Executive Separation Allowance Plan - Ford Motor Co.
FORD MOTOR COMPANY
Executive Separation Allowance Plan
(As amended through December 18, 2000
for Separations on or after January 1, 1981)
Section 1. Introductory. 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 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 Leadership Level One or Two
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 Leadership Level One or Two Employee who is
being separated from employment with the approval of the Company and who
(1) has at least five years' service at the Leadership Level One or Two
level, or its equivalent;
(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 a Leadership Level One or Two 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 a Leadership Level One or Two Employee who has not separated from employment
with the Company.
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Section 3. 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 employment 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 Security Act of
1974, as amended, (i) to which Section 125 or Section 402(e)(3) of the Internal
Revenue Code of 1986, as amended, 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 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 Leadership Level One or Two 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 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 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 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 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
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indirectly in competition with any activity of the Company or any Subsidiary
or Affiliate thereof.
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 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
(2) with respect to any other such employee, such waiver may be granted by
the Annual Incentive Compensation 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 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 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 Leadership Level 1 or 2 Employee or such
employee's
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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.
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 Leadership Level One or Two Employee" shall mean a Leadership
Level One or Two Employee who meets the eligibility criteria set forth in
Section 2, or for periods prior to January 1, 2000, 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 a Leadership Level
One or Two Employee has been married at least one year at the date of the
employee's death.
"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.
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"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, (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 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 -
Human Resources 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.
Section 9. Visteon Corporation. The following shall be applicable to
employees of Ford who were transferred to Visteon Corporaton 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 sevice 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.
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(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.