Exhibit 10-K
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
As applicable to retirements of Eligible Executives
on or after January 1, 1992*
Section 1. Introduction. On January 1, 1985, the Company
established this Plan for the purpose of providing Eligible Executives
with a monthly Supplemental Benefit for their lifetime in the event of
their retirement from employment with the Company under certain
circumstances. The Plan also provides for the award of Conditional
Annuities to selected Eligible Executives under certain circumstances.
Section 2. Definitions. As used in the Plan, the following
terms shall have the following meanings, respectively:
2.01 "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.
2.02 "Committee" shall mean the Compensation and Option
Committee of Ford Motor Company.
2.03 "Company" shall mean Ford Motor Company, Ford Motor Credit
Company, and such of the subsidiaries of the Company as, with the
consent of the Company, shall have adopted the Plan.
2.04 "Credited Service" shall mean without duplication the years
and any fractional year of credited service at retirement, not
exceeding one year for any calendar year, of the Eligible Executive
under all the Retirement Plans.
2.05 "Designated Beneficiary" shall mean the beneficiary or
beneficiaries designated by an Eligible Executive or Eligible Retired
Executive in a writing filed with the Company (subject to such
limitations as to the classes and number of beneficiaries and
contingent beneficiaries and such other limitations as the Committee
may prescribe) to receive, in the event of the death of the Eligible
Executive or Eligible Retired Executive, the Death Benefits provided
in Section 4.04. An Eligible Executive or Eligible Retired Executive
shall be deemed to have designated as beneficiary or beneficiaries
under the Plan the person or persons who receive such Eligible
Executive's or Eligible Retired Executive's life insurance proceeds
under the Company-paid Basic Life Insurance Plan unless such Eligible
Executive or Eligible Retired Executive shall have assigned such life
insurance in which event the Death Benefits shall be paid to such
assignee; provided, however, that if the Eligible Executive or
Eligible Retired Executive shall have filed with the Company a written
designation of a different beneficiary or beneficiaries under the
Plan, such beneficiary form shall control. An Eligible Executive or
Eligible Retired Executive 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
--------------------
*See Appendix A for provisions applicable to retirements of Eligible
Executives on or after January 1, 1985 and prior to January 1, 1992
or retirements of Eligible Executives from certain former Company
Affiliates.
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doubt as to the right of any such beneficiary to receive any payment
under the Plan, the same may be paid to the legal representatives of
the Eligible Executive or Eligible Retired Executive, in which case
the Company, the Committee and the members thereof shall not be under
any further liability to anyone.
2.06 "Eligible Executive" shall mean a person who is the
Chairman of the Board, the Vice Chairman, the President, an Executive
Vice President or a Vice President of the Company (excluding any such
person who is an employee of a foreign Affiliate of the Company) or a
Company employee in Salary Grade 13 or its equivalent or above
(excluding a Company employee who is an employee of Jaguar Cars, a
division of the Company).
2.07 "Eligible Retired Executive" shall mean
(a) with respect to Supplemental Benefits, an Eligible Executive
who
(1) shall retire directly from Company employment (i) on
normal or disability retirement or (ii) with the approval of
the Company at or after age 55 on early retirement;
(2) will receive a normal, disability or early retirement
benefit under one or more Retirement Plans;
(3) has at least ten years of Credited Service without
duplication under all Retirement Plans; and
(4) has at least five continuous years of Eligibility
Service immediately preceding retirement (unless the
eligibility condition set forth in this subparagraph (4) is
waived by the Chairman of the Board or the President).
(b) with respect to Conditional Annuity awards, an Eligible
Executive (other than an Eligible Executive in Salary Grades 13
through 19 or its equivalent) who shall retire directly from
Company employment, (i) on normal or disability retirement or
(ii) with the approval of the Company at or after age 55 on early
retirement.
2.08 "Eligibility Service" shall mean Company service while an
Eligible Executive.
2.09 "FERCO" shall mean Ford Electronics and Refrigeration
Corporation.
2.10 "FERCO Retirement Plan" means the Salaried Retirement Plan
of FERCO as it may be amended.
2.11 "Final Five Year Average Base Salary" means the average of
the final five year-end Monthly Base Salaries immediately preceding
retirement of the Eligible Retired Executive.
2.12 "Final Three Year Average Base Salary" means the average of
the final three year-end Monthly Base Salaries immediately preceding
retirement or death of the Eligible Retired Executive.
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2.13 "General Retirement Plan" means the Ford Motor Company
General Retirement Plan as it may be amended.
2.14 "Monthly Base Salary" of an Eligible Executive means the
monthly base salary paid to such person while an Eligible Executive on
December 31, 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 Income Security Act of 1974, as amended, to
which Section 125 or Section 402(e)(3) of the Internal Revenue Code of
1986, as amended, applies. It does not include supplemental
compensation or any other kind of extra or additional compensation.
2.15 "Plan" means the Supplemental Executive Retirement Plan of
Ford Motor Company, as amended.
2.16 "Retirement Plans" includes the General Retirement Plan and
the FERCO Retirement Plan.
2.17 "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.
