Employment Agreement

Amendment to Employment Agreement

Amendment 2 to Employment Agreement

Executive Separation Allowance Plan

 

 

 

 

EX-10.1 3 ex10_1.htm EXHIBIT 10.1


 

Exhibit 10.1

 

 

William Clay Ford, Jr.

Chairman

Chief Executive Officer

 

Ford Motor Company

One American Road

Dearborn, Michigan 48126-2798

USA

 

August 29, 2006

 

 

 

Mr. Alan Mulally

[Address redacted]

 

Dear Alan,

 

I am pleased to offer you the position of President and Chief Executive Officer, Ford Motor Company, reporting directly to me. Upon acceptance of this offer you will also become a Board Director. The Board and I believe you have the personal and professional qualifications to make significant contributions to the continued success of Ford Motor Company and that you will be an excellent leader to the organization as we address the challenges and opportunities facing us.

 

The leading features of your compensation package are summarized below:

 

·

Base salary of $2,000,000 per year and a 2007 targeted bonus (payable in March 2008) of 175% of base salary. Your March 2007 performance based restricted stock unit and stock option awards will have a minimum value of $6,000,000 and $5,000,000, respectively.

 

·

A hiring bonus of $7,500,000. This amount will be paid, subject to withholding, within two weeks of the date this agreement is approved by the Board of Directors. You may elect to defer this payment, in whole or in part, into the Deferred Compensation Plan.

 

·

In addition, a lump-sum amount of $11,000,000 will be paid, subject to withholding, within two weeks of the date this agreement is approved by the Board of Directors as an offset for forfeited performance and stock option awards in Boeing's long-term incentive plan. You may also elect to defer this amount into the Deferred Compensation Plan.

 

·

An initial stock option grant of 3,000,000 stock options with an option price equal to the Fair Market Value (FMV) of Ford Common Stock (average of the high and low trading prices for Ford Motor Company Common Stock trading the regular way on the NYSE) on the date this agreement is approved by the Board of Directors. These would be Non-Qualified stock options with three year vesting - 33% would vest one year from grant date, another 33% after two years from grant date, and the balance of 34% after three years from grant date. The options would have a ten-year term.

 


-2-

 

·

Also effective on the date this agreement is approved by the Board of Directors is a grant of 1,000,000 Non-Qualified performance-based stock options. The option price for these stock options would be the same as for the options described above. Vesting will occur based on the closing price of Ford Common Stock in NYSE trading the regular way reaching certain thresholds that are maintained for at least 30 consecutive trading days as follows: 250,000 stock options shall vest if Ford Common Stock closes at the price of at least $15 per share for 30 consecutive trading days; an additional 250,000 stock options shall vest after Ford Common Stock closes at the price of at least $20 per share for at least 30 consecutive trading days; an additional 250,000 stock options would vest after Ford Common Stock closes at the price of least $25 per share for at least 30 consecutive trading days; and the final 250,000 stock options would vest after Ford Common Stock closes at the price of at least $30 per share for at least 30 consecutive trading days. These stock options would have a five-year term.

 

·

A grant of 600,000 Restricted Stock Units effective on the date this agreement is approved by the Board of Directors. Restrictions shall lapse for 200,000 units one year from the effective date; on 200,000 units two years from the effective date; and on 200,000 units three years from the effective date. These Restricted Stock Units would be paid in cash as soon as practicable, following the date the restrictions lapse. These payments could be deferred into the Deferred Compensation Plan if you make the election to defer in the year prior to the restrictions being lifted. Dividend equivalent payments would be made until restrictions lapse, consistent with dividends to common shareholders as determined by the Board of Directors. Final award value would be based on the closing price of Ford Common Stock on the date restrictions lapse.

 

·

In the event the Company terminates your employment for reasons other than "for cause" during the first five years of your employment or if there is a Change in Control (as defined in the Appendix) of the Company during the first five years of your employment accompanied by a termination of your employment for Good Reason (as defined in the Appendix), the Company will pay you two times your annual base salary and targeted bonus and remove vesting requirements for the initial stock option grant of 3,000,000 shares and the 600,000 Restricted Stock Units as severance. Should you leave Ford and accept this severance payment, it is made on the condition that you do not join a competitor for five years after the date of your termination and also sign and deliver an acceptable General Release. You will not be entitled to any severance payment if you are terminated or released at any time "for cause,” as defined in the Appendix.

 

·

If you choose to live in temporary housing in Southeast Michigan for the first two years of your employment, we will reimburse you for the costs of temporary living and at the end of the that period, when you relocate your household, you would be eligible for relocation assistance under the Company program.

 

·

You will be required to use the corporate aircraft for personal travel under the Company's Executive Security Program. When traveling on personal business, you will be entitled to have your wife; children, and guests travel with you, at company expense.

