<PAGE> 1
Filed Pursuant to Rule 424(b)(5)
Registration No. 33-64247
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED AUGUST 6, 1996)
$250,000,000
FORD MOTOR COMPANY
7 1/2% DEBENTURES DUE AUGUST 1, 2026
------------------------------
INTEREST PAYABLE FEBRUARY 1 AND AUGUST 1
------------------------------
The Debentures may not be redeemed by Ford prior to maturity and are not
subject to any sinking fund.
The Debentures will be represented by one or more Global Debentures
registered in the name of the Depository's nominee. Beneficial interests in the
Global Debentures will be shown on, and transfers thereof will be effected only
through, records maintained by the Depository and its participants. Except as
described herein, Debentures in definitive form will not be issued. Settlement
for the Debentures will be made in immediately available funds. The Debentures
will trade in the Depository's Same-Day Funds Settlement System until maturity,
and secondary market trading activity for the Debentures will, therefore, settle
in immediately available funds. All payments of principal and interest will be
made by Ford in immediately available funds. See "Description of Debentures --
Same-Day Settlement and Payment".
------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT
OR THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNT(2) FORD(1)(3)
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
Per Debenture...................... 99.418% .875% 98.543%
- -----------------------------------------------------------------------------------------------
Total.............................. $248,545,000 $2,187,500 $246,357,500
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
</TABLE>
(1) Plus accrued interest, if any, from August 1, 1996 to date of delivery.
(2) Ford has agreed to indemnify the Underwriters against certain liabilities,
including liabilities under the Securities Act of 1933.
(3) Before deducting estimated expenses of $140,985 to be paid by Ford.
------------------------------
The Debentures offered by this Prospectus Supplement are offered by the
Underwriters subject to prior sale, withdrawal, cancellation or modification of
the offer without notice, to delivery to and acceptance by the Underwriters and
to certain further conditions. It is expected that delivery of the Global
Debentures will be made in book-entry form through the facilities of the
Depository on or about August 9, 1996.
------------------------------
BEAR, STEARNS & CO. INC.
GOLDMAN, SACHS & CO.
LEHMAN BROTHERS
J.P. MORGAN & CO.
SALOMON BROTHERS INC
AUGUST 6, 1996
<PAGE> 2
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVERALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE DEBENTURES AT A
LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
------------------------
The following information, which is being disclosed pursuant to Florida
law, is accurate as of the date of this Prospectus Supplement:
Autolatina-Comercio, Negocios e Participacoes Ltda., a Brazilian company
("Autolatina"), was a joint venture between Ford and Volkswagen AG in which Ford
had a 49% ownership interest and which was dissolved in 1995. Autolatina
occasionally sold vehicles to persons located in Cuba. Each such sale was made
pursuant to a specific license granted to Ford by the U.S. Department of
Treasury. The last such sale, which involved one medical supply vehicle, was
made to Cubanacan in April 1991. Information concerning Autolatina's or its
Ford-related affiliates' business dealings with the government of Cuba or with
persons located in Cuba may be obtained from the State of Florida Department of
Banking and Finance at The Capitol Building, Suite 1401, Tallahassee, Florida
32399-0350 (telephone number 904-488-0545).
DESCRIPTION OF DEBENTURES
The following description of the particular terms of the debentures offered
hereby (the "Debentures") supplements, and to the extent inconsistent therewith
replaces, the description of the general terms and provisions of Debt Securities
set forth in the Prospectus. The Debentures are part of the $961,700,000
aggregate principal amount of Debt Securities of Ford registered in November
1995 to be issued on terms to be determined at the time of sale. Except for the
Debentures offered hereby, no Debt Securities previously have been sold.
GENERAL
The Debentures will be limited to $250,000,000 aggregate principal amount.
The Debentures will be unsecured obligations of Ford and will mature on August
1, 2026.
The Debentures will bear interest from August 1, 1996 at the applicable
rate per annum set forth on the cover page of this Prospectus Supplement,
payable on February 1 and August 1 of each year, commencing February 1, 1997, to
the person in whose name the Debenture was registered at the close of business
on the preceding January 15 and July 15, respectively, subject to certain
exceptions.
The Debentures may not be redeemed by Ford prior to maturity. The
Debentures will not be subject to any sinking fund.
BOOK-ENTRY, DELIVERY AND FORM
The Debentures will be issued in the form of one or more fully registered
global debentures (the "Global Debentures") which will be deposited with, or on
behalf of, The Depository Trust Company, New York, New York (the "Depository")
and registered in the name of Cede & Co., the Depository's nominee. Beneficial
interests in the Global Debentures will be represented through book-entry
accounts of financial institutions acting on behalf of beneficial owners as
direct and indirect participants in the Depository. Except as set forth below,
the Global Debentures may be transferred, in whole and not in part, only to
another nominee of the Depository or to a successor of the Depository or its
nominee.
The Depository has advised as follows: It is a limited-purpose trust
company which holds securities for its participating organizations (the
"Participants") and facilitates the settlement among Participants of securities
transactions in such securities through electronic book-entry changes in its
Participants' accounts. Participants include securities brokers and dealers
(including the Underwriters), banks and trust companies, clearing corporations
and certain other organizations. Access to the
S-2
<PAGE> 3
Depository's system is also available to others such as banks, brokers, dealers
and trust companies that clear through or maintain a custodial relationship with
a Participant, either directly or indirectly ("indirect participants"). Persons
who are not Participants may beneficially own securities held by the Depository
only through Participants or indirect participants.