2.18 "Supplemental Compensation Plan" shall mean the
Supplemental Compensation Plan of Ford Motor Company.
Section 3. Supplemental Benefits.
3.01 Eligibility. An Eligible Retired Executive shall be
eligible to receive a Supplemental Benefit as provided herein.
3.02 Amount of Supplemental Benefit.
(a) Subject to any reductions pursuant to Subsection (b) below
and to any limitations and reductions pursuant to other provisions of
the Plan, the monthly Supplemental Benefit shall be an amount equal to
the Eligible Executive's Final Five Year Average Base Salary
multiplied by the Eligible Executive's years of Credited Service at
retirement, and further multiplied by the Applicable Percentage based
on the Eligible Executive's position or salary grade immediately
preceding retirement, as follows:
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For retirements on or after January 1, 1992 but prior to August 1,
1995
Status at Retirement Applicable Percentage
-------------------- ---------------------
Chairman, Vice Chairman, President .90%
Executive Vice President .80%
Vice President .70%
Non-Vice Presidents
- Salary Grade 21, 20, 19 .60%
- Salary Grade 18, 17, 16 .40%
- Salary Grade 15, 14, 13 .20%
For retirements on or after August 1, 1995
Status at Retirement Applicable Percentage
-------------------- ---------------------
Vice President Band
- Chairman, Vice Chairman, President .90%
- Executive Vice President .80%
- Group Vice President .75%
- Vice President .70%
Non-Vice President
- General Executive Band .60%
- Executive Band .40%
- Salary Grade 15, 14, 13 .20%
(b) For an Eligible Retired Executive who shall retire before age 62
the monthly Supplemental Benefit payable hereunder shall equal the amount
calculated in accordance with the immediately preceding Subsection (a)
reduced by 5/18 of 1% multiplied by the number of months from the later of
the date the Supplemental Benefit commences or age 55 in the case of
earlier receipt by reason of disability retirement to the first day of the
month after the Eligible Retired Executive would attain age 62.
3.03 Payments. Subject to the earning-out conditions set forth in
Section 5, Supplemental Benefits, in the amount determined under Section
3.02, shall be payable out of the Company's general funds monthly beginning
on the first day of the month when the Eligible Retired Executive's
retirement benefit under any Retirement Plan or under the Company's
Executive Separation Allowance Plan begins. Payments to an Eligible
Retired Executive hereunder shall cease at the end of the month in which
the Eligible Retired Executive dies.
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Section 4. Conditional Annuities.
---------------------
4.01 Eligibility. The Committee may, in its discretion, award to an
Eligible Executive (other than an Eligible Executive in Salary Grades 13
through 19) additional retirement income in the form of a Conditional
Annuity.
4.02 Amount of Conditional Annuity.
(a) In determining the amount of any Conditional Annuity to be
awarded to an Eligible Executive for any year, the Committee shall consider
the Company's profit performance and the amount of supplemental
compensation that is awarded to such Eligible Executive for such year.
Awards shall be made only for years in which the Committee has decided, for
reasons other than individual or corporate performance or termination of
employment, to award supplemental compensation to an Eligible Executive in
an amount which is less than would have been awarded if the historical
relationship to awards to other executives had been followed.
(b) The aggregate annual amount payable under the Conditional
Annuities awarded to any Eligible Executive shall not exceed an amount
equal to the Applicable Percentage of the average of such Eligible
Executive's Final Three Year Average Base Salary, determined in accordance
with the following table:
Applicable Percentage
---------------------
Number of Years for Chairman, All Other
which a Conditional Vice Chairman Eligible
Annuity is awarded and President Executives
------------------- ------------- ----------
[S] [C] [C]
1 30% 20%
2 35 25
3 40 30
4 45 35
5 or more 50 40
The percentage shall be reduced pro rata to the extent that service at
retirement is less than 30 years.
4.03 Payments.
(a) Subject to the earning-out conditions set forth in Section 5,
Conditional Annuities, in the amount determined under Section 4.02, shall
be payable out of the Company's general funds monthly beginning on the
first day of the month when the Eligible Retired Executive's retirement
benefit under any Retirement Plan or under the Company's Executive
Separation Allowance Plan begins. Except as provided in Section 4.04,
payments with respect to an Eligible Retired Executive hereunder shall
cease at the end of the month in which such Eligible Retired Executive
dies.
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(b) For an Eligible Executive who retires before age 65, the monthly
payment under any Conditional Annuity awarded to such Eligible Executive
shall equal the actuarial equivalent (based on factors determined by the
Company's independent consulting actuary) of the monthly amount payable for
retirement at age 65.
4.04 Death Benefits. Upon death before retirement but at or after
age 55, the Eligible Executive's Designated Beneficiary shall be paid a
lump sum equal to 30 times (representing 30 months) the aggregate monthly
amount payable under such Eligible Executive's Conditional Annuities if the
Eligible Executive had been age 55 at death, increased by one-third of one
month for each full month by which such Eligible Executive's age at death
shall exceed age 55. If death occurs within 120 months following
retirement, the monthly payments under the Conditional Annuity shall be
continued to the Designated Beneficiary for the remaining balance of the
120 month period following retirement.