 


-3-

 

·

For benefits and pension plan purposes, you will be credited four (4) additional years of service for every year of actual service.

 

Attached for your information is a summary of the broader range of compensation and benefits related to this offer. Items described in this letter, and the attached summary, are subject to terms, conditions, and requirements of our existing benefit or pension plans and programs. The terms of these benefits or pension plans are programs may be amended from time to time in the future.

 

This offer of at-will employment is subject to Company’s normal pre-employment requirements, which we have discussed. This offer remains in effect until September 3, 2006. We anticipate that you will start work on or before October 1, 2006.

 

I am pleased to offer you this opportunity to join the Ford team and look forward to hearing from you by September 3, 2006.

 

I look forward to your favorable response and assure you of a very warm welcome to Ford.

 

 

Sincerely,

 

/s/ Bill Ford

 

 

Bill Ford

 

 

 I have read the foregoing offer of at-will employment. I agree with, and accept, this offer of employment subject to the terms and conditions detailed above.

 

 

 

 

 

Signed: 

/s/ Alan Mulally

 

Date: 

September 1, 2006

 

Alan Mulally

 

 

 

 


 

Exhibit A-1

 

FOR CAUSE TERMINATION

 

 

For purposes of this offer of employment, the term "for cause" shall mean (a) any act of dishonesty or knowing or willful breach of fiduciary duty on your part that is intended to result in your personal enrichment or gain at the expense of Ford or any of its affiliates or subsidiaries; or (b) commission of a felony involving moral turpitude or unlawful, dishonest or unethical conduct that a reasonable person would consider damaging to the reputation or image of Ford; or (c) any material violation of the published standards of conduct applicable to officers or executives of Ford that warrants termination; or (d) insubordination or refusal to perform assigned duties or to comply with the lawful directions of your supervisors; or (e) any deliberate, willful or intentional act that causes substantial harm, loss or injury to Ford.

 

 

CHANGE IN CONTROL

 

"Change in Control" means:

 

(a) The direct or indirect acquisition by any person of beneficial ownership, through a purchase, merger or other acquisition transaction or series of transactions occurring within a 24 month period, of securities of the Company entitling such person to exercise 50% or more of the combined voting power of the Company’s securities;

 

(b) The transfer, whether by sale, merger or otherwise, in a single transaction or in a series of transactions occurring within a 12 month period, of all or substantially all of the business and assets of the Company in existence as of the date of this Agreement to any person; or

 

(c) The adoption of a plan of liquidation or dissolution of the Company.

 

 

Good Reason” means the occurrence, without the Executive's express written consent, of any of the following events during the Protected Period (which shall be the two year period beginning as of the date of a Change in Control):

 

(a) Subject to the provision below on duplication of payments, a reduction of the Executive's base salary as in effect immediately prior to a Change in Control or of such higher base salary as may have been in effect at any time during the Protected Period, except in connection with the termination of the Executive's employment for Cause or on account of Long-Term Disability or death;

 

(b) Subject to the provision below on duplication of payments, the failure to pay the Executive any portion of his aggregate compensation including, without limitation, annual bonus, long-term incentive and any portion of his compensation deferred under any plan, agreement or arrangement that is payable or has accrued prior to a Change in Control, within thirty days of the date payment of any such compensation is due;

 

(c) The failure to afford the Executive annual bonus and long-term cash incentive compensation target opportunities at a level which, in the aggregate, is at least equal to 80% of the aggregate level of annual bonus and long-term cash incentive compensation target opportunities made available to the Executive immediately prior to the Change in Control, except in connection with the termination of the Executive’s employment for Cause or on account of Long-Term Disability or death;

 

(d) A material diminution or change in the responsibilities of the Executive without the Executive's consent, as such responsibilities existed immediately prior to the Change in Control;

 

(e) Notwithstanding any other provision of this Agreement, the Executive shall have the right to terminate his employment, with such termination being deemed as if a termination for Good Reason during the Protected Period, if any successor to the Company does not assume these obligations upon a Change in Control.

 

Notwithstanding any provision in this Agreement to the contrary, if the Executive is entitled upon a termination of employment to any change of control related benefits or payments under an employment or other agreement, or a severance plan, the Executive shall not be entitled upon such termination to any duplicative payment or benefits under this Agreement but instead shall receive only the greater payment or benefit, determined on an item by item basis.

 


 

Attachment A

 

 

Offer Framework

 

Alan Mulally

 

President and Chief Executive Officer

 

 

1.

