Benefit Equalization Plan - Ford Motor Co.
FORD MOTOR COMPANY
BENEFIT EQUALIZATION PLAN
(as amended as of December 18, 2000)
Section 1. Purpose.
The purpose of this Plan is to preserve certain benefits of employees under the
Company's tax qualified General Retirement Plan and Savings and Stock Investment
Plan for Salaried Employees by providing appropriate Equalization Benefits under
this Plan in place of benefits which cannot be provided under such tax qualified
plans because of limitations imposed by Section 415 and Section 401(a)(17) of
the Internal Revenue Code.
Section 2. Definitions.
As used in this Plan, the following terms shall have the following meanings,
respectively:
2.01 "BEP Salary Reductions" shall mean that portion of salary at the basic
salary rate which would have been credited to an employee's account before
January 1, 1985 pursuant to a salary reduction agreement under paragraph V-2 of
the SSIP but which by reason of Section 4l5 of the Code, exceeds salary
reduction contributions that can be made by the Company on an employee's behalf
under the Tax-Efficient Savings Program of the SSIP.
2.02 "Company" shall mean Ford Motor Company.
2.03 "Committee" shall mean the committee authorized to administer and
interpret the Plan as provided in Section 6.
2.04 The term "Contributory Service" shall have the meaning given that term
in the GRP. "Distribution", "account" and "current market value" as used in
Section 3.02 of this Plan shall have the meanings given those terms as used in
the SSIP.
2.05 "ERISA " shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time.
2.06 "General Retirement Plan" or "GRP" shall mean the Ford Motor Company
General Retirement Plan for Salaried and Certain Other Employees, as amended
from time to time.
2.07 "Internal Revenue Code" or "Code" shall mean the Internal Revenue Code
of 1986, as amended from time to time.
2.08 "Limitations" shall mean the limitations on benefits and/or
contributions imposed on qualified plans by Section 415 and Section 401(a)(17)
of the Code.
2.09 "PBGC" shall mean the Pension Benefit Guaranty Corporation.
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2.10 "Savings and Stock Investment Plan" or "SSIP" shall mean the Ford
Motor Company Savings and Stock Investment Plan for Salaried Employees, as
amended from time to time.
Section 3. Equalization of Benefits.
3.01 GRP Equalization Benefits.
(a) A Periodic GRP Equalization Benefit shall be provided for and
associated with each payment of a GRP benefit that is subject to the
Limitations.
(b) The Periodic GRP Equalization Benefit shall be equal in amount to the
difference between the GRP benefit and the corresponding benefit that
would be payable under the GRP without regard to the Limitations. In
determining the amount of the Periodic GRP Equalization Benefit, the
member's salary shall be the member's salary (as that term is defined
in the GRP) plus BEP Salary Reductions for periods before January 1,
1985 which are credited under this Plan pursuant to Section
3.02(a)(ii)(C) below, but the member shall not make contributions
hereunder based on such BEP Salary Reductions.
The Periodic GRP Equalization Benefit shall be paid by the Company to
the person receiving payment of the corresponding GRP benefit and, as
nearly as practicable, at the same time.
(c) As an alternative to the GRP Periodic Equalization Benefit, the
Company and an employee eligible for the Periodic GRP Equalization
Benefit under this Section 3.0l may agree on payment of the actuarial
equivalent in a lump sum of such Periodic GRP Equalization Benefit,
subject to the following conditions and such other conditions as may
be determined by the Group Vice President and Chief Financial Officer,
the Vice President-General Counsel and the Vice President-Human
Resources:
(i) The actuarial equivalent shall be determined on the basis of the
interest rates and mortality tables, which would be used by the
PBGC for determining the present value of liability for
pensioners' benefits in the case of a terminated retirement plan
under Title IV of ERISA and which are in effect in the month
prior to the month when the employee's GRP benefit begins.
(ii) The agreement must be entered into (A) prior to the year in which
the employee's retirement occurs and (B) not later than six
months before the actual retirement date; provided, however, that
the requirement contained in Subsection (B) immediately above
shall not apply to such an agreement entered into in l984 by the
Company and an eligible employee who retires before July l, l985.
(iii) The agreement once entered is irrevocable.