The Depository advises that its established procedures provide that (i)
upon issuance of the Debentures by Ford, the Depository will credit the accounts
of Participants designated by the Underwriters with the principal amounts of the
Debentures purchased by the Underwriters, and (ii) ownership of interests in the
Global Debentures will be shown on, and the transfer of that ownership will be
effected only through, records maintained by the Depository, the Participants
and the indirect participants. The laws of some states require that certain
persons take physical delivery in definitive form of securities which they own.
Consequently, the ability to transfer beneficial interests in the Global
Debentures is limited to such extent.
So long as a nominee of the Depository is the registered owner of the
Global Debentures, such nominee for all purposes will be considered the sole
owner or holder of the Debentures under the Indenture. Except as provided below,
owners of beneficial interests in the Global Debentures will not be entitled to
have Debentures registered in their names, will not receive or be entitled to
receive physical delivery of Debentures in definitive form, and will not be
considered the owners or holders thereof under the Indenture.
Neither Ford, the Trustee, any Paying Agent nor the Security Registrar will
have any responsibility or liability for any aspect of the records relating to
or payments made on account of beneficial ownership interests in the Global
Debentures, or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
Principal and interest payments on the Debentures registered in the name of
the Depository's nominee will be made by the Trustee to the Depository. Under
the terms of the Indenture, Ford and the Trustee will treat the persons in whose
names the Debentures are registered as the owners of such Debentures for the
purpose of receiving payment of principal and interest on such Debentures and
for all other purposes whatsoever. Therefore, neither Ford, the Trustee nor any
Paying Agent has any direct responsibility or liability for the payment of
principal or interest on the Debentures to owners of beneficial interests in the
Global Debentures. The Depository has advised Ford and the Trustee that its
present practice is to credit the accounts of the Participants on the
appropriate payment date in accordance with their respective holdings in
principal amount of beneficial interests in the Global Debentures as shown on
the records of the Depository, unless the Depository has reason to believe that
it will not receive payment on such payment date. Payments by Participants and
indirect participants to owners of beneficial interests in the Global Debentures
will be governed by standing instructions and customary practices, as is now the
case with securities held for the accounts of customers in bearer form or
registered in "street name," and will be the responsibility of the Participants
or indirect participants.
If the Depository is at any time unwilling or unable to continue as
depository and a successor depository is not appointed by Ford within 90 days,
Ford will issue Debentures in definitive form in exchange for the Global
Debentures. In addition, Ford may at any time determine not to have the
Debentures represented by Global Debentures and, in such event, will issue
Debentures in definitive form in exchange for the Global Debentures. In either
instance, an owner of a beneficial interest in the Global Debentures will be
entitled to have Debentures equal in principal amount to such beneficial
interest registered in its name and will be entitled to physical delivery of
such Debentures in definitive form. Debentures so issued in definitive form will
be issued in denominations of $5,000 and integral multiples thereof and will be
issued in registered form only, without coupons.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Debentures will be made by the Underwriters in
immediately available funds. All payments of principal and interest will be made
by Ford in immediately available funds.
S-3
<PAGE> 4
Secondary trading in long-term notes and debentures of corporate issuers is
generally settled in clearing-house or next-day funds. In contrast, the
Debentures will trade in the Depository's Same-Day Funds Settlement System until
maturity, and secondary market trading activity in the Debentures will therefore
be required by the Depository to settle in immediately available funds. No
assurance can be given as to the effect, if any, of settlement in immediately
available funds on trading activity in the Debentures.
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement
and the Pricing Agreement relating to the Debentures, Ford has agreed to sell to
each of the Underwriters named below (the "Underwriters"), and each of the
Underwriters has severally agreed to purchase, the principal amount of the
Debentures set forth opposite its name below.
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
UNDERWRITER OF DEBENTURES
- ---------------------------------------------------------------------------- ----------------
<S> <C>
Bear, Stearns & Co. Inc. ................................................... $ 50,000,000
Goldman, Sachs & Co. ....................................................... 50,000,000
Lehman Brothers Inc. ....................................................... 50,000,000
J.P. Morgan Securities Inc. ................................................ 50,000,000
Salomon Brothers Inc........................................................ 50,000,000
------------
Total.................................................................. $250,000,000
============
</TABLE>
Under the terms and conditions of the Underwriting Agreement, the
Underwriters are committed to take and pay for all of the Debentures, if any are
taken.
The Underwriters have advised Ford that they propose to offer all or part
of the Debentures directly to retail purchasers at the initial public offering
price set forth on the cover page of this Prospectus Supplement, and to certain
securities dealers at such price less a concession not in excess of .500% of the
principal amount of the Debentures. The Underwriters may allow, and such dealers
may reallow, to certain brokers and dealers a concession not in excess of .250%
of the principal amount of the Debentures. After the Debentures are released for
sale to the public, the offering price and other selling terms may from time to
time be varied by the Underwriters.
The Debentures are a new issue of securities with no established trading
market. Ford has been advised by the Underwriters that they intend to make a
market in the Debentures, but they are not obligated to do so and may
discontinue such market making at any time without notice. No assurance can be
given as to the liquidity of the trading market for the Debentures.
All secondary trading in the Debentures will settle in immediately
available funds. See "Description of Debentures -- Same-Day Settlement and
Payment".