First Year Base Compensation

 

 

 

Base Salary

$2,000,000

 

 

 

 

 

 

Target Bonus

3,500,000

 

 

(175% of base salary)

 

 

 

 

 

 

 

Stock Options

5,000,000

 

 

 

 

 

 

Performance Based Restricted Stock Units

6,000,000

 

 

 

 

 

 

2007 Total Compensation Opportunity

$16,500,000

 

 

 

 

 

 

 

 

2.

Additional One Time Items

 

 

 

Stock Option Grant (# Shares)

4,000,000

 

 

 

 

 

 

Restricted Stock Units (# Shares)

600,000

 

 

 

 

 

 

Signing Bonus

7,500,000

 

 

 

 

 

 

Estimated Value of One Time Items

$22,966,666

 

 

 

 

 

 

 

 

3.

Replace Forfeited Boeing Long Term Incentive Plan's  Performance and Stock Option Awards

$11,000,000

 

 


 

 

 

 

 

 

 

 

EX-10.Y-3 31 ex10_y-3.htm EXHIBIT 10-Y-3


Exhibit 10-Y-3

 

 

Employment Offer Letter and Agreement Amendments

Alan Mulally

 

Effective as of December 31, 2008

 

 

Background

 

·

Section 409A of the Internal Revenue Code Section of 1986, as amended ("Code"), regulates the provision of nonqualified deferred compensation to employees.

 

·

Code Section 409A requires that all agreements providing for nonqualified deferred compensation be amended to comply with its requirements no later than December 31, 2008.

 

·

The amendments described herein are intended to ensure that the terms of Mr. Mulally's employment offer letter and agreement comply with Code Section 409A.

 

Amendments

 

1.

Last sentence of the second bullet point regarding the hiring bonus of $7,500,000 is amended to read as follows:  "You may elect to defer this payment, in whole or in part, into the Deferred Compensation Plan, provided you make your deferral election prior to the date on which the Board of Directors approves this agreement or within 30 days of your acceptance of this offer, whichever comes first."

 

2.

Last sentence of the third bullet point regarding the additional lump sum payment of $11,000,000 is amended to read as follows:  "You may also elect to defer this amount into the Deferred Compensation Plan, provided you make your deferral election prior to the date on which the Board of Directors approves this agreement or within 30 days of your acceptance of this offer, whichever comes first."

 

3.

The following sentence of the sixth bullet point regarding the grant of 600,000 Restricted Stock Units is hereby deleted in its entirety:  "These payments could be deferred into the Deferred Compensation Plan if you make the election to defer in the year prior to the restrictions being lifted."

 

4.

The following shall be added as the second sentence of the seventh bullet point regarding severance payments:  "Any such payments or changes in vesting requirements shall be made on or after the first day of the seventh month following your termination of employment, but in no event later than the December 31st following the first day of such seventh month."

 

5.

The following shall be added to the end of the eighth bullet point regarding temporary housing and relocation:  "Reimbursements for temporary living costs will be made (i) not later than March 15th of the year following the year in which the expense is incurred, and (ii) only for expenses incurred in a year in which you are employed by the Company."

 

6.

The following shall be added to the end of the ninth bullet point regarding corporate aircraft usage:  "Corporate aircraft usage by you or your family members in one year shall not affect usage in any subsequent year.  Your right to use the corporate aircraft is not subject to liquidation or exchange.  Personal use of the aircraft will be limited to the period during which you remain employed by Ford in the capacity of President and Chief Executive Officer."

 

7.

The following shall be added as a final bullet point:  "Notwithstanding anything contained in this agreement to the contrary, for purposes of determining the timing of payments under this agreement upon termination of employment, as defined for purposes of Section 409A of the Internal Revenue Code of 1986, as amended (Code), you will be treated as if you were a 'Specified Employee' under Code Section 409A at the time of termination.  Consequently, no payment of deferred compensation as defined under Code Section 409A shall be made pursuant to this agreement upon termination of employment (other than as a result of death) prior to the first day of the seventh month following such termination of employment."

 

 

 

These amendments are effective as of December 31, 2008.

 

 

/s/ Felicia Fields                                                                   /s/ Alan Mulally                                   

 

Felica Fields                                                                         Alan Mulally

 

 


 

 

 

 

EX-10.V-4 9 f12312012exhibit10-vx4.htm EXHIBIT

 

 

Exhibit 10-V-4

 

Form of Alan Mulally Agreement Amendment dated February 13, 2013

 

 

 

 

 

 

 

 

 

 

Inter Office

 

 

 

 

Group Vice President Human Resources & Corporate Services

 

February 13, 2013

To:        Alan R. Mulally

 

Subject: Retirement/Termination Agreement

 

Dear Alan,

 

This letter is to confirm our mutual understanding of the retirement/termination provisions in your employment offer letter, as well as to detail a new agreement.

