current Report on Form 8-K of Visteon dated October 6, 2005. | |
10.40
|
Intellectual Property Contribution Agreement, dated as of September 30, 2005, among Visteon, Visteon Global Technologies, Inc., Automotive Components Holdings, Inc. and Automotive Components Holdings, LLC is incorporated herein by reference to Exhibit 10.6 to the Current Report on Form 8-K of Visteon dated October 6, 2005. | |
10.40.1
|
Amendment to Intellectual Property Contribution Agreement, dated as of December 11, 2006, among Visteon, Visteon Global Technologies, Inc., Automotive Components Holdings, Inc. and Automotive Components Holdings, LLC, is incorporated herein by reference to Exhibit 10.40.1 to the Annual Report on Form 10-K of Visteon for the period ended December 31, 2006. | |
10.41
|
Software License and Contribution Agreement, dated as of September 30, 2005, among Visteon, Visteon Global Technologies, Inc. and Automotive Components Holdings, Inc. is incorporated herein by reference to Exhibit 10.7 to the Current Report on Form 8-K of Visteon dated October 6, 2005. |
50
Exhibit |
||
Number
|
Exhibit
Name
|
|
10.42
|
Intellectual Property License Agreement, dated as of October 1, 2005, among Visteon, Visteon Global Technologies, Inc. and Ford is incorporated herein by reference to Exhibit 10.14 to the Current Report on Form 8-K of Visteon dated October 6, 2005. | |
10.43
|
Master Agreement, dated as of September 12, 2005, between Visteon and Ford is incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K of Visteon dated September 16, 2005. | |
10.44
|
Master Receivables Purchase & Servicing Agreement, dated as of August 14, 2006, by and among Visteon UK Limited, Visteon Deutschland GmbH, Visteon Sistemas Interiores Espana S.L., Cadiz Electronica SA, Visteon Portuguesa Limited, Visteon Financial Centre P.L.C., The Law Debenture Trust Corporation P.L.C., Citibank, N.A., Citibank International Plc, Citicorp USA, Inc., and Visteon is incorporated herein by reference to Exhibit 10.44 to the Quarterly Report on Form 10-Q of Visteon dated November 7, 2006. | |
10.45
|
Variable Funding Agreement, dated as of August 14, 2006, by and among Visteon UK Limited, Visteon Financial Centre P.L.C., The Law Debenture Trust Corporation P.L.C., Citibank International PLC, and certain financial institutions listed therein, is incorporated herein by reference to Exhibit 10.45 to the Quarterly Report on Form 10-Q of Visteon dated November 7, 2006. | |
10.46
|
Subordinated VLN Facility Agreement, dated as of August 14, 2006, by and among Visteon Netherlands Finance B.V., Visteon Financial Centre P.L.C., The Law Debenture Trust Corporation P.L.C., and Citibank International PLC is incorporated herein by reference to Exhibit 10.46 to the Quarterly Report on Form 10-Q of Visteon dated November 7, 2006. | |
10.47
|
Master Definitions and Framework Deed, dated as of August 14, 2006, by and among Visteon, Visteon Netherlands Finance B.V., Visteon UK Limited, Visteon Deutschland GmbH, Visteon Systemes Interieurs SAS, Visteon Ardennes Industries SAS, Visteon Sistemas Interiores Espana S.L., Cadiz Electronica SA, Visteon Portuguesa Limited, Visteon Financial Centre P.L.C., The Law Debenture Trust Corporation P.L.C., Citibank, N.A., Citibank International PLC, Citicorp USA, Inc., Wilmington Trust SP Services (Dublin) Limited, and certain financial institutions and other entities listed therein, is incorporated herein by reference to Exhibit 10.47 to the Quarterly Report on Form 10-Q of Visteon dated November 7, 2006. | |
12.1
|
Statement re: Computation of Ratios. | |
14.1
|
Visteon Corporation Ethics and Integrity Policy, as amended effective September 23, 2005 (code of business conduct and ethics) is incorporated herein by reference to Exhibit 14.1 to the Current Report on Form 8-K of Visteon dated September 28, 2005. | |
15.1
|
Letter of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm, dated May 9, 2007 relating to Financial Information. | |
31.1
|
Rule 13a-14(a) Certification of Chief Executive Officer dated May 9, 2007. | |
31.2
|
Rule 13a-14(a) Certification of Chief Financial Officer dated May 9, 2007. | |
32.1
|
Section 1350 Certification of Chief Executive Officer dated May 9, 2007. | |
32.2
|
Section 1350 Certification of Chief Financial Officer dated May 9, 2007. |
| Portions of these exhibits have been redacted pursuant to confidential treatment requests filed with the Secretary of the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. The redacted material was filed separately with the Securities and Exchange Commission. |
* | Indicates that exhibit is a management contract or compensatory plan or arrangement. |
51
Exhibit 10.5.1 VISTEON CORPORATION 2004 INCENTIVE PLAN VISTEON CORPORATION EMPLOYEES EQUITY INCENTIVE PLAN TERMS AND CONDITIONS OF NONQUALIFIED STOCK OPTIONS Visteon Corporation, a Delaware corporation (together with its subsidiaries, the "Company"), subject to the terms and conditions of the Visteon Corporation 2004 Incentive Plan, formerly known as the Visteon Corporation 2000 Incentive Plan, and the Visteon Corporation Employees Equity Incentive Plan (collectively, the "Plan") and this Agreement, hereby grants to the Participant named in the Notification Summary or Appendix to this Agreement, non-qualified stock options ("Option") as further described below. 1. Grant of Option. The Company hereby grants to the Participant an "Option" to purchase the number of shares of common stock of the Company ("Option Shares") set forth in the Notification Summary or Appendix, effective as of the date or dates ("Grant Date") and exercisable as of the date or dates ("Vesting Dates") at the price per Option Share ("Exercise Price") set forth in the Notification Summary or Appendix, in accordance with the terms and conditions specified herein. In the event of certain corporate transactions, the number of Option Shares covered by this Agreement may be adjusted by the Organization and Compensation Committee of the Board of Directors of the Company (the "Committee") as further described in Section 13 of the Plan. 2. Termination of Employment. a. Unless provided otherwise under the remaining provisions of this Paragraph 2, if the Participant's employment with the Company is terminated for any reason, the Participant's right to exercise the Option will terminate on the date of termination of employment and all rights hereunder will cease. Options that have not yet vested as of the date of termination of employment will be forfeited. b. Notwithstanding the provisions of Paragraph 2a, if the Participant's employment with the Company is terminated by reason of retirement, disability or death, and provided that at the date of termination, the Participant had remained in the employ of the Company for at least 180 days following the Grant Date, the Participant's rights with respect to the Option will continue in effect or continue to accrue for the period ending on the date immediately preceding the tenth anniversary of the Grant Date, for Options with a Grant Date prior to 2004; on the date immediately preceding the fifth anniversary of the Grant Date, for Options with a Grant Date after 2003 and prior to 2007; and on the date immediately preceding the seventh anniversary of the Grant Date, for Options with a Grant Date after 2006, subject to any other limitation on the exercise of such rights in effect at the date of exercise. For purposes of this Agreement, "retirement" means normal, regular early, special early or disability retirement under a retirement plan of the Company that includes such provisions, or retirement
after 30 years of service, after attaining age 55 and 10 years of service, or after attaining age 65, under any other retirement plan of the Company. c. Notwithstanding the provisions of Paragraph 2a, if the Participant's employment with the Company is terminated under mutually satisfactory conditions, and provided that at the date of termination, the Participant had remained in the employ of the Company for at least 180 days following the Grant Date, the Participant's rights with respect to the Option will continue in effect or continue to accrue until the date 90 days after the date of such termination (but not later than the date immediately preceding the tenth anniversary of the Grant Date, for Options with a Grant Date prior to 2004; and not later than the date immediately preceding the fifth anniversary of the Grant Date, for Options with a Grant Date after 2003 and prior to 2007; and the date immediately preceding the seventh anniversary of the Grant Date, for Options with a Grant Date after 2006), subject to any other limitation on the exercise of such rights in effect at the date of exercise. d. Notwithstanding the provisions of Paragraph 2a, if the Participant's employment with the Company is terminated at any time by reason of a sale or other disposition (including, without limitation, a transfer to a joint venture) of the division, operation or subsidiary in which the Participant was employed or to which the Participant was assigned, the Participant's rights with respect to the Option will terminate on the date of such termination, or such later date as is approved by the Committee (but not later than the date immediately preceding the tenth anniversary of the Grant Date, for Options with a Grant Date prior to 2004; the date immediately preceding the fifth anniversary of the Grant Date, for Options with a Grant Date after 2003 and prior to 2007; and the date immediately preceding the seventh anniversary of the Grant Date, for Options with a Grant Date after 2006), provided that the Participant satisfies both of the following conditions: (i) at the date of termination, the Participant had remained in the employ of the Company for 90 days following the Grant Date, and (ii) the Participant continues to be or becomes employed in such division, operation or subsidiary following such sale or other disposition and remains in such employ until the date of exercise of such Option. e. Notwithstanding the provisions of Paragraph 2a, if the Participant's employment with the Company is terminated due to layoff, and provided that at the date of termination, the Participant had remained in the employ of the Company for at least 365 days following the Grant Date, the Participant's rights with respect to the Option will continue in effect until the date 365 days (in the case of Options with Grant Dates prior to May 9, 2001, 90 days) after the date of such termination (but not later than the date immediately preceding the tenth anniversary of the Grant Date, for Options with a Grant Date prior to 2004; the date immediately preceding the fifth anniversary of the Grant Date, for Options with a Grant Date after 2003 and prior to 2007; and the date immediately preceding the seventh anniversary of the Grant Date, for Options with a Grant Date after 2006), subject to any other limitation on the exercise of such rights in effect at the date of exercise. Options not yet vested at the date of termination will be forfeited. f. Notwithstanding the provisions of Paragraph 2a, if the Participant's employment with the Company is terminated by reason of discharge or release in the best 2