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(iv) Evidence of good health at the time of the agreement will be
required.
Payment under such lump sum agreement shall be made by the Company as
soon as practicable after payment of the GRP benefit begins.
3.02 Savings and Stock Investment Plan Equalization Benefits.
(a) Pre-1985 Subaccount.
The provisions of this Subsection 3.02(a) shall apply in determining
that part of an eligible employee's SSIP Equalization Benefit
subaccount based on periods of service until December 31, 1984.
(i) For an employee who made the election regarding payroll
deductions provided in this Subsection, or who elected to have
credited under this Plan BEP Salary Reductions, a SSIP
Equalization Benefit shall be provided with respect to any class
or classes of the SSIP before January 1, 1985 with respect to
which Company or employee contributions were subject to the
Limitations. (ii) If at any time during a plan year ending before
January 1, 1985 it appeared that contributions by or on behalf of
an employee (including any related Company matching
contributions) to the SSIP would be subject to the Limitations,
such an employee may have elected to have the Company retain in
its general funds and have credited for purposes of computing a
member's subaccount of the SSIP Equalization Benefit under this
Section 3.02(a):
(A) by payroll deduction authorization under this Plan that
portion of the amount the employee had elected to contribute
as employee regular savings contributions to the SSIP for
such pay period (by a payroll deduction authorization in
effect for such pay period under paragraph IV of the SSIP)
which, when added to all other actual and projected Annual
Additions as defined under paragraph XXXI of the SSIP during
such plan year, exceeded the Limitations.
(B) that portion of regular savings and related earnings which
have been returned to the employee pursuant to the
provisions of paragraph XXXI of the SSIP, and
(C) the employee's BEP Salary Reductions.
(iii)There has been established for each eligible employee a
subaccount for periods of participation under this Section
3.02(a) under the SSIP Equalization Benefit Account. This
subaccount shall be equal to the amounts retained by the Company
pursuant to Section 3.02(a)(ii) of this Plan adjusted on the
basis of investment performance and the member's election as to
investment of funds under paragraph VIII and
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transfer of the value of employee and Company contributions under
paragraph IX of the SSIP as though contributions and credits to
the member's account hereunder had been so invested less any
withdrawals pursuant to Section 3.02(a)(iv) of this Plan;
provided, however, that an election by a Company officer of
investment in Company common stock shall not apply under this
Plan with respect to contributions pursuant to Section
3.02(a)(ii) of this Plan (other than related Company matching
contributions) which were made or credited hereunder by or on
behalf of such Company officer; and the officer will be required
to make any other investment election permitted under paragraph
VIII of the SSIP with respect to such amounts.
(iv) An employee may not withdraw any amounts in excess of the
member's regular savings contributions under this Plan and may
not borrow against the subaccount of the member's SSIP
Equalization Benefit.
(v) The SSIP Equalization Benefit under this Section 3.02(a) shall be
equal to the amount at the time of distribution credited to the
employee's subaccount of the SSIP Benefit Equalization Account as
determined under Section 3.02(a)(iii) above.
(b) Post-1984 Subaccount.
The provisions of this Subsection 3.02(b) shall apply in determining
an eligible employee's SSIP Equalization Benefit subaccount based on
periods of service beginning January l, l985.
(i) If at any time during a plan year beginning on or after January
1, 1985 contributions by or on behalf of an employee and related
Company matching contributions to the SSIP are subject to the
Limitations there shall be credited for purposes of computing the
eligible employee's SSIP Equalization Benefit under this Section
3.02(b) an amount equal to the Company matching contributions
which would have been made under the SSIP based upon the
employee's SSIP elections except that such Company matching
contributions cannot be made because of the Limitations. For
periods on or after October 1, 1995, the Company Matching
Contributions shall be made in the form of units in the Ford
Stock Fund rather than shares of Ford common stock.
(ii) There shall be established for each eligible employee a
subaccount for periods of participation under this Section
3.02(b) under the SSIP Equalization Benefit Account. For periods
prior to May 1, 1996, this subaccount shall be equal to the
amounts credited by the Company pursuant to Section 3.02(b)(i) of
this Plan adjusted on the basis of investment performance and any
election by the member to transfer the value of matured Company
matching contributions under paragraph 4.2 of the SSIP, as though
credits to the member's account hereunder had been so invested.