 

Original Agreement

Your hiring agreement provided "for benefits and pension plan purposes, you will be credited four (4) additional years of service for every year of actual service." As a result, upon completion of one year of employment, your benefits under the applicable retirement plans were vested.

 

Based on your agreement and date of hire, you are eligible to participate in following Company retirement plans:

Ford Retirement Plan (FRP), a tax-qualified defined contribution plan to which the Company contributes a percentage of your annual base salary (based on your age)

 

Benefit Equalization Plan (BEP), an unfunded, non-qualified plan to which the Company makes contributions that would have been made for the FRP but for limits under the Internal Revenue Code (IRC)

 

New Agreement

In consideration of your services rendered to the Company, the Company will provide you with a lump-sum cash payment upon termination of employment*, provided such termination is not for cause. The lump-sum amount shall be determined on the following basis:

Provide an additional pre-tax value equal to four times the amount of the Company's contributions to your FRP and FRP-BEP accounts for each year of service from hire through termination, pro-rated to the last day of the month of your termination

 

To be paid on, or as soon as reasonably practicable after, the first day of the seventh month after termination of employment* in compliance with IRC §409A

 

Due to the benefits provided under this agreement, you will not be eligible to participate in the proposed Defined Contribution Supplemental Executive Retirement Plan, effective 1/1/2013.

 

Please indicate your acceptance of this new agreement by signing below and returning the original to my office. Thank you.

 

/s/ Felicia Fields

Felicia J. Fields

Acknowledgement:

 

/s/ Alan Mulally        2/15/2013

Alan R. Mulally Date

 

*For purposes of this agreement, termination of employment shall be determined to have occurred on the date on which you incur a "separation from service" within the meaning of IRC §409A.

 

 

 

 

 

 

 

EX-10.A 2 f12312012exhibit10-a.htm EXHIBIT

 

 

Exhibit 10-A

 

FORD MOTOR COMPANY

Executive Separation Allowance Plan

(As amended and restated effective as of January 1, 2012)

 

Section 1. Introduction. This Plan has been established for the purpose of providing Leadership Level One or Two Employees with an Executive Separation Allowance in the event of separation from employment with the Company under certain circumstances.

 

Section 2. Definitions. As used in the Plan, the following terms shall have the following meanings, respectively:

 

"Affiliate" shall mean, as applied with respect to any person or legal entity specified, a person or legal entity that directly or indirectly, through one or more intermediaries, controls or is controlled by, or is under common control with, the person or legal entity specified.

 

"Code" shall mean the Internal Revenue Code of 1986, as amended from time to time.

 

"Company" shall mean Ford Motor Company and such of the subsidiaries of Ford Motor Company as, with the consent of Ford Motor Company, shall have adopted this Plan.

 

"Contributory Service" shall mean, without duplication, the years and any fractional year of contributory service at retirement, not exceeding one year for any calendar year, of the Eligible Leadership Level One or Two Employee under the Ford Motor Company General Retirement Plan.

 

"Eligible Leadership Level One or Two Employee" shall mean a Leadership Level One or Two Employee who was hired or rehired prior to January 1, 2004 and who meets the eligibility criteria set forth in Section 3, or for periods prior to January 1, 2000, shall mean an Executive Roll Employee who meets the eligibility criteria set forth in Section 3.

 

"Eligible Surviving Spouse" shall mean a spouse, as defined by the Federal Defense of Marriage Act of 1996, to whom a Leadership Level One or Two Employee has been married at least one year at the date of the employee's death.

 

"Executive Separation Allowance" shall mean benefits payable under this Plan as determined in accordance with Section 4.

 

"Leadership Level One or Two Employee" shall mean an employee of the Company (but for periods prior to July 1, 1996, excluding a Company employee who is an employee of Jaguar Cars, a division of the Company) who is assigned to the Leadership Level One or Two, or its equivalent, as such term is defined in the Employee Relations Administration Manual as from time to time constituted.

 

"Plan" shall mean this Ford Motor Company Executive Separation Allowance Plan, as amended from time to time.

 

"Separation From Service" shall be determined to have occurred on the date on which an Eligible Leadership Level One or Two Employee incurs a “separation from service” within the meaning of Code Section 409A.

 

"Service" shall mean an eligible employee's years of service (including fractions of years) used in determining eligibility for an early retirement benefit under the Ford Motor Company General Retirement Plan.

 

"Specified Employee" shall mean an employee of the Company who is a "Key Employee" as defined in Code Section 416(i)(1)(A)(i), (ii) or (iii), applied in accordance with the regulations thereunder and disregarding Subsection 416(i)(5). A Specified Employee shall be identified as of December 31st of each calendar year and such identification shall apply to any Specified Employee who shall incur a Separation From Service in the 12-month period commencing April 1st of the immediately succeeding calendar year.