Section 5. Earning Out Conditions. Anything herein contained to the
contrary notwithstanding, the right of any Eligible Retired Executive to
receive Supplemental Benefit or Conditional Annuity payments hereunder for
any month shall accrue only if, during the entire period from the date of
retirement to the end of such month, the Eligible Retired Executive shall
have earned out such payment 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 Retired Executive's nonfulfillment of the
condition set forth in the immediately preceding paragraph, no further
payment shall be made to the Eligible Retired Executive or the Designated
Beneficiary; provided, however, that the nonfulfillment of such condition
may at any time (whether before, at the time of or subsequent to
termination of employment) be waived in the following manner:
(1) with respect to any such Eligible Retired Executive 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, such waiver may be granted by the Committee
upon its determination that in its sole judgment there shall not have
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 Eligible Retired Executive, such
waiver may be granted by the Supplemental Compensation Award Committee
of Ford Motor Company (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,
Supplemental Benefit and Conditional Annuity 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
employment) acted in a manner inimical to the best interests of the
Company. Any such determination shall be made by (i) the Committee with
respect to any Eligible Retired Executive who at any time shall have been a
member
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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 of Ford Motor Company (or any
committee appointed by it for the purpose) with respect to any other
Eligible Retired Executive, and shall apply to any amounts payable after
the date of the applicable committee's action hereunder, regardless of
whether the Eligible Retired Executive has commenced receiving Supplemental
Benefits hereunder. 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 two
immediately preceding paragraphs of this Section 5 and shall not be subject
to any determination under this paragraph.
Section 6. General Provisions.
------------------
6.01 Administration and Interpretation. An otherwise Eligible
Executive's early retirement under the Plan is subject to approval by the
Executive Personnel Committee. Except as otherwise provided in the
preceding sentence and except as the committees specified in Sections 4 and
5 are authorized to administer the Plan in certain respects, the Vice
President-Human Resources and the Group Vice President and Chief Financial
Officer 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.
6.02 Deductions. The Company may deduct from any payment of
Supplemental Benefits and/or Conditional Annuity awards to an Eligible
Retired Executive all amounts owing to it by such Eligible Retired
Executive for any reason, and all taxes required by law or government
regulation to be deducted or withheld.
6.03 No Contract of Employment. The Plan is an expression of the
Company's present policy with respect to Company executives who meet the
eligibility requirements set forth herein; it is not a part of any contract
of employment. No Eligible Executive, Designated Beneficiary or other
person shall have any legal or other right to any Supplemental Benefit or
Conditional Annuity.
6.04 Governing Law. Except as otherwise provided under federal
law, the Plan and all rights thereunder shall be governed, construed and
administered in accordance with the laws of the State of Michigan.
6.05 Amendment or Termination. The Company reserves the right
to modify or amend, in whole or in part, or to terminate this Plan, at
any time without notice.
Appendix A
Applicable to retirements of Eligible Executives on or after
January 1, 1985 but prior to January 1, 1992, or retirements of
Eligible Executives from certain former Company Affiliates.
Section 1. Definitions. The terms used in this Appendix shall
have the same meaning as those in the Supplemental Executive
Retirement Plan, except as follows:
1.01 "Contributory Service" shall mean without duplication the
years and any fractional year of contributory service at
retirement, not exceeding one year for any calendar year, of the
Eligible Executive under all Retirement Plans.
1.02 "Eligible Executive" shall mean a person who is the Chairman
of the Board, the Vice Chairman, the President, an Executive Vice
President or a Vice President of the Company (excluding any such
person who is an employee of a foreign Affiliate of the Company)
or a Company employee in Salary Grade 13 or its equivalent or
above (Salary Grade 20 or its equivalent or above for Company
employees prior to January 1, 1989).
Section 2. Supplemental Benefits.
---------------------
2.01 Eligibility. An Eligible Retired Executive shall be
eligible to receive a Supplemental Benefit as provided herein.
