Description
of Director Compensation
Fees.*
Effective as of July 13, 2006, the Board of Directors voluntarily reduced Board
fees payable to non-employee directors by half. Since that date, the following
fees are paid to directors who are not Ford employees:
|
Annual
Board membership fee
|
$
|
100,000
|
||
|
Annual
Committee chair fee
|
$
|
2,500
|
||
|
Annual
Presiding Director fee
|
$
|
5,000
|
Deferred
Compensation Plan.
Under
this plan, $60,000 of a director's annual Board membership fee must be deferred
in common stock units. Directors also can choose to have the payment of all
or
some of the remainder of their fees deferred in the form of cash and/or common
stock units. Each common stock unit is equal in value to a share of common
stock
and is ultimately paid in cash. These common stock units generate Dividend
Equivalents in the form of additional common stock units. These units are
credited to the directors' accounts on the date any common stock cash dividends
are paid. Any fees deferred in cash are held in the general funds of the
Company. Interest on fees deferred in cash is credited semi-annually to the
directors' accounts at the then-current U.S. Treasury Bill rate plus 0.75%.
In
general, deferred amounts are not paid until after the director retires from
the
Board. The amounts are then paid, at the director's option, either in a lump
sum
or in annual installments over a period of up to ten years.
Restricted
Stock Plan.
Effective July 1, 2004, Ford amended the Restricted Stock Plan for Non-Employee
Directors providing for its termination, except with respect to outstanding
grants of restricted stock and stock equivalents. Each non-employee director
who
had served for six months received 3,496 shares of common stock subject to
restrictions on sale. In general, the restrictions expire for 20% of the shares
each year following the year of the grant. No new grants of restricted stock
will be made under the plan.
Life
Insurance.
Ford
provides non-employee directors with $200,000 of life insurance and $500,000
of
accidental death or dismemberment coverage. The life insurance coverage
continues after the director retires from the Board if the director is at least
55 years old and has served for at least five years. A director who retires
from
the Board after age 70 or, after age 55 with Board approval, and who has served
for at least five years, may elect to have the life insurance reduced to
$100,000 and receive $15,000 a year for life. The accidental death or
dismemberment coverage may, at the director's expense, be supplemented up to
an
additional $500,000 and ends when the director retires from the
Board.
Vehicle
Evaluation Program.
The
Company provides directors with the use of company vehicles at an estimated
average value for 2005 of approximately $28,000 per director. The directors
are
expected to provide evaluations of the vehicles to the Company.
*
On
March 8, 2005, Homer A. Neal, a member of the Board of Directors, joined the
board of managers of Ford Global Technologies, LLC, a wholly-owned subsidiary
that manages the Company's intellectual property. As a non-employee member
of
such board, Dr. Neal receives the customary fees paid to non-employee members.
Currently, the fees are: Annual Fee: $10,000, Attendance Fee: $1,000 per
meeting. Dr. Neal attended two meetings of the board of managers of Ford Global
Technologies during 2005.
*On
September 13, 2006, the Company entered into a consulting agreement with John
R.
H. Bond, a member of the Board of Directors of the Company. Under the agreement,
Mr. Bond will serve as a consultant and senior advisor to William Clay Ford,
Jr., Executive Chairman of the Board, working on financial and other matters.
The consulting fee will be $25,000 per day for actual days worked, payable
in
arrears. The Company contemplates that Mr. Bond will spend approximately one
and
one-half days adjacent to each of the Company's seven regularly scheduled Board
of Directors meetings consulting pursuant to the consulting agreement, and
that
total fees payable to Mr. Bond will not exceed $262,500 for any twelve month
period unless specifically agreed to by the Company and Mr. Bond. Either party
may terminate the agreement at any time.