 

 


 

 

An employee who is determined to be a Specified Employee shall remain a Specified Employee throughout such 12-month period regardless of whether the employee meets the definition of "Specified Employee" on the date the employee incurs a Separation From Service. This provision is effective for Specified Employees who incur a Separation From Service on or after January 1, 2005. For purposes of determining Specified Employees, the definition of compensation under Treasury Regulation Section 1.415(c)-2(d)(3) shall be used, applied without the use of any of the special timing rules provided in Treasury Regulation Section 1.415(c)-2(e) or the special rule in Treasury Regulation Section 1.415(c)-2(g)(5)(i), but applied with the use of the special rule in Treasury Regulation Section 1.415(c)-2(g)(5)(ii).

 

"Subsidiary" shall mean, as applied with respect to any person or legal entity specified, (i) a person or legal entity a majority of the voting stock of which is owned or controlled, directly or indirectly, by the person or legal entity specified or (ii) any other type of business organization in which the person or legal entity specified owns or controls, directly or indirectly, a majority interest.

 

Section 3. Eligibility. Each Leadership Level One or Two Employee who:

 

(1)    was hired or rehired prior to January 1, 2004;

 

(2)    is being Separated From Service with the approval of the Company;

 

(3)    has at least five years service at the Leadership Level One or Two level, or its equivalent;

 

(4)    has at least ten years of combined Contributory Service or service in any other retirement plan sponsored by a Subsidiary to which the Level One or Two Employee contributed or, if contributions were not permitted, participated;

 

(5)    is at least 55 years of age; and

 

(6)    retires from the Company prior to age 65

 

shall receive an Executive Separation Allowance as provided herein. The Eligible Surviving Spouse of a Leadership Level One or Two Employee who (i) has not Separated From Service with the Company, (ii) meets the eligibility conditions set forth in Subsections (1) through (3) of this Section 3, and (iii) dies on or after January 1, 1981 shall be eligible to receive the Executive Separation Allowance that the Eligible Leadership Level One or Two Employee would have been eligible to receive if such employee had Separated From Service with the approval of the Company and retired on the date of such employee's death.

 

The eligibility conditions set forth in Subsections (3) and (4) of Section 3 may be waived by the Executive Chairman except in the case of a Leadership Level One or Two Employee who has not Separated From Service with the Company.

 

Section 4. Calculation of Amount.

 

A. Base Monthly Salary. For purposes of the Plan, the "Base Monthly Salary" of a Leadership Level One or Two Employee shall be the highest monthly base salary rate of such employee during the employee's 12 months of service immediately preceding Separation From Service with the Company, prior to giving effect to any salary reduction agreement pursuant to an employee benefit plan, as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended, (i) to which Code Section 125 or Code Section 402(e)(3), applies or (ii) which provides for the elective deferral of compensation. It shall not include supplemental compensation or any other kind of extra or additional compensation.

 

B. Amount of Executive Separation Allowance. Subject to any limitation in other provisions of the Plan, the gross monthly amount of the Executive Separation Allowance of an Eligible Leadership Level One or Two Employee under Section 3 above shall be such employee's Base Monthly Salary multiplied by a percentage, not to exceed 60%, equal to the sum of (i) 15%, (ii) five tenths of one percent (.5%) for each month (or fraction thereof) that such employee's age at Separation From Service exceeds 55, not to exceed thirty percent (30%), and (iii) one percent (1%) for each year of such employee's Service in excess of 15, prorated for fractions of a year.

 

 

 


 

 

The gross amount for any month shall be reduced by any payments paid or payable for such month to the Eligible Leadership Level One or Two Employee, the employee's Eligible Surviving Spouse, contingent annuitant, or other beneficiary, (i) under the General Retirement Plan, Benefit Equalization Plan, Select Retirement Plan, or any other Company defined benefit retirement plan, or (ii) as a Pension Parity Benefit from the Supplemental Executive Retirement Plan, other than (a) Supplemental Benefit or Conditional Annuity payments paid or payable from the Supplemental Executive Retirement Plan, (b) under any other Company defined benefit retirement plan from which a voluntary distribution of a lump sum benefit has occurred before age 65, by the monthly annuity payment the Eligible Leadership Level One or Two Employee would have received had the lump sum distribution not occurred, or (c) under any other defined benefit retirement plan from which an involuntary distribution of a lump sum benefit on an actuarially equivalent basis occurred before age 65 and without the Eligible Leadership Level One or Two Employee's retirement.