interest of the Company (or, in the case of Options with Grant Dates prior to May 9, 2001, voluntary quit), the Participant's right to exercise the Option will terminate on the date of termination of employment and all rights hereunder will cease. g. Notwithstanding the provisions of Paragraph 2a, in the case of Options with Grant Dates on and after May 9, 2001, if the Participant's employment with the Company is terminated by reason of voluntary quit, the Participant's rights with respect to Options that are vested at the date of termination will continue in effect until the date 90 days after the date of such termination (but not later than the date immediately preceding the tenth anniversary of the Grant Date, for Options with a Grant Date prior to 2004; the date immediately preceding the fifth anniversary of the Grant Date, for Options with a Grant Date after 2003 and prior to 2007; and the date immediately preceding the seventh anniversary of the Grant Date, for Options with a Grant Date after 2006), subject to any other limitation on the exercise of such rights in effect at the date of exercise. Options not yet vested at the date of termination will be forfeited. h. Notwithstanding the provisions of Paragraph 2a, if the Participant's employment with the Company is terminated without cause under the provisions of the Visteon Separation Program (VSP) or a successor severance plan of the Company, and provided that at the date of termination, the Participant had remained in the employ of the Company for at least 180 days following the Grant Date, the Participant's rights with respect to the Option will continue in effect until the date 365 days after the date of such termination (but not later than the date immediately preceding the tenth anniversary of the Grant Date, for Options with Grant Dates prior to 2004; the date immediately preceding the fifth anniversary of the Grant Date, for Options with Grant Dates after 2003 and prior to 2007; and the date immediately preceding the seventh anniversary of the Grant Date, for Options with a Grant Date after 2006), subject to any other limitation on the exercise of such rights in effect at the date of exercise. Options not yet vested at the date of termination will be forfeited. 3. Cancellation of the Option. The Option will terminate, and cease to be exercisable, on the earliest of the following: a. The date immediately preceding the tenth anniversary of the Grant Date, for Options with Grant Dates prior to 2004; the date immediately preceding the fifth anniversary of the Grant Date, for Options with Grant Dates after 2003 and prior to 2007; or the date immediately preceding the seventh anniversary of the Grant Date, for Options with Grant Dates after 2006; b. In the event of the Participant's termination of employment, such earlier date as determined in accordance with the rules set forth in Paragraph 2. 4. Exercise of Option. a. The Participant may, subject to the limitations of this Agreement and the Plan, exercise all or any portion of the Option that has become vested and that has not been cancelled under Paragraphs 2 and 3 by (i) providing notice of exercise to the Company (in a form 3
acceptable to the Company) specifying the whole number of Option Shares with respect to which the Option is being exercised, accompanied by payment of the exercise price, withholding taxes and any applicable fees and expenses for such Option Shares in cash or by check, or (ii) through a cashless exercise procedure established by the Committee. If the Participant lives in a foreign jurisdiction, the Committee has the right to limit the means of exercise to only a cashless exercise. b. After receiving proper notice of exercise and full payment of the exercise price, including full payment of any taxes, any brokerage fees associated with the sale of the Option Shares, and any other applicable fees and expenses, the Company will issue to the Participant (or the Participant's beneficiary) the Option Shares purchased. c. Notwithstanding the foregoing, the Option will not be exercisable if and to the extent the Committee determines that such exercise would violate applicable state or federal securities laws or the rules and regulations of any securities exchange on which the Stock is then traded, or would violate the laws of any foreign jurisdiction, and the exercise thereof may be limited or delayed until such requirements are met. d. The Company may retain the services of a third-party administrator to effectuate Option exercises and to perform other administrative services in connection with the Plan. To the extent that the Company has retained such an administrator, any reference to the Company shall be deemed to refer to such third party administrator retained by the Company, and the Company may require the Participant to exercise the Participant's Options only through such third-party administrator. 5. Withholding. The Company may deduct and withhold from any cash payable to the Participant or may, as a condition to the issuance of any Option Shares hereunder, require the Participant to pay to the Company or otherwise indemnify the Company to its satisfaction, such amount as may be required for the purpose of satisfying the Company's obligation to withhold federal, state or local taxes in connection with any exercise of the Option. 6. Conditions on Option Award. Notwithstanding anything herein to the contrary, the Committee may cancel the Option, and may refuse to deliver any Option Shares for which the Participant (or the Participant's beneficiary) has tendered a notice of exercise and payment of the exercise price, if: a. During the period from the date of the Participant's termination of employment from the Company to the date any Option Shares purchased hereunder are delivered to the Participant (or the Participant's beneficiary), the Committee determines that the Participant has either (i) refused to be available, upon request, at reasonable times and upon a reasonable basis, to consult with, supply information to and otherwise cooperate with the Company with respect to any matter that was handled by the Participant or under the Participant's supervision while the Participant was in the employ of the Company or (ii) engaged in any activity that is directly or indirectly in competition with any activity of the Company; or 4
b. The Committee determines that the Participant, at any time (whether before or after employment with the Company, and whether before or after the grant of this Option), acted in any manner detrimental to the best interests of the Company. In the event that the Committee refuses to deliver Option Shares under this Paragraph 6, the amount of the exercise price and taxes, if any, tendered by the Participant or the Participant's beneficiary for purchase of the Option Shares will be promptly returned to the Participant or the beneficiary. 7. Nontransferability. Except as provided in Paragraph 8 of this Agreement, the Participant has no rights to sell, assign, transfer, pledge, or otherwise alienate the Option under this Agreement, and any such attempted sale, assignment, transfer, pledge or other conveyance will be null and void. The Option will be exercisable during the Participant's lifetime only by the Participant (or the Participant's legal representative). 8. Beneficiary. The Participant may designate a beneficiary to exercise the Option after the Participant's death on the form or in the manner prescribed for such purpose by the Committee. Absent such designation, the Participant's beneficiary will be the Participant's estate. The Participant may from time to time revoke or change the Participant's beneficiary designation without the consent of any prior beneficiary by filing a new designation with the Company. If a Participant designates his or her spouse as beneficiary, such designation automatically shall become null and void on the date of the Participant's divorce or legal separation from such spouse. The last such designation received by the Company will be controlling; provided, however, that no designation, or change or revocation thereof, will be effective unless received by the Company prior to the Participant's death, and in no event will any designation be effective as of a date prior to such receipt. If the Committee is in doubt as to the identity of the beneficiary, the Company may refuse to recognize such exercise, without liability for any interest or dividends on the underlying Option Shares, until the Committee determines the identity of the beneficiary, or the Committee may deem the Participant's estate as beneficiary, or the Company may apply to any court of appropriate jurisdiction and such application will be a complete discharge of the liability of the Company therefor. 9. Securities Law Restrictions. a. The Participant acknowledges that the Participant is acquiring the Option and the Option Shares for investment purposes only and not with a view to resale or other distribution thereof to the public in violation of the Securities Act of 1933, as amended (the "Act"). The Participant agrees and acknowledges with respect to any Option Shares that have not been registered under the Act, that (a) the Participant will not sell or otherwise dispose of such Option Shares except pursuant to an effective registration statement under the Act and any applicable state securities laws, or in a transaction which in the opinion of counsel for the Company is exempt from such registration, and (b) a legend may be placed on the certificates for the Option Shares to such effect. As further conditions to the issuance of the Option Shares, the 5