2.02 Amount of Supplemental Benefit.
(a) Subject to any reductions pursuant to Subsection (b) below
and to any limitations and reductions pursuant to other provisions of
the Plan, the monthly Supplemental Benefit shall be an amount
determined as follows:
(1) For those participants who were Eligible Executives on
or after January 1, 1989 and retired prior to January 1,
1992, an amount equal to the Eligible Executive's Final Five
Year Average Base Salary multiplied by the Eligible
Executive's years of Contributory Service at retirement, and
further multiplied by the Applicable Percentage based on the
Eligible Executive's position or salary grade immediately
preceding retirement and on when the Contributory Service
occurred, as follows:
Status at Retirement Applicable Percentage
-------------------- ---------------------
Contributory Contributory
Service Service
before 1/1/89 from 1/1/89
------------- ------------
Chairman, Vice Chairman,
President .60% .90%
Executive Vice President .50% .80%
Vice Presidents
Salary Grade 23 .40% .70%
Salary Grade 22 .40% .70%
Salary Grade 21 .40% .70%
Salary Grade 20 .40% .70%
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Non-Vice Presidents
Salary Grade 21 .30% .60%
Salary Grade 20 .30% .60%
Salary Grade 19 .30% .60%
Salary Grade 18, 17, 16 .20% .40%
Salary Grade 15, 14, 13 .10% .20%
(2) For those participants who were Eligible Executives
prior to January 1, 1989 and who retired prior to January 1,
1992, the greater of (A) or (B):
(A) the Eligible Executive's Final Five Year Average Base
Salary multiplied by the Eligible Executive's Credited
Service, and further multiplied by the Applicable Percentage
based on the Eligible Executive's position or salary grade
immediately preceding retirement, as follows:
Status at Retirement Applicable Percentage
--------------------- ---------------------
Chairman, Vice Chairman,
President .50%
Executive Vice President .40%
Vice President
Salary Grade 23 .35%
Salary Grade 22 .30%
Salary Grade 21 .25%
Salary Grade 20 .20%
Non-Vice Presidents
Salary Grade 21 .25%
Salary Grade 20 .20%
(B) the Eligible Executive's Final Five Year Average Base
Salary multiplied by the Eligible Executive's Contributory
Service, and further multiplied by the Applicable Percentage
set forth in Section (a)(1) above based on the Eligible
Executive's position or salary grade immediately preceding
retirement and on when the Contributory Service occurred.
(b) For an Eligible Retired Executive who shall retire before
age 62 the monthly Supplemental Benefit payable hereunder shall equal
the amount calculated in accordance with the immediately preceding
Subsection (a) reduced by 5/18 of 1% multiplied by the number of
months from the later of the date the Supplemental Benefit commences
or age 55 in the case of earlier receipt by reason of disability
retirement to the first day of the month after the Eligible Retired
Executive would attain age 62.
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Section 3. Former Affiliates and Former Employees.
----------------------------------------
3.01 Ford Aerospace Corporation. An employee of Ford Aerospace
Corporation who was a Vice President of Ford Motor Company as of April
1, 1985 and retired May 1, 1985 shall be deemed to be an Eligible
Executive under the Plan only for Supplemental Benefits and shall be
eligible to receive such benefits under the Plan based on Credited
Service under the Salaried Retirement Plan of Ford Aerospace
Corporation.
3.02 Ford New Holland, Inc. The following shall be applicable
to former employees of Ford Tractor Operations who were transferred to
Ford New Holland (FNH) and who participated in the General Retirement
Plan for service through December 31, 1989 ("FNH Employees").
(a) Retirement-Eligible FNH Employees as of January 1, 1989.
A FNH Employee who was eligible to retire under the General
Retirement Plan on or prior to January 1, 1989, and who was in a
position equivalent to a Salary Grade 13 or above on December 31,
1989, and who retires directly from FNH shall be deemed to be an
Eligible Executive under the Plan only for Supplemental Benefits and
shall receive such benefits as are applicable under the terms of the
Plan in effect at the date of retirement, if retired prior to January
1, 1992, or the terms of the Plan in effect on January 1, 1992, if
retired on or after January 1, 1992; provided, however, that for
purposes of calculating the Supplemental Benefit, the Plan shall use
(i) the employee's position or salary grade at FNH as of December 31,
1989; (ii) the Final Five Year Average Base Salary immediately
preceding retirement of the Eligible Executive from FNH; and (iii) the
employee's Credited Service or Contributory Service, as applicable, as
of December 31, 1989.
(b) Non-Retirement Eligible Employees as of January 1, 1989.
A FNH Employee who was not eligible to retire under the General
Retirement Plan on or prior to January 1, 1989, and who was in a
position equivalent to a Salary Grade 13 or above on December 31,
1989, and who retires directly from FNH shall be deemed to be an
Eligible Executive under the Plan only for Supplemental Benefits and
shall receive such benefits as are applicable under the terms of the
Plan in effect as of January 1, 1989; provided, however, that for
purposes of calculating the Supplemental Benefit, the Plan shall use
(i) the employee's position or salary grade at FNH as of December 31,
1989; (ii) the Final Five Year Average Base Salary as of January 1,
1989; and (iii) the employee's Contributory Service as of December 31,
1989.
3.03 Sale of Favesa Operations to Lear Searing Corporation.
An Eligible Executive whose employment was transferred to Lear
Seating Corporation by reason of the sale of a portion of Plastic and
Trim Product Division's seat operations to Lear on November 1, 1993
and who was eligible to retire under the terms of the General
Retirement Plan as of December 31, 1993, shall retain eligibility to
receive a Supplemental Benefit, and shall receive such benefits as are
applicable under the terms of the Plan in effect as of December 31,
1993; provided, however that for purposes of calculating the
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Supplemental Benefit, the Plan shall use (i) the employee's position or
salary grade with the Company as of December 31, 1993; (ii) the Final Five
Year Average Base Salary as of December 31, 1993; and (iii) the employee's
Credited Service as of December 31, 1993.