 

C. Special Executive Separation Allowances. In addition to any other Executive Separation Allowance provided under this Plan, the Company may, in its sole discretion, provide special Executive Separation Allowances to certain Eligible Leadership Level One or Two Employees. Special Executive Separation Allowances provided to Eligible Leadership Level One or Two Employees whose compensation is subject to the executive compensation disclosure rules under the Securities Exchange Act of 1934 shall be set forth in Appendix A. Special Equalization Benefits provided to Eligible Leadership Level One or Two Employees who are not subject to such disclosure rules shall be set forth in a separate confidential schedule to the Plan that is administered by the HR Director-Executive Personnel Office. Any special Executive Separation Allowance provided pursuant to this Section shall be paid in accordance with the terms and conditions of this Plan, including without limitation Section 5.

 

Section 5. Payments. Executive Separation Allowance payments to an Eligible Leadership Level One or Two Employee, in the net amount determined in accordance with Section 4B above, shall be made monthly from the Company's general funds commencing on or as soon as reasonably practicable after the first day of the month following the date on which the Eligible Leadership Level One or Two Employee has a Separation From Service. Payments to an Eligible Leadership Level One or Two Employee shall cease at the end of the month in which such employee attains age 65 or dies, whichever occurs first. In the event of death of an Eligible Leadership Level One or Two Employee prior to such employee attaining age 65, or in the event of death on or after January 1, 1981 of a Leadership Level One or Two Employee whose Eligible Surviving Spouse meets the eligibility conditions set forth in Section 3 for payments hereunder, payments shall be made to such employee's Eligible Surviving Spouse, if any, commencing as soon as reasonably practicable following the date of the Eligible Leadership Level One or Two Employee's death, and continuing until the earlier of the death of such Eligible Surviving Spouse, or the end of the month in which the Eligible Leadership Level One or Two Employee would have attained age 65.

 

Anything herein contained to the contrary notwithstanding, the right of any Eligible Leadership Level One or Two Employee to receive an installment of Executive Separation Allowance hereunder for any month shall be payable only if:

 

(i)

During the entire period from the date of such employee's Separation From Service to the end of such month, such employee shall have earned out such installment by refraining from engaging in any activity that is directly or indirectly in competition with any activity of the Company or any Subsidiary or Affiliate thereof;

 

(ii)

If a Specified Employee incurs a Separation From Service, other than as a result of such Specified Employee's death, payment of any Executive Separation Allowance benefit to such Specified Employee shall commence on or as soon as reasonably practicable after the first day of the seventh month following the Separation From Service and any Executive Separation Allowance benefits to which such Specified Employee otherwise would have been entitled during the first six months following such Specified Employee's Separation From Service shall be accumulated and paid in a lump sum payment on or as soon as reasonably practicable after the first day of the seventh month following such Separation From Service; and

 

(iii)

The payments delayed under this Section shall not bear interest.

 

In the event of an Eligible Leadership Level One or Two Employee's nonfulfillment of the condition set forth in the immediately preceding paragraph, no further installment shall be paid to such employee; provided, however, that the nonfulfillment of such condition may at any time (whether before, at the time of or subsequent to termination of the employee's employment) be waived in the following manner:

 

 

 


 

 

(1) with respect to any such employee who at any time shall have been a member of the Board of Directors, a Vice President, the Treasurer, the Controller or the Secretary of the Company, such waiver may be granted by the Compensation Committee upon its determination that in its sole judgment there shall have not been and will not be any substantial adverse effect upon the Company or any Subsidiary or Affiliate thereof by reason of the nonfulfillment of such condition; and

 

(2) with respect to any other such employee, such waiver may be granted by the Annual Incentive Compensation Committee (or any committee appointed for the purpose) upon its determination that in its sole judgment there shall not have been and will not be any such substantial adverse effect.

 

Anything herein contained to the contrary notwithstanding, Executive Separation Allowance payments shall not be paid to or with respect to any person as to whom it has been determined that such person at any time (whether before or subsequent to termination of the employee's employment) acted in a manner inimical to the best interests of the Company. Any such determination shall be made by (i) the Compensation Committee with respect to any Leadership Level One Employee who at any time shall have been a member of the Board of Directors, an Executive Vice President, a Vice President, the Treasurer, the Controller or the Secretary of the Company, and (ii) the Annual Incentive Compensation Committee with respect to any other Leadership Level One or Two Employee, and shall apply to any amounts payable after the date of the applicable Committee's action hereunder, regardless of whether the person has commenced receiving Executive Separation Allowance. Conduct which constitutes engaging in an activity that is directly or indirectly in competition with any activity of the Company or any Subsidiary or Affiliate thereof shall be governed by the four immediately preceding paragraphs of this Section and shall not be subject to any determination under this paragraph.