Participant agrees for himself or herself, the Participant's beneficiary, and the Participant's heirs, legatees and legal representatives, prior to such issuance, to execute and deliver to the Company such investment representations and warranties, and to take such other actions, as the Committee determines may be necessary or appropriate for compliance with the Act and any applicable securities laws. b. Notwithstanding anything herein to the contrary, the Committee, in its sole and absolute discretion, may refuse to honor any notice of exercise, may delay an exercise or delay issuing Option Shares following an exercise, may impose additional limitations on the Participant's or beneficiary's ability to exercise the Option or receive Option Shares upon exercise, and/or may impose restrictions or conditions on the Participant's or beneficiary's ability to directly or indirectly sell, hypothecate, pledge, loan, or otherwise encumber, transfer or dispose of the Option Shares acquired upon exercise, if the Committee determines that such action is necessary or desirable for compliance with any applicable state, federal or foreign law, the requirements of any stock exchange on which the Option Shares are then traded, or is requested by the Company or the underwriters managing any underwritten offering of the Company's securities pursuant to an effective registration statement filed under the Act. 10. Limited Interest. a. The grant of the Option shall not be construed as giving the Participant any interest other than as provided in this Agreement. b. The Participant shall have no rights as a shareholder as a result of the grant of the Option, until the Option is exercised, the exercise price and applicable taxes are paid, and the Option Shares issued hereunder. c. The grant of the Option shall not confer on the Participant any right to continue as an employee or continue in service of the Company, nor interfere in any way with the right of the Company to terminate the Participant at any time. d. The grant of the Option shall not affect in any way the right or power of the Company to make or authorize any or all adjustments, recapitalizations, reorganizations, or other changes in the Company's capital structure or its business, or any merger, consolidation or business combination of the Company, or any issuance or modification of any term, condition, or covenant of any bond, debenture, debt, preferred stock or other instrument ahead of or affecting the stock or the rights of the holders thereof, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business or any other Company act or proceeding, whether of a similar character or otherwise. e. The Participant acknowledges and agrees that the Plan is discretionary in nature and limited in duration, and may be amended, cancelled, or terminated by the Company, in its sole discretion, at any time. The grant of the Option under the Plan is a one-time benefit and does not create any contractual or other right to receive a grant of stock options or benefits in lieu of stock options in the future. Future grants, if any, will be at the sole discretion of the Committee, including, but not limited to, the timing of any grant, the number of options, vesting provisions, and the exercise price. 6
11. Consent to Transfer of Personal Data. The Participant voluntarily acknowledges and consents to the collection, use, processing and transfer of personal data as described in this paragraph. The Participant is not obliged to consent to such collection, use, processing and transfer of personal data. However, failure to provide the consent may affect the Participant's ability to participate in the Plan. The Company holds certain personal information about the Participant, including the Participant's name, home address and telephone number, date of birth, social security number or other employee identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, details of all options or any other entitlement to shares of stock awarded, canceled, purchased, vested, unvested or outstanding in the Participant's favor, for the purpose of managing and administering the Plan ("Data"). The Company and/or its subsidiaries will transfer Data amongst themselves as necessary for the purpose of implementation, administration and management of the Participant's participation in the Plan, and the Company may further transfer Data to any third parties assisting the Company in the implementation, administration and management of the Plan. These recipients may be located in the European Economic Area, or elsewhere throughout the world, such as the United States. The Participant authorizes them to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing the Participant's participation in the Plan, including any requisite transfer of such Data as may be required for the administration of the Plan and/or the subsequent holding of shares of stock on the Participant's behalf to a broker or other third party with whom the Participant may elect to deposit any shares of stock acquired pursuant to the Plan. The Participant may, at any time, review Data, require any necessary amendments to it or withdraw the consents herein in writing by contacting the Company; however, withdrawing consent may affect Participant's ability to participate in the Plan. 12. Incorporation by Reference. The terms of the Plan are expressly incorporated herein by reference. Capitalized terms that are not defined in this Agreement will have the meaning ascribed to them under the Plan. In the event of any conflict between this Agreement and the Plan, the Plan shall govern. 13. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without reference to any conflict of laws principles thereof. 14. Severability. In the event any term or condition set forth in this Agreement is held illegal or invalid for any reason, the illegality or invalidity will not affect the remaining provisions of the Agreement, and the Agreement shall be construed and enforced as if the illegal or invalid provision had not been inserted. 7
15. Amendment. The terms and conditions set forth in this Agreement may not be amended, modified, terminated or otherwise altered except by the written consent of the parties thereto. 16. Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original but all of which together will constitute one and the same instrument. 8
Exhibit 10.5.2 VISTEON CORPORATION 2004 INCENTIVE PLAN VISTEON CORPORATION EMPLOYEES EQUITY INCENTIVE PLAN TERMS AND CONDITIONS OF RESTRICTED STOCK GRANTS Visteon Corporation, a Delaware corporation (together with its subsidiaries, the "Company"), subject to the terms of the Visteon Corporation 2004 Incentive Plan, formerly known as the Visteon Corporation 2000 Incentive Plan, and the Visteon Corporation Employees Equity Incentive Plan (collectively, the "Plan") and this Agreement, hereby grants to the Participant named in the Notification Summary or Appendix to this Agreement, shares of common stock of the Company subject to restrictions ("Restricted Shares") as further described herein. 1. Grant of Restricted Stock. The Company hereby grants to the Participant the number of Restricted Shares set forth in the Notification Summary or Appendix, effective as of the date or dates ("Grant Date") and subject to such restrictions set forth in the Notification Summary or Appendix. In the event of certain corporate transactions, the number of Restricted Shares covered by this Agreement may be adjusted by the Organization and Compensation Committee of the Board of Directors of the Company (the "Committee") as further described in Section 13 of the Plan. 2. Lapsing of Restrictions and Release of Shares. a. During the Participant's continuous employment with the Company, the restrictions on the Restricted Shares will lapse in accordance with the release schedule set forth in the Notification Summary or Appendix. b. In the event that application of the release schedule results in the release of a fractional share of restricted stock, only whole shares will be considered released. c. Upon a Change in Control of the Company, the Restricted Shares subject to restrictions will be released to the Participant, provided the Participant is employed by the Company, as of the date immediately preceding the date on which the Change in Control occurs. 3. Termination of Employment. a. Unless provided otherwise under the remaining provisions of this Paragraph 3, if the Participant's employment with the Company is terminated for any reason, Participant will forfeit any and all rights to Restricted Shares with restrictions that have not lapsed on the termination date. b. Notwithstanding the provisions of Paragraph 3a, if the Participant is placed on leave of absence, with or without pay, the Restricted Shares shall be held by the Company and will be released in accordance with the provisions of Paragraph 2 as if the Participant was actively employed.
