Exhibit 10.2
Page 1 of 8
FORD MOTOR COMPANY DEFERRED COMPENSATION PLAN
1. Purpose. This Plan, which shall be known as the "Ford
Motor Company Deferred Compensation Plan" and is hereinafter
referred to as the "Plan", is intended to provide for the
deferment of payment of (i) awards of supplemental compensation
under the Ford Motor Company Supplemental Compensation Plan, (ii)
base salary and (iii) incentive awards payable only in cash under
the Ford Motor Company 1990 Long-Term Incentive Plan or any other
incentive compensation plan of the Company.
2. Definitions. As used in the Plan, the following terms
shall have the following meanings, respectively:
(a) The term "Committee" shall mean, unless the
context otherwise requires, the following as they from time to
time may be constituted:
(i) The Compensation and Option Committee with respect to all
matters affecting any Section 16 Person.
(ii) The Deferred Compensation Committee with respect to all
matters affecting employees other than Section 16 Persons.
(b) The term "Compensation and Option Committee" shall mean the
Compensation and Option Committee of the Board of Directors of the Company.
(c) The term "Company" when used in the Plan with reference to
employment shall include subsidiaries of the Company.
(d) The term "Deferred Compensation" shall mean compensation
deferred pursuant to paragraph (a), (b), (c) or (d) of Section 5 hereto, and
any interest equivalents, dividend equivalents or other earnings or return on
such amounts determined in accordance with the Plan.
(e) The term "Deferred Compensation Account" with respect to a
participant shall mean the book entry account established by the Company for
such participant with respect to his or her Deferred Compensation.
(f) The term "Deferred Compensation Committee" shall mean the
committee comprised of the Vice President - Employee Relations, the Group Vice
President and Chief Financial Officer and the Vice President - General Counsel
or such other persons as may be designated members of such Committee by the
Compensation and Option Committee.
(g) The term "employee" shall mean any person who is regularly
employed by the Company or a subsidiary at a salary (as distinguished from a
pension, retirement allowance, severance pay, retainer, commission, fee under a
contract or other arrangement, or hourly, piecework or other wage) and is
enrolled on the active employment rolls of the Company or a subsidiary,
including, but without limitation, any employee who also is an officer or
director of the Company or a subsidiary.
(h) The term "Ford Stock" shall mean Ford Common Stock.
(i) The term "Ford Stock Unit" shall mean a unit having a value
based upon Ford Stock.
(j) The term "1990 Plan" shall mean the Ford Motor Company 1990
Long-Term Incentive Plan, as amended.
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Exhibit 10.2
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(k) The term "SC Plan" shall mean the Ford Motor Company
Supplemental Compensation Plan, as amended.
(l) The term "Section 16 Person" shall mean any employee who is
subject to the reporting requirements of Section 16(a) or the liability
provisions of Section 16(b) of the Securities Exchange Act of 1934, as amended.
(m) The term "SSIP" shall mean the Company's Savings and Stock
Investment Plan for Salaried Employees, as amended.
(n) The term "subsidiary" shall mean any corporation a majority
of the voting stock of which is owned directly or indirectly by the Company.
3. Administration. Except as otherwise herein expressly provided, the
Compensation and Option Committee shall have full power and authority to
construe, interpret and administer the Plan. The Compensation and Option
Committee shall make all decisions relating to matters affecting any Section 16
Person, but may otherwise delegate any of its authority under the Plan. The
Compensation and Option Committee and the Deferred Compensation Committee each
may at any time adopt or terminate, and may from time to time amend, modify or
suspend such rules, regulations, policies and practices as they in their sole
discretion may determine in connection with the administration of, or the
performance of their respective responsibilities under, the Plan.
4. Eligibility of Participants; Amounts Deferrable.
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(a) Participating Subsidiaries and Foreign Location Participants.
The Deferred Compensation Committee shall determine the extent to which
subsidiaries and employees at foreign locations may participate in the Plan or
similar plans.
(b) Supplemental Compensation Deferrals. Subject to any limitations
determined under paragraph (a) or paragraph (e) of this Section 4, employees
who receive an award or an installment of an award of supplemental compensation
for 1995 or any subsequent year under the SC Plan are eligible to defer payment
under the Plan from 1% to 100%, in 1% increments, of such amount net of
applicable taxes, but not less than $1,000, provided that such employees are
actively employed by the Company both at the time of the election to defer and
at the time the award or installment would otherwise be payable in the absence
of such deferral.
