Executive Employment Agreement - Ford Motor Co. and Carl E. Reichardt
EXECUTIVE EMPLOYMENT AGREEMENT
This Agreement, entered into as of the 1st day of November, 2001 (the "Effective
Date"), between Ford Motor Company, a Delaware corporation, (the "Company") and
Carl E. Reichardt, an individual residing at 8 West Shore Road, Belvedere,
California 94920 (the "Executive").
RECITALS
1. The Company desires to retain the Executive and the Executive desires to
accept employment with the Company under the terms and provisions set forth
below.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises and covenants contained
in this Agreement, the Company and the Executive agree as follows:
1. Term. The Term of Executive's employment shall not be for a definite term.
The Executive shall serve at the pleasure of the Board of Directors. At the
will of either the Executive or the Company, the Executive's employment may
be terminated at any time, without advance notice, with or without cause.
For purposes of this Agreement, the period during which the Company employs
Executive shall be known as the "Employment Period". Notwithstanding
anything to the contrary contained herein, the Employment Period is subject
to termination pursuant to Section 5.
2. Employment. The Company agrees to employ and engage the services of the
Executive during the Employment Period as the Vice Chairman of the Company.
The Executive agrees to serve the Company in the capacity of Vice Chairman.
3. Job Description.
3.1 Position and Duties. During the Employment Period, the Executive's
position, duties and responsibilities shall be those of Vice
Chairman of the Company provided, however, that the Company shall
have the absolute right to modify or change the position, duties,
responsibilities and title of the Executive in any respect, so
long as the Executive shall continue to be employed in a senior
executive capacity during the Employment Period. Executive shall
perform such duties and have such responsibilities that are of the
same character and nature as those typically performed by a Vice
Chairman. Executive shall report to the Chairman of the Board of
Directors and Chief Executive Officer. Nothing herein contained
shall be construed to interfere with Executive's continued service
on the Company's Board of Directors, including Board appointments
to serve on Board Committees, and Executive shall continue on the
Board solely at the discretion of the Board, subject to
shareholder approval.
3.2 Devotion of Efforts. The Executive shall devote such time as is
necessary to perform Executive's job duties, use best efforts to
promote the interests of the Company and perform faithfully and
efficiently the responsibilities assigned to
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the Executive in accordance with this Agreement. During the
Employment Period, Executive shall not engage in other employment,
except with the prior consent of the Board of Directors; provided
however, that Executive may continue to serve on those corporate
boards of which he is a member as of the Effective Date.
4. Compensation and Other Employment Terms.
4.1 Base Salary. During the Employment Period, the Company shall pay
the Executive an initial annual base salary of $900,000 ("Base
Salary"). The Base Salary shall be payable in the form of
Restricted Stock under the terms and conditions of the Company's
1998 Long-Term Incentive Plan (including Stock Option Plan).
Shares of Restricted Stock shall be issued to Executive within
thirty days after the end of any calendar quarter. The number of
Restricted Stock shares to be issued for any calendar quarter
shall be determined by dividing the quarterly dollar amount of
base salary by the Fair Market Value of Ford Common Stock on the
last trading day of the calendar quarter for which the
determination is being made. For November and December 2001, the
number of Restricted Stock shares was 9768, and for January
through March 2002, the number of Restricted Stock shares was
13707. Such shares were credited to a book entry account in
Executive's name at EquiServe Trust Company, N.A., subject to
execution of this Agreement. The Executive may not sell,
transfer, or otherwise dispose of any shares of Restricted Stock
granted under this Section 4.1 for a period of one year from the
grant date. Prior to the expiration of any restrictions, the
Executive will be notified by the Company and will be given the
option to use share withholding or to write a check to the Company
to pay income taxes on the value of the shares for which the
restriction is lapsing. During the restriction period, the
Executive shall be eligible to receive dividend payments and shall
be entitled to vote the shares. Before the anniversary date of
this Agreement, the Company shall review and evaluate the
performance of Executive. At the discretion of the Company, the
Base Salary may be increased in consideration of the Executive's
overall performance. The Company reserves the right to pay
Executive in cash for Base Salary at any time.
4.2 Incentive Compensation. As further compensation, at the discretion
of the Company, the Executive shall be eligible for annual
incentive compensation payments in an amount determined under the
Company's Annual Incentive Compensation Plan. The Company reserves
the right to make any annual incentive compensation payments in
the form of Restricted Stock, at the Company's discretion.
4.3 Long-Term Incentive Program. Executive shall be eligible to
participate in the 1998 Long-Term Incentive Plan (including
Performance Stock Rights and Stock Options) on the same basis as
other Company executives. The Company reserves the right to make
any awards thereunder in the form of Restricted Stock, at the
Company's discretion. On March 15, 2002, the Company awarded
Executive Restricted Stock under such plan in the amount of
295,770 shares for Executive's 2002 long-term incentive
compensation.