c. Notwithstanding the provisions of Paragraph 3a, if the Participant's employment with the Company is terminated by reason of disability (as defined in the Company's long-term disability plan), death, retirement or termination without cause under the provisions of the Visteon Separation Program (VSP) or a successor severance plan of the Company, and if the Participant had remained in the employ of the Company for at least 180 days following the Grant Date, the Restricted Shares shall be released to the Participant on a pro rata basis, based on the number of months that have lapsed following the Grant Date in the manner set forth in the Notification Summary or Appendix. For purposes of this Agreement, "retirement" means normal, regular early, special early or disability retirement under a retirement plan of the Company that includes such provisions, or retirement after 30 years of service, after attaining age 55 and 10 years of service, or after attaining age 65, under any other retirement plan of the Company. d. Notwithstanding the provisions of Paragraph 3a, if the Participant's employment with the Company is terminated at any time by reason of a sale or other disposition (including, without limitation, a transfer to a joint venture) of the division, operation or subsidiary in which the Participant was employed or to which the Participant was assigned, the Restricted Shares shall be forfeited, provided that if the Participant satisfies both of the following conditions, Restricted Shares prorated based on the number of months from the Grant Date to the date of termination of employment from the Company shall be released to the Participant: (i) at the date of Participant's termination of employment with the Company, the Participant had been actively employed by the Company for at least 90 days following the Grant Date, and (ii) Participant continues employment with the division, operation or subsidiary following such sale or other disposition (or any successor to such division, operation or subsidiary) until the earlier of retirement as defined in Paragraph 2c, substituting "successor" for "Company", or the date that the restrictions would otherwise lapse. 4. Restricted Share Account. a. The Company will hold the Restricted Shares in an account in the name of the Participant. As soon as practicable following the lapse of restrictions on the Restricted Shares, or as otherwise specified in the Notification Summary or Appendix, said shares shall be released to the Participant. As soon as practicable following the date on which there occurs any event that results in the Participant ceasing to accrue service toward satisfaction of restrictions for the Restricted Shares, the Company shall release to the Participant the number of Restricted Shares, if any, to which the Participant is entitled, less applicable withholding and brokerage fees associated with the sale of Restricted Shares, and the remaining Restricted Shares shall be forfeited. b. The Company may retain the services of a third-party administrator to perform administrative services in connection with the Plan. To the extent the Company has retained such an administrator, any reference to the Company shall be deemed to refer to any such third-party administrator retained by the Company, and the Company may require the Participant to exercise the Participant's rights under this Agreement only through such third-party administrator. 2
5. Dividends. Any dividends paid on Restricted Shares prior to the date on which the Participant forfeits such shares shall be distributed to the Participant, subject to applicable withholding, fees and expenses. 6. Withholding. a. Upon the release of previously granted Restricted Shares pursuant to Paragraph 4 above, the Company may satisfy its tax withholding obligations in any manner determined by the Committee, including by withholding a portion of the Participant's cash compensation or by withholding a number of shares of stock having a fair market value, as determined by the Committee, equal to the amount required to be withheld. The fair market value of any fractional share of stock remaining after the withholding requirements are satisfied will be paid to the Participant in cash. The Company may also require the Participant to deliver a check in the amount of any tax withholding obligation, or to otherwise indemnify the Company, as a condition to the issuance of any stock hereunder. b. Dividends paid on Restricted Shares prior to the lapse of the restrictions are subject to applicable tax withholding as described in subsection 6(a). Dividends paid on Restricted Shares after restrictions have lapsed are not subject to tax withholding. 7. Conditions on Award. Notwithstanding anything herein to the contrary, the Committee may cancel an award of Restricted Shares, and may refuse to deliver shares of stock for which restrictions have lapsed, if: a. During the period from the date of the Participant's termination of employment from the Company to the date any shares of stock for which restrictions have lapsed are delivered to the Participant (or the Participant's beneficiary), the Committee determines that the Participant has either (i) refused to be available, upon request, at reasonable times and upon a reasonable basis, to consult with, supply information to and otherwise cooperate with the Company with respect to any matter that was handled by the Participant or under the Participant's supervision while the Participant was in the employ of the Company or (ii) engaged in any activity that is directly or indirectly in competition with any activity of the Company; or b. The Committee determines that the Participant, at any time (whether before or after the Participant's employment with the Company, and whether before or after the grant of the Restricted Shares), acted in any manner that the Committee deems detrimental to the best interests of the Company. 8. Nontransferability. Except as provided in Paragraph 9 of this Agreement, the Participant has no right to sell, assign, transfer, pledge, or otherwise alienate the Restricted Shares prior to the date on 3
which the Restricted Shares are transferred to the Participant free and clear of the restrictions, and any attempted sale, assignment, transfer, pledge or other conveyance will be null and void. 9. Beneficiary. The Participant may designate a beneficiary to receive stock that may be released on or after the Participant's death on the form or in the manner prescribed for such purpose by the Committee. Absent such designation, the Participant's beneficiary will be the Participant's estate. The Participant may from time to time revoke or change the beneficiary designation without the consent of any prior beneficiary by filing a new designation with the Company. If a Participant designates his or her spouse as beneficiary, such designation automatically shall become null and void on the date of the Participant's divorce or legal separation from such spouse. The last such designation received by the Company will be controlling; provided, however, that no designation, or change or revocation thereof, will be effective unless received by the Company prior to the Participant's death, and in no event will any designation be effective as of a date prior to such receipt. If the Committee is in doubt as to the identity of the beneficiary, the Committee may deem the Participant's estate as the beneficiary, or the Company may apply to any court of appropriate jurisdiction and such application will be a complete discharge of the liability of the Company therefor. 10. Securities Law Restrictions. a. The Participant acknowledges that the Restricted Shares granted under this Agreement, and any stock that may be transferred to the Participant, are being acquired for investment purposes only and not with a view to resale or other distribution thereof to the public in violation of the Securities Act of 1933, as amended (the "Act"). The Participant agrees and acknowledges, with respect to any stock that has not been registered under the Act, that (a) the Participant will not sell or otherwise dispose of such stock except pursuant to an effective registration statement under the Act and any applicable state securities laws, or in a transaction which in the opinion of counsel for the Company is exempt from such registration, and (b) a legend may be placed on the certificates for the stock to such effect. As further conditions to the issuance of the stock, the Participant agrees for himself or herself, the Participant's beneficiary, and the Participant's heirs, legatees and legal representatives, prior to such issuance, to execute and deliver to the Company such investment representations and warranties, and to take such other actions, as the Committee determines may be necessary or appropriate for compliance with the Act and any applicable securities laws. b. Notwithstanding anything herein to the contrary, the Committee, in its sole and absolute discretion, may delay transferring stock or may impose restrictions or conditions on the Participant's (or any beneficiary's) ability to directly or indirectly sell, hypothecate, pledge, loan, or otherwise encumber, transfer or dispose of the stock, if the Committee determines that such action is necessary or desirable for compliance with any applicable state, federal or foreign law, the requirements of any stock exchange on which the stock is then traded, or is requested by the Company or the underwriters managing any underwritten offering of the Company's securities pursuant to an effective registration statement filed under the Act. 4