(c) Base Salary Deferrals. Subject to any limitations determined
under paragraph (a) or paragraph (e) of this Section 4, employees who are
eligible to participate in the SC Plan and who are actively employed by the
Company at the time a salary deferral election is made are eligible to defer
payment of from 1% to 50% of base salary in 1% increments, provided that the
Compensation and Option Committee has determined that base salary deferrals may
be made for the employment period covered by such deferral. Notwithstanding
the foregoing, the Compensation and Option Committee may impose such additional
limitations on eligibility as it deems appropriate in its sole discretion.
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Exhibit 10.2
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(d) Deferrals of Incentive Compensation. Subject to any limitations
determined under paragraph (a) or paragraph (e) of this Section 4, employees
who are eligible to participate in the SC Plan and who are actively employed by
the Company at the time an election is made to defer payment of an award
payable only in cash under the 1990 Plan or other incentive compensation plan
are eligible to defer payment of from 1% to 100%, in 1% increments, of such
award net of applicable taxes, but not less than $1,000, provided that (i) the
Compensation and Option Committee has determined that deferrals may be made for
such awards and (ii) such employees are actively employed by the Company both
at the time of the election to defer and at the time the award would otherwise
be payable in the absence of such deferral.
(e) Eligibility of Compensation and Option Committee Members. No
person while a member of the Compensation and Option Committee shall be
eligible to participate under the Plan.
5. Deferral Elections.
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(a) Supplemental Compensation Deferrals. A participant's decision
to defer payment of supplemental compensation under the Plan must be made prior
to September 30 of the performance year for which the supplemental compensation
is determined.
(b) Base Salary Deferrals. A participant's decision to defer
payment of base salary under the Plan must be made prior to the calendar year
during which the base salary will be earned; provided, however, that such
decision may be made with respect to base salary earned during the first
calendar year that base salary deferrals are permitted under the Plan within
thirty days of implementation of the base salary component of the Plan but
prior to earning any such salary.
(c) Incentive Compensation Deferrals. Subject to the limitations
set forth in Section 4 hereof, the Compensation and Option Committee shall
determine the required timing for participants to make elections to defer
payment of awards payable only in cash under the 1990 Plan or other incentive
compensation plan.
(d) Mandatory Deferrals. The Compensation and Option Committee may
mandatorily defer payment under the Plan of a portion of certain supplemental
compensation awards pursuant to Rule 13 under the SC Plan. The Compensation
and Option Committee may determine the extent to which it may mandatorily defer
payment under the Plan of compensation payable only in cash under the 1990 Plan
or other incentive compensation plan.
(e) Deferred Compensation Accounts. Amounts deferred pursuant to
paragraphs (a), (b), (c) or (d) of Section 5 will be credited by book entry to
the participant's Deferred Compensation Account. All such amounts shall be
held in the general funds of the Company. Each participant shall have the
status of an unsecured general creditor of the Company with respect to his or
her Deferred Compensation Account. The participant shall designate the
percentage of the amount elected for deferral to be allocated to each
investment option available under the Plan for purposes of accounting only and
not for actual investment. In addition, with respect to any particular
deferral under the Plan, the participant shall elect (i) the year in which
distribution shall be made or distribution upon retirement and (ii) the method
of distribution desired with respect to any such deferral election if the
participant elected distribution upon retirement, i.e., in a lump sum payment
or in ten annual installments. Notwithstanding the foregoing, any Section 16
Person who elects to defer any or part of his or her compensation under the
Plan based on Ford Stock Units may elect distribution of all Deferred
Compensation applicable to the deferral, notwithstanding any other investment
options selected, only upon retirement. Any distribution schedule of a
participant who becomes a Section 16 Person subsequent to having elected to
defer any compensation under the Plan based on Ford Stock Units shall
automatically be amended, as of the effective date of becoming a Section 16
Person, to provide for distribution upon retirement of all Deferred
Compensation applicable to the particular deferral, notwithstanding any other
investment options selected for the deferral.
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Exhibit 10.2
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6. Investment Options; Methodology; No Ownership Rights.
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(a) General. Unless otherwise delegated to the Deferred
Compensation Committee, the Compensation and Option Committee has the sole
discretion to determine the investment options available as the measurement
mechanism for deferrals and redesignations under the Plan, the manner and
extent to which elections may be made, the method of valuing the various
investment options and the Deferred Compensation Accounts and the method of
crediting the Deferred Compensation Accounts with, or making other adjustments
as a result of, dividend equivalents, interest equivalents or other earnings or
return on such Accounts.