Section 4. General. Except as otherwise provided in this
Appendix A, the terms of the Plan applicable to retirements of
Eligible Executives on or after January 1, 1992 shall be applicable to
the retirements of Eligible Executives on or after January 1, 1985 but
prior to January 1, 1992.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
As applicable to retirements of Eligible Executives
on or after January 1, 1992*
Section 1. Introduction. On January 1, 1985, the Company
established this Plan for the purpose of providing Eligible Executives
with a monthly Supplemental Benefit for their lifetime in the event of
their retirement from employment with the Company under certain
circumstances. The Plan also provides for the award of Conditional
Annuities to selected Eligible Executives under certain circumstances.
Section 2. Definitions. As used in the Plan, the following
terms shall have the following meanings, respectively:
2.01 "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.
2.02 "Committee" shall mean the Compensation and Option
Committee of Ford Motor Company.
2.03 "Company" shall mean Ford Motor Company, Ford Motor Credit
Company, and such of the subsidiaries of the Company as, with the
consent of the Company, shall have adopted the Plan.
2.04 "Credited Service" shall mean without duplication the years
and any fractional year of credited service at retirement, not
exceeding one year for any calendar year, of the Eligible Executive
under all the Retirement Plans.
2.05 "Designated Beneficiary" shall mean the beneficiary or
beneficiaries designated by an Eligible Executive or Eligible Retired
Executive in a writing filed with the Company (subject to such
limitations as to the classes and number of beneficiaries and
contingent beneficiaries and such other limitations as the Committee
may prescribe) to receive, in the event of the death of the Eligible
Executive or Eligible Retired Executive, the Death Benefits provided
in Section 4.04. An Eligible Executive or Eligible Retired Executive
shall be deemed to have designated as beneficiary or beneficiaries
under the Plan the person or persons who receive such Eligible
Executive's or Eligible Retired Executive's life insurance proceeds
under the Company-paid Basic Life Insurance Plan unless such Eligible
Executive or Eligible Retired Executive shall have assigned such life
insurance in which event the Death Benefits shall be paid to such
assignee; provided, however, that if the Eligible Executive or
Eligible Retired Executive shall have filed with the Company a written
designation of a different beneficiary or beneficiaries under the
Plan, such beneficiary form shall control. An Eligible Executive or
Eligible Retired Executive 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
--------------------
*See Appendix A for provisions applicable to retirements of Eligible
Executives on or after January 1, 1985 and prior to January 1, 1992
or retirements of Eligible Executives from certain former Company
Affiliates.
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doubt as to the right of any such beneficiary to receive any payment
under the Plan, the same may be paid to the legal representatives of
the Eligible Executive or Eligible Retired Executive, in which case
the Company, the Committee and the members thereof shall not be under
any further liability to anyone.
2.06 "Eligible Executive" shall mean a person who is the
Chairman of the Board, the Vice Chairman, the President, an Executive
Vice President or a Vice President of the Company (excluding any such
person who is an employee of a foreign Affiliate of the Company) or a
Company employee in Salary Grade 13 or its equivalent or above
(excluding a Company employee who is an employee of Jaguar Cars, a
division of the Company).
2.07 "Eligible Retired Executive" shall mean
(a) with respect to Supplemental Benefits, an Eligible Executive
who
(1) shall retire directly from Company employment (i) on
normal or disability retirement or (ii) with the approval of
the Company at or after age 55 on early retirement;
(2) will receive a normal, disability or early retirement
benefit under one or more Retirement Plans;
(3) has at least ten years of Credited Service without
duplication under all Retirement Plans; and
(4) has at least five continuous years of Eligibility
Service immediately preceding retirement (unless the
eligibility condition set forth in this subparagraph (4) is
waived by the Chairman of the Board or the President).
(b) with respect to Conditional Annuity awards, an Eligible
Executive (other than an Eligible Executive in Salary Grades 13
through 19 or its equivalent) who shall retire directly from
Company employment, (i) on normal or disability retirement or
(ii) with the approval of the Company at or after age 55 on early
retirement.
2.08 "Eligibility Service" shall mean Company service while an
Eligible Executive.
2.09 "FERCO" shall mean Ford Electronics and Refrigeration
Corporation.
2.10 "FERCO Retirement Plan" means the Salaried Retirement Plan
of FERCO as it may be amended.
2.11 "Final Five Year Average Base Salary" means the average of
the final five year-end Monthly Base Salaries immediately preceding
retirement of the Eligible Retired Executive.
2.12 "Final Three Year Average Base Salary" means the average of
the final three year-end Monthly Base Salaries immediately preceding
retirement or death of the Eligible Retired Executive.
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2.13 "General Retirement Plan" means the Ford Motor Company
General Retirement Plan as it may be amended.
2.14 "Monthly Base Salary" of an Eligible Executive means the
monthly base salary paid to such person while an Eligible Executive on
December 31, 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 Income Security Act of 1974, as amended, to
which Section 125 or Section 402(e)(3) of the Internal Revenue Code of
1986, as amended, applies. It does not include supplemental
compensation or any other kind of extra or additional compensation.
2.15 "Plan" means the Supplemental Executive Retirement Plan of
Ford Motor Company, as amended.
2.16 "Retirement Plans" includes the General Retirement Plan and
the FERCO Retirement Plan.
2.17 "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.