11. Voting Rights. The Restricted Shares may be voted by the Participant. 12. Limited Interest. a. The grant of the Restricted Shares shall not be construed as giving the Participant any interest other than as provided in this Agreement. b. The grant of the Restricted Shares shall not confer on the Participant any right to continue as an employee or continue in service of the Company, nor interfere in any way with the right of the Company to terminate the Participant's employment at any time. c. The grant of the Restricted Shares shall not affect in any way the right or power of the Company to make or authorize any or all adjustments, recapitalizations, reorganizations, or other changes in the Company's capital structure or its business, or any merger, consolidation or business combination of the Company, or any issuance or modification of any term, condition, or covenant of any bond, debenture, debt, preferred stock or other instrument ahead of or affecting the stock or the rights of the holders thereof, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business or any other Company act or proceeding, whether of a similar character or otherwise. d. The Participant acknowledges and agrees that the Plan is discretionary in nature and limited in duration, and may be amended, cancelled, or terminated by the Company, in its sole discretion, at any time. The grant of the Restricted Stock under the Plan is a one-time benefit and does not create any contractual or other right to receive a grant of Restricted Stock or benefits in lieu of Restricted Stock in the future. Future grants, if any, will be at the sole discretion of the Committee, including, but not limited to, the timing of any grant, the number of shares to be granted, and restrictions placed on such shares. 13. Consent to Transfer of Personal Data. The Participant voluntarily acknowledges and consents to the collection, use, processing and transfer of personal data as described in this paragraph. The Participant is not obliged to consent to such collection, use, processing and transfer of personal data. However, failure to provide the consent may affect the Participant's ability to participate in the Plan. The Company holds certain personal information about the Participant, including the Participant's name, home address and telephone number, date of birth, social security number or other employee identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, details of all options or any other entitlement to shares of stock awarded, canceled, purchased, vested, unvested or outstanding in the Participant's favor, for the purpose of managing and administering the Plan ("Data"). The Company and/or its subsidiaries will transfer Data amongst themselves as necessary for the purpose of implementation, administration and management of the Participant's participation in the Plan, and the Company may further transfer Data to any third parties assisting the Company in the implementation, administration and management of the Plan. These recipients may be located in the European Economic Area, or elsewhere throughout the world, such as the United States. The Participant authorizes them to 5
receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing the Participant's participation in the Plan, including any requisite transfer of such Data as may be required for the administration of the Plan and/or the subsequent holding of shares of stock on the Participant's behalf to a broker or other third party with whom the Participant may elect to deposit any shares of stock acquired pursuant to the Plan. The Participant may, at any time, review Data, require any necessary amendments to it or withdraw the consents herein in writing by contacting the Company; however, withdrawing consent may affect the Participant's ability to participate in the Plan. 14. Incorporation by Reference. The terms of the Plan are expressly incorporated herein by reference. Capitalized terms that are not defined in this Agreement will have the meaning ascribed to them under the Plan. In the event of any conflict between this Agreement and the Plan, the Plan shall govern. 15. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without reference to any conflict of laws principles thereof. 16. Severability. In the event any provision of the Agreement is held illegal or invalid for any reason, the illegality or invalidity will not affect the remaining provisions of the Agreement, and the Agreement shall be construed and enforced as if the illegal or invalid provision has not been inserted. 17. Amendment. This Agreement may not be amended, modified, terminated or otherwise altered except by the written consent of the parties thereto. 18. Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original but all of which together will constitute one and the same instrument. 6
Exhibit 10.5.3 VISTEON CORPORATION 2004 INCENTIVE PLAN VISTEON CORPORATION EMPLOYEES EQUITY INCENTIVE PLAN TERMS AND CONDITIONS OF RESTRICTED STOCK UNITS Visteon Corporation, a Delaware corporation (together with its subsidiaries, the "Company"), subject to the terms of the Visteon Corporation 2004 Incentive Plan, formerly known as the Visteon Corporation 2000 Incentive Plan, and the Visteon Corporation Employees Equity Incentive Plan (collectively, the "Plan") and this Agreement, hereby grants to the Participant named in the Notification Summary or Appendix to this Agreement, Restricted Stock Units as further described herein. 1. Grant of Restricted Stock Unit. The Company hereby grants to the Participant the number of Restricted Stock Units set forth in the Notification Summary or Appendix, effective as of the date or dates ("Grant Date") and subject to the terms and conditions set forth herein and in the Notification Summary or Appendix attached hereto. In the event of certain corporate transactions, the number of Restricted Stock Units covered by this Agreement may be adjusted by the Organization and Compensation Committee of the Board of Directors of the Company (the "Committee") as further described in Section 13 of the Plan. 2. Vesting of Restricted Stock Units and Payment of Final Award. a. During the Participant's continuous employment with the Company, the Restricted Stock Units will vest in accordance with the vesting schedule set forth in the Notification Summary or Appendix. b. In the event that application of the vesting schedule results in the vesting of a fractional unit, only whole units will be considered vested. c. Upon a Change in Control of the Company, outstanding Restricted Stock Units will vest and a Final Award, as provided in Section 4, paid to the Participant, provided the Participant is employed by the Company, as of the date immediately preceding the date on which the Change in Control occurs. 3. Termination of Employment. a. Unless provided otherwise under the remaining provisions of this Paragraph 3, if the Participant's employment with the Company is terminated for any reason, Participant will forfeit any and all rights to Restricted Stock Units that have not vested on the termination date. b. Notwithstanding the provisions of Paragraph 3a, if the Participant is placed on leave of absence, with or without pay, the Restricted Stock Units shall remain in the
Participant's Account and will vest in accordance with the provisions of Paragraph 2 as if the Participant was actively employed. c. Notwithstanding the provisions of Paragraph 3a, if the Participant's employment with the Company is terminated by reason of disability (as defined in the Company's long-term disability plan), death, retirement or termination without cause under the provisions of the Visteon Separation Program (VSP) or a successor severance plan of the Company, and if the Participant had remained in the employ of the Company for at least 180 days following the Grant Date, the Restricted Stock Units shall vest on a pro rata basis, based on the number of months that have lapsed following the Grant Date in the manner set forth in the Notification Summary or Appendix. For purposes of this Agreement, "retirement" means normal, regular early, special early or disability retirement under a retirement plan of the Company that includes such provisions, or retirement after 30 years of service, after attaining age 55 and 10 years of service, or after attaining age 65, under any other retirement plan of the Company. d. Notwithstanding the provisions of Paragraph 3a, if the Participant's employment with the Company is terminated at any time by reason of a sale or other disposition (including, without limitation, a transfer to a joint venture) of the division, operation or subsidiary in which the Participant was employed or to which the Participant was assigned, the Restricted Stock Units shall be forfeited, provided that if the Participant satisfies both of the following conditions, Restricted Stock Units prorated based on the number of months from the Grant Date to the date of termination of employment from the Company shall vest and a Final Award determined in accordance with Section 4 and paid to the Participant: (i) at the date of Participant's termination of employment with the Company, the Participant had been actively employed by the Company for at least 90 days following the Grant Date, and (ii) Participant continues employment with the division, operation or subsidiary following such sale or other disposition (or any successor to such division, operation or subsidiary) until the earlier of retirement as defined in Paragraph 2c, substituting "successor" for "Company", or the date that the Restricted Stock Units would otherwise vest. 4. Restricted Stock Unit Account and Final Awards. a. The Company will credit the Restricted Stock Units to a hypothetical Restricted Stock Unit Account that shall be the record of Restricted Stock Units granted to the Participant under the plan and shall be for record keeping purposes only. The Company shall have no obligation to segregate any assets for the benefit of the Participant. As soon as practicable following the vesting of the Restricted Stock Units, or as otherwise specified in the Notification Summary or Appendix, the Company shall pay to the Participant a single lump sum cash award equal to the number of vested Restricted Stock Units in the Participant's Restricted Stock Unit Account multiplied by the Fair Market Value (as defined in the Plan) on the vesting date of a share of Company Common Stock, less applicable withholding taxes. As soon as practicable following the date on which there occurs any event that results in the Participant ceasing to accrue service toward vesting of the Restricted Stock Units, the Company shall pay to the Participant a Final Award based on the number of Restricted Stock Units, if any, in which the 2