For periods May 1, 1996 and after, this subaccount shall be equal
to the amounts credited by the Company
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pursuant to Section 3.02(b)(i) of this Plan and adjusted on the
basis of investment performance attributable to any separate
investment election made by an eligible employee (other than a
Company officer) on or after May 1, 1996. The investment options
for managing the subaccount shall be identical to the investment
options specified in Article VIII of the SSIP, although they will
have separate fund codes. Any BEP credits earned prior to May 1,
1996 will continue to be based on the same SSIP investment
elections used prior to May 1, 1996 unless the eligible employee
elects to reallocate or transfer all or part of the subaccount
balance among other investment options available under Article
XIII of the SSIP on or after May 1, 1996. Fidelity Institutional
Retirement Services Company will maintain the accounts and
process the elections and otherwise be the recordkeeper with
respect to this subaccount. Company officers with this subaccount
are not eligible to reallocate or transfer credits under the
subaccount from the Ford Stock Fund to other investment options,
or from other investment options to the Ford Stock Fund.
(iii)An employee may not withdraw any amounts credited under this
Section 3.02(b) and may not borrow against this subaccount of the
member's SSIP Equalization Benefit. This subaccount will not
accept rollovers from other plans.
(iv) The SSIP Equalization Benefit under this Section 3.02(b) shall be
equal to the amount at the time of distribution credited to the
employee's subaccount of the SSIP Benefit Equalization Account as
determined under Section 3.02(b)(ii) above.
(v) In the event of death of an eligible employee with an SSIP
Benefit Equalization subaccount, the balance of the subaccount
shall be payable to the same beneficiary as the eligible employee
has designated under Article XIV of the SSIP unless the eligible
employee makes a separate designation under this Plan pursuant to
the rules established by the Compensation and Option Committee.
(c) Payment of SSIP Equalization Benefit.
The SSIP Equalization Benefit shall be paid in cash by the Company to
the employee, or if the employee is deceased, to the employee's
beneficiary under the SSIP, and shall be made as soon as practicable
after death, retirement or other termination of employment.
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Section 4. Equalization Benefits Not Funded.
The Company's obligations under this Plan shall not be funded and Equalization
Benefits under this Plan shall be payable only out of the general funds of the
Company.
Section 5. Amendment, Termination, Etc.
The Board of Directors of the Company shall have the right at any time to amend,
modify, discontinue or terminate this Plan in whole or in part; provided,
however, that no such action shall deprive any person of an Equalization Benefit
under this Plan in respect of any GRP benefit or any SSIP benefit to which the
member's rights shall have become vested (under the vesting provisions of the
applicable Plans, without regard to any provisions limiting benefits or
contributions) prior to the date of such action by the Board of Directors.
Section 6. Administration and Interpretation of the Plan.
Full authority to administer and interpret this Plan shall be vested in the
Compensation and Option Committee of the Board of Directors of the Company. The
Committee is authorized from time to time to establish such rules and
regulations as it may deem appropriate for the proper administration of the
Plan, and to make such determinations under, and such interpretations of, and to
take such steps in connection with, the Plan as it may deem necessary or
advisable. Each determination, interpretation, or other action by the Committee
shall be in its sole discretion and shall be final, binding and conclusive for
all purposes and upon all persons.
References to Articles, Sections or paragraphs of the Code or of the GRP or of
the SSIP shall be applicable to any corresponding provision of the Code or of
the applicable plans containing essentially the same Limitations, in the event
that the applicable Code or plan provisions shall be renumbered.
Section 7. 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,
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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 a GRP Equalization Benefit
and/or a SSIP Equalization Benefit and shall receive such
benefits as are applicable under the terms of the Plan in effect
on the retirement date, based on meeting eligibility criteria as
of July 1, 2000 with respect to GRP or SSIP participation prior
to July 1, 2000.
(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 Employees. The Plan
shall have no liability for a GRP Equalization Benefit and/or a
SSIP Equalization Benefit payable to Group III Employees who were
otherwise eligible hereunder with respect to GRP or SSIP
participation prior to July 1, 2000 on or after July 1, 2000.