Exhibit
10-B
FORD
MOTOR COMPANY
Executive
Separation Allowance Plan
(As
amended through October 1, 2006)
Section
1. Introduction.
This
Plan has been established for the purpose of providing Leadership Level One
or
Two Employees who are hired or rehired prior to January 1, 2004 with an
Executive Separation Allowance (ESAP) 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.
Section
2. 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.
"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 Leadership Level One or Two Employee under the Ford Motor Company
General Retirement 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 3, or for periods prior to January 1, 2000, shall mean
an
Executive Roll Employee who meets the eligibility criteria set forth in Section
3.
"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.
"Internal
Revenue Code"
or
"Code" shall mean the Internal Revenue Code of 1986, as amended from time to
time.
"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.
"Separation
From Service" shall
mean termination from Company employment.
"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.
"Specified
Employee" shall
mean an employee of the Company who is a Key Employee as defined in Code Section
416(i) without regard to paragraph 5 thereof. A Specified Employee shall be
identified as of December 31st
of each
calendar year and shall apply to any Specified Employee who shall incur a
Separation From Service in the 12-month period commencing January 1st
of the
immediately succeeding calendar year. This provision is effective for Specified
Employees who incur a Separation From Service on or after January 1,
2005.
"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
3. Eligibility.
Each
Leadership Level One or Two Employee who is being separated from employment
with
the approval of the Company and who:
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(1)
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has
at least five years service at the Leadership Level One or Two level,
or
its equivalent;
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(2)
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has
at least ten years of contributory membership under the General Retirement
Plan;
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(3)
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is
at least 55 years of age; and
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(4)
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retires
from the Company prior to age 65
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shall
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 3, 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 3 may
be
waived by the Executive Chairman except in the case of a Leadership Level One
or
Two Employee who has not separated from employment with the
Company.
Section
4. 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
Service 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 Income Security Act of 1974, as amended, (i) to which
Code Section 125 or Code Section 402(e)(3), 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 3 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 From Service 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
5. Payments.
Executive Separation Allowance payments to an Eligible Leadership Level One
or
Two Employee, in the net amount determined in accordance with Section 4B above,
shall be made monthly from the Company's general funds commencing on the first
day of the month following the date that is the later of the date on which
the
Eligible Leadership Level One or Two Employee 1) reaches at least age 55 with
10
years of Contributory Service; or 2) has a Separation From Service. 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 3 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 be payable only
if:
| (i) |
During
the entire period from the date of such employee's Separation From
Service
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;
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| (ii) |
If
a Specified Employee incurs a Separation From Service, payment of
any
Executive Separation Allowance benefit accrued or vested after December
31, 2004 shall not commence (or be paid) earlier than the first day
of the
seventh month following the Separation From Service;
and
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| (iii) |
The
payments delayed under this Section shall not bear
interest.
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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
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 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 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
5
and
shall not be subject to any determination under this paragraph.
Any
Executive Separation Allowance payments resumed after reemployment with the
Company under Section 7A or employment with a Subsidiary of the Company under
Section 7B shall be paid on the basis of the percentage of Base Monthly Salary
applicable at the time of the initial determination under Section
4B.
Section
6. Deductions.
The
Company may deduct from any payment of Executive Separation Allowance to an
Eligible Leadership Level One or Two 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
7A. 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
7B. 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
8. Administration
and Interpretation.
Except
as
the committees specified in Section 5 and the Executive Chairman is authorized
to administer the Plan in certain respects, the Group Vice President - Corporate
Human Resources and Labor Affairs 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. Amendment
and Termination. The
Company reserves the right to amend, modify or terminate the Plan at any time
without notice.
Section
10. Local
Payment Authorities. The
Vice
President and Treasurer and the Assistant Treasurer (or in the event of a change
in title, their functional equivalent) may act individually to delegate
authority to administrative personnel to make benefit payments to Eligible
Leadership Level One or Two Employees in accordance with Plan
provisions.
Section
11. 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.
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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
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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)
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Group
III Employees.
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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.
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Section
12. Code
Section 409A.
With
respect to benefits accrued or vested after December 31, 2004, the Company
reserves the right to take such action, on a uniform basis, as the Company
deems
necessary or desirable to ensure compliance with Code Section 409A, and
applicable additional regulatory guidance thereunder, or to achieve the goals
of
the Plan without having adverse tax consequences under this Plan for any
employee or beneficiary.
After
receipt of Plan benefits accrued or vested after December 31, 2004, the
obligations of the Company with respect to such benefits shall be satisfied
and
no Eligible Leadership Level One or Two Employee, or their Eligible Surviving
Spouse, shall have any further claims against the Plan or the Company with
respect to Plan benefits accrued or vested after December 31, 2004.
Section
13. Claim for Benefits
Denial
of a Claim. A
claim
for benefits under the plan shall be submitted in writing to the plan
administrator. If a claim for benefits or participation is denied in whole
or in
part by the plan administrator, the Eligible Leadership Level One or Two
Employee will receive written notification within a reasonable period from
the
date the claim for benefits or participation is received. Such notice shall
be
deemed given upon mailing, full postage prepaid in the United States mail or
on
the date sent electronically to the Eligible Leadership Level One or Two
Employee. If the plan administrator determines that an extensive period of
time
for processing is required, written notice shall be furnished to the Eligible
Leadership Level One or Two Employee as soon as practical.
Review
of Denial of the Claim. In
the
event that the plan administrator denies a claim for benefits or participation,
the Eligible Leadership Level One or Two Employee may request a review by filing
a written appeal to the Group Vice President - Corporate Human Resources and
Labor Affairs, or his or her designee, within sixty (60) days of receipt of
the
written notification of denial. The appeal will be considered, and a decision
shall be rendered as soon as practical. In the event a time extension is needed
to consider the appeal and render the decision, written notice shall be provided
to the Eligible Leadership One or Two Employee notifying them of such time
extension.
Decision
on Appeal. The
decision on review of the appeal shall be in writing. Such notice shall be
deemed given upon mailing, full postage prepaid in the United States mail or
on
the date sent electronically to the Eligible Leadership Level One or Two
Employee. Decisions on the appeal are final and conclusive and are only subject
to the arbitrary and capricious standard of judicial review.
Limitations
Period. No
legal
action for benefits under the plan may be brought against the plan until after
the claims and appeal procedures have been exhausted. Legal actions under the
plan for benefits must be brought no later than two (2) years after the claim
arises. No other action may be brought against the plan more than six (6) months
after the claim arises.