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4.4 Employee Benefits and Services. The Executive shall be eligible
during the Employment Period for the employee benefits and
services customarily provided to senior executives of the Company,
except as otherwise provided below:
(a) SSIP. Participation in the Savings and Stock Investment
Plan ("SSIP") shall be deferred until such time as
Executive receives cash salary from the Company. If the
Executive receives cash salary from the Company, Executive
shall be permitted to participate in the SSIP on the same
basis as available to other Company executives. Executive
will be vested in the SSIP after one year of Company
service.
(b) Retirement Plans and Retiree Life Insurance. Executive
became ineligible to participate in the Company's
Directors Life Insurance and Optional Retirement Plan
("Director's Plan") when he became an active employee of
the Company. Executive shall participate in the General
Retirement Plan ("GRP") only on a non-contributory basis
until such time as Executive receives cash salary from the
Company. If the Executive receives cash salary from the
Company, Executive shall be permitted to participate in
the GRP on the same basis as available to other Company
executives. Executive will be vested in the GRP after one
year of Company service. For the period in which
Executive is precluded from participating in the GRP on a
contributory basis, the Company shall provide Executive a
defined pension benefit through a combination of qualified
and non-qualified plans that will duplicate the GRP
benefit Executive would have been eligible to receive
under the GRP as if he had been a contributing member at
all times eligible, with a minimum benefit of at least
$1,250 per month. Upon retirement, Executive shall be
eligible for $100,000 of Company paid life insurance. In
the event Executive resigns as an employee but remains on
the Company's Board of Directors, Executive shall receive
the retirement arrangements described above and shall not
be eligible for the Directors Plan. The retirement
arrangements described herein are subject to the Board of
Directors approval.
(c) Health Plans. Executive will continue participation in the
Board of Directors Comprehensive Medical Plan while
Executive remains on the Company's Board of Directors.
Executive specifically disclaims any participation in the
health, dental and vision plans made available to the
employees of the Company until such time as Executive
resigns from the Company's Board of Directors but remains
a Company employee.
(d) Changes to Employee Benefit Plans. Nothing in this
Agreement shall prevent the Board of Directors of the
Company from changing, modifying, amending or terminating
the employee benefit plans of the Company so as to
eliminate, reduce or otherwise change any benefit payable
under this Agreement.
(e) Other Prerequisites. Executive shall be entitled to all
other prerequisites consistent with those received by
other executives of the Company with similar rank. In
addition, Executive shall be entitled to use the Company
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aircraft for personal use while the Company aircraft is
not being used for other business purposes. For this
purpose, personal use also shall include use by the
Executive's spouse and/or children provided the spouse
and/or children accompany Executive on the same trip. The
Company shall gross up Executive for the amount of tax
attributable to increased taxable income as a result of
the personal use of Company aircraft.
4.5 Tax Reporting. Executive agrees to submit regular reports of
personal use of the employee benefits as required under the
Internal Revenue Code of 1986 to be treated as taxable income to
Executive in order to allow the Company to determine the value of
the employee benefits that must be reported to the Internal
Revenue Service as compensation to Executive. Tax withholding on
all elements of compensation shall be in accordance with
applicable federal and state tax requirements and in accordance
with Company polices and procedures.
5. Termination.
5.1 Death. This Agreement shall terminate automatically upon the
Executive's death. All benefits and compensation then accrued
hereunder, and under any plans provided for in Section 4.4 hereof,
shall be paid to the Executive's beneficiaries, legal
representatives, or heirs, as appropriate. Any outstanding shares
of Restricted Stock shall be immediately vested as of the date of
death and the Company shall take appropriate action to release any
applicable restriction as of the date of death or as soon as
administratively practicable thereafter.
5.2 Disability. If, as a result of the Executive's incapacity due to
physical or mental illness, the Executive (i) shall have been
absent from the performance of Executive's duties with the Company
for three consecutive months, and (ii) shall not, within thirty
(30) days after written notice of termination is given to the
Executive, have returned to the full-time performance of duties,
the Company may terminate the Executive's employment for
disability. During such period of absence, the Executive shall
continue to receive the benefits provided in Section 4 hereof, and
thereafter the Executive's benefits shall be determined under the
Company's disability insurance plans and policies provided under
Section 4.4 hereof. Upon termination of employment for continued
disability, any outstanding shares of Restricted Stock shall be
immediately vested as of the date of such termination and the
Company shall take appropriate action to release any applicable
restriction as of the date of such termination or as soon as
administratively practicable thereafter.
5.3 Voluntary Termination by Executive. At any time during the
Employment Period, the Executive may voluntarily terminate
employment with the Company upon prior written notice. In the
event of such termination, all benefits and compensation then
accrued hereunder, and under any plans provided for in Section 4.4
hereof, shall be paid promptly to the Executive in accordance with
such plans.