Participant has vested, less applicable withholding taxes, and the remaining Restricted Stock Units shall be forfeited. b. The Company may retain the services of a third-party administrator to perform administrative services in connection with the Plan. To the extent the Company has retained such an administrator, any reference to the Company shall be deemed to refer to any such third-party administrator retained by the Company, and the Company may require the Participant to exercise the Participant's rights under this Agreement only through such third-party administrator. 5. Dividend Equivalents. Each Participant to whom a Restricted Stock Unit is granted and remains outstanding shall be entitled to receive payment of the same amount of cash that such Participant would have received as cash dividends, as if, on each record date during the period that the Restricted Stock Unit remains outstanding, such Participant had been the holder of record of a number of shares of Stock equal to 100% of the Restricted Stock Units, subject to applicable withholding taxes. 6. Withholding. a. Upon the Vesting of Restricted Stock Units pursuant to Paragraph 4 above, the Company may satisfy its tax withholding obligations in any manner determined by the Committee, including by withholding a portion of the Participant's cash compensation. The fair market value of any fraction of a vested Restricted Stock Unit remaining after the withholding requirements are satisfied will be paid to the Participant in cash. The Company may also require the Participant to deliver a check in the amount of any tax withholding obligation, or to otherwise indemnify the Company, as a condition to the issuance of any Final Award hereunder. b. Dividend Equivalents paid on Restricted Stock Units are subject to applicable tax withholding as described in subsection 6(a). 7. Conditions on Award. Notwithstanding anything herein to the contrary, the Committee may cancel an award of Restricted Stock Units, and may refuse to pay a Final Award, if: a. During the period from the date of the Participant's termination of employment from the Company to the date any Final Award is paid to the Participant (or the Participant's beneficiary), the Committee determines that the Participant has either (i) refused to be available, upon request, at reasonable times and upon a reasonable basis, to consult with, supply information to and otherwise cooperate with the Company with respect to any matter that was handled by the Participant or under the Participant's supervision while the Participant was in the employ of the Company or (ii) engaged in any activity that is directly or indirectly in competition with any activity of the Company; or 3
b. The Committee determines that the Participant, at any time (whether before or after the Participant's employment with the Company, and whether before or after the grant of the Restricted Stock Units), acted in any manner that the Committee deems detrimental to the best interests of the Company. 8. Nontransferability. Except as provided in Paragraph 9 of this Agreement, the Participant has no right to sell, assign, transfer, pledge, or otherwise alienate the Restricted Stock Units, and any attempted sale, assignment, transfer, pledge or other conveyance will be null and void. 9. Beneficiary. The Participant may designate a beneficiary to receive any Final Award that may be paid on or after the Participant's death on the form or in the manner prescribed for such purpose by the Committee. Absent such designation, the Participant's beneficiary will be the Participant's estate. The Participant may from time to time revoke or change the beneficiary designation without the consent of any prior beneficiary by filing a new designation with the Company. If a Participant designates his or her spouse as beneficiary, such designation automatically shall become null and void on the date of the Participant's divorce or legal separation from such spouse. The last such designation received by the Company will be controlling; provided, however, that no designation, or change or revocation thereof, will be effective unless received by the Company prior to the Participant's death, and in no event will any designation be effective as of a date prior to such receipt. If the Committee is in doubt as to the identity of the beneficiary, the Committee may deem the Participant's estate as the beneficiary, or the Company may apply to any court of appropriate jurisdiction and such application will be a complete discharge of the liability of the Company therefor. 10. Legal Restrictions. Notwithstanding anything herein to the contrary, the Committee, in its sole and absolute discretion, may delay payment of a Final Award to a Participant or beneficiary or may impose restrictions or conditions on the Participant's (or any beneficiary's) receipt of a Final Award, if the Committee determines that such action is necessary or desirable for compliance with any applicable state, federal or foreign law, the requirements of any stock exchange on which the stock is then traded, or is requested by the Company or the underwriters managing any underwritten offering of the Company's securities pursuant to an effective registration statement filed under the Act. 11. Voting Rights. Participants shall have no voting rights with respect to the Restricted Stock Units. 12. Limited Interest. a. The grant of the Restricted Stock Units shall not be construed as giving the Participant any interest other than as provided in this Agreement. 4
b. The grant of the Restricted Stock Units shall not confer on the Participant any right to continue as an employee or continue in service of the Company, nor interfere in any way with the right of the Company to terminate the Participant's employment at any time. c. The grant of the Restricted Stock Units shall not affect in any way the right or power of the Company to make or authorize any or all adjustments, recapitalizations, reorganizations, or other changes in the Company's capital structure or its business, or any merger, consolidation or business combination of the Company, or any issuance or modification of any term, condition, or covenant of any bond, debenture, debt, preferred stock or other instrument ahead of or affecting the stock or the rights of the holders thereof, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business or any other Company act or proceeding, whether of a similar character or otherwise. d. The Participant acknowledges and agrees that the Plan is discretionary in nature and limited in duration, and may be amended, cancelled, or terminated by the Company, in its sole discretion, at any time. The grant of the Restricted Stock Units under the Plan is a one-time benefit and does not create any contractual or other right to receive a grant of Restricted Stock Units or benefits in lieu of Restricted Stock Units in the future. Future grants, if any, will be at the sole discretion of the Committee, including, but not limited to, the timing of any grant, the number of Restricted Stock Units to be granted, and the terms and conditions of such Restricted Stock Units. 13. Consent to Transfer of Personal Data. The Participant voluntarily acknowledges and consents to the collection, use, processing and transfer of personal data as described in this paragraph. The Participant is not obliged to consent to such collection, use, processing and transfer of personal data. However, failure to provide the consent may affect the Participant's ability to participate in the Plan. The Company holds certain personal information about the Participant, including the Participant's name, home address and telephone number, date of birth, social security number or other employee identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, details of all options or any other entitlement to shares of stock awarded, canceled, purchased, vested, unvested or outstanding in the Participant's favor, for the purpose of managing and administering the Plan ("Data"). The Company and/or its subsidiaries will transfer Data amongst themselves as necessary for the purpose of implementation, administration and management of the Participant's participation in the Plan, and the Company may further transfer Data to any third parties assisting the Company in the implementation, administration and management of the Plan. These recipients may be located in the European Economic Area, or elsewhere throughout the world, such as the United States. The Participant authorizes them to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing the Participant's participation in the Plan, including any requisite transfer of such Data as may be required for the administration of the Plan and/or the subsequent holding of shares of stock on the Participant's behalf to a broker or other third party with whom the Participant may elect to deposit any shares of stock acquired pursuant to the Plan. The Participant may, at any time, review Data, require any necessary amendments to it or 5
withdraw the consents herein in writing by contacting the Company; however, withdrawing consent may affect the Participant's ability to participate in the Plan. 14. Incorporation by Reference. The terms of the Plan are expressly incorporated herein by reference. Capitalized terms that are not defined in this Agreement will have the meaning ascribed to them under the Plan. In the event of any conflict between this Agreement and the Plan, the Plan shall govern. 15. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without reference to any conflict of laws principles thereof. 16. Severability. In the event any provision of the Agreement is held illegal or invalid for any reason, the illegality or invalidity will not affect the remaining provisions of the Agreement, and the Agreement shall be construed and enforced as if the illegal or invalid provision has not been inserted. 17. Amendment. This Agreement may not be amended, modified, terminated or otherwise altered except by the written consent of the parties thereto. 18. Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original but all of which together will constitute one and the same instrument. 6
Exhibit 10.5.4 VISTEON CORPORATION 2004 INCENTIVE PLAN VISTEON CORPORATION EMPLOYEES EQUITY INCENTIVE PLAN TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS Visteon Corporation, a Delaware corporation (together with its subsidiaries, the "Company"), subject to the terms and conditions of the Visteon Corporation 2004 Incentive Plan, formerly known as the Visteon Corporation 2000 Incentive Plan, and the Visteon Corporation Employees Equity Incentive Plan (collectively, the "Plan") and this Agreement, hereby grants to the Participant named in the Notification Summary or Appendix to this Agreement, Stock Appreciation Rights ("SARs") as further described below. 1. Grant of SARs. The Company hereby grants to the Participant the number of SARs set forth in the Notification Summary or Appendix, effective as of the date or dates ("Grant Date") and exercisable as of the date or dates ("Vesting Dates") at the price per SAR ("Exercise Price") set forth in the Notification Summary or Appendix, in accordance with the terms and conditions specified herein. Each SAR represents the right to receive, without payment to the Company, an amount of cash equal to the amount by which the Fair Market Value of a share of Company Common Stock exceeds the Exercise Price on the date the SAR is exercised. In the event of certain corporate transactions, the number of SARs covered by this Agreement may be adjusted by the Organization and Compensation Committee of the Board of Directors of the Company (the "Committee") as further described in Section 13 of the Plan. 2. Termination of Employment. a. Unless provided otherwise under the remaining provisions of this Paragraph 2, if the Participant's employment with the Company is terminated for any reason, the Participant's right to exercise the SAR will terminate on the date of termination of employment and all rights hereunder will cease. SARs that have not yet vested as of the date of termination of employment will be forfeited. b. Notwithstanding the provisions of Paragraph 2a, if the Participant's employment with the Company is terminated by reason of retirement, disability or death, and provided that at the date of termination, the Participant had remained in the employ of the Company for at least 180 days following the Grant Date, the Participant's rights with respect to the SARs will continue in effect or continue to accrue for the period ending on the date immediately preceding the fifth anniversary of the Grant Date, for SARs with a Grant Date prior to 2007; and on the date immediately preceding the seventh anniversary of the Grant Date, for SARs with a Grant Date after 2006, subject to any other limitation on the exercise of such rights in effect at the date of exercise. For purposes of this Agreement, "retirement" means normal, regular early, special early or disability retirement under a retirement plan of the Company that