Ford has agreed to indemnify the Underwriters against certain liabilities,
including liabilities under the Securities Act of 1933, as amended.
In the ordinary course of their respective businesses, affiliates of J.P.
Morgan Securities Inc. have engaged, and may in the future engage, in commercial
banking and investment banking transactions with Ford and certain of its
affiliates.
S-4
<PAGE> 5
FORD MOTOR COMPANY
DEBT SECURITIES
Ford, in November 1995, registered with the Securities and Exchange
Commission $961,700,000 aggregate principal amount of its Debt Securities
consisting of notes and/or debentures denominated in United States dollars or
any other currency, including composite currencies such as the European Currency
Unit, to be offered from time to time in one or more series, on terms to be
determined at or prior to the time of sale. The Prospectus Supplement
accompanying this Prospectus sets forth, with respect to the particular series
of Debt Securities for which this Prospectus and the Prospectus Supplement are
being delivered, the specific title, the aggregate principal amount, the
authorized denominations, the currencies of issue and payment, the initial
public offering price, the maturity, the interest rate or rates (which may be
either fixed or variable), if any, and/or method of determination thereof, the
time of payment of any interest, any redemption, extension or early repayment
terms, any provision for sinking fund payments, the net proceeds to Ford and
other specific terms relating to such series of Debt Securities.
Ford will sell the Debt Securities to or through underwriters, and may also
sell the Debt Securities directly to other purchasers or through agents. See
"Plan of Distribution". In addition, the Debt Securities may be sold to dealers
at the applicable price to the public set forth in the Prospectus Supplement
relating to a particular series of Debt Securities who later resell to
investors. Such dealers may be deemed to be "underwriters" within the meaning of
the Securities Act of 1933, as amended (the "Securities Act"). If any agents of
Ford or any underwriters are involved in the sale of any Debt Securities, the
names of such agents or underwriters and any applicable commissions or discounts
are set forth in the accompanying Prospectus Supplement.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
The date of this Prospectus is August 6, 1996.
<PAGE> 6
AVAILABLE INFORMATION
Ford is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports and other information with the Securities and Exchange
Commission (the "Commission"). As used herein, "Ford" or the "Company" refers to
Ford Motor Company and its subsidiaries unless the context otherwise requires.
Such reports and other information can be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the following Regional Offices of the Commission:
Seven World Trade Center, Suite 1300, New York, New York 10048 and 500 West
Madison St., Suite 1400, Chicago, Illinois 60661-2511. Copies of such material
can be obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. Such reports and other
information also can be inspected and copied at the offices of the New York
Stock Exchange, Inc., 20 Broad Street, New York, New York 10005.
Ford has filed with the Commission a Registration Statement (Registration
No. 33-64247) under the Securities Act with respect to the securities offered
hereby (the "Registration Statement"). This Prospectus does not contain all the
information set forth in the Registration Statement and the exhibits and
schedules thereto, certain portions of which have been omitted pursuant to the
rules and regulations of the Commission. The information so omitted may be
obtained from the Commission's principal office in Washington, D.C. upon payment
of the fees prescribed by the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Ford's Annual Report on Form 10-K for the year ended December 31, 1995
("Ford's 1995 10-K Report"), Ford's Quarterly Reports on Form 10-Q for the
quarters ended March 31, 1996 and June 30, 1996, respectively ("Ford's 1996 10-Q
Reports"), and Ford's Current Reports on Form 8-K dated January 31, 1996,
February 12, 1996, April 12, 1996, April 17, 1996, May 23, 1996, July 11, 1996
and July 17, 1996 have been filed with the Commission and are incorporated in
this Prospectus by reference. All documents filed by Ford pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus
and prior to the termination of the offering of the Debt Securities shall be
deemed to be incorporated by reference in this Prospectus and to be a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated herein by reference shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified and superseded, to
constitute a part of this Prospectus.
Ford undertakes to provide without charge to each person to whom a copy of
this Prospectus has been delivered, on the written or oral request of any such
person, a copy of any or all of the documents referred to above which have been
or may be incorporated by reference in this Prospectus, other than exhibits to
such documents. Written or telephonic requests for such documents should be
directed to Ford Motor Company, The American Road, Dearborn, Michigan 48121
Attention: Stockholder Relations Department (telephone number 313-845-8540).
------------------------
THIS PROSPECTUS CONTAINS BRIEF SUMMARIES OF CERTAIN MORE DETAILED
INFORMATION CONTAINED IN DOCUMENTS INCORPORATED HEREIN BY REFERENCE. SUCH
SUMMARIES ARE QUALIFIED IN THEIR ENTIRETY BY THE DETAILED INFORMATION CONTAINED
IN THE INCORPORATED DOCUMENTS.
2
<PAGE> 7
FORD MOTOR COMPANY
Ford was incorporated in Delaware in 1919 and acquired the business of a
Michigan company, also known as Ford Motor Company, incorporated in 1903 to
produce automobiles designed and engineered by Henry Ford. Ford is the
second-largest producer of cars and trucks in the world, and ranks among the
largest providers of financial services in the United States.
Ford's two principal business segments are Automotive and Financial
Services. The activities of the Automotive segment consist of the design,
manufacture, assembly and sale of cars and trucks and related parts and
accessories. Substantially all of Ford's automotive products are marketed
through retail dealerships, most of which are privately owned and financed.
The primary activities of the Financial Services segment consist of
financing operations, vehicle and equipment leasing and insurance operations.