 

Section 6. Deductions. The Company may deduct from any payment of Executive Separation Allowance to an Eligible Leadership Level One or Two Employee or Eligible Surviving Spouse any and all amounts owed to it by such Eligible Leadership Level One or Two Employee or Eligible Surviving Spouse for any reason, and all taxes required by law or government regulation to be deducted or withheld.

 

Section 7. Administration and Interpretation. Except as the committees specified in Section 5 and the Executive Chairman is authorized to administer the Plan in certain respects, the Group Vice President -Human Resources and Corporate Services (or, in the event of a change in title, such officer's functional equivalent) shall have full power and authority on behalf of the Company to administer and interpret the Plan. In the event of a change in a designated officer's title, the officer or officers with functional responsibility for executive separation allowance plans shall have the power and authority to administer and interpret the Plan. All decisions with respect to the administration and interpretation of the Plan shall be final and shall be binding upon all persons. In the event that an Article, Section or paragraph of the Code, Treasury Regulations, or the Ford Motor Company General Retirement Plan is renumbered, such renumbered Article, Section or paragraph shall apply to applicable references herein.

 

Section 8. Amendment and Termination. The Company reserves the right to amend, modify or terminate the Plan at any time without notice; provided, however, that no distribution of Executive Separation Allowances shall occur upon termination of this Plan unless applicable requirements of Code Section 409A have been met.

 

Section 9. Local Payment Authorities. The Vice President and Treasurer and the Assistant Treasurer (or, in the event of a change in title, such officer's functional equivalent) may act individually to delegate authority to administrative personnel to make benefit payments to Eligible Leadership Level One or Two Employees in accordance with Plan provisions.

 

Section 10. No Contract of Employment. The Plan is an expression of the Company's present policy with respect to Leadership Level One or Two Employees; it is not a part of any contract of employment. No Leadership Level One or Two Employee, Eligible Surviving Spouse, or any other person shall have any legal or other right to any benefit under this Plan.

 

Section 11. Executive Separation Allowances Not Funded. The Company's obligations under this Plan shall not be funded and Executive Separation Allowance benefits under this Plan shall be payable only out of the general funds of the Company.

 

 

 


 

 

Section 12. Visteon Corporation. The following shall be applicable to employees of Ford who were transferred to Visteon Corporation on April 1, 2000 ("U.S. Visteon Employees") and who ceased active participation in the Plan as of June 30, 2000 after Visteon Corporation was spun-off from Ford, June 28, 2000.

 

(a)    Group I and Group II Employees.

 

For purposes of this paragraph, a "Group I Employee" shall mean a U.S. Visteon Employee who as of July 1, 2000 was eligible for immediate normal or regular early retirement under the provisions of the GRP as in effect on July 1, 2000. A "Group II Employee" shall mean a U.S. Visteon Employee who (i) was not a Group I Employee; (ii) had as of July 1, 2000 a combination of age and continuous service that equals or exceeds sixty (60) points (partial months disregarded); and (iii) could become eligible for normal or regular early retirement under the provisions of the GRP as in effect on July 1, 2000 within the period after July 1, 2000 equal to the employee's Ford service as of July 1, 2000. A Group I or Group II Employee shall retain eligibility to receive an Executive Separation Allowance and shall receive such benefits as are applicable under the terms of the Plan in effect on the retirement date, based on meeting the minimum Leadership Level required for eligibility for such benefits as of July 1, 2000, service as of July 1, 2000, and the Base Monthly Salary as of the retirement date.

 

(b)    Group III Employees.

 

For purposes of this paragraph, a "Group III Employee" shall mean a U.S. Visteon Employee who participated in the GRP prior to July 1, 2000 other than a Group I or Group II Employee. The Plan shall have no liability for any Executive Separation Allowance payable to Group III Employees who were otherwise eligible hereunder with respect to service prior to July 1, 2000 on or after July 1, 2000.

 

Section 13. Code Section 409A.

 

(a)    The provisions of Code Section 409A are incorporated into the Plan by reference to the extent necessary for any benefit provided under the Plan that is subject to Code Section 409A to comply with such requirements and, except as otherwise expressly determined by the Company, the Plan shall be administered in accordance with Code Section 409A as if the requirements of Code Section 409A were set forth herein. The Company reserves the right to take such action, on a uniform basis, as the Company deems necessary or desirable to ensure compliance with Code Section 409A, and applicable additional regulatory guidance thereunder, or to achieve the goals of the Plan without having adverse tax consequences under this Plan for any employee or beneficiary. Unless determined otherwise by the Company, any such action shall be taken in a manner that will enable any benefit provided under the Plan that is intended to be exempt from Code Section 409A to continue to be so exempt, or to enable any benefit provided under the Plan that is intended to comply with Code Section 409A to continue to so comply.