includes such provisions, or retirement after 30 years of service, after attaining age 55 and 10 years of service, or after attaining age 65, under any other retirement plan of the Company. c. Notwithstanding the provisions of Paragraph 2a, if the Participant's employment with the Company is terminated under mutually satisfactory conditions, and provided that at the date of termination, the Participant had remained in the employ of the Company for at least 180 days following the Grant Date, the Participant's rights with respect to the SARs will continue in effect or continue to accrue until the date 90 days after the date of such termination (but not later than the date immediately preceding the fifth anniversary of the Grant Date, for SARs with a Grant Date prior to 2007; and on the date immediately preceding the seventh anniversary of the Grant Date, for SARs with a Grant Date after 2006), subject to any other limitation on the exercise of such rights in effect at the date of exercise. d. Notwithstanding the provisions of Paragraph 2a, if the Participant's employment with the Company is terminated at any time by reason of a sale or other disposition (including, without limitation, a transfer to a joint venture) of the division, operation or subsidiary in which the Participant was employed or to which the Participant was assigned, the Participant's rights with respect to the SARs will terminate on the date of such termination, or such later date as is approved by the Committee (but not later than the date immediately preceding the fifth anniversary of the Grant Date, for SARs with a Grant Date prior to 2007; and on the date immediately preceding the seventh anniversary of the Grant Date, for SARs with a Grant Date after 2006), provided that the Participant satisfies both of the following conditions: (i) at the date of termination, the Participant had remained in the employ of the Company for 90 days following the Grant Date, and (ii) the Participant continues to be or becomes employed in such division, operation or subsidiary following such sale or other disposition and remains in such employ until the date of exercise of such SARs. e. Notwithstanding the provisions of Paragraph 2a, if the Participant's employment with the Company is terminated due to layoff, and provided that at the date of termination, the Participant had remained in the employ of the Company for at least 365 days following the Grant Date, the Participant's rights with respect to the SARs will continue in effect until the date 365 days after the date of such termination (but not later than the date immediately preceding the fifth anniversary of the Grant Date, for SARs with a Grant Date prior to 2007; and on the date immediately preceding the seventh anniversary of the Grant Date, for SARs with a Grant Date after 2006), subject to any other limitation on the exercise of such rights in effect at the date of exercise. SARs not yet vested at the date of termination will be forfeited. f. Notwithstanding the provisions of Paragraph 2a, if the Participant's employment with the Company is terminated by reason of discharge or release in the best interest of the Company, the Participant's right to exercise the SAR will terminate on the date of termination of employment and all rights hereunder will cease. g. Notwithstanding the provisions of Paragraph 2a, if the Participant's employment with the Company is terminated by reason of voluntary quit, the Participant's rights with respect to SARs that are vested at the date of termination will continue in effect until the date 90 days after the date of such termination (but not later than the date immediately preceding the fifth anniversary of the Grant Date, for SARs with a Grant Date prior to 2007; and on the 2
date immediately preceding the seventh anniversary of the Grant Date, for SARs with a Grant Date after 2006), subject to any other limitation on the exercise of such rights in effect at the date of exercise. SARs not yet vested at the date of termination will be forfeited. h. Notwithstanding the provisions of Paragraph 2a, if the Participant's employment with the Company is terminated without cause under the provisions of the Visteon Separation Program (VSP) or a successor severance plan of the Company, and provided that at the date of termination, the Participant had remained in the employ of the Company for at least 180 days following the Grant Date, the Participant's rights with respect to the SARs will continue in effect until the date 365 days after the date of such termination (but not later than the date immediately preceding the fifth anniversary of the Grant Date, for SARs with a Grant Date prior to 2007; and on the date immediately preceding the seventh anniversary of the Grant Date, for SARs with a Grant Date after 2006), subject to any other limitation on the exercise of such rights in effect at the date of exercise. SARs not yet vested at the date of termination will be forfeited. 3. Cancellation of the SARs. The SARs will terminate, and cease to be exercisable, on the earliest of the following: a. The date immediately preceding the fifth anniversary of the Grant Date, for SARs with Grant Dates prior to 2007; and the date immediately preceding the seventh anniversary of the Grant Date, for SARs with Grant Dates after 2006; b. In the event of the Participant's termination of employment, such earlier date as determined in accordance with the rules set forth in Paragraph 2. 4. Exercise of SARs. a. The Participant may, subject to the limitations of this Agreement and the Plan, exercise all or any portion of the SARs that have become vested and that have not been cancelled under Paragraphs 2 and 3 by (i) providing notice of exercise to the Company (in a form acceptable to the Company) specifying the whole number of SARs being exercised. b. After receiving proper notice of exercise, the Company will issue to the Participant (or the Participant's beneficiary) a lump sum cash payment in an amount determined by multiplying (i) the total number of SARs being exercised by the Participant, by (ii) the amount by which the Fair Market Value of a share of Company common stock exceeds the Exercise Price, less any applicable withholding taxes. c. Notwithstanding the foregoing, the SARs will not be exercisable if and to the extent the Committee determines that such exercise would violate applicable state or federal securities laws or the rules and regulations of any securities exchange on which the Company common stock is then traded, or would violate the laws of any foreign jurisdiction, and the exercise thereof may be limited or delayed until such requirements are met. 3
d. The Company may retain the services of a third-party administrator to effectuate SAR exercises and to perform other administrative services in connection with the Plan. To the extent that the Company has retained such an administrator, any reference to the Company shall be deemed to refer to such third party administrator retained by the Company, and the Company may require the Participant to exercise the Participant's SARs only through such third-party administrator. 5. Withholding. The Company may deduct and withhold from any cash payable to the Participant or may require the Participant to pay to the Company or otherwise indemnify the Company to its satisfaction, such amount as may be required for the purpose of satisfying the Company's obligation to withhold federal, state or local taxes in connection with any exercise of the SARs. 6. Conditions on SAR Award. Notwithstanding anything herein to the contrary, the Committee may cancel the SARs, and may refuse to deliver any payment for SARs with respect to which the Participant (or the Participant's beneficiary) has tendered a notice of exercise, if: a. During the period from the date of the Participant's termination of employment from the Company to the date such payment is delivered to the Participant (or the Participant's beneficiary), the Committee determines that the Participant has either (i) refused to be available, upon request, at reasonable times and upon a reasonable basis, to consult with, supply information to and otherwise cooperate with the Company with respect to any matter that was handled by the Participant or under the Participant's supervision while the Participant was in the employ of the Company or (ii) engaged in any activity that is directly or indirectly in competition with any activity of the Company; or b. The Committee determines that the Participant, at any time (whether before or after employment with the Company, and whether before or after the grant of this Option), acted in any manner detrimental to the best interests of the Company. 7. Nontransferability. Except as provided in Paragraph 8 of this Agreement, the Participant has no rights to sell, assign, transfer, pledge, or otherwise alienate the SARs awarded under this Agreement, and any such attempted sale, assignment, transfer, pledge or other conveyance will be null and void. The SARs will be exercisable during the Participant's lifetime only by the Participant (or the Participant's legal representative). 8. Beneficiary. The Participant may designate a beneficiary to exercise the SARs after the Participant's death on the form or in the manner prescribed for such purpose by the Committee. Absent such designation, the Participant's beneficiary will be the Participant's estate. The Participant may from time to time revoke or change the Participant's beneficiary designation without the 4