These activities are conducted through Ford's subsidiaries, Ford FSG, Inc.
("FFSGI"), Ford Holdings, Inc. ("Ford Holdings"), The Hertz Corporation
("Hertz") and Granite Management Corporation ("Granite"). FFSGI is a holding
company that owns primarily Ford Motor Credit Company ("Ford Credit") and a
majority of Ford Credit Europe plc ("Ford Credit Europe") and Associates First
Capital Corporation ("The Associates"). Ford Holdings is a holding company that
owns primarily a portion of FFSGI and all of USL Capital Corporation ("USL
Capital").
The principal executive offices of Ford are located at The American Road,
Dearborn, Michigan 48121, telephone number 313-322-3000.
3
<PAGE> 8
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of "earnings" to "fixed charges" for Ford was as follows for the
first six months of 1996 and each of the years 1991-1995:
<TABLE>
<CAPTION>
SIX MONTHS YEARS ENDED DECEMBER 31
ENDED ----------------------------------------
JUNE 30, 1996 1995 1994 1993 1992 1991
- ------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
1.7 1.6 2.0 1.5 * **
</TABLE>
- -------------------------
* Earnings were inadequate to cover fixed charges by $237 million.
** Earnings were inadequate to cover fixed charges by $2,664 million.
For purposes of the ratio, "earnings" include the income/(loss) before
income taxes and cumulative effects of changes in accounting principles of Ford
and its majority-owned subsidiaries, whether or not consolidated, its
proportionate share of any fifty-percent-owned companies, and any income
received from less-than-fifty-percent-owned companies and fixed charges. "Fixed
charges" consist of interest on borrowed funds, preferred stock dividend
requirements of majority-owned subsidiaries, amortization of debt discount,
premium, and issuance expense, and one-third of all rental expense (the
proportion deemed representative of the interest factor).
USE OF PROCEEDS
Unless otherwise specified in the Prospectus Supplement which accompanies
this Prospectus, the net proceeds from the sale of the Debt Securities will be
used for general corporate purposes of Ford or its affiliates. In the event the
net proceeds of any series of Debt Securities are intended to be used to repay
outstanding indebtedness of Ford or its affiliates, the Prospectus Supplement
which accompanies this Prospectus will specify the interest rate and maturity
date of such indebtedness to be repaid and, if such indebtedness was incurred
within one year, such Prospectus Supplement also will describe the use of the
proceeds of such indebtedness if other than short-term borrowings used for
working capital.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities are to be issued in one or more series under an
Indenture dated as of February 15, 1992, as supplemented from time to time (the
"Indenture"), between Ford and The Bank of New York, Trustee. The term
"Trustee", as used herein, shall mean The Bank of New York and, if at any time
there is more than one Trustee acting under the Indenture, the term "Trustee" as
used herein with respect to Indenture Securities (as defined below) of any
particular series shall mean the Trustee with respect to the Indenture
Securities of such series. The following statements with respect to the Debt
Securities are subject to the detailed provisions of the Indenture, which is
filed as an exhibit to the Registration Statement, and the Trust Indenture Act
of 1939, as amended (the "Trust Indenture Act"). Parenthetical references below
are to the Indenture or the Form of Security contained therein and, whenever any
particular provision of the Indenture or any term used therein is referred to,
such provision or term is incorporated by reference as a part of the statement
in connection with which such reference is made, and the statement in connection
with which such reference is made is qualified in its entirety by such
reference.
The particular terms of each series of Debt Securities, as well as any
modification or addition to the general terms of the Debt Securities as herein
described, which may be applicable to a particular series of Debt Securities,
are described in the Prospectus Supplement relating to such series of Debt
Securities and will be set forth in a filing with the Commission. Accordingly,
for a description of the terms of a particular series of Debt Securities,
reference must be made to both the Prospectus Supplement relating to such series
and to the description of Debt Securities set forth in this Prospectus.
4
<PAGE> 9
GENERAL
The Debt Securities offered hereby will be limited to $961,700,000
aggregate principal amount or the equivalent thereof in any currency, although
the Indenture provides that additional debt securities may be issued thereunder
up to the aggregate principal amount, which is not limited by the Indenture,
authorized from time to time by the Board of Directors of Ford. So long as a
single Trustee is acting for the benefit of the holders of all the Debt
Securities offered hereby and any such additional debt securities issued under
the Indenture, the Debt Securities and any such additional debt securities are
herein collectively referred to as the "Indenture Securities". The Indenture
also provides that there may be more than one Trustee under the Indenture, each
with respect to one or more different series of Indenture Securities. See also
"Trustee" herein. At any time when two or more Trustees are acting, each with
respect to only certain series, the term "Indenture Securities" as used herein
shall mean the one or more series with respect to which each respective Trustee
is acting, and the powers and trust obligations of each such Trustee as
described herein shall extend only to the one or more series of Indenture
Securities for which it is acting as Trustee. The effect of the provisions
contemplating that there might be more than one Trustee acting for different
series of Indenture Securities is that, in that event, those Indenture
Securities (whether of one or more than one series) for which each Trustee is
acting would be treated as if issued under a separate indenture.
