Executive Separation Allowance Plan - Ford Motor Co.
FORD MOTOR COMPANY
EXECUTIVE SEPARATION ALLOWANCE PLAN
(As amended through December 9, 1993
for Separations on or after January 1, 1981)
Section 1. INTRODUCTORY. This Plan has been established for the
purpose of providing Executive Roll Employees with an Executive Separation
Allowance in the event of their separation from employment with the Company
under certain circumstances. The Plan is an expression of the Company's
present policy with respect to separation allowances for Executive Roll
Employees who meet the eligibility requirements set forth below; it is not a
part of any contract of employment and no employee or other person shall have
any legal or other right to any Executive Separation Allowance. The Company
reserves the right to terminate, amend or modify the Plan, in whole or in part,
at any time without notice.
Section 2. ELIGIBILITY. Each Executive Roll Employee who is being
separated from employment with the approval of the Company and who
(1) has at least five years' service on the Executive Roll;
(2) has at least ten years of contributory membership under the
General Retirement Plan;
(3) is at least 55 years of age; and
(4) has applied for early retirement at the employee's option
shall be eligible to receive an Executive Separation Allowance as provided
herein. The Eligible Surviving Spouse of an Executive Roll Employee who (i)
has not separated from employment with the Company, (ii) meets the eligibility
conditions set forth in subsections (1) through (3) of this Section 2, and
(iii) dies on or after January 1, 1981 shall be eligible to receive the
Executive Separation Allowance that the Eligible Surviving Spouse of a deceased
employee would have been eligible to receive if such employee had separated
from employment with the approval of the Company and retired on the date of the
employee's death.
The eligibility conditions set forth in subsections (1) and (2) of
Section 2 may be waived by the Chairman of the Board or the President except in
the case of an Executive Roll Employee who has not separated from employment
with the Company.
Section 3.
CALCULATION OF AMOUNT.
A. BASE MONTHLY SALARY. For purposes of the Plan, the "Base Monthly
Salary" of an Executive Roll Employee shall be the highest monthly base salary
rate of such employee during the employee's 12 months of service immediately
preceding separation from employment with the Company. It shall not include
supplemental compensation or any other kind of extra or additional
compensation.
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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 Executive Roll Employee under
Section 2 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 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 Executive Roll Employee, the
employee's surviving spouse, contingent annuitant, or other beneficiary under
the General Retirement Plan or any other private retirement plan, other than
the Supplemental Executive Retirement Plan, to which the Company or its
subsidiaries shall have contributed.
Section 4. PAYMENTS. Executive Separation Allowance payments, in the
net amount determined in accordance with Section 3B above, shall be made
monthly. Payments to an Eligible Executive Roll 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 Executive Roll Employee
prior to such employee attaining age 65, or in the event of death on or after
January 1, 1981 of an Executive Roll Employee whose Eligible Surviving Spouse
meets the eligibility conditions set forth in Section 2 for payments hereunder,
payments shall be made to such employee's Eligible Surviving Spouse, if any,
until the death of such spouse or, if earlier, until the end of the month in
which the Executive Roll Employee would have attained age 65.
Anything herein contained to the contrary notwithstanding, the right
of any Eligible Executive Roll Employee to receive an installment of Executive
Separation Allowance hereunder for any month shall accrue only if, during the
entire period from the date of such employee's separation 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.
In the event of an Eligible Executive Roll 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 and Option 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
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(2) with respect to any other such employee, such waiver may be
granted by the Supplemental Compensation Award Committee (or any committee
appointed by it 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 and Option Committee with respect to any
Executive Roll 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 Supplemental
Compensation Award Committee with respect to any other Executive Roll 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 4 and shall not be
subject to any determination under this paragraph.
Any Executive Separation Allowance payments resumed after reemployment
with the Company under Section 6A or employment with a Subsidiary of the
Company under Section 6B shall be paid on the basis of the percentage of Base
Monthly Salary applicable at the time of the initial determination under
Section 3B.
Section 5. DEDUCTIONS. The Company may deduct from any payment of
Executive Separation Allowance to an Eligible Executive Roll Employee or such
employee's Eligible Surviving Spouse all amounts owing to it by such employee
for any reason, and all taxes required by law or government regulation to be
deducted or withheld.
Section 6A. PERSON REEMPLOYED BY THE COMPANY. In the event an
employee who shall have been separated from employment with the Company under
circumstances that would make the employee eligible to receive an Executive
Separation Allowance shall be reemployed by the Company before the employee
shall have received payment of the full amount of the employee's Executive
Separation Allowance, no further allowance shall be paid during such period of
reemployment.
Section 6B. PERSON EMPLOYED BY A SUBSIDIARY. In the event an
employee who shall have been separated from employment with the Company under
circumstances that would make the employee eligible to receive an Executive
Separation Allowance shall be employed by a Subsidiary of the Company before
the employee shall have received payment of the full amount of the employee's
Executive Separation Allowance, no further allowance shall be paid during such
period of employment.
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Section 7. 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.
"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.
"ELIGIBLE EXECUTIVE ROLL EMPLOYEE" shall mean an Executive Roll
Employee who meets the eligibility criteria set forth in Section 2.
"ELIGIBLE SURVIVING SPOUSE" shall mean a spouse to whom an Executive
Roll Employee has been married at least one year at the date of the
employee's death.
"EXECUTIVE ROLL EMPLOYEE" shall mean an employee of the Company
(excluding a Company employee who is an employee of Jaguar Cars, a
division of the Company) who is assigned to the Executive Roll, as
such term is defined in the Employee Relations Administration Manual
as from time to time constituted.
"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.
"SUBSIDIARY" shall mean, as applied with respect to any person or
legal entity specified, 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.
Section 8. ADMINISTRATION AND INTERPRETATION. Except as the
committees specified in Section 4 and the Chairman of the Board and the
President are authorized to administer the Plan in certain respects, the
Vice-President - Employee Relations shall have full power and authority on
behalf of the Company 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.