2.18 "Supplemental Compensation Plan" shall mean the
Supplemental Compensation Plan of Ford Motor Company.
Section 3. Supplemental Benefits.
3.01 Eligibility. An Eligible Retired Executive shall be
eligible to receive a Supplemental Benefit as provided herein.
3.02 Amount of Supplemental Benefit.
(a) Subject to any reductions pursuant to Subsection (b) below
and to any limitations and reductions pursuant to other provisions of
the Plan, the monthly Supplemental Benefit shall be an amount equal to
the Eligible Executive's Final Five Year Average Base Salary
multiplied by the Eligible Executive's years of Credited Service at
retirement, and further multiplied by the Applicable Percentage based
on the Eligible Executive's position or salary grade immediately
preceding retirement, as follows:
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For retirements on or after January 1, 1992 but prior to August 1,
1995
Status at Retirement Applicable Percentage
-------------------- ---------------------
Chairman, Vice Chairman, President .90%
Executive Vice President .80%
Vice President .70%
Non-Vice Presidents
- Salary Grade 21, 20, 19 .60%
- Salary Grade 18, 17, 16 .40%
- Salary Grade 15, 14, 13 .20%
For retirements on or after August 1, 1995
Status at Retirement Applicable Percentage
-------------------- ---------------------
Vice President Band
- Chairman, Vice Chairman, President .90%
- Executive Vice President .80%
- Group Vice President .75%
- Vice President .70%
Non-Vice President
- General Executive Band .60%
- Executive Band .40%
- Salary Grade 15, 14, 13 .20%
(b) For an Eligible Retired Executive who shall retire before age 62
the monthly Supplemental Benefit payable hereunder shall equal the amount
calculated in accordance with the immediately preceding Subsection (a)
reduced by 5/18 of 1% multiplied by the number of months from the later of
the date the Supplemental Benefit commences or age 55 in the case of
earlier receipt by reason of disability retirement to the first day of the
month after the Eligible Retired Executive would attain age 62.
3.03 Payments. Subject to the earning-out conditions set forth in
Section 5, Supplemental Benefits, in the amount determined under Section
3.02, shall be payable out of the Company's general funds monthly beginning
on the first day of the month when the Eligible Retired Executive's
retirement benefit under any Retirement Plan or under the Company's
Executive Separation Allowance Plan begins. Payments to an Eligible
Retired Executive hereunder shall cease at the end of the month in which
the Eligible Retired Executive dies.
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Section 4. Conditional Annuities.
---------------------
4.01 Eligibility. The Committee may, in its discretion, award to an
Eligible Executive (other than an Eligible Executive in Salary Grades 13
through 19) additional retirement income in the form of a Conditional
Annuity.
4.02 Amount of Conditional Annuity.
(a) In determining the amount of any Conditional Annuity to be
awarded to an Eligible Executive for any year, the Committee shall consider
the Company's profit performance and the amount of supplemental
compensation that is awarded to such Eligible Executive for such year.
Awards shall be made only for years in which the Committee has decided, for
reasons other than individual or corporate performance or termination of
employment, to award supplemental compensation to an Eligible Executive in
an amount which is less than would have been awarded if the historical
relationship to awards to other executives had been followed.
(b) The aggregate annual amount payable under the Conditional
Annuities awarded to any Eligible Executive shall not exceed an amount
equal to the Applicable Percentage of the average of such Eligible
Executive's Final Three Year Average Base Salary, determined in accordance
with the following table:
Applicable Percentage
---------------------
Number of Years for Chairman, All Other
which a Conditional Vice Chairman Eligible
Annuity is awarded and President Executives
------------------- ------------- ----------
[S] [C] [C]
1 30% 20%
2 35 25
3 40 30
4 45 35
5 or more 50 40
The percentage shall be reduced pro rata to the extent that service at
retirement is less than 30 years.
4.03 Payments.
(a) Subject to the earning-out conditions set forth in Section 5,
Conditional Annuities, in the amount determined under Section 4.02, shall
be payable out of the Company's general funds monthly beginning on the
first day of the month when the Eligible Retired Executive's retirement
benefit under any Retirement Plan or under the Company's Executive
Separation Allowance Plan begins. Except as provided in Section 4.04,
payments with respect to an Eligible Retired Executive hereunder shall
cease at the end of the month in which such Eligible Retired Executive
dies.
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(b) For an Eligible Executive who retires before age 65, the monthly
payment under any Conditional Annuity awarded to such Eligible Executive
shall equal the actuarial equivalent (based on factors determined by the
Company's independent consulting actuary) of the monthly amount payable for
retirement at age 65.
4.04 Death Benefits. Upon death before retirement but at or after
age 55, the Eligible Executive's Designated Beneficiary shall be paid a
lump sum equal to 30 times (representing 30 months) the aggregate monthly
amount payable under such Eligible Executive's Conditional Annuities if the
Eligible Executive had been age 55 at death, increased by one-third of one
month for each full month by which such Eligible Executive's age at death
shall exceed age 55. If death occurs within 120 months following
retirement, the monthly payments under the Conditional Annuity shall be
continued to the Designated Beneficiary for the remaining balance of the
120 month period following retirement.