The Prospectus Supplement which accompanies this Prospectus sets forth a
description of the particular series of Debt Securities being offered thereby,
including: (1) the designation or title of such Debt Securities; (2) the
aggregate principal amount of such Debt Securities; (3) the percentage of their
principal amount at which such Debt Securities will be offered; (4) the date or
dates on which the principal of such Debt Securities will be payable; (5) the
rate or rates (which may be either fixed or variable) and/or the method of
determination of such rate or rates at which such Debt Securities shall bear
interest, if any; (6) the date or dates from which any such interest shall
accrue, or the method of determination of such date or dates, and the date or
dates on which any such interest shall be payable; (7) the terms for redemption,
extension or early repayment of such Debt Securities, if any; (8) the
denominations in which such Debt Securities are authorized to be issued; (9) the
currencies in which such Debt Securities are issued or payable; (10) the
provisions for a sinking fund, if any; (11) any additional restrictive covenants
of Ford included for the benefit of the holders of such Debt Securities; (12)
any additional Event of Default with respect to such Debt Securities; (13)
whether such Debt Securities are issuable as a Global Security (as defined in
the Indenture); (14) any provisions in modification of, in addition to or in
lieu of the defeasance and covenant defeasance provisions in respect of the Debt
Securities and (15) any other term or provision relating to such Debt Securities
which is not inconsistent with the provisions of the Indenture.
One or more series of Debt Securities may be sold at a substantial discount
below their stated principal amount, bearing no interest or interest at a rate
which at the time of issuance is below market rates. Federal income tax
consequences and special considerations applicable thereto will be described in
the Prospectus Supplement relating to any such series of Debt Securities.
The Debt Securities will be unsecured obligations of Ford and will rank
pari passu with all other unsecured and unsubordinated indebtedness of Ford
(parent company only).
Except as otherwise provided in the Prospectus Supplement, principal (and
premium, if any) and interest, if any, will be payable at an office or agency to
be maintained by Ford in New York City, except that at the option of Ford
interest may be paid by check mailed to, or by wire transfer to the account of,
the person entitled thereto. (Form of Security and Sections 10.01 and 10.02.)
Except as otherwise provided in the Prospectus Supplement, the Debt
Securities will be issued only in fully registered form without coupons and may
be presented for registration of transfer or exchange at the corporate trust
office of the Trustee. No service charge will be made for any transfer or
exchange of the Debt Securities, but Ford may require payment of a sum to cover
any tax or other governmental charge payable in connection therewith. (Section
3.05.)
5
<PAGE> 10
The Indenture contains no provisions that would afford holders of Debt
Securities protection in the event of a highly leveraged transaction or a change
in control of Ford.
SUBSIDIARIES
The term "subsidiary of Ford" is defined in the Indenture as a corporation
a majority of the outstanding voting stock of which is owned, directly or
indirectly, by Ford and/or one or more subsidiaries of Ford. The term
"Manufacturing Subsidiary" is defined in the Indenture as a subsidiary of Ford
which owns or leases a Principal Domestic Manufacturing Property (as defined
below). (Section 1.01.)
LIMITATION ON LIENS
If Ford or any Manufacturing Subsidiary shall incur, suffer to exist or
guarantee any Debt (as defined in the Indenture) secured by a Mortgage (as
defined in the Indenture) on any Principal Domestic Manufacturing Property of
Ford or any Manufacturing Subsidiary or on any shares of stock of or Debt of any
Manufacturing Subsidiary, Ford will secure or cause such Manufacturing
Subsidiary to secure the Indenture Securities equally and ratably with (or prior
to) such secured Debt, unless, after giving effect thereto, the aggregate amount
of all such Debt so secured, together with all Attributable Debt (as defined
below) in respect of sale and leaseback transactions involving Principal
Domestic Manufacturing Properties, would not exceed 5% of the Consolidated Net
Tangible Automotive Assets of Ford and its consolidated subsidiaries. This
restriction will not apply to Debt secured by (a) Mortgages on property of, or
on any shares of stock of or Debt of, any corporation existing at the time such
corporation becomes a Manufacturing Subsidiary, (b) Mortgages in favor of Ford
or a Manufacturing Subsidiary, (c) Mortgages in favor of governmental bodies to
secure progress or certain advance payments, (d) Mortgages on property, shares
of stock or Debt existing at the time of acquisition thereof (including
acquisition through merger or consolidation) and certain purchase money
Mortgages, and (e) any extension, renewal or replacement of any Mortgage
referred to in the foregoing clauses (a) through (d), inclusive. (Section
10.04.) "Principal Domestic Manufacturing Property" is defined in the Indenture
to include principal automotive and related manufacturing or assembly plants
owned or leased by Ford or a subsidiary of Ford and located within the United
States. "Attributable Debt" is defined in the Indenture to mean the total net
amount of rent (discounted at the rate of 9.5% per annum compounded annually)
required to be paid during the remaining term of any lease. "Consolidated Net
Tangible Automotive Assets" is defined in the Indenture to mean the aggregate
amount of Ford's automotive assets after deducting current liabilities and
certain intangibles plus Ford's equity in the net assets of its financial
services subsidiaries after deducting certain intangibles. (Section 1.01.)
MERGER AND CONSOLIDATION
The Indenture provides that no consolidation or merger of Ford with or into
any other corporation shall be permitted and no sale or conveyance of its
property as an entirety, or substantially as an entirety, may be made to another
corporation if, as a result thereof, any Principal Domestic Manufacturing
Property of Ford or any Manufacturing Subsidiary or any shares of stock or Debt
of any Manufacturing Subsidiary would thereupon become subject to a Mortgage,
unless the Indenture Securities shall be equally and ratably secured with (or
prior to) the Debt secured by such Mortgage, or unless such Mortgage could be
created pursuant to Section 10.04 (see "Ford's Limitation on Liens" above)
without equally and ratably securing the Indenture Securities. (Section 8.03.)