(b) Investment Options. Unless otherwise determined by the
Compensation and Option Committee, the investment options available as the
measurement mechanism for deferrals and redesignations under the Plan shall be
some or all of those provided in the Company's SSIP.
(c) Methodology. Unless otherwise determined by the Compensation
and Option Committee, the methodology for valuing the various investment
options and the Deferred Compensation Accounts and for calculating amounts to
be credited or debited or other adjustments to any Deferred Compensation
Account with respect to any investment options shall be the same as that used
under the SSIP.
(d) No Ownership Rights. Investment options available under the Plan
shall be used solely for measuring the value of Deferred Compensation Accounts
and accounting, on a book entry basis, as if the deferred amounts had been
invested in actual investments, but no such investments shall be made on behalf
of participants. Participants shall not have any voting rights or any other
ownership rights with respect to the investment options selected as the
measuring mechanism for their Deferred Compensation Accounts.
7. Redesignation Within a Deferred Compensation Account.
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(a) General. Except as otherwise provided in paragraph (f) of this
Section 7, a participant or the beneficiary or legal representative of a
deceased participant, may redesignate amounts credited to a Deferred
Compensation Account among the investments available under the Plan. No
redesignations relating to a particular deferral may occur on or after the
scheduled distribution date for the deferral under the Plan.
(b) Eligible Participants. Except as otherwise provided in
paragraph (f) of this Section 7, active employees and retired participants are
eligible to redesignate.
(c) Permitted Frequency. Redesignations may be made at the same
frequency as transfers may be made under the SSIP.
(d) Amount of Redesignation. Any redesignation relating to a
particular deferral shall be in a specified percentage or dollar amount of the
investment option from which the redesignation is being made.
(e) Timing. Redesignation shall occur on the day the participant's
written redesignation election form or telephonic election is received by the
Company or its agent designated for this purpose; provided, however, that if
such redesignation request is received after 4 p.m. Eastern Time, or on a day
that is not a business day (i.e., a day that either the Company's World
Headquarters offices in Dearborn, Michigan or the principal offices of its
designated agent are not open to the public for business), then such
redesignation shall be effective on the next business day.
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Exhibit 10.2
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(f) Limitations on Redesignations Involving Ford Stock Units.
(i) Material, Nonpublic Information. The Committee in its sole
discretion at any time may rescind a redesignation in or out of Ford Stock
Units if such redesignation was made by a participant who (i) at the time of
the redesignation the Committee believes was in the possession of material,
nonpublic information with respect to the Company and (ii) in the Committee's
estimation benefited from such information by the timing of his or her
redesignation. In the event of a rescission, the participant's Deferred
Compensation Account shall be restored to a status as though such redesignation
had not occurred.
(ii) Section 16 Persons. Section 16 Persons may not redesignate
into or out of Ford Stock Units.
8. Adjustments. In the event of a reorganization, recapitalization,
stock split, stock dividend, combination of shares, merger, consolidation,
rights offering or any other change in the corporate structure of the Company
or shares of Ford Stock or units of any other investment option provided under
the Plan, the Compensation and Option Committee shall make such adjustments, if
any, as it may deem appropriate in the number of Ford Stock Units, shares of
Ford Stock represented by Ford Stock Units or shares or units of other
investment options credited to participants' Deferred Compensation Accounts.
9. Reserve. No debit to the Reserve under the SC Plan shall be made as a
result of credits to a Deferred Compensation Account or distribution of all or
part of such Account under the Plan; provided, however, that all awards of
supplemental compensation made under the SC Plan shall be debited to such
Reserve, notwithstanding any deferrals made under the Plan with respect to any
such awards.
10. Distribution of Deferred Compensation; Financial Hardship.
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(a) General. Except as otherwise provided in paragraph (b) of this
Section 10 or in Section 12, or as otherwise determined by the Committee,
distribution of all or any part of a participant's Deferred Compensation
Account shall be made on, or as soon thereafter as practicable, (i) March 15 of
the year selected by the participant for distribution with respect to the
particular deferral if the participant is an active employee of the Company on
the distribution date, (ii) March 15 of the year following death or termination
for reasons other than retirement, notwithstanding any prior selection by the
participant of a subsequent year for distribution with respect to the
particular deferral, (iii) March 15 of the year following retirement if the
participant selected distribution upon retirement with respect to the
particular deferral and a lump sum distribution was selected, or if the
participant selected a particular year for distribution with respect to the
particular deferral but retired prior to the year selected, or (iv) March 15 of
the year following retirement with respect to the first annual instalment and
continuing on the applicable number of consecutive anniversaries of such date
if ten annual installments were selected by the participant with respect to the
particular deferral. Unless otherwise determined by the Committee, a Deferred
Compensation Account or part thereof relating to a particular distribution
shall be valued, for purposes of the distribution, as of March 15 of the year
of distribution or as of the next preceding day for which valuation information
is available.