Section 5. Earning Out Conditions. Anything herein contained to the
contrary notwithstanding, the right of any Eligible Retired Executive to
receive Supplemental Benefit or Conditional Annuity payments hereunder for
any month shall accrue only if, during the entire period from the date of
retirement to the end of such month, the Eligible Retired Executive shall
have earned out such payment 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 Retired Executive's nonfulfillment of the
condition set forth in the immediately preceding paragraph, no further
payment shall be made to the Eligible Retired Executive or the Designated
Beneficiary; provided, however, that the nonfulfillment of such condition
may at any time (whether before, at the time of or subsequent to
termination of employment) be waived in the following manner:
(1) with respect to any such Eligible Retired Executive 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, such waiver may be granted by the Committee
upon its determination that in its sole judgment there shall not have
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 Eligible Retired Executive, such
waiver may be granted by the Supplemental Compensation Award Committee
of Ford Motor Company (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,
Supplemental Benefit and Conditional Annuity 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
employment) acted in a manner inimical to the best interests of the
Company. Any such determination shall be made by (i) the Committee with
respect to any Eligible Retired Executive who at any time shall have been a
member
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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 of Ford Motor Company (or any
committee appointed by it for the purpose) with respect to any other
Eligible Retired Executive, and shall apply to any amounts payable after
the date of the applicable committee's action hereunder, regardless of
whether the Eligible Retired Executive has commenced receiving Supplemental
Benefits hereunder. 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 two
immediately preceding paragraphs of this Section 5 and shall not be subject
to any determination under this paragraph.
Section 6. General Provisions.
------------------
6.01 Administration and Interpretation. An otherwise Eligible
Executive's early retirement under the Plan is subject to approval by the
Executive Personnel Committee. Except as otherwise provided in the
preceding sentence and except as the committees specified in Sections 4 and
5 are authorized to administer the Plan in certain respects, the Vice
President-Human Resources and the Group Vice President and Chief Financial
Officer 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.
6.02 Deductions. The Company may deduct from any payment of
Supplemental Benefits and/or Conditional Annuity awards to an Eligible
Retired Executive all amounts owing to it by such Eligible Retired
Executive for any reason, and all taxes required by law or government
regulation to be deducted or withheld.
6.03 No Contract of Employment. The Plan is an expression of the
Company's present policy with respect to Company executives who meet the
eligibility requirements set forth herein; it is not a part of any contract
of employment. No Eligible Executive, Designated Beneficiary or other
person shall have any legal or other right to any Supplemental Benefit or
Conditional Annuity.
6.04 Governing Law. Except as otherwise provided under federal
law, the Plan and all rights thereunder shall be governed, construed and
administered in accordance with the laws of the State of Michigan.
6.05 Amendment or Termination. The Company reserves the right
to modify or amend, in whole or in part, or to terminate this Plan, at
any time without notice.
Appendix A
Applicable to retirements of Eligible Executives on or after
January 1, 1985 but prior to January 1, 1992, or retirements of
Eligible Executives from certain former Company Affiliates.
Section 1. Definitions. The terms used in this Appendix shall
have the same meaning as those in the Supplemental Executive
Retirement Plan, except as follows:
1.01 "Contributory Service" shall mean without duplication the
years and any fractional year of contributory service at
retirement, not exceeding one year for any calendar year, of the
Eligible Executive under all Retirement Plans.
1.02 "Eligible Executive" shall mean a person who is the Chairman
of the Board, the Vice Chairman, the President, an Executive Vice
President or a Vice President of the Company (excluding any such
person who is an employee of a foreign Affiliate of the Company)
or a Company employee in Salary Grade 13 or its equivalent or
above (Salary Grade 20 or its equivalent or above for Company
employees prior to January 1, 1989).
Section 2. Supplemental Benefits.
---------------------
2.01 Eligibility. An Eligible Retired Executive shall be
eligible to receive a Supplemental Benefit as provided herein.