LIMITATION ON SALES AND LEASEBACKS
Neither Ford nor any Manufacturing Subsidiary may enter into any sale and
leaseback transaction involving any Principal Domestic Manufacturing Property
unless (a) Ford or such Manufacturing Subsidiary could create Debt secured by a
mortgage pursuant to Section 10.04 (see
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<PAGE> 11
"Limitation on Liens" above) on the Principal Domestic Manufacturing Property to
be leased in an amount equal to the Attributable Debt with respect to the sale
and leaseback transaction without equally and ratably securing the Indenture
Securities, or (b) Ford, within 120 days after the sale or transfer shall have
been made, applies to the retirement of its Funded Debt (as defined in the
Indenture) an amount (subject to credits for certain voluntary retirements of
Funded Debt of Ford) equal to the greater of (i) the net proceeds of the sale of
the Principal Domestic Manufacturing Property leased pursuant to such
arrangement or (ii) the fair market value of the Principal Domestic
Manufacturing Property so leased. This restriction will not apply to any sale
and leaseback transaction (a) between Ford and a Manufacturing Subsidiary or
between Manufacturing Subsidiaries or (b) involving the taking back of a lease
for a period of three years or less. (Section 10.05.)
EVENTS OF DEFAULT AND NOTICE THEREOF
The Indenture defines an Event of Default with respect to any series of
Indenture Securities as being any one of the following events: (a) failure to
pay interest for 30 days after becoming due; (b) failure to pay principal or
premium, if any, for five business days after becoming due at maturity, upon
redemption or otherwise; (c) failure to make a sinking fund payment for five
days after becoming due; (d) failure to perform any other covenant of Ford
(other than a covenant included in the Indenture solely for the benefit of one
or more series of Indenture Securities other than such series or a covenant
default in the performance of which would be covered by clause (f) below) for 90
days after notice; (e) certain events of bankruptcy, insolvency or
reorganization of Ford; and (f) any other Event of Default provided with respect
to Indenture Securities of such series. No Event of Default provided with
respect to a particular series of Indenture Securities (except as to events
described in clauses (d) and (e)) necessarily constitutes an Event of Default
with respect to any other series of Indenture Securities. (Section 5.01.)
If an Event of Default in respect of a particular series of Indenture
Securities outstanding occurs and is continuing, either the Trustee or the
holders of at least 25% in aggregate principal amount of the Indenture
Securities outstanding of such series may declare the principal amount (or, if
the Indenture Securities of such series are Original Issue Discount Securities
(as defined in the Indenture), such portion of the principal amount as may be
specified in the terms of such series) of all of the Indenture Securities of
such series to be due and payable immediately. At any time after such a
declaration of acceleration in respect of a particular series of Indenture
Securities has been made, but before a judgment or decree for the payment of
money due upon acceleration has been obtained by the Trustee, the holders of a
majority in aggregate principal amount of the Indenture Securities outstanding
of such series may, under certain circumstances, waive all defaults and rescind
and annul such declaration and its consequences if all Events of Default in
respect of the Indenture Securities of such series, other than the non-payment
of principal due solely by such declaration of acceleration, have been cured or
waived as provided in the Indenture. (Section 5.02.)
The Indenture provides that the Trustee shall, within 90 days after the
occurrence of a default in respect of a particular series of Indenture
Securities, give the holders of such series notice of all uncured defaults known
to it (the term "default" to include the events specified above without grace
periods); provided that, except in the case of default in the payment of the
principal of, or any premium, interest or mandatory sinking fund payment, with
respect to, any of the Indenture Securities of such series, the Trustee shall be
protected in withholding such notice if it in good faith determines that the
withholding of such notice is in the interests of the holders of such series.
(Section 6.01.)
Pursuant to the terms of the Indenture, Ford is required to furnish to the
Trustee annually a brief certificate of the principal executive, financial or
accounting officer of Ford as to his knowledge of Ford's compliance (determined
without regard to any period of grace or requirement of notice) with all
conditions and covenants under the Indenture and, if a default exists
thereunder, specifying the nature of such default. (Section 10.06.)
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<PAGE> 12
The Indenture provides that the holders of a majority in aggregate
principal amount of all Indenture Securities of a particular series then
outstanding will have the right to waive certain defaults in respect of such
series and, subject to certain limitations, to direct the time, method and place
of conducting any proceedings for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee. (Sections 5.12 and
5.13.) The Indenture is deemed under the Trust Indenture Act to provide that, in
case an Event of Default in respect of a particular series of Indenture
Securities shall occur (which shall not have been cured or waived), the Trustee
will be required to exercise such of its rights and powers under the Indenture,
and to use the degree of care and skill in their exercise, that a prudent man
would exercise or use in the conduct of his own affairs, but otherwise need only
perform such duties as are specifically set forth in the Indenture. Subject to
such provisions, the Trustee will be under no obligation to exercise any of its
rights or powers under the Indenture at the request of any of the holders of
such series unless they shall have offered to the Trustee reasonable security or
indemnity. (Section 6.02.)