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Exhibit 10.2
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(b) Financial Hardship. At the written request of a participant,
the Committee, in its sole discretion, may authorize the cessation of deferrals
under the Plan by such participant and distribution of all or any part of the
participant's Deferred Compensation Account prior to his or her scheduled
distribution date or dates, or accelerate payment of any installment payable
with respect to Deferred Compensation, upon a showing of unforeseeable
emergency by the participant. For purposes of this paragraph, "unforeseeable
emergency" shall mean severe financial hardship resulting from extraordinary
and unforeseeable circumstances arising as a result of one or more recent
events beyond the control of the participant. In any event, payment shall not
be made to the extent such emergency is or may be relieved (i) through
reimbursement or compensation by insurance or otherwise, (ii) by liquidation of
the participant's assets, to the extent the liquidation of such assets would
not itself cause severe financial hardship and (iii) by cessation of deferrals
under the Plan. Withdrawals of amounts because of unforeseeable emergency
shall only be permitted to the extent reasonably necessary to satisfy the
emergency. Examples of what are not considered to be unforeseeable emergencies
include the need to send a participant's child to college or the desire to
purchase a home. The Committee shall determine the applicable distribution
date and the date as of which the amount to be distributed shall be valued with
respect to any financial hardship withdrawal or distribution made pursuant to
this paragraph (b) of this Section 10. Any participant whose deferrals have
ceased under the Plan pursuant to this paragraph may not elect to recommence
deferrals until the next applicable deferral period. Notwithstanding anything
contained herein to the contrary, financial hardship withdrawals or cessation
of deferrals under the Plan pursuant to this paragraph shall not be available
with respect to amounts deferred in Ford Stock Units by Section 16 Persons.
11. Designation of Beneficiaries and Effect of Death.
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(a) Designation of Beneficiaries. A participant may file with the
Company a written designation of a beneficiary or beneficiaries (subject to
such limitations as to the classes and number of beneficiaries and contingent
beneficiaries and such other limitations as the Compensation and Option
Committee from time to time may prescribe) to receive, in the event of the
death of the participant, undistributed amounts of Deferred Compensation that
would have been payable to such participant had he or she been living. A
participant shall be deemed to have designated as beneficiary or beneficiaries
under the Plan the person or persons who receive such participant's life
insurance proceeds under the Company-paid basic Life Insurance Plan unless such
participant shall have assigned such life insurance or shall have filed with
the Company a written designation of a different beneficiary or beneficiaries
under the Plan. A participant may from time to time revoke or change any such
designation of beneficiary and any designation of beneficiary under the Plan
shall be controlling over any testamentary or other disposition; provided,
however, that if the Committee shall be in doubt as to the right of any such
beneficiary to receive any such payment, the same may be paid to the legal
representatives of the participant, in which case the Company, the Committee
and the members thereof shall not be under any further liability to anyone.
(b) Distribution Upon Death. Subject to the provisions of Section
10 hereof, in the event of the death of any participant prior to distribution
of all or part of such participant's Deferred Compensation Account, the total
value of such participant's entire Deferred Compensation Account shall be
distributed in cash in one lump sum in accordance with paragraph (a) of Section
10 to any beneficiary or beneficiaries designated or deemed designated by the
participant pursuant to paragraph (a) of this Section 11 who shall survive such
participant (to the extent such designation is effective and enforceable at the
time of such participant's death) or, in the absence of such designation or
such surviving beneficiary, to the legal representative of such person, at such
time (or as soon thereafter as practicable) and otherwise as if such person
were living and had fulfilled all applicable conditions as to earning out set
forth in, or established pursuant to the Plan, provided such conditions shall
have been fulfilled by such person until the time of his or her death.
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Exhibit 10.2
Page 7 of 8
12. Effect of Inimical Conduct. Anything contained in the Plan
notwithstanding, all rights of a participant under the Plan to receive
distribution of all or any part of his or her Deferred Compensation Account
shall cease on and as of the date on which it has been determined by the
Committee that such participant at any time (whether before or subsequent to
termination of such participant's employment) acted in a manner inimical to the
best interests of the Company.