2.02 Amount of Supplemental Benefit.
(a) Subject to any reductions pursuant to Subsection (b) below
and to any limitations and reductions pursuant to other provisions of
the Plan, the monthly Supplemental Benefit shall be an amount
determined as follows:
(1) For those participants who were Eligible Executives on
or after January 1, 1989 and retired prior to January 1,
1992, an amount equal to the Eligible Executive's Final Five
Year Average Base Salary multiplied by the Eligible
Executive's years of Contributory Service at retirement, and
further multiplied by the Applicable Percentage based on the
Eligible Executive's position or salary grade immediately
preceding retirement and on when the Contributory Service
occurred, as follows:
Status at Retirement Applicable Percentage
-------------------- ---------------------
Contributory Contributory
Service Service
before 1/1/89 from 1/1/89
------------- ------------
Chairman, Vice Chairman,
President .60% .90%
Executive Vice President .50% .80%
Vice Presidents
Salary Grade 23 .40% .70%
Salary Grade 22 .40% .70%
Salary Grade 21 .40% .70%
Salary Grade 20 .40% .70%
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Non-Vice Presidents
Salary Grade 21 .30% .60%
Salary Grade 20 .30% .60%
Salary Grade 19 .30% .60%
Salary Grade 18, 17, 16 .20% .40%
Salary Grade 15, 14, 13 .10% .20%
(2) For those participants who were Eligible Executives
prior to January 1, 1989 and who retired prior to January 1,
1992, the greater of (A) or (B):
(A) the Eligible Executive's Final Five Year Average Base
Salary multiplied by the Eligible Executive's Credited
Service, and further multiplied by the Applicable Percentage
based on the Eligible Executive's position or salary grade
immediately preceding retirement, as follows:
Status at Retirement Applicable Percentage
--------------------- ---------------------
Chairman, Vice Chairman,
President .50%
Executive Vice President .40%
Vice President
Salary Grade 23 .35%
Salary Grade 22 .30%
Salary Grade 21 .25%
Salary Grade 20 .20%
Non-Vice Presidents
Salary Grade 21 .25%
Salary Grade 20 .20%
(B) the Eligible Executive's Final Five Year Average Base
Salary multiplied by the Eligible Executive's Contributory
Service, and further multiplied by the Applicable Percentage
set forth in Section (a)(1) above based on the Eligible
Executive's position or salary grade immediately preceding
retirement and on when the Contributory Service occurred.
(b) For an Eligible Retired Executive who shall retire before
age 62 the monthly Supplemental Benefit payable hereunder shall equal
the amount calculated in accordance with the immediately preceding
Subsection (a) reduced by 5/18 of 1% multiplied by the number of
months from the later of the date the Supplemental Benefit commences
or age 55 in the case of earlier receipt by reason of disability
retirement to the first day of the month after the Eligible Retired
Executive would attain age 62.
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Section 3. Former Affiliates and Former Employees.
----------------------------------------
3.01 Ford Aerospace Corporation. An employee of Ford Aerospace
Corporation who was a Vice President of Ford Motor Company as of April
1, 1985 and retired May 1, 1985 shall be deemed to be an Eligible
Executive under the Plan only for Supplemental Benefits and shall be
eligible to receive such benefits under the Plan based on Credited
Service under the Salaried Retirement Plan of Ford Aerospace
Corporation.
3.02 Ford New Holland, Inc. The following shall be applicable
to former employees of Ford Tractor Operations who were transferred to
Ford New Holland (FNH) and who participated in the General Retirement
Plan for service through December 31, 1989 ("FNH Employees").
(a) Retirement-Eligible FNH Employees as of January 1, 1989.
A FNH Employee who was eligible to retire under the General
Retirement Plan on or prior to January 1, 1989, and who was in a
position equivalent to a Salary Grade 13 or above on December 31,
1989, and who retires directly from FNH shall be deemed to be an
Eligible Executive under the Plan only for Supplemental Benefits and
shall receive such benefits as are applicable under the terms of the
Plan in effect at the date of retirement, if retired prior to January
1, 1992, or the terms of the Plan in effect on January 1, 1992, if
retired on or after January 1, 1992; provided, however, that for
purposes of calculating the Supplemental Benefit, the Plan shall use
(i) the employee's position or salary grade at FNH as of December 31,
1989; (ii) the Final Five Year Average Base Salary immediately
preceding retirement of the Eligible Executive from FNH; and (iii) the
employee's Credited Service or Contributory Service, as applicable, as
of December 31, 1989.
(b) Non-Retirement Eligible Employees as of January 1, 1989.
A FNH Employee who was not eligible to retire under the General
Retirement Plan on or prior to January 1, 1989, and who was in a
position equivalent to a Salary Grade 13 or above on December 31,
1989, and who retires directly from FNH shall be deemed to be an
Eligible Executive under the Plan only for Supplemental Benefits and
shall receive such benefits as are applicable under the terms of the
Plan in effect as of January 1, 1989; provided, however, that for
purposes of calculating the Supplemental Benefit, the Plan shall use
(i) the employee's position or salary grade at FNH as of December 31,
1989; (ii) the Final Five Year Average Base Salary as of January 1,
1989; and (iii) the employee's Contributory Service as of December 31,
1989.
3.03 Sale of Favesa Operations to Lear Searing Corporation.
An Eligible Executive whose employment was transferred to Lear
Seating Corporation by reason of the sale of a portion of Plastic and
Trim Product Division's seat operations to Lear on November 1, 1993
and who was eligible to retire under the terms of the General
Retirement Plan as of December 31, 1993, shall retain eligibility to
receive a Supplemental Benefit, and shall receive such benefits as are
applicable under the terms of the Plan in effect as of December 31,
1993; provided, however that for purposes of calculating the
-4-
Supplemental Benefit, the Plan shall use (i) the employee's position or
salary grade with the Company as of December 31, 1993; (ii) the Final Five
Year Average Base Salary as of December 31, 1993; and (iii) the employee's
Credited Service as of December 31, 1993.
Section 4. General. Except as otherwise provided in this
Appendix A, the terms of the Plan applicable to retirements of
Eligible Executives on or after January 1, 1992 shall be applicable to
the retirements of Eligible Executives on or after January 1, 1985 but
prior to January 1, 1992.