CalSTRS Rejects Icahn Offer for Lear Corporation.

SACRAMENTO, Calif. -- The California State Teachers' Retirement System has decided to vote its 1.4 million shares of common stock in the Lear Corporation against the merger with the Carl Icahn unit, American Real Estate Partners (AREP). CalSTRS believes that the offer price is too low, by almost half, and that the long-term value of Lear will be realized more successfully if the current merger is not consummated. CalSTRS wrote a letter to the corporation's Chairman and Chief Executive Officer detailing its concerns with the merger and informing the company that CalSTRS is pursuing the filing of its Appraisal Rights under Delaware Law.

"This merger makes no economic sense for the shareholders of Lear Corporation and the stunningly inadequate price causes us to wonder about the board's representation of shareholders in this transaction," said Christopher J. Ailman, CalSTRS Chief Investment Officer.

"CalSTRS owns almost two percent of the outstanding shares of Lear and is a long-term holder of the stock; we do not want to see the long-term value accrue to favored share owners like Carl Icahn at the expense of the other 85 percent of shareholders. Although we are mindful of the $100 million termination fee that exists in this deal, we believe that this merger should be terminated and that the company should be shopped in a transparent and arms-length manner. CalSTRS supports Delaware Chancery Judge Strine's decision to require Lear to disclose more information on this deal to its investors before that meeting was to have taken place on June 27, 2007," Mr. Ailman concluded.

With a $171.1 billion investment portfolio, the California State Teachers' Retirement System is the second-largest public pension fund in the United States. It provides retirement, disability and survivor benefits to California's nearly 800,000 public school educators from kindergarten through community college.

Below please find a letter from CalSTRS to the CEO of Lear Corporation.

June 22, 2007

Mr. Robert E Rossiter
Chairman and Chief Executive Officer
Lear Corporation.
21557 Telegraph Road
Southfield, MI 48033

Dear Mr. Rossiter,

This letter is sent to you on behalf of the California State Teachers'
Retirement System (CalSTRS). As of the record date, May 14, 2007, for
the upcoming meeting scheduled for June 27, 2007, CalSTRS held 1.4
million shares of common stock in the Lear Corporation.
Representatives of CalSTRS and Lear shared a conference call regarding
the proposed merger between Lear and AREP on June 18, 2007. During
that call, we expressed our concern that this offer did not reflect
the underlying value of the company and that, in the absence of a
competing offer; we would prefer that the merger not proceed. It is
regrettable that shareholders may have to pay the $100 million
termination or break-up fee if this transaction fails, but even with
its consideration, we still believe that Lear has the capacity to earn
its way out of the conditions surrounding this offer.

We have also talked to some of the other large shareholders of Lear
Corporation and found that they share our belief that this is not an
attractive offer and that the merger should be scuttled. CalSTRS is a
long-term investor in Lear Corporation and does not wish to see the
long-term value accrue to other interested or favored shareholders.
The $36.00 per share offer from AREP only represents a 3.8% premium
for the shares' closing price on February 2, 2007. The unfairness of
this offer has caused us to pursue the issue of Appraisal Rights.

We understand that these large shareholders have talked with the
Company several times, each time stating that Lear could command
values of as much as $60.00 per share on its own and expressing their
desire that the merger not proceed. From the filing of the litigation
by several shareholders over the merger terms, it is clear that
shareholders believe that they are being shut out of any opportunity
to receive the true value for Lear.

We are also dismayed by senior management's decision to keep the
substantial change-in-control payments even though the executive team
will be practically unchanged as a result of this merger. Finally, we
do not believe that the "shopping process" was conducted fairly or
thoroughly; this "go-shop" feature was hamstrung from the beginning by
the signed agreement with Icahn and the large termination penalty.
The speed with which the Lear board approved this transaction hardly
left any time for other suitors to either emerge or entertain merging
with the Company. All of these circumstances give the impression of a
less than "arms-length" transaction, concocted in short hurried time
periods, to the benefit of one large shareholder, Mr. Icahn at the
expense of the other 85% owned by public shareholders. Additionally,
the related transactions among the board members and the Company also
call into question whether the board was fulfilling its fiduciary duty
to the public shareholders when it was "negotiating" this deal.

CalSTRS' portfolio is valued at $170 billion, as of March 30, 2007;
$100 billion of our portfolio is invested in the public equity
markets, on both U.S, and Non-U.S. markets. For reasons of
diversification, risk, costs and other reasons, that I won't take the
time to get into in this letter, a substantial portion of the CalSTRS
portfolio is invested in the indexed or passive style of investment
management. These securities are held for the long-term as we do not
trade them on company news or events. Over the past two decades, we
have experienced a great many mergers; during this same time period,
we have seen that the great majority of these mergers did not live up
to their promise and instead of being deals that created value for the
shareholders, especially long-term shareholders like CalSTRS, these
transactions were value destroyers.

The automotive and automotive supplier industries have been undergoing
a secular, wholesale restructuring over the past four years. We
believe that this consolidation/restructuring is in its early stages
and that while a substantial shakeout may take place, shareholders
will be rewarded with tremendous upside from some of the companies;
and, we believe that Lear is one of those companies where long-term
patient capital will be rewarded. We do not believe that the $36.00
per share offer from American Real Estate Partners is adequate or even
close to the true value of Lear.

It is my hope that you will reconvene the "Special Committee" of the
board and terminate this deal and go out into the market place in a
sincere fashion that encourages other bidders.

Please feel free to contact me to discuss this letter.

Sincerely,

Christopher J. Ailman
Chief Investment Officer