consent of any prior beneficiary by filing a new designation with the Company. If a Participant designates his or her spouse as beneficiary, such designation automatically shall become null and void on the date of the Participant's divorce or legal separation from such spouse. The last such designation received by the Company will be controlling; provided, however, that no designation, or change or revocation thereof, will be effective unless received by the Company prior to the Participant's death, and in no event will any designation be effective as of a date prior to such receipt. If the Committee is in doubt as to the identity of the beneficiary, the Company may refuse to recognize such exercise, without liability for any interest, until the Committee determines the identity of the beneficiary, or the Committee may deem the Participant's estate as beneficiary, or the Company may apply to any court of appropriate jurisdiction and such application will be a complete discharge of the liability of the Company therefor. 9. Securities Law Restrictions. Notwithstanding anything herein to the contrary, the Committee, in its sole and absolute discretion, may refuse to honor any notice of exercise, may delay an exercise or delay issuing payment following an exercise, may impose additional limitations on the Participant's or beneficiary's ability to exercise the SAR or receive payment upon exercise, if the Committee determines that such action is necessary or desirable for compliance with any applicable state, federal or foreign law, the requirements of any stock exchange on which the Company common stock is then traded, or is requested by the Company or the underwriters managing any underwritten offering of the Company's securities pursuant to an effective registration statement filed under the Act. 10. Limited Interest. a. The grant of the SARS shall not be construed as giving the Participant any interest other than as provided in this Agreement. b. The Participant shall have no rights as a shareholder as a result of the grant or exercise of the SARs. c. The grant of the SARs shall not confer on the Participant any right to continue as an employee or continue in service of the Company, nor interfere in any way with the right of the Company to terminate the Participant at any time. d. The grant of the SARs shall not affect in any way the right or power of the Company to make or authorize any or all adjustments, recapitalizations, reorganizations, or other changes in the Company's capital structure or its business, or any merger, consolidation or business combination of the Company, or any issuance or modification of any term, condition, or covenant of any bond, debenture, debt, preferred stock or other instrument ahead of or affecting the stock or the rights of the holders thereof, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business or any other Company act or proceeding, whether of a similar character or otherwise. e. The Participant acknowledges and agrees that the Plan is discretionary in nature and limited in duration, and may be amended, cancelled, or terminated by the Company, 5
in its sole discretion, at any time. The grant of the SARs under the Plan is a one-time benefit and does not create any contractual or other right to receive a grant of SARs or benefits in lieu of SARs in the future. Future grants, if any, will be at the sole discretion of the Committee, including, but not limited to, the timing of any grant, the number of SARs, vesting provisions, and the exercise price. 11. Consent to Transfer of Personal Data. The Participant voluntarily acknowledges and consents to the collection, use, processing and transfer of personal data as described in this paragraph. The Participant is not obliged to consent to such collection, use, processing and transfer of personal data. However, failure to provide the consent may affect the Participant's ability to participate in the Plan. The Company holds certain personal information about the Participant, including the Participant's name, home address and telephone number, date of birth, social security number or other employee identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, details of all awards, options or any other entitlement to shares of stock awarded, canceled, purchased, vested, unvested or outstanding in the Participant's favor, for the purpose of managing and administering the Plan ("Data"). The Company and/or its subsidiaries will transfer Data amongst themselves as necessary for the purpose of implementation, administration and management of the Participant's participation in the Plan, and the Company may further transfer Data to any third parties assisting the Company in the implementation, administration and management of the Plan. These recipients may be located in the European Economic Area, or elsewhere throughout the world, such as the United States. The Participant authorizes them to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing the Participant's participation in the Plan, including any requisite transfer of such Data as may be required for the administration of the Plan and/or the subsequent holding of shares of stock on the Participant's behalf to a broker or other third party with whom the Participant may elect to deposit any shares of stock acquired pursuant to the Plan. The Participant may, at any time, review Data, require any necessary amendments to it or withdraw the consents herein in writing by contacting the Company; however, withdrawing consent may affect Participant's ability to participate in the Plan. 12. Incorporation by Reference. The terms of the Plan are expressly incorporated herein by reference. Capitalized terms that are not defined in this Agreement will have the meaning ascribed to them under the Plan. In the event of any conflict between this Agreement and the Plan, the Plan shall govern. 13. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without reference to any conflict of laws principles thereof. 6
14. Severability. In the event any term or condition set forth in this Agreement is held illegal or invalid for any reason, the illegality or invalidity will not affect the remaining provisions of the Agreement, and the Agreement shall be construed and enforced as if the illegal or invalid provision had not been inserted. 15. Amendment. The terms and conditions set forth in this Agreement may not be amended, modified, terminated or otherwise altered except by the written consent of the parties thereto. 16. Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original but all of which together will constitute one and the same instrument. 7
Three Months | ||||||||||||||||||||
Ended | For the Years Ended December 31, | |||||||||||||||||||
March 31, 2007 | 2006 | 2005 | 2004 | 2003 | ||||||||||||||||
Earnings |
||||||||||||||||||||
Income/(loss) before income taxes, minority interest and
change in accounting |
$ | (130 | ) | $ | (111 | ) | $ | (173 | ) | $ | (539 | ) | $ | (1,194 | ) | |||||
Earnings of non-consolidated affiliates |
(9 | ) | (33 | ) | (25 | ) | (45 | ) | (55 | ) | ||||||||||
Cash dividends received from non-consolidated affiliates |
| 24 | 48 | 42 | 35 | |||||||||||||||
Fixed charges |
55 | 213 | 185 | 140 | 126 | |||||||||||||||
Amortization of capitalized interest, net of interest capitalized |
2 | 6 | 4 | 1 | 3 | |||||||||||||||
Earnings |
$ | (82 | ) | $ | 99 | $ | 39 | $ | (401 | ) | $ | (1,085 | ) | |||||||
Fixed Charges |
||||||||||||||||||||
Interest and related charges on debt |
$ | 49 | $ | 190 | $ | 158 | $ | 109 | $ | 97 | ||||||||||
Portion of rental expense representative of the interest factor |
6 | 23 | 27 | 31 | 29 | |||||||||||||||
Fixed charges |
$ | 55 | $ | 213 | $ | 185 | $ | 140 | $ | 126 | ||||||||||
Ratios |
||||||||||||||||||||
Ratio of earnings to fixed charges* |
N/A | N/A | N/A | N/A | N/A |
* | For the three months ended March 31, 2007 and years ended December 31, 2006, 2005, 2004, and 2003, fixed charges exceed earnings by $137 million, $115 million, $146 million, $541 million, and $1,211 million, respectively, resulting in a ratio of less than one. |
Exhibit 15.1 May 9, 2007 Securities and Exchange Commission 100 F Street, N.E. Washington, DC 20549 Commissioners: We are aware that our report dated May 9, 2007 on our review of interim financial information of Visteon Corporation (the "Company") for the three month periods ended March 31, 2007 and March 31, 2006 included in the Company's quarterly report on Form 10-Q for the quarter ended March 31, 2007 is incorporated by reference in its Registration Statements on Form S-3 (No. 333-85406) dated April 2, 2002, and Form S-8 (Nos. 333-39756, 333-39758, 333-40202, 333-87794, and 333-115463) dated June 21, 2000, June 21, 2000, June 26, 2000, May 8, 2002, and May 13, 2004, respectively. Very truly yours, /s/ PricewaterhouseCoopers LLP PricewaterhouseCoopers LLP
EXHIBIT 31.1 CERTIFICATION PURSUANT TO EXCHANGE ACT RULE 13A-14(A) I, MICHAEL F. JOHNSTON, CERTIFY THAT: 1. I have reviewed this Quarterly Report on Form 10-Q of Visteon Corporation; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: May 9, 2007 /s/ Michael F. Johnston ---------------------------------------- Michael F. Johnston Chairman and Chief Executive Officer (Principal Executive Officer)
EXHIBIT 31.2 CERTIFICATION PURSUANT TO EXCHANGE ACT RULE 13A-14(A) I, WILLIAM G. QUIGLEY III, CERTIFY THAT: 1. I have reviewed this Quarterly Report on Form 10-Q of Visteon Corporation; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: May 9, 2007 /s/ William G. Quigley III ---------------------------------------- William G. Quigley III Senior Vice President and Chief Financial Officer (Principal Financial Officer)
EXHIBIT 32.1 CERTIFICATION PURSUANT TO 18 U.S.C. SS. 1350 AND EXCHANGE ACT RULE 13a-14(b) Solely for the purposes of complying with 18 U.S.C. ss. 1350 and Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), I, the undersigned Chairman and Chief Executive Officer of Visteon Corporation (the "Company"), hereby certify, based on my knowledge, that the Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2007 (the "Report") fully complies with the requirements of Section 13(a) of the Exchange Act and that information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ Michael F. Johnston - ---------------------------------------- Michael F. Johnston May 9, 2007
EXHIBIT 32.2 CERTIFICATION PURSUANT TO 18 U.S.C. SS. 1350 AND EXCHANGE ACT RULE 13a-14(b) Solely for the purposes of complying with 18 U.S.C. ss. 1350 and Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), I, the undersigned Senior Vice President and Chief Financial Officer of Visteon Corporation (the "Company"), hereby certify, based on my knowledge, that the Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2007 (the "Report") fully complies with the requirements of Section 13(a) of the Exchange Act of 1934 and that information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ William G. Quigley III - ---------------------------------------- William G. Quigley III May 9, 2007