DEFEASANCE AND COVENANT DEFEASANCE
Except as otherwise provided in the Prospectus Supplement, Ford may elect
(a) to defease a series of Indenture Securities with the effect that Ford will
be discharged from any and all obligations with respect to such series of
Indenture Securities (except for the obligation to issue Indenture Securities of
such series in definitive registered form in exchange for a global security
under certain circumstances, to register the transfer or exchange of such
Indenture Securities, to replace temporary or mutilated, destroyed, lost or
stolen Indenture Securities, to maintain an office or agency in respect of the
Indenture Securities and to hold moneys for payment in trust) ("defeasance")
and/or (b) to be released from its obligations with respect to such series of
Indenture Securities under Sections 8.03, 10.04 and 10.05 of the Indenture
(being the obligations described under "Merger and Consolidation", under
"Limitation on Liens", and under "Limitation on Sales and Leasebacks",
respectively) and, if provided pursuant to Section 3.01 of the Indenture, the
obligations of Ford with respect to any other covenant, and any omission to
comply with such obligations shall not constitute a default or an Event of
Default with respect to Indenture Securities of such series ("covenant
defeasance"), in either case upon the irrevocable deposit with the Trustee, in
trust, of money and/or U.S. Government Obligations (as defined in the Indenture)
which through the payment of principal and interest in accordance with their
terms will provide money in an amount sufficient to pay the principal of, and
premium, interest and mandatory sinking fund payments, if any, with respect to,
such Indenture Securities, on the scheduled due dates therefor. Such a trust may
only be established if, among other things, Ford has delivered to the Trustee an
Opinion of Counsel (as specified in the Indenture) to the effect that the
holders of such Indenture Securities will not recognize income, gain or loss for
Federal income tax purposes as a result of such defeasance or covenant
defeasance and will be subject to Federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such defeasance
or covenant defeasance had not occurred. Such opinion, in the case of defeasance
under clause (a) above, must refer to and be based on a ruling of the Internal
Revenue Service or a change in applicable Federal income tax law occurring after
the date of the first issuance of Indenture Securities. (Article Fourteen.)
In the event Ford effects covenant defeasance with respect to Indenture
Securities of any series and the Indenture Securities of such series are
declared due and payable because of the occurrence of any Event of Default other
than the Event of Default described in clause (d) under "Events of Default and
Notice Thereof" with respect to sections 8.03, 10.04 and 10.05 of the Indenture
(which Sections would no longer be applicable to Indenture Securities of that
series) or described in clause (d) or (f) under "Events of Default and Notice
Thereof" with respect to any other covenant with respect to which there has been
defeasance, the amount of money and U.S. Government Obligations on deposit with
the Trustee will be sufficient to pay amounts due on the Indenture Securities of
such series when they become due but may not be sufficient to pay amounts due on
the Indenture Securities of such series at the time of the acceleration
resulting from such Event of Default.
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<PAGE> 13
However, the Company and Ford would remain liable to make payment of such amount
due at the time of acceleration.
The Prospectus Supplement may further describe any provision in
modification of, in addition to or in lieu of the provisions described under
this caption "Defeasance and Covenant Defeasance".
MODIFICATION OF THE INDENTURE
With certain exceptions, the Indenture, the rights and obligations of Ford
and the rights of the holders of a particular series thereunder may be modified
by Ford with the consent of the holders of not less than 66 2/3% in aggregate
principal amount of the Indenture Securities of such series then outstanding of
each series affected by such modification; but no such modification may be made
which would (i) extend the fixed maturity of any Indenture Security of such
series, or reduce the principal amount thereof, or reduce the rate or extend the
time of payment of interest thereon, without the consent of the holder of each
Indenture Security of such series so affected; or (ii) reduce the above-stated
percentage of Indenture Securities of such series, the consent of the holders of
which is required to modify or alter the Indenture, without the consent of the
holders of all Indenture Securities of such series then outstanding. (Section
9.02.)
TRUSTEE
The Trustee may resign or be removed with respect to one or more series of
Indenture Securities and a successor Trustee may be appointed to act with
respect to such one or more series. (Section 6.08.) In the event that there
shall be two or more persons acting as Trustee with respect to different series
of Indenture Securities, each such Trustee shall be a trustee of a trust or
trusts under the Indenture separate and apart from the trust or trusts
administered by any other such Trustee, and any action described herein to be
taken by the "Trustee" may then be taken by each such Trustee with respect to,
and only with respect to, the one or more series of Indenture Securities for
which it is acting as Trustee. (Section 6.09.)
CONCERNING THE BANK OF NEW YORK
The Bank of New York, Trustee under the Indenture, is also the trustee
under indentures covering a number of outstanding issues of notes and debentures
of certain of Ford's subsidiaries, is a depositary of Ford and certain of its
subsidiaries, has from time to time made loans to Ford and certain of its
subsidiaries, has from time to time purchased receivables from Ford and certain
of its subsidiaries, and has performed other services for such companies in the
normal course of its business. The Bank of New York's principal corporate trust
office is located at 101 Barclay Street, New York, New York 10286.
PLAN OF DISTRIBUTION
Ford may sell the Debt Securities to or through underwriters and also may
sell the Debt Securities directly to one or more other purchasers or through
agents.