5.4 Retirement. Executive may terminate Executive's employment
hereunder by retirement during the Employment Period, provided the
Company consents to
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such retirement action. In such event, this Agreement shall
terminate automatically. All benefits and compensation then
accrued hereunder, and under any plans provided for in Section
4.4 hereof, shall be paid promptly to the Executive in
accordance with such plans.
5.5 Termination by Company. The Company may terminate the employment
of Executive at any time, without advance notice, with or without
cause. In the event of such termination other than for cause, all
benefits and compensation then accrued hereunder, and under any
plans provided for in Section 4.4 hereof, shall be paid promptly
to the Executive in accordance with such plans.
6. Proprietary Information. Executive acknowledges that Executive's work as an
employee of the Company will likely involve access to and creation of trade
secrets and other proprietary and confidential information concerning the
Company, its customers, suppliers and other non-publicly known aspects of
the Company's business (collectively "Proprietary Information"). Executive
shall use Proprietary Information only as required by Executive's duties on
behalf of the Company. Executive acknowledges that this limitation on use
and disclosure prevents Executive from discussing Proprietary Information,
even in general terms, with persons outside the Company, except to the
extent authorized by the Chairman of the Board of Directors and Chief
Executive Officer. Executive acknowledges that Executive's obligation to
keep Proprietary Information strictly confidential shall survive the
termination of Executive's employment and/or this Agreement. For purposes
of this Agreement, Proprietary Information includes but is not limited to
the following:
(i) information, ideas, and materials of or about the Company or its
Affiliates (an "Affiliate" is any company which controls, is controlled by
or is under common control with the Company), employees, client companies,
or others with whom the Company conducts business or with whom the Company
has an obligation of confidentiality;
(ii) information, ideas or materials of a technical nature such as research
and development projects and results, software design and specifications,
source and object code, training and training materials, invention,
disclosures, patent applications, and other materials and concepts relating
to products and processes; and
(iii) information, ideas, or materials of a business nature such as
nonpublic financial information; information relating to profits, costs,
marketing, strategy, purchasing, sales, customers, suppliers, pricing,
bidding, customer information, contract terms, employees, salaries, product
development plans; business and financial plans, proposals and forecasts,
client company information, marketing and sales plans and forecasts, any
nonpublic internal functionality, algorithms, design parameters, and other
proprietary features of the Company's current and anticipated products and
research efforts.
Executive acknowledges that the Proprietary Information is vital,
sensitive, confidential and proprietary to the Company or the Company's
Affiliates and constitutes Company or Company Affiliate trade secret
matters.
7. Company-Owned Intellectual Property Rights. All right, title and interest
in and to all of the Executive's "Discoveries" and work product made during
the Employment Period
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in connection with the Executive's employment with the Company or relating
to the business, shall belong solely to the Company, whether or not they
are protected or protectable under applicable patent, trademark,
service mark, copyright or trade secret laws. For purposes of this
Section 7, "Discoveries" means all inventions, designs, discoveries,
improvements and works of authorship relating to the Company's
know-how, processes, designs, computer programs and routines, formulae,
techniques, developments or experimental work, work-in-progress, product
improvements or modifications, domain or trade names or logos, or business
plans, proposals or trade secrets that are related to the present or future
business of the Company. All works or other material containing or
reflecting any such Discoveries and work product shall be deemed work made
for hire and shall be owned by the Company without further consideration.
If it is determined that any such works are not works made for hire,
Executive hereby assigns to the Company all of the Executive's right, title
and interest, including all rights of copyright, patent, and other
intellectual property rights, to or in such Discoveries or work product.
Executive shall keep the Company informed of the development of all
Discoveries made, conceived or reduced to practice, in whole or in part,
alone or with others, which either result from any work Executive may do,
or at the request of, the Company, or are related to the Company's present
or contemplated activities, investigations, or obligations. The obligation
to inform the Company of Discoveries shall continue for one year after
termination of employment if the Discovery is based on Proprietary
Information. At the Company's request and expense, Executive shall execute
any deeds or documents necessary to transfer ownership and control of any
such Discoveries or work product to the Company and to cooperate with the
Company or its nominee in perfecting the Company's title (or the title of
the Company's nominee) in such materials. Executive grants the Company a
permanent, non-exclusive, paid-up and worldwide license under the
Executive's intellectual property rights embodied in any Discoveries or
work product that are delivered to the Company by the Executive in
connection with the performance of services for the Company to use, have
used, make, have made, sell and have sold such Discoveries and reproduce in
quantities, prepared derivative works and publicly display and distribute
such work product.