    

(b)    In no event shall any transfer of liabilities to or from this Plan result in an impermissible acceleration or deferral of any Executive Separation Allowance under Code Section 409A. In the event such a transfer would cause an impermissible acceleration or deferral under Code Section 409A, such transfer shall not occur.

 

(c)    In the event an Eligible Leadership Level One or Two Employee is reemployed following a Separation From Service, distribution of any Executive Separation Allowance shall not cease upon such Eligible Leadership Level One or Two Employee's reemployment.

 

(d)    After receipt of Plan benefits, the obligations of the Company with respect to such benefits shall be satisfied and no Eligible Leadership Level One or Two Employee, or such Eligible Leadership Level One or Two Employee's Eligible Surviving Spouse, shall have any further claims against the Plan or the Company with respect to Plan benefits.

 

 


 

 

 

Section 14. Claim for Benefits

 

Denial of a Claim. A claim for benefits under the plan shall be submitted in writing to the plan administrator. If a claim for benefits or participation is denied in whole or in part by the plan administrator, the Eligible Leadership Level One or Two Employee will receive written notification within a reasonable period from the date the claim for benefits or participation is received. Such notice shall be deemed given upon mailing, full postage prepaid in the United States mail or on the date sent electronically to the Eligible Leadership Level One or Two Employee. If the plan administrator determines that an extensive period of time for processing is required, written notice shall be furnished to the Eligible Leadership Level One or Two Employee as soon as practical.

 

Review of Denial of the Claim. In the event that the plan administrator denies a claim for benefits or participation, the Eligible Leadership Level One or Two Employee may request a review by filing a written appeal to the Group Vice President -Human Resources and Corporate Services (or, in the event of a change in title, such officer's functional equivalent), or such officer's designee, within sixty (60) days of receipt of the written notification of denial. The appeal will be considered, and a decision shall be rendered as soon as practical. In the event a time extension is needed to consider the appeal and render the decision, written notice shall be provided to the Eligible Leadership One or Two Employee notifying them of such time extension.

 

Decision on Appeal. The decision on review of the appeal shall be in writing. Such notice shall be deemed given upon mailing, full postage prepaid in the United States mail or on the date sent electronically to the Eligible Leadership Level One or Two Employee. Decisions on the appeal are final and conclusive and are only subject to the arbitrary and capricious standard of judicial review.

 

Limitations Period. No legal action for benefits under the plan may be brought against the plan until after the claims and appeal procedures have been exhausted. Legal actions under the plan for benefits must be brought no later than two (2) years after the claim arises. No other action may be brought against the plan more than six (6) months after the claim arises.

 

 


 

 

Appendix A

Special Executive Separation Allowances

 

Named Executive Officers

 

 

Section 1. Special Executive Separation Allowances Based on Notional Service and Salary. Special Executive Separation Allowances will be provided to each Eligible Leadership Level One or Two Employee listed in Subsection 1.D below for the period of time during which such Eligible Leadership Level One or Two Employee did not receive a cash base salary from the Company by determining the Executive Separation Allowance that otherwise would have been provided to such Eligible Leadership Level One or Two Employee for such period using notional service and salary as follows; provided that, in no event shall an Eligible Leadership Level One or Two Employee receive both an Executive Separation Allowance and a special Executive Separation Allowance for the same period of service:

 

A. Contributory Service. Contributory Service, if any, for each such Eligible Leadership Level One or Two Employee for any period of time during which the Eligible Leadership Level One or Two Employee did not receive a cash base salary shall be determined by the Committee, in its sole discretion, based on the contributory service the Eligible Leadership Level One or Two Employee would have accrued had the Eligible Leadership Level One or Two Employee participated in the Ford Motor Company General Retirement Plan on a contributory basis during such period of time.

 

B. Service. Service, if any, for each such Eligible Leadership Level One or Two Employee for any period of time during which the Eligible Leadership Level One or Two Employee did not receive a cash base salary shall be determined by the Committee, in its sole discretion, based on the service the Eligible Leadership Level One or Two Employee would have accrued had the Eligible Leadership Level One or Two Employee participated in, and accrued credited service under, the Ford Motor Company General Retirement Plan during such period of time.

 

C. Base Monthly Salary. Base Monthly Salary for each such Eligible Leadership Level One or Two Employee shall be determined by the Committee, in its sole discretion, based on a notional base monthly salary for the period of time during which the Eligible Leadership Level One or Two Employee did not receive a cash base salary.

 

D. Affected Eligible Leadership Level One or Two Employees. The following Eligible Leadership Level One or Two Employees' special Executive Separation Allowances shall be determined in accordance with this Section:

 

William Clay Ford, Jr.