13. Limitations. A participant shall not have any interest in any
Deferred Compensation credited to his or her Deferred Compensation Account
until it is distributed in accordance with the Plan. All amounts deferred
under the Plan shall remain the sole property of the Company, subject to the
claims of its general creditors and available for use for whatever purposes are
desired. With respect to Deferred Compensation, a participant shall be merely
a general creditor of the Company and the obligation of the Company hereunder
shall be purely contractual and shall not be funded or secured in any way. The
Plan shall not constitute part of any participant's or employee's employment
contract with the Company or any participating subsidiary. Participation in
the Plan shall not create or imply a right to continued employment.
14. Annual Statements of Account. Account statements shall be sent to
participants as soon as practicable following the end of each year as to the
balances of their respective Deferred Compensation Accounts as of the end of
the previous calendar year.
15. Withholding of Taxes. The Company shall have the right to withhold
an amount sufficient to satisfy any federal, state or local income taxes or
FICA or medicare taxes that the Company may be required by law to pay with
respect to any Deferred Compensation Account, including withholding payment
from a participant's current compensation.
16. No Assignment of Benefits. No rights or benefits under the Plan
shall, except as otherwise specifically provided by law, be subject to
assignment (except for the designation of beneficiaries pursuant to paragraph
(a) of Section 11), nor shall such rights or benefits be subject to attachment
or legal process for or against a participant or his or her beneficiary or
beneficiaries, as the case may be.
17. Administration Expense. The entire expense of offering and
administering the Plan shall be borne by the Company and its participating
subsidiaries and shall not be charged against the Reserve under the SC Plan.
18. Amendment, Modification, Suspension and Termination of the Plan;
Rescissions and Corrections. The Compensation and Option Committee, at any
time may terminate, and at any time and from time to time, and in any respect,
may amend or modify the Plan or suspend any of its provisions; provided,
however, that no such amendment, modification, suspension or termination shall,
without the consent of a participant, adversely affect such participant's
rights with respect to amounts credited to or accrued in his or her Deferred
Compensation Account. The Committee at any time may rescind or correct any
deferrals or credits to any Deferred Compensation Account made in error or that
jeopardize the intended tax status or legal compliance of the Plan.
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Exhibit 10.2
Page 8 of 8
19. Indemnification and Exculpation.
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(a) Indemnification. Each person who is or shall have been a member
of the Compensation and Option Committee or a member of the Deferred
Compensation Committee shall be indemnified and held harmless by the Company
against and from any and all loss, cost, liability or expense that may be
imposed upon or reasonably incurred by such person in connection with or
resulting from any claim, action, suit or proceeding to which such person may
be or become a party or in which such person may be or become involved by
reason of any action taken or failure to act under the Plan and against and
from any and all amounts paid by such person in settlement thereof (with the
Company's written approval) or paid by such person in satisfaction of a
judgment in any such action, suit or proceeding, except a judgment in favor of
the Company based upon a finding of such person's lack of good faith; subject,
however, to the condition that upon the institution of any claim, action, suit
or proceeding against such person, such person shall in writing give the
Company an opportunity, at its own expense, to handle and defend the same
before such person undertakes to handle and defend it on such person's behalf.
The foregoing right of indemnification shall not be exclusive of any other
right to which such person may be entitled as a matter of law or otherwise, or
any power that the Company may have to indemnify or hold such person harmless.
(b) Exculpation. Each member of the Compensation and Option
Committee and each member of the Deferred Compensation Committee shall be fully
justified in relying or acting in good faith upon any information furnished in
connection with the administration of the Plan or any appropriate person or
persons other than such person. In no event shall any person who is or shall
have been a member of the Compensation and Option Committee or a member of the
Deferred Compensation Committee be held liable for any determination made or
other action taken or any omission to act in reliance upon any such
information, or for any action (including the furnishing of information) taken
or any failure to act, if in good faith.
20. Finality of Determinations. Each determination, interpretation or
other action made or taken pursuant to the provisions of the Plan by the
Compensation and Option Committee or the Deferred Compensation Committee shall
be final and shall be binding and conclusive for all purposes and upon all
persons, including, but without limitation thereto, the Company, its
stockholders, the Compensation and Option Committee and each of the members
thereof, the Deferred Compensation Committee and each of the members thereof,
and the directors, officers, and employees of the Company, the Plan
participants, and their respective successors in interest.
21. Governing Law. The Plan shall be governed by and construed in
accordance with the laws of the State of Michigan.
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