8. Return of Company Materials Upon Termination. Executive acknowledges that
all Proprietary Information prepared by Executive or coming into
Executive's possession by virtue of Executive's employment by the Company
are and shall remain the property of the Company or the Company's
affiliates, as the case may be, and that upon termination of Executive's
employment hereunder, Executive shall return immediately to the Company all
Proprietary Information in Executive's possession, together with all copies
thereof.
9. Business Reputation. Each party to this Agreement acknowledges that the
business reputation of the other is a valuable asset of such other party.
Each party agrees that it shall take no action that publicly disparages the
reputation or business of the other or, in the case of the Company, its
customers, including, but not limited to, publishing material that
disparages the other party, any of the other party's Affiliates, or, if the
Company is the other party, the management or management practices of the
Company, the Company's owners, its Affiliates or customers.
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10. Personal Assistants. In the event that Executive's two personal assistants
are terminated from their employment by Wells Fargo Bank while Executive is
employed by the Company, the Company shall employ the personal assistants
as salaried employees at least at the same base salary as paid at Wells
Fargo with eligibility for benefits available to other active salaried
employees of the Company at that time, until the death of Executive.
Company employment of the two personal assistants shall be on the same
terms and conditions as applicable to other persons hiring into the Company
at the same time. In the event the Company hires the personal assistants,
the Company may terminate the employment of the personal assistants at any
time, without advance notice, with or without cause.
11. Miscellaneous.
11.1 Entire Agreement. This Agreement (including the documents referred
to herein) constitutes the entire agreement between the parties
and supersedes any prior understandings or agreements between the
parties, written or oral, to the extent they related in any way to
the subject matter hereof.
11.2 No Assignment; Assumption. This Agreement is personal to Executive
and shall not be assigned by Executive, other than by last will
and testament or by the laws of descent and distribution with
respect to any amounts due hereunder. This Agreement shall inure
to the benefit of and be binding upon any successor to the
business or assets of the company which assumes this Agreement,
whether expressly or by operation of law.
11.3 Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.
11.4 Arbitration. Any controversy, claim or dispute of whatever nature
between Executive and the Company arising out of or relating to
this Agreement, or arising out of Executive's employment with the
Company, shall be resolved by mediation in accordance with the
Model Procedure for Mediation of Business Disputes of the CPR
Institute for Dispute Resolution ("CPR"). If the mediation is not
successful in resolving the dispute in thirty (30) days, the
parties shall submit the dispute to binding arbitration in
accordance with the CPR Rules for Non-Administered Arbitration of
Business Disputes, by a sole arbitrator. The mediation/arbitration
shall take place in Dearborn, Michigan. Each party shall bear its
own costs, expenses and fees, including without limitation
attorneys' fees and experts' fees with respect to any such
mediation or arbitration. Judgment upon any resulting arbitration
award may be entered in any court of competent jurisdiction.
11.5 Notices. All notices, requests, demands, claims, and other
communications hereunder shall be in writing. Any notice, request,
demand, claim, or other communication hereunder shall be deemed
duly given if (and then two business days after) it is sent by
registered or certified mail, return receipt requested, postage
prepaid, and addressed to the intended recipient as set forth
below:
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If to the Company:
Ford Motor Company
One American Road
Dearborn, Michigan 48126-2798
Attention: Secretary
If to the Executive:
Carl E. Reichardt
8 West Shore Road
Belvedere, CA 94920
Either party may send any notice, request, demand, claim or the
other communication hereunder to the intended recipient at the
address set forth above using any other means (including personal
delivery, expedited courier, messenger service, telecopy, telex,
ordinary mail, or electronic mail), but no such notice, request,
demand, claim, or other communication shall be deemed to have been
duly given unless and until it actually is received by the
intended recipient. Either party may change the address to which
notices, requests, demands, claims, and other communications
hereunder are to be delivered by giving the other party notice in
the manner herein set forth.
11.6 Governing Law. This Agreement shall be governed by and construed
in accordance with the domestic laws of the State of Michigan
without giving effect to any choice or conflict of law provision
or rule (whether the State of Michigan or any other jurisdiction)
that would cause the application of the law of any jurisdiction
other than the State of Michigan.
11.7 Amendments. No amendment of any provision of this Agreement shall
be valid unless the same shall be in writing and signed by both
the Company and the Executive.
11.8 Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction
shall not affect the validity or enforceability of the remaining
terms and provisions hereof or the validity or enforceability of
the offending term or provision in any other situation or in any
other jurisdiction.
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11.9 Compensation Committee. The terms of this Agreement are subject
to approval by the Ford Motor Company Board of Directors
Compensation Committee and shall not be binding or enforceable
until such approval is obtained.
*****
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
/s/ Carl E. Reichardt
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Carl E. Reichardt
Ford Motor Company
By: /s/ J. M. Rintamaki
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Title: Secretary
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