The Prospectus Supplement sets forth the terms of the offering of the
particular series of Debt Securities to which such Prospectus Supplement
relates, including (i) the name or names of any underwriters or agents with whom
Ford has entered into arrangements with respect to the sale of such series of
Debt Securities, (ii) the initial public offering or purchase price of such
series of Debt Securities, (iii) any underwriting discounts, commissions and
other items constituting underwriters' compensation from Ford and any other
discounts, concessions or commissions allowed or reallowed or paid by any
underwriters to other dealers, (iv) any commissions paid to any agents, (v) the
net proceeds to Ford, and (vi) the securities exchanges, if any, on which such
series of Debt Securities will be listed. The Debt Securities of each series
will be consecutively numbered, beginning with the number one.
If underwriters are used in a sale of any Debt Securities, such Debt
Securities will be acquired for their own account and may be resold from time to
time in one or more transactions including negotiated transactions, at a fixed
public offering price or at varying prices determined at the time of
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<PAGE> 14
sale. Unless otherwise set forth in the Prospectus Supplement relating to a
particular series of Debt Securities, the obligations of the underwriters to
purchase such series of Debt Securities will be subject to certain conditions
precedent and each of the underwriters with respect to such series of Debt
Securities will be obligated to purchase all of the Debt Securities of such
series allocated to it if any such Debt Securities are purchased. Any initial
public offering price and any discounts or concessions allowed or reallowed or
paid to dealers may be changed from time to time.
The Debt Securities may also be offered and sold by Ford directly or
through agents designated by Ford from time to time. Unless otherwise indicated
in the Prospectus Supplement, any such agent or agents will be acting on a best
efforts basis for the period of its or their appointment. Any agent
participating in the distribution of the Debt Securities may be deemed to be an
"underwriter", as that term is defined in the Securities Act, of the Debt
Securities so offered and sold. The Debt Securities may also be sold to dealers
at the applicable price to the public set forth in the Prospectus Supplement
relating to a particular series of Debt Securities who later resell to
investors. Such dealers may be deemed to be "underwriters" within the meaning of
the Securities Act.
If so indicated in the Prospectus Supplement relating to a particular
series of Debt Securities, Ford will authorize underwriters or agents to solicit
offers by certain institutions to purchase Debt Securities of such series from
Ford pursuant to delayed delivery contracts providing for payment and delivery
at a future date. Such contracts will be subject only to those conditions set
forth in the Prospectus Supplement, and the Prospectus Supplement will set forth
the commission payable for solicitation of such contracts.
Underwriters and agents may be entitled, under agreements entered into with
Ford, to indemnification by Ford against certain civil liabilities, including
liabilities under the Securities Act.
LEGAL OPINIONS
The legality of the Debt Securities will be passed on for Ford by J. M.
Rintamaki, Esq., Secretary and an Assistant General Counsel of Ford or other
counsel satisfactory to any underwriters or agents, and for any underwriters or
agents by Shearman & Sterling, 599 Lexington Avenue, New York, New York 10022.
Mr. Rintamaki is a full-time employee of Ford and owns, and holds options to
purchase, shares of Common Stock of Ford. Shearman & Sterling have in the past
provided, and may continue to provide, legal services to Ford and its
subsidiaries.
EXPERTS
The financial statements which are incorporated in this Prospectus by
reference to Ford's 1995 10-K Report have been audited by Coopers & Lybrand
L.L.P., independent certified public accountants, to the extent indicated in
their report therein, and have been so incorporated in reliance on the report of
that firm given on their authority as experts in accounting and auditing.
With respect to the unaudited interim financial information of the Company
for the periods ending March 31, 1996 and June 30, 1996 incorporated in this
Prospectus by reference to Ford's 1996 10-Q Reports, Coopers & Lybrand L.L.P.
have reported that they have applied limited procedures in accordance with
professional standards for a review of such information. However, their reports,
included in Ford's 1996 10-Q Reports, state that they did not audit and they do
not express an opinion on that interim financial information. Accordingly, the
degree of reliance on their reports on such information should be restricted in
light of the limited nature of the review procedures applied. The accountants
are not subject to the liability provisions of Section 11 of the Securities Act
of 1933 for their reports on the unaudited interim financial information because
such reports do not constitute "reports" or a "part" of the registration
statement prepared or certified by the accountants within the meaning of
Sections 7 and 11 of such Act.
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NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE
ACCOMPANYING PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS DO NOT CONSTITUTE AN OFFER
TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE
SECURITIES OFFERED BY THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS
OR AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY
JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS
SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS NOR ANY SALE MADE HEREUNDER OR
THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF FORD MOTOR COMPANY SINCE THE DATE OF THIS
PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS, OR THAT THE INFORMATION
HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SINCE SUCH DATE.
------------------------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
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<S> <C>
Description of Debentures............. S-2
Underwriting.......................... S-4
PROSPECTUS
Available Information................. 2
Incorporation of Certain Documents by
Reference........................... 2
Ford Motor Company.................... 3
Ratio of Earnings to Fixed Charges.... 4
Use of Proceeds....................... 4
Description of Debt Securities........ 4
Plan of Distribution.................. 9
Legal Opinions........................ 10
Experts............................... 10
</TABLE>
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$250,000,000
FORD MOTOR COMPANY
7 1/2% DEBENTURES
DUE AUGUST 1, 2026
[FORD LOGO]
----------------------------------------
PROSPECTUS
AND
PROSPECTUS SUPPLEMENT
----------------------------------------
BEAR, STEARNS & CO. INC.
GOLDMAN, SACHS & CO.
LEHMAN BROTHERS
J.P. MORGAN & CO.
SALOMON BROTHERS INC
AUGUST 6, 1996
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